A firm's external environment and the hiring of a non‐standard workforce: implications for organisations

This article empirically investigates organisations' strategic decision to hire non‐standard employees. Using US firm‐level data and a matched pair design, the study shows that firms operating in a more competitive environment and a less uncertain environment have a higher proportion of non‐standard workers. Further, firms with a greater proportion of non‐standard workers show higher financial growth. And finally, in a highly competitive environment, those firms that hire more non‐standard workers achieve significantly higher financial growth. Similar growth is experienced by those firms in the low uncertainty environment hiring more non‐standard workers. These results are all consistent with the research hypotheses.     

Adoption of cleaner technology for climate proactivity: a technology–firm–stakeholder framework

The adoption of cleaner technology (CT) has the potential to play an important role in tackling the impacts of business on climate change on business. It is therefore important to understand the factors motivating the adoption of CT in business. Using a technology–firm–stakeholder framework, this study proposes a perception‐based model for the adoption of CT for climate proactivity that is tested against data collected from 106 firms in India. Six factors are tested using a logistic regression and five are found to be significant in distinguishing adopter firms from non‐adopter firms. The results suggest that the perception‐based model using a technology–firm–stakeholder framework is a useful approach for examining factors affecting the adoption decision. While techno‐economic benefits are perceived to be higher by adopter firms than by non‐adopter firms, other benefits are not perceived differently by either adopter or non‐adopter firms. In addition, adopter firms perceive lower financial costs and higher technical capability than non‐adopter firms do. Also, adopter firms perceive higher regulatory pressure but lower stakeholder pressure than non‐adopter firms do. Implications of the findings and future research areas are discussed. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.     

Corporate engagement in processes for planetary sustainability: understanding corporate capacity in the non‐renewable resource extractive sector,Australia

In recent years corporations have come under increasing pressure from governments, consumers, investors, competitors, business partners and communities to balance their pursuit of economic gain with environmental and social concerns. Non‐renewable resource extractive corporations in particular, due to their profile, visibility and activities, have come under mounting pressure to embed the concept of ecological sustainability into strategic decision‐making processes and operations. In this regard, there is a growing base of evidence that describes efforts, successes and failures in the sector to meet mounting societal expectations. However, to date there has been limited explanatory research into corporate capacity to engage in processes for ecological sustainability. This paper presents an emergent explanation of the internal factors mediating corporate engagement in ecological sustainability in non‐renewable resource extractive corporations in Australia. It identifies the five factors of leadership, resources, structures, culture and understanding and conceptualizes these internal factors as capacity for engagement. While all of the factors are seen as interdependent and essential, leadership is identified as the most critical. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.     

The contours of employee voice in SMEs: the importance of context

This article develops a context‐sensitive approach to analyse how and why voice operates in small‐ to medium‐sized enterprises (SMEs), an area that remains under‐theorised and under‐researched. By building on a priori frameworks with proven ability to unpack complexity and take account of the wider context of SMEs, this article explores how resources (human and social capital) and constraints (product market, labour market and strategic orientation) interact to shape voice practices. The article finds significant differences between ‘reported’ compared with ‘actual’ practices in situ, and identifies different types of firms (‘strategic market regulation’, ‘strategic market‐led’ and ‘non‐strategic market‐led’) along with the factors that influence the form and practice of voice. Overall, the article argues that researchers should further pursue research that appreciates the layered nature of ontology and the role played by firm context to explain complex organisational phenomena, if we are to advance our understanding of voice practices in SMEs and beyond.     

Determinants of environmental management systems standards implementation: evidence from Greek industry

This paper employs logistic regression analysis to test a model that predicts the implementation or non‐implementation of Environmental Management Systems Standards (EMSSs) by considering various factors as explanatory variables. The dependent variable is dichotomous: industrial firms either implementing or not implementing EMSSs. From past experience we identify 15 major variables contributing to implementation of EMSSs. A sample of 259 respondents (84 implementing and 175 not) is used to estimate the parameters of the logistic regression model employing maximum likelihood. The results show an overall significant model with four of the 15 variables significant. The significance of management perception of environmental issues on their decision to implement EMSS was confirmed with regards to their perception on win–win possibilities. Pressure on companies to improve their environmental performance does not result in higher uptake of the standards. Company image and size are important factors in its decision to implement EMSS. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment     

Beyond profitability: effects of acquisitions on technical efficiency in the Italian pasta industry

