Risk Management by Securities Settlement Agents

As developing countries search for ways to promote capital formation through the establishment of organized exchanges, they will need to pay more attention to the role of risk management in the securities settlement process. The delivery-versus-payment (DVP) agents that facilitate the process of exchanging securities for funds in most world markets have both the incentive and comparative informational advantage to monitor, measure, and manage risks inherent in the securities settlement system.
Unfortunately, most DVP agents have accomplished this task to date through the cumbersome use of position and net debit limits, capital requirements, and collateral requirements. Such limits and requirements are almost everywhere based on relatively arbitrary criteria that may have no relation to the actual replacement cost, principal, or liquidity risk of the transaction, portfolio, or participant on which they are imposed.
To remedy this shortcoming in the current state of risk management at DVP agents, this article holds out the possibility of integrated, comprehensive risk management processes that emphasize and rely on forward-looking measures of risk for individual brokers and across brokers. Many risk measures could serve the settlement agent's purposes, including "value at risk" (or "VaR"), "below target risk,""below-target probability," and "downside semi-variance." The actual summary risk measure used for risk monitoring and control is not as important as the methodology used to generate that risk measure. "The goal of such a process," as the authors put it, "is to ensure that the risks to which a settlement agent and its residual claimants are exposed are those risks to which the agent's shareholders think they are and want to be exposed."     

Tactical Opportunities,Risk Attitude and Choice of Farming Strategy: an Application of the Distribution Method

When assessing farming strategies, it is important to account for the opportunities provided for tactically adjusting to outcomes of risk. The hypothesis that accounting for tactical adjustment is more important than accounting for risk attitude was supported in this study with regard to identifying the optimal drainage recirculation strategy for an irrigated dairy farm. Failing to account for tactical adjustment would lead to a sub-optimal choice, costing the farmer about A$3 100 in present value terms. In contrast, failing to account for risk aversion would not affect the strategy chosen. The distribution method was found to be well suited to modelling tactical adjustment.     

AN EVALUATION OF PROCESS‐ORIENTED SUPPLY CHAIN MANAGEMENT FRAMEWORKS

Supply chain management (SCM) is implemented by integrating corporate functions using business processes within and across companies. Several process‐oriented frameworks for SCM have been proposed but only two of these provide sufficient detail to enable implementation. We evaluate the Supply‐Chain Operations Reference (SCOR) framework and The Global Supply Chain Forum (GSCF) framework using four criteria and identify their relative strengths and weaknesses.     

The Contingent Value of Responsive and Proactive Market Orientations for New Product Program Performance*

While the benefits of being market oriented are largely accepted, a group of scholars and managers remain skeptical. Marketing scholars have sought to counter the criticisms leveled against market orientation (MO) by arguing that it has both responsive and proactive dimensions. However, few studies have empirically examined the complexity of the effects of these dimensions on firm performance. Drawing on theories of resource‐based advantage and organizational search behavior, this article advances understanding by arguing that responsive and proactive market orientations have curvilinear effects on product development performance, that their interaction may be positively related to product development performance, and that their effects on new product program performance are moderated differentially by the organizational implementation conditions and marketing function power. Survey results of 175 U.S. firms indicate support for most of the hypotheses. Specifically, whereas responsive MO has a U‐shaped relationship with new product program performance, proactive MO has an inverted U‐shaped relationship with new product program performance. Contrary to the arguments presented here, the interaction of both orientations is negatively related to new product program performance. This study finds that both orientations are needed; however, new product program performance is enhanced when one is at higher level and the other is at lower level. Finally, responsive MO is only positively related to new product program performance under specific conditions such as when strategic consensus among managers is high. On the other hand, the positive effect of proactive MO on new product program performance is further strengthened when learning orientation and marketing power are high. Overall, this study suggests that the effects of responsive and proactive MO on new product program performance are more complex than previously theoretically argued and empirically examined.     

The Diffusion of Calculative and Collaborative HRM Practices in European Firms

The aim of this paper is to trace and explain variations in calculative and collaborative human resource management (HRM) practices between companies and across national borders. Variations and similarities are explained in terms of the convergence and divergence of HRM practices determined by national institutions, and the increasing influence of multinational companies (MNCs). We explore the diffusion of HRM practices in Europe over time, using data sets from two surveys conducted in several European countries in 1995 and 2000. We use institutional explanations for the development of three selected bundles of HRM practices: individual, calculative performance‐oriented practices; collective incentive schemes for the alignment of interests; and collaborative practices that seek to enhance the commitment of employees. We found substantial effects of country‐specific institutions and of the country of origin of MNCs, which clearly support the institutional duality thesis. Foreign‐owned MNCs, especially those that are US‐based, appear to moderate country‐specific institutional effects on the diffusion of the three HRM bundles.     

