Value Creation Effect Research Articles

Linking Organizational Strategy to Information Technology Strategy and Value Creation: Impact on Organizational Performance

Previous empirical studies confirm that organizational strategy has a significant and substantive impact on organizational performance. The purpose of this research is to examine the inter-relationships and interactions among organizational strategy, information technology strategy, value creation and organizational performance in the Regional Civil Service Agency (BKD) province of south Sulawesi. The concept of organizational performance was extended to include ‘stakeholder orientation’ items. Model development and hypothesis testing was conducted using Smart-PLS 2.0 on a sample of 196 respondents from 24 Civil Service Agency (BKD). Results show a confirmation of previous studies as it relates to hypothesis testing that the organizational strategy has significant and positive effect on organizational performance directly or through the mediating effect of information technology strategy and value creation. Limitations of the study, that the study was only conducted on city and County government organization then respondents used only the leaders so that limits the generalization of the findings of the research.

Project Suspensions and Failures in New Product Development: Returns for Entrepreneurial Firms in Co‐Development Alliances

Entrepreneurial biotech and large pharmaceutical firms often form alliances to co‐develop new products. Yet, new product development (NPD) is fraught with challenges that often result in project suspensions and failures. Considering this, how can firms increase the chances that their co‐development alliances will create value? To answer this question, the authors build on insights from signaling theory to argue that prior project suspensions provide positive signals leading to an increase in value creation, while project failures have the opposite effect. In addition, drawing on insights from temporal construal theory, this research predicts that the strength of these effects is contingent on the stage along the exploration–exploitation continuum at which the alliance is formed. The authors undertook event study analyses of 248 alliances formed by 104 biotechnology firms from the United States and Europe listed on eight stock exchanges over an 8‐year period between 1996 and 2003. The results confirm that prior NPD project suspensions have a stronger value creation effect (or prior failures have a weaker value destruction effect) in the case of exploration alliances in the upstream of NPD processes than in the case of moderate‐scale exploitation alliances in the downstream of NPD. This study is among the first to examine how both prior NPD project suspensions and failures of firms affect the abnormal returns achieved from co‐development alliances. This research therefore contributes to the innovation literature by honing a better understanding of setbacks and failures in NPD. Moreover, the findings contribute to the literature on strategic alliances by identifying new conditions under which firms can create or preserve value. This research also contributes to signaling theory by providing evidence of the moderation effect caused by the signaling environment. Finally, this study contributes to the entrepreneurial literature on value creation for entrepreneurial firms in alliances following adverse events.

Influence of customer engagement with company social networks on stickiness: Mediating effect of customer value creation

Company social networks have become an important means for the socialized marketing of a company, forming a new challenge to companies on how to attract customers. Based on such theories as customer engagement, value co-creation, and relationship marketing, this paper presents a model of the influence of customer engagement on stickiness. Data collected from 260 valid questionnaires from Sina’s enterprise microblog users were analyzed by structural equation modeling. Empirical results show that customer engagement has a direct and positive influence on customer stickiness as well as an indirect influence through customer value creation. This study enriches previous researches on existing theories of customer engagement, value co-creation, and stickiness, and gives practical guidance for companies to encourage customer engagement and enhance the stickiness of company social networks.

Entre o Mercado Primário e o Secundário: uma análise exploratória da criação de valor e vantagem competitiva nas relações China-Brasil

A criação de valor e a vantagem competitiva são temas essenciais para o sucesso das empresas que atuam em mercados primários e secundários. O presente artigo teve como objetivo analisar as diferenças na criação de valor e geração de vantagem competitiva em mercados primários e secundários China-Brasil. Para isto, realizou-se um conjunto de entrevistas com gestores de empresas chinesas e brasileiras. Após a coleta de dados, realizou-se análise de que derivaram em vinte categorias finais: (a) criação de valor no mercado primário sem a presença de intermediário, (b) criação de valor no mercado secundário com a presença de intermediário, (c) vantagem competitiva no mercado primário sem a presença intermediário e (d) vantagem competitiva no mercado secundário com a presença de intermediário. As analises das categorias permitiram estabelecer algumas relações teóricas/empíricas importantes no entendimento da relação da criação de valor e vantagem competitiva em empresas que atuam em mercados primários e secundários.

Differences between “exploration” and “exploitation” of cross-border mergers & acquisitions and its value creation effect

This paper adopts the case study method to respectively research the value creation in the exploration and exploitation type of China’s four cross-border mergers & acquisitions, and discusses the similarities and differences between the value creation in the utilization and exploration type of mergers & acquisitions, and finds that the former type of mergers and acquisitions is suitable for a medium or higher level of integration in the aspect of the organization structure, culture, human resources and supply chain, so as to realize the value creation through the improvement of synergies and market forces; the latter type of mergers and acquisitions is suitable for higher level of integration in the aspect of the supply chain, research & development, brand and channel, so as to create value by broadening the marketing channel and enhancing innovation capability.

