Profit sharing, technical efficiency change and finance constraints

This paper analyses the mechanisms through which profit-sharing schemes may induce debt constrained firms to improve technical efficiency over time to guarantee positive profits. This hypothesis is first formalised in a partial equilibrium framework and then is tested on a sample of Italian traditional and cooperative firms. Technical efficiency change indexes are computed by DEA. These are regressed on a measure of finance constraints to analyse their impact on firms’ efficiency growth. The results support the hypothesis that a restriction in the availability of financial resources can affect positively the growth in efficiency in firms with profit-sharing schemes.

Profit sharing in a manufacturing plant in a developing country : communication and organisational dynamics

The adaptation of profit sharing creates a fundamental change in employee compensation by making a portion of total compensation directly dependent upon the total profits of the firm and the performance of the employee. The major goal of this study is to test for and measure the impact of the independent variable, a profit sharing plan implemented at Shahvand Industrial Company, upon communication behaviour, communication outcomes, and organisational outcomes as dependent variables. A quasi-experimental non-equivalent control group design with pre and posttest was the research design used to test the effects of profit sharing participation on permanent-part-time operative employees implemented by SIC. Several conclusions were reached as a result of the statistical analysis of the data collected in this study. Overall, few of the hypothesised effects of profit sharing participation appeared to have been realised according to the empirical results of this study. The finding that certain communication behaviours were more favourable for profit sharing participants than for non-participants support the general hypothesis of the integrated profit sharing model. The observed changes in communication behaviours indicate that information sharing and idea generation are important components of the profit sharing process. The results of this study did not reveal any changes in either communication or organisational outcomes. A significant finding of this study is that the implementation of profit sharing plans require a relatively long period of time. Patience is required to achieve high levels of success and management must make long-term commitment to profit sharing. Findings of this study should be interpreted with caution, taking into consideration that most of the previo.us researches on profit sharing have been conducted in Western European or American countries, while the current study was based on data collected from an organisation in a developing country. This implies that the findings reported in this thesis may not be comparable in certain respects to results derived from companies in major industrialised economies.

Inspiring lecturers: sharing e-learning practice through european case studies

What motivates a university lecturer to consider introducing a new e-learning approach to their educational practice? Accounts of e-learning practice can invite discussion and reflection on the approaches taken, reinforcement of a particular model, connection with the experience of others, vicarious learning opportunities and glimpses into tacit knowledge. If these examples provoke thinking, could they have the ‘sticky qualities’, the memorable inspiration and ideas that move us to action, when we observe the practice of others? (Szulanski, 2003) “Case studies have the capacity to inspire but also to provoke and to challenge.” (JISC, 2004) This paper will discuss a process followed for sharing best practices of e-learning. It will explain how good practices were identified and gathered by the EUNIS E-Learning Task Force collaboration, using a database and a weblog (EUNIC, 2008). It will examine the methods used for the developing and compiling of the practices and the communication of these. Actual examples of some of the case studies gathered will be included in an appendix. Suggestions of ways to develop this process further and the tangible benefits identified will be examined to ask if effective practice can also become embedded practice.

The impact of foreign direct investment on UK manufacturing: is there a profit squeeze in domestic firms?

This paper examines the extent to which foreign direct investment (FDI) in selected UK manufacturing sectors has an impact on reported profits in domestic firms. Foreign manufacturing firms are characterized by relatively high labour productivity and low wage shares. Entry by foreign firms not only impacts on domestic market shares, but also on domestic cost conditions. As a result, profitability in the indigenous sector may be reduced. There are a number of policy implications of this analysis which are explored.

Enabling innovation:knowledge control, sharing and coordination boundaries in UK and German manufacturing

We investigate how boundaries in knowledge control, sharing and co-ordination influence UK and German manufacturing firms’ innovation intensity (an indicator of the volume of product change) and product life (an indicator of the pace of generational change). In general UK plants more commonly face knowledge control boundaries related to plant ownership or control, while German plants more commonly face boundaries related to knowledge sharing and knowledge co-ordination between functional groups. Our empirical results emphasise the importance of the strategic management of innovation. Knowledge control boundaries – related to external ownership, group membership and decision making autonomy – have a weak negative influence on plants’ innovation outcomes. Strategic decisions relating to multifunctional working and networking are found to be more important in overcoming knowledge sharing and co-ordination boundaries. Knowledge sharing boundaries, related to plant or company boundaries, prove most important where a plant has no in-house R&D capability. Knowledge co-ordination boundaries related to functional or multi-functional working have strong but differential effects on different innovation output measures: functional boundaries increase product life in both countries, and in Germany maintaining functional boundaries is also associated with increased innovation intensity.

