Indian Companies Research Articles

Employee Well-being: An Emerging Strategy for Human Capital Management

Wellbeing is fundamentally associated with numerous aspects in one's life say health, job, family, community, environment, and financial benefits to name a few of them. The term employee wellbeing is very comprehensive and hence it has a widespread impact not only on the employee's performance at the workplace and her/his life at home but also creates a great impact on the organizations where they are working. After the COVID-19 pandemic employers are focusing more on wellbeing now than ever before. On one side it is seen that this pandemic has introduced the Work from Home (WFH) concept more rigorously and employees could balance work and life profoundly. In contrast, on the other side, some found juggling between work and life, as there are no distinctive boundaries between work and life. When employees can maintain healthy and positive mental states, they can take on their roles confidently and enthusiastically, leading to higher productivity and job satisfaction. This article explores the concept of employee well-being, examining its advantages for organizations and current practices in Indian companies. Further, it offers recommendations for strategies that organizations can implement to enhance employee well-being.

Free Cash Flows and Corporate Buybacks: A Study of Indian Firms

The present research examined the effects of cash flow volatility on the buyback decisions of Indian firms. The sample constitutes 179 Indian companies listed on the Bombay Stock Exchange from 2012-2020. Firms have been divided into two sets, i.e., permanent and volatile cash flow firms. Across these two sets, the study determines the major factors affecting their buyback decisions. The results of ordinary least square regression suggested that when firms have fluctuating cash flows each year, they prefer to opt for repurchases than dividend payments. Further, stock undervaluation is the key determinant of repurchases decisions. Thus, firms with constant cash flows are not highly motivated for buyback decisions. Further, the study explored that larger the size of the firm, lower is the tendency to repurchase shares. Large, manufacturing and mature firms with consistent cash funds are more strongly tended towards repurchases. Correspondingly, such companies engaged in buybacks because of their low market-to-book ratios and high information asymmetry. As cash based firms become more old, their propensity to purchase equity reduces.

Comparative Study of Profitability Ratios of Selected FMCG Companies in India

Comparative Study of Profitability Ratios of Selected FMCG Companies in India

Exploring the synergistic effects of circular economy, Industry 4.0 technology, and green human resource management practices on sustainable performance: Empirical evidence from Indian companies

Exploring the synergistic effects of circular economy, Industry 4.0 technology, and green human resource management practices on sustainable performance: Empirical evidence from Indian companies

ESG Performance and Systemic Risk Nexus: Role of Firm-Specific Factors in Indian Companies

This study investigates the ESG performance–systemic risk (SR) nexus among Indian companies. Using the beta coefficient from the Capital Asset Pricing Model (CAPM) and statistical analysis, it explores how ESG performance affects SR. The findings reveal that firms with higher ESG scores have lower SR sensitivity. Notably, there is a significant difference in risk sensitivity between high- and low-ESG-rated companies, with ESG effects being less pronounced in high-cap firms compared to low-cap firms. Conversely, large firms, older firms, and those with lower borrowing costs show a diminished effect of ESG ratings on their SR sensitivity. These results underscore the importance of firm-specific characteristics in determining the efficacy of ESG strategies in risk mitigation. This study reveals that ESG performance reduces SR, with market valuation affecting this relationship.

Ethical work climate and organizational citizenship behavior in collectivist culture: does power distance matter?

PurposeDrawing from social exchange theory and a collectivist cultural framework, this study explores the relationship between ethical work climate and organizational citizenship behavior, considering power distance as a potential moderator.Design/methodology/approachThe study used standard scales to obtain data from 244 employees working in various private companies in India. Structural equation modeling was adopted to test the hypotheses using Analysis of Moment Structures (AMOS).FindingsThe study results show a significant relationship between ethical climate and organizational citizenship behavior. Ethical work climate influences power distance negatively. However, the results also show that power distance does not serve as a moderator between ethical work climate and organizational citizenship behavior.Practical implicationsCorporate leaders often expect employees to demonstrate organizational citizenship behavior, which is aimed at advancing the organization’s interests and outcomes. This study underscores the necessity for expanding the organizational vision to enhance the ethical work climate. Such an initiative not only promotes improved organizational citizenship behavior but also helps to reduce employees' perceptions of power distance within the organization.Originality/valueAmid extensive literature rooted in individualistic cultures, our study explores the relationship between ethical work climate and organizational citizenship behavior within a collectivist context. This research uniquely introduces the moderating role of power distance, offering new and distinct insights into this dynamic.

