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Showing impact case studies 1 to 8 of 8
Submitting institution
The University of Reading
Unit of assessment
17 - Business and Management Studies
Summary impact type
Societal
Is this case study continued from a case study submitted in 2014?
No

1. Summary of the impact

The challenge with delivering government policies is often knowing how to influence behaviour. Through engagement with the Government Communication Service (GCS), research from the University of Reading has informed communication strategies across all UK government departments and platforms (including digital, web, press and broadcast) with a combined annual budget spend of GBP300,000,000. The research has produced a tool called the “Henley Reputation Model”, which evaluates communications in order to effect behaviour change. Having far-reaching impacts across all government departments and arms lengths bodies, the Henley Reputation Model underpins the government’s Communications Evaluation Framework, used by over 400 government departments, agencies and public bodies in the UK, and is shared with public sector bodies overseas. This Framework has brought about positive behaviour change, demonstrating successful delivery of a wide range of policy priorities across government.

2. Underpinning research

The underpinning research for this case comprises a body of work produced by Money and his colleagues at Reading since 2006. The initial research developed a conceptual model based on theoretical research [refs 1 and 2] regarding the effectiveness of communication strategies used by organisations to build reputation and influence behaviour. The research proposes key components of organisational communication strategies, such as organisational listening, leveraging senior leadership and influencer voices, and causally links them to desired outcomes such as cooperation, compliance and advocacy behaviour of message recipients. This novel foundational work allowed Money and his colleagues to follow up on the proposed linkages in subsequent empirical work, to provide nuance and detail for organisational strategies and likely recipient behaviour. For example, Ref 3 reports on the underpinning research as to why compliant and non-compliant taxpayers were responding in different ways to the same communications from Her Majesty’s Revenue and Customs (HMRC). In this research, key organisational messages associated with subsequent compliance behaviour relate to communications built around organisational listening on issues of procedural fairness and the voice of individual taxpayers. The research guides communication strategies accordingly in order to achieve compliance. In 2013 the National Audit Office awarded the HMRC for representing best practice in communications for this work. This research [ref 3] published in 2013, has not only guided the communications and evaluation strategy of HMRC from 2014-2020, but it is one of the key foundations for the first GCS Evaluation Framework of 2016, which was subsequently implemented as a mandatory tool to guide communication strategy and evaluation across all 401 government departments and related bodies.

The focus on linking specific aspects of communications to specific behavioural outcomes was novel at this time because the value of communication has often been measured by practitioners more generally in terms of awareness of and attitudes towards the communication itself, rather than in terms of tangible behaviour change. The research is therefore methodologically innovative in that the link between drivers (messages) and outcomes (citizen behaviour) had not been widely conceptualised, analysed or measured before. The work is often referred to as the “Henley Reputation Model”, and it uses a cause–effect logic [refs 1 and 2]. It was applied to underpin a communication strategy for the HMRC which resulted in a publication and a Reputation Model adapted for the government sector [ref 3]. The research has since been developed to allow the Model to be used in communications strategies deployed by the police force [ref 4] exploring how communicating about police performance (league tables) impacts citizens’ engagement with the police force.

Money and his colleagues continued to theoretically and empirically develop a theory of change related to communications to include a more granular categorisation of citizen behaviour [ref 5] and to explain how citizen values may effect their response to communications [ref 6]. The recent development of the novel Reputation Model [ref 5] suggested that the behavioural outcomes of communication could be usefully categorised as “starting”, “stopping” and “maintaining” behaviours; and communication drivers could therefore relate to functional, relational, motivational and/or third-party influence drivers. This categorisation was adopted as part of the GCS Evaluation Framework 2.0, which was launched by the GCS in June 2018. The research allows communicators to apply a theory of change that permits them to categorise behaviour change and better understand communication drivers by using these categories, when previously behaviour change had been considered as one category. It also guides data collection and insight generation across different departments and communication activities. Communication campaigns can therefore be planned, tested and evaluated according to which messages resonate with whom and why. The Henley Reputation Model has provided a more granular approach to understanding behavioural change outcomes in relation to more nuanced drivers and has allowed the whole process of planning and evaluating government communications to be iterative and in constant refinement.

Since 2018, this refined Henley Reputation Model has informed the communication strategies of all UK government departments (through the GCS Evaluation Framework), as well as strategies in other countries, through the Foreign and Commonwealth Office (FCO).

3. References to the research

  1. Money, K. and Hillenbrand, C. (2006) ‘ Using reputation measurement to create value: An analysis and integration of existing measures’. Journal of General Management, 32 (1). pp. 1–12. doi: https://doi.org/10.1177/030630700603200101 (ABS 2*).

  2. Money, K.G., Hillenbrand, C., Day, M.B. and Magnan, G.M. (2010) ‘ Exploring reputation of B2B partnerships: Extending the study of reputation from the perception of single firms to the perception of inter-firm partnerships’. Industrial Marketing Management, 39 (5). pp. 761–768. doi: https://doi.org/10.1016/j.indmarman.2010.02.015. (ABS 3*).

  3. Money, K., Hillenbrand, C., Henseler, J. and da Camara, N. (2013) ‘ Exploring unanticipated consequences of strategy amongst stakeholder segments: The case of a European Revenue Service’. Long Range Planning, 45 (5–6). pp. 395–423. doi: https://doi.org/10.1016/j.lrp.2012.09.003. (ABS 3*)

  4. Mason, D., Hillenbrand, C. and Money, K. (2014) ‘ Are informed citizens more trusting? Transparency of performance data and trust towards a British police force’ . Journal of Business Ethics, 122 (2). pp. 321–341. doi: https://doi.org/10.1007/s10551-013-1702-6. (ABS 3*).

  5. Ghobadian, A.Money, K. and  Hillenbrand, C. (2015) ‘ Corporate responsibility research: past – present – future’. Group & Organization Management, 40 (3). pp. 271-294. ISSN 1059-6011 doi:  https://doi.org/10.1177/1059601115590320. (ABS 3*)

  6. West, B., Hillenbrand, C., Money, K., Ghobadian, A. and Ireland, R.D. (2016) ‘ Exploring the impact of social axioms on firm reputation: A stakeholder perspective’. British Journal of Management, 27 (2). pp. 249–270. doi: https://doi.org/10.1111/1467-8551.12153 (ABS 4*).

The underpinning research for this case study comprises six papers published in blind, peer-reviewed journals: one of these is located in an AJG/ABS 4* journal, with four in 3* journals, and one in a 2* journal. The Journal of Business Ethics (also on the prestigious FT45 journal list) and the British Journal of Management are particularly competitive and adopt strict refereeing standards. The research meets or exceeds 2* quality definitions, providing important new knowledge by using a mixture of quantitative, qualitative and conceptual approaches to develop and test tools that assess the effectiveness of the communication strategies used by governments to build trust and influence people’s behaviour.

4. Details of the impact

Historically, the government has often used tools such as taxation, regulation and legislation to deliver its policy outcomes. However, many of the bigger policy challenges, such as the increase in chronic health conditions, can only be resolved if people are persuaded to change their behaviour. Through engagement with HMRC (in which initial research and impact took place) and subsequently the GCS, Money et al.’s research has informed the communication strategies across UK government departments within the UK, and internationally, with a combined annual budget spend of GBP300,000,000 (a total in the region of GBP1,500,000,000 between 2016 and 2020) [source 1]. The research underpins the approach taken to guiding communications strategy and evaluation in the HMRC from 2014 and the GCS Evaluation Framework (launched in 2016, and revised in 2018). This is a mandatory framework for guiding communications across all 400 UK government departments, agencies and public bodies, and has been shared across the public sector globally [source 3]. In so doing, it has helped influence behaviour in order to deliver a range of positive policy outcomes and acted as a multiplier of the impact initially achieved in HMRC. The purpose of the GCS is to deliver world-class public service communications that support ministers’ priorities, enable the efficient and effective operation of public services, and improve people’s lives. The successful implementation of government policies is contingent upon compelling communications. It therefore plays a significant role in achieving positive change through raising awareness, changing perceptions or encouraging behaviour change in society, whether that concerns the implementation of the NHS Long-Term Plan, for example, or exiting the EU. The GCS also addresses disinformation.

The GCS Evaluation Framework

Money and Hillenbrand’s 2006 article [ref 1] was first used by HMRC across its communication division in a study that was subsequently recognised as best practice by the National Audit Office in 2013. The HMRC research was published in an article in 2013 [ref 3] and has been used to guide HMRC communications and evaluation strategy between 2014 and 2020 (source 7). In 2013, the then Head of Evaluation in HMRC, and a close collaborator with Henley Business School (University of Reading), was seconded to the GCS to guide “Project Aspire”– an initiative to develop a mandatory evaluation framework for use across government. Money was a key advisor to Project Aspire, which led to the launch of the Evaluation Council in 2013. Money was invited to be a full member of the Evaluation Council in 2014 alongside key industry players such as Google, eBay, and Kantar; as well as NGOs such as Oxfam and AMEC (International Association for the Measurement and Evaluation of Communications). Having overseen over 100 campaigns since 2014, the Council supports GCS to develop, improve and embed best-practice approaches to planning, delivering and evaluating government communications activity. It also acts as a sounding board to help shape future cross-government communication initiatives, bringing scrutiny, rigour and challenge to GCS campaign planning and evaluation.

As a result, the GCS Evaluation Framework (2016) [source 2] was launched, drawing heavily on research by Money et al. [refs 1 and 3; source 1]. Specifically, the Framework was underpinned by the research on cause–effect relationships, with the outlined components of organisational communications strategies, as well as behavioural change outcomes, derived from Money’s research. The GCS Framework is now a mandatory tool used to evaluate and guide government communications across all 25 government departments (such as, for example, the Ministry of Justice, HMRC, and the FCO) as well as all 401 non-ministerial departments and arms-length bodies (such as Ofcom, the DVLA and the British Council), both nationally and internationally.

Further University of Reading research underpinned the subsequently revised “Evaluation Framework 2.0” [source 3], launched in 2018. This cited six publications by Money et. al., the only academic research mentioned. Specifically, the research [ref 5] enabled a focus on categorising behavioural outcomes more effectively and applying a theory of change related to communication strategies. This is highlighted in the Government Communication Plan 2019/20 where “setting the highest standards of communication practice” includes “evaluating the outcomes and impact of every campaign utilising the Evaluation Framework 2.0” [source 4]. In addition, the research was used to provide guidelines on data collection and how to choose key performance indicators. This has allowed GCS to develop a joint database across government departments allowing learning to be shared across the GCS, not only saving costs, but also acting as case studies of best practice using the research.

Adoption/Implementation

Money’s work has influenced government communication both nationally and internationally. In addition to sharing the Evaluation Framework with public sector communicators across the world, who have similarly used it to improve the standards, consistency and impacts of their communication [source 1], it has also been used by the FCO. Money has directly mentored senior communicators in the FCO and the Department of Trade and Industry as part of his role on the Evaluation Council. Thus the Reputation Framework has been used to guide consular and diplomatic efforts overseas, seeking to encourage positive relations for the UK and its citizens in relation to safety, counter-terrorism, trade and foreign inward investment.

Since 2014, HMRC has used the Henley Reputation Model [refs 3 and 5] and the GCS Evaluation Frameworks (based on this Henley research) to develop, evaluate and adapt its communications strategy (on a yearly, monthly and sometimes weekly basis) with SME’s, large companies and individuals to increase tax compliance and reduce tax avoidance. This includes communications related to corporation tax, income tax, excise duties national insurance and VAT. These HMRC communications have played an important role in reducing the tax gap (the difference between the amount of tax that should, in theory, be paid to HMRC, and what is actually paid) through impacts on the behaviours of large companies, SME’s and individuals. “In summary, between 2014 to 2019 the tax gap has decreased in each consecutive year, from an estimated 7.2% in 2014 (£38bn) to an estimated 4.7% (£31bn) in 2019, at a total saving of at least £7bn over this period” [source 5]. The role of adapting and developing communications, informed through research outputs [refs 3 and 5] and the GCS Evaluation Frameworks of 2016 and 2018, “has played an important role in achieving a reduction in the tax gap, [t]hereby securing more revenue for the HMRC to assist the government in funding important government services such as health (NHS) and education” [source 5].

Across the machinery of government, the GCS Evaluation Framework is required to have an agile approach, reflecting the challenges in delivering a diverse array of time-sensitive policies. Underpinned by the Reading research and the theory of change, this approach has been shown to be fit for purpose, influencing communications across a breadth of policy areas. For example, since 2016, “Public Health England has used the Evaluation Framework to guide its ‘One You’ campaign evaluation, using findings to optimise planning and delivery of a multi-year campaign that aims to save the NHS £11 billion a year by encouraging people in mid-life to engage in healthier behaviours such as diet and exercise and reduce behaviours such as smoking and drinking alcohol” [source 1]. Furthermore, “ACT (Action Counters Terrorism) is an ongoing Government campaign that reached more than 50% of the UK population at least 6 times during 2017 alone. Its strategy was informed by evaluation of previous activity and has been very successful, significantly increasing knowledge of what may constitute terrorist activity and improving awareness of appropriate course of action. This has in turn resulted in increased and appropriate use of counter-terrorism help lines” [source 1]. Meanwhile, the “Department for International Trade’s GREAT campaign encourages UK businesses to export overseas and the international community to visit and do more business with the UK. It used the GCS Evaluation Framework to identify opportunities for growth and to target communication for UK business and exporters as well as to encourage related activities such as tourism” [source 1]. Since 2016, it is estimated that the GREAT campaign has brought a gain of GBP1,700,000,000 to the UK (NAO 2015).

