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Strategic Commitment (strategic + commitment)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Supplier Selection and Assessment: Their Impact on Business Performance

JOURNAL OF SUPPLY CHAIN MANAGEMENT, Issue 4 2002
Vijay R. Kannan
SUMMARY Increasingly, firms are allocating more resources to their core competencies and encouraging the outsourcing of non-core activities, which increases their reliance and dependence on suppliers. This increases the importance of effective supplier selection and assessment. Sparse evidence exists regarding the impact of supplier selection and assessment on a buying firm's business performance. This research describes an empirical study of the importance of supplier selection and assessment criteria of American manufacturing companies for items to be used in products already in production. Moreover, it identifies relationships between criteria and a buying firm's business performance. Results indicate that soft, non-quantifiable selection criteria, such as a supplier's strategic commitment to a buyer, have a greater impact on performance than hard, more quantifiable criteria such as supplier capability, yet are considered to be less important. Assessment of a supplier's willingness and ability to share information also has a significant impact on the buying firm's performance, yet is again considered to be relatively unimportant. [source]

Strategic managerial incentives under adverse selection

MANAGERIAL AND DECISION ECONOMICS, Issue 8 2005
Michel Cavagnac
We extend the strategic contract model where the owner designs incentive schemes for her manager before the latter takes output decisions. Firstly, we introduce private knowledge regarding costs within each owner,manager pair. Under adverse selection, we show that delegation involves a trade-off between strategic commitment and the cost of an extra informational rent linked to decentralization. Which policies will arise in equilibrium? We introduce in the game an initial stage where owners can simultaneously choose between control and delegation. We show that if decision variables are strategic substitutes, choosing output control through a quantity-lump sum transfer contract is a dominating strategy. If decision variables are strategic complements, this policy is a dominated strategy. Further, two types of dominant-strategies equilibrium may arise: in the first type, both principals use delegation; in the second one, both principals implement delegation for a low-cost manager and output control for a high-cost one. Copyright © 2005 John Wiley & Sons, Ltd. [source]

On the Effectiveness of the Lifetime,Employment,Contract Policy

THE MANCHESTER SCHOOL, Issue 6 2002
Kazuhiro Ohnishi
This paper examines a subgame perfect equilibrium when one of two duopolists executes a lifetime,employment,contract policy, which is a strategic commitment that generates kinks in the reaction curve, by using a two,stage quantity,setting model. The purpose of the paper is to show concretely in what kinds of cases the policy is effective. [source]

Lifetime Employment Contract and Strategic Entry Deterrence: Cournot and Bertrand

AUSTRALIAN ECONOMIC PAPERS, Issue 1 2001
Kazuhiro Ohnishi
This paper is based on a two-stage model of an incumbent firm and a potential entrant, and studies both quantity-setting competition and price-setting competition. We consider a lifetime-employment-contract policy as a strategic commitment that generates kinks in the reaction curve. Furthermore, demand functions are classified into two cases in terms of the strategic relevance between both firms. Therefore, we examine the following four cases: ,quantity-setting competition with strategic substitutes', ,quantity-setting competition with strategic complements', ,price-setting competition with strategic substitutes' and ,price-setting competition with strategic complements'. The purpose of this paper is to analyse entry deterrence in the four cases and to show the effectiveness of the lifetime-employment-contract policy as a result of its analyses. [source]

A Two-stage Price-setting Equilibrium Designed in Consideration of Goods Relevance and Strategic Relevance

AUSTRALIAN ECONOMIC PAPERS, Issue 2 2000
Kazuhiro OhnishiArticle first published online: 18 DEC 200
This paper analyses the subgame perfect Nash equilibrium of a two-stage price-setting duopoly. The demand functions are classified into four cases in terms of the goods' relevance and strategic relevance between two firms. All four cases are correlated with two opposite prior commitments that generate kinks in the reaction curve. This paper assumes that only one firm can execute the prior commitments. In the model, we find that the firm can increase its payoff with one of the prior commitments in each of the four cases. We also find that our equilibrium outcomes are different from those of Matsumura (1998) in this Journal, and that they occur at the Stackelberg point in all four cases if, and only if, the firm's reaction curves shift to the Stackelberg point as a result of the prior commitments. As a consequence, the effectiveness of strategic commitments is proved. [source]