Entry inclinations under uncertainty

This paper considers the market entry decision of a potential entrant that behaves as if it knew the future market demand and its own cost schedules, and formulates a set of probability judgements as to the unknown output rates that its future rivals will maintain. The special case where entry is free and each in-market seller, as well as the potential entrant, assumes that the others will not alter their production provokes the classic Cournot-Stackelberg situation. Although one might suspect that uncertainty would tend to inhibit entry as compared with an equivalent, in the expected-value sense, certainty situation, this is not at all the case. The suspucion is not necessarily true even when management is risk averse.     

Leader Development Through Reading and Reflection

The current investigation serves to assess the usefulness, lessons learned, and leader development of eight male students in a senior level university leadership class based on reading and reflection. Thematic analysis of participants’ responses revealed three major themes to explain students’ lessons learned in leader development through journaling: (a) Relationship Development, (b) Technical Skill Development, and (c) Awareness Development. Support exists for the effectiveness of reading and reflection as a pedagogical tool for leader lesson development with a college‐age sample.     

Regulators Markets And Standards Coordination: Policy Lessons From Telepoint

Using quarterly data for 56 new ethical-drug products launched between 1989 and 1996, we estimate the coefficients of a regression equation that has cumulative future sales beyond the forecast period as its dependent variable and third-quarter sales, post-launch product improvements and promotional activities, pre-launch product quality and speed to market, and market growth as the independent variables. We find the future success of a new product to be detectable as early as the third quarter after launch, and that while post-launch promotional activities can contribute to that success, if the product has not shown signs of life by the third quarter it is unlikely to do so afterwards. The implication is that being first to the market can contribute to the success of a new drug, as can having the highest-quality drug, though neither being first nor being best is necessary. Rather, a new drug can be both the first and the best in its product category, but if strong signs of success do not appear within nine months after launch, the drug is likely to be fighting a losing uphill battle thereafter, even in a growing market. Or, at least in pharmaceuticals, you get only one bite at the cherry.     

The Case for Activist Directors: A Conversation with Ira M. Millstein

In this conversation held at the 2016 Millstein Governance Forum at Columbia Law School, Ira Millstein, a leading authority on corporate governance and founding chair of the Millstein Center for Global Markets and Corporate Ownership, discusses his new book, The Activist Director, with Geoff Colvin of Fortune Magazine. In explaining why he wrote the book, Millstein said that it is important for boards of directors to understand the key role they must play to secure the future of our corporations, and for shareholders to recognize, encourage, and support this role. The role of directors has changed significantly over the years. Yet corporate performance, broadly speaking, has not lived up to expectations, and Millstein attributes this in part to the failure of directors to adapt and evolve quickly and decisively enough—which in turn has helped to fuel the rise of activist investors. Much of the problem stems from the tendency of boards to view themselves as oversight organizations that review and “challenge” management at arm's length, as opposed to truly engaging with management to make better decisions. To address this problem, Millstein makes the case for “activist” directors who will partner with management, think deliberately and critically about the company's strategy, and work for the longterm interest of the corporation. And to provide financial incentives for directors to reinforce their commitment to the corporations they serve, Millstein favors an increase in compensation for directors that is tied to long‐term performance. As an early example of what became an activist board, Millstein describes his own experience with the board of General Motors in the late 1980s and early 1990s when it confronted managerial failure and ended up replacing the CEO. In the current environment of activist investors, activist boards must give serious consideration to shareholder proposals for change, without succumbing to pressure for shortsighted cutbacks in value‐adding investment and while ensuring that management is focused on long‐term growth and innovation. Directors must have the courage and commitment to carry out the course of action they deem to be in the best longterm interests of the corporation.