Defense Companies Research Articles

FOREX EFFICIENCY AND FINANCIAL PERFORMANCE OF INDIAN DEFENCE COMPANIES – EXAMINING CONNECTION

This study explores the impact of financial performance on forex efficiency of the selected Indian Defence companies. To meet this objective the sample of five companies selected from nifty defence index based on availability of data. This research uses a descriptive research design and the analysis spans over ten years from April 2014 to March 2024. The financial performance indicators, including profitability, liquidity, asset efficiency, and solvency are examined in relation to forex efficiency through correlation and panel regression analysis. This research aims to address two key questions: the overall relationship between financial performance and forex efficiency in selected Defence companies and the influence of selected financial indicators on forex efficiency. The previous studies have explored related themes but they have not specifically targeted the Defence sector or detailed how particular financial indicator impact forex efficiency. This study fills this gap by providing a meticulous analysis of how financial performance influences forex efficiency. This contributes in valuable insights for strategic financial management and policy formulation in the Defence industry.

Digital Transformation of Organizations and Their Organizational Cultures: A Case Study in a National Defense Industry

Digital transformation is essential for organizations to gain a competitive edge in today’s fast-changing environment. It involves a radical shift in products, services, people, and processes to enhance performance, posing a significant challenge. This paper explores digital transformation within a national defense company, which already upholds high-quality standards and a strong culture—key factors in facilitating digital transformation. The literature on organizational digital transformation and its benefits is reviewed, and the digitalization process is analyzed to outline the steps needed for transformation. A crucial prerequisite is cultivating an adaptive, high-performance culture, which requires assessing the current organizational state and implementing necessary actions. This paper presents an assessment of the company and proposes actions for cultural and digital transformation. The inextricable link between digital transformation and organizational culture change is highlighted, along with the benefits, barriers, and strategic proposals for digital strategy, vision, and mission.

Investor behavior in times of conflict: A natural experiment on the interplay of geopolitical risk and defense stocks

We examine the connectedness of aerospace and defense companies and their relation to measures of geopolitical risk. With hierarchical clustering, we find stable and localized company clusters. Increasing geopolitical risk leaves these clusters intact but strengthens inter-cluster connectedness. Focusing on intraday data, we find that for most companies, instantaneous news arrival in form of jumps impacts realized volatility significantly. Further, we show that different measures of geopolitical uncertainty (GPR and COVOL) have differing impact on short-term predictions of intraday volatility, underlying the importance to distinguish between different sources of uncertainty. We provide evidence that investors react instantaneously to increases in geopolitical risk with some persistence of these shocks. The COVOL index holds significant informational content for short- and medium-term predictions of realized volatility of global aerospace and defense companies.

Enhancing operational rations for Special Operations Forces: A qualitative analysis and roadmap for product improvement

AbstractNinety‐eight (n = 98) military personnel from the Brazilian Army Special Operations Forces (SOF) participated in 10 Focus Groups to discuss the suitability of Combat Operational Rations with the service doctrine. The operational rations provided partially meet the operational and doctrinal demands of the SOF. Although the military personnel felt secure with the rations provided, the need to customize kits with locally sourced food items before the start of the mission and complaints about the excessive packaging volume were the categories that showed the highest level of engagement. The insights obtained for improving the rations indicated the need for adjustments in palatability, menu variety, modularization, practicality, and an increase in the nutritional content of macro and micronutrients. Further studies should be conducted in partnership with military technical sectors and strategic defense companies to assess the feasibility of developing rations better aligned with the SOF doctrine.Practical ApplicationsAddressing the challenges identified in the Rations used by the Brazilian Army Special Operations Forces (SOF) is crucial for improving the readiness and performance of elite military units and offers valuable insights for academic research. This benefits the academic community by demonstrating the real‐world relevance of nutrition science, food technology, and logistics in military settings. Furthermore, the collaboration between military technical sectors and strategic defense companies presents an opportunity for industrial innovation. Companies involved in producing and supplying rations can use these findings to develop more suitable, efficient, and cost‐effective products tailored to the unique demands of SOF units.

