Using Leading Indicators to Forecast U.S. Home Sales in a Bayesian Vector Autoregressive Framework

This article uses Bayesian vector autoregressive models to examine the usefulness of leading indicators in predicting U.S. home sales. The benchmark Bayesian model includes home sales, price of homes, mortgage rate, real personal disposable income, and unemployment rate. We evaluate the forecasting performance of six alternative leading indicators by adding each, in turn, to the benchmark model. Out-of-sample forecast performance over three periods shows that the model that includes building permits authorized consistently produces the most accurate forecasts. Thus, the intention to build in the future provides good information with which to predict U.S. home sales. Another finding suggests that leading indicators with longer leads outperform the short-leading indicators.     

Reconceptualizing competitive dynamics: A multidimensional framework

Competitive dynamics research, despite progress, lacks a conceptual framework that can extend the field's reach to address today's environment. Increasing stakeholder power and globalization are but two of the organizational and economic forces compelling a broader conceptualization of competition. Our framework expands competitive dynamics along five dimensions—aims of competition, mode of competing, roster of actors, action toolkit, and time horizon of interaction—that prove useful for contrasting the rivalrous and competitive‐cooperative modes and a new approach we call relational competition. We draw conjectures about the moderators, such as industry and culture, that determine the appropriateness of these forms of interaction, and conclude by relating our method to three discrete perspectives: the configurational, transaction cost, and stakeholder views. Copyright © 2014 John Wiley & Sons, Ltd.     

ADRs,Analysts, and Accuracy: Does Cross Listing in the United States Improve a Firm's Information Environment and Increase Market Value?

This paper investigates the relation between cross listing in the United States and the information environment of non‐U.S. firms. We find that firms that cross list on U.S. exchanges have greater analyst coverage and increased forecast accuracy than firms that are not cross listed. A time‐series analysis shows that a change in analyst coverage and forecast accuracy occurs around cross listing. We also document that firms that have more analyst coverage and higher forecast accuracy have higher valuations. Furthermore, the change in firm value around cross listing is correlated with changes in analyst following and forecast accuracy, suggesting that cross listing enhances firm value through its effect on the firm's information environment. Our findings support the hypothesis that cross‐listed firms have better information environments, which are associated with higher market valuations.     

Analyst forecast characteristics and the cost of debt

We examine the relation between analyst forecast characteristics and the cost of debt financing. Consistent with the view that the information contained in analysts’ forecasts is economically significant across asset classes, we find that analyst activity reduces bond yield spreads. We also find that the economic impact of analysts is most pronounced when uncertainty about firm value is highest (that is, when firms have high idiosyncratic risk). Our findings are robust to controls for private information in equity prices and level of corporate disclosures. Overall, the results indicate that the information contained in analyst forecasts is valued outside the equity market and provide an additional channel in which better information is associated with a lower cost of capital.     

ECONOMIC ANALYSIS IN THE MAINTENANCE,REPAIR, AND OVERHAUL INDUSTRY: AN OPTIONS APPROACH

This paper presents a practical case application of the real options framework to a multi-stage investment in the aerospace maintenance, repair, and overhaul (MRO) industry. With the deregulated commercial airline industry and military procurement reform, the $44 billion MRO sector must implement tools to remain strategically poised. In this case study, the MRO participant values a multi-stage irreversible expenditure in maintenance equipment and processes under air travel demand uncertainty using a real options analysis. The investment scenario is viewed from a delay, growth, and compound options framework, and an appropriate sensitivity analysis is performed. The main contribution of this paper is the detailed real option framing, valuation, and discussion that may be used as an illustration for industry practitioners or classroom instruction.     

Training European trade unionists

This article analyses the findings from a pilot research project looking at the pattern of trade union education provision in Germany, Italy, Sweden and the UK. In each country the trade union movements are adapting their training systems to meet new challenges in often hostile economic and political climates. In spite of common problems there remain significant national differences in trade union education deriving from divergent traditions which we explore through a systems model which ocuses on the key issues of national legislation, funding, training provision and accreditation. We conclude by suggesting the need for new research and policy agendas.     

