Consequences of customer loyalty to the loyalty program and to the company

Gaining customer loyalty is an important goal of marketing, and loyalty programs are intended to help in reaching it. Research on loyalty programs suggests that customers differentiate between loyalty to a company and loyalty to a loyalty program, yet little is known about the consequences of these two types of loyalty. Therefore, our study intends to make two main contributions: (1) improving our understanding of the constructs "program loyalty" and "company loyalty", (2) investigating the relative impact of the two types of loyalty on preference, intention, and purchase behavior for the case of a multi-firm loyalty program. Results indicate that company loyalty influences a customer's choice to visit a particular provider and to prefer it over competitors, but it is not a strong predictor of purchase behavior. Conversely, program loyalty is a far more important driver of purchase behavior. This implies that company loyalty primarily attracts customers to a particular provider and program loyalty ensures that once inside the store, more money is spent. © 2011 Academy of Marketing Science.

Implications of restructuring and privatisation for competitiveness and perfomance:two Brazilian steel companies

The thesis examines the effects of the privatisation process on productivity, competitiveness and performance in two major Brazilian steel companies, which were privatised in between 1991 and 1993. The case study method was adopted in this research due to its strengths as a useful technique allowing in-depth examination of the privatisation process, the context in which it happened and its effects on the companies. The thesis has developed a company analysis framework consisting of three components: management, competitiveness/productivity and performance and examined the evidence on the companies within this framework.The research indicates that there is no straightforward relationship between privatisation, competitiveness and performance. There were many significant differences in the management and technological capabilities, products and performance of the two companies, and these have largely influenced the effects of privatisation on each company. Company Alpha's strengths in technological and management capabilities and high value added products explain strong productivity and financial performance during and after privatisation. Company Beta's performance was weak before the privatisation and remained weak immediately after. Before the privatisation, weaknesses in management, commodity type low value added products and shortage of funds for investment were the major problems. These were compounded by greater government interference. Despite major restructuring, the poor performance has continued after privatisation largely because the company has not been able to improve its productivity sufficiently to be cost competitive in commodity type markets. Both companies state that their strategies have changed significantly. They claim to be more responsive to market conditions and customers and are attempting to develop closer links with major customers. It is not possible to assess the consequences of these changes in the short time that has elapsed since privatisation but Alpha appears to be more effective in developing a coherent strategy because of its strengths. Both companies accelerated their programme of organisational restructuring and reducing the number of their employees during the privatisation process to improve productivity and performance. Alpha has attained standards comparable to major international steel companies. Beta has had to make much bigger organisational changes and cuts in its labour force but its productivity levels still remain low in comparison with Alpha and international competitors.

