Private Sector Adaptation Research Articles

The interplay of strategic management accounting, business strategy and organizational change: as influenced by a configurational theory

PurposeThis paper aims to discuss the interplay between strategic management accounting (SMA) and three organizational change configurations: strategy, structure and restructuring. This explication occurs within a context that is characterized by organization restructuring and corporate strategy changes within Jordan Customs Organization (JCO).Design/methodology/approachThis paper uses a qualitative research approach and presents an interpretive case study of the JCO public sector organization. To collect data, it uses methodological triangulation, which includes interviews, historical and statistical analyses, documents and archival records. It is informed by the theoretical lens of configurational theory and strategic typologies to interpret the influences of organizational change configurations on SMA as it relates to the interplay of strategy, structure and restructuring.FindingsThe study findings agree with the related literature that SMA practices have developed management accounting from important operational transactions to gain a more strategic orientation through integrating customers, human resources, processes and financial departments. This paper concludes that specific SMA techniques have been used for strategizing by organizations in the public sector, providing a valuable counterpoint to the private sector adaptation that has dominated SMA research. This study finds that organizational restructuring has also contributed to decentralization and delegation, which has led to the distribution of tasks and specialization in accounting departments. It also concludes that SMA may facilitate or delay organizational change configurations in JCO. SMA can play a significant role in ensuring that the institution learns in response to organizational changes. On the contrary, this paper also concludes that organizational practices led to changes in SMA rules and routines.Research limitations/implicationsA general criticism of case-study methods is that they lack rigor and provide little basis for generalization. First, case studies tend to be specific and individual, posing significant issues regarding generalization. Therefore, several comparative case studies involving various organizations should be conducted to ascertain if these practices have become more commonplace, especially in the public sector. Second, considering the nature of a government entity and the sensitivity of the information that required confidentiality, certain strategizing imperatives could not be directly examined, such as meetings between top management to make important decisions of strategic significance. This paper has important implications because it highlights the shortcomings of a supercilious singular relationship between strategic choices and the design of SMA practices.Originality/valueThis paper contributes to the growing literature by focusing on the relationship between SMA and three organizational change configurations: strategy, structure and restructuring. This paper is informed by the configuration theory perspective commonly used in accounting research. The empirical evidence in this study is provided in an SMA field, where empirical research is needed to be comparable with traditional accounting practices.

Adaptation to climate change in the UK wine sector

This research contributes to literature on private sector adaptation, examining business-level adaptation to climate change in the UK wine sector. The research adopts a temporal and relational view of adaptation, through a sector-wide, value chain lens and through considering adaptation to both climate variability and longer-term change. Using the lens of ‘a good year’ and ‘a bad year’ in the sector, we consider the role of extreme events in adaptation decision-making and learning. We focus, unusually, on both opportunities and risks of climate change. Results show businesses increasingly see climate change as an opportunity for the UK wine sector. Yet climate risks remain and propagate along value chains, through supply and demand. This produces winners and losers in ‘good years’ and ‘bad years’, as well as over longer timescales. We find businesses along the value chain take steps to engage in extensive proactive adaptation behaviour, often right from business design and development. Business relationships condition climate risk exposure and adaptive capacity and adaptation decisions within one business can influence risks and opportunities throughout the value chain. Our results also reflect and develop organisational adaptation theories. We find businesses continually refine their adaptation strategies in response to climate variability and extreme events. They enhance adaptation learning by experimenting with new technologies and strategies. Irregular and extreme events can become important focal or tipping points in creative iteration and innovation of adaptation strategies, including for longer-term climate change. Our results stand in contrast to earlier literatures which suggest that businesses consider climate change to be too uncertain, or long-term, to engage in adaptation. Instead, climate change has become a master-narrative within the wine industry, through which sector actors often interpret their experiences and orient their business design and activities. Results indicate a strong dependence on own experience in adaptation decision making, that risks creating adaptation lock-in. We propose a typology of proactive private sector adaptation responses.

