A systematic review of risk management in innovation-oriented firms

Innovation and risk are inseparable. In fact, literature on innovation management often recommends that innovation-oriented firms must actively monitor, evaluate, analyze and treat future events in order to mitigate risks whenever possible. This approach is particularly important in emergent economies characterized by unstructured national innovation systems and constant economic and market instability. However, there has been no systematic effort to identify and categorize risks that potentially impact businesses based on innovation. Thus, we propose an interpretative framework of risk events with potential financial impact in innovation-oriented firms constructed and tested by means of a mixed studies review. The risk events were identified through a comprehensive systematic search and review of the published literature on risk and innovation. From the 115 works that were analyzed, it was possible to identify nine categories of risk events frequently associated with innovation-oriented businesses that may generate financial impacts. The proposed interpretative framework was tested in an empirical study with 13 innovation-oriented firms located in six Brazilian technological parks. Results from the empirical study suggest that managers found the proposed interpretative framework complete and comprehensive. Moreover, the empirical study signaled which risk events are more relevant for the Brazilian context. The proposed framework is a first necessary step for future development of ERM models applicable in innovation-intensive contexts.     

Welfare effects of unbundling under different regulatory regimes in natural gas markets

In this paper, we develop a theoretical model that enriches the literature on the pros and cons of ownership unbundling vis-à-vis lighter unbundling frameworks in the natural gas markets. For each regulatory framework, we compute equilibrium outcomes when an incumbent firm and a new entrant compete à la Cournot in the final gas market. We find that the entrant’s contracting conditions in the upstream market and the transmission tariff are key determinants of the market structure in the downstream gas market (both with ownership and with legal unbundling). We also study how the regulator must optimally set transmission tariffs in each of the two unbundling regimes. We conclude that welfare maximizing tariffs often require free access to the transmission network (in both regulatoy regimes). However, when the regulator aims at promoting the break-even of the regulated transmission system operator, the first-best tariff is unfeasible in both regimes. Hence, we study a more realistic set-up, in which the regulator’s action is constrained by the break-even of the regulated firm (the transmission system operator). In this set-up, we find that, for a given transmission tariff, final prices in the downstream market are always higher with ownership unbundling than with legal unbundling.     

Predicting effectiveness in global leadership activities

Given the importance of effective global leadership, both academics and practitioners alike have become increasingly interested in ways to develop successful global business leaders. This study of over two hundred global leaders found that high contact cross-cultural leadership development experiences and the leaders’ personality characteristics were predictors of effectiveness in global leadership activities. Testing hypotheses based on social learning theory and the contact hypothesis, extroversion is found to moderate the relationship between high contact cross-cultural leadership development experiences and effectiveness on global leadership activities: Highly extroverted leaders with a greater number of high contact cross-cultural leadership development experiences are the most effective on global leadership activities.     

Market Feedback,Investment Constraints,and Managerial Behavior

This paper examines the joint role of market feedback and investment constraints on managerial behavior. Using a sample of UK fixed price initial public offerings, we show that underperformance of share returns at the IPO significantly affects managerial investment decisions in the period after the offering. Firms with better investment opportunities and proportionately lower fixed (higher intangible) assets are more sensitive to negative market feedback. Over the longer term, the more responsive firms perform significantly better than their non‐responsive counterparts. The findings contribute to the debate on the informational advantage of managers over investors and present strong evidence that the market, on aggregate, can provide a superior assessment of a firm's opportunities. Managers who are able to respond to negative market feedback can significantly improve their firm's future prospects.     

From collective learning to Silicon Valley replication: The limits to synergistic entrepreneurship in Sophia Antipolis

Taking Silicon Valley as a “Weberian ideal type” of high-tech development, one can derive 10 key characteristics which together can be used to measure to what extent other regions of the world have been able to duplicate this “hot spot” of economic transformation. Comparisons of such synergistic entrepreneurship are illustrated by the case of Sophia Antipolis in France, characterized by initial large company involvement, a utopian environmental design by Pierre Laffitte and the process of high-tech innovation among small and medium-sized companies, particularly in the telecommunication sector.     

