Does innovation lead to global orientation? Empirical evidence from a sample of Italian firms

This paper analyses the relationship between innovation at firm and industry level, and the global vs regional strategy of multinational enterprises (MNEs). Based on data from a sample of large Italian manufacturing firms, the analysis shows that technological assets affect a firm’s ability to overcome the liability of (regional) foreignness: the extent to which MNEs can exploit their firm-specific technological advantages is greater within their home region, but they also exploit them outside it. Furthermore, the results show that a firm’s foreign (outside the home country) and global sales (outside the home region) are higher, the greater the technology intensity of the industry in which they operate. These findings suggest that, although MNEs tend to operate regionally rather than globally, their strategic orientation is contingent upon firm- and industry-specific factors. Managers need to take the potential for globally exploiting R&D investments into account, even if it may not be equally successful within and outside the home region, and may be constrained by a number of inter-regional barriers.     

Institutional support and firms’ entrepreneurial orientation in emerging economies

In recent years, many governments in emerging economies have used macro-level institutional support to boost entrepreneurship, but the actual impact of institutional support on firms’ entrepreneurial orientation (EO) remains unclear. To provide a holistic understanding of this impact, we examine the relationship between institutional support and three specific dimensions of EO—proactiveness, innovativeness, and risk-taking—and we explore how these relationships are contingent on firm ownership and the industry life cycle. A two-study, mixed-methods empirical design confirms our hypotheses. Specifically, Study 1 surveys 303 Chinese firms and finds that institutional support has a decreasingly positive relationship with proactiveness, an increasingly positive relationship with innovativeness, and a positive linear relationship with risk-taking; each of these three relationships is weaker for state-owned enterprises (SOEs) than for non-SOEs and for firms in fast-growing industries than for firms in slow-growing industries. Study 2 conducts a scenario-based experiment using6 133 MBA students, and its results again support the main effects hypotheses.     

Walking on thin ice: CEOs′ internationalization decisions in underperforming firms

We build on previous research on the behavioral theory of the firm to examine the relationship between performance shortfalls and internationalization. We start from existing literature in claiming that the interplay between the aspirations of restoring performance and survival concerns leads to an inverted U-shaped relationship between a firm's performance shortfalls and its new internationalization. Our main contribution is to show that CEO duality moderates this relationship. Dual CEOs have a high control of the board that reduces oversight and increases their job security. This allows them to impose their risk preferences, thus embracing survival over aspirations. Our empirical analysis using a sample of Spanish listed firms from 1986 to 2010 provides support for our hypotheses.     

The cassava starch industry in Vietnam: can small firms survive and prosper?

The paper focuses on the starch industry in Vietnam. That industry is mainly composed of small firms that adapted to rapid change over the past decade. There are also large firms and multinationals in the industry. Based on 1998 field survey data, an analysis of microefficiency and transaction costs suggests that small and medium firms can survive and prosper in the industry. A policy strategy that promotes small and medium firms increases rural incomes, important in a country that is still mainly rural and where the income gap between urban and rural areas is growing.     

Human resource strategy to improve organizational performance: a route for firms in Britain?

Performance, in the context of organization, is not only a broad concept which has been used synonymously with productivity, efficiency, effectiveness and, more recently competitiveness, it has also been a subject of study for social scientists from a wide range of disciplinary perspectives. More recently, efforts have been made by human resource management (HRM) theorists to try to establish a causal link between HRM and performance. This has led to a growing number of studies which examine the potential contribution that good human resource policy can make to improving organizational performance. This paper is not concerned with the conceptual debate of HRM and performance. Rather, it explores whether adopting good HR practices to improve performance is a practicable approach to organizations in the UK. Drawing on existing empirical evidence from other studies, the paper reviews the strategies British firms deploy to improve labour productivity. In particular, the issue of whether they use the 'high-road' HRM or 'low-road' HRM strategy to enhance performance is investigated. This paper concludes by suggesting that high-road HRM may lead to better organizational performance, but it may not be a strategy that firms opt for, given the historical, social and institutional context of employment relationships in Britain.     

What explains variation in voluntary disclosure? A study of the annual reports of corporations listed on the Stockholm Stock Exchange

The demand for information and transparency from listed corporations has recently increased. In spite of an increased demand for mandatory disclosures from regulators, corporations choose to voluntarily disclose additional information in order to satisfy demands from the capital market. However, the extent and content of information in those voluntary disclosures vary across corporations. The aim of this study is to explain the variation in the content of information in voluntary disclosures by listed corporations. The analyses are based on data collected from 431 annual reports from corporations listed on the Stockholm Stock Exchange during the years 2002 and 2005. The findings support explanations from agency theory and positive accounting theory that size and the debt ratio are positively correlated with the content of information in voluntary disclosures. Corporations with a high share of management ownership disclosed less information than corporations with a low share of management ownership. The study also shows that variations in voluntary disclosures can be explained by factors derived from institutional theory and ‘international capital market pressures’. The results indicate that foreign ownership and international listing to some extent have a positive effect on the content of information in voluntary disclosures. Industry was another factor that had a significant influence on voluntary disclosures. One important finding is that regulation to some extent can stimulate voluntary disclosures; our results did not indicate an ‘unintended chilling effect’ due to too much regulation. In general, the corporations disclosed more voluntary information after the introduction of IFRS.     

