PIMS and BCG: New horizons or false dawn?

Strategic market opportunities arise either because a firm is exceptionally well placed competitively or because it recognizes the opportunity, on the basis of private information, before others. Strategic market analysis must reflect these two possible routes to attractive opportunities. Both the approaches developed by the Strategic Planning Institute (SPI) through its Profit Impact of Market Strategy (PIMS) and the Boston Consulting Group's (BCG) growth/share matrix fail to reflect the full impact of competitive expectations and risk. Analysis of PIMS data should be directed more towards generalities of limited direct economic significance whereas the BCG approach should be used mostly in the context of experience curve effects. Neither approach should dominate a full analysis of the specific nature and critical ambiguities in any strategic option.     

Evolutionary economics and the counterfactual threat: on the nature and role of counterfactual history as an empirical tool in economics

Counterfactual conditional statements are ubiquitous in any scientific endeavour. This paper contains an analysis of the nature of counterfactual conditionals and the conditions under which they are considered assertable by scientists. The paper then applies this analysis to the use of counterfactuals in evolutionary economics, arguing that because evolutionary economics is inherently concerned with historical processes it cannot avoid the use of counterfactual history as one of its tools of empirical analysis. We discuss the strengths and pitfalls of counterfactual history. We argue that because evolutionary economics starts from the foundation that randomness may be inherent in any economic system, the very aspects of evolutionary economics that make counterfactual history a desirable empirical tool also make that tool difficult to employ. RID="*" ID="*" We thank the participants of the International Seminar on Evolutionary Economics as a Research Programme in Stockholm, May 1997, for many helpful comments. We also thank Lorri Baier for many helpful substantive and textual comments. Correspondence to: R. Cowan     

Uncertainty, co-ordination and path dependence

Our objective is to assess whether dynamics hinder or assist co-ordination in a game with strategic complementarities. We study two dynamic aspects: different agents make decisions at different points in time; and extra information about a payoff-relevant state of nature becomes available over time. We find that the dynamic resolution of information matters most for uniqueness of equilibrium. This is demonstrated by showing that the condition for uniqueness is weaker when learning occurs. We also analyse how successfully agents co-ordinate when there is a unique equilibrium. Finally, we show that path dependence occurs: the order in which signals arrive matters, as well as the total amount of information received.     

What did Medicare do? The initial impact of Medicare on mortality and out of pocket medical spending

We study the impact of the introduction of one of the major pillars of the social insurance system in the United States: the introduction of Medicare in 1965. Our results suggest that, in its first 10 years, the establishment of universal health insurance for the elderly had no discernible impact on elderly mortality. However, we find a substantial reduction in the elderly's exposure to out of pocket medical expenditure risk. Specifically, we estimate that the introduction of Medicare was associated with a 40% decline in out of pocket spending for the top quartile of the out of pocket spending distribution. A stylized expected utility framework suggests that the welfare gains from such reductions in risk exposure alone may be sufficient to cover almost two-fifths of the costs of Medicare. These findings underscore the importance of considering the direct insurance benefits from public health insurance programs, in addition to any indirect benefits from an effect on health.     

Positional embeddedness in a community source software development project network: the importance of relationship intensity

This study examines those job and relationship characteristics that explain the positional embeddedness of individuals working in a multi‐organization project network. The analysis focuses differentially on three levels of relationship intensiveness: communication, coordination, and collaboration. Data were collected on the work relationships of 46 technical and administrative personnel involved in the Kuali Financial System, a community source software development project involving 12 organizations, 10 of which were colleges and universities, spread across the United States. Results were generally supportive of the hypotheses. Specifically, positional embeddedness was explained by characteristics of the project worker including the task performed, time spent on the task, and influence, as well as the ease of access to others. There was, however, little consistency in the explanatory power of these factors when comparing across levels of relationship intensity. Findings have implications for design of complex research and development projects that involve interactions across multiple organizations.     

Attention allocation to multiple goals: The case of for‐profit social enterprises

The complexity of issues firms have to attend to make it impossible for CEOs to give their full attention to all issues concurrently. Drawing on the “attention‐based view” of the firm, this paper opens the black box of attention allocation in for‐profit social enterprises by showing how attention structures and the context in which the firm operates interplay. Utilizing empirical data on 148 for‐profit social enterprises, findings show that the attention structures—other‐regarding values, utilitarian identity, and resource availability—have a significant impact on the relative attention to social goals, while past firm performance as a context variable moderates these relations. Applying the principles of structural and situated attention, this paper makes an important contribution to management theory and attention allocation in for‐profit social enterprises. Copyright © 2014 John Wiley & Sons, Ltd.     

Customer perceived value,satisfaction, and loyalty: The role of switching costs

It is a marketplace reality that marketing managers sometimes inflict switching costs on their customers, to inhibit them from defecting to new suppliers. In a competitive setting, such as the Internet market, where competition may be only one click away, has the potential of switching costs as an exit barrier and a binding ingredient of customer loyalty become altered? To address that issue, this article examines the moderating effects of switching costs on customer loyalty through both satisfaction and perceived‐value measures. The results, evoked from a Web‐based survey of online service users, indicate that companies that strive for customer loyalty should focus primarily on satisfaction and perceived value. The moderating effects of switching costs on the association of customer loyalty and customer satisfaction and perceived value are significant only when the level of customer satisfaction or perceived value is above average. In light of the major findings, the article sets forth strategic implications for customer loyalty in the setting of electronic commerce. © 2004 Wiley Periodicals, Inc.     

Toward the development of a multidimensional scale for improving evaluations of Business Ethics

This study represents an improvement in the ethics scales inventory published in a 1988 Journal of Business Ethics article. The article presents the distillation and validation process whereby the original 33 item inventory was reduced to eight items. These eight items comprise the following ethical dimensions: a moral equity dimension, a relativism dimension, and a contractualism dimension. The multidimensional ethics scale demonstrates significant predictive ability.Dr Reidenbach is the Director of the Center for Business Development and Research and Professor of Marketing at the University of Southern Mississippi. He is the co-author of two books on business ethics and has contributed numerous articles on ethics to various academic and applied business journals. Dr Donald P. Robin, Professor of Business Ethics and Professor of Marketing, is co-author with Dr R. Eric Reidenbach of two recent books (1989) on business ethics. Both books, Business Ethics: Where Profits Meet Value Systems and Ethics and Profits: A Convergence of Corporate America's Economic and Social Responsibilities were published by Prentice-Hall. Dr Robin is a frequent lecturer on business ethics and has written several articles on the subject for both ethics and business journals.