Unlike traditional studies on the impact of ownership changes—which use either profitability measures or stock prices—this paper investigates the impact of acquisitions on acquired firms' technical efficiency. Using a panel of Italian firms in the pasta industry for the 1981–1997 period, I estimate a stochastic production frontier with exogenous factors affecting efficiency in a translog specification with non‐neutral technical progress. The main result is that acquired firms experience, within the 6 years period following the acquisition, an increase in technical efficiency of the order of 10%. This result is statistically significant and proves to be robust with respect to the inclusion of size and calendar year effects as explanatory variables of firms' inefficiency. These findings contribute to the debate on the welfare gains of ownership changes by providing evidence that mergers and acquisitions lead to cost savings, due to the reduction of acquired firms' X‐inefficiency. Copyright © 2002 John Wiley & Sons, Ltd.     

Strategic managerial incentives under adverse selection

We extend the strategic contract model where the owner designs incentive schemes for her manager before the latter takes output decisions. Firstly, we introduce private knowledge regarding costs within each owner–manager pair. Under adverse selection, we show that delegation involves a trade‐off between strategic commitment and the cost of an extra informational rent linked to decentralization. Which policies will arise in equilibrium? We introduce in the game an initial stage where owners can simultaneously choose between control and delegation. We show that if decision variables are strategic substitutes, choosing output control through a quantity‐lump sum transfer contract is a dominating strategy. If decision variables are strategic complements, this policy is a dominated strategy. Further, two types of dominant‐strategies equilibrium may arise: in the first type, both principals use delegation; in the second one, both principals implement delegation for a low‐cost manager and output control for a high‐cost one. Copyright © 2005 John Wiley & Sons, Ltd.     

When Necessity Becomes a Virtue: The Effect of Product Market Competition on Corporate Social Responsibility

We test whether Corporate Social Responsibility (CSR) is driven by strategic considerations by empirically studying the link between competition and firms' social performance. We find that firms in more competitive industries have better social ratings. In particular, we show that (i) different market concentration proxies are negatively related to widely used CSR measures; (ii) that an increase in competition due to higher import penetration leads to superior CSR performance; (iii) that firms in more competitive environments have a superior environmental performance, measured by firm pollution levels; and (iv) that more product competition is associated to a larger within‐industry CSR variance. We interpret these results as evidence that CSR is strategically chosen.     

An analysis of non-financial factors associated with financial distress

This article examines factors associated with financial distress among 1006 Spanish manufacturings (SMEs), distinguishing high and low technology industries. Financial distress is analysed using industrial organizational theory through the Porter's five competitive forces model (external factors) and the resource based view through strategic variables (internal factors), such as training, planning, innovation, technology and quality. Two different sources of information were used in the study: Qualitative information related to environmental conditions and strategic variables was gathered through a questionnaire addressed to the firm manager. Quantitative information to identify whether the firm was in financial distress was gathered from the balance sheets and earning statements of the firms. Evidence from this study shows that environmental conditions and some strategic variables are associated with financial distress. The results found that young SMEs with low technology and in a highly competitive environment had a higher probability of financial distress. High bargaining power of buyers and high degree of rivalry among existing competitors were positively associated with financial distress. Financial distress in high-technology industries was not affected by external factors. However, firms with a quality certification have better quality control procedures that ultimately improve financial performance of firms in the technology industries.     

Horizontal alliances and the merger paradox

Mergers and alliances are two organizational forms which allow firms to combine complementary capabilities to realize strategic goals; they are, in many cases, strategic substitutes. Managerial decision‐makers, therefore, require a framework for choosing between the two strategies. This paper contributes to this decision‐making process by highlighting one advantage of alliances over mergers. Specifically, while the profitability of a cost‐reducing horizontal merger is diminished by the resulting expansion of non‐merging competitor(s), an alliance, where partners collaborate to reduce costs but sell their product independently, enables its partners to realize the benefits of merging but avoid the problem of strengthening competitors. A model is developed which demonstrates the profitability of establishing such an alliance compared to a merger. The implications of this strategy for antitrust review are briefly discussed. Copyright © 2005 John Wiley & Sons, Ltd.     

