Managers Of Firms Research Articles

Redefining supply chain sustainability: introducing the context of extreme weather events

PurposeExtreme weather events are on the rise around the globe. Nevertheless, it is unclear how these extreme weather events have impacted the supply chain sustainability (SCS) framework. To this end, this paper aims to identify and analyze the aspects and criteria to enable manufacturing firms to navigate shifts toward SCS under extreme weather events.Design/methodology/approachThe Best-Worst Method is deployed and extended with the entropy concept to obtain the degree of significance of the identified framework of aspects and criteria for SCS in the context of extreme weather events through the lens of managers in the manufacturing firms of a developing country-Nigeria.FindingsThe results show that extreme weather preparedness and economic aspects take center stage and are most critical for overcoming the risk of unsustainable patterns within manufacturing supply chains under extreme weather events in developing country.Originality/valueThis study advances the body of knowledge by identifying how extreme weather events have become a significant moderator of the SCS framework in manufacturing firms. This research will assist decision-makers in the manufacturing sector to position viable niche regimes to achieve SCS in the context of extreme weather events for expected performance gains.

Influence of supplier development on supplier satisfaction: a mediating role of buyer–supplier relationship

PurposeThe study aims to understand the influence of supplier development (SD) activities on supplier satisfaction through the lens of social capital theory (SCT) and to understand the mediating role of the buyer–supplier relationship (BSR) in improving supplier satisfaction (SS).Design/methodology/approachThe research is based on survey of 110 key informants belonging to 50 medium to small supplier companies in the Indian automotive sector. We employed the PLS variance-based modelling technique for the data analysis.FindingsThe investigation resulted in a comprehensive framework for SD activities influencing SS. Further findings recognize a positive influence of SD activities such as payment terms and BSR, which are components of structural social capital on the SS. SD activities such as quality management and delivery, which are indicators of relational capital, affect SS through the mediation of BSR.Originality/valueThe study confirms the role of BSR in SS. The deliberations can help the managers of buyer and supplier firms and researchers to classify and strategize SD activities to improve performance and BSR to become preferred customers through SS.

Do Firm Size, Corporate Governance, and Tax Panning Effect on Earning Management?

This research aims to test the influence of firm size, good corporate governance, and tax planning on earnings management. The type of research used is quantitative descriptive verification research. This research uses a sample of retail firms in the Food Retail and Distributors, Supermarkets and Convenience Stores, and Electronics Retail sectors, which are listed on the Indonesia Stock Exchange (IDX) for the 2017-2021 period. The sampling technique in this research is purposive sampling with a sample size of 40 firms. This research uses secondary data, namely firm financial reports obtained from the official websites www.idx.co.id and www.idnfinancials.com. The analytical method used is multiple linear. The results of this research indicate that firm size, corporate governance, and tax planning do not affect earnings management. The managerial implication of this research is that firm managers need to understand that firm size, CG, and tax planning are interrelated in influencing earnings management. Managers must ensure that the tax management strategies used do not violate GCG principles and remain within the corridors of applicable tax regulations earning.

Product Market Competition and Stock Price Crash Risk: Evidence from China

Synopsis The research problem This study analyzes the relationship between product market competition (PMC) and stock price crash risk in China, especially for firms with weak corporate governance and a lower-quality information environment. Motivation Emerging capital markets like China have less-developed financial systems and institutions compared to developed capital markets like Europe and the United States, making them more susceptible to stock price crash risk. The impact of product market competition (PMC) on corporate decision-making has attracted considerable attention from scholars, especially given the increasingly intense and complex strategic competition in global markets and uncertainty in the world today. However, the effect of PMC on a firm’s stock price crash risk has not been thoroughly explored. Therefore, this study investigated how PMC affects managers’ tendency to hoard bad news and how this behavior contributes to the risk of stock price crashes. The test hypotheses We tested two competing hypotheses: PMC is negatively correlated with crash risk, and PMC is positively correlated with crash risk. Target population This study should be of interest to stakeholders, including firm managers, practitioners, regulatory authorities, policymakers, and investors. Adopted methodology This study employed ordinary least squares (OLS), difference-in-differences analysis (DID), and path analysis. Analysis Using a sample of Chinese A-share listed manufacturing firms from 2000 to 2021, this study found that competitive pressure from the product market encouraged managers to hide bad news, thereby increasing future stock price crash risk. Moreover, we performed additional tests to examine how PMC affected stock price crash risk. Findings We found robust evidence that PMC significantly increases stock price crash risk. Further tests showed that the effect of PMC on crash risk is more pronounced for firms with weak corporate governance and a lower-quality information environment. We also provide evidence that firms in highly competitive industries tend to disclose fewer negative words in the management discussion and analysis section of the annual report and fewer risk factors in the internal control report. Moreover, we show that operational risk is the underlying driver through which PMC affects crash risk.

