Turbulent Economic Environment Research Articles

Risk Management in Microfinance Institutions

Microfinance is fast becoming a household name globally due to its acceptance as a means of reaching those that were not served by the conventional big banks. The survival of microfinance institutions in any country depends majorly on the overall political and economic environment of such a nation. However, the greatest challenge the microfinance institutions will face globally in pursuance of its financial intermediary role is how best to manage its credit and risk exposures in comparison with the rising competition, sophistication and turbulent economic and social environment especially in developing nations. After examining different concept of microfinance and risk management, this paper focus on those peculiar risks associated with microfinance business and suggested how regulators and operators in the sector can best guide against distress or imminent collapse while striking a balance between profitability and unhealthy risk exposure.

Exploring intentions towards human, social and financial capital investments in a turbulent economic environment

This article applies the theory of planned behaviour in order to understand intentions to create new ventures or participate in existing ones, by investing human, social and financial capital in a turbulent economic environment, such as the one in Greece. We hypothesize that subjective norms relate to investment intentions (IIs) and that individual attitudes and perceived behavioural control over the investment mediate this relationship. We also propose that norms, attitudes and control interact in explaining IIs in such a way that intentions are stronger when positive norms and attitudes coexist with high levels of control. Hypotheses are tested by means of a cross-sectional quantitative study that was conducted in Greece ( N = 203). Bootstrap analyses support our mediation hypotheses by showing that norms relate positively to IIs via their associations with positive attitudes and high control. In addition, regression analyses show that norms, attitudes and control interact in explaining intentions. However, contrary to expectations, results show that positive attitudes towards investment boost IIs, in conditions where norms are positive but control is low.

Do not say a word! Conceptualizing employee silence in a long-term crisis context

Although research has emphasized the organizational and individual factors that influence employee voice and silence at work, it is less known how employee voice/silence is affected by the economic context, particularly when this context is one of intensive and long-term economic crisis in a country with weak institutional bases. In this study, we explore how employee silence is formulated in long-term turbulent economic environments and in more vulnerable organizational settings like those of small enterprises. The study draws on qualitative data gathered from 63 interviews with employees in a total of 48 small enterprises in Greece in two periods of time (2009 and 2015). This study suggests a new type of employee silence, social empathy silence, and offers a conceptual framework for understanding the development of silence over time in particular contexts of long-term turbulence and crisis.

Dilemmas of human potential management, from the viewpoint of employment security

In this study - based on the result of own and others empirical research, regarding conditions of person’s functioning in the process of work during the last decade of 2000’s - an attempt of indicating dilemmas connected with shaping of employment security has been made. The field of study was approached not only from the perspective of employees and employers, but also with the intent of showing the diversity of solutions adopted in this area The results of presented research have confirmed the validity of solutions postulated by science, in relation to the results of monitoring of the turbulent economic environment and the progressing changes in employees’ expectations

ГОСУДАРСТВО-ПРЕДПРИНИМАТЕЛЬ: ВТОРОЕ ДЫХАНИЕ?

The article analyzes the evolution of the state-owned enterprises’ (SOEs) role in the economy in the period from 1998 to 2013. The attention to this subject is determined by the growing influence of SOEs at the national and international levels, in particular by the internationalization of their activities in both developed and developing (emerging) economies. Within the category of enterprises that are recognized as state-owned, two groups are distinguished in accordance to the share of state’s participation in the equity (types A and B). Type A includes majority-owned enterprises where the state owns more than 50 per cent of the shares or holds effective control by other means. Type B includes minority-owned enterprises in which the state holds between 10 and 50 per cent of the ordinary share capital or voting rights (partly state-owned enterprises, PSOEs). The international investment activities of SOEs dramatically increased after the global financial crisis of 2008–2009. This is a relatively new phenomenon which is likely to develop further in the near future. The key models and spheres of SOEs dissemination are presented (petroleum and infrastructure, financial services, utilities). The performance of SOEs and private enterprises is compared in several sectors (oil exploration, extracting industries, supply of electricity and heating, communication, aviation). The author analyzes the OECD-led efforts to reform the guidelines of the governance and accountability of SOEs with the aim to increase efficiency and transparency of SOEs functioning in accordance with high international standards of responsible business conduct. An overview of the main changes to the OECD Guidelines on Corporate Governance of State-Owned Enterprises (2005) is presented. The document stresses that SOEs should not be used to finance political activities; that the governments should be able to identify and disclose the public policy rationales that justify the maintenance of enterprises under state ownership. At last, the OECD indexes that characterize the state’s role in the economy (direct government control over enterprises and governance of SOEs) are analyzed. The author expects an increase of the SOEs role in the national and global economy in the short and long term for managing the challenges of the currently very turbulent economic environment.

