Hidden Champions Research Articles

Performance measurement in a “hidden champion” company: An empirical study

The purpose of the paper is to review and evaluate the performance of a specific type of globally successful innovative company introduced to scientific literature as “hidden champion” by Simon (1990), using a combination of traditional financial key performance indicators (KPIs) with the modern evaluation method of the European Foundation for Quality Management (EFQM) model. The results showed that there are many areas in the selected company where EFQM allows building an effective management system, applied as a benchmarking tool for using the experience of leading companies. The joint utilisation of the KPIs and the EFQM model helps to create an objective picture and evaluate the organization in a relatively complex way. This paper provides in-depth insights into the application of new models in practice that are still scarce and may serve as a base for further research realized on larger samples. This work shows for the first time the application of EFQM commonly used in large organizations, for the special category of small and medium-size enterprises (SMEs) companies called “hidden champions” (HCs). In general, there is a lack of studies in domestic literature devoted to the concept of “hidden champions”. This paper contributes to this field from the perspective of quality management, and it provides also valuable insight for practice.

An assessment of selected tax burdens and reliefs of hidden champions: Theoretical comparison between Slovakia and Ireland

The purpose of the paper is to review and evaluate selected tax burdens and reliefs between Slovakia and Ireland in relation to a specific type of globally successful innovative company introduced to scientific literature as “hidden champion” (HC) by Simon (1990). In the process of writing the work, the following methods of comparison, logical generalization, analysis, and synthesis were used. The results showed that both countries lack in providing specific regime in research and development (R&D), corporate income, and value-added tax (VAT) aspects to small and medium-sized enterprises (SMEs) (including HCs). Moreover, as reported by Ibec (2019), small companies face several challenges to their growth due to taxation. A parallel view on two countries (tax heaven and a classic approach country) provides a great prospect on all gaps in the taxation system. Although improvements are predicted and confirmed every second year, tax policy in the analyzed countries is not fully matched to current situations. The work reveals for the first time the fact that there are few specialized programs for SMEs, getting an exemption or applying for relief is difficult. In general, there is a lack of studies devoted to taxes within the concept of “hidden champions”. This paper contributes to this field from the perspective of policymaking, and it provides valuable insight for practice.

Davids and Goliaths: Hidden Champions in an Age of State Capitalism

Davids and Goliaths: Hidden Champions in an Age of State Capitalism

Laboratory and Analytical Device Standard (LADS): A Communication Standard Based on OPC UA for Networked Laboratories.

In a similar vein to Industry 4.0 in manufacturing industries, digitisation is making inroads in the laboratory industry in the form of Laboratory 4.0, or networked laboratories. Companies can gain decisive competitive edges by automating their work processes and systems and networking them with each other and primary IT systems. A uniform communication standard such as OPC UA, a well-established global standard in the aforementioned manufacturing industries, is essential to a modular, scalable network of heterogeneous laboratory structures. Can the laboratory industry benefit from this standard and the years of development experience? In SPECTARIS, the German Industry Association for Optics, Photonics, Analytical and Medical Technologies, over 30 global market leaders, hidden champions and drivers of innovation in the laboratory industry put their heads together in the "Networked Laboratory Devices" working group and created the "Laboratory and Analytical Device Standard", or LADS for short. Unlike numerous other attempts to establish communication standards for laboratories, LADS is based on the advanced OPC UA standard and takes an agnostic approach to cover the variety of devices, systems and requirements in laboratories. In this context, "agnostic" refers to the generic design and display of potentially as-yet-unknown aspects of the flow of information or communication structures. For the first time, LADS allows for modular, scalable networking of heterogeneous laboratory structures, efficient data transfers and - currently unused - user, process and device-based data analysis (keywords: big data, predictive analytics, data science) - even taking normative requirements into consideration. This agnostic modelling makes LADS a future-proof communication solution for the laboratory industry, the likes of which the world has never seen.

Hidden Champions in the Chinese Century: Ascent and Transformation

Hidden Champions, little-known global market leaders, are extremely important for the export performance of countries. They are a little-used source of management knowledge. No country has more Hidden Champions than Germany. After a phase of hyper globalization the Hidden Champions are facing new challenges, especially from rising Chinese competitors. They have to increase their R&D activities once again and include unfamiliar areas of knowledge in the process. They need to relocate their centers of excellence to the best place, which is often China. New drivers such as digitalization, business ecosystems and sustainability require them to adapt and open up their traditionally closed corporate cultures. This applies equally to cooperation partners and foreign environments.

