Search results

The increasing frequency with which the business environment demands strategic change elevates the role played by performance measures in assessing alternative business strategies. Traditional accounting measures of performance have long been criticized for their inadequacy in guiding strategic decisions. Two alternative measures of business performance, EVA (eco‐nomic value added) and MVA (market value added) have been attracting much attention of late. According to a recent article in Fortune, EVA is employed by a large number of firms, including Coca‐Cola, AT&T, Quaker Oats, Eli Lilly, Georgia Pacific, and Tenneco. Unlike traditional accounting measures of performance, EVA attempts to measure the value that firms create or destroy by subtracting a capital charge from the returns they generate on invested capital. In addition to their use as performance measures, EVA and MVA are recommended by some as metrics for executive compensation plans and the development of corporate strategies.

We examine whether systematic risk of the financial services industry (banks, finance, insurance, and real-estate sectors) declined after the passage of GLBA. This study differs from prior work in that we examine changes over a long period of time (5 years before and 5 years after the Act) and we use the Carhart (1997) four-factor model for assessing changes in risks. The study finds that banks, insurance, finance, and real-estate segments load on the market, size, and value factors before as well as after GLBA (the real-estate segment loads on the value factor only after GLBA). Except for finance companies, betas decline significantly for all the other segments after the GLBA. In the case of banks even their loadings on the size and value factors decline after the GLBA, while in the case of finance and real-estate companies the loadings on the momentum factor exhibits reduction in risk after the Act. Overall, the GLBA had a risk reducing impact on the financial services industry.

This paper aims to propose an extended model to examine these motivations. As technology-led changes have revolutionized the marketplace, researchers and practitioners have grown keen to understand customers’ motivations for engaging in co-innovation in online communities.

The research model is based on a review of previous literature and relevant business practices.

The proposed conceptual model can be used to test empirically and explicate customers’ attitude towards engagement in co-innovation communities in the hospitality industry. Three major motivations drive customer engagement in online co-innovation communities (OCCs): brand equity, sense of community and monetary incentive. Customers’ prior experience with co-innovation projects also moderates the effects of the three motivations on customers’ attitude towards engagement in OCCs.

The proposed model highlights the importance of engaging customers through OCCs to create service innovations. These OCCs advance customers’ active participation in the firm’s co-creation and co-innovation process. Leading service firms already rely on online brand communities to stay on the cutting edge. Co-creation represents a unique, strategic partnership between the firm and the customer that can enhance both the customer experience and the firm’s innovativeness.

This study provides an initial exploration of the key components of the co-innovation of service through online communities in the hospitality industry.