Sharing the proceeds from a hierarchical venture

We consider the problem of distributing the proceeds generated from a joint venture in which the participating agents are hierarchically organized. We introduce and characterize a family of allocation rules where revenue ‘bubbles up’ in the hierarchy. The family is flexible enough to accommodate the no-transfer rule where no revenue bubbles up) and the full-transfer rule (where all the revenues bubble up to the top of the hierarchy). Intermediate rules within the family are reminiscent of popular incentive mechanisms for social mobilization or multi-level marketing

Tax Competition in a Fiscal Union with Decentralized Leadership

This paper examines capital tax competition in the presence of an interstate transfer policy without federal commitment. Lack of commitment implies that tax policy is chosen prior to federal transfers. The paper’s main result is that ex-post federal policy internalizes horizontal fiscal externalities, insulating tax policy from capital mobility. Federal policy, however, introduces a new source of inefficiency unrelated to tax competition. Specifically, ex-post transfer payments prove to be equivalent to an interstate revenue-sharing system which may render federal intervention in the presence of fiscal externalities welfare-deteriorating relative to tax competition.federalism, capital tax competition, commitment, soft budget constraints

Decisions about entry modes for telecom companies into digital music business: An empirical case study

The digital music market offers an opportunity for telecom companies to furnish value-added services. However, little effort has been made to study empirically how to make a decision about entry modes for telecom companies into digital music business. This study therefore investigates various strategies that telecom companies may implement to enter the digital music industry. The results of a series of expert surveys reveal that the preference ranking of entry modes is acquisition, joint venture, and contractual agreement, respectively. Moreover, the leading key factors in selecting entry modes are complementary capabilities, hostility of environment, relational risk between firms as partners, commitment of resources, and availability of expertise. Furthermore, an importance-performance analysis was conducted to understand the different aspects that are of different performances and importance in each entry mode. The implications of the findings are also discussed. --Telecom companies,Digital music business,Entry modes,Value added

The Internet's Effects on Global Production Networks: Challenges and Opportunities for Managing in Developing Asia

Placing global production networks (GPN) on the Internet poses a fundamental challenge, but also creates new opportunities for managing in Developing Asia. Network flagships can now select best-performing suppliers on a global scale, increasing the pressure on Asian suppliers. But the transition form EDI to the Internet may also provide new opportunities for Asian suppliers, by reducing barriers to network entry, and by enhancing knowledge diffusion. A conceptual framework is introduced to assess how the Internet reshapes business organization and GPN. That framework is applied to one of the role models of managing in Asia, Taiwan's Acer Group. The paper highlights a vicious circle that must be broken to reap the benefits of the Internet: Asian firms must reduce a huge efficiency gap between manufacturing and the management of supporting digital information systems (DIS). The challenge is to embrace the Internet as flexible infrastructures that support not only information exchange, but also knowledge sharing, creation and utilization. The Internet facilities this task: it provides new opportunities for the outsourcing of mission-critical support services.

Marketing innovative service solutions with inter-organizational service networks: opportunities and threats

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Organization, Control and the Single Entity Defense in Antitrust

Since at least the 1930's economists have puzzled over how to delineate the boundaries of the firm. With the advent of antitrust legislation in 1890, courts have been pressed to consider what constitute conspiracies between corporate entities to restrain commerce. By the 1940's, courts started to characterize conspiracies by sorting out what they are not — specifically, by extending the status of "single entity" to certain types of business arrangements. Both efforts in economics and in the law to sort out what constitutes a "firm" or "single entity" have focused on "control." A difficulty is that neither the law nor economics offer an operationally significant concept of control. Even so, both law and economics contribute concepts other than control that provide a way of understanding economic organization. These concepts — control rights, adaptation, delegation, and renegotiation — suggests how one can subsume the sometimes confusing array of single entity tests proposed in the case law within a two-stage sequence of tests.

