Ownership identity, strategy and performance:business group affiliates versus independent firms in India

We consider whether the impact of entrepreneurial orientation on business performance is moderated by the company affiliation with business groups. Within business groups, we explore the trade-off between inter-firm insurance that enables risk-taking, and inefficient resource allocation. Risk-taking in group affiliated firms leads to higher performance, compared to independent firms, but the impact of proactivity is attenuated. Utilizing Indian data, we show that risk-taking may undermine rather than improve business performance, but this effect is not present in business groups. Proactivity enhances performance, but less so in business groups. Firms can also enhance performance by technological knowledge acquisition, but these effects are not significantly different for various ownership categories.

Az exportteljesítmények és a hátterükben álló vállalati jellemzők elemzése (Export performance clusters of the Hungarian enterprises)

A tanulmány célja a Magyarországon működő exportáló vállalatok jellemzőinek feltárása volt a 2009-es vállalati versenyképességi felmérés alapján. Több tanulmány vizsgálta a vállalatok exportteljesítményét vállalati méret és tulajdonosi szerkezet szerinti bontásban, az elemzésben a szerző viszont ettől eltérő szemléletmódot alkalmazott. A vállalatok exportteljesítménye áll (exportértékesítés volumene, aránya, exportárbevétel változása, jövedelmezőség), a vállalati csoportképzés, klaszterelemzés középpontjában. Három jól elkülöníthető klasztert sikerült azonosítani: a jelentős exporthányaddal és folyamatos növekedéssel jellemezhető sikeres exportáló vállalatok csoportját, a stagnálással, s gyakran csökkenő exportértékesítéssel jellemezhető vállalatcsoportot, s végül a harmadik klasztert azok a jelenleg még alacsony export-ár bevétellel és alacsony exportaránnyal jellemezhető vállalatok képezték, melyekre a növekedés és a kiugróan magas jövedelmezőség volt a jellemző. Az elemzés egyediségét az adja, hogy a vállalati versenyképességi felmérés adatbázisa lehetővé tette a különböző exportteljesítmények hátterében álló működési jellemzők vizsgálatát, amelynek eredményeit a cikk bemutatja. Fő következtetésként megállapítható, hogy a sikeres exportáló vállalatok csoportja mindegyik jellemző szerint jobb működési jellemzőkkel rendelkezik a másik két csoporthoz viszonyítva. / === / The purpose of the paper is to reveal the main characteristics of the Hungarian export oriented firms. It is based on the Hungarian Competitiveness Research Survey 2009. 85% of enterprises were small or medium size in the sample. The aim of the analysis was to identify main factors and tendencies of the overall export performance. Several papers discussed the export activities of firms according to their size and ownership structure in Hungary. A different method was used here. The overall export performance (measured by volume, change, and share of export revenues, and firm profitability ratios) was put in the centre of cluster analysis. Three different clusters were identified. Firms in the firstcluster had significant export performance and growth rate. The second cluster was the group of stagnating firms and the third one contained those whose export performance was low but signaled growth with excellent profitability ratios. The uniqueness of the paper derived from the Competitiveness Research Survey because it provided an opportunity to analyse the connection between export performance and other management and operational characteristics of enterprises. The paper may induce futher research in exploring main enterprise level factors of export performance of the Hungarian firms.

Vállalati versenyképesség és innováció = Firm competitiveness and innovation

A tanulmány bemutatja a „Versenyben a világgal 2009” kutatás alapján a hazai vállatok legfontosabb innovációs jellemzőit, az innovációs tevékenységre ható tényezőket és a vállalati versenyképesség és innováció közötti kapcsolatot. Eredményeink szerint kevés cég vesz részt innovációs együttműködésekben, s elsősorban a nagyobbak. Az állam szerepében (szabályozás, törvények, adóztatás) látják a vállalatok az innováció legnagyobb gátját. A külföldi tulajdonú cégek nagyobb arányban vezetnek be új termékeket, szolgáltatásokat, mint hazai versenytársaik. Az állami innovációs támogatások segítették a kooperációban folyó kutatások létrejöttét, s hozzájárultak az új termékek, szolgáltatások kifejlesztéséhez. Kutatásaink szerint az innovatív cégek versenyképesebbek. _____ This paper analyses the determinants of innovation activities and the impact of innovation on competitiveness, based on Hungarian firm level data. We find that low proportion of the companies take part in R&D collaborations, mainly the large ones. The legislation, regulations and taxation policy of the Hungarian government hampers firms’ innovation activities above all others. Foreign owned subsidiaries have a higher innovation performance than the Hungarian counterparts’. Innovation subsidies stimulate companies to participate in R&D collaboration and contribute to the firms’ higher innovation performance. According to our research innovative firms are more competitive.

