How to Coordinate Value Generation in Service Networks

The fundamental paradigm shift from traditional value chains to agile service value networks implies new economic and organizational challenges. As coordination mechanisms, auctions have proven to perform quite well in situations where intangible and heterogeneous goods are traded. Nevertheless, traditional approaches in the area of multidimensional combinatorial auctions are not quite suitable to enable the trade of composite services. A flawless service execution and therefore the requester’s valuation highly depends on the accurate sequence of the functional parts of the composition, meaning that in contrary to service bundles, composite services only generate value through a valid order of their components. The authors present an abstract model as a formalization of service value networks. The model comprehends a graph-based mechanism implementation to allocate multidimensional service offers within the network, to impose penalties for non-performance and to determine prices for complex services. The mechanism and the bidding language support various types of QoS attributes and their (semantic) aggregation. It is analytically shown that this variant is incentive compatible with respect to all dimensions of the service offer (quality and price). Based on these results, the authors numerically analyze strategic behavior of participating service providers regarding possible collusion strategies.     

The owner's edge: Brand ownership influences causal maps

Understanding the coherence between the attributes of a brand is a key asset for marketers managing brand equity. This study proposes consumer causal maps as a powerful instrument to achieve this purpose. These maps shed light on how different consumer groups think about the brand. Compared to non-owners, brand owners have been able to develop more expertise regarding the specific brand, which leads them to have more extensive causal maps. An exception occurs for the category leader, for which owners and non-owners have equally extensive maps. The surprising finding of this study is that the leading brand seems to encompass the ingredients for the causal maps of the other brands in the category. The results highlight how management should address owners and non-owners differently, in particular if a brand is far from category leadership.     

The impact of customer-specific marketing expenses on customer retention and customer profitability

We study the effects of customer-specific marketing expenses on customer retention and customer profitability in a business-to-business setting. Using data from a company providing hygiene services, we look at the impact of a hitherto unstudied type of expense targeted at individual customer relationships: the offering of free equipment to customers. The data allow tracking the activities performed in more than 4,500 customer relationships over a period of 4 years. Retention rates are higher for customers targeted with free equipment, but this effect results from an interaction with customer size. First-order dynamic panel data analyses show that the impact of targeted marketing expenses on customer dollar profit is positive for large customers, but there is no effect for smaller customers. Thus, targeted marketing expenses seem to be a tool for relationship maintenance rather than customer development: they help in retaining large customers that generate more profit, but they do not seem to work in developing new customers into larger, more profitable ones.     

Relative economic efficiency in Texas nursing facilities: A profit function analysis

The purpose of this analysis is to examine the relative economic efficiency of profit-seeking versus nonprofit nursing facilities. A Cobb-Douglas profit function is used on cross-sectional data to determine the technical efficiency, price efficiency, and overall economic efficiency of Texas nursing facilities. Ownership form influences the profit level of the firm. Profit-seeking firms are more economically efficient than their nonprofit counterparts. Inclusion of price efficiency analyses reinforces profit-seeking firms’ superior technical efficiency. Additionally, nursing facilities are price takers in the output market as well as in resource markets, indicating effective industry regulation.     

Managing Impressions in the Face of Rising Stakeholder Pressures: Examining Oil Companies’ Shifting Stances in the Climate Change Debate

In this paper, we examine how organizations’ impression management (IM) evolves in response to rising stakeholder pressures regarding organizations’ corporate responsibility initiatives. We conducted a comparative case study analysis over a period of 13 years (1997–2009) for two organizations—Exxon and BP—that took extreme (but different) initial stances on climate change. We found that as stakeholder pressures rose, their IM tactics unfolded in four phases: (i) advocating the initial stance, (ii) sensegiving to clarify the initial stance, (iii) image repairing, and (iv) adjusting the stance. Taken together, our analysis of IM over these four phases provides three key insights about the evolution of IM in the face of rising pressures. First, when faced with stakeholder pressures, it seems that organizations do not immediately resort to conforming but tend to give in gradually when pressures increase and start to come from relatively powerful stakeholders. Second, evolution of IM seems to be characterized by path dependence, i.e., even as organizations’ positions evolve, they continue to show their conviction in their initial positions and try to convey that their subsequent positions flow logically from the previous ones. Finally, IM involves navigation between symbolism and substance, and companies tend to strive toward harmonizing their symbolic and substantive actions as stakeholder pressure increases.     

