Creating a world class business through a merger of two equals: an interview with Paul Walsh, Chief Executive Officer of Diageo Plc

Purpose – The purpose of this paper is to explore, from a practical point-of-view, a number of key strategic issues that critically influence organisations' competitiveness. Design/methodology/approach – The paper is based on a semi-structured interview with Mr Paul Walsh, CEO of Diageo. Diageo is a highly successful company and Mr Walsh has played a central role in making Diageo the number one branded drink company in the world. Findings – The paper discusses the key attributes of successful merger, lessons from a complex cross boarder acquisition, rationale for strategic alliance with competitors, distinctive resources, and the role of corporate social responsibility. Research limitations/implications – It is not too often that management scholars have the opportunity to discuss with the CEOs of large multinationals the rational of key strategic decisions. In this paper these issues are explored from the perspective of a CEO of a large and successful company. The lessons, while not generalisable, offer unique insights to students of management and management researchers. Originality/value – The paper offers a bridge between theory and practice. It demonstrates that from Diageo's perspective the distinctive capabilities are intangible. It also offers insight into how to successfully execute strategic decision. In terms of originality it offers a view from the top, which is often missing from strategy research.

Endocannabinoids in neuroendopsychology: multiphasic control of mitochondrial function

The endocannabinoid system (ECS) is a construct based on the discovery of receptors that are modulated by the plant compound tetrahydrocannabinol and the subsequent identification of a family of nascent ligands, the 'endocannabinoids'. The function of the ECS is thus defined by modulation of these receptors-in particular, by two of the best-described ligands (2-arachidonyl glycerol and anandamide), and by their metabolic pathways. Endocannabinoids are released by cell stress, and promote both cell survival and death according to concentration. The ECS appears to shift the immune system towards a type 2 response, while maintaining a positive energy balance and reducing anxiety. It may therefore be important in resolution of injury and inflammation. Data suggest that the ECS could potentially modulate mitochondrial function by several different pathways; this may help explain its actions in the central nervous system. Dose-related control of mitochondrial function could therefore provide an insight into its role in health and disease, and why it might have its own pathology, and possibly, new therapeutic directions.

Foreign executive appointments: a multilevel examination

As multinational enterprises (MNE) expand, their attachment to the country of origin is challenged by the need to adapt to an increasingly diverse geographical posture. We examine how these countervailing forces affect top management team (TMT) composition and test a model that associates foreign executive appointments with individual- and firm-level antecedents. Using multilevel data comprising 1,446 TMT appointments at 360 large European firms between 2001 and 2005, we show that individual experiential characteristics, the type of TMT function, prior performance of the MNE, and the MNE’s overall degree of internationalization are associated with foreign TMT appointments. We discuss how our findings contribute to the international business literature and complement recent research on the internationalization of TMTs.

Synaptic vesicle glycoprotein 2A modulates vesicular release and calcium channel function at peripheral sympathetic synapses

Synaptic vesicle glycoprotein (SV)2A is a transmembrane protein found in secretory vesicles and is critical for Ca2+-dependent exocytosis in central neurons, although its mechanism of action remains uncertain. Previous studies have proposed, variously, a role of SV2 in the maintenance and formation of the readily releasable pool (RRP) or in the regulation of Ca2+ responsiveness of primed vesicles. Such previous studies have typically used genetic approaches to ablate SV2 levels; here, we used a strategy involving small interference RNA (siRNA) injection to knockdown solely presynaptic SV2A levels in rat superior cervical ganglion (SCG) neuron synapses. Moreover, we investigated the effects of SV2A knockdown on voltage-dependent Ca2+ channel (VDCC) function in SCG neurons. Thus, we extended the studies of SV2A mechanisms by investigating the effects on vesicular transmitter release and VDCC function in peripheral sympathetic neurons. We first demonstrated an siRNA-mediated SV2A knockdown. We showed that this SV2A knockdown markedly affected presynaptic function, causing an attenuated RRP size, increased paired-pulse depression and delayed RRP recovery after stimulus-dependent depletion. We further demonstrated that the SV2A–siRNA-mediated effects on vesicular release were accompanied by a reduction in VDCC current density in isolated SCG neurons. Together, our data showed that SV2A is required for correct transmitter release at sympathetic neurons. Mechanistically, we demonstrated that presynaptic SV2A: (i) acted to direct normal synaptic transmission by maintaining RRP size, (ii) had a facilitatory role in recovery from synaptic depression, and that (iii) SV2A deficits were associated with aberrant Ca2+ current density, which may contribute to the secretory phenotype in sympathetic peripheral neurons.

