The real new economy

During the soar-and-swoon days of the late 1990s, many people believed that information technology, and the Internet in particular, were "changing everything" in business. A fundamental change did happen in the 1990s, but it was less about technology than about competition. Under director Diana Farrell, the McKinsey Global Institute has conducted an extensive study of productivity and its connection to corporate IT spending and use during that period. The study revealed that information technology is important--but not central--to the fate of industries and individual companies. So if information technology was not the primary factor in the productivity surge, what was? The study points to competition and innovation. In those industries that saw increases in competitive intensity, managers were forced to innovate aggressively to protect their revenues and profits. Those innovations--in products, business practices, and technology--led to the gains in productivity. In fact, a critical dynamic of the new economy--the real new economy--is the virtuous cycle of competition, innovation, and productivity growth. Managers can innovate in many ways, but during the 1990s, information technology was a particularly powerful tool, for three reasons: First, IT enabled the development of attractive new products and efficient new business processes. Second, it facilitated the rapid industrywide diffusion of innovations. And third, it exhibited strong scale economies--its benefits multiplied rapidly as its use expanded. This article reveals surprising data on how various industries in the United States and Europe were affected by competition, innovation, and information technology in the 1990s and offers insights about how managers can get more from their IT investments.     

Resettlement: Zimbabwe's first step

More than a year after independence, the main changes in agriculture in Zimbabwe have been minimum wage legislation, a high maize price accompanied by an exceptionally good growing season, the UNHCR (United Nations High Commission for Refugees) reinstallation and food programmes and the small beginnings of resettlement (and larger numbers of squatters). Certain food subsidies also affect rural areas although their greatest benefits accrue to those with urban incomes and urban diets. In addition the ‘former tribal trust lands’ are subject to increasing politicization as the newly elected district councils flex their muscles, providing at the same time an apparent attempt at decentralization and local participation with greatly increased expectations of assistance from the state. The future is uncertain, but it is evident that while the standard of living for the majority in rural areas remains so starkly low, the government will be forced to contend with sharply polarized forces, both within and outside the state apparatus, that seek to speed or dissipate the rate of change.     

U.S. inequality: Debt constraints or incomplete asset markets?

To examine the role of debt constraints and incomplete asset markets (lack of insurance markets) in explaining U.S. inequality, we run horse races between competing models. For a widely used model, we decompose inequality into its fundamental driving forces. The underlying source of inequality in all models is uninsurable idiosyncratic risk. Both debt constraints and incomplete asset markets are needed to account for inequality, but asset market incompleteness is the key friction. It better accounts for the concentration and dispersion of wealth, and is the most costly friction in terms of welfare. Tight debt constraints are important for explaining the lower tail of the wealth distribution.     

Urban recreation research: An overview

Despite the fact that the population of the United States ha shifted from largely rural to largely urban in this century, the commitment to research in recreation, inadequate as it is, has remained in the hinterlands. There is no critical mass of recreation researchers focusing on urban recreation as there now is focused on outdoor recreation. Urban recreation studies have been noncumulative in nature due to the wide range their sponsors, staff, substantive topics, lack of generalizability, and inevitable tensions between practitioners and researchers. Ironically, urban recreational research, and support of it, has diminished in this country at the same time that there has been an increasing concern for such information and knowledge. The future looks bleak insofar as the development of a strong, major, national urban recreation research program is concerned.     

On Ethically Solvent Leaders: The Roles of Pride and Moral Identity in Predicting Leader Ethical Behavior

The popular media has repeatedly pointed to pride as one of the key factors motivating leaders to behave unethically. However, given the devastating consequences that leader unethical behavior may have, a more scientific account of the role of pride is warranted. The present study differentiates between authentic and hubristic pride and assesses its impact on leader ethical behavior, while taking into consideration the extent to which leaders find it important to their self-concept to be a moral person. In two experiments we found that with higher levels of moral identity, authentically proud leaders are more likely to engage in ethical behavior than hubristically proud leaders, and that this effect is mediated by leaders’ motivation to act selflessly. A field survey among organizational leaders corroborated that moral identity may bring the positive effect of authentic pride and the negative effect of hubristic pride on leader ethical behavior to the forefront.     