Other examples of positive policy outcomes include the Department for Education, which has used the Framework to shape its communication in relation to apprenticeships. With its spend of approximately GBP170,000,000 in 2019, it guided 21,197 applications for apprenticeships (the apprenticeship market is worth GBP2,500,000,000 a year). It is estimated that the Framework drove 50–60% of these applications (that is, applicants replied because of the communication guided by the Framework) [source 1]. In the field of healthcare, a further example includes the work done by the Medicines and Healthcare products Regulatory Agency (MHRA) on its “#FakeMeds” campaign which started in 2016 and is ongoing. One in ten people have bought fake medical products online in the last year, according to the MHRA. Fake medicine and devices can lead to serious negative health consequences. In 2018, it seized over 4,600,000 fake medical products and closed 4,700 websites. Positive outcomes include a 43% increase in the reporting of counterfeit dental equipment sales and a 16% increase in searches for products registered as legitimate on the EU registry [source 1]. Similarly, “in the year 2018/2019, Public Health England used the framework to guide its ‘Keep Antibiotics Working Campaign’. The campaign set out to impact citizen behaviour by avoiding taking antibiotics if they don’t need them. The campaign is estimated to have directly resulted in 1.5 million fewer prescriptions of antibiotics in 2018/2019 by explaining the dangers of using antibiotics” [source 1].

In summary, in the words of Alex Aiken, Executive Director of Government Communications: “Communication is one of the four main levers of government alongside legislation, regulation and taxation. When done well, its contribution to delivering government policies is profound.” The Evaluation Framework has facilitated significant policy outcomes across a breadth of government policy areas (domestic and international) where a change in behaviour is the required policy outcome. As a result, the positive policy outcomes have been profound, having “far-reaching impacts across all government departments and arms lengths bodies” [source 1]. These include an effective counter-terrorism campaign, improved health outcomes, and increased trade. Thus the Framework has “helped departments communicate more effectively and more efficiently, improved stakeholder relationships and improved trust, encouraged pro-social behaviour, discouraged anti-social behaviour, and shown return on investment for tax spend” [source 1].

5. Sources to corroborate the impact

  1. Letter from the Executive Director of the Government Communication Service and two follow up letters from Head of Insight and Evaluation (Prime Minister’s Office and Cabinet Office Communications).

  2. Government Communication Plan (2016) – includes GCS Evaluation Framework.

  3. Government Communication Service: Evaluation Framework 2.0 (2018).

  4. Government Communication Plan 2019/20.

  5. Letter from Head of Comms Project & Evaluation at HMRC.

Submitting institution
The University of Reading
Unit of assessment
17 - Business and Management Studies
Summary impact type
Political
Is this case study continued from a case study submitted in 2014?
Yes

1. Summary of the impact

The housing market in the UK has been described as “broken”. It is seen as one of the greatest barriers to progress in building a stronger and fairer Britain. Becoming increasingly unaffordable, housing accounts for more than a third of the disposable income of 2,200,000 working households with below-average income (Housing White Paper, 2017). Research at Reading has informed a number of government policies aimed at improving the affordability of and access to housing; these include the government’s annual house construction target (300,000), set with a view to increasing supply, and therefore improving affordability. The empirical model developed at Reading is fully embedded in policy cycles across numerous government departments, including the Ministry of Housing, Communities and Local Government (MHCLG). It also underpins the twice-yearly housing market forecasts conducted by the Office for Budget Responsibility and used in negotiations with HM Treasury over public expenditure planning.

2. Underpinning research

Long-term research at the University of Reading (backed by funding of approximately GBP1,000,000 from MHCLG since 2005) has led to the development of an econometric model of regional housing markets [ref 2]. Originally developed in the early 2000s to look at the effects on affordability of increases in housing supply, the model is still in widespread use and has expanded its scope to cover questions related to housing tenure, financial deregulation, the effects of Brexit and Right to Buy sales as recent examples. Simulations are conducted using the model, to determine the predicted impacts of changes in key policy variables on the outcomes of interest, in particular affordability [ref 5].

Regularly used to underpin government policy, the model has been refined over time and is an econometric model of housing affordability at the regional level, including specifications of the housing and labour markets, and demographic segments. For example, recent research has examined intergenerational aspects of housing affordability and the factors that affect opportunities for home ownership among different cohorts, in particular first-time buyers [ref 6]. Meen’s research at the international level has also suggested that housing supply in the UK is less responsive to price rises than in other countries, implying that shortages and a lack of affordability can persist for prolonged periods [refs 1 and 4].

Modelling the effects of policy changes on housing is complex and had not been attempted on this scale in Britain before. Housing mobility, for example, implies that the effects of increases in housing supply on regional affordability are difficult to capture since households are likely to move into areas where new housing is being constructed, potentially offsetting any improvements in affordability in those areas. The interactions between these different factors affect not only house prices and affordability, but also household formation and the proportion who are owners, all of which are captured within the model [ref 3]. In contrast to official projections of household formation (which are trend-based), the model allows users to consider how worsening affordability reduces the number of new households. In summary, the model demonstrates the strength of economic forces, and the impact of monetary and fiscal policy on housing.

The premise that housing affordability can be improved through increasing supply is underpinned by the model and reiterated in the 2017 Housing White Paper, ‘Fixing our broken housing market’. However, the key issue was by how much housing supply would need to be increased in order to induce a major improvement in affordability; this was a difficult quantitative issue because of the interdependencies across local markets. Contrary to expectations at the time, the conclusions were that supply increases would have to be very large and sustained over long periods of time to have a significant effect on affordability. This fundamentally challenged the traditional view, according to which planning decisions for housing should be based on expected increases in the number of households, as opposed to the need to modify the housing supply. Meen’s research showed that increases in provision would need to be much larger; and this indicated that there would need to be significant building on greenfield sites, where the cost of building is typically lower and supply responses to price changes are greater [ref 4]. While this analysis originally attracted considerable controversy, it is now generally accepted as correct, although political realities prevent the conclusions from being fully adopted. Nonetheless, since 2017, the government has had a house-building target of 300,000 dwellings per annum, underpinned by the research at Reading, which is much higher than recent outturns.

3. References to the research

  1. Meen, G. (2002) ‘ The time-series behavior of house prices: A transatlantic divide’, Journal of Housing Economics, 11 (1): 1–23.

  2. Meen, G. (2009) ‘ Modelling local spatial poverty traps in England’ . Housing Studies, 24 (1). pp. 127–147. doi: https://doi.org/10.1080/02673030802547413

  3. Meen, G. and Andrew, M. (2008) ‘ Planning for housing in the post-Barker era: Affordibility, household formation and tenure choice’ . Oxford Review of Economic Policy, 24 (1). pp. 79–98. doi: https://doi.org/10.1093/oxrep/grn010

  4. Ball, M.J., Meen, G.P. and Nygaard, C.-A.B. (2010) ‘ Housing supply price elasticities revisited: Evidence from international, national, local and company data’ . Journal of Housing Economics, 19 (4). pp. 255–268. doi: https://doi.org/10.1016/j.jhe.2010.09.004

  5. Meen, G. (2011) ‘ A long-run model of housing affordability’ . Housing Studies, 26 (7–8). pp. 1081–1103. doi: https://doi.org/10.1080/02673037.2011.609327

  6. Meen, G. (2013) ‘ Homeownership for future generations in the UK’ . Urban Studies, 50 (4). pp. 637–656. doi: https://doi.org/10.1177/0042098012458006

The underpinning research for this case study comprises six journal papers, all of which are published in refereed journals (one is rated 3* by the AJG/ABS list and three are rated 2*). The research meets or exceeds 2* quality definitions, providing important new knowledge centred around the development and various empirical uses of a novel econometric model of regional housing markets that has become influential in the housing economics literature.

4. Details of the impact

Research conducted at the University of Reading by Meen, demonstrating how increasing housing supply can improve affordability, has underpinned the key econometric model used for housing policy analysis and forecasting across government. Reflecting Meen’s longstanding expertise in housing, and his close working relationship with MHCLG (for which he was awarded an OBE), the model has expanded beyond the focus of affordability and housing supply to embrace related issues of tenure, financial deregulation and Right to Buy Sales, as well as broader cross-government priorities, including Brexit. Indeed, when analysts “consider policy interventions, the model is used implicitly (if not explicitly)” and is “fully embedded in the policy cycle” [Section 5, source 1]. Results are shared with the Office for Budget Responsibility (OBR), the official independent forecasting agency, and are used in negotiations with HM Treasury over public expenditure planning. In particular, the model has informed government “understanding of the housing market and how changes in the economy and demography will affect housing outcomes” [source 1].

“Our broken housing market is one of the greatest barriers to progress in Britain today. Whether buying or renting, the fact is that housing is increasingly unaffordable – particularly for ordinary working class people who are struggling to get by” (Theresa May, foreword to Housing White Paper, 2017). In this context, Meen’s research has changed and informed the government’s policies around housing supply [sources 1 and 2]. Outputs from the model were shared with ministers and showed that “at current levels of house building, affordability will get worse” and “provided a compelling case to be more ambitious about creating the conditions for supply to be permanently higher” [source 1]. The model’s predictions that even housing supply significantly above current levels would only lead to a slowing of worsening affordability has “compelled (policy) ambition to be bolder and more radical” [source 1]. Thus, an annual government target of 300,000 additional homes was set out in the November 2017 government budget. If the government delivers 300,000 new homes per year (including change of use and/or office conversions), this will constitute a significant increase in the rate of house-building, since the number built in a year averaged only 177,000 in the period 2005/06 to 2017/18 (according to the Public Accounts Committee). The evidence-informed goal represents a change in local authority target-setting, as targets were previously set according to anticipated increases in households and are now being informed additionally by affordability indicators on a regional basis. The government trajectory towards the target of 300,000 is regularly updated on the basis of housing government forecasts informed by the model and shared across Whitehall by the Secretary of State, the Chancellor of the Exchequer and the Cabinet Office [source 1]; potential shortfalls are the trigger for further investigation and policy changes.

‘Fixing our broken housing market’ has caused much debate in the UK and is recognised by the government as key to building a stronger, fairer Britain (White Paper, 2017). Despite this, the most recent figures for affordability show that, on average, full-time workers could expect to pay an estimated 7.8 times their annual workplace-based earnings on purchasing a home in England and Wales in 2018 (Office for National Statistics, 2019). Current statistics show that housing in 77 local authorities became less affordable over the last five years (Office for National Statistics, 2018), with the gap between the most and least affordable areas continuing to widen. In recognition of the variance in affordability according to geography, the model has been used to inform government policy on the geographical targeting of housing investment in high-demand areas such as London and the South East [source 1].

Meen’s long-term engagement with parliamentary select committees, the MHCLG and the OBR has continued as successive governments have utilised his expertise to tackle a variety of important economic and social policy issues. For example, the OBR produced the working paper Forecasting House Prices [source 3], which looked to develop a five-year forecast using models for house prices, whilst examining insights regarding the drivers of house price rises. This forecasting approach was based heavily on a series of Meen’s papers, most notably his 2013 paper [ref 6] and forms part of OBR’s core forecasting activities on house prices today [sources 1 and 3].

Meen also contributed to parliamentary debate through his appointment as a Specialist Adviser to the House of Lords Economic Affairs Select Committee Inquiry into the UK housing market in 2015/16 (House of Lords 2016, ‘Building more homes’, source 4). The Committee concentrated on ways of increasing housing supply (the theme of a number of government and independent reports) but was sceptical of the widespread view that increasing general market housing would benefit those on low incomes. This was consistent with Meen’s work on the effects of increases in housing supply; the Committee then called for the relaxation of controls on local authority borrowing in order to increase the amount of affordable housing. Controls have now been relaxed. Furthermore, the results produced by the model showed that new affordable housing output does not significantly crowd out new private housing supply; this has been used by MHCLG to “convince HM Treasury of the efficacy of affordable housing investment” [source 1]. The model has also been used “multiple times” to test “the impact of changes to stamp duty” and was “influential in the eventual HM Treasury decision” to make changes to Stamp Duty in 2017 [source 1].

Although work on the model was suspended during the period of the Coalition government, the need was such that it resumed in 2015 with a rebuilding of the model to reflect new policy priorities. Further updating, including the most recent research on tenure, took place in 2018/19. For example, the model’s Right to Buy sales equations are used to forecast the numbers of local authority housing sales to tenants across the UK regions. The MHCLG “uses this to project the total amount of income that it expects local authorities to receive from sales. This provides the basis for estimates of the amount that authorities must spend on replacement housing stock to comply with the requirement to spend receipts within three years. The modelling results are shared with the OBR at Fiscal Events, and feed into the Local Authority Self-Financed Expenditure forecasts” [source 1]. The model has also been used to inform potential policy interventions in the event of a “no-deal” Brexit [source 1]: “The model was used to test multiple Brexit scenarios and how they would affect the housing market. The potential impacts on housing construction, housing transactions, house prices and affordability were looked at. The analysis provided a baseline to design potential policy interventions in case of a no-deal, including where to focus our attention and what the trigger signs might be in a housing downturn” [source 1].

Meen has also provided guidance on housing economics and the use of models since the model’s inception, training successive generations of economists in the Ministry since 2005; in terms of skills capacity, Meen facilitated the setting-up of a system within MHCLG which will enable the ongoing training of economists in-house. In addition, he was invited to give a seminar on housing affordability to MHCLG staff, including researchers and policy analysts, in January 2017. Subsequent to this, he provided oral evidence to the House of Commons Communities and Local Government Committee on housing for older persons in January 2018, and this is cited in the final report [source 7]. There is a view that there is no housing shortage in Britain. Rather, older households are “under-occupying” housing, particularly once their children have left home. Therefore, if they could be encouraged to downsize, the housing problem would be reduced. One view is that the failure to downsize is due to the lack of suitable alternative accommodation. However, Meen’s evidence concentrated on the absence of incentives to do so. Most older-person households have paid off their mortgages and so their housing costs are low; the tax system, and expected capital gains in housing assets over time, encourage them to stay.

