The capabilities of the transnational firm: accessing knowledge and leveraging inter-firm relationships

The nature of competition imposes a fundamental re-examination of strategies, both at the corporate and business level. Observation of a large number of firms reveals changes aimed at creating more permeable boundaries for breaking down costs, while increasing efficiency in product innovation and manufacturing. What appears to be relevant in many of these efforts is the emergence of transnational organisational architectures (TOA) in which the value-generating activities are distributed among different countries and actors, and then recomposed at the corporate level without losing efficiency. In this paper, we put forward the proposition that relational capability represents a distinctive competence for the transnational firm. The ability to access new knowledge or complementary capabilities, and to leverage inter-firm relationships and opportunities wherever they arise emerges as a critical factor for success on a global scale.     

合作电子商务价值创造的实证研究：情景双元理论

 开展企业间合作电子商务已经成为企业获取电子商务价值的关键路径。有研究认为具备情景双元性的企业能够获取合作电子商务活动的长期成功,然而关于情景双元性的前因,已有研究主要关注组织内的相关因素,缺乏对组织间合作商务管理因素的考虑。在合作电子商务的背景下,焦点企业需要构建一种企业间商务管理机制(即企业间情景),同时追求企业间整合性和适应性,进而获取合作电子商务价值。        基于组织情景双元理论,从合作商务管理的视角,实证研究企业间IT治理(包括正式治理和关系治理)对电子商务双元能力(包括电子商务整合能力和电子商务适应能力)的使能作用以及电子商务双元能力的价值驱动机制。采用问卷调查法,收集205家企业中高层管理者的数据,基于PLS的结构方程和Smart PLS工具对研究模型进行假设验证。        研究结果表明,与关系治理相比,作为硬性情景因素的正式治理更利于电子商务整合能力的形成;与正式治理相比,作为软性情景因素的关系治理更利于电子商务适应能力的形成;电子商务双元能力能够同时兼顾并影响短期和长期企业绩效。验证了合作环境动荡性在企业间IT治理与电子商务双元能力之间的正向调节作用,还发现合作环境动荡性在电子商务双元能力对价值驱动过程中的差异化调节作用,即合作环境动荡性正向调节电子商务适应能力与企业绩效的关系,但在电子商务整合能力与企业绩效之间的调节作用不显著。研究结果扩展了情景双元理论在信息系统领域的应用,丰富了企业间合作电子商务领域的研究视角,对业界和学术界均有重要的指导意义。     

Alliance governance choices: Disentangling the effects of uncertainty and alliance experience

This article analyses the interaction between alliance experience and behavioural uncertainty to improve our understanding of alliance governance. We investigate the extent to which the effect of alliance experience on governance choices is explained by a reduction in “mundane” transaction costs or by a reduction in “opportunistic” transaction costs. Based on more than 12,000 firm experiences with equity and non-equity alliances, we demonstrate a reduction in mundane transaction costs over time by firms reusing the same governance structure in successive alliances. We also find that in high behavioural uncertainty alliances, firms rely on their experience as a substitute for equity governance to reduce opportunistic transaction costs.     

Governance Choices for Corporate Social Responsibility: to Contribute,Collaborate or Internalize?

Within a competitive business environment where resources are limited, it is increasingly important for senior management to make every investment count. Measuring ‘return on investment’ occurs at every level of operations—so why not also in the arena of Corporate Social activity? Until now, much research has focused on finding the link between corporate social responsibility (CSR) and increased business performance. Researchers have not examined the cost implications associated with the different forms of governance utilized by companies to implement their CSR activities, e.g., outsourcing through charitable contributions, developing an in-house program, or creating a more collaborative model, which benefits both the company and the partner nonprofit organization. Careful examination and evaluation of these costs will help senior management choose the governance structure that will maximize the benefits they reap from CSR activities.Drawing upon insights from organizational economics, this article develops a framework to compare the alternative modes of CSR governance and identifies the key drivers that affect governance choice, including associated costs. Most importantly, it provides a decision-making tool that can guide senior management in this vital choice as a way to contribute to the competitive advantage of the firm.     

The vertical network organization as a specific governance structure: what are the challenges for incomplete contracts theories and what are the theoretical implications for the boundaries of the (hub-) firm?

Departing from the seminal question that Coase raised in his 1937 work, this article discusses and assesses incomplete contracts theories’ analyses of the firm’s boundaries—notably transaction cost theory and the modern theory of property rights—by investigating the case of the vertical network organization (VNO). We perform a theoretical characterization and analysis of the functioning rules of the VNO to shed light on intra-network incentive provisions and coordination mechanisms. Our findings cast doubt on the role that hold-up considerations on the firm’s boundaries play and allow us to question forms of power within the VNO. Finally, we focus on the theoretical implications of the emergence of the VNO. The legal nature of the firm does not match the economic definition of the VNO, which tends to treat the firm as a specific governance structure.     