The impact of perceived corporate environmental performance on the behavior of capital market decision makers : analysis of food industry companies

Environmental protectionism and sustainable development has been gaining increased attention among governments, investors and consumers alike. As a result, firms are facing growing pressure from the various stakeholders to improve their environmental performance. This study is focusing on the food industry, which in recent years has been a subject of increased scrutiny due to their role in resource consumption, waste generation and unsustainable production practices. Our research is aiming to examine how the financial community evaluates the environmental stewardship of food industry companies as proxied by market reactions in response to environmental news. Are all company related environmental news items evaluated equally, and which financial and non-financial firm-specific attributes can influence market responses? Have there been changes in reactions on the stock exchange in the past two decades?

Systemic country differences in the European innovation performance - Does institutional context matter?

The so-called "High Performance Working System" (HPWS) and the lean production are representing the theoretical and methodological foundations of this paper. In this relation it is worth making distinction between various theoretical streams of the HPWS. The first theoretical stream in the literature is focusing on the diffusion of the Japanese-style management and organizational practices both in the US and in the Europe. The second theoretical strand comprises the approach of sociology of work and dealing with the learning/innovation capabilities of the new forms of work organization. Finally, the third theoretical approach is addressing on the types of knowledge and learning process and their relations with the innovation capabilities of the firm. The authors’ analysis is based on the international comparison, both in regional and in cross country comparison. For regional comparison the share of ICT clusters in Europe, USA and the rest of the world was assessed. For the purpose of the cross-country comparison in the EU, the innovation performance measured by the index Innovation Union Scoreboard (IUS) was used in both the before and after the financial crisis.

The impact of CEO compensation and CEO horizon on a firm's discretionary research and development expenditures

Agency costs are said to arise as a result of the separation of ownership from control inherent in the corporate form of ownership. One such agency problem concerns the potential variance between the time horizons of principal shareholders and agent managers. Agency theory suggests that these costs can be alleviated or controlled through performance-based Chief Executive Officer (CEO) contracting. However, components of a CEO's compensation contract can exacerbate or mitigate agency-related problems (Antle and Smith, 1985). According to the horizon hypothesis, a self-serving CEO reduces discretionary research and development (R&D) expenditures to increase earnings and earnings-based bonus compensation. Agency theorists contend that a CEO's market-based compensation component can mitigate horizon problems. This study seeks to determine whether there is a relationship between CEO earnings- and market-based compensation components and R&D expenditures in the largest United States industrial firms from 1987 to 1993.^ Consistent with the horizon hypothesis, results provide evidence of a negative and statistically significant relationship between CEO cash compensation (i.e., salary and bonus) and the firm's R&D expenditures. Consistent with the expectations of agency theory, results provide evidence of a positive and statistically significant relationship between market-based CEO compensation and R&D.^ Further results of this study provide evidence of a positive and statistically significant relationship between CEO tenure and the firm's R&D expenditures. Although there is a negative relationship between CEO age and the firm's R&D, it was not statistically significant at the 0.5 level. ^

Power and influence in joint venture relationships and their impact on performance