Meen also gave advice on both modelling and policy to the independent Redfern Review into the decline in home ownership (2016); this was commissioned by the Shadow Secretary of State for Housing. The technical report accompanying the Review, on forecasting house prices and home ownership and produced by Oxford Economics [source 5], cites 11 papers by Meen out of a total of 25 references, alongside providing the basis for house price modelling. More recent work with the UK Collaborative Centre for Housing has been used to inform the Affordable Housing Commission Report Defining and Measuring Housing Affordability – An Alternative Approach [source 8].

Beyond England, a commissioned review of tax revenue forecasting models for the Scottish housing market concluded: “The models that were most popular for forecasting house prices included error-correction models. Particularly, the most influential literature for practitioners in the UK was the work of Geoff Meen” [Scottish Government, source 6].

In summary, this body of research has underpinned cross-government policy reform aimed at addressing the challenges in the UK’s “broken” housing markert. Of particular concern has been the rise in housing costs, making housing increasingly unaffordable. In terms of reach, Meen’s long-term research has been adopted on a national scale and has informed a variety of important economic and societal policies associated with housing. Significantly, in addressing the barriers to a “fairer and stronger Britain”, it has informed “radical” policy decisions (for example, housing targets) which have urgent and compelling ramifications for planning policy and housing affordability as a whole.

5. Sources to corroborate the impact

  1. Testimonial from MHCLG.

  2. Ministry of Housing, Communities and Local Government (2018) ‘ Analysis of the determinants of house price changes ’. Ad hoc publication, April.

  3. Auterson, T. (2014) Forecasting House Prices . Working Paper No.6, Office for Budget Responsibility (See pp. 2, 6, 16, 21, 35.)

  4. Select Committee on Economic Affairs, House of Lords (15 July 2016) ‘ Building more homes ’., 1st Report of Session 2016/17. HL Paper 20. www.parliament.uk (Appendix 1, which lists Professor Meen as a special adviser.)

  5. Oxford Economics (2016) Forecasting UK House Prices and Home Ownership: A Report for the Redfern Review into the Decline of Home Ownership . (See Section 4.2, p. 22.)

  6. Scottish Government (2017) A Review of Tax Revenue Forecasting Models for the Scottish Housing Market. (See p. 46 in particular.)

  7. Communities and Local Government Committee, House of Commons (2018) Oral evidence: Housing for older people , HC 370. Second Report of Session 2017–19. (See pp. 25, 26, 33 and 68.)

  8. Affordable Housing Commission (2019) Defining and Measuring Housing Affordability – An Alternative Approach .

Submitting institution
The University of Reading
Unit of assessment
17 - Business and Management Studies
Summary impact type
Societal
Is this case study continued from a case study submitted in 2014?
No

1. Summary of the impact

Connecting stakeholder data to corporate strategy is critical for the ongoing success of a business, yet it is something that many companies struggle to do. Research at the University of Reading, led by Professor Carola Hillenbrand, has produced an innovative tool which addresses this gap and underpins corporate stakeholder engagement strategies. By using this tool, companies are now able to measure and strengthen the key drivers of stakeholder relationships, achieving corporate goals such as greater customer retention, more pro-social outcomes and more ambitious sustainability targets. The approach, known as the “RELATE tool”, enables organisations to build stronger relationships with stakeholders by measuring and influencing the psychological drivers of behaviour. The tool is used internationally across FTSE 100 and Fortune Global 500 companies (such as Zurich Insurance, Nokia, and Unilever), as well as by other well-known UK companies such as the John Lewis Partnership and Deloitte. For example, in Unilever, it guides engagement in over 190 countries with the 2,500,000,000 people who use a Unilever product each day, where the Unilever brands applying the RELATE tool are now producing 70% of Unilever’s turnover growth.

2. Underpinning research

Working with key industry organisations, such as Canon, Allied Dunbar, Shell, Unilever and a number of UK financial service organisations, Hillenbrand and her colleagues at the University of Reading have co-designed a tool which uses theory and knowledge from social and behavioural psychology to help corporations strengthen stakeholder relationships, with the aim of achieving organisational attainment targets. Previously, it had been methodologically difficult to address the lack of connection between stakeholder data and corporate strategy. What is novel, therefore, is that the bi-directional RELATE tool utilises psychological knowledge to create a feedback loop enabling stakeholder insights to inform corporate strategy, which in turn can be evaluated, refined and modified into a process that will help the organisation to change stakeholder behaviour. The research has its foundations in stakeholder theory as well as social and behavioural psychology and integrates stakeholder relationship strategies with business targets and pro-social outcomes.

Hillenbrand et al.’s 2012 article [ref 3], which won an Emerald Literati Award (2014) for the best paper and presents the RELATE tool, provides much of the academic foundation for subsequent impact work by outlining a bi-directional model of stakeholder engagement. This paper advances knowledge by proposing a data-driven process for stakeholder engagement (for example, what psychological drivers are likely to lead to stakeholder support and subsequent organisational attainment). This article integrates previous research from psychology [ref 1] and stakeholder management, based on interviews and focus group discussions with employees and customers [ref 2], to develop the RELATE tool. It used quantitiative data from 700 customers of a European service organisation, which was analysed using the partial least squares equation modelling technique. What is novel about the research process and findings of Hillenbrand et al. [refs 1,2,3], and the RELATE tool generally, is that a specific stakeholder relationship strategy is linked to a measurable organisational outcome. The difference that the RELATE tool is therefore making is that desired organisational outcomes (such as sustainability targets) can be traced back to the implementation of a stakeholder relationship strategy – therefore allowing for implementation of evidence-based stakeholder strategies.

Since 2012, the application and further advancements of early relational frameworks have shifted Hillenbrand and her colleagues’ work specifically to understand how the psychological make-up of individuals can influence their engagement with organisations. For example, Hillenbrand et al.’s 2013 article [ref 4] unpacks the psychological mechanism by which corporate responsibility impacts stakeholder relationships, providing insights for organisations like Unilever, which want to leverage corporate responsibility and sustainability to generate stakeholder support. Using qualitative data from a UK service organisation (n=708 customers and n=359 employees), it built on advances in the application of psychological theories to the field of management, and empirically tested a theoretical model of how corporate-responsibility-related experiences and beliefs drove stakeholder trust and positive intent.

With a survey of 130 retail employees, the research cited in ref 5 moved this a stage further by exploring how the deeply held beliefs and cultural backgrounds of individuals could influence their engagement with organisations. Once again, this is innovative because it allows organisations to tailor engagement strategies to the psychological make-up and cultural attitudes of the individuals they are engaging with. This is particularly valuable to global organisations when tailoring engagement strategies in different parts of the world. Following a qualitative analysis of in-depth interviews with representatives of community groups (NGOs/thinktanks and special interest groups), as well as interviews with those representing business groups (business leaders and industry representatives), the research cited in ref 6 applied the RELATE tool to the specific case of understanding the impact of corporate tax strategies on stakeholder trust and engagement. This research has been used by Deloitte to guide large companies in how to develop tax strategies that are supported by organisational stakeholders and in line with societal expectations.

3. References to the research

  1. Money, K., Hillenbrand, C. and Da Camara, N. (2009) ‘ Putting positive psychology to work in organisations’. Journal of General Management, 34 (3). pp. 21–36. doi: https://doi.org/10.1177/030630700903400302. (ABS 2*).

  2. Hillenbrand, C., Money, K. and Pavelin, S. (2011) ‘ Stakeholder-defined corporate responsibility for a pre-credit-crunch financial service company: Lessons for how good reputations are won and lost’ . Journal of Business Ethics, 105 (3). pp. 337–356. doi: https://doi.org/10.1007/s10551-011-0969-8. (ABS 3*).

  3. Money, K., Hillenbrand, C., Hunter, I. and Money, A.G. (2012) ‘ Modelling bi-directional research: A fresh approach to stakeholder theory’. Journal of Strategy and Management, 5 (1). pp. 5–24. doi: https://doi.org/10.1108/17554251211200428. (ABS 1*).

  4. Hillenbrand, C., Money, K. and Ghobadian, A. (2013) Unpacking the mechanism by which corporate responsibility impacts stakeholder relationships . British Journal of Management, 24 (1). pp. 127–146. doi: https://doi.org/10.1111/j.1467-8551.2011.00794.x. (ABS 4*).

  5. West, B., Hillenbrand, C. and Money, K. (2015) ‘ Building employee relationships through corporate social responsibility: The moderating role of social cynicism and reward for application’. Group & Organization Management, 40 (3). pp. 295–322. doi: https://doi.org/10.1177/1059601114560062. (ABS 3*).

  6. Hillenbrand, C., Money, K. G., Brooks, C. and Tovstiga, N. (2019) ‘ Corporate tax: What do stakeholders expect?’ Journal of Business Ethics, 158 (2). pp. 403-426.doi: https://doi.org/10.1007/s10551-017-3700-6. (ABS 3*).

The underpinning research for this case study comprises six papers, all published in refereed journals listed on the AJG/ABS list (one 4*-rated journal, three 3* journals and one 1* that won an award at the journal). The Journal of Business Ethics (also on the prestigious FT45 journal list) and the British Journal of Management are particularly competitive and adopt strict refereeing standards. The research meets or exceeds 2* quality definitions, providing important new knowledge by developing and empirically testing a framework to help corporations strengthen stakeholder relationships and achieve their attainment targets.

4. Details of the impact

Critical to the success of a business is the connection of stakeholder data with corporate strategy. The RELATE tool addresses this challenge and is used globally by a number of large companies and international consultancies to guide stakeholder engagement and improve organisational attainment. It has informed the global engagement strategies of FTSE 100 and Fortune 500 companies, driving significant increases in revenue from more sustainable brands, increased customer retention, increased staff wellbeing and retention, as well as underpinned corporate tax strategies. This has been facilitated by the engagement activities led by Hillenbrand as Academic Director of the John Madejski Centre for Reputation. The Centre was established in 2000 based on the tenet that healthy relationships are the foundation of flourishing organisations and communities.

From 2014 to the present day, the RELATE tool has underpinned Unilever’s global stakeholder engagement strategy relating to employees, consumers and across the supply chain. The researchers co-delivered the work through deep engagement with Unilever, which was facilitated by the Vice-President of Sustainable Business & Communications (a Visiting Fellow at the Henley Business School) and his team. Insights were derived that have since been applied to help encourage sustainable consumption in the 190 countries in which Unilever operates with the 2,500,000,000 customers who use a Unilever product each day [source 1]. In doing so, Unilever has been able to address the “attitude–behaviour” gap between what consumers say and what they actually do in relation to sustainability. This is important for Unilever in delivering its Sustainable Living Plan, which aims to decouple growth from its environmental footprint while increasing positive social impact. The tool has resulted in a better understanding of consumer motivation regarding sustainable behaviour. Application of the RELATE tool has been labelled internally by Unilever as project “Stopgap” and has led to significant business benefits for Unilever. In 2017, using the tool, Unilever was able to increase the growth of more sustainable brands 46% faster than the rest of the business (in 2018 and 2019 this figure was in the order of 50%) and delivered 70% of Unilever’s turnover growth [source 1]. The tool has therefore influenced sustainable consumption and strategic decision-making in relation to the global supply chain. With a turnover of EUR 53,000,000,000 and a forecast for stability in light of the coronavirus, the insights embedded in Unilever’s systems continue to generate new revenue and encourage sustainable consumption in 2020.

Further research (2014 to 2016), co-designed with Echo Research and Zurich Insurance and underpinned by the research outlined in refs 1 and 3, enabled the data-driven tool to underpin strategies for improved outcomes for both external stakeholders (for example, customer service experiences) and the business (for example, decreased turnover of customers). Zurich provides a wide range of products and services in more than 210 countries and territories. The tool led to the development of a global multi-stakeholder performance dashboard, which allowed Zurich to assess the value of trust among stakeholders, including customers (both personal and B2B), employees (and prospective employees), suppliers, governments and NGOs [source 2]. This “led to actionable insights that were translated into a data driven tool to underpin strategies for stakeholder engagements to improve relationships and trust with consumers, employees, prospects, investors, politicians, regulators and the general public” [source 2]. In summary, it enabled Zurich to better guide its strategy and demonstrate its performance with regard to one of its key strategic objectives: “At Zurich we have set out on a journey to become the best global insurer as measured by our customers, employees, and shareholders and by our contribution to the communities in which we work” [source 2].

In the UK, Hillenbrand and her team worked with the John Lewis (JL) Partnership to build a stakeholder engagement strategy to “increase the happiness and wellbeing of its 95,000 partners across all of its 60 John Lewis shops and 300 Waitrose stores” [source 5]. This opportunity arose from engagement in the form of a presentation given jointly by Unilever (Vice-President of Sustainable Business & Communications) and the Reading researchers at an event hosted by the Institute for Public Relations in 2013, which was watched by the then Director of Communications at the John Lewis Partnership. JL named the initiative “Project Sophia”; it ran from 2014 to 2016 and was underpinned by the application of the models in the research [refs 1,3,4, source 5]. It involved conducting research (both focus group discussions and surveys) with a representative sample of JL and Waitrose staff, which led to changes in JL’s engagement with its staff, including the introduction of multi-disciplinary team collaboration and information sharing across the group – both of which were linked to increases in staff wellbeing [source 5]. The project also identified instances of excellent performance and traced their links to staff satisfaction and happiness; these were subsequently replicated and showcased across JL as best practice. An example of this related to employees having higher resilience when expectations were clear and could be linked to key aspects of the JL organisational purpose; this led to a “need to know” and “nice to know” framing of expectations which was championed across the group [source 5].