Organizational emotional capability,product and process innovation,and firm performance: An empirical analysis

The concept of emotional capability is one of the competencies that a firm has which is vital for the daily life of the organization. However, the effect of emotional capability, involving the dynamics of encouragement, displaying freedom, playfulness, experiencing, reconciliation, and identification constructs on the firm innovativeness (i.e., product and process) is interestingly missing in the technology and innovation management (TIM) literature. In this study, by investigating 163 Turkish firms, the dynamics of encouragement and experiencing were found to have a positive association with both firm product and process innovativeness; and the dynamics of displaying freedom have a positive relationship with firm process innovativeness. We also demonstrate that the impact of emotional capability constructs on firm innovativeness is contingent upon environmental uncertainty. Specifically, we find that the influence of the dynamics of encouragement on firm product innovation increases with increased rate of environmental uncertainty. Interestingly, the relationship between the dynamics of experiencing and product innovation across low, medium, and high levels of environmental uncertainty is an ∩-shaped. And, the relationship between the dynamics of displaying freedom and product innovation across low, medium, and high levels of environmental uncertainty is a U-shaped. In addition, we show that a firm's emotional capability influences its financial and market performance via firm innovativeness. We discuss the theoretical and managerial implications of the study's findings.     

A Review of Theory in Family Business Research: The Implications for Corporate Governance

In recent years, increasing scholarly attention has been directed toward the field of family business research. Based on an exhaustive sample of 235 publications, this article provides a comprehensive review and a critical assessment of the theoretical underpinnings and corporate governance issues in family business research. Three predominant theoretical perspectives, namely principal–agent theory, stewardship theory and the resource‐based view of the firm, have emerged and provide empirical evidence that family businesses significantly differ from non‐family firms in important dimensions such as agency costs, competitive advantages or corporate governance structure. On their own, none of the aforementioned perspectives succeeds in addressing all complexities associated with family businesses and their corporate governance. Accordingly, joint approaches combining different theoretical frameworks can help to improve understanding of the family business. The article concludes by discussing possible directions for future research that might further contribute to building a comprehensive theory of the family business and its corporate governance.     

基于联立方程模型的公司治理溢价研究——兼谈如何检验公司治理评价指标的有效性

公司治理溢价研究可以揭示公司治理与企业价值之间的互动机理,不仅有助于深化和丰富公司治理理论,为上市公司优化公司治理指明方向和重点,而且有助于投资者全面评估企业价值.而对公司治理的客观评价是公司治理溢价研究中的关键问题,本文在以往研究成果基础上,以上证公司治理板块的评选结果为参照样本,给出了检验公司治理评价指标有效性的科学方法,进而验证了以DEA方法构建的公司治理效率值指标的有效性;在此基础上利用联立方程模型对公司治理溢价进行研究,解决了公司治理与企业价值之间可能存在的内生性问题;以2007年中国沪市578家A股公司为样本对联立方程模型进行估计.结果表明,中国股票市场存在公司治理溢价,公司治理效率值每增加0.1,流通盘市场附加值就会有37.2%的溢价.     

Board of director efficacy and firm performance variability

While academic researchers continue to debate the effect of board independence in increasing performance, its efficacy could also be reflected in whether firm performance is made more stable. Board governance activities are a constellation of actions aimed at managing agency costs and ensuring the viability of a company over time. The efficacy of such actions would, therefore, be reflected in a distal outcome, specifically, in lower firm performance variability. Boards that can control agency costs and limit both underinvestment and overinvestment would reduce a firm's deviation from its mean performance trajectory. Using a longitudinal sample of publicly traded companies in the United States, we find that board stability, board resource provision, and CEO influence are negatively associated with performance variability. Board independence is not associated with performance variability. With increasing board independence, greater board stability and greater CEO influence are negatively associated with performance variability, however, greater board resource provision is not associated with performance variability.     

CEO duality and agency cost: evidence from Bangladesh

This study examines if Chief Executive Officer (CEO) duality reduces the firms’ agency cost in Bangladesh. The agency costs are measured as two efficiency ratios: ‘expense ratio’ and ‘asset utilization ratio’. The finding is that, there is no significant relationship between CEO duality and agency costs. These findings imply that, duality may have given the CEOs enormous powers; it may have reduced the check and balance or board’s ability to exercise the governance (monitoring) function, which is not helpful to enhance firm efficiency. This study contributes to the global debate on CEO duality and provides a new avenue of knowledge on CEO duality and firm efficiency in the context of an emerging economy.     

