A mixed-integer linear programming approach to the optimization of event-bus schedules: a scheduling application in the tourism sector

This paper deals with “The Enchanted Journey,” which is a daily event tour booked by Bollywood-film fans. During the tour, the participants visit original sites of famous Bollywood films at various locations in Switzerland; moreover, the tour includes stops for lunch and shopping. Each day, up to five buses operate the tour. For operational reasons, however, two or more buses cannot stay at the same location simultaneously. Further operative constraints include time windows for all activities and precedence constraints between some activities. The planning problem is how to compute a feasible schedule for each bus. We implement a two-step hierarchical approach. In the first step, we minimize the total waiting time; in the second step, we minimize the total travel time of all buses. We present a basic formulation of this problem as a mixed-integer linear program. We enhance this basic formulation by symmetry-breaking constraints, which reduces the search space without loss of generality. We report on computational results obtained with the Gurobi Solver. Our numerical results show that all relevant problem instances can be solved using the basic formulation within reasonable CPU time, and that the symmetry-breaking constraints reduce that CPU time considerably.

Planning of a make-to-order production process in the printing industry

Offset printing is a common method to produce large amounts of printed matter. We consider a real-world offset printing process that is used to imprint customer-specific designs on napkin pouches. The production equipment used gives rise to various technological constraints. The planning problem consists of allocating designs to printing-plate slots such that the given customer demand for each design is fulfilled, all technological and organizational constraints are met and the total overproduction and setup costs are minimized. We formulate this planning problem as a mixed-binary linear program, and we develop a multi-pass matching-based savings heuristic. We report computational results for a set of problem instances devised from real-world data.

Do individual directors matter?

Paper 1: Pilot study of Swiss firms Abstract Using a fixed effects approach, we investigate whether the presence of specific individuals on Swiss firms’ boards affects firm performance and the policy choices they make. We find evidence for a substantial impact of these directors’ presence on their firms. Moreover, the director effects are correlated across policies and performance measures but uncorrelated to the directors’ background. We find these results interesting but conclude that they should to be substantiated on a dataset that is larger and better understood by researchers. Also, further tests are required to rule out methodological concerns. Paper 2: Evidence from the S&P 1,500 Abstract We ask whether directors on corporate boards contribute to firm performance as individuals. From the universe of the S&P 1,500 firms since 1996 we track 2,062 directors who serve on multiple boards over extended periods of time. Our initial findings suggest that the presence of these directors is associated with substantial performance shifts (director fixed effects). Closer examination shows that these effects are statistical artifacts and we conclude that directors are largely fungible. Moreover, we contribute to the discussion of the fixed effects method. In particular, we highlight that the selection of the randomization method is pivotal when generating placebo benchmarks. Paper 3: Robustness, statistical power, and important directors Abstract This article provides a better understanding of Senn’s (2014) findings: The outcome that individual directors are unrelated to firm performance proves robust against different estimation models and testing strategies. By looking at CEOs, the statistical power of the placebo benchmarking test is evaluated. We find that only the stronger tests are able to detect CEO fixed effects. However, these tests are not suitable to analyze directors. The suitable tests would detect director effects if the inter quartile range of the true effects amounted to 3 percentage points ROA. As Senn (2014) finds no such effects for outside directors in general, we focus on groups of particularly important directors (e.g., COBs, non-busy directors, successful directors). Overall, our evidence suggests that the members of these groups are not individually associated with firm performance either. Thus, we confirm that individual directors are largely fungible. If the individual has an effect on performance, it is of small magnitude.

Fuzzy knowledge representation in cognitive cities

This paper gives an insight into cognitive computing for smart cities, resulting in cognitive cities. Cognitive cities and cognitive computing research with the underlying concepts of knowledge graphs and fuzzy cognitive maps are presented and supported by existing tools (i.e., IBM Watson and Google Now) and intended tools (meta-app). The paper illustrates FCM as a suiting instrument to represent information/knowledge in a city environment driven by human-technology interaction, enforcing the concept of cognitive cities. A proposed paper prototype combines the findings of the paper and shows the next step in the implementation of the proposed meta-app.