Rethinking performance management: a behaviour-based perspective

In a turbulent economic and social environment, understanding the drivers of individual and organisational performance has become paramount. This research emphasises the centrality of human behaviour as the major determinant of performance outcomes. Drawing on the main assumptions underpinning organisational behaviour, applied psychology and human resource development literature, this research provides a thorough analysis of the concept of behaviour, its antecedents and consequences, and addresses potential implications for performance management. Specific guiding principles are suggested to lay the foundations of behaviour-based performance management systems that recognise the role of behaviour in predicting performance and link human-oriented investments to organisational effectiveness.

Re-thinking complex, fluid and contradictory knowledge(s) in higher education

Turbulent economic, political, social and cultural environments, coupled with the unpredictable natural environment, are currently the most prominent features of the state of the world. While in the past these phenomena were more simple, straightforward and certain, of late they have become complex, unpredictable and often contradictory to the previous ‘norm’, thus presenting challenges that are more difficult to understand and resolve. Consequently, the realisation has emerged that contemporary education systems, largely based on present disciplinary grounded knowledge, are no longer adequate. In the light of the need for scholars in all fields of knowledge to rethink how broader, open-ended inquiries of knowledge production can be pursued in higher education, I argue that the ‘knowledge’ that is perceived as inadequate because of its complexity, uncertainty and contradictory nature, should be revisited through multi-dimensional knowledge production processes underscored by socio-cultural perspectives. Key words: complexity, uncertainty, contradiction, ways of knowing, knowledge

Macro-economic factors and foreign direct investment in India: a Toda Yamamoto causality approach

The turbulent global economic environment of past few years marked the subprime crisis 2007-08, European debt crisis 2009, Greece crisis 2015, see-saw oil prices, Islamic extremism and age-old political unrest of Middle-East compels to re-examine the influence of economic variables on FDI inflows as all these events contribute heavily to the macroeconomic dynamics of countries like India who seek more of foreign direct investment for mobilising their growth prospects. The study uses the macro-economic variables like gross domestic product, real effective exchange rates, balance of payments, consumer price index and gross capital formation for India from 1980-2013. The study adopts time-series estimations like ARDL co-integration test and Toda Yamamoto Granger causality test. The causality test validates causation existing between FDI and all economic variables under study except REER. However, results suggest that FDI causes inflation, may be of the fact that inward FDI is not productively used causing extra money supply in the economy resulting in inflation.

The impact of compensation on the performance of competence-exploiting and competence-creating FDI

In the face of the current turbulent economic environment, multinational enterprises may choose to invest in RD factoring on the differentiated mandates of decentralised units. Further, we demonstrate that the provision of financial rewards and the effective organisational design stand out as the most influential drivers of advanced RD regardless the type of research implemented in these units.

Innovation Evaluation: Past and Current Models and a Framework for Infrastructure Projects

Innovation is at the heart of today's competitive economy. The infrastructure industry of a nation plays a crucial role in its economic development and having understood innovation, and its impacts are very important in the current turbulent economic environment. Innovation and infrastructure are both referred to as two main factors to getting competitive internationally; therefore, having innovation evaluated has become one of the priorities for most governments and organizations. Innovation is a complex and multifaceted phenomenon and is very difficult to measure. The aim of this paper is to develop a framework to evaluate innovation and its benefits in infrastructure projects. For this purpose, a systematic review approach was adopted to review past and current models and frameworks in the literature related to the field of innovation and measurement. As the literature is very fragmented and lacks consensus on innovation measurement, it was intended to develop a comprehensive framework with a holistic attitude in mind in order to consider as many as possible interacting elements of the innovation process. The results showed that having a clear understanding of innovation requires evaluating not only inputs and intermediate outputs of the process, but also necessitates evaluation of what happens in the process of innovation, as well as longer term benefits. The proposed framework is developed in the context of infrastructure projects, and it consolidated necessary measuring aspects of innovation, especially the risk of impacts in the process. This area of research is new and relatively unstudied in the context of infrastructure. However, this study begins to scratch the surface of a large area of research that can act as the first step toward more reliable evaluation of innovation in infrastructure projects.

