The Foodservice Industry's Social Responsibility Regarding the Obesity Epidemic, Part II: Incorporating Strategic Corporate Social Responsibility into Foodservice Operations

Just as all types of business firms are now expected to go beyond their profit-oriented activities in boosting the well-being of the community, so, too, is corporate social responsibility (CSR) expected from foodservice firms. The significance of the obesity epidemic, combined with the foodservice industry's role in the development of this epidemic, suggests that the industry has an ethical responsibility to implement CSR activities that will help reduce obesity, particularly among children. CSR should be seen as an efficient management strategy through which a firm voluntarily integrates social and environmental concerns into its business operations and its interactions with stakeholders. Although costs are associated with CSR initiatives, benefits accrue to the firm. Decisions regarding alternative CSR activities should be based on a cost-benefit analysis and calculation of the present value of the revenue stream that can be identified as resulting from the specific CSR activities. CSR initiatives should be viewed as long-term investments that will enhance the firms’ value. Key areas for foodservice firms' CSR activities include marketing practices, particularly practices impacting advertising to children and marketing that will enhance the firms’ visibility; portion-size modification; new-product development; and consistent nutrition labeling on menus.

Assessing the impact of business group diversification on the internationalization of their affiliates: The case of Latin American firms

This dissertation explored the capacity of business group diversification to generate value to their affiliates in an institutional environment characterized by the adoption of structural pro-market reforms. In particular, the three empirical essays explored the impact of business group diversification on the internationalization process of their affiliates. ^ The first essay examined the direct effect of business group diversification on firm performance and its moderating effect on the multinationality-performance relationship. It further explored whether such moderating effect varies depending upon whether the focal affiliate is a manufacturing or service firm. The findings suggested that the benefits of business group diversification on firm performance have a threshold, that those benefits are significant at earlier stages of internationalization and that these benefits are stronger for service firms. ^ The second essay studied the capacity of business group diversification to ameliorate the negative effects of the added complexity faced by its affiliates when they internationalized. The essay explored this capacity in different dimensions of international complexity. The results indicated that business group diversification effectively ameliorated the effects of the added international complexity. This positive effect is stronger in the institutional voids rather than the societal complexity dimension. In the former dimension, diversified business groups can use both their non-market resources and previous experience to ameliorate the effects of complexity on firm performance. ^ The last essay explored whether the benefits of business group diversification on the scope-performance relationship varies depending on the level of development of the network of subsidiaries and the region of operation of the focal firm. The results suggested that the benefits of business group diversification are location bound within the region but that they are not related to the level of development of the targeted countries. ^ The three essays use longitudinal analyses on a sample of Latin American firms to test the hypotheses. While the first essay used multilevel models and fix effects models, the last two essays used exclusively fix effects models to assess the impact of business group diversification. In conclusion, this dissertation aimed to explain the capacity of business group diversification to generate value under conditions of institutional change.^

Bankruptcy Situation Model in Small Business: The Case of Restaurant Firms

The purpose of this paper is to describe and discuss the current bankruptcy prediction models. This is done in the context of pros and cons of proposed models to determine the appropriate factors of failure phenomenon in cases involving restaurants that have filed for bankruptcy under Chapter 11. A sample of 11 restaurant companies that filed for bankruptcy between 1993 and 2003 were identified from the Form 8-K reported to the Securities and Exchange Commission (SEC). By applying financial ratios retrieved from the annual reports which contain, income statements, balance sheets, statements of cash flows, and statements of stockholders’ equity (or deficit) to the Atlman’s mode, Springate model, and Fulmer’s model. The study found that Atlman’s model for the non-manufacturing industry provided the most accurate bankruptcy predictions.

The role of market knowledge in recognizing and exploiting entrepreneurial opportunities in technology intensive firms

Entrepreneurial opportunity recognition is an increasingly prevalent phenomenon. Of particular interest is the ability of promising technology based ventures to recognize and exploit opportunities. Recent research drawing on the Austrian economic theory emphasizes the importance of knowledge, particularly market knowledge, behind opportunity recognition. While insightful, this research has tended to overlook those interrelationships that exist between different types of knowledge (technology and market knowledge) as well as between a firm’s knowledge base and its entrepreneurial orientation. Additional shortfalls of prior research include the ambiguous definitions provided for entrepreneurial opportunities, oversight of opportunity exploitation with an extensive focus on opportunity recognition only, and the lack of quantitative, empirical evidence on entrepreneurial opportunity recognition. ^ In this dissertation, these research gaps are addressed by integrating Schumpeterian opportunity development view with a Kirznerian opportunity discovery theory as well as insights from literature on entrepreneurial orientation. A sample of 85 new biotechnology ventures from the United States, Finland, and Sweden was analyzed. While leaders in all 85 companies were interviewed for the research in 2003-2004, 42 firms provided data in 2007. Data was analyzed using regression analysis. ^ The results show the value and importance of early market knowledge and technology knowledge as well as an entrepreneurial company posture for subsequent opportunity recognition. The highest numbers of new opportunities are recognized in firms where high levels of market knowledge are combined with high levels of technology knowledge (measured with a number of patents). A firm’s entrepreneurial orientation also enhances its opportunity recognition. Furthermore, the results show that new ventures with more market knowledge are able to gather more equity investments, license out more technologies, and achieve higher sales than new ventures with lower levels of market knowledge. Overall, the findings of this dissertation help further our understanding of the sources of entrepreneurial opportunities, and should encourage further research in this area. ^

