Adoption barriers and resistance to sustainable solutions in the automotive sector

Development of alternative fuels and engines in the automotive sector is a requirement for building a sustainable energy policy. However, private consumers' acceptance of technological alternatives to internal combustion engines is still minimal. This study has two objectives. Based on theoretical and empirical findings, this study examines risk-related adoption barriers and their impact upon innovation resistance to sustainable solutions in the automotive sector. In the next step, a cluster analysis leads to various groups of private drivers with reference to the risk dimensions as perceived by consumers in the context of a possible purchase of an NGV. The paper concludes with research and managerial implications as opportunities to address and overcome risk-related adoption barriers and individual consumer's innovation resistance.     

Can Cultural Competency Speak to the Race Disparities in Methadone Dosage Levels?

Although national methadone treatment trends have improved substantially from 1988 to 2001, current research has found that African Americans still receive lower dosages of methadone treatment than their white and Hispanic counterparts, which has significant public health concerns. We sought to empirically examine whether the degree of cultural competency within an outpatient substance abuse treatment (OSAT) organization has influence on the methadone dosage levels received by African Americans in 1995 and in 2005. The 1995 and 2005 National Drug Abuse Treatment System Survey (NDATSS) provided a nationally-representative, stratified sample of 618 and 566 OSAT organizations, respectively, of which 121 and 140 affiliated methadone maintenance treatment programs, respectively, were analyzed. The organizations’ director and clinical supervisor were surveyed. Fixed-effects linear regression models were fitted with measures of cultural competency, client, and organizational characteristics to assess methadone dosage levels. Culturally-competent units have smaller numbers of methadone clients, greater percentages of clients who receive methadone dosages of less than 40 mg/d, smaller percentages of clients who receive methadone dosages of 80 mg/d or more, and provide a larger number of therapeutic and ancillary services during treatment than non-culturally-competent units. OSAT units with more African Americans are significantly more likely to have clients who receive dosages of less than 40 mg/d and are significantly less likely to have clients who receive dosages of 80 mg/d or more. There is no racial difference among culturally-competent unit clients who receive dosages of less than 40 mg/d, between 40 and 59 mg/d, between 60 and 79 mg/d, and 80 mg/d or more. However, among non-culturally-competent units, a racial difference exists among African Americans and other clients who receive these various dosage levels. Research indicating that African Americans receive lower dosages of methadone than their White and Hispanic counterparts may now be explained by whether these clients receive treatment in culturally competent organizations, rather than solely by arguments related to organizational differences in resources, experience and training of staff, staff bias and/or racism. Culturally competent organizations may seek a method of treatment that dissuades “replacing one drug for another,” while simultaneously treating the root cause of the addiction through the provision of comprehensive therapeutic and ancillary support services. Further research is needed to determine if cultural competency results in better substance abuse treatment outcomes for African Americans.     

An analysis of pricing and basis risk for industry loss warranties

In recent years, industry loss warranties (ILWs) have become increasingly popular in the reinsurance market. The defining feature of ILW contracts is their dependence on an industry loss index. The use of an index reduces moral hazard and generally results in lower prices compared to traditional, purely indemnity-based reinsurance contracts. However, use of the index also introduces basis risk since the industry loss and the reinsured company’s loss are usually not fully correlated. The aim of this paper is to simultaneously examine basis risk and pricing of an indemnity-based industry loss warranty contract, which is done by comparing actuarial and financial pricing approaches for different measures of basis risk. Our numerical results show that modification of the contract parameters to reduce basis risk can either raise or lower prices, depending on the specific parameter choice. For instance, basis risk can be reduced by decreasing the industry loss trigger, which implies higher prices, or by increasing the reinsured company attachment, thus inducing lower prices.     

Price presentation and consumers’ choice

Currently, regulatory authorities and consumers ask for more cost transparency with respect to financial product components. In life insurance, for instance, the premium for products should be split in its components: A premium for death benefits, the savings premium, the cost of an investment guarantee, and the administration costs. In this regard, it is important for insurance companies and regulators to know to what extent the way of presenting the prices of an offer affects consumer evaluation of the product. Based on a paper by Huber et al. (How do price presentation effects influence consumer choice? The case of life insurance products. Working paper, 2011) as presented at the annual meeting of Deutscher Verein für Versicherungswissenschaft in 2011, this article presents the effects of different forms of presenting the price of life insurance contract components and especially of investment guarantees on consumer evaluation of this product. This is done by means of an experimental study using a representative panel for Switzerland and by focusing on unit-linked life insurance products. The findings reveal that, contrary to consumer products, there is no effect of price bundling and price optic on consumer evaluation and purchase intention for life insurance products. However, there is a significant moderating effect of consumer experience with insurance products on this relationship.     

