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Reach If central banks can more accurately determine the presence of a bubble, they will be in a better position to know how to deal with it. — Professor Robert Sollis page 22

WOMEN LEADERS STILL FACE BARRIERS TO BUSINESS SUCCESS

T HE POWER OF AUGMENTED REALITY

TIME TO REMEMBER THE FORGOTTEN WORKERS

R E S E A R C H M AT T E R S

ISSUE #6

2018

CHALLENGE TODAY, CHANGE TOMORROW

REACH | Research Matters

Message from our Director

Contents Welcome to the latest edition of Reach, Newcastle University Business School’s annual research magazine. Research is at the heart of everything we do at Newcastle University Business School and this magazine will give you just a snapshot of the research delivered by our academics. Research plays a vital role in how we engage with organisations and policy makers on a regional, national and international platform. And by providing the foundations for education, our research helps to ensure that our students are engaged with knowledge and expertise which reflects the latest business thinking. As part of Newcastle University, we are a founding member of the Russell Group, an association of the leading research-intensive UK universities. We conduct our research with a commitment to excellence and a concern for the needs of local and global economic and societal issues.

We aim to lead distinctive interdisciplinary research and innovation in the Future of Work and Leading on Leadership.

As a School we continue to expand fields of research and academic excellence. In particular, we aim to lead distinctive interdisciplinary research and innovation in the Future of Work and Leading on Leadership, with demonstrable vibrant collaborations delivering new global perspectives and solutions.

Professor Sharon Mavin Director Newcastle University Business School

Our research is world-leading and the 2014 Research Excellence Framework (REF) ranked the Business School 14th for Research Power in the UK, with 97% of outputs recognised worldwide. Our team of world-leading academic researchers challenge conventional business thinking and their approaches reflect cutting edge thinking grounded in real-world practice. This, combined with exposure to new knowledge, helps to make sure that our research is able to impact business, policy and society on a global scale.

IMPACTING BUSINESS Our academic faculty engages with organisations across the world, helping to find innovative solutions to the latest business issues.

INTRODUCTION 02

Message from our Director

IMPACTING BUSINESS 04 Women leaders still face barriers to business success 08 Has EVA had its day? 10 The power of augmented reality 12 Strong director networks can fast-track Merger and Acquisitions 14 Keeping control of business 16

Buy British campaigns fall flat

18 Authenticity is the key ingredient 20 All’s fair in business

IMPACTING POLICY 22 Don’t let the bubble burst 26 Enterprise policy needs radical reform 28 Drone technology could be a lifesaver 30 Migration can boost the economy

IMPACTING SOCIETY 32 Time to remember the forgotten workers 36 Investments worth the risk 38 Fuse helps businesses get better connected 40 Innovation is the key to NHS success

IMPACTING POLICY Research from Newcastle University Business School is turning conventional thinking on its head and our academic researchers’ work is helping to influence policy on a global scale.

IMPACTING SOCIETY Our researchers are leading the way in how global communities and organisations can adapt and thrive in a rapidly changing world. Answering the big questions facing society today.

For further information about our research, visit ncl.ac.uk/business-school

2018

CONTENTS

ISSUE #6

IMPACTING BUSINESS | Professor Sharon Mavin

REACH | Research Matters

Women leaders still face barriers to business success Professor Sharon Mavin, Director of Newcastle University Business School, is leading an innovative research project which highlights invisible-visible challenges faced by women business leaders.

2018

WOMEN LEADERS STILL FACE BARRIERS TO BUSINESS SUCCESS

ISSUE #6

REACH | Research Matters

IMPACTING BUSINESS | Professor Sharon Mavin

Professor Mavin is the lead researcher behind the study, which explores how women leaders are perceived by their peers, other women and how they are characterised by the media. It provides deeper understanding of why there are so few women in top leadership roles. Professor Sharon Mavin Director, Newcastle University Business School

Mavin S, Grandy G. A theory of Abject Appearance: Women elite leaders’ intra-gender ‘management’ of bodies and appearance.

For further information about our research, visit ncl.ac.uk/business-school

In her research, Professor Mavin argues that there is a preoccupation with how women leaders look, which takes the focus away from their leadership abilities and aptitudes in the corporate and organisational world. She has developed a theoretical tool called ‘Abject Appearance’ to illustrate the tactics women leaders deploy to manage the situation as they construct their leader identity in a traditionally men-dominated environment. More than 80 women from a variety of UK-based organisations were interviewed: executive directors or non-executive directors in FTSE 100 or FTSE 250 companies, and elite leaders named in an annual UK regional newspaper supplement that profiled the top 250 influential leaders. Interviews focused on women’s progression into top leadership roles and covered a range of issues, such as their leadership ambitions, competition and cooperation with their peers, and friendships at work. A key finding from the study is that women in top leader positions felt they were often judged more on their appearance than their competence as business leaders. This may seem insignificant and inconsequential, but it has serious ramifications in how women leaders are normalised (or not) in our society. Professor Mavin says: “Women told us how distracting this is. Women have to be consciously aware of how they look at all times. The situation is sexist because the same level of continual judgement doesn’t apply to men and should be addressed. We are conditioned and socialised that it’s normal to ‘see’ men in positions of power. Gendering women’s appearance is one way of ‘seeing’ women as women – rather than as powerful leaders. “Also, it’s easier for women to get their dress ‘wrong’. A suit is the professional norm for a man but if a woman wears a similar style, she can be seen as encroaching on masculine territory.

2018

“The situation is exacerbated by the way in which women are portrayed in the media. Some women leaders won’t engage with a journalist if they are questioned about their clothes or family. They don’t want the media messages to be focused on these issues; they are leaders in significant responsible positions, delivering incredible work and want to talk about pertinent business issues – not where they bought their clothes or shoes.” The study highlights two main strategies that women deploy for dealing with the situation. The first strategy is to shift the focus away from the body and appearance. Some women do this by ‘calling out’ sexism directly, so that the focus is on competence, ability and intellect rather than appearance. Others refuse to engage with media unless there are agreed boundaries around a focus of the business and their organisation. The second strategy is to keep the focus on appearance but look and dress ‘professionally’. Even this is a difficult balance; anything that reveals ‘too much’ draws attention to the body, while conservative suits and haircuts – such as a Hilary Clinton-style bob and pant suit – are acceptable but get commented on as being boring. Professor Mavin continues: “Women who adopt this strategy aim to neutralise any discussion about appearance by looking professional ‘enough’ to be taken seriously. Wearing a garish dress, having an unusual haircut or being overweight is viewed as automatically attracting attention for the wrong reasons and undermining women’s credibility for top leader roles. “The research shows that sexism is still alive and well in the corporate and organisational world – because women don’t wear a suit, shirt and tie. It is time for this gendering through appearance (by men and women) – to stop. It should be called out. If racism isn’t acceptable in football, why does sexism continue in business? “The study aims to bring this sexism to the surface to encourage business leaders and organisations to consider the impact of, and crack down on, appearance sexism in the workplace. It may also help to effect a change in government policy so that sexist reporting and imagery in the media is banned.”

Professor Mavin recently presented findings from the study to the North East Dynamo Executive Women Leaders in IT programme and has held discussions with key policymakers and the Government Equalities Office about the way in which women business leaders are perceived and portrayed. Findings from the research project have informed two Government Equalities Office reports on body image and confidence, while she has also been working with colleagues across UK universities on a three-year project, funded by the ESRC, to challenge gender-based misrepresentations of women business leaders and professionals in the media.

Sexism is still alive and well in the corporate and organisational world. If racism isn’t acceptable in football, why does sexism continue in business?

As part of this Professor Mavin was involved in a round-table meeting of journalists, academics and business leaders in the House of Commons, where conversations focused on current representations of women in the media, and the challenges and changes needed to portray women in less gendered ways. Professor Mavin, who has been nominated for a Northern Power Women Award 2018, says: “Inaccurate and gendered media portrayals of women are a wider societal issue, not just a problem in business. These portrayals reinforce stereotypes of how a woman should look and behave and undermine women’s leadership when they don’t live up to perceived gendered norms. “There are wider societal issues with the media’s obsession with women’s bodies and the Government Equalities Office is working to address these. There is evidence to show the negative impact for young women and girls, who assess themselves against media images of how they ‘should’ look; for example, against how celebrities are portrayed. This can lead to lack of self-confidence, and more serious problems including eating disorders or drug and alcohol abuse. “The impact of the focus on women leaders’ bodies and appearance should not be underestimated – it’s one way of making sure women leaders are still out of place and not normal. This study provides a starting point for challenging this sexism and furthering research that will help to address these vital issues in society.”

WOMEN LEADERS STILL FACE BARRIERS TO BUSINESS SUCCESS

ISSUE #6

IMPACTING BUSINESS | Dr Josie McLaren

REACH | Research Matters

Has EVA had its day? Several years ago, a new management control system called Economic Value Added (EVA) was patented and developed as a measure for maintaining and creating value with several high-profile companies in the UK and US, for example Coca-Cola, Lloyds Bank and Tate & Lyle, implementing it as their main management accounting system. While some practitioners and consultants have championed the success of this system in both public and private sector organisations, experts at Newcastle University Business School have highlighted key shortcomings of EVA and its ineffectiveness as a long-term, sustainable measurement tool under certain conditions. In a recent study, Dr Josie McLaren, Senior Lecturer in Accounting and Finance, has charted the creation, use and eventual rejection of an EVA-based management accounting system in three large, exnationalised infrastructure firms in New Zealand over a period of more than 10 years. She conducted indepth interviews with staff in each firm at the start of the period in 2001, and another set of interviews a decade later, when the business world was grappling with the after-effects of the financial crash of 2008. Dr McLaren found that the system failed in all three cases, mainly due to external factors such as increasingly challenging economic conditions and the introduction of new International Financial Reporting Standards. Internal pressures, including the way in which staff applied the system, also contributed to its downfall. The research findings can help company directors understand the strengths and limitations of EVA in particular business environments and they could also be of interest to regulators as they highlight the fact that the suitability of EVA should be questioned as a mechanism for determining prices in monopoly businesses.

