Tight–loose coupling with customers: the enactment of customer orientation

This article argues that tight linkages with customers present a paradox for the firm. The research question of this study is: What is the behavioral and cognitive process by which a firm establishes close links with its customers, and how can this process be both beneficial and detrimental? Existing theory and data from apparel retailers suggest that firms forge these tight links by enacting their customer environment. In the process of enactment, cognitions and actions reinforce each other and become increasingly focused. The tight coupling generated through enactment comes at the price of increased commitment and restricted vision. The author argues that firms should balance the natural process of tight coupling with a deliberate effort at loose coupling, and draws implications for further research on the organization‐environment interface. Copyright © 2003 John Wiley & Sons, Ltd.     

A multivariate nonparametric test for return and volatility timing

This paper develops a novel approach to simultaneously test for market timing in stock index returns and volatility. The tests are based on the estimation of a system of regression equations with indicator variables and provide detailed information about the statistical significance of alternative market timing components.     

Non-dictatorial extensive social choice

Summary. Different social planners may have different opinions on the well-being of individuals under different social options (Roberts, 1980). If utilities are translation- or ratio-scale measurable, or if the social ranking might be incomplete, or if interplanner comparability is allowed; then there exist non-dictatorial aggregation rules. We propose extensions, intersections, and mixtures of the Pareto, utilitarian, leximin, Kolm-Pollak, and iso-elastic rules.Received: 16 May 2001, Revised: 18 November 2003, JEL Classification Numbers: D63, D71. Correspondence to: Erwin OogheErwin Ooghe, Luc Lauwers: We are extremely grateful to the referee who was willing to review this paper many times. Her/his extensive and in-depth comments had a strong impact. Further thanks are due to Bart Capéau, Marc Fleurbaey, Maurice Salles, Erik Schokkaert, and Alain Trannoy. The first author gratefully acknowledges the financial support by the TMR network Living Standards, Inequality and Taxation (ERBFMRXCT 980248) of the European Communities.     

Foreign Aid and Consumption Smoothing: Evidence from Global Food Aid

The paper examines the cyclical properties of food aid with respect to food availability in recipient countries, with a view to assessing its impact on consumption in some 150 developing countries and transition economies, covering 1970 to 2000. The results show that global food aid has been allocated to countries most in need. Food aid has also been countercyclical within countries with the greatest need. However, for most countries, food aid is not countercyclical. The amount of food aid provided is also insufficient to mitigate contemporaneous shortfalls in consumption.     

How sustainable is participatory watershed development in India?

Watershed conservation is widely recognized as a major strategy for rural development throughout the developing world. In India, the apparent success of participatory approaches to watershed development resulted in a decentralization of project planning, implementation, and management to local communities at the village scale. We explore the effectiveness of this so‐called community‐based approach in achieving sustainable soil and water conservation in four semi‐arid regions in India, and analyze what factors explain project success. We confirm the result of earlier studies that participatory approaches are more effective in establishing soil and water conservation in the short run. However, our main result is that investments in community organization fail to ensure household commitment to maintenance in the longer term. Without better returns to investment in soil and water conservation and without local institutions to coordinate investment in the long run, the sustainability of participatory watershed management is seriously threatened.     

Scanner data, time aggregation and the construction of price indexes

We examine the impact of time aggregation on price change estimates for 19 supermarket item categories using scanner data. Time aggregation choices lead to a difference in price change estimates for chained indexes which ranged from 0.28% to 29.73% for a superlative index and an incredible 14.88%-46,463.71% for a non-superlative index. Traditional index number theory appears to break down with weekly data, even for superlative indexes. Monthly and (in some cases) quarterly time aggregation were insufficient to eliminate downward drift in superlative indexes. To eliminate drift, a novel adaptation of a multilateral index number method is proposed.     

Intergenerational transmission of preferences

We propose a perfect empathy model of cultural transmission to capture the evolution of preferences in a population. Unlike existing imperfect empathy models, focusing on stable interior equilibria, we demonstrate that a corner outcome will eventuate. However, which corner outcome emerges is unknown, and depends on the interplay of “history” and “expectations”.     

The Effects of Mainstream and Emerging Customer Orientations on Radical and Disruptive Innovations

The merits of being customer‐oriented for firm innovation have long been debated. Firms focused on their existing customers have been argued to be less innovative. This paper distinguishes between mainstream and emerging customer orientations and examines their effects on the introduction of disruptive and radical product innovations. Radical product innovations draw on a substantially new technology and could initially be targeted at a mainstream or an emerging market. In contrast, disruptive innovations are initially targeted at an emerging market, and may not involve the newest technology. This paper hypothesizes that mainstream customer orientation is negatively related to disruptive innovation and positively related to radical innovation, and that emerging customer orientation is positively related to disruptive innovation. To test these hypotheses, longitudinal and multiple informant data from senior executives in 128 SBUs of 19 Fortune 200 corporations are analyzed, with technology scanning and willingness to cannibalize as key control variables. The results support the hypotheses, providing evidence for contrasting effects of being oriented to mainstream customers and/or emerging customers on radical and disruptive innovations. Mainstream customer orientation has a positive impact on the introduction of radical innovations but a negative impact on disruptive innovation, while emerging customer orientation has a positive effect on disruptive innovation and is unrelated to radical innovations. Technology scanning is positively related to radical innovation but not to disruptive innovation, supporting the idea that disruptive innovation may not require new technology. In contrast, willingness to cannibalize is positively related to disruptive innovation but not to radical innovation, supporting the idea that radical innovation does not require cannibalization of existing investments. Additionally, mainstream customer orientation is found to have a near‐zero correlation with emerging customer orientation, indicating that the two can coexist and can be pursued simultaneously.