Profitability of Defense Companies in the US and Europe

ABSTRACT The profitability (ROA) of US and European defense companies are influenced by past profitability, debt policy, company size, and defense specialization. Taking into account the effect of these variables, individual company characteristics and time specificities, the profitability of US defense companies remains higher than that of European companies. Moreover, US defense firms are more profitable when specialized in defense, while European companies are more dependent on the civilian market and its evolution. The position of a company in the SIPRI ranking has a negative impact on American companies’ profitability, while it positively influences European companies’ profitability. These results could be due to excessive fragmentation (of orders and industries) on the European market and high concentration on the US market.

Investigating extreme linkage topology in the aerospace and defence industry

This paper analyses return and volatility spillovers among 21 global aerospace and defence (A&D) companies from six countries and three continents using quantile-based models and daily data from August 23, 2010, to July 1, 2022. The results show that both return and volatility spillovers vary over time, and those estimated at normal market conditions, intensify during COVID-19 and Russia–Ukraine war periods. Spillovers of returns estimated at lower and upper quantiles exceed those estimated at the middle quantile. Volatility spillover is extremely high at the upper quantile and exhibits low variability. Chinese defence stocks are segmented from the rest under normal return conditions and a moderate volatility state. In contrast, they are somewhat integrated under extreme return conditions and volatility states. Hence, Chinese defence stocks entail more diversification benefits under normal conditions than in bear or bull markets. Further analysis shows that geopolitical risk consistently plays a significant role in driving both returns and volatility spillovers, especially during the pandemic and war periods, without ignoring the role of macroeconomic and financial variables. These results have implications for investors concerned with stock portfolio management under various return and volatility conditions and for policymakers preoccupied with policy design under unstable periods

Targeting profits: The economic impact of arms embargoes on defense companies

This study explores the impact of arms embargoes on the economic performance of major international defense companies. The direction of this effect is not immediately clear as it relies on the embargo evading opportunities by exporting companies on the one hand and the stringency of enforcement by the sending state on the other. The main findings in this study indicate that the total revenues of a defense company significantly drop after the introduction of an arms embargo. As a result, the net profits of these companies are under downward pressure when the number of arms embargoes increases globally. It turns out that the ability of a firm to effectively mitigate the negative consequences of an embargo is both related to firm-specific particularities, such as the degree of diversification, as well as, country differences. For instance, the negative effect appears, in particular, to be present in countries with a strong rule of law or effective control of corruption.

An Analysis of the Determinants of Government-Funded Defense Companies using a Decision Tree

This study attempted to analyze the factors that influence the participation of beneficiary companies in the government’s defense industry promotion support project. To this end, experimental data were analyzed by constructing a prediction model consisting of highly important variables in beneficiary company decisions among various company information using the decision tree model, one of the data mining techniques. In addition, various rules were derived to determine the beneficiary companies of the government’s support project using the analysis results expressed as decision trees. Three policy measures were presented based on the important rules that repeatedly appear in different predictive models to increase the effect of the government’s industrial development. Using the analysis methods presented in this study and the determinants of the beneficiary companies of the government support project will help create a sustainable future defense industry growth environment.

Efficient Human Resource Allocation in Projects Using Centralized Data Envelopment Analysis

Human resource allocation is a critical component of project management, especially for projects that rely on the knowledge and expertise of skilled personnel. Data Envelopment Analysis (DEA) is a suitable method for this allocation since teams working for different tasks of a project can be considered as Decision Making Units (DMUs) that produce valuable outputs using different types and levels of personnel (inputs). We use Centralized DEA models for efficient allocation of human resources of the overall project among several teams. Using the software teams of a project undertaken in a large technological defense company as DMUs, we define appropriate outputs that measure effort, importance of work, and schedule performance. Factors relevant to the importance of work are aggregated using Rank Order Centroid weights according to expert evaluations. We differentiate between the permanent personnel of the company by their expertise level, and also subcontractors as different inputs. We define staffing policies with varying flexibilities that can be applied in different time periods, and suggest the transfer or removal of some personnel. Our results demonstrate that a centralized view on human resource allocation can bring noteworthy savings, especially in the long term when there is higher flexibility in staffing decisions.

