Investor relations,reputational bonding,and corporate governance: The case of Royal Ahold

Royal Ahold (Koninklijke Ahold NV) was one of the major success stories in the 1990s and is one of the major failures, suffering a complete meltdown, in 2003. We investigate the strategy, investor relations, accounting transparency and corporate governance of Ahold; these elements jointly drive the firm’s performance over the past decade. Investor relations and its implications are an important but under researched aspect of the market’s belief formation process. For Ahold, investor relations is an important component of reputational bonding [Siegel, J., 2005. Can foreign firms bond themselves effectively by renting US securities laws? Journal of Financial Economics 75, 319–359]. Our clinical study documents investor relations’ influence on investor expectations. We then provide an in-depth analysis of the strategy, accounting transparency and corporate governance that lead to Ahold’s downfall. We provide insights and implications into these relationships that present theory and empirical studies have not fully addressed.     

A brand choice model for TV advertising management using single-source data

A brand choice model for TV advertising management using single-source data is proposed. The model replaces household-specific advertising exposure, which is often used as a covariate in a brand choice model, with gross rating points (GRP), a managerial control variable for advertising. In particular, given daily GRP, a probabilistic model of advertising exposure for heterogeneous customers is integrated into a brand choice model with advertising threshold under a Bayesian framework. Through hierarchical modeling, demographic information on panels provides managerial insights into advertising planning.     

The Multi-Sector Business Cycle Model and Aggregate Shocks: An Empirical Analysis

This paper discusses the applicability of a multi-sector business cycle model to the Japanese economy. Through dynamic factor analysis, output fluctuations are broken down into aggregate and sectoral shocks. It is shown that independent sectoral shocks are more significant than common shocks, which is consistent with the model proposed by Long and Plosser (1983). In addition, the paper reveals that the importance of aggregate shocks increased during the so-called "Bubble" period in the late 1980s.     

Who Faces Higher Prices? An Empirical Analysis Based on Japanese Homescan Data

On the basis of household‐level scanner data (called homescan data) for Japan, we construct a household‐level price index and investigate the causes of price differences across households. We observe large price differentials across households, a result that is consistent with the previous research based on the data in the USA. However, the differences across age and income groups are small. In addition, we find that elderly people face higher prices than the younger ones, which is contrary to the results of the previous research. The most important determinant of the price level is the extent to which households rely on bargain sales; doubling purchases of goods at bargain sales decreases the price level by about 2%, while shopping frequency only has a limited effect on the price level.     

Environmental Protection in the Presence of Unemployment and Common Resources

This paper examines the effects of an export tax (on a processed resource good), the number of harvesters and an afforestation policy in a small, open economy with urban unemployment. The export tax increases the urban unemployment rate, but improves the quality of the environment. Here, the optimal export tax is lower than the adjusted marginal environmental damage. Reducing the number of harvesters has a similar resource allocation effect to that of an export tax. However, the afforestation policy can resolve the trade‐off between urban unemployment and the quality of the environment and may also improve the welfare of a country.     

The Disciplining Role of Leverage in Dutch Firms

In this study we investigate the role of leverage indisciplining overinvestment problems. We measure the relationships between leverage, Tobin's qand corporate governance characteristics for Dutch listed firms. Besides, ourempirical analysis tests for determinants of leverage from tax and bankruptcy theories. Representinggrowth opportunities, q is expected to be an agency-based determinant of leverage.Simultaneously, q represents firm value, which is determined by leverage and governancestructures. We test a structural equations model in which we deal with this simultaneousnature of the relation between leverage and q. Our results indicate that Dutch managersavoid the disciplining role of debt, when they are most likely to overinvest. Leverage is mainlydetermined by tax advantages and bankruptcy costs. In addition, we test the impact ofleverage on excess investment. We do not find a difference in the influence of leverage oninvestment between potential overinvestors and other firms. This confirms that the disciplinary roleof leverage in Dutch firms is absent.     

Stakeholder Management Capability: A Discourse–Theoretical Approach

Since its inception, Stakeholder Management Capability (SMC) has constituted a powerful hermeneutic through which business organizations have understood and leveraged stakeholder relationships. On this model, achieving a high level of capability largely depends on managerial ability to effectively bargain with stakeholders and establish solidarity vis-à-vis the successful negotiation, implementation, and execution of "win–win" transactional exchanges. Against this account, it is rightly pointed out that a transactional explanation of stakeholder relationships, regarded by many as the bottom line for stakeholder management, fails to provide managerial direction regarding how to resolve a variety of normative stakeholder claims that resist commoditization. In response to this issue, this paper has two overlapping goals. It seeks to elaborate a discourse theoretical approach to the problem by first drawing out Jurgen Habermas’ theory of communicative action and delineating the various types of rational discourse. Second, the paper attempts to present concrete implications for SMC relative to reshaping the contours of rational, process, and transactional analysis in light of central discourse theoretical conclusions. Dr. Abe J. Zakhem works primarily in the areas of ethical theory and business ethics. He has worked in private industry as a senior management consultant and chief operating officer and is currently an assistant professor at Seton Hall University.     

Integrating business modeling and roadmapping methods - The Innovation Support Technology (IST) approach

The purpose of this paper is to report the integration studies of business modeling and roadmapping methods for the “Innovation Support Technology (IST)” and the IST's practical application to real-world cases. The IST is conducted for the purpose of offering a convenient tool for engineers and researchers in order to enhance corporate value from R&D outputs. “Japan's lost decade” has forced companies to change R&D management and R&D operation style, especially regional industries. We propose the framework for revitalization of regional industries by using the Strategic Technology Roadmap made by the Ministry of Economy, Trade and Industry (METI-TRM) with business modeling. We applied this IST method to several real-world cases to show its effectiveness. This study represents the result of over four years (fall 2002) of work with the value creation framework of the business modeling method for R&D outputs, done by a group of researchers from JATES (Japan Techno-Economics Society).