Inspire - issue 10

INSPIRE LOUGHBOROUGH UNIVERSITY SCHOOL OF BUSINESS AND ECONOMICS BI-ANNUAL MAGAZINE ISSUE 10

COVER STORY:

ADD TO BASKET THE RISE OF ONLINE RETAIL

Alistair Milne examines the growth of FinTech PG14 Is home-based working better for you?

Donald Hislop investigates PG22 Automotive expert Jim Saker shines a light on #Dieselgate PG26

Editor: Ondine Barry Assistant Editor: Jessica Jackson

LOUGHBOROUGH UNIVERSITY

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SCHOOL OF BUSINESS AND ECONOMICS

WELCOME It is a pleasure to welcome you to the tenth edition of Inspire, the magazine of the School of Business and Economics at Loughborough University. This is the first issue since the departure of our previous Dean, Angus Laing, in July.

I have taken over the role of Acting Dean until such a time as a permanent appointment is made; more on that later.

Over the past five years, under Angus’ leadership, the School has taken significant strides forward. We are seeing record numbers of students on our programmes, the majority of our research is recognised as world leading and internationally excellent, and we continue to engage with and support a broad range of external organisations.

As a testament to our success, the recent Times Good University Guide ranked all of our degree programmes in the top 10 in the UK. We are continuing to build on these successes and see an exciting future for the School.

This issue of Inspire showcases a range of the work being carried out in the School.

We were pleased to welcome Professor Monica Giulietti as a member of our faculty over the summer. Monica, along with other recent appointments, enhances our rapidly growing profile in the field of productivity and performance. Such is the strength of this profile that the School has recently been awarded the running of a leading international conference in this field. Loughborough staff will be hosting the European Workshop on Efficiency and Productivity Analysis in both 2017 and 2019.

Meanwhile, the article on page 28 profiles Monica’s career and her work on energy retail markets and regulation.

TRANSFORMING PRACTICE, INSPIRING WINNERS

Other contributions from our staff include Professor Thorsten Gruber who explores the future of service management, Dr João S. Oliveira outlines his research on export performance and Dr Donald Hislop discusses the changing nature of the workplace and its impact on workers.

Professor Jim Saker has worked with the automotive industry, focusing on the retail sector, over many years; he provides his own take on the recent VW crisis.

Professor Alistair Milne argues for Europewide support of ‘FinTech’ and Dr Fiona EllisChadwick comments on the history of online shopping. We also report on a mock trial on the future of cash, for which Professor David Llewellyn presided as judge.

The verdict... you will have to read the article to find out.

Previous issues have reported on the work of some of the School’s Research Interest Groups (RIGs). These groups represent areas of new and emerging research, and aim to provide a basis for some to grow into fully fledged Research Centres. Given the dynamic space in which our research is performed, some of these groups will flourish and others will come to a natural conclusion. In this issue of Inspire, we summarise the work of all the current RIGs on page 18.

I am also pleased to see an article discussing the efforts of one of our current students. Sahil Jhamb, a second year undergraduate, is already working to change the world through business and social enterprise. He typifies the attitude and motivation we want to engender in all of our students.

The issue is completed with our regular feature from graduate Jeff Prestridge.

On this occasion Jeff reflects on the impact of the internet on the way we manage our personal finances.

Over the next few months the School will be going through the process of appointing a new Dean. Importantly, the appointee will be charged with leading the School through its next phase of development.

We expect to provide further news in issue 11 of Inspire.

Sincerely yours,

Stewart Robinson Acting Dean School of Business and Economics Loughborough University 3

LOUGHBOROUGH UNIVERSITY

NEWS

Dr Zebrowski publishes new book on ‘Resilience’ Dr Chris Zebrowski, a Lecturer in Politics and International Relations, has just published a new book entitled The Value of Resilience: Securing Life in the 21st Century.

The Value of Resilience, published by Routledge Press in their ‘Interventions’ series, situates the idea of resilience within the evolution of risk management and civil contingencies over the last century.

Celebrating Global Entrepreneurship Week

Zebrowski is part of the University’s Secure and Resilient Societies Research Challenge, led by Professor Mark Freeman, and this new book fits in perfectly with the back story to the group’s objectives. It is also the first book to critically examine resilience as a security value whose ascendance is radically re-defining the ways in which security is understood and practiced in the 21st Century.

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Resilience, Zebrowski argues, was not lying in wait for the march The Value of Resilience of science to provide Securing life in thefor twenty-first century the conditions its recognition.

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Uniting these fields is a common problem.

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By drawing attention to the complex historical processes

To celebrate Global Entrepreneurship Week (mid-November each year), the School launched a free, six-week e-learning course for secondary school students (Years 12 & 13) on Innovation and Enterprise.

Experts from the School of Business and Economics developed a degreelevel online course aimed specifically at students aged 16-18, with a focus on preparing for university studies as well as transferable job skills such as CV preparation. At the end of the six-week course, students who successfully complete the course will receive a Loughborough University Certificate of Accomplishment.

A suite of inspiring video case studies has been created specifically for this course, focusing on six Loughborough University graduates who have all recently created successful businesses, for students to learn from.

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For more details, or to request a copy for review, please contact: Laura Holliday, Marketing Assistant, Laura.Holliday@tandf.co.uk

A new book by ‘lean’ experts Professor Zoe Radnor and Dr Nicola Bateman has just been published by Routledge Press on service operations improvements for organisations in the public sector.

Drawing on a range of theory and frameworks, the book entitled Public Service Operations Management: A Research Handbook develops the research agenda, and knowledge and understanding in Public Service OM,

with a new empirical analysis of the impact of contextual factors, including the migration of planning systems founded on MRP/ERP and the adoption of industrialbased improvement practices such as TQM, Lean Thinking, and Six Sigma.

The book will be of interest to researchers, educators and advanced students in public management, service operations management, health service management and public policy studies.

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Zoe Monda stand Public

For more information visit: www.routledge.com/9780415735186

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SCHOOL OF BUSINESS AND ECONOMICS

MP endorsement for School’s new Masters programme for the mutual sector The Building Societies Association (BSA) and the School of Business and Economics together have developed a completely unique Masters programme, geared specifically for people in the mutual sector, and just recently welcomed its first cohort.

The three-year MSc in Leadership and Management includes all of the elements that would be in a standard business school Masters on this topic, such as: • Leading and Managing People, • Corporate Governance, • and modules on Financial, Operations and Marketing Management, Strategy and Planning.

But, unlike a more conventional business school Masters – which focuses almost exclusively on operating in a PLC/shareholderowned business structure – woven throughout will be the practical, cultural and ethical approach required to lead a modern mutual.

BSA Chief Executive Robin Fieth said: “The rigour with which a building society has to be led and managed is no different to that of a PLC. But customer-owned businesses take a different approach to how they operate and make decisions. Their focus is not on maximising shareholder value, but on delivering real and sustainable value to current and future generations of members. This programme provides the rigour and focus to develop the mutual leaders of tomorrow.”

The unique SBE/BSA Masters programme on Leadership and Management featured in speeches at the annual BSA lunch held in London in November. The lunch was attended by politicians, top building society executives, the press, executives from banks and other financial institutions.

The Keynote Address was given by West Worcestershire MP Harriett Baldwin (Economic Secretary of the Treasury) in which she made strong public reference and support to this innovative SBE/BSA Masters programme.

Harriet commentated that it was a great initiative by the BSA and Loughborough University and would be of value for those who work in customer-owned mutual financial services firms.

For more information on bespoke Executive Education programmes, please contact Vicki Unwin E: v.e.unwin@lboro.ac.uk or T: 01509 222160

Special guest lecture Former MI5 Intelligence Officer ‘Spook’ Annie Machon will be on campus early December to present a special SBE undergraduate lecture titled, Spies, Lies and Whistleblowers: Ethics and Accountability within Intelligence.

As a former intelligence officer for MI5, Annie has a rare perspective both on the inner workings of governments, intelligence agencies and the media, as well as the wider implications for the need

of increased openness and accountability in public and private sectors.

In her lecture, Annie will explore the struggle regarding intelligence as the concept of secrecy matched against democracy. She will look at the tension that lies in the maxim - you can either have democracy or you can have intelligence.