Supplier relationship management and business performance of small-scale grapes processing firms in Dodoma, Tanzania: the moderating role of logistics capabilities

PurposeThis paper aims to investigate the effect of supplier relationship management (SRM) on the business performance of small-scale grapes processing firms in Dodoma, Tanzania. The paper also examines the moderating role of logistics capabilities in the relationship between SRM and business performance.Design/methodology/approachThis research uses a cross-sectional survey design. A structured questionnaire was used to collect data from 202 small-scale grape processing firms. The data were analysed through descriptive and structural equation modelling.FindingsThe findings revealed that buyer-supplier relationships, supplier development and supplier selection were positively and significantly related to business performance. Furthermore, knowledge transfer had no relationship with business performance. On the other hand, the findings showed that logistics capabilities significantly moderated the relationship between SRM and business performance.Research limitations/implicationsThe study was cross-sectional, conducted only in Tanzania, and focussed entirely on small-scale firms processing grapes as raw materials. Thus, generalising the study findings to other countries with different conditions should be done cautiously. Also, this study used subjective measures, and other studies could use objective measures.Practical implicationsThe study helps firm managers understand the importance of supplier relationship management on business performance. The findings also can be used by policymakers to create targeted policies and initiatives that support the firm’s growth and sustainability.Originality/valueTo the best of the researchers’ knowledge, this is the first attempt to find empirical support for the moderating role of logistics capability in supplier relationship management and the business performance of small-scale grapes processing firms in the Tanzanian context.

New blood brings change: Exploring the link between rookie independent directors and corporate cash holdings

This study examines the relationship between rookie independent directors (RIDs) and corporate cash holdings, using a sample of Chinese A-share firms listed on the Shenzhen and Shanghai stock exchanges from 2006 to 2020. We further investigate the moderating effect of economic policy uncertainty on this association. Our results reveal that the presence of rookie independent directors is positively and significantly related to corporate cash holdings, and that economic policy uncertainty amplifies this relationship. Importantly, we also demonstrate that firms with rookie independent directors exhibit improved operating performance when making cash holding decisions in the Chinese context. The study also finds that firms with greater growth opportunities tend to prefer RIDs, who bring new perspectives essential for leveraging these opportunities, leading to enhanced cash holdings. To ensure the robustness of our findings, we employ a variety of advanced econometric techniques, including alternative proxies, tests for reverse causality, two-stage least squares, propensity score matching, and entropy balancing. Based on our results, we recommend that shareholders in China carefully consider the role of RIDs in their governance structure, as they effectively monitor firm management and contribute to the protection of shareholder interests.

Family involvement in management and risk-taking of family firms: The moderating role of kinship composition

Corporate risk-taking is a crucial factor that influences firm growth, performance, and survival. Based on the socioemotional wealth and agency theories, we investigate the effect of family involvement in management on risk-taking by considering the moderating role of kinship composition. Using data on Chinese listed family firms, we find that increased family involvement in management significantly reduces family firms’ risk-taking level. The richness of family managers’ kinship weakens the negative effect of family involvement in management on the risk-taking level. Our study enriches the socioemotional wealth and agency theories, by introducing insights of the differential order mode perspective, and demonstrates the significance of kinship ties of family managers on family firms’ risk-taking strategies.

What Drives the Sustainability Reporting Intentions of Firms?