The Match Between Structural Attributes and Content-Based Orientation of Managerial Cognition: An Exploratory fsQCA Study of ‘Hidden Champions’

ABSTRACTStrategic decision makers interpret information and translate it into organizational action through the lens of strategic schemas. How should firms realize high performance with various strategic schemas? Cognitive content and structure have been shown to underlie strategic schemas, but few studies have considered them together. This study employs aggregation analysis to clarify the interaction between cognitive content (technology orientation, market orientation) and structure (complexity, centrality) in affecting the firm performance (FP) of ‘hidden champion’ companies, identified by the Economy and Information Technology Department of Zhejiang Province, China. The empirical method applies fuzzy-set qualitative comparative analysis to generate strategic schema profiles for high FP. This exploratory study fills a gap in the literature on managerial cognition and provides key lessons from ‘hidden champion’ companies in China and their paths for small- and medium-sized enterprises to grow.

Digital pioneers in the periphery? Toward a typology of rural Hidden Champions in times of digitalization

We unravel dimensions, conditions, and outcomes of digitalization for Hidden Champions (HCs) in rural areas in Germany. As highly innovative small- and medium-sized market leaders, HCs are challenged to maintain their niche dominance but are endowed with significant resources. However, firms in rural areas face resource constraints related to digitalization and innovation. Based on qualitative interviews with 28 companies, we develop a typology of HCs with four firm types differing in their handling of digitalization: Digital HCs, HCs of Digitalization, Traditional HCs, and Digitalization-Skeptical HCs. Their digitalization-related potential and risk assessment, resource availability, strategy, and innovation types are portrayed. We provide evidence that innovative market leaders in rural areas are not necessarily also digitalization front-runners. We contribute to a deeper understanding of the nexus of digitalization, SMEs, and rural areas. Our findings have managerial and policy implications. Less innovative SME can emulate HCs’ handling of digitalization. Regional policymakers should expand firm type-specific digitalization policy formulation.

Hidden Champions as a Determinant of Regional Development: An Analysis of German Districts

Abstract Hidden Champions (HCs) are defined as market leaders in niche markets. They represent the success of the German Mittelstand like no other group of firms. However, little is known on how HCs contribute to regional development. Given their export strength, regional embeddedness, and strong vertical integration we expect HCs to have a profound effect on regional development. Using a German dataset of 1,645 HCs located in 401 German districts, we analyze the effect of HCs on a variety of regional development dimensions. Our results show that HCs are not equally distributed across regions and influence regional development. Regions with a higher number of HCs show strong regional economic performance in terms of median income. Moreover, HC intensity affects regional unemployment and trainee rates as well as regional innovation in terms of patents. Surprisingly, we did not find an effect of regional HC intensity on regional R&D levels and GDP. We can further conclude that the effect of HCs is not limited to the particular region in which they are located but that sizable spillover effects exist. Besides its contribution to the regional development literature, our study adds to a better understanding of the HC-phenomenon. Implications for regional policy makers are discussed.

О восстановлении ведущей роли машиностроения в построении новой экономики Украины

The leaders of the modern world economy reached a high level of development during the period of industrial capitalist production. At present, in the world, machine production follows the path of minimizing and universalizing machines (systems, industries), robotization, computerization, digitalization, the formation of artificial intelligence, etc. All this is not de-industrialization, but a new stage in machine production, hyper-industrialization, building a new economy and introducing digitalization. Moving machine production from developed countries to third world countries does not mean de-industrialization of parent producer countries at all. It means their further development. In Ukraine, these complex processes are inadequately perceived, industry, mechanical engineering, for various reasons, have undergone total destruction through changes in forms of ownership, loss of strategy and development prospects, which is fundamentally wrong. In studies, insufficient attention is paid to the functioning of machine-building enterprises in “falling”, collapsing markets, there is no unambiguous and adequate understanding of what should be attributed to mechanical engineering, there is no clear classification of sub-sectors of mechanical engineering or business associations (industry, industry, sub-sector, complex, cluster). The variety of machine building classifications makes it difficult to assess economic activity objectively. The purpose of the article is to develop proposals for restoring the leading role of the industry in the technical re-equipment of the domestic economy production, its way out of the ongoing systemic crisis, based on the analysis of how the mechanical engineering functions as a driver of industrial and social development of industry and economy. It is shown that mechanical engineering provides a high level of labor productivity, production culture, science, contributes to the further deepening of labor cooperation. It was revealed that the most intellectually and professionally prepared part of the middle class was formed in mechanical engineering. The article examines the evolution of mechanical engineering over the years of the formation of the state, comparison with a number of industrial countries. The necessity of prioritizing the development of mechanical engineering for the formation of a modern self-sufficient economy is proved, the main directions of management including collaborative, structural and organizational regulation of the industry and the introduction of nature-like processes are outlined. The expediency and possibility to develop highly specialized industries in Ukraine and the cultivation of "hidden champions" have been substantiated.