The purpose of this research was to apply the concepts of power and influence tactics to the joint venture context by examining how they relate to venture performance. In addition, culture and the expectations of future cooperation were examined for their association with influence tactic use and joint venture performance. Data were collected from 58 parent firms of U.S.-based domestic and international joint ventures about their relationships with their partners.^ Under the theories of social exchange and power dependence, a parent's level of power is based on its partner's dependence on the relationship. The statistical results indicated that: (1) the greater the total of power of both parents in an equal power relationship, the greater the joint venture's performance; and (2) the greater the inequality between each parent's level of power, the lower the joint venture's performance. It was also found that the way in which a parent firm tried to influence its partner was related to joint venture performance. Specifically, the use of references to a partner's legitimate authority was negatively related to performance, while the use of rational arguments and compromises was positively related.^ Contrary to expectations, the cultural backgrounds of the parents were not shown to have a relationship to influence tactic use or joint venture's performance. On the other hand, greater expectation of future cooperation had a positive association with performance, and a significant relationship with influence tactic use. The greater the expectation, the less partners used more confrontational tactics such as pressure or legitimate authority. ^

Three essays on the interrelationships among financial restatements, corporate governance, market microstructure and the firm's rate of return

The increase in the number of financial restatements in recent years has resulted in a significant decrease in the amount of market capitalization for restated companies. Prior literature did not differentiate between single and multiple restatements announcements. This research investigated the inter-relationships among multiple financial restatements, corporate governance, market microstructure and the firm’s rate of return in the form of three essays by differentiating between single and multiple restatement announcement companies. First essay examined the stock performance of companies announcing the financial restatement multiple times. The postulation is that prior research overestimates the abnormal return by not separating single restatement companies from multiple restatement companies. This study investigated how market penalizes the companies that announce restatement more than once. Differentiating the restatement announcement data based on number of restatement announcements, the results supported the non persistence hypothesis that the market has no memory and negative abnormal returns obtained after each of the restatement announcements are completely random. Second essay examined the multiple restatement announcements and its perceived resultant information asymmetry around the announcement day. This study examined the pattern of information asymmetry for these announcements in terms of whether the bid-ask spread widens around the announcement day. The empirical analysis supported the hypotheses that the spread does widen not only around the first restatement announcement day but around every subsequent announcement days as well. The third essay empirically examined the financial and corporate governance characteristics of single and multiple restatement announcements companies. The analysis showed that corporate governance variables influence the occurrence of multiple restatement announcements and can distinguish multiple restatements announcement companies from single restatement announcement companies.

A capability maturity model to assess supply chain performance

In an overcapacity world, where the customers can choose from many similar products to satisfy their needs, enterprises are looking for new approaches and tools that can help them not only to maintain, but also to increase their competitive edge. Innovation, flexibility, quality, and service excellence are required to, at the very least, survive the on-going transition that industry is experiencing from mass production to mass customization. In order to help these enterprises, this research develops a Supply Chain Capability Maturity Model named S(CM)2. The Supply Chain Capability Maturity Model is intended to model, analyze, and improve the supply chain management operations of an enterprise. The Supply Chain Capability Maturity Model provides a clear roadmap for enterprise improvement, covering multiple views and abstraction levels of the supply chain, and provides tools to aid the firm in making improvements. The principal research tool applied is the Delphi method, which systematically gathered the knowledge and experience of eighty eight experts in Mexico. The model is validated using a case study and interviews with experts in supply chain management. The resulting contribution is a holistic model of the supply chain integrating multiple perspectives, and providing a systematic procedure for the improvement of a company’s supply chain operations.

Market valuation of environmental performance

This research investigated the general association between corporate environmental performance and the firms’ annual returns independent of any particular environmental event. The association analysis was based on the most recent environmental data for the years 2006, 2007, and 2008. The results indicated that while some environmental variables were significantly associated with firms’ returns, the majority were not. The results also indicated that environmental concerns were more likely to be associated with increase in the firm value than were environmental strengths; however, there were no mean differences between firms whose environmental performance increased as compared with those whose performance deteriorated. Overall, the results provided support for the perspective that environmental strengths require firm expenditures that place additional financial burdens on firms, resulting in lower stock returns.^

Secondary stakeholders as agents of influence: Three essays on political risk, reputation, and multinational performance

