Intra-Firm and Inter-Firm Knowledge Transfers Intra-Firm and Inter-Firm Knowledge Transfers and Productivity in the Retailing Sectorand Productivity in the Retailing Sector

Dolores Anon Higon, Aston UniversityDolores Anon Higon, Aston University

Jeremy Clegg, Leeds UniversityJeremy Clegg, Leeds University

Irena Grugulis, Bradford University Irena Grugulis, Bradford University

Allan Williams, University of ExeterAllan Williams, University of Exeter

Ödül Bozkurt, Bradford and Leeds UniversitiesÖdül Bozkurt, Bradford and Leeds Universities

Nicholas Vasilakos, Aston UniversityNicholas Vasilakos, Aston University

IDEAS Factory, 25IDEAS Factory, 25thth of January 2005, Nottingham of January 2005, Nottingham

Literature ReviewLiterature Review Productivity: Productivity:

Productivity in services, and especially retailing, is significantly Productivity in services, and especially retailing, is significantly informed by non-material inputs; informed by non-material inputs;

These include the knowledge embodied in both the business plans These include the knowledge embodied in both the business plans of individual firms and in the skills of their workers; of individual firms and in the skills of their workers;

The relationship of knowledge to labour productivity and of this to The relationship of knowledge to labour productivity and of this to overall productivity is unclear in the food retail sector.overall productivity is unclear in the food retail sector.

Knowledge Work:Knowledge Work:

““Knowledge work” does not necessarily entail “knowledgeable Knowledge work” does not necessarily entail “knowledgeable workers”;workers”;

Retail sector may include business strategies that vary Retail sector may include business strategies that vary significantly in terms of the generation of knowledge work: Those significantly in terms of the generation of knowledge work: Those that rely on high degrees of personalised (tacit) knowledge in that rely on high degrees of personalised (tacit) knowledge in workers, and those that rely on extensive standardisation.workers, and those that rely on extensive standardisation.

Knowledge Transfer: Knowledge Transfer: Knowledge transfer inside firms is crucial for their productivityKnowledge transfer inside firms is crucial for their productivity A central ownership advantage that multinational firms rely on is A central ownership advantage that multinational firms rely on is

knowledge, which they transfer internally in the global knowledge, which they transfer internally in the global organization; organization;

We can therefore expect multinational food retailers to have We can therefore expect multinational food retailers to have competitive advantages (over domestic ones) derived from competitive advantages (over domestic ones) derived from knowledge transfer. knowledge transfer.

Skills:Skills: Knowledge transfer can involve the diffusion of business Knowledge transfer can involve the diffusion of business

models that rely on knowledge work to variable degrees; models that rely on knowledge work to variable degrees; Multinationals’ business models may increase skills of the Multinationals’ business models may increase skills of the

workforce through knowledge transfer; workforce through knowledge transfer; Or these business models may rely on standardisation and Or these business models may rely on standardisation and

deskilling of the workforce. deskilling of the workforce.

Selected Issues on UK Retail Selected Issues on UK Retail Productivity and InnovationProductivity and Innovation

Nicholas V. VasilakosNicholas V. VasilakosDolores AnonDolores Anon

Aston Business SchoolAston Business SchoolNottingham, 25/01/2006Nottingham, 25/01/2006

Measures and Determinants of Measures and Determinants of Retail ProductivityRetail Productivity

• Most commonly seen measures of Productivity:Most commonly seen measures of Productivity:• Labour Productivity (Y/L)Labour Productivity (Y/L)• TFP TFP

• Selected factors claimed to affect productivity:Selected factors claimed to affect productivity:• Size of business: For UK – the bigger, the better (Reynolds et al 2005])Size of business: For UK – the bigger, the better (Reynolds et al 2005])• Planning regulation – barriers to enter-exit (Doms et al, 2001)Planning regulation – barriers to enter-exit (Doms et al, 2001)• Innovation & Technological Sophistication (Doms et al, 2002)Innovation & Technological Sophistication (Doms et al, 2002)

• Van Ark et al (2002) and Basu et al (2003) on ICT-intensityVan Ark et al (2002) and Basu et al (2003) on ICT-intensity

• The role of innovation:The role of innovation:• Two types of innovation: Two types of innovation:

(i)(i) fundamental: self-service, marketing and ICT.fundamental: self-service, marketing and ICT.(ii)(ii) Incremental: e.g. managerial know-how, entrepreneurship etc.Incremental: e.g. managerial know-how, entrepreneurship etc.

Econometric Problems / ConcernsEconometric Problems / Concerns

Measurement errors: Measurement errors: of output – positively related to the service-intensity of the of output – positively related to the service-intensity of the

sector.sector. of prices – use of CPI may not always be an appropriate of prices – use of CPI may not always be an appropriate

deflator (e.g. Nakamora [1999] )deflator (e.g. Nakamora [1999] ) of inputs – e.g. if market rigidities (e.g. planning regulation – of inputs – e.g. if market rigidities (e.g. planning regulation –

refer to trade unions/land) distort input prices)refer to trade unions/land) distort input prices)

““Put it down to market power..” (e.g. Griffith, 2004 Put it down to market power..” (e.g. Griffith, 2004 or Reynolds, 2005)or Reynolds, 2005)

Incorporating “quality of service” in productivity Incorporating “quality of service” in productivity measures.measures.

Econometrics/ DataEconometrics/ Data Y = A F(L, K, M)Y = A F(L, K, M) Focus:Focus:

– Model “A” Model “A” – Measurement of Real OutputMeasurement of Real Output– Controls for: Market structure, Ownership Controls for: Market structure, Ownership

(MNE, non-MNE), size, location.(MNE, non-MNE), size, location.

Datasets: Datasets: – ARD + FDIARD + FDI– FAMEFAME– Data we look for: licenses, skills (ESS ?)Data we look for: licenses, skills (ESS ?)

Data and Methods II Data and Methods II Survey Research AnalysisSurvey Research Analysis

Company-Level Questionnaire Survey: Company-Level Questionnaire Survey: 705 non-specialized retail stores from the FAME data base; top-30 705 non-specialized retail stores from the FAME data base; top-30

initially contacted by telephone;initially contacted by telephone; Target group: Management at head offices; Target group: Management at head offices; Target response rate: 30-40%, ie c 210-280. Target response rate: 30-40%, ie c 210-280.

Questionnaire will focus on: Questionnaire will focus on: Ownership; Ownership; Basic employment data; Basic employment data; Management’s assessment of sources of productivity in the sector; Management’s assessment of sources of productivity in the sector; Management’s evaluation of the relative importance of knowledge Management’s evaluation of the relative importance of knowledge

transfer in productivity; transfer in productivity; Management’s evaluation of the relative importance of other Management’s evaluation of the relative importance of other

factors including human mobility, market research, use of external factors including human mobility, market research, use of external consultancies, purchase/leasing/patenting of technology, consultancies, purchase/leasing/patenting of technology, suppliers, intra-company transfers.suppliers, intra-company transfers.

Data and Methods III Data and Methods III Qualitative Case StudiesQualitative Case Studies

Ownership Domestic Multinational Work Organization High level skilling

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Low level skilling

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[Other contacts suggestions welcomed]

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