Financial Literacy and Preparation for Retirement

To meet the challenges of an ageing population, eligibility ages for state pensions have increased, early retirement arrangements have been abolished, and a substantial part of the risk and responsibility for an adequate standard of living after retirement has been shifted from the government, employers and pension funds to individuals and private households. Consequently, policy makers have become more concerned with whether individuals are able to make pension-related decisions that are in their own best interest.     

Logo design in marketing communications: Brand logo complexity moderates exposure effects on brand recognition and brand attitude

Although good logos are essential for creating brand awareness and brand equity, the effects of logo design features have not been tested empirically. Extending previous findings regarding the effects of design complexity and exposure in advertising to the field of brand logos, two experiments tested the effects of logo complexity and exposure on brand recognition and brand attitude. It was hypothesized that logo complexity moderates the effects of exposure on logo recognition and brand attitudes, such that exposure increases recognition and positively impacts brand attitudes in particular for complex logos. Experiment 1 (N = 68) tested the effects of six unfamiliar logos on recognition (in milliseconds) in a 2 (logo design complexity: simple vs complex) × 2 (logo exposure: one vs four) mixed design. Experiment 2 (N = 164) tested the effects of eight familiar logos on logo recognition and brand attitudes in a 2 (complexity: simple vs complex) × 2 (logo exposure: well-established vs recently established) within-subjects design. Findings showed that increases in exposure led to an increase in brand recognition and to more positive attitudes in particular for complex brand logos, suggesting short-term benefits for simple brand logos, and long-term benefits for complex logos.     

Actuaries,Conflicts of Interest and Professional Independence: The Case of James Hardie Industries Limited

Drawing on calls by researchers to examine corporate scandals involving potential conflicts of interest or compromise to professional independence involving the actuarial profession, this article outlines one such case. The consulting actuaries – to a large Australian listed company, James Hardie Industries Limited – found themselves advising two parties in a corporate restructuring where the interests of each were sometimes competing and the interests of the public appeared to be ignored. The James Hardie case is instructive in a number of ways: first, it demonstrates the subtlety with which conflicts of interest or pressures on professional independence can arise; second, it demonstrates how important professional issues can be obfuscated by more obvious and pressing financial and strategic issues; and finally it demonstrates that adherence to professional codes of conduct and the ease with which professional ethics can be compromised when those codes are vague and transgressions are rarely actionable. The James Hardie case highlights structural issues in the employment of consulting actuaries which presents risks to the profession. It demonstrates that the combination of an aggressive corporate management with a strategic agenda reliant on consulting actuaries that have a vested interest in promoting and maintaining valuable relationships, both financially and professionally, results in ethical challenges.     

Corporate Governance in South Africa

The King Report on Corporate Governance (1994) evoked unprecedented interest in corporate governance in South Africa. This does not mean that corporate governance was not an issue of concern before the release of this historical report. To the contrary, corporate governance in its broader sense has been at stake since the inception of the first publicly owned companies in South Africa. This article intends to give an overview of corporate governance in South Africa. It starts by making a distinction between broad and narrow conceptions of corporate governance. Before applying this distinction to the practice of corporate governance in South Africa, a brief overview of the corporate landscape in South Africa is provided. Then the South African situation with regard to broad and narrow corporate governance respectively is analysed. The article ends with a discussion of the review of corporate governance that currently is in the making in South Africa. Throughout the article both the financial and ethical dimensions of corporate governance is attended to.