Enabling private sector adaptation to climate change: factors supporting and limiting adaptation amongst Sri Lankan SMEs

Enabling private sector adaptation to climate change: factors supporting and limiting adaptation amongst Sri Lankan SMEs

The triple differential vulnerability of female entrepreneurs to climate risk in sub‐Saharan Africa: Gendered barriers and enablers to private sector adaptation

AbstractThe ability of businesses to adapt effectively to climate change is highly influenced by the external business enabling environment. Constraints to adaptive capacity are experienced by small and medium enterprises (SMEs) across sub‐Saharan Africa, regardless of the gender of the business owner. However, gender is a critical social cleavage through which differences in adaptive capacity manifest and in Africa most entrepreneurs are women. We conduct a systematic review to synthesize existing knowledge on differential vulnerability of female entrepreneurs in Africa to climate risk, in relation to their sensitivity to extreme climate events and their adaptive capacity. We synthesize this literature using a vulnerability analysis approach that situates vulnerability and adaptive capacity within the context of the wider climate risk framework denoted in the IPCC Fifth Assessment Report. In doing so, we identify gendered barriers and enablers to private sector adaptation and suggest women entrepreneurs face a “triple differential vulnerability” to climate change, wherein they: (1) are often more sensitive to climate risk, as a result of their concentration in certain sectors and types of enterprises (e.g., micro SMEs in the agricultural sector in remote regions); (2) face additional barriers to adaptation in the business environment, including access to finance, technologies, (climate and adaptation) information and supportive policies; and (3) are also often concurrently on the frontline of managing climate risk at household levels. Since various forms of inequality often create compounding experiences of discrimination and vulnerability, we pay particular attention to how factors of differential vulnerability intersect, amplify, and reproduce.This article is categorized under: Climate and Development > Social Justice and the Politics of Development Vulnerability and Adaptation to Climate Change > Institutions for Adaptation

What role for multi-stakeholder partnerships in adaptation to climate change? Experiences from private sector adaptation in Kenya

Amidst increasing interest in multi-stakeholder partnerships (MSPs) in climate discourse, this paper identifies four rationales for why MSPs may be particularly suited to supporting adaptation from existing literatures. With a focus on MSPs that seek to support adaptation among micro, small and medium enterprises (SMEs) in Kenya, we then investigate the extent to which this potential is being realised in practice, through interviews with partners engaged in the design and implementation of MSPs. This allows us to examine some of the opportunities, challenges and distributional risks that may result from employing MSPs to support adaptation. We find that through action and investment from donors and the public sector in areas such as research, data access, relationship building, training and capacity building, access to finance and business incubation, MSPs can enable a wide range of private sector actors to deliver adaptation resources to SMEs. Beneficiaries include small-scale SMEs in agricultural value chains in remote regions, that could otherwise fall outside of market inclusion. As such, respondents in this research typically considered MSPs to present an exciting opportunity to plug gaps in adaptation and development finance. Further analysis, however, suggests that dependence on market mechanisms for delivering adaptation resources means that MSPs risk excluding the poorest groups, exposing businesses to new risks and reproducing existing inequalities. Additionally, MSPs often remain heavily dependent on donor-led organisations for both resources and momentum. In Kenya, opportunities to develop more integrated responses to supporting the adaptive capacity of SMEs are being missed through a disconnect between the practice of MSPs and national public sector development frameworks and institutions.

Enabling private sector adaptation to climate change in sub‐Saharan Africa

AbstractThe private sector is increasingly recognized as having important potential to help society adapt and become more resilient to climate change. Yet there is limited research examining how to promote and facilitate private sector adaptation in developing countries and in particular how governments can create an enabling environment to stimulate and incentivize domestic private sector adaptation. In this paper, we address this gap through a review of the key factors required to provide an enabling environment for the private sector denoted by existing adaptation literatures. We do this with a focus on adaptation by small and medium enterprises (SMEs) in sub‐Saharan Africa (SSA). To advance this review, we draw insights from a much larger, yet generally independent, literature on enabling environments for private sector development. This literature disaggregates the private sector and highlights key constraints to the development and growth of SMEs in SSA, including deficient infrastructure and evidence of an African gap in access to and use of finance. Both areas of scholarship are then combined in a framework identifying key “building blocks” constituting enabling conditions for private sector adaptation. The framework could be applied in many ways including to focus strategies to enhance private sector adaptation and to identify trade‐offs and interactions between policies or initiatives surrounding private sector development. By combining these literatures, we call for a more holistic approach to develop enabling environments for SME adaptation and climate resilient development that addresses the broader structural deficits that condition vulnerability and barriers that limit adaptive capacity.This article is categorized under: Vulnerability and Adaptation to Climate Change > Institutions for Adaptation

Private finance for adaptation: do private realities meet public ambitions?

