Business Commons^™

What Makes A Great Strategy? Gea Farm Technologies Road To Smart Farming, Jan-Philipp BüChler Prof. Dr.

Case Studies

GEA Farm Technologies is a mid-sized world market leader of mechanical equipment and service solutions for milk production and livestock farming. Senior management of the hidden champion gets approval for an accelerated acquisition strategy to boost growth and innovate the business model vis-á-vis strong competitors in order to lead and develop the market. However, the existing strategic management of internal technology development would be altered and a significant part of management attention would be shifted towards M&A as well as post-merger integration efforts. The case study invites students to explore the benefits and limits of this business model innovation and …

Tesla Transformation And Hidden Champions: The Pace Of Innovation It The Only Thing That Matters In The Long Run., Jan-Philipp BüChler Prof. Dr.

Case Studies

After having internally invested significant amounts of time and resources into customer-specific development, the CEO of CoMaTec - family-owned and mid-sized world-market leader in the automotive industry - receives the contract for batch production from emerging electric automotive giant TESLA. However, the timing for the final development stage and start of production (SOP) deviates distinctly from all prior agreements. The tightened timing would put his company at tremendous risk. Should he accept the contract? Which mitigation strategies present an option for managing the emerging risks?

Contractual Stakeholderism, Kishanthi Parella

Scholarly Articles

In 2019, the Business Roundtable announced its commitment to all corporate stakeholders—consumers, employees, suppliers, and communities—and not just shareholders. This announcement has reawakened an old debate over corporate social responsibility. Stakeholderism advocates argue that corporate leaders must consider the interests of the various stakeholders impacted by corporate decision-making. Stakeholderism critics challenge this view, expressing concerns that stakeholderism will magnify managerial agency costs, chill regulation, risk inauthenticity, and lead to impractical solutions.

This Article proposes “contractual stakeholderism” to operationalize stakeholderism in accordance with the views of its advocates but in a way that is attentive to the concerns of its critics. …

A Human Factors Study Of Risk Management Of Complex Agile Scrum Projects In Large Enterprises, Ravi Kalluri

Engineering Management & Systems Engineering Faculty Publications

Agile Project Management methods have gained phenomenal success in the IT software world in managing projects of high complexity and uncertainty. However, Agile projects come with their unique set of risks. This paper seeks to explore the risks posed by human factors to complex Agile Scrum projects in large enterprises. Project Risk Management is crucial in determining the future performance of a complex project. Increasing project complexity makes it more and more difficult to anticipate potential events that could affect the project and to make effective decisions to reduce project risk exposure. This is even more true for Agile projects …

Uri And Its Students: A Contract For The Provision Of A Safe Environment, Danielle Joan Beatrice

Senior Honors Projects

DANIELLE BEATRICE (English; Philosophy; Business) URI and Its Students: A Contract for the Provision of a Safe Environment

Sponsor: Judith Swift (Communication Studies, Coastal Institute)

When students begin to attend college, they expect to be consumed with busy schedules, heavy workloads, and an exciting social life. Students do not anticipate being in dangerous situations. However, this does not mean that such situations do not occur. Therefore, it is essential to teach students to be active participants in educating themselves and their peers regarding prevention and response to emergency situations. My Honors Project aims to increase the awareness of safety-related issues …

The Opportunity Zones Program Provides High Returns On Investments, Kane Moran

Honors Program Theses and Projects

The Opportunity Zones Program is a new tax incentive established in the Tax Cuts and Jobs Act of 2017. The program aims to direct investors towards low-income communities in the United States by providing more attractive investment prospects. The end goal of the program is to disrupt the unhealthy trend of geographic inequality caused by a disproportionate number of investments being funneled to a select few areas of the U.S. On a large scale, the benefits include a more balanced economy across the entire nation, while also providing tax benefits for investors, which can contribute to a higher return on …

Public-Private Partnerships In Transportation: Lessons Learned For The New Space Era, Janet K. Tinoco

