WORKING PAPERS

Ref. IMD 2004-04, August 2004.

Abstract:
Current healthcare reforms in the US, Germany and the UK, representing significantly different funding conditions, reflect a common interest in market-driven cost containment. Each reform project embraces fixed-price, prospective contracts to deal with shortcomings of the respective current approaches. In each case, economic motives affect clinical autonomy and treatment decisions and limit patients' choice and payers' financial commitment. In each case, cost containment however may also result in unwarranted exclusions from vital cures and generally sub-optimal healthcare supply. Regulatory responses to evident risks differ in substance, each suffering from some acute shortcomings. Yet, in a more general sense the three healthcare projects are similar: In each case, political authorities effectively displace the responsibility for actually "managing care" without having set effective substantive and procedural standards. But quality norms and treatment standards are essential to distinguish proper treatment from malpractice, and the wrongful from the justified denial of service. Clarity about the legal status of managed care organization, contractors and patients is vital in determining the extent and allocation of liabilities, rights and obligations. Murky standards at each level hamper operational and regulatory governance and fuel concerns for legitimacy. If these concerns are self-evident - why are responses to them not patently obvious? As is argued next, the explanation has three elements. (1) Like most OECD countries, the USA, the UK and Germany do not face up to the essence of "managing care." (2.) Dodging the facts has fuelled the delegation of de facto decision-making to healthcare suppliers and manifests itself in a diluted system of governance and cost control. (3.) Growing demand-sides concerns are being "dealt" with through the promotion of patient rights, which, however, de facto are, and for all practical purposes should be, of little legal significance. There may be a right to "healthcare" but there cannot be an inalienable right to treatment. The question is how to advance from the current state of affairs.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2004-06, September 2004.

Abstract:
This study examines the reliability and validity of two scores in the Fortune Corporate Reputation Survey (FRS): Innovativeness and Quality of Products/Services. In spite of the strong correlation between Innovativeness and Quality scores of FRS, the two appear to tap different dimensions of corporate reputation. The findings of the results provide evidence of reliability and validity of the FRS database.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2005-01, January 2005.

Abstract:
Some researchers argue that leaders need integrity to be effective, while others argue that only results matter, not how you get them. Few have empirically examined the impact of integrity on leadership effectiveness. We examine the impact of leadership behaviors on effectiveness as well as values such as integrity, flexibility and conformity, using a sample of top-level public service managers. We find that the values of Integrity and Flexibility have a significant impact on effectiveness over and above the impact of various leadership behaviors: Integrity for managers and their peers and flexibility for direct reports and peers.
Full text (PDF, 176KB)

Ref. IMD 2005-03, March 2005.

Abstract:
Average healthcare costs in OECD countries, upon having risen from 5% of GDP in 1970 to 8.4% of GDP in 2001, are presently estimated to grow at 5% annually.1 And yet, as Table 1 indicates, increases in spending do not necessarily translate into higher levels of service or more equal access to it. Nor do more outlays automatically improve a nation’s general health status, clinical outcomes or process of care. Hence, countries with rather different institutional structures and spending levels, exhausting conventional funding opportunities and missing out on otherwise important expenditures, have put healthcare reforms on top of their domestic policy agendas. In each case, the goal is to build a sustainable financial foundation and to contain costs by testing patient needs and efficacious treatment patterns. In each case, determining cost-effective therapies as a condition for coverage amounts to ‘managing care’ raises concerns about the legitimacy and contestability of results and standards and points to growing problems of healthcare governance. This article cuts across the debate to identify common patterns and potential challenges. Section 1 presents a typology of healthcare systems based on funding methods and supply contracts and, challenging often presumed performance differences, points to the need for detailed case analysis. Section 2 discusses healthcare reforms in the structurally very different US, UK and German systems. In each case, incentive contracts, to deal with shortcomings of the current approach, evoke regulatory concerns. Summing up each country's policy responses, section 3 exposes a range of common governance challenges that market-driven healthcare reforms would need to address.
Full text (PDF, 176KB)

Ref. IMD 2005-07, March 2005.

Abstract:
This paper documents the extent to which plant performance varies over an extended period of time, with some plants performing persistently well and sister plants performing persistently poorly. It examines why this phenomenon occurs. It does so by interviews and surveys of senior manufacturing executives who oversee multiple plants. The interview and survey results are consistent with one another and point to the importance of the "mentality" of a plant’s management and workforce: how they think about the factory and its operations. The nature of that mentality is explored.
Full text (PDF, 176KB)

Ref. IMD 2005-09, May 2005.