Complementing clusters: a competitiveness rationale for infrastructure investments

Purpose– The purpose of this paper is to present a novel application of cluster theory and cluster methodology to evaluate large infrastructure investments. The complementing clusters approach, which builds on the notion of infrastructure as connecting isolated “economic islands”, is able to assess the potential for value creation effects of new infrastructure investment.Design/methodology/approach– The author uses simulation analysis based on a unique data set encompassing all employees and employers, as well as cluster mapping, for every pair of “economic islands” being connected by the examined infrastructure investments. The empirical setting is of large fjord crossings in Western Norway, the so-called E39 project.Findings– The empirical findings show that productivity gains are higher when an integrated labor market hosting complementary clusters is formed. Limitations remain regarding the economic integration path.Research limitations/implications– The authors provide an ex-ante analysis using information over the past 10 years. Following the expected infrastructure investments, future research should examine the extent to which productivity gains materialized and the reasons underlying the achieved materialization levels.Practical implications– Current evaluation of large infrastructure investments focuses on transportation economics effects, technical feasibility and environmental consequences. The authors complement this current practice by advancing a theoretically grounded value creation perspective that can affect future evaluation practices.Originality/value– Cluster complementarity-based evaluation is a novel methodology that is applicable to investment decisions which are central for economic development. Cluster analysis of infrastructure investments provides new and valuable data for making such investments decisions.

Theoretical Framework and Research Case of the Energy Enterprise Internal Auditing Management System’s Innovation and Upgrade

The energy enterprise group has its basic features and value properties, and it has the driving force of pursuing maximal value. As an important internal control mechanism, the internal audit system contributes to the value creation of the enterprise. The actual operating condition of the energy enterprise group is not consistent with its market performance. The value creation and development effect has not been recognized by the investors. Ignorance of the relationship between the management authority and its operating risk may lead to the damage of the energy enterprise value. Meanwhile, the transformation and upgrade of the energy enterprise group faces both opportunities and problems, which is important for the internal audit system to be improved through five directions—strategy improvement, function expansion, organization revolution, process reengineering and safeguard mechanism to meet the demands of the enterprise value development.

PARTISIPASI PELANGGAN, ANTESEDEN DAN PENGARUHNYA TERHADAP KUALITAS JASA: PERSPEKTIF SERVICE-DOMINANT LOGIC

This paper studies customers as active participants in service encounter. Based on Service-Dominant Logic perspective, this paper discusses previous research related to antecedents of customer participation, and its effect on service quality. The author reveals that there is an inconsistency in previous research, the customer participation has a positive effect or otherwise negatively affect the perceived service quality. The author proposes some proposition that perceived service risk, customer readiness, and perceived control are antecedents of customer participation. Further, the author proposes that the effect of value creation on service quality is moderated by customer culture and organizational culture.

Multilateral R&D alliances by new ventures

We examine the antecedents and outcomes of new ventures' formation of multilateral R&D alliances. Our results show an inverted U-shaped relationship between market uncertainty and a new venture's likelihood of forming multilateral R&D alliances. Top management team's social capital and ventures' technological capabilities are critical for new ventures to identify and capture alliance opportunities. Moreover, our analysis reveals value creation effects of multilateral R&D alliances for new ventures despite the challenges and difficulties associated. We further show that the value creation effect is a function of the type of exchange relationship (i.e., net- vs. chain-based) in the multilateral R&D alliance and that governance structure moderates this relationship.

Introducing the paradigm of organizational value creation effect on customer loyalty: A case study of Tehran province food industry unites

Article history: Received October 1, 2011 Received in Revised form November, 14, 2011 Accepted 15 December 2011 Available online 24 December 2011 Today, organization cannot firmly survive without having a broad captive market. Rather, through value creation for customers and achieve their loyalty, we can maintain and increase the existing market share. Providing a specific product or service requires modern ideas and approaches to be applied in organizations. Resource limitations prevent organizations from being the best on all value creation contexts; so they must focus on some range of customercentric values regarding the given customer groups; because customer needs will change as time goes by and it requires different kinds of values to be taken into consideration. In this research, organizational value creation effects on customer loyalty is studied by more recent and complete customer value model designed by Flint et al. (2010) [Flint et al. (2010). Customer value anticipation, customer satisfaction and loyalty: An empirical examination. Industrial Marketing Management, 40, 219-230]. In this regard, some questionnaires are distributed among a statistical population including 90 customers of Tehran Food Industries. Results show that organizational value creation affects on customer loyalty. Among effective factors, product quality has the most effects on organizational value creation following by product price, marketing and after-sales services. © 2012 Growing Science Ltd. All rights reserved.

