Consequences of competitive bidding in project-based production

This paper discusses the consequences competitive bidding have on lead time in project-based production, such as construction. Earlier studies argued that competitive bidding may significantly increase resource consumption and generate waste in the delivery process, which this paper supports. However, the relation between competitive bidding and lead time has been less discussed. Lead time reduction has long been considered a fundamental objective for overall business improvement. An objective of our study was to understand what contributes to long lead times. The reported findings are from a 4-year study on the delivery process of power distribution equipment, a type of engineered-to-order (ETO) product. The paper concludes by suggesting procurement practices that reduce lead times for ETO products.     

Twenty-five years of business systems research and lessons for international business studies

Since 1992, the national business systems (NBS) approach has been increasingly used to analyse not only firm characteristics, structures and strategies within NBS, but also the nature of international business and its interactions with both national and transnational institutions. In reviewing 25 years of NBS literature, we heed calls in IB journals urging researchers to use NBS notions and findings in IB research. Our systematic review of 96 articles analyses the patterns and contributions of NBS literature, revealing four thematic junctures: (1) comparative business systems, (2) firm internationalisation and the management/organisation inside MNCs, (3) the role of internationalisation in the development of organisational capabilities and innovation and (4) the emergence of transnational communities in and across firms and societies. Themes are described in terms of (a) the research questions (RQ) they focus on, (b) how NBS approach investigates the RQ and what are the major findings, (c) how IB frames and approaches the same RQ, (d) how does the NBS approach extend the perspectives of IB and (e) what are the problems faced by NBS in terms of developing further insights into the RQ. Our review contributes to the recent endeavour of IB research to institutionalism, encouraging a productive dialogue between IB and NBS research.     

Reducing the ecological footprint of urban cars

This study develops the policy-making capabilities of the Ecological Footprint. The new capabilities we introduce in our Ecological Footprint model allow us to clarify policy options in the face of the increasing management complexity due to a more interconnected and uncertain world. We investigate the effectiveness of three illustrative policy options for reducing the Ecological Footprint of urban car transport: (1) improvements in efficiency/technology, (2) substitution with alternate fuel mixes, and (3) the reduction in demand by altering urban form. We investigate the success of policy options for a subnational case study jurisdiction in Australia, but in the uncertain global context. We use a resilience framework that considers critical social, economic, and environmental variables, multiple scales, and multiple possible futures. We find that delaying policy options to mitigate CO₂ emissions from the transport sector will increase the risks borne by society as a result of future global uncertainty, the uncertain timing of globally coordinated action on climate change and the timing of peak oil. We also find that the success of local policy is affected by the global future which prevails. The use of the Ecological Footprint allows policy to be informed by the consequences of both CO₂ emissions and increasing demand for land. The study provides a decision-making framework that allows local decision makers to make robust policy despite global uncertainty. This framework has wider applicability to other nations and/or subnational jurisdictions worldwide.     

Estimating unobservable valuation parameters for illiquid assets

A problem that often arises in applied finance is one where decision‐makers need to choose a value for some parameter that will affect the cash flows between two parties involved in the operation of an illiquid asset. Because the values of the cash flows also depend on various unobservable parameters, identifying the value of the policy parameter that achieves the desired allocation between the parties is no simple task, often resulting in disputes and the invocation of ad hoc approaches. We show how this problem can be solved using an extension of the well‐known ‘implied volatility’ technique from option pricing, and apply it to the determination of equilibrium rental rates on ground leases of commercial land.     

The role of On‐line communities on the internet for Sustainable Development

For the world to move towards a more sustainable future greater understanding is required about the links between society, reality, business activity, the environment, technology and sustainable development (Welford, 199816). Technological development of the Internet offers the potential, if appropriately utilized, to be an enabler of a more sustainable future. On‐line communications, via the Internet, is driving the evolution of cyber based communities in both domestic and commercial environments. Such changes in international communications are clearly at a relatively early stage of development, which raises many issues of fundamental interest but also concern. Security and control are issues of prime importance to all existing and future participants in cyberspace, due to the direct implications on both freedom and order. The Internet has evolved from a small specialist controlled environment, including both scientists and academic members, to on‐line activity that is currently viewed by many as anarchic in nature. The more recent rise of the World Wide Web (WWW), driven by corporate acceptance and adoption, appears to be pushing towards formalization of both the Internet infrastructure and also applications. In exploring the role of on‐line communities for sustainable development the paper addresses fundamental issues of importance. Copyright © 1999 John Wiley & Sons, Ltd and ERP Environment.     

