Informing the US Energy Policy Debate with Threshold 21

There has been growing concern about the recent emergence of the critical challenges of energy availability and the impacts of climate change. Both are inextricably linked and dealing with them is fundamental to the progress of America and humanity. There are, however, a number of different views expressed, reflecting different assumptions, special interests, and partisan objectives. Decision-makers and the public need easy-to-use and transparent tools to better visualize, analyze, and understand the broader and longer-term implications of the varying underlying assumptions, policies, and strategies, including both their positive and negative impacts — both direct and indirect — and how to manage them.Threshold 21 (T21) the simulation model presented in this paper aims to become such a tool. The Millennium Institute has developed it over the last 24 years.The T21-USA model results indicate that a continuation of current policies and trends will lead the US to become increasingly dependent on foreign energy resources and more vulnerable to price fluctuations. Furthermore, alternative scenarios simulating improved CAFE and Renewable Portfolio Standards (RPS) show that major reductions in the US' resource consumption and pollution generation could be possible while stimulating the economy over the medium and longer term. Nevertheless, the model shows that unintended consequences, such as the Jevons Paradox, have to be taken into consideration when defining national energy policies.     

Measuring Intangible Capital: A Review of Current Practice

This paper examines international practices that measure firm-level investments into intangible capital. The issues motivating the paper are the need for a standardised framework for measuring intangible capital and the possibility for standardised applications of these measures into the future. The paper analyses the differences and problems associated with the properties of the "official" (accounting) and "non-official" measurement approaches. We propose that the way to a standardised, more comparable approach to measuring intangible capital is to employ a back-to-basics "costs" approach which classifies investments in intangible capital as assets based on management intent at the time.     

Implementing TQM: top down or bottom up?

Here the authors examine the challenges posed by the phased introduction of TQM in an organisation. Longitudinal study shows that the phased approach has experienced difficulties which are examined in the context of the debate as to where in the organisation the leading edge of change is best located.     

Applying a systems approach to human resource management

One reason why organizational improvement efforts often fall short of expectations is that they are rarely systematic. This article describes both the theory and practice of improving human resource management (HRM) using an example from McDonnell Douglas Corporation, in which an integrated systems approach was applied. A model of various, specific HRM initiatives is presented. The plan for undertaking these initiatives is also described. A key factor in the success of this approach is in changing the mental models that executives hold regarding how organizations really function. A major part of this shift is appreciating that organizational improvement initiatives are not additive but interactive. © 1999 John Wiley & Sons, Inc.     

The implication of discount rate changes for market timing

This study implements and tests a market timing trading rule using the public information contained in discount rate changes as signals to enter or exit the stock market. The trading rule entails entering the market on an initial discount rate cut and remaining fully invested through any subsequent cuts. Alternatively, an initial discount rate increase signals an exit from the market and remaining out of the market through any subsequent increases. It is presumed that short-term Treasury instruments are held in out-market periods. We test and report the results of this market timing strategy in comparison to a benchmark buy-and-hold strategy through the use of various investment performance measures. Analysis of ex-post returns indicates that the market timing trading rule produces higher risk-adjusted returns than a buy-and-hold-the-market strategy. Even without a risk adjustment, the returns of the strategy exceed those of the passive buy-and-hold strategy in the three subperiods analyzed. The strategy's predictive accuracy for timing the market clearly exceeds the minimum predictive accuracy suggested by earlier market timing literature. Finally, the results of the statistical analysis indicate that the strategy is successful in outguessing the market as defined in the classical Treynor and Mazuy illustration.     

Synergies and Internal Agency Conflicts: The Double-Edged Sword of Mergers

This paper investigates the interaction between synergies and internal agency conflicts that emerges endogenously in multi-division firms. A divisional manager's entrenchment choice depends directly on the specificity of her division's assets, because the specificity governs whether entrenchment activities reduce the likelihood of her division being divested. The presence of synergies, by modifying the difference between the value of assets in their current use and in alternative uses, may alter the divisional manager's entrenchment incentive. In "the double-edged sword of mergers," synergy and internal agency effects are of opposite sign and merger gains may not be increasing in expected synergies. We characterize when divisions should optimally stand alone and when they should be part of a merged firm. We predict an absence of diversifying mergers in industries plagued by misdeployed assets, offer a novel explanation for the cross-sectional variation in postmerger valuation, and explain why mergers may be valuable ex ante while leading to successful divestitures ex post.