Organizational researchers have recently taken an interest in the ways in which social movements, non-governmental organizations (NGOs), and other secondary stakeholders attempt to influence corporate behavior. Scholars, however, have yet to carefully probe the link between secondary stakeholder legal action and target firm stock market performance. This is puzzling given the sharp rise in NGO-initiated civil lawsuits against corporations in recent years for alleged overseas human rights abuses and environmental misconduct. Furthermore, few studies have considered how such lawsuits impact a target firm’s intangible assets, namely its image and reputation. Structured in the form of three essays, this dissertation examined the antecedents and consequences of secondary stakeholder legal activism in both conceptual and empirical settings. ^ Essay One argued that conventional approaches to understanding political risk fail to account for the reputational risks to multinational enterprises (MNEs) posed by transnational networks of human rights NGOs employing litigation-based strategies. It offered a new framework for understanding this emerging challenge to multinational corporate activity. Essay Two empirically tested the relationship between the filing of human rights-related civil lawsuits and corporate stock market performance using an event study methodology and regression analysis. The statistical analysis performed showed that target firms experience a significant decline in share price upon filing and that both industry and nature of the lawsuit are significantly and negatively related to shareholder wealth. Essay Three drew upon social movement and social identity theories to develop and test a set of hypotheses on how secondary stakeholder groups select their targets for human rights-related civil lawsuits. The results of a logistic regression model offered support for the proposition that MNE targets are chosen based on both interest and identity factors. The results of these essays suggest that legal action initiated by secondary stakeholder groups is a new and salient threat to multinational business and that firms doing business in countries with weak political institutions should factor this into corporate planning and take steps to mitigate their exposure to such risks.^

Control of MNC environmental performance and the challenges of subsidiary network dimensions

The trend of green consumerism and increased standardization of environmental regulations has driven multinational corporations (MNCs) to seek standardization of environmental practices or at least seek to be associated with such behavior. In fact, many firms are seeking to free ride on this global green movement, without having the actual ecological footprint to substantiate their environmental claims. While scholars have articulated the benefits from such optimization of uniform global green operations, the challenges for MNCs to control and implement such operations are understudied. For firms to translate environmental commitment to actual performance, the obstacles are substantial, particularly for the MNC. This is attributed to headquarters' (HQ) control challenges (1) in managing core elements of the corporate environmental management (CEM) process and specifically matching verbal commitment and policy with ecological performance and by (2) the fact that the MNC operates in multiple markets and the HQ is required to implement policy across complex subsidiary networks consisting of diverse and distant units. Drawing from the literature on HQ challenges of MNC management and control, this study examines (1) how core components of the CEM process impact optimization of global environmental performance (GEP) and then uses network theory to examine how (2) a subsidiary network's dimensions can present challenges to the implementation of green management policies. It presents a framework for CEM which includes (1) MNCs' Verbal environmental commitment, (2) green policy Management which guides standards for operations, (3) actual environmental Performance reflected in a firm's ecological footprint and (4) corporate environmental Reputation (VMPR). Then it explains how an MNC's key subsidiary network dimensions (density, diversity, and dispersion) create challenges that hinder the relationship between green policy management and actual environmental performance. It combines content analysis, multiple regression, and post-hoc hierarchal cluster analysis to study US manufacturing MNCs. The findings support a positive significant effect of verbal environmental commitment and green policy management on actual global environmental performance and environmental reputation, as well as a direct impact of verbal environmental commitment on green policy management. Unexpectedly, network dimensions were not found to moderate the relationship between green management policy and GEP.

An Analysis of Stock Market Performance:The Dow Jones Industrial Average and the Three Top Performing Lodging Firma: 1982-1988

