Performance Indicators Of Companies Research Articles

Blue Line Management: What Value Creation Really Means

The current economic crisis has raised serious questions about the doctrine of shareholder value maximization. In light of these questions we find corporate executives increasingly expressing doubts and confusion over what the proper goal of their businesses should be. Meanwhile, many observers have taken a perverse delight in holding finance, and especially the theories promoted by finance academics, accountable for the economic collapse. After seemingly countless conversations and debates in which we endeavor to defend finance from the onslaught, we now believe that much of the contentious nature of the discourse has arisen from fundamental errors about what the terms 'shareholder value,' 'value creation' and 'market efficiency' really mean. The most serious error is the tendency to equate share price and other indicators of company performance with value. Much of the blame for this state of affairs rests squarely with finance professionals, especially those who teach in the world’s leading business schools. The problem is that contemporary corporate finance has erected an edifice of terminology and exposition that seems destined to mislead and confuse. Naturally, this confusion has found its way into Wall Street and corporate boardrooms. Our aim is to lift the veil of confusion by offering a framework for value-based thinking that both identifies the source of common errors and offers a way forward. The centerpiece of this framework is a concept we call 'blue-line management.' We define it as an approach in which all decisions and resource allocations are made with one aim: to create value. This approach stands in stark contrast to the more common practice of “red-line management” in which value creation may be the stated goal, but the business is managed to deliver on specific indicators, independent of whether these efforts are value creating or value destroying.

Internationalization and Company Performance: A Study of Emerging Russian Multinationals

Russia is one of the fastest growing emerging economies and large Russian companies, mainly resource exporters, have entered the global markets in recent years. The internationalization process of Russian enterprises and its implications on foreign direct investment paradigms have attracted global interest. This paper studies the effect of internationalization on the performance of large Russian companies (state‐owned, privatized and de‐novo). The results show that international operations have a significant effect on company performance indicators. Companies with international operations have significantly higher profitability and labor productivity. However, profitability or labor productivity is not significantly higher in the early years of trade liberalization. The positive effects grow gradually with the integration of Russian companies to world markets. Specifically, the expansion of the de‐novo private sector has been strong.

Proposed verification method for the content suitability of the customer satisfaction survey

PurposeTo address multiple problems facing a company's top management with respect to the customer satisfaction survey. Is the customer satisfaction survey still suitable after many years of use? What method should be applied to help ensure better utilization of information from the customer satisfaction survey? Should the three aspects (i.e. quality, delivery, and responsiveness) representing the customer satisfaction continue to be used as part of the survey's main contents. As an ISO 9001: 2000 certified company, the customer satisfaction survey is required.Design/methodology/approachA method was proposed to help integrate the survey results with other key performance indicators (or ratios). This integration represented the verification effort on the suitability of the customer satisfaction survey. The examinations into the interrelationships between these three aspects the company's performance indicators included three perspectives. They were: no time‐factor consideration; one‐period time‐lag factor; and two‐period time‐lag factor. The set of key performance indicators was selected jointly with the company's top management.FindingsThe findings indicated that the quality and responsiveness aspects were still suitable. This was because these results were closely related to the production volumes, number of customer complaints, number of customers, and, etc. Therefore, the revision of the customer satisfaction survey needed to focus on adding other aspects such as flexibility and courtesy while doing away with the delivery aspect.Practical implicationsThe proposed method, and its findings and recommendations received positive responses from the company's top management. This method utilized and related existing performance information in an integrated manner.Originality/valueThis study generated a potential approach to understand and to help interpret the customer satisfaction survey's results, to boost the utilization of relevant performance information, and likely to assist in a target‐setting process during a planning session.

Seven dimensions of corporate identity

PurposeThis paper investigates what organisations perceive as the essential components of corporate identity concept and their contents. It proposes an operational definition of corporate identity on the basis of the practitioners' views.Design/methodology/approachThe information was gathered through 32 in‐depth interviews with managers from different organisations (mainly multinational companies) and an analysis of corporate literature and web sites. The initial analysis is based on a multidisciplinary categorisation developed by the first author, which facilitated the systematic analysis of a wide range of components (e.g. corporate communication, corporate design, corporate culture etc.) associated with corporate identity.FindingsThe study shows that there is a considerable divergence in opinions concerning the fundamental components of corporate identity among practitioners. Most interviewees heavily associated identity with the areas of corporate design, communication, behaviour and strategy whereas there was no unanimous agreement as to whether or not corporate culture was a product or determinant of corporate identity.Research limitations/implicationsDeveloping sub‐items and their measures for each dimension presented in the proposed definition and examining the possible relationships between them might be the further step. Also additional empirical research which considers consequences of corporate identity management in relation to company performance indicators could enhance overall understanding of the concept.Practical implicationsSenior company management can use the categorisation discussed in this paper as a starting point for development of corporate identity management strategies.Originality/valueRecategorisation of Melewar's corporate identity dimensions, which help define corporate identity concept in measurable terms.

