The effect of compensation program and structure on sbu competitive strategy: A study of technology-intensive firms

In this paper we examine the impact various compensation programs have upon business-level strategy for technology-intensive firms. Similarly, we examine the effect of centralization of R&D and non-R&D decision-making, formality of procedures, and SBU size on competitive strategy. Analysis of data from 79 SBUs suggest that there is a resource trade-off between marketing-oriented strategies and R&D-oriented strategies, and that managers who operate under certain types of compensation programs will tend to favor R&D/innovation strategies and capital investment over other alternatives. Structure and competitive position also appear to play a significant role in determining technology and investment strategy.     

A clarification of the interest rate parity theorem

Recognition of the role of market-makers in the euro-deposit and exchange markets, makes it necessary to re-formulate the interest rate parity theorem's predicted equilibrium relationship between forward exchange rates and interest rates in terms of a set of inequalities, rather than an equation. A euro-bank quotes typically for two-way business in euro-currency deposits swaps, outright forward exchange and spot exchange. It must decide whether to quote for each directly or indirectly, by combining quotes from two or more of the other markets. Where indirect (satellite) quotation prevails the inequalities collapse into continuous identities. Market conditions which favour direct compared to indirect quotation are assessed.     

The dynamics of a regulatory space realignment: Strategic responses in a local context

This paper seeks to extend and deepen our understanding of the production and interpretation of accounting regulation. It analyses how, in response to a regulatory crisis, a revised set of regulatory arrangements, principally in the realm of disciplinary procedure oversight, was re-negotiated and re-shaped in the Irish professional accounting context. We mobilize the concept of regulatory space ( and ) and Oliver’s (1991) typology of strategic responses to institutional pressures to theorise the actor dynamics, strategies and resources enrolled throughout the process of developing and interpreting the proposed regulations. By highlighting the interaction between different sets of actors within the regulatory realignment, we extend Oliver’s (1991) (implicit) focus on the strategic responses of one class of actor during an institutional change. While prior research finds that regulators adopt compromise or acquiescence strategies when confronted with aggressive regulatee resistance, thereby significantly diluting proposed regulations (see, Shapiro & Matson, 2008), we unveil a context where regulators successfully enrolled strategies of defiance to repel this resistance. We also find limited evidence of agreement on meaning between the regulators and regulatees, despite conceptions of regulatory space viewing this agreement as central to the initial interpretation of regulatory rules (Scott, 2001). Our analysis provides a counterpoint to prior research suggesting that the accounting establishment has been highly successful in influencing the design and interpretation of new regulations aimed at overseeing the accounting profession (see, Malsch & Gendron, 2011). Drawing on our findings, we suggest that the passivity of national regulators in the process of developing and interpreting (local or global) regulations should not be automatically presumed. We conclude with a call for an enhanced focus on the influence of national political and social contexts on the development and interpretation of accounting regulations.     

Higher education in flight: a new direction for international assignments research

This paper draws attention to the significant internationalisation of the higher education sector and role of international assignments in supporting and driving this. The paper then proceeds to identify the similarities and unique features of the sector in the context of international assignments which we argue, primarily revolve around alternative forms, namely international frequent flyers and short-term assignments. Finally, a model is proposed that may facilitate higher education institutes in more effective international assignment utilisation.     

Bounds for best response functions in binary games

This paper studies the identification of best response functions in binary games without making strong parametric assumptions about the payoffs. The best response function gives the utility maximizing response to a decision of the other players. This is analogous to the response function in the treatment-response literature, taking the decision of the other players as the treatment, except that the best response function has additional structure implied by the associated utility maximization problem. Further, the relationship between the data and the best response function is not the same as the relationship between the data and the response function in the treatment-response literature. We focus especially on the case of a complete information entry game with two firms. We also discuss the case of an entry game with many firms, non-entry games, and incomplete information. Our analysis of the entry game is based on the observation of realized entry decisions, which we then link to the best response functions under various assumptions including those concerning the level of rationality of the firms, including the assumption of Nash equilibrium play, the symmetry of the payoffs between firms, and whether mixed strategies are admitted.     

Knowledge, values and internationalisation—introduction to the special edition

Internationalisation is increasingly being seen as an organisational learning process. However, entrepreneurial enterprises tend to be smaller, more innovative and more agile than their larger counterparts. When they internationalise, entrepreneurial firms often expand at a rapid rate. The cultures of so-called ‘born global’ firms also appear to differ from firms that internationalise in a more gradual, stepwise fashion. This raises interesting questions about how entrepreneurial firms acquire and manage knowledge about markets, networks and capabilities in turbulent and uncertain environments and how the values embedded in organisational cultures might influence strategic choices. The following articles in this special edition of the Journal of International Entrepreneurship focus specifically on how innovative firms—particularly small and medium-sized enterprises—recognise and exploit market opportunities, how they learn from international market entry and penetration experiences to improve core capabilities and how values may influence supply chain management and start-up decisions.     

The volunteer's dilemma and alternate solutions for ensuring responsibility within accountable care organizations

ABSTRACT

The emphasis on accountable care organizations (ACOs) in recent health care reform increases the potential for social dilemmas such as the volunteer's dilemma within networks of providers who collectively share responsibility for a patient population. Providers in an ACO often receive financial incentives based on how well the group performs in defined quality measures. Care interventions may be indicated for certain patients, such as postdischarge follow-up to prevent readmission. However, the providers conducting the interventions may be unreliable if they vary in their belief in the intervention's effectiveness. We characterize such potential for care coordination failures as instability of an asymmetric equilibrium, illustrated by an example in which ACO patients would benefit from interventions to prevent readmission but individual providers or care teams do not perceive sufficient value in conducting the intervention. We then propose three economic mechanisms that can help ensure that patients receive indicated interventions, illustrate the impact of each with an example, and explore conditions that lead to significant improvements in overall utility.     

Tourism stakeholder exclusion and conflict in a small island

Research in the Isle of Man, British Isles, reveals limited and dysfunctional collaboration between stakeholders, and in particular between public and private sector actors. Power and influence over tourism decision-making is generally felt to be restricted to a small and opaque network. Moreover, different levels of interest in and support for tourism further divide stakeholders. Various negative consequences are shown to arise from this absence of collaboration, including a lack of shared vision or future strategy for local tourism, and high levels of mutual mistrust between stakeholders. Resulting conflict, wasted resources, lost enthusiasm and lack of strategic direction appear to undermine the current and future management of island tourism. Emphasised by research is the importance of stakeholder collaboration to sustainable tourism management and underlying factors which may enhance or undermine. Focus on describing dysfunctional collaboration within an untypical small island setting makes a unique contribution to the existing literature.     

An Empirical Test of Pricing Kernel Monotonicity

A large class of asset pricing models predicts that securities which have high payoffs when market returns are low tend to be more valuable than those with high payoffs when market returns are high. More generally, we expect the projection of the stochastic discount factor on the market portfolio—that is, the discounted pricing kernel evaluated at the market portfolio—to be a monotonically decreasing function of the market portfolio. Numerous recent empirical studies appear to contradict this prediction. The non‐monotonicity of empirical pricing kernel estimates has become known as the pricing kernel puzzle. In this paper we propose and apply a formal statistical test of pricing kernel monotonicity. We apply the test using 17 years of data from the market for European put and call options written on the S&P 500 index. Statistically significant violations of pricing kernel monotonicity occur in a substantial proportion of months, suggesting that observed non‐monotonicities are unlikely to be the product of statistical noise. Copyright © 2014 John Wiley & Sons, Ltd.