An obsolescence management framework for a defense industry company

Obsolescence issues in complex product lifecycles can cause disruptions in projects, leading to delays in project schedules, significant costs, and loss of prestige, particularly in defense companies. This article aims to address the obsolescence management issues of electronic components in complex product lifecycles in the defense industry with a new framework called the "Shell Structure”. The Shell Structure acts as a shield that safeguards and reinforces electronic components involved in every phase of the product lifecycle from obsolescence problems. The Shell Structure consists of five main processes: project management, research and development, manufacturing and services, supply chain management, and the new obsolescence management process. A new overarching obsolescence management process integrated into these main processes have been designed, specifically tailored for a large-scale defense industry company, using a process map example. The main obsolescence management process encompasses three subprocesses: the development of obsolescence management plan, the development of obsolescence management strategies, and the monitoring of obsolescence management plan. These processes interact in real-time, ensuring that electronic component data flows seamlessly in the context of digitalization utilizing Complex Event Processing System architecture. The obsolescence management-focused framework fosters interdisciplinary collaboration among the main processes of defense companies through the Shell Structure.

Prospects for the supply of weapons from the US, the eu and the United Kingdom to Ukraine

This study examines the prospects of arms supplies from the United States, the EU and the United Kingdom to Ukraine in the context of the ongoing military conflict. The paper analyzes the issue of expanding the nomenclature, up to the provision of American-made jet aircraft complexes, the supplied equipment and the process of transition from stocks of military equipment both produced by NATO and the Soviet model to newly produced samples. The problem of the impact of a special military operation on the defense industry of London, Washington and Brussels is considered separately. There is a tendency to increase the value of shares of defense companies and their profits. The paper concludes that the increase in military production with the further course of the conflict and the supply of weapons will grow both quantitatively and qualitatively. In addition, the existing problems of the defense industry of the United States, Great Britain and the European Union in the current period are revealed - the high cost of products, issues of standardization with Soviet weapons, its complexity in using and training personnel. The main conclusion of the work can be called the statement of a significant time required for the deployment of mass industrial production.

Digital Transformation of Organizations and Their Organizational Cultures: A Case Study in a National Defense Industry

Digital transformation has become vital for organizations in order for them to differentiate from competitors providing a competitive advantage in the fast-changing environment they operate. Digital transformation is considered as a radical transformation affecting organization’s products, services, people and processes while improving performance. It is a risky and tremendous challenge for most organizations. Based on a dissertation with the current paper an approach on digital transformation, in a national defense company is attempted. Products and services provided are characterized through high quality standards and a strong culture. Those characteristics are considered a fruitable ground for providing a framework to transform an organization into a digital one. Taking into consideration the above, literature research on digital transformation of organizations and their benefits are provided. The digitalization process is analyzed in order to show the building blocks of transforming the organization into a digital one. However, in order to start such a process, the organization has to have an adaptive high performance organization culture. This is considered as the base to start the digitalization process. In order for the organization to have such a culture, current situation has to be assessed and certain actions to be taken. An assessment of above-mentioned company is presented and actions proposed. It is obvious that organizational digital transformation is inextricably linked with an organizational culture change. The benefits and barriers from such a transformation are shown and finally proposals presented regarding a digital strategy implementation as well as a vision and mission statement for the company.

Sources of strength: mapping the defence sector in Europe

ABSTRACTThe European Union defence sector is not only crucial for the EU’s security, but it is also a major industrial asset for EU member states, as it may foster innovation and greater integration among member states, as well as facilitate technology transfer. The understanding of and inferences about the sector, however, are laborious since data on the defence industry in Europe is often contradictory and confused and it is mostly compared at the national not at the European level. As a contribution to address such shortcomings and as opening piece for this Special Issue, this article focuses on the finding, collecting, cleaning, and organizing data on the geographical concentration/location of EU defence industries. This is a fully original descriptive analysis of the current situation, and it provides a reliable basis on the concentration/location of defence companies. This paper represents a firm basis from which to explore (in future research) how defence companies contribute to the technological integration of the EU and it should help the reader to better understand the following articles in this Special Issue.