Publications

Entrepreneurial firms in the space sector have accomplished unimaginable feats unheard of just 20 years ago, such as reusable rockets and cargo launches to the International Space Station (ISS). Clearly, the private sector will continue to be a significant participant in the future of the space industry, partnering with governments and nations, to accomplish more with less. Likewise, the public sector must cope with decreased funding and worthy space objectives while balancing cost, risk, and return. Partnering with private enterprise is the best solution to meeting mandated objectives in space program advancement. This paper addresses partnerships in real property assets …

Maximizing Operating Room Performance Using Portfolio Selection, Vivek Reddy Gunna, Amin Abedini, Wei Li

Mechanical Engineering Faculty Publications

The operating room (OR) is responsible for most hospital admissions and is one of the most cost and work intensive areas in the hospital. From recent trends, we observe an ironic parallel increase among expenditure and waiting time. Therefore, improving OR scheduling has become obligatory, particularly in terms of patient flow and benefit. Most of the hospitals rely on average patient arrivals and processing times in OR planning. But in practice, variations in arrivals and processing times causes high instability in OR performance. Our model of optimization provides OR schedules maximizing patient flow and benefit at a fixed level of …

Women Directors On Public Company Boards: Does A Critical Mass Affect Leverage?, Cindy K. Harris

Business and Economics Faculty Publications

This study examines the relationship between corporate leverage (the ratio of total debt to total assets) and gender diversity on US public company boards, with particular focus on boards that have at least 25% women directors. Using this critical mass of women eliminates from consideration boards with lesser female representation, whose female directors may be marginalized in their contributions to board functioning and decision-making. I hypothesize that when boards have this minimum threshold of gender diversity, the influence of risk-averse female directors will impact board decisions related to financing, resulting in lower debt ratios when compared to boards with no …

System Of Systems Perspective On Risk: Towards A Unified Concept, C. Ariel Pinto, Michael K. Mcshane, Ipek Bozkurt

Finance Faculty Publications

Many systems and projects that concern systems engineers, engineering managers, and business managers today can be defined as system of systems (SoS), which are described as ambiguous, uncertain and dynamic, among others. In addition to the traditional view on risk identification, analysis and management, the concept of risk should be considered with respect to these systems of systems. The purpose of this paper is to analyse both fundamental concepts and recent publications in system of systems, business and engineering management, as well as risk analysis, modelling, and management for the purpose of better describing the concept of risk with respect …

R&D Project Scheduling When Activities May Fail, Bert De Reyck, Roel Leus

Research Collection Lee Kong Chian School Of Business

An R&D project typically consists of several stages. Due to technological risks, the project may have to be terminated before completion, each stage having a specific likelihood of success. In the project planning and scheduling literature, this technological uncertainty has typically been ignored and project plans are developed only for scenarios in which the project succeeds. In this paper we examine how to schedule projects in order to maximize their expected net present value when the project activities have a probability of failure and when an activity's failure leads to overall project termination. We formulate the problem, show that it …

The Impact Of Enterprise Risk Management On The Internal Audit Function, Mark S. Beasley, Richard Clune, Dana Hermanson

Faculty and Research Publications

This exploratory study provides evidence about factors associated with the overall impact of enterprise risk management (ERM) on the internal audit function’s activities. Based on responses from 122 organizations in several countries, we find that ERM has the greatest impact on internal audit’s activities when (a) the organization’s ERM process is more completely in place, (b) the CFO and audit committee have called for greater internal audit activity related to ERM, (c) the chief audit executive’s (CAE) tenure is longer, (d) the organization is in the banking industry or is an educational institution, and (e) the internal audit function has …

Rapid Calculation Of The Price Of Guaranteed Minimum Death Benefit Ratchet Options Embedded In Annuities, Eric R. Ulm

Journal of Actuarial Practice (1993-2006)

This paper presents a new method of obtaining quick and accurate values and deltas for discrete look back options using Taylor series expansions. This method is applied to the case of ratchet guaranteed minimum death benefits attached to annuity contracts, and the method is extended to include annuities where a fixed fund is attached to the variable account. Finally, both the speed and the accuracy of the method are compared to Monte Carlo simulation and the exact analytic solution. The Taylor expansion method is shown to be faster and, in most cases, more accurate than the alternative methods.

