High Corporate Performance Research Articles

Do Managers Always Make Optimal Investment Decisions: Relationship between Managerial Optimism Measured by BERT and Investment Decision-making

This paper aims to investigate the effect of managerial optimism on corporate investment and performance. BERT’s methodology, a machine learning method developed by Google, was used to measure managerial optimism for companies listed on KSE (Korea Stock Exchange) and KOSDAQ from 2009 to 2019. Optimism, when there are capital constraints of companies, is defined as overconfidence, and unlike previous studies, the meaning of managerial optimism and overconfidence is distinguished. The empirical analysis revealed the following: higher the manager’s optimism, higher the cash flow, smaller the size of the firm, larger the debt ratio and lastly, higher the growth potential, higher the investment. Furthermore, in analyzing the relationship between performance and investment, higher optimism and investment was associated with higher corporate performance. Finally, when a company is in a capital constraint state, it was found that managerial optimism negatively affected corporate performance. These findings are consistent with previous studies that showed that more optimistic managers have higher investment and that excessive optimism is not good for corporate value.

Talk the walk: how corporate vision works for performance

PurposeThe development of an effective corporate vision is a necessary issue for corporate performance, and it is a key issue for corporate sustainable development as well. The recognition of questions like “what is the role of corporate vision in corporate performance” is directly related to the attitude and practice of entrepreneurs and managers toward the development of corporate vision as well as the effectiveness of the corporate vision itself. To better answer the questions concerning the role of corporate vision development and effectively guide the practice of corporations, the authors study the pathways and mechanisms by which corporate visions operate to assist businesses in achieving high performance.Design/methodology/approachThe article completes the construction of indicators to measure each dimension of the corporate vision in line with social cognitive theory and analyzes the relationship between corporate vision and corporate performance by combining qualitative comparative analysis (QCA) and necessary condition analysis (NCA) research methods. The article provides insights into the logic of constructing and adjusting corporate visions from a process perspective.FindingsThe mechanisms by which corporate visions can be articulated, accepted and transformed within the organization are also the means by which corporate visions can improve corporate performance. In a dynamic environment, the corporate vision setting and acceptance process integrates the requirements of various stakeholders, leading to the adjustment and acceptance of the corporate vision. As a result, the vision has continuous validity in a changing environment. Both start-ups and non-start-ups can benefit from the guidance provided by a strong corporate vision in overcoming a variety of issues and obstacles to produce strong business performance.Originality/valueThis is the first study that shows the relationship between corporate vision and corporate performance from a process perspective. The authors are interested in understanding which characteristics for building a corporate vision are more accepted by organizational members and, in turn, create high corporate performance. The authors also explore the conditions for corporate vision acceptance. This research has positive implications for shedding some light on the mechanisms by which corporate visions improve corporate performance.

Environmental Costs and Key Financial Performance Indicators of Oil Firms in Nigeria

This study examined the effect of environmental costs on the key financial performance indicators of oil firms in Nigeria. The study specifically examined the effect of environmental cost on the retained earnings, earnings per share and the return on asset of oil firms in Nigeria. A sample of three firms was selected out of a population of eleven oil and gas firms listed on the Nigeria Stock Exchange during the period. Secondary data were collected from the selected firms and analysed using multiple regression analysis. Findings of the analysis shows that environmental cost has a positive and insignificant effect on the retained earnings of oil firms in Nigeria. It was also observed that environmental cost has a negative and insignificant effect on the earnings per share of oil firms in Nigeria. The study equally revealed that environmental cost has a positive and significant effect on the return on asset of oil firms in Nigeria based on the findings, the study recommends that oil firms should adopt uniform reporting and disclosure standards of environmental cost for the purpose of control and measurement of performance. Firms (especially smaller ones), should be encouraged to disclose their environmental practices in their annual reports to enhance their competitiveness which would subsequently lead to high corporate performance. Top management should ensure that they comply with the environmental laws of the nation as it will go a long way in enhancing sustainability.

