Recent Submissions

  • Strategic behaviour in flexibility markets: New games and sequencing options

    Beckstedde, Ellen; Meeus, Leonardo; Delarue, Erik (2021)
    Distribution system operators are expected to procure flexibility when it is cheaper than expanding their distribution grid. How to integrate these flexibility markets in the existing sequence of electricity markets is an important open issue in the evolution of electricity markets in Europe. In this paper, we investigate four market sequencing options: (1) the nodal wholesale market that includes network constraints(WNC); (2) the zonal wholesale market without network constraints followed by an integrated redispatch market to remedy the network congestion at transmission and distribution level created by the wholesale market in a coordinated way (WIR); (3) the zonal wholesale market followed by separate flexibility, redispatch and balancing markets in that order, which implies that congestion at distribution level is treated before congestion at transmission level (WFRB); and (4) the zonal wholesale market followed by separate redispatch, flexibility and balancing markets in that alternative order, which implies that congestion at transmission level is managed before congestion at distribution level (WRFB). We analyse how changing the market sequence can impact the strategic behaviour of flexibility providers, here represented by a Balancing responsible Party (BRP). We introduce a bi-level model in which the strategic BRP in the upper level acts as a first mover that anticipatesthe effect of its offers on the market outcome of the lower-level optimization problems. In analogy with the inc-dec game triggered by redispatch markets, we find that flexibility markets can trigger new games. These games will be difficult to detect by regulators as they can be performed by relatively small players. We observe that the WNC market design clearly outperforms the other sequencing options, but there is no clear second best among the alternatives WIR, WFRB, and WRFB.
  • Practice note: Copycat behavior by junior auditors – The impact of their senior’s working style and the role of promotion incentives

    Cardinaels, Eddy; Reusen, Evelien; Goris, Jeffrey; Stouthuysen, Kristof (2020)
    As a key attribute to audit quality, regulators specify that more experienced staff (i.e. managers, senior auditors) should provide less experienced staff with appropriate coaching and on-the-job training (IAASB 2014). It is fairly common for junior auditors to start their auditing career by mimicking a more senior person who performs similar tasks; as the saying goes, “Monkey see, monkey do” (Cannon, 2016). Yet, while imitation is an inherent human tendency, limited evidence exists on the impact of such imitative behavior on the quality of an individual auditor’s judgment. The objective of our research project is to examine the extent to which mimicking behavior occurs in junior–senior auditor relationships and its consequences for audit quality. In particular, we advance the argument that this imitation tendency may lead junior auditors to follow seniors’ auditing practices, even when those practices are not always ideal. We also examine whether promotion opportunities for the junior can be an important contributor in mimicking an audit style of a senior (which in turn would affect audit quality). The tendency to imitate their senior – even though his working practices might not be ideal - might be higher when the direct senior has a strong voice in the promotion decision of the junior. The findings of this study are expected to provide valuable insights and r recommendations for practice
  • Practice note: Imitatiegedrag bij junior auditors: De impact van de werkstijl van de senior en de rol van promotiedruk

    Cardinaels, Eddy; Reusen, Evelien; Goris, Jeffrey; Stouthuysen, Kristof (2020)
    Om audit kwaliteit te waarborgen, hebben meer ervaren auditors (i.e., senior auditors) de taak om minder ervaren auditors (i.e., junior auditors) tijdig te beoordelen en te voorzien van gepaste coaching en ‘on-the-job’ training (IAASB 2014). Het geven van het goede voorbeeld door de senior is hierbij belangrijk, zeker wanneer we erkennen dat junior auditors in het begin van hun carrière vaak geneigd zijn het gedrag en de werkstijl van senior auditors te imiteren. Hoewel het imiteren van anderen deel uitmaakt van het menselijke gedrag, hebben we tot op heden nog maar weinig inzicht in hoe imitatiegedrag de oordeelsvorming bij junior auditors beïnvloedt. Het doel van dit onderzoeksproject is om de rol van imitatiegedrag in junior-senior auditor relaties na te gaan en inzicht te krijgen in de gevolgen hiervan op auditkwaliteit. Tegelijkertijd onderzoeken we ook hoe promotiedruk dit imitatiegedrag kan versterken. De neiging van junior auditors om hun senior te imiteren – zelfs wanneer deze laatste zijn werkstijl niet in lijn is met de verwachte professioneelkritische houding – kan meer uitgesproken zijn wanneer de senior auditor een doorslaggevende stem heeft bij toekomstige promotiebeslissingen. De bevindingen van deze studie zullen leiden tot waardevolle inzichten voor het wereldwijde auditberoep.
  • Literature review: The impact of auditor interactions on audit quality