The growing importance of inter-company collaboration

Guest editorial: This special issue has been drawn from papers that were published as part of the Second European Conference on Management of Technology (EuroMOT) which was held at Aston Business School (Birmingham, UK) 10-12 September 2006. This was the official European conference for the International Association for Management of Technology (IAMOT); the overall theme of the conference was “Technology and global integration.” There were many high-calibre papers submitted to the conference and published in the associated proceedings (Bennett et al., 2006). The streams of interest that emerged from these submissions were the importance of: technology strategy, innovation, process technologies, managing change, national policies and systems, research and development, supply chain technology, service and operational technology, education and training, small company incubation, technology transfer, virtual operations, technology in developing countries, partnership and alliance, and financing and investment. This special issue focuses upon the streams of interest that accentuate the importance of collaboration between different organisations. Such organisations vary greatly in character; for instance, they may be large or small, publicly or privately owned, and operate in manufacturing or service sectors. Despite these varying characteristics they all have something in common; they all stress the importance of inter-organisational collaboration as a critical success factor for their organisation. In today's global economy it is essential that organisations decide what their core competencies are what those of complementing organisations are. Core competences should be developed to become a bases of differentiation, leverage and competitive advantage, whilst those that are less mature should be outsourced to other organisations that can claim to have had more recognition and success in that particular core competence (Porter, 2001). This strategic trend can be observed throughout advanced economies and is growing strongly. If a posteriori reasoning is applied here it follows that organisations could continue to become more specialised in fewer areas whilst simultaneously becoming more dependent upon other organisations for critical parts of their operations. Such actions seem to fly in the face of rational business strategy and so the question must be asked: why are organisations developing this way? The answer could lie in the recent changes in endogenous and exogenous factors of the organisation; the former emphasising resource-based issues in the short-term, and strategic positioning in the long-term whilst the later emphasises transaction costs in the short-term and acquisition of new skills and knowledge in the long-term. For a harmonious balance of these forces to prevail requires organisations to firstly declare a shared meta-strategy, then to put some cross-organisational processes into place which have their routine operations automated as far as possible. A rolling business plan would review, assess and reposition each organisation within this meta-strategy according to how well they have contributed (Binder and Clegg, 2006). The important common issue here is that an increasing number of businesses today are gaining direct benefit from increasing their levels of inter-organisational collaboration. Such collaboration has largely been possible due to recent technological advances which can make organisational structures more agile (e.g. the extended or the virtual enterprise), organisational infra-structure more connected, and the sharing of real-time information an operational reality. This special issue consists of research papers that have explored the above phenomenon in some way. For instance, the role of government intervention, the use of internet-based technologies, the role of research and development organisations, the changing relationships between start-ups and established firms, the importance of cross-company communities of practice, the practice of networking, the front-loading of large-scale projects, innovation and the probabilistic uncertainties that organisations experience are explored in these papers. The cases cited in these papers are limited as they have a Eurocentric focus. However, it is hoped that readers of this special issue will gain a valuable insight into the increasing importance of collaborative practices via these studies.

Strategic group theory:review, examination and application in the UK pharmaceutical industry

Purpose – The purpose of this paper is to consider the current status of strategic group theory in the light of developments over the last three decades. and then to discuss the continuing value of the concept, both to strategic management research and practising managers. Design/methodology/approach – Critical review of the idea of strategic groups together with a practical strategic mapping illustration. Findings – Strategic group theory still provides a useful approach for management research, which allows a detailed appraisal and comparison of company strategies within an industry. Research limitations/ implications – Strategic group research would undoubtedly benefit from more directly comparable, industry-specific studies, with a more careful focus on variable selection and the statistical methods used for validation. Future studies should aim to build sets of industry specific variables that describe strategic choice within that industry. The statistical methods used to identify strategic groupings need to be robust to ensure that strategic groups are not solely an artefact of method. Practical implications – The paper looks specifically at an application of strategic group theory in the UK pharmaceutical industry. The practical benefits of strategic groups as a classification system and of strategic mapping as a strategy development and analysis tool are discussed. Originality/value – The review of strategic group theory alongside alternative taxonomies and application of the concept to the UK pharmaceutical industry.

International retail restructuring and divestment: the experience of Tesco

A key purpose of this study is to explore the lessons learned from international retail divestment and market withdrawal experiences. Drawing on 33 in-depth interviews with leading investment banks and key retail executives at Tesco, the study investigates the company's international restructuring and divestment activities in Ireland and France during the mid -1980s and 1990s. It has been demonstrated that, despite the progressive merger and acquisition wave sweeping through the corporate retail landscape recently, international retail divestment is quite widespread. The main conclusion from this study is that Tesco originally did not envisage divestment or de-internationalisation as part of the original internationalisation strategy process in either the acquisition of Three Guys in Ireland or Catteau in France. There was no appreciation from Tesco during their early period of expansion of the fact that exit pressures might arise during the course of market entry. In this regard, the case study provides insights into the relationship between investment and divestment within the context of international retail restructuring. The case evidence also demonstrates the positive impact of the Three Guys and Catteau divestments which helped management to refocus and rejuvenate the company's internationalisation process.

