Rank friction: an ordinal approach to persistent profitability

We present an ordinal method for studying persistence in firm profitability. The method is based on the degree of stability in a ranked performance distribution over time. The method gives a numerical index of rank friction (Rf) that can be applied to any ranked data over any period of time. Rf is nonparametric and can be used to test theoretical assumptions in strategic management. We illustrate the method in an empirical study of 40 years of profit data in 12 industries. Copyright © 2010 John Wiley & Sons, Ltd.     

Institutional environment for entrepreneurship in rapidly emerging major economies: the case of Brazil,China, India,and Korea

The country institutional profile (CIP) construct has become the most widely used conceptualization of institutional environment for entrepreneurship. This construct is frequently employed to study institutional forces influencing entrepreneurial activity at the national level. However, relatively little is known about the cross-national equivalence of the construct. Moreover, the institutional environment for entrepreneurship in emerging economies remains largely under-explored. To address these issues, in the current study, we used the most frequently utilized CIP scale to collect data from 809 young adults in four rapidly emerging countries: Brazil, China, India, and South Korea. We examined the invariance of the CIP construct and unraveled differences in perceived institutional profiles among these rapidly emerging economies. Results support the CIP construct as largely invariant in the four REME countries and revealed important differences in specific aspects of institutional environments in these countries. Implications for future research and practice are discussed.     

Intergenerational Influence in Consumer Deal Proneness

Although there has been ample research on the correlates of consumer deal proneness, there has been little research on how deal proneness develops. In two studies of parent/adult–child dyads, considerable parent–child similarity both in overall deal proneness and in the pattern of preferences for particular types of sales promotions was found. Further, the second of these two studies indicates that parent–child similarity is mediated by communication between parents and their children and tends to be stronger among parents with a permissive parenting style. These results provide evidence that consumer enthusiasm for sales promotions is, to at least some extent, transmitted from parents to their children.     

Business models: Impact on business markets and opportunities for marketing research

Business models have evolved in the context of new venture creation. By offering an entrepreneurial perspective to established marketing elements such as value propositions, value capturing and value networks, business models provide marketing discipline with both challenges and opportunities to engage with entrepreneurial environments. In particular, business models call for approaches that elucidate value-in-use of marketing offerings, reveal the performance of contracts in orchestrating value networks and identify the performance of network configurations. In this article we present some implications of and opportunities for business models for marketing research.     

A Measure of Distributive Justice in Distribution Channels: Scale Development and Validation

ABSTRACT

The construct of distributive justice has been conceptualized largely along the three allocation rules of equity, equality, and need. Extant empirical research in the marketing channels area, however, treats distributive justice as a unidimensional, global construct focusing almost exclusively on the allocation rule of equity. As a result, the measurement of equality and need, two distinct and significant allocation rules, has been largely overlooked in the context of people and organizations involved in interorganizational exchange. The current study tests a measure of distributive justice that takes into account each of the three allocation rules. Results indicate valid scales that accurately measure three rules of distributive justice across two independent samples of channel participants in franchise systems. This research represents an important step toward accurately, concisely, and efficiently measuring this important and socially relevant construct in an interorganizational setting.     

Through Thick and Thin: How Fair Trade Consumers Have Reacted to the Global Economic Recession

Research on fair trade has flourished over the past decade as fair trade food products have gained popularity amongst consumers in many developed economies. This study examines the effects of recessionary economic conditions on fair trade consumers’ purchasing behaviour. An online survey was administered to 306 fair trade consumers from Canada, the United Kingdom and the United States of America. The results reveal a discrepancy among fair trade consumers as only consumers that purchase fair trade on an occasional basis adhered to established consumer behaviour norms, i.e. decreasing their purchases of fair trade products and becoming significantly more price aware. Respondents who actively consume fair trade generally remained loyal to their purchase. While some active consumers altered their purchasing behaviour, this phenomenon was not common amongst this group as no statistically significant changes were observed. Differences were also noted among the three countries as the Canadian and US fair trade consumers significantly decreased their consumption of fair trade as a result of the recession, whereas the UK consumers did not. In addition to the research results, theoretical and managerial implications will be discussed along with future research directions.     

The increasing role of the private sector in Asian industrial development

In recent years, there has been a powerful trend on the global scene and above all in the Asian region for the private sector in general and private industry in particular to assume a growing, and indeed leading, role in economic and industrial development. This article reviews some recent trends of private investment and privatization policies pursued in selected Asian countries and discusses the implications of private sector-led industrial development for the role of governments and international organizations.     

Managing a Portfolio of Interdependent New Product Candidates in the Pharmaceutical Industry

Highly regulated industries such as pharmaceuticals and agrochemicals face the challenge of maintaining a 0continuous stream of new products. This is difficult because of low probabilities of technical success, high development costs, uncertain market impact, a scarcity of good new product ideas, and limited human and capital resources available to develop them. The problem of evaluating and selecting which new products to develop and then of sequencing or of scheduling them is complicated further by the presence of dependencies between products both in the market place and in the development process itself. This study proposes a portfolio management approach that selects a sequence of projects, which maximizes the expected economic returns at an acceptable level of risk for a given level of resources in a new product development pipeline. A probabilistic network model of distinct activities is used to capture all the activities and resources required in the “process” of developing a new drug. A prioritization scheme suggesting sequences for developing new independent drug candidates with unlimited resources is generated with a conventional bubble chart approach. These sequences initiate a genetic algorithm (GA)‐based search for the optimal sequence in the presence of product dependencies and limited resources. By statistically evaluating the sequences generated during the GA search using a discrete event simulation model, it is possible to construct an economic reward‐risk frontier that illustrates the trade‐offs between expected rewards and risks. The model ideally is suited to answer various “what if” questions relative to changes in the resource level on pipeline performance. The methodology is illustrated with an industrially motivated case study, involving nine interdependent new product candidates targeting three diseases. The dramatic results yield a candidate sequence with an expected return 28 percent higher than the sequence suggested by the bubble chart approach at almost the same level of risk. The synergism among the candidate dependencies, pipeline resources, and economic and technical uncertainties demonstrates the necessity of a computationally intensive approach if the best development strategy is to be realized.