Alignment or entrenchment? Corporate governance and cash holdings in growing firms

This study contends that the association between corporate cash holdings and corporate governance is subject to the investment environments that firms face. For example, firms with an abundance of investment opportunities have a strong incentive to hold cash in order to maintain their competitive positions. Shareholders accept high levels of cash holdings in such growing firms if corporate governance can protect their interests. This study examines the effects of corporate governance on cash holdings for a sample of high-tech firms. The results show that CEO ownership, the directorship of venture capitalists (VCs), and independent directors play critical roles in corporate cash policy. In addition, the boards are more effective when the firms' CEOs are also their founders or when VCs hold a large stake of company shares. The effects of corporate governance are more significant in younger firms while the effects of firm-specific economic variables are more significant in older firms in the sample.     

Rationale of internationalization of China's national oil companies: seeking natural resources,strategic assets or sectoral specialization?

The bulk of the existing literature emphasized that China's companies sought strategic assets (technology, brands and access to markets) through internationalization in order to overcome latecomers' comparative disadvantage, while some studies suggested that these firms went after natural resources to address China's rising oil imports. The third argument (which we coin the ‘sectoral strength’ hypothesis) suggested that the upstream firms in extractive business would seek natural resources, whereas downstream ones would seek strategic assets. In this study, we examine the rationale of main overseas investment deals (‘going out’) of China's two largest national oil companies during 2002–2010 which were also China's top two non-financial firms with the largest outward investment stocks during 2004–2010. We conclude that these deals can be best explained by the ‘sectoral specialisation’ hypothesis supplemented with a consideration for strategic assets.     

How do institutional transitions impact the efficacy of related and unrelated diversification strategies used by business groups?

Drawing from institutional theory and organizational theory, this paper reports findings from a longitudinal study of Indian business groups as they were responding to pro-market institutional reforms. It explores their diversification choices at the group level, and the group performance consequences of these choices during a period of institutional change (1988–2012). Results show that although overall group diversification had a positive impact on performance, as institutions developed and market reforms took root, unrelated diversification resulted in poorer performance. However, related diversification strategies resulted in positive group performance outcomes after pro-market reforms had taken root. This suggests that the performance consequences of alternative diversification strategies adopted by business groups change as institutional development occurs, an important facet of business group evolution that has received limited attention in the extant literature.     

Lost in translation? Corporate governance,independent boards and blockholder appropriation

Emerging economies are oftentimes characterized by state capitalism, concentrated ownership and constrained resources, where firms face underinvestment due to resource misappropriation. The adoption of Anglo-American corporate governance practices may result in sub-optimal outcomes. We draw on the multiple agency perspective and research on cross-national governance to examine how independent directors, as agents with multiple roles, might mitigate blockholder appropriation. Using unique panel data from Russian publicly traded firms where the government and the business elite are predominant blockholders, we find that independent directors in private firms are less effective in mitigating blockholder appropriation than in state-owned enterprises. We further investigate board independence effects driven by the exposure to three international governance boundary conditions, namely Russian Multinational Enterprises, foreign listings of Russian firms, and foreign independent directors on Russian boards. Our study focuses on the agents that might assuage principal-principal conflicts, explores when ineffective governance can be minimized, and contributes to research on how governance practices developed in advanced economies get translated in emerging market economies.     

Head in the clouds or feet on the ground? CEO perspectives and the international business research agenda

In response to recent articles examining the current state and future direction of international business (IB) research, this article directly surveys CEOs of the largest Fortune 500 companies to solicit their views about university‐based IB research and to identify the most significant IB problems their firms encounter. Results suggest a consistently low appreciation by CEOs for university‐based IB research over an extended period of time. Data also suggest a window of opportunity to capture a constituency among those companies that anticipate a significant increase in their international activity. To capture a practitioner constituency, however, research should focus on key problem areas that have been identified in this article, and the findings should be presented in accessible forms and venues. © 2012 Wiley Periodicals, Inc.     

Assessment of learning in business education: Standardized or homegrown?