Resources, strategies, location determinants, and host country location choice by emerging market firms

The extant literature had studied the determinants of the firms’ location decisions with help of host country characteristics and distances between home and host countries. Firm resources and its internationalization strategies had found limited attention in this literature. To address this gap, the research question in this dissertation was whether and how firms’ resources and internationalization strategies impacted the international location decisions of emerging market firms. ^ To explore the research question, data were hand-collected from Indian software firms on their location decisions taken between April 2000 and March 2009. To analyze the multi-level longitudinal dataset, hierarchical linear modeling was used. The results showed that the internationalization strategies, namely market-seeking or labor-seeking had direct impact on firms’ location decision. This direct relationship was moderated by firm resource which, in case of Indian software firms, was the appraisal at CMMI level-5. Indian software firms located in developed countries with a market-seeking strategy and in emerging markets with a labor-seeking strategy. However, software firms with resource such as CMMI level-5 appraisal, when in a labor-seeking mode, were more likely to locate in a developed country over emerging market than firms without the appraisal. Software firms with CMMI level-5 appraisal, when in market-seeking mode, were more likely to locate in a developed country over an emerging market than firms without the appraisal. ^ It was concluded that the internationalization strategies and resources of companies predicted their location choices, over and above the variables studied in the theoretical field of location determinants.^

Essays of strategic alliance portfolio configuration—Its performance properties, strategic antecedents and consequential effects on multinational firms' continuing foreign expansion

This dissertation focused on an increasingly prevalent phenomenon in today's global business environment—strategic alliance portfolio. Building on resource-based view, resource dependency theory and real options theory, this dissertation adopted a multi-dimensional perspective to examine the performance implications, strategic antecedents of alliance portfolio configuration, and its strategic effects on firms' decision-making on their continuing foreign expansion. The dissertation consisted of three interrelated essays, each of which dealt with a specific research question. In the first essay I applied a two-dimensional construct that embraces both alliance relations' and alliance partners' attributes to illustrate alliance portfolio configuration. Based on this framework, a longitudinal study was conducted attempting to explore the performance properties of alliance portfolio configuration. The results revealed that alliance diversity and partner diversity have different relative contributions to firms' economic performance. The relationship between alliance portfolio configuration and firm performance was shaped by degree of multinationality in a curvilinear pattern. The second essay attempted to identify the firm level driving forces of alliance portfolio configuration and how these forces interacting with firms' internationalization influence firms' strategic choices on alliance portfolio configuration. The empirical results indicated that past alliance experience, slack resource and firms' brand images are three critical determinants shaping alliance portfolios, but those shaping relationships are conditioned by firms' multinationality. The third essay primarily employed real options theory to build a conceptual framework, revealing how country-, alliance portfolio-, firm-, and industry level factors and their interactions influence firms' strategic decision-making on post-entry continuing expansion in foreign markets. The two empirical studies were resided in global hospitality and travel industries and use panel data to test the relevant theoretical models. Overall, the dissertation advanced and enriched the theoretical domain of alliance portfolio. It particularly shed valuable insights on three fundamental questions in the domain of alliance portfolio research, namely "if and how alliance portfolios contribute to firms' economic performance"; "what determines the appearance of alliance portfolios”; and "how alliance portfolios affect firms' strategic decision-making". This dissertation also extended the international business and strategic management research on service multinationals' foreign expansion and performance.