Realignment strategies in the US retail industry during a recessionary time

Purpose– The purpose of this paper is to examine the range of realignment strategies employed by retailers in the USA in response to the 2008 economic recession.Design/methodology/approach– Following the grounded theory approach, National Retail Federation News Briefs published between 2008 and 2011 were analyzed by sorting them into thematic categories and comparing trends in strategic decisions during the recession (2008-2009) and after the recession (2010-2011). Based on the emergent categories, propositions were developed to provide theoretical explanations of the findings.Findings– The authors found five thematic categories of realignment strategies: promotional, organizational, price, operational, and product realignments. In line with contingency theories, retailers used these strategies to achieve a greater fit with the altered business environment and consumer consumption patterns. While promotional realignment was most prevalent, followed by organizational realignment, different realignment strategies were pursued based on the strategic focus and long-term vs short-term orientation of the retailers.Originality/value– The contribution of the findings is twofold: filling a critical gap in the literature examining the range of realignment decisions of the US retail industry in response to the recent economic recession; and enhancing the theoretical understanding of underlying factors or mechanisms of specific realignment decisions in the context of a turbulent economic environment.

Integration of Six Sigma and ISM to improve Supply Chain Coordination – A conceptual framework

To achieve competitiveness and to improve supply chain performance, supply chain coordination (SCC) is considered as a key challenge by the companies to satisfy their customers. In today’s turbulent economic environment, SCC is a topic of great significance among business houses because SCC creates understanding, molds human behavior and improve competitiveness. As observed from literature that the dynamics of global market has resulted in serious pressure and distraction to activities of various supply chain entities i.e. suppliers, manufacturer, distributors, wholesaler, retailers and customers, which ultimately affects the SC performance. Thus, supply chains are exposed to risks due to uncertain and turbulent economic environment. To overcome these challenges, authors in this study developed a conceptual framework for knowledge management based on Six Sigma and ISM which can be used to study various supply chain dimensions be it human, process or quality dimensions. The main advantage of this framework is that it not only helps to understand information regarding the strength and weaknesses of various supply chain entities in a supply chain but also helps to determine the structural relationship among key dimensions of interest. The proposed framework can be applied by industries to model and analyze their processes effectively, compare their performance both within and outside their industry segment and thus improve competitiveness by following knowledge management practices.

Real and accrual earnings management and IPO failure risk

This paper analyses the relationship between real and accrual earnings management activities and IPO failure risk. While the association between accrual earnings management and IPO failure has been researched in a limited setting, to date, there has been no work that analyses the impact of real activities-based manipulation on the probability of IPO failure. Based on a sample of 570 UK IPO firms that went public over the period 1998–2008, we find evidence that IPO firms manipulate earnings upward utilising real and accrual earnings management during the IPO year. We also find that IPO firms with high levels of real and/or accrual earnings management during the IPO year have a higher probability of IPO failure and lower survival rates in subsequent periods. In addition, we find that IPO firms experience a higher probability of IPO failure and lower survival rates in the post-IPO period when greater real earnings management takes place during the IPO as compared to accrual earnings management. While our work contributes to the growing literature on real and accrual earnings management around IPOs, the majority of our failed IPO events are from the Alternative Investment Market and occur during the financial crisis. Future research, therefore, should consider whether these results are generalisable to more developed firms and less turbulent economic environments.

