Project management priorities and the link with performance management systems

This paper reports the results of a project management practices study in the U.K. social housing sector. A five‐factor model of project priorities is established, comprising traditional measures of project cost, time, and quality, in combination with a need to focus on stakeholders and to develop a customer and project team orientation. This model supports and integrates previously fragmented notions of project performance measurement. The relationship between these five project management criteria and the effectiveness and use of a performance management system (PMS) is then explored, with some limited evidence found that PMS effectiveness is an antecedent to practices that focus on the customer, the project team members, and other stakeholders     

Specification and power of cross-sectional abnormal working capital accruals models in the Spanish context

The aim of this study is to examine one attribute of performance measurement systems (PMS) that is not widely addressed in the management accounting literature, namely the dynamism of PMS. This attribute refers to the periodic review of performance indicators by organizations. Based on contingency theory and using survey data from a sample of manufacturing firms, this study examines whether the association between the dynamism of PMS and organizational performance is contingent on the level of external and internal changes. The results suggest three main conclusions. First, even though the current business environment is characterized by fast changes, manufacturing organizations do not appear to revise their PMS to a great extent. Second, while periodic revisions of performance indicators are beneficial, these revisions may not necessarily be appropriate at all times and in all circumstances as the need for dynamic PMS varies depending on the degree of external and internal change. Third, an absence of dynamic PMS may be more harmful in a context of higher levels of change than to have dynamic PMS even if they are not required.     

The link between the management of employees and patient mortality in acute hospitals

The relationship between human resource management practices and organizational performance (including quality of care in health-care organizations) is an important topic in the organizational sciences but little research has been conducted examining this relationship in hospital settings. Human resource (HR) directors from sixty-one acute hospitals in England (Hospital Trusts) completed questionnaires or interviews exploring HR practices and procedures. The interviews probed for information about the extensiveness and sophistication of appraisal for employees, the extent and sophistication of training for employees and the percentage of staff working in teams. Data on patient mortality were also gathered. The findings revealed strong associations between HR practices and patient mortality generally. The extent and sophistication of appraisal in the hospitals was particularly strongly related, but there were links too with the sophistication of training for staff, and also with the percentages of staff working in teams.     

Doing more and doing better are two different entities: Different patterns of family control and environmental performance

Family firms bear two types of agency costs, including type I and type II agency problems, in corporate environmental practices: (1) Outside executives at family firms hesitate to engage in environmental strategies, which can lead to drops in profits; (2) Controlling families employ opportunistically environmental management to achieve their interests. We argue that a primary cause for the agency problems lies on ineffective internal corporate governance at family firms, which can cause loss of managerial (or power) balance between outside executives and family executives. Our findings show that family firms with ownership and strategic control (FSC), which family executives and outside executives monitor and constrain each other, can achieve the highest environmental performance. Moreover, external controls, including product market competition and provincial environmental regulations, substitute effective internal control of FSC. The environmental performance premium of FSC is more prevalent when the production market competition is lower. Family firms with ownership, operational, and strategic control (FOSC) can achieve higher environmental performance within a province with more stringent environmental regulations.     

Employee stock ownership and financial performance in European countries: The moderating effects of uncertainty avoidance and social trust

This study investigates how the effect of employee stock ownership on financial performance may hinge on the diverse cultural and societal contexts of European countries. Based on agency and national culture theories, we hypothesize that the positive relationship between employee stock ownership and return on assets (ROA) is stronger in those nations with lower uncertainty avoidance and higher social trust. Using a multisource, time‐lagged, large‐scale dataset of 1,741 firms from 21 countries in Europe, our multilevel, random coefficient modeling analysis found evidence for these hypotheses, suggesting that uncertainty avoidance and social trust serve as important contextual cues in predicting the linkage between employee stock ownership and financial performance. Our supplemental analysis with distinction between the managerial and nonmanagerial employee stock ownership further indicates managerial employee stock ownership has a direct positive effect on ROA. Although nonmanagerial employee stock ownership had a nonsignificant association with ROA, the relationship was positive and significant when uncertainty avoidance was low and social trust was high. This research contributes to the existing literature by illuminating some of the contextual influences altering the effectiveness of employee stock ownership. Our findings also offer practical suggestions for effectively using employee stock ownership.     