Abstract:
This paper focuses on the drivers of high-impact learning experiences for executives. Based on the most successful IMD sessions and programs with over 80 companies in 2004, it offers a new way to define and manage the process of great learning, by identifying the common factors underpinning many great learning experiences. These drivers are:

• Emotional highs: the explicit engagement of executives at an emotional as well as an intellectual level. Going beyond the “comfort zone” is critical to opening executives to new perspectives, while positive emotions provide a foundation for retaining and applying learning in future.
• Energizing roles: the active management of relationships and roles among the participants and the educator to develop the interactions required for learning. Placing the learner at the heart of the experience and changing roles to create energy and sharing fosters deeper learning.
• Real world context: the reflection of “real” business challenges that executives are facing daily in the content and context of the learning process. Relevance drives engagement, as well as retention and application of learning. It requires deep understanding of the executives and the business environment to create situations and content that participants can relate to effectively.
• 3-Dimensional learning: learning experiences designed around intellectual awareness, emotional awareness and action-based application. All three dimensions are required to embed learning. Using many different approaches and stimuli helps to accelerate this process.

These drivers need to be brought together to meet specific executive development needs with a "learning script". Great learning scripts resemble theatrical scripts in that they comprise a series of parts (or acts), each with associated content, activities and roles. Orchestrating a great learning experience requires insight, method and art – and each needs to be customized to specific executive development needs. This represents a new approach to executive education that involves a broad, holistic approach to developing the whole person. High-impact learning generates changes in attitudes, beliefs and behaviours – and is applied to generate positive impact in the workplace. The basic phases in such learning draw on the work on many learning theories, even if the terminology, sequences and some of the underlying rationales vary. However, this paper does not explore learning theory in depth since the nature of learning is fluid and its exact mechanics remain obscure despite neurological breakthroughs, because every person is unique. The insights in this paper are aimed at both executives and educators. For executives the value is in understanding better what makes for an effective learning experience to allow informed choice of the most appropriate process for each person. For educators, it articulates, probably for the first time, the critical factors that underpin “learning that sticks”.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2005-16, November 2005.

Abstract:
On June 17th 2005, the European Union summit broke up in a bitter dispute over the EU’s budget and the future of its constitution. Arguments about the union’s financial plans, even sullen accusations of national egoism, have been a usual element of European politics for years. But the popular rejection of the proposed EU constitution by France and the Netherlands, two major advocates of European unity, just prior to the meeting had raised deep questions about the union’s legitimacy and purpose. Hopes by some that successful ratifications in the remaining EU countries would change the French and Dutch stance were soon dispelled. Already at the summit, the Dutch prime minister announced that his country would not vote again on the same, un-amended document; Denmark, Portugal, Ireland, Britain and the Czech Republic put their referendum schedule on hold. Nearly fifty-five years since the beginning of the European voyage, attempts to reach the EU’s "final and natural constitutional destiny" appeared to have thrown the union off course and into "one of the deepest crisis in its history.Or, is Europe facing a unique opportunity for political, economic and institutional renewal?
Full text (PDF, 120KB)

Ref. IMD 2005-18, November 2005.

Abstract:
Decision theory prescribes investing in prediction as a way to control future outcomes. However, favorable outcomes can also be achieved through control strategies that directly resolve uncertainties. We empirically investigate the orthogonal nature of prediction and control as paths to success in the new venture investment setting. Results show that control-oriented strategies may limit downside risk without compromising the potential for high returns.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2005-20, November 2005.

Abstract:
Despite academic interest in entrepreneurship, research in the area has been criticized for a lack of theoretical grounding. This paper attempts to consolidate entrepreneurial study by applying the theoretical foundation of effectuation to the issue of new venture performance and integrating contemporary entrepreneurship research using meta-analytic techniques. We find effectual constructs positively related to new venture performance suggesting that effectuation in specific, and non-predictive strategies in general, may offer useful insight into new venture success. We close with a critique of our work, presenting an agenda for elevating research to a level commensurate with the best efforts in management.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2005-22, November 2005.