In their dialogue - An Analysis of Stock Market Performance: The Dow Jones Industrial Average and the Three Top Performing Lodging Firms 1982 – 1988 - by N. H. Ringstrom, Professor and Elisa S. Moncarz, Associate Professor, School of Hospitality Management at Florida International University, Professors Ringstrom and Moncarz state at the outset: “An interesting comparison can be made between the Dow Jones lndustrial Average and the three top performing, publicly held lodging firms which had $100 million or more in annual lodging revenues. The authors provide that analytical comparison with Prime Motor Inns Inc., the Marriott Corporation, and Hilton Hotels Corporation.” “Based on a criterion of size, only those with $100 million in annual lodging revenues or more resulted in the inclusion of the following six major hotel firms: Prime Motor Inns, Inc., Marriott Corporation, Hilton Hotels Corporation, Ramada Inc., Holiday Corporation and La Quinta Motor Inns, Inc.,” say Professors Ringstrom and Moncarz in framing this discussion with its underpinnings in the years 1982 to 1988. The article looks at each company’s fiscal and Dow Jones performance for the years in question, and presents a detailed analysis of said performance. Graphic analysis is included. It helps to have a fairly vigorous knowledge of stock market and fiscal examination criteria to digest this material. The Ringstrom and Moncarz analysis of Prime Motor Inns Incorporated occupies the first 7 pages of this article in and of itself. Marriot Corporation also occupies a prominent position in this discussion. “Marriott, a giant in the hospitality industry, is huge and continuing to grow. Its 1987 sales were more than $6.5 billion, and its employees numbered over 200,000 individuals, which place Marriott among the 10 largest private employers in the country,” Ringstrom and Moncarz parse Marriott’s influence as a significant financial player. “The firm has a fantastic history of growth over the past 60 years, starting in May 1927 with a nine-seat A & W Root Beer stand in Washington, D.C.,” offer the authors in initialing Marriot’s portion of the discussion with a brief history lesson. The Marriot firm was officially incorporated as Hot Shoppes Inc. in 1929. As the thesis statement for the discussion suggests the performance of these huge, hospitality giants is compared and contrasted directly to the Dow Jones Industrial Average performance. Reasons and empirical data are offered by the authors to explain the distinctions. It would be difficult to explain those distinctions without delving deeply into corporate financial history and the authors willingly do so in an effort to help you understand the growth, as well as some of the setbacks of these hospitality based juggernauts. Ringstrom and Moncarz conclude the article with an extensive overview and analysis of the Hilton Hotels Corporation performance for the period outlined. It may well be the most fiscally dynamic of the firms presented for your perusal. “It is interesting to note that Hilton Hotels Corporation maintained a very strong financial position with relatively little debt during the years 1982-1988…the highest among all companies in the study,” the authors paint.

Market-Driven Hotel Brands: Linking Market Orientation, Innovation, and Performance

"Market orientation" is a term popularized by marketing practitioners to indicate the extent to which a firm is market driven. This presumed linkage between market orientation and profitability has caught the attention of scholars, but, surprisingly, only two prior studies have reported a positive association between the two. Given the special relevance to the hotel industry of being market driven, we believe this industry provides the ideal setting for demonstrating the link between market orientation and performance. This research examines this linkage in the hotel industry. The results of our study suggest that market orientation is positively and significantly related to innovation, subjective performance, and objective performance. This result yields a number of useful ideas about how to harness the power of the marketing concept.

The mediating effect of innovation on the relationship between corporate reputation and performance in U.S. firms

In recent years, corporate reputation has gained the attention of many scholars in the strategic management and related fields. There is a general consensus that higher corporate reputation is positively related to firm success or performance. However, the link is not always straightforward; as a result, it calls for researchers to dedicate their efforts to investigate the causes and effects of firm reputation and how it is related to performance. In this doctoral dissertation, innovation is suggested as a mediating variable in this relationship. Innovation is a critical factor for firm success and survival. Highly reputed firms are in a more advantageous position to attract critical resources for innovation such as human and financial capital. These firms face constant pressure from external stakeholders, e.g. the general public, or customers, to achieve and remain at high levels of innovativeness. As a result, firms are in constant search, internally or externally, for new technologies expanding their knowledge base. Consequently, these firms engage in firms acquisitions. In the dissertation, the author assesses the effects of domestic versus international acquisitions as well as related versus unrelated acquisitions on the level of innovativeness and performance. Building upon an established measure of firm-level degree of internationalization (DOI), the dissertation proposes a more detailed and enhanced measure for the firm's DOI. It is modeled as an interaction effect between corporate reputation and resources for innovation. More specifically, firms with higher levels of internationalization will have access to resources for innovation, i.e. human and financial capital, at a global scale. Additionally, the distance between firms and higher education institutions, i.e. universities, is considered as another interaction effect for the human capital attraction. The dissertation is built on two theoretical frameworks, the resource-based view of the firm and institutional theory. It studies 211 U.S. firms using a longitudinal panel data structure from 2006 to 2012. It utilizes a linear dynamic panel data estimation methodology for its hypotheses analyses. Results confirm the hypotheses proposed in the study.