The author gives an overview of typical learning outcomes in business education and assessment instruments that help measure and test these outcomes. Using data from a recently accredited program the author investigated the determinants of performance on assessment exams to help identify and evaluate differences between homegrown and standardized assessment instruments. The results indicate that performance on assessment exams whether standardized or homegrown is significantly related to the general performance of the students in the program. Accordingly, the ultimate choice of the instrument boils down to 2 important variables: the match between exam objectives and institutional objectives and the total cost of the instrument.     

Businessman or host? Individual differences between entrepreneurs and small business owners in the hospitality industry

Prior research has identified individual characteristics that distinguish business owners from non-business owners. The researchers tested their contention that not every successful business owner can be characterized by such typical ‘entrepreneurial’ characteristics. Multiple analysis of variance on a unique data set of 194 business owners in the hospitality industry revealed that several individual characteristics discriminated between entrepreneurs and small business owners. Entrepreneurs possessed higher levels of independence, tolerance of ambiguity, risk-taking propensity, innovativeness, and leadership qualities, but not of market orientation and self-efficacy. It is concluded that ‘entrepreneurial’ characteristics identified in the literature may be useful predicting a specific type of business ownership. However, other criteria need to be developed in order to describe other groups of business owners operating in the service industries.     

Philanthropy, Integration or Innovation? Exploring the Financial and Societal Outcomes of Different Types of Corporate Responsibility

This article argues that previous research on the outcomes of corporate responsibility should be refined in two ways. First, although there is abundant research that addresses the link between corporate responsibility (CR) and financial performance, hardly any studies scrutinize whether the type of corporate responsibility makes a difference to this link. Second, while the majority of CR research conducted within business studies concentrates on the financial outcomes for the firm, the societal outcomes of CR are left largely unexplored. To tackle these two deficiencies, this article extends the different conceptualizations of corporate responsibility and elaborates both the financial and the societal outcomes of different types of CR.     

The Chinese government and the national oil companies (NOCs): who is the principal?

China has conducted six government reforms over the past three decades to separate government functions from the major industries. These reforms enabled a number of national oil companies (NOCs) to be established in the 1980s, and the NOCs were further listed in the international stock markets in the new century. However, due to the incomplete government and enterprise reforms, the government has not been very successful in playing a role as the ‘principal’ to make the NOCs as an ‘agent’ to manage China's petroleum industry on its behalf. A sensible government–NOCs relationship may be created by either further removing the NOCs’ political functions, and strengthening China's energy market mechanism, or by establishing a Super-Energy Ministry that can assert fundamental authority over the NOCs, and manage the energy sector.     

Do Variations in the Strength of Corporate Governance Still Matter? A Comparison of the Pre- and Post-Regulation Environment

Corporate scandals brought the issue of corporate governance to the forefront of the agendas of lawmakers and regulators in the early 2000s. As a result, Congress, the New York Stock Exchange, and the NASDAQ enacted standards to improve the quality of corporate governance, thereby enhancing the quantity and quality of disclosures by listed companies. We investigate the relationship between corporate governance strength and the quality of disclosures in pre- and post-regulation time periods. If cross-sectional differences in corporate governance policies affect the quality of financial disclosures, the quality of information available to analysts varies with such policies. Specifically, higher quality disclosures, produced as a result of strong corporate governance, should lead to more accurate and less dispersed analysts’ forecasts. Our analysis suggests that voluntary implementation of stronger corporate governance enhanced the quality of disclosures in the pre-regulation period; however, exceeding current corporate governance standards does not appear to result in higher quality disclosures post-regulation. These results suggest that SOX and the stronger regulations enacted by U.S. exchanges were effective in reducing variation in the quality of financial information available to investors.     

Am I cheap? Testing the role of store personality and self-congruity in discount retailing

This study examines whether consumer perceptions of store personality (SP) differ according to the store's format (hard-discount versus soft-discount and value retailing). A consumer survey (n?=?306) is conducted in which respondents are asked to rate these retail formats on five SP dimensions and in terms of self-congruity (SC). The findings of both repeated measures ANOVA and hypothesis testing of proportion difference indicate that the three formats differ significantly in terms of all five SP dimensions. Moreover, consumers perceive a greater match between their self-concept and the value retailer's personality than the discounter's. A PLS model is estimated linking SP and SC to store loyalty and word-of-mouth intentions (WOM). The SP measurement model is only partially confirmed by the data. The effect of SC is found to dominate in explaining loyalty and WOM. These results provide valuable insights for optimising retail positioning strategies.     

Conclusion: Korean business and management – the end of the model?

Recent financial crisis has raised questions about the underpinnings and longevity of economic success in Asia, and has reminded us to be sceptical of pundits and the eponymous populist predictions relating to the region. Several perspectives can guide the analysis and evaluation of industrialization, from ‘state’ versus ‘market’, ‘internal’ versus ‘external’, and ‘macro’ versus ‘micro’. Companies in Korea as ‘latecomers’ have pursued ‘catch-up’ strategies. However, Korean corporate capabilities reside in a restricted number of industries, firms and functions (production), and are poor elsewhere, such as in marketing, technology (design and development) and organization, and small and medium-sized enterprises. Furthermore, many factors regarded once as sources of Korea's success are now seen as weaknesses. The future challenges facing Korea include its dirigiste economy, organizational structures and governance, financial transparency and labour market flexibility. While there are undoubted problems, its urgent tasks are not insurmountable.     

Multiple interpretations of “national culture” and the implications for International business: The case of Taiwan

This paper considers the implications for international business of cases whereby a country may have two, or more, conflicting interpretations of its “national culture”. A case study of the different ways in which Taiwanese self-initiated expatriates of the benshengren and waishengren social categories use their status as “Taiwanese” to do business in London suggests that the varying interpretations which people of the same national origin and ethnic group have of their “national culture”, as a symbol of identity, affects the social resources they can use. The paper concludes by considering new directions for studying national culture in international business, and for re-evaluating earlier research.     

Business Ethics and the ‘End of History’ in Corporate Law

If social scientists take natural science as a model, they may err in their predictions and may offer facile ethical views. MacIntyre assails them for this, but he is unduly pessimistic about business, and in rejecting the separation thesis he raises some difficulties about naturalism. Aristotle’s views of the good life and of the close relationship between internal and external goods provide a corrective to MacIntyre, and in fact suggest how virtues can support social capital and thus prevail within and among firms in competitive markets. Aristotle’s views are not necessarily inimical to those underlying modern democratic capitalism, but they raise questions about the limits to the good life. The separation thesis misses the importance of addressing the questions with both empirical and ethical resources.     

Is Corporate Responsibility Converging? A Comparison of Corporate Responsibility Reporting in the USA, UK, Australia, and Germany

Corporate social reporting, while not mandatory in most countries, has been adopted by many large companies around the world and there are now a variety of competing global standards for non-financial reporting, such as the Global Reporting Initiative and the UN Global Compact. However, while some companies (e.g., Henkel, BHP, Johnson and Johnson) have a long standing tradition in reporting non-financial information, other companies provide only limited information, or in some cases, no information at all. Previous studies have suggested that there are, country and industry-specific, differences in the extent of CSR reports (e.g., Kolk et al.: 2001, Business Strategy and the Environment 10, 15–28; Kolk: 2005, Management International Review 45, 145–166; Maignan and Ralston: 2002, Journal of International Business Studies 33(3), 497–514). However, findings are inconclusive or contradictory and it is often difficult to compare previous studies owing to the idiosyncratic methods used in each study (Graafland et al.: 2004, Journal of Business Ethics 53, 137–152). Furthermore, previous studies have relied mainly on simple measures, such as word counts and page counts of reports, to compare the extent of reporting that may not capture significant differences in the content of the reports. In this article, we seek to overcome some of these deficiencies by using textual analysis software and a more robust statistical method to more objectively and reliably compare the CSR reports of firms in different industries and countries. We examine a sample of leading companies in four countries (US, UK, Australia, and Germany) and test whether or not membership of the Global Compact makes a difference to CSR reporting and is overcoming industry and country specific factors that limit standardization. We conclude that GlobalCompact membership is having an effect only in certain areas of CSR reporting, related to the environment and workers, and that businesses from different countries vary significantly in the extent to which they promote CSR and the CSR issues that they choose to emphasize in their reports. These country differences are argued to be related to the different institutional arrangements in each country.     