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LOUGHBOROUGH UNIVERSITY

NEWS

Summer 2015 Graduation Celebrations Our summer graduation ceremonies were held this July in the Sir David Wallace building with the reception just a short walk away in the Netball Centre.

The reception was a festive affair, with hundreds of our new graduates celebrating with family and friends.

Our winter graduation ceremonies will take place Monday, December 14th, so if you are graduating, we look forward to seeing you at the reception!

Top academics from Europe on campus for Service Innovation event The Centre for Service Management (CSM) held its inaugural 1st European Health and Social Care Service Innovation Symposium this autumn, drawing a very prestigious group of international academics to the event to discuss the latest research in service innovation as well as to look into future research collaborations in this crucial area.

Professor Thorsten Gruber, CSM Co-Director, said: “Health and social care are facing major challenges all across Europe. The proportion of elderly people is growing with urgent needs of specialist care as well as primary care; chronic lifestylerelated diseases and mental illnesses among the young and able-bodied are increasing as well.

“These and other challenges drive costs throughout Europe and indicate a strong need for service innovations that can improve the efficiency of health and social care towards positive health economic values and ethically acceptable patient-centred models. We believe that these problems are so complex and interconnected that they can only be solved by multidisciplinary and international teams of researchers.”

This event is the second in a line of events that CSM has hosted on this

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topic, the first being a collaborative network formation workshop that brought together colleagues from the Centre, the SBE, Loughborough Design School (LDS), Loughborough University’s Department of Computer Science, several external practitioners and academics to explore service innovation in health and social care based on patient and user involvement.

Resulting research projects in this area would aim at increasing the value for patients, improving efficiency and opening up avenues for national and international commercialisation.

Professor Gruber added: “We believe that when the public sector, business companies and academia all work together, it can improve the conditions for enhanced competitiveness, new business ventures and service innovations for the benefit of citizens.”

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Thousands raised in memory of Ben Pocock July 17th 2015 marked the first anniversary of the passing of International Business student Ben Pocock, who was a victim of the MH17 Malaysia Airline flight that went down over Ukraine.

Ben was on track for a First Class degree in International Business and was on his way out to complete a professional placement and study abroad period for his third year at the University of Western Australia, Perth. Ben was also a talented athlete playing on the University’s Ultimate Frisbee team, winning ‘Player of the Year’ in 2013.

In the year since his death, three of Ben’s coursemates and colleagues have been raising money for the charity Hearing Dogs for Deaf People in honour of their friend and in support of his family. The three students competed in the 2015 London Triathlon, each doing one segment of the event, finishing up in a brilliant 14th place overall.

So far, more than £5,500 has been raised. This money has gone towards sponsoring the training of a hearing dog. The donation page has been kept active in the hope of raising £10,000 which would allow them to also name the dog.

Rumor has it that the three students will be taking part in the 2016 London Triathlon as well, so please do support them.

To find out more about the “Hearing Dogs for Deaf People” Charity, visit their website:

www.hearingdogs.org.uk

A Bear in a China Shop:

George Magnus lecture

The Centre for Post-crisis Finance organised a free public lecture by George Magnus, leading economist and author, this past November.

George Magnus is an independent economist and commentator, after having had a long career in the financial services industry. He is currently an Associate at the China Centre, Oxford University, works as an external senior adviser to UBS and to other financial institutions and sits on the advisory board of the Montreal-based Bank Credit Analyst.

He is widely credited with having identified the trigger points leading to the 2008 financial crisis and with helping us to understand its lingering consequences.

If you would like to donate, there has been a Just Giving page set up for this cause:

The SBE was honoured to receive Mr Magnus and his talk drew near-on 100 people attending.

www.justgiving.com/ben-pocock-LDNtriathlon 7

LOUGHBOROUGH UNIVERSITY

NEWS

Are mega-journals changing academia?

Open-access has radically changed the academic publishing landscape over the last few years, and mega-journals are an increasingly important part of this. Now a new research project is set to find out what effect they are having on academia and beyond.

A partnership between the School of the Arts, English and Drama and the School of Business and Economics at Loughborough University and the Information School at Sheffield University has secured £450,000 AHRC funding for a two-year project investigating openaccess mega-journals.

Dr Stephen Pinfield, from Sheffield University, is leading the project.

Dr Jenny Fry and Claire Creaser (SBE) are co-investigators and are leading the Loughborough-end of the project, assisted by Valérie Spezi (SBE).

Mega-journals are making a real impact on how academics approach publishing their work. PLOS ONE, founded in 2006,

was the first open-access mega-journal and is now the world’s largest academic journal, publishing 31,500 articles in 2013. Following its success, other established publishers, including Nature, have launched mega-journal titles.

The scope of these journals is unprecedentedly wide. Both PLOS ONE and Nature Scientific Reports publish articles across the entire fields of science and medicine. The typically online-only publications make their articles freely available to all, usually by charging prepublication article-processing charges, rather than reader subscriptions. Megajournals completely reverse the trend of increasing specialisation in academic publishing over the last 40 years by creating massive openly available databases of multi disciplinary research content.

The research will include interviews with major stakeholders in the publishing industry, focus groups, bibliometricsbased studies of mega-journals and a large-scale survey of researchers.

Assembling this evidence will allow the

2016 Doctoral Student Colloquium January 28th 2016 will mark the first-ever Doctoral Student Colloquium for PhD students studying business in the Midlands, organised by the Centre for Service Management.

The Colloquium theme is: ‘Unifying Services Research: Shared Interests, Shared Insights and Shared Outcomes’ Registration has now passed for the event, but do visit the Colloquium website if you are interested in finding out more about the event, including a list of presenters and workshop topics. Presentations and post-event information will be shared on the site as well so do check back.

www.lboro.ac.uk/research/csm/sbe-dc #CSMPhD2016

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team to draw conclusions of interest to researchers, publishers, research managers and policymakers.

Dr Pinfield said: “Claims have been made that open-access mega-journals represent the future of research publishing. They have certainly had an important role to date in remoulding the academic publishing market and could ostensibly contribute to changing the nature and reach of scholarship. They seem to have the potential to enhance the ability of scholarly publications to move across boundaries – disciplinary boundaries and also those between academia and the rest of society.”

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‘Exploring Our Digital Shadow’: The 2nd International Data and Information Management Conference The Centre for Information Management will be hosting the 2nd International Data and Information Management Conference (IDIMC) on 12th – 13th of January 2016.

This two-day conference aims to bring together researchers, managers and policy makers from academia, industry, government, commerce and the third sector. To follow on from the 2014 conference, ‘Making connections’, the overarching theme of this conference will be ‘Exploring our digital shadow’.

The first day focusses on early career researchers, with a programme including a selection of workshops designed to hone skills in information management research. The second day comprises a series of invited and contributed papers and posters with a broad appeal across the sector. There will be excellent networking opportunities throughout both days.

Confirmed speakers • Danny Budzak (London Legacy Development Corporation) • Andrew Jack (Financial Times) • Christine Borgman (UCLA) • Stewart Robinson (Loughborough University) Presentation topics include Social Media, Embedded Intelligence, Information Security, From Big Data to Big Impact, Information Behaviour and Knowledge Management.

Registration is now open. To find out more and to book your place, please visit http://idimc.org/registration/ For further information about the conference see www.idimc.org or email Sharon Fletcher at idimc@lboro.ac.uk

A UK Top 10 first for the School The 2016 Times Good University Guide, published earlier this autumn, has ranked all of the School’s undergraduate programmes in the top 10, with the addition for the first time of the economics BSc’s following a concerted effort to develop and hone that area.

Professor David Saal, Head of Economics at the SBE, said: “I am delighted that the Times Good University Guide has ranked us in the UK top 10. This achievement reflects the high quality of economics education provided here at Loughborough and is particularly evident in our outstanding student satisfaction scores, of which we are immensely proud.”

TOP

10 FOR ALL SBE UNDERGRADUATE PROGRAMES

TIMES GOOD UNIVERSITY GUIDE 2016

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ADD TO BASKET: The rise of online retailing

By Fiona Ellis-Chadwick

Twenty years ago, in the USA, Jeff Bezos quit his job as a successful Vice President at a Wall Street investment firm and subsequently went on to change the face of retailing around the world.

