Inventory Routing - A Strategic Management Accounting Perspective

This dissertation develops a strategic management accounting perspective of inventory routing. The thesis studies the drivers of cost efficiency gains by identifying the role of the underlying cost structure, demand, information sharing, forecasting accuracy, service levels, vehicle fleet, planning horizon and other strategic factors as well as the interaction effects among these factors with respect to performance outcomes. The task is to enhance the knowledge of the strategic situations that favor the implementation of inventory routing systems, understanding cause-and-effect relationships, linkages and gaining a holistic view of the value proposition of inventory routing. The thesis applies an exploratory case study design, which is based on normative quantitative empirical research using optimization, simulation and factor analysis. Data and results are drawn from a real world application to cash supply chains. The first research paper shows that performance gains require a common cost component and cannot be explained by simple linear or affine cost structures. Inventory management and distribution decisions become separable in the absence of a set-dependent cost structure, and neither economies of scope nor coordination problems are present in this case. The second research paper analyzes whether information sharing improves the overall forecasting accuracy. Analysis suggests that the potential for information sharing is limited to coordination of replenishments and that central information do not yield more accurate forecasts based on joint forecasting. The third research paper develops a novel formulation of the stochastic inventory routing model that accounts for minimal service levels and forecasting accuracy. The developed model allows studying the interaction of minimal service levels and forecasting accuracy with the underlying cost structure in inventory routing. Interestingly, results show that the factors minimal service level and forecasting accuracy are not statistically significant, and subsequently not relevant for the strategic decision problem to introduce inventory routing, or in other words, to effectively internalize inventory management and distribution decisions at the supplier. Consequently the main contribution of this thesis is the result that cost benefits of inventory routing are derived from the joint decision model that accounts for the underlying set-dependent cost structure rather than the level of information sharing. This result suggests that the value of information sharing of demand and inventory data is likely to be overstated in prior literature. In other words, cost benefits of inventory routing are primarily determined by the cost structure (i.e. level of fixed costs and transportation costs) rather than the level of information sharing, joint forecasting, forecasting accuracy or service levels.

Designing Creativity Through Clusters - A periodisation of cluster discourse

The thesis focuses on one of the most dominant articulations of the relation between geographical place and development, clusters - internationally competing place-bound economic system of production in related industries. The dominant articulation of cluster discourse represents the subnational region as a system of production, and as a means for competitiveness for Western countries. Its reproduction in theories has become one of the most prolific exports of economic geography to other disciplines and for policymaking. By analysing cluster discourse the thesis traces how the languages and processes of globalization have over time altered the understandings of the relation between geographical place and the economy. It shows how in its latest incarnation of the cluster discourse, the language of mainstream economics is combined with ‘softer’ elements (e.g. community, learning, creativity) in the economic geographic discourse. This is typical for the idea of soft capitalism, wherein it is assumed that economic success emanates from soft characteristics, such as knowledge, learning and creativity, rather than straightforward technological or cost advantages. A reoccurring critique against the dominant understanding of the relationship between competitiveness and regions, as articulated in cluster discourse, has pinpointed the perspective’s inability to reconcile the respective and reciprocal roles of local standard of living with firm competitiveness. The thesis traces how such critique is increasingly appropriated through the fusion of the economic, social and cultural landscape into the language of capitalism. It shows how cluster discourse has appropriated its critique, by focusing on creativity, with its strong associations to arts, individual artists and the cultural sphere in general, while predominantly creating its meaning in relation to competitiveness. The thesis consists of six essays that each outlines the development of the cluster discourse. The essays show how meaning systems and strategies are created, accepted and naturalized in cluster discourse, how this affects individuals, the economic landscape and society at large, as well as showing which understandings are marginalized in the process. The thesis argues that clusters are a) inseparable from ideology and politics and b) they are the result of purposeful social practice. It calls for increased reflexivity within corporate and economic geographic research on clusters, and underlines the importance of placing issues of power at the centre of analysis.

Profitable Customer Management: A Study in Retail Banking

The increasing focus of relationship marketing and customer relationship management (CRM) studies on issues of customer profitability has led to the emergence of an area of research on profitable customer management. Nevertheless, there is a notable lack of empirical research examining the current practices of firms specifically with regard to the profitable management of customer relationships according to the approaches suggested in theory. This thesis fills this research gap by exploring profitable customer management in the retail banking sector. Several topics are covered, including marketing metrics and accountability; challenges in the implementation of profitable customer management approaches in practice; analytic versus heuristic (‘rule of thumb’) decision making; and the modification of costly customer behavior in order to increase customer profitability, customer lifetime value (CLV), and customer equity, i.e. the financial value of the customer base. The thesis critically reviews the concept of customer equity and proposes a Customer Equity Scorecard, providing a starting point for a constructive dialog between marketing and finance concerning the development of appropriate metrics to measure marketing outcomes. Since customer management and measurement issues go hand in hand, profitable customer management is contingent on both marketing management skills and financial measurement skills. A clear gap between marketing theory and practice regarding profitable customer management is also identified. The findings show that key customer management aspects that have been proposed within the literature on profitable customer management for many years, are not being actively applied by the banks included in the research. Instead, several areas of customer management decision making are found to be influenced by heuristics. This dilemma for marketing accountability is addressed by emphasizing that CLV and customer equity, which are aggregate metrics, only provide certain indications regarding the relative value of customers and the approximate value of the customer base (or groups of customers), respectively. The value created by marketing manifests itself in the effect of marketing actions on customer perceptions, behavior, and ultimately the components of CLV, namely revenues, costs, risk, and retention, as well as additional components of customer equity, such as customer acquisition. The thesis also points out that although costs are a crucial component of CLV, they have largely been neglected in prior CRM research. Cost-cutting has often been viewed negatively in customer-focused marketing literature on service quality and customer profitability, but the case studies in this thesis demonstrate that reduced costs do not necessarily have to lead to lower service quality, customer retention, and customer-related revenues. Consequently, this thesis provides an expanded foundation upon which marketers can stake their claim for accountability. By focusing on the range of drivers and all of the components of CLV and customer equity, marketing has the potential to provide specific evidence concerning how various activities have affected the drivers and components of CLV within different groups of customers, and the implications for customer equity on a customer base level.

On the Discursive Construction of Corruption: A Critical Analysis of Media Texts

While extant studies have greatly advanced our understanding of corruption, we still know little of the processes through which specific practices or events come to be labeled as corruption. In a time when public attention devoted to corruption and other forms of corporate misbehavior has exploded, this thesis raises – and seeks to answer – crucial questions related to how the phenomenon is socially and discursively constructed. What kinds of struggles are manifested in public disputes about corruption? How do constructions of corruption relate with broader conceptions of (il)legitimacy in and around organizations? What are the discursive dynamics involved in the emergence and evolution of corruption scandals? The thesis consists of four essays that each employ different research designs and tackle these questions in slightly different theoretical and methodological ways. The empirical focus is on the media coverage of a number of significant and widely discussed scandals in Norway in the period 2003-2008. By illuminating crucial processes through which conceptions of corruption were constructed, reproduced, and transformed in these scandals, the thesis seeks to paint a more nuanced picture of corruption than what is currently offered in the literature. In particular, the thesis challenges traditional conceptions of corruption as a dysfunctional feature of organizations in and of itself by emphasizing the ambiguous, temporal, context-specific, and at times even contradictory features of corruption in public discussions.