Business Commons^™

Production Costs, Scope Economies, And Multi-Client Outsourcing Under Quantity Competition, Debing Ni, Kevin W. Li Dr., Xiaowo Tang

Odette School of Business Publications

Two game models are developed based on production costs and scope economies to investigate the widely observed multi-client outsourcing (MCO) phenomenon. Analytical results demonstrate that outsourcers’ high in-house production costs and the advantage of scope economies motivate firms to outsource collectively to an independent vendor. Under certain conditions, if both firms make their outsourcing decisions simultaneously, collective outsourcing is one of the two equilibria; if both firms make decisions sequentially, collective outsourcing becomes the unique equilibrium. Furthermore, the comparative statics of the critical degree of scope economies are examined for the occurrence of MCO with regard to diverse market parameters. …

A Matrix-Based Approach To Searching Colored Paths In A Weighted Colored Multidigraph, Haiyan Xu, Kevin W. Li Dr., D. Marc Kilgour, Keith W. Hipel .

Odette School of Business Publications

An algebraic approach to finding all edge-weighted-colored paths within a weighted colored multidigraph is developed. Generally, the adjacency matrix represents a simple digraph and determines all paths between any two vertices, and is not readily extendable to colored multidigraphs. To bridge the gap, a conversion function is proposed to transform the original problem of searching edge-colored paths in a colored multidigraph to a standard problem of finding paths in a simple digraph. Moreover, edge weights can be used to represent some preference attribute. Its potentially wide realm of applicability is illustrated by a case study: status quo analysis in the …

Developments In Business Gaming A Review Of The Past 40 Years, A. J. Faria Dr., David Hutchinson Dr., William J. Wellington Dr., Steven Gold

Odette School of Business Publications

This article examines developments in business simulation gaming during the past 40 years. Covered in this article are a brief history of business games, the changing technology employed in the development and use of business games, changes in why business games are adopted and used, changes in how business games are administered, and the current state of business gaming. Readers interested in developments in other areas of simulation gaming (urban planning, social studies, ecology, economics, geography, health, etc.) are encouraged to look at other articles appearing during the 40th anniversary year of Simulation & Gaming and at the many fine …

An Approach To Multiattribute Decision Making With Interval-Valued Intuitionistic Fuzzy Assessments And Incomplete Weights, Zhou-Jing Wang, Kevin W. Li Dr., Weize Wang

Odette School of Business Publications

This article proposes an approach to multiattribute decision making with incomplete attribute weight information where individual assessments are provided as interval-valued intuitionistic fuzzy numbers (IVIFNs). By employing a series of optimization models, the proposed approach derives a linear program for determining attribute weights. The weights are subsequently used to synthesize individual IVIFN assessments into an aggregated IVIFN value for each alternative. In order to rank alternatives based on their aggregated IVIFN values, a novel method is developed for comparing two IVIFNs by introducing two new functions: the membership uncertainty index and the hesitation uncertainty index. An illustrative investment decision problem …

A Matrix Approach To Status Quo Analysis In The Graph Model For Conflict Resolution, Haiyan Xu, Kevin W. Li Dr., Keith W. Hipel, D. Marc Kilgour

Odette School of Business Publications

An algebraic method is developed to carry out status quo analysis within the framework of the graph model for conflict resolution. As a form of post-stability analysis, status quo analysis aims at confirming that possible equilibria, or states stable for all decision-makers, are in fact reachable from the status quo or any other initial state. Although pseudo-codes for status quo analysis have been developed, they have never been implemented within a practical decision support system. The novel matrix approach to status quo analysis designed here is convenient for computer implementation and easy to employ, as is illustrated by an application …

Using Self-Concept Theory To Identify And Develop Volunteer Leader Potential In Healthcare, Francine K. Schlosser, Deborah Mcphee, Andrew Templer

Odette School of Business Publications

Resource constraints in the Canadian publicly funded healthcare system have created a need for more volunteer leaders to effectively manage other volunteers. Self-concept theory has been conceptualized and applied within a volunteer context, and the views of healthcare stakeholders, such as volunteers, volunteer leaders, and supervisors, triangulated to form an understanding of the attitudes and behaviors of volunteer leaders. We propose that leaders are differentiated from others by how they view their roles in the organization and their ability to make a difference in these roles. This interpretation can be informed by self-concept theory because each individual's notion of self-concept …

