Perceived Environmental Uncertainty Research Articles

DETERMINING THE MODERATING EFFECT OF PERCEIVED ENVIRONMENTAL UNCERTAINTY - MANAGEMENT ACOUNTING INFORMATION SYSTEMS RELATIONSHIP IN INDONESIA MANUFACTURING COMPANIES

This study examines the effect of perceived environmental uncertainty (PEU) on the design of management accounting information system (MAIS) which is moderated by decentralization. MAIS is design to provide chief executive officers information to make decision, planning, and controlling was defined in terms of the extent to which managers use time information characteristics ofbroad scope, timeliness, and aggregation in manufacturing finns. The study of 158 chief executive officers that have responsible for an organization, drawn from the manufacturing companies in Jakarta, Tangerang, Bogor, and Kerawang. The questionnaire survey, which was analyzed by using a regression analysis, suggests that PEU have an effect on the aggregated MA S information moderated by decentralization.Keywords: PEU, MAIS, Manufacturing Companies, Decentralization

Can balanced scorecard adoption mediate the impacts of environmental uncertainty on hotel performance? The moderating role of organizational decision-making structure

ABSTRACTThis paper examines the influence of perceived environmental uncertainty (PEU) on hotel performance (HP) by examining the mediating role of balanced scorecard (BSC) adoption. It also examines the moderating role of organizational structure in the direct relationship between the extent of BSC adoption and HP and the indirect relationship between PEU and HP. A total of 400 top- and middle-level managers from 44 five-star-hotels in Antalya responded to surveys. Using Hayes’s process-macro models 1, 4, and 7 for analysis, the findings suggest that: HP was influenced by PEU and BSC dimensions’ adoption, including financial, customer, and internal business processes, as well as innovation and learning; financial, customer, and internal business processes mediated the relations between PEU and HP; and the effects of financial, customer, and internal business processes on HP were strengthened by high decentralization. The results highlight the importance of the balance scorecard dimensions’ adoption in the hospitality industry.

Explaining success of performance management systems

PurposeThe purpose of this paper is to use the logical chain of key factors (KFs) to explain the success of performance management systems (PMS) and corporate performance.Design/methodology/approachThe authors use the strength of the KFs chain to capture PMS success. First, the authors assume that perceived environmental uncertainty (PEU) is positively associated with the strength (H1). The higher the PEU, the stronger is the chain as a response to uncertainty. Second, the authors assume that the strength improves performance (H2) but third, that the impact of the strength is negatively moderated by competition (H3). Fourth, the authors assume that this improvement leads to superior corporate performance (H4). The research model is tested by applying the partial least squares method for a sample of 61 Estonian and Finnish firms.FindingsEmpirical evidence shows that PEU is negatively correlated to the strength of the chain but when controlled for a set of control variables, the path coefficient is positive. The strength of the chain is positively associated with improvement in performance. The impact of the strength of the chain on financial performance is negatively moderated by competition. The improvement in performance is positively associated with the attainment level of strategic goals. The improvement in non-financial performance does not significantly affect corporate profitability.Practical implicationsThe levels of PEU and competition should be taken into the account when designing, adjusting and assessing the PMS of organization.Originality/valueThe authors give explanation why evidence about the effects of PMS on the performance of the firm is mixed.

PERCEIVED ENVIRONMENTAL UNCERTAINTY AND INNOVATION ADOPTION: EXPLORING THE TURKISH CONTEXT

Because innovation and environmental uncertainty are highly crucial concepts for organizations’ survival, and managers are key decision makers in organizational operations, investigating the relationship between innovation and environmental uncertainty from managers’ lenses is important. This study aims to explore how managers’ adoption of radical and incremental innovation is affected by perceived environmental uncertainty (PEU). Data collected from 230 managers that work for companies that operate in various industries has been analyzed by using Multinomial logistic regression analysis. Results of the study indicate that government and policies factor is the effective factor on managers’ decisions on innovation adoption, and in uncertain environments in terms of governmental and policy factor, managers choose to adopt both types of innovation since they want avoid to take risks of adopting solely one type of innovation.

