• Title/Summary/Keyword: Contractual Efficiency

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The Effect of Unobservable Efforts on Contractual Efficiency: Wholesale Contract vs. Revenue-Sharing Contract

  • Kang, Sungwook;Yang, Hongsuk
    • Management Science and Financial Engineering
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    • v.19 no.2
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    • pp.1-11
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    • 2013
  • An interesting puzzle in business practices is that although many researchers emphasize the benefits of a revenue-sharing contract, a wholesale contract has remained to be the most common contractual form. By introducing the concept of unobservable efforts, we examine the contractual efficiency of a wholesale contract and a revenue-sharing contract. The multi-task agency model and experimental design approach are used to analyze the relationship between the contractual efficiency and parameters. A major finding of our study is that a wholesale contract coordinates unobservable efforts, while it fails to coordinate the order quantity decision. Because unobservable efforts have mixed effects on the contractual efficiency, the superiority of contract type depends on parameters. This finding implies that a wholesale contract can be a competitive contract, especially when unobservable efforts are heavily involved. Our conclusion is that the current popularity of a wholesale contract is manager's rational response to complex supply chain environments rather than irrational behaviors.

A MODEL FOR SELECTION, AWARDING, AND MONITORING OF PPP PROJECTS IN DEVELOPING COUNTRIES; HEALTH CARE FACILITIES IN COLOMBIA

  • Henry Arboleda-Mantilla;Carlos A. Arboleda
    • International conference on construction engineering and project management
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    • 2013.01a
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    • pp.344-351
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    • 2013
  • Private participation on public infrastructures projects is being promoted by governments of several developing countries, among them Colombia. As a result, several advantages such as service delivery efficiency, technology application and faster execution of the projects have been recognized. Hence, the Colombian Government is looking for schemes that allow the private investment in projects like hospitals, schools, prisons and public edification. In this paper, experiences in PPP from other countries were analyzed and adjusted to the Colombian environment. As a result, a model adapted to Colombia is presented, based on a well-developed case from Spain. The awarding process is defined by economic criteria, previous compliance of minimum technical exigencies. Once the infrastructure is operating, contractual periodical payments will be done, based on the performance of the facility.

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MECHAINSED RICE SHARE FARMING IN PERMATANG PAUH SEBERANG PERAI,MALAYSIA-A MANAGEMENT EXPERIENCE

  • Hussain, M.D
    • Proceedings of the Korean Society for Agricultural Machinery Conference
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    • 1993.10a
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    • pp.538-545
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    • 1993
  • Individual farming involving small land parcel (0.5 to 1.0ha) is declining because it is uneconomic and unable to incorporate modern technological innovation to improve its production efficiency. A centrally managed medium scale mechanised rice share farming was implemented at Permatang Pauh, Sebeerang Perai, Malaysia in 1988-1991 for eight seasons on a contiguous 57 ha rice land rented from 100 owners. Ten participants were chosen to participate in this project which perpetuated from revolving fund of MR 165.000. The objective of the project was to overcome problem of production efficiency and to provide a stable income to farmers operating on a medium and full time basis. Mechanisation was given prime emphasis to optime and reduce labour requirement and meeting the targeted crop scheduling. Direct seeding and mechanical transplanting methods of crop establishment were adopted. Land preparations, crop establishment and crop care were done using machineries purchased by the group. Selected participants were trained to operate machineries which composed 2 and 4 wheel tractors, mechanical transplanters, motorised seeders and sprayers. Harvesting and transportation of rice to the mills were done on contractual basis using combine harvesters and bulk handling via 3-4 ton lorries respectively. The net clean yield (less 10-20 percent deduction at rice mills) obtained in such project has contributed to stabilise the production and income of participating farmers.