Using The I-Markor Scale To Identify Market-Oriented Individuals In The Financial Services Sector, Francine K. Schlosser, Rod Mcnaughton

Odette School of Business Publications

Purpose – Extant studies of the market orientation of service firms rarely consider the contribution of individual employees to the realization of this orientation. Existing scales that measure market orientation reveal the perceptions of a key informant about the dominant orientation within the firm. These scales do not measure the willingness of employees to act in a market-oriented way. This paper aims to report the development of a multi-dimensional scale of individual market-oriented behavior. Design/methodology/approach – The scale development process included identification of items from focus groups with employees of a major Canadian financial services firm and the market orientation …

Governance Role Of Analyst Coverage And Investor Protection, Jerry Sun

Odette School of Business Publications

This study examines whether investor protection affects the governance role of analysts in constraining earnings management. Using a sample of 50,966 company-year observations from 24 countries for 1990-2007, the study finds that earnings management is more negatively associated with analyst coverage in weak investor protection countries than in strong investor protection countries. The findings suggest that analyst coverage plays a more important governance role in countries where investor protection is weak (i.e., a substitute relationship exists between analyst coverage and investor protection). [PUBLICATION ABSTRACT]

The Effect Of Earnings Quality And Country-Level Institutions On The Value Relevance Of Earnings, Steven F. Cahan, David Emanuel, Jerry Sun

Odette School of Business Publications

This study investigates the relationship between the value relevance of earnings and earnings quality across countries. We find that there is a stronger relationship between earnings quality and the value relevance of earnings in countries with high investor protection than in countries with weak investor protection. We also find that the association between the value relevance of earnings and earnings quality is higher when a country's information environment is less opaque. Overall, our study documents evidence on international differences in the ability of stock prices to capture useful accounting information, consistent with the notion that the returns-earnings association reflects not …

Compensation Committee Governance Quality, Chief Executive Officer Stock Option Grants, And Future Firm Performance, Jerry Sun, Steven F. Cahan, David Emanuel

Odette School of Business Publications

This paper examines whether the relationship between future firm performance and chief executive officer (CEO) stock option grants is affected by the quality of the compensation committee. Compensation committee quality is measured using six committee characteristics--the proportion of directors appointed during the tenure of the incumbent CEO, the proportion of directors with at least ten years' board service, the proportion of directors who are CEOs at other companies, the aggregate shareholding of directors on the compensation committee, the proportion of directors with three or more additional board seats, and compensation committee size. We find that future firm performance is more …

The Impact Of The Csrc Regulation No. 12-1996 On The Credibility Of Chinese Ipo Earnings Forecasts, Jerry Mon, Guoping Liu

Odette School of Business Publications

This study examines whether the Chinese Securities Regulatory Commission (the CSRC) Regulation No. 12-1996, Announcement of Some Rules on the Issuance of Shares, may enhance the credibility of management earnings forecasts in Chinese IPO prospectuses. Using a sample of 858 IPO earnings forecasts over the period 1991-2005, we find that earnings forecasts have been less optimistic and more accurate after the regulation was promulgated on December 26, 1996. Overall, our findings suggest that the CSRC Regulation No. 12-1996 can improve the reliability of Chinese IPO earnings forecasts.

The Effect Of Compensation Committee Quality On The Association Between Ceo Cash Compensation And Accounting Performance, Jerry Sun, Steven Cahan

Odette School of Business Publications

We examine the effect of compensation committee quality on the association between CEO cash compensation and accounting earnings and the moderating effects of growth opportunities and earnings status.