Exploring Sustainable Investments: How They Drive Firm Performance in Indian Private and Publicly Listed Companies

This research aims to present a holistic view of sustainable investments on firm performance by exploring the dimensions of sustainable investments and firm performance concerning Indian private and publicly listed companies. Panel data regression has been used to explore the relationship between sustainable investment and firm performance. The data of 75 BSE-listed companies has been extracted from Prowess IQ from 2012–2022.Two panels based on different ownership structures were created to observe the impact of sustainable investment and firm performance. The findings of this study indicate that sustainable investments positively impact firm performance in private ownership but negatively impact the firm’s performance in public ownership. The study provides an extensive and holistic view of sustainable investments in Indian companies listed in the BSE, which can be helpful for researchers, professionals, and policymakers in the field. The findings of this research contribute to the solutions to socio-economic challenges and support sustainable development goals through sustainable investments. This research is one of the first attempts to provide a holistic view of sustainable investments by including various aspects of sustainability and firm performance in Indian listed companies and ownership.

INVESTING IN OUR ROOTS: A STUDY OF CSR ALLOCATION FOR HERITAGE, ART AND CULTURE BY PSUS AND NON-PSUS

This research paper explores the corporate social responsibility (CSR) spending patterns of public sector undertakings (PSUs) versus non-public sector undertakings (non-PSUs) companies in India, specifically focusing on contributions towards heritage, art, and culture. The study utilizes data from the National CSR portal, covering the period from 2017-‘18 to 2021-‘22. The analysis reveals that non-PSUs consistently demonstrate higher average contributions to heritage, art, and culture than PSUs. However, the spending patterns show significant year-on-year variability for both sectors, with PSUs exhibiting more fluctuation. The findings underscore the need for more strategic and consistent CSR investments in heritage, art, and culture, particularly among PSUs. The paper concludes with recommendations for policy measures to enhance corporate contributions to preserving and promoting India's rich cultural heritage.

Birds, bees and CSR managers: why is biodiversity conservation challenging for companies?

Purpose The purpose of this study is to learn what kinds of obstacles Indian businesses face when trying to make biodiversity protection a top priority as part of their corporate social responsibility (CSR) efforts. Interventions are proposed to elevate biodiversity protection to the ranks of CSR priorities among Indian businesses. Design/methodology/approach This study applies an interpretive phenomenological analysis strategy to glean information from in-depth interviews with leaders and professionals in CSR. Findings The findings of the study revealed that the main factors influencing Indian companies’ CSR area choices are existing processes and stakeholder pressures. Companies prioritise engaging with local communities and employees when selecting CSR activities. The major challenge is integrating biodiversity into business plans, with CSR heads struggling to secure investment due to long gestation periods and limited media coverage. Implementing agencies face issues with project deliverables, mainly due to land ownership and lack of local government support. Companies can also encourage employee involvement in pro-environmental behaviours. The study also provides practical solutions for Indian companies to enhance their CSR engagement in biodiversity conservation. Research limitations/implications The research only focuses on the opinions of CSR specialists and leaders, so it may only consider part of the situation’s complexity inside the organisation. The results may only apply to the business climate in India; hence, extra care is warranted when extrapolating them to other countries. Nonetheless, the study provides valuable insights into the interplay between CSR and biodiversity protection that might inform future studies and policy initiatives. Originality/value This research fills a gap in the literature by investigating an uncharted territory: the role of CSR in protecting biodiversity in India. Examining obstacles and variables affecting CSR objectives illuminates business involvement in biodiversity conservation. The recommended treatments have real-world consequences for improving CSR involvement in this critical area.