Global leaders have adopted sustainable development goals to address critical issues like climate change, biodiversity loss, and pollution from both human activities and firms. Over the years, there has been a demand for stricter regulations, accountability, and improved sustainable business practices by stakeholders. In the field of accounting, voluntary disclosure of firms’ sustainability efforts has become an important component of firm reporting architecture. Despite being a voluntary practice in many jurisdictions, sustainability reporting has become essential for firms to demonstrate their commitment to meeting sustainability goals, ensuring future growth, and achieving long-term success. This study examines firms’ sustainability reporting intentions and further investigates the dominant factors that drive such intentions, relying on the extended version of the Theory of Planned Behaviour. Data for the study were gathered from managers of member firms with the Association of Ghana Industries. Using a total of 518 valid responses, the study’s hypotheses were tested employing the partial least square structural equation modelling technique. The results indicate that subjective norm, perceived behavioural control, dynamic capabilities, cultural tightness–looseness, sustainability commitment, and perceived benefit are good predictors of firms’ sustainability reporting intentions. However, the results suggest an inverse relationship exists between attitude, perceived cost, and intention to engage in sustainability reporting. The findings highlight some of the critical factors driving sustainability reporting behaviour among firms.

Digital transformation is not a painless change:Evidence from corporate risk

Digital transformation (DT) is a must for enterprises, however, enterprises first face more challenges and shocks in the process of DT. Based on the data of A-share listed companies from 2012 to 2020, we find that DT increases corporate risk (CR). Multiple tests provide convincing support for the robustness of our baseline results. We prove that the risk policy of expanding digital innovation activities is an important channel through which DT leads to an increase in CR. In addition, we test for cross-sectional variation in baseline effects. The promotion effect of DT on corporate total risk is mainly driven by high-tech enterprises and fierce industry competition environment. Overall, this paper highlights the unintended outcomes of DT on corporate operations through specific risk policy mechanisms, offering crucial practical insights on risk management for firms in DT.

An Integrated Model of Digital Adoption, Strategic Sourcing, Inventory Management and Procurement Excellence Driving Firm Performance

An Integrated Model of Digital Adoption, Strategic Sourcing, Inventory Management and Procurement Excellence Driving Firm Performance

Modelling the impact of turbulent economic conditions on non-audit services provision and audit quality during the global financial crisis

PurposeMotivated by concerns and the ongoing debate regarding auditors’ independence and impartiality, this paper aims to examine the impact of the financial crisis on non-audit services (NAS) provision and audit quality (main and robust variables) in the four largest Eurozone countries together during the global financial crisis (GFC).Design/methodology/approachThe authors used a time trend OLS model with a dummy variable as well as a baseline model with a dummy and control variables accounting for multicollinearity, considering the characteristics of the GFC.FindingsIt documented a positive (negative) relationship between NAS provision (audit quality) and crisis in four Eurozone countries, Germany, France, Italy and Spain, in the context of a baseline approach, supporting the hypotheses that there are higher non-audit fees and a lower audit quality. Moreover, it is revealed that NAS provision and audit quality behave similarly, using a time trend approach, during the GFC. Considering the role of the auditor specialization or not (Big4 vs non-Big4) in companies, a significant effect from crisis on non-audit fees and audit quality for the four countries under the baseline approach is found. In general, the findings persist for NAS provision and audit quality using the robust methods of the time trend and panel OLS approaches. Multicollinearity was not found to affect the findings of the regressions.Practical implicationsThe study provides important implications for firm managers, auditors and regulatory authorities.Originality/valueTo the best of the author’s knowledge, it is the first time that the impact of the crisis on non-audit fees and audit quality is investigated during the GFC with two sets of OLS models (a time trend OLS with a dummy and a panel OLS with a dummy and control variables) in four largest Eurozone countries together.

The irruption of autonomous and connected vehicle technologies and the repositioning of the periphery in the European automotive industry

PurposeAutonomous and connected mobility technologies have led to a reconfiguration of the automotive industry value chain. This may involve an impact on the geography of the European automotive industry, especially for peripheral countries. The aim of the paper is to analyse the repositioning of a peripheral country (Portugal) in the core-periphery model of the automotive industry derived from this new technological context.Design/methodology/approachAn eclectic theoretical framework, based on the global value chain (GVC) approach, the spatial division of labour and location theory, supports this research. Moreover, an original empirical study was developed. This study comprised a comparative analysis of two samples of firms based on the key variables related to country position. One sample comprised Portuguese traditional automotive firms and the other Portuguese firms linked to autonomous and connected mobility technologies.FindingsThe results highlight the upgrading of Portugal in the European core-periphery model of the automotive industry. This is due to the presence of domestic firms, especially multinationals, linked to autonomous and connected mobility technologies in the country. The decision power derived from their position on the first levels of supply and the added value of activities and technological innovation of these new actors change the role of the country in the European automotive industry. The main implication is that managers of domestic firms and policy makers in peripheral countries can upgrade a country’s position in the European core-periphery model by shifting its competitiveness toward knowledge-based activities linked to the new mobility technologies.Originality/valueThis research is supported by a novel eclectic theoretical framework based on the global value chain (GVC) approach, the spatial division of labour and location theory. Moreover, country position is analysed through empirical evidence. An original comparative empirical study based on the key variables defined under this theoretical framework was developed.

