Abstract: Much of the current thinking about competitive strategy focuses on ways that firms can create imperfectly competitive product markets in order to obtain greater than normal economic performance. However, the economic performance of firms does not depend simply on whether or not its strategies create such markets, but also on the cost of implementing those strategies. Clearly, if the cost of strategy implementation is greater than returns obtained from creating an imperfectly competitive product market, then firms will not obtain above normal economic performance from their strategizing efforts. To help analyze the cost of implementing strategies, we introduce the concept of a strategic factor market, i.e., a market where the resources necessary to implement a strategy are acquired. If strategic factor markets are perfect, then the cost of acquiring strategic resources will approximately equal the economic value of those resources once they are used to implement product market strategies. Even if such strategies create imperfectly competitive product markets, they will not generate above normal economic performance for a firm, for their full value would have been anticipated when the resources necessary for implementation were acquired. However, strategic factor markets will be imperfectly competitive when different firms have different expectations about the future value of a strategic resource. In these settings, firms may obtain above normal economic performance from acquiring strategic resources and implementing strategies. We show that other apparent strategic factor market imperfections, including when a firm already controls all the resources needed to implement a strategy, when a firm controls unique resources, when only a small number of firms attempt to implement a strategy, and when some firms have access to lower cost capital than others, and so on, are all special cases of differences in expectations held by firms about the future value of a strategic resource. Firms can attempt to develop better expectations about the future value of strategic resources by analyzing their competitive environments or by analyzing skills and capabilities they already control. Environmental analysis cannot be expected to improve the expectations of some firms better than others, and thus cannot be a source of more accurate expectations about the future value of a strategic resource. However, analyzing a firm's skills and capabilities can be a source of more accurate expectations. Thus, from the point of view of firms seeking greater than normal economic performance, our analysis suggests that strategic choices should flow mainly from the analysis of its unique skills and capabilities, rather than from the analysis of its competitive environment.

Abstract: Accurate marketing research depends on accurate user judgments regarding their needs. However, for very novel products or in product categories characterized by rapid change—such as “high technology” products—most potential users will not have the real-world experience needed to problem solve and provide accurate data to inquiring market researchers. In this paper I explore the problem and propose a solution: Marketing research analyses which focus on what I term the “lead users” of a product or process. Lead users are users whose present strong needs will become general in a marketplace months or years in the future. Since lead users are familiar with conditions which lie in the future for most others, they can serve as a need-forecasting laboratory for marketing research. Moreover, since lead users often attempt to fill the need they experience, they can provide new product concept and design data as well. In this paper I explore how lead users can be systematically identified, and how lead user percept...

Abstract: This paper examines electronic mail in organizational communication. Based on ideas about how social context cues within a communication setting affect information exchange, it argues that electronic mail does not simply speed up the exchange of information but leads to the exchange of new information as well. In a field study in a Fortune 500 company, we used questionnaire data and actual messages to examine electronic mail communication at all levels of the organization. Based on hypotheses from research on social communication, we explored effects of electronic communication related to self-absorption, status equalization, and uninhibited behavior. Consistent with experimental studies, we found that decreasing social context cues has substantial deregulating effects on communication. And we found that much of the information conveyed through electronic mail was information that would not have been conveyed through another medium.

Abstract: This paper proposes and empirically tests whether different models are needed to predict the adoption of technical process innovations that contain a high degree of new knowledge radical innovations and a low degree of new knowledge incremental innovations. Results from a sample of 40 footwear manufacturers suggest that extensive knowledge depth measured by the number of technical specialists is important for the adoption of both innovation types. Larger firms are likely to have both more technical specialists and to adopt radical innovations. The study did not find associations between the adoption of either innovation type and decentralized decision making, managerial attitudes toward change, and exposure to external information. By implication, managers trying to encourage technical process innovation adoption need not be as concerned about modifying centralization of decision making, managerial attitudes and exposure to external information as would managers trying to encourage other types of innovation adoption, e.g., innovations in social services where these factors have been found to be important. Instead, investment in human capital in the form of technical specialists appears to be a major facilitator of technical process innovation adoption.

