Integrating skills profiling and purchasing portfolio management:an opportunity for building purchasing capability

Kralijc’s (1983) purchasing portfolio approach holds that different types of purchases need different sourcing strategies, underpinned by distinct sets of resources and practices. The approach is widely deployed in business and extensively researched, and yet little research has been conducted on how knowledge and skills vary across a portfolio of purchases. This study extends the body of knowledge on purchasing portfolio management, and its application in the strategic development of purchasing in an organization, and on human resource management in the purchasing function. A novel approach to profiling purchasing skills is proposed, which is well suited to dynamic environments which require flexibility. In a survey, experienced purchasing personnel described a specific purchase and profiled the skills required for effective performance in purchasing that item. Purchases were categorized according to their importance to the organization (internally-oriented evaluation of cost and production factors) and to the supply market (externally-oriented evaluation of commercial risk and uncertainty). Through cluster analysis three key types of purchase situations were identified. The skills required for effective purchasing vary significantly across the three clusters (for 22 skills, p<0.01). Prior research shows that global organizations use the purchasing portfolio approach to develop sourcing strategies, but also aggregate analyses to inform the design of purchasing arrangements (local vs global) and to develop their improvement plans. Such organizations would also benefit from profiling skills by purchase type. We demonstrate how the survey can be adapted to provide a management tool for global firms seeking to improve procurement capability, flexibility and performance.

Success factors of product innovation:an updated meta-analysis

Assessing factors that predict new product success (NPS) holds critical importance for companies, as research shows that despite considerable new product investment, success rates are generally below 25%. Over the decades, meta-analytical attempts have been made to summarize empirical findings on NPS factors. However, market environment changes such as increased global competition, as well as methodological advancements in meta-analytical research, present a timely opportunity to augment their results. Hence, a key objective of this research is to provide an updated and extended meta-analytic investigation of the factors affecting NPS. Using Henard and Szymanski's meta-analysis as the most comprehensive recent summary of empirical findings, this study updates their findings by analyzing articles published from 1999 through 2011, the period following the original meta-analysis. Based on 233 empirical studies (from 204 manuscripts) on NPS, with a total 2618 effect sizes, this study also takes advantage of more recent methodological developments by re-calculating effects of the meta-analysis employing a random effects model. The study's scope broadens by including overlooked but important additional variables, notably “country culture,” and discusses substantive differences between the updated meta-analysis and its predecessor. Results reveal generally weaker effect sizes than those reported by Henard and Szymanski in 2001, and provide evolutionary evidence of decreased effects of common success factors over time. Moreover, culture emerges as an important moderating factor, weakening effect sizes for individualistic countries and strengthening effects for risk-averse countries, highlighting the importance of further investigating culture's role in product innovation studies, and of tracking changes of success factors of product innovations. Finally, a sharp increase since 1999 in studies investigating product and process characteristics identifies a significant shift in research interest in new product development success factors. The finding that the importance of success factors generally declines over time calls for new theoretical approaches to better capture the nature of new product development (NPD) success factors. One might speculate that the potential to create competitive advantages through an understanding of NPD success factors is reduced as knowledge of these factors becomes more widespread among managers. Results also imply that managers attempting to improve success rates of NPDs need to consider national culture as this factor exhibits a strong moderating effect: Working in varied cultural contexts will result in differing antecedents of successful new product ventures.

Impact of online channel use on customer revenues and costs to serve:considering product portfolios and self-selection

Developing a strategy for online channels requires knowledge of the effects of customers' online use on their revenue and cost to serve, which ultimately influence customer profitability. The authors theoretically discuss and empirically examine these effects. An empirical study of retail banking customers reveals that online use improves customer profitability by increasing customer revenue and decreasing cost to serve. Moreover, the revenue effects of online use are substantially larger than the cost-to-serve effects, although the effects of online use on customer revenue and cost to serve vary by product portfolio. Self-selection effects also emerge and can be even greater than online use effects. Ignoring self-selection effects thus can lead to poor managerial decision-making.

Improving marketing's contribution to new product development

In many firms, the marketing department plays a minor role in new product development (NPD). However, recent research demonstrates that marketing capabilities more strongly influence firm performance than other areas such as research and development. This finding underscores the importance of identifying relevant capabilities that can improve the position of marketing within the NPD process as part of the quest to improve innovation performance. However, thus far, it has remained unclear precisely how the marketing department can increase its influence on NPD to enhance a firm's innovation performance. The results of this study demonstrate that the relationship between marketing capabilities and innovation performance is generally mediated by the decision influence of marketing on NPD. In particular, both marketing research quality and the ability to translate customer needs into product characteristics serve to increase marketing's influence on NPD. This increased influence, in turn, positively contributes to overall firm innovation performance. Hence, these results show that in addition to having the appropriate marketing capabilities, the marketing department must achieve a status in which these capabilities can translate into performance implications.