Achieving purchasing competence through purchasing performance measurement system design—A multiple-case study analysis

Purchasing competence, the level of strategic integration and alignment, is a key determinant of the purchasing function's impact on overall corporate success. Previous research has revealed that the implementation of a mature purchasing performance measurement system (PPMS) can be a means to attain a high level of functional strategic integration. In this research, we develop five propositions on how PPMS should be designed to facilitate strategic integration. We challenge these propositions using data gathered from four case studies with German companies from different industrial sectors. While each of these companies pursues multiple strategic objectives within Purchasing, the PPMSs designs focus heavily on cost-related strategy and performance dimensions. Thus, our findings indicate the need to develop PPMS schemes allowing a direct linkage between financial performance and non-financial performance measures in order to incentivize the desired multiple strategic goals beyond periodical cost reduction. Moreover, such measurement systems need to be adapted at the category level of purchasing practices to obtain the desired level of pre-defined strategic performance dimensions. Hence, the level of purchasing competence is determined at category level and a PPMS must transform strategy into measurable goals at this level.     

New forms of ownership and human resource practices in Vietnam

In 1986, the government of Vietnam commenced the move from a centrally planned system to a market‐oriented economy with a multisectoral economic structure and a multiownership system.This process, known as Doi Moi, has had a major effect on the economic and social fabric of Vietnam. Although the body of research on this topic has grown, few studies have explored the effect of these economic changes on the internal operations of enterprises. In particular, little is known about the relationship between these new forms of ownership and how enterprises structure their human resource management. This article seeks to explore this relationship through detailed case studies of 32 enterprises covering the range of ownership types.The findings reveal a diversity of human resource management practices, but certain practices are now more prevalent in particular types of enterprises; human resource management remains the overall exception. The article concludes by considering the theoretical and practical implications of these results for economies undergoing transition. © 2008 Wiley Periodicals, Inc.     

Enhancing firm performance through internal market orientation and employee organizational commitment

Considering the importance of retaining key staff and managing the negative impact of high labor turnover on firm performance, this study investigates the notion of internal market orientation (IMO) as an employee management tool for helping companies retain employees and leverage performance via their organizational commitment. Drawing on data from three different managerial respondents in 275 companies based in China, the findings demonstrate the precedential effect of IMO on corporate performance through employees’ organizational commitment and retention. Interdepartmental relationship and interdepartmental communication, together with ownership types are identified as potential moderating variables, which may vary IMO’s effectiveness in the framework. This study provides scholars and practitioners with empirical evidence of IMO’s contribution to different industries and markets. Building on a western perspective, this study extends the literature in an emerging market context and specifically has implications for managing Chinese employees.     

The relationship between human resource management practices,business strategy and firm performance: evidence from steel industry in Taiwan

The primary objective of this study is to investigate the relationship between human resource management (HRM) practices, business strategy and firm performance. We examined the following HRM practices: training and development; teamwork; compensation/incentives; HR planning; performance appraisal; and employment security. We surveyed 236 managers working at steel firms in Taiwan to explore their perceptions on the impact of HRM practices and business strategy on firm performance. The results of this study are summarized as follows: (1) HRM practices will be positively related to firm performance; (2) there is a close linkage between HRM practices and business strategy; (3) business strategies will be positively related to firm performance; (4) integrating HRM practices with business strategies will be positively related to firm performance.     

Ten years after: Interference of hospital slack in process performance benefits of quality practices

We investigate the long-term relationship between an organization's quality management practices and process-level performance. Further, we examine whether availability of organizational slack over the study interval interferes with the relationship between quality practices and process performance. Organizational slack consists of the available and accessible resources in an organization; we focus here on unabsorbed slack in the form of financial resources. We investigate the quality practices of U.S. general acute care hospitals, measured by their depth of implementation of practices characterizing a total quality management system, and use them to predict process performance related to four medical conditions. Analysis reveals differing effects that are dependent on hospital slack conditions. In hospitals with high slack, quality practices significantly predict three of four studied process performance measures. In contrast, in hospitals with low slack, quality practices predict only one of the four process performance measures, while other factors outweigh the effects of quality practices. This study lends support to management taking a long-term perspective related to implementation of quality management systems, and highlights the relevance of slack conditions in garnering the benefits of such systems.     