The effect of superiors' exogenous constraints on budget negotiations

In a world characterized by increasing pressure from financial and product markets, the question of how exogenous constraints affect internal coordination and control processes has become increasingly important. This experiment investigates how two exogenous constraints that superiors can face in budget negotiation settings, increased opportunity costs and financial pressure to meet unit targets, affect budget negotiations and subordinate effort. The results show that both constraints induce more cooperation, but in different ways. Financial pressure on the superior leads to more cooperative negotiation behavior by superiors and subordinates than increased opportunity costs. Specifically, subordinates do not take advantage of the superior's increased financial pressure to enforce lower budgets. After negotiation, both constraints strongly mitigate the negative effects of superior budget imposition on subordinate effort because exogenous constraints eliminate the effect of procedural fairness considerations on subordinate effort.

Essays on behavioral aspects of the design and disclosure of compensation contracts

This thesis consists of four essays on the design and disclosure of compensation contracts. Essays 1, 2 and 3 focus on behavioral aspects of mandatory compensation disclosure rules and of contract negotiations in agency relationships. The three experimental studies develop psychology- based theory and present results that deviate from standard economic predictions. Furthermore, the results of Essay 1 and 2 also have implications for firms’ discretion in how to communicate their top management’s incentives to the capital market. Essay 4 analyzes the role of fairness perceptions for the evaluation of executive compensation. For this purpose, two surveys targeting representative eligible voters as well as investment professionals were conducted. Essay 1 investigates the role of the detailed ‘Compensation Discussion and Analysis’, which is part of the Security and Exchange Commission’s 2006 regulation, on investors’ evaluations of executive performance. Compensation disclosure complying with this regulation clarifies the relationship between realized reported compensation and the underlying performance measures and their target achievement levels. The experimental findings suggest that the salient presentation of executives’ incentives inherent in the ‘Compensation Discussion and Analysis’ makes investors’ performance evaluations less outcome dependent. Therefore, investors’ judgment and investment decisions might be less affected by noisy environmental factors that drive financial performance. The results also suggest that fairness perceptions of compensation contracts are essential for investors’ performance evaluations in that more transparent disclosure increases the perceived fairness of compensation and the performance evaluation of managers who are not responsible for a bad financial performance. These results have important practical implications as firms might choose to communicate their top management’s incentive compensation more transparently in order to benefit from less volatile expectations about their future performance. Similar to the first experiment, the experiment described in Essay 2 addresses the question of more transparent compensation disclosure. However, other than the first experiment, the second experiment does not analyze the effect of a more salient presentation of contract information but the informational effect of contract information itself. For this purpose, the experiment tests two conditions in which the assessment of the compensation contracts’ incentive compatibility, which determines executive effort, is either possible or not. On the one hand, the results suggest that the quality of investors’ expectations about executive effort is improved, but on the other hand investors might over-adjust their prior expectations about executive effort if being confronted with an unexpected financial performance and under-adjust if the financial performance confirms their prior expectations. Therefore, in the experiment, more transparent compensation disclosure does not lead to more correct overall judgments of executive effort and to even lower processing quality of outcome information. These results add to the literature on disclosure which predominantly advocates more transparency. The findings of the experiment however, identify decreased information processing quality as a relevant disclosure cost category. Firms might therefore carefully evaluate the additional costs and benefits of more transparent compensation disclosure. Together with the results from the experiment in Essay 1, the two experiments on compensation disclosure imply that firms should rather focus on their discretion how to present their compensation disclosure to benefit from investors’ improved fairness perceptions and their spill-over on performance evaluation. Essay 3 studies the behavioral effects of contextual factors in recruitment processes that do not affect the employer’s or the applicant’s bargaining power from a standard economic perspective. In particular, the experiment studies two common characteristics of recruitment processes: Pre-contractual competition among job applicants and job applicants’ non-binding effort announcements as they might be made during job interviews. Despite the standard economic irrelevance of these factors, the experiment develops theory regarding the behavioral effects on employees’ subsequent effort provision and the employers’ contract design choices. The experimental findings largely support the predictions. More specifically, the results suggest that firms can benefit from increased effort and, therefore, may generate higher profits. Further, firms may seize a larger share of the employment relationship’s profit by highlighting the competitive aspects of the recruitment process and by requiring applicants to make announcements about their future effort. Finally, Essay 4 studies the role of fairness perceptions for the public evaluation of executive compensation. Although economic criteria for the design of incentive compensation generally do not make restrictive recommendations with regard to the amount of compensation, fairness perceptions might be relevant from the perspective of firms and standard setters. This is because behavioral theory has identified fairness as an important determinant of individuals’ judgment and decisions. However, although fairness concerns about executive compensation are often stated in the popular media and even in the literature, evidence on the meaning of fairness in the context of executive compensation is scarce and ambiguous. In order to inform practitioners and standard setters whether fairness concerns are exclusive to non-professionals or relevant for investment professionals as well, the two surveys presented in Essay 4 aim to find commonalities in the opinions of representative eligible voters and investments professionals. The results suggest that fairness is an important criterion for both groups. Especially, exposure to risk in the form of the variable compensation share is an important criterion shared by both groups. The higher the assumed variable share, the higher is the compensation amount to be perceived as fair. However, to a large extent, opinions on executive compensation depend on personality characteristics, and to some extent, investment professionals’ perceptions deviate systematically from those of non-professionals. The findings imply that firms might benefit from emphasizing the riskiness of their managers’ variable pay components and, therefore, the findings are also in line with those of Essay 1.