A systems methodology for analysing and simulating manufacturing systems

The Systems Engineering Group (SEG) at De Montfort University are developing the Boardman Soft Systems Methodology (BSSM) which allows complex human systems to be modelled, this work builds upon Checkland's Soft Systems Methodology (1981). The BSSM has been applied to the modelling of the systems engineering process as used in design and manufacturing companies. The BSSM is used to solicit information from a company and this data is then transformed into systemic diagrams (systemigrams). These systemigrams are posited to be accurate and concise representations of the system which has been modelled. This paper describes the collaboration between SEG and a manufacturing company (MC) in Leicester, England. The purpose of this collaboration was twofold. First, it was to create an objective view of the MC's processes, in the form of systemigrams. It was important to get this modelled by a source outside of the company, as it is difficult for people within a system being modelled to be unbiased. Secondly, it allowed a series of systemigrams to be produced which can then be subjected to simulation, for the purpose of aiding risk management decisions and to reduce the project cycle time

Management role in employee participation:a comparative study of multi-national enterprises in India and the U.K.

This research is an Anglo-Indian comparative case study. It studies managerial action in the participation arena of two British multi-nationals i.e. Cadbury Limited and ICI plc. The research was carried out in matched pairs of factories of the above named companies, located in the Midlands of the UK and in Bombay in India. The data for this research was collected through semi-structured interviews with managers and non-management actors, study of company documents and non-participant observation of some participation forums. The research conceptualises the idea of a `participation arena' consisting of the structures, processes, purposes and dynamics of participation. This arena is visualised as broadly reflecting the organisation structure and can be divided into corporate, unit and shopfloor level. Managerial action in this arena is examined in terms of interaction between three sets of factors i.e. company business objectives, strategies and policies; managerial values of power and control; and the responses of unions. Similarities and differences between management action in the home and host plants of the two multi-national companies are also examined. The major findings of the research are as follows. There is significant difference between the participation arena of the parent and the subsidiary company. The latter is marked by absence of higher level participation forums and lack of opportunity for employees to discuss, let alone influence, key decisions. This results from parent company control over key activities of the subsidiary. The similarities in management action in the participation arenas of the two companies in both countries can be attributed to the operation of the three sets of factors mentioned above. Nevertheless, the particular circumstances of each company are a greater influence on managerial action than the national context. Finally, future areas of research in this field are explored.

Design of a stock control methodology for use within an oil blending company

The thesis deals with the background, development and description of a mathematical stock control methodology for use within an oil and chemical blending company, where demand and replenishment lead-times are generally non-stationary. The stock control model proper relies on, as input, adaptive forecasts of demand determined for an economical forecast/replenishment period precalculated on an individual stock-item basis. The control procedure is principally that of the continuous review, reorder level type, where the reorder level and reorder quantity 'float', that is, each changes in accordance with changes in demand. Two versions of the Methodology are presented; a cost minimisation version and a service level version. Realising the importance of demand forecasts, four recognised variations of the Trigg and Leach adaptive forecasting routine are examined. A fifth variation, developed, is proposed as part of the stock control methodology. The results of testing the cost minimisation version of the Methodology with historical data, by means of a computerised simulation, are presented together with a description of the simulation used. The performance of the Methodology is in addition compared favourably to a rule-of-thumb approach considered by the Company as an interim solution for reducing stack levels. The contribution of the work to the field of scientific stock control is felt to be significant for the following reasons:- (I) The Methodology is designed specifically for use with non-stationary demand and for this reason alone appears to be unique. (2) The Methodology is unique in its approach and the cost-minimisation version is shown to work successfully with the demand data presented. (3) The Methodology and the thesis as a whole fill an important gap between complex mathematical stock control theory and practical application. A brief description of a computerised order processing/stock monitoring system, designed and implemented as a pre-requisite for the Methodology's practical operation, is presented as an appendix.

