Social cost-benefit analysis in practice: Some reflections in the light of case studies using Little-Mirrlees techniques

This paper reviews case studies of SCBA using Little-Mirrlees methodology, in the light of earlier criticisms of the method. Two classes of criticisms are considered — first-order or transcendental, and second-order or immanent. While there were many differences between the case studies, it was found that with respect to second-order criticisms some (but not all) of the suggested pitfalls had been avoided in the best studies. But the first-order criticisms remained of fundamental importance in shedding doubt on the basis of SCBA: in particular this applied to the definition and derivation of social objectives, to the political economy of decision-making and to the question of factors making for dynamic versus static allocational efficiency.     

Teaching Business Ethics: Theory and Practice

Business ethics teaching can be improved when ethicists integrate the ethical theories they apply to business with the organizational design of the course. By utilizing three techniques – implementing a Total Quality Management-style survey and review, nominating and electing class virtues, and telling personal stories of moral action – classes can be organized to operate by the social contract, rights, stakeholder, and virtue theories that dominate business ethics literature. Classes then become laboratories for the practical articulation and application of the theories as well as providing real examples of the theories in action. This methodology produces benefits for the particular class and for the development and refinement of the theories themselves.This paper describes each of the three pedagogical techniques; and then explicitly relates them to these leading business ethics theories to demonstrate how the integration can lead to a community seeking and discovering moral truth in the classroom.     

The four things a service business must get right

Many of the management tools and techniques used in service businesses were designed to tackle the challenges of product companies. Although they are valuable to service managers, they aren't sufficient for success. In this article, Harvard Business School's Frei explains why and urges companies to add some new ones to the mix. After years of extensive research and analysis, she offers an approach for crafting a profitable service business based on four critical elements: the design of the offering, employee management, customer management, and the funding mechanism. Just like a product that's going to market, a service needs to be compellingly designed, and management must field a workforce capable of producing it at an attractive price. Additionally, however, service firms must manage their customers, who do not simply use the service but also can be integral to its production: Because customers' involvement as producers can wreak havoc on costs, companies must also develop creative ways to fund their distinctive offerings, by providing a self-service alternative, for example, or by offsetting expenses with operational savings. A close look at successful service businesses--Wal-Mart, Commerce Bank, the Cleveland Clinic, and others--reveals that effective integration of the four elements is key. There is no "right" way to combine them; the appropriate design of one depends upon the other three. If managers don't get all four pulling together, they risk pulling the enterprise apart. Incumbents can fend off attacks from highly focused upstarts by becoming multifocused--that is, by pursuing multiple niches through optimized service models rather than trying to cover the entire waterfront with one model. Shared services within a firm (functions such as HR and finance) can help, since they will enable it to generate economies of scale and experience across models.     

The optimal extent of discovery

We characterize how the process of publicly gathering information via discovery affects strategic interactions between litigants. It allows privately informed defendants to signal through the timing of settlement offers, with weaker ones attempting to settle prediscovery. Discovery reduces the probability of trial. Properly designed limited discovery reduces expected litigation costs. Stronger defendants gain more (lose less) from a given amount of discovery. We find that the court should grant more discovery when defendants are believed to be stronger and should grant discovery on more efficient sources of information, leaving less efficient ones to trial.     

Multidimensional trust building in e-retailing: Cross-cultural differences in trust formation and implications for perceived risk

The importance of trust in consumers' purchase decisions in e-retailing is of significant interest to retailers. As retailing becomes increasingly globalized, retailers are more interested in cultural differences related to purchase decisions. This empirical study researches how cultural factors are related to multiple dimensions of trust and trust building. Although previous research has examined the influence of trust as a one-dimensional construct, this research examines three dimensions of the trust construct—competence, benevolence and integrity. This research proposes that cultural values will have an impact on how consumers with Eastern vs. Western cultural backgrounds form their trust of e-retailers and how that trust influences their interactions with e-retailers. It focuses on differences between USA (n=252) and Korean (n=256) online customers. It examines how two significant trust forming antecedents, reputation and website quality, affect the three dimensions of trust in the two different cultures, and how the trust dimensions impact two significant consequences, willingness to depend on the e-retailer and related perceptions of risk when dealing with e-retailers.