The innovative tool is now being used internationally in many different companies and countries through intermediary organisations such as T-Media and Deloitte who act as multipliers of the impact. Engagement with T-Media arose from Henley Business School’s thriving alumni community, as some of the directors of T-Media had graduated with Henley MBAs and had learnt about the RELATE tool as part of their course. T-Media is one of Finland’s leading stakeholder engagement and strategic advice consultancies, with a compound annual growth rate of 25% for several successive years; it states that the research has “significantly influenced our reputation measurement and advisory service business” [source 3]. Since 2014, they have used it with 100 clients (including large multinational enterprises: Finnair, Lidl and Nokia) to measure the drivers of stakeholder engagement and commitment. This research has led to the development of stakeholder engagement strategies which have brought business benefits ranging “from employee engagement and customer loyalty to encouraging sustainable behaviours from stakeholders and protecting share prices in time of crisis” [source 3]. For example, T-Media has used the research to help Nokia to achieve its mission to “engage better with changing labour markets and drive youth employment and skills development in Finland”. In another telecom operator business (DNA), the research has informed “day to day stakeholder engagement and value creation strategy…” helping to drive business and build reputation in many areas [source 3].

In an associated piece of work, the Reading researchers produced an article [ref 6] and a related practitioner report with the financial support of Deloitte, which explained how the tool could be used to develop a tax engagement process that would improve firms’ policies and transparency on tax with external stakeholders, and identify common ground and gaps. This is important as large corporations require a balance in terms of successfully communicating societal value, openness and fairness to customers on the one hand, and keeping shareholders happy on the other. Companies are therefore keen to avoid high-profile bad publicity on low, but legal, tax payments – as experienced by Starbucks and Amazon. Deloitte made extensive use of the report and its findings in large numbers of client interactions, including those with FTSE 100 firms that they advise. The report and a summary of it were made available to all 3,000 individuals in the tax practice; they distributed a copy of the summary findings to every tax partner in the UK firm and Switzerland (approximately 220); and they drafted a “conversation guide” on how to talk to their clients about the research findings (they estimate that over 500 such conversations took place). They also displayed the summary findings in their Academy (a private meeting space for the C-suite of the FTSE), which has 4,000 members. Deloitte also shared the research with their major public policy stakeholders (including HM Treasury) [source 4].

In summary, the research addresses the challenge that companies experience when endeavouring to connect stakeholder data to corporate strategy. It demonstrates that the key to achieving organisational and corporate attainment is measuring and strengthening the principal drivers of relationships between organisations and their stakeholders. Underpinned by research grounded in an understanding of the psychological mechanisms which influence stakeholder behaviour, the RELATE tool has an international reach. It has been adopted by FTSE 100 and Fortune Global 500 companies as well as other large global companies. As a result, these organisations are now better able to deliver their corporate strategies. The resulting benefits and attainment are significant in terms of higher revenue, increased customer retention, more pro-social outcomes and higher sustainability attainments. It follows therefore that the societal benefits are also significant in terms, for example, of working towards the Sustainable Development Goals.

5. Sources to corroborate the impact

  1. Letter from Vice-President of Global Communications, Unilever plc.

  2. Testimonial from the CEO of Echo Research.

  3. Letter from the CEO of T-Media.

  4. Letter from Deloitte.

  5. Letter from the former Director of Communications at the John Lewis Partnership.

Submitting institution
The University of Reading
Unit of assessment
17 - Business and Management Studies
Summary impact type
Societal
Is this case study continued from a case study submitted in 2014?
No

1. Summary of the impact

Very often, businesses fail when a known problem is not recognised and properly addressed by the Board. Meanwhile, board judgements in unclear/unknown situations are dependent on the quality and rigour of more intense board interactions. In this regard, the role of the Company Secretary is important. It carries with it an element of strategic stewardship, enabling the post-holder to shape board outcomes positively, and therefore enhance organisational performance. Recognising the importance of the Company Secretary to organisational survival, research at the University of Reading (Henley Business School) has underpinned the new core competency framework and training programme adopted by the Institute of Chartered Secretaries and Administrators (ICSA). It has done this by analysing the role and skillsets for effective company secretaries. The competency framework was implemented by ICSA in 2018 across its global network of 36,000 members, who represent a range of sectors, from major multinationals to small and medium-sized enterprises (SMEs). The framework has enabled company secretaries to fulfil their role as governance professionals with the capacity to underpin more resilient and sustained achievement of board outcomes.

2. Underpinning research

Under the direction of Professor Andrew Kakabadse, the Henley Directors’ Forum is a global research and advisory group at the University of Reading focusing on enhancing the performance of its network. Research within the Forum uses their database of 19,000 organisations across 41 countries. For more than a decade, the Directors’ Forum has attracted critical research funding from a number of organisations and associated bodies. Since 2014, their funded research has included ground-breaking qualitative work supported by ICSA, focusing on the role and contribution of the Company Secretary [refs 1 and 3] and on how to address conflict and tension in the boardroom [ref 2]. The research team engaged with board members through semi-structured interviews and focus group discussions, and at events, with support from ICSA. The combined networks of the Henley Directors Forum and ICSA facilitated access to the boards (Chair people, CEOs, non-executive directors, company secretaries) of the largest organisations (such as BAE, Barclays, Barratt Homes, National Grid), as well as those of SMEs. The sample comprised a range of 300+ private, public and third-sector organisations within the ICSA global network (34,000 members at that time across 70 countries).

The aim was to understand the critical role of the Company Secretary in building trust between board members through good governance practice. The key responsibilities of the Company Secretary role, and the characteristics of the individuals operating within it, were explored from the perspectives of board members and the incumbents. Pilot-testing confirmed a gap for full-scale study and informed the research questions. An inductive thematic analysis of the transcripts was undertaken. This identified the necessary discretionary skills required of an effective Company Secretary from different stakeholder perspectives, and evaluated opportunities for raising the profile and impact of the Company Secretary at board level. Relevant conceptual development of the research garnered significant new insights into the unique stewardship role of the Company Secretary, and how it could be better understood and promoted. This role requires a multifaceted skillset, and, when deployed effectively, it becomes the cornerstone of successful board outcomes and ultimately, the longer-term survival of the organisation. Indeed, the skills and attributes of the best company secretaries are closest to those of the Chair and include humanity, humility, high intelligence, an understanding of agendas, the ability to negotiate and resilience [refs 1, 2, and 3].

The research has demonstrated that the Company Secretary is key to delivering strategic leadership, and adds significant value when it comes to delivering organisational objectives [refs 1, 2, and 3]. It has brought attention to the key strategic influencing and behavioural attributes, skills and capabilities that are an important contribution to the board – for example, building trust, having open relationships, enabling positive interactions, providing timely and good quality information and communications, observing dynamics, and being diplomatic. These attributes represent “statesperson-like” qualities, which are critical for better decision-making when steering the board, by engaging board-member contributions and weathering times of change or crisis [refs 3, 4, and 5]. The Company Secretary is often the first to know of strategic business issues which need addressing, and frequently has the best institutional memory of any of the board members. Furthermore, critically, the research has demonstrated that success in progressing organisational business and addressing potential threats to the longer-term sustainability of the organisation is dependent on the effective engagement of the Company Secretary by the Chair and CEO. Indeed, to be effective, a Company Secretary should be established within the trivariate framework that includes the Chairman and CEO [ref 3].

The key findings demonstrated the unique and widely misunderstood role of the Company Secretary, a role which is, however, alongside that of the Chair, the most important on the board for improving board outcomes [refs 3, 4, and 5]. Despite at times wrongly being considered an administrative function, the role delivers proactive strategic leadership, providing a vital bridge between the executive management and the board. The recommendations from the research included addressing gaps in the ICSA qualification (and the impact of gaps in reporting line on the role), and developing the higher-level discretionary capacity, perhaps through a doctorate-level qualification or continuing professional development [refs 1 and 2]. As a result, ICSA has enhanced its own training programmes, to promote higher-order skillsets across their network, addressing issues such as handling boardroom ethical dilemmas, how to manage changing board dynamics, and succession planning. This research has also underpinned ICSA’s competency development framework. This framework is being deployed internationally across organisations of different sizes in all sectors (private, public, third), in a bid to raise the competencies, skills and profile of the Company Secretary role.

3. References to the research

  1. Kakabadse, A., Korac-Kakabadse, N., Khan, N., Morais, F. and Lee-Kelly, E. (2014) The Company Secretary: Building Trust Through Governance. Report. ICSA, Reading.

  2. Kakabadse, A., Kakabadse, N., Moore, P., Morais, F. and Goyal, R. (2016) The Conflict and Tension in the Boardroom Report. ICSA, London.

  3. Kakabadse, A., Khan, N. and Kakabadse, N.K. (2016) ‘ Company secretary: A role of breadth and majesty’ . Society and Business Review, 11 (3). pp. 333–349. doi: https://doi.org/10.1108/sbr-04-2016-0023

  4. Kakabadse, A. (2015) The Success Formula: How Smart Leaders Deliver Outstanding Value. Bloomsbury.

  5. Kakabadse, A., Khan, N. and Kakabadse, N. (2017) ‘ Leadership on the board: The role of company secretary’ . In: Storey, J., Hartley, J., Denis, J.-L., t' Hart, P. and Ulrich, D. (eds) The Routledge Companion to Leadership. Routledge, Abingdon.

The underpinning research for this case study comprises two reports commissioned by a professional body, an article in a blind-refereed journal (rated 2* by the AJG/ABS list), a refereed 200-page book, and a book chapter. The work meets or exceeds 2* quality definitions. It utilises Andrew Kakabadse’s unique database of company boards spanning over 40 countries and based on the results of a mixture of interviews and large-scale surveys that led to important new knowledge on the roles and attributes of successful company secretaries.

4. Details of the impact

Recognising that the effective deployment of the Company Secretary is pertinent to positive board outcomes, the research has raised the role’s profile among board members and shown it to be critical to board governance. Furthermore, it has empowered company secretaries and enabled them be more confident [source 1]. This has been possible through the deep developmental engagement over several years between the University of Reading and ICSA. As a result, ICSA’s core competency framework [source 2] and training programmes, underpinned by the research, have been implemented across its global ICSA network, now consisting of 36,000 members across 70 countries.

The Company Secretary is an executive position that usually reports directly to the Chair and is the key point of contact for other board members. In the context of stricter governance regimes, new disclosure regulations, and greater competitive pressures on boards, the secretariat holds a strategic function. However, historically, the role of the Company Secretary has been undervalued and misunderstood. Often, the demise of organisations is a result of the inability of boards to recognise and address a known business problem. In this regard, the Henley research has demonstrated the importance of the unique skillset of an effective Company Secretary in addressing these issues, and the importance of the role to the success of the organisation.

Increasing the skills capacity of company secretaries through an evidence-informed change in a training programme

The initial report [ref 1] has been reprinted three times and disseminated across ICSA’s global network [source 1]. Furthermore, it has been downloaded over 1,500 times from the ICSA website and University of Reading repository. The findings of the research projects were launched as printed and online reports, with keynote presentations given at the ICSA Annual Conference (London) to an audience of over 1,000 delegates (company secretaries and board members) comprising FTSE-listed and Multinational Enterprise (MNE) companies. Following this launch, ICSA cascaded the findings via their local and regional offices across 70 countries, where it has guided the work of ICSA with organisations in countries such as Australia, Hong Kong and China [source 1]. This was complemented by the release of the second report, published in 2016, on conflict in the boardroom [ref 2].

When the research was conducted, only 15% of company secretaries demonstrated higher-order skills. As a result of the evidence, the focus has since been to target the remaining 85% (29,000 members), to share best practice and learning widely and to “raise the bar of training” [source 1]. This represents a strategic change in ICSA’s training offer, moving away from focusing solely on technical skills, to add the softer skillset and strategic awareness demonstrated by effective company secretaries [refs 1 and 2; source 1 and 5]. For the first time, the research was used to develop a master’s programme. ICSA also redesigned their continuing professional development training to reflect the importance of life-long learning [source 1]. For example, there are two courses offered on the role of the Company Secretary – parts 1 and 2 [source 3a]. More than 200 delegates have attended the London-based ICSA courses, with further regional and international offices providing local delegates with similar training. There are also courses offered on director duties, effective influencing skills and risk management [source 3b]. ICSA are also developing courses that are specific to the private, public or third sector [source 3a]. The advantage of these is the opportunity to focus on sector-specific issues; for example, the skills needed by voluntary board members in charities will differ from those needed in the private sector and indeed the abilities required in the public sector. The new ICSA Governance Leadership programme [source 3a] is being offered as either a residential three-day course or as modular days.

The research also underpins the executive education two-day board director’s open programme at Henley Business School, and the master’s programme in Board Practice and Directorship that is designed for practising, experienced board members and company secretaries. The two-day open programme has had 60 participants a year for the last four years, and the master’s programme has 20 board-level participants in its 2020 cohort across the public, state-owned and private sectors.

The Policy and Research Director for ICSA reports that the research-informed training has led to an increased confidence among company secretaries, with an improved skillset in terms of transferrable skills. Examples include a Company Secretary in a UK-based FTSE 100 company, who “had the confidence to stand up for themselves and, when necessary, work with the board to effect leadership change where the current style was inimical with the board’s chosen culture”. Through the training, the company secretaries are now able to work across sectors and have a clearer career path, as the research has provided an “intellectual underpinning” of the Company Secretary as a Governance professional [source 1]; this concurs with observations from the ICSA’s membership on the changing nature of the role [source 1]. Other examples include individual company secretaries working across a number of different boards within the same sector, with each board requiring a different and nuanced strategic approach, as well as providing a strategic steer on the evaluation and appropriate composition of the board [source 1 and 5].

Change in name to Corporate Governance Institute and launch of a core competency framework

In 2018, ICSA launched its new skills competency framework, which was underpinned by the research. This has been “well received in the market place” [source 1]. Indeed, a number of FTSE 100 companies have used the framework as part of annual performance reviews – in terms both of informing development needs and of evaluating performance [source 1]. In turn, ICSA has observed a “change in how boards are operating”. Furthermore, as a result of developing a set of competencies, a number of company secretaries have moved into different roles, including that of chief governance officer and those of non-executive directors [source 1].