Abstract:
The purpose of this work is to develop a systematic understanding of the role of interorganizational coordination in market formation. Based on qualitative research in the RFID (radio frequency identification industry) I identify how a diverse interorganizational community organized around the MIT Auto ID Center coordinated the adoption of an information systems innovation, the EPC (electronic product code). I present a parsimonious model of the causes of coordination problems and the mechanisms organizations use to solve them.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2005-24, November 2005.

Abstract:
The literature has shown how escalation of commitment can bias decision-making, but very little is known about moderators to the phenomenon. In the venture capital setting, the authors examine venture investors’ involvement in portfolio firms to show that experience and specialization can dramatically impact the relationship between escalation of commitment and performance. In addition to building theory, the authors uncover differences in the nature of involvement, offer new directions for escalation of commitment research, and make practical recommendations.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2005-26, November 2005.

Abstract:
The theory of effectual reasoning advanced by Sarasvathy (2001a) proposes a decision process employed by entrepreneurs that differs substantially from the rational choice paradigm. This paper seeks to clarify this distinctive point of view on entrepreneurial decision-making by pointing to nine things that effectuation is not. The paper further explains the effectual paradigm and illustrates how effectuation integrates with other theories used in management science.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2005-28, November 2005.

Abstract:
Effects of corporate sustainability management are of great interest to both companies and society. In particular, its micro-level economic effects are often the subject of debates and studies discussing the importance and robustness of a business case for corporate sustainability. Obviously these effects are of major importance to promoters and critics of CSM, so is their quantification. Based on recent empirical evidence, we will describe how important and common quantification is and what its drivers and effects are.
Full text (PDF, 448KB)

Ref. IMD 2005-30, November 2005.

Abstract:
It is well known that cross-listing domestic stocks in foreign exchanges has significant valuation effects on the listed company’s shares. The literature has associated these effects with improvements in liquidity and governance, removal of barriers to investment, and better access to capital and product markets. We use a data set of firms with dual class shares that list only one class in the U.S. We characterize the two classes in terms of liquidity, ownership restrictions and voting characteristics. Consequently we can separate econometrically the different effects of the crosslisting. Our results are consistent with the ADR improving the liquidity in the domestic market and the access of foreign investors to the firm. We deem the effects of improving investor protection as economically small, and we do not find evidence that the valuation impact of the cross-listing is related to better access to foreign markets. Overall, our results explain why less and less firms are willing to list in the U.S.: Sarbanes Oxley has increased the cost of adopting better governance while its benefits are not substantial; ADRs become illiquid a few months after the listing; and market segmentation has decreased significantly in the last years.
Full text (PDF, 376KB)

Ref. IMD 2005-32, November 2005.

Abstract:
This paper shows that the dynamics of Chapter 11 turn dramatically on the size of the business. The vast majority of the assets administered in Chapter 11 are concentrated in a handful of large cases, but most of the businesses in Chapter 11 are small, and the smaller the business, the smaller the distribution to general unsecured creditors. For businesses with assets above $5 million, unsecured creditors typically collect half of what they are owed. Where the business’s assets are worth less than $200,000, ordinary general creditors usually recover nothing. In the typical small Chapter 11 case, the tax collector is the central figure. In small business bankruptcies, priority tax liabilities are the largest unsecured liabilities of the business. Tax obligations are entitled to priority and are obligations of both the corporation and those who run it. Given the large shadow tax claims cast over small Chapter 11 reorganizations, accounts of small Chapter 11 must focus squarely on them.
Full text (PDF, 408KB)

Ref. IMD 2006-01, January 2006.

Abstract:
The authors describe a shift from the traditional approach to sustainability management in companies, which motivates employees using instrumental arguments, external performance criteria and goals, compliance, and control, toward an approach that acknowledges that some employees care about environmental and social outcomes independently of the potential benefits to the company. A value-based management approach results in employees acting responsibly toward the environment and society based upon their self-espoused values, encouraging discretionary behavior and personal effort for sustainability. The authors conceptualize how a dual management system, using both instrumental and value-based orientations, can function in order to encourage both intrinsically and extrinsically motivated employees to work toward sustainability.
Full text (PDF, 104KB)

Ref. IMD 2006-03, April 2006.

Abstract:
The literature has cataloged more than twenty determinants of escalation of commitment, but has considered only one view of what happens afterwards. The authors build knowledge around the phenomenon by constructing theory to understand the relationship between escalation of commitment and performance outcomes. The authors identify expertise as a moderator and demonstrate its impact in the setting of venture capital investing. In addition, the authors explore escalation of commitment in terms of time devoted to a project, uncover differences in the nature of that involvement, offer new directions for escalation of commitment research, and make practical recommendations.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2006-07, November 2006.