Pay for performance does not always increase performance

Pay for performance can have a positive or a negative influence on actual performance. The aim of this study was to give an explanation for this contradiction.We demonstrated that the variability of the payment can act as a stressor. According to the transactional model of stress, the influence on performance depends on the subjective interpretation of the variability as challenge or threat. Therefore we manipulated the degree of variability. The data showed decreasing performance for participants who preferred less-variable payments. They performed better under a less-variable rather than more-variable payment. The participants who preferred more-variable payment schemes showed the opposite pattern. These participants showed a higher performance under a more-variable rather than less-variable payment scheme.

Dynamische Fähigkeiten und Unternehmenserfolg: Untersuchung des Mediationseffekts der Unternehmensinnovativität

Veränderung ist eine Konstante im heutigen unternehmerischen Wettbewerb - sei es eine Veränderung der Kundenbedürfnisse, eine Veränderung im Sinne des technologischen Fortschritts oder eine Veränderung des Wettbewerberumfelds. Dadurch werden Unternehmen kontinuierlich vor die Herausforderung gestellt, ihre unternehmerische Wertschöpfung regelmässig an die jeweilige Veränderung anzupassen. Nur wenn diese Anpassung gelingt, können Unternehmen einen nachhaltigen Unternehmenserfolg erzielen. Für die Anpassung der unternehmerischen Wertschöpfung ist ein abgestimmtes Set an Fähigkeiten erforderlich. So müssen Unternehmen zunächst in der Lage sein, Veränderung in den verschiedenen Dimensionen – Kunden, Technologie, Wettbewerber – zu erkennen. Anschliessend müssen Unternehmen aus der erkannten Veränderung angemessene Handlungskonzepte ableiten können, anhand derer die unternehmerische Wertschöpfung angepasst werden kann. Schliesslich müssen Unternehmen über Fähigkeiten verfügen, die Handlungskonzepte realisieren zu können. Diese drei Arten von Fähigkeiten bilden das Grundgerüst des Konzepts dynamischer Fähigkeiten („Dynamic Capabilities“) nach David J. Teece. Mit dem Konzept der Rekonfiguration unternehmerischer Wertschöpfung anhand dynamischer Fähigkeiten hat Teece eine Möglichkeit geschaffen, nachhaltigen Unternehmenserfolg in veränderlichen Märkten zu erklären. Durch das Konzept wird allerdings noch nicht die Frage beantwortet, wie sich die Rekonfiguration konkret manifestiert und zum Unternehmenserfolg beiträgt. In der vorliegenden Untersuchung wird eine Antwort auf diese Frage entwickelt. Es wird die These aufgestellt und überprüft, nach der die dynamischen Fähigkeiten positiv auf die Unternehmensinnovativität wirken. Als Resultat der verbesserten Unternehmensinnovativität sollten Unternehmen dann einen nachhaltigen Erfolg erzielen können. Dazu werden im ersten Teil der Untersuchung (Kapitel 1-4) die Forschungsfragen aus der Literatur abgeleitet, und es werden die zu überprüfenden Hypothesen entwickelt. Im zweiten Teil (Kapitel 5-9) werden zunächst die Ergebnisse einer qualitativen Vorstudie vorgestellt. Danach folgen die Erläuterungen der Operationalisierungen sowie der Untersuchungsmethodik. Im Anschluss werden die Ergebnisse der quantitativen Untersuchung präsentiert und erläutert. Abschliessend werden die Ergebnisse kritisch diskutiert und Schlussfolgerungen für die Forschung sowie die unternehmerische Praxis abgeleitet.