The research gave ICSA, formerly known as the Institute of Chartered Secretaries and Administrators, “an academic underpinning” for its move to re-position itself and to rename itself as the Chartered Governance Institute. As a result of the repositioning of ICSA and their revised training curriculum, the profile of the Company Secretary has become better recognised and acknowledged at board level as a governance professional [source 1 and 5]. FTSE 100 companies report, for example, an increased resilience of boards where company secretaries are well placed as “trusted advisors to the board” as well as more broadly within the firm on governance issues [source 5]. Indeed, within larger organisations, the secretariat is an evolving department/function [see, for example, source 4 and 5] that enables increased strategic contributions. As company secretaries “get governance in a way that many other executives don’t…..[the Company Secretary role] has become more important over the last three to five years” [source 5]. In the finance field, section 166s, issued by the Financial Conduct Authority, now scrutinise the governance pathways for decision making, which are designed and implemented by company secretaries [source 5]. As a result, the perception of the Company Secretary role has changed with an appreciation of its strategic nature, whereby there is a consistency in terms of information provision to the board acting as a “bridge [for] the independent [directors’] perspective and the executives’ perspective and to help them get what they need in order to challenge the business and make the decisions that they need to make” [source 5]. Indeed, the demonstration of these softer skills is now more key to promotion than technical skills [source 5].

In summary, the research has demonstrated the unique skillset required for the Company Secretary role and the benefits that it can bring to an organisation. It has underpinned a core competency framework and training programme adopted by ICSA and used in executive education at Henley Business School and within FTSE 100 companies. The changed profile of the Company Secretary, facilitated by the training programmes and competency framework, has improved board outcomes across a range of businesses for different sectors on a global basis. This is significant in terms improving the composition and agility of the board, and thus its ability to respond to business needs in an effective and timely manner, which ultimately underpins the success of an organisation.

5. Sources to corroborate the impact

  1. Interview with Policy and Research Director of ICSA and follow up email.

  2. The Governance Institute (2018) The Competency Framework for Governance Professionals. ICSA, London.

  3. a) The Chartered Governance Institute Training Courses b) Example of training syllabus (Risk Management).

  4. Example of secretariat function: GlaxoSmithKline Corporate Secretariat.

  5. Interview with FTSE100 Company Secretary (12 October 2020)

Submitting institution
The University of Reading
Unit of assessment
17 - Business and Management Studies
Summary impact type
Economic
Is this case study continued from a case study submitted in 2014?
No

1. Summary of the impact

Delivery of appropriate financial advice to retail investors is challenging because most investments carry varying degrees of risk, while willingness to accept this in exchange for higher expected returns differs from one person to another and is hard to measure. Research at the University of Reading led by Chris Brooks developed a new attitude-to-risk questionnaire (ATRQ), which is widely used by independent financial advisers (IFAs) in assisting their clients to select products that are appropriate for their risk appetite. The new ATRQ helps to ensure the suitability of the investment products and to avoid legal risk for the adviser. Since its launch in February 2018, the questionnaire has been used by almost 200,000 retail investors when meeting with over 2,000 financial advisers, and it currently constitutes around 20% of all such questionnaires completed in the UK.

2. Underpinning research

The impact discussed in this case study arose from an ESRC funded project (GBP523,883), awarded to Chris Brooks and Carola Hillenbrand, and which was co-designed with an industry project partner. The project was part of a continuing interdisciplinary collaboration between Brooks (a finance academic), and Hillenbrand and Kevin Money (both chartered psychologists), during which principles from psychology were applied to choices and behaviour in financial contexts. This project specifically aimed to examine in detail the process by which retail investors in the UK make financial decisions via independent advisers, focusing on the effects of the cognitive and emotional biases of investors in the decision-making process and the possible consequences thereof.

The first stage of their funded project involved a thorough investigation of a database containing completed ATRQs as well as other information about the retail clients of IFAs, including demographic profiles, wealth levels and employment status, resulting from more than half a million interactions between IFAs and their clients. The database was obtained from ESRC project partner Distribution Technology, which is the UK’s leading provider of such questionnaires to IFAs, as it includes them in its suite of software and analytical tools.

ATRQs constitute the predominant and preferred approach used in the industry to assess investor risk tolerance. The project team developed an in-depth knowledge of the existing ATRQ – notably its strengths and weaknesses – used by the company, based on the detailed statistical analysis they conducted, and this underlying research formed the outputs by Brooks, Sangiorgi, Hillenbrand and Money [refs 1 and 2]. This quantitative approach was combined with a series of focus groups comprising industry professionals and staff at the company to investigate the challenges with their existing questionnaire design and the features that a new approach would ideally contain. The research team then conducted an in-depth online survey with around 1,000 respondents from the general public to test a large number of possible replacement questions (around 50).

A final set of questions for the new questionnaire was selected, on the basis both of their individual efficacy and of their ability to cover a range of dimensions of risk with an intuitive three-factor solution when subjected to a principal component analysis. This solution mapped onto the cognitive, emotional and behavioural aspects of risk, and the researchers also developed an overall aggregate scale that appropriately combined information from the individual questions into an intuitive overall risk-tolerance measure.

The research team’s new ATRQ has several important advantages over the existing one, including that is grounded in psychometric theory, and that it considers emotional dimensions of attitude to risk as well as cognitive and behavioural aspects, which is highly innovative as the approach used by other providers does not include an emotional element. Evidence from the psychology literature highlights the importance of emotions in explaining financial choices – for example, anxious investors tend to dwell on previous losses, while those with a predisposition to anger have more of an internal reference point and consider circumstances to be forecastable and low risk. Additionally, the fear of regret can lead to irrational decision-making. The questionnaire design drew on the research by Hillenbrand, Saraeva, Money and Brooks [ref 3] regarding the effects that emotions can have on financial decision-making.

The project team ensured that each question was succinct and did not involve long examples or diagrams which could be misinterpreted. They also endeavoured to draft each question in plain English, using as little specific financial or statistical terminology as possible, so that they were easy to understand by both experienced investors and clients with no prior knowledge or background in investment. The training of two of the research team as psychologists helped to ensure that the questions minimised the possibility of behavioural biases in decision-making leading to inappropriate outcomes. The process to develop the new questionnaire is described in detail in Brooks, Hillenbrand and Money’s 2019 output [ref 4].

3. References to the research

ESRC Grant, ‘Understanding the decision-making of retail investors’, October 2016 – September 2020, FEC GBP523,883, ES/P000657/1.

  1. Brooks, C., Sangiorgi, I., Hillenbrand, C. and Money, K. (2018) ‘ Why are older investors less willing to take financial risks?’ International Review of Financial Analysis, 56. pp. 52–72. doi: https://doi.org/10.1016/j.irfa.2017.12.008 (Blind-refereed ABS 3* journal).

  2. Brooks, C., Sangiorgi, I., Hillenbrand, C. and Money, K. (2019) ‘ Experience wears the trousers: Exploring gender and attitude to financial risk’. Journal of Economic Behavior & Organization, 163. pp. 483–515. doi: https://doi.org/10.1016/j.jebo.2019.04.026 (Blind-refereed ABS 3* journal).

  3. Hillenbrand, C., Saraeva, A., Money, K. and Brooks, C. (2019) ‘ To invest or not to invest? The roles of product information, attitudes towards finance and life variables in retail investor propensity to engage with financial products’ . British Journal of Management. doi: https://doi.org/10.1111/1467-8551.12348 (Blind-refereed ABS 4* journal).

  4. Brooks, C., Hillenbrand, C. and Money, K. (2018) Developing an Attitude to Risk Questionnaire for Retail Investors, Working Paper and White Paper written for Distribution Technology. doi: http://dx.doi.org/10.2139/ssrn.3598326

The underpinning research for this case study was funded by a major, heavily refereed ESRC grant and comprises three papers published in competitive double-blind peer-reviewed journals (one paper in an AJG/ABS 4*-rated journal and two papers in 3* journals), as well as an unpublished working paper. The research meets or exceeds 2* quality definitions, and uses rigorous quantitative methods and surveys with previously unused data to develop important new knowledge about retail investors.

4. Details of the impact

Financial planning and investment by retail investors is fraught with many and increasing difficulties. There is much evidence that the choices they make are often inappropriate, and yet their decisions are very important and could have a profound effect on the financial resources they have available (particularly in retirement). Recognising the complexity of decision-making processes around investment, the Reading research has developed a new questionnaire which more accurately assesses retail investor attitude to risk and allows IFAs to propose the most appropriate financial product choices for their clients. The development of the tool is timely, as it is set within the context of social and demographic changes, including our ageing population, diminishing annuity and savings rates, availability of a wider range of investment products, and changing employment patterns. This means that investment decisions are increasingly complex yet more important than ever.

Many retail investors make financial decisions with the support of a financial adviser. The first step in the process of selecting appropriate investments is usually for the adviser to present the investor with an ATRQ, to gauge their willingness to take financial risks. For these clients, if the questionnaire is not appropriately designed, there is the possibility that they could be advised to select unsuitable investments. Such products could either be too risky (the client ends up bearing more risk than they are comfortable with, leading to many years of worry and recriminations if the investments do incur losses) or not risky enough (so that average investment returns are too low to achieve desired lifestyle goals in the future).

Working with the project partner, Distribution Technology, the research team developed a new scale aimed at measuring attitudes to financial risk. This engagement, incorporating the latest research and psychometric thinking, continues today [source 1]. Risk appetite is typically measured on a scale of 1 to 10, with 1 representing highly risk-averse and 10 implying considerable risk tolerance. With expertise in psychology, reputation and finance, the Reading researchers were in a unique position to understand the business needs of the company and also to provide an advisory and challenge role through the appointment of Brooks to the company’s Investment Committee and to their Financial Planning Advisory Board from 2016.

The research has meant that IFAs are now equipped with a more robust tool than was previously available, providing psychometric analysis (including emotions) alongside an assessment of financial acumen, enabling them to accurately map the investor’s appetite for risk to the appropriate financial assets. Thus, the questionnaire has an important role to play in relation to the focus of the Financial Conduct Authority (FCA) on supporting consumers to make the right financial decisions by ensuring that the advice market develops the right recommendations or guidance. The new tool therefore helps IFAs to avoid the risk of subsequent legal action by enabling them to ensure regulatory compliance in their processes. This is particularly important in the light of recommendations which emerged from the FCA’s Retail Distribution Review and the Treasury’s Financial Advice Market Review, where the aim is to underpin an industry which delivers affordable and accessible financial advice and guidance to everyone, at all stages of their lives.

Increasing business through trust and regulatory compliance

The adoption of the revised ATRQ by Distribution Technology is significant both for the company and the IFAs who use it. The company states: “Between the introduction of the new questionnaire in February 2018, and the end of October 2020, the questionnaire was completed nearly 200,000 times. 65% of risk profiles carried out using our system, which is the leader in the UK, are now done with the new questionnaire, and we expect this to rise even higher once we finish building our next version of Dynamic Planner” [source 1]. Furthermore, they continue, “the new questionnaire developed at the Henley Business School is now one of the most important components of our software. The purpose of our business is to help advice firms match people with suitable portfolios as part of an engaging financial planning experience. Accurately risk profiling investors, which is what your questionnaire does, is central to this” [source 1].

Importantly, Distribution Technology’s product ensures compliance with FCA guidelines by separating out traits such as attitude to risk from investor experience and capacity for loss. As a result, Distribution Technology is experiencing business growth with the changed ATRQ, enabling it “to produce high quality due diligence documentation, which has helped us win some big clients and our overall revenue from advisers is growing at 25% a year”. Moreover, the continued engagement with the research team has enabled the future-proofing of the software, giving the company “flexibility to react to future legislative changes and new psychometrics techniques. Working with the Reading academics, we will be able to make changes to the attitude to risk questionnaire if needed. If we decide we want to measure specific psychological traits, we can, or if we decide to show a breakdown of cognitive, behavioural, or emotional traits, or a breakdown between enablers, constrainers and drivers we can do that too” [source 1]. With modification to “to suit specific markets in other countries”, this flexibility is also enabling expansion to the global market as part of the company’s business growth strategy, with its first expansion into an EU country in negotiation [source 1].

The questionnaire also enables IFAs to be more confident in their advice and less likely to fear future liability. Financial advisers now have greater confidence in using the questionnaire, with one company, Chase Buckingham, stating that they now know that they are “asking all the right questions; we know we are not missing anything, and we know that a client’s capacity for loss is covered within it as well. We definitely would recommend it to a fellow IFA, because, like I said, it is so widely recognised” [source 3]. There has also been increased confidence in terms of regulatory compliance. Jan Oliff, a user of Dynamic Planner, said: “I needed to find ways to keep [my business] moving forward compliantly” [source 4].

Improving consumer confidence in investment decisions

A further benefit of the new questionnaire is that it helps to ensure that the advisory process runs smoothly, thereby improving trust in financial services by giving consumers more confidence in the advice that they receive, which results in benefits for IFAs in terms of increased business and for customers in terms of their peace of mind.

The new questionnaire considers emotional as well as cognitive and behavioural aspects of attitude to risk. It therefore enables advisers to provide the most suitable guidance for their clients in order for them to fulfil their long-term financial goals whilst understanding the potential for short-term market downturns. The outcome of the ATRQ is important for each client, since the Reading research [ref 1] indicated that that was the main determinant of the type of financial product that they ended up selecting and level of risk they took on.

The design and wording of the questionnaire act as a springboard to effective conversations between client and adviser about how much risk the former wants to take. This has a positive impact on customer retention within the sector, with the Distribution Technology recognising that “accurate risk profiling is building longer, deeper relationships” [source 5]. Reports from the IFAs are noting “positive engaged experiences” and that “clients are more engaged with the questionnaire”. There is also “significantly less confusion or debate about what the questions mean. This questionnaire still challenges clients to think and reflect [on] the importance of making the right choices, but [they] are much less distracted by thoughts that the questions don’t make sense. As an advisor, I feel more comfortable in sending these questionnaires out via email” [source 2].