The private sector’s role in climate finance is increasingly subject to political and scientific debate. Yet there is poor empirical evidence of private engagement in adaptation and its potential contribution to the industrialised countries’ mobilisation of USD 100 billion of annual climate finance from 2020 onwards to support developing countries to address climate change. This paper analysed 101 case studies of private sector adaptation under the Private Sector Initiative (PSI) of the UNFCCC Nairobi work programme, and examined these against ten ‘adaptation finance criteria’ that were distilled from UN climate negotiation outcomes. Results show that private adaptation interventions complement public adaptation activities. Yet the ten adaptation finance criteria are not met, which demonstrates that the diplomatic UNFCCC conceptualisation of financing adaptation is dissonant from the private sector reality. For example, while the case studies’ investments are ‘new and additional’ to Official Development Assistance (ODA), their ‘predictability’ remains unclear. And despite some commitment for ‘up-scaling’, plans and associated costs for doing so remain undisclosed. Developed countries’ role in ‘mobilising’ private financial resources under the PSI seems limited. It is unrealistic to expect that the UNFCCC alters existing criteria to suit private initiatives, or that the private sector aligns its initiatives to meet existing criteria. This paper advocates monitoring and reporting only of those private investments that principally finance adaptation. This practical way forward would allow private finance to meet criteria such as predictability, transparency, and mobilisation, but would drastically reduce the amount of private investment that could contribute to reaching the USD 100 billion climate finance target.

Climate Change Risk Information Disclosure, Insurance, the Private Sector and the Role of Government

Climate risk disclosure from insurance and reinsurance companies has been controversial in terms of what it can accomplish and whether it can influence private sector adaptation behavior. This white paper details findings and makes recommendations about government policies requiring climate risk disclosure from insurance companies and their effectiveness. The findings and recommendations are based on a multi-disciplinary workshop involving academics, government, and the private sector, co-hosted by UNC Law's Center for Law, Environment, Adaptation, and Resources (CLEAR), the Georgetown Climate Center (GCC), UCLA Law's Emmett Institute on Climate Change and the Environment, and the Cooperative Institute for Climate and Satellites - North Carolina.

Not a panacea: private-sector engagement in adaptation and adaptation finance in developing countries

The role of the private sector in climate finance is increasingly emphasized in international political debates. Knowledge of private engagement in mitigating climate change and in more advanced economies is growing, but the evidence base for private-sector engagement in climate change adaptation in developing countries remains weak. Starting from the premise that the private sector's role in adaptation is often inevitable and potentially significant, this article first analyses the potential of private-sector engagement in adaptation and adaptation financing in developing countries by conceptualizing the private sector's roles and motivation therein. For further inquiry, and for a discussion based on a developing-country context, interviews were conducted with key stakeholders for adaptation of Zambia's agricultural sector, including on ways in which the government can incentivize private-sector engagement in adaptation.How much private-sector adaptation and adaptation finance can be identified depends on the interpretation of the concept of adaptation. Under a broad interpretation, the domestic private sector in particular can contribute substantially to adaptation, both directly and indirectly, through its investments and activities. However, the international private sector's role in financing adaptation should be analysed under a strict interpretation of adaptation and appears limited.Policy relevanceInternational political debates increasingly stress the importance of private climate finance, yet are constrained by vagueness around the private sector's role in adaptation finance. This article conceptualizes and scrutinizes private-sector engagement in adaptation and adaptation finance in developing countries. It concludes that the domestic private sector in particular can contribute substantially to adaptation in direct and indirect ways, and that domestic policies incentivize such contributions. However, international private financing of adaptation is more limited and its analysis requires a stricter interpretation of adaptation. Private-sector engagement in adaptation and adaptation finance can supplement, but not substitute for, public investments in adaptation. These limitations are particularly important when discussing private adaptation finance as part of the developed countries' pledge to mobilize US$100 billion of climate finance per annum from 2020 onwards.