Jeff had a big ambition: to develop the world’s largest online book store. And so Amazon.com was launched in 1995. It proved the principle that it was possible to sell goods across the information superhighway on an industrial scale and introduced the notion that the internet was going to revolutionise the way we shop.

And it has, in ways we could not even have imagined in 1995.

We can now buy almost anything and shop any time, any place, anywhere – and millions of us are doing so every day. But does this mean that the internet will eventually replace the high street and that we will all be shopping in bed via a smartphone or tablet rather than nipping into town to stock up on our needs?

While it is highly unlikely that the internet will totally replace the high street (we humans are too sociable and gregarious by nature to stay in bed forever), there have been significant changes to the physical appearance of retailing in the last two decades. Tens of thousands of retail stores have closed and well-known high street brands have disappeared. Indeed, every retail sector has seen

significant losses, and leading multiples like Littlewoods Stores, Dolcis shoes and Victorian Wine have already been forgotten and retired to the annals of retail history.

So to what extent is the internet responsible for reshaping retailing in the UK? Retailers used to be at the centre of the local economy insofar as local communities often lived, worked and shopped within the same geographic locale. However, the growth of online retailing has created opportunities for them to expand their reach and sell to customers in more geographically dispersed places. Moving from physical to digital space has created opportunities and challenges, and retailers have responded.

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— “Even though large, established retailers have invested millions of pounds in radical digital programmes, the competition is fierce and many retailers have struggled to maintain profitability.”

—

Not a level playing field In the early days predictions were made that all retailers online would compete on a level playing field, but this is not how things have turned out. Indeed, smaller retailers had some early successes as they were able to respond to the internet opportunity more quickly than their larger, more established rivals (who it must be said were generally slow starters in the digital world, fearful of the implications of online shopping and worried about the cannibalisation of their market share).

However, by 2005 things changed, and the larger retailers began leading the way and putting pressure on the traditional small high street retailer due to a number of factors, most notably perhaps sheer size.

The reach, capabilities and resources of the larger players have provided an advantage over the small players.

Additionally, with size comes efficiencies, being able to maximize the marketing function, streamline the supply chain and develop lean store portfolios. These advantages have left smaller players struggling to match the big players on price, product availability, channel choice and visibility online.

The rise of the mega multiple retailer has also created opportunities for these companies to streamline their own operations, which has directly impacted on the high street. Over the last two decades, many of the UK’s leading retail brands have either disappeared completely or been subsumed into a larger operation (think of House of Fraser and its takeover of independent department stores), with the outcome being a significant reduction in the total number of high street stores.

Simultaneously, the spend online has been growing, which has not only stimulated growth and development of online channels by physical retailers, but also created a market opportunity for pure players (online-only retailers) to enter the retail market.

Shifting patterns of behaviour and raised consumer expectations have also been driving the development of online retailing. As a result, shoppers increasingly 12

expect a shopping experience that allows them to buy anything, at any time of the day, in any location, through a choice of channels (physical store, online, mobile and via social media). During the last decade, large retailers have developed ways to deal with logistical and operational challenges of this style of selling and have worked towards offering the ‘best ever’ shopping experience.

Intelligent retailing The rise of big data and the ability to analyse and interpret a customer’s every move is giving those retailers that are able to access this new form of information a distinct advantage. They can manage their product portfolio and manipulate prices to meet customer demands in real time and ensure their retail operations are highly streamlined and cost efficient.

One such company is Shop Direct, one of the UK’s largest online retailers, that has invested more than £100k in a special User Experience lab where they observe online shopper behaviour and then modify sites to improve the bottom line.

Despite these obvious successes, the online retailing revolution has presented many challenges and threats to retailers large and small. UK retailers have spent the last twenty years learning how to operate online and put appropriate technology solutions in place. Arguably, there is still some way to go before they are all able to manage the digital environment and all that it entails to realise the full potential.

The pure players Meanwhile, there is a much bigger threat. Pure play retailers have been taking advantage of the renaissance of going shopping. They have focused on honing their technology solutions and learning how to be retailers, unencumbered by large property portfolios, large staffing commitment and many other factors associated with running multiple channels.

They have focused on costs and driving prices down while offering excellent delivery services, which many of their physical counter parts struggle to match.

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Indeed, pure plays have been rewarded with year-on-year sales growth and are set to soon overtake their physical counter parts.

And all this thanks to Mr Bezos leaving his job back in 1995.

Postscript Digital technology has created a radical new market place where innovation can swiftly move from an introduction to global phenomenon in a very short space of time.

In many ways, adapting to the e-commerce environment has therefore never been easier. However, shoppers’ appetite for e-commerce has disproportionately favoured online retailers that have developed the managerial capabilities, corporate resources and operational scale to take advantage of the many benefits the digital world has to offer.

Even though large, established retailers have invested millions of pounds in radical digital transformation programmes, developing sophisticated e-commerce websites selling ever-broadening ranges of stock, the competition is fierce and many retailers (large and small), lacking the skills and financing to adapt, have struggled to maintain profitability. The result has been sustained pressure on the high street and a shift in the make-up of the retail sector.

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About Fiona I am an active researcher and teacher, and my research activities continue to focus on projects exploring the adoption, application and development of online retailing from a strategic management perspective.

For the last 20 years I have been engaged in carrying out pioneering research looking at e-commerce adoption in the context of retailing.

In 1995, I started investigating retail uptake of the internet, when little was known about the likely impact of this new technology or how it might shape retailing in the future. And in the last two decades have mapped the ongoing growth and development of online retailing.

My work has identified the need for retailers to take a planned and longterm strategic approach towards Internet adoption and also identified the core areas of a business activity likely to determine their level of future success.

Fiona Ellis-Chadwick is Senior Lecturer in Marketing and Retailing and head of Impact@ SBE and can be reached on f.e.ellis-chadwick@lboro.ac.uk 13

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FINTECH AND THE GROWTH OF THE BORDERLESS MARKET The growing interest in FinTech

By Alistair Milne

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By Alistair Milne

Something big is stirring in the world of financial technology, at least if we are to believe the hype and money now surrounding ‘FinTech’.

Examples of these new technologies include cryptocurrencies such as Bitcoin and Ripple, the use of big data for risk analytics, new peer-to-peer and other platforms, distributed ledgers for supporting transaction efficiency and meeting the demands for online and micropayments and reliable financial security.

The US remains the hotbed of activity.

Accenture reports some $9.9bn of venture capital funding for US financial technology start-ups in 2014, compared with $3.4bn in 2013 and only $2bn in 2012. Forbes reports that global funding in the first half of 2015 reached $8bn, with 26 individual funding rounds of over $50m.

The UK is making a considerable effort to catch up, with the publication earlier in the year of a government review of FinTech (Government Office for Science, 2015, ‘FinTech Futures: The UK as a World Leader in Financial Technology’) and with more than half of all European FinTech funding raised for Londonbased firms. Major European financial institutions are now paying close attention to developments in financial technologies including UBS, ING, Barclays, Santander and Deutsche Bank.

What does all this mean? I believe that Europe can and should grasp the opportunities offered by innovative financial technology. While Europe may have been relatively slow out of the blocks in developing and supporting FinTech, a co-ordinated European approach can still deliver a crucial lead in this emerging field and provide important support for policy goals such as the of financing small- and medium-sized enterprise and delivering EU capital market and banking union.

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— “While public sector support is crucial for innovation, it can be leveraged much further through crowdfunding and peer-to-peer lending.”

—

FinTech, FinData and borderless markets Financial technology and the accompanying standardisation of financial data have a key, but not always sufficiently appreciated, role to play in furthering the goal of seamless and borderless markets especially across Europe.

• Europe-wide, efficient digital supply chain and supporting supply chain finance.

The European Banking Association is already working with the Commission to support the development of ‘e-invoicing’, with the aim to digitize all of European invoicing by 2020. There is still more to be achieved, both through use of ‘smart contracts’ (embedded e-invoice software) and from the standardisation of supply chain data.

