The growth-profitability relationship : strategic orientations as moderator

Principal Topic: In this study we investigate how strategic orientation moderates the impact of growth on profitability for a sample of Danish high growth (Gazelle) firms. ---------- Firm growth has been an essential part of both management research and entrepreneurship research for decades (e.g. Penrose 1959, Birch 1987, Storey 1994). From a societal point of view, firm growth has been perceived as economic generator and job creator. In entrepreneurship research, growth has been an important part of the field (Davidsson, Delmar and Wiklund 2006), and many have used growth as a measure of success. In strategic management, growth has been seen as an approach to achieve competitive advantages and a way of becoming increasing profitable (e.g. Russo and Fouts 1997, Cho and Pucic 2005). However, although firm growth used to be perceived as a natural pathway to profitability recently more skepticism has emerged due to both new theoretical development and new empirical insights. Empirically, studies show inconsistent and inconclusive empirical evidence regarding the impact of growth on profitability. Our review reveals that some studies find a substantial positive relationship, some find a weak positive relationship, some find no relationship and further some find a negative relationship. Overall, two dominant yet divergent theoretical positions can be identified. The first position, mainly focusing on the environmental fit, argues that firms are likely to become more profitable if they enter a market quickly and on a larger scale due to first mover advantages and economic of scale. The second position, mainly focusing the internal fit, argues that growth may lead to a range of internal challenges and difficulties, including rapid change in structure, reward systems, decision making, communication and management style. The inconsistent empirical results together with two divergent theoretical positions call for further investigations into the circumstances by which growth generate profitability and into the circumstances by which growth do not generate profitability. In this project, we investigate how strategic orientations influence the impact of growth on profitability by asking the following research question: How is the impact of growth on profitability moderated by strategic orientation? Based on a literature review of how growth impacts profitability in areas such as entrepreneurship, strategic management and strategic entrepreneurship we develop three hypotheses regarding the growth-profitability relationship and strategic orientation as a potential moderator. ---------- Methodology/Key Propositions: The three hypotheses are tested on data collected in 2008. All firms in Denmark, including all listed and non-listed (VAT-registered) firms who experienced a 100 % growth and had a positive sales or gross profit over a four years period (2004-2007) were surveyed. In total 2,475 fulfilled the requirements. Among those 1,107 firms returned usable questionnaires satisfactory giving us a response rate on 45 %. The financial data together with data on number of employees were obtained from D&B (previously Dun & Bradstreet). The remaining data were obtained through the survey. Hierarchical regression models with ROA (return on assets) as the dependent variable were used to test the hypotheses. In the first model control variables including region, industry, firm age, CEO age, CEO gender, CEO education and number of employees were entered. In the second model, growth measured as growth in employees was entered. Then strategic orientation (differentiation, cost leadership, focus differentiation and focus cost leadership) and then interaction effects of strategic orientation and growth were entered in the model. ---------- Results and Implications: The results show a positive impact of firm growth on profitability and further that this impact is moderated by strategic orientation. Specifically, it was found that growth has a larger impact on profitability when firms do not pursue a focus strategy including both focus differentiation and focus cost leadership. Our preliminary interpretation of the results suggests that the value of growth depends on the circumstances and more specifically 'how much is left to fight for'. It seems like those firms who target towards a narrow segment are less likely to gain value of growth. The remaining market shares to fight for to these firms are not large enough to compensate for the cost of growing. Based on our findings, it therefore seems like growth has a more positive relationship with profitability for those who approach a broad market segment. Furthermore we argue that firms pursuing af Focus strategy will have more specialized assets that decreases the possibilities of further profitable expansion. For firms, CEOs, board of directors etc., the study shows that high growth is not necessarily something worth aiming for. It is a trade-off between the cost of growing and the value of growing. For many firms, there might be better ways of generating profitability in the long run. It depends on the strategic orientation of the firm. For advisors and consultants, the conditional value of growth implies that in-depth knowledge on their clients' situation is necessary before any advice can be given. And finally, for policy makers, it means they have to be careful when initiating new policies to promote firm growth. They need to take into consideration firm strategy and industry conditions.

