Higher Levels Of Firm Performance Research Articles

Corporate Entrepreneurship and Firm Performance of Construction Companies in Port Harcourt

Purpose: This study examined the relationship between corporate entrepreneurship and firm performance of construction companies in Port Harcourt. Competitive aggressiveness and autonomy were used as proxies for corporate entrepreneurship as independent variables while firm performance was proxied with productivity and delivery performance as dependent variables. Methodology: Four hypotheses guided the study which adopted a cross-sectional research design with purposive sampling technique used to select a sample size of 130 general managers, marketing managers, human resource managers and project managers in 26 construction companies in Port Harcourt registered with the FINELIB Nigeria Business Directory. Structured questionnaire was used to collect primary data and the responses were collated on a five-point Likert scale. The data were analysed using descriptive statistics, and the hypotheses were evaluated using the Spearman Rank Correlation Coefficient with SPSS version 23.0. Findings: The findings showed that corporate entrepreneurship had a strong and significant relationship with firm performance of construction companies in Port Harcourt. In particular, competitive aggressiveness and autonomy had strong and positive linear associations with both productivity and delivery performance when tested at 0.05 level of confidence. It concluded therefore that it is important that construction companies in Port Harcourt should adopt corporate entrepreneurship in the areas of competitive aggressiveness and autonomy in order to improve their performance. Unique Contribution to Theory, Policy and Practice: It is recommended that construction companies in Port Harcourt should compete aggressively and improve upon the autonomy in their decision-making if they are to achieve higher levels of firm performance

Role of innovation ambidexterity in technology startup performance: an empirical study

ABSTRACT Innovation ambidexterity is equivocal and this concept holds a significant position in the literature of strategic entrepreneurship as it binds together the crucial dimensions of organisational learning theory. Ambidexterity is recognised as a source for achieving higher levels of firm performance; however, scholars left a gap in examining how innovation ambidexterity is achieved, particularly so in startups. Therefore, this study investigates how a balance between exploratory and exploitative innovations can lead towards better startup performance under the moderating effects of absorptive capacity and environmental dynamism. This is a cross-sectional empirical research on young incubating technology startups and the data were analysed using partial least square structural equation modelling (PLS-SEM). Our results highlight that innovation ambidexterity plays a crucial role in achieving better startup performance. This research contributes to the ambidexterity literature by providing quantitative evidence at a large scale, delineating the procedure through which entrepreneurs can achieve innovation ambidexterity. The research enriches the organisational learning theory by providing a more inclusive understanding of innovation ambidexterity concept.

Successive product generations: financial implications of industry release rhythm alignment

A central question for firms releasing successive generations of a product is whether they should pursue a market-driven approach and align own product releases to existing industry-level patterns. While an alignment with industry patterns enables firms to capitalize on general market receptivity, it may also entail dilution and competitive interference effects. Using data on the consumer electronics and automotive industries, we show that the effectiveness of such alignment depends on two additional timing-related decisions: the firm’s release regularity for successive product generations and its preannouncement timing. Firms benefit from alignment to the industry only if they release successive generations in a regular manner (to create anticipation) and refrain from early preannouncements (to avoid competitive counteraction). For all other combinations of release regularity and preannouncement timing, not aligning to the industry rhythm leads to higher levels of firm performance. Taken together, our findings enable a nuanced view of the interplay of timing-related launch decisions that provides actionable guidance for managers.

Foreign ownership and performance: mediating and moderating effects

PurposeAlthough foreign ownership has been widely studied to show its impact on firm performance, the findings are mixed and the underlying rational to explain the impact is not entirely clear. The purpose of this study is to determine if there is a direct relationship between foreign ownership and performance or if this relationship is indirect and affected by mediating and moderating variables such as international diversification and competitive environment.Design/methodology/approachFinancial data, survey data and other financial measures for known indices are used in the research, and SPSS and SEM (Stata 15) analyses are used to test empirically derived hypotheses.FindingsResults from this study indicate that the relationship between foreign ownership and firm performance is mediated by international diversification, such that higher levels of both foreign corporate and foreign institutional ownership lead to higher levels of international diversification, which then lead to higher levels of firm performance. Results from this study also indicate that the competitive environment moderates the relationship between a firm’s level of international diversification and performance, such that the effect of international diversification on performance is greater as the environment becomes more competitive.Practical implicationsThis study provides empirical evidence for managers to seriously consider the impact of foreign ownership on decisions involving international diversification, along with competitive environment, when formulating and implementing organizational strategies.Originality/valueThis study extends prior research examining the effects of foreign ownership on firm performance by uniquely showing how international diversification mediates the relationship between foreign ownership and firm performance and how the competitive environment moderates the relationship between international diversification and firm performance.