Estimating the basis risk of index-linked hedging strategies using multivariate extreme value theory

This paper studies the empirical quantification of basis risk in the context of index-linked hedging strategies. Basis risk refers to the risk of non-payment of the index-linked instrument, given that the hedger’s loss exceeds some critical level. The quantification of such risk measures from empirical data can be done in various ways and requires special consideration of the dependence structure between the index and the company’s losses as well as the estimation of the tails of a distribution. In this context, previous literature shows that extreme value theory can be superior to traditional methods with respect to estimating quantile risk measures such as the value at risk. Thus, the aim of this paper is to conduct an empirical analysis of basis risk using multivariate extreme value theory and extreme value copulas to estimate the underlying risk processes and their dependence structure in order to obtain a more adequate picture of basis risk associated with index-linked hedging strategies. Our results emphasize that the application of extreme value theory leads to better fits of the tails of the marginal distributions in the considered stock price sample and that traditional methods in regard to estimating marginal distributions tend to overestimate basis risk, while basis risk can in contrast be higher when taking into account extreme value copulas.     

Does the professionalism of management practices in nonprofits and for-profits affect job satisfaction?

This paper examines workers' satisfaction related to the level of professionalism of managerial practices in the French services sector. The data used are from the original survey conducted by the French Institute for Demographic Research and include both workers' responses on their satisfaction level, individual characteristics, job conditions, etc. and employers' responses on managerial practices implemented. We construct an index of workers' overall satisfaction and an index of ‘managerial professionalism’. In our model of workers' overall job satisfaction, the index of managerial practices is treated as an endogenous variable using two-stage least squares regressions. We show that the index of managerial practices is strongly and positively associated with workers' overall workplace satisfaction. Overall workplace satisfaction is found to be strongly associated with wages and individuals' perceptions about work environment. Finally, working in nonprofits is positively associated with greater overall job satisfaction.     

Motivation Gaps and Implementation Traps: The Paradoxical and Time-Varying Effects of Family Ownership on Firm Absorptive Capacity

We present a theoretical framework of family ownership as a driver of the heterogeneity (between-firm differences) and variability (within-firm differences over time) of absorptive capacity (AC). Building on our analysis of the multiple dimensions of family ownership influence on firm behavior and the mechanisms that can shape the firm willingness and ability to acquire, assimilate, transform, and exploit external knowledge, we introduce the concepts of motivation gap and implementation gap to explain why, paradoxically, family ownership can cause both upward and downward divergences in AC. Our contingency framework identifies conditions under which the positive and negative effects of family ownership on AC are likely to prevail and adds a temporal perspective suggesting that AC varies depending on the duration of family ownership and ownership succession.     

The role of Great Barrier Reef tourism operators in addressing climate change through strategic communication and direct action

The projected decline in reef health worldwide will have huge repercussions on millions of stakeholders depending upon coral reefs. Urgent action is needed to sustain coral reefs into the future. Tourism operators are recognised as stewards of Australia's Great Barrier Reef (GBR), a World Heritage Site, and are taking action on climate change, through their business practices and by engaging guests with interpretation and targeted messages. Yet little is known about how tourism operators along the GBR perceive climate change, or what actions they believe are most effective to address climate change impacts on the GBR. We describe a set of semi-structured interviews with 19 tourism operators in the Whitsundays and Cairns, the most popular tourism destinations along the GBR. Using a thematic analysis to code and report patterns within the data, we show tourism operators recognise the threat of climate change and strongly support increased action to address it. Most respondents are hesitant to engage their guests about climate change despite acknowledging an interest, expertise, and responsibility to do so. Understanding the barriers preventing tourism operators from addressing climate change is an important step towards helping them, and the tourists visiting the region, take action to protect the GBR.     

Open innovation practices in SMEs and large enterprises

Few studies on open innovation (OI) address OI practices in small and medium-sized enterprises (SMEs) and how their use of OI and the resulting benefits differ from those of large enterprises. The lack of resources in SMEs to engage in looking outward is said to be a barrier to OI, but at the same time this shortage is cited as a motive for looking beyond organisational boundaries for technological knowledge. We investigate how OI dimensions impact the innovative performance of SMEs in comparison to large companies. The key finding is that the effects of OI practices in SMEs often differ from those in large firms. SMEs are more effective in using different OI practices simultaneously when they introduce new products on the market, whereas this is less the case for large firms. Turnover from new products in SMEs is driven by intellectual property protection mechanisms, while large firms in this case benefit more from their search strategies.     

Teaching business ethics

Business ethics should be taught in business schools as an integrated part of core curricula in MBA programs with a dual focus on both analytical frameworks and their applications to the business disciplines. To overcome the reluctance of many faculty to handle ethical issues, a critical mass of faculty must develop suitable materials, educate their peers in its use, and take the lead by introducing it in their own courses and on senior management programs.Jeffrey Gandz is an Associate Professor in the School of Business Administration, The University of Western Ontario. Following ten years of management experience in Europe and North America, Professor Gandz completed his Ph.D. at York University. He is active as a mediator and arbitrator in labour disputes, teaches Organizational Behavior, Human Resource Management, and Labour Relations at Western, and has published widely in those fields.Nadine Hayes is a Ph.D. candidate at The University of Western Ontario and a graduate of Western's Honors Business Administration Program. She has written several case studies in the field of Business Ethics and has worked with Jeffrey Gandz in developing the School's approach to the teaching of business ethics.