Does Thinking Style Make a Difference in Environmental Perception and Orientation? Evidence from Entrepreneurs in Post-Sanction Iran

Styles of thinking set different paths for an entrepreneur’s perception and strategic action. In order to understand the environmental consequences of a thinking style, we investigated the relations between entrepreneurs’ linear and nonlinear styles of thinking with their perception of environmental uncertainty in their businesses. Furthermore, we tested the effect of the entrepreneurs’ linear and nonlinear style of thinking on their newly established firms’ orientation towards preserving the surrounding internal and external environment. Entrepreneurs with linear or rational thinking styles prefer more tangible data, information, facts, and analytical tools, and entrepreneurs with nonlinear or non-rational thinking styles rely more on internal feelings, impressions, imagination, creativity, and sensations when making important organizational decisions. By using cross-sectional survey data from 144 entrepreneurs in post-sanction Iran (2016–2017), we found that entrepreneurs with a linear style of thinking, in comparison to entrepreneurs with a nonlinear style of thinking, perceive a higher level of environmental state, effect, and response uncertainty in their business context. Furthermore, our survey results reveal that newly established firms by entrepreneurs with nonlinear styles of thinking have a more external environmental orientation, while newly established firms by entrepreneurs with a linear style of thinking have a more internal environmental orientation. Recognizing this contingency advances our understanding of how entrepreneurs perceive and enact their environments.

Forces affecting perception of product comments on social‐WOM: An interactive, relational communication perspective

AbstractAn attempt is made to explore the predicting factors of the perception of product comments on word‐of‐mouth through social media (social‐WOM). The concept of the Social Information Processing theory is borrowed to develop a 4‐stage framework in which 4 determinants drive the 2 perceptions of sWOM product comments through 2 sequential intervening mediators. The field study is conducted in Taiwan. Survey data are collected from a sample of 408 participants. The findings show that, in a social media community, intimacy, dominance, and informality alleviate the perception of environmental uncertainty, which in turn stimulates the involvement of sWOM product comments; eventually, both the outcome variables of trustability and quality of these comments arise. Additionally, task orientation and intimacy and dominance are able to drive community members to perceive the 2 outcome perceptions through the direct pathway of involvement. Furthermore, environmental uncertainty is capable of straightforwardly evoking the quality of comments.

Management Control of New Product Development and Perceived Environmental Uncertainty: Exploring Heterogeneity Using a Finite Mixture Approach

ABSTRACTResults regarding the association between perceived environmental uncertainty (PEU) and management control (MC) of new product development (NPD) are ambiguous and sometimes contradictory. Based on survey data for 276 firms, we first contribute to MC research by finding that firms have two completely different responses regarding their MC of NPD when facing high PEU. Whereas the first group of firms increases all MCs when PEU increases, the second group responds with a loosening of MC. The first group consists of slightly larger and older firms than the second group, with relatively emergent innovation strategies, greater innovation capabilities, and weaker perceived complexity of their environment. Second, we reveal these two contrary groups of firms behind an aggregated sample by introducing finite mixture partial least squares (FIMIX-PLS) as a new approach to MC research. Our study may inspire future researchers to control for previously unobserved heterogeneity in structural models by using FIMIX-PLS.JEL Classifications: D81; L60; M11; M40; O32.

The Effect of Perceived Environmental Uncertainty on the Use and Perceived Usefulness of Strategic Management Accounting: Some Empirical Evidence

The purpose of this paper is to investigate whether perceived environmental uncertainty (PEU) affects the use and the perceived usefulness of strategic management accounting (SMA). The study takes the perspective that SMA can be regarded as a set of strategically oriented management accounting techniques and makes the research hypothesis that as PEU increases the use and perceived usefulness of SMA techniques also increase. To test the hypothesis, the responses of 55 CFOS to a questionnaire survey were analysed. The survey considered a cross-section of large manufacturing companies in Italy. The regression-based analysis mainly shows: (1) a positive relationship between PEU and the use of strategic pricing as SMA technique supporting product pricing decisions; (2) a positive relationship between PEU and the use of balanced scorecard; (3) a positive association between PEU and the perceived usefulness of all the SMA techniques included in the study

The Relationship between Non-Financial Stakeholders and Capital Structure

Financial accountong literatures have highlighted the important role of non-financial factors such as intellectual capital (IC) as a main value added factor for companies, and perceived environmental uncertainty (PEU) as unpredictable contingency factor from a dynamic environment on the corporate performance (CP). Therefore, it is important for organizations to rely more on non-financial than financial factors to achieve higher competitive advantage. Identifying the most important non-financial factors affecting corporate performance from these environments and their relationship with capital structures is the main issue in today's dynamic conditions. This research examined the relationship between non-financial factors of IC and PEU and evaluated their influence on CS directly or indirectly by considering corporate performance as mediator. Questionnaires were distributed to 339 public listed Iranian manufacturing companies selected by census. Data were analysed using structural equation modeling. The main findings of this study are IC can enhance corporate performance, PEU is positively linked to corporate performance, and corporate performance is positively linked to capital structure. The results also indicated a full mediating role of corporate performance in the relationship between PEU and capital structure. This study contributes to determining capital structure decision making, by considering IC and PEU in the context of companies in Iran. Also, we analyze intellectual capital relation with and 1) traditional vs. secular-rational values and 2) survival vs. self-expresion values. Based on the analysis of existing knowledge, neutral networks, expert and decision support systems and in order to determine most effective versions of intellectual capital an Intellectual capital multiple criteria decision support (ICMCDS) system consisting of a database, databa management system, model-base, model-base management system and user interface was developed. Further in-depth research is needed to examine this links betwwen non-financial factors with different measurement perspectives and capital structure to develop a deeper understanding of their effect on capital structure.DOI: http://dx.doi.org/10.5755/j01.ee.28.4.16812

