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.

Sustained release and osteogenic potential of heparan sulfate-doped fibrin glue scaffolds within a rat cranial model

This paper explores the potential therapeutic role of the naturally occurring sugar heparan sulfate (HS) for the augmentation of bone repair. Scaffolds comprising fibrin glue loaded with 5 lg of embryonically derived HS were assessed, firstly as a release-reservoir, and secondly as a scaffold to stimulate bone regeneration in a critical size rat cranial defect. We show HS-loaded scaffolds have a uniform distribution of HS, which was readily released with a typical burst phase, quickly followed by a prolonged delivery lasting several days. Importantly, the released HS contributed to improved wound healing over a 3-month period as determined by microcomputed tomography (lCT) scanning, histology, histomorphometry, and PCR for osteogenic markers. In all cases, only minimal healing was observed after 1 and 3 months in the absence of HS. In contrast, marked healing was observed by 3 months following HS treatment, with nearly full closure of the defect site. PCR analysis showed significant increases in the gene expression of the osteogenic markers Runx2, alkaline phosphatase, and osteopontin in the heparin sulfate group compared with controls. These results further emphasize the important role HS plays in augmenting wound healing, and its successful delivery in a hydrogel provides a novel alternative to autologous bone graft and growth factorbased therapies.

Assessing the impact of floods and flood legislation on residential property prices

The changing development and population sprawl in major cities, especially those located in high rainfall areas, has resulted in the need to review and re-assess potential flood impacts in these cities. In many cases these new flood lines and flood maps have placed residential property that was previously considered to be flood free to now be considered to be potentially flood liable. Previous research based in Sydney and the UK has identified the fact that residential property that has been subject to flooding has a decreased price and higher investment risk than flood free property in the same location. These studies have also shown that the greatest impact on residential property subject to flooding is just following a flood event. In June 2009, Brisbane City Council released revised flood maps for the Greater Brisbane region and these maps have identified areas that have not previously been considered flood liable. This paper will analyse the sale performance of flood liable streets in the main flood areas of Brisbane over the period January 1990 through to June 2009, to determine the variation in price for these flood liable areas to the residential property immediately adjoining them. The average sale price will be tracked on both a geographic location and socio-economic basis.

More legislative traffic on the 'Doi Moi' superhighway : technology transfer, IP and competition law in Vietnam

Since 1986 Vietnam has been engaged in the transition from a centrally-controlled economy to a socialist-oriented market economy (the 'doi moi' renovation). The process for global economic integration has been slow given the magnitude of necessary reforms. Consequently technology entrepreneurs often discount Vietnam as a possible commercialization base which means that it is not realising its economic potential as a hub of technology transfer in the Asia-Pacific region. Three significant factors in the current uncertainty are Vietnam's laws on competition, intellectual property and technology transfer. Another problem is the lack of literature on these laws. This article first discusses the conceptual relationship between competition, intellectual property and technology transfer. Hopefully the article will provide some guidance for the technology entrepreneur considering foreign direct investment (FDI) in Vietnam. The bottom line is that these laws still need further reform to bolster entrepreneurial confidence.

Unlocking the potential through Creative Commons

In November 2006, the Australian Research Council Centre of Excellence for Creative Industries and Innovation (CCi), in conjunction with the Queensland University of Technology, hosted the CCau Industry Forum, a research-focused industry engagement event. The event was run by the CCi ccClinic and CC + OCL Research projects, and aimed to evaluate understanding of and attitudes towards copyright, OCL and CC in Australia. The Forum focused on the government, education and the creative industries sectors. Unlocking the Potential Through Creative Commons: An Industry Engagement and Action Agenda evaluates and responds to the outcomes of this Forum and presents a strategy for continued research into Creative Commons in Australia.

Structural equation model of construction contract dispute potential

This paper presents the results of a structural equation model (SEM) for describing and quantifying the fundamental factors that affect contract disputes between owners and contractors in the construction industry. Through this example, the potential impact of SEM analysis in construction engineering and management research is illustrated. The purpose of the specific model developed in this research is to explain how and why contract related construction problems occur. This study builds upon earlier work, which developed a disputes potential index, and the likelihood of construction disputes was modeled using logistic regression. In this earlier study, questionnaires were completed on 159 construction projects, which measured both qualitative and quantitative aspects of contract disputes, management ability, financial planning, risk allocation, and project scope definition for both owners and contractors. The SEM approach offers several advantages over the previously employed logistic regression methodology. The final set of structural equations provides insight into the interaction of the variables that was not apparent in the original logistic regression modeling methodology.