Digital transformation of the business models of Chinese sporting goods enterprises in the post-COVID-19 era: a knowledge-management perspective

Purpose From a knowledge-management perspective, this paper aims to analyze the digital transformation of the business models of traditional Chinese sporting goods companies in the context of the pandemic crisis and to explore the role of their digital transformation in coping with the crisis. Design/methodology/approach Using theoretical sampling, typical sporting goods companies are selected for case studies. We provide an in-depth analysis of how these companies achieve high performance levels through the digital transformation of their business models in the post-COVID-19 era and discuss the key role of knowledge management in this achievement. Findings Focusing on the challenges faced by Chinese sporting goods enterprises during the pandemic crisis from the knowledge-management perspective, we find that through the digital transformation of their business models, enterprises can improve their knowledge-management capabilities, enhance their flexibility to respond to sudden crises and maintain a higher level of corporate performance. Research limitations/implications This paper has significant implications for sporting goods companies wishing to achieve high corporate performance through the digital transformation of their business models in the post-COVID-19 era. Future research should address the dynamic mechanism of the digital transformation of business models to improve enterprise knowledge-management capabilities and the impact mechanism of knowledge-management capabilities on interenterprise organizational resilience. Originality/value This paper proposes specific strategies in the process of the digital transformation of business models that are essential for improving enterprises’ internal and external knowledge-management capabilities.

Research on Supply Chain Integration under Service-oriented Logics and Joint Influence of Dual Innovation on Corporate Performance Path

The rapid development of economic globalization and the promotion of emerging technologies have spawned a Service-oriented logic that gradually dominates the contemporary industry, and the path for manufacturing companies to improve performance has become more and more complicated. Based on this background, the article uses the data of A-share listed companies in the manufacturing industry in the Yangtze River Delta and the Pearl River Delta in 2019, and uses the research method of fuzzy set qualitative comparative analysis to empirically study the core path and mechanism of multiple complex factors that affect corporate performance. The research results show that manufacturing companies can choose four paths to improve corporate performance (supply chain integration-driven based on internal control, servicing and market dual logic based on internal control-based integration-driven, relying on exploration and innovation-based integration-driven, Relying on the integration-driven type of dual innovation and balance), and found that the core role of supply chain integration and servicing level has become more prominent, becoming a key factor leading to high corporate performance. This research is helpful to identify the influence mechanism of supply chain integration, service level and other factors on corporate performance, and grasp the core of configuration, which has certain reference significance for corporate managers.

The Implication of NESREA Act and Financial Performance on Environmental Disclosure in Nigeria

The study assesses the implication of compliance and enforcement of the NESREA Act, profitability, and Growth on environmental disclosure of cement companies in Nigeria. Secondary data comprising financial and non-financial information were source from annual accounts and reports of the sample companies, spanning a period of five years (2015 – 2019). Panel regression models were considered in assessing the implication of the variables under study. The findings reveal that NDI has a significant P-value which signifies that compliance with NESREA Act increases environmental disclosure by 2.9%. ROA also exerts a significant impact on environmental disclosure. This implies that a 1% increase in the profitability of the sample companies will increase environmental disclosure by 1.4%. Firm Size is also positive and exerts significant impact, by implication, the result suggested that an increase in the total revenue will lead to about 9% increase in environmental disclosure. Hence the study recommends among others that measuring, treatment, disclosure, and reporting of environmental activities need to be standardized and mandated to give a true and fair view of environmental management practices. These will not only protect the environment but will also enhance the firm's competitiveness and subsequently lead to high corporate performance.

Corporate performance management: process of organizational-tailored flow chart

PurposeMain issue in management and strategy is corporate performance. Managers seek effective and strategic way to improve their performance. Authorization, which includes reputational and strategic indicators, is one of these ways. The applying authorization and using this authorization are decision-making process for managers. These processes have potential to make considerable effect on corporate performance. As a considerable result of this research that need of resource dependency type certified aircraft technicians in Anadolu University are decreased owing to this research and, also the purpose of this study is that technicians have got opportunity to creating own human resource in view of both sustainability, and competition in training field.Design/methodology/approachIn this study, both specified and organizational-tailored flowchart as the problem solving techniques in decision-making process of maintenance training organization have been developed, compiled after taking the opinions of experts, for the effective implementation of type rating training, following approval, that cover the types of fleet at Anadolu University. This flowchart may guide to the relevant aircraft maintenance training organizations in their type trainings implementation process.FindingsHuman factor is both vital and necessary element to achieve high corporate performance. By following the flow chart, the implementation process is shortened by eliminating the difficulties in complying with the depth and complexity of the required regulation.Originality/valueThe development of the necessary skills and competencies of the workforce is one of the critical points for the creation, preservation and improvement of corporate value. This research has been carried out with the aim of effective utilization of institutional resources, development of personnel and hence corporate value creation. Anadolu University, which is aware of the importance of core competence, is trying to make it one of its strengths institutionally. The Anadolu University Faculty of Aeronautics and Astronautics, as an organization that has completed the necessary steps to become authorized to give type rating training, may guide other aviation organizations using the organization-specified tailored flow chart developed with the help of expert opinion.

