Coordination Costs Research Articles

Leading Beyond Limits: A Conceptual Framework for Success in the Volatile World

This article presents a conceptual framework for leading beyond limits in today's volatile, uncertain, complex, and ambiguous (VUCA) business environment. It argues that traditional leadership models are insufficient and organizations must cultivate expansive thinking, adaptive problem solving, empowering leadership, and trust-based, agile cultures. Expansive thinking involves envisioning possibilities beyond norms through cognitive flexibility and creative problem solving. Adaptive problem solving enables agility through problem identification, solution generation, and implementation with openness to change. Empowering leadership develops trust, shares power, and recognizes grassroots contributions to problem solve autonomously. High-trust cultures lower coordination costs, boost innovation, and allow risk-taking without fear through psychological safety and continuous adaptation. The framework is grounded in research and practical examples, such as how Whole Foods, Ford, GitHub, and 3M demonstrated beyond-limits leadership amid crises. The author contends mastering these constructs will empower extraordinary results by unleashing human potential amid ongoing industry transformation.

Scheduling of Collaborative Vegetable Harvesters and Harvest-Aid Vehicles on Farms

Transporting harvested vegetables in the field or greenhouse is labor-intensive. The utilization of small harvest-aid vehicles can reduce non-productive time for farmers and improve harvest efficiency. This paper models the process of harvesting vegetables in response to non-productive waiting delays caused by the scheduling of harvest-aid vehicles. Taking into consideration harvesting speed, harvest-aid vehicle capacity, and scheduling conflicts, a harvest-aid vehicle scheduling model is constructed to minimize non-production waiting time and coordination costs. Subsequently, to meet the collaborative needs of harvesters, this paper develops a discrete multi-objective Jaya optimization algorithm (DMO-Jaya), which combines an opposition-based learning mechanism and a long-term memory library to obtain scheduling schemes suitable for agricultural environments. Experiments show that the studied model can schedule harvest-aid vehicles without conflicts. Compared to the NSGA-II algorithm and the MMOPSO, the DMO-Jaya algorithm demonstrates a better diversity of solutions, resulting in a shorter non-productive waiting time for harvesters. This research provides a reference model for improving the efficiency of vegetable harvesting and transportation.

Levels of Unrelated Diversification and Firm Performance: A Conceptual Description of an S-Shaped Hypothesis

This study reconceptualizes the so far inconclusive relationship between unrelated diversification and financial performance by explaining how coordination costs can shape the amount of free cash flow and related agency problems at different levels of unrelated diversification. The study builds upon the notion that coordination requirements and associated coordination costs will vary at levels of unrelated diversification to regulate the amount of free cash flow managers will have at their disposal at each level of unrelated diversification. Based on the agency costs associated with free cash flow, we conceptualize that at different stages of unrelated diversification, the degree of managerial misuse of free cash flow can create different performance implications of the unrelated diversified firm to explain a proposed S-shaped relationship.

The Influence of Strategic Procurement on the Performance of the European Naval Defense Industry

ABSTRACT The naval defense industry plays a crucial role in national security, particularly in the context of global rearmament and shared threats. However, the industry’s performance in Europe has been hindered by factors such as decreased fleets, shrinking industry capabilities, and increasing production costs. This study of 102 large surface vessels (frigates and destroyers) from eight European countries found that production time is positively correlated with technical variables such as weight and speed. A small but significant learning effect also existed, with a 1.5-month decrease for each marginal increase of one unit in the batch. Regarding strategic sourcing, the study found no effect of the share of US subsystems on production time. However, European cooperation led to an increase in production time, likely due to higher coordination costs. Conversely, importing subsystems from a European ally tended to reduce production time. The study’s findings highlight the challenges facing the naval defense industry in Europe and suggest that strategies such as increasing batch size and cooperation with European allies can help to improve performance.

Multiple Large Shareholders and ESG Performance: Evidence from Shareholder Friction

Sustainable corporate governance increasingly influences corporate strategy considerations. Effective governance ensures organizational sustainability, with ESG being a crucial component. Large shareholders, as direct stakeholders, have a key role in developing and implementing corporate ESG strategies. Using data on Chinese listed firms over the 2011–2022 period, we find that multiple large shareholders (MLS) depress company ESG performance, suggesting that MLS may lead to friction and high coordination costs. Interestingly, stronger controlling shareholders mitigate this negative impact, particularly when they are state-owned. Our analysis shows that relatively equal power among MLS exacerbates friction, resulting in unstable executive teams and higher internal pay gaps, which lower governance (G) and social (S) scores. However, the presence of foreign and institutional investors among the large shareholders can alleviate these issues. The negative effect of MLS on ESG is significant in firms operating in clean industries, those with low analyst attention, or those not part of the “Stock Connect Scheme”. This study highlights the drawbacks of MLS in sustainable corporate governance from an ESG perspective.