The modulation of outdoor running speed : the influence of gradient

This thesis aimed to investigate the way in which distance runners modulate their speed in an effort to understand the key processes and determinants of speed selection when encountering hills in natural outdoor environments. One factor which has limited the expansion of knowledge in this area has been a reliance on the motorized treadmill which constrains runners to constant speeds and gradients and only linear paths. Conversely, limits in the portability or storage capacity of available technology have restricted field research to brief durations and level courses. Therefore another aim of this thesis was to evaluate the capacity of lightweight, portable technology to measure running speed in outdoor undulating terrain. The first study of this thesis assessed the validity of a non-differential GPS to measure speed, displacement and position during human locomotion. Three healthy participants walked and ran over straight and curved courses for 59 and 34 trials respectively. A non-differential GPS receiver provided speed data by Doppler Shift and change in GPS position over time, which were compared with actual speeds determined by chronometry. Displacement data from the GPS were compared with a surveyed 100m section, while static positions were collected for 1 hour and compared with the known geodetic point. GPS speed values on the straight course were found to be closely correlated with actual speeds (Doppler shift: r = 0.9994, p < 0.001, Δ GPS position/time: r = 0.9984, p < 0.001). Actual speed errors were lowest using the Doppler shift method (90.8% of values within ± 0.1 m.sec -1). Speed was slightly underestimated on a curved path, though still highly correlated with actual speed (Doppler shift: r = 0.9985, p < 0.001, Δ GPS distance/time: r = 0.9973, p < 0.001). Distance measured by GPS was 100.46 ± 0.49m, while 86.5% of static points were within 1.5m of the actual geodetic point (mean error: 1.08 ± 0.34m, range 0.69-2.10m). Non-differential GPS demonstrated a highly accurate estimation of speed across a wide range of human locomotion velocities using only the raw signal data with a minimal decrease in accuracy around bends. This high level of resolution was matched by accurate displacement and position data. Coupled with reduced size, cost and ease of use, the use of a non-differential receiver offers a valid alternative to differential GPS in the study of overground locomotion. The second study of this dissertation examined speed regulation during overground running on a hilly course. Following an initial laboratory session to calculate physiological thresholds (VO2 max and ventilatory thresholds), eight experienced long distance runners completed a self- paced time trial over three laps of an outdoor course involving uphill, downhill and level sections. A portable gas analyser, GPS receiver and activity monitor were used to collect physiological, speed and stride frequency data. Participants ran 23% slower on uphills and 13.8% faster on downhills compared with level sections. Speeds on level sections were significantly different for 78.4 ± 7.0 seconds following an uphill and 23.6 ± 2.2 seconds following a downhill. Speed changes were primarily regulated by stride length which was 20.5% shorter uphill and 16.2% longer downhill, while stride frequency was relatively stable. Oxygen consumption averaged 100.4% of runner’s individual ventilatory thresholds on uphills, 78.9% on downhills and 89.3% on level sections. Group level speed was highly predicted using a modified gradient factor (r2 = 0.89). Individuals adopted distinct pacing strategies, both across laps and as a function of gradient. Speed was best predicted using a weighted factor to account for prior and current gradients. Oxygen consumption (VO2) limited runner’s speeds only on uphill sections, and was maintained in line with individual ventilatory thresholds. Running speed showed larger individual variation on downhill sections, while speed on the level was systematically influenced by the preceding gradient. Runners who varied their pace more as a function of gradient showed a more consistent level of oxygen consumption. These results suggest that optimising time on the level sections after hills offers the greatest potential to minimise overall time when running over undulating terrain. The third study of this thesis investigated the effect of implementing an individualised pacing strategy on running performance over an undulating course. Six trained distance runners completed three trials involving four laps (9968m) of an outdoor course involving uphill, downhill and level sections. The initial trial was self-paced in the absence of any temporal feedback. For the second and third field trials, runners were paced for the first three laps (7476m) according to two different regimes (Intervention or Control) by matching desired goal times for subsections within each gradient. The fourth lap (2492m) was completed without pacing. Goals for the Intervention trial were based on findings from study two using a modified gradient factor and elapsed distance to predict the time for each section. To maintain the same overall time across all paced conditions, times were proportionately adjusted according to split times from the self-paced trial. The alternative pacing strategy (Control) used the original split times from this initial trial. Five of the six runners increased their range of uphill to downhill speeds on the Intervention trial by more than 30%, but this was unsuccessful in achieving a more consistent level of oxygen consumption with only one runner showing a change of more than 10%. Group level adherence to the Intervention strategy was lowest on downhill sections. Three runners successfully adhered to the Intervention pacing strategy which was gauged by a low Root Mean Square error across subsections and gradients. Of these three, the two who had the largest change in uphill-downhill speeds ran their fastest overall time. This suggests that for some runners the strategy of varying speeds systematically to account for gradients and transitions may benefit race performances on courses involving hills. In summary, a non – differential receiver was found to offer highly accurate measures of speed, distance and position across the range of human locomotion speeds. Self-selected speed was found to be best predicted using a weighted factor to account for prior and current gradients. Oxygen consumption limited runner’s speeds only on uphills, speed on the level was systematically influenced by preceding gradients, while there was a much larger individual variation on downhill sections. Individuals were found to adopt distinct but unrelated pacing strategies as a function of durations and gradients, while runners who varied pace more as a function of gradient showed a more consistent level of oxygen consumption. Finally, the implementation of an individualised pacing strategy to account for gradients and transitions greatly increased runners’ range of uphill-downhill speeds and was able to improve performance in some runners. The efficiency of various gradient-speed trade- offs and the factors limiting faster downhill speeds will however require further investigation to further improve the effectiveness of the suggested strategy.