Does social capital constrain firms’ tax avoidance?

PurposeThis paper aims to investigate whether the level of social capital of the region in which a firm is headquartered affects its tax avoidance activities. Social capital can be defined as the mutual trust in society and literature shows that firms headquartered in high social capital regions exhibit higher level of corporate social responsibility. Recent research suggests that some stakeholders consider tax avoidance as a socially irresponsible and illegitimate activity, whereas others deem corporate tax payments as detrimental to social welfare because they hurt economic development. Building on this debate, the relationship between social capital and tax avoidance is empirically investigated.Design/methodology/approachA sample of 52,962 firm-year observations over the period 1990-2014 was used to empirically investigate the relationship between social capital and tax avoidance.FindingsConsistent with the idea that managers consider corporate tax payments as a socially responsible action, evidence was found that firms headquartered in areas with high social capital engage significantly less in tax avoidance activities. It was also documented that the negative impact of social capital on tax avoidance is stronger in the presence of high religiosity, high corporate performance and lower sensitivity of CEO’s compensation to stock volatility.Originality/valueThis paper extends research on social capital and improves the understanding of the effect of the social environment on managerial decision. Importantly, by studying the relationship between social capital and tax avoidance, the authors add to the recent debate on companies’ perception of the desirability of tax avoidance activities from a social viewpoint.

High performance work systems and corporate performance: the influence of entrepreneurial orientation and organizational learning

This study investigates the functioning mechanisms of how high performance work systems (HPWS) affect organizational performance. We propose that (HPWS) can positively affect organizational performance through the mediating role of entrepreneurial orientation. An organization with high performance work systems can perform better if it enjoys high level of organizational learning. We design and administer a survey questionnaire to high-level executives or founders of companies from manufacturing and service industries and receive 176 valid responses. The results of the empirical data indicate that the relationship between high performance work systems and corporate performance is more positive when organizational learning is stronger. Entrepreneurial orientation partially mediates the relationship between high performance work systems and organizational performance. This study opens new research avenues by extending and incorporating explanations and predictions of HPWS and entrepreneurial orientation, two areas that largely have been considered independently of each other. Implications for practice and directions for future research are provided.

Does innovative effort matter for corporate performance in Spanish companies in a context of financial crisis? A fuzzy-set QCA approach

The aim of this paper is to examine whether innovative effort is a key driver of the financial performance of a set of 3860 Spanish companies in a context of financial crisis. For this purpose, we use contrarian case analysis and configural analysis using fuzzy-set qualitative comparative analysis to test the main tenets of complexity theory: (1) innovative effort, as a single antecedent condition, is not a sufficient or necessary factor of a high score in corporate performance; (2) a few possible configurations lead to high corporate performance (equifinality principle); (3) contrarian cases occur; and (4) causal configurations for high scores for corporate performance are not the mirror opposites of causal configurations for low scores for corporate performance (causal asymmetry principle). The findings suggest that innovative effort, as a single antecedent condition, is not a sufficient or necessary factor for a high score in corporate performance.

The association of earnings quality with corporate performance

PurposeThe aim of this paper is to investigate the association of earnings quality with corporate performance of publicly listed firms of China and tries to provide a new explanation. Poor earnings quality is normally characterized by unhealthy profitability and/or untrue financial information, which leads to a misallocation of capital and low corporate performance. The largest emerging economy of China has experienced a fast and fluctuant growth, while the companies have been thought of low earnings quality.Design/methodology/approachInitial univariate and multivariate analyses are conducted using four earnings quality measures and either accounting-based corporate performance or market-based corporate performance. Further analyses apply unmanaged earnings, earnings-increase management and financially distressed firms.FindingsThe authors find that low earnings quality is associated with high corporate performance for the Chinese publicly listed firm in their sample period. Further evidence shows that earnings management is only a contributor to the negative relationship, not its main driver. They argue that the negative association of earnings quality with corporate performance is a phenomenon of a new emerging market within an economy booming period, particularly in China.Research limitations/implicationsThe results and argument of this paper may not totally follow the traditional literature. But they provide a new research question that requires further studies.Originality/valueIn theoretical discussion, this paper partitions earnings quality into two components: One results from reporting accuracy and the other results from firm’s operating outcome. In empirical analyses, this paper examines both accounting-based performance and market-based performance, and both managed earnings and unmanaged earnings.