"Study Regarding The Correlation Between The Academic And Professional Environment From The Perspective Of Future Graduates. Managerial Accounting Case "

In a turbulent economic environment, characterized by a downward trend of financial resources and jobs offer, professional environment requirements are increasing, and thus, the academic environment's role is becoming major. These were the coordinates that have directed our empirical research on analyzing the perspective of future graduates regarding the correlation between the academic and professional environment in the field of managerial accounting. The research approach considers on one hand, a synthesis of ideas published on this subject in the literature. This is complemented by an empirical study based on a questionnaire to which we have received responses from future graduates of the academic environment in the accounting field. The study results showed that all respondents believe that accounting education is correlated with the professional environment, the academic environment offering them the necessary training in managerial accounting for a successful integration into the professional environment. The majority of respondents also believes that for the integration in the professional environment, future graduates must hold simultaneously theoretical and practical knowledge, but also organizational skills. The results reveals that, by their relevance, the factors that motivate future graduates to prepare in managerial accounting are: the interest to acquire knowledge, labor market integration, discipline content, professor's teaching methods, the promotion of the exam. Also, all respondents would accept to participate in volunteer programs organized by the professional environment in order to gain experience in managerial accounting. Regarding the adaptation of the managerial accounting approach in the academic environment, most respondents support a moderate adjustment by implementing internship and volunteering programs.

Mala Tempora Currunt:How Do PE-BackedFirms React to Financial Crises?

How has PE backing influenced the operating performance of firms (primarily in terms of ROA and ROE) during the recent financial crisis (2006–2010)? In this study, the authors use a dataset of 939 European PE-backed firms and a control sample of 2,516 European non-PE-backed firms. They find that PE-backed firms are more profitable than non-PE-backed firms. Even though the recent financial crisis had a negative effect on the operating performance of both PE- and non-PE-backed firms, the authors report strong evidence that the former have a greater ability to withstand turbulent economic environments. <b>TOPICS:</b>Private equity, financial crises and financial market history, developed, statistical methods

Varieties in developing sustainability: the case of the Israeli kibbutz

Kibbutz communities and organizations were originally structured to be egalitarian and democratic. The last two decades proved to be a major challenge for their sustainability due to a serious economic crisis. Many scholars have lamented the end of the kibbutz, some of them claiming that there is no place for utopias in the twenty-first century. Kibbutz communities were trying to survive within a turbulent economic and social environment. This article will attempt to analyse varieties in developing sustainability that were adopted by kibbutz communities. Focusing on the impact of the economic crisis, we will investigate processes of value change within the kibbutz, taking into consideration that the kibbutz does not exist in a vacuum but is rather embedded within a society that has undergone transformation processes from a socialistic to a capitalistic orientation. The article will look at different solutions that kibbutz communities have adopted and strategies that kibbutz members used in order to cope with this crisis. We will explain how these solutions and strategies are reflected in members' values and attitudes as well as taking into consideration in which areas value change was fast and in which it was slower. Our analysis will lead to a reflection on the different communitarian and non-communitarian models that might evolve in the kibbutz communities and their possible outcome. The discussion will focus on three dimensions of sustainability methods adopted by kibbutz communities that integrate value change, organizational change, and community processes.

Uncertainty and Ongoing Economic Turbulence

The Problem The global financial crisis and uncertainty has the potential to significantly affect the human resource development (HRD) field in terms of investment levels in training and development; the nature, content, and focus of HRD interventions and programs; evaluation processes used to determine return on investment in HRD; and the role of HRD scholars and practitioners in assisting organizations to navigate such uncertain and turbulent economic environments. However, there is little to no debate about how HRD is responding to the crisis or how HRD scholars and practitioners can or should influence people management and development policy and practice during an era of ongoing economic turbulence. The Solution The current issue will address the gap that exists in our understanding of HRD during uncertain times. The issue draws together multi-level and multi-perspective insights into how HRD has responded to the uncertainty and ongoing economic turbulence. The papers are drawn from a range of different cultures and countries, across different levels of analysis, from the individual to the organization, to government and regulation. The methodologies used in the current issue papers are diverse and include quantitative, qualitative, integrative literature review, and an academic-practitioner reflection. The current issue sets out important implications for how HRD practitioners and researchers can assist the HRD field to respond to and shape organizational and government responses to the uncertainty and ongoing turbulence. The Stakeholders Scholars, practitioners, and policy makers interested in the human resource development field.