An exploratory investigation of an integrated model of costing practices in small and medium-sized enterprises

The purpose of this paper is to investigate the effect of perceived environmental uncertainty (PEU) and CEO's involvement in networks on costing practices and, in turn, the mediating effect of costing practices on company performance. A model is advanced and tested using partial least squares (PLS) path modelling. Data were collected from a sample of 138 small and medium-sized enterprises (SMEs) in Malaysia. The PLS path model's results provide support for all of the hypothesised relationships. This study provides empirical evidence on the impact of PEU and CEO's involvement in the costing practices usage by considering contingency theory and upper echelon theory simultaneously for explaining relationships and developing a new model.

Managerial work, importance of information and corporate profitability: evidence from Finland

The objective of this study is to analyse the influence of CEO managerial work role and broad information on the profitability of the firm. The research model is based on five hypotheses on the relationship between work role, importance of broad information, and corporate profitability. Perceived environmental uncertainty (PEU) is expected to moderate the effects of managerial work and broad information on profitability. Managerial roles are described using the classic work roles introduced by Mintzberg (1973). The model is tested using survey data got from 196 Finnish top managers (CEO) of firms from different industries and size classes. The research hypotheses are tested by the partial least squares (PLS) method. Empirical evidence gives partial support to the five hypotheses.

Managerial work, importance of information and corporate profitability: evidence from Finland

The objective of this study is to analyse the influence of CEO managerial work role and broad information on the profitability of the firm. The research model is based on five hypotheses on the relationship between work role, importance of broad information, and corporate profitability. Perceived environmental uncertainty (PEU) is expected to moderate the effects of managerial work and broad information on profitability. Managerial roles are described using the classic work roles introduced by Mintzberg (1973). The model is tested using survey data got from 196 Finnish top managers (CEO) of firms from different industries and size classes. The research hypotheses are tested by the partial least squares (PLS) method. Empirical evidence gives partial support to the five hypotheses.

Taking risks in the face of uncertainty: An exploratory analysis of green innovation

The relationship between uncertainty and firms' risk-taking behaviour has been a focus of investigation since early discussion of the nature of enterprise activity. Here, we focus on how firms' perceptions of environmental uncertainty and their perceptions of the risks involved impact on their willingness to undertake green innovation. Analysis is based on a cross-sectional survey of UK food companies undertaken in 2008. The results reinforce the relationship between perceived environmental uncertainty and perceived innovation risk and emphasise the importance of macro-uncertainty in shaping firms' willingness to undertake green innovation. The perceived (market-related) riskiness of innovation also positively influences the probability of innovating, suggesting either a proactive approach to stimulating market disruption or an opportunistic approach to innovation leadership.

Modeling employee-based brand equity (EBBE) and perceived environmental uncertainty (PEU) on a firm’s performance

Purpose This paper aims to examine the impact of employee-based brand equity (EBBE) and perceived environmental uncertainty (PEU) on firm performance. Design/methodology/approach Data were collected through an e-mail survey from fast-moving consumer goods (FMCG) firms in the UK and UAE. Sample sectors included cosmetics and toiletries, household care products, packaged food, soft drinks and tobacco firms. Quantitative data were analyzed using structural equation modeling. Findings The results suggest strong support for the hypothesized relationships, thereby providing strong validation for the proposed model. One interesting finding was that the PEU affected employee brand equity significantly stronger in the UK than in the UAE. This phenomenon is explained in the discussion section. Research limitations/implications Although several studies have indicated several other elements for EBBE, such as brand commitment and brand citizen behavior, the authors borrowed King et al.’s (2012) EBBE concept and limited their variables on EBBE for brand endorsement, brand allegiance and brand consistent behavior. Practical implications Knowledge is expanded through an empirical study validating the proposed model, which provides meaningful insights for developing training tools for internal brand management. Firms have to increase the brand manager’s commitment to increase the employee brand equity, which in turn increases the firm’s performance. Originality/value This paper makes three imperative contributions to the branding literature: expanding the existing brand equity literature to incorporate employee brand equity; being the first known empirically tested PEU on employee brand equity; and empirically testing employee brand equity, which has been ignored in branding literature on firm performance.

