The Main Street Post

ST. LOUIS MO – Planning to negotiate a raise? Try not to discuss it with the boss in his or her office, a new study by an organizational behavior expert suggests.

Dr. Markus Baer, assistant professor at Washington University in St. Louis

“Parties who negotiate on their home field can be expected to claim between 60 percent and 160 percent more value than the visiting party,” says Dr. Markus Baer, an assistant professor of organizational behavior at Washington University in St. Louis.

His latest study, titled “Location in Negotiation: Is There a Home-Field Advantage?,” demonstrates that those who haggle on turf they know win more often. Its findings “suggest location is an important factor to consider when examining forces (that shape) outcomes of distributive negotiations and, therefore, should be incorporated into existing approaches to negotiation,” Baer writes in the paper.

The conclusion was based on three separate experiments conducted by Baer and his research partner, Dr. Graham Brown of the University of British Columbia.

There’s good news for the visiting party, though. The confidence of the person entering negotiations as an outsider can go a long way in leveling the playing field.

“Confidence plays a critical role in any negotiation, regardless of where it takes place,” Baer says. “Anything a person entering a negotiation can do to boost his or her confidence is a good thing. Something as simple as participating in negotiation training may work to minimize the disadvantage of negotiating on someone else’s home turf.”

Photo from the University of Iowa

Elena Karpova, left, and Jill Lee have taken a closer look at the U.S. and Japanese apparel industries in a new study from Iowa State University

AMES IA – “Keep The Customer Satisfied,” songwriter Paul Simon once sang in harmony with his 1970s companion, Art Garfunkel. The phrase makes for more than just a good lyric; it’s also advice the U.S. fashion and apparel industry has taken to heart … and hems.

“American consumers want styles to change quickly, and they want to see new merchandise in their favorite stores almost every week … at affordable prices,” says Iowa State University Assistant Professor Elena Karpova, who has been studying the fashion industry. In a new report she co-authored with ISU graduate student Juyoung (Jill) Lee, Karpova claims U.S. companies have responded to consumer demand by producing “lower quality items that last a shorter period of time.”

It’s a trend known as “fast fashion.” The term refers to a mostly American practice of frequently replacing inexpensive clothes that become obsolete several weeks after they’re purchased. Among many retailers who reportedly specialize in fast fashion items are Gap and Forever 21, both with stores in Limerick, Exton, and King of Prussia PA; and Urban Outfitters, also in King of Prussia PA.

The duo’s study, however, titled “The U.S. and Japanese apparel demand conditions: implications for industry competitiveness,” points to a significant problem. They contend the focus on lower quality, low-cost clothes has resulted in diminishing returns on market share for U.S. manufacturers both at home and abroad, specifically in Japan.

By analyzing government trade and consumption data between 1995 and 2004 from both countries, Karpova and Lee concluded that domestic output of U.S. apparel producers dropped 40 percent during the years studied, even though the overall market expanded. The growth was fueled by a 50-percent increase in imports, many of them from Japan, where manufacturers churn out higher quality, luxury apparel at respectively higher prices.

The reason? Karpova says consumers “just didn’t see value when they compared the quality of U.S. apparel with imports.” Business can still improve, though, she adds. U.S. companies “should look more into being socially responsible in their production – no sweatshops – with environmentally friendly materials and processes, sustainable design, and style choices that will last a long time.”

The researchers in November (2011) will present a paper on their findings at the International Textile and Apparel Association in Philadelphia.

Photo from Iowa State University, Ames IA

Job seekers who dream of joining a start-up company, hoping it will become the next Starbucks or Google, should carefully consider the risks and rewards of change, according to a Wake Forest University expert.

Polly Black

“It is very exciting to join a start-up,” says Polly Black, director of Winston-Salem NC school’s Center for Innovation, Creativity and Entrepreneurship. Because “it is often an all-hands-on-deck situation, you will have the opportunity to be involved in all aspects of the business right away,” she added.

There is some risk involved, though, and she warns those tempted to accept job offers from start-up businesses without a long-term track record must ask the right questions before making the leap. Here are Black’s top five things to consider:

• Passion. Do you have a real passion for what the start-up company is doing? You will likely be working long hours for little pay, so you need to have a passion for what you are doing.
• Financial stability. What kind of financial backing does the company have? If it is already in business, is it profitable? If it is a social enterprise, how is it sustainable?
• Chemistry. Do you really fit with the people? With small start-ups, it is all about the team and working together.
• Market need. Can company leaders clearly articulate, in a sentence or two, the market need they are meeting with their product or service? If not, that may indicate a lack of focus and clarity that could result in the company going nowhere.
• Experience. What type of work will you be doing? Will you be included in meetings and decision-making? How much autonomy will you have and are you comfortable with that?

Even if you can’t find out directly what resources a company has, Black offers ideas for getting a clearer financial picture. “Ask if the company has any outside investors,” she suggests. “Ask how much of a burden adding a new person will have on the budget for the year? How will they make money to support operations or generate profit? If the business launch is delayed, how long could they afford to keep the same staffing?”

If a company has been trying to get off the ground for a long time and hasn’t yet made it, that can be a bad sign, she notes.

Photo from Wake Forest University

Consumers want convenience when buying groceries, say researchers Joe Aversa, left, and Chris Daniel.