    Cardinaels, Eddy; Reusen, Evelien; Goris, Jeffrey; Stouthuysen, Kristof (2020)
    The judgment and decision-making literature in auditing largely focuses on individual auditor judgments. However, auditors do not work in isolation. They interact with other auditors in audit engagements and with other participants in the financial reporting process. For this reason, scholars have called for more research on how the people, tasks, and environment that auditors interact with influence their performance and hence, the audit quality of their work (Nelson & Tan, 2005; Trotman, Bauer & Humphreys, 2015). This review identifies three specific issues related to these influences that, we believe, warrant additional research and consideration. The first two issues relate to between-auditor interactions within the audit firm. The third issue relates to interactions with groups outside the firm
  • An emergency health financing facility for the European Union. A proposal

    Ashby, Simon; Kolokas, Dimitrios; Veredas, David (2020)
    The unprecedented public health crisis caused by COVID-19 overstretched the structures and mechanisms of the European Union, in particular those that deal with emergencies. In order to be ready for the next health emergency, we propose the creation of the Emergency Health Financing Facility. In its broader version, this Facility integrates some of the existing EU emergencies structures and adds a new layer for the most extreme emergencies that does not increase the burden on public finances. This new layer essentially consists of securitizing health emergency risks in the form of fixed income securities that are sold to institutional investors. The Facility follows the growth of marketbased risk financing facilities across global and regional initiatives, led by the World Bank.
  • Reward taxation in Belgium. Practices, experiences and opinions

    Baeten, Xavier; Van Steerthem, Angie (2020)
    Companies are pressing for phasing out non-statutory benefits in combination with lower taxes on fixed and variable salaries Belgian companies are very dissatisfied with the fiscal and parafiscal levies on salaries. In particular, they are frustrated with the high taxation on fixed and variable salaries and the approach to taxation of the mobility budget. Only the taxation of supplementary pensions can count on any support. With a view to the future, many companies are arguing for extensive reforms, with as the basic principle a downscaling of the profusion of fiscal and parafiscal schemes for non-statutory benefits in combination with lower levies on the fundamental elements, and in particular, the fixed and variable salaries. These are the main findings of a detailed study on the taxation and social security of various remuneration tools by Vlerick Business School's Centre for Excellence in Strategic Rewards. As a result of the collaboration with the employers' organisations VBO and Voka, legal services provider Claeys & Engels, and HR services provider Hudson, no less than 293 companies participated in the study. The study covered three points, namely the satisfaction with the current income tax system, the obstacles companies are experiencing, and preferences for the future. One of the survey’s main findings is that only 6% of the companies are satisfied with general payroll taxes from both a fiscal and parafiscal point of view, regardless of the size of the company. The respondents’ main criticisms related to the high taxes and advance levies on cash (including holiday pay and end-of-year bonus) and variable remuneration. They also pointed out that there are too many different systems—no less than 35 for various non-statutory benefits. Moreover, there is a difference in treatment in indirect taxation (personal income tax and corporation tax) and social security. There were also many specific criticisms about the mobility budget, such as its complexity, the impossibility of including the mobility budget in an overarching approach of flexible rewards, the absence of some mobility instruments in the mobility budget, and the fact that this scheme is much less attractive if the company is not located in an area that is easily accessible by public transport. The study also looked at the tax treatment of 35 non-statutory benefits, examining how many companies are using them and how satisfied they are with them. The top 3 most commonly used and most appreciated benefits are company bicycles, hospitalisation insurance, and meal vouchers. At the other end of the spectrum, the researchers found that the schemes involving the reimbursement of contributions to the third pension pillar (known as pension savings schemes), share-related remuneration, private PC schemes, and intellectual property are used less and that the level of satisfaction with these is consistently below 50%. As regards the preferences for the future, there is a clear need for extensive reforms, as only 3% of respondents want to retain the current payroll taxes. However, they are aware that these reforms cannot be straightforward reductions, and they are prepared to drop the favourable tax regime of many non-statutory benefits in exchange for lower taxation of fixed and variable salaries. Furthermore, there are loud calls to allow employees to make extras contributions to their pension plans (e.g. from their variable salaries). This would be a type of second pillar ‘plus’, under favourable conditions, and in any case more favourable than under the current scheme. Finally, the participating companies are cautiously enthusiastic about the system of unlimited social security contributions combined with limited benefits.
  • What is the right price. 6 paths of value creation that can lead toward higher pricing

