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.

Steering (towards a post apology Australia) without a rudder

After Kevin Rudd’s Apology to Indigenous Peoples after his election as Prime Minister in 2008 the climate was hopeful with many Aboriginal and Torres Strait Islander women (and non-Indigenous women, too) breathing a sigh of relief that the disastrous effects of White Australia’s government policies had at last been symbolically, publicly and officially acknowledged. There was also, though, skepticism about the ‘real’ change this Apology might have for Indigenous Australians. Many of us wondered if the Apology would make any difference at all in the ‘real’ world, where the gaps between non-Indigenous and Indigenous Australians is still so glaringly apparent in areas such as health, education, housing and employment.

Post-PC devises : a summary of early iPad technology

In just under 3 months worldwide sales of Apple's iPad tablet device stood at over 3 million units sold. The iPad device, along with rival products signify a shift in the way in which print and other media products are purchased and consumed by users. While facing initial skepticism about the uptake of the device numerous industries have been quick to adapt the device to their specific needs. Based around a newly developed six point typology of “post PC” device utility this project undertook a significant review of publicly available material to identify worldwide trends in iPad adoption and use within the tertiary sector.

Democracy, Crime and Justice. Annals of the American Academy of Political and Social Sciences

As a growing number of nations embark on a path to democracy, criminologists have become increasingly interested and engaged in the challenges, concerns, and questions connecting democracy with both crime and criminal justice. Rising levels of violence and street crime, white collar crime and corruption both in countries where democracy is securely in place and where it is struggling, have fuelled a deepening skepticism as to the capacity of democracy to deliver on its promise of security and justice for all citizens. What role does crime and criminal justice play in the future of democracy and for democratic political development on a global level? The editors of this special volume of The Annals realized the importance of collecting research from a broad spectrum of countries and covering a range of problems that affect citizens, politicians, and criminal justice officials. The articles here represent a solid balance between mature democracies like the U.S. and U.K. as well as emerging democracies around the globe – specifically in Latin America, Africa and Eastern Europe. They are based on large and small cross-national samples, regional comparisons, and case studies. Each contribution addresses a seminal question for the future of democratic political development across the globe. What is the role of criminal justice in the process of building democracy and instilling confidence in its institutions? Is there a role for unions in democratizing police forces? What is the impact of widespread disenfranchisement of felons on democratic citizenship and the life of democratic institutions? Under what circumstances do mature democracies adopt punitive sentencing regimes? Addressing sensitive topics such as relations between police and the Muslim communities of Western Europe in the wake of terrorist attacks, this volume also sheds light on the effects of terrorism on mature democracies under increasing pressure to provide security for their citizens. By taking a broad vantage point, this collection of research delves into complex topics such as the relationship between the process of democratization and violent crime waves; the impact of rising crime rates on newly established as well as secure democracies; how crime may endanger the transition to democracy; and how existing practices of criminal justice in mature democracies affect their core values and institutions. The collection of these insightful articles not only begins to fill a gap in criminological research but also addresses issues of critical interest to political scientists as well as other social and behavioral scientists and scholars. Taking a fresh approach to the intersection of crime, criminal justice, and democracy, this volume of The Annals is a must-read for criminologists and political scientists and provides a solid foundation for further interdisciplinary research.

Safety of OPRA procedure for individuals with upper limb amputation

Surgical implantations of osseointegrated fixations for bone-anchored prosthesis are developing at an unprecedented pace worldwide while initial skepticism in the orthopedic community is slowly fading away. Clearly, this option is becoming accessible to a wide range of individuals with limb loss. [1-18] The team led by Dr Rickard Branemark has previously published a number of landmark articles focusing on the benefits and safety of the OPRA fixation mainly for individual with lower limb loss, particularly those with transfemoral amputation. [1-3, 19-32] However, similar information is lacking for those with upper limb amputation. This team is once again taking a leading role by sharing a retrospective study focusing on the implant survival, adverse events, implant stability, and bone remodelling for 18 individuals with transhumeral amputation over a 5-year post-operative period. Therefore, a comprehensive analysis of the safety of the procedure is accessible for the first time. In essence, the results showed an implant survival rate of 83% and 80% at 2 and 5 year follow ups, respectively. The most frequent adverse events were superficial skin infections that occurred for 28% (5) participants while the least frequent was deep bone infection that happened only once. More importantly, 38% of complications due to infections were effectively managed with nonoperative treatments (e.g., revision of skin penetration site, local cleaning, antibiotics, restriction of soft tissue mobility). Implant stability and bone remodelling were satisfactory. Clearly, this study provided better understanding of the safety of the OPRA surgical and rehabilitation procedure for individuals with upper limb amputation while establishing standards and benchmark data for future studies. However, strong evidences of the benefits are yet to be demonstrated. However, increase in health related quality of life and functional outcomes (e.g., range of movement) are likely. Altogether, the team of authors are providing further evidence that bone-anchored attachment is definitely a promising alternative to socket prostheses.

Landscape painting

The images in this exhibition were based on questioning relationships between the histories of painting and photography, which helped to establish the indexical references that became both photography’s most powerful attribute and most subtle illusion. Debates over the objectivity or subjectivity of the photograph and the uneasy relationship between painting and photography, as played out in the history of art, have been brought into sharp relief with the contemporary proliferation of digital images. The digital realm of photography gives rise to a general and relative skepticism of verity, but it can be argued that to artist/photographers, this representational malleability is precisely what their purpose becomes. In researching current issues of the indexical in photographic practice, landscape provides a potent vehicle for exploring issues of representation and illusion, the nexus of painting and photography, and the digital realm. One of contemporary photography’s most resonant themes is a return to pictorial subjects and methods, including a renewed interest in floribunda, still life and landscape. The resulting deconstruction and reconstruction of landscape ‘painting’ in this body of work- the monochrome, linear abstraction, painterly representationalsism and pictorialist detail is presented as a perceptual, aesthetic and digital act. The exhibition incorporates landscape painting’s simplicity and complexity, photography’s significance of representation and minimalist aesthetics in an over-mediated world.