The development of customers' satisfaction in the banking sector of Slovakia in the turbulent economic environment

Satisfaction of bank’s customers presents important area of building of long-term relationships with the client, which significantly determines the financial performance of commercial banks through successful business. Satisfied customer buy bank’s products, is willing to pay also higher price for the product or service and represents some form of free advertising and considerable less effort, time and money needed for keep him, than to get a new one. This article presents current situation in the banking sector in Slovakia and quantifies changes in the area of customer satisfaction, which occurred during the financial and economic crisis. Customer satisfaction research has been conducted through a questionnaire survey. First research has been carried out on the first half of 2008 on the sample of 298 respondents, ie. the time before the financial crisis. In that time, the greatest satisfaction has been assigned to the availability of bank’s products and services, and the greatest dissatisfaction has been expressed by respondents to the prices of banking products and services. In 2012, this research has been conducted on the sample of 320 respondents. The change of satisfaction factors, respectively dissatisfied bank’s customers compared with 2008 has been investigated by standard statistical methods. Results of our research in 2012 showed satisfaction reduction of bank customers and also changes in respondents’ preferences of the perception of satisfaction factors, respectively dissatisfaction in relation to commercial banks.

Infosys Limited: is it still the Indian IT bellwether?

Subject area Strategy. Study level/applicability MBA level. The case can be used primarily for the following courses: strategic management, competitive strategy. It can also be used for courses on: international business, international business environment, business marketing. Case overview Intense competition and a turbulent economic environment posed problems for Infosys, a leading information technology (IT) company in India. Infosys lost market share and its second position in the IT industry to Cognizant. An adverse economic environment affected its clients' IT spending and introduced severe price-based competition in the market. Infosys' business model operated on charging price premium from clients, and the company never compromised on its margins. The company was forced to revaluate, as outsourcing, the main revenue earner for Infosys was experiencing commoditization, and other players were willing to compromise on margins. The Indian IT industry had moved up the value chain and competitors were offering consulting services, where there was huge scope for differentiation. Infosys did not have the requisite resources to compete in this domain. Decline in share prices, negative investor sentiments, downward revision of revenue guidance targets, loss of large clients, higher attrition rates, and visa problems in the US market (Infosys earned more than 60 percent revenues from this market) added worries for the company. In response to these challenges, Infosys initiated Strategy 3.0, wherein the company planned to move up the value chain and offer consulting services and other high-end solutions to clients. This was a shift from its predominantly outsourcing-based revenue model. The company acquired Lodestone to hasten implementation of Strategy 3.0. Initial analysis, however, suggested that Infosys was merely aping Cognizant's well-established strategy. Infosys also needed to tackle perceptual issues regarding its competencies. Expected learning outcomes The instructor can use this case to facilitate the understanding of: the impact of an intensely competitive environment on a company's strategy, how changes in the competitive landscape and business environment can erode sources of competitive advantage for an incumbent, the impact of a client's business environment on the vendor's business, the concept of value chain and analyze how companies in an industry move up in the value chain, the concept of business model, and how environmental changes can impact a hitherto robust business model of a company, evolution of business model over a period of time with changes in the business environment, the internal conflict between ideals and values versus revenues and market share for a company, key resources and capabilities that shape the differential advantage for an IT company, designing and implementing strategic solutions, the evolution of the Indian IT industry. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

News Quality from the Recipients' Perspective

Fierce competition on the Web, increased commercialization and a turbulent economic environment may prompt media organizations to violate journalistic quality norms in order to remain competitive. Media users or recipients are then more likely to be confronted with factually inaccurate, incomplete or biased news. One would hope that at least some recipients prefer high-quality media over low-quality media and this preference will counteract pressures on media organizations to downgrade their product. But this hope is based on the assumption that recipients can evaluate the quality of news appropriately. Communication scholars, however, typically argue that recipients are unable to judge media with regard to these normative quality criteria since they lack the appropriate background and professional knowledge to make such judgements. This study investigates how far this is true. A series of 2 × 2 factorial online experiments test whether recipients of news recognize the quality of news items measured by the criteria of diversity, relevance, ethics, impartiality, objectivity and comprehensibility. Results indicate that recipients do recognize differences in quality to some extent where they reflect issues of relevance, impartiality and diversity. But recipients found it hard to evaluate the ethics, objectivity and comprehensibility of a news item. Furthermore, media brand images proved to be an important heuristic when recipients have to evaluate news quality. The results show that it is difficult for recipients to judge news coverage with regard to identified normative quality criteria. However, the audience is by no means completely unable to identify a lack of quality in the news.