Age diversity and firm performance in an emerging economy: Implications for cross-cultural human resource management

This study tests the effect of age diversity on firm performance among international firms. Based on the resource-based view of the firm, it argues that age diversity among employees will influence firm performance. Moreover, it argues that two contextual variables—a firm's level of market diversification and its country of origin—influence the relationship between age diversity and firm performance. By testing relevant hypotheses in a major emerging economy, that is, the People's Republic of China, this study finds a significant and positive effect of age diversity and a significant interactive effect between age diversity and firm strategy on profitability. We also find a significant relationship between age diversity and firm profitability for firms from Western societies, but not for firms from East Asian societies. The paper concludes by discussing the implications of this study's findings. © 2011 Wiley Periodicals, Inc.

An empirical investigation on firm-level performance of cross border mergers and acquisitions

This empirical study investigates the performance of cross border M&A. The first stage is to identify the determinants of making cross border M&A complete. One focus here is to extend the existing empirical evidence in the field of cross border M&A and exploit the likelihood of M&A from a different perspective. Given the determinants of cross border M&A completions, the second stage is to investigate the effects of cross border M&A on post-acquisition firm performance for both targets and acquirers. The thesis exploits a hitherto unused data base, which consists of those firms that are rumoured to be undertaking M&A, and then follow the deal to completion or abandonment. This approach highlights a number of limitations to the previous literature, which relies on statistical methodology to identify potential but non-existent mergers. This thesis changes some conventional understanding for M&A activity. Cross border M&A activity is underpinned by various motives such as synergy, management discipline, and acquisition of complementary resources. Traditionally, it is believed that these motives will boost the international M&A activity and improve firm performance after takeovers. However, this thesis shows that such factors based on these motives as acquirer’s profitability and liquidity and target’s intangible resource actually deter the completion of cross border M&A in the period of 2002-2011. The overall finding suggests that the cross border M&A is the efficiency-seeking activity rather than the resource-seeking activity. Furthermore, compared with firms in takeover rumours, the completion of M&A lowers firm performance. More specifically, the difficulties in transfer of competitive advantages and integration of strategic assets lead to low firm performance in terms of productivity. Besides, firms cannot realise the synergistic effect and managerial disciplinary effect once a cross border M&A is completed, which suggests a low post-acquisition profitability level.

The performance impact of marketing resources

Recently, there has been much interest in the role of marketing resources in contributing to the creation of competitive advantage and subsequently firm performance. Most of this work to date, however, has been conceptual or theoretical in nature, and there has been little empirical research into the nature and impact of marketing resources. Drawing on literature from both the marketing and strategic management disciplines, the authors develop and empirically test scales for measuring marketing resources and assess their impact on performance outcomes. The findings indicate that marketing resources impact on financial performance indirectly through creating customer satisfaction and loyalty and building superior market performance. © 2003 Elsevier Inc. All rights reserved.

Innovation, productivity and growth in US business services:a firm-level analysis

This paper examines the impact of innovation on the performance of US business service firms. We distinguish between different levels of innovation (new-to-market and new-to-firm) in our analysis, and allow explicitly for sample selection issues. Reflecting the literature, which highlights the importance of external interaction in service innovation, we pay particular attention to the role of external innovation linkages and their effect on business performance. We find that the presence of service innovation and its extent has a consistently positive effect on growth, but no effect on productivity. There is evidence that the growth effect of innovation can be attributed, at least in part, to the external linkages maintained by innovators in the process of innovation. External linkages have an overwhelmingly positive effect on (innovator) firm performance, regardless of whether innovation is measured as a discrete or continuous variable, and regardless of the level of innovation considered.

Multinationality-performance relationship:a meta-analysis

- We conduct a Meta-analysis of 54 papers that study the relationship between multinationality and firm performance. The aim is to understand if any systematic relationships exist between the characteristics of each study and the reported results of linear and curvilinear regressions to examine the multinationality-performance relationship. - Our main finding, robust to different specifications and to different weights for each observation, is that when analysis is based on non-US data, the reported return to multinationality is higher. However, this relationship for non-US firms is usually U-shaped rather than inverted U-shaped. This indicates that US firms face lower returns to internationalization than other firms but are less likely to incur losses in the early stages of internationalization. - The findings also highlight the differences that are reported when comparing regression and non-regression based techniques. Our results suggest that in this area regression based analysis is more reliable than say ANOVA or other related approaches. - Other characteristics that influence the estimated rate of return and its shape across different studies are: the measure of multinationality used; size distribution of the sample; and the use of market-based indicators to measure firm performance. Finally, we find no evidence of publication bias.

Understanding marketing department's influence within the firm

Increasing debate centers on the decreasing influence of the marketing department within firms. This study investigates such influence and assesses its determinants and consequences. The results show that the accountability and innovativeness of the marketing department represent the two major drivers of its influence. However, the results do not indicate that the customer-connecting role of the marketing department increases its influence, though this role is important for shaping the firm's market orientation. A marketing department's influence is related positively to market orientation, which in turn is related positively to firm performance. This study also suggests a dual relationship between the marketing department's influence and market orientation. A key implication of this study is that marketers should become more accountable and innovative to gain more influence.