Do board contacts matter? : an analysis of the relationship between boards of directors’ ties and the performance of Australia’s largest companies.

Boards of directors are thought to provide access to a wealth of knowledge and resources for the companies they serve, and are considered important to corporate governance. Under the Resource Based View (RBV) of the firm (Wernerfelt, 1984) boards are viewed as a strategic resource available to firms. As a consequence there has been a significant research effort aimed at establishing a link between board attributes and company performance. In this thesis I explore and extend the study of interlocking directorships (Mizruchi, 1996; Scott 1991a) by examining the links between directors’ opportunity networks and firm performance. Specifically, I use resource dependence theory (Pfeffer & Salancik, 1978) and social capital theory (Burt, 1980b; Coleman, 1988) as the basis for a new measure of a board’s opportunity network. I contend that both directors’ formal company ties and their social ties determine a director’s opportunity network through which they are able to access and mobilise resources for their firms. This approach is based on recent studies that suggest the measurement of interlocks at the director level, rather than at the firm level, may be a more reliable indicator of this phenomenon. This research uses publicly available data drawn from Australia’s top-105 listed companies and their directors in 1999. I employ Social Network Analysis (SNA) (Scott, 1991b) using the UCINET software to analyse the individual director’s formal and social networks. SNA is used to measure a the number of ties a director has to other directors in the top-105 company director network at both one and two degrees of separation, that is, direct ties and indirect (or ‘friend of a friend’) ties. These individual measures of director connectedness are aggregated to produce a board-level network metric for comparison with measures of a firm’s performance using multiple regression analysis. Performance is measured with accounting-based and market-based measures. Findings indicate that better-connected boards are associated with higher market-based company performance (measured by Tobin’s q). However, weaker and mostly unreliable associations were found for accounting-based performance measure ROA. Furthermore, formal (or corporate) network ties are a stronger predictor of market performance than total network ties (comprising social and corporate ties). Similarly, strong ties (connectedness at degree-1) are better predictors of performance than weak ties (connectedness at degree-2). My research makes four contributions to the literature on director interlocks. First, it extends a new way of measuring a board’s opportunity network based on the director rather than the company as the unit of interlock. Second, it establishes evidence of a relationship between market-based measures of firm performance and the connectedness of that firm’s board. Third, it establishes that director’s formal corporate ties matter more to market-based firm performance than their social ties. Fourth, it establishes that director’s strong direct ties are more important to market-based performance than weak ties. The thesis concludes with implications for research and practice, including a more speculative interpretation of these results. In particular, I raise the possibility of reverse causality – that is networked directors seek to join high-performing companies. Thus, the relationship may be a result of symbolic action by companies seeking to increase the legitimacy of their firms rather than a reflection of the social capital available to the companies. This is an important consideration worthy of future investigation.

Towards a new model of successful faking

Existing literature has failed to find robust relationships between individual differences and the ability to fake psychological tests, possibly due to limitations in how successful faking is operationalised. In order to fake, individuals must alter their original profile to create a particular impression. Currently, successful faking is operationalised through statistical definitions, informant ratings, known groups comparisons, the use of archival and baseline data, and breaches of validity indexes. However, there are many methodological limitations to these approaches. This research proposed a three component model of successful faking to address this, where an original response is manipulated into a strategic response, which must match a criteria target. Further, by operationalising successful faking in this manner, this research takes into account the fact that individuals may have been successful in reaching their implicitly created profile, but that this may not have matched the criteria they were instructed to fake.Participants (N=48, 22 students and 26 non-students) completed the BDI-II honestly. Participants then faked the BDI-II as if they had no, mild, moderate and severe depression, as well as completing a checklist revealing which symptoms they thought indicated each level of depression. Findings were consistent with a three component model of successful faking, where individuals effectively changed their profile to what they believed was required, however this profile differed from the criteria defined by the psychometric norms of the test.One of the foremost issues for research in this area is the inconsistent manner in which successful faking is operationalised. This research allowed successful faking to be operationalised in an objective, quantifiable manner. Using this model as a template may allow researchers better understanding of the processes involved in faking, including the role of strategies and abilities in determining the outcome of test dissimulation.