THE STATE OF PRODUCTION, APPLICATION AND SPECIFIC ISSUES OF REGULATORY AND METHODOLOGICAL SUPPORT OF UNMANNED AIRCRAFT TESTS

The experience of armed conflicts that do not cease on our planet confirms the increasing role of unmanned aerial vehicles in today's wars. The article analyzes the state and prospects of the unmanned aircraft vehicles production in the world, and highlights some problematic aspects regarding the provision of own unmanned aircraft vehicle (UAV) development and samples testing of Ukrainian and foreign UAV production in modern conditions. It is shown that the largest producers of military UAVs in the world during the last decade were the USA, Israel, the Republic of Turkey, China, and Iran. A significant part of the European NATO member states, having their own development of unmanned aircraft vehicles and sufficient capacity for their production, prefer the purchase and acceptance into service samples of UAV, mainly of American or Israeli production, which have proven themselves well during armed conflicts in the Middle East. Considering the urgent need of the Armed Forces of Ukraine for UAVs in 2014, Ukraine also followed the path of NATO countries and initially concluded contracts for the supply of foreign-made unmanned aerial vehicles. The beginning of the war with the russian federation also gave a significant impetus to the development of private defense companies in Ukraine. In 2014-2015, an entire industry of unmanned aircraft production was born, and Ukraine became the world's largest testing ground for advanced military technologies. Information about the UAVs used by the Ukrainian military is different, since the Armed Forces receive both officially accepted and adopted UAVs samples, as well as UAVs samples that are transferred by volunteer organizations and often do not have official records (especially those UAVs that are not originally intended for military use). The changes to the regulatory documents that govern the procedures for acceptance into service and acceptance of samples of weapons and military equipment are aimed at ensuring the urgent needs of the Armed Forces of Ukraine for these samples, but they create a number of problems. In the context of providing the Armed Forces with unmanned aircraft vehicles, this is an aggravation of the problems of regulatory and methodological support for the development and testing of UAV samples and the low level of readiness of UAV samples provided by their developers (manufacturers) for testing or proposed for operation under a simplified approval procedure. According to the authors, one of the ways to increase the defense capability of Ukraine is to increase the development and testing efficiency of weapons and military equipment that will be put into operation and armed in the Armed Forces of Ukraine. Therefore, it is necessary to stimulate the developers (manufacturers) of UAVs to strictly comply with the current regulatory documentation on the development of UAVs and to improve the quality of preparation of UAVs samples for testing; to study the experience of NATO countries, as well as in terms of requirements for the specialists training in the combat use of UAV; to promote the implementation of NATO standards in Ukraine in order to expand the opportunities for the participation of UAV in joint operations in NATO member countries and in Ukraine.

방산업체 클라우드 업무환경 도입에 따른 기술보호 방안 연구

방산업체 클라우드 업무환경 도입에 따른 기술보호 방안 연구

ERP System Evaluation in the Defense Industry: A Hybridized Spherical Fuzzy AHP-Codas Approach

Design/methodology/approach: Converting data into information and its diffusion along all organization units has become a vital survival skill. At this point, an ERP system provides an invisible network among a company’s internal and external stakeholders and plays a strategic role. Moreover, ERP systems offer some advantages. For example, integrating financial, customer, and order information, speeding up production processes, and reducing stock level and order lead time. Therefore, we propose an integrated spherical fuzzy-analytical hierarchy process (SF-AHP) and spherical fuzzy-combinative distance-based assessment (SF-CODAS) framework to prioritize the best ERP software provider for the defense industry. Purpose: Despite having the advantages mentioned above, some crucial aspects must be considered while selecting an ERP package. Factors such as high cost, difficulty in installation, and security threats can be very challenging. The latter issue needs special care in the defense industry. This study aims to design an evaluation framework for the ERP selection problem in the sector. Findings: One of the pivoting defense companies in Turkey is chosen as a case study. Seven ERP systems are evaluated with the proposed model. The results show that the proposed model can be successfully implemented in a defense company context. Furthermore, a sensitivity analysis proves the robustness of the approach to varying threshold parameters in CODAS and different fuzzy weighting approaches. Originality/value: The defense professionals prioritize a different set of selection criteria than conventional manufacturing firms. The study provides a rare holistic framework for the defense industry using a hybridized SF-AHP-CODAS technique. Thus, the study may serve as reference work for the researchers and decision-makers during the digitalization journey of defense firms.