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The Profit Sharing and Efficiency of a Joint Venture (공동사업의 이익분배와 효율성)

  • Wee, Jung-Bum;Jun, Sang-Gyung
    • The Korean Journal of Financial Management
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    • v.25 no.1
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    • pp.177-196
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    • 2008
  • The megatrend of convergence in finance, telecommunication, and service industries is being spread over the whole industry. It has generated various kinds of contractual alliance or joint venture. Our paper builds a theoretical model for the profit sharing between two firms that participate in a joint venture. The model shows how the profit sharing rule affects the incentives of the participants, and, eventually, the efficiency. We derive the first-best solution of the profit sharing, where no incentive distortion exists. Then, we compare the incentive-affecting cases with the first best outcome, and assess the efficiency and the fairness of distribution. Our analysis shows that if we properly design the decision-making structure on transfer price and production quantity, we can reach the socially optimal efficiency.

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Block-chain based Secure Data Access over Internet of Health Application Things (IHoT)

  • A. Ezil Sam, Leni;R. Shankar;R. Thiagarajan;Vishal Ratansing Patil
    • KSII Transactions on Internet and Information Systems (TIIS)
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    • v.17 no.5
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    • pp.1484-1502
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    • 2023
  • The medical sector actively changes and implements innovative features in response to technical development and revolutions. Many of the most crucial elements in IoT-connected health services are safeguarding critical patient records from prospective attackers. As a result, BlockChain (BC) is gaining traction in the business sector owing to its large implementations. As a result, BC can efficiently handle everyday life activities as a distributed and decentralized technology. Compared to other industries, the medical sector is one of the most prominent areas where the BC network might be valuable. It generates a wide range of possibilities and probabilities in existing medical institutions. So, throughout this study, we address BC technology's widespread application and influence in modern medical systems, focusing on the critical requirements for such systems, such as trustworthiness, security, and safety. Furthermore, we built the shared ledger for blockchain-based healthcare providers for patient information, contractual between several other parties. The study's findings demonstrate the usefulness of BC technology in IoHT for keeping patient health data. The BDSA-IoHT eliminates 2.01 seconds of service delay and 1.9 seconds of processing time, enhancing efficiency by nearly 30%.

Research Framework for International Franchising (국제프랜차이징 연구요소 및 연구방향)