    Tackx, Koen (2019)
    Our research insights translated into added value for you and your organisation Research – either academic or research for business – can only be valuable when shared. That’s why we translate our research into easy-to-read whitepapers focusing on the key insights that are relevant for you as a manager. This way, your organisation can profit directly from the latest research, the newest theories, the expertise of our faculty and much more.
  • Acting with foresight in times of budget austerity

    Van Dyck, Walter; Schoonaert, Lies (2019)
    Horizon scanning is acknowledged to be one of the key components of a demand-driven healthcare system. We propose it to be a dynamic collaborative process driven by national unmet need matched with continued insight into the innovative pharmaceutical industry medicinal pipeline. Summer 2019 an international agreement was reached between payers to set up and commission an international horizon scanning initiative (IHSI), which is the international front-end of such a system. In this Policy Paper we propose a two-stage structure and organisation of the back-end national part of the horizon scanning process still to be implemented. This will lead to healthcare budgets managed with better foresight, a necessity in the face of breakthrough, some potentially curing therapies coming at a high cost. Taking the Belgian national component of the proposed horizon scanning system to implementation will require a pilot to be carried out. This to test the internal and external validity of the proposed design.
  • European scale-up report

    Collewaert, Veroniek; Manigart, Sophie; Standaert, Thomas (2020)
    Unique view of the landscape and management of European scale-ups The widely held belief that European scale-ups are mainly innovative tech companies is incorrect; they can be found in all sectors and at all levels of innovation. However we can identify major differences between sectors in terms of size and growth, with scale-ups that are active in IT and consumer goods and services leading the way. Scale-ups with external investors on board are more professionally managed and have made greater progress in terms of internationalisation, innovation and talent management. All the same, attracting additional funding proves very difficult and hampers their further growth ambitions. These are some of the conclusions of a large-scale study conducted by Vlerick Business School on behalf of Scale-Ups.eu. Professor Veroniek Collewaert, Professor Sophie Manigart and post-doctoral researcher Thomas Standaert used information about more than 80,000 scale-ups in 8 European countries as their starting point. They specifically investigated management practices by means of a targeted survey among 124 of these scale-ups.
  • Innovation and digitisation in the petrochemical supply chain. Digitisation as an enabler for a sustainable future

    Vereecke, Ann; Van den Bergh, Joachim; Cabos Rodriguez, Alejandra (2020)
    Following the 2018 workshop on the “Digitalisation in the Petrochemical Supply Chain”, EPCA partnered again with Vlerick Business School (VBS) to explore how digitisation can be an enabler for a sustainable petrochemical supply chain. By bringing to the table real case studies in an interactive workshop, highlighting how digitisation can minimise the ecological footprint of the supply chain, EPCA and VBS aimed to showcase cutting-edge solutions and to encourage the EPCA Supply Chain Community to embark on a digital transformation journey which will ultimately make their businesses more sustainable. The report summarises the lessons learned from desk research and from the interviews conducted by VBS researchers with experts in the field, in preparation for the workshop, as well as the conclusions from the roundtable discussions at the Digital Café.
  • Five evolutions in individual career development and their consequences for organisational career management

    Quataert, Sarah; Buyens, Dirk (2020)
    In a hybrid world, for many people work is a lot more than just a functional way of earning money. Professional careers have a strong symbolic function, providing us with a considerable part of our social identity and strongly influencing our self-esteem and overall happiness. Therefore, keeping employees engaged and committed by offering them challenging and rewarding careers is an important area of focus for many organisations and HR departments. However, as a reaction to changing economies, ways of working and organisational designs, the concept of a ‘career’ has changed tremendously. Careers are no longer a sequence of hierarchically ordered jobs, but rather a continually evolving gathering of work-related experiences for which every employee carries individual responsibility. As a consequence, career success is a highly-subjective measure and can only be reached when self-set goals and career values are respected. This white paper consists of two chapters. In the first chapter, we describe five main principles in individual career development that have evolved during the last couple of decades and that strongly impact contemporary career perceptions, leaving the field of careers with a broad spectrum of individual needs and preferences. The second chapter addresses the consequences of these changes for organisational career management and provides suggestions for Talent Managers on how to effectively respond to the evolving career landscape.
  • Pharmaceutical net price transparency across European markets: Insights from a multi-agent simulation model

