The dark side of CRM: advantaged and disadvantaged customers

Purpose – CRM treats various profiles of customers or individual customers differently, purposively favoring certain customers while deliberately disadvantaging others. This research aims to provide insights into how advantaged (favored) and (non-favored) disadvantaged customers perceive fairness in retailers’ marketing tactics. Design/methodology/approach – A multiple study approach has been adopted, influenced by a three-stage process, which involved exploratory interviews, pilot tests, and the main survey. Findings – The results have provided marketers with a perspective on maintaining and enhancing relationships. Service and marketing communications concern the advantaged customers most, while pricing is the most important aspect for the disadvantaged customers. Practical implications – In terms of handling customers, there are important implications from recognizing how those who are favored and those who are not so advantaged perceive their treatment. Failure to appreciate the pitfalls for visibly treating certain customers more favorably and others demonstrably less so, will have stark consequences for retail management and consumer marketing. Originality/value – Contributions are made to the literatures on CRM and on unfairness, particularly in terms of how to address the inevitable inequities inherent in retailers’ CRM offerings. Identification of the advantaged and disadvantaged customers and their respective views allows marketers to develop more appropriate approaches for handling customers who are sensitive to perceived unfairness.

Visceral behaviours and leadership: a dark side of boardroom life?

Purpose – Characteristics of leaders whose behaviour is visceral include taking action based on instinct rather than intellect and exhibiting coarse, base and often negative emotions. Despite the challenge of precisely defining the nature of visceral behaviour, the purpose of this paper is to provide insight into this less attractive side of boardroom life. Design/methodology/approach – Following a literature review of the research into the negative behaviour leaders exhibit, the paper highlights four forms of visceral behaviour based on focused and intimate qualitative case studies involving the experiences of those on the receiving end of that behaviour within a boardroom context. Findings – Based on interviews with an international sample of five chief executive officers (CEOs), plus three subordinates with substantial profit and loss responsibility, the study reveals a distinctly human experience from which no one is exempt. The idiosyncratic nature of the visceral behaviour experienced resulted in each study participant's unique experience. The authors conclude that leaders need to adopt specific measures in order to control and reduce the darker human tendencies. Research limitations/implications – The experiences of study participants are presented in four case studies, providing insight into their experiences whilst also protecting their identity. The study participants were drawn from a sample of companies operating globally within a single sector of the manufacturing industry. The concepts the authors present require validating in other organisations with different demographic profiles. Originality/value – The paper presents a model based on two dimensions – choice and level of mastery – that provides the reader with insight into the forms of visceral behaviour to which leaders succumb. Insight enables us to offer managers strategic suggestions to guard against visceral behaviour and assist them in mitigating its worst aspects, in both those with whom they work and themselves.

The 2013 hot, dry summer in Western Europe

The European summer of 2013 was marked by hot and dry conditions in Western Europe associated with a northward shifted Atlantic storm track and a positive phase of the SNAO. Model results suggest that, relative to a 1964–93 reference period, changes in SST/SIE explain 63% (±26%) of the area-averaged warming signal over Western Europe, with the remaining 37% (±29%) explained by the direct impact of changes in anthropogenic radiative forcings from GHG and aerosols. The results further suggest that the anomalous atmospheric circulation, and associated low rainfall, were also influenced both by changes in SST/SIE and by the direct impact of changes in radiative forcings; however, the magnitude of the forced signals in these variables is much less, relative to internal variability, than for surface air temperature. Further evidence suggests that changes in North Atlantic SST were likely an important factor in explaining the striking contrast between the European summers of 2013 and that of 2012. A major area for further work is to understand more completely the mechanisms that explain these influences.

Two-way communication costs and the boundaries of the firm

Casson and Wadeson (International Journal of the Economics of Business, 1998, 5, pp. 5-27) have modelled the dialogue, or conversation, which customers have with their suppliers in order to convey their requirements, while taking production implications into account. They showed that this has important implications for the positioning of the boundaries of the firm. Unfortunately, their model has the restriction that communication is only costly in the direction of customer to supplier. This paper extends their model by introducing two-way communication costs. It shows that the level of communication cost in the direction of supplier to customer is a key additional factor in determining the nature of the dialogue that takes place. It also shows that this has important additional implications for the positioning of the boundaries of the firm. Custom computer software development is used as an example of an application of the theory.