Elephants in pyjamas: testing the weak central coherence account of autism spectrum disorders using a syntactic disambiguation task

According to the weak central coherence (CC) account individuals with autism spectrum disorders (ASD) exhibit enhanced local processing and weak part-whole integration. CC was investigated in the verbal domain. Adolescents, recruited using a 2 (ASD status) by 2 (language impairment status) design, completed an aural forced choice comprehension task involving syntactically ambiguous sentences. Half the picture targets depicted the least plausible interpretation, resulting in longer RTs across groups. These were assumed to reflect local processing. There was no ASD by plausibility interaction and consequently little evidence for weak CC in the verbal domain when conceptualised as enhanced local processing. Furthermore, there was little evidence that the processing of syntactically ambiguous sentences differed as a function of ASD or language-impairment status.

Role of FTO in adipocyte development and function: recent insights

In 2007, FTO was identified as the first genome-wide association study (GWAS) gene associated with obesity in humans. Since then, various animal models have served to establish the mechanistic basis behind this association. Many earlier studies focussed on FTO’s effects on food intake via central mechanisms. Emerging evidence, however, implicates adipose tissue development and function in the causal relationship between perturbations in FTO expression and obesity. The purpose of this mini review is to shed light on these new studies of FTO function in adipose tissue and present a clearer picture of its impact on obesity susceptibility.

The Immune-Pineal Axis Stress as a Modulator of Pineal Gland Function

The temporal organization of mammals presents a daily adjustment to the environmental light/dark cycle. The environmental light detected by the retina adjusts the central clock in the suprachiasmatic nuclei, which innervate the pineal gland through a polysynaptic pathway. During the night, this gland produces and releases the nocturnal hormone melatonin, which circulates throughout the whole body and adjusts several bodily functions according to the existence and duration of darkness. We have previously shown that during the time frame of an inflammatory response, pro-inflammatory cytokines, such as tumor necrosis factor-a, inhibit while anti-inflammatory mediators, such as glucocorticoids, enhance the synthesis of melatonin, interfering in the daily adjustment of the light/dark cycle. Therefore, injury disconnects the organism from environmental cycling, while recovery restores the light/dark information to the whole organism. Here, we extend these observations by evaluating the effect of a mild restraint stress, which did not induce macroscopic gastric lesions. After 2 h of restraint, there was an increase in circulating corticosterone, indicating activation of the hypothalamus-pituitary-adrenal (HPA) axis. In parallel, an increase in melatonin production was observed. Taking into account the data obtained with models of inflammation and stress, we reinforce the hypothesis that the activity of the pineal gland is modulated by the state of the immune system and the HPA axis, implicating the darkness hormone melatonin as a modulator of defense responses.

Single Synapse Information Coding in Intraburst Spike Patterns of Central Pattern Generator Motor Neurons

Burst firing is ubiquitous in nervous systems and has been intensively studied in central pattern generators (CPGs). Previous works have described subtle intraburst spike patterns (IBSPs) that, despite being traditionally neglected for their lack of relation to CPG motor function, were shown to be cell-type specific and sensitive to CPG connectivity. Here we address this matter by investigating how a bursting motor neuron expresses information about other neurons in the network. We performed experiments on the crustacean stomatogastric pyloric CPG, both in control conditions and interacting in real-time with computer model neurons. The sensitivity of postsynaptic to presynaptic IBSPs was inferred by computing their average mutual information along each neuron burst. We found that details of input patterns are nonlinearly and inhomogeneously coded through a single synapse into the fine IBSPs structure of the postsynaptic neuron following burst. In this way, motor neurons are able to use different time scales to convey two types of information simultaneously: muscle contraction (related to bursting rhythm) and the behavior of other CPG neurons (at a much shorter timescale by using IBSPs as information carriers). Moreover, the analysis revealed that the coding mechanism described takes part in a previously unsuspected information pathway from a CPG motor neuron to a nerve that projects to sensory brain areas, thus providing evidence of the general physiological role of information coding through IBSPs in the regulation of neuronal firing patterns in remote circuits by the CNS.

Brazilian indexing and inertial inflation: evidence from time-varying estimates of an inflation transfer function

This paper is a theoretica1 and empirica1 study of the re1ationship between indexing po1icy and feedback mechanisms in the inflationary adjustment process in Brazil. The focus of our study is on two policy issues: (1) did the Brazilian system of indexing of interest rates, the exchange rate, and wages make inflation so dependent on its own past values that it created a significant feedback process and inertia in the behaviour of inflation in and (2) was the feedback effect of past inf1ation upon itself so strong that dominated the effect of monetary/fiscal variables upon current inflation? This paper develops a simple model designed to capture several "stylized facts" of Brazi1ian indexing po1icy. Separate ru1es of "backward indexing" for interest rates, the exchange rate, and wages, reflecting the evolution of po1icy changes in Brazil, are incorporated in a two-sector model of industrial and agricultural prices. A transfer function derived irom this mode1 shows inflation depending on three factors: (1) past values of inflation, (2) monetary and fiscal variables, and (3) supply- .shock variables. The indexing rules for interest rates, the exchange rate, and wages place restrictions on the coefficients of the transfer function. Variations in the policy-determined parameters of the indexing rules imply changes in the coefficients of the transfer function for inflation. One implication of this model, in contrast to previous results derived in analytically simpler models of indexing, is that a higher degree of indexing does not make current inflation more responsive to current monetary shocks. The empirical section of this paper studies the central hypotheses of this model through estimation of the inflation transfer function with time-varying parameters. The results show a systematic non-random variation of the transfer function coefficients closely synchronized with changes in the observed values of the wage-indexing parameters. Non-parametric tests show the variation of the transfer function coefficients to be statistically significant at the time of the changes in wage indexing rules in Brazil. As the degree of indexing increased, the inflation feadback coefficients increased, while the effect of external price and agricultura shocs progressively increased and monetary effects progressively decreased.

The insurance function of contracts

One of the central problems in contract law is to define the frontier between legal and illegal breaches of promises. The distinction between good and bad faith is perhaps the conceptual tool most commonly used to tell one from the other. Lawyers spend a lot of energy trying to frame better definitions of the concepts of good and bad faith based on principles of ethics or justice, but often pay much less attention to theories dealing with the incentives that can engender good faith behavior in contractual relationships. By describing the economics of what Stiglitz defined as “explicit” and “implicit” insurance, I highlight the “insurance function” hidden in any promise with basically no mathematical notation. My aim is to render the subject intelligible and useful to lawyers with little familiarity with economics.

Dois exercícios de política monetária e fiscal com atuação ótima do Banco Central

O objetivo da tese é analisar questões relativas à coordenação entre as políticas monetária e fiscal no Brasil após a adoção do regime de metas de inflação. Utiliza-se de um modelo de metas de inflação para uma economia pequena e aberta para a incorporação um bloco de equações que descrevem a dinâmica das variáveis fiscais. Tendo por base os conceitos de Leeper (1991), ambas as entidades, Banco Central e Tesouro Nacional, podem agir de forma ativa ou passiva, e será este comportamento estratégico que determinará a eficiência da política monetária. Foram estimados os parâmetros que calibram o modelo e feitas as simulações para alguns dos choques que abalaram a economia brasileira nos últimos anos. Os resultados mostraram que nos arranjos em que a autoridade fiscal reage a aumentos de dívida pública com alterações no superávit primário, a trajetória de ajuste das variáveis frente a choques tende a ser, na maioria dos casos, menos volátil propiciando uma atuação mais eficiente do Banco Central. Nestes arranjos, o Banco Central não precisa tomar para si funções que são inerentes ao Tesouro. Também são analisadas as variações no comportamento do Banco Central e do Tesouro Nacional em função de diferentes composições da dívida pública. Os resultados mostram que a estrutura do endividamento público será benéfica, ou não, à condução das políticas monetária e fiscal, dependendo do tipo de choque enfrentado. O primeiro capítulo, introdutório, procura contextualizar o regime de metas de inflação brasileiro e descrever, sucintamente, a evolução da economia brasileira desde sua implantação. No segundo capítulo são analisados os fundamentos teóricos do regime de metas de inflação, sua origem e principais componentes; em seguida, são apresentados, as regras de política fiscal necessárias à estabilidade de preços e o problema da dominância fiscal no âmbito da economia brasileira. O terceiro capítulo apresenta a incorporação do bloco de equações fiscais no modelo de metas de inflação para economia aberta proposto por Svensson (2000), e as estimações e calibrações dos seus parâmetros para a economia brasileira. O quarto capítulo discute as diferentes formas de coordenação entre as autoridades monetária e fiscal e a atuação ótima do Banco Central. O quinto capítulo tem como base a mais eficiente forma de coordenação obtida no capítulo anterior para analisar as mudanças no comportamento da autoridade monetária e fiscal frente a diferentes estruturas de prazos e indexadores da dívida pública que afetam suas elasticidades, juros, inflação e câmbio.