Disentangling the emergence of perceived environmental uncertainty among technology entrepreneurs

Purpose– The purpose of this paper is to examine how network externalities impact on perception of environmental uncertainties.Design/methodology/approach– The source of sample comes from the Science & Technology Parks database, a major association of corporate information of new technology ventures in Iran. The sampling frame comprises a wide range of industry segments including electronics, chemicals, agriculture, computer equipment, pharmaceuticals and medicines, telecommunication equipment, and others. The author used the conventional method of back-translation to translate the measures from English to Persian. There were 380 NTVs that the author could reach to send the survey. Among 380 NTVs, 177 entrepreneurs fully completed all the items (46 percent response rate).Findings– The findings showed that what might decrease the state uncertainty perception, at same time it can give arise to other types of uncertainty. Thus, the result confirmed that the three types of uncertainty are differentiable.Research limitations/implications– In the study, the author used cross-sectional self-report data, which cannot suggest causal relationships very well.Practical implications– Investigating factors that influence the perception of environmental uncertainty may help explain why organizations, under the same environment, can behave heterogeneously.Originality/value– By providing a clear picture about the relationship between market with network effect and perception of environmental uncertainty, this study contributes to the theoretical and empirical understanding of the emergence of environmental uncertainty perception.

The effect of transformational leadership on the profitability of Finnish firms

Purpose – The purpose of this study is to find the effect of transformational leadership in profitability in different contexts. Design/methodology/approach – Data are gathered of 200 Finnish firms. Profitability is measured by profitability ratios one to two years after the survey to take account of lagged effects. The sample is split into sub-samples with respect to four context variables indicated by prior research to be important for transformational leadership: size, competition, perceived environmental uncertainty (PEU) and research and development (R & D) effort. The effect of leadership dimensions on lagged profitability was assessed by partial least squares analysis. Findings – Factor analysis gave a five-factor solution for transformational leadership variables indicating dimensions as: challenging, enabling, visioning, rewarding and contesting. Results did show that transformational leadership has a weak general effect on profitability. Results also offer some support for hypotheses for the strong effects of transformational leadership in different contexts. Enabling has an effect in low competition context; rewarding has an effect in low PEU, low competition and high R & D contexts; and contesting has an effect in large companies and in high PEU context. Research limitations/implications – The commonly used Bass’ measurement of transformational leadership was not used here; instead, Kouzes and Posners’ modified version was in use. Factor analysis of this version resulted to the three factors only in a few loadings, even if high. Practical implications – The importance of rewarding behavior of leaders is even stronger than previously thought. Thus, managers should concentrate more on the positive feedback of followers. Originality/value – This paper fulfills a gap of research on leadership and profitability and also stresses the importance of situational variables which may affect the usefulness of different leadership styles.

Contingent Factors, Extent of Budget Use and Performance: A Structural Equation Approach

The present study investigates the contextual factors that impact the extent of budget use and performance based on contingency theory. For this purpose, we carried out a questionnaire survey of Turkish firms. In order to analyse the data, confirmatory factor analysis and covariance‐based structural equation modelling were used. We find that the extent of budget use and performance are affected significantly by contextual factors. Size, structure, perceived environmental uncertainty (PEU) and information technology (IT) determine the extent of budget use. The study also finds that performance is significantly affected by the extent of budget use and other contingent factors (i.e., structure, PEU, functionality of IT). Furthermore, there is a mediating role of budget use between contextual factors and performance.

Management Styles and Effective Organizational Response to PEU during Economic Crisis in India

This paper explores the organizational response to the perceived environmental uncertainty (PEU) during the period of economic crisis in India between 2011- 14. We proposed that management practice...

Risk management in Scottish, Chinese and German small and medium-sized enterprises: a country comparison

Even though the study of risk management (RM) in small and medium-sized enterprises (SMEs) has increased recently, there have been few cross-country studies. Therefore, the present research project can be considered as one of the first of its kind drawing upon an extensive empirical study into the status of RM in SMEs. More precisely, the cross-country study, involving SMEs from China, Germany and Scotland, investigates differences in their RM practices. The findings, which were based on a web-based survey, provide a clearer understanding of the personal and organisational factors that have influenced the RM practices of SMEs in these countries. This study also sheds light on the influence that the perception of environmental uncertainty has on the RM efforts in SMEs.

Opportunity evaluation and changing beliefs during the nascent entrepreneurial process

This article explores an important but less understood part of the nascent entrepreneurial process, the changes that occur to beliefs associated with continuing evaluation of the opportunity and related learning. Using samples from the Panel Study of Entrepreneurial Dynamics, we demonstrate that engaging in planning activities by nascent entrepreneurs as they proceed through the process is associated with a decrease in perceptions of environmental uncertainty but an increase in perceived individual self-efficacy and business performance expectations. Overall, our evidence is consistent with a dynamic view of the nascent stage of the entrepreneurial process characterized by ongoing significant changes in beliefs.