Strategic logistics outsourcing: an integrated QFD and AHP approach

Third-party logistics service providers (3PLs) play a vital role in contemporary supply chain management. Evaluation and selection of the right 3PLs depends on a wide range of quantitative and qualitative criteria rather than cost-based factors. Although various multi-criteria decision making approaches have been proposed, they have not considered the impact of business objectives and requirements of company stakeholders on the evaluating criteria. To enable the "voice" of company stakeholders is considered, this paper develops an integrated approach for selecting 3PL strategically. In the approach, multiple evaluating criteria are derived from the requirements of company stakeholders using a series of house of quality (HOQ). The importance of evaluating criteria is prioritized with respect to the degree of achieving the stakeholder requirements using analytic hierarchy process (AHP). Based on the ranked criteria, alternative 3PLs are evaluated and compared with each other using AHP again to make an optimal selection.

Language policy and governmentality in businesses in Wales:a continuum of empowerment and regulation

In this paper, I examine how language policy acts as a means of both empowering the Welsh language and theminority language worker and as a means of exerting power over them. For this purpose, the study focuses on a particular site: private sector businesses in Wales. Therein, I trace two major discursive processes: first, the Welsh Government’s national language policy documents that promote corporate bilingualism and bilingual employees as value-added resources; second, the practice and discourse of company managers who sustain or appropriate such promotional discourses for creating and promoting their own organisational values. By drawing on concepts from governmentality, critical language policy and discourse studies, I show that promoting bilingualism in business is characterised by local and global governmentalities. These not only bring about critical shifts in valuing language as symbolic entities attached to ethnonational concerns or as promotional objects that bring material gain. Language governmentalities also appear to shape new forms of ‘languaging’ the minority language worker as selfgoverning, and yet, governed subjects who are ultimately made responsible for ‘owning’ Welsh.

Optimization of physical distribution problem in logistics management

Physical distribution plays an imporant role in contemporary logistics management. Both satisfaction level of of customer and competitiveness of company can be enhanced if the distribution problem is solved optimally. The multi-depot vehicle routing problem (MDVRP) belongs to a practical logistics distribution problem, which consists of three critical issues: customer assignment, customer routing, and vehicle sequencing. According to the literatures, the solution approaches for the MDVRP are not satisfactory because some unrealistic assumptions were made on the first sub-problem of the MDVRP, ot the customer assignment problem. To refine the approaches, the focus of this paper is confined to this problem only. This paper formulates the customer assignment problem as a minimax-type integer linear programming model with the objective of minimizing the cycle time of the depots where setup times are explicitly considered. Since the model is proven to be MP-complete, a genetic algorithm is developed for solving the problem. The efficiency and effectiveness of the genetic algorithm are illustrated by a numerical example.