QRA of chemical reaction systems: The state of the practice

This paper discusses a quantitative risk assessment (QRA) of an exothermic chemical process. Fault tree/event tree techniques were used to estimate the frequency of runaway reactions that could result in over-pressure and vessel rupture. The paper focuses on the current methodology used in performing this type of study, emphasizing analytical techniques that help avoid potential time-consuming pitfalls. The challenging problem of predicting how rare sequences of events (e.g., involving failure of several engineered control and safety systems) will develop is systematically modeled using fault trees/event trees, which makes the QRA process a unique and powerful analytical tool. The results of this study provided the guidance for selecting the most appropriate action(s) to implement from a set of various design options for improving the safety of this system. Use of QRA has enabled plant management to have confidence that they are selecting the most cost-effective safety improvement option.     

Re‐Thinking Territorial Cohesion in the European Planning Context

The socio‐economic dimensions of cohesion have long been considered an integral part of Europeanization. However, recently a third dimension has been added to the Europe 2020 cohesion policy debate: territorial cohesion. Consequently this term is as yet undeveloped, resulting in a lack of consensus on how to define and interpret it. Such ambiguity represents a theoretical and empirical challenge to regional actors needing to respond to European Union (EU) directives while operationalizing the concept within their national and/or regional agendas. This article uses Portugal as a case study to examine how the concept of territorial cohesion is being interpreted and transposed from EU‐based to territorial‐based instruments and policy documents. First, we conducted a qualitative content analysis (QCA) of a selection of European and regional publications to compare their intrinsic discourses. This was followed by around 60 structured qualitative interviews, conducted with leading actors who had been instrumental in writing or implementing regional policy documents. On the basis of this dual analysis we conclude that, as a whole, the writers of the Portuguese strategic documents successfully transposed this concept, although perceptible differences exist between regions, as local actors have selectively redefined it to better suit their strategic priorities. These differences are debated with the aim of contributing to the design of effective public policies that facilitate inclusion, cohesion and Europeanization.     

Heterogeneity of plural forms: A revised transaction cost approach

Strategies pushing firms to adopt plural forms and the heterogeneity of solutions they endorse have attracted increasing attention. This paper proposes a theoretical framework that combines asset specificity and uncertainty to explain why there are plural forms and focuses on the key role of uncertainty, within a given range of asset specificity, to predict what and when specific types of plural forms should be observed. Propositions derived from this model are tested on an extensive set of cases from the agribusiness sector. The empirical richness of these cases allows going beyond the existing literature, which has essentially focused on franchising.     

Giving a voice to managers: forging the desire line through the creation of informal employee voice channels and productive resistance

Abstract

Within the extensive body of employee voice literature, the voice of the ordinary shopfloor employee has resonated loudly. The important role that line managers play in encouraging or inhibiting that voice has also been well documented. However, within the voice literature there has been silence with respect to line managers themselves being considered as voicers. In this paper, these missing managerial voices are amplified through the presentation of a case study of front and middle line manager voice within a university setting. Within this hierarchical organisation subject to increased managerialism, semi-structured interviews with 26 participants were conducted and it was found that line managers’ voice was thwarted due to relational and structural blockages in their formal voice channels. In some cases, this led to suppressed voice and a sense that line managers had no one to voice to. However, some managers were able to be creative and their actions led to productive resistance. While for others, these blockages motivated line managers to use covert ‘underground channels’ where their voice was raised informally and their interests could be advanced. The paper extends our knowledge by considering the line manager as a voicer, and not merely a manager of voice.     

Facility risk review as an approach to prioritizing loss prevention efforts

In large, complex facilities such as refineries and chemical facilities, it is difficult to identify and compare the risks from many different threats to personnel and production activities. Such a comparison, however, is worthwhile because managers can use this information in allocating limited loss prevention resources. A facility risk review (FRR), as described in this paper, is an effective means of identifying and ranking risks in a facility.