    Van Dyck, Walter; Riccaboni, Massimo; Swoboda, Torben (2020)
    In innovative drug markets the widespread practice across the EU of country-specific confidential agreements reached between national payers and innovative pharmaceutical manufacturers continues to be a highly disputed basis for pharmaceutical health policy making. With pharmaceutical health policy striving for fair and sustainable pricing under increasing budgetary pressures, public stakeholders are more and more willing to be involved in transparent access decision-making related to novel medicines, considered to be a societal good. Full net price transparency is believed by many to promote price competition and to increase equity by making presently unaffordable pharmaceutical products accessible to patients in lower-income markets. To investigate the viability of a net price transparency (NPT) system we develop and analyse a multi-agent model representing the European country-level situation to conduct counterfactual analyses of various NPT systems. In line with previous recent NPT research in other geographical, regulatory and market contexts, we find that a full NPT system encompassing higher- and lower-income EU countries would not be viable. This while, counterintuitively and acting as rational economic agents, middle- and lower-income countries would not be deciding to join and give up their confidential agreement system with the pharmaceutical industry. Also, a full NPT system would be seen to be unjust while violating Ramsey pricing and distributive justice principles. Maximally, a partial price transparency system could be a viable solution if entailing only the group of high-income countries including UK and Germany committing to NPT, leaving all other countries free to opt for confidential discounts. Viability of this solution is contingent upon UK or Germany accepting a higher price than they could get in their present confidential rebate system. Finally, in a dynamic game theoretic analysis, we show that middle- and lower-income countries, might be joining the high-income group later. In any case, a net price transparency system would delay access in middle- to lower-income countries. Hence, we conclude that even a partial transparency system would be a challenging case to reach from a political perspective and it will negatively impact population health improvement by the novel therapy, especially in lower-income countries.
  • The consequences of greater net price transparency for innovative medicines in Europe: Searching for a consensus

    Riccaboni, Massimo; Van Dyck, Walter; Gyger, Pius; Bentata, Pierre; Marques-Gomes, Joao; Czech, Marcin; Mestre-Ferrandiz, Jorge; Greiner, Wolfgang; Voncina, Luka; Groot, Wim; Wilsdon, Tim; Ross-Stewart, Kirsty; Pistollato, Michele (2020)
    The merits of greater or lesser net price transparency (NPT) has been a topic for discussion for many years across business and industry in general. However, in the past few years, the debate on NPT of innovative medicines has intensified, with organisations such as the United Nations (UN), the World Health Organization (WHO) and the Organisation for Economic Co-operation and Development (OECD) leading calls for greater transparency in the pharmaceutical sector, specifically focused on prices. In May 2019 the World Health Assembly (WHA) approved a resolution to support the greater public disclosure of prices and research and development (R&D) costs for both medicines and other health products supported by several European and non-European governments. To contribute to the international debate on the transparency of medicine prices in Europe, Merck Sharp & Dohme (MSD) asked Charles River Associates (CRA) to curate a panel of experts to develop evidence on the impact of greater NPT of innovative medicines. Professor Walter Van Dyck1 and Professor Massimo Riccaboni2 were asked by CRA to lead this research, supported by a wider panel of 10 experts from a range of European markets. A structured literature review was first conducted to summarise the theoretical consequences of greater NPT. This was supplemented with a survey of national payers and payer experts3 from a range of European markets. This was used as pre-read information for an expert advisory board of 12 economic and health economic experts representing 12 countries selected to give a range of market sizes, national income and payer approaches. The debate and the consensus reached by the advisory board have been summarised in this report. In addition, a computational model has been developed by two key investigators to provide new, empirical evidence to illustrate the impact of NPT on different European markets.
  • Strategy in turbulent times. Our take on how to survive a crisis and bounce back