Fair play in family firms: examining the perceived justice of performance management systems

PurposeThis study examines the intricate relationship between family influence and perceived justice in performance management systems within family firms. Recognizing the unique dynamics that family ownership brings to human resource practices, the research aims to delineate how family presence affects both the process and the perception of fairness in performance evaluations.Design/methodology/approachUsing a conceptual framework, the research adopts a dual-method approach, combining a comprehensive literature review with theoretical modeling. The study synthesizes existing research and theoretical insights to explore the effects of family influence on the perceived fairness of performance management practices.FindingsThe findings reveal that family influence profoundly shapes fairness perceptions in performance management, impacting family and non-family employees. It affects systems' design, implementation and reception, with mechanisms including resource distribution and criteria alignment. Specifically, family influence molds fairness perceptions within the performance management process, enhancing organizational performance and fostering trust in family businesses, thus supporting sustainable growth.Originality/valueThis study contributes to the family business and human resource management literature by providing a nuanced understanding of how family dynamics influence perceptions of justice in performance management. It underscores the dual role of family influence in enhancing and complicating fairness perceptions, thus offering a balanced view that can inform academic research and practical HR management in family firms.

Board Structure and Financial Performance of Manufacturing Companies in Nigeria

This study examines the impact of board structure on corporate financial performance in Nigeria. It investigates the Diversity of boards of directors in Nigerian firms and analyses whether board structure has an impact on financial performance, as measured by return on equity (ROE) and return on capital employed (ROCE). Based on the extensive literature, four board characteristics (board Diversity, board size, board ownership and CEO duality) have been identified as possibly having an impact on corporate financial performance and these characteristics are set as the independent variables. The Ordinary Least Squares (OLS) regression was used to estimate the relationship between corporate performance measures and the independent variables. Findings from the study show that there is strong positive association between board size and corporate financial performance. Evidence also exists that there is a positive association between outside directors sitting on the board and corporate financial performance. However, a negative association was observed between directors’ stockholding and firm financial performance measures. In addition, the study reveals a negative association between ROE and CEO duality, while a strong positive association was observed between ROCE and CEO duality. The study suggests that large board size should be encouraged and the Diversity of outside directors as members of the board should be sustained and improved upon to enhance corporate financial performance.

Differentiation Strategy and the Performance of Medical Insurance Companies in Kenya

Against a backdrop of escalating global competition, health insurance firms grapple with the need to stand out amidst a saturated market. The study recognizes the imperative for organizations to adopt differentiation strategies, with a focus on product, personnel, distribution, and image differentiation. Acknowledging the current dearth of comprehensive research in the Kenyan context, the research problem centres on the critical need to investigate the extent to which differentiation strategies influence the performance of health insurance companies in the region. The general objective of the study was to investigate the effect of differentiation strategy on performance of Health Insurance Companies in Kenya. Drawing on established theories such as Porter's Competitive Advantage Model, Upper Echelons Theory, Resource-Based View, and Transaction Cost Economics, the study employs a multi-theoretical framework to provide a nuanced understanding of the complex relationships between differentiation strategies and organizational outcomes. Adopting the descriptive research design, the target population comprises 980 employees in the medical insurance firms in the top management and middle level management in Nairobi, drawn from the respective insurance firms’ Human Resources Departments. Employing a multi-stage sampling technique, the established sample size is 101 top and middle level management staff who were reached by stratified random sampling. A semi-structured questionnaire was the main data collection instrument and was distributed through a drop-and- pick- latter approach. Data was analyzed using both descriptive and inferential statistics. Descriptive statistics measures of mean and standard deviation was used, while for inferential statistics, regression equations were employed. The study established that product differentiation strategy, personnel differentiation strategy, product differentiation strategy and image differentiation strategy had a positive significant effect on performance of health insurance companies in Kenya. The study concludes that product differentiation is the key aspect distinguishing one company’s products or services from its competition. Personnel differentiation strategy gives an organization the ability to respond in time to the needs of their members through the skills and knowledge of employees. A differentiated distribution strategy allows insurance companies to expand their sale potential by getting their product in front of more potential customers. An effective image establishes the product's character and value proposition and a person responds differently to company and brand images. The study recommends that the insurance companies should consider opportunities for differentiation in all of its production areas: marketing, product management, engineering, sales, and customer support. Organizations looking to build personnel differentiation strategy will need to produce or design extremely unique or distinctive products or services that create increased value for the consumer. The insurance companies should devote resources to channel management preferably at least one dedicated manager whose sole responsibility is to manage those relationships and build the marketing programs to drive revenue through the channel. The insurance companies should identify their brand gaps, which are the discrepancies between their desired and actual brand performance.

