The myth of purchasing professionals’ expertise. More evidence on whether computers can make better procurement decisions

In a previous experiment, we have shown that risk assessments of purchasing experts are certainly not better than that of subjects untrained in purchasing, and worse than the decisions made by formal models (J. Purchas. Supply Manage. 9 (2003) 191–198). Since both these results are rather counterintuitive, we conducted a series of experiments geared at replication and extension of these findings. These new experiments show that our previous results are robust, and reveal an additional finding that is both worrying and puzzling. It actually seems to be the case that for the purchasing decision tasks in our experiments, experts perform worse with growing experience. It therefore seems that, at least for the kinds of purchasing decisions under study, it does not make much sense to use expert judgments at all. However, we show that there is a way in which expert judgments can be used in combination with formal models to improve the predictive accuracy of purchasing predictions. In our case, superior predictions are made when we combine the prediction of a formal model with the prediction of the ‘average expert’, thereby combining the robust linear trends as encapsulated in the formal model with the more intuitive configural rules used by experts. We provide several explanations for this phenomenon.     

Estimating structural equation models with non-normal variables by using transformations

We discuss structural equation models for non-normal variables. In this situation the maximum likelihood and the generalized least-squares estimates of the model parameters can give incorrect estimates of the standard errors and the associated goodness-of-fit chi-squared statistics. If the sample size is not large, for instance smaller than about 1000, asymptotic distribution-free estimation methods are also not applicable. This paper assumes that the observed variables are transformed to normally distributed variables. The non-normally distributed variables are transformed with a Box–Cox function. Estimation of the model parameters and the transformation parameters is done by the maximum likelihood method. Furthermore, the test statistics (i.e. standard deviations) of these parameters are derived. This makes it possible to show the importance of the transformations. Finally, an empirical example is presented.     

Dispute resolution and litigation in the construction industry. Evidence on conflicts and conflict resolution in The Netherlands and Germany

The construction industry is regarded to be a tough and competitive business characterized by short-term and opportunistic relations rather than being based on cooperative partnerships. In particular, conflicts and litigation have been claimed to proliferate in the construction industry. Upon closer inspection of the literature, it seems that the empirical basis of these claims is largely circumstantial. Using data on contractor–subcontractor relations in the construction industry in The Netherlands, we consider the extent to which litigation in construction is common. Then we compare the results to similar data sets on IT-purchasing both in The Netherlands and Germany, and to a data set with more general business-to-business transactions of larger Dutch and German firms. We find some evidence that the construction industry has higher percentages of transactions leading to either arbitration, suspension of the relation, or legal steps (1.6% versus 1.2, 0.4 and 0.6). The differences are however not as extreme as one might conclude based on superficial reading of the popular and scientific literature, and certainly not bigger than the differences between the other data sets.     

What makes transplants thrive: managing the transfer of “best practice” at Japanese auto plants in North America

Multinational companies are a conduit by which superior organizing principles can be transferred across national, institutional, and cultural environments. However, for such transplantation efforts to be successful, the companies face the challenge of adapting their practices and principles to the requirements of local environments. In the process they risk losing the performance benefits from those practices. In this paper we study the North American transplant production facilities of Japanese automobile producers—companies known for their ability to achieve superior labor productivity and quality in their manufacturing plants, along with high levels of product variety—for insight into how the practices associated with superior performance (including work systems, technology choices, and supplier relations) can be implemented outside of Japan. By comparing the Japanese transplants with automobile plants in Japan, and Big 3 plants in North America, we show that the extent of transfer varies by type of practice. Furthermore, we find that plants can shape and alter their external environment, and can also buffer themselves from it. Despite these modifications, we find that the transplants are able to achieve productivity and quality levels similar to plants in Japan.     

Nascent Entrepreneurship Research: Achievements and Opportunities

This paper provides an overview of the articles contained in this issue, all of which were presented at a major research conference on nascent entrepreneurship hosted by the Centre for Entrepreneurship, Durham University UK in September 2005. It also sets the papers in their broader research context and identifies some of the achievements made and challenges faced by researchers in this relatively new field.     

Land use, economy and ecology Needs and prospects for co-evolutionary development

This article examines new developments which may pose a threat to coevolutionary development in Europe, and scrutinizes in particular the current agricultural policies of the European Community (EC). With the help of a threefold typology—ecological, traditional and modern—the likely perceptions and behaviour of farmers in the face of external change are discussed. On this basis the authors identify research needs, and draw up an extensive research agenda which will have to be addressed if ecologically sustainable agricultural development and land use are to be promoted.     

REASONS FOR PREFERRING NET TO GROSS FIGURES OF INCOME AND PRODUCT (AND VICE VERSA)

For the first time, a systematic discussion is presented of the choice between gross and net national accounting figures of value added, product and income for alternative purposes. Some traditional arguments for preferring gross to net figures are challenged and several historical reasons are given for the present popularity of gross figures. The quantitative importance of the issue (“what does it matter in practice?”) is also assessed.     

The ties that bind: Buyer-supplier relations in the construction industry

This study considers the consequences of Inter Organisational relations at two levels: the micro level of the individual, and the macro level of the organisation. Merging Transaction Cost Economics with theories on the Social Embeddedness of relations, the paper tackles several hypotheses about problems in buyer–supplier relations. We amend the general hypothesis, as has been put forward by other researchers, that having a common past in combination with an expected common future in business will reduce the likelihood that problems and conflicts occur. Our focus lies on whether this shared past and future can preclude problems better when the organisational relations are at the micro level. Our analyses of survey data from 448 contractor–subcontractor relations from the contractor's perspective in the construction industry reveal mixed support for effects of a shared past or future. We hardly find any of the expected positive effects of a shared past on supplier performance. However, we do find support for the hypothesis that a larger likelihood of future business with the same business partner has a stronger (negative) effect on the occurrence of problems if the expected future business is at the level of individuals (instead of at the level of organisations).