Monitoring and Home Bias in Global Hiring: Evidence from an Online Labor Platform

Online labor platforms increasingly use monitoring systems to manage remote workers. This study assesses whether and how these systems mitigate employer bias in hiring foreign versus domestic workers. Leveraging the exogenous introduction of a monitoring system for time-based projects on a leading online labor platform, we employ a difference-in-differences model to estimate the impact of monitoring systems on mitigating employers’ tendency to bias against hiring foreign workers (home bias). Results indicate a significant reduction in home bias, along with a 15% increase in the hiring of foreign workers following the introduction of the monitoring system. The mitigation effect is notably stronger in high-routine projects or when employers lack prior positive experiences with foreign workers, two scenarios characterized by low external uncertainty and high internal uncertainty, respectively. Moreover, employers no longer exhibit a stronger home bias in scenarios of lower moral hazard risk or coordination costs. These findings lend support to the effectiveness of monitoring systems in mitigating employers’ home bias through facilitating contractual control and coordination. Our study offers important implications for the design of online labor platforms and policymaking.

Overseas operations, global value chain position and technological innovation

Based on a sample of Chinese listed companies with overseas operations from 2010 to 2020, this study empirically studies the impact of multinational corporations (MNCs) overseas expansion on their technological innovation and the moderating effect of the global value chain position. Based on the combination of internalization innovation theory and global value chain approach, the results of this study show an inverted U-shaped relationship between overseas operations of MNCs and technological innovation due to the simultaneous existence of the learning effect, advantages of economies of scale, internal and external coordination costs, and technology spillover risk, and the above positive and negative effects play different roles at different stages of MNCs’ overseas operations. The moderating effects test find that global value chain position strengthens the positive effect of low degree of overseas operations and weakens the negative effect of high degree of overseas operations on technological innovation. Furthermore, this study also distinguishes the heterogeneity of industry attributes and subsidiary types.

Legality of Environmental Coordination Costs in The Construction of Housing Projects As A Form of Corporate Social Responsibility (Home Price Component Study)

This research aims to find out the application of Corporate Social Responsibility (CSR), to know the setting of environmental coordination costs charged to developers in housing construction against the sale price of houses in PT Harapan Inti Persada Indah (PT HIPI). This research is a type of normative jurisprudence, with legislative approaches, case approaches and conceptual approaches carried out around the area of serpong garder II and the office environment of PT HIPI. Using primary legal material sources such as the results of observations and interviews. The results of the research that PT HIPI has implemented its social responsibility but has not implemented it is not in accordance with the regulations of the legislation. As far as environmental coordination costs can make as CSR costs as well as influence the component of house sales price in PT HIPI.

Tunable linear feedback control of urban drainage systems using models defined purely from data.

Real-time and model-predictive control promises to make urban drainage systems (UDS) adaptive, coordinated, and dynamically optimal. Though early implementations are promising, existing control algorithms have drawbacks in computational expense, trust, system-level coordination, and labor cost. Linear feedback control has distinct advantages in computational expense, interpretation, and coordination. However, current methods for building linear feedback controllers require calibrated software models. Here we present an automated method for generating tunable linear feedback controllers that require only system response data. The controller design consists of three main steps: (1) estimating the network connectivity using tools for causal inference, (2) identifying a linear, time-invariant (LTI) dynamical system which approximates the network, and (3) designing and tuning a feedback controller based on the LTI urban drainage system approximation. The flooding safety, erosion prevention, and water treatment performance of the method are evaluated across 190 design storms on a separated sewer model. Strong results suggest that the system knowledge required for generating effective, safe, and tunable controllers for UDS is surprisingly basic. This method allows near-turnkey synthesis of controllers solely from sensor data or reduction of process-based models.