Abstract:
This paper examines how long tenured top management teams may overcome risk avoidance or the commitment to the status quo through the size and depth of their industry experience. This research question is applied to investment bandwagon behavior. There may be several reasons for firms to bunch their capacity expansions or “hop on an investment bandwagon.” These reasons include coordinating through maintaining market shares, information effects and decision-making biases and longtenured top management teams. Yet long tenured top management teams with vivid and deep memories of past expansions may better foresee when they should commence a new expansion. Based on an empirical analysis 35 US headquartered companies operating in the worldwide petrochemicals industry from 1982 – 1995, the results indicate that executive team tenure exhibits both risk avoidance and experience through a curvilinear relationship. However, this curvilinear relationship is moderated by depth rather than size of the top management team’ past expansion experience.
Full text (PDF, 216KB)

Ref. IMD 2006-09, November 2006.

Abstract:
The present paper aims to highlight the challenge of sustainable consumption and to explore the contributions businesses and their multiple stakeholders can make to meet the challenge. It is the result of a comprehensive literature research and a multi-stakeholder dialogue involving managers from various companies, NGOs and researchers. For the purposes of this paper, the authors define sustainable consumption as a behavior pattern of consumers/private households in relation to products and services that puts less strain – over the entire product and service life cycle (essentially purchase, use and disposal/recycling) – on global, regional or local environmental and social systems than alternative patterns.
Full text (PDF, 144KB)

Ref. IMD 2006-11, December 2006.

Abstract:
Human artifacts lie on the interface between their inner environments and their outer environments. Organizations, therefore, are apt subjects to be studied through a science of the artificial. Furthermore, organizational design happens at two interfaces: first, at the interface between organizational founder/s and the firms they design, and second, between the firms and the environments in which they operate. The author uses recent developments in the study of entrepreneurial expertise to show why an effectual logic of design is necessary at the first interface, and what its consequences are for designing at the second. In particular, the author uses the exemplar case of Starbucks to codify three key characteristics of the design problem at the first interface – namely, Knightian uncertainty, goal ambiguity, and environmental isotropy. The author then uses an “alternate histories” method to trace four strategic options – namely, planning, adaptation, vision, and transformation -- for designing at the second interface. In the final analysis, organizational design is important because effectuators using transformational approaches not only design organizations, but concurrently end up designing the environments we live in.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2006-13, December 2006.

Abstract:
Recent theorizing in entrepreneurship has proposed effectuation as a baseline model of entrepreneurial expertise that goes beyond the “toolbox” of basic business skills such as market research and business planning. This study seeks to empirically delineate key elements of entrepreneurial expertise as compared with basic business knowledge. Think aloud protocols were extracted from 27 expert entrepreneurs and 37 MBA students who were asked to identify the market for a single new product. Analyses revealed that 89% of experts used effectuation more frequently than causation, while MBA students demonstrated a noticeably opposing preference, with 81% using causation more than effectuation.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2006-15, December 2006.

Abstract:
“The Innovator’s Dilemma” consists in the fact that by doing the right thing – i.e., listening to current customers -- leading firms often end up losing their markets to upstart newcomers. Therefore, understanding how entrepreneurs successfully create such upstart firms and new markets ought to have direct implications for theorizing about this dilemma. This paper examines implications of recent studies in entrepreneurial expertise, and outlines how an effectual logic of non-predictive control may be used to overcome the innovators’ dilemma in large corporations. The paper also identifies new questions for future research in the overlap between the origin and evolution of new markets and entrepreneurship.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2006-17, December 2006.

Abstract:
In A Behavioral Theory of the Firm (BTF), Cyert and March (1963) present a clutch of ideas for explaining the behavior of established firms within an environment of well-defined markets, stakeholder relationships, technologies, etc. In this paper, the authors outline a behavioral theory of the entrepreneurial firm that emphasizes transforming environments rather than acting within extant ones. In particular, the authors explicate three ideas that parallel key concepts in BTF: (1) accumulating stakeholder commitments under goal ambiguity (in line with a political conception of goals), (2) achieving control (as opposed to managing expectations) through non-predictive strategies; and, (3) predominately exaptive (rather than adaptive) orientation.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2006-19, December 2006.