Impact of Financial Structure, Leverage, and Profitability on Stock Prices: Evidence from Non-Financial Nifty 50 Indian Companies

Impact of Financial Structure, Leverage, and Profitability on Stock Prices: Evidence from Non-Financial Nifty 50 Indian Companies

Does Sustainability Assurance enhance the connection between Corporate Governance and Firm Performance in India?

Scholarly attention to the association between corporate governance and firm performance, considering sustainability assurance as a moderator is scarce. This study aims to examine the moderating role of sustainability assurance in the nexus between corporate governance and firm performance in India. The data relating to 35 environmentally sensitive companies among the top 100 National Stock Exchange (NSE) listed entities were gathered from the ProwessIQ Database and annual reports of companies during 2016–2022. The fixed effect regression model was employed. The results show an insignificant effect of board effectiveness on firm performance as measured by return on assets (ROA), return on equity (ROE), and Tobin’s Q. Similar findings were documented on the audit committee effectiveness and firm performance nexus, except for Tobin’s Q (β = 0.316). In addition, the study did not support the moderating role of sustainability assurance on the board effectiveness and firm performance nexus, indicating the presence of ineffective corporate governance mechanisms. However, the results show that sustainability assurance significantly and negatively moderates the relationship between audit committee effectiveness and ROA (β = –0.021), ROE (β = –0.074), and Tobin’s Q (β = –0.996). This implies that the practice of external assurance of sustainability reports by firms with audit committee effectiveness is an additional burden due to the extra cost involved. Further, the result indicates the learning curve effect among Indian companies. Thus, the findings suggest the need for regulatory focus on encouraging sustainable business practices in terms of effective corporate governance and sustainability assurance. AcknowledgmentThe authors are grateful to Manipal Academy of Higher Education (MAHE), Manipal, for providing financial assistance in the form of a “JRF Contingency Grant” for this research article.

Related Party Transactions and Audit Fees: Indian Evidence

SUMMARY We examine the effect of related party transactions (RPTs) on audit fees in Indian public companies. RPTs can be used to manipulate financial statements or to transfer wealth between firms and their related parties, and the presence of RPTs increases audit risk. RPTs are relatively more important in India than in advanced economies, so we examine the association between RPTs and audit fees in the Indian setting. We find that audit fees increase by 3.58 percent moving from the first to third quartile of related party sales (RPSs). The association between RPSs and audit fees becomes prominent after the enactment of The Companies Act of 2013. Discussions with audit partners suggest that The Companies Act of 2013 led to increases in audit effort. Our results provide information regarding the corporate governance environment in India and highlight the importance of separately analyzing different types of RPTs. Data Availability: Data will be made available upon request after completion of related projects. JEL Classifications: G34; M41; M42.

A Study on Financial Soundness and Comparative Efficiency: A Comparison of Public Sector General Insurance Companies in India Using the CARAMEL Model

A Study on Financial Soundness and Comparative Efficiency: A Comparison of Public Sector General Insurance Companies in India Using the CARAMEL Model

Do independent directors enhance better corporate governance in companies in India?

PurposeThe effectiveness of independent directors in making autonomous decisions for better corporate governance in organizations has often been questioned. This paper aims to investigate their role in company’s decision making in India and the reasons behind their ineffectiveness.Design/methodology/approachThis paper examines the regulatory environment and ongoing reforms in which independent directors operate. It identifies crucial factors such as ownership patterns, the appointment and selection process that affect their autonomy. The analysis draws from newspaper articles, blogs, India’s regulatory requirements, The Companies Act and relevant related literature.FindingsThe findings reveal that the independence of directors remains largely in form but not in function. This paper recommends a fair and more robust selection through an independent authority, and disclosure of the resignations of independent directors. Independent directors should be given more powers and their risk-reward scheme should be analyzed.Originality/valueThe paper emphasizes the need for independent directors to be truly independent from the senior management, promoters, and other existing directors. It calls for tighter and more transparent appointment procedures to ensure that independent directors are not influenced by senior management and can bring objectivity to the company board.