Environmental Orientation of Exporting SMEs from an Emerging Economy: Its Antecedents and Consequences

This study proposes and empirically tests a model delineating the major antecedents and consequences of environmental orientation for exporting SMEs from China. Based on a survey on 414 exporting SMEs, it has derived empirical support for most of the hypothesized relationships of the proposed model. To summarize, the findings show that, among the surveyed firms, their CEOs’ environmental beliefs and SMEs’ efforts in scanning developed markets contribute significantly to the development of their internal and external environmental orientations, respectively. The two orientations, in turn, serve as significant drivers of the practice of proactive environmental strategies. This strategic practice is also found to contribute directly to corporate export performance. CEOs’ environmental beliefs are further found to exert a direct and positive impact on such practice. Moreover, exporting SMEs operating in areas with strong (vs. weak) ecological infrastructure are found to be more effective in translating their external environmental orientation into the practice of proactive environmental strategies, and finally into higher corporate performance. This study provides academic and practical insights into the complex and contingent processes underlying the development of environmental orientation and its impacts on various organizational outcomes of exporting SMEs.

The Mediating Role of Intellectual Capital in Corporate Governance and the Corporate Performance Relationship

Corporate governance significantly effects corporate performance and this relationship is established through number of studies theoretically and empirically conducted in this field. Also, there are studies which show the relationship between corporate governance and intellectual capital performance. Furthermore, intellectual capital performance positively effects corporate performance as shown in the previous studies. These relationships trigger this study to explore the role of intellectual capital as a mediator between corporate governance and corporate performance relationship. This study focuses on the idea that governance measures, board of directors in this study, can contribute to the intellectual capital efficiency of the companies which in turn results in higher corporate performance. A single structural model of corporate governance, intellectual capital and corporate performance is conceptualized. In the model, board of directors, variables are taken as governance measures, Value Added Intellectual Coefficient (VAICTM) as intellectual capital performance measure and traditional financial measures as corporate performance measures. It is intellectual capital resources which act as mechanism through which the corporate governance is able to influence the corporate performance. Intellectual capital is taken as mediator to confirm that IC properly mediates the CG and performance relationship conceptually. This study will be beneficial for the research community to combine different areas of study under one model. This study will suggest the management and other regulatory bodies to understand the importance of intellectual capital along with governance and performance.

Are American Interlocking Directorates Associated with Brain Circulation and do They Translate into Higher Corporate Performance?

This study explores interlocking directorates, with specific focus on those connections when a director sits as an inside director for an American corporation and an outside director for firm located outside of North America. The goal of this study is to explore the spatial relationship between the personal histories of directors and the headquarter's location of the corporate boards on which they sit. First, it was found that a geographical relationship in the interlocking network of American companies exists. Second, it was determined that domestic personal histories played a significant role as 96.5 percent of directors attended a university in the United States and 93.4 percent directors were born there. When North American universities and North American births were deleted from the sample, a geographical pattern also emerges for Asian firms. Finally, the study found that the lone region that consistently displayed greater firm performance where a director's personal history and the interlocked company were the same as Asia.

Application of information technology in creative economy: Manufacturing vs. creative industries

The primary purpose of this paper is to review the historical development of the application of IT, its relationships with corporate strategy, and its influence on corporate performance. The secondary purposes are to empirically investigate the above relationships and the differences in these relationships between creative and manufacturing industries and to identify the most powerful IT traits for a firm's success in each industry in Korea. The research findings confirmed that application of IT provides several kinds of competitive advantage such as efficiency, threat, functionality, attack, and integration, and that it significantly contributes to corporate performance. Application of IT plays significant roles in mediating between corporate strategy and performance. The research findings indicate that IT traits of efficiency and integration are the two most powerful competitive advantages for corporations. These research results indicate that corporate strategy is essential in delivering high corporate performance in both creative and manufacturing industries. Firms in creative industries should seriously consider IT traits of efficiency and threat, while firms in manufacturing industries should deeply take IT traits of efficiency and integration into account.