Abstract:
How organizations attempt to coordinate with one another in markets increasingly marked by network externalities is an emerging topic of interest for researchers working in the traditions of innovation studies and new product development. New network externality products often face complex “chicken-and-egg” coordination problems, since the user base and complementary goods that add to product value are not yet established. In this paper the authors highlight three mechanisms of spontaneous coordination among large numbers of organizations: focal points, leadership and common knowledge. The authors catalogue these three mechanisms at work using data from the RFID (Radio Frequency IDentification) industry.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2006-23, December 2006.

Abstract:
In preparation for a major empirical study on stakeholders and their approach to corporate sustainability, the authors review existing theoretical frameworks such as legitimacy theory and corporate social performance, key concepts such as the corporate license to operate and corporate sustainability management. In addition, they examine existing empirical studies in relevant areas, define primary research gaps and make suggestions for further research.
Full text (PDF, 104KB)

Ref. IMD 2007-01, February 2007.

Abstract:
The purpose of this paper is to question the continued usefulness of the hierarchy of strategies framework and to propose a new approach. The hierarchy of strategies was a useful framework when it was first proposed, but since then a changed business context has made this framework obsolete. What is needed instead is a framework around a heterarchy of strategies. The locus of decision making is no longer hierarchical and corporate, business and functional strategies are far more interdependent and interlinked than they have been in the past. The paper provides a framework for managers whether from corporate, business divisions or functions to help with the continuous renewal of their firm.
Full text (PDF, 88KB)

Ref. IMD 2007-03, February 2007.

Abstract:
This paper examines the link between the cooperative mechanisms to prevent supply chain hold-up and learning in negotiations. The analysis comes from data generated from an experiment based on the French Champagne industry. Results show that dyads where both parties have prior negotiation experience could best align context, intent, and negotiation approach with higher individual and joint outcomes. While dyads with asymmetric negotiation experience achieved more win-win outcomes than inexperienced dyads, their results still tended to be driven by the less experienced party. These results suggest that prior negotiation experience rather than cooperative context matters more for negotiation outcomes.
Full text (PDF, 240KB)

Ref. IMD 2007-05, April 2007.

Abstract:
This working paper is the result of research undertaken by the Brazilian Foundation for Sustainable Development (FBDS), with the assistance of technical and methodological support from the Forum for Corporate Sustainability Management (CSM) of IMD - International Institute for Management Development in Lausanne, Switzerland. CSM performed a similar study in Europe, the USA and Asia in the two-year period 2002-2003 in partnership with WWF, the global conservation organization. This study also had research support from COPPEAD Institute of Administration of the Federal University of Rio de Janeiro (UFRJ) and was sponsored by the following companies: Klabin, Tetra Pak and Banco Real ABN AMRO. The study used interviews, questionnaires and sectoral public and corporate information in order to assess the business case for corporate sustainability in three Brazilian business sectors, namely: pulp and paper, food and beverage, and electrical utilities. This working paper concerns the food & beverage (F&B) industry. The F&B industrial sector was chosen for this study because of its major relevance to the Brazilian economy and its exposure to both environmental issues – given its interference in and dependence on natural resources – and social issues, considering its share of responsibility in social impacts related to food such as malnutrition, obesity and responsible consumption. Between August and December 2005, we interviewed 22 top executives from five companies – AmBev, Coca-Cola Brasil, Nestlé Brasil, Perdigão and Sadia – and three representatives of stakeholder groups with strong vested interests in the sector (from a retail company and an NGO), as illustrated in graph 1. In addition, 30 professionals from top and middle management of the companies in the sector answered questionnaires.
Full text (PDF, 624KB)

Ref. IMD 2007-07, June 2007.

Abstract:
Entrepreneur-managers are highly desired in the corporate world. But few are successful unless they have an executive sponsor. The context that he/she sets for the shaping and implementation of a renewal project is vital to its success. Renewal requires taking risks, and the sponsor must manage these risks through the interactions and iterations he has with the entrepreneur-manager in the planning process. The sponsor must also ensure that the renewal project is housed in the proper organizational home to give it the right balance of autonomy and connectivity with the rest of the firm. Finally, the sponsor must deploy a control system with proper incentives, one that enforces discipline in implementation without killing the entrepreneurial spirit that is needed for the renewal efforts to succeed.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2007-09, June 2007.

