Product Development Strategy and Organizational Learning: A Tale of Two PC Makers

The personal computer (PC) marketplace in the US presents a dizzying array of component suppliers and products. No single firm dominates the industry with a complete package of hardware and software components. Although one company's operating systems and general-purpose applications are installed on most PCs in the US, the other system components—processors, memory, storage devices, display adapters, monitors, specialized applications, and so on—come from any number of sources. David T. Methe, Ryoko Toyama, and Junichiro Miyabe point out that the PC industry in Japan also exhibits this decentralized nature. However, they also note that despite the decentralized network structure of the Japanese PC industry, one company—NEC—was able to achieve a dominant market share. To provide insight into the key issues involved in the management of complex technology, they contrast NEC's strategic approach to product development and organizational learning with the approaches taken by Fujitsu—the firm that placed a distant second in this market. Despite matching NEC in terms of technological capabilities, financial resources, and managerial talent, Fujitsu never managed to threaten NEC's dominance of the PC market in Japan. Fujitsu continually emphasized technological leadership, even at the expense of protecting its installed base. Poor coordination of resources and product development efforts resulted in incompatibilities among Fujitsu's various products, and the company failed to foster close relationships with suppliers of such key technologies as software and peripherals. NEC's PCs did not enjoy the advantages of first-to-market status or technological leadership. Instead, NEC achieved market dominance by finding the combination of product technologies that met the needs of the greatest number of consumers. Throughout almost 20 years of competition in the PC industry, NEC successfully maintained consistency and backward compatibility across its product lines. NEC also recognized the importance of third-party software developers, and carefully cultivated relations with these firms as a source of competitive advantage. In other words, NEC struck the right balance between three key factors: technological innovation, motivation of third-party developers of software and peripherals, and service to its installed base of customers.     

On Persistent Demand Shortages: A Behavioural Approach

We incorporate two sets of behavioural assumptions, fairness concerns and insatiable desire for money, into a dynamic optimization model to illuminate how they can generate persistent aggregate demand shortages. We obtain the conditions for persistent unemployment and temporary unemployment. Policy implications differ significantly between the two cases. A monetary expansion raises private consumption under temporary unemployment but not under persistent unemployment. A fiscal expansion may or may not increase short‐run private consumption but crowds out long‐run consumption under temporary unemployment. Under persistent unemployment, however, a fiscal expansion always increases private consumption. The “paradoxes of toil and flexibility” also appear.     

Road traffic injury among child motorcyclists in Vientiane Capital,Laos: a cross-sectional study using a hospital-based injury surveillance database

This study investigated the distribution of motorcyclists, including drivers and passengers, who were involved in road traffic crashes and admitted to hospital in Vientiane Capital, Laos. The focus was on child motorcycle drivers and passengers under 15 years. A hospital-based injury surveillance database in Vientiane Capital was used. The surveillance was performed in two hospitals. From 1 September to 31 December 2009, 3968 patients were admitted to the participating hospitals with road traffic injuries. Patients under 15 years accounted for 10.8% (427/3968). The majority of patients under 15 years were motorcycle drivers or passengers (71.7%, 306/427). Child motorcyclists including drivers and passengers were less likely to wear a helmet than adults (adjusted odds ratio [OR], 0.3, 95% confidence interval [CI], 0.2–0.5, for children 10–14 years; adjusted OR: 0.1, 95% CI, 0.05–0.4, for children under 10 years). It is suggested that stricter regulation enforcement for child motorcycle drivers and passengers may be needed. In addition, barriers against wearing helmets for motorcycle drivers and passengers in Laos should also be examined in further studies.     

Seniority bias in a tournament

The paper presents a model where the probability of promotion tends to increase with seniority (overall labor market experience) without relying on the accumulation of general human capital. To this end, we consider the optimal design of a tournament (a relative compensation scheme) between two agents with different time horizon, the young and the old, in an overlapping generations framework. When the principal can only imperfectly monitor each agent’s effort level, the difference in time horizon leads to the ex post difference in the marginal value of effort between the two agents. In this case, the optimal tournament necessarily involves a bias towards the old agent. Within this framework, we also examine the relationship between: (1) the monitoring accuracy and the optimal bias; and (2) the value of outside options and the optimal bias.     

USING EL NIÑO-SOUTHERN OSCILLATION CLIMATE DATA TO IMPROVE FOOD POLICY PLANNING IN INDONESIA

Despite the impact of El Niño-Southern Oscillation (ENSO) events on climate in the Indo-Pacific region, models linking ENSO-based climate variability to Indonesian cereal production are not well developed. This study measures connections among sea-surface temperature anomalies (SSTAs), rainfall, and Indonesian rice and corn production from 1971 to 1998. Year-to-year August SSTA fluctuations explain about half the interannual variance in paddy production during the main (wet) season. These effects are cumulative for rice: during strong El Niño years, wet season production shortfalls are not made up subsequently. For corn, the cumulative area sown is actually higher in El Niño years than La Niña years. Indonesia's paddy production varies on average by 1.4 million tons for every 1°C change in August SSTAs. The paper illustrates how an SSTA model might assist policy makers with budgetary processes, and private sector cereal traders with framing production expectations.     

Ability transmission,endogenous fertility and educational subsidy

In this study, we attempt to investigate how educational subsidy, childcare allowance and family allowance affect economic growth and income distribution on the basis of simulation models which incorporate intergenerational ability transmission and endogenous fertility. The simulation results show that financial support for higher education can both increase economic growth and reduce income inequality, especially if the abilities of parent and child are closely correlated. In contrast with educational subsidy, raising childcare allowance or family allowance has limited impacts on growth and income inequality.     

Hierarchies Versus Committees: Communication and Information Acquisition in Organizations

In most firms workers are divided asymmetrically in terms of authority and responsibility. In this paper, we view the asymmetric allocations of authority and responsibility as essential features of hierarchy and examine why hierarchies often prevail in organizations from that perspective. A key departure is that we consider a case where the authority relationship is defined only by the allocation of responsibility through contingent contracts. Within this framework, we show that the contractual arrangement that allocates responsibility asymmetrically often emerges as the optimal organizational form, which gives rise to the chain of command pertaining to hierarchical organizations.     

Team Incentives under Relative Performance Evaluation

This paper examines the optimal provision of incentives in the repeated setting with many agents under the restriction that only relative performance evaluation is feasible for contracting. We show that the optimal contract in the repeated setting may take a different form than that in the static setting. In the repeated setting, it may be optimal for the principal to arbitrarily divide the agents into teams and compensate them based on team ranking, as it allows the principal to motivate the agents through peer sanctions. The situation draws a clear contrast to the static setting where such a strategy is never optimal. The result indicates that the concept of team plays an important role in the repeated setting even when performances can only be evaluated in relative terms.