Institutional Market Power in Comté: Insights from a ‘Double Marginalisation’ Model

This article explores the economic efficiency of a horizontally and vertically coordinated industry where upstream producers are atomised, but downstream processors are few, explicitly considering participation incentives and allowing the coordinated industry to exert market power towards buyers. The model offers insight into the probable social impacts of the government‐sanctioned supply control scheme in place in the French Comté cheese market, suggesting it falls short of constituting a Pareto‐improvement compared with a laissez‐faire situation. More generally, our theoretical model provides guidance to identify instances where encouraging industry coordination may be socially desirable. We formally introduce the concept of ‘seller‐equivalent degree of overall market power’ of the separated industry, a market characteristic comprised of measurable or inferable parameters, the value of which is shown to determine the potential for Pareto improvements through industry integration.     

Can farmers extend their cultivation areas in urban agriculture? A contribution from agronomic analysis of market gardening systems around Mahajanga (Madagascar)

The rapid urbanization in developing countries implies an increasing pressure on urban agriculture for production. As most perishable food products come from this agriculture in close proximity to population concentrations, we analysed from an agronomic point of view how market-garden farmers can meet this increasing urban demand. This work took place in the case of Mahajanga, a secondary city with high increasing demographic rate on the Northwest coast of Madagascar. Based on preliminary surveys to characterize the farming systems (on a sample of 91 farms), 11 market-garden farmers chosen in the three main agricultural zones of the urban area were surveyed during two years. Surveys aimed at understanding their decision rules in crop choices, crop allocation to land and resource management, and to estimate their room for manoeuvre to increase their leafy vegetable areas under cultivation. The wholesalers and retailers who buy the farmers’ produce were also surveyed. A previous model of decision rules regarding crop location on farm territory was used to analyse the on-farm surveys and cartographic methods (GIS and on-farm manual representations) were used to quantify the land use. We highlight the following major points. (1) The leafy vegetable production in the surveyed farms already intensively uses land: farmers have complex decision rules largely depending on the water dynamics in the two main environments (lowlands and lakesides) where leafy vegetables are cultivated during the dry season. (2) The scarcity of farmers’ resources (labour money and water) leads to very little internal room for manoeuvre to increase the leafy vegetable production in the farms. (3) At territorial level however, some land reserve exist in one of the lowlands, but not on lakesides. The water availability for agriculture must be better informed through specialized hydrologic studies, as one of the main constraints nowadays to extend the agricultural area. An extrapolation to other cases of urban agriculture is then discussed as well as the role of agronomy to help urban planners to consider the place of agriculture in the urban development.     

FOREIGN ENTRY,CULTURAL BARRIERS,AND LEARNING

This paper examines the longevity of foreign entries. Hypotheses are developed on the mode (start-ups vs. acquisitions) and ownership structure (wholly owned vs. joint ventures) in relation to cultural distance. The hypotheses are tested within a framework of organizational learning, using data on 225 entries that 13 Dutch firms carried out from 1966 onwards. Results show that the presence of cultural barriers punctuates an organization's learning. Cultural distance is a prominent factor in foreign entry whenever this involves another firm, requiring the firm to engage in ‘double layered acculturation.’ We also identify locational ‘paths of learning.’ The longevity of acquisitions is positively influenced by prior entries of the firm in the same country. Similarly, the longevity of foreign entries, in which the firm has a majority stake, improves whenever the expanding firm engaged in prior entries in the same country and in other countries in the same cultural block.     

CUSTOMER POWER,STRATEGIC INVESTMENT,AND THE FAILURE OF LEADING FIRMS

Why might firms be regarded as astutely managed at one point, yet subsequently lose their positions of industry leadership when faced with technological change? We present a model, grounded in a study of the world disk drive industry, that charts the process through which the demands of a firm's customers shape the allocation of resources in technological innovation—a model that links theories of resource dependence and resource allocation. We show that established firms led the industry in developing technologies of every sort—even radical ones—whenever the technologies addressed existing customers' needs. The same firms failed to develop simpler technologies that initially were only useful in emerging markets, because impetus coalesces behind, and resources are allocated to, programs targeting powerful customers. Projects targeted at technologies for which no customers yet exist languish for lack of impetus and resources. Because the rate of technical progress can exceed the performance demanded in a market, technologies which initially can only be used in emerging markets later can invade mainstream ones, carrying entrant firms to victory over established companies.     

STRATEGY AND CONTROL IN SUPPLIER–DISTRIBUTOR RELATIONSHIPS: AN AGENCY PERSPECTIVE

This paper examines the influence of competitive strategy on the relationship between suppliers and their distribution networks. Drawing on agency theory, hypotheses are developed specifying the appropriate match between manufacturer strategies and systems of control within distribution channels. Cluster analysis is used to show distinct differences in channel management and structure for the three generic strategies of cost leadership, differentiation and focus. Results suggest that variation in control relationships may be explained by the demands posed by manufacturers' competitive strategies. This study therefore extends the applicability of Porter's typology to the specific structure of distribution channels and shows that agency theory can provide insights into the economic basis of interorganizational relationships.     

Toxic hazard reduction with passive mitigation systems

A major component of the United States Environmental Protection Agency's 112(r) Risk Management Program Rule is the evaluation and control of potential public exposures to toxic chemicals. The rule requires identification and evaluation of a worst case accidental toxic release scenario, but provides for the inclusion of passive mitigation systems in modeling the dispersion hazard zones that are to be communicated to the public. These passive mitigation systems can be taken into account in the consequence modeling if they will withstand the initiating event that causes the accidental release and function as intended. This paper discusses several passive mitigation systems that can be designed as an integral part of storage or processing of highly toxic chemicals. These include, but are not limited to, optimizing storage conditions, design of secondary containment, toxic vapor generation control, and enclosure design. The effectiveness of various passive mitigation systems is evaluated using consequence modeling for case studies involving highly toxic chemicals such as phosgene, chlorine, and ethylene oxide.     

The employee selection interview: A fresh look at an old problem

This article takes a fresh look at employee selection interviews as they are practiced in most organizations. Interviewers' selection decisions are demonstrated to be idiosyncratic and it is concluded that variation in interviewers' decision processes jeopardizes organizational effectiveness. Practical recommendations for improving employment interviews are offered. © 1996 by John Wiley & Sons, Inc.     

DEVELOPMENTS IN DANISH ENVIRONMENTAL REPORTING

Developments in environmental reporting in Denmark in the 1990s are described and also some interesting legal developments regarding the new Danish law requiring approximately 2000 companies to produce environmental reports. Some tentative speculations are offered about future directions for environmental reporting in Denmark and elsewhere.