Strengthening Economic Subjects' Internal Capacities : improvement of decision-making process

Corporate restructuring is the essential of many economic subjects in the modern society. By choosing the appropriate strategies and techniques for company restructuring, the performance could be improved, and additional value for the shareholders could be created. Adverse changes in the capital and product markets, competition strengthening and insufficiently successful management, are common reasons for undertaking numerous activities aimed to basic changes in corporate structure. Changes in management structure, and the forming of a competent leading team impact on decision-making process improvement, and consequently, on strengthening the quality of corporate governance. The aim of this chapter is to analyse the managers' competence and modern information systems, as tools to improve decision-making process. This chapter emphasize the importance of professional and ethical values to improve the effectiveness of decision-making process, giving special attention to the mechanisms of managers’ control. Mechanisms of professional and independent supervision, along with ethic codex and proper motivation system allows the creation of partnership environment where managers, conducting business in the interests of company owners and other stakeholders, keep working in their favour. The rest of the chapter highlights the need for information system that provide promptly respond to the managers’\ud requirements with relevant information, giving particular reference to the decision support system and BSC system. The separate part of the chapter presents a contribution of cash flow analysis to improving decision-making process, by analysing cash flow performance measures and cash flow analysis in function of individual decision-making

Improving the Economic Decision-Making Capability and Viability of Chinese Wool Textile Mills

The successful restructuring of Chinese industries is of immense importance not only for the continued development of China but also to the stability of the world economy. The transformation of the Chinese wool textile industry illustrates well the many problems and pressures currently facing most Chinese industries. The Chinese wool textile industry has undergone major upheaval and restructuring in its drive to modernize and take advantage of developments in world textile markets. Macro level ownership and administrative reforms are well advanced as is the uptake of new technology and equipment. However, the changing market and institutional environment also demands an increasing level of sophistication in mill management decisions including product selection, input procurement, product pricing, investment appraisal, cost analysis and proactive identification of new market and growth opportunities. This paper outlines a series of analyses that have been integrated into a decision-making model designed to assist mill managers with these decisions. Features of the model include a whole-of-mill approach, a design based on existing mill structures and information systems, and the capacity for the model to be tailored to individual mills. All of these features facilitate the adoption of the model by time and resource constrained managers seeking to maintain the viability of their enterprises in the face of extremely dynamic market conditions.China, wool textile mills, industry transition, decision-making models, Agribusiness, Livestock Production/Industries,

Why Markets Make Mistakes

Many models of markets are based on assumptions of rationality, transparency, efficiency, and homogeneity in various combinations. They assume, at least implicitly, that decision makers understand the structure of the market and how it produces the dynamics which can be observed or might potentially occur. Are these models acceptable simplifications, or can they be seriously misleading? The research described in this article explains why markets routinely and repeatedly make 'mistakes' that are inconsistent with the simplifying assumptions. System Dynamics models are used to show how misestimating demand growth, allowing financial discipline to lapse, unrealistic business planning, and misperception of technology trajectories can produce disastrously wrong business decisions. The undesirable outcomes could include vicious cycles of investment and profitability, market bubbles, accelerated commoditization, excessive investment in dead-end technologies, giving up on a product that becomes a huge success, waiting too long to reinvent legacy companies, and changes in market leadership. The article illuminates the effects of bounded rationality, imperfect information, and fragmentation of decision making. Decision makers rely on simple mental models which have serious limitations. They become increasingly deficient as problems grow more complex, as the environment changes more rapidly, and as the number of decision makers increases. The amplification and tipping dynamics typical of highly coupled systems, for example, bandwagon, network, and lemming effects, are not anticipated. Examples are drawn from airlines, telecommunications, IT, aerospace, energy, and media. The key conclusions in this article are about the critical roles of behavioral factors in the evolution of markets

Process modeling of US retail craft buyer decision making

The study examines decision making strategies of United States retail craft buyers. Four objectives guided the research: (1) profile craft buyer behavior, (2) describe buyer preferences for U.S. or international craft, (3) compare selection methods for textile crafts to other craft media, and (4) compare findings to existing models of buyer behavior and propose a revised model;Theoretically, the study was based on two models of buyer behavior, Sheth\u27s theory of retail buying and Samli, Grewal, and Mathur s theory of international buyer behavior. A composite model was developed incorporating these theories with available information on craft buyers obtained in interviews and observations during wholesale markets. The components in the proposed model generated the focus of the research inquiry;The research consisted of two stages of investigation. Stage I provided a contextual description of craft retailing for Stage II. The process involved mailing a 14-page questionnaire to a systematic sample of 779 craft buyers in the United States. Conceptual content of the instrument included information on buyers, craft businesses, craft products, customers, and strategies for decision making in wholesale markets. The results were generated from a response rate of 48.7%. Stage II consisted of 45 in-depth telephone interviews with respondents from Stage I. The criteria for sampling were willingness to be interviewed and marketing both U.S. and international craft in the business. The interviews addressed buyer experiences in the business and specific market and craft product decisions. The transcribed interviews were analyzed using the constant comparative method;Results indicate that buyers are diverse in their experiences and approaches to buying craft. Four primary themes (individual perspectives, business environment, global market, and market environment) emerged as the basis for a holistic grounded theory of retail craft buyer behavior. Several subthemes further explain buyer behavior. A revised model of retail craft buyer behavior illustrates the penetrating influence of the individual in buying decisions. The research contributes new concepts to existing buyer behavior. Recommendations are made for future research