Employer branding : strategic implications for staff recruitment

In many developed economies, changing demographics and economic conditions have given rise to increasingly competitive labour markets, where competition for good employees is strong. Consequently, strategic investments in attracting suitably qualified and skilled employees are recommended. One such strategy is employer branding. Employer branding in the context of recruitment is the package of psychological, economic, and functional benefits that potential employees associate with employment with a particular company. Knowledge of these perceptions can help organisations to create an attractive and competitive employer brand. Utilising information economics and signalling theory, we examine the nature and consequences of employer branding. Depth interviews reveal that job seekers evaluate: the attractiveness of employers based on any previous direct work experiences with the employer or in the sector; the clarity, credibility, and consistency of the potential employers’ brand signals; perceptions of the employers’ brand investments; and perceptions of the employers’ product or service brand portfolio.

Strategic infrastructure asset management : a conceptual framework to identify capabilities

Purpose – The purpose of this paper is to develop a conceptual framework that can be used to identify capabilities needed in the management of infrastructure assets. Design/methodology/approach – This paper utilises a qualitative approach to analyse secondary data in order to develop a conceptual framework that identifies capabilities for strategic infrastructure asset management. Findings – In an external business environment that is undergoing rapid change, it is more appropriate to focus on factors internal to the organisation such as resources and capabilities as a basis to develop competitive advantage. However, there is currently very little understanding of the internal capabilities that are appropriate for infrastructure asset management. Therefore, a conceptual framework is needful to guide infrastructure organisations in the identification of capabilities. Research limitations/implications – This is a conceptual paper and future empirical research should be conducted to validate the propositions made in the paper. Practical implications – The paper clearly argues the need for infrastructure organisations to adopt a systematic approach to identifying the capabilities needed in the management of strategic infrastructure assets. The discussion on the impact of essential capabilities is useful in providing the impetus for managers who operate in a deregulated infrastructure business landscape to review their existing strategies. Originality/value – The paper provides a new perspective on how asset managers can create value for their organisations by investing in the relevant capabilities.

Technological talespinning : new media and higher education in the USA : an examination of technological determinism

This thesis examines the theory of technological determinism, which espouses the view that technological change drives social change, through an analysis of the impact of new media on higher education models in the United States of America. In so doing, it explores the impacts of new media technologies on higher education, in particular, and society in general. The thesis reviews the theoretical shape of the discourse surrounding new media technologies before narrowing in on utopian claims about the impact of new media technologies on education. It tests these claims through a specific case study of higher education in the USA. The study investigates whether 'new' media technologies (eg the Internet) are resulting in new forms of higher education in the USA and whether the blurring of information and entertainment technologies has caused a similar blurring in education and entertainment providers. It uses primary data gathered by the author in a series of interviews with key education, industry and media representatives in North America in 1997. Chapter 2 looks at the literature and history surrounding several topics central to the thesis - the discourses of technological determinism, the history of technology use and adoption in education, and impacts of new media technologies on education. Chapter 3 presents the findings of the American case study on the relationship between media and higher education and Chapter 4 concludes and synthesises the investigation.

