The struggle to create an organization for the 21st century

The horizontal company is hot--but getting there is difficult. You have to define core processes, transfer power, and redesign work. Here's how four organizations are coping.     

A model of noisy introspection

We present a theoretical model of noisy introspection designed to explain behavior in games played only once. The model determines layers of beliefs about others' beliefs about …, etc., but allows for surprises by relaxing the equilibrium requirement that belief distributions coincide with decision distributions. Noise is injected into iterated conjectures about others' decisions and beliefs, which causes the predictions to differ from those of deterministic models of iterated thinking, e.g., rationalizability. The paper contains a convergence proof that implies existence and uniqueness of the outcome of the iterated thought process. In addition, estimated introspection and noise parameters for data from 37 one-shot matrix games are reported. The accuracy of the model is compared with that of several alternatives.     

Migration selectivity and the effects of public programs

"A model of the spatial distribution of mobile heterogeneous agents is formulated to assess how a price change or program subsidy that is location-specific affects the composition of local residents via selective migration and thus biases evaluations of the effectiveness of the program based on its local consequences. Longitudinal data from Colombia are used to test the implications of migration selectivity. The findings confirm the existence of selective migration, suggesting that local subsidies to human capital attract high-income but, within income groups, low-fertility households and those with low human capital endowments. These migration patterns are shown to be consistent with the dominance of endowment over tastes heterogeneity in the population under plausible behavioral assumptions."     

Are prior restrictions on factor shares appropriate in growth accounting estimations?

Several studies make different prior assumptions on the magnitude of factor shares and scale of production when accounting for economic growth. The initial Solow estimations for instance assumed a capital share of 0.3 and constant returns to scale. Most authors have subsequently used the same restrictions just because they were used in previous studies even when production in the countries under study may not necessarily be taking place under constant returns to scale and capital share may be a value not any close to 0.3. This is likely to distort growth accounting estimation results. This study investigates whether these prior restrictions on factor shares and scale of production as commonly used in the literature are appropriate and whether the Solow assumptions are likely biased even in developed countries. Using Kenyan data and structural vector autoregressions, the main findings are; first, in all cases of the unrestricted estimations, the share of physical capital is less than 0.16. An estimation which imposes 0.3 as the share of physical capital in this case would therefore not be in line with the data generating process leading to biased results. Secondly, in all cases, the explanatory power of the model decreases when the restrictions are imposed implying that the restrictions are not appropriate in growth accounting exercises. The paper further disputes the “styled fact” in growth studies that the Solow assumptions may be relevant for developed countries but not developing countries and concludes that the Solow assumptions may be biased even in developed countries.     

Artificial Intelligence and Declined Guilt: Retailing Morality Comparison Between Human and AI

Journal of Business Ethics - Several technological developments, such as self-service technologies and artificial intelligence (AI), are disrupting the retailing industry by changing consumption...     

Placing entrepreneurship and firming small town economies: manufacturing firms,adaptive embeddedness,survival and linked enterprise structures

ABSTRACT

SMEs make a major contribution to the economy of cities and places. The relationship between firms and place is increasingly explained through the application of city-based externality models. Such explanations have limited validity in a number of contexts. One of these is in the economies of small- and medium-sized towns and communities (SMST). Whilst convention has sought to apply core-periphery explanations to the functioning of firms within SMSTs, the economies of SMSTs and entrepreneurial processes of SME embedding, adaptation and survival in such places are more complex. This paper explores these entrepreneurial processes in the context of manufacturing firms in five SMSTs in the West Midlands, UK. The paper uses interview data to understand the relationships between SMEs and place through the development of successive and evolving linked enterprise structures. Through these linked enterprise structures, SMEs engage in a process of adaptive embeddedness, resulting in new resource configurations through fluid iterations of structural, emotional, and circumstantial embeddedness. This paper is the first to identify and explore these different forms of embeddedness.     

An Experimental Analysis of Face to Face versus Computer Mediated Communication Channels

Experimental research on Group Decision Support Systems (GDSS) has generally focused on democratic groups whose members typically share the same objectives. In organizations, however, there are many situations where groups have a leader who has the power to override the group's recommendation, the objective of the leader may not be the same as the objective of each member, and not everyone may have the same information. This paper reports the results of an experiment in which the groups, having a designated leader, worked on a mixed-motive task. Within this context, we analyze group decision outcomes and processes for groups that use a face-to-face channel of cormnunication and those that utilize computer mediated communication. We compare performance of the leader and members with respect to an objective measure of performance, the efficient frontier. The results indicate that for this task groups using face-to-face channel outperform groups using computer mediated communication.     

Exploration versus exploitation: Emotions and performance as antecedents and consequences of team decisions

We analyze performance and emotions as antecedents and consequences of team strategic decisions to explore a new routine versus exploiting an existing one. In a laboratory study, we examine team decision making over time and draw causal inferences about the relationships among team emotions, team performance, and explore–exploit decisions. We use self‐report data to measure team emotions, and validate results with psychophysiological data. We find that declines in performance increase the likelihood that teams decide to explore new routines rather than exploit existing ones. We also find a marginal positive effect of positive emotions, as measured by both self‐report and psychophysiological data, on team decisions to explore a new routine. Further, teams successful at implementing new routines report increased positive emotions, as measured by the self‐report data. This relationship is fully mediated by performance change. Copyright © 2015 John Wiley & Sons, Ltd.     

The relative efficiency of schizophrenia health care systems: an international comparison using data envelopment analysis

Abstract

Aim

To compare the health economic efficiency of health care systems across nations, within the area of schizophrenia, using a data envelopment analysis (DEA) approach.