Abstract: This paper contains an axiomatic treatment of the Analytic Hierarchy Process AHP. The set of axioms corresponding to hierarchic structures are a special case of axioms for priority setting in systems with feedback which allow for a wide class of dependencies. The axioms highlight: 1 the reciprocal property that is basic in making paired comparisons; 2 homogeneity that is characteristic of people's ability for making comparisons among things that are not too dissimilar with respect to a common property and, hence, the need for arranging them within an order preserving hierarchy; 3 dependence of a lower level on the adjacent higher level; 4 the idea that an outcome can only reflect expectations when the latter are well represented in the hierarchy. The AHP neither assumes transitivity or the stronger condition of consistency nor does it include strong assumptions of the usual notions of rationality. A number of facts are derived from these axioms providing an operational basis for the AHP.

Abstract: To what extent would the rate of development and introduction of inventions decline in the absence of patent protection? To what extent do firms make use of the patent system, and what differences exist among firms and industries and over time in the propensity to patent? These questions are in need of much more study. This paper, which reports the results of an empirical investigation based on data obtained from a random sample of 100 U.S. manufacturing firms, provides new findings bearing on each of these questions.

Abstract: Attention to the subject of organizational effectiveness has been increasing in the last several years as popular management books have extolled management excellence, almost two million jobs have been lost due to poor U.S. competitiveness, and economic conditions have put pressure on organizations to become more accountable with their resources. However, despite its popularity, much confusion continues in the organizational literature regarding the definition, circumscription, and appropriate criteria for assessing effectiveness. In this paper, I summarize what areas are becoming consensual among most writers on effectiveness, and I point out continuing areas of disagreement and conflict. The five statements summarizing consensual characteristics of effectiveness and the three statements summarizing areas of continuing conflict point out that agreement about effectiveness is mainly an agreement to disagree. Conflicts center mainly on the incompatibility and inappropriateness of commonly selected criteria. The main theme of the paper, however, is a discussion of an inherent, but largely ignored, characteristic of effectiveness in organizations-the paradoxical nature of effectiveness criteria. This discussion illustrates that the most effective organizations are also those characterized by paradoxes-i.e., contradictions, simultaneous opposites, and incompatibilities. Taking account of this characteristic helps explain one reason why so much confusion and disagreement continues to surround effectiveness, and it uncovers a new set of research questions that can guide future investigations. Some suggestions are provided for how research on paradoxes in effectiveness might be pursued in the future.

Abstract: In this survey paper we discuss the development of the simple assembly line balancing problem SALBP; modifications and generalizations over time; present alternate 0-1 programming formulations and a general integer programming formulation of the problem; discuss other well-known problems related to SALBP; describe and comment on a number of exact i.e., optimum-seeking methods; and present a summary of the reported computational experiences. All models discussed here are deterministic i.e., all input parameters are assumed to be known with certainty and all the algorithms discussed are exact. The problem is termed "simple" in the sense that no "mixed-models," "subassembly lines," "zoning restrictions," etc. are considered. Due to the richness of the literature, we exclude from discussion here a the inexact i.e., heuristic/approximate algorithms for SALPB and b the algorithms for the general assembly line balancing problem including the stochastic models.

Abstract: An empirical investigation of 97 firms was conducted to determine the relationships that three aspects of the chief executive's CEO's personality have with the strategies, structures, decision making methods and performance of their firms. CEO flexibility was associated with niche strategies, simple, informal structures, and intuitive, risk-embracing decision making. CEO need for achievement was related to broadly focussed, marketing-oriented strategies, formal and sophisticated structures, and proactive, analytical decision making. Executives with an internal locus of control pursued more product innovation, were more future oriented, and tailored their approaches to the circumstances facing their firms. The relationships between personality and organizational characteristics were found to be by far the strongest in small firms and also somewhat more significant in dynamic environments. Flexibility and locus of control related to corporate performance under certain conditions; need for achievement did not.

Abstract: Researchers in all academic disciplines benefit from an understanding of the intellectual development of their field. This understanding is essential for conducting studies which build systematically on prior research. The purpose of this study is to document the intellectual development of the ideas represented by published research in Management Information Systems MIS based on an author co-citation analysis. The resulting mapping is intended to serve as a benchmark for future assessments of MIS as a field as well as a means for documenting the emergence of new research specialties. The study sought to identify 1 the subfields which constitute MIS research, 2 the reference disciplines of these subfields, 3 the diffusion of the ideas represented by these subfields to other disciplines, and 4 which of these subfields represent active areas of current MIS research. Nine invisible colleges, or informal clusters of research were uncovered. These nine empirically defined conceptual groupings collectively define the intellectual foundations of MIS as well as the forces currently shaping MIS research. Four of the clusters represent early MIS research themes which are still popular, based on subsequent citation patterns. Despite the centrality of the concept of the organization to widely-accepted definitions of MIS, the results suggest that MIS research is not well-grounded in organization theory nor have MIS research results been widely diffused in the organizational literature. Suggestions for developing a better link between MIS and organizational theory are presented based on the concept of organizational effectiveness.