Defending election victory by attacking company revenues: The impact of elections on the international defense industry

This study examines the influence of upcoming general elections on the sales revenues of major defense companies. Based on the empirical findings, several broad conclusions can be drawn. First, as a result of election-induced procurement decisions, the total revenues of defense companies in major arms-producing countries increase when domestic elections are approaching to boost the performance of the economy. Second, elections in democratic foreign countries cause a fall in the revenues received by domestic defense firms as foreign governments are likely to shift their public expenditures away from defense imports and towards domestic contractors or to other public spending categories. In contrast, elections in autocratic foreign countries slightly improve the defense sales of arms producers as authoritarian rulers try to deter any political actions of challengers by signalling their military capabilities. Finally, governments of countries that are subject to serious security risks are more likely to increase their purchase of military-strategic items abroad when elections are upcoming for protection purposes.

Implementing Cybersecurity In DefTech Sdn Bhd using DoDAF

A company's architecture significantly affects how much it is worth. Enterprise Architecture (EA) is the term used to describe the ideas and standards that guide the execution of information, technology, and business mission in defence companies. The main objective is to align information technology and business strategy better. For this project, we selected Defence Technologies Sdn Bhd (DefTech) for the case study in implementing the EA. the purpose of this research is to include the as-is and to-be scenarios in detail of each division in the organisation by using DoDAF. DefTech is in the security and defence industry. The main aim is to implement Cybersecurity for data security and asset planning since they supply and produce armoured and logistic vehicles specifically for military and homeland security. The As-Is and To-Be scenarios for DefTech were explained, and data leak protection has been added as the future architecture for the organisation. The component will increase cybersecurity protection and traceability during data leakage. Implementing and enforcing a DoDAF standard reduces inefficiencies in enterprise security and identifies weaknesses. EA has shown potential utility for designing integrated architectures for a business on its own. Still, it can also act as the hub for other initiatives to govern the collaborative enterprise, particularly those centred on security.

Digital transformation of organizations and their organizational cultures. A case study in a national defense industry

Digital transformation has become vital for organizations in order for them to differentiate from competitors providing a competitive advantage in the fast-changing environment they operate. Digital transformation is considered as a radical transformation affecting organization’s products, services, people and processes while improving performance. It is a risky and tremendous challenge for most organizations. Based on a dissertation with the current paper an approach on digital transformation, in a national defense company is attempted. Products and services provided are characterized through high quality standards and a strong culture. Those characteristics are considered a fruitable ground for providing a framework to transform an organization into a digital one. Taking into consideration the above, literature research on digital transformation of organizations and their benefits are provided. The digitalization process is analyzed in order to show the building blocks of transforming the organization into a digital one. However, in order to start such a process, the organization has to have an adaptive high performance organization culture. This is considered as the base to start the digitalization process. In order for the organization to have such a culture, current situation has to be assessed and certain actions to be taken. An assessment of above-mentioned company is presented and actions proposed. It is obvious that organizational digital transformation is inextricably linked with an organizational culture change. The benefits and barriers from such a transformation are shown and finally proposals presented regarding a digital strategy implementation as well as a vision and mission statement for the company.
 EL Classifications: M14.
 Key words: Digital transformation, digitalization process, digital strategy, organizational culture change, vision and mission statement

European Defence Industries’ Sales Performance: A Benefit-Of-The-Doubt Based Comparative Analysis

ABSTRACT The Russian invasion of Ukraine has generated a new impetus towards an enhanced European defence pillar, while many EU members have announced significant increases in their respective defence budgets over the coming years. Expectedly, a large percentage of the capital and technological inputs required to support the efforts towards a common European defence and the increased defence needs of many EU members will be procured from the European Defence Technological and Industrial Base (EDTIB). The European defence companies are among the major suppliers of conventional arms in the world. Their cumulative share of world arms exports is the second largest globally. This paper uses a Benefit-of-the-Doubt (BoD) model via Data Envelopment Analysis (DEA) to comparatively evaluate the sales performance of major European defence industries vis-à-vis other major international arms producers. The sample used in the analysis contains 72 firms and spans the period 2016–2020. The findings indicate that on the whole US defence manufacturers have a dominant presence among the biggest global producers and outrank many major European companies. These findings offer valuable policy recommendations.