Getting marketing back in the boardroom:understanding the drivers of marketing's influence within the firm

As many strategically important aspects of marketing are addressed by other functions in the organization, the decreased influence of the marketing department within companies is a topic of growing debate. In this study, the authors investigate this diminished influence and assess its determinants and consequences. They interviewed 25 marketing and finance executives from leading Dutch firms. They also conducted a large-scale Internet-based survey of several hundred marketing, finance, and general managers. Their results show that accountability and the innovativeness of the marketing department are the major drivers of the marketing department’s influence. They also demonstrate that a firm’s short-term orientation is negatively related to the influence of the marketing department. Marketing influence is positively related to market orientation, which is positively related to firm performance. Their results do not support prior findings of a direct positive link between marketing influence and firm performance, which might suggest that there is no need for a strong marketing department. The study suggests that an influential marketing department is relevant primarily when the firm is not market oriented. When firms are market oriented, a less influential marketing department does not lower their performance. Hence, it appears that they can choose to have an influential or noninfluential marketing department without any repercussions for their performance. Marketing activities could move to other functions. The authors suggest that marketing departments should aim to retain their influence. Dispersing marketing decision making among many functions can cause a lack of coordination; customers also lose their advocate within the firm. How can marketing departments regain their influence? The authors suggest two general solutions. First, marketing departments should become more accountable by linking marketing actions and policies with financial results. Marketers should become capable in analytics and finance. Second, they should become more innovative by increasing their share in new product or service concepts. They can do so by using their knowledge of the market and customers to contribute to new product or service development.

The innovation value chain and export performance:a study of Taiwanese manufacturing industries

This thesis involves the secondary data of 1806 innovative manufacturing firms derived from the database of 2nd Taiwanese Innovation Survey. Three topics are researched. The first topic investigates the innovation value chain (IVC) in Taiwanese manufacturing firms. Previous IVC studies are all done in developed countries such as UK, Ireland, Northern Ireland and Switzerland, and it leaves the gap of those non-developed countries. The result shows the overall knowledge sourcing pattern of Taiwanese manufacturing firms presenting a complementary relationship which is consistent to the previous IVC studies. The main innovation input is still derived from internal R&D which suggests more utilisation of external knowledge may boost innovation outcome. Product innovation does enhance firm growth while process innovation reduces a firm’s productivity. The second topic uses the lens of IVC to investigate the difference of the innovation process from knowledge linkages to value added between high-tech and low- tech sectors. The findings indicate (1) there are significant differences in the IVC between high- and low-tech sectors, however these are defined; (2) how you define ‘sector’ matters i.e. the nature of the high-tech and low-tech differences varies depending on whether the technology definition is carried out at the industry or firm level; and (3) the high uncertainty of innovation cause the difficulty to predict firm performance especially for those firms with high intensity of innovation. The third topic investigates the innovation-exporting relationship and explores the determinants of export performance. Product innovation enhances export performance once a firm enters international markets while process innovation affects negatively on a firm’s likelihood of being an exporter. Furthermore, IP protection is found to affect directly export performance positively.

HRM, organizational capacity for change, and performance:a global perspective

This special issue brings together a variety of articles, each one enriching understanding about whether and how human resource management (HRM) influences organizational performance (however defined) against a backdrop of complex change. We present a preliminary framework that enables us to integrate the diverse themes explored in the special issue, proposing a mediating role for organizational change capacity (OCC). OCC represents a particular subset within the resource-based literature labeled as “dynamic capabilities.” Although not well researched, there is evidence that OCC is positively associated with firm performance and that this relationship is stronger given conditions of high uncertainty. Our framework reflects on external and internal parameters, which we suggest moderate the relationship between human resource management (HRM), OCC, and organizational performance. Our intention is to provide compelling insight for both practitioners and researchers, especially those whose remit extends beyond national boundaries, with reference to areas of the globe as disparate as Greece, Ireland, Pakistan, Switzerland, and the United Kingdom. © 2012 Wiley Periodicals, Inc.

Multinational Performance and the Geography of FDI:evidence from 46 countries

The literature on multinationality and firm performance has generally disregarded the role of geography. However, the location of FDI assumes particular importance in terms of the link between multinationality at the firm level. The purpose of this paper is to consider the multinationality-performance relationship within the context of greater emphasis on the importance of location, but also emphasising the importance of the location decision. This paper draws on firm-level data covering over 16,000 multinationals from 46 countries over the period of 1997-2007 and allows for different effects upon the performance of the multinational firm depending on the level of development of the host economy. In our results, we find a clear positive relation between multinationality and firm performance. However, investment in developing countries is associated with larger effects on performance than in the case of investment in developed countries. We also find that the return to investing in developing countries is U-shaped. This indicates that multinationals are likely to face losses in the early stage of their investment in developing countries before the positive returns are realized. Overall, our results suggest that the net gains for multinationals from greater geographical diversification have not yet been fully explored. Geographical diversification into developing countries may be an important source of competitive advantages that deserves more serious consideration from business leaders and academics alike. © 2013 Springer-Verlag Berlin Heidelberg.

