Are incentives without expertise sufficient? Evidence from fortune 500 firms

Agency theory predicts that incentives will align agents' interests with those of principals. However, the resource‐based view suggests that to be effective, the incentive to deliver must be paired with the ability to deliver. Using Fortune 500 boards as an empirical context, this study shows that the presence of directors who lack top‐level experience but own large shareholdings is negatively associated with firm value, an effect that increases in the number of such directors. Firm value rises after such directors depart from boards, with the greatest increases occurring when many of these directors leave. While agency theory highlights the importance of the right incentives being in place, this research suggests that this can be ineffective if the right resources are not also in place. Copyright © 2013 John Wiley & Sons, Ltd.     

First-mover (dis)advantages: retrospective and link with the resource-based view

This article reflects upon and updates our prize-winning paper, ‘First-mover advantages,’ which was published in SMJ 10 years ago. We discuss the evolution of the literature over the past decade and suggest opportunities for continuing research. In particular, we see benefits from linking empirical findings on first-mover advantages with the complementary stream of research on the resource-based view of the firm. © 1998 John Wiley & Sons, Ltd.     

Are Bank Mergers Good News for Shareholders? The Effect of Bank Mergers on Shareholder Value in Japan

This study investigates the effects of bank mergers on the welfare of affiliated client firms. The findings demonstrate that, in general, bank mergers increase the welfare of client firms. However, there are significant differences in the impact of a bank merger on client firms across different merger, bank, and firm characteristics. Client firms of banks involved in mega‐mergers do not enjoy an increase in welfare. Client firms of undercapitalized banks in fact suffer significant welfare losses. In the long‐run, weak “zombie” firms also in many cases experience welfare losses following the announcement of a merger by their main bank.     

An Overview of Six Sigma

We provide an introductory overview of the Six Sigma development and improvement processes. A historical perspective is provided. We also discuss the statistical methods frequently used within this framework and briefly comment on the impact of Six Sigma on the practice of statistics in industry.     

Belief-value structures as determinants of consumer behaviour: A study of housing preferences and choices

The role of consumers' belief-value structures was investigated in the context of residential preferences and simulated residential choices by means of a questionnaire answered by 36 adult Swedish respondents. Three models with different assumptions concerning how beliefs about the attainment of life values affect consumer behaviour were used for predicting preferences for and choices among hypothetical housing alternatives. A model assuming that the evaluation of a given alternative is determined by a weighted sum of the evaluations of the life values which it is believed to lead to, without specifying how individual attributes contribute to this value-fulfillment, was found to be the most successful one in predicting both preference ratings and choices. The results further suggested that whereas the age of the respondents and the format of the information about attributes may have an effect on belief-value structures, the ability to use such structures in order to predict preferences and choices may not be much affected by these factors. The present approach was compared with the laddering technique, and it was suggested that the two methods may be fruitfully combined in the study of consumer attitudes and behaviour.     

Corporate economic performance: Diversification strategy versus market structure

This paper incorporates both diversification strategy and market structure variables in a study of corporate economic performance. A subsample of 128 firms from Rumelt's 1974 study was updated and utilized to investigate the possibility that market structure variables might moderate or confound the diversification/performance relationship he reported. Study results indicate that performance differences could be demonstrated for some of Rumelt's categories, but, across the range of categories, a hypothesis of performance differences was rejected. As expected, categories associated with distinctly high or distinctly low economic performance were also associated with significant differences in a series of market structure variables.     

Developing Loyalty Programs for Convention Attendees: An Exploratory Study

Reward programs build loyalty for hospitality businesses. Such programs are rare in the convention industry, despite the fact that the industry is challenged to increase attendance while maximizing profits. This study evaluated the attributes of a possible reward program for convention attendees. Attendees at a large international convention completed a survey on which they rated potential reward program attributes and benefits. Benefits were classified into four primary dimensions: monetary, redemption, functional, and recognition; and two secondary categories: tangible–intangible and direct–indirect. Attendees prefer tangible, monetary rewards directly related to the convention. Suggestions are provided for creating effective reward programs that could increase loyalty for conventions.     

The impact of shopbot use on prices and price dispersion: Evidence from online book retailing

Internet price search tools, notably shopbots, have reduced consumers' search costs for price and product characteristics. While a variety of analytic models predict that increased consumer search will lower price levels among competing retailers, there is no consensus in the literature as to how price dispersion will change with increased consumer search. Moreover, there are no papers that have empirically tested these predictions using direct observation of variation in shopbot use over time.This paper examines the impact of changes in shopbot use over time on pricing behavior in the Internet book market. We do this by combining price and clickstream data collected from August 1999 to July 2001 — a period of rapid expansion in shopbot use. We find that a 1% increase in shopbot use is correlated with a $0.41 decrease in price levels and a 1.1% decrease in price dispersion.     

Bureaucrats as entrepreneurs: a case study of organic rice production in East Java

The sustainability of inorganic ‘green revolution’ rice-growing technology has been called into question because of the resulting depletion of soil quality and the susceptibility of crops to pest infestations. This, together with health concerns about the use of chemicals in the production of foods, raises the question of whether it might be feasible to return to organic methods for the production of rice in Indonesia. This paper describes an experiment along these lines. It was found that organic farming methods could be used with only a small decline in yields per hectare, but that local demand for organic rice produced domestically was not strong enough to generate sales at prices that would cover higher production costs. If organic farming methods are to be adopted in Indonesia, therefore, it may be necessary to focus on exporting to countries where there is a potentially strong consumer demand for organic rice.