Structural Reforms and Competitiveness: Will Europe Overtake America?

http://deepblue.lib.umich.edu/bitstream/2027.42/39930/3/wp545.pd

Placing the Networks on the Web: Challenges and Opportunities for Managing in Developing Asia

Placing the networks on the Web poses a fundamental challenge, but also provides new opportunities for managing in Developing Asia. There is a huge efficiency gap between the region's manufacturing systems and the management of complementary, knowledge-intensive support services. The challenge is to reduce this gap as quickly as possible by embracing the Internet as a core business function, despite a weak base of accumulated knowledge of how to manage IT-based information systems. Asian companies, even the best, lag substantially behind their American and European counterparts. There is a potential vicious circle that needs to be broken: a belated transition to IT-based information systems has prevented the accumulation of knowledge, through trial-and-error, of how to design and implement an appropriate IT organization that reflects the peculiar strengths and weaknesses of diverse Asian management systems. Limited resources prevent any attempt to address these problems in a big leap forward. This implies that in-house efforts need to be supplemented with outsourcing of IT services. There is also a need for strategic partnering with major suppliers of Internet software and networking equipment. The opportunity is that the Internet provides almost unlimited opportunities for the outsourcing of mission-critical support services, such as ERP (enterprise resource planning), HRM (human resource management). Furthermore, fierce competition among major producers of Internet software and networking equipment has created a buyers' market - placing Asian firms in a reasonably strong bargaining position. These developments are generally not well covered by existing studies, which are primarily focused on developments in the U.S. and Europe. The paper tries to fill this gap, and explores how placing global production networks on the Web affects managing in Developing Asia. A conceptual framework is introduced in parts 1 to 3. That framework is then applied to one of the role models of managing in Asia, Taiwan's Acer Group. Part 1 introduces a taxonomy of expected benefits from Internet-enabled transformations of business organization. In part 2, we argue that the real issue is to analyze how the Internet reshapes the organization of global production networks. In part3, we access conflicting claims on how an increased use of the Internet to manage global production networks affects international knowledge diffusion. In part 4, the example of Taiwan's Acer Group is used to describe the challenge for Asian firms to embrace the Internet as a key management function. And in part 5, we ask what Acer's experience tells us about Developing Asia's opportunities.

Value creation and change in social structures: the role of entrepreneurial innovation from an emergence perspective

Aim: Our aim is to develop a more complete understanding of how processes that entrepreneurs perform interact with wider society and the causal effects of society on entrepreneurial behaviour and vice versa. We aim to show how entrepreneurial agency is put into effect in relation to the disruption of social structure and social change. This has implications for innovation and entrepreneurship policy and practice, and for entrepreneurship theory. We also investigate the role of ‘value’ in these processes. Contribution to the literature Our central argument is that emergent forms (or ‘emergents’) may be short lived (ephemeral) but have causal power on the performance of the actors in the system of inter-relationships in the innovation ecosystem. The emphasis on inter-related social processes and ontological stratification provides theoretical development of extant entrepreneurship theory on new venture creation (by explaining process), effectuation (by linking individualism and holism) and opportunity recognition (by deconstructing opportunity into anticipation, ontology and process). Methodology The paper takes an 'emergence' perspective as a way to understand entrepreneurial processes that give rise to innovation. The anticipation of value and the inter-relationship with social and organisational structures are fundamental to this perspective. A longitudinal analysis of a case study of the development of a new business model within an entrepreneurial firm is described. The case is followed through seven phases in which the relationship between process and emergent ontological status is shown to have destabilising and stabilising effects which produce emergent properties. Results and Implications One methodological contribution is framing how to conceptualise the empirical evidence. Emergents have causal effects on the anticipations of value inherent in their particular system of innovation. This causality is manifest as the attraction of resource in the firm; the stabilisation of the emergent constitutes strategy in the enterprise. A key role of the entrepreneurs in our case study was the creation and maintenance of evolving ontological materiality, as meaningful to themselves and to those with whom they interacted. In simple terms, they made things meaningful to people who mattered