(Noisy) communication

Communication is central to many settings in marketing and economics. A focal attribute of communication is miscommunication. We model this key characteristic as a noise in the messages communicated, so that the sender of a message is uncertain about its perception by the receiver, and then identify the strategic consequences of miscommunication. We study a model where competing senders (of different types) can invest in improving the precision of the informative but noisy message they send to a receiver, and find that there exists a separating equilibrium where senders’ types are completely revealed. Thus, although communication is noisy it delivers perfect results in equilibrium. This result stems from the fact that a sender’s willingness to invest in improving the precision of their messages can itself serve as a signal. Interestingly, the content of the messages is ignored by the receiver in such a signaling equilibrium, but plays a central role by shaping her beliefs off the equilibrium path (and thus, enables separation between the types). This result also illustrates the uniqueness of the signaling model presented here. Unlike other signaling models, the suggested model does not require that the costs and benefits of the senders will be correlated with their types to achieve separation. The model’s results have implications for various marketing communication tools such as advertising and sales forces.

Choice under restrictions

Nearly every decision a person makes is restricted in some way. While we are painfully aware of some of these restrictions, others go largely undetected. This paper presents a conceptual framework for understanding how restrictions interact with situational and individual characteristics, as well as goals to influence behavior. Implications for overlooked research opportunities in choice modeling are presented and discussed.     

Is property assessment really essential for taxation? Evaluating the performance of an ‘Alternative Assessment’ method

Many countries evade the formal valuation of real property for taxation purposes by using qualitative and spatial criteria in order to pursue an equitable distribution of burden. This paper evaluates the performance of a prototypical setup as such, by analyzing the relationship between property value, household income and the actual tax paid, in the exact framework of which the qualitative criteria are set to determine tax assessment. Drawing on detailed data from the Israeli Household Expenditure Surveys 1997–2005, the strong correlation between the three variables is evident. Yet, the limited differences in rates, compared with large variation in property value, make it regressive. Policy implications are relevant for many other countries using non-ad valorem taxation.     

A demand‐based perspective on sustainable competitive advantage

We develop an approach to analyzing the sustainability of competitive advantage that emphasizes demand‐side factors. We extend the added‐value approach to business strategy by introducing an explicit treatment of how firms create value for consumers. This allows us to characterize how consumer heterogeneity and marginal utility from performance improvements on the demand side interact with resource heterogeneity and improving technologies on the supply side. Using this approach, we address a variety of questions including whether technology substitutions will be permanent or transitory; the sequence in which new technologies attack different market segments; how rents from different types of resources change over time; whether decreasing marginal utility and imitation give rise to similar rent profiles; the extent of synergies within a firm's resource portfolio; the emergence of new generic strategies; and the conditions that support strategic diversity in a market. Our focus on consumer utility and value creation complements the traditional focus in the strategy literature on competition and value capture. Copyright © 2006 John Wiley & Sons, Ltd.     

An Institutional Theory Perspective on Corruption: The Case of a Developing Democracy

The purpose of this paper is to use quantitative data to describe corruption in the SANPS, and use Luo's ( 2005 ) institutional theory to gain insights into how corruption develops and remains entrenched despite the introduction of anti‐corruption legislation. A total of 1,500 questionnaires were distributed to public servants in nine provinces, but predominantly in Kwa Zulu Natal and Gauteng. There were 702 returned giving a response rate of 47%. We conclude that the findings discussed in this paper lend support for Luo's theoretical model being able to provide insight into the development of corruption, its consequences and possible remedies.     

Are Incentives the Bricks or the Building?

The efforts of economists to emphasize the importance of incentives as determinants of organizational performance, while successful to some degree, may have left the mistaken impression that "getting the incentives right" is the only task requiring the attention of senior executives when designing corporate organizations. The author identifies the incentive-intensive companies envisioned by economists as "mercenary organizations" (or MOs), or companies whose distinguishing feature is near-complete reliance on financial rewards and controls. Citing the difficulties of devising an effective incentive system that cannot be gamed (which he calls the organizational equivalent of "an anti-gravity machine"), the article questions whether such organizations are likely to yield superior performance.
As an alternative to paying more attention to incentive design, the author suggests devoting more corporate resources to seeking and attracting individuals with low "monitoring costs." After holding up examples of top executives who appear committed to that search, the author posits a "character-rich" organization (CRO) as an alternative to the MO of the economists.
Then, viewing all companies as occupying points on a continuum with the MO and CRO as its poles, the author argues that all companies combine elements of both kinds of organizations. And perhaps most important, the CEOs of many of the most successful large organizations, without minimizing the importance of incentives, pay even greater attention to the search for trustworthy individuals and the creation of a culture of teamwork and accountability.     

The Incidence of the Land Use Regulatory Tax

Land use regulation has been found to impose a substantial tax on housing within select U.S. metropolitan areas. In this article, we develop hypotheses regarding the incidence of this tax by income class and racial group within these areas. Parcel‐level data from Miami‐Dade County, Florida, are used to test our hypotheses. We find that, while the tax rises with a household's permanent income, this rise is less than proportional, making it a regressive tax. We also find, controlling for household permanent income, that the tax is a higher percentage of the price of homes located in black neighborhoods in comparison to those located in white or Hispanic neighborhoods.     

The Methodological and Ethical Issues of Conducting Management Research in the Voluntary Sector

This article discusses the methodological and ethical issues involved in conducting research in the voluntary sector. By outlining a proposed research strategy the authors highlight the challenges and issues that voluntary sector researchers face. The article concludes that the nature of the voluntary sector and the unique characteristics of voluntary organizations not only impact on the development of voluntary sector management theory but also on the research design, ethics and practices adopted for empirical studies into voluntary organizations.     

Management initiatives and just-in-time manufacturing

Numerous benefits have been claimed for firms that implement just-in-time (JIT) approaches to manufacturing. While a fair number of Western firms have been successful at such implementations, other firms that could benefit appear to be addressing only a few features rather than the overall philosophy and system. This paper considers whether each of a number of management initiatives is necessary for the implementation of just-in-time manufacturing. A case-based research methodology was used for theory testing at six plants, each which claimed to be implementing just-in-time manufacturing. Data were obtained via interviews, questionnaires, direct observation, and collection of documents. Of six management initiatives considered, four were supported as necessary conditions for both JIT flow and JIT quality, as well as for employee involvement. These four are: (1) promotion of employee responsibility, (2) provision of training, (3) promotion of teamwork, and (4) demonstration of visible commitment. The other two management initiatives were rejected as necessary conditions. These are: (1) provision of workforce security, and (2) use of group performance measures. The results also indicated that employee involvement plays a central role in JIT implementation.