Research Findings/Insights: Using a sample of 812 US firms, we find that CEO cash compensation is more positively associated with accounting earnings when firms have high compensation committee quality. We also find that the positive effect of compensation committee quality on the association between CEO cash compensation and accounting earnings is less for high growth firms or loss-making firms.Theoretical

Implications: We contribute to the agency-based research on CEO compensation by: 1) directly …

What Happens To Ceo Compensation Following Turnover And Succession?, Eahab Elsaid, Wallace N. Davidson Iii

Odette School of Business Publications

When boards hire CEOs, the board and successor CEO have an opportunity to redesign the predecessor's compensation contract. The CEO's relative bargaining power will influence the outcome of compensation negotiations. Analyzing 508 successions, we find that total compensation of successor CEOs increases by 69% over their predecessor, but the structure of successor compensation is heavily influenced by the predecessors’ contracts. When the board's bargaining power is large, successors have a greater proportion of pay-at-risk and smaller proportion of salary. When the CEO's bargaining power is large, there is a smaller proportion of pay-at-risk and relatively greater proportion of salary.

Ceo Compensation Structure Following Succession: Evidence Of Optimal Incentives With Career Concerns, Eahab Elsaid, Wallace N. Davidson Iii, Bradley W. Benson

Odette School of Business Publications

To motivate managers to pursue shareholder interests, boards may design management compensation packages to reward managers for good firm performance. However, note that when CEOs are far from retirement, they have career concerns. In these cases, Gibbons and Murphy argue that it may not be optimal for their current compensation to be too dependent on firm performance. Testing this proposition, we find that abnormal returns are negatively related to the percentage of performance-based pay of newly hired CEOs when companies announce CEO successions. Since these newly hired CEOs are likely some distance from retirement, we interpret these results as being …

User Heterogeneity And Bi-Criteria System Optimum, Xiaolei Guo, Hai Yang

Odette School of Business Publications

For a traffic network with fixed demand of heterogeneous users in terms of their different values of time (VOT), the system performance can be measured either in time unit by the total system travel time (in short, system time), or in monetary unit by the total system travel cost (in short, system cost). Thus we have two different objectives for network optimization, i.e., to minimize system time and to minimize system cost, which naturally gives rise to a bi-objective minimization problem. A Pareto optimum of this bi-objective optimization problem represents a bi-criteria system optimum for network optimization in the sense …

Analysis Of A Build-Operate-Transfer Scheme For Road Franchising, Xiaolei Guo, Hai Yang

Odette School of Business Publications

Private provision of public roads through build-operate-transfer (BOT) contracts is increasing around the world. Under a BOT contract, a private firm would build a road, charge tolls to road users for a period, and then transfer the road to the government. By viewing a BOT contract as a combination of three variables: concession period, road capacity, and toll charge. We study optimal BOT contracts that maximize social welfare and allow the private sector an acceptable profit. We also study how to reach optimal BOT contracts, either through bilateral negotiations between public and private sectors or through competitive auctions.

Pareto-Improving And Revenue-Neutral Congestion Pricing Schemes In Two-Mode Traffic Networks, Yang Liu, Xiaolei Guo, Hai Yang

Odette School of Business Publications

This paper studies a Pareto-improving and revenue-neutral congestion pricing scheme on a simple two-mode (highway and transit) network: this scheme aims at simultaneously improving system performance, making every individual user better off, and having zero total revenue. Different Pareto-improving situations are explored when a two-mode transportation system serves for travel groups with different value-of-time (VOT) distributions. Since the congestion pricing scheme suggested here charges transit users negative tolls and automobile users positive tolls, it can be considered as a proper way to implement congestion pricing and transit subsidy in one step, while offsetting the inequity for the poor. For a …

A Dea-Topsis Method For Multiple Criteria Decision Analysis In Emergency Management, Ye Chen, Kevin W. Li Dr., Haiyan Xu, Si-Feng Liu

Odette School of Business Publications

A hybrid approach of DEA (data envelopment analysis) and TOPSIS (technique for order performance (preference) by similarity to ideal solution) is proposed for multiple criteria decision analysis in emergency management. Two DEA-based optimization models are constructed to facilitate identifying parameter information regarding criterion weights and quantifying qualitative criteria in TOPSIS. An emergency management case study utilizing data from the Emergency Management Australia (EMA) Disasters Database is provided to demonstrate the feasibility of the proposed analysis procedure.