The IFA sector is also reporting how the ARTQ is facilitating engagement during “challenging market conditions” in the absence of face-to-face meetings with clients during Covid-19 restrictions. One large firm with over 3,000 clients and managing GBP220,000,000 in client assets reports that “clients have become more engaged with the new questionnaire, particularly since this has been available electronically. Through this increased engagement, our clients better understand the relevance of what they are being asked and [it] allows for more open and frank discussion about their attitude towards risk and the range of risk matched investments solutions that might be available to them.” In turn, and despite the challenges of Covid-19 restrictions, this has “has streamlined our client on-boarding process and in turn has led to a perceivable increase in new business” [source 2].

In summary, the research has addressed a key challenge in the financial advice sector, where attitudes to risk need to be aligned appropriately with financial advice. It has applied principles from psychology to choices and behaviour, providing a way of making a more robust assessment of consumer risk appetite. This directly addresses the more stringent recent FCA guidance, which states that “investor experience and capacity for loss should not be conflated with attitude to risk” [source 1], as well as recommendations from the reviews of the Financial Advice Market by the Treasury and the FCA requiring the industry to deliver more robust financial advice.

The new questionnaire has been universally well received by advisers who have adopted it, and provides a more accessible, better informed and more confident basis for decision-making by the consumer. Its usage is growing rapidly, with an average monthly completion of around 9,000 plans in the UK, with each plan often being made jointly between two partners, each having completed separately an attititude to risk questionnaire. The level of client appetite for risk assessed by the ATRQ exactly matches the risk level of the product which is eventually selected 70% of the time, implying that the questionnaire is providing an outcome that advisers and their clients are happy with and do not feel the need to modify. To provide an idea of the scale of importance of the process in terms of financial outcomes, Distribution Technology estimates that over GBP3,000,000,000 is invested in financial products after the client’s risk-tolerance level has been assessed using the Reading ATRQ.

5. Sources to corroborate the impact

  1. Testimonial from the company Distribution Technology, regarding the number of users of the questionnaire and how important it is to their business.

  2. Reports from IFAs on using the new ATRQ.

  3. Chase Buckingham Case Study .

  4. Jan Oliff Financial Planning Case study .

  5. Dynamic Planner Investment Process.

Submitting institution
The University of Reading
Unit of assessment
17 - Business and Management Studies
Summary impact type
Health
Is this case study continued from a case study submitted in 2014?
No

1. Summary of the impact

Whilst an ageing population is seen as a global phenomenon, in China this population is rising more rapidly than in many other countries. As a consequence, demand for health care has increased, and delivering a good-quality service is a challenge for providers. Research from the University of Reading on an integrated clinical pathway management approach and a digital platform has been used by over 1,000 major public hospitals (over 400 Grade A hospitals) and 1,400 suburban hospitals, covering 31 provinces and 200 cities in China. Informing the decision-making of over 1,500,000 doctors, the integrated pathway management approach has improved the quality of hospital service and increased capacity, with reduced medical error, reduced patient waiting time, shorter hospital stays, and fewer unnecessary tests. The successful adoption of this research also led to the growth of the Chinese company, Sinldo Information Technology (Beijing) Co. Ltd, where Li is the Scientific Advisor and which is now listed on a Chinese Stock Exchange.

2. Underpinning research

In addition to China's large (1,400,000,000) and ageing population, shortages in critical health and care workers have compounded the demand for health care, in a country where major hospitals can have over 4,000 beds, with outpatient volumes of 4,000,000 patients per year. Within this context, research at the University of Reading has addressed how the quality, efficiency and safety of hospital services can be significantly improved through the effective use of information, data and clinical pathway knowledge. Prior to this, there was limited research on integrating best-practice clinical pathways with local hospital practices and existing technical information systems. Although digital systems are increasingly used in hospitals, they form information silos; thus, their effectiveness has been limited, owing to a lack of alignment with clinical pathways. By developing an integrated clinical pathway platform, the research has addressed the lack of connection between best practice clinical pathways, local hospital practices and existing hospital information systems.

Funded by the National Natural Science Foundation of China (NSFC), this research first developed a theoretical underpinning and a co-designed research methodology for integrated pathway management by drawing on organisational semiotics. Led by Li (Ref 1), the integrated clinical pathway management approach was piloted by working closely with key hospital staff in selected hospitals (Hospitals 301 and 309, China), including the hospital’s Director of Information. It built on research understanding and encoding the complex clinical pathway knowledge into a knowledge-based management system (Ref 2). The first pilot in Hospital 301 was with 70 staff participants; the second pilot, funded by the hospital R&D fund, was implemented in Hospital 309 and a total of 342 patient pathways were analysed. The findings since the second pilot (in 2014) show that the integrated clinical pathway management approach and the digital platform can significantly reduce medical errors, costs and waiting times (Ref 1).

The introduction of the co-designed integrated pathway management approach through agent technology differentiates this work from other clinical decision systems; it generates a personalised patient support pathway, whereby best-practice clinical pathways are integrated with existing hospital processes and information systems. Further work on the integrated digital platform has incorporated cloud and mobile technology for wider adoption (Ref 3). Having received funding from Sinldo Information Technology, ESRC, and NSFC, the innovative approach is now enabling further collaborative research, with data generated from the integrated hospital data platforms informing medical science and the pharmaceutical industry on differing medication patterns for different patient groups (Ref 4).

3. References to the research

  1. Li, W., Liu, K., Yang, H. and Yu, C. (2014) ‘ Integrated clinical pathway management for medical quality improvement – Based on a semiotically inspired systems architecture’. European journal of Information Systems, 23 (4). pp. 400–417. doi: https://doi.org/10.1057/ejis.2013.9

  2. Li, W. (2014) ‘ Clinical pathway enhanced by knowledge management: A critical step towards medical quality improvement’. In: Michell, V., Rosenorn-Lanng, D.J., Gulliver, S.R. and Currie, W. (eds) Handbook of Research on Patient Safety and Quality Care Through Health Informatics. IGI Global.

  3. Li, W. and Yang, G. (2016) ‘ Best practice of "Internet+" hospital: seamless medical services across whole process’. China Digital Medicine, 2016 (5). pp. 31–33. doi: https://doi.org/10.3969/j.issn.1673-7571.2016.05.009

  4. Huang, H., Shang, X., Zhao, H., Wu, N., Li, W., Xu, Y., Zhou, Y. and Lei, F. (2019) ‘ Discovering medication patterns for high-complexity drug-using diseases through electronic medical records’ . IEEE Access, 7. pp. 125280–125299. doi: https://doi.org/10.1109/ACCESS.2019.2937892

The underpinning research for this case study comprises four journal articles (one of which is published in a blind-refereed journal rated at 3* by the AJG/ABS list, while one is rated at 2*), and one book chapter. The research meets or exceeds 2* quality definitions, and uses large databases of patient records to develop important new knowledge on integrated clinical pathway management systems.

4. Details of the impact

Improving hospital practices and patient experience

Responding to the challenge of rapidly increasing health-care demand in China, research at the University of Reading has underpinned a major change in hospital practice across the country. In addition to improving clinical outcomes, it has brought significant benefit to the quality of the patient experience prior to, during and after a hospital visit. Through the development of a digital integrated clinical pathway management approach, and a digital platform linked to existing hospital information systems, the research has enabled up-to-date clinical pathway knowledge and healthcare data to be readily accessible through mobile technology by the patient, clinician and hospital management. In so doing, it has considerably improved hospital service capacity, and reduced medical error, patient waiting time, length of hospital stay, and unnecessary tests. At the same time, it has increased patient surgery and patient referrals. The integrated clinical pathway approach has also been responsible for improved diagnoses, resulting in the saving of lives [sources 5 to 7].

Through successful pilots in collaboration with Chinese hospitals, the novel approach was developed and demonstrated by the Reading team. On the basis of this approach, and informatic tools derived from the research, the Sinldo Information Technology company was set up, with Li acting as the Scientific Advisor (see below). By 2018, research at Reading had underpinned the delivery of bespoke digital platforms and integrated clinical pathway management systems across 2,400 hospitals in China [source 1]; this includes 1,000 major public hospitals (over 400 Grade A hospitals) and 1,400 suburban hospitals, covering 31 provinces and 200 cities in China [source 4]. In summary, the research outcome has been translated into products and services including the following:

  1. A digital platform
  • a knowledge-based platform to facilitate decision making based on best-practice clinical pathways, integrated with existing hospital systems

  • front-end applications for doctor workstations (providing integrated information on patient pathway activities, treatment progression and patient condition), and nurse workstations (providing integrated information on care activities and patient condition every day along the pathway)

  • patient applications (integrating hospital service information along a patient’s journey).

  1. A consulting tool to map best-practice clinical pathways to local hospital processes (outpatient and inpatient processes, and doctors’ working processes) with the support of the digital platform.

The research has enabled better utilisation of health-care resources and improved service quality, despite the dramatically increasing demand for health care. It supports 1,500,000 doctors and helps 600,000,000 outpatients and 25,000,000 inpatients each year by enabling the right information to be available at the right time on the clinical pathway. Moreover, it supports hospital services for 480,000,000 patients with hypertension, 350,000,000 patients with cardiovascular disease, 270,000,000 patients with diabetes and 120,000,000 patients with cancer [source 9] every year.

According to statistics from 100 major hospitals that applied this research, it has on average reduced medical error by 30% (from an average of 252 adverse events and prescribing errors on six disease pathways during six months before implementation to 168 adverse events and prescribing errors after implementation), and reduced waiting times by 50%, patient record and treatment data accessing times by 90%, and admission/discharge/referral times by 85%, with a total reduction of average length of stay from 12 days to 10 days [source 6]. Specifically, 23 hospitals were assessed for detailed impact (31 pieces of evidence collected).

For example, Wuhan Central Hospital adopted the mobile health application for integrated care service in September 2014. By December 2015, 98% of patients felt the process had been improved; there was a 55–83% reduction in medical errors; a 27% reduction in unnecessary tests and an 80% reduction in waiting times. The average time for patient record updating (including in ICU) was reduced by 24.4 hours. Due to the significant reduction in waiting time, the overall outpatient time was reduced from 260 to 170 minutes, while the average inpatient stay was reduced by 176.8 hours [source 6 and ref 4].

A further example is that of the Second Affiliated Hospital of Xi’an Jiaotong University, which adopted a hospital-wide information integration platform in 2015. This has significantly improved the hospital’s service capacity: completed outpatient cases increased by 62%, completed inpatient cases increased by 49%, completed surgery cases increased by 99%, outpatient cost reduced by 9% and patient referrals increased by 40% [source 6]. This has benefited patients by improving their experience of hospital (through reduced waiting times and fewer medical errors), benefited doctors by providing them with more efficient workplaces, benefited hospital chief executives by giving them an improved overview of performance supported by an integrated data platform, and benefited hospitals by improving their use of resources and the quality of the service they offer.

Professor Xijing He, the former dean of the hospital, confirms that “the integrated clinical pathway platform enabled seamless access to various systems linking to doctors’ mobile applications, where they can get the most up-to-date information at the point of care. Furthermore, with the best practice clinical pathway knowledge incorporated in the digital platform, doctors will be warned of abnormal values (in patient test results) … for timely interventions, which ensures patient safety and service quality” [source 6].

Adoption and commercialisation of the research

As a result of the Reading team’s research, a system was developed with Sinldo which embraced the integrated clinical pathway management approach. In order to maximise care provision, it bridged the gap between healthcare best practices and the patient journey. Through Li’s continued engagement with these hospitals, she was instrumental in demonstrating more broadly to the Chinese health-care sector the added value of the informatics tools developed. She also successfully pitched the potential of these artificial-intelligence-based systems to investors [source 1]. The number of employees in the company grew from 89 in 2014 to 171 in 2017, and it has received four rounds of financing/investment (attracting GBP14,568,598 in total) since 2013 [sources 2–4]. In April 2017, Sinldo was listed on the National Equities Exchange and Quotations (NEEQ) stock market [source 2]. It was recognised as China’s first digital health company listed on that market since China’s national strategy of “Internet + Health” was introduced in 2015. This has also given Sinldo a means to make an eventual transition to being listed on the main stock exchanges in the future and competing with larger firms.

Hongqiao Yang, Chairman of Sinldo Information Technology (Beijing) Co. Ltd. confirms that “Sinldo became a leading technology company providing a data integration platform and Weizi [Li] has been playing a key role in research and development before and after Sinldo’s establishment. The successful pilots of her research outcome led to the start of the company and she has been working continuously with the company team and hospital staff to develop applications in different hospitals. Weizi’s research has brought inspiration and innovation in our products and our partnership development with hospitals and investors.” (source 1)

This research from the University of Reading, which was a winner in the 2018 ESRC Excellence in Impact Awards [source 8], has made a highly significant contribution to addressing the challenge of providing high-quality health care to the whole of the Chinese population, considered to be the fastest-growing elderly population globally. Through the design, implementation and subsequent commercialisation of appropriate informatics technology, it has improved patient health outcomes through increased efficiency and efficacy of hospital service delivery, reaching 600 million outpatients and 25 million inpatients each year. Critical to this has been the encoding of the complex clinical pathway information into a knowledge-based management system. For the Chinese nation, this has been highly significant, with both social and economic benefits in terms of increased efficiency and improved health outcomes. For individuals, it has meant not just a decrease in inconvenience (for example, through shorter waiting times, referral times and length of hospital stay), but for many patients, it has provided more fundamental benefits, such as reduced medical errors, with lifesaving ramifications.

5. Sources to corroborate the impact

  1. Letter from the Chairman of Sinldo Information Technology.

  2. Company information on Sinldo Information Technology (annual reports, investors and investments, listing on NEEQ stock market).