Theory and development of GPS integrity monitoring system

This thesis discusses various aspects of the integrity monitoring of GPS applied to civil aircraft navigation in different phases of flight. These flight phases include en route, terminal, non-precision approach and precision approach. The thesis includes four major topics: probability problem of GPS navigation service, risk analysis of aircraft precision approach and landing, theoretical analysis of Receiver Autonomous Integrity Monitoring (RAIM) techniques and RAIM availability, and GPS integrity monitoring at a ground reference station. Particular attention is paid to the mathematical aspects of the GPS integrity monitoring system. The research has been built upon the stringent integrity requirements defined by civil aviation community, and concentrates on the capability and performance investigation of practical integrity monitoring systems with rigorous mathematical and statistical concepts and approaches. Major contributions of this research are: • Rigorous integrity and continuity risk analysis for aircraft precision approach. Based on the joint probability density function of the affecting components, the integrity and continuity risks of aircraft precision approach with DGPS were computed. This advanced the conventional method of allocating the risk probability. • A theoretical study of RAIM test power. This is the first time a theoretical study on RAIM test power based on the probability statistical theory has been presented, resulting in a new set of RAIM criteria. • Development of a GPS integrity monitoring and DGPS quality control system based on GPS reference station. A prototype of GPS integrity monitoring and DGPS correction prediction system has been developed and tested, based on the A USN A V GPS base station on the roof of QUT ITE Building.

A grounded theory study of technology appropriation in anaesthesia

The human-technology nexus is a strong focus of Information Systems (IS) research; however, very few studies have explored this phenomenon in anaesthesia. Anaesthesia has a long history of adoption of technological artifacts, ranging from early apparatus to present-day information systems such as electronic monitoring and pulse oximetry. This prevalence of technology in modern anaesthesia and the rich human-technology relationship provides a fertile empirical setting for IS research. This study employed a grounded theory approach that began with a broad initial guiding question and, through simultaneous data collection and analysis, uncovered a core category of technology appropriation. This emergent basic social process captures a central activity of anaesthestists and is supported by three major concepts: knowledge-directed medicine, complementary artifacts and culture of anaesthesia. The outcomes of this study are: (1) a substantive theory that integrates the aforementioned concepts and pertains to the research setting of anaesthesia and (2) a formal theory, which further develops the core category of appropriation from anaesthesia-specific to a broader, more general perspective. These outcomes fulfill the objective of a grounded theory study, being the formation of theory that describes and explains observed patterns in the empirical field. In generalizing the notion of appropriation, the formal theory is developed using the theories of Karl Marx. This Marxian model of technology appropriation is a three-tiered theoretical lens that examines appropriation behaviours at a highly abstract level, connecting the stages of natural, species and social being to the transition of a technology-as-artifact to a technology-in-use via the processes of perception, orientation and realization. The contributions of this research are two-fold: (1) the substantive model contributes to practice by providing a model that describes and explains the human-technology nexus in anaesthesia, and thereby offers potential predictive capabilities for designers and administrators to optimize future appropriations of new anaesthetic technological artifacts; and (2) the formal model contributes to research by drawing attention to the philosophical foundations of appropriation in the work of Marx, and subsequently expanding the current understanding of contemporary IS theories of adoption and appropriation.