Impact of customization and innovation on hospitality firms’ performance

ABSTRACTThis study examines how process innovation and customization, both individually and in combination, improve hospitality firms’ financial and non-financial performance. The paper investigates both process innovation and customization as important firm-level capabilities that have the capacity to improve the performance of hospitality firms due to the nature of their operations. This paper uses data from hospitality firms operating in Ghana. The study finds that hospitality firms’ customization capability allows hospitality firms to benefit from using the customer as a key resource and as a production partner to provide the desired value for customer satisfaction. This study further finds that process innovation and customization produce higher levels of firm performance when they are deployed together as they have complementary properties. This study, therefore, offers that customization capability should target at improving innovation capability in order to achieve higher overall firm performance for hospitality firms.

Reducing environmental uncertainty: How high performance work systems moderate the resource dependence‐firm performance relationship

AbstractFirm performance is a major concern for all organizations and involves a multitude of antecedents. Reducing environmental uncertainty and dependency through the use of strategic actions in the resource dependency theory (RDT) framework and enhancing work practices through high performance work systems (HPWS) lead to higher levels of firm performance. We reveal the interconnectivity between RDT and HPWS and develop propositions as to how components of HPWS positively moderate the relationship between firm performance and the environmental uncertainty‐reducing strategic actions proposed by RDT such as mergers and acquisitions, joint ventures, boards of directors, political action, and executive succession. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

Understanding Complexity: the Curvilinear Relationship Between Environmental Performance and Firm Performance

The nature of the relationship between environmental performance (EP) and firm performance (FP) of corporations is a long standing and contentious issue in the literature. This study is intended to advance this debate by arguing for the existence of curvilinear relationship and empirically testing the same using survey data on UK manufacturing firms. FP is captured in terms of growth in sales and market share. Our results show evidence for a quadratic relationship—as firms improve their EP, they seem to achieve much higher levels of FP. These results are consistent with the resource-based view of a firm; as firms engage in EP activities, they are able to gain inimitable knowledge that helps in further learning to further improve performance. Based on our results, we suggest that new studies focus on strategies to extend the period of increasing returns and maximizing the benefits of the positive association between EP and FP.

Alignment's nomological network: Theory and evaluation

While the importance of IT-business alignment is rarely questioned, a strong theoretical foundation of alignment's nomological network has not been developed or tested. This has generated a debate on why tighter alignment may or may not lead to higher levels of firm performance. To further understand the alignment-performance relationship, we used meta-analytic structural equation modeling techniques to probe the inter-relationships found in 78 independent data sets drawn from the literature. We find intellectual alignment influences operational alignment, identify a more nuanced understanding of the performance constructs, and offer insight into how governance structure and social alignment influence intellectual and operational alignment.

The Diversity of Personnel Practices and Firm Performance

Personnel economics tends be based on single-firm case studies. Here we examine the personnel practices of nearly 5,000 firms, over a period of 20 years, using detailed matched employer-employee panel data from Portugal. In the spirit of Baker et al. (1994a,b), we consider different dimensions of personnel management within each firm: worker turnover, the role of job levels and human capital as wage determinants, the dispersion of wages within job levels, the importance of tenure in terms of promotions and exits, and the scope for careers. We find a large degree of diversity in most of these practices across firms. Moreover, some personnel practices are shown to be robust predictors of higher levels of firm performance, even after controlling for time-invariant firm heterogeneity and other variables: low wage dispersion at low and intermediate job levels and a tight relationship between human capital variables and wages.

Modesty in the Top Management Team

Much of the recent research on executive characteristics focuses on attributes that society tends to view negatively, such as self-interest, self-serving bias, and narcissism. While providing insights into how executives’ impact organizational outcomes, there may be attributes more positively viewed by society present in top management teams (TMTs) that have been overlooked, specifically TMT modesty. Though modesty deviates from the conventional view of executives, evidence from social psychology suggests that modesty positively impacts career success and upward mobility, suggesting that at least some individuals that rise to the level of the TMT are more modest than previously expected. Building on this insight, we argue that TMT modesty both elicits positive investor reactions following earnings calls and corresponds with higher levels of firm performance.

Which Fit Fits? The Effect of Two Types of Leadership-Culture Fit on Firm Performance.

This study examined whether organizational culture moderated the association between CEO task and relationship leadership and firm performance. We hypothesized that CEO leadership behavior that is complementary with the organization’s culture is associated with higher levels of firm performance than supplementary leadership behavior. Results from a sample of 119 CEOs and 337 TMT members revealed that CEO task leadership and relationship leadership were positively associated with firm performance. Findings also confirmed the complementary interaction between leadership and organizational culture. We discuss theoretical and practical implications and suggest directions for future research.