Cultivating entrepreneurial human capital in multinational corporations: An intercultural paradox mindset lens

The development of an entrepreneurial strategic orientation is of growing concern for global corporations. Through a human capital lens, we probe how and when firms can develop and cultivate managerial entrepreneurial resources; by explicitly encouraging cross-cultural experiences that stimulate systematic shifts in mindset and behavior. Drawing on paradox theory and intercultural psychology, we put forth a model positing that cross-cultural experience (an endowment firms can either hire for or facilitate themselves) develops managerial entrepreneurialism—consisting of (a) venture ideation, (b) opportunity recognition, and (c) entrepreneurial behavior—through the intervening mechanism of a paradox mindset. As a boundary condition we uncover that paradox mindset formation partially hinges on home cultural tightness-looseness. We employ three distinct experiments on multinational samples of individual professionals (n = 506), active entrepreneurs (n = 370), and current managers in global firms (n = 288) to test our theorizing. Finding general support for our model, with analyses yielding important theoretical and practical implications from non-findings too, we conclude that a paradox mindset is a necessary, but not de facto, mediating step between cross-cultural experience and the cultivation of entrepreneurial managers. We also find that paradox mindset formation is conditional and related to home cultural tightness-looseness.

Shareholder Patience: Implications for Executive Compensation and Firm Performance

Purpose: This paper explores how shareholder patience can influence firm performance and the efficacy of executive compensation and corporate governance in organizations. The shareholders’ patience, as reflected in their tendency to hold stock for extended periods, enables firm management to make long-term decisions and sustain ongoing project stability, which reflects positively on firm value. Shareholder patience amplifies the positive effects of un-exercisable options on a firm’s long-term performance and restrains overconfident CEOs by improving governance rather than by relying on market reactions, which positively influences performance.Study design/methodology/approach: The quantitative analysis conducted in this paper utilizes a fixed-effects regression model.Sample and data: This paper utilizes a multi-industry sample of 1,397 publicly traded U.S. firms that operated between 1999 and 2016. The data were retrieved from various archival sources.Results: Shareholders’ patience was positively associated with a firm’s performance, both in the short term and the long term. Further, the shareholders’ patience accentuated the positive effects of TMT un-exercisable stock options on the firm’s long-term performance but did not influence the negative effects of TMT exercisable stock options on the firm’s performance. Shareholder patience weakened the negative effects of CEO overconfidence on firm performance.Originality/value: This paper provides evidence of the effects of shareholders’ patience on the efficacy of executive compensation, which reflects positively on a firm’s performance.Research limitations/implications: The findings presented in this paper have limitations in terms of generalizability to non-U.S. firms and private and entrepreneurial firms.