A Study of Working Capital Management with Special Reference to Escorts Kubota Limited

Escorts Kubota limited was formerly known as Escorts Limited. It is an Indian multinational company. It operates in agricultural machinery sector and many more sectors like construction machinery, material handling and railway equipment. It has its headquarters at Haryana and Faridabad. The Research study was conducted to study the working capital management in Escorts Kubota limited. The study is divided into three sections. The first section of the study gives the introduction, which includes the overview of Working capital management, objectives of the study, significance of the study and the limitations of the study. Second section of the study deals with the analyses of the data and in the third section findings and conclusions are given.

Assessing social capital and its impact on economic performance: A comparative study of members and non-members of farmer producer companies in India

Farmer producer companies (FPCs), modern farmer collectives registered under India’s Companies Act, play a crucial role in providing core services like input supply, marketing, technical, and financial support, as well as auxiliary services such as social capital and consultancy, which are linked to higher economic performance and innovation. The study analyzes the levels of social capital among members and non-members of FPCs and their relationship to the economic performance of their members. The data on social capital were collected from 20 FPCs (292 members and 77 non-members) from Maharashtra state of India. Unpaired student T-tests and Mann-Whitney tests were performed to compare the levels of social capital among the members and non-members. OLS regression was performed to understand the difference in social capital and its effect on economic performance. The results reveal that all the indicators of social capital were significantly higher for the members (Mean = 4.27) than for non-members (Mean = 3.14). The social capital indicators related to membership and participation in groups (p-value < 0.10) and the sharing of production and other information (p-value < 0.01) positively affected economic performance. Higher levels of education (p-value < 0.05) and frequent contact with members (p-value < 0.01) positively affected, whereas higher landholding (p-value < 0.10) and years of membership (p-value < 0.01) negatively affected the economic performance of members. As the Indian government plans to add 10,000 FPCs in the next three years, the strategy to increase the social capital of FPCs may enhance the overall resilience and sustainability of rural economies.

Board gender diversity and social disclosures: some empirical evidence from Indian companies

PurposeThe objective of this study is to assess if corporate social disclosures in a company are influenced by gender diversity at board level. We also investigate the number of women directors, who can collectively make an impact on social disclosures, by considering different numbers of women directors on the board.Design/methodology/approachWe have measured board gender diversity using the ratio of women at board and have also used two indices: the Blau-index and the Shannon-index. The social disclosure index is fetched from Bloomberg terminal. The research is quantitative and has been carried out using panel data models for estimating the linkage between board gender diversity and corporate social disclosures.FindingsOur results support the idea that women are more conscious of social concerns and that having a gender diverse board has a favourable impact on social disclosures. It also shows that when there is only one woman director on the board, she might not be able to affect social disclosures in a company; however, two or more women on board may significantly influence social disclosures.Practical implicationsThe study supports critical mass theory and has significant implications for academics, corporations and regulatory bodies. With the mandatory regulations on women directors, the study determines the significance of board gender diversity to improve policies for disseminating information of social nature.Originality/valueThe past studies have so far inspected the impact of gender diversity on financial performance, corporate social responsibility disclosures, dividend policies and corporate sustainability disclosures but have not specifically assessed the influence of gender diversity on social disclosures.