Мотивація розвитку цифрових навичок та компетенцій працівників підприємств

The introduction of digital technologies in production and everyday life significantly changes the labor market, the ratio of age groups, areas of activity, forms of organization of production and employment, which requires new skills and competencies of workers. Digital skills become critical for both employees and employers. Knowledge in the field of search, filtering, systematization, evaluation and analysis of a large amount of data, digital content and information becomes mandatory for managers and professionals. The peculiarity of modern work is the change of traditional boundaries of labor activity, strengthening the role of individual professional qualities of employees, their competencies. Therefore, the work of a modern worker becomes more pronounced. This fact should be taken into account when implementing new forms of motivation. Motivation to mastering the digital competencies of staff is a process of creating conditions under which employees can realize their values, needs, potential and which have an active influence on the purposeful change of human behavior. In the conditions of economy digitalization the staff motivation methods to digital skills and competences reception, their realization in digital technologies acquire special value. The list of digital skills and competencies is outlined, the expediency of using gamification to activate staff is substantiated, measures of motivation the generation Z to master and use digital skills for work efficiency are developed. Emphasis is placed on the qualities of management and employees in enterprises – "hidden champions".

How emerging market firms can upgrade and develop into hidden champions: evidence from China

How emerging market firms can upgrade and develop into hidden champions: evidence from China

Subsidiarity as secret of success: “Hidden Champion” SMEs and subsidiarity as winning HRM configuration in interdisciplinary case studies

PurposeThis paper contributes to the theory of the relationship between human resource management (HRM) and innovation at small- to medium-sized enterprises (SMEs) by conducting a conceptual analysis of the question why Germany boasts by far the highest number of “Hidden Champion” SMEs. This is done by case studies from the army and public financial management of aid disbursal in developing countries. Implications for HRM at SMEs are discussed.Design/methodology/approachConceptual analysis using case studies.FindingsContributing towards filling the gap concerning theoretical underpinnings of the link between HRM and innovation, we suggest that interdisciplinary work from relevant organisational case studies indicates that the concept of institutional design to provide motivational incentives may be relevant, especially concerning high performance systems with bundles of HRM practices. Specifically, the fundamental principle of subsidiarity is found to be important.Research limitations/implicationsThe research is broadly applicable to organisations of all kinds, as the diverse case studies indicate. We point towards tentative implications for the firms that account for the majority of the work force, namely SMEs, and among them the most successful ones, the so-called “Hidden Champions”.Practical implicationsHR managers can improve motivation, performance and innovation by decentralising decision-making as far as possible, while ensuring the overall organisational goals are well understood and shared, and resources are dedicated to train and educate staff. Additionally, the conception of rank-order competitions complements the institutional design.Social implicationsGreater productivity and material performance as well as greater job satisfaction via larger autonomy and decision-making power on the local level can be achieved by the application of subsidiarity as key HRM configuration. This can be employed at SMEs, as discussed, but also other organisations. Further, the principle of subsidiarity and the greater emphasis on staff training and education may help reduce inequality.Originality/valueOur paper contributes towards filling the gap in the literature on the link between HRM and innovation, by identifying the role of subsidiarity. We introduce an interdisciplinary perspective, with contributions from economics and psychology, among others. We also contribute to the history of HRM.

