Book Reviews

The first review is of a business novel that contains important lessons about teams and teamwork. The enjoyable story is based on the product development activities of a fictitious Fungible Company, and is an absorbing book to read. The second review covers a book on Total Quality Management (TQM). As our reviewer points out, this book deals with both the philosophy and tools, covering all aspects of TQM.
Finally, we inaugurate a new feature, Brief Notes. From time to time, we will provide short comments about books that may have a specialized or some limited value to practitioners.     

Hypothesis tests using data envelopment analysis

A substantial body of recent work has opened the way to exploring the statistical properties of DEA estimators of production frontiers and related efficiency measures. The purpose of this paper is to survey several possibilities that have been pursued, and to present them in a unified framework. These include the development of statistics to test hypotheses about the characteristics of the production frontier, such as returns to scale, input substitutability, and model specification, and also about variation in efficiencies relative to the production frontier.     

When promises become contracts: Implied contracts and handbook provisions on job security

In this article, policy capturing was used to examine how lawyers, as experts, understand the wording in employee handbook passages that promise procedural protections for employees. Specifically, how the wording of employee handbook passages can create both legal and nonlegal obligations was examined. Forty-six lawyers were asked to make the following judgments: whether the handbook passage constituted a legal or moral obligation and the chances of the employer winning or being granted a summary judgment in a wrongful discharge suit. Five aspects of the handbook passages were examined: verb strength, specificity, contract disclaimers, legalistic jargon, and the employee's signature.     

Ex ante assessment of the returns to livestock disease control in Indonesia

Agriculture's importance in the process of economic growth highlights the role of sustained advances in farm production practices by improving the quantity and quality of farm products. In this context, investment in improved agricultural technology continues to be an important avenue of assistance to the developing countries. However, the increased resource pressures facing both aid donors and recipients have emphasised the need for the prior assessment of the potential benefits of aid projects to assist effective aid planning and management. Here, the main requirements are to establish viable project goals for translation into effective programmes, to predict the likely project impacts, and to evaluate the potential benefits and costs of adopting the project's outcomes. An ex ante assessment of assistance in controlling a major livestock disease in Indonesia's eastern islands is described in this paper. The annual net benefits from controlling this disease ranged between $A0.45 and $A2.5 million according to the mortality rate reduction achieved. The benefits were shared between beef producers and consumers according to the market elasticity conditions assumed.     

Ecosystems,externalities, and economies

This paper incorporates an ecosystem model into a model of a simple economy. The decisionmaking agents in the ecosystem are individual organisms aggregated to the species level. A species may provide utility directly to humans, or it may provide utility indirectly because it is used either as a raw material in goods fabrication or as sustenance for other species. We describe a comparative static equilibrium of the ecosystem where species' demands for other species are equal to the supplies of those other species, and energy is conserved. The ecosystem is then embedded in the economy so that the effects of human intervention can be traced through both the ecosystem and the economy. Human intervention creates ecosystem externalities such that ecosystem equilibria are shifted and the new equilibria affect the utility or the production processes of other humans. This framework allows us to describe in principle which ecosystem services can be efficiently usurped by humans, which waste flows can be efficiently allowed into ecosystems, and which ecosystem organisms and physical attributes can be efficiently maintained.     

The Mode of Acquisition in Takeovers: Taxes and Asymmetric Information

We develop a model in which the mode of acquisition conveys information concerning the value of the bidder. The model incorporates the possibility that offers containing both cash and stock can be made in a setting consistent with the U.S. tax code. We demonstrate that bidders with unfavorable private information about their equity value choose offers containing some stock to avoid the capital gains tax consequences of cash offers. The model yields a number of unique predictions about the construction of acquisition offers. We present evidence consistent with the model.     

THE LAST MILE: AN EXAMINATION OF EFFECTS OF ONLINE RETAIL DELIVERY STRATEGIES ON CONSUMERS

The Internet has increased the level of importance of the end‐consumer market to transportation carriers. In two between subject experiments, carrier disclosure on retail merchant websites is examined as a strategic differentiation strategy. Predictions are offered concerning effects of carrier disclosure strategies on product delivery‐related expectations, consumer attitudes, and intentions to purchase a product online. Results from Study 1 reveal significant differences between disclosure and nondisclosure of the carrier for numerous product delivery‐related variables, as well as many differences between the six carriers examined in this first study. Study 2 extends these findings by showing that providing consumers with a choice of carrier leads to increased levels of satisfaction with the online experience and greater willingness to buy, relative to nondisclosure and disclosure strategies.     

A STRUCTURAL EQUATION MODEL OF SUPPLY CHAIN MANAGEMENT STRATEGIES AND FIRM PERFORMANCE

This research develops and analyzes a theoretical framework for supplier management and customer relationship strategies, supply chain management strategy, and firm performance using structural equation modeling. Data used in the paper were collected from a comprehensive survey circulated to a wide variety of U.S. and European business executives. Based on the findings, a clearer picture of the practice and benefits of SCM and its strategic implications emerges.     

Conditioning as disintegration

Conditional probability distributions seem to have a bad reputation when it comes to rigorous treatment of conditioning. Technical arguments are published as manipulations of Radon–Nikodym derivatives, although we all secretly perform heuristic calculations using elementary definitions of conditional probabilities. In print, measurability and averaging properties substitute for intuitive ideas about random variables behaving like constants given particular conditioning information.
One way to engage in rigorous, guilt-free manipulation of conditional distributions is to treat them as disintegrating measures—families of probability measures concentrating on the level sets of a conditioning statistic. In this paper we present a little theory and a range of examples—from EM algorithms and the Neyman factorization, through Bayes theory and marginalization paradoxes—to suggest that disintegrations have both intuitive appeal and the rigor needed for many problems in mathematical statistics.