The eclipse of solidarity: Precarious work, agency and collective action

Precarious work is a growing and alarming phenomenon. This paper analyses two of its distinctive normative features. First, precarity increases the risks workers face, blurring their capacity for prospection and lessening their security in accessing the opportunities associated with their jobs. Second, precarious work challenges workers’ collective action capacity. I will argue that both features threaten workers’ republican freedom. I develop the second point by presenting a conception of solidarity between workers and then showing how precarious work erodes it. On the one hand, when the labour market is dualised, precarity is distributed unevenly and the risks undergone by groups of workers are different. Thus, dual labour markets create a potential conflict of interest between the preferences of different groups, insiders and outsiders. On the other hand, various economic changes hinder workers from acting based on shared purposes due to increased coordination costs. To the extent that workers’ power depends on their bonds and collective action, primarily through unions, the eclipse of their solidarity leaves them powerless and thus increases their domination. Finally, I consider various scenarios that could boost workers’ collective power.

Talking cheap, or speaking Euro? Assessing congruence between leaders’ communication and negotiators’ positioning in the Eurozone crisis*

ABSTRACT Whether European leaders ‘talk the walk’ is a key question in EU studies. Prior research has made substantial inroads into explaining how EU and national leaders communicate about European integration, as well as what positions member states and EU institutions take in EU negotiations and why. However, we do not know to what extent leaders’ communication is congruent with what their negotiators do in Brussels, nor what explains such (in)congruence. This article presents a first dive into these questions. It formulates two theoretical arguments on why leaders’ communication and negotiation positions may diverge: accidentally, due to coordination costs, or intentionally, due to strategic and electoral calculations. Leveraging three novel databases on the Eurozone crisis, we come to two important conclusions: first, the degree of incongruence is substantial and similar to what is found at the national level. Second, our results favour a political-strategic argument for incongruence, but many important questions remain.

The rise (and fall) of tech clusters

Tech clusters play a growing role in knowledge-based economies by accommodating high-tech firms and providing an environment that fosters location-dependent knowledge spillovers and promote R&D investments by firms. Yet, not much is known about the economic conditions under which such entities may form in equilibrium without government interventions. This paper develops a spatial equilibrium model with a competitive final sector and a monopolistically competitive intermediate sector, which allows us to determine necessary and sufficient conditions for a tech cluster to emerge as an equilibrium outcome. We show that strongly localized knowledge spillovers, skilled labor abundance, and low commuting costs are key drivers for a tech cluster to form. With continual improvements in infrastructure and communication technology that lowers distance decay in knowledge spillover or coordination costs, tech clusters will eventually be fragmented.

How does digital transformation promote supply chain diversification? From the perspective of supply chain transaction costs

Companies must implement digital transformation to achieve supply chain diversification with the current volatile economic conditions, which is crucial for their survival and as a fundamental measure to ensure industrial supply chain resilience and security. Based on A-listed companies, this paper systematically examines the impact of digital transformation on supply chain diversification, exploring the underlying mechanism of this effect from the transaction cost perspective. This paper reveals that digital transformation can significantly promote upstream suppliers, downstream customers, and the whole supply chain diversification. This impact operates mainly through the reduction effects of supply and demand coordination and inventory transportation costs.

What drives businesses to transact with complementary currencies?

There is an ongoing debate on complementary currencies’ (CCs) contribution to a transition towards resilient and sustainable economies. As part of this debate, this paper investigates which factors lead to significant acceptance and sufficient growth of a CC from a bottom-up perspective, i.e., based on its members’ decisions. First, we identify the benefits and costs driving firms’ use of CCs and find four factors that constitute a trade-off: credit gains, reciprocity expectations, coordination costs, and intrinsic motivations. Second, we use an agent-based model to explore how these elements determine CCs’ success as a network. Our key finding is that the coupling of intrinsic motivation with preferential attachment – a phenomenon where members are more likely to transact with each other rather than with outsiders – may be the key to growth and acceptance: these results suggest that intrinsic motivation provides an incentive to join the network, but preferential attachment is the emerging economic rationale that drives firms’ acceptance of CCs. The identified trade-off and the theory of intrinsic motivation-preferential attachment provide new avenues to investigate under what conditions CCs contribute to resilient economies.

Country portfolio diversity and firms’ portfolio adjustment decisions: A behavioral perspective

Taking a behavioral perspective, we explore how environmental diversity in a firm’s country portfolio shapes managers’ decisions to adjust the portfolio through foreign entries and exits. We argue that country portfolio diversity causes firms to exponentially incur behavioral failures and coordination costs that serve as a distress signal to managers, who therefore increasingly restrict foreign entries and increasingly undertake foreign exits as a function of such diversity. Applying performance feedback theory, we also argue that managers’ tendency to interpret behavioral failures and coordination costs from portfolio diversity as a distress signal – and, hence, their tendency to restrict entries and undertake exits as a function of such diversity – depends on whether their firm performs below or above their aspirations. Using measures of cultural, administrative, geographic and economic portfolio diversity, we find support for our ideas in a panel data analysis of all foreign entries and exits by 232 retailers from 24 countries over the period 2001–2007. Our findings illustrate the value of applying a behavioral lens to explain changes in a firm’s full set of international activities.