Abstract:
Through a protocol analysis experiment comparing 27 expert entrepreneurs with 37 novices, this study shows how expertise accumulated in the process of starting new ventures fundamentally changes the way entrepreneurs frame problems and make decisions. The results show that expert entrepreneurs employ non-predictive strategies within frames based on an effectual logic, whereas novices rely on the more traditional predictive strategies based on causal frames. The generalization of these findings to the larger role of expertise in generating alternative frames in decision making is also discussed.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2007-11, July 2007.

Abstract:
Merger and acquisition (M&A) activity is close to breaking new records and it has gained significant momentum over time. This development contradicts the fact that most M&As are considered to be unsuccessful. The authors are not surprised, however, at how difficult it seems to be to succeed in M&A transactions. Most studies stop at examining the success or failure rate of M&As and one or two obscure success factors. The authors are interested in the following question: Why do M&As continue to take place, not only on a small scale but also periodically with great magnitude, particularly when M&As in the previous wave – and even the ones before that – may have failed. In this paper the authors explore why companies, their management and shareholders are prepared to try over and over again, an aspect that M&A research has not explored to date.
Full text (PDF, 120KB)

Ref. IMD 2007-13, November 2007.

Abstract:
The generation of new markets is an emerging area of interest among researchers working in the traditions of evolutionary economics. And true to those traditions, the current study incorporates empirical evidence from psychology and cognitive science to develop micro-foundations for evolutionary theories of new market generation. In this paper we present an in-depth analysis of how expert entrepreneurs, as opposed to novice managers, use effectual logic to conceptualize the creation of new markets. Our results challenge received wisdom based on search and selection processes and move beyond combinatorial ideas to develop instead a "transformational" view of market genesis.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2007-15, November 2007.

Abtract:
"The Innovator’s Dilemma" consists in the fact that by doing the right thing – i.e., listening to current customers - leading firms often end up losing their markets to upstart newcomers. Therefore, understanding how entrepreneurs successfully create such upstart firms and new markets ought to have direct implications for theorizing about this dilemma. This paper examines implications of recent studies in entrepreneurial expertise, and outlines how an effectual logic of non-predictive control may be used to overcome the innovators’ dilemma in large corporations. The paper also identifies new questions for future research in the overlap between the origin and evolution of new markets and entrepreneurship.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2007-17, November 2007.

Abstract:
Few CEOs would argue with the contention that a firm’s ability to generate timely market and customer insights comprises a set of critical operational and strategic competencies. There are indeed striking examples of firms that have achieved exceptional success through the disciplined use of data, analysis and information. Such success has stirred interest among leaders of many other firms who, too, have formulated information-based marketing strategies. The successful implementation of such strategies often requires considerable resources and a cultural change in the organization to embrace fact-based decision making. Yet despite a willingness to spend on information and to commit to cultural change, CEOs, their management teams and the organizations they lead may find the transition to information-driven marketing difficult. Ironically it is often the amount of information rather than the lack thereof that stands in the way of generating actionable and profitable insight.
Full text (PDF, 64KB)

Ref. IMD 2007-19, November 2007.

Abstract:
In retailing, inventory analysis and inventory practice have traditionally been based on the assumption that underlying demand does not vary with inventory levels. A growing body of research supports the contention that the validity of this assumption has significant implications for optimal inventory policies. The concern for such inventory effects motivated a major US magazine publisher to conduct the market study documented in this article. It presents empirical evidence that demand can indeed vary with inventory, and it quantifies the magnitude of these inventory effects which are two fold. An inventory decrease for one brand can, first, result in a decrease of demand for the brand and, second, in an increase of demand for a competing brand. These observations support the expansion of the traditional Newsvendor Model to include inventory effects as well as the practice to make inventory decisions for retail categories rather than individual brands.
Full text (PDF, 353KB)

Ref. IMD 2007-21, November 2007.

Abstract:
Whether entrepreneurship is a process of sophisticated search or willful creation is among the key issues facing entrepreneurship scholars. We offer three contributions. First, we review major convergence areas of entrepreneurship literature against the backdrop of positioning and construction and show that the bulk of current work rests on the foundational assumption that opportunities are found and positioned within a given environment. Our second contribution is an empirical test of effectuation where we demonstrate a positive relationship between a creation-oriented approach and venture performance. Our third contribution is an agenda to gain balance between construction and positioning in entrepreneurship research.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2007-23, November 2007.