The influence of organizational and national culture on new product performance

The authors conduct a meta-analysis on the combined influence of organizational and national culture on new product performance. For this purpose, they refer to the effectiveness of value congruency and develop a conceptual model describing the fit between organizational culture types as suggested by the competing values framework and national culture, as described by Hofstede's cultural dimensions. The meta-analysis is based on 489 effect sizes taken from 123 manuscripts. The findings show that organizations with a market culture show the highest new product performance, while hierarchy-type organizations show the lowest performance. The influence of national culture variables supports the effect of value congruency, and shows that in individualistic cultures the impact of a clan culture decreases, the impact of an adhocracy culture type decreases with uncertainty avoidance, and the influence of a hierarchy culture type increases with power distance. The superior effect of a market culture type can be matched by other organizational orientations, but in particular national cultures only. The combined findings underline the importance for firms that seek to improve the success rate of new products on international markets to consider the fit of a national culture with a firm's organizational culture.

Decision-making in product quality based on failure knowledge

Decision-making in product quality is an indispensable stage in product development, in order to reduce product development risk. Based on the identification of the deficiencies of quality function deployment (QFD) and failure modes and effects analysis (FMEA), a novel decision-making method is presented that draws upon a knowledge network of failure scenarios. An ontological expression of failure scenarios is presented together with a framework of failure knowledge network (FKN). According to the roles of quality characteristics (QCs) in failure processing, QCs are set into three categories namely perceptible QCs, restrictive QCs, and controllable QCs, which present the monitor targets, control targets and improvement targets respectively for quality management. A mathematical model and algorithms based on the analytic network process (ANP) is introduced for calculating the priority of QCs with respect to different development scenarios. A case study is provided according to the proposed decision-making procedure based on FKN. This methodology is applied in the propeller design process to solve the problem of prioritising QCs. This paper provides a practical approach for decision-making in product quality. Copyright © 2011 Inderscience Enterprises Ltd.

Real estate research needs of the plan sponsor community:what do the plan sponsor real estate investment managers want to know?

This article reports the results of a web-based survey of real estate portfolio managers in the pension fund industry. The study focused on ascertaining the real estate research interests of the respondents as well as whether or not research funding should be allocated to various research topics. Performance measures of real estate assets and portfolios, microeconomic factors affecting real estate and the role of real estate in a mixed-asset portfolio were the top three real estate research interests. There was some variation by the type and size of fund providing evidence that segmentation is important within the money management industry. Respondents were also queried on more focused research subtopics and additional questions in the survey focused on satisfaction with existing real estate benchmarks, and perceptions of the usefulness of published research. Findings should be used to guide research practitioners and academics as to the most important research interests of plan sponsor real estate investment managers.

Retrieving designs from a sketch using an automated GT coding and classification system

While the retrieval of existing designs to prevent unnecessary duplication of parts is a recognised strategy in the control of design costs the available techniques to achieve this, even in product data management systems, are limited in performance or require large resources. A novel system has been developed based on a new version of an existing coding system (CAMAC) that allows automatic coding of engineering drawings and their subsequent retrieval using a drawing of the desired component as the input. The ability to find designs using a detail drawing rather than textual descriptions is a significant achievement in itself. Previous testing of the system has demonstrated this capability but if a means could be found to find parts from a simple sketch then its practical application would be much more effective. This paper describes the development and testing of such a search capability using a database of over 3000 engineering components.

Marking high-technology market evolution through the foci of market stories:the case of local area networks