Eurosystem monetary targeting: Lessons from U.S. data

Using a small empirical model of inflation, output, and money estimated on U.S. data, we compare the relative performance of monetary targeting and inflation targeting. The results show monetary targeting to be quite inefficient, yielding both higher inflation and output variability. This is true even with a nonstochastic money demand formulation. Our results are also robust to using a P∗ model of inflation. Therefore, in these popular frameworks, there is no support for the prominent role given to money growth in the Eurosystem's monetary policy strategy.     

Economic Benefits Resulting From Irrigation Water Use: Theory and an Application to Groundwater Use

Traditional economic analysis using a crop production function approachhas assumed that all variable factors, including irrigation water, arefully employed in the crop production process. However, this paper firstdemonstrates that economic benefits of irrigation water areoverestimated when the crop production function, and therefore theirrigation water demand function, is expressed in terms of irrigationwater supplied, rather than consumptive irrigation water use. Second,the paper demonstrates that the magnitude of the estimation bias isproportional to the rate of irrigation water losses through leaching,runoff and evaporation. Consequently, the model misspecification problemwould lead to increased irrigation water use and reduce incentives forfarmers to adopt improved irrigation technologies.     

Varieties of paternalism and the heterogeneity of utility structures

A principal source of interest in behavioral economics has been its advertised contributions to policies aimed at ‘nudging’ people away from allegedly natural but self-defeating behavior toward patterns of response thought more likely to improve their welfare. This has occasioned controversies among economists and philosophers around the normative limits of paternalism, especially by technical policy advisors. One recent suggestion has been that ‘boosting,’ in which interventions aim to enhance people’s general cognitive skills and representational repertoires instead of manipulating their choice environments behind their backs, avoids the main normative challenges. A limitation in most of this literature is that it has focused on relatively sweeping policy recommendations and consequently on strong polar alternatives of general paternalism and strict laissez faire. We review a real instance, drawn from a consulting project we conducted for an investment bank, of a proposed intervention that is more typical of the kind that economists are more often actually called upon to offer. In this example, the sophistication of current tools for preference attribution, combined with philosophical externalism about the semantics of preferences that makes it less plausible to attribute their literal self-conscious representation to people as propositional attitude content becomes more tightly refined, blocks applicability of the distinction between nudging and boosting. This seems to call for irreducible, context-specific ethical judgment in assessing the appropriateness of the forms of paternalism that economists must actually wrestle with in going about their everyday business.     

The economic value of INTUITY in aortic valve replacement

Objective: The recent development of the EDWARDS INTUITY Elite? (EIE) valve system enables the rapid deployment of a prosthetic surgical heart valve in an aortic valve replacement (AVR) procedure via both the minimally invasive (MISAVR) and conventional (CAVR) approaches. In order to understand its economic value, this study performed a cost evaluation of the EIE valve system used in a MIS rapid-deployment approach (MIS-RDAVR) vs MISAVR and CAVR, respectively, compared to standard prosthetic aortic valves.

Methods: A simulation model was developed using TreeAge (and validated with MS Excel) to compare the inpatient utilization and complication costs for each treatment arm. Thirty-day clinical end-points for the MIS-RDAVR (mortality and complications) were taken from the TRANSFORM trial; and a best evidence review of the published literature was used for the MISAVR and CAVR approaches. Studies were pooled and parameter estimates were weighted by sample size in order to compare the TRANSFORM patients. Cost data (2016 USD) were taken from the Premier database. Incremental cost and cost-effectiveness was assessed and one-way/probabilistic sensitivity analyses performed to gauge the robustness of the results.

Results: MIS-RDAVR costs $2,621 less than CAVR and had lower mortality rates, making it a superior (dominant) technology relative to CAVR. MIS-RDAVR costs $4,560 more than MISAVR, but was associated with an additional 0.20 life years-per-patient. This implies a cost-effectiveness ratio of $22,903 per-life-year-gained. Thus, MIS-RDAVR is cost-effective compared to MISAVR.

Conclusions: The EIE valve system deployed in a MIS approach appears to be a cost-effective technology compared to MISAVR and CAVR. When compared to CAVR it may achieve cost savings as well. These results suggest that MIS-RDAVR confers superior economic value compared to both standard MISAVR and CAVR via lowered key complication rates (re-operation, renal complications, wound infection, TIA, endocarditis) and utilization (cross-clamp time, hospital ward days).