Abstract: This paper reviews recent work on the development of analytical models of Flexible Manufacturing Systems (FMSs). The contributions of each of the groups concerned with model development are summarized and an assessment is made of the strengths and weaknesses of its modelling approach. A number of directions in which models require extension are outlined, in particular the representation of such aspects of FMS operation as the tool delivery systems, the blocking phenomenon, the transient behavior and the differences between flexible machining systems and flexible assembly systems. Further work is also required on the structure of FMS control and the integration with plant production planning and control.

Abstract: In this paper, the joint problem of ordering and offering price discount by a supplier to his sole/major buyer is analyzed. The objective is to induce the buyer to alter his order schedule and size so that the supplier can benefit from lower set up, ordering, and inventory holding costs. We generalize the quantity discount pricing model of Monahan (Monahan, J. P. 1984. A quantity discount pricing model to increase vendor profits. Management Sci. 30 (6) 720–726.) to: (1) explicitly incorporate constraints imposed on the amount of discount that can be offered; and (2) relax the implicit assumption of a lot-for-lot (or order-for-order) policy adopted by the supplier. An algorithm is developed to solve the supplier's joint ordering and price discount problem.

Abstract: Some authors have argued that research on organizational effectiveness should cease. This study demonstrates why organizational effectiveness studies are crucial in certain types of organizations, and it points out how many of the weaknesses and criticisms of past investigations can be addressed. The results of this study of 29 organizations indicate that certain managerial strategies are strongly associated with high static scores and with improving effectiveness over time. Managerial strategies, in fact, were found to be more important than structure, demographics, finances, and other factors. Proactive strategies and those with an external emphasis are more successful than internal and reactive strategies. Managerial strategies that are multifaceted are more likely to lead to effectiveness than monolithic strategies.

Abstract: The problem of plant layout has generally been treated as a static one. In this paper, we deal with the dynamic nature of this problem. Both optimal and heuristic procedures are developed for this problem and are based on a dynamic programming formulation. The use of one of these approaches depends on the ability to solve the static problem efficiently. Finally, we briefly discuss the issue of extending the planning horizon, and how to resolve system nervousness when previously planned layouts need to be changed.

Abstract: Problems of allocating joint costs in a reasonable way arise in many practical situations where people decide to work together to save costs. Cost allocation methods based on game theoretical concepts take into account the strategic aspects of cost allocation situations. We give a survey of cost allocation methods based on the nucleolus and the Shapley value, and introduce also a new one, the so-called cost gap allocation method which is based on the I„-value. It is shown that for some large subclasses of cost allocation problems this new cost allocation method coincides with old separable cost methods proposed in the thirties by the Tennessee Valley Authority and also with the separable costs-remaining benefits SCRB method. Properties of this cost gap allocation method are also treated.

Abstract: This paper introduces and explicates the decision-making paradigm of organizational design. We argue that the domains of existing design paradigms are declining in scope, and that the nature of current and future organizational environments requires use of a design paradigm that responds to the increasing frequency and criticality of the decision-making process. In particular, we argue that the decision-making paradigm is applicable when the organizational environments are hostile, complex, and turbulent. The focal concept of the decision-making paradigm is that organizations should be designed primarily to facilitate the making of organizational decisions. The paper sets forth the paradigm's six major concepts and discusses the principal domains of its application. The paper also examines the relationships between the decision-making paradigm and the literatures on 1 organizational decision making, 2 the information processing view of organizations, and 3 the need for compatibility between the organization's design and the design of its technologically supported information systems. The paper concludes by identifying ten organizational design guidelines that follow from the decision-making paradigm.