Bottleneck to Success: Case Study on Scaling Up Issues of Indian Start-ups

The dynamic growth of start-up companies in India has significantly disrupted the business landscape. However, many start-ups encounter substantial setbacks during the scaling-up stage. This qualitative study explores the challenges faced by Indian start-ups as they scale their businesses. The findings reveal that the primary obstacles include the non-availability of financial resources, difficulties in acquiring the right talent, and challenges in achieving product acceptance. According to the Department for Promotion of Industry and Internal Trade (DPIIT), India is home to over 50,000 start-ups as of 2023, with a yearly growth rate of approximately 12-15%. Despite this robust growth, data shows that about 90% of Indian start-ups fail within the first five years, primarily due to scaling issues. This study highlights that limited access to financial resources remains a critical barrier, with start-ups often struggling to secure funding beyond the initial stages. Talent acquisition is another major hurdle, as start-ups compete with established companies for skilled professionals. Furthermore, gaining market acceptance for new products poses significant challenges due to high competition and market saturation. By developing a comprehensive model, the study demonstrates that government intervention can play a crucial role in addressing these challenges. Initiatives like the Startup India program, which offers tax benefits, easier compliance, and funding support, are steps in the right direction. Additionally, the results underscore the importance of clearly defining problem statements, exercising patience, and possessing a risk-taking ability as essential factors for the success of start-up companies.

Novel insights from financial analysis of the failure to commercialise plazomicin: Implications for the antibiotic investment ecosystem

The need for novel antibiotics to combat emerging multi-drug resistant bacterial strains is widely acknowledged. The development of new therapeutic agents relies on small and medium-sized biotechnology enterprises (SMEs), representing 75% of the late-stage pipeline. However, most SME sponsors of an antibacterial approved by the FDA since 2010 have gone bankrupt, or exited at a loss, below investment cost. Uncovering financial flows related to the development and commercialisation of a single drug is complex and typically untransparent. There is therefore a lack of empirical research on the financial vulnerabilities of these critical SMEs. The development of plazomicin by Achaogen (2004–2019) entailed financial disclosures as a public company enabling application of financial analysis methods to: determine quantum and timing of public and private investments; quantify development costs; and provide a deeper understanding of the role of capital market dependency in exacerbating pipeline fragility. Achaogen’s widely cited bankruptcy, and plazomicin’s commercialisation failure, created a perception that novel antibiotics have zero market value, causing investors to question the SME developer business model. Our analysis of Achaogen’s inability to fund commercialisation suggests three key implications for the antibiotic investment ecosystem: (1) novel antibiotics with narrow approval for small patient populations affected by severe resistant infections cannot be successfully commercialised in the current US antibiotic market; (2) SMEs need incentive payments structured to enable them to survive the commercialisation cashflow drought, and (3) these changes are necessary to restore industry and financial investor confidence in the antibiotic SME development model. Achaogen’s demise demonstrates that proposals to incentivise innovation, e.g. by providing one-off payments at registration, may be insufficient to ensure access to novel antibiotics developed by SMEs. In plazomicin’s case, moreover, US government biosecurity investments have not resulted in access, as the Indian and Chinese companies which bought post-bankruptcy rights have not widely commercialised the drug. This study is timely as new market-based incentives are currently being proposed by the US, EU, Canada and Japan. In order to make further government funding effective, ensuring access, not only innovation, these must support sustainable financial models for the SMEs critical to novel antibiotic development.

Interplay of paradoxical virtual leadership and psychological contract violation – impact on organizational citizenship behavior

PurposeThe daunting task of managing knowledge workers virtually has not always yielded positive results. This empirical work discusses the impact of Virtual Leadership on Organizational Citizenship Behavior. The study investigated how Psychological Contract Violation moderates the relationship between Virtual Leadership and Organizational Citizenship Behavior.Design/methodology/approachData was collected from 392 IT engineers working in software companies in India. The cross-sectional data was analyzed using Warp-PLS software, IBM SPSS and IBM Amos.FindingsThe results support the proposition that virtual leadership is negatively associated with Organizational citizenship behavior, at sub-dimension levels except obedience. The moderating role of psychological contract violation is also established by the results.Practical implicationsVirtual leaders should demonstrate collaborative behaviors to generate organizational citizenship behavior among team members. Leaders should be imparted training to enable them to adapt themselves to virtual environment. This study highlights the paradoxical nature of virtual leadership and opens the possibilities for future research.Originality/valueThe study is one of the first to report a negative association between Virtual leadership and Organization citizenship behavior. There is uniqueness in the use of the “Contingency theory of leadership” to explain the difficulties faced while managing a virtual team.