Research Summary 6: Analytical Procedures And Audit Planning Decisions, Steven M. Glover, James Jiambalvo, Jane Kennedy

Faculty Publications

Auditors perform analytical procedures in planning the nature, timing and extent of testing. Significant fluctuations between the current year’s unaudited data and expected results signal an increased risk of material error and help auditors focus their planned tests on high-risk areas. This study examined auditors’ decisions to revise preliminary audit plans after analytical procedures performed during planning revealed significant, unexpected fluctuations. Specifically we examined whether the extent of corroboration for management’s explanation for the fluctuation and the presence of an explicit incentive for management to misstate the financial statements influenced auditors’ decisions to revise their audit plans.

Determination Of Optimal Premiums As A Constrained Optimization Problem, Farrokh Guiahi

Journal of Actuarial Practice (1993-2006)

A simple stochastic model of an insurer's underwriting and related investment operations is used to determine the optimal amounts of written premiums for one period for the insurer's book of business. The written premium for each class is determined by the solution of a constrained optimization problem. The insurer's objective function is the expected profit on a book of business over the period. The insurer has a safety constraint where a certain portion of capital and surplus can be depleted with a small probability. This paper provides an explicit solution for optimum expected profit and corresponding written premiums by classes. …

Dynamic Immunization And Transaction Costs With Different Term Structure Models, Eliseo Navarro, Juan M. Nave

Journal of Actuarial Practice (1993-2006)

A bond portfolio selection model is developed in a dynamic framework using different term structures, but without transactions costs. We show that the optimal portfolios are consistent with Khang's dynamic immunization theorem, i.e., the optimal path consists of making portfolio duration equal to the investor's horizon planning period. The model is then extended to include transaction costs. The resulting optimal portfolios are no longer consistent with Khang's dynamic immunization theorem. In fact, the strategy for constructing the optimal portfolio consists of initially choosing a portfolio with a duration that is smaller than the horizon planning period.

Asset Allocation In Investing To Meet Liabilities, Anthony Dardis, Vinh Loi Huynh

Journal of Actuarial Practice (1993-2006)

We present some rudimentary concepts on asset/liability management and describe an approach to asset allocation modeling for institutions that invest to meet liabilities. The traditional risk/reward framework of financial economics is used as a starting pOint. The definitions of risk and reward are then refined with regard to the institution under consideration. A simple model of a U.S. life office is examined. We assume that the only investments available are domestic stocks and long-dated government bonds. Stochastic simulation is used to create a large number of future investment scenarios using historical total return data for these asset classes. The ability …

Actuarial Conservatism: Not In Public Sector Defined Benefit Pension Plans, Brian A. Jones

Journal of Actuarial Practice (1993-2006)

Most actuaries tend to be conservative, and most, including this writer, probably would be happy to be so categorized. But actuarial conservatism may not be the best rule in defined benefit public sector pension plans. This paper argues that it is not appropriate for actuaries to employ conservatism assumptions in such public sector plans.

A Critique Of Defined Contribution Plans Using A Simulation Approach, David M. Knox

Journal of Actuarial Practice (1993-2006)

During the 1980s there was a trend in many countries away from defined benefit plans toward defined contribution plans. This development means that the individual member bears the full investment risk in the preretirement period and the annuity rate risk at retirement, as no pension benefit (expressed as a percentage of salary) is provided. This paper, through the use of a stochastic model for both inflation and a range of investment returns, analyses the distribution of retirement incomes that will be produced from a defined contribution plan. The impacts of changing entry and exit ages, different investment strategies, alternative career …