  3. Sinldo Pioneer Award for hospital data integration platform.

  4. Data integration platform implemented in 400 major hospitals and 2,000 medium hospitals.

  5. Hospital case studies reported by Outlook Weekly (Xinhua News Agency) – Internet + hospital special issue March 2016.

  6. Data quality improvement in Haikou Hospital, before and after the use of the system’. Hainan Medicine Journal, Jul. 2017, Vol. 28, No. 14.

  7. ESRC Excellence in Impact Awards 2018.

  8. Updated data about the adoption of the integrated clinical pathway digital platform in China with number of doctor and patient users (in different disease groups)

Submitting institution
The University of Reading
Unit of assessment
17 - Business and Management Studies
Summary impact type
Societal
Is this case study continued from a case study submitted in 2014?
No

1. Summary of the impact

In order for developing countries to access the globalised economy more fairly, they must attract appropriate forms of foreign direct investment (FDI). Long-term research conducted by Narula on FDI, and its impact on economic development has established a deep understanding of the optimal means to achieve development through MNEs. This research proposes more positive, sustainable and equitable outcomes resulting from FDI. It now underpins policy change, specifically in Nigeria, around investment promotion and special economic zones (SEZs), so that FDI synchronises effectively with industrial policy whilst also addressing the sustainable development goals. The research on MNE-assisted development has underpinned inward investment policy more broadly across the Global South through the long-term work by Narula in a research advisory capacity to UNCTAD (United Nations Conference on Trade and Development).

2. Underpinning research

Understanding the relationship between the quality of knowledge, infrastructure and domestic firms in a country, and the kinds of foreign investment it attracts lies at the heart of the research in this area at the University of Reading [ref 2]. In this context, the benefits of MNEs (that is, firms that have established affiliates or subsidiaries in other countries) for host countries are often debated. MNEs account for a large proportion of global trade and investment; they therefore have the ability to influence the wellbeing and business practices in the places where they operate. But how, and under what circumstances, do domestic firms benefit from the presence of incoming MNEs? The principles governing the interaction between FDI and economic development in the host country have been the theme of Narula’s work. The principles of MNE-assisted development are much the same, whether the geographical foci of the policy initiatives are narrow, for instance, in an SEZ, or in a wider space, such as a state or a country. MNE-assisted development depends, crucially, on creating effective linkages between foreign investors and domestic actors. Even within an SEZ, which is a geographically and legally delimited space within a country, the overall goal is to promote deeper and more extensive linkages to the larger economy. As such, regulations governing SEZs tend to be critical to attracting the “right kinds” of FDI.

From detailed analysis and synthesis of the literature, a key contribution of the research has been connecting the determinants of MNE location and the reasons why MNEs select and embed themselves in specific geographies and not in others [ref 3]. SEZs are one example of such specific geographies. SEZs are popular because they are more suitable when countries are resource-constrained, as is the case with developing countries. MNEs seek not only stable institutions and knowledge infrastructure and the presence of technologically competent suppliers, but also competitors, because proximity to other actors is key to learning in a modern integrated economy [ref 5]. In today’s global world, this applies just as much to less developed countries which specialise in agriculture and extractive sectors, apparel and agro-foods [refs 4 and 7], as it does to countries that specialise in sectors such as ICT and biotechnology. This line of work helps refine industrial and development policy with respect to creating more even and sustained development effects [ref 5].

FDI and MNEs do not always result in positive outcomes for host countries. Much of Narula’s work over the last decade has been on identifying the bottlenecks that hinder MNE-assisted development. Narula (in collaboration with colleagues and students) has addressed multiple aspects of our understanding of these heterogenous situations [ref 1]. Negative outcomes are to be expected in some cases, and policymakers need to be able to pre-empt them [ref 7]. His work proposes concrete normative advice that outlines how these negative effects can be minimised and the positive effects increased.

3. References to the research

  1. Narula, R. and Driffield, N. (2012) ‘ Does FDI cause development? The ambiguity of the evidence and why it matters’ . European Journal of Development Research, 24 (1). pp. 1–7. doi: https://doi.org/10.1057/ejdr.2011.51

  2. Narula, R. and Dunning, J.H. (2012) ‘ Multinational enterprises, development and globalization: Some clarifications and a research agenda’ . In: Pietrobelli, C. and Rasiah, R. (eds) Evidence-Based Development Economics: Essays in Honor of Sanjaya Lall. University of Malaya Press, Kuala Lumpur, pp. 19-40.

  3. Mudambi, R., Narula, R. and Santangelo, G.D. (2018) ‘ Location, collocation and innovation by multinational enterprises: A research agenda’ . Industry and Innovation, 25 (3). pp. 229–241. doi: https://doi.org/10.1080/13662716.2017.1415135

  4. Narula, R. (2018) ‘ Multinational firms and the extractive sectors in the 21st century: Can they drive development?’ Journal of World Business, 53 (1). pp. 85–91. doi: https://doi.org/10.1016/j.jwb.2017.09.004

  5. Narula, R. and Pineli, A. (2019) ‘ Improving the development impact of multinational enterprises: Policy and research challenges’ . Economia e Politica Industriale/Journal of Industrial and Business Economics, 46 (1). pp. 1–24. doi: https://doi.org/10.1007/s40812-018-0104-2

  6. Narula, R. and Zhan, J. (2019) ‘ Using special economic zones to facilitate development: Policy implications’ . Transnational Corporations, 26 (2). pp. 1–25. doi: https://doi.org/10.18356/d3e73f33-en

  7. Narula, R. (2019) ‘ Enforcing higher labour standards within developing country value chains: Consequences for MNEs and informal actors in a dual economy’ . Journal of International Business Studies, 50. pp. 1622–1635. doi: https://doi.org/10.1057/s41267-019-00265-1

The underpinning research for this case study comprises six journal papers, all of which are published in refereed journals (two are rated 4* by the AJG/ABS list). The Journal of International Business Studies in particular is the leading field journal, is highly competitive and adopts strict refereeing standards. The research meets or exceeds 2* quality definitions, providing important new knowledge on the policy implications of the links between foreign direct investment and economic development.

4. Details of the impact

Long-term research by Narula on FDI has paved the way for a more detailed analysis of MNE-assisted development and the policies that create effective synergies between sustainable development and MNEs. This is important for addressing the sustainable development needs of the host country, especially as suboptimal choices can have long-term negative implications. Furthermore, synergies differ by industry, and are constantly evolving, so policymaking must continually be fine-tuned. Narula’s research is directly impacting FDI policy change in Nigeria and more generally globally through his longstanding advisory role with the intergovernmental body UNCTAD. His research is therefore supporting developing countries to access the benefits of a globalised economy more fairly and effectively.

Facilitating the shaping of FDI policy globally through UNCTAD to secure sustainable development

Since 2000, Narula has been advising UNCTAD with his role being instrumental in helping to support developing countries in accessing the benefits of a globalised economy more effectively. This has included shaping UNCTAD’s annual World Investment Report (WIR), which plays an important part in influencing policymaking by governments interested in the application of MNE-assisted development. Narula’s research has informed UNCTAD’s role in facilitating inclusive growth and sustainable development in countries which have required support to access the globalised economy through the strategic use of trade, investment, finance and technology. The Head of the Investment Research Branch of UNCTAD describes the University of Reading research as having a “significant impact” [source 1] by providing the evidence-informed link between MNEs and development. This, in turn, has developed an “understanding of policy choices available for less developed countries”. In particular, Narula’s work has informed the “locational choices of multinational enterprises and the costs and benefits of linkages and spillovers” [source 1]. Downloaded 300,000 times annually, the WIR is “a standard reference for policymakers of the 193 member States” [source 1]. It supports policymakers by monitoring global and regional FDI trends and documenting national and international investment policy developments.

Shaping FDI policy in Nigeria to secure sustainable development outcomes

More specifically, Narula has been engaged in an advisory capacity with the Kaduna State government in Nigeria. His research on MNE-assisted development policies [refs 5 and 7] has underpinned the shaping of long-term, proactive FDI investment and industrial strategies which embrace the necessary synergies between development and MNEs [source 3].The adoption of the research is “addressing the challenges of inequality” in Kaduna State, which has a large informal economy [source 3]. As stated by the Chief of Staff in Kaduna State, the research papers [refs 5 and 7] “provide useful insights for attracting investments associated with global value chains in resource-based informal economies”, with the State “seeking to attract USD 500 million in investments by 2023” [source 3]. The State is “already implementing some of his recommendations to link [its] FDI attraction activity with more effective embedding and aftercare actions” [source 2]. As a result, “Kaduna State is focused on further strengthening its Agro-Allied Industries, while also increasing our presence in Light Engineering and Electronics assembly. [It] expect[s] to create up to 15,000 jobs in the local community, and create up to 45,000 indirect jobs” [source 3].

Shaping next generation SEZs to achieve sustainable development

Narula’s recent work with UNCTAD focuses on next-generation SEZs. SEZs have grown in popularity since the 1980s, when China utilised them as a central pillar in its economic catch-up. Most low-income countries have tried to imitate China’s use of SEZs to kickstart their development. SEZs are key policy instruments for attracting FDI for industrial development. More than 5,000 SEZs have been established, and at least 500 more are in the pipeline across the world. Many countries are now looking to establish a “new generation” of SEZs that are adapted for sustainable economic growth in a globalised world economy. The cumulative investment in SEZs is likely to be upwards of USD1,000,000,000,000.

Therefore, acting as senior adviser in the drafting of the WIR 2019 report [source 1], Narula was instrumental in setting its research and policy agenda, extending his own considerable work in the area, in addition to commissioning a variety of background papers. As a result, UNCTAD’s WIR 2019 is specifically focused on policies to promote SEZs. In addition to providing an overview of the global SEZ landscape, the report addresses sustainable development challenges in the context of globalisation and the fourth industrial revolution. Building on these contributions, and in collaboration with the UNCTAD team, he helped to “refine and shape the primary policy recommendations and structure of the WIR” [source 1]. Narula subsequently compiled a special issue of the background papers in UNCTAD’s house journal, Transnational Corporations, with a key introductory paper [ref 6] that acts as a more rigorous academic complement to the practitioner-focused WIR.

More directly, Narula is working with the Kaduna State Investment Promotion Agency (KADIPA), the primary government organisation charged with promoting, attracting and embedding foreign investors in Kaduna. His research (particularly ref 6) is underpinning the reshaping of their investment promotion activities and their SEZ policy [sources 2 and 3]. Kaduna is recognised as a “gateway” to Northern Nigeria. Both of the key SEZs in Kaduna State are being refocused along more environmentally friendly lines, as well as being redesigned to create much-needed jobs in rural areas. This is an ambitious project whereby the State, informed by University of Reading research, is developing policies for a “Green Economic Zone”, which will have zero emissions. The Executive Secretary of the Kaduna Investment Promotion Agency has described Narula’s research and engagement as “invaluable in re-drawing the long-term policy measures that we seek to implement to engage more effectively in raising our investment profile. His hands-on experience in practical measures that can be implemented in the specific situation of Kaduna State are invaluable in guiding us forward to effectively link our industrial strategy with our investment targets” [source 2].

In summary, for the global South, it is important that FDI does not come at the expense of sustainable development in the host country. The body of research at Reading on FDI, and the role of appropriate MNE involvement in this context, has informed policy choices globally through UNCTAD reports. More specifically, the research is shaping investment and industrial policy change in Kaduna State in Nigeria, ensuring that resulting foreign investments (for example, in the new Green Economic Zone within Kaduna State) protect the host country in order to ensure positive outcomes towards sustainable development.

5. Sources to corroborate the impact

  1. Letter from Head of Investment Research Branch, UNCTAD.

  2. Letter from Head of KADIPA.

  3. Letter from Chief of Staff, Kaduna State Government.

Submitting institution
The University of Reading
Unit of assessment
17 - Business and Management Studies
Summary impact type
Societal
Is this case study continued from a case study submitted in 2014?
No

1. Summary of the impact

Facilitating economic growth through the implementation of local content policy (LCP) can be challenging when considered as a stand-alone policy. Since 2016, research at the University of Reading has shaped the policies of governments in Kazakhstan, Russia and Kuwait on trade, industry and investment through its focus on LCP in the context of country-specific economic development strategies. As a result of the research, local content (LC) is now recognised by international organisations as a developmental instrument for nurturing the whole economy, beyond the oil and gas sectors. These organisations include the European Bank for Reconstruction and Development (EBRD), the United Nations Economic Commission for Europe (UNECE), and resource-rich governments. The research has therefore demonstrated how LCP can be adopted to enable economic growth in industries associated with natural resource extraction.

2. Underpinning research

Professor Kalyuzhnova is the founder of the Centre for Euro-Asian Studies (CEAS) at the University of Reading. CEAS has earned a worldwide reputation for its unique expertise on and leading research into resource-rich Euro-Asian countries in the areas of business, economics, politics and diplomacy. Between 2000 and 2020, CEAS carried out a variety of research projects related to economic development in a group of emerging economies that are rich in natural resources, investigating new governmental initiatives in economic policy, including that of LC [ref 3]. Although there are variations in its application between countries, broadly defined, LC is an industrial tool that can enable domestic producers to expand their activities using domestic inputs, procurement, labour and technology, and gain access to international technological and managerial expertise in order to enhance their competitiveness [ref 2].

In 2010, CEAS formulated the first project related to the impact of LC development in Kazakhstan; this was supported by a Strategic Partnership Grant from the British Council’s INSPIRE programme, which is aimed at strengthening the links between higher education institutions in the UK and those in central and south-east Asia. This facilitated a long-standing collaboration between CEAS and both Kainar University and the Kazakh–British Technical University in Kazakhstan. Through continued engagement, CEAS was successful in winning further British Council Institutional Links funding (from the Newton Fund) for research on LC impact in Kazakhstan’s Energy Value Chain and was tasked with developing a Centre for Competitiveness (they received GBP500,000, April 2015 to April 2017). The research generated by this funding was novel in that LC had not been considered before as an instrument for industrial and economic policy. As a result of this engagement, the Kazakh–British Research Centre for Competitiveness (KBCC) was formed and is still in existence today. The research investigated government policies in five resource-rich countries to determine which LCPs and institutional drivers underpinned innovation-driven growth in other industries in those countries. It aimed to understand what supports successful LC strategies and how these relate to developments in domestic research, innovation and skills capacity, which drive economic activity. The five resource-rich countries studied were Brazil, Kazakhstan, Norway, Russia and, for comparison, the UK.