Editorial

This special issue of the Journal of the Operational Research Society is dedicated to papers on the related subjects of knowledge management and intellectual capital. These subjects continue to generate considerable interest amongst both practitioners and academics. This issue demonstrates that operational researchers have many contributions to offer to the area, especially by bringing multi-disciplinary, integrated and holistic perspectives. The papers included are both theoretical as well as practical, and include a number of case studies showing how knowledge management has been implemented in practice that may assist other organisations in their search for a better means of managing what is now recognised as a core organisational activity. It has been accepted by a growing number of organisations that the precise handling of information and knowledge is a significant factor in facilitating their success but that there is a challenge in how to implement a strategy and processes for this handling. It is here, in the particular area of knowledge process handling that we can see the contributions of operational researchers most clearly as is illustrated in the papers included in this journal edition. The issue comprises nine papers, contributed by authors based in eight different countries on five continents. Lind and Seigerroth describe an approach that they call team-based reconstruction, intended to help articulate knowledge in a particular organisational. context. They illustrate the use of this approach with three case studies, two in manufacturing and one in public sector health care. Different ways of carrying out reconstruction are analysed, and the benefits of team-based reconstruction are established. Edwards and Kidd, and Connell, Powell and Klein both concentrate on knowledge transfer. Edwards and Kidd discuss the issues involved in transferring knowledge across frontières (borders) of various kinds, from those borders within organisations to those between countries. They present two examples, one in distribution and the other in manufacturing. They conclude that trust and culture both play an important part in facilitating such transfers, that IT should be kept in a supporting role in knowledge management projects, and that a staged approach to this IT support may be the most effective. Connell, Powell and Klein consider the oft-quoted distinction between explicit and tacit knowledge, and argue that such a distinction is sometimes unhelpful. They suggest that knowledge should rather be regarded as a holistic systemic property. The consequences of this for knowledge transfer are examined, with a particular emphasis on what this might mean for the practice of OR Their view of OR in the context of knowledge management very much echoes Lind and Seigerroth's focus on knowledge for human action. This is an interesting convergence of views given that, broadly speaking, one set of authors comes from within the OR community, and the other from outside it. Hafeez and Abdelmeguid present the nearest to a 'hard' OR contribution of the papers in this special issue. In their paper they construct and use system dynamics models to investigate alternative ways in which an organisation might close a knowledge gap or skills gap. The methods they use have the potential to be generalised to any other quantifiable aspects of intellectual capital. The contribution by Revilla, Sarkis and Modrego is also at the 'hard' end of the spectrum. They evaluate the performance of public–private research collaborations in Spain, using an approach based on data envelopment analysis. They found that larger organisations tended to perform relatively better than smaller ones, even though the approach used takes into account scale effects. Perhaps more interesting was that many factors that might have been thought relevant, such as the organisation's existing knowledge base or how widely applicable the results of the project would be, had no significant effect on the performance. It may be that how well the partnership between the collaborators works (not a factor it was possible to take into account in this study) is more important than most other factors. Mak and Ramaprasad introduce the concept of a knowledge supply network. This builds on existing ideas of supply chain management, but also integrates the design chain and the marketing chain, to address all the intellectual property connected with the network as a whole. The authors regard the knowledge supply network as the natural focus for considering knowledge management issues. They propose seven criteria for evaluating knowledge supply network architecture, and illustrate their argument with an example from the electronics industry—integrated circuit design and fabrication. In the paper by Hasan and Crawford, their interest lies in the holistic approach to knowledge management. They demonstrate their argument—that there is no simple IT solution for organisational knowledge management efforts—through two case study investigations. These case studies, in Australian universities, are investigated through cultural historical activity theory, which focuses the study on the activities that are carried out by people in support of their interpretations of their role, the opportunities available and the organisation's purpose. Human activities, it is argued, are mediated by the available tools, including IT and IS and in this particular context, KMS. It is this argument that places the available technology into the knowledge activity process and permits the future design of KMS to be improved through the lessons learnt by studying these knowledge activity systems in practice. Wijnhoven concentrates on knowledge management at the operational level of the organisation. He is concerned with studying the transformation of certain inputs to outputs—the operations function—and the consequent realisation of organisational goals via the management of these operations. He argues that the inputs and outputs of this process in the context of knowledge management are different types of knowledge and names the operation method the knowledge logistics. The method of transformation he calls learning. This theoretical paper discusses the operational management of four types of knowledge objects—explicit understanding; information; skills; and norms and values; and shows how through the proposed framework learning can transfer these objects to clients in a logistical process without a major transformation in content. Millie Kwan continues this theme with a paper about process-oriented knowledge management. In her case study she discusses an implementation of knowledge management where the knowledge is centred around an organisational process and the mission, rationale and objectives of the process define the scope of the project. In her case they are concerned with the effective use of real estate (property and buildings) within a Fortune 100 company. In order to manage the knowledge about this property and the process by which the best 'deal' for internal customers and the overall company was reached, a KMS was devised. She argues that process knowledge is a source of core competence and thus needs to be strategically managed. Finally, you may also wish to read a related paper originally submitted for this Special Issue, 'Customer knowledge management' by Garcia-Murillo and Annabi, which was published in the August 2002 issue of the Journal of the Operational Research Society, 53(8), 875–884.

