Decision making for business model development: a process study of effectuation and causation in new technology-based ventures

This study investigates the decision-making logics used by new ventures to develop their business models. In particular, they focussed on the logics of effectuation and causation and how their dynamics shape the development of business models over time. They found that the effectual decision-making logic was used dominantly to generate a viable value proposition for a specific customer segment. Causal logic is then used dominantly to define the other business model components in relation to the value proposition and customer segment. When a shortage of resources emerges, causal logic is replaced by an increase in effectual decision-making again. They concluded that before investing significant resources in a business model it was crucial for firms to reduce, as far as possible, technological and market uncertainty through effectual strategies to avoid high re-configuration costs later.     

2006 IIE-EED Business Meeting Minutes

The duration measure of weighted average life has been applied in the capital budgeting literature as a measure of project liquidity. Duration is superior to payback methods because it considers both the timing and present value of the entire cash flow stream. However, the literature is ambivalent on the choice of discount rate in calculating project duration. For duration to properly serve as a project liquidity measure, the internal rate of return should be used to discount future cash flows. Examples show that using the firm's cost of capital to calculate duration fails to measure the time to recover initial project outlays in present value dollars.     

New development: Information for localism? Policy sense-making for local governance

Recent policy changes in the UK emphasising localism, as opposed to centrally-driven performance management, have potentially significant implications for the use of information in local policy-shaping. This article explores the challenges that this implies for framing the problem and in terms of the current and future uses of information for local governance.     

When Is Efficiency Separable from Distribution in the Provision of Club Goods?

Using the homogeneous of degree zero inverse congestion (“quality”) function employed most frequently in the literature, we characterise completely the families of utility functions which are then necessary and sufficient for break-even utilitarian welfare maximising provision of club goods with self-selection to be separable from distribution. Two types of separation—involving, alternatively (a) the price and quality; (b) the price, quality, facility size and total utilisation—are considered. When separation is possible, utility functions and optimal decisions take simple, intuitive forms. Our results extend the scope of separation results previously obtained only for pure public goods. Journal of Economic Literature Classification Numbers: D62, H23, H40.     

The future of the uplands

Upland areas provide UK society with many important functions, goods and services, but have experienced a number of disturbing trends and face an uncertain future. This paper outlines historic, current and future drivers of environmental, economic, socio-cultural and policy change in UK uplands, and assesses how these have affected or are likely to affect ways in which land is used and the provision of ecosystem services. Information is synthesised into scenarios summarising a range of possible futures anticipated for UK uplands to 2060 and beyond. Finally, innovations in science, technology, governance and policy are evaluated that could enable uplands to continue providing key ecosystem services under a range of scenarios. The paper concludes that many upland areas will need to be prepared for significant reductions in grazing and prescribed burning. Conversely, other areas could experience agricultural intensification, for example significant increases in grazing or an expansion of arable or bioenergy crops into upland valleys, due to anticipated increases in global demand for food and energy. These scenarios will take place in the context of climate change. Many may take place together and may interact with each other, with complex and unpredictable implications for the upland environment, economy and society. In this context, a number of advances are needed in science, technology and policy to maintain viable upland communities and the future provision of ecosystem services. These may include funding for ecological and hydrological restoration via carbon offsetting or other means. It may also involve advances in ecosystem service modelling, mapping and valuation, which through stakeholder participation could facilitate more integrated rural planning. New forms of environmental governance need to be explored that can empower those interested in developing upland economies to maintain thriving upland communities, while managing the ecosystem services they provide as efficiently as possible.     

Thirty years of social accounting,reporting and auditing: what (if anything) have we learnt?

In an increasingly complex world with increasingly powerful organisations it seems inevitable that society – or groups in society – would become anxious about whether these organisations could be encouraged to match that power with an appropriate responsibility. This is the function of accountability – to require individuals and organisations to present an account of those actions for which society holds them – or would wish to hold them – responsible. And the history of social accounting, at its most fundamental, is a history of attempts to develop this accountability. It seems to me that the widespread and systematic practice of social and environmental accounting is a deeply essential element in any well‐functioning, complex democracy. The corollary is that the absence of such mechanisms raises fundamental questions about the nature of modern democracies. This article briefly outlines what I believe to be the three strands of social accounting. It then identifies a few of the lessons that we may be able to learn from current experience and, in particular, how social accounting is related to accountability, democracy and sustainability. The central issue of the tension between accountability and control is touched upon: I then illustrate how the stakeholder model can be used to help define the social account, and conclude with a few words on attestation.     

ON THE SHAREHOLDER WEALTH EFFECTS OF DEPOSIT INSURANCE PREMIUM REVISIONS ON LARGE,PUBLICLY TRADED COMMERCIAL BANKS

Evidence is provided from changes in deposit insurance premiums in the early 1990s on the validity of the premium absorption hypothesis and the premium shifting hypothesis. Analysis of abnormal market returns associated with deposit insurance events using a market‐model event‐study methodology suggests that reductions in deposit insurance premiums are associated with increases in the market value of banking organizations; conversely, increases in deposit insurance premiums are associated with decreases in market wealth. The largest banks in the sample and banks with low equity capital (and low risk‐based capital ratios) appear to be most affected. These results are generally consistent with the premium absorption hypothesis but inconsistent with the premium shifting hypothesis.     

An Experimental Study of Auditor Analytical Review Judgements

This paper provides evidence as to how five factors highlighted in the current UK auditing standard are taken into account by auditors in analytical review (AR) judgements. While the relative importance of particular cues was generally found to be consistent with the standard, certain factors were taken into account only to a marginal extent. Little evidence of configural cue usage was identified. The study also provides evidence of a tendency towards conservatism in the way auditors approach AR. The results suggest both that the potential to substitute AR for other substantive procedures may be realised only imperfectly and that the issue of configural reasoning should be addressed in the auditing standard.     

UNRELIABLE MARKETS AND PERISHABLE PRODUCTS

This paper considers the behaviour of a farmer facing an unreliable market for his perishable product. In the context of a simple model, where unreliability is characterised as demand uncertainty at the going market price, the optimal responses of a risk-averse farmer both to the introduction and to an increase in the level of unreliability are analysed. Conditions determining these responses are described and are shown to contrast markedly with the conditions determining a farmer's responses to uncertainty in other parameters such as price. Finally, the policy implications of the paper are discussed, with particular reference to the problem of unstable supply.