An evolutionary stage model of outsourcing and competence destruction : a Triad comparison of the consumer electronics industry

Outsourcing has gained much prominence in managerial practice and academic discussions in the last two decades or so. Yet, we still do not understand the full implications of outsourcing strategy for corporate performance. Traditionally outsourcing across borders is explained as a cost-cutting exercise, but more recently the core competency argument states that outsourcing also leads to an increased focus, thereby improving effectiveness. However, no general explanation has so far been provided for how outsourcing could lead to deterioration in a firm‟s competence base. We longitudinally analyze three cases of major consumer electronics manufacturers, Emerson Radio from the U.S., Japan‟s Sony and Philips from the Netherlands to understand the dynamic process related to their sourcing strategies. We develop an evolutionary stage model that relates outsourcing to competence development inside the firm and shows that a vicious cycle may emerge. Thus it is appropriate to look not only at how outsourcing is influenced by an organization‟s current set of competences, but also how it alters that set over time. The four stages of the model are offshore sourcing, phasing out, increasing dependence on foreign suppliers, and finally industry exit or outsourcing reduction. The evolutionary stage model helps managers understand for which activities and under which conditions outsourcing across borders is not a viable option. Results suggest that each of these firms had faced a loss of manufacturing competitiveness in its home country, to which it responded by offshoring and then outsourcing production. When a loss of competences occurred, some outsourcing decisions were reversed

Predictive User Modeling with Actionable Attributes

Different machine learning techniques have been proposed and used for modeling individual and group user needs, interests and preferences. In the traditional predictive modeling instances are described by observable variables, called attributes. The goal is to learn a model for predicting the target variable for unseen instances. For example, for marketing purposes a company consider profiling a new user based on her observed web browsing behavior, referral keywords or other relevant information. In many real world applications the values of some attributes are not only observable, but can be actively decided by a decision maker. Furthermore, in some of such applications the decision maker is interested not only to generate accurate predictions, but to maximize the probability of the desired outcome. For example, a direct marketing manager can choose which type of a special offer to send to a client (actionable attribute), hoping that the right choice will result in a positive response with a higher probability. We study how to learn to choose the value of an actionable attribute in order to maximize the probability of a desired outcome in predictive modeling. We emphasize that not all instances are equally sensitive to changes in actions. Accurate choice of an action is critical for those instances, which are on the borderline (e.g. users who do not have a strong opinion one way or the other). We formulate three supervised learning approaches for learning to select the value of an actionable attribute at an instance level. We also introduce a focused training procedure which puts more emphasis on the situations where varying the action is the most likely to take the effect. The proof of concept experimental validation on two real-world case studies in web analytics and e-learning domains highlights the potential of the proposed approaches

Data Mining in Electronic Commerce

Modern business is rushing toward e-commerce. If the transition is done properly, it enables better management, new services, lower transaction costs and better customer relations. Success depends on skilled information technologists, among whom are statisticians. This paper focuses on some of the contributions that statisticians are making to help change the business world, especially through the development and application of data mining methods. This is a very large area, and the topics we cover are chosen to avoid overlap with other papers in this special issue, as well as to respect the limitations of our expertise. Inevitably, electronic commerce has raised and is raising fresh research problems in a very wide range of statistical areas, and we try to emphasize those challenges.Comment: Published at http://dx.doi.org/10.1214/088342306000000204 in the Statistical Science (http://www.imstat.org/sts/) by the Institute of Mathematical Statistics (http://www.imstat.org

A Multi-Agent Simulation of Retail Management Practices

We apply Agent-Based Modeling and Simulation (ABMS) to investigate a set of problems in a retail context. Specifically, we are working to understand the relationship between human resource management practices and retail productivity. Despite the fact we are working within a relatively novel and complex domain, it is clear that intelligent agents do offer potential for developing organizational capabilities in the future. Our multi-disciplinary research team has worked with a UK department store to collect data and capture perceptions about operations from actors within departments. Based on this case study work, we have built a simulator that we present in this paper. We then use the simulator to gather empirical evidence regarding two specific management practices: empowerment and employee development

Virtuous and Adverse Selection within Economic Organizations

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The Governance of Services

The problem of assessing a system of governance for composite services in the social economy is approached by means of original methods.The main innovation is that the welfare structure of a society is separated from the legal transaction- or institutional structure.As both the various types of services and the various modes of management are defined in terms of relations between sets of persons, these structures can be compared and the performance of a managementsystem can be assessed.The dynamics of a wide range of hybrid forms of organization - between market and hierarchy - is analyzed in this framework. The approach elaborates on the new institutional economics, and the social theory of micromotives and macrobehavior in exchange and transactions.welfare and transactions;hybrid organizations;typology of services;typology of modes of governance;institutional economics

Analyzing policy capturing data using structural equation modeling for within-subject experiments (SEMWISE)

We present the SEMWISE (structural equation modeling for within-subject experiments) approach for analyzing policy capturing data. Policy capturing entails estimating the weights (or utilities) of experimentally manipulated attributes in predicting a response variable of interest (e.g., the effect of experimentally manipulated market-technology combination characteristics on perceived entrepreneurial opportunity). In the SEMWISE approach, a factor model is specified in which latent weight factors capture individually varying effects of experimentally manipulated attributes on the response variable. We describe the core SEMWISE model and propose several extensions (how to incorporate nonbinary attributes and interactions, model multiple indicators of the response variable, relate the latent weight factors to antecedents and/or consequences, and simultaneously investigate several populations of respondents). The primary advantage of the SEMWISE approach is that it facilitates the integration of individually varying policy capturing weights into a broader nomological network while accounting for measurement error. We illustrate the approach with two empirical examples, compare and contrast the SEMWISE approach with multilevel modeling (MLM), discuss how researchers can choose between SEMWISE and MLM, and provide implementation guidelines

SME and global industries: managing the global supply chain in the consumer electronic industry

This research takes place within a broader study, which aims to highlight the evolution strategies of the companies competing within the consumer electronics industry, and the consequent changes that have characterized the market worldwide. This paper analyzes some management and organizational issues of a me-dium Italian firm (Mivar), which has been producing television sets for almost fifty years. The aim of this paper is to underline not so much the path of Mivar growth, but the gradual loss of competitiveness, which has now led this firm to a position of total dependence on its environment. This could pro-voke the exit of Mivar from the market.Emphasizing the opportunities offered to companies by the growing inter-nationalization of the business, we highlight, however, that generally the globalization of an industrial sector does not imply a consequent internationalization of the firms operating in it. This can happen especially if the firm suffers for weaknesses due to sub-optimal size and inadequacy of its governance, like in the case of Mivar, where the lack of internationalization of its business causes several problems in managing the global supply chain, therefore compromising the system of relationships with upstream and downstream companies.Television Set Industry, Internationalization, SME Governance, International Supply Chain

Participation in multicriteria decision support - the case of conflicting water allocation in the Spree River basin

This discussion paper presents the Integrated Methodological Approach for participatory multi-criteria decision support under uncertainty (IMA), which emerged from the debates about participation, multi-criteria analysis (MCA) and benefit-cost analysis (BCA). It provides a framework for participatory and science-based evaluation processes with combined use of BCA and MCA to support large-scale public decisions. While IMA does not claim to realize an all-inclusive participation scheme, it offers the advantage to improve the quality of decision making through advances in competence and fairness. Its practical application with emphasis on its participatory elements is demonstrated by the case study on the water allocation conflict of the German Spree River, which involves the German capital of Berlin, an important wetland, and the needs to remediate a post-mining landscape. --Participation,Multi-criteria analysis,Cost-benefit analysis,River basin management,Integrated Assesment