Greening Emerging Economies: Enhancing Environmental, Social, and Governance Performance through Environmental Management Accounting and Green Financing

Given the rising interest in sustainability globally, this paper investigates whether the environmental management accounting (EMA) and green financing of a firm are associated with superior environmental, social, and governance (ESG) performance, considering manufacturing firms from emerging economies like Bangladesh to address a gap in relevant research. Drawing on the perspective of contingency theory, this study is one of the first to analyze how EMA and green financing enable sustainable production to enhance ESG performance, as well as the mediation that sustainable production exerts on this relationship. This study entails an analysis of ESG performance in sensitive industries, i.e., those that are more likely to cause social and environmental damage. To test our hypotheses, we applied partial least squares path modeling to analyze data from 467 responses. Further, we used fuzzy set qualitative comparative analysis (fsQCA) to check the robustness. The results suggest that sensitive industries present superior ESG performance through integrating EMA and green financing. Further, empirical evidence demonstrates that sustainable production fully mediates the relationship between EMA and ESG performance. Meanwhile, sustainable production does not moderate green financing and ESG performance. For managers, this study demonstrates how embedding green financing and EMA into the organizational process for transitioning to a sustainable production model can present superior ESG performance. Our study contributes to research on both the impact of EMA and green financing on ESG performance, mediation effects of sustainable production, and integrated analysis using PLS-SEM and fsQCA, and the practice of sustainability management in firms in developing countries.

The asymmetric impact of monetary policy and firm leverage on firm investment: some insights from Pakistan

PurposeThis paper aims to investigate whether negative and positive monetary policy (MP) shocks have asymmetric impacts on corporate firms’ investment decisions in Pakistan using firm-level panel data set. Moreover, the authors emphasized on symmetric effects of MP; the authors examine whether high-leverage and low-leverage firms respond differently to negative and positive unanticipated shocks in MP instruments.Design/methodology/approachIn contrast to the conventional framework of VAR, it uses an alternative methodology of Taylor rule to estimate unanticipated MP shocks. The two-step system-generalized method of movement (GMM) estimation method is applied to examine the effect of MP shocks on firm investment through leverage-based asymmetry.FindingsThe two-step system-GMM estimation results indicate that unanticipated negative changes (unfavorable shocks) in MP instruments have negative, significant effects on investment. In contrast, unanticipated positive changes (favorable shocks) have statistically insignificant impacts on firm investment. The results also reveal that firm leverage has a significant role in establishing the effect of unanticipated negative changes in MP instruments on investments. Finally, the results indicate that high-leverage firms respond more to negative changes than low-leverage firms. Yet, the results show that only low-leverage firms positively respond to unanticipated positive shocks in MP.Practical implicationsThe findings of the paper suggest that MP authorities should pay due attention to the asymmetric effects of MP shocks on firm investment while designing MP. Because firm leverage has a significant influence on the effects of MP shocks, firm managers should take into account such role of leverage while deciding capital structure of their firms.Originality/valueFirst, unlike “Keynesian asymmetry” and most of published empirical research work, the authors use both unanticipated negative and positive MP shocks simultaneously. Departing from the conventional empirical literature, the authors differentiate between unanticipated positive and negative shocks in MP using the backward-looking Taylor rule. Second, the authors contribute to the existing literature by investigating the differential effects of positive and negative unanticipated MP shocks on firms’ investment decisions. Unlike the published studies that have emphasized on the symmetric effects of MP, the authors examine whether high-leverage and low-leverage firms respond differently to negative and positive unanticipated shocks in MP instruments.

Environmental Accounting and Sustainable Development of Firms in Rivers State, Nigeria

Within the scope of the research, environmental accounting and sustainable development were explored in relation to oil and gas firms located in Rivers State, Nigeria. There was a correlational survey research design used for the investigation. A total of six oil and gas businesses that were active in the Rivers State Region of Nigeria were included in the study's research population. For this particular investigation, secondary data served as the instrument. Statistical Package for the Social Sciences (SPSS) Version 22 was used in order to do the analysis on the data. A simple bivariate regression analysis was performed at a significance level of.05. The research issues were evaluated using the mean and standard deviations, and hypotheses were assessed using the analysis. The data indicated that there is no substantial connection between the cost of waste management and the ecologically sustainable growth of oil and gas businesses in Rivers State, Nigeria. Additionally, there is a strong significant association between the cost of pollution control and the development of ecological sustainability, as well as a strong significant relationship between the cost of pollution control and the development of economic sustainability for oil and gas businesses in Rivers State, Nigeria. By adhering to social responsibility in waste management, oil and gas firms should put a premium value on initiatives that are focused towards reducing their ecological footprint and promoting sustainable growth while also reducing their environmental impact.