Developing a decomposable measure of profit efficiency using DEA

In for-profit organizations efficiency measurement with reference to the potential for profit augmentation is particularly important as is its decomposition into technical, and allocative components. Different profit efficiency approaches can be found in the literature to measure and decompose overall profit efficiency. In this paper, we highlight some problems within existing approaches and propose a new measure of profit efficiency based on a geometric mean of input/output adjustments needed for maximizing profits. Overall profit efficiency is calculated through this efficiency measure and is decomposed into its technical and allocative components. Technical efficiency is calculated based on a non-oriented geometric distance function (GDF) that is able to incorporate all the sources of inefficiency, while allocative efficiency is retrieved residually. We also define a measure of profitability efficiency which complements profit efficiency in that it makes it possible to retrieve the scale efficiency of a unit as a component of its profitability efficiency. In addition, the measure of profitability efficiency allows for a dual profitability interpretation of the GDF measure of technical efficiency. The concepts introduced in the paper are illustrated using a numerical example.

School outcomes:sharing the responsibility between pupil and school

This paper uses a Data Envelopment Analysis based approach to decompose pupil under-attainment into that attributable to the school the pupil attends and that attributable to the pupil. The approach measures pupil attainment in terms of value added. Data on over 6700 A-level pupils from 122 English schools have been analysed. The results suggest that at current levels of school effectiveness a pupil's own application accounts for the major part of any under-attainment, though schools also have scope to improve their effectiveness.The approach also makes it possible to identify target attainment levels a pupil could be set and the extent to which the attainment of those targets necessitates an improvement in the effectiveness of the school the pupil attends and in the pupil's own efforts.

People, technology, processes and risk knowledge sharing

The present global economic crisis creates doubts about the good use of accumulated experience and knowledge in managing risk in financial services. Typically, risk management practice does not use knowledge management (KM) to improve and to develop new answers to the threats. A key reason is that it is not clear how to break down the “organizational silos” view of risk management (RM) that is commonly taken. As a result, there has been relatively little work on finding the relationships between RM and KM. We have been doing research for the last couple of years on the identification of relationships between these two disciplines. At ECKM 2007 we presented a general review of the literature(s) and some hypotheses for starting research on KM and its relationship to the perceived value of enterprise risk management. This article presents findings based on our preliminary analyses, concentrating on those factors affecting the perceived quality of risk knowledge sharing. These come from a questionnaire survey of RM employees in organisations in the financial services sector, which yielded 121 responses. We have included five explanatory variables for the perceived quality of risk knowledge sharing. These comprised two variables relating to people (organizational capacity for work coordination and perceived quality of communication among groups), one relating to process (perceived quality of risk control) and two related to technology (web channel functionality and RM information system functionality). Our findings so far are that four of these five variables have a significant positive association with the perceived quality of risk knowledge sharing: contrary to expectations, web channel functionality did not have a significant association. Indeed, in some of our exploratory regression studies its coefficient (although not significant) was negative. In stepwise regression, the variable organizational capacity for work coordination accounted for by far the largest part of the variation in the dependent variable perceived quality of risk knowledge sharing. The “people” variables thus appear to have the greatest influence on the perceived quality of risk knowledge sharing, even in a sector that relies heavily on technology and on quantitative approaches to decision making. We have also found similar results with the dependent variable perceived value of Enterprise Risk Management (ERM) implementation.

The strategic role of relational capabilities in the business-to-business service profit chain

This paper extends the original service profit chain by examining the role of relational capabilities with employees, customers and strategic partners on process and performance outcomes in a business-to-business context. More specifically, we demonstrate how satisfied and loyal employees are better in developing relationships with customers and strategic partners. These relationships enable firms to be more responsive towards customers and become more innovative, which increase customer satisfaction and loyalty and, ultimately, financial performance. Our results provide support for the development of relational capabilities in a business-to-business environment by extending the service profit chain (SPC) model. However, we find that while the development of strong customer relationships contributes to an improved service responsiveness of the firm, strategic partners do not.

Approaches to sharing knowledge in group problem structuring

Problem-structuring techniques are an integral aspect of 'Soft-OR'. SSM, SAST, Strategic Choice, and JOURNEY Making, all depend for their success on a group developing a shared view of a problem through some form of explicit modelling. The negotiated problem structure becomes the basis for problem resolution. Implicit to this process is an assumption that members of the group share and build their knowledge about the problem domain. This paper explores the extent to which this assumption is reasonable. The research is based on detailed records from the use of JOURNEY Making, where it has used special purpose Group Support software to aid the group problem structuring. This software continuously tracks the contributions of each member of the group and thus the extent to which they appear to be 'connecting' and augmenting their own knowledge with that of other members of the group. Software records of problem resolution in real organisational settings are used to explore the sharing of knowledge among senior managers. These explorations suggest a typology of knowledge sharing. The implications of this typology for problem structuring and an agenda for future research are considered.

Faces of pricing and profit planning at the doorstep of the EU: government pricing policy in the innovative pharmaceutical sector in Turkey

The majority of research on the pharmaceutical sector has focused on an overall micro economic, medical oriented welfare issues, whereas the marketing management role of the innovative drug manufacturer has to a large extent been disregarded. Using the case of Turkey, through a series of in-depth interviews with highly innovative companies, other marketing management possibilities to develop pricing strategies and plan for profit are explored based on broader definitions of value and transparency. Our results suggest that pharmaceutical companies as well as governments might have a too narrow focus of value and underestimate the potential long term benefits of a broader approach to marketing management and long term relationships between the various stakeholders.