Insider Trades and Private Information: The Special Case of Delayed-Disclosure Trades

In certain circumstances, insider trades such as private transactionsbetween executives and their firms could be disclosed afterthe end of the firm's fiscal year, on a Form-5 filing. We findthat insider sales disclosed in such a delayed manner for largefirms are predictive of negative future returns (–6 to–8 percent), as well as lower future annual earnings relativeto analyst forecasts. These results stand in contrast to existingfindings on the uninformativeness of quickly disclosed open-marketinsider sales. The Sarbanes-Oxley Act curtailed the use of Form5 under the presumption that managers used this vehicle opportunistically.Our systematic evidence supports this presumption.     

Marketing executives' perceptions of equitable salary increases

Employees' perceptions of fair and equitable salary increases is the subject of this article. Factors hypothesized to be the major determinants of the “perceived amount of pay that should be received” in Lawler's model of pay satisfaction are employed as predictor variables in a multiple regression equation context to explain the observed variation in executives' perceptions of fair and equitable salary increases. A national sample of industrial marketing executives were surveyed. A significant relationship was observed between employees perceptions of fair and equitable salary increases and a number of perceived personal job input and job demands related variables, current salary and wage history, and perceived non-monetary outcomes which are theorized in Lawler's model to be among the major determinants of the perceived amount of pay that should be received.     

Does Distance Still Matter? The Information Revolution in Small Business Lending

The distance between small firms and their lenders is increasing, and they are communicating in more impersonal ways. After documenting these systematic changes, we demonstrate they do not arise from small firms locating differently, consolidation in the banking industry, or biases in the sample. Instead, improvements in lender productivity appear to explain our findings. We also find distant firms no longer have to be the highest quality credits, indicating they have greater access to credit. The evidence indicates there has been substantial development of the financial sector, even in areas such as small business lending.     

Brand portfolio, corporate image, and reputation: Managing brand deletions

Brand portfolio management addresses, among other issues, the interrelated questions of what brands to add, retain, or delete. A small number of brands in a firm’s brand portfolio can often have a disproportionately large positive or negative impact on its image and reputation and the responses of stakeholders. Brand deletions can be critical from the standpoint of a firm being able to free up resources to redeploy toward enhancing the competitive standing and financial performance of brands in its portfolio with the greatest potential to positively affect its image and reputation. Against this backdrop, the authors focus on the organizational and environmental drivers of brand deletion propensity, the predisposition of a firm to delete a particular brand from its brand portfolio. The authors propose a conceptual model delineating the drivers of brand deletion propensity and suggest directions for future research, including the related concept of brand deletion intensity. Rajan Varadarajan (varadarajan@tamu.edu) is Distinguished Professor of Marketing and holder of the Ford Chair in Marketing and E-Commerce in the Mays Business School at Texas A&M University. His primary teaching and research interest is in the area of strategy. His research on strategy has been published in theJournal of Marketing, the Journal of the Academy of Marketing Science, theAcademy of Management Journal, theStrategic Management Journal, and other journals. Rajan served as editor of theJournal of Marketing from 1993 to 1996 and theJournal of the Academy of Marketing Science from 2000 to 2003. He currently serves on the editorial review boards of theJournal of Marketing, theJournal of the Academy of Marketing Science, theJournal of International Marketing, theJournal of Interactive Marketing and other journals. He is a recipient of a number of honors and awards, including the Academy of Marketing Science Distinguished Marketing Educator Award (2003), the American Marketing Association Mahajan Award for Career Contributions to Marketing Strategy (2003), and the Texas A&M University Distinguished Achievement Award in Research (1994). Mark P. DeFanti (mdefanti@tamu.edu) is a doctoral student in marketing at Texas A&M University. He received his M.B.A. from The University of Texas at Austin and his B.A. from Amherst College. His current research interests include brand portfolio management, corporate name changes, and business-to-business branding. His teaching interests include advertising, brand management, and marketing strategy. Paul S. Busch (p-busch@tamu.edu) is a professor of marketing in the Mays Business School at Texas A&M University. He received his Ph.D. from Pennsylvania State University. His research has been published in theJournal of Marketing, theJournal of Marketing Research, Decision Sciences, theJournal of Business Research, andBusiness Horizons. He serves on the editorial review boards of theJournal of Business-to-Business Marketing, theAsian Journal of Marketing, andMarketing Management. His research interests include buyer-seller relationships, business-to-business branding, and brand portfolio management. His teaching interests include promotional strategy and new product development.     

Interactivity in the electronic marketplace: An exposition of the concept and implications for research