Arriving at a strategic theory of the firm

The theory of the firm seeks to explain the existence and boundaries of the firm in relation to the market. Since the pioneering work of Coase (The nature of the firm. Economica , 4 , 386–405, 1937), economics has developed a whole family of theories that focus on the ability of firms to economize on certain costs of using markets. More recently, researchers in strategic management have published several theories of the firm that have tended to emphasize the benefits of incorporation rather than the costs of using the market. Although researchers in the strategy profession have tentatively labeled their work as 'moving towards' a strategic theory of the firm, economists have been very critical of existing approaches. This paper seeks to begin 'arriving' at a strategic theory of the firm by addressing these criticisms and offering an integration of the strategic and economic perspectives within an institutional framework. The paper concludes with future directions for research in the theory of the firm.     

When outsourcing is not an option: International relocation of investment bank research — Or isn't it?

Outsourcing is high on the agenda of firms seeking to cut costs. Based on an enhanced value-chain concept we develop a model that determines the conditions under which outsourcing and offshoring are not expedient. The model allows for an integrated analysis of horizontal and vertical links to actors within and outside the firm. Equity and country research in investment banks and their outsourcing potential are used as case studies. We draw mainly on qualitative evidence from interviews with investment bank analysts, as well as data on locations of research units of foreign investment banks in India. The option of outsourcing certain stages of business processes and offshoring parts of the value chain within firms to low-wage locations depends crucially on how processes are ‘embedded’ in relation to other departments within and to corresponding actors outside the firm. Our analysis shows that there is little, if any, scope for outsourcing but some potential for low-level research activities to be offshored to low-cost regions.     

信息技术、核心能力和企业绩效的实证研究

信息技术增强企业竞争力的机理是有效提升企业信息技术应用水平的重要前提。基于核心能力理论构建信息技术资源和信息技术应用能力通过企业核心能力这一中介变量影响企业绩效的理论模型,并考虑环境动态性在信息技术增强企业竞争力过程中的调节效应,应用偏最小二乘法的结构方程模型,对中国296家企业的问卷调查数据进行分析。研究结果表明,在不考虑环境动态性的情况下,无论是信息技术资源还是信息技术应用能力都无法直接影响企业绩效,信息技术必须通过支持企业核心能力间接影响企业绩效;环境动态性在信息技术增强企业竞争力过程中有显著的调节作用,不同环境下信息技术影响企业绩效的机理是不同的,在稳定环境下企业信息技术应用的重点是获取支持核心能力的信息技术资源,在动态环境下企业更应该构建信息技术应用能力,才能实现对不断变化的核心能力的持续支持,进而提升企业绩效。     

Internal corporate governance mechanisms as drivers of firm value: panel data evidence for Chilean firms

The paper analyses to what extent ownership structure, capital structure, and dividend policy as corporate governance mechanisms drive the firm value. From a data panel of publicly quoted Chilean firms for the years 2002–2010, we find that there is an inverse U-shaped relationship between ownership concentration and firm value. The positive slope is supported by the supervision hypothesis; whilst the negative relation between ownership concentration and firm value is supported by the expropriation hypothesis. We also find that there is a positive impact of both leverage and the dividend pay-out on the firm value. In this case, these two mechanisms reduce the free cash flows which otherwise might be used opportunistically by managers in their own interests (free rider problem). Contrary to the previous empirical literature in Chile, it is found that the mere fact that a firm is affiliated to a business group/conglomerate impacts positively its value. This positive effect is basically driven by the development of intragroup capital markets, and the governance imposed by the rules of the conglomerate.     

Corporate Governance and Performance During Consolidation of the United States and European Defense Industries

Under a market-oriented corporate governance system, the United States defense industry consolidate quicker and gained a comparative advantage in simple measures of firm performance, including profit margin and market share, than the continental European defense industry, which is more oriented toward stakeholder relationships in corporate governance. The defense industry in the United Kingdom, also characterized by market-oriented governance, performed well. On a wider set of measures related to firm performance and other stakeholders, the evidence is less clear. Concerns have been expressed about the European defense industry's survival in its current form. Likewise, concerns have been raised about the increasing level of concentration in the United States, its potential effect on innovation, and the erection of trade barriers. This paper concludes that corporate governance concepts are useful in analyzing firm conduct and performance in the defense industry and other traditionally -- 'national' industries. It also concludes that policy concerns might successfully be addressed through increased Transatlantic cooperation, attention to the flexibility inherent in the Anglo-American system of corporate governance, and recommendations to modify public procurement policies.     