Competitive Information Systems in Support of Pricing

Considerable attention has recently been paid to the opportunities presented by information systems technology for implementing, or even driving, corporate strategy. But organizations attempting to identify systems that provide competitive advantage are finding the search to be frustrating and often unrewarding. This paper combines two familiar information systems concepts, the Anthony model and information attributes, to produce a framework for identifying one class of competitive information systems, systems in support of product pricing. For the vast majority of companies operating in imperfect markets, pricing is an information intensive process, in which ambiguous cost projections are balanced with elusive estimates of demand in an attempt to satisfy conflicting stakeholders. As such, pricing presents a rich opportunity to creatively apply information systems technology for competitive advantage. To assist in identifying applications we present a framework to structure the search and a series of working examples that can motivate synergistic discovery. The framework, shown below, categorizes pricing information systems according to decision type and information attributes. The Y-axis contains the three levels of management decision making proposed by Anthony [1965]; four areas of pricing decision-choosing a pricing strategy, setting the basic price level, determinign the price structure, and the price administration- are mapped into the Anthony model. The X-axis includes categories of information attributes taht information systems are likely to impact. We illustrate the matrix by mapping examples into the cells. We are hopeful that readers familiar with a particular firms\u27s attributes and competitive environment will find that the examples help stimulate the discovery of new pricing applications. The paper concludes with some thoughts on using the framework. An appendix to the paper presents a pricing primer for those unfamiliar with the pricing process and its information requirements

A selection framework for derivative products: Development of an impact metric and platform value assessment methodology

In today’s product development environment, most companies develop product platforms due to the time and cost advantages that are reaped on subsequent development efforts. Many Research and Development (R&D) efforts conclude with the establishment of a platform that anticipates certain technologies and/or markets. However, when a new unanticipated market or technology arises, firms often struggle to assess these opportunities. Most tools to date focus on the upfront decisions while the product platform is under development. There is little work that examines these decisions with the added constraint of a preexisting platform. This work proposes a new methodology derived from existing tools that address platform development, specifically, the development of derivative products given the constraints of existing platforms and new opportunities that were not identified during the development of the original platforms. The methodology estimates the impact of making a change in a specific part of the platform in order to integrate new technologies and develop new derivative products, using information theory and coupling indices that capture different aspects of a platform and are combined to extract the most relevant characteristics of each tool. This estimation is fed into a Real Options decision tree model that establishes the value of the opportunity conducting simulations for certain scenarios of markets to pursue, technologies to integrate, and existing platforms to use. The methodology is applied to a water cooler in order to illustrate the process using two different platforms under a common set of assumptions. This case study suggested that the proposed approach facilitated the decisions to integrate new technologies and pursue new markets from existing platforms. Opportunities for future work include examining the appropriate ways of combining Coupling Indices and Information Theory, the linkage between impact assessment and the cost of technology integration, and the relationship between the type of industry and the required investment to integrate technologies. In addition, a real application case would provide more meaningful results and allow the refinement of this approach