It is widely recognized that a better understanding of interactivity and its implications is essential for facilitating research focused on the emerging electronic marketplace. However, deficiencies persist in our understanding of this important concept. Building on research in various fields of study (e.g., information systems, marketing, and computer-mediated communication), this article presents a conceptualization of interactivity from a marketplace perspective that is missing or inadequately articulated in the literature. Specifically, interactivity is conceptualized as a characteristic of computer-mediated communication in the marketplace that increases with the bidirectionality, timeliness, mutual controllability, and responsiveness of communication as perceived by consumers and firms. The article concludes with a research agenda focusing on issues relating to measurement, conceptual refinement, and management of interactivity in the electronic marketplace. Manjit S. Yadav (yadav@tamu.edu) is an associate professor of marketing and Mays Research Fellow, Department of Marketing, Mays Business School, Texas A&M University. He obtained his Ph.D. in marketing from Virginia Tech. His current research focuses primarily on strategic issues related to the Internet and the electronic marketplace. He has published in a number of journals including theJournal of Marketing Research, the Journal of Consumer Research, the Journal of the Academy of Marketing Science, andSloan Management Review. He is a member of the Editorial Review Board of theJournal of the Academy of Marketing Science and theJournal of Interactive Marketing. He is a recipient of the Faculty Distinguished Achievement Award in Teaching (Mays Business School, Texas A&M University). He cochaired the American Marketing Association’s Faculty Consortium on Electronic Commerce held at Texas A&M University. Rajan Varadarajan (varadarajan@tamu.edu) is a distinguished professor of marketing and holder of the Ford Chair in Marketing and E-Commerce in the Mays Business School at Texas A&M University. His primary teaching and research interest is in the area of strategy. His research on strategy has been published in theJournal of Marketing, theJournal of the Academy of Marketing Science, theAcademy of Management Journal, theStrategic Management Journal, and other journals. He served as editor of theJournal of Marketing from 1993 to 1996 and theJournal of the Academy of Marketing Science from 2000 to 2003. He currently serves on the Editorial Review Boards of theJournal of Marketing, theJournal of the Academy of Marketing Science, theJournal of International Marketing, theJournal of Interactive Marketing, and other journals. He is a recipient of a number of honors and awards including the Academy of Marketing Science Distinguished Marketing Educator Award (2003), the American Marketing Association Mahajan Award for Career Contributions to Marketing Strategy (2003), and the Texas A&M University Distinguished Achievement Award in Research (1994).     

Strategic alliances: A synthesis of conceptual foundations

Strategic alliances, a manifestation of interorganizational cooperative strategies, entails the pooling of specific resources and skills by the cooperating organizations in order to achieve common goals, as well as goals specific to the individual partners. Gaining access to new markets; accelerating the pace of entry into new markets; sharing of research and development, manufacturing, and/or marketing costs; broadening the product line/filling product line gaps; and learning new skills are among the motives underlying the entry of firms into strategic alliances. During the last decade, an increasing number of firms have entered into alliances with other firms within the same industry, as well as within other industries. Some firms have progressed well beyond forming isolated alliances to establishing a web of intra- and interindustry, and intra-and international strategic alliances. Against this backdrop, we provide a synthesis of the conceptual foundations of strategic alliances and explore the role of marketing in strategic alliances. His major research interests are in the areas of corporate, business, and marketing strategy. His research studies have been published in theJournal of Marketing, Journal of the Academy of Marketing Science, Academy of Management Journal, Strategic Management Journal, Sloan Management Review, California Management Review, Business Horizons, Journal of Business Research, and other journals. Her major research interests are in the areas of marketing ethics and international marketing. Her research studies have been published in theJournal of Marketing Education, The Philanthropist, andFestival Management and Event Tourism Journal.     

Structural properties of the price-to-earnings and price-to-book ratios

We examine the structural properties of a firm’s price-to-earnings (P/E) and price-to-book (P/B) ratios and the relation between these two ratios. A benchmark result is obtained under the hypothesis that firms use replacement cost accounting to value their operating assets, so that the P/B ratio coincides with Tobin’s q. The firm’s P/E ratio can then be expressed as a convex combination of the P/E ratios suggested respectively by the permanent earnings model and the Gordon growth model, with the relative weight to be placed on these two endpoints determined entirely by Tobin’s q. Under current financial reporting rules, the accounting for operating assets is likely to be more conservative than replacement cost accounting. Our findings characterize how the magnitude and behavior of the P/E and P/B ratios are jointly shaped by several key variables, including both past and anticipated future growth, economic profitability, and accounting conservatism     

THE CORPORATE PERFORMANCE CONUNDRUM: A SYNTHESIS OF CONTEMPORARY VIEWS AND AN EXTENSION

What characterizes superior organizational performance? The question has always fascinated practitioners and academic researchers, and a string of recent bestsellers attests to the current prominence of performance as an organizational issue. This article brings together recent perspectives on performance and provides some further conclusions of its own based on analysis of a new database. Articles on 74 companies rated by Business Month as being one of the five best-managed companies during each of the 15 years in the 1972–86 timeframe were content analysed in an effort to isolate the key strategic and organizational factors associated with superior corporate performance. Results indicate that superior performance is associated with a broad product line accompanied by geographic diversity, an emphasis on planning coupled with sound financial controls and reporting systems, a high level of commitment to product and process innovation, investments in modernization of manufacturing facilities, a reputation for superior quality and customer service, and progressive human resource management practices. These findings are compared and contrasted with the conclusions of other recent studies and implications of the findings for management are discussed. Far from being the result of applying any particular formula, superior performance is found to require a diverse mix of competencies and values.     

Compensating for the winner's curse: Experimental evidence

We conduct experiments on common value auctions with rationing. In each auction, the good is randomly allocated to one of the k highest bidders, at the (k+1)st highest price. When k>1, bidders are rationed. As the degree of rationing increases, the equilibrium bid function increases. Consistent with prior literature, we find that bidders suffer from the winner's curse and lose money on average. However, bids in the experiments do adjust in the appropriate direction as the degree of rationing changes, providing support for the comparative statics implications of the theory. Our results are consistent with subjects having an intuitive understanding of the winner's curse, but being unable to compute the equilibrium bid levels.     

Global business partnering among family-owned enterprises

This article focuses on foreign partnering in the family-owned business sector of a developing economy in Latin America. The article presents a report on four selected Brazilian companies. Following an analysis from a grounded theory perspective, the findings are discussed, and directions for future research are provided.