Stakeholder management in sustainable supply chains: A case study of the bioenergy industry

Engaging with stakeholders and managing their issues when striving for a sustainable supply chain (SC) is a significant challenge. Although most studies on sustainable supply chain management (SSCM) consider stakeholder management necessary, little is known about related stakeholder management practices in SSCM. Thus, this paper seeks to enrich the theoretical debate on stakeholder management practices in SSCM through a case study approach to bioenergy SCs in Chile. Based on 28 interviews with SC actors and representatives from the surrounding stakeholder environment, the deductive–inductive analysis reveals that stakeholder management combines different practices to discuss stakeholder concerns, address them, and evaluate the process at the SC's external and internal levels. We propose structuring these practices based on two dimensions: “practices to address stakeholder requirements” and “practices whereby stakeholders are integrated.” The analysis' results indicate that although two-way communication with stakeholders can be seen as the core of stakeholder management, a certain willingness to learn and transform SC design is a prerequisite for true orientation toward stakeholder management in SSCM. Additionally, linkage development and local anchoring are practices used to obtain further legitimacy at the external level. Building on these findings, this study can guide practitioners in engaging with stakeholders and managing their issues across the SC.     

Performance compensation contracts and CEOs’ incentive to shift risk to debtholders: An empirical analysis

The paper investigates the relationships among CEO incentive contracts, manager ownership, charter value, and bank risk taking. We analyze whether the presence and magnitude of incentive contracts induce CEOs of financially distressed firms and firms with high manager ownership to take unprofitable risks that shift wealth from debtholders to equity holders. Our sample focuses on banks that had both the incentive and opportunity to shift risks, and compares them with those that did not. We compare weak and strong banks in periods when the banks’ principal creditor, the FDIC, was a lenient and then a stringent monitor. The evidence is consistent with bonus compensation inducing CEOs of financially weak firms to shift risk to debtholders only if they do not have large insider ownership. The evidence is also consistent with these contracts rewarding CEOs for their effort to manage unforeseeable risk albeit not their ability. Low charter value banks with high managerial ownership took profitable risk during the lenient regulatory period.     

To Thine Shareholders Be True? Linking Large Corporate Ownership to Firms’ Use of Commitment Human Resource Practices

Human resource practitioners and academics have increasingly realized the importance of corporate governance for firm human resource activities. This study investigates how one important form of corporate governance, namely, ownership within large, publicly traded firms, is associated with a firm's use of commitment human resource practices (CHRPs), specifically, the use of incentive compensation, profit sharing, and participative decision making. Our findings indicate that the types of large investor, namely, family and institutional, are differentially associated with the likelihood of the firm using these CHRPs. Specifically, family owners with their long‐term investment horizon, as well as their stakeholder orientation, increase the likelihood of the firm using these practices. In contrast, large institutional owners with their shorter‐term investment horizon, as well as their investor orientation, decrease the likelihood of the firm using these practices. Furthermore, among institutional investors, transient institutional investors are negatively associated with these practices, while dedicated institutional investors are not associated with these practices. Taken together, our results regarding the positive association of family ownership and this subset of CHRPs and the negative association of transient institutional investors and this set of practices, have important implications for human resource professionals who not only need to understand how ownership affects HR practices but also how to articulate the value of these investments in order to attract investors. © 2015 Wiley Periodicals, Inc.     

Corporate governance and firm efficiency: evidence from China's publicly listed firms

This paper applies a two‐stage, double bootstrapping data envelope analysis approach to investigate whether and to what extent various distinctive corporate governance practices affect productive efficiency in a sample of 461 publicly listed manufacturing firms in China between 1999 and 2002. We find that firm efficiency is negatively related to state ownership while positively related to public and employee share ownership. In addition, the relationship between ownership concentration and firm efficiency is U‐shaped, indicating the presence of tunneling activities by the largest shareholder. Among three types of controlling shareholder, state exerts the most negative impact on firm efficiency, followed by state‐owned legal entities. These results provide strong evidence that political interferences have reduced firm efficiency. It shows that the proportion of outside directors and the number of board meetings are positively associated with firm efficiency, suggesting that board of directors can be an effective internal governance mechanism. Furthermore, provincial market development, a proxy for the strength of external governance mechanism, is positively related to firm efficiency. Overall, our findings illustrate that restructuring state‐owned enterprises via improvements in corporate governance has enhanced firm efficiency, but partial privatization without transfer of ownership and control from the state to the public remains a major source of inefficiency in corporate China. Copyright © 2008 John Wiley & Sons, Ltd.     

Intra- and inter-group composite indicators using the BoD model

We extent the radial DEA model with a single constant input, often referred to as the Benefit-of-the-Doubt (BoD) model, to account for environmental or contextual differences. Based on this we estimate three types of composite indicators, namely the pooled that uses the entire sample of the evaluated units, the intra-group that accounts for within group differences, and the inter-group that reflects between group differences. In addition, we provide theoretically consistent aggregation rules for these types of composite indicators. We applied the proposed methodology to analyze the financial performance of public and private hospitals in Greece by means of financial ratios referring to their liquidity performance and to examine the extent of differences in the inter-group composite indicators between the two types of ownership both at the individual and the aggregate level.     

Towards a framework for supply chain finance for the supply side

Buyers increasingly offer financing alternatives to their suppliers – so called supply chain finance (SCF) practices for the supply side. Expected benefits however do not always materialize for involved actors. Guidance is needed when to provide these SCF practices to suppliers and why to select different types of practices. To provide this guidance, the paper involves an exploratory multiple-case study design including data within eight buyer-supplier-financial service provider triads. The findings explain contextual situations for the provision of SCF practices based on the contingency approach. They distinguish endogenous, relationship-related and exogenous contingencies within the aforementioned triads. Differentiation criteria are determined for the selection of SCF practices along the dimensions ‘time of financing’ (pre- versus post-shipment) and ‘source of funds’ (supply chain internal and external). Testable propositions and key learnings summarize the derived findings and form the basis to develop a contingency framework on SCF practices for the supply side.     

Top Management Compensation and Shareholder Returns: Unravelling Different Models of the Relationship

In order to further examine the relationship between executive pay and company performance, this paper investigates the linkage between two separate components of executive compensation (i.e. cash compensation and stock options) and market return performance, among a selected sample of US pharmaceutical company CEOs and COOs. In the surveyed sample, changes in cash compensation were found to exhibit a between-firm relationship with lagged market returns, while Δ stock option grants displayed a within-firm relationship. The former result suggests a commonality in practices across all firms, while the latter denotes idiosyncratic firm-specific practices. These contrasts represent different degrees of the agency problem in the contracts for cash compensation as compared to the stock option components. Levels of cash compensation were affected primarily by firm size. Market returns were not instrumental influences on the levels of both compensation components     

CORPORATE GOVERNANCE OF BANKS: A SURVEY

This paper reviews the empirical literature on the corporate governance of banks. We start by highlighting the main differences between banks and nonfinancial firms and focus on three characteristics that make banks special: (i) regulation, (ii) the capital structure of banks, and (iii) the complexity and opacity of their business and structure. Next, we discuss the characteristics of corporate governance in banks and how they differ from the governance of nonfinancial firms. We then review the evidence on three governance mechanisms: (i) boards, (ii) ownership structures, and (iii) executive compensation. Our review suggests that some of the empirical regularities found in the literature on corporate governance of nonfinancial institutions, such as the positive (negative) association between board independence (size) and performance, do not hold for banks. Also, existing work provides no conclusive results regarding the relationship between different governance mechanisms and various measures for banks’ performance. We discuss potential explanations for these mixed results.     

Does ownership matter for service delivery value? an examination of citizens’ service satisfaction

Governments across the world outsource service delivery to external agents, but does ownership matter for service delivery value? Though theory points to clear ownership differences on effectiveness, there remains limited empirical evidence of the impact of ownership on citizens’ satisfaction. Focusing on local authorities in England, we draw on secondary data (2007 and 2009) to examine if ownership type matters. The findings indicate that ownership – public, non-profit, private – confers no direct benefits for citizens’ satisfaction suggesting that the outsourcing decision should not rely on unfounded assumptions about performance differentials between ownership types. The implications for public management are explored.     

Performance impacts of management in Korean schools: Testing the Meier and O’Toole model

This article investigates the impact of management on performance in Korean schools. Drawing upon the model of Meier and O’Toole, we test the linear relationships of internal management, managerial networking, and managerial quality with multiple dimensions of performance. We also examine the nonlinear relationships between networking and performance. The results show a general consistency in the positive link between management and performance, providing evidence to support the key arguments from the model. Still, there are noticeable differences in specific findings. As one of the first applications of the Meier and O'Toole model in Asia, this study illustrates the importance of the national context in management–performance linkage.