Three essays on a longitudinal analysis of business start-ups using the Kauffman Firm Survey

This dissertation focused on the longitudinal analysis of business start-ups using three waves of data from the Kauffman Firm Survey. ^ The first essay used the data from years 2004-2008, and examined the simultaneous relationship between a firm's capital structure, human resource policies, and its impact on the level of innovation. The firm leverage was calculated as, debt divided by total financial resources. Index of employee well-being was determined by a set of nine dichotomous questions asked in the survey. A negative binomial fixed effects model was used to analyze the effect of employee well-being and leverage on the count data of patents and copyrights, which were used as a proxy for innovation. The paper demonstrated that employee well-being positively affects the firm's innovation, while a higher leverage ratio had a negative impact on the innovation. No significant relation was found between leverage and employee well-being.^ The second essay used the data from years 2004-2009, and inquired whether a higher entrepreneurial speed of learning is desirable, and whether there is a linkage between the speed of learning and growth rate of the firm. The change in the speed of learning was measured using a pooled OLS estimator in repeated cross-sections. There was evidence of a declining speed of learning over time, and it was concluded that a higher speed of learning is not necessarily a good thing, because speed of learning is contingent on the entrepreneur's initial knowledge, and the precision of the signals he receives from the market. Also, there was no reason to expect speed of learning to be related to the growth of the firm in one direction over another.^ The third essay used the data from years 2004-2010, and determined the timing of diversification activities by the business start-ups. It captured when a start-up diversified for the first time, and explored the association between an early diversification strategy adopted by a firm, and its survival rate. A semi-parametric Cox proportional hazard model was used to examine the survival pattern. The results demonstrated that firms diversifying at an early stage in their lives show a higher survival rate; however, this effect fades over time.^

S Corporations Can Benefit Many Closely-Held Hospitality Firms

In his discussion - S Corporations Can Benefit Many Closely-Held Hospitality Firms - by John M. Tarras, Assistant Professor, School of Hotel, Restaurant & Institutional Management at Michigan State University, Assistant Professor Tarras initially offers: “Organization as an S corporation has many advantages for hospitality firms since passage of the Tax Reform Act of 1986. The author discusses those advantages and lists the disadvantages as well.” In the opening paragraphs Tarras alludes to the relationship between hospitality firms, S corporations, and the Tax Reform Act of 1986, and then defines what an S corporation is. “An S corporation is a form of business entity that combines many of the tax advantages of partnerships with the legal attributes of a corporation, including limited liability for its shareholders. Its name is obtained from a subchapter of the Internal Revenue Code. Except for tax purposes, the S corporation is treated in the same manner as any regular corporation. Like a partnership, income and losses for an S corporation are generally passed through directly to shareholders for inclusion on their individual returns. An S corporation thus avoids the double tax problem facing regular corporations.” There are certain criteria to be met and caveats to be avoided in qualifying for S corporation status. Tarras lists and cites these for you. “Due to the complicated nature of S corporations, the election may be inadvertently terminated if the eligibility requirements are violated,” Tarras expands and cites. As the article suggests at the outset, there are advantages and disadvantages to S corporation status; the author outlines some examples for you. “Traditionally, the S corporation has been used by hospitality firms wishing to avoid the "double tax" problem of a regular corporation,” Tarras informs you. “Regular corporations are taxed once at the corporate level, and again at the shareholder level when income is distributed to shareholders in the form of dividends.” Tarras advises you as to why an S corporation is an advantage in this situation. “Since the S corporation generally is not subject to any corporate taxes, it generally makes no difference whether distributions to shareholders of S corporations are characterized as compensation or dividends,” thus the double tax is avoided. This is just one such positive illustration. Assistant Professor Tarras wants you to know: “Perhaps the most important reason to consider the S corporation has to do with the downward revision of tax rates for both individuals and corporations.” He highlights a case study for you. Some of the disadvantages of S corporation affiliation are the caveats alluded to earlier. They include, “the limitation of an S corporation of 35 shareholders,” Tarras cites. “Also, there are limits as to who may own stock in an S corporation.” These are but two of the limitations of an S corporation. Tarras closes with a further glimpse of the down-sides of an S corporation.