Financial Distress Prediction in an International Context: A Review and Empirical Analysis of Altman's Z‐Score Model

This paper assesses the classification performance of the Z‐Score model in predicting bankruptcy and other types of firm distress, with the goal of examining the model's usefulness for all parties, especially banks that operate internationally and need to assess the failure risk of firms. We analyze the performance of the Z‐Score model for firms from 31 European and three non‐European countries using different modifications of the original model. This study is the first to offer such a comprehensive international analysis. Except for the United States and China, the firms in the sample are primarily private, and include non‐financial companies across all industrial sectors. We use the original Z′′‐Score model developed by Altman, Corporate Financial Distress: A Complete Guide to Predicting, Avoiding, and Dealing with Bankruptcy (1983) for private and public manufacturing and non‐manufacturing firms. While there is some evidence that Z‐Score models of bankruptcy prediction have been outperformed by competing market‐based or hazard models, in other studies, Z‐Score models perform very well. Without a comprehensive international comparison, however, the results of competing models are difficult to generalize. This study offers evidence that the general Z‐Score model works reasonably well for most countries (the prediction accuracy is approximately 0.75) and classification accuracy can be improved further (above 0.90) by using country‐specific estimation that incorporates additional variables.     

The impact of selected factors on new business formation in the private healthcare sector

Numerous factors influence the development of the private healthcare sector. Therefore, the selection of these factors, which represent a potential opportunity for forming new entities, is a crucial from the point of view of entrepreneurship. In our research we selected strategic variables which have got direct influence on entrepreneurship in the private healthcare sector in Poland. Theoretical approach was based on literature review which have revealed the main factors and their relationships with entrepreneurship according to the previous research studies. This research study was conducted for the entire population of municipalities in Poland. Methodology was based on Intelligent Data Analysis (IDA) which can be applied for a large amounts of data in order to extract useful knowledge from it. Moreover, in research study were applied explanation techniques – decision rules –in order to indicate, to what extent the environment have influence on strategic choices conditioning the success of businesses. The results have revealed that it is possible to determine a set of the most important factors influencing entrepreneurship in the private healthcare sector in Poland. On the other hand, were indicated these variables which do not participate in process of influencing on entrepreneurship in private healthcare sector in Poland.

     

Human Resource Strategy and Competitive Advantage: A Longitudinal Study of Engineering Consultancies

Concepts associated with the resource-based view of the firm are increasingly finding their way into the strategic HRM debate. Drawing on this literature, this paper reports one of the first industry-based, longitudinal investigations into the relationship between human resource strategy and competitive advantage. Set in New Zealand, but in an internationally oriented sector, the study examines one of the more neglected spheres of professional services: engineering consultancies. The results indicate that the consultancy firms that survived the major business traumas of the late 1980s and early 1990s adopted similar structural, competitive, operational and HR responses associated with their evolving 'industry recipe'. In interpreting the relationship between HRM and firm performance, then, it is important to distinguish those features of a firm's HRM which are strategic to ongoing viability from those that might form the basis of a relatively enduring form of competitive advantage. While there is insufficient evidence to conclude that any of the primary subjects in this study have established an enviable form of superiority, the study suggests that opportunities do exist for professional service firms to develop industry leadership through superior HRM. The analysis has implications for the wider work of theory-building in strategic HRM.     

Outsourcing occupational safety and health: An analysis of the make or buy decision

This paper investigates the factors affecting the outsourcing decision of occupational safety and health (OSH) services. I posit several hypotheses following the three main approaches to the make or buy question: (1) the transaction cost theory, (2) the resource‐based view of the firm, and (3) the behavioral decision‐making framework. The empirical analysis draws on microdata from 3,047 Spanish firms that are legally obliged to provide organized OSH activities but free to choose the option to outsource. Results show that informational symmetries and increasing transaction costs mainly explain the decision to outsource the OSH activity. Organizational behavior variables, such as management commitment to safety and workers' representation, also relate to the outcome of the decision but not necessarily as hypothesized. Finally, I did not generally observe the strategic value of safety in informing the make or buy decision. © 2009 Wiley Periodicals, Inc.     

Corporate Sustainable Development: is ‘Integrated Reporting’ a Legitimation Strategy?

In the field of sustainability reporting (SR), the so‐called ‘integrated report’ (IR) is gaining momentum. In spite of its voluntary nature, a growing number of firms are adopting IR by participating in the International Integrated Reporting Council (IIRC) Pilot Programme. Stimulated by concerns on the use of SR as a legitimation strategy, the paper investigates whether the decision to adopt an IR stems from the need to repair legitimacy threats. By showing that IR adopters have significantly higher Bloomberg ESG disclosure ratings relative to non‐adopters, we reject the hypothesis of firms adopting IR as a response to a poor rating. Additionally, we show that other proxies of legitimacy pressures (size, leverage, profitability, industry) do not play a role in explaining IR adoption. Overall, our evidence suggests that corporate engagement in IR is not a matter of strategic legitimation. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Boardroom Strategizing in Professional Associations: Processual and Institutional Perspectives*