Communication costs and the boundaries of the firm

Much has been written about where the boundaries of the firm are drawn, but little about what occurs at the boundaries themselves. When a firm subcontracts, does it inform its suppliers fully of what it requires, or is it willing to accept what they have available? In practice firms often engage in a dialogue, or conversation, with their suppliers, in which at first they set out their general requirements, and only when the supplier reports back on how these can be met are their more specific requirements set out. This paper models such conversations as a rational response to communication costs. The model is used to examine the impact of new information technology, such as CAD/CAM, on the conduct of subcontracting. It can also be used to examine its impact on the marketing activities of firms. The technique of analysis, which is based on the economic theory of teams, has more general applications too. It can be used to model all the forms of dialogue involved in the processes of coordination both within and between firms.

Information strategies and the theory of the Firm

Information costs play a key role in determining the relative efficiency of alternative organisational structures. The choice of locations at which information is stored in a firm is an important determinant of its information costs. A specific example of information use is modelled in order to explore what factors determine whether information should be stored centrally or locally and if it should be replicated at different sites. This provides insights into why firms are structured hierarchically, with some decisions and tasks being performed centrally and others at different levels of decentralisation. The effects of new information technologies are also discussed. These can radically alter the patterns and levels of information costs within a firm and so can cause substantial changes in organisational structure.

Modeling growth strategy in a biotechnology startup firm

The top managers of a biotechnology startup firm agreed to participate in a system dynamics modeling project to help them think about the firm's growth strategy. The article describes how the model was created and used to stimulate debate and discussion about growth management. The paper highlights several novel features about the process used for capturing management team knowledge. A heavy emphasis was placed on mapping the operating structure of the factory and distribution channels. Qualitative modeling methods (structural diagrams, descriptive variable names, and friendly algebra) were used to capture the management team's descriptions of the business. Simulation scenarios were crafted to stimulate debate about strategic issues such as capacity allocation, capacity expansion, customer recruitment, customer retention, and market growth, and to engage the management team in using the computer to design strategic scenarios. The article concludes with comments on the impact of the project.

Institutions, unionization and voice: the relative impact of context and actors on firm level practice

Trade unions provide a voice in the way firms are run, an input into reward systems and increased security of employment. But these vary with national context. Using transnational survey evidence, this article explores the relative impact of setting, and of unions and collective bargaining, on these issues. It is found that, irrespective of context, organizations are significantly more likely to make use of compulsory redundancies in the absence of unions and collective bargaining. However, in other areas, the impact of unions appeared less pronounced than that of the wider context. The article explores the reasons behind this, and the broader policy implications thereof.

The economic theory of the firm as a foundation for international business theory

The economic theory of the firm is central to the theory of the multinational enterprise. Recent literature on multinationals, however, makes only limited reference to the economic theory of the firm. Multinationals play an important role in coordinating the international division of labour through internal markets. The paper reviews the economic principles that underlie this view. Optimal internalisation equates marginal benefits and costs. The benefits of internalisation stem mainly from the difficulties of licensing proprietary knowledge, reflecting the view that MNEs possess an ‘ownership’ or ‘firm-specific’ advantage. The costs of internalisation, it is argued, reflect managerial capability, and in particular the capability to manage a large firm. The paper argues that management capability is a complement to ownership advantage. Ownership advantage determines the potential of the firm, and management capability governs the fulfilment of this potential through overcoming barriers to growth. The analysis is applied to a variety of issues, including out-sourcing, geographical dispersion of production, and regional specialisation in marketing.

Avoiding the dark side of positive online consumer reviews: enhancing reviews' usefulness for high risk-averse travelers

The influence of positive online consumer reviews on a traveler's decision making remains unclear. To better understand the perceived usefulness of online reviews, this study conducts two experiments using positive and negative online consumer reviews. Study results suggest that high risk-averse travelers find negative online reviews more useful than positive reviews. For positive online reviews, high-risk averse travelers feel expert reviewers' postings, travel product pictures, and well-known brand names enhance usefulness of the positive online reviews. These findings offer interesting implications for both marketing theory and practice.

Supply management capabilities, routine bundles and their impact on firm performance

Despite the generally positive contribution of supply management capabilities to firm performance their respective routines require more depth of assessment. Using the resource-based view we examine four routines bundles comprising ostensive and performative aspects of supply management capability – supply management integration, coordinated sourcing, collaboration management and performance assessment. Using structural equation modelling we measure supply management capability empirically as a second-order latent variable and estimate its effect on a series of financial and operational performance measures. The routines-based approach allows us to demonstrate a different, more fine-grained approach for assessing consistent bundles of homogeneous patterns of activity across firms. The results suggest supply management capability is formed of internally consistent routine bundles, which are significantly related to financial performance, mediated by operational performance. Our results confirm an indirect effect of firm performance for ‘core’ routines forming the architecture of a supply management capability. Supply management capability primarily improves the operational performance of the business, which is subsequently translated into improved financial performance. The study is significant for practice as it offers a different view about the face-valid rationale of supply management directly influencing firm financial performance. We confound this assumption, prompting caution when placing too much importance on directly assessing supply management capability using financial performance of the business.

Root elongation rate is correlated with the length of the bare root apex of maize and lupin roots despite contrasting responses of root growth to compact and dry soils

Background We investigated interacting effects of matric potential and soil strength on root elongation of maize and lupin, and relations between root elongation rates and the length of bare (hairless) root apex. Methods Root elongation rates and the length of bare root apexwere determined formaize and lupin seedlings in sandy loam soil of various matric potentials (−0.01 to −1.6 MPa) and bulk densities (0.9 to 1.5 Mg m−3). Results Root elongation rates slowed with both decreasing matric potential and increasing penetrometer resistance. Root elongation of maize slowed to 10 % of the unimpeded rate when penetrometer resistance increased to 2 MPa, whereas lupin elongated at about 40 % of the unimpeded rate. Maize root elongation rate was more sensitive to changes in matric potential in loosely packed soil (penetrometer resistances <1 MPa) than lupin. Despite these differing responses, root elongation rate of both species was linearly correlated with length of the bare root apex (r2 0.69 to 0.97). Conclusion Maize root elongation was more sensitive to changes in matric potential and mechanical impedance than lupin. Robust linear relationships between elongation rate and length of bare apex suggest good potential for estimating root elongation rates for excavated roots.

Stability of probiotic Lactobacillus plantarum in dry microcapsules under accelerated storage conditions

This study investigated the stability of freeze dried and fluid bed dried alginate microcapsules coated with chitosan containing model probiotic bacteria, Lactobacillus plantarum, during storage for up to 45 days at different water activities (0.11, 0.23, 0.40 and 0.70) and temperatures (4, 30 and 37 °C). The loss in cell viability was around 0.8 log in the case of fluid bed drying and around 1.3 in the case of freeze drying, with the former method resulting in dried capsules of smaller size (~ 1 mm vs 1.3 mm), more irregular shape, and with a rougher surface. In both cases, the water activity and water content were less than 0.25 and 10% w/w, respectively, which favours high storage stability. The storage stability studies demonstrated that as the water activity and temperature decreased the survival of the dried encapsulated cells increased. Considerably better survival was observed for fluid bed dried encapsulated cells compared to freeze dried encapsulated cells and freeze dried free cells with 10% sucrose (control), and in some cases, e.g. at 4 and 30 °C at water activities of 0.11, 0.23 and 0.40, there was more than 1 log difference after 45 days, with concentrations higher than 108 CFU/g after 45 days of storage. The results indicate that fluid bed drying is an effective and efficient manufacturing method to produce probiotic containing capsules with enhanced storage stability.