Delegation of pricing authority to the sales force:an agency-theoretic perspective of its determinants and impact on performance

In industrial selling situations, the questions of what factors drive pricing authority delegation to salespeople and under what conditions price delegation is beneficial for the firm are often asked. To advance knowledge in this area, we (1) develop and empirically test a framework of important drivers of price delegation based on agency-theoretic research and (2) investigate the impact of price delegation on firm performance, taking into account agency theory variables as potential moderators. The study is based on data from a sample of 181 companies from the industrial machinery and electrical engineering industry in Germany. The results indicate that the degree of pricing delegation increases as information asymmetry between the salesperson and sales manager increases and as it becomes more difficult to monitor salespeople's efforts. Conversely, risk-aversion of salespeople is negatively related to the degree of price delegation. Furthermore, we find a positive effect of price delegation on firm performance, which is amplified when market-related uncertainty is high and when salespeople possess better customer-related information than their managers. Hence, our results clearly show that rigid, “one price fits all” policies are inappropriate in many B2B market situations. Instead, sales managers should grant their salespeople sufficient leeway to adapt prices to changing customer requirements and market conditions, especially in firms that operate in highly uncertain selling environments.

A survey based analysis of IT adoption and 3PLs' performance

Purpose: In today's competitive scenario, effective supply chain management is increasingly dependent on third-party logistics (3PL) companies' capabilities and performance. The dissemination of information technology (IT) has contributed to change the supply chain role of 3PL companies and IT is considered an important element influencing the performance of modern logistics companies. Therefore, the purpose of this paper is to explore the relationship between IT and 3PLs' performance, assuming that logistics capabilities play a mediating role in this relationship. Design/methodology/approach: Empirical evidence based on a questionnaire survey conducted on a sample of logistics service companies operating in the Italian market was used to test a conceptual resource-based view (RBV) framework linking IT adoption, logistics capabilities and firm performance. Factor analysis and ordinary least square (OLS) regression analysis have been used to test hypotheses. The focus of the paper is multidisciplinary in nature; management of information systems, strategy, logistics and supply chain management approaches have been combined in the analysis. Findings: The results indicate strong relationships among data gathering technologies, transactional capabilities and firm performance, in terms of both efficiency and effectiveness. Moreover, a positive correlation between enterprise information technologies and 3PL financial performance has been found. Originality/value: The paper successfully uses the concept of logistics capabilities as mediating factor between IT adoption and firm performance. Objective measures have been proposed for IT adoption and logistics capabilities. Direct and indirect relationships among variables have been successfully tested. © Emerald Group Publishing Limited.

Board composition, ownership structure and dividend policies in an emerging market: further evidence from CASE 50

Purpose – The purpose of this study is to examine dividend policies in an emerging capital market, in a country undergoing a transitional period. Design/methodology/approach – Using pooled cross-sectional observations from the top 50 listed Egyptian firms between 2003 and 2005, this study examines the effect of board of directors’ composition and ownership structure on dividend policies in Egypt. Findings – It is found that there is a significant positive association between institutional ownership and firm performance, and both dividend decision and payout ratio. The results confirm that firms with a higher return on equity and a higher institutional ownership distribute higher levels of dividend. No significant association was found between board composition and dividend decisions or ratios. Originality/value – This study provides additional evidence of the applicability of the signalling model in the emerging market of Egypt. It was found that despite the high institutional ownership and the closely held nature of the firms, which imply lower agency costs, the payment of higher dividend was considered necessary to attract capital during this transitional period.

The impact of board independence and ownership structure on the timeliness of corporate internet reporting of Irish-listed companies

Purpose – This study seeks to provide valuable new insight into the timeliness of corporate internet reporting (TCIR) by a sample of Irish-listed companies. Design/methodology/approach – The authors apply an updated version of Abdelsalam et al. TCIR index to assess the timeliness of corporate internet reporting. The index encompasses 13 criteria that are used to measure the TCIR for a sample of Irish-listed companies. In addition, the authors assess the timeliness of posting companies’ annual and interim reports to their web sites. Furthermore, the study examines the influence of board independence and ownership structure on the TCIR behaviour. Board composition is measured by the percentage of independent directors, chairman’s dual role and average tenure of directors. Ownership structure is represented by managerial ownership and blockholder ownership. Findings – It is found that Irish-listed companies, on average, satisfy only 46 per cent of the timeliness criteria assessed by the timeliness index. After controlling for size, audit fees and firm performance, evidence that TCIR is positively associated with board of director’s independence and chief executive officer (CEO) ownership is provided. Furthermore, it is found that large companies are faster in posting their annual reports to their web sites. The findings suggest that board composition and ownership structure influence a firm’s TCIR behaviour, presumably in response to the information asymmetry between management and investors and the resulting agency costs. Practical implications – The findings highlight the need for improvement in TCIR by Irish-listed companies in many areas, especially in regard to the regular updates of information provided on their web sites. Originality/value – This study represents one of the first comprehensive examinations of the important dimension of the TCIR in Irish-listed companies.