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Dr McLaren says: “Developed and patented by Stern Stewart & Co, EVA is defined as net operating profit after tax, minus the cost of all capital – debt and equity – that has been invested in an enterprise. It is based on sound, well-established economic principles and, in some cases, it can be a useful guide to the financial performance of a business because it takes into account the cost of capital. Simply looking at accounting profit isn’t enough; a firm could be breaking even in terms of accounting profit but making a loss if it is failing to cover the cost of the invested capital. “Stern Stewart & Co claims that EVA can work in any organisation but our research shows that in certain conditions, such as economic recessions or periods of financial crisis, this system is much less effective. Companies tend to respond to failing credit markets by conserving cash balances to bolster their business and EVA is then no longer an appropriate objective.

The research findings can help company directors understand the strengths and limitations of EVA in particular business environments.

“In my second round of interviews in 2011, respondents also highlighted the extra workload placed upon them by International Financial Reporting Standards, which became the global standard for the preparation of financial statements. Making sure they complied with these regulations became an immediate priority, rather than adhering to the principles of EVA.” The research also found that the application of EVA in each of the companies resulted in internal pressures felt by staff. One interviewee remarked that some managers struggled to understand it; another said that the system was difficult to use because it was subjective and not supported by traditional accounting standards. Some managers eventually stopped paying attention to it; others decided to modify it by simplifying the calculations, thereby reducing its effectiveness.

“The measure created uncertainty. The various adjustments that were made to tailor it to each company, and the absence of EVA-based accounting standards, made it difficult for managers to calculate. It’s natural in a market environment to look for benchmarks in performance or prices to enable comparisons to be made, but this was impossible with EVA.”

need for further exploration of the measure and its effects on other types of companies with different objectives. It also demonstrates the importance of longitudinal studies in order to fully understand the impacts of systems within firms.

Dr McLaren became interested in this research topic after visiting New Zealand in the late 1990s and discovering that EVA was described as ‘the next big innovation’. It was relatively unheard of in the UK, however, so she carried out further research on the subject and eventually secured funding from the Chartered Institute of Management Accountants to conduct an initial study on EVA and a series of interviews within the three New Zealand companies.

“My research showed that, although EVA was eventually rejected by all three companies, it wasn’t just a management trend. Stern Stewart & Co still exists as an agency and the New Zealand Treasury encourages the use of this measurement for Crown businesses. In China, state-owned enterprises are required to report EVA information. This shows that the relevance of EVA can go beyond decision-making and control within a firm. However, the results demonstrate that there are dangers inherent in using it as a wider governance and pricing mechanism.”

This is the first study of its kind to critique the lifecycle of an EVA-based management accounting system, and it has highlighted the

Dr McLaren is returning to New Zealand in 2018, when she will renew her contacts with the three companies and the Treasury.

Dr Josie McLaren Senior Lecturer in Accounting and Finance

McLaren J, Appleyard T, Mitchell F. The Rise and Fall of Management Accounting Systems: A Case Study Investigation of EVA™

For further information about our research, visit ncl.ac.uk/business-school

Winner of the British Accounting and Finance Association Prize for the best accounting paper published in The British Accounting Review in 2016

Dr McLaren says: “Internal pressures arose as a result of the unintended outcomes brought about by EVA. With some firms it created conflict between business unit managers, who sought to increase their unit’s EVA at the expense of overall firm value.

HAS EVA HAD ITS DAY?

ISSUE #6

IMPACTING BUSINESS | Dr Ana Javornik

REACH | Research Matters

The important thing to keep in mind is that if the potential of AR is to be realised, companies need to focus on gaining a better understanding of how the technology influences consumer responses.”

Consumers don’t want their lives to become digitalised; they want to use elements of the virtual world to improve aspects of the physical world in which they live.

Dr Javornik has spent several years researching consumer responses to AR in different situations. In one laboratory experiment, participants were asked to look for their preferred model of sunglasses or furniture by using an AR app or a static image. The results consistently showed that when participants saw the element in an AR environment – such as seeing a pair of sunglasses simulated on their face or a virtual chair in their office – it created a far more immersive experience for them than if the sunglasses were simply stuck on their online photo or if the furniture was located in a random virtual room. Dr Javornik says: “From this experiment we could see that people using the AR app had positive attitudes towards it and were willing to tell others about it. However, in that context these effects didn’t seem to extend to the products themselves or the brands, just the technology.” Further experiments were conducted to determine how attitudes to the brands could change if the app was tailored more closely to the consumer’s individual preferences. One study explored how consumers use AR to try on make-up in a store. The app used in the study allowed participants to put on virtual lipstick or eye shadow that moved with their faces.

The power of augmented reality Augmented reality (AR) is an emerging technology that’s rapidly changing the way in which companies interact with their customers.

2018

Not only did participants enjoy experimenting with different looks and styles, the fact that the AR app was deployed in a familiar retail setting meant that they related to the products as well as the technology. In other words, they were more likely to buy the products and acknowledge the value of the app as a useful shopping tool, not just for playing around.

How to realise AR’s potential in promoting and selling products is a challenge that has been taxing marketing experts around the globe but new research by Newcastle University Business School could help to shed light on this puzzling dilemma. Dr Ana Javornik, Lecturer in Marketing at Newcastle University Business School, says: “AR technology is not a new concept; it was first developed in 1968 at Harvard University when computer scientist Ivan Sutherland created an AR head-mounted display system. However, almost 50 years on, it is clear that marketers have yet to fully exploit the potential of AR in a commercial context. “Some manufacturers have used the technology to highlight various production processes, for example, but in a consumer context some AR apps are sometimes still seen as gimmicky rather than useful – however this trend is really starting to change.

Dr Ana Javornik Lecturer in Marketing

Javornik A . What Marketers need to understand about augmented reality

THE POWER OF AUGMENTED REALITY

Another study showed that when participants frequently used a similar AR make-up app on their phones over a five-day period, they reported that the technology was not only enjoyable but also useful in helping them decide which make-up they wanted to buy. Dr Javornik says: “If the AR experience is just a one-off episode, which was true of the laboratory experiment, people will automatically be drawn primarily to the technology, especially if they haven’t tried it before. However, if the AR app is cleverly used in an environment that the customer can relate to, it has the capacity to influence consumer purchase activities.

“AR is therefore useful to consumers as it can, for instance, help them to decide which products to buy before physically trying them on or to experience something in a new way. Marketing experts can also use my research to adapt their AR strategies to fit the changing needs of their customers. “Consumers don’t want their lives to become digitalised, they want to use elements of the virtual world to improve aspects of the physical world in which they live. This is one reason why people like Snapchat’s AR feature, which allows users to play with different visual effects to transform ordinary videos into shareable stories.” There are limitations to AR, however. The technology is currently not sufficiently advanced to allow for accurate 3D modelling in certain situations, so there is much advancement that is expected to emerge in the field in the coming years. However, the potential for AR is vast and the technology is being applied across a whole host of industries, including tourism, retail, computer gaming, fashion and manufacturing. Dr Javornik says: “AR apps could offer innovative stakeholder engagement with cultural institutions, as we have shown in an interdisciplinary project where I collaborated with University College London, English National Opera and creative agency Holition. We observed the attitudes that opera singers and theatrical make-up artists developed for virtual ‘try-on’ apps: the AR mirror showed the potential to support singers as they were getting into character and building their roles, while make-up artists perceived it as a helpful tool for developing the artistic looks for each character. Visitors also interacted with the mirror to see what they’d look like as one of their operatic characters.” AR can help companies and public sector organisations to promote and sell products, win and retain customers and boost the appeal of their brand. It can also educate consumers about an expensive product or brand they really care about. As the technology becomes more sophisticated, the potential of AR will increase rapidly and marketers who can successfully integrate it into the customer experience will be the ones who stand out from the crowd.

For further information about our research, visit ncl.ac.uk/business-school

ISSUE #6

IMPACTING BUSINESS | Dr Yang Zhao

Strong director networks can fast-track Merger & Acquisitions It’s a common practice for firms to invite top managers of other corporations or bankers to serve on their board of directors.

REACH | Research Matters

Despite some legislative restrictions, in UK listed companies there are many interlocking directorships that create value for companies and allow those who work at boardroom level to gather information on corporate strategies, sector trends, executive remuneration and managerial vacancies in other companies. Dr Yang Zhao Lecturer in Banking and Finance

Renneboog L, Zhao Y. Director networks and takeovers.

Until now, little research has been conducted on the impact of these networks on company takeovers, but a new study has highlighted key trends that could help firms and shareholders generate greater value from a merger or acquisition (M&A). Dr Yang Zhao, from Newcastle University Business School, and Professor Luc Renneboog, from Tillburg University in the Netherlands, have conducted research which shows that when two firms are connected via their directors, the probability that they merge or that one firm takes over the other is significantly higher than when the firms are not connected at all. Dr Zhao says: “Takeover activity is affected not only by direct links with other firms but also by the indirect connections of the board and chief executive (CEO) of the bidding firms. Our research has found that if the directors hold many connections, acquisitions frequently occur. “Better connected companies are more active bidders. When a bidder and a target have one or more directors in common, it’s far more likely that the takeover transaction will be completed successfully.” In his research, Dr Zhao analysed acquisitions in the UK from the early 2000s to 2013, looking at the length of time it took to complete the transaction, how well the directors of each company knew each other, and how the market reacted to the deal. He found that if the directors of bidder and target companies were well connected, not only was there a greater probability that the takeover would go through, the time it took for the deal to be completed was shorter and the whole process was generally smoother and more efficient. Well-connected targets were more likely to accept offers that involved the bidder taking an equity stake in the business, while directors of the target firm who knew directors in the acquiring company had a better chance of being invited onto the board of the combined firm following the M&A.

2018

STRONG DIRECTOR NETWORKS CAN FAST-TRACK MERGER & ACQUISITIONS

Directors’ connections can create genuine value for companies and shareholders in the M&A process.