Using negotiated budgets for planning and performance evaluation: An experimental study : an experimental study

Budgets are often simultaneously used for the conflicting purposes of planning and performance evaluation. While economic theory suggests that firms should use separate budgets for conflicting purposes this contrasts with existing evidence that firms rarely do so. We address two open questions related to these observations in an experiment. Specifically, we investigate how a planning task that is in conflict with the performance evaluation task affects behavior in budget negotiations and their outcomes. Additionally, we analyze whether a single budget can be effectively used for both purposes compared to two separate budgets. We develop theory to predict that adding a planning task that is in conflict with the superior’s performance evaluation task increases the subordinate’s cooperation in and after the negotiation of a performance evaluation budget. Moreover, we predict that subordinate cooperation increases even more when the superior is restricted to use a single budget for both purposes. Our results broadly support our hypotheses. Specifically, we find that when budgets are used for both planning and performance evaluation, this increases the subordinate’s budget proposals during the negotiation and his performance after the negotiation. These effects tend to be even larger when the superior is restricted to a single budget rather than separate budgets for planning and performance evaluation, particularly with respect to subordinate performance. In our experimental setting, the benefits of increased subordinate cooperation even more than offset the loss in flexibility from the superior’s restriction to a single budget. The results of this study add to the understanding of the interdependencies of conflicting budgeting purposes and contribute to explain why firms often use a single budget for multiple purposes.

The Evolution of Routines under flexible Information Technology

Many technological developments of the past two decades come with the promise of greater IT flexi-bility, i.e. greater capacity to adapt IT. These technologies are increasingly used to improve organiza-tional routines that are not affected by large, hard-to-change IT such as ERP. Yet, most findings on the interaction of routines and IT stem from contexts where IT is hard to change. Our research ex-plores how routines and IT co-evolve when IT is flexible. We review the literatures on routines to sug-gest that IT may act as a boundary object that mediates the learning process unfolding between the ostensive and the performative aspect of the routine. Although prior work has concluded from such conceptualizations that IT stabilizes routines, we qualify that flexible IT can also stimulate change because it enables learning in short feedback cycles. We suggest that, however, such change might not always materialize because it is contingent on governance choices and technical knowledge. We de-scribe the case-study method to explore how routines and flexible IT co-evolve and how governance and technical knowledge influence this process. We expect to contribute towards stronger theory of routines and to develop recommendations for the effective implementation of flexible IT in loosely coupled routines.

Dear Brand, Please Help me to Become a True-Man Out of the Truman: The Role of Brand Authenticity

Although brand authenticity is gaining increasing interest in academia and managerial practice, empirical studies on its contribution to the branding literature are still limited. The authors therefore conceptually and empirically examine the emergence and outcomes of perceived brand authenticity (PBA). A prior multi-phase scale development process resulted in a 17-item PBA scale to measure its four dimensions of credibility, integrity, symbolism, and longevity. Brand authenticity perceptions are influenced by indexical, existential, and iconic cues, whereby the latter’s influence is moderated by consumers’ level of marketing skepticism. Further, PBA increases emotional brand attachment. This relationship is particularly strong for consumers with a high level of self-authenticity. In addition, PBA effects are stronger in a North American market context compared to a European context.