    Abraham, Filip; Fehre, Kerstin; Meeus, Leonardo; Peeters, Carine; Verweire, Kurt; Weiss, Martin (2020)
    As the saying goes, never waste a good crisis. We have certainly seen our fair share of crises in the past 30 years. And now there is the COVID-19 pandemic to add to the list. For some sectors, it is difficult to see the COVID-19 crisis as anything other than a threat. Notable examples include the hospitality industry, aviation and the performing arts sector. For others, such as diagnostics companies, the crisis has turned out to be a gold mine. Some companies have also made some very bold moves. In this white paper, Vlerick strategy experts have joined forces to reflect on the implications of the pandemic for businesses, to share best practices on how to deal with the current situation in the short term, and to offer methods and advice on how to build a strategy for the new normal. The message is not to all reinvent yourselves, but rather to put the COVID-19 crisis in perspective and answer some of the most pressing questions facing businesses today. How can you survive this crisis, and how can you be ready for the next one? How can you be better prepared for the future, bearing in mind that that future is unknown? Our Vlerick experts also explore why some organisations cannot see beyond the threats, while others seize the opportunities, and what you can do to help your company succeed. The COVID-19 pandemic may well have been the trigger, but the analysis and advice presented in this white paper have relevance far beyond the current crisis, a crisis that serves to show exactly how turbulent today’s environment is.
  • The career perspectives of graduates. Update 2020

    Vandenbroucke, Astrid; Quataert, Sarah; Defever, Emmy; Buyens, Dirk (2020)
    The expectations final-year students have of their first job are still high. Good communication with their colleagues, a sociable atmosphere and plenty of opportunities for training are at the top of the list. What is more, these millennials prioritise career security over job security. They consider their relationship with their first employer to be temporary, expecting to work for a whole range of different companies during their working life. However, the Covid-19 outbreak has toned down their optimism about the future. Now afraid that fewer jobs will be available to suit their skills and qualifications, they are once again attaching greater importance to job security. The Centre for Excellence in Strategic Talent Management at Vlerick Business School has conducted its tenth large-scale study of final-year students’ expectations of the employment market and their career. 614 students who were due to graduate in June 2020 took part in the survey, of whom 294 were Masters students and 320 Advanced Masters. The research focuses both on their career plans and on what these ‘millennial’ graduates expect from their first employer. Last but not least, the study also contains important insights for companies hoping to recruit recent graduates.
  • Belgian high growth monitor. Shedding light on Belgium's fastest growing firms

    Dillen, Yannick; Crijns, Hans; Standaert, Thomas (2020)
    Fast-growing businesses are known as the engine of job creation. The situation is no different in Belgium. During the last available research period (2015-2018), 920 fast-growing companies were responsible for 52,779 new jobs. They represent 3.8% of Belgian companies with at least 10 employees. Although these figures reveal that Belgium is doing less well than the European average, this group of healthy Belgian ‘gazelles’ does show stability. Over the years they have created around 50,000 jobs during each growth period, even during the period 2009-2012 which was ravaged by the financial crisis. A hopeful sign, especially now that many companies are having trouble keeping their heads above water. This is evident from the annual Belgian High-Growth Monitor, a study conducted by the Growth Management Impulse Centre for Medium-Sized Enterprises (iGMO) at Vlerick Business School, in collaboration with partners EY and KBC. Professor Hans Crijns and lecturer Yannick Dillen analysed the figures available for Belgian fast-growing companies* from the period 2015-2018, in combination with a survey of Belgian owners/managers of growth companies. This survey dates from just before the first wave of coronavirus, but was supplemented by a follow-up survey in the summer.
  • From bioethics to biopolitics: A game-theoretic institutional life sciences perspective

    Van Dyck, Walter (2020)
    This paper is an essay on the highly-valued by society but felt-to-be excessively-priced nature of medicines.
  • 2020 M&A Monitor: Shedding light on M&A in Belgium