Responsibility for private sector adaptation to climate change

The Intergovernmental Panel on Climate Change (2007) indicates that vulnerable industries should adapt to the increasing likelihood of extreme weather events along with slowly shifting mean annual temperatures and precipitation patterns, to prevent major damages or periods of inoperability in the future. Most articles in the literature on business management frame organizational adaptation to climate change as a private action. This makes adaptation the sole responsibility of a company, for its sole benefit, and overlooks the fact that some companies provide goods and services such a food, water, electricity, and medical care, that are so vital to society that even a short-term setback in operations could put public security at risk. This raises the following questions: (1) Who is responsible for climate change adaptation by private-sector suppliers of infrastructure? (2) How can those who are identified to be responsible, actually be held to assume their responsibility for adapting to climate change? These questions will be addressed through a comprehensive review of the literature on business management, complemented by a review of specialized literature on public management. This review leads to several conclusions. Even though tasks that formerly belonged to the state have been taken over by private companies, the state still holds ultimate responsibility in the event of failure of private-sector owned utilities, insofar as they are critical infrastructure. Therefore, it remains the state's responsibility to foster adaptation to climate change with appropriate action. In theory, effective ways of assuming this responsibility, while enabling infrastructure providers the flexibility adapt to climate change, would be to delegate adaptation to an agency, or to conduct with stakeholders. In view of this theory, Germany will be used as a case study to demonstrate how private-sector infrastructure providers can plan and implement climate change adaptation in practice, through the regulatory modes of negotiations and enforced self-regulation.

Derivative Market Competition: OTC Markets Versus Organized Derivative Exchanges

Chapter I - Derivative Market Competition: OTC Markets Versus Organized Derivative Exchanges Recent regulatory initiatives in the United States have again raised the issue of a ''level regulatory and supervisory playing field'' and the degree of competition globally between over-the-counter (OTC) derivatives and organized derivative exchange (ODE) markets. This chapter models some important aspects of how an ODE market interrelates with the OTC markets. It analyzes various ways in which an ODE market can respond to competition from the OTC markets and considers whether ODE markets would actually benefit from a more level playing field. Among other factors, such as different transaction costs, different abilities to mitigate credit risk play a significant role in determining the degree of competition between the two types of markets. This implies that a potentially important service ODE markets can provide OTC market participants is to extend clearing services to them. Such services would allow the OTC markets to focus more on providing less competitive contracts/innovations and instead customize their contracts to specific investors’ risk preferences and needs. Chapter II – Crisis Resolution and Private Sector Adaptation Efforts at crisis resolution that succeed in reducing potential inefficiencies and instability in the international financial system are in the interest of both the private and the public sector. Unlike in the domestic context, in the international context, in the absence of clearly established rules of the game, the approaches adopted toward crisis resolution, and the extent to which they are interpreted by market participants as setting a precedent, can have profound implications for the nature and structure of international capital flows. The key conclusion of this chapter is that recent experiences with payment suspensions and bond restructurings are limited as guides to determining the future success or failures of these initiatives, as the private sector most likely has adapted in order to minimize any unwanted public sector involvement. Chapter III - European Equity Market Integration: Cyclical or Structural? Reviewing the empirical evidence of equity market integration in the European Union, the chapter finds a significant increase in the importance of global sector factors for a number of industries. Unlike most past studies, which only covered developments during the bull market of the late nineties, the results presented in this chapter suggest that the degree of Euroland equity market integration has declined gradually following the bursting of the TMT bubble. This seems to suggest that the findings of previous studies that Euroland equity markets were nearly fully financially integrated is worth revisiting. There are, however, several good reasons to believe that the structural factors driving European equity market integration have yet to play themselves out fully. Institutional investors both outside the Euroland area and within have substantial untapped capacity to take on Euroland exposures and invest additionally in Euroland equities.