Sosialisasi dan Dampak Budaya Organisasi

Abstract : Interest in corporate culture rapidly grew among organization and management researchers and practitioners in Indonesia since 1990. They were impressed by the concept of strong corporate culture which according to research reports was closely related to high corporate performance. In fact, they were so excited by the fact that strong corporate culture could be a competitive advantage in the era of global competion. This article describes that building a strong corporate culture needs a consistent socialization for values internalization and effective behavioral practice. In addition, socialization is a continuing learning process beyond initiation programs for new employees which involves reward system consistency as well as a powerful idden hierarchy known as the company’s cultural network.

Peran Budaya Pembelajaran dan Knowledge Management Terhadap Kinerja Perusahaan: Studi Kasus PT XYZ

Nowadays, food industries face a lot of challenges and problems at the same time, as business competition is very tough. People’s compsumtion life style changes, and raw food material becomes scarce; therefore, PT XYZ, which is a family business company, has to struggle to survive and grow. In fact, innovation becomes one of the most important factors that leads companies to win the competition. PT XYZ, therefore, has to keep on innovating its production process and products. Being innovative means that PT XYZ has to apply learning culture as it encourages knowledge management (KM). In other words, the learning culture will support the KM activities, which eventually will result in high corporate performance. This article discusses to which extent PT XYZ has adopted learning culture refected on the seven dimensions of Learning Organization. A quantitative analysis was used to identify current learning culture, and a qualitative approach was used to explain the role of knowledge management in the learning cutture.

Similarities and differences in employee motivation viewed by Korean and Japanese executives: empirical study on employee motivation management of Japanese-affiliated companies in Korea

This study examines similarities and differences in employee motivation management between Korean and Japanese executives of Japanese-affiliated companies in Korea, based on questionnaire surveys. The respondents' views of employee motivation factors were analysed, by contrast with motivational factors and hygiene factors (maintenance factors) developed by Herzberg. The survey results reveal that both Korean and Japanese executives realize the importance of employee motivation management, and that Japanese executives have a stronger awareness of it than Korean executives. Both recognize it for the sake of high corporate performance, employee job satisfaction and customer satisfaction. Seeing motivation factors: the majority of Korean and Japanese executives regard ‘wage and bonus increases’ as a strong motivational factor; ‘employment stability’ is recognized as a motivational factor by Korean executives; and ‘clarifying company policy and job objectives’ is the most important motivational factor to Japanese executives. Their views of these three factors are not consistent with Herzberg's theory. We also found a recognition gap between Korean and Japanese executives: ‘esteem and praise for job performance’ is a hygiene factor to Korean executives but a motivational factor to Japanese executives.

EDI performance in the automotive supply chain

This paper presents the results of a questionnaire survey to automobile first-tier suppliers in the US. We address the effects of Electronic Data Interchange (EDI) on the automotive supply chain, specifically addressing first and second-tier suppliers. We also examine the reasons for suppliers not using EDI. Our analyses show: (1) the size of a firm does not affect the degree of EDI integration, (2) firms with high corporate performance have a high level of EDI integration, (3) firms with high corporate performance have a high level of information sharing with suppliers, and finally (4) US automakers are directing first-tier suppliers to use EDI, yet first-tier suppliers have not been able to enforce its use by their suppliers.

Creating Value Under Uncertainty

The business environment in Nigeria has been unstable and chaotic for many years. Inflation reached 100% in 1995 and frequent unpredictable changes in economic policies have destabilized the economic environment. Yet, some business enterprises have sustained a tradition of superior competitive performance, earning good returns on investment even as many environment wearied multinationals divest. The aim of this paper is to examine the actions taken by two successful companies to create value in Nigeria's uncertain business environment. The paper begins with a short summary of Nigeria's economic environment and its impact on manufacturing performance. It then reviews the principles of Economic Value Added (EVA) as a measure of corporate performance. The second part of the paper analyses the performance of two selected Nigerian companies-Nigerian Breweries Pic and Dunlop Nigeria Pic-and describes the strategies these companies used to achieve high and sustained corporate performance in Nigeria's economic environment. The paper ends with a discussion on the suitability of EVA-based performance measures in uncertain business environments.