A framework for strategic infrastructure asset management

The concept of asset management is not a new but an evolving idea that has been attracting attention of many organisations operating and/or owning some kind of infrastructure assets. The term asset management have been used widely with fundamental differences in interpretation and usage. Regardless of the context of the usage of the term, asset management implies the process of optimising return by scrutinising performance and making key strategic decisions throughout all phases of an assets lifecycle (Sarfi and Tao, 2004). Hence, asset management is a philosophy and discipline through which organisations are enabled to more effectively deploy their resources to provide higher levels of customer service and reliability while balancing financial objectives. In Australia, asset management made its way into the public works in 1993 when the Australian Accounting Standard Board issued the Australian Accounting Standard 27 – AAS27. Standard AAS27 required government agencies to capitalise and depreciate assets rather than expense them against earnings. This development has indirectly forced organisations managing infrastructure assets to consider the useful life and cost effectiveness of asset investments. The Australian State Treasuries and the Australian National Audit Office was the first organisation to formalise the concepts and principles of asset management in Australia in which they defined asset management as “ a systematic, structured process covering the whole life of an asset”(Australian National Audit Office, 1996). This initiative led other Government bodies and industry sectors to develop, refine and apply the concept of asset management in the management of their respective infrastructure assets. Hence, it can be argued that the concept of asset management has emerged as a separate and recognised field of management during the late 1990s. In comparison to other disciplines such as construction, facilities, maintenance, project management, economics, finance, to name a few, asset management is a relatively new discipline and is clearly a contemporary topic. The primary contributors to the literature in asset management are largely government organisations and industry practitioners. These contributions take the form of guidelines and reports on the best practice of asset management. More recently, some of these best practices have been made to become a standard such as the PAS 55 (IAM, 2004, IAM, 2008b) in UK. As such, current literature in this field tends to lack well-grounded theories. To-date, while receiving relatively more interest and attention from empirical researchers, the advancement of this field, particularly in terms of the volume of academic and theoretical development is at best moderate. A plausible reason for the lack of advancement is that many researchers and practitioners are still unaware of, or unimpressed by, the contribution that asset management can make to the performance of infrastructure asset. This paper seeks to explore the practices of organisations that manage infrastructure assets to develop a framework of strategic infrastructure asset management processes. It will begin by examining the development of asset management. This is followed by the discussion on the method to be adopted for this paper. Next, is the discussion of the result form case studies. It first describes the goals of infrastructure asset management and how they can support the broader business goals. Following this, a set of core processes that can support the achievement of business goals are provided. These core processes are synthesised based on the practices of asset managers in the case study organisations.

Theatre audience contribution : facilitating a new text through the post-performance discussion

Theatre Audience Contribution introduces a new approach to theatre audience research: audience contribution through the post-performance discussion. This volume considers the physical and vocal behaviour of audience members as an integral part of the theatrical event that changes, adds to and informs the theatrical experience. Post-performance discussions, although rising in popularity, are yet an under-explored and under-utilised avenue for audience contribution. Beginning with an overview of reception theory and the historical role of theatre audiences, the author introduces a new method for the facilitation of post-performance discussions that encourages audience contribution and privileges the audience voice. Two case studies explore post-performance discussions that inform the theatrical event and discover a new role for the contemporary audience: audience critic. This accessible volume has significant implications for theatre theorists, practitioners and audiences alike.

Stakeholder engagement by governance networks

As the problems involving infrastructure delivery have become more complex and contentious, there has been an acknowledgement that these problems cannot be resolved by any one body working alone. This understanding has driven multi-sectoral collaboration and has led to an expansion of the set of actors, including stakeholders, who are now involved in delivery of infrastructure projects and services. However, more needs to be understood about how to include stakeholders in these processes and ways of developing the requisite combination of stakeholders to achieve effective outcomes. This thesis draws on stakeholder theory and governance network theory to obtain insights into how three multi-level networks within the Roads Alliance in Queensland engage with stakeholders in the delivery of complex and sensitive infrastructure services and projects. New knowledge about stakeholders will be obtained by testing a model of Stakeholder Salience and Engagement which combines and extends the stakeholder identification and salience theory, ladder of stakeholder management and engagement and the model of stakeholder engagement and moral treatment of stakeholders. By applying this model, the broad research question: “Who or what decides how stakeholders are engaged by governance networks delivering public outcomes?” will be addressed. The case studies will test a theoretical model of stakeholder salience and engagement which links strategic decisions about stakeholder salience with the quality and quantity of engagement strategies for engaging different types of stakeholders. A multiple embedded case study design has been selected as the overall approach to explore, describe, explain and evaluate how stakeholder engagement occurs in three governance networks delivering road infrastructure in Queensland. The research design also incorporates a four stage approach to data collection: observations, stakeholder analysis, telephone survey questionnaire and semi-structured interviews. The outcomes of this research will contribute to and extend stakeholder theory by showing how stakeholder salience impacts on decisions about the types of engagement processes implemented. Governance network theory will be extended by showing how governance networks interact with stakeholders through the concepts of stakeholder salience and engagement. From a practical perspective this research will provide governance networks with an indication of how to optimise engagement with different types of stakeholders. 2