The executive toolbox: building legislative support in a multiparty presidential regime

How do presidents win legislative support under conditions of extreme multipartism? Comparative presidential research has offered two parallel answers, one relying on distributive politics and the other claiming that legislative success is a function of coalition formation. We merge these insights in an integrated approach to executive-legislative relations, also adding contextual factors related to dynamism and bargaining conditions. We find that the two presidential “tools” – pork and coalition goods – are substitutable resources, with pork functioning as a fine-tuning instrument that interacts reciprocally with legislative support. Pork expenditures also depend upon a president’s bargaining leverage and the distribution of legislative seats.

Análise da função de reação do Banco Central do Brasil entre 2000 e 2012: inclusão de preços de ativos, não linearidade e queda da taxa de juros neutra

Neste trabalho são abordados empiricamente dois temas bastante atuais no âmbito da política monetária: a estimativa de uma Regra de Taylor aumentada com a inclusão de um vetor de preços de ativos financeiros e a hipótese de não-linearidade da Regra de Taylor. Os principais resultados encontrados sugerem que o Banco Central do Brasil não segue uma Regra de Taylor aumentada na condução da política monetária e que há evidências de não-linearidade de sua função de reação. Além disso, encontramos evidência de recuo da taxa de juros real de equilíbrio (ou neutra) da economia brasileira.

Credibilidade e função de reação do Banco Central do Brasil

Recentemente as expectativas de inflação de mais longo prazo passaram a ficar desancoradas da meta. A fim de testar a perda de credibilidade no compromisso do Banco Central do Brasil de trazer a inflação para o centro da meta, inicialmente, recriamos indicadores de credibilidade para essa instituição e encontramos que esses índices estão em patamares relativamente baixos em termos históricos. Em seguida, calculamos a função de reação do Banco Central utilizando uma Regra de Taylor em janelas moveis de cinco anos no período 2005-2014 como uma tentativa de justificar essa queda da credibilidade nos últimos anos. Os resultados apontaram uma mudança mais acentuada na função de reação do Banco Central do Brasil a partir de 2013, em que a variável hiato do produto ganhou maior importância e o desvio da inflação em relação à meta perdeu significância. Essa mudança pode ter sido um dos principais geradores para a queda recente de credibilidade.

Mudanças de regimes na função de reação do Banco Central do Brasil : uma abordagem utilizando Markov Regime Switching

O presente trabalho busca identificar a ocorrência, duração e probabilidades de transição de diferentes regimes na condução da política monetária no Brasil a partir da implantação do sistema de metas de inflação em 1999. A estimação da função de reação do Banco Central do Brasil é realizada a partir de uma Regra de Taylor forward looking para uma economia aberta, onde utilizamos a metodologia Markov Regime Switching para caracterizar de forma endógena os diferentes regimes de política monetária. Os resultados obtidos indicam a ocorrência de três regimes distintos de política monetária a partir da implantação do sistema de metas de inflação no Brasil. O primeiro regime ocorre durante 21% do período estudado e se caracteriza pela não aderência ao princípio de Taylor e discricionariedade da autoridade monetária, que reage demonstrando maior sensibilidade ao hiato do produto. O segundo regime é o de maior duração, ocorre durante 67% do período estudado, e se caracteriza pela aderência ao princípio de Taylor e equilíbrio nos pesos atribuídos pelo Banco Central tanto ao hiato do produto como ao desvio das expectativas de inflação com relação à meta. Já o terceiro regime ocorre durante 12% do período estudado e se caracteriza não somente pela aderência ao princípio de Taylor, como também por uma maior aversão ao desvio das expectativas de inflação com relação à meta.