• Online and mobile commerce. Another crucial policy area is the development of online and mobile commerce. The Single European Payments Area (SEPA) has been highly successful in harmonising card and bank-to-bank payments, but mobile and online payments remain relatively fragmented across Europe.

• Risk finance. The provision of risk finance (equity and debt) for innovative small companies, risk finance is a central plank of policy for growth. While public sector support is crucial for innovation, it can be leveraged much further through crowdfunding and peer-to-peer lending platforms. This in turn needs to be supported by standardisation of credit, accounting and other financial data and the development of automated programming interfaces (APIs) to support the interoperabliity of systems for credit and portfolio risk analysis.

• Banking union. The implementation of banking union is limited by variations in data between institutions and across member states. These data inconsistencies make it difficult to conduct reliable and credible stress tests or ensure orderly resolution of troubled institutions.

• Capital market union. While larger firms can access European securities markets, the ability of smaller firms to issue equity and debt securities is hampered by continuing differences in corporate information between firms and by the limited availability of market data.

The European policy goal of supporting European securitisation markets relies on the ability to access and process standardised underlying data.

• Financial stability. Limited access to standardised granular data weakens the ability of the Prudential Regulation Authority in the UK, the Federal Reserve in the US and European Central Bank, the European Systemic Risk Board to monitor either exposures between financial institutions or common exposures to shared sources of risk.

• Financial inclusion. The overriding necessity of ‘KYC’ (know your customer) and ‘AML’ (anti-money laundering) compliance places substantial obstacles to the access of some disadvantaged groups to financial services.

• Transparency in savings vehicles.

Financial technology can also be employed to ensure the maximum possible transparency, of fees and the tradeoffs of risk and return in UCITs and other savings vehicles, to ensure that European savers can make the best possible provision for retirement.

This article is based on a commentary that Professor Milne wrote for CEPS, ‘Achieving European Policy Objectives through Financial Technology’, which was recently published and can be viewed online at: www.ceps.eu

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The need for co-ordination and standardisation These opportunities are immense.

At the same time there is a danger of getting carried away by the excitement surrounding FinTech. There are parallels with the first wave of the internet in the late 1990s and the dot.com bubble. While financial technologies will profoundly change payments, credit markets and other banking and financial services, it is impossible to predict which particular technologies will succeed.

In this context, the principal role of policy is not picking winners, it is ensuring that there is a co-ordinated response to the opportunities for financial services including the necessary supporting standardisation and interoperability of financial data and financial messaging.

These are the kinds of policy actions on which Europe has a strong track record in other domains (e.g., telecommunications, geo spatial data and e-commerce).

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Some areas where public action will be appropriate: • The call for standardisation of financial technologies. This is crucial to ensuring the necessary exploitation of economies of scale. Large industry players, as well as CEN (The European Committee for Standardization) and member standards organisations, are aware, but often public sector action is needed to co-ordinate or overcome vested interests.

• Agreement on and – to a lesser extent public investment in – shared digital infrastructure (e.g., supporting payments, ownership registration of physical and financial assets).

• A balanced regulatory treatment of financial innovation taking proper account of the need to promote competition from new business models and innovative forms of financial intermediation. There is a danger that fears about ‘shadow banking’, off balance sheet risks or the disruptive impact of technological innovation on incumbent firms, may lead to an excessively conservative regulatory response. Indeed, it can be argued that it is the burden of financial regulation and compliance is the main barrier to entry that protects banks and insurance companies from the competition challenger institutions.

• Full use of public sector digital procurement, across the EU, in order to provide the critical mass for the uptake of efficient financial technologies.

Widespread adoption of electronic financial and regulatory reporting to minimise duplication and maximise the opportunities for flexible re-use of reported information.

CONCLUSIONS: HITTING SEVERAL BIRDS WITH ONE STONE While there is growing awareness of the potential of FinTech for achieving many policy objectives, doing so requires vision and appropriate, focused action. I believe this needs to be pursued at European level.

There is evident commercial potential in innovations (such as the employment of big data for risk analytics, mobile and online payments technology, the use of distributed ledger (blockchain) to promote transaction efficiency, or the development of alternative funding platforms for small- and medium-sized enterprise), but fully realising these and other benefits cannot be left to entrepreneurial action alone.

Alistair Milne is Professor of Financial Economics and Director of the Centre for Post-crisis Finance. Alistair can be reached on a.k.l.milne@lboro.ac.uk

Exploiting the opportunities of FinTech for improving the functioning of financial markets requires cooperation. This is Europe’s strength and why Europe can still be the global leader in financial technologies. An agreed common and targeted public policy approach can achieve the many policy goals listed here.

Put succinctly, there are two key challenges. One is determining at European level the priorities for application of information and communication technologies in order to bridge the several national, social and institutional divides that limit the single market in financial services. The other is then making vigorous efforts to promote and enforce underpinning technological and data standardisation, including their consistent use by public sector bodies to achieve critical mass, so that the opportunities of financial technologies can be fully exploited.

These two steps will go a long way towards the creation of borderless European financial markets, as open as possible to all participants and as effective as possible in the sharing of risk and the allocation of savings to the most productive possible purposes.

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LOUGHBOROUGH UNIVERSITY

Research Interest Groups (RIGs): Emerging Areas of Research In the last few years, the School expanded its research portfolio to include ‘Interest Groups’, smaller and more focussed research areas separate to the Research Centres and representing new and emerging areas of research.

Currently, there are eight active RIGs housed in the SBE: BUSINESS AND ECONOMICS EDUCATION

MONEY AND DEVELOPING ECONOMIES

Led by Dr Keith Pond

Led by Professor Eric Pentecost

The Business and Economics Education Research Interest Group aims to strengthen and highlight the School’s acknowledged leadership in research-informed teaching. The BEE-RIG will, selectively, study practical application, testing and adoption of innovations in business and economics teaching and action research in the area of pedagogy. The group also aims to raise the profile and recognition of learning and teaching within the SBE and to undertake theory-based research into cognitive skills and metacognition.

The focus of the MaDE-RIG is on role of money, monetary policy and financial development in both developed and developing countries, with particular emphasis on the achievement of the macroeconomic goals of economic stability and economic development. Specific interests of the group are in exchange rate determination and policy, balance of payments analysis, financial repression, development finance and the conduct of monetary policy in both developed and developing economies.

EMERGENCY MANAGEMENT

Led by Dr Antuela Tako

Led by Dr Lili Yang

Emergency management (EM) is an interdisciplinary area within the broader context of management. Skills and techniques, systems and models are required to identify, assess, understand and cope with a serious situation. By undertaking multidisciplinary applied research, the EM-RIG aims to the understand the impacts of natural and man-made disasters on society, improve emergency management, and enhance preparedness, response, recovery and mitigation from various emergency events.

LOGISTICS AND TRANSPORTATION ANALYTICS Led by Professor Jiyin Liu

The Logistics and Transportation Analytics Research Interest Group focuses on research, development and application of multidisciplinary work that impacts on future challenges facing logistics and transportation. The members of the LTA-RIG utilise both qualitative tools (for problem exploration) and analytical tools (for problem solving). The group members are experienced in optimisation, modelling, heuristics, forecasting, systems thinking and case study work.

MANAGEMENT ACCOUNTING Led by Professor Will Seal

The Management Accounting Research Interest Group (MA-RIG) provides a forum for developing research on traditional and contemporary themes in the field. Currently, the research design is predominantly interpretive and data are analysed through a variety of theoretical lenses. The group couples management accounting scholarship with practice by circulating work-inprogress and entering into dialogues. The overall goal of the group is to bridge the gap between theory and practice. There are four key themes: pragmatic constructivism, performance management, sustainability and Lean accounting.

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SIMULATION PRACTICE

The focus of the SP-RIG is on the practice of simulation, looking at how people go about developing and using simulation models and investigating how the practice of simulation can be improved.

As a result, group interests lie in the methodology and methods employed in simulation studies. Members use a range of simulation methods (discrete-event simulation, system dynamics and agent-based modelling) and apply them across many application domains (e.g., manufacturing, services, health, supply chain, utilities). Through its work the group aspires to support stakeholder involvement in simulation studies and aims to establish its research in client-oriented modelling.

TOWN CENTRES Led by Cathy Hart

Town centres perform a vital socio-economic role in local communities; however, they also face ongoing challenges of increasing online competition, reduced consumer spending and empty shops. Many town centres have experienced economic decline, and the Government prioritised the need for action by backing measures from the Portas Pilots to the Future High Streets Forum. The Town Centres Research Interest Group aims to generate and disseminate empirical evidence that will help practitioners as well as academics to understand the different drivers of current and future town centre behaviour.

VISUAL DECISION PRACTICES Led by Professor L. Alberto Franco

The overall purpose of the Visual Decision Practices Research Interest Group (VDP-RIG) is to study the visual tools that organisations use to perform their decision-making practices.

The VDP-RIG will thus explore this under-researched aspect of visual decision practices by drawing on its collective multidisciplinary expertise (operations management, organisational behaviour, problem structuring, simulation) with a view to assess the extent to which current and new visual tools are delivering their expected value.

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CASH ON TRIAL Is bitcoin our inevitable future?

By David Llewellyn

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LOUGHBOROUGH UNIVERSITY

The Accusation

CASH • Is an essential part of many kinds of criminal activities • Is an inefficient means of payment • Prevents central banks from implementing optimal monetary policy in times when price stability would require negative interest rates

In 1985, cash represented 85 per cent of all transactions in the UK. This has since fallen dramatically, and this year, for the first time in history, cash accounts for just less than half of all transactions.

With the emergence of contactless cards, and a wide range of other electronic means of making payment (including Bitcoin), the critical amount for non-cash transactions has fallen. The engineer who comes to your home to fix a fridge door might now bring a card verification instrument. This all prompts the question of whether, in an increasing digital age, cash is on the way out and whether this should be encouraged.

Professor David Llewellyn, a leading expert in banking and finance and Chair of the Banking Stakeholder Group of the European Banking Authority, was recently invited to preside as judge on an international mock trial held in Zurich debating the future of cash.

Organised jointly by the University of Zurich, the Liberales Institut and SUERF Council of Management, the mock trial involved witnesses, experts and a full court including prosecution and defense teams and an audience (the trial was open to anyone interested in the topic).

— “This all prompts the question of whether, in an increasing digital age, cash is on the way out and whether this should be encouraged.”

—

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As presiding Judge, Professor Llewellyn explained to the court that the trial would be conducted under English court procedures but that he would reserve the right, if necessary, to accept a jury verdict of “not proven” (available under Scottish court procedures), which would mean that the prosecution would be able to bring the same case at a time in the future if new evidence emerged.

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THE PROSECUTION

THE DEFENSE

SUERF

The Prosecution began their case against cash by calling three eminent expert witnesses. There was also written and video testimony from additional experts including Professor Willem Buiter (Chief Economist of Citibank in New York) and Andy Haldane (Chief Economist at the Bank of England).

The main arguments in the Prosecution case were that:

After the Prosecution case had been made and witnesses cross-examined, the Defense team had their chance to defend the use of cash. The main arguments in the Defense case were that:

The European Money and Finance Forum was established in 1963 by a group of academics and bankers from France, the United Kingdom, the Netherlands and Belgium.

• cash offers the advantage of anonymity (though some would argue that this is a disadvantage);

• it is economically inefficient to use cash: production and movement of cash is costly;

• not everyone (customers and shops) has access to state-of-the-art technology, though this is likely to change as the uptake of new payments technology accelerates partly associated with demographic trends; and

• it is a subsidy to some criminal activity such as drug dealing and money laundering;

• increased use of technology-based payment options enhances the danger of cyber crime.

• there is always a danger of being mugged;

Another argument used in defence of cash is that people have confidence that it can always be used whereas some other means of payment are less certain. This may, however, be a wasting asset: for instance, it is no longer possible to pay cash on London buses!

• there is no record of transactions being made when cash is used;

• it is not always easy or convenient to get access to cash precisely when you need it; • counterfeiting is a problem; and • it is a way of avoiding paying tax for work done if payment is made in cash and it effectively subsidises the grey economy with the result that the true level of output in the economy is probably underestimated.

At a more technical level, the charge was made in court that, under some circumstances, the existence of cash might prevent an optimum monetary policy being pursued. This could arise if, in the interests of stimulating the economy, the central bank would wish to set a negative rate of interest. This could be problematic if depositors have the option of avoiding the negative interest rate on their bank account by moving into cash.

Professor Llewellyn then took time to call in further experts and assess their views before hearing the final court pleadings from both the Prosecution and the Defense.

In line with English court procedure, the Judge directed the Jury on the key issues and their options for the verdict including one of “not proven”.

THE JURY’S VERDICT The Defendant in the case (cash) was found not guilty on each of the three charges and the case was dismissed. Or was it…?

SUERF is a network association of practitioners in the financial sector, central bankers and regulators, as well as academics. The focus of the Association is on the analysis, discussion and understanding of financial markets and institutions, the monetary economy, the conduct of regulation, supervision and monetary policy, and related issues.

SUERF’s events provide a unique European network for the analysis and discussion of these and related issues.

SUERF is incorporated under French law and has its legal domicile at the Banque de France in Paris and the permanent secretariat is located at the Austrian Central Bank in Vienna. SUERF has evolved as a unique forum for the exchange of information, research results and ideas. Its membership embraces central banks and supervisors from most European countries, including the European Central Bank and the Bank for International Settlements, financial institutions, academic Institutions and their representatives. There is a clear advantage in facilitating dialogue between the different constituencies so that each gains from the perspectives of the others.

Members are drawn from all over Europe and beyond. The School of Business and Economics is an Academic Institution Member of SUERFF and Professor Llewellyn is a member of the Council of Management and former President.

David Llewellyn is Professor of Money and Banking and can be reached on d.t.llewellyn@lboro.ac.uk 21

LOUGHBOROUGH UNIVERSITY

By Donald Hislop

TO INFINITY AND BEYOND The evolution of the contemporary workplace

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Historically, for the majority of workers, their workplace was on premises owned by their employer, where they worked at a fixed, static location such as in a particular office or part of a factory. However for many workers, due to the interrelated effects of a number of factors such as globalisation, advances in computer and communication technologies (most recently with the development of tablet computers and smartphones), and the evolution of corporate strategies, the character of their workplace is changing in quite dramatic ways.

Understanding how these changes impact on workers, with a particular focus on how they use computer and communication technologies, represents the central focus of my research in this area.

With home-based working, which an increasing proportion of workers are undertaking, people work either partly or wholly from their home. For such workers, the workplace may be whatever part of the home is colonized as a workspace for the duration of the home-based working day. This could vary from being a dedicated home workspace, such as a garden office, a home-office, to the corner of a bedroom or a kitchen table, dependent on people’s home circumstances.

For home-workers the elimination of sometimes long and potentially tiring and stressful commutes represents one of the key benefits of homeworking. Further, the ability to better and more flexibly balance the demands of work and family represents another key potential benefit of homebased working.

However, working at home may not always be as idyllic as initial impressions seem. For example, working at home, especially when it is done for a large part of the working week, may create feelings of professional and social isolation, due to feelings of being disconnected from and somewhat invisible to organisational colleagues, and through a lack of colleagues to share ideas formally with, or chat informally to.

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Secondly, if home circumstances are not ideal for working, when for example, people may not have a location that can be used a dedicated workspace, working at home may be challenging for the worker, and feel like the intrusion of work into the home domain for other family members.

Finally, working from home may also blur the boundary between home and work domains, making it difficult for people to sometimes disconnect from the demands of work.

However, the experience of homeworking is always affected by changing circumstances. For example, a recent study I was involved in found that the use of mobile ICTs such as smartphones by some self-employed homeworkers significantly changed their experience of work.

On the positive side, their use increased people’s level of spatial flexibility, allowing them to leave the home, but still be available to deal with work-related communications. For the majority this had the added advantage of reducing people’s level of social isolation, as they could leave the home to meet up with friends, or do shopping, but still engage in work-related communication activity as and when necessary. More negatively, for some this created concerns about their potential inability to switch off from work.

However, people’s preferences with regard to the nature of the boundary between home and work, when working from home are highly variable, with some (labelled segmentors) preferring to keep them separate, while other (labelled integrators) are happy for the domains of work and non-work to overlap.

One area where more research is needed is how factors such as personality influence people’s preferences regarding the character of the work-home boundary, and how to manage it. This is the central focus of Hannah Evans’ PhD research, which involved surveying almost 400 home-based workers and interviewing a sample of them, which aims to contribute to knowledge on this topic.

Another trend reducing the significance of traditional workplaces is the growth in

mobile, or multi-location working. This type of work is something that has always existed for some, for example, delivery workers such as postal workers, drivers and transport workers such as sailors, or sales and support staff who are required to travel between the sites of the various clients they work for.

However, for a growing number of traditionally office-based managerial and professional workers, regularly undertaking work-related journeys is an intrinsic part of their job. For such workers, advances in communication technologies create the potential to provide people with access to work-related email and communication virtually irrespective of location.

Such developments facilitate working ‘on the move’, and thus for mobile or multilocation workers, the workplace is not necessarily a singular location, but is a space and location that may be constantly changing, and could include the car, train or plane used for travelling, a hotel, railway station or airport, or a client site.

For example, data collected during a recent British Academy-funded research project from business people travelling by train, plane or car found that a significant proportion of travellers worked in a wide range of locations, with some of the most popular being in their cars (when parked!), at airports, or when sitting on train carriages.

However, people’s ability to work was significantly influenced by a range of factors such a noise levels, space constraints or privacy concerns. Such factors made working while on planes for example, particularly challenging.

Donald Hislop is Reader in Sociology of Contemporary Work and Acting Director of the Centre for Professional Work and Society. Donald can be reached on d.hislop@lboro.ac.uk 23

LOUGHBOROUGH UNIVERSITY

STUDENT PROFILE Sahil Jhamb, Management Sciences

HELPING PEOPLE BRICK BY BRICK Sahil Jhamb is a secondyear Management Sciences student who is set on changing the world through business and social enterprise.

“One of the reasons I chose Loughborough in the first place was its growing reputation for entrepreneurship and its entrepreneurial culture,” he says.

“I wanted to be in an environment where failure is tolerated and you are encouraged to take risks.”

During his first year on the programme, Sahil became actively involved with Enactus and Tedx, and whilst completing his modules he helped to develop an app (Hourglass), which aims to prevent procrastination by controlling how and where you use your revision time. He also worked with the University’s Enterprise Hub as an Enterprise Leader and pursued his passion for recreational running.

Not one to slow down, during the summer Sahil won the Santander 60 Second Pitch Competition for the ‘myINDIA’ project. “myINDIA began as a social enterprise working with women in South India,” explains Sahil, “working alongside an international organisation called the Russ Foundation whose aim is to create sustainable solutions to long-term development obstacles.”

The firewood and charcoal used by families in rural villages were both damaging to the environment

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and harmful to health, and so the myINDIA team sought to find a lowcost, high-impact solution.

allowed him to travel to India to help implement the project first-hand alongside local engineers.

Sahil joined the myINDIA project (which has since been renamed UNIfuel as it has expanded into South Africa) through his involvement with Enactus, a student society focussed on using entrepreneurial action “to change lives on a local and global scale”.

“I think the importance of social enterprise is growing. People are now realising that you can not necessarily rely on governments to correct market failure. They may miss out on individual matters and that’s where we realised we could use business to make an impact in the world. Once you realise the importance of using business to make a difference, you can apply your knowledge to change the world.”

“We realised that we could utilise our high-calibre business and engineering departments as well as leading academics in the field of renewable energy, to find a sustainable solution to this problem.

Alongside the chemical engineering department we tested compositions of the biomass briquette using materials that would be available in India, whilst our commercial team worked effortlessly to raise the initial funds for the project to be implemented.”

“From working with the Russ Foundation we had access to a range of materials including coconut husks, rice, paper and sawdust as these were readily available on their site. Through this project we have managed to employ two women at 200 rupees each which is double the national living wage.”

Through an online voting system, Sahil won the 60 Second Pitch competition and was awarded £1,500 to further develop the project as well as on-going support from Santander. Sahil was also awarded the Loughborough University Ede and Ravenscroft Prize of £500 which

Not surprisingly, Sahil has big plans: “I have every intention of going into my own business. I want to be in the position to make a difference in the world but also make a profit.”

His immediate priority involves looking for a professional placement for his third year on the programme.

“Ideally, I want to gain experience in either marketing or supply chain management and I want to be in a company where I can make an impact.”

His advice to prospective students: “Get involved in everything, and if you have an idea, even if you think it is crazy, just do it. Even if you fail you will learn something, and that will help you in the long-run. Failure is a stepping stone to success.”

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— “I think the importance of social enterprise is growing.

Once you realise the importance of using business to make a difference, you can apply your knowledge to change the world.”

—

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LOUGHBOROUGH UNIVERSITY

Professor Jim Saker reflects on working in a sector whose image seems to go from bad to worse.

The announcement of the death of George Cole earlier this year left me with an obvious sense of sadness. He was one of the UK’s great character actors. In fact if anything he was too good, and as a result of the quality of his acting the retail automotive sector suffered. His portrayal of the second-hand car dealer Arthur Daley in the TV series ‘Minder’ captured the imagination of the British public, and for many years car salesmen were stereotyped by this iconic but untrustworthy character.

When we first launched the Retail Automotive degrees at Loughborough in the late 1990s The Independent boldly proclaimed ‘Arthur Daley goes to college.’ The profession was openly ridiculed and was held in particularly low esteem – a reputation that was reinforced 26

by the weekly instalments showing Arthur coming up with some devious scheme to ‘rip off’ the general public or business acquaintance. It demonstrated the power of television to influence peoples’ perception of both an industry and a profession.

By comparison, at around the same time another TV series ‘Silent Witness’ starring Amanda Burton portrayed a sophisticated professional cutting through crime and coming up with unexpected solutions. This raised the profile of forensic science to such a level that universities were inundated with applicants wanting to study this previously low-profile subject area.

The Centre for Automotive Management here in the SBE has been successful in raising

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— “The public feel betrayed and there may well be a reluctance to believe in the brand going forward.”

—

awareness of the relevance of higher education in the automotive retail sector.

From attracting the £7m investment in the Henry Ford College through to offering programmes for the likes of Renault, Mercedes Benz and Scania, the School has moved from a national focus to a global reach.

Despite our best efforts, the image of the sector remains poor. A recent extensive US Public Policy poll placed car retailers as being less popular than colonoscopies, cockroaches, Donald Trump and France!

They did however manage to beat the Kardashians, North Korea, the ebola virus and gonorrhoea, which was reassuring!

Although the poll was light-hearted, it did however reproduce a stereotype that we have been fighting to overcome.

The small steps that had been made in changing the public perception of the retail end of the motor industry have been wiped out when the news broke in the United States that a major car company had been deliberately trying to falsify emission test results.

The legacy of Arthur Daley is nothing by comparison to the damage that is currently being caused by the VW emission scandal.

The admission by the now ex-Chairman Martin Winterkorn that the company had deliberately fitted ‘defeat device’ software to falsify emission test results in both the US and Europe takes the issue of trust to a different level. The implication that this happened across the VW group raises major problems for Audi, Skoda and Seat.

At the time of writing, other car companies are being looked at, but nothing as yet has been alleged.

From an academic perspective one is left trying to evaluate the root cause of how a vast corporation could behave in this way. Winterkorn led a Board that was and still is made up of engineers not sales people. It was widely known in the industry that this was a ‘top down’ organisation regarding the decision making process.

Questions have to be raised as to the type of corporate governance taking place in the organisation.

The problem with this situation is that potentially everyone loses (except for the lawyers). Obviously VW will lose out heavily in the way of fines and compensation. One suspects that the damage to the brand will be enormous. The public feel betrayed and there may well be a reluctance to believe in the brand going forward.

then commission based on sales. As a direct result of the VW #Dieselgate scandal a number of car sales people were unable to pay their mortgage on the south coast of the UK. The scale of this scandal is far reaching.

When the School first launched the degree programmes in the sector, I was invited to go on a radio show and was asked whether we would be teaching ethics. I assured the questioner that it was a fundamental part of our strategy. It is a shame that Volkswagen didn’t appear to include it in theirs.

Maybe it’s because I’ve spent the last twenty years working with people from car dealerships, but I have immense sympathy for the VW dealers in the UK and elsewhere. Some are part of large groups who have the resources to ride out the crisis with customers switching from one brand to another. These organisations have the legal power and resource to force compensation from Volkswagen.

However, the structure of the industry also has a number of ‘owner drivers,’ small family-run businesses that have been built up over the years. These SMEs face a far greater challenge. For example in September we heard of a small VW dealership that had firm orders for 40 new cars with the new number plate on them. After the announcement of the emission scandal 34 people cancelled their orders. Car sales people are usually remunerated with a small basic fee and

Jim Saker is Associate Dean {Enterprise}, Professor of Marketing and Director of the Centre for Automotive Management. Jim can be reached on j.m.saker@lboro.ac.uk 27

LOUGHBOROUGH UNIVERSITY

STAFF PROFILE Professor Monica Giulietti

A FOUNT OF ENERGY Professor Monica Giulietti is new to the SBE, having only arrived this summer from Warwick Business School. She comes across as a pleasant balance of calm and energetic, vibrant and interesting with an intelligence that sparks.

Monica did her first degree at the University of Bologna in economics and politics where she was at the time caught up in some very interesting student movements, and which left an impression on her.

“In my days at Bologna left-wing movements were quite big. My father was actually an officer in the army, so it was also a time of very big family strife because obviously that was not approved and the way I dressed was a big issue,” Monica says, laughing.

“It was interesting, but there is something I think that’s left with you, the idea of justice and fairness I think… It’s possible, looking back at my academic career, my involvement left a mark, and I think still now being able to inform policy and provide rigorous advice is one of the things that I most enjoy about the job.”

As well as teaching undergraduate students about energy and the environment, Monica’s research for the last fifteen years has concentrated on the energy market and energy consumption, with a UK/EU policy focus. She is part of the Midlands Energy Consortium (MEC) and because of her research interests and 28

policy expertise sits on the University’s Energy Research Challenge team as the SBE representative.

“One of the research projects that I’m working on is about energy storage, which is not only a global issue because there’s a lot of debate about whether this technology is viable, but it is also a multidisciplinary challenge.”

Monica works with the MEC promoting collaborations for research projects and research grants. One of the projects created with the MEC with Monica in charge is on energy storage, an area in which she is an expert. She also has a new project that just started this October on distributed generation, i.e., looking at local energy plans with the involvement of local councils.

Through the MEC, Monica has had some involvement with the ETI (Energy Technology Institute) on campus, participating in a few of their research exhibitions, notably involving a research study she leads on energy storage.

What she is most passionate about in terms of research is in the area of climate

change: “As an academic you have to try and be objective, but I would say energy consumption is one of the most important areas I look at. We’re trying to tackle issues associated with climate change, but also initiate a change in the energy industry as a whole with renewables. There are changes in the way we interact with energy that are quite interesting to investigate.”

According to Monica, and based on findings by the Competition and Market Authority, the lack of consumer engagement in the energy market is one of the most concerning issues.

“They found that people don’t actually make an informed choice, they don’t change supplier. Which I think opens up a lot of questions, because much of the focus of the whole debate has been about energy prices and finding the best price as a consumer. But I think there should be a broader view, instead, about how much energy we use. A lot of people find it challenging to choose the correct supplier for them because they have no idea how much they use, and so there’s a bigger debate to be had about these issues, as well as smart meters and new appliances…”

Monica is, as previously mentioned, also involved with the Energy Research Challenge at the University, headed up

by Professor Kevin Lomas, and has been working with the Engineering department

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here at Loughborough on the development of energy research even before she arrived. In addition, Monica is also part of a Loughborough University project called Pioneers in Practice, which is a European Union-funded initiative involving herself and a colleague in Engineering.

Given her academic and industry background, it is not surprising that Monica knows now-retired Professor Tom Weyman-Jones as well as fairly new-tothe-SBE Professor David Saal, both leading experts in efficiency and productivity within the utilities sector.

“Tom and I go back a long way actually,” she says, “because he was a guest speaker at one of my first lecturer jobs, so I’ve known him a long time.

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involved in discussions at European Union level about how the market should work and how the national governments should deal with issues, and I’ve engaged with the House of Lords through the Industry and Parliament Trust, and have run some workshops with the Department of Energy.

There is an aspect to my work that is not ‘traditional’, but I think it’s an important area to develop.”

Monica Giulietti is Professor of Microeconomics and can be reached on m.giulietti@lboro.ac.uk

“David and I used to work together at Aston Business School and have supervised students together in the area of utilities. We haven’t quite managed to do any specific research projects together, but I think there might be the opportunity in the future.”

In terms of building a stronger research community at the SBE around the environment and energy consumption and storage, Monica is hoping to be at the centre of that, and is looking forward she says to taking on new PhD students soon.

“My main expertise is in energy retail markets, and as such I’ve been advising the Council of European Regulators. I’ve been 29

LOUGHBOROUGH UNIVERSITY

By Jo達o S. Oliveira

EXPORT PERFORMANCE RESEARCH: MATCHING DATA WITH THEORY Given the enhanced importance that exporting has for companies and nations, over the last six decades many researchers have devoted their efforts to examine what causes businesses to be more or less successful in their export activities.

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When studying the predictors export performance researchers typically focus either on what leads the company to be successful in a single export venture (an export venture is defined as the company’s exports of a single product/product line to a particular export market) or on what causes the company’s export function as a whole to be successful (the company’s export function is comprised of all its export ventures). It is not uncommon for small-to-medium-sized companies to operate in dozens, or even hundreds, of export ventures.

Unfortunately, it is often the case that studies aiming at developing theories concerning the success of the company’s entire export function to test those theories and generalise the findings obtained using data from a single export venture within the company. In this context, findings regarding a single export venture of the firm do not necessarily hold for all the remaining export ventures of the firm, i.e., they do not generalise automatically to the company’s entire export function.

The results obtained in such studies are, thus, likely to be biased. This may lead researchers to produce less accurate recommendations for managerial practice.

For example, a research study focusing on a single export venture per firm may find that adapting extensively the product in that single venture to meet the characteristics of the venture market is good for the performance attained in such venture.

However, it is not a given fact that those results will automatically apply to all the remaining export products/markets of the company (i.e., to the company’s entire export function). If the aforementioned result were to be generalisable to the company’s export function as a whole, this would imply that the company should carry out high levels of product adaptation in each and every export venture in which it operates. Yet the latter inference is not at all certain, because the costs associated with undertaking extensive product adaptation individually across all the export ventures in which the firm operates may escalate rapidly, resulting in reduced

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export profits for the firm as a whole (or, in other words, in diminished export functionwide profits).

As the example just described demonstrates, it is imperative that researchers match the type of data which are gathered and tested in a particular study to the type of theory which they put forward to address their specific research question(s).

We have developed a framework that seeks to guide researchers in such an endeavour.

There are at least four generic types of research question in export performance research. Each of those requires a different type of data. Specifically: 1. When the objective of a study is to examine how the overall level of export function performance attained by the company varies across companies, researchers ought to gather data concerning the company’s export function as a whole.

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For example, if a researcher is interested in examining whether the level of international experience of the firm’s top management team is a critical factor for the company’s overall export success, then information ought to be gathered at the export function level.

Findings of such type of research could help, for example, in making senior management-related recruitment decisions that assist in boosting the company’s overall export performance.

3. When the purpose of the study is to examine what leads to performance variations across different export ventures within companies, researchers need to gather data on multiple export ventures per company sampled.

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This type of research can, for example, help managers in terms of diagnosing poor/exceptional performing export ventures of their companies. Also, for example, research of this kind has the potential to guide management practice in terms of the kinds of remedies that need to be applied to declining ventures.

4. In cases where the objective of the study is to analyse how export performance varies across companies that operate in only one export venture (for instance, companies that are just starting their export activities), researchers should collect data on a single export venture per company sampled.

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Studies of this kind can assist managers in terms of identifying key success factors that can help firms in successfully expanding to additional export markets beyond the single export market in which they already operate.

João S. Oliveira is Lecturer in Marketing and can be reached on j.oliveira@lboro.ac.uk

2. In situations where the purpose of the study is to analyse how the performance attained by a company in a particular group (i.e., cohort) of export ventures varies across companies, the data collected in each of the sampled companies should focus on that particular cohort of export ventures.

•

For instance, if the purpose of a specific investigation is to identify critical success factors in B2B export ventures, then the researcher should collect data on each company’s cohort of B2B export ventures.

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LOUGHBOROUGH UNIVERSITY

STAFF PROFILE Professor Thorsten Gruber

EXPLORING THE FUTURE OF SERVICE MANAGEMENT Professor Thorsten Gruber is Co-Director of the Centre for Service Management (CSM), having founded the Centre two years ago together with Professor Zoe Radnor.

Thorsten conducts research in the areas of service failure and recovery, complaint handling and complaint management, amongst other issues.

He started his work on customer complaint handling with his doctoral thesis which sought to answer the question of how customers want to be treated in case of a complaint. “If something goes wrong, how do you want employees to treat you and solve your problem? Later, I looked into how employees could help customers with their complaints and what customers expect of employees,” says Thorsten.

“Currently, my interest has expanded to cover areas like service technology, especially what we call ‘radical service innovation’ – such as service robots and autonomous vehicles.”

Recently, the Centre for Service Management held the first European Health and Social Care Service Innovation 32

Symposium with presenters from all over Europe. One of the main issues discussed was health and social care, which, Thorsten and the Centre participants agreed, needed to be addressed on a multidisciplinary level. It is for this reason that the Centre brought together experts from academia and industry across many sectors, including but not limited to marketing, operations management, computer science and the Loughborough Design School.

“There’s a strong interest in exploring how technology can be used to help improve not only the wellbeing of patients but also of citizens in general,” explains Thorsten.

A special section in the prestigious Journal of Service Management will focus on some of the issues that were studied at the Symposium.

“It is a good opportunity,” says Thorsten.

“It helps highlight our research and our

— “Currently, my interest has expanded to cover areas like service technology, especially what we call ‘radical service innovation’ – such as service robots and autonomous vehicles.”

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— “Services play an important role in all our lives. Most of GDP comes from services. Higher education is a service industry. So we are all in one way or another affected by services.”

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plans for collaborative research in Europe.

One of the main reasons behind hosting the Symposium was to look into the creation of research teams to go for joint funding on research projects across Europe. In our Centre, we aim to create interdisciplinary and multidisciplinary teams to tackle important social challenges like healthcare.

“We are able to cover a wide range of areas in the Centre because we have a very healthy mix of academics from different areas – marketing and operations management to strategy and information science. We founded the Centre on this basic tenant that it would be the platform where we would assemble colleagues from diverse areas to work as a team on issues of key importance. It is from this start that the Centre has widened and expanded to include a healthy mix of people from a range of disciplines.”

The Centre for Service Management organises events throughout the year, attracting academics and experts from industry who are actively involved with service issues and, increasingly, from areas that are traditionally not under the service ‘banner’, which indicates how varied and wide-ranging the scope of service research has become in recent years.

“Services play an important role in all our lives. Most of GDP comes from services.

Higher education is a service industry. So we are all in one way or another affected by services or involved in service delivery. The big game changer, however, is technology.

Technology is playing a massive role in changing business models. And to keep abreast, organisations not only need to be mindful of it but also adapt and use it to 34

their best advantage. As they say in football, my other passion, you are only as good as your last game. You can never stand still. You can never rest on your laurels.”

The next major event planned by the Centre for Service Management is a Doctoral Colloquium in January 2016, organised by Higor Leite and Rachel Fuller (PhD students in CSM) bringing together PhD students from across the UK with the aim of creating a doctoral community, sponsored by CSM but with a wider remit of business and management.

“Our PhD students are very important because they’re the next generation of researchers and it’s essential that they feel welcomed and valued. They are a vital part of the Centre. After the Colloquium, we are hoping to hold an event next year on the role of technology in services, hopefully bringing together academics and practitioners in the area. Including practitioners is important because we want to see what they are experiencing in the area of technology, what the burning issues are, and possibly look at creating some projects that are of mutual interest.”

A recent area of interest for Thorsten is that of academic measurement, with regard to citations and research assessments. He observes that there is a constant and progressively higher increase in calls for academics to publish exclusively in “top-level” (defined by journal rankings and journal impact factors) journals and to get cited as much as possible. Thorsten finds this recent trend very disturbing and potentially dangerous. Writing about, what he calls, an “academic sell-out” in the Journal of Marketing for Higher

Education, Thorsten makes the case that the chase of citation metrics and journal rankings will inevitably distract academics from pursuing research that may well be impactful and important, but may not fall within the remit of a 4* journal because it is specialist, for example.

“Early career academics have a more difficult time at the moment because they may not have that many citations yet, so I want to help them by showing that there are other ways where they can demonstrate their potential, for example, a worldwide readership, by using research portals such as academia.edu. I would also really like to see us being able to critically discuss these developments and say, ‘Is this really the academia we want?’”

Thorsten Gruber is Professor of Service Management and Co-Director of the Centre for Service Management.

Thorsten can be reached on t.gruber@lboro.ac.uk

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BUSINESS INSIGHT

By Jeff Prestridge

DON’T WORRY BE ʼAPPY Looking back on my thrilling three years at Loughborough University as an economics student in the 1970s, I sometimes wonder how I survived.

No mobile phone to ring friends or girlfriends. No computer to write up my cutting-edge essays on the economic theories of John Maynard Keynes and Milton Friedman. And no internet to provide me with instant knowledge.

Just a landline at William Morris Hall (more out of order than a 1st XV rugby team player on a Saturday night), a fountain pen for writing and the wonderful resource that was the Herbert Manzoni library (now no more, replaced by the even-more-wonderful Pilkington Library).

What a transformation there has been.

If only I were a student today (student loan excepted).

Equally, my profession as a journalist has changed dramatically in the 30 years I’ve been putting the personal finance world to rights.

When I first started out in journalism, I would bang out my copy on a manual typewriter, creating more noise than prophetic words. Someone else would then lovingly set them to page.

Fact checking was done through manual library records. Indeed, it wasn’t until well into my career at The Mail on Sunday that the internet revolutionised everything I did.

I can’t remember the last time I used the company’s library and its meticulously maintained files of newspaper cuttings.

The internet has also revolutionised the money world I report on. Thirty years ago, branches were the way we conducted our banking with cheques very much to the fore. But today, branches are shrinking as the young especially (but not exclusively) embrace internet banking and use mobile ‘apps’.

A cashless society awaits.

But it’s not just banking that has undergone a revolution as a result of the web. The way we invest has changed beyond recognition.

Rather than use a stockbroker, most people are now happy doing their investing online, using so called investment ‘platforms’ to run their collection of tax-friendly Individual Savings Accounts and defined contribution-based pensions. All their investments under one roof, enabling them to see at a click how their longterm wealth is building and to make changes to their portfolios, if indeed change is required – again at the mere click of a computer mouse.

We even manage our energy bills online, our insurances and our other household bills (everything from telephone to broadband).

Empowering? Yes. Liberating? Yes. A force for good? Yes. Yet the embracing of the internet within the personal finance world is

not all milk and honey. It’s created an industry that is more impersonal than it once was, spawning the likes of ‘robo-advisers’ that would not be out of place in Aldous Huxley’s Brave New World.

It’s also been responsible for financial exclusion – with the elderly and the less well-off increasingly disenfranchised.

And it’s not driven down costs in the way it should have done.

Most worryingly of all, the internet has spawned a wave of cyber crime that leaves our personal finances exposed to criminals, based here or in the darker reaches of Eastern Europe and Russia. Mark my words, Talk Talk is just the tip of the iceberg.

Two steps forward. One-and-a-half steps back.

Jeff Prestridge is a Distinguished Alumnus and Personal Finance Editor of The Mail on Sunday. He can be contacted via Twitter @jeffprestridge

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