Re-Thinking Community Needs Assessment to Drive Value

Re-Thinking Community Needs Assessment to Drive Value Lanell White, MSI The information environment has continually changed over the past several years. Libraries face many challenges: changes in mission and strategy, restructuring, stagnant budgets, shrinking teams, increased scope of responsibility, and pressures to transform information delivery. At the same time, end users have grown to expect ubiquitous access to content across a variety of devices, with tools for learning, analytics, visualization, and productivity seamlessly integrated. Now more than ever, it is critical to have a fact-based understanding of community needs so that the library can successfully deliver information products and services into the community that support its growth, and reflect its values and goals. Getting in touch with the needs of the community requires a shift in thinking – moving beyond anecdotal stories or proxies for assessment and adopting a more formalized, objective approach in effective decision-making. In essence, managing a library is like managing a business that exists within a larger business. Accordingly, the library function adheres to the same tenets critical to any successful business: understanding market and client needs, adjusting tactics to external factors, continually revisiting the strategic plan, altering services and library offerings along with distribution tactics, and evaluating return on investment — it makes no difference whether customers are external or internal. In the end, to effectively serve the community and generate value and game-changing outcomes from strategic initiatives, librarians must thoroughly and objectively understand the needs, habits, and preferences of the markets they hope to serve. Delivering the ideal set of information products and services does not happen magically –– it requires in-depth planning, and preparation as well as continual monitoring. The presentation will: Identify key trends shaping the information industry, including the library and information management environment that serve as a backdrop as libraries assess their 2015 plans. Cover fundamental best practices for librarians starting or revising needs assessment programs, including ways to: conduct and measure needs assessment in strategic intervals; focus on outcomes that matter to target client groups; and communicate hard-hitting recommendations to leadership and stakeholders. Lastly, attendees will also learn how to leverage Outsell’s Information Product Development Life Cycle (IPDL) – a framework for discovering and addressing end-user needs in the context of library services, products, and decision-making

Towards Leveraging the Frontline for Strategic Issue Identification under Uncertainty

This paper presents different corporate prediction aggregation techniques and introduces a new type of prediction mechanism linking the sensing of operational capabilities by frontline employees to the identification of fuzzy events and emerging strategic issues as ‘early warning signals’. Based on the literatures on prediction markets and fuzzy logic the methodology collects information from many diverse frontline employees to develop valid signaling predictors. Individuals in the frontline gain deep insights as they perform operational activities in direct interactions with many internal and external stakeholders and we tap into this unique knowledge source to identify new issues and opportunities for ongoing strategic decision-making. Aggregating dispersed information from crowds is not a new phenomenon. The capacity to aggregate heterogeneous and dispersed information from the environment is seen as a critical input for strategic decision making [Arrow, 1974; Hayek, 1945; Stinchcombe, 1990]. Hayek’s notion of information aggregation and dispersed knowledge, has established the foundations for prediction markets where the main objective of prediction markets is to create accurate predictions of given issues of interest, and such markets have demonstrated that crowds have the ability to predict outcomes [Berg, Forsythe and Rietz, 1996; 1997; Thompson, 2012: Wolfers and Zitzewitz, 2004]. Corporate prediction markets take various forms. Borrowing from the concepts used by Spann and Skiera (2003), they refer to the evolution in prediction aggregation as first-generation (G1) and second-generation (G2) prediction markets. In G1 markets participating employees invest in the outcome of already defined problems, such as, forecasts on next quarter’s sales volume, market entries by new competitors or performance of certain markets. In recent years, G2 markets, preference markets, aggregate predictions from the firm’s stakeholders about the probable success rates of various product concepts and ideas [Slamka, Jank and Skiera, 2012]. Hence, the participants in G1 and G2 prediction markets typically invest in the outcome of predefined time constrained issues. Here we propose a spring-off mechanism to G1 and G2 markets based on predictions without markets of fuzzy events or emerging issues not yet clearly defined, but nonetheless evolving phenomena to consider for responsive strategies. The notion of an event and its related probability constitute the most basic concepts of probability theory. An event is an accurately specified collection of points in a sample range. In contrast, in everyday life individuals often encounter situations in which an “event” is fuzzy and rather ill-defined than being a sharply defined collection of points [Zadeh, 1965]. We draw on fuzzy sets theory that offers mathematical models to deal with information that is uncertain and vague. That is, our contribution proposes formalized tools to deal with the intrinsic fuzziness in decision making problems [Fisher, 2003]

Mktg

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The implications of alternative developer decision-making strategies on land-use and land-cover in an agent-based land market model

Land developers play a key role in land-use and land cover change, as\ud they directly make land development decisions and bridge the land and housing\ud markets. Developers choose and purchase land from rural land owners, develop\ud and subdivide land into parcel lots, build structures on lots, and sell houses to residential households. Developers determine the initial landscaping states of developed parcels, affecting the state and future trajectories of residential land cover, as well as land market activity. Despite their importance, developers are underrepresented in land use change models due to paucity of data and knowledge regarding their decision-making. Drawing on economic theories and empirical literature, we have developed a generalized model of land development decision-making within a broader agent-based model of land-use change via land markets. Developer’s strategies combine their specialty in developing of particular subdivision types, their perception of and attitude towards market uncertainty, and their learning and adaptation strategies based on the dynamics of the simulated land and housing markets. We present a new agent-based land market model that includes these elements. The model will be used to experiment with these different development decision-making methods and compare their impacts on model outputs, particularly on the quantity and spatial pattern of resultant land use changes. Coupling between the land market and a carbon sequestration model, developed for the larger SLUCE2 project, will allow us, in future work, to examine how different developer’s strategies will affect the carbon balance in residential\ud landscape