Donors’ Participation the Health System: A Double-Edged Sword

The presence of donors in health system, despite its positive results, can also have weaknesses that sometimes act as a double-edged sword in achieving health priorities. In some cases, the needs are considered by donors as unnecessarily the real ones in health system. On the other hand; sometimes, benevolent actions are involved in political intentions and pressures.
 In order to eliminate deficiencies, it is necessary to comply with standards, priorities, and real needs of health system in any field. What helps this alignment and action towards goals is using the capacity of scientific evidence. With the help of scientific evidence, the real needs of health sector can be identified and prioritized, and the capacity of donors can be used to meet those needs. Moreover, reforming and re-engineering the processes of benefactors' activities in the field of health, directing benefactors' aid, developing rules and standards, and creating transparency in costs for inter-sectoral coordination are solutions that will help to improve the conditions about this issue.

Rebel Institutionalization, Religious Holidays, and Political Violence

Abstract Identifying a clear relationship between rebel group structures and the use of violence faces the challenge that group structures rarely change over time. We exploit the analytical advantage provided by long religious holidays to address this issue using the principal-agent framework. Religious holidays serve as a focal point and reduce group coordination costs, but also raise the societal costs of violence. We argue the principal of rebel groups is more sensitive to the increased societal costs than the agents and thereby attempts to restrain the agents from attacking during religious holidays. However, the success of these attempts depends on the group’s institutionalization level. Long religious holidays exacerbate the principal-agent problem due to the high costs of restraining agents from attacking for an extended period, making them the most likely case for our analysis. We test the theory by first conducting microlevel analysis of Islamic separatist groups in three Southeast Asian countries and then analyzing a cross-sectional sample of Islamic rebel groups. Results show that highly institutionalized groups that have a central command system and control over constituent groups are less likely to attack during long religious holidays than on other days, and vice versa for weakly institutionalized groups.

Effects of foreign direct investment in services on input imports of manufacturing firms: Evidence from China

AbstractThis study investigates the causal effects of foreign direct investment (FDI) in services on the input imports of manufacturing firms. We exploit a plausibly exogenous policy of FDI liberalization in services in China to construct an instrumental variable for FDI in services and address endogeneity concerns. The results demonstrate that FDI in services positively impacts both the value and sophistication of input imports for manufacturing firms. Mechanism analysis reveals that FDI in services enhances firms' input imports through reductions in production costs, relief from financial constraints, and decreased remote coordination costs. The positive effects of FDI in services are particularly pronounced for firms with lower initial productivity and higher levels of human capital.

The geography of collective bargaining in French multi‐establishment companies

AbstractDespite growing interest in the firm bargaining process, little research focuses on the structure of bargaining within multi‐establishment firms. We question whether running negotiations at the workplace level and/or firm level is a strategic choice for employers. We hypothesize that the level chosen depends on the geography of the firm. Employers face a trade‐off: workplace bargaining is more efficient because it meets local conditions; yet higher level negotiations increase coordination costs for workers and weakens their bargaining power, which can benefit the employer. Using a French representative survey, we find a significant relation between the level of bargaining within a firm and the number, spatial distribution and heterogeneity of its establishments, suggesting that the structure of multi‐establishment firms can inform the level at which collective bargaining takes place.

Optimization of regulation and fiscal policies for urban residential land use and traffic network management

Residential land use density regulation is an important policy instrument for reducing the local external diseconomies caused by concentration of population and buildings in urban areas. But density regulation also affects the distribution of population across the whole urban space, which determines the travel demands hence traffic flows over the transportation network in the city. In this paper, we formulate a model integrating the residential location choice equilibrium, traffic network equilibrium and the housing market equilibrium, subject to floor area ratio (FAR) regulation, a representative practical strategy for density regulation. The restriction of FAR regulation on housing supply is formulated as a development coordination cost function dependent on the level of FAR that is actually realized under the designated upper FAR limit. Complementary location-specific tax/subsidy policies, and road pricing schemes, are also addressed in a unified manner.The mathematical structure of the model is explored, and efficient algorithms are developed for solving the equilibrium equations, and for the optimization of FAR regulations and the pecuniary strategies.