The effectiveness of strategic planning: competitiveness in the Brazilian supermarket sector

This paper considers the relative impact of management strategic planning practices and economic changes on company performance. The paper focuses on the Brazilian supermarket sector during the period 1988–1999. This was a period marked by significant changes in economic and competitive conditions. Using sales figures as indicators of company performance, ANOVA tests were applied. The results derived suggest that variables representing changes in economic conditions and strategic planning were both statistically significant when they were used to explain performance differences among Brazilian supermarket operations. Differences in company management practices were found to play a more important role than changes in the environment. However, the results clearly suggest that management by itself was unable to take advantage of the upward and downward movements in the economy to modify the relative competitive positions of companies operating within the market. This finding challenges the existing literature on strategic planning.

OWNERSHIP CONCENTRATION AND FIRM PERFORMANCE IN RUSSIA: THE CASE OF BLUE CHIPS OF THE STOCK MARKET

Based on panel data from 1995.1997, the paper focusses on the impact of ownership concentration on the performance of Russian non-financial privatised companies that constitute the group of .blue chips. of the country.s stock market. We consider three indicators of company performance . labour productivity, profitability, and Tobins.s q . and employ instrumental variables technique to correct regression results for endogeneity of ownership. We find that ownership concentration positively affects labour productivity, but has a negative impact on Tobins.s q. The relationship between ownership concentration and profitability follows a U-shaped pattern with the turning point at 56% concentration. These findings imply that ownership concentration results in higher technical efficiency of enterprises, but the benefits from productivity improvements do not accrue to all shareholders. This is consistent with the expropriation hypothesis that large owners use their power to extract private benefits of control.

Corporate Disclosure of Environmental Liability Information: Theory and Evidence*

Abstract. The decision to disclose information concerning a firm's environmental liabilities is modeled as a sequential game involving the firm, a capital market, and outside stakeholders who can impose proprietary (political) costs on the firm. A partial disclosure equilibrium is derived in which firms reveal information strategically, maximizing the share‐value net of expected political costs. Inherent uncertainty regarding the existence and size of the liabilities creates a setting where outsiders are uncertain if management is informed about these liabilities, so firms can plausibly withhold “bad news”, that is, they do not disclose liabilities that exceed a threshold level. Three novel hypotheses are that a firm is more likely to disclose as (1) its pollution propensity increases, (2) outsiders' knowledge of its environmental liabilities increases, and (3) the risk of incurring proprietary costs decreases. Empirical support is found for the hypotheses, based on the accounting disclosures made by sample firms selected from the records of the Ontario Ministry of the Environment and Energy.Improved accounting and auditing standards for environmental disclosure would build on at least three implications of the study: To the extent that inherent uncertainty leaves managers with discretion as to what to disclose, the partial disclosure equilibrium result suggests that not all firms will comply with disclosure standards. Publishing broad environmental performance indicators for companies in nonaccounting outlets would increase public awareness of a manager's private information endowment, making voluntary accounting disclosures of the liabilities more likely. If a significant decline in stakeholder tolerance of pollution occurs, the expected proprietary costs of disclosing increase, and companies become less likely to disclose.

Assessing Effectiveness of Joint Committees in a Labor-Management Cooperation Program

Experiments and programs in labor-management cooperation are popularly believed to be effective in improving performance, but are often conducted with little or no evaluation of their success. This paper reports a test of a joint problem-solving model in a large telecommunications firm, as part of an overall assessment of the firm's quality-of-worklife (QWL) and employee involvement (El) committees. The assessment employed interviews, company performance indicators, and questionnaire survey data. Results showed strong evidence of the success of the joint committees as well as support for the model with respect to the contribution of key climate and process variables.

The Impact of Quality Management on Productivity

Management approaches based on improvements in all aspects of quality are being vigorously promoted by private consultants and government agencies as the route to improved organizational performance. Raises the question of whether these approaches work and attempts to answer it by describing a study of several companies undertaking quality processes which are generally based on total quality management concepts. Concludes that these approaches have had a significant impact on operations and relationships inside the organizations, which have probably contributed to their long‐term viability. Qualifies this conclusion by adding that, as measured by traditional overall company performance indicators, the direct impact of these quality‐oriented processes is greatly overshadowed by the effects of the other internal and external factors which influence business performance.