The public health role of community pharmacies

This article describes the experience of developing an enhanced public health role for a community pharmacy in the Castle Vale estate in Birmingham. It shows that the neighbourhood-based regeneration context of Castle Vale has created a stimulating setting for an ambitious and innovative pharmacy company to demonstrate what might be possible on a much wider scale in the UK. A core ethos of the Castle Vale regeneration initiative has been public-private partnership and this project reveals some 'critical success factors' for on-the-ground achievement.

Business implications of manufacturing innovation : the experience of increasing automation in smaller to medium sized companies.

Despite the considerable potential of advanced manufacturing technologies (AMT) for improving the economic performance of many firms, a growing body of literature highlights many instances where realising this potential has proven to be a more difficult task than initially envisaged. Focussing upon the implementation of new manufacturing technologies in several smaller to medium sized enterprises (SME), the research examines the proposition that many of these problems can be attributed in part to inadequate consideration of the integrated nature of such technologies, where the effects of their implementation are not localised, but are felt throughout a business. The criteria for the economic evaluation of such technologies are seen as needing to reflect this, and the research develops an innovative methodology employing micro-computer based spreadsheets, to demonstrate how a series of financial models can be used to quantify the effects of new investments upon overall company performance. Case studies include: the development of a prototype machine based absorption costing system to assist in the evaluation of CNC machine tool purchases in a press making company; the economics and strategy of introducing a flexible manufacturing system for the production of ballscrews; and analysing the progressive introduction of computer based printing presses in a packaging and general print company. Complementary insights are also provided from discussion with the management of several other companies which have experienced technological change. The research was conducted as a collaborative CASE project in the Interdisciplinary Higher Degrees Scheme and was jointly funded by the SERC and Gaydon Technology Limited and later assisted by PE-Inbucon. The findings of the research shows that the introduction of new manufacturing technologies usually requires a fundamental rethink of the existing practices of a business. In particular, its implementation is seen as ideally needing to take place as part of a longer term business and manufacturing strategy, but that short term commercial pressures and limited resources often mean that firms experience difficulty in realising this. The use of a spreadsheet based methodology is shown to be of considerable assistance in evaluating new investments, and is seen as being the limit of sophistication that a smaller business is willing to employ. Several points for effective modelling practice are also given, together with an outline of the context in which a modelling approach is most applicable.

The process of strategic change:a management perspective

This thesis is concerned with the management processes concerned with complex strategic decision in organisations. The research has sought to explore these processes by taking as its focus the reconstruction of decision processes a) on the basis of an historical study of an industry and in particular a major company in that industry; and b) the perception and understanding of strategic decision processes and change by managers involved in companies in that industry. The main body of analysis and theoretical contributions arise from the detailed analysis of extended depth interviews with managers carried out in 1980 and 1983 which trace thirteen years of the strategic development of a firm. In so doing, extensive use is made of verbatim accounts by managers of events and their interpretation of events. This is then compared with data gathered from.similar interviews with managers of two other companies and examined in the light of existing research and theory in the field. The thesis both provides a detailed insight into the processes associated with the identification and resolution of complex strategic issues and also generates a body of theory concerning the mechanisms by which strategic decisions and the processes of strategic change are interwoven with the cultural and political fabric of organisations. The thesis is divided into four parts. The first part deals with the background to the research, provid1ng a fuller summary of the purpose, structure and content of the thesis and a discussion of relevant previous research and the methodology employed herein. The second part mainly provides case studies of the industry and the main company studied. The third part is a detailed presentation and analysis of data. The fourth part is a synthesis of the findings and consolidation of the theoretical interpretation advanced in the thesis.