Bargaining Through Agents: An Experimental Study of Delegation and Commitment

While face-to-face bargaining has proven itself to be extremely efficient in the laboratory, it appears to break down often in the real world. This discrepancy, we assert, is explained by the fact that in the real world face-to-face bargaining is usually conducted not between principals but between the agents of principals. We find a substantial increase in inefficiency when bargaining is conducted through agents rather than through principals and offer an explanation for this rise in inefficiency. As such, this paper helps to shed light on the growing literature on delegation, commitment, and preference distortion games. Journal of Economic Literature Classification Numbers: C78, C92.     

Projecting soviet energy requirements using a vintage capital model

A Solow-type vintage capital model with capital utilization is used to estimate the long-term average embedded rate of improvement in energy efficiency of Soviet fixed-capital commissionings: 2.6% per year. The results are combined with planned Soviet capital stock growth to forecast cap Soviet energy requirements through 1990. The implied Soviet capital utilization goals call for greater energy savings than have been achieved in the past. The results also identify an upper bound for rates of hidden inflation contained in Soviet capital commissionings data. It appears an estimate such as S. Cohn's 1% (Soviet Stud. 33, 2:269–299, 1981) is far more likely than A. Nove's 6 to 7% (Soviet Stud. 33, 1:142–145, 198 1).     

The Intelligence Gap: What the Multinational Enterprise Can Learn From Government and Military Intelligence Organizations

Over the past several decades, companies have spent literally trillions of dollars acquiring the latest technologies and building their internal information processing and analysis capabilities. And yet with all this expenditure of time, money, and effort, large enterprises are still caught off‐guard on an almost daily basis because they fail to anticipate critical developments in their competitive environment. This shortcoming can be mitigated by adopting an intelligence mind‐set. This article provides an overview of seven specific problems concerning the use of business intelligence in the multinational enterprise (MNE) and discusses the corresponding best practices found in professional intelligence organizations. It closes with some suggestions on implementing those best practices in the MNE. © 2014 Wiley Periodicals, Inc.     

Strategy,core competence,and HR involvement as determinants of HR effectiveness and refinery performance

This study examines the impact of strategy, core competence, and involvement of HR executives in strategic decision making on the refinery managers' evaluation of the effectiveness of HR and on refinery performance among 86 U.S. petrochemical refineries. Survey results indicated that higher involvement of HR in organizational strategy was strongly related to perceptions of HR effectiveness, and that the relationship was strongest to the extent that refineries pursued a product innovation strategy and viewed skilled employees as their core competence. HR involvement was unrelated to refinery performance but was actually negatively related when refineries emphasized efficient production as their core competence. © 1998 John Wiley & Sons, Inc.     

Creating Value at the Intersection of Sourcing,Hedging and Trading

Higher commodity prices, along with higher currency and commodity price volatility, have combined with challenging economic circumstances to make for difficult economics within many industries today. These factors can introduce risk to both top‐line revenue and the cost structure, and wreak havoc on net cash flow and profitability. To the extent that high prices and increasing price volatility continue to be the rule in many global commodity categories, the authors suggest that both sourcing and hedging will soon be (if they are not already) near the top of the strategic agenda for many companies. Many companies now design their hedging programs—and in some cases their sourcing—to achieve the goals of reducing cash flow volatility and optimizing value (as opposed to the more conventional aim of minimizing sourced or manufactured unit cost). And a growing number of corporate managements have expressed interest in an even more systematic approach to risk management. Rising pressure for growth and profitability has led companies with large commodities exposures—both those that are naturally long and those with a natural short—to explore a more strategic role for commodity hedging and trading, as well as the use of innovative risk‐shifting mechanisms for inbound and outbound material flows. This article shows how companies can design their commodity risk management programs to make the greatest use of the expertise and capabilities of four different corporate groups: Purchasing, Treasury, Selling, and Marketing. To that end, the authors presents a five‐step program for creating a company‐wide strategic risk management program:

• ? The first step involves making active design choices about what risks to “own” and what risks to limit based on the company's strategy, core competencies, and relative competitive advantages in owning that risk.
• ? The second step is to establish relevant risk guidelines based on capacity to own risks and, to a lesser extent, risk appetite, with specific hedging targets and benchmarks. This involves defining objectives, priorities, and constraints (for example, protecting liquidity or increasing debt capacity by reducing cash flow volatility).
• ? The third step is to identify and characterize a complete inventory of all exposures—source, size and drivers—and those exposures to be managed. This involves defining, measuring and analyzing all exposures (e.g., commodities, FX, interest rates), with special attention to aggregating, netting, natural offsets, and correlations.
• ? The fourth step involves comparing the suitability of various hedging tools and determining how to incorporate these tools into a systematic program that will achieve stated goals, views, and risk preferences for each exposure.
• ? The fifth and last step is establishing an appropriate risk management operating model, which involves considerations of organizational architecture, management processes, decision rights, information flows, and governance.