Regulating B2B online reverse auctions through voluntary codes of conduct

In response to real and perceived abuse by market makers, buyers, and sellers, some industry trade groups representing suppliers have developed voluntary codes of conduct, white papers, and other forms of guidance for online reverse auction participants. The intent of these guidelines is to improve both the reverse auction process and relationships between buyers and sellers. This paper examines the rationale for creating guidelines and codes of conduct, and examines their efficacy in regulating reverse auctions to achieve improved outcomes for market makers, buyers, and sellers. Data from primary and related secondary sources indicate that industry-specific codes of conduct and guidelines have not had a favorable impact.     

Centre-State Resource Allocation in India: A Suggestive Mathematical Approach

Journal of Quantitative Economics - The paper tries to apply a new technique — the decomposition principle — to centre state financial relations in India. As, appropriate data are not...     

Initial public offerings in the gaming industry: an empirical study

The fastest growing segment of the hospitality industry is gaming-related business. This industry has experienced record numbers of companies going public, and their stocks are considered favorable long-term investments. Research in the initial public offering (IPO) area suggests that investors acquiring stock at the initial offering price earn large returns. The purpose of this study was to determine if large returns are being experienced for IPOs in the gaming segment of the hospitality industry, and if these large returns were limited to investors who purchased the stock at the initial offer price. There were 14 gaming-related companies selected for the study. The conclusions supported research reporting that the highest returns from IPO investments are made when the stock is purchased at the initial offer price. This study concludes that returns based on the initial offer price were greater than the casino index and the IPO index. When the investor purchased the stock at the first day's closing price, however, returns compared to the two indices were surpassed only after holding the stock for 8 weeks.     

Does management experience change the ethical perceptions of retail professionals: A comparison of the ethical perceptions of current students with those of recent graduates?

The purpose of this study was to extend the previous research on ethics in retailing. Prior research of Dornoff and Tankersley (1985–1976), Gifford and Norris (1987), Norris and Gifford (1988), and Burns and Rayman (1989) examined the ethics orientation of retail sales persons, sales managers, and business school students. These studies found the college students less ethically-oriented than retail sales people and retail managers. The present study attempts to extend the research on ethics formation to a geographically and academically diverse sample, and to determine if retail management experience in the form of a professional practicum or internship, or entry level management training programs, such as experienced by recent graduates, are critical factors in the formation of business ethics. The sample consisted of thirty-three students majoring in Human Ecology with a concentration in Retail Merchandising and 51 recent graduates of the retail Merchandising program. The series of fourteen vignettes developed by Dornoff and Tankersley (1975–1976) was used. An acknowledged limitation of this study is the validity of the questionnaire developed by Dornoff and Tankersley due to the method of development and new laws concerning warranties and credit etc. which have occurred since 1976. The instrument was used, however, to maintain consistency with earlier studies for the purpose of comparison of groups. No significant differences were found in the students' perceptions of the fourteen actions presented in the vignettes, but the range of the responses in the post-internship tests increased in many cases. The alumni appeared to be slightly more ethical than the students but not as ethical as the managers surveyed in 1986 by Norris and Gifford. Indications are that the critical point of ethics formation may be at the mid-management level and that internships and management training programs have little effect on the ethical perceptions of participants. These findings are consistent with studies such as Gable and Topol (1988), and Jordan and Davis (1990) which showed high Machiavellian scores among young retailing executives, often buyers, as opposed to upper level retailing management. Scales with measure Machiavellianism, or manipulativeness, have been used as an alternative method of examining business ethics.Dr. DuPont is director of the Retail Merchandising Program at The University of Texas at Austin. She held numerous executing retailing positions with Federated Stores and Associated Dry Goods before entering academia. Dr. DuPont has established and supervised retail merchandising programs at two state universities. She has published work related to retail internships, human relations, and employer evaluation and motivation.Dr. Craig teaches in the Textiles and Apparel area at The University of Texas at Austin. She did a dissertation concerning entrepreneurship in the apparel industry.