The work highlighted LCP as an industrial policy that is chosen by governments to generate further industrial development through non-fiscal means, that is, by stimulating economic activity, market development and technological innovation through industrial diversification and innovation-led growth [ref 1].

This study found that LCP could be a critical, but not the only, condition for the economic development of resource-rich countries. It could indeed have an impact on both the approaches related to firms’ development and on the functioning of national innovation systems, and thus contribute to industrial diversification and innovation-led growth. The research showed that, under the correct conditions, LCP could become a strategic tool that targets knowledge-transfer, technological innovation and economies of scale to create the conditions for spin-offs and positive externalities. Moreover, successful implementation of LCP is dependent upon development strategies based on unique macro-economic policy objectives, which are country-specific. LCP, when applied correctly, is therefore more than a policy that just secures an immediate increase in the percentage of local employees and procurement.

Although there is no single blueprint for LC delivery across countries, the research made recommendations in terms of LCP development and implementation. These included facilitating the procurement processes and revising industrial policies to ensure that small firms can participate [ref 5]; this may require innovations in social knowledge and governance structures [ref 6] in order to support local industry. In addition, the supporting sectors for oil and gas (for example, ICT, software, e-leadership and financial services) should be developed in terms of skills capacity, digital strategy and infrastructure by providing tax exemptions, subsidies and subventions. The research found that governments could also learn from international LC practices, adapting them to the domestic conditions around the known capabilities of firms, regulators and knowledge institutions. Furthermore, governments should consider the attractiveness of their countries to foreign capital investors when implementing LCP. This is important in terms of securing investment by industries with highly technical and safety-sensitive global supply chain standards – and avoiding monopolistic positions in smaller domestic markets, leading to higher costs that reduce country revenues and attractiveness for investors.

Through comparative case studies across countries rich in natural resources, such as oil and gas, the research has identified the factors influencing the success of LC policy implementation. It has shown that LCP is multidimensional and can be used as a vehicle for enabling the start-up of economic activity, technological catch-up or skills capacity accumulation, and sustaining demand for local goods, work and services. LCP can therefore be used as a strategic intervention to facilitate knowledge-transfer and technological innovation, creating the conditions for spin-offs and positive externalities to arise. It has therefore enabled government and industries to develop and adopt LCPs as part of their industrial and economic development strategies. Such strategies facilitate the exploitation of natural reserves whilst at the same time upskilling the local supply chain industries.

3. References to the research

  1. Kalyuzhnova, Y. and Pomfret, R. (2017) Sustainable Energy in Kazakhstan: Moving to Cleaner Energy in a Resource-Rich Country. Routledge, London.

  2. Kalyuzhnova, Y., Nygaard, C.A., Omarov, Y. and Saparbayev, A. (2016) Local Content Policies in Resource-Rich Countries. Euro-Asian Studies. Palgrave Macmillan, Basingstoke.

  3. Kalyuzhnova, Y.  (2008) Economics of the Caspian Oil and Gas Wealth: Companies, Governments, Policies . Euro-Asian Studies. Palgrave MacMillan, Basingstoke.

  4. Kalyuzhnova, Y. and Belitski, M. (2019) ‘ The impact of corruption and local content policy in on firm performance: Evidence from Kazakhstan’ . Resources Policy, 61. pp. 67–76. doi: https://doi.org/10.1016/j.resourpol.2019.01.016

  5. Belitski, M., Kalyuzhnova, Y. and Azhgaliyeva, D. (2017) ‘ The role of alliances in leveraging national local content policies for firm competitiveness’. International Journal of Strategic Business Alliances, 6 (1/2). pp. 69–85. doi: https://doi.org/10.1504/IJSBA.2017.089844

  6. Heim, I., Kalyuzhnova, Y., Li, W. and Liu, K. (2019) ‘ Value co‐creation between foreign firms and indigenous small‐ and medium‐sized enterprises (SMEs) in Kazakhstan's oil and gas industry: The role of information technology spillovers’ . Thunderbird International Business Review, 61 (6). pp. 911–927. doi: https://doi.org/10.1002/tie.22067

The underpinning research for this case study comprises three full-length books (all refereed and of around 200–300 pages) and three refereed journal articles, two of which are in journals that are AJG/ABS list-rated as 2*. The research meets or exceeds 2* quality definitions, and develops important new knowledge on how local content policy can be shaped to enable economic growth in resource-rich countries.

4. Details of the impact

Addressing the context-specific challenges of implementing LCP, Kalyuzhnova’s research has underpinned the development, refinement and adoption of LCP in resource-rich emerging economies. It has informed investment decisions by the EBRD and underpinned the teaching and training of business executives in LCP on a global scale. Importantly, the research has shown how the embedding of LCP within industrial strategies drives economic growth and development within a country. Professor Kalyuzhnova has therefore played a pivotal role in educating and influencing a diverse range of senior international stakeholders in the strategic development and deployment of LCP.

The long-term engagement of CEAS with Kazakhstan through the KBCC, and its facilitation through the British Council Institutional Links grant, gave the collaborative research a great deal of influence over the policy of the newly formed Kazakhstan National Agency on Development of Local Content (NADLoC) in November 2015. It facilitated the provision of timely KBCC policy briefs on how to adjust LCPs [source 2], and this coincided with Kazakhstan’s accession to membership of the Eurasian Economic Union and its accession to the World Trade Organization. NADLoC was later incorporated within the Kazakhstan Center for Industry and Export, which has confirmed that research-informed LC measures were adopted in the State Program of Industrial and Innovative Development of the Republic of Kazakhstan for 2020–2025 [source 1]. These measures included “stimulating the development of basic industries” and “technological development and digitalization of manufacturing industries” [source 1]. In particular, the research findings relating to the harmonisation of supplier requirements and the encouragement of certification systems for local engineering suppliers by local governmental agencies, have been adopted and implemented by the new state programme for the engineering of oil and gas machinery [Evidence 5].

In terms of facilitating development in the manufacturing industry, Kalyuzhnova has had a longterm engagement with the Kazakhstan Manufacturing Union. This has resulted in widespread uptake of the research findings across the engineering industries through its large membership (543 companies). The Union [source 5], following research findings, now provides training for its members on mentoring, health and safety standards, accounting and finance, and has collated individual examples of companies implementing the research findings [source 5]. As a result, there have been “measurable changes in mechanical engineering practice recorded over the past two years. It should be noted that in 2018 and 2019, Kazakhstan's mechanical engineering showed a steady increase in production volumes by 20 and 27%, respectively” [source 5]. The Almaty Fan Plant LLP, for example, moved away from process upgrades to management training, thus demonstrating a change in business strategy based on an awareness that it would be preferable to focus on management skills before making any investment in technical upgrades [source 5]. Since then the company has “managed to upgrade the technical processes, which has led to the expansion of its competitive range of the products”, as well as becoming an exporter [source 5]. Another engineering company has won a national prize for implementing LCP and developing new production technologies, while a further company has demonstrated a successful change in strategy and diversified to include engineering to supply the defence sector [source 5]. As a result of Kalyuzhnova’s “significant sustained impact on the shaping of local content development in Kazakhstan”, she has been invited to act as Special Adviser to the Association of Kazakhstan Machinery Industry [source 5].

Acting as an adviser, Kalyuzhnova has also used her research to inform the EBRD’s investment decisions with numerous clients and governments across central Asia [source 4]. As a multilateral developmental investment bank, the EBRD uses investment as a tool to build open-market economies while fostering sustainable and inclusive growth. In particular, risks such as corruption and inadequate indicators around quantitative targets for LCP are considered by the Bank, alongside the research findings in relation to the importance of investment in innovation, capacity-building and transparency around procurement as part of LCP [source 4]. Furthermore, the EBRD foresees the continued use of the research to inform “future discussions with clients in other Central Asian countries such as Uzbekistan” [source 4].

More widely, acting as an invited specialist to the United Nations Economic and Social Council (ECOSOC), Kalyuzhnova has informed discussions on energy provision and sustainable development. Furthermore, In November 2018, Kalyuzhnova was invited to speak with the UNECE in Geneva, this time to the Team of Specialists on Innovation and Competitiveness, on reshaping policies in order to promote sustainable and inclusive growth [source 6]. “Her presentation was instrumental in shaping the Report of the Team of Specialists on Innovation and Competitiveness Policies on its Eleventh session. In particular, Section 29, p4, highlighted the main principles corroborated by Professor Kalyuzhnova’s book” [source 6] where “local content policies can achieve economic and social objectives if adequately designed, implemented and used in conjunction with innovation strategies” (ECE/CECI/ICP/2018/2). She has since become a peer-reviewer of policy recommendations of UNECE for SPECA (Special Programme for the Economies of Central Asia), with a specific focus on Georgia. “This series of UNECE Innovation for Sustainable Development Reviews is a flagship, demand driven policy advisory service under the UNECE sub-programme 4, with reviews including policy recommendations issued as official UN publications and forming the basis for future capacity building activities for the beneficiary countries” [source 6]. “Her contribution has been especially appreciated with detailed analytical commentary, leveraging her academic expertise on chapters on public procurement and financing as drivers of innovative development and innovation and growth dynamics in Georgian enterprises” [source 6]. In October 2019, she led a capacity-building event for SPECA countries related to LC development. It was jointly organised by UNECE, Henley Business School and the Moscow State Institute of International Relations (MGIMO) Business Incubator, and “Kalyuzhnova led on producing a guide for SPECA policymakers” [source 6].

The introduction of LC research into curricula has developed through Kalyuzhnova’s links between CEAS and many educational institutions and professional bodies across Kazakhstan, Russia and the Middle East. This has enabled the development of high-level executive training, master’s programmes aimed at professionals, and a range of industries aligning the advice on LC to their development strategies. Kalyuzhnova et al.’s book entitled Local Content Policies in Resource-Rich Countries [ref 2] (translated into Arabic in 2018, with extracts also translated into Russian) has been adopted as the key LC text by a number of universities (in, for example, Kazakhstan, Russia and Uzbekistan) [source 7]. For example, within Kyrgyzstan, the book formed part of the EC International Cooperation and Development project “Support to the Education Sector of the Kyrgyz Republic”, which aimed to guide the Kyrgyz government in the implementation of structural reforms in the education sector; case studies from the book were used in the training of entrepreneurs. In Kazakhstan, the Institute of Engineering and Information Technology, responsible for promoting the oil and gas industry, used the research to underpin training programmes across the sector, involving 550 participants in nine cities with “94% reporting the gaining of new skills” [source 7].

Within Russia, the SKOLKOVO Energy Centre at the Moscow School of Management used the research to “take a strategic direction in terms of encouraging new research initiatives and new engagements and collaborations with local industry” [source 8]. Adopting the core principles of the book, the Centre made evidence-based recommendations to policymakers for the oil and gas industry; these recommendations were subsequently adopted by the Ministry for Trade and Industry in formulating policy on localisation and import substitution. Further work undertaken by the SKOLKOVO Energy Centre on the performance of the Russian oil industry, based on the Reading research, has been presented by the Russian oil minister to President Vladimir Putin (2018) [source 8].

The findings of the research have now also impacted the Middle East (Kuwait). Supply chain companies in the Kuwaiti oil sector have changed their policies and invested in building the capacity of local suppliers by providing training on management, accountancy and finance. As a result, and in collaboration with the relevant government agencies, there is now a focus on upskilling and employing local Kuwaiti managers instead of recruiting talent from overseas [source 3]. These changes have been facilitated by Kalyuzhnova’s engagement, in an advisory capacity [source 9], with the Kuwait National Assembly (Parliament) since 2017 and the hosting of an international conference on LCP at the University of Reading in 2018. Since then, the Kuwait National Assembly has established a new department on LC, and is implementing the research findings by stimulating an increase in technology within the local supply chain for the oil and gas industry. “Already, by 2019 the rate of recruitment of expatriate workers in the private sector has decreased by 62% which is an indication of policy implementation to restructure the demographic balance in the country.” This is all part of a wider strategy on increasing domestic value added [source 9].

In summary, research at the University of Reading has addressed the challenges associated with implementing LCP in resource-rich countries as a driver for economic growth. It has demonstrated the importance of aligning LCP with country-specific industry and economic policies, thus creating the conditions for spin-offs and positive externalities. As a result, it has underpinned the implementation of appropriate LCP policy interventions with a reach across a number of resource-rich nations in Euro-Asia, as well as Kuwait. In terms of significance, the impact of the revised policies on local supply chain industries (such as manufacturing and engineering) are now being realised, with increased skills capacity, production and diversification, all of which play an important role in the overall aim of increasing economic growth more generally.

5. Sources to corroborate the impact

  1. Letter from Deputy Chairman, National Agency on Development of Local Content, Kazakhstan.

  2. Letter from Kazakh Ambassador to the United Kingdom.

  3. Testimonial from Leader of the Committee for Supply Chain Companies for the Kuwaiti Oil Sector.

  4. Testimonial from European Bank for Reconstruction and Development, Lead Economist Central Asia.

  5. Letters from Deputy Chairman of the Committee for Kazakhstan Mechanical Engineering and Metalworking (2018 and 2020).

  6. Testimonials from the UNECE Secretariat (November 2018 and May 2020).

  7. Collection of letters from professional bodies and education institutions.

  8. Statement from Director SKOLKOVO Energy Centre, Moscow School of Management.

  9. Letters from Kuwait National Assembly (2019 and 2020).

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