State ownership and listed firm performance: a universally negative governance relationship?

Our analysis of more than 1,000 Chinese listed firms, 2003–2005, reveals a positive association between state ownership (SO) and firm performance. Arguably, if SO “causes” performance, it must be through the channel of agency cost. Therefore, our paper checks the robustness of this positive SO/performance finding by analyzing the role of agency cost as a mediator. It emerges that SO in the Chinese context may represent a strategic asset rather than an agency burden. However, it is not clear whether this is an outcome driven by efficiency or power.     

Does business model affect accounting choices? An empirical analysis of European listed companies

Financial accounting research increasingly includes business model (BM) constructs, but the ability of financial reporting to capture BM characteristics has not been verified. This study empirically explores the links between BMs and accounting choices by clustering a sample of 103 European listed companies according to an innovative, nonlinear algorithm (self-organizing map) that uses pertinent industrial, strategic, governance, and financial variables to uncover different dimensions of a BM. The authors investigate accounting choices (accounting measurement, accounting treatment, and disclosure level) by companies that belong to the different identified BMs. The analysis of the relations between different company BMs and their accounting choices indicates no significant connections, which offers empirical confirmation of the criticisms regarding the inability of financial reporting to represent (or even consider) a company’s BM. The results suggest further attempt to capture BM in financial reporting, which requires regulators to establish accounting standards that acknowledge the value creation processes of an entity and incentivize managers to represent those processes.     

Evaluation frequency and evaluator’s experience: the case of venture capital investment firms and monitoring intensity in stage financing

In this paper we analyze the relation between an investor’s experience and the intensity of monitoring activities. Specifically, we consider venture capitalist firms and their choices of time intervals between financing rounds. We hypothesize that more industry investment experience leads to longer time intervals between financing rounds and hence, lower monitoring intensity. Using a unique data set of venture capital firms from Germany during the period from 1995 to 2005 we find evidence for our hypothesis that in a given time frame more experienced investors evaluate and monitor their investments less often than less experienced investors. In addition, VC investors pool their experience and share the risk involved in investing by forming syndicates which reduces the incentives to monitor subsequently. On the basis of our results we argue that the optimal frequency of performance evaluations should take into account the experience of the evaluator.     

Beyond appearances – Do dynamic capabilities of innovative firms actually differ?

Dynamic capabilities are the higher-order capabilities needed for changing operational-level capabilities and learning in new domains, and thus they are critical for innovation activities. The aim of this study is to explore heterogeneity of dynamic capabilities in a comparative setting. We chose four innovative case firms representing a single industry, namely magazine publishing. The similarity of the cases provided a solid foundation for comparing their dynamic capabilities. Based on the results it seems that the practices comprising sensing capabilities are likely to be similar across firms within a single industry, while practices comprising seizing and reconfiguring types of capabilities may differ more between companies. Thus dynamic capabilities have both idiosyncratic and common features across an industry. These findings are relevant to practicing managers in that they illustrate that competing companies within the same industry tend to develop similar types of practices to match the changing requirement of the operating environment. Hence, managers should not be falsely comforted by the current situation within their firms, but proactively develop their unique capabilities to gain advantage over their competitors.     

Using Malmquist Indexes to measure changes in the productivity and efficiency of US accounting firms before and after the Sarbanes–Oxley Act

There have been many criticisms of the Sarbanes–Oxley (SOX) Act passed in July of 2002 to correct business accountability and performance practices. The act has a major emphasis on accounting and its practices. This paper attempts a response to these criticisms by investigating changes in productive efficiency for 62 of the largest US public accounting firms between the periods (2000–2001) and (2003–2004)—the periods before and after enactment of SOX in July of 2002. DEA is used to calculate Malmquist indexes of productivity and efficiency changes. This index is used because it can distinguish between changes in technical efficiency, which limit the possibilities, and changes in the performance efficiencies for each firm. Contrary to many of the criticisms, results indicate that accounting firms have exhibited significant post SOX growth in productive efficiency which is better than pre-SOX performances.     