Dual-class shares,external financing needs,and firm performance

Whereas the agency theory predicts that dual-class shares decrease firm performance, the stewardship theory predicts that dual-class shares increase firm performance. The cumulative findings on the performance consequences of dual-class shares have been weak and/or inconclusive. Because endogeneity is a constant challenge in empirical corporate governance studies, this study uses a unique law change in Switzerland as a source of exogenous variation in the fraction of firms with dual-class shares. Controlling for firm fixed effects and time-varying confounders, we find that dual-class shares neither harm nor benefit firm performance on average. However, dual-class shares increase firm performance if the firm requires external finance and dual-class shares decrease firm performance if the firm does not require external finance. External financing needs mitigate the agency costs between controlling and minority shareholders and create a context in which dual-class shares facilitate firm-specific investments instead of private perquisites. The study’s results have both managerial and policy implications.     

Theories of the Firm–Market Boundary

A central role of the entrepreneur-manager is assembling a strategic bundle of complementary assets and activities, either existing or foreseen, which when combined create value for the firm. This process of creating value, however, requires managers to assess which activities should be handled by the market and which should be handled within hierarchy. Indeed, for more than 40 years, economists, sociologists and organizational scholars have extensively examined the theory of the firm's central question: what determines the boundaries of the firm? Many alternative theories have emerged and are frequently positioned as competing explanations, often with no shortage of critique for one another. In this paper, we review these theories and suggest that the core theories that have emerged to explain the boundary of the firm commonly address distinctly different directional forces on the firm boundary—forces that are tightly interrelated. We specifically address these divergent, directional forces—as they relate to organizational boundaries—by focusing on four central questions. First, what are the virtues of markets in organizing assets and activities? Second, what factors drive markets to fail? Third, what are the virtues of integration in organizing assets and activities? Fourth, what factors drive organizations to fail? We argue that a complete theory of the firm must address these four questions and we review the relevant literature regarding each of these questions and discuss extant debates and the associated implications for future research.     

The role and effect of controlling shareholders in corporate governance

This paper examines two potentially contradictory effects of the presence of controlling shareholders. Controlling shareholders have been shown to be beneficial, as they generally have a long-term interest in the firm and are willing and able to monitor the actions of senior managers closely and decrease agency costs between shareholders and management (agency costs of Type I). However, they are also in a position to expropriate the firm’s assets, especially when they are actively involved in management (agency costs of Type II). More specifically, this article reviews how regulatory and legislative bodies have tried to curb the consumption of private benefits by controlling shareholders while preserving the beneficial aspects of their long-term interest and their monitoring role, the effect controlling shareholders on the application and effectiveness of corporate governance best practices as well as on the executive and board member remuneration.     

The use and effectiveness of top executive dismissal

We provide a systematic assessment of the empirical evidence on the use and effectiveness of top executive dismissal as a governance and performance improvement mechanism. Our results suggest that poor individual and firm performance significantly increase the likelihood of executive dismissal. A strong power base might help under-performing top executives to extend their tenure in office, but effective ownership and governance structures can provide a counterweight to such entrenchment behaviors. However, our review casts doubt on the effectiveness of top executive dismissal as a means to enhance future firm performance: employing meta-analytical techniques we show that, although the dismissal announcement leads to positive abnormal returns, it has no significant effect on long-term measures of firm performance. On the basis of our findings, we develop a conceptual model of the possible antecedents and consequences of top executive dismissal. We derive implications for boards involved in situations of executive dismissal and for the successors of dismissed executives, and we provide directions for future leadership research on executive dismissal.     

制度环境、公司治理对企业竞争优势的影响研究——基于中国上市公司的经验证据

如何通过外部制度和内部制度的安排延续企业的竞争优势,是制度变迁背景下中国企业面临的核心问题.本文以2002年-2005年的中国上市公司为样本,基于国内地区差距,实证分析了制度环境和公司治理时企业竞争优势的影响.回归结果发现,政府支持市场化程度、经济法律环境水平、股权集中度、股权竞争度、董事会独立性、专业委员会设置程度以及股东参与决策程度与企业竞争优势显著正相关.研究结果表明,好的制度环境与有效的公司治理能提高企业的竞争优势;企业持续竞争优势的源泉应包含以政府为主体的宏观层次的制度竞争和以企业为主体的微观层次的公司治理竞争.