Publication database

Quicker, Higher, Stronger: A couple of years ago, the Russian branch of a global professional services firm published its annual partner promotion announcement in a leading Russian business journal, giving the names and pictures of the newly appointed partners. To the readers' surprise, most of these partners looked like a fresh-faced class of new university graduates. In some countries people of this age have not even graduated yet: the youngest partner was 26 years old. Just four years previously he had joined a competing professional organization as an intern, combining his last academic year's study with on-the-job training. With the growth of market opportunities and lack of more senior staff, he was quickly put on assignments with increasing complexity and responsibility and then made responsible for developing new business and delivering it successfully. A combination of personal qualities, learning opportunities and luck (or perhaps because the employer had no other choice) eventually led to his becoming a partner very early in life...

With permission of Elsevier

Russian firebird: After a decade of a spectacular retreat, Russia is re-emerging as an active player on the world scene, and for the first time in its modern history is becoming a serious factor in the global economy. With its $1000 billion economy set to grow at 5-7% over the next two decades, 27% of world gas and 6% of world oil reserves, the largest territory in the world and the largest population in Europe, the country is once again attracting the attention of the West and the rest of the world. While politicians and intellectuals warn of Russia's increasing assertiveness and criticize its government for suppressing democracy, business people vote with their dollars and Euros-in 2007, Russia received a record $87 billion in foreign investments, more than double the amount of the previous year. It is a market no serious global company can ignore. Domestic consumption has been growing at double-digit numbers for the last 3 years, real estate prices in Moscow have reached London levels, and in 2007 Russians bought more cars than any other European nation except Germany. Disposable income for a large segment of the population has been increasing steadily, allowing the purchase of luxury goods and foreign travel-28 million Russians traveled abroad in 2007. The foundation has been set for a property-owning middle class. Thanks to its oil-fueled economy, Moscow can now count itself as the city with the largest number of billionaires in the world. In its turn, Russian business has started to expand internationally, with deals such as Evraz Group S.A.'s purchase of Oregon Steel Mills for $2.3 billion and Gazprom's acquisition of the Serbian gas monopoly. In short, in 2007, Russia invested $54 billion outside its borders...

With permission of Elsevier

We consider a market with two suppliers and a set of buyers in search of procurement contracts with one of the suppliers. In particular, each buyer needs to process a certain volume of work, and each supplier's ability to process the customers' requests is constrained by a production capacity. The procurement contracts include guarantees that the products will be available when needed, and the buyers select a supplier based on their service delivery offers. The suppliers are modeled as make-to-stock queues and compete for the buyers' business. The main objective of this paper is to determine how the procurement contracts are established between buyers and suppliers. Because each buyer selects a single supplier to establish the sourcing relationship, the game fails to have a pure-strategy Nash equilibrium. Instead, an equilibrium is defined as the limit equilibrium of some discrete action games.

© 2008 INFORMS

The article focuses on the developments in several B2B companies which traditionally produce goods and based on this experience are trying to enter the business of management consulting. It is the aim of the paper to identify the specific challenges that these companies are facing regarding marketing and selling their management consulting services. Furthermore hypotheses are developed that should give direction how to overcome those challenges successfully. Due to the lack of current research results, an explorative case study approach is chosen referring to two companies from the IT industry having gained relevant experience in this business area. In addition, theoretical frameworks demonstrate the plausibility of the hypotheses developed. If further research supports these hypotheses, it will have significant impact on the market strategy, marketing communication and sales organization of companies going to increase their consulting services.

With permission of Elsevier

Existing evidence suggests that preferences are affected by whether a price is presented as one all-inclusive expense or partitioned into a set of mandatory charges. To explain this phenomenon, we introduce a new mechanism whereby price partitioning affects a consumer's perception of the secondary (i.e., nonfocal) benefits derived from a transaction. Four experiments support the hypothesis that a partitioned price increases the amount of attention paid to secondary attributes tagged with distinct price components. Characteristics of the offered secondary attributes such as their perceived value, relative importance, and evaluability can therefore determine whether price partitioning stimulates or hinders demand. Beyond its descriptive and prescriptive implications, this theory contributes to the emerging notion that pricing can transform, as well as capture, the utility of an offer.

© 2008 INFORMS

This paper considers a call center outsourcing contract analysis and choice problem faced by a contractor and a service provider. The service provider receives an uncertain call volume over multiple periods and is considering outsourcing all or part of these calls to a contractor. Each call brings in a fixed revenue to the service provider. Answering calls requires having service capacity; thus implicit in the outsourcing decision is a capacity decision. Insufficient capacity implies that calls cannot be answered, which in turn means there will be a revenue loss. Faced with a choice between a volume-based and a capacity-based contract offered by a contractor that has pricing power, the service provider determines optimal capacity levels. The optimal price and capacity of the contractor together with the optimal capacity of the service provider determine optimal profits of each party under the two contracts being considered. This paper characterizes optimal capacity levels and partially characterizes optimal pricing decisions under each contract. The impact of demand variability and the economic parameters on contract choice are explored through numerical examples. It is shown that no contract type is universally preferred and that operating environments as well as cost-revenue structures have an important effect.

© 2008 INFORMS

Motivated by workforce planning problems in health care, professional, warranty, and repair services, we propose modeling service centers that are exclusively dedicated to fixed client constituencies as closed multiserver queueing systems, a framework we refer to as membership services. We provide fluid and diffusion approximations of the number of users within the membership who are requesting service. The approximations are obtained via many-server limit theorems, where the limiting regime assumptions of each theorem correspond to a particular staffing strategy a manager might employ. Accordingly, we propose staffing rules designed to meet a certain desired performance criterion. In particular, when the objective is to minimize the staffing size subject to a constraint on the probability of delay for a service-requesting customer, we suggest staffing rules inspired by the so-called quality- and efficiency-driven (QED), or Halfin-Whitt, limiting regime. Numerical evaluations of our proposed QED scheme indicate that, although justified for large systems, the staffing rule performs well for memberships of all sizes.

© 2008 INFORMS

We document a general pattern in the euro area overnight interbank rate (EONIA) and analyze how German banks compared to other EMU banks respond to these predictable changes in the price for reserve holdings. At the beginning of the maintenance period, when the EONIA is typically above average, we observe that German banks hold substantially less reserves than their daily average required reserves. Thus in contrast to other EMU banks, German banks back load the fulfillment of their reserve requirements over the reserve maintenance period and thereby benefit from the general pattern in the EONIA. Looking at the disaggregate data we find than this is particularly the case for the Landesbanks.We argue that the end of the calender month effect in the EONIA may be driven by a temporary shortage of liquidity, relative to reserve requirements, at the beginning of the maintenance period (which coincides with the end of the calendar month).

With permission of Elsevier