  • Kim, Ju-Young;Lim, Young-Kyun;Shim, Jae-Duck
    • Journal of Global Scholars of Marketing Science
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    • v.18 no.4
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    • pp.61-118
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    • 2008
  • The purpose of this research is to construct research framework for international franchising based on existing literature and to identify research components in the framework. Franchise can be defined as management styles that allow franchisee use various management assets of franchisor in order to make or sell product or service. It can be divided into product distribution franchise that is designed to sell products and business format franchise that is designed for running it as business whatever its form is. International franchising can be defined as a way of internationalization of franchisor to foreign country by providing its business format or package to franchisee of host country. International franchising is growing fast for last four decades but academic research on this is quite limited. Especially in Korea, research about international franchising is carried out on by case study format with single case or empirical study format with survey based on domestic franchise theory. Therefore, this paper tries to review existing literature on international franchising research, providing research framework, and then stimulating new research on this field. International franchising research components include motives and environmental factors for decision of expanding to international franchising, entrance modes and development plan for international franchising, contracts and management strategy of international franchising, and various performance measures from different perspectives. First, motives of international franchising are fee collection from franchisee. Also it provides easier way to expanding to foreign country. The other motives including increase total sales volume, occupying better strategic position, getting quality resources, and improving efficiency. Environmental factors that facilitating international franchising encompasses economic condition, trend, and legal or political factors in host and/or home countries. In addition, control power and risk management capability of franchisor plays critical role in successful franchising contract. Final decision to enter foreign country via franchising is determined by numerous factors like history, size, growth, competitiveness, management system, bonding capability, industry characteristics of franchisor. After deciding to enter into foreign country, franchisor needs to set entrance modes of international franchising. Within contractual mode, there are master franchising and area developing franchising, licensing, direct franchising, and joint venture. Theories about entrance mode selection contain concepts of efficiency, knowledge-based approach, competence-based approach, agent theory, and governance cost. The next step after entrance decision is operation strategy. Operation strategy starts with selecting a target city and a target country for franchising. In order to finding, screening targets, franchisor needs to collect information about candidates. Critical information includes brand patent, commercial laws, regulations, market conditions, country risk, and industry analysis. After selecting a target city in target country, franchisor needs to select franchisee, in other word, partner. The first important criteria for selecting partners are financial credibility and capability, possession of real estate. And cultural similarity and knowledge about franchisor and/or home country are also recognized as critical criteria. The most important element in operating strategy is legal document between franchisor and franchisee with home and host countries. Terms and conditions in legal documents give objective information about characteristics of franchising agreement for academic research. Legal documents have definitions of terminology, territory and exclusivity, agreement of term, initial fee, continuing fees, clearing currency, and rights about sub-franchising. Also, legal documents could have terms about softer elements like training program and operation manual. And harder elements like law competent court and terms of expiration. Next element in operating strategy is about product and service. Especially for business format franchising, product/service deliverable, benefit communicators, system identifiers (architectural features), and format facilitators are listed for product/service strategic elements. Another important decision on product/service is standardization vs. customization. The rationale behind standardization is cost reduction, efficiency, consistency, image congruence, brand awareness, and competitiveness on price. Also standardization enables large scale R&D and innovative change in management style. Another element in operating strategy is control management. The simple way to control franchise contract is relying on legal terms, contractual control system. There are other control systems, administrative control system and ethical control system. Contractual control system is a coercive source of power, but franchisor usually doesn't want to use legal power since it doesn't help to build up positive relationship. Instead, self-regulation is widely used. Administrative control system uses control mechanism from ordinary work relationship. Its main component is supporting activities to franchisee and communication method. For example, franchisor provides advertising, training, manual, and delivery, then franchisee follows franchisor's direction. Another component is building franchisor's brand power. The last research element is performance factor of international franchising. Performance elements can be divided into franchisor's performance and franchisee's performance. The conceptual performance measures of franchisor are simple but not easy to obtain objectively. They are profit, sale, cost, experience, and brand power. The performance measures of franchisee are mostly about benefits of host country. They contain small business development, promotion of employment, introduction of new business model, and level up technology status. There are indirect benefits, like increase of tax, refinement of corporate citizenship, regional economic clustering, and improvement of international balance. In addition to those, host country gets socio-cultural change other than economic effects. It includes demographic change, social trend, customer value change, social communication, and social globalization. Sometimes it is called as westernization or McDonaldization of society. In addition, the paper reviews on theories that have been frequently applied to international franchising research, such as agent theory, resource-based view, transaction cost theory, organizational learning theory, and international expansion theories. Resource based theory is used in strategic decision based on resources, like decision about entrance and cooperation depending on resources of franchisee and franchisor. Transaction cost theory can be applied in determination of mutual trust or satisfaction of franchising players. Agent theory tries to explain strategic decision for reducing problem caused by utilizing agent, for example research on control system in franchising agreements. Organizational Learning theory is relatively new in franchising research. It assumes organization tries to maximize performance and learning of organization. In addition, Internalization theory advocates strategic decision of direct investment for removing inefficiency of market transaction and is applied in research on terms of contract. And oligopolistic competition theory is used to explain various entry modes for international expansion. Competency theory support strategic decision of utilizing key competitive advantage. Furthermore, research methodologies including qualitative and quantitative methodologies are suggested for more rigorous international franchising research. Quantitative research needs more real data other than survey data which is usually respondent's judgment. In order to verify theory more rigorously, research based on real data is essential. However, real quantitative data is quite hard to get. The qualitative research other than single case study is also highly recommended. Since international franchising has limited number of applications, scientific research based on grounded theory and ethnography study can be used. Scientific case study is differentiated with single case study on its data collection method and analysis method. The key concept is triangulation in measurement, logical coding and comparison. Finally, it provides overall research direction for international franchising after summarizing research trend in Korea. International franchising research in Korea has two different types, one is for studying Korean franchisor going overseas and the other is for Korean franchisee of foreign franchisor. Among research on Korean franchisor, two common patterns are observed. First of all, they usually deal with success story of one franchisor. The other common pattern is that they focus on same industry and country. Therefore, international franchise research needs to extend their focus to broader subjects with scientific research methodology as well as development of new theory.

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