    Luypaert, Mathieu; Spolverato, Gianni (2020)
    The Belgian mergers and acquisitions market experienced a good and stable year in 2019, with slight growth in the smaller transactions segment. However, as a result of the Covid-19 pandemic, merger and acquisition activities are expected to decline by more than 30% in 2020. In addition, 60% of Belgian experts also expect a price drop of more than 10%. Liquidity problems in many companies could also cause the balance of power to shift, mainly putting buyers in a strong bargaining position. Finally, for the first time a question was asked about the expected impact of an acquisition on future employment. This impact appears to be positive across the board. These are the main conclusions of the seventh edition of the M&A Monitor, an annual survey of around 110 Belgian merger and acquisition specialists including corporate finance advisers, private equity investors, brokers, bankers and lawyers. The survey asks about their experiences in the M&A market and the deals they were involved in during 2019 on the one hand, and their expectations for 2020 on the other. In order to estimate these expectations correctly, an additional survey was sent out in the second half of March which specifically asked about the expected impact of the Covid-19 pandemic. The study was conducted by professor Mathieu Luypaert and researcher Gianni Spolverato of the Centre for Mergers, Acquisitions & Buyouts at Vlerick Business School in collaboration with Bank J.Van Breda & Co., BDO, NautaDutilh and Sowaccess.
  • Performance and reward management in an agile environment. 10 Key findings based on a qualitative study

    De Ruyck, Bettina; Quataert, Sarah; Vandenbroucke, Astrid; Van Steerthem, Angie; Baeten, Xavier; Dewettinck, Koen (2020)
    Agility is an emerging key dimension of business excellence. Research by Vlerick Business School, surveying the largest for-profit organisations in Belgium, revealed that, for 93% of them, agile ways of working have become more important in the last few years. And the top three terms associated with the concept of agility are: adaptability, speed and customer centricity. Although agility has really taken off, many organisations are still struggling with implementing agile approaches in the area of performance and reward management. An agile way of working is transforming how organisations manage and reward their talent, but only a mere 18% of the largest for-profit organisations in Belgium consider themselves to be agile on performance management and 28% on reward management. How do you approach performance management when you need to evaluate projects that are run by several different leaders and organised around teams? How to align employees’ career aspirations with business needs in a non-hierarchical environment? Can we allow a merit-pay process when talent systems are becoming more team-focused? That’s why our Centre for Excellence in Strategic Talent Management and our Centre for Excellence in Strategic Rewards joined forces for a new study that sheds a light on 8 Belgian and 4 Dutch companies that were either working agilely from the very beginning or changed the tires while driving the car. Based on a qualitative study with the support of our Chair Partner Hudson, the research team identified 10 key findings, each representing a phenomenon, trend or influence currently playing in agile working contexts: A purpose-led approach towards performance & career development From taking up additional roles to role-based job design Career self-management as the main driver for career evolution Questioning the role of supervisors in the performance management process Transparency to enhance trust, ownership and internal fairness Actively identifying and managing poor performance Team members deciding on salary increases and promotions To pay or not to pay for individual performance? It all depends... Customised and on the spot recognition Managing and rewarding agile teams in crisis situations
  • Supply chain planning in the digital age

    Vereecke, Ann (2020)
    With new, digital technologies entering the factories and the supply chain, the role of people in manufacturing and logistics is undeniably changing. Existing tasks are disappearing or changing, new tasks are emerging. Digital technologies can be used to automate certain tasks, yet their full power is in how they can augment and extend the human capabilities of employees. But what about the planning function? How is this function being impacted by the introduction of digital technologies – and, in particular, artificial intelligence – making the planning system more advanced? In collaboration with OMP, partner in our Research Centre for People in the Smart Digitised Supply Chain, Professor Ann Vereecke, and researchers Alejandra Cabos-Rodríguez and Nicholas Vijverman, conducted a series of interviews with decision-makers in multinational manufacturing companies. The insights from those interviews can be found in the report ‘Supply Chain Planning in the Digital Age’. The reports looks into the future of supply chain planning in order to answer two sets of questions: What does the planning system of the future look like for manufacturing companies? Knowing that planning algorithms are becoming more advanced, self-learning and prescriptive, will this have an impact on the different modules of the planning system and on how these modules interact with each other? And what impact will this have on the interaction between the ‘human’ and the ‘machine’ – that is, between the planner and the planning tool? Who is the planner of the future? What will the planner’s responsibility be if algorithms are doing the planning? What skills and competencies does the planner need? Somewhat controversially, one may even wonder whether we will still need a planner in the future.

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