Getting the most out of advertising and promotion

Until recently, believing in the effectiveness of advertising and promotion was largely a matter of faith. Despite all the data collected by marketing departments, none measured what was really important: the incremental sales of a product over and above those that would happen without the advertising and promotion. Thanks to a qualitatively new kind of marketing data, that situation is changing. "Single source" data correlate information on actual consumer purchases (available from universal-product-code scanners used in supermarkets and drug-stores) with information on the corresponding television advertising those consumers receive or on the promotion events they see. This allows managers to measure the incremental impact of advertising and promotion and to improve marketing productivity. To take advantage of the new single-source data, however, managers have to throw out much of the conventional wisdom about advertising and promotion that has grown up over the years. They must learn how to evaluate marketing differently by continually examining the appropriate balance between advertising and promotion. They must also train their sales force to do a different and extremely important job: to demonstrate to retailers the consumer pull of the company's advertising and promotion programs, as well as the effect of these programs on retailer profitability.     

Corporate Reporting in Central and Eastern Europe: Issues,Challenges and Research Opportunities

The purpose of this paper, building upon the papers included in this special section of Accounting in Europe on Corporate reporting in CEE countries and on our knowledge of the region, is to broaden out and open up dialogue and debate about how local institutions are evolving and impact the corporate reporting practices in this under-researched region. We begin by discussing the institutional context for conducting research on corporate reporting by entities in Central and Eastern Europe (CEE), within the broader context of emerging, transitional economies. We also reflect on how research conducted on CEE countries can make a relevant contribution to the international literature, and exemplify by summarizing the research questions and findings of the papers included in the special section. A future research agenda emerges, given the gaps in the international literature and the future research implications suggested in the papers constituting the special section.     

Collusive tax evasion and social norms

Although collusive tax evasion by buyers and sellers of commodities and also by employers and employees is widespread all over the world, it has rarely been analyzed in the tax evasion literature. To fill this gap and to compare collusive tax evasion with independent tax evasion, this paper develops a simple noncooperative game-theoretic model and confirms the model’s predictions in a laboratory experiment. Because collusive tax evasion involves social interaction, this paper focuses on the effect of social norms and theoretically and empirically demonstrates that the tax compliance norm has a stronger negative effect on the magnitude of collusive tax evasion than on independent tax evasion. The reason for this result is that in a collusive tax evasion game with multiple equilibria social norms affect the range of equilibria and act as an equilibrium selection device, whereas social norms need to be strongly internalized to change the behavior of taxpayers who evade taxes unobservedly.     

Unearthing the Integral Determinants of Foreign Ownership Prevalence of Companies in Africa: Role of Country-level Governance

ABSTRACT

This study seeks to deepen our understanding on how country-level governance structures influence prevalence of foreign ownership of firms in Africa. This study reinforces the new institutional economics perspective by empirically highlighting that governance structures influence the prevalence of foreign ownership of companies in an economy. Using archival data from 39 African economies, we found that there is a significant positive association between regulatory quality and foreign ownership prevalence. Also, foreign ownership is prevalent in African countries that are politically stable and embrace rule of law. However, we found that countries with high voice and accountability structures are associated with low foreign ownership prevalence.     

Human Resource Management in the Building Industry： International Comparison

This paper summarizes the results of the international questionnaire survey which took place at the start of 2013 in order to examine, judge, and compare the implemented concept and procedures of human resource management in the questioned building companies operating in the Visegrad Four countries （the Czech Republic, Hungary, Poland, and the Slovak Republic） and the Federal Republic of Germany, and proposes an optimal approach to human resource management in the context of the current and expected economic development. The questionnaire survey was based on the assumption that effective human resource management is a condition of the successful function of each building company and that human resource management is that area of management which distinguishes the successful building companies from the unsuccessful ones. In total, 202 companies from the Czech Republic, 105 companies from Hungary, 100 companies from Poland, 102 companies from the Slovak Republic, and 99 companies from the Federal Republic of Germany took part in the questionnaire survey. The results of the questionnaire survey showed that among the building companies questioned in individual countries, there was no substantial difference in the overall concept and in the partial procedures of human resource management. The implemented concept and procedures in the questioned building companies show significant merits and surprising shortcomings, whereas it is difficult to prove an unequivocal connection between the efficiency of human resource management and the success of building companies. This relationship is determined by a series of other political, economic, legal, social, cultural, technical, demographic, and natural effects which are not related to the efficiency of human resource management or to the performance of the workforce of building companies.     