Abstract: In this paper, we report on a computational experiment designed to assess the efficacy of 26 heuristic decision rules which group work tasks into work stations along an assembly line such that the number of work stations required is minimized. The heuristic decision rules investigated vary from simple list processing procedures that consider a single attribute of each work task for assignment, to procedures which are optimal seeking, but which have had their search terminated through the imposition of a limit on the amount of computation time that can be devoted to each search. Also included are heuristic decision rules which backtrack in an attempt to locate an improved solution, and decision rules which probabilistically search for improved solutions. Our investigation differs from those reported previously, in that the objective in balancing each line is to determine the minimum number of work stations for a given limit on the time available for assembly at each work station the cycle time. Previous approaches have investigated the problem of determining the minimum cycle time for a given line length. We also compare the results obtained with the optimal solution for a subset of the problems investigated. Both problems which have appeared in the open literature and problems which have been solved for the first time are included. Because a portion of our results differ from those reported previously, we suggest why these differences have occurred. Guidelines are also given to those balancing industrial assembly lines on the choice of the heuristic decision rule to use whether one is attempting to obtain a minimum station balance given a limit on the time available for assembly at each work station, or whether one is attempting to minimize the time devoted to assembly at a work station given a limit on the number of work stations available.

Abstract: We consider nonlinear programming problem P with stochastic constraints. The Lagrangean corresponding to such problems has a stochastic part, which in this work is replaced by its certainty equivalent in the sense of expected utility theory. It is shown that the deterministic surrogate problem CE-P thus obtained, contains a penalty function which penalizes violation of the constraints in the mean. The approach is related to several known methods in stochastic programming such as: chance constraints, stochastic goal programming, reliability programming and mean-variance analysis. The dual problem of CE-P is studied for problems with stochastic righthand sides in the constraints and a comprehensive duality theory is developed by introducing a new certainty equivalent NCE concept. Motivation for the NCE and its potential role in Decision Theory are discussed, as well as mean-variance approximations.

Abstract: This research examines the effectiveness of alternative strategies for dealing with the problem of order instability, or nervousness, which occurs in Material Requirements Planning systems. Nervousness can be particularly disruptive in multi-level production processes where a change in order size or timing at one level can result in changes at other levels. This study proposes and evaluates five different strategies for treating nervousness caused by the interaction of lot-sizing decisions and the planning horizon. Not evaluated here are the effects on order instability caused by demand uncertainty or supply and lead-time uncertainty. The five strategies examined are: 1 Freezing the schedule within the planning horizon, 2 Lot-for-Lot after stage 1, 3 Safety stocks, 4 Forecast beyond the planning horizon, and 5 Change cost procedure. A series of simulation experiments was conducted to test the effectiveness of the five strategies on schedule stability and system costs. The experiments were constructed to evaluate the impacts of various lot-sizing methods, the length of the planning horizon, setup and holding cost parameters and product assembly structure. The results indicate that when the source of nervousness is due to changes in decisions caused by a rolling planning horizon, safety stock and lot-for-lot approaches are not cost effective. Under most conditions, the strategies of incorporating a change cost to discourage schedule changes or freezing the schedule within the planning horizon appear to be dominant.

Abstract: The problem addressed in this paper is the scheduling of activities in a project to maximize net present value given cash inflows, outflows, and resource restrictions. Although optimization procedures exist for small problems of this type, they generally cannot solve large-scale problems and may not be widely available. Six heuristic scheduling rules are compared on 80 test problems. The test problems include large-scale engineering construction projects as well as 50 resource constrained problems from the literature.

Abstract: A theory based upon random search within a fixed population of technological possibilities is used to explain the manufacturing progress function. The theory is consistent with the power function relation between unit costs and cumulative output that has frequently been observed. It is also consistent with initial rates of improvement smaller than those predicted later by the power function relation, the eventual cessation of cost reduction, and an irregularity of improvements. Existing theories in the literature either fail to agree with the main empirical phenomena or else assume precisely what they attempt to explain.

Abstract: In multi-echelon repairable inventory systems with high set-up cost for order and/or high demand rates, the use of batch ordering may be more cost-effective than the common S-1, S ordering policy. This paper addresses the issue of determining the optimal order batch size and stocking levels at the stocking locations in such a system. A power approximation is used to estimate the total system stock and backorder levels from which the optimal batch size can be readily determined. A search routine involving "one-pass" searches are then followed to obtain the stocking levels at the depot and the local sites of the system. This procedure has been evaluated using 900 test cases and has been found to be very effective. The power approximation approach also results in a simple analytical relationship to test whether or not S-1, S is an optimal ordering policy for repairable items in a multi-echelon environment.