Want to pick up some steak for dinner, along with a cute pair of shoes and a new flat-screen TV?

Growing consumer demand for convenience is a driving force behind changes in grocery retailing during the past decade, according to a new report by researchers at the Ryerson University Centre for the Study of Commercial Activity in Toronto, Canada.

For proof of their conclusions, greater Pottstown PA residents might look no further than the Gateway At Sanatoga shopping center, now being erected at the Sanatoga interchange of U.S. Route 422.

Due to open later this fall (2011), Gateway’s anchor tenant will be a Costco Warehouse whose retailing philosophy figures prominently in the Ryerson study.

“People want to have the option of buying groceries in the same places where they are purchasing clothing or electronics,” said Christopher Daniel, lead author of the report titled “Emerging Trends in Grocery Retailing.” More non-grocery retailers are selling convenience food products in their stores, he says.

The report found the industry is breaking into four main types of grocery retailers:

• “Pure play” grocery stores (supermarkets that only offer groceries);
• General merchandise stores and warehouse clubs, like Costco, with food products;
• Grocery stores with added general merchandise; and
• Other retailers that offer groceries.

In the future the researchers foresee an increase in mixed-use locations like Gateway, although it is not specifically identified, where grocery sales will be combined with condos, office buildings, and even other retailers in multi-level developments.

The report examines key trends in the grocery industry over the past 20 years, the major players and the size of the market. It was co-authored by Joe Aversa, a Ryerson analyst, and centre director Tony Hernandez.

Related (to the Gateway At Sanatoga project):

• Buying Spree: Gimme A Steak, Those Shoes, That TV
• Structural Steel On Its Way Up At Limerick Costco Site
• Costco Construction Still Aiming For A Spring Opening
• Contractor Agrees To End Night Work At Sanatoga Gateway
• Sanatoga Gateway’s Overnight Noise Near An End
• Beep!-Beep!, No Sleep For Residents Near Gateway Site
• Pipeline Being Moved At Sanatoga Gateway
• What Gateway At Sanatoga Marketing Says About Us
• Before Demise, Limerick Homes Get Firefighters’ Farewell
• Ground Clearing Begins At Sanatoga “Gateway”
• Developer Sets New Costco Date: Spring 2011
• New Activity Stirs For Gateway At Sanatoga Project
• Costco Approved Without Traffic Improvements (WhatsThe422.com)
• Sanatoga Gateway Endorsed By Limerick Planners (WhatsThe422.com)
• Sanatoga Project Faces Limerick Zoning Decisions
• Sanatoga Shopping Project On Limerick Zoning Agenda
• More Web Searches Seek ‘Sanatoga Springs’
• Board Approves Interchange Mapping Costs
• Sanatoga Springs Promotion In Flux
• Townships Agree To Interchange Planning
• Township Interviews For ‘Bigger Picture’
• Missing Walks Latest Bridge Complaint
• Trying, Trying Again At The Interchange
• Just One Speaker At Sanatoga Springs Hearing
• The Overlooked Users Of Sanatoga Springs
• County Suggests Cooperation On Sanatoga Springs
• Improving The Odds At The Interchange
• More About … Sanatoga Springs (No. 1 In A Series)
• Trial Balloon: An Inter-Municipal Agreement
• Lobbyists Court Lower Pottsgrove
• A New Arrival In “Sanatoga Springs”

Photo from Ryerson University

Jeremy Woods, left, explored mistakes in company decision-making by interviewing Cincinnati OH small business owners

Small business owners who want to avoid costly mistakes will find it pays to consult with others, new research from the University of Cincinnati shows.

One-time entrepreneur Jeremy Woods, currently a doctoral student in the university’s College of Business, is focusing his studies on small business decision-making mistakes. He’s exploring what is called “escalation of commitment,” a practice in which small business owners continue to pursue failing ventures simply to prove they were right, even if the cost of their mistakes keeps climbing.

“We’ve all had the ‘I’m going to make this work’ feeling, but sometimes the best decision is to walk away,” says Woods, “an action that doesn’t come easy for driven and determined entrepreneurs.” Fortunately, according to his research, escalation of commitment can be avoided by systematically seeking the input of respected colleagues.

His conclusions were presented earlier this month (May 6-8, 2011) during the Family Enterprise Research Conference in Grand Rapids MI, and will be discussed again June 15-18 at the International Council of Small Business Conference in Stockholm, Sweden.

“Consultation with outside advisers can bring more information and fresh perspectives into the decision-making process, and convince business owners to pursue alternative options,” says Woods, who based his research on a national questionnaire sponsored by business professors studying entrepreneurship. It surveyed more than 1,200 start-up business owners across the country. Woods mined the data and discovered a significant correlation between consulting with outside advisers and achieving revenues sooner.

He’s already begun taking his research further.

This month he started work with more than 400 research participants, including small business owners and graduate business students. Each is being given a business scenario that involves pursuit of a sluggish sales prospect and experimental manipulations for consultation with outside advisers. After reading the scenario, participants must answer questions about the decision-making process, including their confidence level and their perception of the value of their intended actions.

“This is when the real fun begins,” says Woods. “Not only do we have the opportunity to give small business consultants some concrete findings to justify the value of their suggestions. We also have the opportunity to work together with small business owners to identify practical ways to choose between alternative courses of action.”

Photo from the University of Cinncinatti