Firm Value Creation Effect of Global Collaborations for Technology Development: A Longitudinal Analysis of Korean Firms

Firm Value Creation Effect of Global Collaborations for Technology Development: A Longitudinal Analysis of Korean Firms

A look at the value creation effects of patenting and capital investment through a real options lens: the moderating role of uncertainty

AbstractThis article applies a real options approach to analyzing the impact of a firm's investment in appropriable technology (as represented by the intensity of its patenting activities and capital investment) on the firm's opportunities to create value through future investment (as represented by Tobin's q). Recognizing the mixed results with regard to the relationship between patenting and firm value, we argue that such investment may primarily create value by offering future technology options and that the relationship may be more appropriately modeled on the basis of real options theory. We argue that patenting creates and replenishes a firm's technology options whereas capital investment entails the exercise of such options. Three hypotheses are derived from a valuation model based on the real options approach and tested using a fixed‐effects panel data procedure. The results of our empirical analysis using a sample of 161 U.S.‐based biotechnology firms are consistent with our predictions. Copyright © 2010 Strategic Management Society.

The Consequences of Issuing Convertible Bonds: Dilution and/or Financial Restructuring?

Abstract Historically, most convertible bond (CB) issues have been converted to equity sooner or later. The announcement of a CB issue will bring about a future dilution of the firm's capital, and is often followed by a drop in share price. However, a CB issue by itself creates future value for the shareholders if it enables the firm to make profitable investments. It can also issue a positive signal regarding the restructuring of the firm's financial liabilities and its attempts to optimise its financial structure. These positive effects, if they occur, will develop gradually after the issue, and cannot be identified by a simple short‐term event analysis of a CB issue announcement. In this paper, we test the significance of the dilution effect, coupled with a possible value creation effect, using data from the French stock market. We introduce a comparison between dilutive convertibles and non‐dilutive exchangeable bonds. By integrating different corrections and by selecting a window of analysis over a longer period after the announcement of the issue, we show that the negative cumulative average abnormal returns generally observed in previous studies become non‐significant. This absence of global incidence is indicative of large differences in individual behaviour by issuers of CBs, and leads us to take into account the strategic choices linked to the issue of a CB. Two goals, often described as ‘investment financing’ or ‘financial restructuring’, may exist when issuing, and may appear to explain the size of the abnormal returns.

Economic opportunities resulting from a global deployment of concentrated solar power (CSP) technologies—The example of German technology providers

Several energy scenario studies consider concentrated solar power (CSP) plants as an important technology option to reduce the world’s CO 2 emissions to a level required for not letting the global average temperature exceed a threshold of 2–2.4 °C. A global ramp up of CSP technologies offers great economic opportunities for technology providers as CSP technologies include highly specialised components. This paper analyses possible value creation effects resulting from a global deployment of CSP until 2050 as projected in scenarios of the International Energy Agency (IEA) and Greenpeace International. The analysis focuses on the economic opportunities of German technology providers since companies such as Schott Solar, Flabeg or Solar Millennium are among the leading suppliers of CSP technologies on the global market.

An Alternative Real Option Approach to R&D Project Assessment

An organization can take diversifying actions to reduce the total risks of project portfolios. For an R&D project, the overall level of risk could be reduced with better management and/or appropriate diversifying. In this paper, we develop an alternative real option approach to assess R&D projects in consideration of diversifying investments. The distinguishing feature of our model setting is that two major uncertainties of R&D investment, i.e., the market and technological risks, are combined to generate a specific underlying process of R&D projects. The net present value rule and traditional real option methods are applied in evaluating R&D projects. It is found that the outcomes of the traditional real option methods would be affected by evaluators' expectation upon the market or technological outlook. The proposed method incorporating diversification effect could lead to more reasonable assessments for R&D projects since the influence of R&D firms' subjective views could be resolved. The value creation effect from diversifying actions has been examined through the numerical analyses. The results indicate that better management for R&D investment diversification will increase the project value.

Event Study Methodology in Marketing

An event study measures the impact of specific events (exogenous and endogenous) on stock prices. Often used in finance, this methodology is also of interest in marketing. Indeed, it seems that marketing decisions impact significantly on financial markets. In addition, marketing factors that tend to increase or mitigate the impact of an event are largely ignored. With this in mind, the objective of this paper is to argue the usefulness of event studies and provide insights into some necessary adaptations of these studies for marketing research. The main contribution of this paper is to demonstrate that a full spectrum of data, not purely financial, should be used in order to better understand the value creation or value destruction effects of an event.

The value creation effects of mergers and acquisitions: Evidence from the JSE Securities Exchange South Africa

The aggregate gains from mergers and acquisitions (M&As) and the distribution thereof continues to attract the interest of finance researchers. The South African research on M&As is limited, constrained by small samples and tends to focus more on the short-term price reaction. It places too much faith on the rationality paradigm, the notions and implications of market efficiency, contains no methodological innovations and at best involved replications.