Flexible Budgeting under Uncertainty: A Real Options Perspective

This paper examines the relationships between uncertainty and the perceived usefulness of traditional annual budgets versus flexible budgets in 95 Swedish companies. We form hypotheses that the perceived usefulness of the annual budgets as well as the attitudes to more flexible budget alternatives are influenced by the uncertainty that the companies face. Our study distinguishes between two separate kinds of uncertainty: exogenous stochastic uncertainty (deriving from the firm’s environment) and endogenous deterministic uncertainty (caused by the strategic choices made by the firm itself). Based on a structural equations modelling analysis of data from a mail survey we found that the more accentuated exogenous uncertainty a company faces, the more accentuated is the expected trend towards flexibility in the budget system, and vice versa; the more endogenous uncertainty they face, the more negative are their attitudes towards budget flexibility. We also found that these relationships were not present with regard to the attitudes towards the usefulness of the annual budget. Noteworthy is, however, that there was a significant negative relationship between the perceived usefulness of the annual budget and budget flexibility. Thus, our results seem to indicate that the degree of flexibility in the budget system is influenced by both general attitudes towards the usefulness of traditional budgets and by the actual degree of exogenous uncertainty a company faces and by the strategy that it executes.

What is A Virtual Service?- Broadening the Perspective on Technology-Based Services

This article expands the discussion of the impact of technology on services and contributes to a broader comprehension of the nature of virtual services. This is done by discovering dimensions that distinguish physical services from virtual services, i.e. services that are distributed by electronic means and where the customer has no direct human interaction with the service provider. Differences in the core characteristics of services, servicescape and service delivery are discussed. Moreover, dimensions that differentiate between virtual services are analysed. A classification scheme for virtual services is proposed, including the origin of the service, the element of the service offering, the customisation process, stage of the service process performed, and the degree of mobility of the service.

Exploring Customer Value Formation: A Customer Dominant Logic Perspective

This paper extends current discussions about value creation and proposes a customer dominant value perspective. A customer-dominant marketing logic positions the customer in the center, rather than the service provider/producer or the interaction or the system. The focus is shifted from the company´s service processes involving the customer, to the customer´s multi-contextual value formation, involving the company. It is argued that value is not always an active process of creation; instead value is embedded and formed in the highly dynamic and multi-contextual reality and life of the customer. This leads to a need to look beyond the current line of visibility where visible customer-company interactions are focused to the invisible and mental life of the customer. From this follows a need to extend the temporal scope, from exchange and use even further to accumulated experiences in the customer´s life. The aim of this paper is to explore value formation from a customer dominant logic perspective. This is done in three steps: first, value formation is contrasted to earlier views on the company’s role in value creation by using a broad ontologically driven framework discussing what, how, when, where and who. Next, implications of the proposed characteristics of value formation compared to earlier approaches are put forward. Finally, some tentative suggestions of how this perspective would affect marketing in service companies are presented. As value formation in a CDL perspective has a different focus and scope than earlier views on value it leads to posing questions about the customer that reveals earlier hidden aspects of the role of a service for the customer. This insight might be used in service development and innovation.

Customer Needing - Conceptualising Industrial Service from a Customer Perspective

Views on industrial service have conceptually progressed from the output of the provider’s production process to the result of an interaction process in which the customer also is involved. Although there are attempts to be customer-oriented, especially when the focus is on solutions, an industrial company’s offering combining goods and services is inherently seller-oriented. There is, however, a need to go beyond the current literature and company practices. We propose that what is needed is a genuinely customer-based parallel concept to offering that takes the customer’s view and put forward a new concept labelled customer needing. A needing is based on the customer’s mental model of their business and strategies which will affect priorities, decisions, and actions. A needing can be modelled as a configuration of three dimensions containing six functions that create realised value for the customer. These dimensions and functions can be used to describe needings which represent starting points for sellers’ creation of successful offerings. When offerings match needings over time the seller should have the potential to form and sustain successful buyer relationships.

