How Does Firm Scope Depend on Customer Switching Costs? Evidence from Mobile Telecommunications Markets

This paper examines the relative advantages of single-product and multiproduct firms following changes in customer switching costs. Whereas a single-product firm can closely tailor offerings to customers’ needs, a multiproduct firm can create value for customers in the form of flexibility, allowing them to change between product varieties as preferences evolve without needing to switch providers. We argue that this value-creation mechanism is more effective when customers face high switching costs and explore this prediction in the mobile telecommunications sector, using an exogenous policy change (mobile number portability) that suddenly decreases customer switching costs. Our results reveal that when customer switching costs fall, multiproduct firms see lower growth than single-product firms, and entry with a multiproduct offering becomes less frequent than before. The study highlights how customer switching costs can enable or inhibit choices of firm scope. This paper was accepted by Joshua Gans, business strategy.

Determinants of Web-technology Investment in Malaysian Logistics Industry: An Application of Technological, Organizational and Environmental (TOE) Model

This study is intended to seek empirical evidence on factors determining web technology investment in the Malaysian logistics industry. Technological, Organizational and Environmental (TOE) Model is used as a basis to examine the determinants of web technology investments under three characteristics; technological characteristics (technology competence and web functionalities); organizational characteristics (firm size, firm scope, and managerial beliefs); and environmental characteristics (regulatory support and pressure intensity). Questionnaire surveys were sent to 169 companies listed in the directory of the Malaysian logistics industry. It was found that five factors (web functionalities (WF), firm size (FZ), managerial beliefs (MB), regulatory support (RS), and pressure intensity (PI)) significantly influenced web technology investment. This study provides a greater understanding on the perceptions of the Malaysian logistics industry towards web technology investment.

Crude Furnace Floor Creep Assessment and Remaining Life Assessment due to Hot Spots

Fitness for Service (FFS) assessment and remaining life assessment of the furnace floor plates in a crude charge heater where hot spots up to 500°C have been observed during operation in 2018 was undertaken as a pre assessment prior to the unit turnaround. The remaining life assessment results would provide the turnaround team with firm scope for repair in order to resintate the bottom plate and avoid discovery scope. Two Finite Element (FE) models were created to account for hotspot temperature conditions measured at November 2018 and June 2019. Each of these FE models involved successive loading conditions, so that the effects of each loading scenario could be investigated. The loading conditions were applied in steps, in the following order: 1. Gravity. 2. Temperature, modelling hotspot behaviour. 3. Creep, viscoelastic analysis. Utilising the FE models created for the two hotspot conditions, remaining life was calculated and suggested that the worst location for creep damage is near burner 2 (the maximum creep damage location of the November 2018 condition). Based on the assessment, the following recommendations are made: 1. Continue to observe and maintain temperatures below the creep temperature range (i.e. no additional hotspots are created and temperatures are not increasing). 2. Undertake creep testing from metal samples. 3. Re-inspect in 8 years at the same locations where metallographic replication was performed in September 2019.

Adoption of Automatic Warehousing Systems in Logistics Firms: A Technology–Organization–Environment Framework

The adoption of automatic warehousing systems, a type of green technology, has been an emerging trend in the logistics industry. In this study, we develop a conceptual model using a technology–organization–environment framework to investigate the factors which influence logistics firms to adopt green technology. Our model proposes that the adoption of green technology is influenced by perceived advantage, cost, technological turbulence, business partner influence, firm size, firm scope and operational performance. The objective of this study is to identify the conditions, as well as the contributing factors, for the adoption of automatic warehousing systems in logistics firms. Data were collected from 98 firms in China, and structural equation modeling with partial least squares is adopted to analyze the data. The results suggest that high perceived relative advantage, firm size, cost, firm scope, operation performance, technological turbulence and influence of business partners are important factors affecting IT adoption in small businesses. Therefore, decision support should be provided for enterprises from the three aspects of technology, organization and environment to improve the adoption of automatic warehousing systems.

Can Firms Be Both Broad and Deep? Exploring Interdependencies Between Horizontal and Vertical Firm Scope

Firms can be horizontally diversified, with considerable breadth, or vertically integrated, with great depth. This study explores how breadth and depth affect each other as influenced by capability requirements and coordination demands. Using construction industry data, we assess the interdependence between contractors’ portfolios of building types (horizontal scope) and the extent of integration of the activities needed to complete each project (vertical scope). We find that vertical and horizontal scope have a negative interdependency only when contractors face managerial constraints due to coordination challenges. Further, we show that this effect can be mitigated through organizational structures that centralize key functions. Our findings highlight the importance of coordination in the theory of the firm, as we link firm boundaries to managerial coordination and internal organization.

Firm Value Improvement Strategy, Corporate Social Responsibility, and Institutional Ownership

The study is intended to appraise return on assets (ROA), debt/equity ratio (DER), and firm size(SIZE) on price-to-book-value (PBV) with corporate social responsibility as an intervening variable and institutional proprietorship as a moderating variable. By using purposive sampling, 267 manufacturing companies are determined from the Indonesia Stock Exchange in the period of 2013-2017. Data are analyzed using multiple and bivariate regression analysis. The results show that ROA and firm size have a positive effect on corporate society awareness, while DER has no significant effect respectively. Profit gain, firm scope, and corporate social responsibility have a positive effect on firm utility. It came into a conclusion that corporate social awareness can be used to mediate the influence on leverage and firm scope toward the firm value, but cannot be used to mediate the effect of profit gain on firm utility.