The purpose of this report was to evaluate the effectiveness and practicality of system dynamics modeling in integrating econometric equations to describe the effects of supply…
Abstract
Purpose
The purpose of this report was to evaluate the effectiveness and practicality of system dynamics modeling in integrating econometric equations to describe the effects of supply chain material and information delays on pricing decisions and consequent financial results in an animal feed export business.
Design/methodology/approach
An empirical dynamic model, loaded with econometric theory of price effect on competitive demand, was used to describe the input data.
Findings
The model simulation outputs proved themselves relevant in analyzing the complex interconnections of multiple variables affecting the profitability in a commercial routine, supporting the decision process among sales managers. The impact of information delay on price decisions and business financial results were estimated using the model proposed.
Originality/value
This paper describes an empirical model, based on system dynamics, that predicts operating contribution margins and cash conversion cycles based on estimation of information and material delays in a supply chain. The method is pragmatic and simple for business routine implementation.
Details
Keywords
Paolo Depaoli, Stefano Za and Eusebio Scornavacca
E-business maturity models have been widely used to guide the process of digital transformation of business. However, these models have been criticized for their predominantly…
Abstract
Purpose
E-business maturity models have been widely used to guide the process of digital transformation of business. However, these models have been criticized for their predominantly technocentric approach, which is poorly suited for SMEs. The purpose of this paper is to produce a holistic, nonlinear e-business development model for SMEs that takes into account the interactions of the organization in the pursuit of its business objectives.
Design/methodology/approach
Based on the literature review, this paper proposes a nonlinear digital development model for SMEs that factors in the interactions between digital technologies and organizational processes. The model is applied to three cases using a qualitative research approach.
Findings
The analysis of the cases demonstrates how the model recognizes that SMEs have an agile and flexible operating structure and reduces the role of technology in order to refocus the entrepreneurs on the relationship among business goals, organizational capabilities and communication requirements.
Practical implications
The proposed model helps the business owners to clarify and better understand what kind of interaction levels exist between the relevant actors in the pursuit of the firm's goals and to identify the best mix of digital and nondigital communication methods to support their work. It also assists policymakers to overcome technological bias when assessing the current state of play of e-business development in the SME universe and formulate actions that support the development of digitally oriented SMEs.
Originality/value
This paper proposes a novel, nonlinear, interaction-based development model for SMEs in order to complement previous technocentric models focusing mainly on a mechanist perspective of e-business maturity models.
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Keywords
Imre Fertő, Adrienn Molnár and József Tóth
– The purpose of this paper is to investigate the innovation performance in the Hungarian food chain using the concept of open innovation.
Abstract
Purpose
The purpose of this paper is to investigate the innovation performance in the Hungarian food chain using the concept of open innovation.
Design/methodology/approach
Empirical analysis is based on the data from a 2014 survey of more than 300 small- and medium-sized agricultural producers, food processors and food retailers. The authors analyse innovation performance taking into account not only the direct impacts of external knowledge inflows and absorptive capacity, but also the indirect effect of external knowledge inflows mediated by the existence of potentially complementary internal resources (absorptive capacity). The authors determine the impact of open innovation and a company’s absorptive capacity on innovation performance employing two stage approaches. First, the authors apply a semi-non parametric probit model. Second, the authors run cluster analysis to categorize companies based on their open innovation, absorptive capacity, firm and managerial characteristics.
Findings
Results imply the openness along the food chain may decrease the introduction time of innovation in all areas of innovation, as well the innovation propensity. The openness towards competitors may decrease the introduction time of innovation with regard to technological innovation, but it may increase with regard to product innovation, as well the innovation propensity. The absorptive capacity decreases the introduction time of technological product, organizational and market innovation. There is a positive relationship between the use of external knowledge (when it is defined as openness with competitors) and own innovation capacity with regard to innovation propensity, but not when it is defined as openness along the food chain. The enterprises of the sample are dividing into two groups: innovative (dominated by processors) and not innovative ones (dominated by producers and retailers).
Research limitations/implications
Some limitations of the paper are worth mentioning. The study is limited in its scope with regard to the research setting and the unit of analysis (Hungarian food chain). With regard to the former, our sample consists of 302 SMEs along the food chain, almost equally distributed as producers, processors and retailers. At the end of 2014 in Hungary there were 7,766 producers, 2,681 processors and 6,420 retailers in this category, which means 1.3 – 3.7 per cent coverage (Agrárgazdasági Kutatóintézet, 2014). Regarding the latter, the paper defines food chain in a narrow sense (three levels); therefore, the results represent the perspectives of a limited number of food chain partners (producers, processors, retailers). Were the definition to be widened, input from additional members would be necessary (such as suppliers of suppliers, customers of customers, third parties or competitors). Nevertheless, although the scope may be narrow, it is appropriate for our objective. Future research is recommended to overcome the paper’s limitations (i.e. extend its scope to other countries, sectors and levels of chain).
Practical implications
The analysis provides valuable inputs for policy makers and SMEs along the food chain that wish to build and improve (open) innovation system. Policy makers would need more targeted innovation development programmes in order to solve the tight innovation bottlenecks. These programmes should target first of all at expanding the absorptive capacities of the food chain’s enterprises. The authors also need further research in order to investigate how much the restricted use of open innovation systems in the Hungarian food enterprises is linked to the cost and benefits of creation such systems.
Originality/value
The authors analyse innovation performance taking into account not only the direct impacts of external knowledge inflows and absorptive capacity, but also the indirect effect of external knowledge inflows mediated by the existence of potentially complementary internal resources (absorptive capacity).