Global Mindset, Networks and Trader Performance: A Study of the Global Grain and Oilseed Sector

<p>As a result of globalisation of trade, the research on the role of global mindset (GM) in enhancing performance has gained momentum in the new millennium. Even though GM is considered as an essential prerequisite to performance in the current international business environment, the empirical evidence of the direct effects of GM on performance is mixed. One of the reasons for this mixed evidence is the existence of other mechanisms, such as mediators and moderators, which influence GM–performance relationships. This study focuses on one such mechanism, namely networks (NWs), and examines how NWs mediate the association between GM and the performance of the global grain and oilseed traders. The study argues that GM has little direct effect on trader performance (TP). Rather, GM strengthens network structure (NWS), which collectively leads to enhanced network leverage (NWL) and thus increased TP. Based on a sample of 78 traders in the global grain and oilseed sector (GGOS), the study finds that both the network (NW) components – NWS and NWL – mediate the association between GM and TP. The finding of full path mediation provides empirical evidence that superior GM leads to superior NWS, which results in superior NWL and thus superior TP. The method used in data analysis is Partial Least Square Structural Equations Modelling (PLS-SEM), using SmartPLS software. This study makes two main contributions. Firstly, the study endorses the critical role of GM in enhancing the performance of traders in the GGOS. Secondly, the study provides a deeper understanding of how GM enhances performance; that is, the serial mediating roles of NWS and NWL. The current research has largely suggested single mediation of relationship quality. This study goes a step further and introduces NWL into the argument. The key implications of the study include the need to strengthen the GM and NWs of traders, as the interplay between the two is critical in enhancing their performance. The findings need to be interpreted carefully, as the study suffers from limitations of small sample size and single sector study.</p>

Global Mindset, Networks and Trader Performance: A Study of the Global Grain and Oilseed Sector

<p>As a result of globalisation of trade, the research on the role of global mindset (GM) in enhancing performance has gained momentum in the new millennium. Even though GM is considered as an essential prerequisite to performance in the current international business environment, the empirical evidence of the direct effects of GM on performance is mixed. One of the reasons for this mixed evidence is the existence of other mechanisms, such as mediators and moderators, which influence GM–performance relationships. This study focuses on one such mechanism, namely networks (NWs), and examines how NWs mediate the association between GM and the performance of the global grain and oilseed traders. The study argues that GM has little direct effect on trader performance (TP). Rather, GM strengthens network structure (NWS), which collectively leads to enhanced network leverage (NWL) and thus increased TP. Based on a sample of 78 traders in the global grain and oilseed sector (GGOS), the study finds that both the network (NW) components – NWS and NWL – mediate the association between GM and TP. The finding of full path mediation provides empirical evidence that superior GM leads to superior NWS, which results in superior NWL and thus superior TP. The method used in data analysis is Partial Least Square Structural Equations Modelling (PLS-SEM), using SmartPLS software. This study makes two main contributions. Firstly, the study endorses the critical role of GM in enhancing the performance of traders in the GGOS. Secondly, the study provides a deeper understanding of how GM enhances performance; that is, the serial mediating roles of NWS and NWL. The current research has largely suggested single mediation of relationship quality. This study goes a step further and introduces NWL into the argument. The key implications of the study include the need to strengthen the GM and NWs of traders, as the interplay between the two is critical in enhancing their performance. The findings need to be interpreted carefully, as the study suffers from limitations of small sample size and single sector study.</p>

The Persistence of Organizational Deviance: When Informal Sanctioning Systems Undermine Formal Sanctioning Systems

ABSTRACT:Organizations adopt formal sanctioning systems to deter ethical violations, but the formal systems’ effectiveness may be undermined by informal sanctioning systems which promote violations. I conducted an ethnographic study of six trading crowds on two financial exchanges to understand how informal and formal sanctioning systems, which are grounded in different interpretations of equity, interact to affect trader deviance from rules established by the financial exchange (exchange deviance). To deter informal trader norms that conflict with exchange rules, the exchanges formally prohibit traders’ informal sanctions. The exchanges, however, underestimate traders’ informal sanctions related to ostracism and social rejection, which are not only difficult for the exchanges to detect, but also interpersonally hurtful and harmful to trader performance. Consequently, the traders’ informal social sanctions lead to secondary sanctions from trading firms. Ultimately, the informal sanctioning system evades the formal sanctioning system by exploiting what the exchanges deem to be minor rule violations.

Cluster Analysis for Evaluating Trading Strategies

In this article, we introduce a new methodology to empirically identify the primary strategies used by a trader using only post-trade fill data. To do this, we apply a well-established statistical clustering technique called k-means to a sample of progress charts, representing the portion of the order completed by each point in the day as a measure of a trade’s aggressiveness. Our methodology identifies the primary strategies used by a trader and determines which strategy the trader used for each order in the sample. Having identified the strategy used for each order, trading cost analysis can be performed by strategy. We also discuss ways to exploit this technique to characterize trader behavior, assess trader performance, and suggest the appropriate benchmarks for each distinct trading strategy.

Trader Alpha Frontier: A Framework for Portfolio Managers and Traders to Maximize Portfolio Performance

Trader performance is currently measured against various benchmarks without consideration for the volatility of trading results. The author introduces trader alpha frontier (TAF) as a way to measure trader performance against the risks taken by the trader. This article formulates how to carve out trader alpha from overall portfolio returns. It also explores trader performance attribution by delineating between the main components of trader alpha and suggesting benchmarks to measure each component. As a result, the author unveils a new benchmark, called execution-weighted price (EWP). It is tough to reach TAF, but it is worth the effort since it aligns the mutual objective of a portfolio manager and a trader to maximize overall portfolio performance.