Abstract:
Affordable loss involves decision makers estimating what they might be able to put at risk and examining what they are willing to lose in order to follow a particular course of action. This paper analyses how potential entrepreneurs may use the affordable loss heuristic in making the “plunge decision” to start a new venture. We show that affordable loss may be integrated with several frequently used approaches to making the plunge decision. We then explain the behavioral aspects of affordable loss in detail, focusing on how individuals decide what they can afford to lose, and how they decide what they are willing to lose in order to take the plunge into entrepreneurship. The paper also discusses the implications of affordable loss for the economics of entrepreneurship.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2008-01, January 2008.

Abstract:
The 1992 Rio Declaration on Environment and Development stresses the importance of the business community in achieving the goals of sustainable development strategies. The purpose of this paper is to review the empirical evidence of corporate sustainability in the Association of Southeast Asian Nations (ASEAN). This paper examines industry’s response to the call for corporate sustainability in three of the wealthier ASEAN member nations: Singapore, Malaysia and Thailand. It focuses on the integration of the economic and environmental dimension of corporate sustainability. The research combines quantitative and qualitative research methods (211 questionnaires and 35 semi-structured interviews). It identifies the importance of corporate sustainability in business practice, looks at managers’ attitudes to environmental requirements as well as their perception of environmental pressure groups, and analyses drivers of and barriers to the implementation of corporate sustainability. The importance of corporate sustainability varies significantly in Singapore, Malaysia and Thailand. The data confirms a positive interdependence between economic and ecological performance. Furthermore, managers and companies behave rationally towards their political, business and social environment: Economic considerations are for example one of the most important levers for the implementation of environmental measures; environmental requirements of international customers and capital providers exert the strongest environmental pressure.
Full text (PDF, 208KB)

Ref. IMD 2008-03, January 2008.

Abstract:
With theory generation in mind, the authors followed an organization in order to analyze how it interpreted workforce diversity as a potential strategic issue. Based on this data, The authors coded observations, interviews and issue-relevant text/documents. They gave the codes analytical meaning and conceptualized the inputs into a model that presents the important perspectives on the issue under investigation. The authors confirmed the findings by applying triangulation techniques. The study generates a grounded theory explaining what goes on when diversity is discussed as a potential strategic issue in an organization, and it creates new insights into the understanding and interpretation of diversity as a strategic issue in a European context.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2008-05, January 2008.

Abstract:
The authors examined perceptions of managers from four Western European cultural groups about women’s and men’s leadership. Participants from every cultural group perceived reliable gender-based differences in leadership effectiveness. More often than not, findings showed that participants’ gender – not their cultural beliefs – influenced these stereotypic perceptions. Unexpectedly, gender stereotypes of leaders were least prevalent among Latin respondents compared to those from more egalitarian cultures. In the Nordic and Anglo groups, male participants’ stereotypes disparaged women’s performance at highly valued leadership competencies. The implications for women’s leadership advancement in these different cultural contexts are discussed.

Full text not available (please contact our research department mentioning the title and reference number of the working paper)

Ref. IMD 2008-07, January 2008.

Abstract:
This paper is the result of research undertaken between December 2006 and August 2007 by the Brazilian Foundation for Sustainable Development (FBDS), with the technical and methodological support of the Forum for Corporate Sustainability Management (CSM) of IMD - International Institute for Management Development, an institution that performed a similar study in Europe, the USA and Asia in the two-year period 2002/2003 in partnership with WWF, the global conservation organization. The study, which was also given research support from COPPEAD Administration Institute of the Federal University of Rio de Janeiro (UFRJ) and sponsored by the Itaú, Itaú BBA and Bradesco banks, used interviews, questionnaires and sectoral public and corporate information in order to assess the business case for corporate sustainability in the banking sector in Brazil.
Full text (PDF, 2.64MB)

Ref. IMD 2009-01, February 2009.

Abstract:
This study focuses on a major global issue: the rise of sovereign wealth funds (SWFs). Using the largest data set of their holdings to date, we document a large SWF premium of more than 15% of firm value. Using data from 2002 through 2007 that includes SWF holdings in 8,000 firms in 58 countries, we find that firms with higher ownership by SWFs have higher firm valuations and better operating performance. Additionally, they tend not to invest heavily in firms in high-tech industries or those operating in areas involving intensive research and development.

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