Abstract: Linear programming formulations for piecewise loglinear estimation of efficient production surfaces are derived from a set of basic properties postulated for the underlying production possibility sets Unlike the piecewise linear model of Banker, Charnes, and Cooper Banker R D, A Charnes, W W Cooper 1984 Models for the estimation of technical and scale inefficiencies in data envelopment analysis Management Sci30 September 1078-1092, this approach permits the identification of increasing marginal products, and estimation of the classical S-shaped production functions Methods are also provided for estimating technical inefficiencies and other production characteristics, such as rates of substitution and transformation, marginal products, returns to scale and most productive scale sizes on the basis of observed production data The results of a simulation study are reported to illustrate the usefulness of this estimation method in empirical applications when there are a priori reasons to expect increasing marginal products in some regions of the production function A modified model is provided to extend this analysis to the situation of non-competing outputs addressed by the bi-extremal model of Banker, Charnes, Cooper, and Schinnar Banker R D, A Charnes, W W Cooper, A Schinnar 1981 A bi-extremal principle for frontier estimation and efficiency evaluation Management Sci27 December 1370-1382

Abstract: Business Portfolio Planning techniques often suggest that firms should invest in industries with high profitability, high growth, or other attractive characteristics. Critiquing this view, we suggest that the same factors which lead to high profitability in an industry may cause its inefficient participants to earn lower profits. Higher growth, on the other hand, may benefit inefficient firms while reducing the gains of efficient competitors. The paper offers theory and evidence to support this view of performance dependencies for the special case of diversified firms.

Abstract: In this paper we present a heuristic method, based on Lagrangian relaxation, for multilevel lot-sizing when there is a single bottleneck facility. A series of Lagrangian relaxations one for each item in the product structure is imbedded in a branch and bound procedure. The objective is to find a production schedule that fits within available capacity at minimum cost. The method has two solution phases, dual and primal. In the dual phase of the procedure, implied costs of setups and production are determined based on a tentative schedule. The primal phase is repeated with these new prices and we iterate to reach a good solution. The solution procedure is first tested on two special cases: uncapacitated multilevel lot-sizing and the capacitated, single-level multi-item lot sizing problem. The results show that the solution procedure can provide better solutions than some heuristics designed especially for those problems. Test results on the bottleneck problem indicate that good feasible solutions are found for problems too difficult to solve with exact methods.

Abstract: The impact of forecasted demand and forecast error, introduced in the Master Production Schedule, upon Material Requirements Planning (MRP) Systems is investigated. A computerized simulation was built to examine several questions. Results indicate that forecasting error, especially the mean error, does impact MRP system inventory costs and shortages; the greater the forecast error the greater the shortages. An exception to this general relationship was that a slight forecast BIAS may improve MRP system performance, which was the case for systems studied herein. Lot-sizing rules and product structure (bill of material structure) were also found to impact total MRP system inventory costs and shortages. The more complicated the MRP structure, the greater the differentiation among lot-sizing rules and the greater the cost impact of forecast errors. A good lot-sizing rule appears to be the period order quantity rule. However, as the forecast error level gets higher, it becomes difficult to select the better lo...

Abstract: A central issue in new product development and planning is the market timing/entry decision. An entry too early may risk pushing an under-developed product into the marketplace, with possible negat...

Abstract: This paper examines the problem of rank ordering a set of players or objects on the basis of a set of pairwise comparisons arising from a tournament. The criterion for deriving this ranking is to have as few cases as possible where player i is ranked above j while i was actually defeated by j in the tournament. Such a situation is referred to as a violation. The objective, therefore, is to determine the Minimum Violations Ranking MVR. While there are situations where this ranking would be allowed to contain ties among subsets of objects, we will concern ourselves herein with linear ordering no ties. A series of examples are given where this requirement would seem to be appropriate. In order to put the MVR problem into proper perspective we introduce the concept of a distance on the set of tournaments. A set of natural axioms is presented which any such distance measure should obey, and it is proven that in the presence of these axioms a unique such measure exists. It is then shown that the MVR problem is equivalent to the minimum distance problem, which can be represented in several forms-in particular as a problem of determining the minimum feedback edge set in a graph and as a mixed integer generalized network problem. This opens up a wide scope of possible solution procedures for the MVR problem. An optimal algorithm is presented along with computational results. In addition, various heuristics are discussed including an improved heuristic referred to as the Iterated Kendall method.