Previous research suggests that changing consumer and producer knowledge structures play a role in market evolution and that the sociocognitive processes of product markets are revealed in the sensemaking stories of market actors that are rebroadcasted in commercial publications. In this article, the authors lend further support to the story-based nature of market sensemaking and the use of the sociocognitive approach in explaining the evolution of high-technology markets. They examine the content (i.e., subject matter or topic) and volume (i.e., the number) of market stories and the extent to which content and volume of market stories evolve as a technology emerges. Data were obtained from a content analysis of 10,412 article abstracts, published in key trade journals, pertaining to Local Area Network (LAN) technologies and spanning the period 1981 to 2000. Hypotheses concerning the evolving nature (content and volume) of market stories in technology evolution are tested. The analysis identified four categories of market stories - technical, product availability, product adoption, and product discontinuation. The findings show that the emerging technology passes initially through a 'technical-intensive' phase whereby technology related stories dominate, through a 'supply-push' phase, in which stories presenting products embracing the technology tend to exceed technical stories while there is a rise in the number of product adoption reference stories, to a 'product-focus' phase, with stories predominantly focusing on product availability. Overall story volume declines when a technology matures as the need for sensemaking reduces. When stories about product discontinuation surface, these signal the decline of current technology. New technologies that fail to maintain the 'product-focus' stage also reflect limited market acceptance. The article also discusses the theoretical and managerial implications of the study's findings. © 2002 Elsevier Science Inc. All rights reserved.

The innovation value chain in new technology-based firms:evidence from the U.K.

Innovation is central to the survival and growth of firms, and ultimately to the health of the economies of which they are part. A clear understanding both of the processes by which firms perform innovation and the benefits which flow from innovation in terms of productivity and growth is therefore essential. This paper demonstrates the use of a conceptual framework and modeling tool, the innovation value chain (IVC), and shows how the IVC approach helps to highlight strengths and weaknesses in the innovation performance of a key group of firms-new technology-based firms. The value of the IVC is demonstrated in showing the key interrelationships in the whole process of innovation from sourcing knowledge through product and process innovation to performance in terms of the growth and productivity outcomes of different types of innovation. The use of the IVC highlights key complementarities, such as that between internal R&D, external R&D, and other external sources of knowledge. Other important relationships are also highlighted. Skill resources matter throughout the IVC, being positively associated with external knowledge linkages and innovation success, and also having a direct influence on growth independent of the effect on innovation. A key benefit of the IVC approach is therefore its ability to highlight the roles of different factors at various stages of the knowledge-innovation-performance nexus, and to show their indirect as well as direct impact. This in turn permits both managerial and policy implications to be drawn. © 2012 Product Development & Management Association.

Opinion leaders' role in innovation diffusion:a simulation study

This study investigates the critical role that opinion leaders (or influentials) play in the adoption process of new products. Recent existing reseach evidence indicates a limited effect of opinion leaders on diffusion processes, yet these studies take into account merely the network position of opinion leaders without addressing their influential power. Empirical findings of our study show that opinion leaders, in addition to having a more central network position, possess more accurate knowledge about a product and tend to be less susceptible to norms and more innovative. Experiments that address these attributes, using an agent-based model, demonstrate that opinion leaders increase the speed of the information stream and the adoption process itself. Furthermore, they increase the maximum adoption percentage. These results indicate that targeting opinion leaders remains a valuable marketing strategy.

On the comparative performance of socially responsible and Islamic mutual funds

This is the first study to provide comprehensive analyses of the relative performance of both socially responsible investment (SRI) and Islamic mutual funds. The analysis proceeds in two stages. In the first, the performance of the two categories of funds is measured using partial frontier methods. In the second stage, we use quantile regression techniques.By combining two variants of the Free Disposal Hull (FDH) methods (order-m and order-?) in the first stage of analysis and quantile regression in the second stage, we provide detailed analyses of the impact of different covariates across methods and across different quantiles. In spite of the differences in the screening criteria and portfolio management of both types of funds, variation in the performance is only found for some of the quantiles of the conditional distribution of mutual fund performance. We established that for the most inefficient funds the superior performance of SRI funds is significant. In contrast, for the best mutual funds this evidence vanished and even Islamic funds perform better than SRI.These results show the benefits of performing the analysis using quantile regression.

On the comparative performance of socially responsible and Islamic mutual funds

This is the first study to provide comprehensive analyses of the relative performance of both socially responsible investment (SRI) and Islamic mutual funds. The analysis proceeds in two stages. In the first, the performance of the two categories of funds is measured using partial frontier methods. In the second stage, we use quantile regression techniques. By combining two variants of the Free Disposal Hull (FDH) methods (order- m and order- α) in the first stage of analysis and quantile regression in the second stage, we provide detailed analyses of the impact of different covariates across methods and across different quantiles. In spite of the differences in the screening criteria and portfolio management of both types of funds, variation in the performance is only found for some of the quantiles of the conditional distribution of mutual fund performance. We established that for the most inefficient funds the superior performance of SRI funds is significant. In contrast, for the best mutual funds this evidence vanished and even Islamic funds perform better than SRI. These results show the benefits of performing the analysis using quantile regression. © 2013 Elsevier B.V.