Pioneering Research in Comparative Corporate Governance: The Role of Special Issues

Pioneering Research in Comparative Corporate Governance: The Role of Special Issues

Competitive Strategies and Firm Performance: a Comparative Analysis of Pure, Hybrid and ‘Stuck‐in‐the‐middle’ Strategies in Spanish Firms

The purpose of this study was to examine the viability of hybrid competitive strategies, which combine differentiation and cost elements, and their impact on organizational performance in comparison to pure strategies and ‘stuck‐in‐the‐middle’ combinations. Previous studies have focused above all on US data. The analysis carried out in this paper has centred on a multisectorial sample of 164 Spanish firms. The findings show that a large number of the organizations use different types of hybrid strategies and also that such strategies tend to be associated with higher levels of firm performance, particularly those strategies which place emphasis on a greater number of strategic dimensions, and specifically on innovation differentiation.

Corporate governance reform within the UK banking industry and its effect on firm performance

Using a corporate governance scorecard (Corp-Gov Score) measuring twenty-six areas of corporate governance best practices in four UK banks, this study examined whether improved levels of corporate governance led to higher levels of firm performance within the UK banking industry over the time period 1999-2006. The twenty-six measures were split into four sub-sector areas of Corp-Gov Score comprising Board of Directors, Remuneration Policies, Auditing Policies, and Transparency/Disclosure Policies. Using both correlation and regression analysis on the information extracted from the Annual Reports, the study provides evidence about the extent to which UK banks have complied with recent corporate governance reforms post Enron. The results indicate that improvements in corporate governance can enhance the performance of UK banks when measuring using Return on Equity. The biggest sub-sector driver of this improvement is in the area of the Board of Directors. Our results further indicate that large boards within UK banks can have a negative impact on firm performance, and that increases in directors’ remuneration does not lead to increased levels of firm performance. Evidence is given that corporate governance within UK banks plays an important role, but how it affects firm performance is open to debate.

Do managerial ties in China always produce value? Competition, uncertainty, and domestic vs. foreign firms

AbstractWhile most advocate that foreign firms should utilize managerial ties to conduct business in China, recent literature cautions that such ties may offer only conditional value. This study examines three sources of heterogeneity that may condition the value of ties: firm ownership (foreign vs. domestic), competition, and structural uncertainty. Results from a survey of 280 firms in China indicate that though foreign and domestic firms utilize ties at a similar level, their performance gains from tie utilization differ. Managerial ties have a monotonic, positive effect on performance for domestic firms, whereas the effect is curvilinear (i.e., inverted U‐shaped) for foreign firms. Therefore, compared with domestic firms, foreign firms have a competitive disadvantage from tie utilization. Furthermore, managerial ties are less effective for fostering performance when competition becomes more intense. However, ties lead to higher levels of firm performance when structural uncertainty increases. Overall, these results support the contingency view of managerial ties and caution companies about the unconditional use of ties as the market becomes more heterogeneous. Copyright © 2008 John Wiley & Sons, Ltd.

An Empirical Analysis of the Levers of Control Framework

The purpose of this paper is to use the levers of control framework to explore the antecedents of control systems - various facets of strategy that drive the use of controls, and to explore the costs and benefits of the control system - costs in terms of consumption of a constrained resource (i.e., management attention) and benefits (i.e., learning). Using data from a survey of 122 Chief Financial Officers, this study tests a structural equation model that relates strategic risk and uncertainty to control systems, which in turn are hypothesized to affect learning and attention, and ultimately firm performance. The study finds that strategic risk and uncertainty are associated with both the role of the performance measurement system regarding whether it functions as a diagnostic or interactive control, and the importance of the belief and boundary systems. Managerial attention is facilitated by diagnostic controls and belief systems, while the interactive use of the performance measurement system consumes management attention. The efficient use of management attention and organizational learning is associated with higher levels of firm performance. Implications along with ideas for future research are discussed.

Stock Option Incentives and Firm Performance

This paper analyzes the performance consequences of employee stock options for a broad sample of firms during the period 1996-1999. Our tests are performed separately for the top-5 executives and all other employees. We estimate the expected level of option incentives based on each firm's economic characteristics. We examine the association between the unexpected level of option incentives and firm performance as measured by future abnormal returns, future return on assets, and current and future firm value (Tobin's Q). We find consistent evidence that firms with unexpectedly high levels of option incentives exhibit significantly higher levels of firm performance. The results hold for both Executives and Employees and are consistent across each of our three measures of firm performance.

The role of the reward system for a total quality management based strategy

This study examines the impact of reward practices on the relationship between an organizational strategy based on the principles of total quality management (TQM) and perceptions of firm performance. Major findings include: higher levels of firm performance were significantly correlated with greater use of TQM practices, but not with greater use of quality rhetoric in either formal strategic documents or informal strategic discussions; the use of extrinsic reward practices – including profit sharing, gainsharing, employment security, and comp time – exhibited a significantly positive moderating effect on the relationship between TQM and perceived firm performance. Regarding implications for practitioners, it is insufficient to include quality rhetoric in the formal and informal strategy. As the anecdotal literature has often advocated, the current research provides empirical support that management must “walk the talk” with regard to TQM efforts. Further, in order to realize even higher levels of firm performance, an organization should utilize reward practices which specifically complement its TQM‐based strategy.