Analysis on the Patent Portfolio for Hidden Champion Companies: Focusing on the “Hidden Champion” companies introduced in Herman Simon's book

Analysis on the Patent Portfolio for Hidden Champion Companies: Focusing on the “Hidden Champion” companies introduced in Herman Simon's book

A hidden champion? The European Court of Justice as an agenda‐setter in the case of posted workers

AbstractSince the comparative turn in European integration research, analyses of the legislative process of the EU have taken inspiration from research on national political systems. While the consequences of the formal monopoly of initiative of the Commission are much analysed, it is only recently that the role of the Court in EU legislation has been further appreciated. In the literature, it is disputed how far case law constrains the EU legislator. The analysis of the 2016 proposal for a revision of the 1996 Posted Workers Directive allows us to uncover the mechanisms by which the European judiciary shapes and constrains agenda‐setting based on the constitutionalization of EU law. In this highly political case, being hailed as a major breakthrough, we ask whether political majorities or case law constraints had the upper hand.

Champions of Digital Transformation? The Dynamic Capabilities of Hidden Champions

Hidden Champions (HCs) are small- and medium-sized global market leaders that repeatedly show superior innovation capabilities and economic performance. However, empirical evidence on how the digital transformation may affect their success story remains scarce. I argue that HCs show stronger dynamic capabilities which enables them to be better prepared for the digital transformation than non-HCs firms. To test this hypothesis, I use data from the Mannheim Innovation Panel. This allows me to identify a representative set of German HCs and develop a firm digital readiness index, reflecting the use of important digital technologies and applications. An instrumental variable estimation suggests that higher levels of digital readiness lead to an increase in share of revenue from innovations and productivity. In combination with higher average digital readiness levels of HCs compared to non-HCs, my findings indicate that HCs may indeed be better prepared for the digital transformation.

PhiChem: An Entrepreneurship Case Study of a Hidden Champion in China

The case study of Shanghai PhiChem examines a returnee entrepreneur from the United States to China who started a high-technology chemical material firm. It shows how the entrepreneur started the business with limited resources but later successfully grew the business to an initial public offering. Its success factors and innovative strategies have been identified and analyzed in detail. Specifically, Shanghai PhiChem has focused more on the high value-added components of the smiling curve and has excelled as a hidden champion in China. Implications are given to entrepreneurs and managers in the emerging market from the perspectives of market entry, operations, and customer management.

The success story of graphite as a lithium-ion anode material – fundamentals, remaining challenges, and recent developments including silicon (oxide) composites

This review provides a comprehensive overview about the “hidden champion” of lithium-ion battery technology – graphite.

RURAL ENTREPRENEURSHIP: BETWEEN START-UPS, HIDDEN CHAMPIONS AND FAMILY BUSINESSES

The paper is focused on the role of entrepreneurship in rural areas. This topic is becoming more urgent in Germany nowadays in the context of contemporary tendencies based on accelerating economic development, rethinking of social issues, implementing sustainable development goals in everyday practices, and new political frameworks. The research is based on the hypothesis that rural regions are very diverse; nevertheless, these regions generally have lower start-up rates than urban regions. Conducting the research we clarified that the sector structure of start-ups in rural areas is less focused on high-tech and more on start-ups in the area of the “Green Economy”. Venture capital-financed start-ups are rarely found in rural regions. The importance of Family Businesses and Hidden Champions is stronger in rural regions than in urban ones. There are large differences within the group of rural regions in terms of start-up activities and entrepreneurship in the form of Family Businesses and Hidden Champions.
 We concluded that Champions in rural areas can be explained by the strengths of rural regions. There is often a special long-term relationship between rural regions and their companies. Regionally rooted Family Businesses and Hidden Champions value the region’s solidarity with businesses as strength of rural regions.

ENERGY STORAGE: KEYS FOR EUROPE IN COMING YEARS

Energy storage is one of the levers of change for energy transition. The take-off of this technology is unquestionable and unstoppable. Europe has historically been, together with the USA, one of the driving forces behind storage technologies, however, the manufacturing of a large proportion of these technologies has been left in the hands of Asian countries. Aware of this reality, the European Commission has deployed a series of measures to address the second revolution in the development and manufacture of storage systems. This paper aims to review the current initiatives that have been deployed, as well as identify some of the hidden champions who are already working in Spain to achieve this reality. In this sense, we will propose the following steps that must be taken to achieve a position of technological leadership in some technologies such as solid state batteries.

일본 중소제조기업의 글로벌화와 한국에 대한 시사점: 일본형 히든챔피언, GNT기업의 고찰을 중심으로

일본 중소제조기업의 글로벌화와 한국에 대한 시사점: 일본형 히든챔피언, GNT기업의 고찰을 중심으로