CEO political liberalism,stakeholders, and firms’ support for LGBT employees

We argue that CEO political liberalism, or the extent to which CEOs are more liberal rather than conservative, affects firms’ support for LGBT employees. Specifically, compared to conservative CEOs, liberal CEOs will be more likely to support LGBT employees by implementing LGBT-friendly policies. We furthermore posit that the presence of certain internal and external stakeholders—including boards, top management teams, and employees, as well as transient institutional investors and LGBT advocacy organizations—alter the proposed effect. Results based on a sample of Fortune 500 firms support our arguments. Our findings contribute to the literatures on leadership, stakeholders, and workplace diversity.     

“The adoption and implementation of performance measurement process in Italian public organisations: the influence of political,cultural and rational factors”

One of the main challenges in the field of performance measurement and management in public organisations is about how to use and manage performance measures effectively. This study aims to examine the stages involved in the process of utilisation of performance measures, i.e. adoption and implementation, and to investigate the political, cultural and rational factors that affect this process. For this purpose, a theoretical model from the literature has been extended and tested by using the data gathered through a survey involving the managers of several departments of Italian regions and municipal districts. The final sample has included 201 usable observations. The data analysis has been conducted using structural equation modelling. A significant cause-and-effect relationship was found between the stages of adoption and implementation. Moreover, it was found that adoption is driven significantly by rational factors. Otherwise actual implementation is influenced by factors addressed both by political considerations, such as external interest groups and by rational evaluations such as resources. The effects of other rational and cultural factors on implementation stage are mediated by adoption.     

International market selection strategies selected by ‘micro’ and ‘small’ firms

Policy-makers and practitioners are seeking to promote the development of established firms. This paper suggests they may need to target customized export programmes to the specific situational demands of established ‘micro’ and ‘small’ firms. The following broad research question is explored: are there differences between ‘micro’ and ‘small’ firms with regard to the decision to sell goods or services abroad? In 1990/91, survey responses were gathered from 621 independent businesses located in Great Britain. In 1997, a follow-on telephone survey was conducted with 150 surviving firms. This survey gathered information on the propensity to export goods or services abroad and the mode of export behaviour reported by established ‘micro’ as well as ‘small’ firms. The performance of exporting and non-exporting firms was also compared. Implications for policy-makers, practitioners and researchers are highlighted.     

A new model for successful management of engineering design firms — “superpositioning”

A SuperPositioning model for successful management of engineering design firms is discussed which allows firms to be categorized within a matrix bounded by two primary drivers, their engineering Design Techology (how they do their work) and their Values (the primary reward thrusts or motivations of the owners). Technologies are separated into Strong Idea (Brains), Strong Service (Gray Hair) and Strong Delivery (Routine Procedure). Values are divided between Practice Centered Business and Business Centered Practice.The firm's Design Technology affects the optimal way it should handle Project Design, Project Decision Making, Middle and Lower Level Staffing, Markets, What it Sells, What it Can Charge, and Best Management Style. Its choice of Values impacts the Organization Structure, Organization Decision-Making, Staffing at the Top, How it Markets, Best Clients, Marketing Organization, Profit Strategy, Reward and Management Style. Firms that optimize their strategies for these elements to match their choice of drivers are observed to perform better for their clients and in terms of their owner's satisfaction.     

Increasing offensive or defensive efficiency? An analysis of Italian and Spanish football

This paper analyses technical efficiency of Italian and Spanish football during three recent seasons, to shed light on the sport performance of professional football clubs. To achieve this we have used mathematical optimisation methods, particularly DEA models, which enable the calculation of the frontiers of efficient production. Some of the most interesting results are the following. Firstly, the Spanish league is clearly more homogeneous and competitive than the Italian league. Secondly, to obtain a better classification in the Italian league, it is much more important to improve defensive, rather than offensive, efficiency. The popular maxim holds in Italy: the best attack begins with a good defence. Third, in Spain our analysis supports the idea that to improve the ranking in the league, the best-rewarded strategy consists in improving offensive efficiency playing at home ground, followed by increasing offensive efficiency when playing away from home.     

‘Born-again global’ firms: An extension to the ‘born global’ phenomenon

Firm internationalisation has for long been regarded as an incremental process, wherein firms gravitate towards ‘psychologically close’ markets and increase commitment to international markets in a gradual, stepwise manner through a series of evolutionary ‘stages.’ However, much of the recent literature provides clear evidence of rapid and dedicated internationalisation by ‘born global’ firms. Typically, these are smaller entrepreneurial firms that internationalise from inception or begin shortly thereafter. Their main source of competitive advantage is often related to a more sophisticated knowledge base that they use to exploit the dynamics of an increasingly global market environment. This contribution posits that there is growing evidence of another phenomenon, that of the emergence of ‘born-again’ global firms. These are firms that have been well established in their domestic markets, with apparently no great motivation to internationalise, but which have suddenly embraced rapid and dedicated internationalisation. The underlying motivations and triggers leading to such a strategy are explored and illustrated through a number of case studies. Research and public policy implications of the ‘born-again’ global phenomenon are discussed.