Understanding Annual Reports of Hospitality Firms

In her discussion - Understanding Annual Reports of Hospitality Firms - by Elisa S. Moncarz, Associate Professor, School of Hospitality Management, Florida International University, Associate Professor Moncarz initially offers: “Management bears full responsibility for the reporting function of annual reports prepared by publicly-held companies designed to provide interested parties with information that is useful in making business and economic decisions. In Part I the author reviews the content of annual reports of firms in the hospitality industry, while looking at recent developments affecting annual reports. Part 11, in a subsequent issue, will comprise an in-depth examination of the annual report of an actual firm in the hospitality industry, focusing on suggested guidelines and recommendations for how to use annual reports as an aid to the decision-making process in the hospitality industry.” This article is to be considered a primer on reading and understanding annual reports, as well as a glimpse into the dynamics that affect them. In defining what an annual report is, Associate Professor Moncarz informs you with citation, “Annual reports are required by the Securities Exchange Commission (SEC) ¹ for all companies with securities sold to the general public. These reports, which must be issued within 90 days after the close of the calendar (or fiscal) year, comprise a primary source of information about these companies,” she further reports. “Indeed, the official version of the company's history is summed up yearly in its annual report by providing full information of the company's operations over the period as well as what the company is gearing up to accomplish in the next year,” Professor Moncarz closes the definition. Why should thus happen over and above SEC requirements? The financial component is an important one; the author offers her informed view: “The major objective of financial statement reporting is to provide information that is useful to present and potential investors, creditors, and other financial statement users in making rational investment, credit, and similar decisions. Thus, financial statements represent the primary (and most reliable) source of knowledge about a particular firm in the hospitality industry.” The above two paragraphs crystallize the requirement and the objective of annual reports. “A typical annual report of a hospitality firm contains a number of standard features which may be broken down into the following three sections…” General, financial data, and supplementary data are variously bounded and circumscribed for you. As a marketing device and feel-good initiative, the annual report is a useful tool for a hospitality corporation that is in-the-black, and focused on the future, says the author. She cites the Marriott Corporation’s 1985 annual report as an example. Of course, an annual report can also be a harbinger of bad news for shareholders as well. Notes/footnotes and disclosure are key elements to the credibility of any annual report; Professor Moncarz discusses these concepts at length. “Given the likelihood that the hospitality industry will continue to face an uncertain economic environment for some time, financial statement users should become more demanding in their need for information that will help assure the firm's survival and evaluate its ability to generate earnings, increase the firm's investment value, and provide for its future growth,” Professor Moncarz says. “Accordingly, understanding annual reports in the hospitality industry should become even more critical.”

Three Essays on a Longitudinal Analysis of Business Start-ups using the Kauffman Firm Survey

This dissertation focused on the longitudinal analysis of business start-ups using three waves of data from the Kauffman Firm Survey. The first essay used the data from years 2004-2008, and examined the simultaneous relationship between a firm’s capital structure, human resource policies, and its impact on the level of innovation. The firm leverage was calculated as, debt divided by total financial resources. Index of employee well-being was determined by a set of nine dichotomous questions asked in the survey. A negative binomial fixed effects model was used to analyze the effect of employee well-being and leverage on the count data of patents and copyrights, which were used as a proxy for innovation. The paper demonstrated that employee well-being positively affects the firm's innovation, while a higher leverage ratio had a negative impact on the innovation. No significant relation was found between leverage and employee well-being. The second essay used the data from years 2004-2009, and inquired whether a higher entrepreneurial speed of learning is desirable, and whether there is a linkage between the speed of learning and growth rate of the firm. The change in the speed of learning was measured using a pooled OLS estimator in repeated cross-sections. There was evidence of a declining speed of learning over time, and it was concluded that a higher speed of learning is not necessarily a good thing, because speed of learning is contingent on the entrepreneur's initial knowledge, and the precision of the signals he receives from the market. Also, there was no reason to expect speed of learning to be related to the growth of the firm in one direction over another. The third essay used the data from years 2004-2010, and determined the timing of diversification activities by the business start-ups. It captured when a start-up diversified for the first time, and explored the association between an early diversification strategy adopted by a firm, and its survival rate. A semi-parametric Cox proportional hazard model was used to examine the survival pattern. The results demonstrated that firms diversifying at an early stage in their lives show a higher survival rate; however, this effect fades over time.

The Survival and Stock Performance of Emerging Country Firms in the United States

Many firms from emerging markets flocked to developed countries at high cost with hopes of acquiring strategic assets that are difficult to obtain in home countries. Adequate research has focused on the motivations and strategies of emerging country firms' (ECFs') internationalization, while limited studies have explored their survival in advanced economies years after their venturing abroad. Due to the imprinting effect of home country institutions that inhibit their development outside their home market, ECFs are inclined to hire executives with international background and affiliate to world-wide organizations for the purpose of linking up with the global market, embracing multiple perspectives for strategic decisions, and absorbing the knowledge of foreign markets. However, the effects of such orientation on survival are under limited exploration. Motivated by the discussion above, I explore ECFs’ survival and stock performance in a developed country (U.S.). Applying population ecology, signaling theory and institutional theory, the dissertation investigates the characteristics of ECFs that survived in the developed country (U.S.), tests the impacts of global orientation on their survival, and examines how global-oriented activities (i.e. joining United Nations Global Compact) affect their stock performance. The dissertation is structured in the form of three empirical essays. The first essay explores and compares different characteristics of ECFs and developed country firms (DCFs) that managed to survive in the U.S. The second essay proposes the concept of global orientation, and tests its influences on ECFs’ survival. Employing signaling theory and institutional theory, the third essay investigates stock market reactions to announcements of United Nation Global Compact (UNGC) participation. The dissertation serves to explore the survival of ECFs in the developed country (U.S.) by comparison with DCFs, enriching traditional theories by testing non-traditional arguments in the context of ECFs’ foreign operation, and better informing practitioners operating ECFs about ways of surviving in developed countries and improving stockholders’ confidence in their future growth.