The Structure of Problem Structuring Conversations: A Boundary Games Approach

One of the questions associated with facilitated problem structuring is how the micro level of actors’ multimodal communications, contributes to the emergence of a macro level, framing the possibilities for action in a workshop. This paper shows a way to study this macro level, building the visualization of the conversations’ structure starting from a boundary games theory micro analysis of the interactions. Our empirical evidence comes from following a group of academic consultants working to define a value proposition for their activity. We focus on analyzing two out of nine workshops that were felt diametrically opposite in terms of facilitation and achievements. Moving from the micro towards an upward level, three configurations building the structure are identified—shifting, branching and converging. The work carried out allows us to: (1) visualize the structure of conversations in a problem structuring context, (2) highlight the role of multimodal communications in building the conversations and (3) construct an interpretation bridging the micro and macro readings of a workshop. This knowledge is useful for facilitators guiding the dynamic of a workshop and for researchers looking forward to understanding how micro level interactions build higher levels of the social phenomenon of intervention.     

Science and Corporate Strategy: A Bibliometric Update of Hounshell and Smith

Hounshell and Smith's Science and Corporate Strategy: DuPont R&D, 1902- 1980 is one of the most comprehensive business history books ever written. In addition, it highlights the important relationship between corporate strategy and R&D activities. The purpose of this current paper is to update the information on DuPont's R&D activities using secondary data and bibliometrics. Our findings are that DuPont underwent a series of dramatic shifts in their R&D efforts during the 1980s and into the 1990s. For example, there was a focus on life sciences, a concerted attempt to reduce R&D, and an endeavour to align R&D more with core businesses. Beyond the bibliometrics, we found that corporate performance and changes in the top management team may have precipitated these changes in R&D. The implications of such relationships are also discussed.     

The Breakdown of Idiosyncratic Volatility Into Expected and Unexpected Components and Its Effects on Stock Returns in Brazil

Based on studies of idiosyncratic volatility developed in the recent literature, this study analyzes its relation with expected returns through the breakdown of idiosyncratic volatility in the Brazilian stock market and presents evidence of the importance of expected idiosyncratic volatility for asset pricing. We study the impact of the expected and unexpected components of idiosyncratic volatility on the returns of shares listed on the BOVESPA between 2004 and 2011. The results show a strong positive and significant relation between expected idiosyncratic volatility and returns. This evidence is highlighted when we use unexpected idiosyncratic volatility to control for unexpected returns. Additional robustness tests, controlling for size and momentum effects, also have positive and significant coefficients, corroborating previous findings.     

AN ATTEMPT TO EXPLAIN DIFFERENCES IN ECONOMIC GROWTH: A STOCHASTIC FRONTIER APPROACH

Total factor productivity (TFP), factor accumulation, and growth are analysed for a panel of 40 countries in 2001–11. TFP growth and technical inefficiency are estimated using a stochastic frontier model. Environmental variables are found to have an important role in explaining differences in inefficiency across countries. Over 2001–11, the general improvement in technical efficiency of countries is almost outweighed by technological regress. Results indicate that differences in factor accumulation between OECD and emerging economies are more important than differences in TFP change to explain differences in economic growth. Results also indicate negative and significant random shocks for the OECD countries.     

Marketing and the law

Marketing decisions are particularly vulnerable to legal rulings made in both the courts and the legislatures. The effective management of those legal implications challenges the modern marketing professional. Grasping marketing’s overall legal environment, including its governing case law, regulatory statutes and future trends, is essential. This review will provide analysis of recent court cases and legislation with particular emphasis on creatively assisting the marketer’s management of the legal factor.