Moving toward stakeholder-based HRM: a perspective of Italian HR managers

HR practices that look beyond focusing mainly on shareholders' interests to include a wider group of stakeholders are likely to result in a more effective HR system. This work examines Italian HR managers' perspectives of stakeholders and their perceived salience, based on data collected from 30 HR managers from the highest capitalization companies in the Milan Stock Exchange. The Mitchell, Agle and Wood model of stakeholder salience is applied to classify the stakeholders of the HR system into four clusters: definitive, dependent, discretionary and non-stakeholders. The results are discussed with reference to the body of knowledge on strategic HRM, putting forward specific managerial implications and proposing avenues for further research.     

Communication Flows in International Product Innovation Teams

Recently, we have witnessed a strong growth in the internationalization of many firms' product development activities. However, the lack of attention devoted by scientific research to the management of international innovation contrasts sharply with the importance attached to it as a cornerstone of international business success. Although several empirical studies and normative theories have specified the communication requirements in innovation teams, an empirically based insight is definitely needed on the communication requirements and requirements that prevail in the complex context of international innovation teams, in which the participants are located in different company units, countries, and cultures. This article addresses the following research question: viewing international innovation as an interfunctional activity, what are the communication requirements an international innovation team is facing, and what are the communication capabilities (interface mechanisms) that may be adopted to initiate, develop, and launch the new product effectively and efficiently? An extensive case study research project was designed to develop a comprehensive theoretical framework. Over a two year time period, the research team has investigated selected innovation projects in four European multinational corporations. The analysis of the case study data suggests five requirements that determine the effectiveness and efficiency of communication in international product development teams: network transparency, knowledge codification, knowledge credibility, communication cost, secrecy. To cope with these communication requirements, organizations may create firm level capabilities (parallel structures, cross‐functional and inter‐unit climate, communication infrastructure, goal congruence) and team level capabilities (core team, team leadership, formalization, procedural justice). The evidence from the in‐depth case study research indicates that these mechanisms provide a parsimonious and powerful approach to address the communication requirements in international product innovation teams. After the information processing framework proposed by Tushman and Nadler [124], the adoption of these mechanisms is expected to improve innovation effectiveness. This holds important consequences for the management of international product innovation projects. First, the innovating firm must balance centralization and decentralization, employ formal as well as informal strategies, and integrate ad‐hoc and permanent strategies. Second, it highlights the critical role of the project leader. Given the fact that companies often select the most available person, rather than the best person for the job, the allocation of light weight project leaders may create heavyweight problems in international teams. Third, following the argument in favor of procedural justice, the absence of involvement may severely hinder cross‐functional commitment to international innovation projects. Fourth, the innovating firm must also actively manage the communication flows with external parties. Failure to do so may result in flawed specifications, and a limited understanding about product design and market strategies.     

State-owned enterprises' political capital,city administrative rank and economic resources acquisition: Empirical evidence from Chinese capital markets

This paper examines the impact of Chinese State-Owned Enterprises' (SOE) corporate political capital and the administrative rank of the city where the firm is located on their ability to acquire economic resources. The study found that the stronger the political capital owned by SOEs and the higher the administrative rank of the cities in which SOEs were located, the easier it was for them to obtain more loans and subsidies. We also found that as the city administrative rank increased, the positive effect of SOEs' political capital on economic resources acquisition also increased. When SOEs were divided into commercial competitive versus specific functional enterprises, the administrative rank of the city in which the enterprise was located played a significant positive role in obtaining economic resources for commercial competitive enterprises, while the role of their political capital played a limited role. For specific functional enterprises, their own political capital played the more significant positive role. This paper expands the research scope of corporate political connections with a new perspective.     

Bernoulli speculator and trading strategy risk

In a continuous‐time model of a complete information economy, we examine the case of a “pure” speculator who chooses to trade only on forward or futures contracts written on interest‐rate‐sensitive instruments. Assuming logarithmic utility, we assess whether his strategy exhibits the same structure as when he uses primitive assets only. It turns out that when interest rates follow stochastic processes, as in the model of Heath, Jarrow, and Morton (1992), where the instantaneous forward rate is driven by an arbitrary number of factors, the speculative trading strategy involving forwards exhibits an extra term vis‐a‐vis the one using futures or primitive assets. This extra term, different from a Merton–Breeden dynamic hedge, is novel and can be interpreted as a hedge against an “endogenous risk,” namely the interest‐rate risk brought about by the optimal trading strategy itself. Thus, only the strategy using futures (or the cash assets themselves) involves a single speculative term, even for the Bernoulli speculator. This result illustrates another major aspect of the marking to market feature that differentiates futures and forwards, and thus has some bearing on the issue of the optimal design of financial contracts. Real financial markets being, in fact, incomplete, the additional “endogenous” risk associated with forwards cannot be hedged perfectly. Since using futures eliminates the latter, risk‐averse agents will find them attractive in relation to forward contracts, other things being equal. © 2000 John Wiley & Sons, Inc. Jrl Fut Mark 20: 507–523, 2000