A MATHEMATICAL MODEL OF THE ADAPTIVE BEHAVIOUR OF ORGANIZATIONS

The recent work on organizational configuration and quantum structural change by Miller and Friesen (1984), and on the population ecology of organizations by Hannan and Freeman (1978, 1983) suggests some integral relationships between eiivironments, structure and optimal adaptive strategies. These appear to warrant a more systematic and formal analysis. Towards that end a mathematical model is developed to show the way organizations adapt t o changing environments. Using a Markovian representation, three types of environments are examined t o test the implications that the model has for adopting strategies of generalism vs. specialism, concerted ‘quantum’ 71,s. piecemeal change, and batching changes together vs. changing gradually and promptly.     

Information asymmetries and technological innovation in large engineering construction projects

Research on technological innovation shows that information asymmetries between suppliers and buyers constitute a major barrier to the successful introduction of new products. Most of this research, however, puts the burden of overcoming these asymmetries on producers of new products. In the case of large engineering construction projects innovation is often the result of joint problem solving by owners, prime contractors, consultants, and equipment suppliers. In this paper we examine the relationship between innovativeness of large engineering construction projects and internal owner capabilities, degree of control over project, and dependence on external organizations, We use data on power plant construction projects to test hypotheses derived from agency and organization theories of innovation. Our results indicate that organization theories of innovation are on the whole better predictors of the impact on innovativeness of owner's capabilities and relationship to external organizations.     

Ethical Rationality: A Strategic Approach to Organizational Crisis

In this paper, we present an ethical and strategic approach to managing organizational crises. The proposed crisis management model (1) offers a new approach to guide an organization’s strategic and ethical response to crisis, and (2) provides a two-by-two framework for classifying organizational crises. The ethically rational approach to crisis draws upon strategic rationality, crisis, and ethics literature to understand and address organizational crises. Recent examples of corporate crises are employed to illustrate the theoretical claims advanced. Finally, the paper provides guidelines for a morally optimal outcome for the organization and its stakeholders. Peter Snyder is a Ph.D. student in Organizations and Strategic Management at the University of Wisconsin-Milwaukee. His research interests include strategy making and corporate governance. Molly Hall is an attorney who practices international and environmental law in Milwaukee, Wisconsin. She teaches adjunct courses in business ethics, environmental policy, and the European Union. Joline Robertson is a Ph.D. candidate in Organizations and Strategic Management at the University of Wisconsin-Milwaukee. Her research interests include international business. Tomasz Jasinski is a Ph.D. student in Organizations and Strategic Management at the University of Wisconsin-Milwaukee. His research interests include strategic alliances. Janice S. Miller received her Ph.D. from Arizona State Univerity in Business Administration with a concentration in Human Resource management. She has been on the faculty at the University of Wisconsin-Milwaukee UWM since 1996 and has served as the Associate Dean for Academic Programs in the School of Business Administration since 2002. Dr. Miller’s primary research interests include performance management, compensation and ethical issues in organizations.     

Managing Operational Flexibility in Investment Decisions: The Case of Intel

Significant attention has been paid to how real options analysis can help in valuing operating flexibility when making major capital investment decisions. But there has been far less study of how to manage such flexibility, particularly in cases where a decision to defer, contract, or expand any one investment program affects a range of other programs, including those outside the firm. Such interrelated investments are increasingly common in a "connected" economy where products and technologies are designed across firms and industries.
Based on a field study at Intel, this paper describes and analyzes one set of practices for coordinating such diverse systems of investments. It shows how information about interrelated investments is communicated within and between companies so that coherent changes can be made at the level of an overall system. The authors argue that studies of investment appraisal need to move beyond the predominant focus on valuation to encompass the wider organizational processes by which operational flexibility is exercised in the modern economy.