Reengineering of materials management system: A case study

A business process reengineering (BPR) project relating to the materials management function of a cement manufacturing plant is presented in this paper. The BPR project evolved out of an organisation development (OD) intervention initiative. Such an intervention aimed at improving value innovation capability of materials management professionals of a large cement manufacturing plant in India. The proposition here is that the value metrics relate to inside-in value innovations in order to deliver inside-out value to the customers in the face of fierce competition in Indian Cement industry. Materials of all types used in a cement plant constitute 60–70% of the total cost and hence the effective operations of procurement and inventory are the critical success factors for strategic value innovations and thereby competitiveness. The primary emphasis in this project was on learning and implementation, by creating an urgency for instilling responsible leadership and building organic partnership through knowledge networking.     

Internal Marketing at Continental Airlines: Convincing Employees that Management Knows Best

Maintaining a high level of customer service quality is necessary for success, particularly for firms in service industries, but employees need to be motivated to provide it. Management can provide the motivation through the use of compensation schemes and internal marketing. In this paper we examine profit sharing compensation schemes that reward employees for achieving customer service objectives. We discuss how such schemes should be implemented, and explain why management needs to convince employees through internal marketing programs about the benefits of its scheme. We obtain the optimal amount of profit that the firm should share with employees, and the optimal effort it should spend on internal marketing. Finally, we relate the analysis to a successful scheme implemented by Continental Airlines.     

Customer-centric pricing: The surprising secret for profitability

Companies spend enormous amounts of energy and capital in creating value for customers, but less regard is given to actually capturing the value they have created. Segmentation based on buying behavior uncovers a tremendous differential in willingness to pay for subjective product attributes such as convenience, status, and quality. Purchase decisions are made through an assessment of a myriad of factors balancing perceptions of value components against price in a subtle, complex, and often sub-conscious decision matrix. Customer-centric pricing requires the simultaneous and continuous assessment of product attributes, customer perceptions, and the circumstances of time and place by listening to customers' actions. It is a means of assuring that companies assess the value they create for customers and extract that value from the marketplace.     

How many pirates should a software firm tolerate?: An analysis of piracy protection on the diffusion of software

This paper examines the relationship between the rate of software diffusion and piracy. Literature suggests that tolerating some piracy can be justified since it speeds up software diffusion. The question is, how much should be tolerated? Using innovation diffusion models of software adoption by legal buyers and pirates, answers to this question are obtained for the three scenarios of monopoly, multiple generations of software and competitive markets. Results include, for example, that a monopoly should start with minimum protection of its software but well before the product has diffused half way, impose maximum protection and maintain it thereafter. The results provide important strategic guidelines for firms in the software industry for managing piracy.     

Common Method Variance in Advertising Research: When to Be Concerned and How to Control for It

In this article we discuss and analyze the critical issues related to common method variance (CMV) that are particularly relevant to advertising research and recommend best practices for assessing the effects of CMV in this domain. Specifically, we cover the development of CMV as a domain-specific methodological concern and the underlying sources of CMV that are likely to operate in cross-sectional survey-based studies in the field of advertising. We discuss in detail the available procedural and statistical techniques that can be applied to control for and/or measure the effects of sources of CMV in a single study and across research domains. In addition, we provide a critical look at how these techniques have been employed in past research and make recommendations for future examinations of CMV in advertising research.     

Dynamic supply chain modeling using a new fuzzy hybrid negotiation mechanism

The key part of dynamic supply chain management is negotiating with suppliers and with buyers. Coordination is essential for successful supply chain management. In order to model coordination among suppliers and buyers in a dynamic supply chain, this paper takes a step further and proposes a new fuzzy- logic-based hybrid negotiation mechanism. In most real-world negotiation situations, agents have a common interest to cooperate, but have conflicting interests over exactly how to cooperate. These situations involve restrictions and preferences that may be vaguely and partly defined. Therefore, this study takes the advantage of fuzzy logic and develops a hybrid negotiation-based mechanism, that combines both cooperative and competitive negotiations. Achieving effective coordination in a multi-agent system is non-trivial as no agent possesses the global view of the problem space. Moreover, the different strategies adopted by agents may produce conflicts. While agents coordinate with each other in the operations, they will negotiate about their strategies to reduce conflicts. The proposed fuzzy hybrid negotiation mechanism allows negotiation agents more flexibility and robustness in an automated negotiation system. The proposed mechanism not only helps sellers and buyers to explore various new choices and opportunities that the e-markets offer but also allows them to identify and analyze their resource constraints in a given schedule, and helps them to explore and exploit many alternatives for a better solution. The efficacy of the proposed approach is demonstrated through an illustrative example.     

An integrated fuzzy multi-attribute decision-making model for employees' performance appraisal

Evaluating and ranking the employees working in organisations are challenging tasks involving several factors. Each employee achieves certain skill levels in various factors and the resulting information can be overwhelming. This article demonstrates how an integrated tool like fuzzy multi-attribute decision making (FMADM), with fuzzy analytic hierarchy process (FAHP), fuzzy quality function deployment (FQFD), is applied as a fair evaluating and sorting tool to support the performance appraisal (PA) system. The fuzzy linguistic approach has the advantage of reducing distortion and losing of information. FMADM focuses on the best practices of employees for the purpose of improving overall performance. Unlike traditional PAs, FMADM searches for the highly skilled employees who will serve as peers. The FMADM process identifies employees who require improvements in certain factor(s), and the magnitude of improvements required. This study supports the ideas that rating formats need re-examination as an alternative to traditional rating methods. Earlier adopted methods have seldom identified and quantified the individual factors for improvement, whereas FMADM could overcome these shortfalls. Based on the results of FMADM, the improvement of employees' performance is possible by way of providing training, talent enhancement and further qualification wherever required.     

A taxonomy of information technology-enhanced pricing strategies

As a result of evolving technology, opportunities for innovative pricing strategies continuously emerge. The authors provide an updated taxonomy to show how such emerging strategies relate to recent technological advances. Specifically, they cite increased availability of information, enhanced reach, and expanded interactivity as three technological advancements and identify six pricing strategies enhanced by these factors. They also discuss the role of utility, prospect, range, and signaling theories for emerging pricing strategies, along with several applications and managerial implications.     

Stock Option Expensing: The Role of Corporate Governance

Analysis of the corporate stock option expensing decision (before the practice became mandatory in 2006) continues to be of interest because it provides insight into the underlying factors affecting not only expense recognition, but the overall corporate decision‐making process. Using a sample of 207 companies that volunteered to expense options and more than 1,000 non‐expensing firms, the authors found that companies that provide more disclosure and appeared to have a stronger alignment of managerial and shareholder interests were also more likely to expense stock options—a finding that the authors view as indirect evidence that voluntary expensing was more likely to occur in companies that practiced effective corporate governance. And consistent with the prediction of efficient market theorists, the study also found no significant market reaction to announcements of these decisions to expense options. The study also found that companies that were the heaviest users of options—notably, smaller, high—growth, and less‐profitable firms—were least likely to expense them. And while this finding adds to the weight of evidence suggesting that companies often make accounting decisions designed to boost reported earnings, the authors also recognize that the possibility that the decision by other companies not to expense may have been a strategy designed primarily to preserve access to capital markets.