Virtual currencies and distributed ledger technology are today ‘hype’ issues in payment developments. However, a considerable number of elements in these development proposals seem to be repackaging old solutions. This paper analyses distributed ledger technology and virtual currencies based on a general framework for funds transfer systems. The main conclusions are that distributed ledger technology can provide increased efficiency and security in ledgers, which today are already distributed, like those custodian systems used for book-entry shares and bonds. However, virtual currencies constructed as non-redeemable and non-interest-bearing bearer bonds will probably have major difficulties in finding long-term market demand. One interesting observation is also made concerning the possibility for the markets to move towards a unit of account (currency) based on a basket of real assets instead of fiat currencies.
Companies can no longer perceive themselves as stand-alone entities in the business environment. As a result of major trends such as Globalization, Outsourcing and Off-shoring, companies have more and more begun to perceive themselves as part of a chain (or network) of companies. With the increased length of chains and the increased interdependencies between organizations, coordination between such entities has become increasingly important. Due to the fact that Supply Chain (SC) decision making is distributed over various players, one of the key managerial challenges in any SC consisting of autonomous organizations is to align decisions. Typically, each organization will take decisions to optimize its own performance. But what is best for an individual organization is not always best for the SC, so that un-aligned decision making usually leaves the SC in a state of sub-optimization. Contract mechanisms might be useful to tackle such challenges. Ideally, contract mechanisms ensure that the SC is optimized as if it were a single unit (coordination) and is designed such that all players benefit from working together through the coordinating mechanism (win-win). A SC is said to be coordinated (or optimized) if it achieves the same profit as it would in a centralized situation (or full partnership). Furthermore, win-win is said to be achieved if all the players in the SC make greater profits when compared to the decentralized decision-making situation. The effectiveness of contract mechanisms lies in their design; the decision-making authorities remain unchanged, but the incentives of the various SC entities are aligned in such a way that optimizing one’s own situation “automatically” optimizes the SC. This dissertation aims to devise contract mechanisms in various SC settings. As such it contributes to the understanding of where and how such mechanisms can coordinate operational and marketing decisions across autonomous organizations and lead to win-win. The focus is on a range of operational and marketing decisions like pricing and replenishment, promotions, service level and assortments (number of products in the product line). The typical setting is as follows. In a two player SC with a Supplier and a Buyer, the Supplier sells the product at a wholesale price to the Buyer. The Buyer then fixes the final selling price and sells it to the end-consumer. In a traditional decentralized situation, the Supplier charges a higher wholesale price and the Buyer charges a higher retail price and orders a lower quantity than what is optimal for the entire SC. In this setting contracts like revenue-sharing and quantity discounts are designed and analyzed which can induce the Buyer to fix the final selling price and order quantity at the SC optimal level. In essence, the contract mechanisms coordinate both pricing and replenishment decisions and provide win-win opportunities. Similarly, when the end-consumer demand can be influenced by promotions, it is shown that non-optimal promotional decisions are made in a decentralized situation. A new rebate mechanism is designed to coordinate the promotional decisions and provide win-win opportunities. Furthermore, it is shown that contract mechanism can coordinate service level and product line decisions and provide win-win opportunities. gned and analyzed to address the issues of coordination and win-win. In all models studied, we were able to find at least one mechanism for achieving coordination and providing win-win opportunities. Furthermore, relationships between the parameters of different contract mechanisms are established wherever possible. Also, the different mechanisms have been analyzed and reviewed from an implementation perspective. In this flat (globalized) world, we believe that incentive alignment will help businesses to deliver value to their customers and maintain or enhance their competitive positioning. Therefore, in our view, this thesis will aid businesses with an important tool in aligning the incentives within their SCs.
We industrial researchers work at a dangerous crossroads, the nexus of science and money. R&D leaders, being more or less senior players, are perhaps most comfortable on the Science Road. This road is storied, long, varied, full of side shows, a wonderful bazaar of curiosity where insight as to What Might Be can advance us from stage to stage. For most of us, it has been and is a road of delight of the mind. Its length, expressed as mental travel, demands that we commit to it for many years, and so we seek patient leadership that knows that the product pipeline-our output-is variable at best. It's a long way between gas stations on this road. The intersecting road, that of money, is essentially discontinuous. Potholes and washouts on that route have terminal consequences, and seasons last three months at a time. Travelers on that road move between famine and feast, traps and snares, events of unexpected bounty and windfall. However, they can't carry it with them, and every three months or so, the gain or loss has to be recognized and surrendered to the toll collectors. Money Road travelers' survival depends on their last balance. In industrial work, the Money Road people deal with abstract statements of success or failure, and are responsible for the currently visible state of the firm. They tend to become our bosses, and they have a fairly short life expectancy. When our bosses come up empty on fuel on the Money Road, the rules under which Science Road folks work change fast. If we want continuity of experience for our people and their work on Science Road, we have to provide that shelter. Many of us have felt the discomfort of the associated career discontinuities, and are inclined to blame the different culture of Money Road, and to demonize the many MBAs traveling there, or even the possession of an MBA degree! Using the MBA as a scapegoat doesn't start at the right place. One might as well blame one's Modern Language teachers for any prompt destructive effects of globalization. This writer has traveled both roads, and survived any number of close calls at the crossroads (yes, some fender-benders, but never quite a total wreck) and looking at the culture clash (and there is one, along with a frequent generation gap) has come to somewhat different conclusions. Let's start with why we have MBAs at all, touching on the first and fairly successful application of their skills, then return to insights on the place of inventive people in our business, and close with comments on the ways in which industrial research managers are now expected to contribute. This is written from the viewpoint of a crossover career in industry and academe, running market-focused research programs of many hundreds of Ph.D.s, training researchers, preparing dozens of MBA candidates, as well as hundreds of scientists and engineers, within various universities. Starting with the joy of bench work, creating new products and processes, this career led to the more abstract world of the planning corporate auditor, then to creation of new jobs and companies, some from scratch and some from corporate discards. What's an MBA All About? The MBA is basically an American invention, and it has served its home well. Its origination is claimed by the University of Chicago, about 100 years ago, thus establishing a permanent claim to mental rigor in quantitative financial analysis. The degree came to popularity in the context of the rise of the giant, functionally managed, globally decentralized manufacturing company, itself a mimic of Roman imperial style. Both are long gone and further evolution has extended the scope to policy and to overall leadership, through consultation and shared learning. What is it now about? In its most concise statement, the MBA experience first teaches a required trust and collaboration between persons of profoundly different backgrounds. It is indeed iconic and formulaic in its emphasis on the language of finance to express purpose and performance, much as the conversations of airline pilots with ground controllers use a subset of natural English. …