Role of Organizational Capital at Different Phases of Business’s life Cycle A study of PSX Companies

Ghulam Ali Bhatti,Zahid Bashir,Sobia Arshad

doi:10.54784/1990-6587.1428

Abstract

The goal of this study was to examine the association between Business Life Cycle phases and organizational capital using PSX index companies. Mainly, the study investigates the relationship of organizational capital phases during different phases of the life cycle and comparison with high and low organizational capital. To fulfill this objective data has been collected of 56 companies of PSX index companies with yearly observations ranging from 2011-2020. For estimation, a multinomial logistic model was used due to categories of the dependent variable. The results indicate that organizational capital is positively significant at the maturity phase but negatively significant at the introduction, growth shake-out, and decline phase of the Business Life Cycle. Business Life Cycle and size, ROE, Capex, and leverage significantly but negatively whereas age and ATO significantly affect Business Life Cycle phases. The results vary with different phases of the Business Life Cycle. For future study, the study recommended that the scholar increase the number of observations for more accurate results or used different proxy for measuring organizational capital.

Highlights

A Business Life Cycle is a set of phases in which companies move from one phase to another due to the performance of business operations
The descriptive statistic in table 2 shows the sample N, which represents those companies that are listed in the Pakistan Stock Exchange
The major goal of this research was to look at the organizational capital as well as stages of the Business Life Cycle using a group of PSX index businesses

Summary

Introduction

A Business Life Cycle is a set of phases in which companies move from one phase to another due to the performance of business operations. The developed phase of a company’s life cycle, for the most part, results in a move toward maximizing productivity with efficiency, diminishing uncertainty and declining venture consumption. It is marked by noteworthy distribution of capital to investors, and improved administration structures (Barclay and Smith 2005; Filatotchev et al 2006). The introductory stage has adversely correlated either size as well as ROE, meaning small as well as setback businesses belonged there These findings are consistent with the prior results (Dickinson 2011; Perez et al 2004; Shah et al 2021). The coefficient of change in the sale is -0.009 which is statistically insignificant, indicating no link between the introductory stage of the Business Life Cycle and the ∆ sale. The outcomes were in line with those of other research investigations (Hasan et al 2018; Leung et al 2018; Watson et al 2021; Zafar et al 2017)

Objectives

Methods

Results

Conclusion