The transformation of banana with potential virus resistance genes

One approach to reducing the yield losses caused by banana viral diseases is the use of genetic engineering and pathogen-derived resistance strategies to generate resistant cultivars. The development of transgenic virus resistance requires an efficient banana transformation method, particularly for commercially important 'Cavendish' type cultivars such as 'Grand Nain'. Prior to this study, only two examples of the stable transformation of banana had been reported, both of which demonstrated the principle of transformation but did not characterise transgenic plants in terms of the efficiency at which individual transgenic lines were generated, relative activities of promoters in stably transformed plants, and the stability of transgene expression. The aim of this study was to develop more efficient transformation methods for banana, assess the activity of some commonly used and also novel promoters in stably transformed plants, and transform banana with genes that could potentially confer resistance to banana bunchy top nanovirus (BBTV) and banana bract mosaic potyvirus (BBrMV). A regeneration system using immature male flowers as the explant was established. The frequency of somatic embryogenesis in male flower explants was influenced by the season in which the inflorescences were harvested. Further, the media requirements of various banana cultivars in respect to the 2,4-D concentration in the initiation media also differed. Following the optimisation of these and other parameters, embryogenic cell suspensions of several banana (Musa spp.) cultivars including 'Grand Nain' (AAA), 'Williams' (AAA), 'SH-3362' (AA), 'Goldfinger' (AAAB) and 'Bluggoe' (ABB) were successfully generated. Highly efficient transformation methods were developed for both 'Bluggoe' and 'Grand Nain'; this is the first report of microprojectile bombardment transformation of the commercially important 'Grand Nain' cultivar. Following bombardment of embryogenic suspension cells, regeneration was monitored from single transfom1ed cells to whole plants using a reporter gene encoding the green fluorescent protein (gfp). Selection with kanamycin enabled the regeneration of a greater number of plants than with geneticin, while still preventing the regeneration of non-transformed plants. Southern hybridisation confirmed the neomycin phosphotransferase gene (npt II) was stably integrated into the banana genome and that multiple transgenic lines were derived from single bombardments. The activity, stability and tissue specificity of the cauliflower mosaic virus 358 (CaMV 35S) and maize polyubiquitin-1 (Ubi-1) promoters were examined. In stably transformed banana, the Ubi-1 promoter provided approximately six-fold higher p-glucuronidase (GUS) activity than the CaMV 35S promoter, and both promoters remained active in glasshouse grown plants for the six months they were observed. The intergenic regions ofBBTV DNA-I to -6 were isolated and fused to either the uidA (GUS) or gfjJ reporter genes to assess their promoter activities. BBTV promoter activity was detected in banana embryogenic cells using the gfp reporter gene. Promoters derived from BBTV DNA-4 and -5 generated the highest levels of transient activity, which were greater than that generated by the maize Ubi-1 promoter. In transgenic banana plants, the activity of the BBTV DNA-6 promoter (BT6.1) was restricted to the phloem of leaves and roots, stomata and root meristems. The activity of the BT6.1 promoter was enhanced by the inclusion of intron-containing fragments derived from the maize Ubi-1, rice Act-1, and sugarcane rbcS 5' untranslated regions in GUS reporter gene constructs. In transient assays in banana, the rice Act-1 and maize Ubi-1 introns provided the most significant enhancement, increasing expression levels 300-fold and 100-fold, respectively. The sugarcane rbcS intron increased expression about 10-fold. In stably transformed banana plants, the maize Ubi-1 intron enhanced BT6.1 promoter activity to levels similar to that of the CaMV 35S promoter, but did not appear to alter the tissue specificity of the promoter. Both 'Grand Nain' and 'Bluggoe' were transformed with constructs that could potentially confer resistance to BBTV and BBrMV, including constructs containing BBTV DNA-1 major and internal genes, BBTV DNA-5 gene, and the BBrMV coat protein-coding region all under the control of the Ubi-1 promoter, while the BT6 promoter was used to drive the npt II selectable marker gene. At least 30 transgenic lines containing each construct were identified and replicates of each line are currently being generated by micropropagation in preparation for virus challenge.