Managing the transfer of capabilities within multinational corporations:: the dual role of the subsidiary

In this article, the relation is explored between the external technical embeddedness of the subsidiary, its assigned role, and capability development in the MNC. It is argued that assigning roles of responsibility or mandates to certain subsidiaries can effect integration of subsidiary-developed knowledge in the MNC. Departing from literature on the market-as-networks perspective and writings from recent years on subsidiary roles, hypotheses are developed and a model outlined. The model describes a significant link between the external technical embeddedness of the subsidiary and its assigned role within the MNC, and a significant relation between the subsidiary's assigned role and its importance for other units’ capability development. The model is tested on a sample of 97 subsidiaries using the LISREL 8.3 statistical method. The final model implies that by assigning specific roles to different subsidiaries, headquarters can exploit the knowledge developed in the external environments of these subsidiaries.     

Issues in the estimation and application of latent structure models of choice

Our paper provides a brief review and summary of issues and advances in the use of latent structure and other finite mixture models in the analysis of choice data. Focus is directed to three primary areas: (1) estimation and computational issues, (2) specification and interpretation issues, and (3) future research issues. We comment on what latent structure models have promised, what has been, to date, delivered, and what we should look forward to in the future.     

Optimales Vertragsdesign bei moralischem Risiko in der Rückversicherung

This paper addresses the optimal design of risk sharing arrangements in reinsurance contracts with asymmetric information concerning the primary insurer’s behavior. The latter usually has significant unobservable discretions, for instance with respect to risk selection, implying a moral hazard problem. We show that the existence of moral hazard strongly affects the characteristics of the reinsurance indemnification rule, i. e. the connection between the level of losses and the indemnity, which is specified in the contract. For this analysis, a standard model framework from the theory of optimal reinsurance with perfect information is modified by the assumption that the primary insurer has unobservable control of the probability distribution of the extent of losses. In particular, the solution indicates that for this situation, a Pareto-optimal indemnity rule is less steep, and therefore the primary insurer’s share in a marginal increase of the loss is greater, compared to the case of complete information. A deductible, however, turns out not to be a suitable approach in this context.     

How Does a Development Moratorium Affect Development Timing Choices and Land Values?

This paper investigates how a development moratorium affects choices of development timing and land values in a framework where both the value of developed property evolves stochastically and the development costs are fully irreversible. We assume that a regulator initially announces that land is not allowed to be developed during a finite period of time in the future. A developer, thus, must decide whether to develop land before the timing ordinance is imposed, or after it expires. The development moratorium reduces the developer’s option value from waiting and, thus, accelerates development. We also use simulation analysis to demonstrate how the other factors that relate to the demand and supply conditions of the real estate market affect this accelerating effect.     

Managers’ Corporate Entrepreneurial Actions and Job Satisfaction

Through the development and extension of theories and scholars’ subsequent empirical analyses of significant, theoretically grounded research questions, the knowledge about corporate entrepreneurship (CE) and its successful use continues to advance. Moreover, the literature suggests important relationships between the corporate environment, managers’ entrepreneurial behavior and successful implementation of corporate entrepreneurship actions. In an attempt to test some of those relationships, we describe an empirical study of 523 managers that examines the relationships among the antecedents to managers’ entrepreneurial behavior, a decision to implement entrepreneurial actions, and resulting job satisfaction and reinforcement practices.     

Structuring Corporate Headquarters: An Investigation of Franchising

This article focuses on the structuring of the corporate headquarters in a franchise organization. Four essential issues that are related to franchisors organizational structure are discussed—homogeneity and heterogeneity of franchisors structure, company-owned and franchise arrangement, the dynamics between strategy and structure, and performing innovative and administrative functions simultaneously in the headquarters. Propositions are given for each issue. The results of qualitative analysis associated with each issue are discussed.