S. Andrew Starbird

Moral Hazard, Inspection Policy, and Food Safety

Buyers have imperfect information about the food safety efforts exerted by suppliers. To gather information about safety, buyers often employ sampling inspection. Sampling inspection exhibits sampling error so some unsafe product passes inspection and some safe product does not. This uncertainty influences buyer and supplier behavior. In this article, I use a principal-agent model to examine how sampling inspection policies influence food safety. I use the model to examine the sampling inspection policies in the 1996 Pathogen Reduction/Hazard Analysis Critical Control Point Act. I conclude that the regulation of sampling inspection procedures is an effective tool for policy makers who wish to improve food safety.

Acceptance sampling, imperfect production, and the optimality of zero defects

Acceptance sampling is often used to monitor the quality of raw materials and components when product testing is destructive, time-consuming, or expensive. In this paper we consider the effect of a buyer-imposed acceptance sampling policy on the optimal batch size and optimal quality level delivered by an expected cost minimizing supplier. We define quality as the suppliers process capability, i.e., the probability that a unit conforms to all product specifications, and we assume that unit cost is an increasing function of the quality level. We also assume that the supplier faces a known and constant pass-through cost, i.e., a fixed cost per defective unit passed on to the buyer. We show that the acceptance sampling plan has a significant impact on the suppliers optimal quality level, and we derive the conditions under which zero defects (100% conformance) is the policy that minimizes the suppliers expected annual cost.

Contract Selectivity, Food Safety, and Traceability

Contracts are an increasingly common method for coordinating exchange in the food industry. Contracts often include specifications for product attributes including food safety. One of the goals of explicit safety specifications is to discourage or deter suppliers who would deliver unsafe food. In this article, we use a principal-agent model in the context of adverse selection to examine how contracts that include traceability can be used to select against producers who cannot meet a processors safety specifications. We find that the motivation to select against unsafe producers depends on the magnitude of the failure costs and the proportion of the failure costs allocated to producers. We also identify the conditions under which the processor selects against unsafe producers regardless of traceability. Our results are important to regulators and negotiators who want to support safe producers and deter unsafe producers.

Managing quality in California food processing firms

The study evaluates the factors critical to effective quality management in California food processors. The survey results indicate that food processors perform relatively well in terms of the support given by senior management and the role of the quality department. However, the firms perform relatively poorly in the areas of training and employee awareness. Firms in which the responsibility for quality management is shared throughout the plant tend to perform better with respect to 8 of the 10 critical quality factors.

Graduate Agribusiness Management Programs: Too Many and Too Cheap

Nearly two dozen graduate programs in agribusiness management have emerged in the last decade. All are at public universities. This pattern raises several questions: Why have private universities stayed out of this market? Is this trend good for our students? Who is benefiting the most from this trend? In this paper, I present some hypotheses regarding the answers to these questions. Copyright 2003, Oxford University Press.

Traceability, Moral Hazard, and Food Safety

Errors in traceability can significantly impact the moral hazard associated with producing safe food. The effect of moral hazard depends on the proportion of unsafe food costs that can be allocated to the responsible producer, which depends on the efficiency of the traceability system. In this paper, we develop a model that identifies the minimum level of traceability needed to mitigate moral hazard and motivate suppliers to produce safe food. Regulators and consumer can use the results of this research to design regulations and contracts that mitigate moral hazard and motivate producers to deliver safe food.

Critical success factors for managing quality in food processing firms

Factors critical to successfully managing quality in the food processing industry are identified and include: the role of top management, the role of the quality department, employee relations, training, and process management. Little relationship was found between a factors importance and firm performance with respect to that factor. Thus, while a factor might be important to successfully managing quality, the firm may not be managing it well. This suggests that many companies have a long way to go to improve quality management. Firms with decentralized quality structures had higher overall levels of quality performance than those in which quality was the responsibility of a single department. ©1994 by John Wiley & Sons, Inc.

The Globalization of Business Schools: Curriculum and Pedagogical Issues

In this article we explore the connection between learning goals, cognitive skill development, and pedagogical strategies. We identify cognitive skills that are important to students of international business, and link them to the pedagogical strategies that support them. The characteristics that impact the effectiveness of international business pedagogy are described. Finally, three university programs are used to illustrate the connection between explicit learning goals, pedagogy, and cognitive skill development.

The evaluation of international agribusiness investment locations using multidimensional scaling

In this article, a method for comparing various locations for a foreign investment is presented. The method requires several assumptions regarding the characteristics of a preferred location, and the variables that can be used to measure these characteristics. Multidimensional scaling is used to map the locations in such a way that proximity indicates similarity with regard to the preferred characteristics. The technique is applied to twenty Central American, South American, and Caribbean countries.

Competitive food manufacturing: Evidence from the 1994 competitive manufacturing survey

Despite accounting for 10% of the US gross domestic product from manufacturing in 1991, the US food manufacturing industry has been, for the most part, neglected in the strategic management literature. In this article we use a survey of over 225 food manufacturing firms to explore the relationship between manufacturing strategy and competitiveness in this important-industry. Specifically, we examine the relationship between manufacturing objectives, manufacturing policy adoption rates, manufacturing performance, and financial performance. Our results suggest that many food manufacturing firms fail to fully exploit manufacturings potential contributions to customer satisfaction and that they frequently adopt manufacturing policies that have little or no effect on manufacturing performance. Firms can use the results presented in this article to benchmark their performance relative to the best firms in the industry.