Dr Zhao says: “These connections have a clear impact on the takeover strategy and process. They help to build trust and this makes it easier to integrate the two businesses in the months after the M&A has taken place. “My research highlights how directors’ connections can create genuine value for companies and shareholders in the M&A process. It could also help intermediaries, such as lawyers and accountants, who are working on behalf of the bidder or target firm to get the deal done.” However, the study also indicated that the market did not acknowledge the impact of these connections when evaluating the M&A. Dr Zhao says: “When the deals were announced to the market, the share price reactions to connected M&As were relatively small and did not differ that much from reactions to unconnected M&As. This suggests that analysts did not realise that the two parties involved were connected, or perhaps they didn’t believe it to be important. “More research into this issue is needed but our study has at least shed some light on the understanding of M&As and director networks.”

For further information about our research, visit ncl.ac.uk/business-school

ISSUE #6

IMPACTING BUSINESS | Dr Fabrizio Casalin and Dr Sara Maioli

REACH | Research Matters

Keeping control of business

These results highlight several useful insights for company managers as they try to make their businesses more efficient, productive and profitable. Dr Casalin adds: “The structure of the upper and lower-stream supply chain has a sizeable impact on inventory holdings. Managers can create value for companies by increasing the concentration of suppliers and decreasing the density of the customer base.

The manufacturing industry is a major driver of trade in almost every country across the world. Companies design, engineer and, in many cases, export products across the globe, generating business, creating jobs and boosting economic performance. The profitability of these firms often depends, not just on production volumes and certainty of demand, but also on good stock control and effective management of customer and supplier relationships – and it’s this topic which informs a new research project undertaken by Newcastle University Business School. A research team made up of Dr Fabrizio Casalin and Dr Sara Maioli of Newcastle University Business School, Dr Gu Pang, formerly of Newcastle University Business School and Mr Ting Cao, Senior Data Analyst at IBM China, explores the links between supplier and customer-base concentrations and inventory holdings in 516 manufacturing firms in China. They then go on to look at the relationships between inventory, bad debt and two forms of financing used to extend credit to customers and fund the purchase of supplies: account receivables and payables. As well as contributing to the growing strand of literature on inventories and supply chain structures, the research highlights how inventory management is affected by customer and supplier clusters and volumes of payables and receivables. In doing so, it could help manufacturing firms exert greater control over these important influences and ultimately become more efficient and profitable. To explore the relationships described above, the research team analysed the corporate reports and annual financial statements of Chinese listed manufacturing firms, collecting data on the volume of transactions each company had carried out with their five largest suppliers and customers. Since such statistics are not readily available from the current downloadable academic databases, they were extracted from the annual financial statements using a text-sourcing algorithm.

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“Also, the fact that higher levels of bad debt have a negative effect on inventories suggests that managers should extend receivables to customers with particular care. The trade-off between the issuance of receivables and the likelihood of facing non-performing loans requires skilful judgement, constant monitoring and gathering of information on the lower stream of the supply chain.

The dataset was then compared with a wide range of balance sheet indicators including inventories, assets, sales, payables and receivables, as well as other company-specific indicators such as the size and financial performance of firms.

“The research also showed that firms with less constrained access to payables are less sensitive to the level of bad debts. Thus, companies with full access to trade payments can benefit from a more flexible management of inventories – something that managers should take into account when shaping their supplier base.”

The study showed that firms with a highly concentrated supply base had lower inventory levels. The research team posit that this finding may be due to the strong levels of trust and coordination that such firms built with suppliers as they are able to manage these relationships effectively.

The study is the first attempt to unravel the relationships between supply and customer bases, payables and receivables, and inventory holdings. It also found that the main conclusions generally held true when breaking down the sample of companies into six distinct industrial segments: machinery, electronics, food and beverages, chemicals, pharmaceuticals and metal manufacturing.

On the other hand, companies with a high customer density tended to retain large volumes of stock as a result of the bargaining power exercised by customers. Dr Casalin says: “Given the predominant role of Chinese firms in international trade, those that rely on fewer customers might fear over-exposure to the risk of stock-out – or running out of stock – which could result in the loss of precious business. That’s why they tend to keep their inventory levels relatively high. Such a risk becomes more severe for firms engaging in international trade because sourcing supplies from overseas can be costlier and less reliable than sourcing them from the domestic market. International markets have a large variety of products – and customers are prone to switch supplier if there is any danger of stock-out.”

The study has laid down foundations for further research into different types of companies, their position in the supply chain and the degree to which they do business in overseas markets. Dr Casalin says: “This study shows that good inventory management is an important factor in creating value within a company. By shaping supplier and customer bases, managers can have a direct impact on the profitability of a company and therefore generate value for shareholders. Further research could focus on whether the company operates in the business-to-business or businessto-consumer market, which could be an important determinant of inventory holdings. Our study has provided a basis for this research.”

When the analysis was extended to the role of financial factors, the study found that companies with high volumes of payables and receivables also had larger amounts of inventory. However, firms that were more exposed to bad debts – or the likelihood of customers defaulting on payments – tended to reduce their inventory levels, although this relationship became less severe when a company was less financially constrained and had access to large volumes of payables.

Dr Fabrizio Casalin Lecturer in Banking and Finance

Dr Sara Maioli Lecturer in Economics

Casalin F, Pang G, Maioli S, Cao T. Inventories and the concentration of suppliers and customers: Evidence from the Chinese manufacturing sector

The structure of the upper and lower-stream supply chain has a sizeable impact on inventory holdings.

For further information about our research, visit ncl.ac.uk/business-school

KEEPING CONTROL OF BUSINESS

ISSUE #6

IMPACTING BUSINESS | Professor David Higgins

Buy British campaigns fall flat

REACH | Research Matters

Any campaign to promote homegrown products has to depend on a strong manufacturing base and at the moment Britain doesn’t have this.

As Britain prepares to make its exit from the European Union, the UK government has come under mounting pressure to develop a strategy for protecting, building and nurturing trade agreements with EU countries. With protectionist sentiment on the rise, there have been growing calls for ministers to encourage British people to buy home-grown goods, in the same way that President Trump has urged American people to boycott foreign products and give their preference to those made at home. Professor David Higgins Professor of Accounting and Finance

Higgins D, Clayton D. The ineffectiveness of ‘Buy British’ campaigns

However, while a post-Brexit ‘Buy British’ campaign may appeal in some quarters, a new study shows why this may prove ineffective and why the UK government may be better off pursuing a different strategy for protecting British trade once the departure from the EU becomes reality. Recent research from Professor David Higgins of Newcastle University Business School and Dr David Clayton of York University has highlighted the failure of Buy British campaigns in the 1960s and 1980s. The study also suggests that, due in part to Britain’s diminished manufacturing base, the chances of a successful similar campaign in the post-Brexit era is remote. Professor Higgins says: “Campaigns to promote the purchase of domestic products tend to gather pace in times of economic crisis or when big political events such as Brexit occur. The problem is that, in Britain, manufacturing is generally not very strong if you discount certain sectors such as aerospace and high-value, niche products. “Any campaign to promote home-grown products has to depend on a strong manufacturing base and at the moment Britain doesn’t have this.”

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Professor Higgins and Dr Clayton conducted extensive research into two previous Buy British campaigns to see whether any lessons could be applied in the current environment. In exploring the campaigns of the 1960s and 1980s, a range of factors were analysed, including relevant legislation, government policies on economic affairs, the rhetoric of key business groups and media commentaries on the campaigns. The study showed that, while there were differences in the political landscapes of these eras, both campaigns were ineffective. In the 1960s, although there was considerable scope for a government initiative to promote home-grown products before Britain’s ascension to the European Economic Community, such a move failed due to Treasury constraints on national advertising campaigns. Nationalised industries, which back then accounted for a large proportion of Britain’s economy, relied mainly on industrial resources rather than consumer durables so any government promotion of British product purchases in this instance would have been futile. In addition, these industries were already directing more than 90% of their purchases to domestic suppliers. Efforts to encourage private businesses to run the campaign also proved ineffective. The Confederation of British Industry (CBI) refused to take the lead because it would go against the organisation’s desire for free trade, where goods and services are sold on merit, not on the basis of their origin.

Professor Higgins’ research found that the Buy British movement failed once again in the 1980s, although under different circumstances. By then Britain had signed up to the Treaty of Rome, a landmark piece of legislation that created a large free trade area to boost business in Europe. The law also required the reduction and eventual abolition of tariffs, as well as the elimination of measures that would have ‘equivalent effect’, such as the promotion of one country’s goods over another. “This meant that any government intervention to promote domestic trade would have contravened Britain’s treaty obligations,” says Professor Higgins. “The only way to overcome this restriction was for companies to voluntarily mark their products ‘British’. However, this was not a rational strategy for most firms to follow, as overseas consumers generally considered British goods to be of inferior quality to those sold in their own country. “By using a British mark, companies effectively risked devaluing their pre-existing brands by associating them with inferior products. “Our conclusions are that, in the 1960s and 1980s, firms acting individually or collectively via industrywide bodies did not want to promote their products using ‘British’ marks. Action required top-down pressure from government to persuade consumers to buy British – but that didn’t happen for the reasons I’ve outlined.”

BUY BRITISH CAMPAIGNS FALL FLAT

So, what lessons can be learned from these two failed campaigns? The first is that it is difficult to encourage the purchase of home-grown products in a world where many countries – and consumers – value liberalism and free trade. Another conclusion is that such a campaign can only take place if the country’s manufacturing industry is able to sustain it. Britain’s share of world trade in manufactured goods has slumped from 25% to less than 10% since the 1950s, while reliance on imports has grown rapidly. Today, Britain still imports significantly more than it exports and the economy is powered largely by service industries. Professor Higgins says: “Ironically, in the post-Brexit era, the UK government would be in a stronger position to lend its support to a Buy British campaign but our manufacturing base isn’t strong enough. There needs to be a massive rebalancing of the economy away from service industries and towards manufacturing. “The problem is that this would require a substantial influx of new skills because much of our manufacturing expertise has been lost overseas. Our research showed that consumers of British goods place more value on innovation and engineering design than price, so there needs to be a 20 or 30-year plan to encourage more people to become highly skilled in these areas.”

For further information about our research, visit ncl.ac.uk/ business-school For related debates, see: www.cambridge.org/ core/books/brandsgeographic-originand-the-global-ec onomy/3D989B7 BA79438601AFD 09635878FA87

ISSUE #6

IMPACTING BUSINESS | Dr Elena Chatzopoulou

REACH | Research Matters

behaviour, has undertaken ground-breaking research that could help entrepreneurs promote their ethnic restaurants more effectively and strengthen relationships with their customers.