Dimensionality of quality from a customer perspective in the wood industry

The research analyzes product quality from a customer perspective in the case of the wood products industry. Of specific interest is to understand better how environmental quality is perceived from a customer perspective. The empirical material used comprises four data-sets from Finland, Germany and the UK, collected during 1992 2004. The methods consist of a set of quantitative statistical analyses. The results indicate that perceived quality from a customer perspective can be presented using a multidimensional and hierarchical construct with tangible and intangible dimensions, that is common to different markets and products. This applies in the case of wood products but also more generally at least for some other construction materials. For wood products, tangible product quality has two main sub-dimensions: technical quality and appearance. For product intangibles, a few main quality dimensions seem be detectable: Quality of intangibles related to the physical product, such as environmental issues and product-related information, supplier-related characteristics, and service and sales personnel behavior. Environmental quality and information are often perceived as being inter-related. Technical performance and appearance are the most important considerations for customers in the case of wood products. Organizational customers in particular also clearly consider certain intangible quality dimensions to be important, such as service and supplier reliability. The high technical quality may be considered as a license to operate , but product appearance and intangible quality provide potential for differentiation for attracting certain market segments. Intangible quality issues are those where Nordic suppliers underperform in comparison to their Central-European competitors on the important German markets. Environmental quality may not have been used to its full extent to attract customers. One possibility is to increase the availability of the environment-related information, or to develop environment-related product characteristics to also provide some individual benefits. Information technology provides clear potential to facilitate information-based quality improvements, which was clearly recognized by Finnish forest industry already in the early 1990s. The results indeed indicate that wood products markets are segmented with regard to quality demands

Mentoring in an Entrepreneurial Setting - The Mentor's Perspective

This paper discusses mentoring from the mentors' point of view in an entrepreneurial setting. The aim of the paper is to present why mentoring can be considered important for entrepreneurs who are mentors and under what circumstances mentoring is valuable for the mentor. A pilot mentorprogramme was conducted among women entrepreneurs during 1998. A study was made in order to examine the mentors’ perception of the programme. Firstly mentoring and entrepreneurship in Finland are discussed briefly. Secondly the results of the study are presented. The results of the study show that mentoring can be valuable for the mentors both on a vocational and a personal level. However, it is important to choose the mentees of the programme on a rather strict basis. The results demonstrate a need to be careful in choosing mentees.

Magnetic resonance imaging and ultrasonography in brachial plexus birth injury

Brachial plexus birth injury (BPBI) is caused by stretching, tearing or avulsion of the C5-C8 or Th1 nerve roots during delivery. Foetal-maternal disproportion is the main reason for BPBI. The goal of this study was to find out the incidence of posterior subluxation of the humeral head during first year of life in BPBI and optimal timing of the ultrasonographic screening of the glenohumeral joint. The glenohumeral congruity and posterior subluxation of the humeral head associated to muscle atrophy were assessed and surgical treatment of the shoulder girdle as well as muscle changes in elbow flexion contracture were evaluated. The prospective, population based part of the study included all neonates born in Helsinki area during years 2003-2006. Patients with BPBI sent to the Hospital for Children and Adolescents because of decreased external rotation, internal rotation contracture or deformation of the glenohumeral joint as well as patients with elbow flexion contracture were also included in this prospective study. The incidence of BPBI was calculated to be 3.1/1000 newborns in Helsinki area. About 80% of the patients with BPBI recover totally during the follow-up within the first year of life. Permanent plexus injury at the age of one year was noted in 20% of the patients (0.64/1000 newborns). Muscle imbalance resulted in sonographically detected posterior subluxation in one third of the patients with permanent BPBI. If muscle imbalance and posterior subluxation are left untreated bony deformities will develop. All patients with internal rotation contracture of the glenohumeral joint presented muscle atrophy of the rotator cuff muscles. Especially subscapular and infraspinous muscles were affected. A correlation was found particularly between greatest thickness of subscapular muscle and subluxation of the humeral head, degree of glenoid retroversion, as well as amount of internal rotation contracture. Supinator muscle atrophy was evident among all the studied patients with elbow flexion contracture. Brachial muscle pathology seemed to be an important factor for elbow flexion contracture in BPBI. Residual dysfunction of the upper extremity may require operative treatment such as tendon lengthening, tendon transfers, relocation of the humeral head or osteotomy of the humerus. Relocation of the humeral head improved the glenohumeral congruency among patients under 5 years of age. Functional improvement without remodeling of the glenohumeral joint was achieved by other reconstructive procedures. In conclusion: Shoulder screening by US should be done to all patients with permanent BPBI at the age of 3 and 6 months. Especially atrophy of the subscapular muscle correlates with glenohumeral deformity and posterior subluxation of the humeral head, which has not been reported in previous studies. Permanent muscle changes are the main reason for diminished range of motion of the elbow and forearm. Relocation of the humeral head, when needed, should be performed under the age of 5 years.