Is Corporate Responsibility Converging? A Comparison of Corporate Responsibility Reporting in the USA,UK, Australia,and Germany

Corporate social reporting, while not mandatory in most countries, has been adopted by many large companies around the world and there are now a variety of competing global standards for non-financial reporting, such as the Global Reporting Initiative and the UN Global Compact. However, while some companies (e.g., Henkel, BHP, Johnson and Johnson) have a long standing tradition in reporting non-financial information, other companies provide only limited information, or in some cases, no information at all. Previous studies have suggested that there are, country and industry-specific, differences in the extent of CSR reports (e.g., Kolk et al.: 2001, Business Strategy and the Environment 10, 15–28; Kolk: 2005, Management International Review 45, 145–166; Maignan and Ralston: 2002, Journal of International Business Studies 33(3), 497–514). However, findings are inconclusive or contradictory and it is often difficult to compare previous studies owing to the idiosyncratic methods used in each study (Graafland et al.: 2004, Journal of Business Ethics 53, 137–152). Furthermore, previous studies have relied mainly on simple measures, such as word counts and page counts of reports, to compare the extent of reporting that may not capture significant differences in the content of the reports. In this article, we seek to overcome some of these deficiencies by using textual analysis software and a more robust statistical method to more objectively and reliably compare the CSR reports of firms in different industries and countries. We examine a sample of leading companies in four countries (US, UK, Australia, and Germany) and test whether or not membership of the Global Compact makes a difference to CSR reporting and is overcoming industry and country specific factors that limit standardization. We conclude that GlobalCompact membership is having an effect only in certain areas of CSR reporting, related to the environment and workers, and that businesses from different countries vary significantly in the extent to which they promote CSR and the CSR issues that they choose to emphasize in their reports. These country differences are argued to be related to the different institutional arrangements in each country.     

Corporate diversification and CEO turnover in family businesses: self-entrenchment or risk reduction?

Our study investigates differences in CEO turnover between focused and diversified firms to determine whether diversification strategies are necessarily associated with governance efficiency in family businesses. We find that large family CEO firms are more likely to engage in corporate diversification than are small non-family CEO firms and their CEOs are seldom replaced. Large family CEO diversified firms also have lower turnover sensitivity relative to focused firms. The results imply that the CEOs of diversified firms have entrenched themselves, thereby increasing agency costs within family businesses. However, we fail to find diversification discounts in family businesses. It is interesting that CEOs tend to diversify their businesses in order to decrease firm risk. Founding families favor risk-reducing decisions in order to maintain family wealth and prestige; suggesting that family businesses are more interested in survival than growth. Although family businesses may benefit from risk reduction, a negative relationship between diversification level and CEO turnover is still evidence of poor corporate governance. Agency theory may not completely account for the adoption of diversification strategies in family businesses and corporate diversification may weaken the effectiveness of internal monitoring mechanisms.

Does Corporate Social Responsibility Influence Customer Loyalty in the Taiwan Insurance Sector? The role of Corporate Image and Customer Satisfaction

This study aims to investigate the impact of corporate social responsibility on customer loyalty, and examines the role of corporate image and customer satisfaction. The empirical results indicate a positive effect of economic and legal corporate social responsibility on customer loyalty, as well as a partial mediating effect of customer satisfaction between corporate social responsibility and customer loyalty. Moreover, this study identifies the moderating effect of corporate image between corporate social responsibility and customer loyalty. The results of this study are useful to the life insurance sector for enhancing their customer loyalty and service marketing strategy.     

Does impact of campaign and consumer guilt help in exploring the role of national identity and purchase decisions of consumers?

Extant research emphasized the role of consumer guilt and the importance of campaigns in consumers' willingness to buy domestic-made products. The antecedents of willingness to buy domestic-made products have not been well understood in literature. This is because the experience of national identity vis a vis the understanding of the consumers' guilt feeling has partly been explained. To address these concerns, we developed a survey in the context of Indian cities. We note that consumers' experience with foreign-made products is negative when they feel uncomfortable buying them, and thereby develop a feeling of guilt. Marketing managers are more likely to prepare consumers' experiences with their products by emphasizing the high or low impact of the campaign on consumers’ willingness to buy domestic-made products.