A Greek restaurant has a better chance of being successful if it is faithful to tradition; by serving Greek food made with original ingredients.

In her paper entitled “Quality Conventions Theory and the Communication of Authenticity: evidence from Greek restaurants in the UK and Greece”, Dr Chatzopoulou explores the concept of authenticity in helping to foster a sense of customer loyalty. The aim of the research is to discover the factors that make a Greek restaurant ‘authentic’ in the eyes of consumers and restaurateurs. Drawing on existing academic frameworks, Dr Chatzopoulou also attempted to categorise the different types of ethnic restaurants and their associated characteristics. Interviews were conducted with restaurant owners in the UK and Greece, and with consumers from a variety of different social backgrounds and nationalities. Participants were shown two sample Greek ethnic restaurant menus and asked specific questions about the quality of the cuisine on offer, the ingredients, price, the ethnicity of the staff and how far the menu swayed from perceived ethnic norms. The questions were designed to establish participants’ attitudes to food quality and how ‘authentic’ they perceived these restaurants to be. Three main types of restaurants were identified: market-oriented outlets that are more likely to serve food from different origins and adapt their menus to fit the tastes and price points of their customers; domestic-oriented eateries that are faithful to tradition; and ‘inspirational’ restaurants which focus on a niche market by offering innovative recipes that go beyond the specific traditions of Greek cuisine.

Authenticity is the key ingredient The highly competitive nature of the hospitality trade means that restaurateurs have to work hard at finding innovative ways of attracting and retaining customers.

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This is especially important in the booming ethnic cuisine business, where restaurateurs grapple with a common problem: how to provide food and drink that mirrors a particular culture while ensuring that their eaterie is unique enough to stand out from the competition. It’s a difficult puzzle to solve but Newcastle University Business School may just have found the answer. Dr Elena Chatzopoulou, an expert in marketing management and consumer

Dr Elena Chatzopoulou Lecturer in Marketing

drink from different cultures are perceived to be lacking an identity. As one respondent, a UK-based Greek restaurant owner, remarked: “I can’t please everyone. If someone doesn’t like Greek food, don’t come here.” Dr Chatzopoulou said: “Generally customers don’t recommend market-oriented restaurants because they are thought to be inauthentic and not of high quality. According to the restaurateurs, a Greek restaurant has a better chance of being successful if it is faithful to tradition; by serving Greek food made with original ingredients, for example. “It’s vital that ethnic restaurants have an identity. The research found that customers were more likely to recommend a restaurant to others if it is faithful to tradition. A traditional restaurant brings out a sense of nostalgia in some customers, perhaps because it reminds them of a previous holiday in that country.” However, the research also found that respondents who did not have strong links with Greek culture tended not to associate authenticity with tradition. One female respondent, who has lived in several countries outside of Greece for the last 20 years, said Greek restaurants abroad had “stuck with the taverna style for too long.” She said: “People immediately associate Greek cuisine with just tavernas, moussaka dishes… which is fine to have and I think it’s important to keep this but, at the same time, enrich it with different offerings. I think that would be really nice to see.”

A key finding from the research was that consumers tended to favour restaurants with a strong identity than those which tried to cater for a variety of tastes.

For her, authenticity and quality are defined more by innovation – such as the ability of the chef to surprise and delight customers with tastes from other countries. Yet these ‘inspirational’ restaurants are less likely to be recommended by customers if they move too far from tradition because they’re in danger of losing their identity.

Dr Chatzopoulou says: “Market-oriented ethnic restaurants tend to have a globalised feel and serve cuisine such as burgers, paninis and sandwiches as well as authentic Greek food. Price is not really an issue for consumers; many say they would be happy to pay a bit more if they know they are getting a high-quality meal.

Dr Chatzopoulou said: “Owners of inspirational restaurants want to adapt their offering to make it unique, but in doing so there’s a danger that it loses its identity. Offering fusion cuisine, which combines elements of different culinary traditions, can be successful but only if the restaurant has a clear identity.”

“Restaurateurs who base their offering predominantly on pricing and value for money may therefore be missing a trick.”

Chatzopoulou E, Gorton M, Kuznesof S. Defining food authenticity: An efficient promotion for ethnic restaurants

For most respondents, an ethnic restaurant’s authenticity is defined by the strength of its identity. Eateries that offer a mix of food and

AUTHENTICITY IS THE KEY INGREDIENT

For further information about our research, visit ncl.ac.uk/business-school

ISSUE #6

IMPACTING BUSINESS | Ade Oyedijo

REACH | Research Matters

All’s fair in business It’s generally perceived that strong buyer-supplier relationships depend on high levels of mutual trust and respect, which in turn can help a company to win business and generate profits. However, new research has revealed that some companies are operating without truly understanding what “fairness” is, or its value in helping to form healthy, sustainable relationships with supply chain partners. Ade Oyedijo, a PhD student at Newcastle University Business School, has explored these issues in a study which identifies key factors that influence or affect how fairness is perceived by supply chain partners. His research could help businesses build and strengthen supply chains in different sectors. He says: “Fairness is a subjective concept and people’s perceptions of it depend on various factors including their age, personal upbringing and religion. However, it is also dependent on the employer’s size, business strategy, values and mission statement as well as external circumstances such as changes in government or the introduction of new industry regulations.” Mr Oyedijo conducted interviews with managing directors, chief executives, purchasing managers and supply chain staff and discovered major differences in how people defined and perceived fair behaviour. He spoke with manufacturers, service sector companies and public healthcare organisations. “In a supply chain context, fairness has a lot to do with treating people and businesses how you would want to be treated,” says Mr Oyedijo. “The emphasis on people is due to the fact that supply chains are run and managed by human beings who have feelings and emotions. In my research, people broadly understood that treating supply chain partners well was good for business but there were major differences in how they defined and perceived fair behaviour. A company manager who believes he is treating his supplier well might be surprised to learn that his supplier thinks otherwise. “The concept of fairness is very difficult to measure, which is probably why many researchers have previously shied away from the issue.

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“What my research highlights is the need for a clear definition of fairness so that companies can operate to standards that are universally acceptable in industry or the public sector. “We need regulators to implement standards similar to the international Fairtrade system, for example, which governs the way in which food producers trade with the supply chain and its consumers.”

Fairness is a key skill that companies should learn so that they can gain and retain competitive advantage in the marketplace.

Government ministers could also consult the research as they work out how to plot Britain’s exit from the European Union. Interview respondents cited Brexit as an external factor that could alter how fairly EU companies thought they were being treated by UK suppliers and customers. Mr Oyedijo says: “Brexit is likely to bring about major changes that are outside the control of UK businesses. Import tariffs could force a UK company to change the price they charge for a particular product, for example, and there may also be changes in product quality and expertise depending on future labour laws between Britain and the EU. These are factors that are external to supply chain practitioners but have a role to play in defining perceptions of fairness in the supply chain.

“All of this could affect what may be perceived to be fair or unfair, and could ultimately damage the trust and longevity of established relationships between British and EU companies. This means that the UK government may need to consult with business groups to develop a post-Brexit strategy that ultimately won’t damage Britain’s trade prospects. “Based on my research so far, I believe that fairness is a key skill that companies should learn so that they can gain and retain competitive advantage in the marketplace. Companies that are perceived to be fair are usually far more successful than those that aren’t.

Ade Oyedijo PhD student

“Fairness and trust go hand in hand. If one isn’t there, neither is the other and business becomes purely transactional, which means it’s less likely to be sustainable. Companies are in business to make profit and this research highlights that fairness in a supply chain context is simply good business.”

For further information about our research, visit ncl.ac.uk/business-school

Under the Fairtrade system, farmers receive a guaranteed minimum price for their products even when world market prices fall, plus a premium which is typically reinvested in the local community or in farm improvements to increase income. In return, farmers are expected to use sustainable production techniques to protect the environment and provide decent working conditions for staff. “The Fairtrade Mark is a standard that is recognised and respected by consumers around the world,” says Mr Oyedijo. “Consumers know they will get a product that has been ethically produced and sourced, and that their purchase will benefit farmers and local communities. That’s why so many people are willing to buy these products. “If regulators could introduce similar trading standards in other sectors, it would help to increase customer loyalty and retention levels and this can only be good for business. It would also help to reduce the difference in perceptions of fairness between supply chain partners.” As well as benefiting companies and regulators, Mr Oyedijo’s research could also help to strengthen the relationships between buyers and suppliers in the supply chain. By laying the groundwork for a recognised, established framework for fair behaviour in business, the study could assist individual companies in their efforts to incentivise, motivate and retain supply chain partners, which in turn could increase productivity, profitability and relationship value.

ALL’S FAIR IN BUSINESS

ISSUE #6

IMPACTING POLICY | Professor Robert Sollis

REACH | Research Matters

Don’t let the bubble burst Professor Robert Sollis talks about how the financial crash of 2007–2008 sent global financial markets into a tailspin and very few experts saw it coming.

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DON’T LET THE BUBBLE BURST

ISSUE #6

IMPACTING POLICY | Professor Robert Sollis

The US sub-prime mortgage crisis and collapse of US house prices were key reasons for the financial crash, which subsequently led to economic recessions in the US, UK and in many other countries. In the US housing market, problems arose because in the early and mid-2000s many banks issued large numbers of sub-prime mortgages (mortgages for borrowers with low credit ratings). This practice, which is now generally considered to be an irresponsible lending practice, along with low interest rates led to excessive consumer spending and a house price bubble. Borrowers also extracted cash from their homes to fuel discretionary purchases. As they stretched their income, they struggled to make mortgage payments and the housing market eventually collapsed – bursting the house price bubble. Before the collapse, most banks and borrowers believed that the housing market was secure and that house prices wouldn’t decline by a large amount, and many sub-prime mortgages were turned into mortgage-backed securities. However, as the mortgages began to lose their value, so did the financial securities that were built on them, causing widespread damage to companies, the public finances and the wider economy. It highlighted the need for central banks and financial regulators to form a strategy for predicting and dealing with asset price bubbles (a bubble is said to exist when the price of an asset exceeds the

2018

REACH | Research Matters

Investors with a long position in the asset – in other words, they have bought the asset – could make a big loss when the bubble bursts. One way of avoiding this is to not invest in assets if a bubble exists, or to sell the asset as soon as the bubble has started. Our techniques can be used to help to make these decisions, or to determine the stability of a particular currency. Sometimes a currency can appear relatively strong even though the economy in which it operates is not.”

Professor Sollis says: “Detecting whether bubbles exist, and accurately dating the start and end of bubbles, is hugely important for central banks and financial regulators. Our research will help them to decide whether financial markets are overheating or not and respond accordingly through monetary policy interventions. If there’s a sudden rapid rise in the FTSE index, for example, is this justified by the fundamental strength of the companies in the index, or is it driven by irrational behaviour on the part of investors?

The research could be used as a basis for further exploration of asset price bubbles, including for testing various theories on why these bubbles exist in the first place and for predicting when bubbles are going to burst just before they do.

“If central banks can more accurately determine the presence of a bubble, they will be in a better position to know how to deal with it. If they raise interest rates – a common tool to combat asset price bubbles – this can have detrimental consequences for the economy if no bubble actually exists. Without the presence of a bubble, price growth may have continued, so by raising interest rates a central bank could unwittingly have taken action that could stunt this growth. In some cases, it could even trigger an economic downturn or recession.

value that is truly justified by the current and future prospects for the asset). New research undertaken by Professor Robert Sollis at Newcastle University Business School can assist central banks and financial regulators with this challenging task.

If central banks can more accurately determine the presence of a bubble, they will be in a better position to know how to deal with it.

Composite stock market index to determine the start and end dates of the dot.com bubble, which arose when investors piled vast amounts of money into Internet business ventures. Existing techniques for dating the start and end of bubbles suggest that the bubble began as early as mid1995 and burst early in 2001, but when their new algorithms were applied, the start date was determined to be November 1998 and the end date was determined to be September 2000.

Professor Sollis has helped to develop a new statistical test and computer algorithms that can be used to ascertain whether an asset price bubble exists, when the bubble starts and when it ends. Along with his research colleagues, he has shown that for many assets, an existing statistical test for bubbles that has been popular with researchers is in fact biased in favour of concluding that a bubble exists, due to a weakness that was not previously recognised. The new test which they have developed involves modifying the existing test to correct this weakness. Professor Sollis undertook experiments to compare their new test with the existing test, focusing on the presence of bubbles in commodity price data, including gold, silver, platinum and crude oil prices. The original test indicated that nearly all of the commodity prices considered contained bubbles, but when their new test was applied to the same data, there was much less evidence to suggest the presence of a bubble. In some cases, there was no evidence of a bubble at all.

“There is still a lot of work to do on the topic of asset price bubbles,” says Professor Sollis. “For example, how do bubbles in the digital currency Bitcoin differ from bubbles in traditional assets such as gold, shares and bonds? How does quantitative easing, where central banks create additional money which they use to buy bonds so as to stimulate the economy, affect the presence of bubbles in financial markets? “If we can gain a better understanding of these and other issues, it will be of great benefit to policymakers, investors and risk managers around the globe.”

“Getting it wrong could be costly. The papers we have written can help banks determine whether a bubble exists or not, when it started and whether it has already burst.” Monte Carlo-style computer simulation experiments prove that the new test and algorithms developed by Professor Sollis and his research colleagues are more accurate than existing techniques. These experiments involve simulations of random data to represent possible future economic scenarios, similar to exploring the possible outcomes of spinning a roulette wheel in a Monte Carlo casino. Professor Sollis says: “If central banks use our techniques, they are more likely to implement the correct policies if they decide to try popping asset price bubbles. The techniques could also prove useful to investors, portfolio managers and risk managers working in the City. If an asset price contains a bubble, then at some point in the future the bubble will burst and the asset price will fall.

In a separate experiment, Professor Sollis applied the new computer algorithms they have developed to a sample of monthly data on the Nasdaq

DON’T LET THE BUBBLE BURST

Professor Robert Sollis Professor of Financial Economics

Harvey DI, Leybourne SJ, Sollis R. Improving the accuracy of asset price bubble start and end date estimators

For further information about our research, visit ncl.ac.uk/business-school

ISSUE #6

IMPACTING POLICY | Dr Oliver Mallett

Enterprise policy needs radical reform For years, successive governments have hailed the importance of small and medium-sized enterprises (SMEs) to the UK economy.

REACH | Research Matters

Phrases such as “driving force behind job creation” and “engine room of the economy” have been used to describe a group of businesses that make up more than 99% of private companies nationally. Governments have therefore often put SMEs at the heart of their enterprise policies, and spent a significant amount of money (as much as £8 billion annually), on the basis that helping these businesses can boost economic growth. However, a new study has questioned the effectiveness of these policies, claiming that many of the assumptions behind them are incorrect. Headed by Dr Oliver Mallett, Senior Lecturer in Organisational Behaviour at Newcastle University Business School, and Dr Robert Wapshott of the University of Sheffield, the ground-breaking research could eventually pave the way for a radical reform of UK enterprise policy. Dr Mallett and Dr Wapshott analysed UK political manifestos from 1964 to 2015 to examine the development of SME policy in political discourse. In particular, they looked at how the broadly defined category of SME has been characterised in the manifestos and assessed these characterisations in relation to existing evidence on this group of businesses. Dr Mallett says: “When we analysed how SMEs were characterised in political manifestos during the last 50 years, we found three main consistent themes. These businesses were generally seen to have the potential for growth but as struggling to access finance and as overburdened by

regulation. These assumptions about SMEs have consistently underpinned the policies aimed at using them to achieve wider economic ends. “However, these characterisations are inherently problematic when set aside research evidence. For instance, the majority of job creation is accounted for by a very small proportion of SMEs. The reality for many of these businesses is the threat of failure, with roughly half of all new businesses likely to fail within the first four years. A lot of these companies are what I’d call lifestyle or wage-substitution businesses; their owners are not seeking business growth and are often reluctant to hire new employees; instead, they are focused on providing themselves with an income. “It cannot be said that the performance of a few firms provides a helpful model on which to base a wider characterisation of SMEs or their potential role in the economy. The characterisation of SMEs as having growth potential is therefore wide of the mark; contraction or exit appears to be the most likely outcome over the longer term and a more accurate assumption to make is that a majority of SMEs are not focused on scaling up or creating lots of jobs.” When access to finance was considered, evidence showed that most SMEs had little desire to take on additional debt or equity finance to fund their expansion plans. They were particularly averse to equity deals that would allow other parties to take a stake in their venture. Dr Mallett says: “During the last recession there was much criticism of the banks for reining in lending. Our research shows that it was a demand-side problem rather than a supplyside issue; SME appetite for external finance

was weak. Perhaps wisely, during a period of significant economic uncertainty, SMEs focused on paying off existing debts rather than taking on new ones. The significance of government schemes to boost access to finance was also overplayed. For instance, the Enterprise Finance Guarantee Scheme introduced in 2009 to provide an alternative to bank funding represented only about 2% of the term loan market for SMEs.” The study also called into question the notion that SMEs are overburdened by regulation. Successive governments have assumed that a reduction in regulation results in lower costs for SMEs, making it easier to grow a business. However, evidence shows that many regulations have no effect on SMEs; an audit of government regulatory reform in the 2010–15 parliament found that 90% of the claimed cost reductions could be attributed to just 10 regulatory decisions. Further, regulatory change itself is challenging for firms who prize stability and predictability. Consequently, the relevance and impact of regulatory reform on SMEs may be limited and not worthy of the attention given to it by policymakers. “Our research shows that these assumptions are shared across the major UK political parties,” says Dr Mallett. “There needs to be a serious critical debate about government policy on SMEs. When ministers address wider economic concerns – job creation and economic growth, for example – do they need to concentrate on SMEs or are there more meaningful and relevant categories of business, such as high-growth firms and those with rapid scale-up potential? “Even the existing definition of an SME, which is widely used and accepted across Europe, is problematic because it obscures many differences that may be important for understanding how these firms operate, their individual goals and the different challenges they encounter. If government policy doesn’t take into account these differences, it will continue to be ineffective, so the underlying assumptions that underpin these policies need to be addressed.” Not only could UK and EU policymakers benefit from the research, business support groups could also view it as a useful benchmark to see if they are adequately representing the needs and concerns of their members. Small and medium-sized firms could also benefit from a critical review of current assumptions, which could lead to new policies that provide a better trading environment in which they can flourish.

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ENTERPRISE POLICY NEEDS RADICAL REFORM

There needs to be a serious critical debate about government policy on SMEs.

Dr Oliver Mallett Senior Lecturer in Organisational Behaviour at Newcastle University Business School

Wapshott R, Mallett O. Small and mediumsized enterprise policy: Designed to fail?

For further information about our research, visit ncl.ac.uk/business-school

ISSUE #6

REACH | Research Matters

IMPACTING POLICY | Professor Steve Hughes

Drone technology could be a lifesaver Professor Steve Hughes talks about how Newcastle University Business School is playing a key role in a new study that aims to measure the performance of ground and air assets in search and rescue operations, with the ultimate aim of getting the right asset combination to save lives.

The Business School teamed up with The Centre for Search Research (TCSR) to conduct an experiment at Northumberland National Park over two days in May, 2017. The aim was to deploy air and ground assets working against the clock to find randomly distributed targets over a two-kilometre area of open moorland.

globe involved in search and rescue operations, although further research is required to analyse the effectiveness of assets deployed in different terrains such as earthquakes, avalanches and at sea.

Air assets including fixed and rotary-wing aircrafts and unmanned aerial vehicles – commonly known as drones – took part in the exercise, while members from the Northumberland National Park Mountain Rescue Team and air scenting dogs searched the area on foot.

We wanted to look at a variety of search assets, on the ground and in the air, to see how their combined capabilities can assist search operations for missing people.

‘Exercise Northumberland’ was the first research project to compare the effectiveness of multiple search assets since the Home Office’s ‘O’Donnell’ experiments were published in 1987 and 2008. Since then, significant advances in new technology – such as the development of drones – have taken place; new methods for ground search have been introduced and new approaches to search management have been devised and adopted. Professor Steve Hughes, who led the experiment on behalf of the Business School, says: “A lot has been said about drone technology but we don’t know much about its usefulness in complex search operations. If we can learn more about this technology, we can understand how effectively drones can operate alongside other ground and air assets in different environments. This will allow us to assess the interoperability and effectiveness of different services and technology in saving lives in hazardous conditions. “The usefulness of drones depends on several factors including the quality of the information it provides and how quickly a human can interpret this information. It may take time to decipher a low-quality image, for example, which will lengthen the time it takes to search for missing people. “The weather also plays a major role in how effective drones can be. During our exercise, had conditions deteriorated any further we probably wouldn’t have been able to continue using the drones. The weather also has an influence on the effectiveness of other airborne assets, such as fixed-wing aircraft. “Ultimately, we wanted to look at a variety of search assets, on the ground and in the air, to see how their combined capabilities can assist search operations for missing people.” The recent project pioneered by Newcastle University Business School and TCSR provides a useful reference point for agencies across the

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DRONE TECHNOLOGY COULD BE A LIFESAVER

Professor Hughes says: “Deploying a drone in open moorland is different to using it in a search operation along the coast, for example. The effectiveness of a drone in a coastal setting may vary due to changes in wind speeds or visibility levels. “What we have to do is measure the performance of drones in different situations. This will allow us to understand how best to use them alongside other assets in search operations. “We also a need to develop more efficient lines of communication between the various agencies responsible for search and rescue operations.” TCSR said the research was an important addition to existing studies on the efficacy of search operation management. Peter Roberts, co-founder at TCSR, says: “The research is ground-breaking in terms of its scope and originality. The collaboration of the various agencies who have participated in and observed the experiment is unique. “We’re looking at new technologies and how, through a better understanding of their operational application, they can be used to help in the search for a missing person. “Drone technology, for example, is useful when used in conjunction with other search assets. It adds something to the search and rescue mission in certain environments. In essence, drones are another tool in the toolbox which trained searchers can use when trying to save lives.” In a period of funding cuts to public services, increasing frequency of natural or man-made disasters, cost-effective and efficient search and rescue methods, the interoperability of various assets is increasingly critical in the pursuit of saving lives.

Professor Steve Hughes Professor of International Organisations

Exercise Northumberland Research Report Carl Hamilton, Dave Perkins and Pete Roberts, The Centre for Search Research and Professor Steven Hughes, Newcastle University Business School

For further information about our research, visit ncl.ac.uk/business-school

ISSUE #6

IMPACTING POLICY | Dr Wessel Vermeulen

REACH | Research Matters

Migration can boost the economy How do countries make their economies stronger and robust enough to withstand future financial or economic shocks? It’s a challenge that governments across the world are facing and Dr Wessel Vermeulen, Lecturer in Economics at Newcastle University London, together with Michel Beine of the University of Luxembourg and Serge Coulombe of Ottawa University, explores how policymakers can use labour mobility as a market mechanism to control economic performance. He argues that a spike in income from production of natural resources, such as oil, gas or water, increases the size and value of this sector but has a negative effect on other parts of the economy. In other words, a boom in natural resources can trigger a slowdown in manufacturing and other areas of trade. While governments can use policy levers to manage imbalances in the economy, such as raising or cutting interest rates or introducing subsidies for certain industries, Dr Vermeulen suggests that an inflow of workers can also be effective in ironing out these peaks and troughs.

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Ministers should be wary of placing too many restrictions on the movement of labour because it can have a detrimental effect on the manufacturing industry – and the economy as a whole.

Dr Vermeulen says: “We found that the expansion of the non-tradable sector was smaller if the labour supply increased due to an inflow of workers. However, this depended on the type of migration channel.

To test the idea, he developed a theoretical model and applied it to 10 provinces in Canada over a 22-year period from 1987–2009. Three provinces were richly endowed with natural resource reserves; the other seven relied more on manufacturing for economic prosperity. The research looked at the effect of three types of migration on the economies of each province: permanent immigrants who arrived in the country under a traditional points-based system; temporary foreign workers enrolled on programmes designed to boost business; and people who found work after moving from one Canadian province to another. It is the first in-depth study of the role of immigration as a mechanism for controlling ‘Dutch disease’, where increased production of natural resources leads to a fall in the competitiveness of the manufacturing sector. Two key findings emerged from the research. Firstly, the size of Canada’s non-tradable sector – which includes public and business services, hotel accommodation, construction and real estate – increased over time and provided a greater share of economic wealth. Secondly, the migration of workers into the three provinces experiencing a natural resources boom had a significant mitigating influence on Dutch disease.

“While permanent international immigration had little effect, temporary foreign workers and interprovincial migration reduced the impact of Dutch disease – in this case, the squeeze on the manufacturing sector. This is probably because people in the last two groups tended to move to the area to find new work, whereas those in the first group may have just wanted a better overall quality of life rather than a change of job.” The research can help policymakers use migration as a tool to manage imbalances in the economy. “Migration is controlled by government,” says Dr Vermeulen. “Sometimes immigration and economic performance are seen as two separate issues but my research shows that they are linked. “Ministers should be wary of placing too many restrictions on the movement of labour because it can have a detrimental effect on the manufacturing industry – and the economy as a whole. A productive manufacturing operation can help to rebalance the economy and better protect it from future financial shocks. “Now that we have the data to analyse migration effects on different regions within a country, it could help national institutions exert greater control over economic performance.” As well as benefiting policymakers, the research could also be useful for business groups that represent key trades such as engineering and manufacturing.

“These groups want to have a free migration regime,” says Dr Vermeulen. “The bigger the talent pool, the greater choice companies will have when it comes to building a skills base that can make them more competitive. Business groups will always represent the interests of their members and lobbying for the free movement of trade will be high on their agenda.” From a UK perspective, the decision to leave the European Union could have a major impact on labour flows in the post-Brexit era. Some companies have expressed concern that tougher laws on immigration could damage industry, particularly the manufacturing sector which is already struggling to fill skills gaps in certain areas. “UK industry would not have performed as well as it has in the last 15–20 years without the contribution of migrant workers,” says Dr Vermeulen. “My research, which can be applied to different countries, suggests that it could be a mistake to rely solely on homegrown talent.”

Dr Wessel Vermeulen Lecturer in Economics, Newcastle University London

Beine M, Coulombe C, Vermeulen WN. Dutch Disease and the Mitigation Effect of Migration: Evidence from Canadian Provinces.

Dr Vermeulen’s study has laid the foundations for further research into the effect of migration on economic performance – for example, by looking at its impact on individual companies or particular groups of employers. He says: “If we do this, we can gain more insight into how an economy is performing. Do we need more diversity within a particular sector, for instance? Are we seeing the birth of more small businesses or is the economy being driven by the growth of a few large companies? “If governments knew the answers to these questions, they could adapt their policies accordingly.”

For further information about our research, visit ncl.ac.uk/business-school

MIGRATION CAN BOOST THE ECONOMY

ISSUE #6

IMPACTING SOCIETY | Dr Jo McBride

REACH | Research Matters

Time to remember the forgotten workers Just over a decade ago, the worst financial crash in living memory put thousands of people out of work, brought big institutions crashing down and wreaked havoc with public finances across the globe.

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TIME TO REMEMBER THE FORGOTTEN WORKERS

ISSUE #6

IMPACTING SOCIETY | Dr Jo McBride

REACH | Research Matters

in the morning and then during the evenings or at weekends, while some complained of a lack of control with their manager deciding which two days they could take off each week as their ‘weekend’. As well as having to contend with unsociable working hours and low pay, employees also said they had little job satisfaction despite a strong desire to work hard for their employer. The vast majority did not feel valued by their manager and were frustrated that their opinions weren’t listened to, while some complained of being micro-managed by controlling, inflexible bosses. Dr McBride says: “Successive governments have told us that employment is the best route out of poverty but that’s not the case for many of these forgotten workers. Around 5.6 million people in Britain are still paid below the pay threshold defined by the Living Wage Foundation as the minimum that people need to live on. Some of the people we spoke to never buy clothes, struggle to buy birthday presents and have not had a break from work for more than 10 years. “As well as the issue of low pay, many workers are having to compromise their quality of life and well-being just to make ends meet. Some workers are getting up at 4.00am to do their first job and by the time they finish their working day they’re not getting into bed until midnight. Some take annual leave entitlement to take on other jobs just to make ends meet.

What it also did was spawn a new generation of workers who, several years on, are still struggling to enjoy a decent quality of life despite juggling multiple jobs. The concerns, work-life experiences and challenges these employees face – dubbed the forgotten workers – have been chronicled in a new study by Dr Jo McBride, who has teamed up with fellow academic Dr Andrew Smith, from Bradford University, to explore the key socio-economic and policy issues surrounding low-paid work and multiple employment. The first study in the UK to focus on low-paid workers in more than one job, it could prove to be a valuable resource for government ministers as they look to form an effective strategy for helping people enjoy a better quality of life. Focusing on Yorkshire and the North East – two UK regions with high levels of unemployment, poverty and social deprivation – the researchers conducted extensive interviews with low-paid workers in

2018

several jobs, as well as with other individuals and organisations such as trade union officials, employers, poverty groups and foodbank organisers. Ranging in age from their late teens to their sixties, the workers were employed across a wide variety of industries including social services, care, catering, education, retail and the voluntary sector. Their employment contracts included full-time, part-time, temporary, seasonal, casual and zero-hours agreements. Workers were asked a series of questions about their experience of work, levels of job satisfaction and work-life balance – and the findings highlighted several key trends. Those surveyed had up to seven different jobs at any given time and many said they were struggling to make ends meet, with some using food banks to get by. Many had complex, fragmented and elongated work patterns and had to clock in early

Around 5.6 million people in Britain are still paid below the pay threshold defined by the Living Wage Foundation as the minimum that people need to live on.

“Workers on zero-hours contracts are also getting a raw deal. Despite claims that this type of contract offers choice and flexibility, there are major issues with insufficient wages and irregular hours which makes planning ahead very difficult and affects things such as arranging childcare and paying finances that are set each month such as rent. There’s a lack of transparency on how hours and shifts are allocated, and many feel they can’t turn down the offer of extra shifts in case they aren’t asked again.” Another key finding from the research was the poor work-life balance cited by many respondents. For some, long working days left little time for important family activities, such as picking up the children from school, family meals together and putting the children to bed. While some employers had a work-life balance policy in place, generally it was available for core staff only.

Dr McBride says: “This highlights the complex juggling act that these workers have to undertake on a daily basis. Many have a frenetic daily routine of dashing from job to job and trying to cover domestic and care responsibilities at the same time.” The study also gives some context into why the lives of forgotten workers are so challenging. It cites previous research from the Trades Union Congress (TUC) which shows that only one in 40 jobs created since the last recession is full-time. It also charts the government’s ongoing austerity policy, which has resulted in public sector cuts, reductions in pay and working hours, and a rise in zero-hours contracts and what is now termed precarious work. Against this backdrop, the study highlights a growing need for the government to form policies that enable workers to have access to a real living wage, rather than market-based minimum wage, with better security so that they can have a better quality of life. The study is sure to be a useful resource for ethical employers who are looking to make improvements to pay and working conditions to attract and retain staff.

Dr Jo McBride Senior Lecturer in Industrial Relations, Work and Employment

The Forgotten Workers: Low-paid Workers in Multiple Employment’ Dr Jo McBride, Dr Andrew Smith

“There are many beneficiaries of this research,” says Dr McBride. “Trade unions could use it to reinforce their lobbying activities on issues of poverty, low pay and working conditions. Unions face major challenges representing people with more than one job, particularly if each job has a different union recognised. This means that vulnerable workers, such as these people, are potentially left unprotected at some places of work. “Perhaps our research can bring about a change in legislation so that workers can be assured of decent working conditions, regardless of how many jobs they have. It also fits in with the Workplace 2020 initiative, which aims to generate improvements in working conditions for millions of people across the country. Our study might also be a useful tool for local governments and poverty groups when arguing their case for better public policy on this issue.” Dr McBride is hosting workshops with regional MPs, several think-tank groups on poverty, regional councils from Yorkshire and the North East, trade unions and poverty organisations to keep these vital issues firmly in the public consciousness. She also wants to compile additional evidencebased research that could be useful in future campaigns on workplace rights and social change. For further information about our research, visit ncl.ac.uk/business-school

TIME TO REMEMBER THE FORGOTTEN WORKERS

ISSUE #6

IMPACTING SOCIETY | Rosie Cao

Investments worth the risk If you had a spare £100 lying around, would you be prepared to invest it if there was a risk of losing the money?

REACH | Research Matters

What are the factors that would influence your investment decision? What is the maximum amount you’d pay and, on a scale of 1–100, how risky do you perceive that investment to be? These and other fundamental questions are being addressed in ground-breaking research by PhD student, Rosie Cao, who has explored a range of behavioural, cultural and linguistic factors that influence financial investment decisions. Drawing on information from 1,900 people across five countries – Great Britain, China, Singapore, the United States and Vietnam – she has used complex mathematical models to identify trends in investors’ decision-making processes and assess their willingness to take financial risks (financial risk tolerance), risk perception and risk attitude. Ms Cao says: “The basic aim of my research is to gain a better understanding of the risk profile of investors from different cultures and speaking different languages. The survey covered people who have already invested in stocks and shares, as well as other people who haven’t. “If we can identify the factors that influence our financial risk tolerance – in other words, our willingness to take financial risks – it can help to explain our investment decisions. This is important on many levels. Firstly, it can help fund managers to understand their clients’ attitudes to risk and make better investment decisions on their behalf as well as change their levels of financial risk tolerance. “The fact that the research covers different cultures and countries is also useful in helping professionals working in financial investment to widen their client base. Instead of just targeting clients in their own country, for example, fund managers have a better chance of winning work overseas if they understand the behavioural, linguistic and cultural trends that affect investment decisions there.” A third group of people who could benefit from the research are policymakers and regulators. “It could help them to devise new investment products to suit the risk profile of certain customer types,” said Ms Cao. “For example, my research indicates that older people tend to be less willing to make high-risk financial investments so they might benefit from lower-risk products.”

2018

INVESTMENTS WORTH THE RISK

The 1,900 people who participated in the research were asked a range of questions about their attitudes to and perceptions of risk, and their willingness to take risks when it came to investing their money. Several key findings emerged, including the reticence of older people to take risks and the fact that people from Eastern cultures, such as China and Vietnam, demonstrated higher financial risk tolerance levels than respondents from Western countries.

Rosie Cao PhD student

If we understand more about the way people behave, and the factors that influence their behaviour, we could improve society’s financial well-being.

Ms Cao says: “The main purpose of my study is to identify differences in individual financial risk tolerance with respect to age, cultural background and language. This will hopefully be the first step in constructing a more comprehensive model of human behaviour and decision-making processes surrounding financial investments.” While the research could benefit individual investors, fund managers, policymakers and regulators, it could also pave the way for further research that explores other elements of human psychology and behaviour. Ms Cao says: “If we understand more about the way people behave, and the factors that influence their behaviour, we could help society tackle other important issues such as obesity, smoking and excessive drinking. The same principles can be applied, just in a financial context. “My research is just the first step, but it opens up a whole world of possibilities to address key problems in society.”

For further information about our research, visit ncl.ac.uk/business-school

ISSUE #6

IMPACTING SOCIETY | Professor Jonathan Sapsed

REACH | Research Matters

Fuse helps businesses get better connected The UK is developing a global reputation for its creative talent, which generates billions of pounds each year for the national economy.

Creative Fuse has shown that there is a significant opportunity to grow the CDIT sector by encouraging the combination of art, design and technology skills among firms and freelancers.

Creative Fuse North East is funded by:

Creative, digital and IT industries (CDIT) produced £87.4 billion of economic output in 2015 – a figure that’s likely to be even higher now – making this diverse sector one of the fastest-growing trades in the country. Despite the recent growth of this sector and its importance to the UK economy, however, it faces several key challenges which have been outlined in a new report led by Newcastle University Business School with colleagues in Creative Arts, CURDS and Northumbria University. Creative Fuse North East is an action-research project funded by the Arts and Humanities Research Council (AHRC), Arts Council England, and the European Regional Development Fund (ERDF). The project has received up to £892,638 of funding from the ERDF as part of the European Structural and Investment Funds Growth Programme 2014–20. Creative Fuse North East will run until October 2018. Creative Fuse North East is a partnership between the region’s five universities, industry specialists, local authorities and arts and culture organisations, which is exploring ways of tackling barriers to growth and capitalising on the rich potential that digital technology offers. It builds on previous work conducted by the Business School’s Professor Jonathan Sapsed on the Brighton Fuse project, which saw private and public sector organisations join forces to discover how technology can boost innovation in the arts, humanities and design sectors. Professor Sapsed says: “Our latest research could benefit CDIT professionals by highlighting areas where there is untapped potential. It also outlines existing barriers to growth and, in doing so, could help policymakers adapt their strategies to create a trading environment that makes it easier for companies to expand and prosper.”

2018

The Creative Fuse team analysed a wide range of business and employment databases to develop an initial understanding of the North East CDIT sector. A survey was then created and circulated to more than 500 firms and freelancers who work in the industry. Questions focused on how these companies and individuals innovate to generate business, what their common challenges are, and what changes they would like to see to remove barriers to growth. Interviews with business people, artists, and intermediaries who support the CDIT sector were also conducted.

of the UK; one chief executive said she couldn’t reconcile how a train journey to London is more expensive than a flight to Dubai! Others thought that the transport network wasn’t good enough and they felt a bit isolated in the North East. “Some businesses, particularly those in rural areas, cited poor mobile phone reception and the lack of reliable broadband connectivity as key barriers to growth.

The survey responses revealed some interesting trends. There were high levels of innovation in most of the businesses in the sample, with 93% empowering staff to try new things and 70% providing training for employees in the last 12 months.

“We need to look at these issues at a policy level to make this region more visible and better connected to people in the south of the country. If this could be achieved, North Eastbased creative and digital firms would have a better chance of growing their business.”

Many businesses were prepared to test and develop applications of emerging technologies in sectors outside of CDIT. One respondent, for example, capitalised on an opportunity to bring virtual reality into care homes to deliver reminiscence-based experiences to patients; another business used its technology to create 3D interactive digital car configurators for automotive dealerships.

Access to skills was also flagged as a major barrier to growth. 30% of businesses said the lack of available talent was a key trading disadvantage, while more than one half of freelancers noted insufficient time and excessive training costs as a hindrance to the development of new skills. This indicates a need for further and higher education institutions to work more closely with businesses to tackle skills shortages.

Businesses highlighted the good quality of life in the North East as a major advantage, with affordable office space, a burgeoning art community and the region’s reputation for creativity also cited as key plus points. However, disadvantages included the distance from London, poor access to affordable private finance and the lack of a well-connected transport system. Professor Sapsed says: “Connectivity is a key issue for businesses in the North East CDIT sector. Some respondents highlighted the prohibitive cost of travelling to the south

Businesses were also concerned about Britain’s impending exit from the European Union. While more than one quarter (27%) of firms surveyed said international markets were a source of revenues, some were worried that the loss of labour mobility and EU funding post-Brexit could reduce their chances of capitalising on key European markets. Given these concerns, most companies were keen to build a customer base closer to home, with seven out of 10 viewing the local market as “very or extremely important”.

FUSE HELPS BUSINESSES GET BETTER CONNECTED

Professor Sapsed says: “The research highlights a need for UK regions to be better connected in the post-Brexit era so they can take advantage of opportunities in the domestic market. Brexit has also forced some companies to look at overseas markets beyond Europe. “There’s a wider world of opportunities outside of Europe and companies can benefit from working with partners all over the world. “Creative Fuse has shown that there is a significant opportunity to grow the CDIT sector by encouraging the combination of art, design and technology skills among firms and freelancers. A related opportunity is to connect CDIT professionals with other industries. This will facilitate a transfer of skills that will support growth and innovation in key sectors such as manufacturing and healthcare.

Professor Jonathan Sapsed Professor of Innovation and Entrepreneurship

Creative Fuse North East www.creativefusene.org.uk

“Tourism organisations may also be interested in our research. Quality of life and affordability were clearly valued by the survey respondents so there is real potential to promote the North East as a great place for creative professionals. This could help to prevent a brain-drain of talent and persuade people from outside of the region to relocate here.” In the next phase of Creative Fuse, a series of innovation pilot projects will apply various creative and technical disciplines from the CDIT sector to other markets. One pilot will use technology to help Northumbria Police tackle cybercrime; others will see universities work with small firms and freelancers to address vital social and industrial challenges. The key aim of these projects is to support economic growth and find ways of solving real-world problems in society.

For further information about our research, visit ncl.ac.uk/business-school

ISSUE #6

IMPACTING SOCIETY | Dr Rebecca Casey

REACH | Research Matters

Innovation is the key to NHS success In an age of austerity, public sector organisations are grappling with the challenge of doing more with less. Government funding cuts have put pressure on public services and organisations such as the National Health Service and local authorities have had to find new ways of becoming more efficient, streamlined and productive. In short, they need to gain maximum benefit from the resources they have at their disposal, which is why the term ‘benefits realisation’ (BR) is becoming an increasingly important buzzword. It’s also the theme of new research which explores the human dimension of developing and adopting a BR capability in NHS organisations. Co-authored by Dr Rebecca Casey of Newcastle University Business School, the study looks at how these trusts can best use their resources to extract benefits from IT investments and, crucially, why many of them have failed to achieve decent results. She says: “Public sector organisations are trying to gain a better understanding of BR so that they can survive and prosper in times of austerity. While existing studies have explored the concept, to date there has been little research on the skills and activities needed to develop such a capability. This is the basis of my work. “The human dimension of BR is key. If organisations can understand how to utilise their staff resources to develop a dynamic BR capability, they will have a better chance of delivering a more efficient service to the public.” Using an existing academic BR framework, Dr Casey and colleagues from Northumbria University conducted an in-depth survey of acute hospital trusts in the UK, surveying three distinct groups of senior staff in each hospital: finance directors, IT directors and directors of nursing. The aim of the research was to find out how well BR was understood by these employees and, if such a capability had been established to realise benefits from IT investments, how robust or ‘mature’ it was.

2018

From this, several key trends became apparent. Most of the hospitals had only a basic level of BR capability and their main focus was on implementing an IT system, rather than sensing when a new system was required or when existing processes needed adapting to help staff become more productive.

The study highlights an overreliance on tried and tested best practice models, and the need to create new models, a more entrepreneurial culture and different ways of doing things.

Lack of staff training was also a key issue. Whilst IT staff were generally familiar with benefits realisation, employees in other departments had not received the requisite training even though they were using the technology on a regular basis. The survey responses highlighted a lack of innovation in the hospitals and a top-down management approach, with clinicians and patients generally not consulted in decisionmaking processes. Managers were too keen to move on to the next IT project without fully analysing how effectively existing systems were working. They were also hampered by having to use systems imposed by government rather than one which better suited the needs of the organisation and staff who worked there. Dr Casey says: “Our research highlights the internal focus of hospitals and the lack of planning for BR beyond the end of the project implementation stage. Hospitals need to be more proactive in their approach to IT-enabled change and identify the benefits well in advance of developing a business case for a particular system. “Many hospitals use PRINCE2 and while this system has some benefits, managers tend to focus too much on its implementation and lose sight of the important aspects of BR. Identifying benefits, planning how they will be realised, putting measures in place to ensure this happens and reviewing the entire process are all essential if a BR capability is to work effectively. “Our research shows that hospitals could benefit from educating their staff in BR and developing a process by which all employees on IT projects share experiences and learn from them. Cross-functional teams could be set up

to plan, implement and measure the success of certain systems and then be disbanded when not required any more. A flexible approach like this could bring about the innovation so desperately needed to maximise BR from IT projects.”

trusts so that healthcare professionals can use technology to remotely monitor patient data. In some cases, it enables patients to send in data about their health, access hospital services remotely and receive more care in the home.

The study highlights an over-reliance on tried and tested best practice models, and the need to create new models, a more entrepreneurial culture and different ways of doing things. Above all, it makes the point that without the right people in place to sense, seize and transform – three key human resources components of an effective BR capability – IT change projects will continue to deliver poor results.

“The idea behind it is to reduce hospital admissions and the burden on NHS staff but the technology needs to work efficiently and staff need to know how to get maximum BR from it. Also, structural factors such as NHS payment systems are impeding chances of realising financial benefits. The government’s ‘payment by results’ approach diverts funding to trusts for each patient seen or treated in hospital; organisations that implement an effective telehealth system will therefore lose out on vital income.

Dr Casey also conducted a separate three-year study on an NHS trust, where she looked specifically at what happens within certain IT projects and how frontline staff implement and realise the benefits from them. She found that projects which followed traditional methods based on PRINCE2 principles tended to be less successful than those which adopted a more flexible approach and utilised the knowledge and capabilities of frontline staff across different departments. Dr Casey says: “Following the collapse of the National Programme for IT, a government scheme to revolutionise the way technology is used in the NHS, there has been a move towards more locally driven initiatives led by individual trusts. Telehealth, for example, is used by some

INNOVATION IS THE KEY TO NHS SUCCESS

“As well as benefiting healthcare practitioners and private contractors working on NHS projects, my research may also encourage policymakers to review current legislation so that benefits from innovations like telehealth can be realised.” Further research into BR is required, particularly on the different stages of BR growth models within NHS organisations. Dr Casey, who is a committee member of the Association for Project Management’s special interest group on Benefits Management, is also conducting further work on this subject with the aim of informing and influencing national policy on BR.

Dr Rebecca Casey Lecturer in Information Systems Management

Waring T, Robson A, Casey R. Benefits realisation from IT enabled innovation: A capability challenge for NHS English Acute Hospital Trusts

For further information about our research, visit ncl.ac.uk/business-school

ISSUE #6

REACH | Research Matters

Contributors Meet the academic faculty, whose research in Business, Policy and Society features in this edition of Reach.

Professor Sharon Mavin is Director of Newcastle University Business School, Newcastle University, UK and Professor of Leadership and Organisation Studies. Professor Mavin is an international scholar in gender, women’s leadership, identity, learning, dirty work and organisation studies. A Fellow of the British Academy of Management, Professor Mavin is Chair of the Chartered Association of Business School’s Diversity Committee and Chair of the University Forum for Human Resources and Development (UFHRD).

2018

Professor Jonathan Sapsed is Professor of Innovation and Entrepreneurship. Professor Sapsed researches and lectures on innovation management and policy. He has also researched creativity and innovation in digital firms in Silicon Valley in the US, UK video games developers, as well as companies such as Disney, Sun Microsystems, Ericsson, and QinetiQ.

Professor David Higgins is Professor of Accounting and Finance whose main areas of research are: intellectual property, especially the evolution and protection of merchandise marks and trade-marks; corporate governance, with particular relevance to the ‘staple industries’; and general aspects of British business and economic history from the midnineteenth century.

Professor Robert Sollis is Professor of Financial Economics whose primary research interests lie in the areas of financial econometrics and time series econometrics.

Dr Rebecca Casey is Lecturer in Information Systems Management. Her research focuses on: Realising Benefits from IS/IT investments; Digital Health; Information Systems Evaluation; Project Management of IS/IT; Business Intelligence; and Critical Information Systems Research.

Dr Sara Maioli is Lecturer in Economics whose research interests relate to: international economics; trade and labour; applied micro-econometrics; international business; and rural businesses.

Dr Wessel Vermeulen is Lecturer in Economics at Newcastle University London. His research focuses on international and regional economics, using applied theoretical and empirical methods, as well as conflict studies and genocide prevention.

Dr Jo McBride is Senior Lecturer in Industrial Relations, Work and Employment whose research on industrial relations issues has a current focus on low-paid workers and the unskilled.

Professor Sollis has also recently been involved in several linked research projects focusing on the development of econometric tests to help detect the presence of asset price bubbles.

Dr Yang Zhao is Lecturer in Banking and Finance and studies the impact of corporate networks on various issues in corporate finance and corporate governance, including: executive compensation; mergers and acquisitions; executive turnover; and insider trading.

CONTRIBUTORS

Professor Steve Hughes is Professor of International Organisations and has a long-standing research interest in the institutions of trade and development. Steve is currently engaged in collaborative research with colleagues at the universities of Auckland and Oxford on topics related to developments in global political economy.

Dr Ana Javornik is Lecturer in Marketing and her research focuses on consumer behaviour and consumer experience with emerging technologies, especially with augmented reality.

Dr Oliver Mallett is Senior Lecturer in Organisational Behaviour with research interests in: Employment relationships in small and mediumsized enterprises; Enterprise policy: governments, SMEs and the self-employed; and Narrative and discursive approaches to theory and research, particularly in relation to identity.

Dr Fabrizio Casalin is Lecturer in Banking and Finance whose research includes: the term structure of interest rates; the relationship between external finance and aggregate investment; the value of reputation on e-commerce platforms; and the link between inventory holdings and the structure of the supply chain.

Dr Elena Chatzopoulou is Lecturer in Marketing with research interests in Food and Fashion Marketing, by focusing on ethnicity, brand identity, quality conventions, authenticity perceptions and social identity.

Ade Oyedijo is a current PhD student whose research centres on behavioural supply chain management, particularly investigating how human behaviour impacts supply chain management and the role of fairness perceptions on this relationship.

Dr Josie McLaren is Senior Lecturer in Accounting & Finance. Her research interests lie at the interface of Accounting and Finance, including: the experiences of firms using Economic Value Added (EVA) as a performance measure; and integrating a finance and accounting perspective.

Rosie Cao is a current PhD student who is examining how cultural and linguistic factors influence differences in financial risk tolerance and investment behaviour across age groups.

ISSUE #6

Details are correct at the time of printing (January 2018) but should be checked on the University’s and School’s website.

CHALLENGE TODAY, CHANGE TOMORROW

Acknowledgements Edited by: Newcastle University Business School. Designed by: Digitronix. Printed by: Statex Colour Print. © Newcastle University, 2018. The University of Newcastle upon Tyne trading as Newcastle University.

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