abstract This study examines strategic decision‐making at the boardroom level of two non‐profit professional associations, penetrating directors' strategic orientations, discourse and decisions in their holistic context. In comparison with the predominantly survey and interview based literature on board level strategy behaviour, this study employs a longitudinal complete member researcher, participant observer methodology. Its findings are analysed from an institutional theory perspective and reveal selective championing of strategies by directors, the evaluation of strategic proposals and progress in predominantly financial resource/outcome terms, and directors' attention to navigating strategic initiatives through organizational politics. Also revealed are private sector philosophies imported into the non‐profit boardroom, the predominantly ceremonial role of formal strategic plans, and an informally enacted strategic discourse. This study offers a unique insider view of strategizing at the highest organizational level.     

Measures for Sustainable Investment Decisions and Business Strategy – A Triple Bottom Line Approach

Traditionally, most investors have only taken economic variables (profitability and risk) into account when making investment decisions. In this paper we propose two measures, the Relative Sustainable Performance Measure (RSPM) and the Measure of Commitment‐failure (MC), that permit sustainable decision making, which takes environmental and social variables into consideration in addition to the economic variables, for both investors and companies themselves. This makes a triple bottom line (TBL) approach to investment decision making possible. We apply our measures to the worldwide chemical sector and validate them. Moreover, we propose a 2D graphical sustainability analysis, which is simple and easy for investors to understand when making investment decisions and can be used if they are concerned about environmental and social matters. It also enables companies to analyse their sustainability performance and adapt their business plans accordingly. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

The Economic Consequences of Increased Disclosure: Evidence from Cross-Listings of Chinese Firms

In this paper, we investigate the impact of cross‐listings on information asymmetry risk, the cost of capital and firm value of a group of cross‐listed Chinese companies. Our paper is the first to examine the effect of cross‐listing on information asymmetry risk. Because cross‐listed firms are subject to increased disclosure requirements, increased regulatory scrutiny and increased legal liability, we propose that Chinese cross‐listed firms have lower information asymmetry risk, lower cost of capital and higher firm value than their non‐cross‐listed counterparts. We find in both univariate and multivariate tests that cross‐listed firms enjoyed lower information asymmetry risk in the domestic market compared with the non‐cross‐listed firms. We also find that cross‐listed firms have lower cost of capital in the cross‐listing market than non‐cross‐listed firms in the domestic markets. Finally, we find that cross‐listed firms are associated with higher firm value as measured by Tobin's Q. These results have implications for international investors and companies seeking cross‐listing opportunities.     

Competition,Outside Directors and Executive Turnover: Implications for Corporate Governance in the EU

This study examines the relevance of non‐executive outside directors with multiple directorships for corporate governance building on a large panel of European listed firms in the period 2003 to 2011. Focusing on executive turnover as an indicator for effective monitoring, the findings reveal that multiple directorships and product market competition are substitutes. Outsiders increase executive turnover in underperforming firms exclusively if competition in the industry is weak. In environments with effective competition, outsiders do not significantly influence the decision to replace underperforming managers. In fiercely competitive industries, the market pressure seems to effectively limit managerial discretion for opportunistic behavior. Copyright © 2016 John Wiley & Sons, Ltd.     

Environmental Policies for Sustainable Development: An Analysis of the Drivers of Proactive Environmental Strategies in the Service Sector

This article examines the drivers of environmental proactivity in the service sector. Hypotheses were tested using multiple hierarchical regression analysis with data from a sample of 41 managers in Spanish environmental consulting companies. Results show statistically significant relationships between (1) managers’ attitude towards sustainable development, (2) positive short‐term firm performance and (3) the strategic attitude of environmental consulting firms and the adoption of proactive environmental strategies by the studied companies. This article is pioneering in the analysis of drivers of corporate proactive environmental strategies in the consultancy sector. The findings have practical implications for policy‐makers, investors and other agents interested in a better management of the environment. Economic incentives such as subsidies to environmental training programmes for managers can induce changes in cognitive components of managers’ attitudes. Education policies could also affect managers’ attitudes towards the environment. Companies may also encourage attitude change by providing their managers with financial assistance to receive environmental training. External assistance to develop a strategic attitude could be an interesting policy to encourage voluntary environmental initiatives. Finally, fiscal deductions, tax breaks or subsidies to those companies interested in managing the environment can be effective incentives for those firms facing a weak short‐term financial situation. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment