How market value relates to corporate philanthropy and its assurance. The moderating effect of the business sector

Corporate philanthropy strategy integrated into the core business constitutes a novel vision and a little‐explored field of study with regard to corporate social commitment. The goal of this study is to analyse how the diverse ways of managing and assuring philanthropy can be considered signals of a firm's social commitment and consequently affect its market value. In addition, the analysis considers whether the business sector moderates those relationships. We aim to provide a comprehensive vision of corporate philanthropy and its effect on market value. From a sample of 965 firm‐years, of 193 firms from 2011 to 2015, we found that the market responds positively to the professional, independent management of philanthropy via a foundation, in preference to donations, and welcomes external assurance of corporate philanthropy as a set of actions that improve the perceived reliability of philanthropic activities. In addition, we observe a moderating effect of the business sector on the relationships among corporate philanthropy, assurance and the company's market value. The main contribution of this study is the provision of new evidence of how corporate philanthropy and its assurance are effective signals that reduce the information asymmetries between firms and investors, affecting company market value positively.     

Enhancing frontline employee support during a product-harm crisis: Evidence and strategic managerial implications for firms

Product-harm crises can negatively affect a firm's corporate image, reputation, and credibility. This research investigates antecedents and factors that can impact the extent to which frontline employees will be supportive of their organization when the firm faces such a crisis. Leveraging social exchange theory and its focus on reciprocal exchanges, we theorize and test processes using regression models, which shed light on how managers can solicit employee support during crises situations by providing the frontline employees with ethical and supportive working conditions. To offer convergent validity across multiple methodologies, we also test the influence of experimental effects of the relative severity of a crisis and whether a firm was quick or slow in its response on frontline employee support. Furthermore, our research demonstrates that the firm's strengths in corporate social responsibility, the employees' organizational citizenship behavior, and employee organizational identification serially mediate the supportive relationship, which provides a unique contribution to the marketing literature. Finally, we provide managerial implications to further enhance frontline employee support.     

Weathering consumer pricing sensitivity: The importance of customer contact and personalized services in the financial services industry

In a low-cost switching environment, certain firm actions undertaken by service employees can improve consumer loyalty, satisfaction and reduce price sensitivity. Interestingly, consumers' satisfaction levels can actually increase when experiencing a price increase. Counterintuitively, when consumers experience a price decrease, their loyalty decreases, suggesting that it might be in the firm's best interest to not offer such pricing discounts as these customers may be hypersensitive to price. Overall, it appears much easier for service employees to positively influence customer satisfaction than customer loyalty; satisfied consumers do not necessarily become loyal consumers.     

Corporate Governance and Firm Value: The Impact of Corporate Social Responsibility

This study investigates the effects of internal and external corporate governance and monitoring mechanisms on the choice of corporate social responsibility (CSR) engagement and the value of firms engaging in CSR activities. The study finds the CSR choice is positively associated with the internal and external corporate governance and monitoring mechanisms, including board leadership, board independence, institutional ownership, analyst following, and anti- takeover provisions, after controlling for various firm characteristics. After correcting for endogeneity and simultaneity issues, the results show that CSR engagement positively influences firm value measured by industry-adjusted Tobin’s q. We find that the impact of analyst following for firms that engage in CSR on firm value is strongly positive, while the board leadership, board independence, blockholders’ ownership, and institutional ownership play a relatively weaker role in enhancing firm value. Furthermore, we find that CSR activities that address internal social enhancement within the firm, such as employees diversity, firm relationship with its employees, and product quality, enhance the value of firm more than other CSR subcategories for broader external social enhancement such as community relation and environmental concerns.     

Service Orientation: Its Impact on Business Performance in the Medical Service Industry

From the viewpoint of internal marketing, employees who are content in their job may be motivated to satisfy their customers better than ones who are not content. Another relevant premise is that the content employees, because of their work motivation, would eventually help improve the performance of their firm. To verify these relationships, some previous studies looked into the effects of organisational service orientation on employee's satisfaction. But only few of them investigated the mediating effects of variables such as service value and customer orientation for their role in linking service orientation to business performance. This study examines how an organisation's service orientation had an effect on its performance at hospitals. For this purpose, verification of the mediating role of service value perceived by employees as well as the role of customer orientation on the firm's performance was attempted. For this study, a total of 292 usable questionnaires were collected from hospital staffs located in metropolitan cities of Korea. The hypotheses concerning relationships among service orientation, service value, employee satisfaction and customer orientation were verified by covariance structural modelling, using SPSS 10.0 and AMOS 4.0 programs. The result is as follows. First, organisational service orientation had a positive effect on both employee satisfaction and service value perceived by hospital staff. Second, employee satisfaction had a positive impact on service value and customer orientation. Finally, service value as well as employee's customer orientation were found to exert positive influence on the medical firm's performance.     

Corporate governance and investment-cash flow sensitivity: Evidence from emerging markets

Controlling for country-level governance, we investigate how firms' corporate governance influences financing constraints. Using firm-level corporate governance rankings across 14 emerging markets, we find that better corporate governance lowers the dependence of emerging market firms on internally generated cash flows, and reduces financing constraints that would otherwise distort efficient allocation of investment and destroy firm value. Additionally and more importantly, firm-level corporate governance matters more significantly in countries with weaker country-level governance. This suggests substitutability between firm-specific and country-level governance in determining a firm's investment sensitivity to internal cash flows.     

Customer satisfaction,corporate image,and service quality in professional services

This study explores the impact of corporate image and service quality on customer satisfaction in the professional service industries. Data were collected on audit firms, sending a questionnaire to financial executives of leading Italian companies. The results show that the most important variable explaining customer satisfaction was the apparent effectiveness of the audit firm. In relation to service quality, managers' satisfaction was primarily driven by their perception of audit firm's work as a useful value-adding service. The length of audit firm–auditee relation, the location of the auditor's office, and the financial executive's personal characteristics were also significant drivers of customer satisfaction.     

Corporate entrepreneurship,customer-oriented selling,absorptive capacity,and international sales performance in the international B2B setting: Conceptual framework and research propositions

In the international business-to-business (B2B) setting, a firm's salespeople often have more direct, prolonged, and intimate contact with the customer and market environments than any other employees of the firm. In fact, for customers in many B2B markets, the salesperson is the face of the firm. The sales function can be characterized as an inherently entrepreneurial activity. Entrepreneurship is founded on knowing or seeing something others do not see, and the sales force has long been recognized as an important source of knowledge about a firm's customers and environment. However, there has been relatively little work linking entrepreneurship to international sales performance, especially in the B2B context.This paper focuses on the intelligence-gathering role of salespeople to firms practicing corporate entrepreneurship in the international B2B setting. More specifically, drawing on the theories of corporate entrepreneurship and the knowledge-based view of the firm, the authors develop a conceptual model that proposes international sales performance for firms practicing corporate entrepreneurship will be enhanced when salespeople practice customer-oriented selling and the firm's absorptive capacity is stronger. Recommended methodology for testing the proposed model is a single-informant survey of sales managers with firms in the domain of interest, using structural equation modeling with moderator tests. The paper concludes with implications and directions for future research.     

Corporate cash holdings,uncertainty avoidance,and the multinationality of firms

We examine the relationship between uncertainty avoidance, multinationality and firm cash holdings. We develop several hypotheses from corporate finance and multinational firm theory, positing that cultural factors as well firm multinationality influence corporate cash holdings. In particular, firms in countries with high uncertainty avoidance hold more cash as a way to hedge against undesired states of nature. At the same time, firm multinationality moderates the effects culture has on the firm's holdings of liquid assets. Based on a large panel of firms in fifty countries, we present evidence consistent with these hypotheses. Firms in countries with high levels of uncertainty avoidance tend to hold more cash. Against commonly held views in cash management, the degree of multinationality of the firm is positively correlated with holdings of cash. At the same time, the effect of national culture on firm's cash holdings is lower for multinationals. These results are economically significant.     

Implementation and Outcomes of Customer Value: A Dyadic Perspective

This study examines the concept of customer value based on the views shared by service firms and their consumers. Using qualitative and quantitative approaches, the study reveals customer satisfaction and retention as outcomes of front-line service employees' value delivery practices. Our results suggest that service employees' efforts to deliver customer value, even when based on a dyadic view, do not necessarily lead to customer retention. Rather, customers become more loyal when the value provided by service employees is matched by consumers' satisfaction. In other words, satisfaction is an important and necessary mediating variable between employees' efforts and customer retention.     

Effect of Customers' and Suppliers' Perceptions of the Market Orientation of Manufacturing Firms on Channel Relationships and Financial Performance

ABSTRACT

This study is designed to investigate the effect of customers' and suppliers' perceptions of the market orientation of manufacturing firms on customers' and suppliers' trust in, cooperative norms in, and satisfaction with the relationship with the manufacturing firm. The findings from a sample of 72 matched sets of suppliers, manufacturing firms and customers in industrial channels in the Netherlands reveal that the perceived market orientation of manufacturing firms engaged in channel partnerships has a positive influence on customers' and suppliers' levels of trust in, cooperative norms in, and satisfaction with the relationship. This study further investigates the effect of the customers' and suppliers' trust in, cooperative norms in, and satisfaction with the relationship on the financial performance of the manufacturing firm. The results reveal that customers' and suppliers' cooperative norms in the relationship positively influence the manufacturing firm's financial performance. Customer's and supplier's trust in and satisfaction with the relationship have no effect on the manufacturing firm's financial performance.     

THE EFFECTS OF CULTURE AND HUMAN RESOURCE MANAGEMENT POLICIES ON SUPPLY CHAIN MANAGEMENT STRATEGY

Afirm's corporate culture and human resource management (HRM) policies have an important impact upon the success of that organization's supply chain management strategy. A model that examines the relationship between organizational culture, HRM policies, and the firm's transaction/relationship orientation toward its employees and the impact of these factors on its choice of supply chain partners is presented. The paper then discusses four different HRM/logistics strategies a firm can implement and examines the degree of cultural fit that is likely to develop in each of these four strategies. Finally, managers are provided with a list of questions that allow an assessment of the fit between the firm's human resource and logistics management strategies.     

Intragroup Transactions,Corporate Governance,and Corporate Philanthropy in Korean Business Groups

This study examines how the corporate philanthropy decisions of group-affiliated firms in Korea (Chaebol firms) are made. Based on the attention-based view, we argue that when corporate decision makers at group-affiliated firms focus their attention more (less) on internal markets than external stakeholders because of the firm’s high (low) reliance on intragroup transactions, the firm will decrease (increase) its level of corporate philanthropy. We further argue that the relationship will be stronger when governance mechanisms focus on the instrumental value of corporate philanthropy. Using a panel sample of group-affiliated firms in Korea from 2011 to 2015, we find that as intragroup sales increase, the level of corporate philanthropy decreases, and such a negative relationship is stronger when outside director representation and foreign investor ownership are high. Our study suggests that internal dependence and corporate governance mechanisms jointly affect the level of corporate philanthropy at firms in a business group. Thus, this study contributes to the literature on corporate philanthropy, business group, and corporate governance.     

What do we know about corporate philanthropy? A review and research directions

During the past decades, academics and practitioners have been extensively focusing on corporate philanthropy as an important part of corporate social responsibility and a vast number of papers have been published on this topic in various disciplines. To have a better understanding of the evolution of corporate philanthropy, this paper critically reviews some 60 years of research covering 228 corporate philanthropy documents (including 214 journal articles, 5 dissertations, and 9 books and book chapters) across and between disciplines, and analyzes their content in a systematic and comprehensive manner. A multi-level and multidisciplinary theoretical framework that synthesizes and integrates the corporate philanthropy literature at micro-, meso-, and macro-levels of analysis is offered. Specifically, the framework presents antecedents, intermediaries (moderators and mediators), consequences of corporate philanthropy, and the underlying mechanisms of the corporate philanthropy–firm performance relationship. This paper helps bridge important knowledge gaps of corporate philanthropy and its relation with firm performance by studying corporate philanthropy at a multi-level of analysis and applying diverse theoretical frameworks of corporate philanthropy. The paper concludes by offering several suggestions for future research on corporate philanthropy.     

Female analysts and COVID-19 corporate donation

This paper examines the impact of female analysts' coverage on firm's philanthropic activities amidst the outbreak of the COVID-19 pandemic in China. Using a hand-collected dataset of corporate philanthropy, the paper provides robust evidence that firms covered by female analysts are more likely to contribute actively to the well-being of societies by increasing corporate donation. This positive relationship is more pronounced if the company is privately controlled or covered by female analysts with more working experience, or located in more infectious provinces. Overall, our findings call for more female analyst recruitment, yielding benefits of pressuring firms to engage in philanthropy.     

When Organizational Justice Matters for Affective Merger Commitment

We investigate when organizational justice matters to employees’ commitment in the postacquisition process after a company is taken over in a cross‐border acquisition. Overwhelming evidence from the literature suggests that employees who are treated fairly during acquisitions are more committed to their new firms. We extend this finding by dividing organizational justice into three subdimensions: informational justice, interpersonal justice, and procedural justice. We find evidence that procedural justice is an important antecedent of affective merger commitment at an early stage of the integration period, while informational justice becomes important at a later stage. Further analysis on heterogeneity between the target firm's employees and the bidder firm's employees reveals that, immediately after the acquisition, target firm's employees value knowing where they will be at the new firm (procedural justice), while bidder firm employees are more concerned about communication and transparency (informational justice). Our results point to the importance of organizational justice in a cross‐border merger and acquisition (M&A) setting and the need for a separate study of issues related to bidder firms and target firms. © 2016 Wiley Periodicals, Inc.     

The impact of informal social interaction on innovation capability in the context of buyer-supplier dyads

Although many studies employ social network theory to explain firm innovation, how individual-level factors lead to a firm's collective innovation capability remains under-researched. Building on studies that use the work boundary to define formal and informal social interactions, this research aims to illuminate how informal buyer-supplier employee interactions influence buyer firms' innovation capabilities through knowledge acquisition. Integrating the literatures on absorptive capacity and social interaction, the analysis of survey data from 273 Chinese manufacturing firms suggests that employees' informal interactions are positively associated with knowledge acquisition and enhance firms' innovation capabilities. Furthermore, the indirect effects of informal interactions on innovation capability are moderated by knowledge application.     

Organizational Commitment in Mexican Small and Medium-Sized Firms: The Role of Work Status,Organizational Climate,and Entrepreneurial Orientation*

In this study, we examine the role of individuals' commitment in small and medium-sized firms. More specifically, we argue that employees will commit themselves to their firm based on their current work status in the firm, their perception of the organizational climate, and the firm's entrepreneurial orientation. We also examine how individuals' commitment affect the actual effort they exert vis-à-vis their firm. The study's hypotheses are tested by applying quantitative analyses to survey data collected from 863 Mexican small and medium-sized businesses. We found that individuals' position and tenure in the firm, their perception of psychological safety and meaningfulness, and the firm's entrepreneurial orientation all are positively related to organizational commitment. We also found a positive relationship between organizational commitment and effort. Finally, our findings show that organizational commitment mediates the relationship between many of the predictor variables and effort. We discuss the limitations and implications of our findings and provide directions for future research.     

Sharing management: Three ethical scenarios

How might a transition from closely-held to shared management help or hinder the presence of the ethical in a corporation? I propose three fictional scenarios according to which such a transition might occur. In one, managerial power is shared, but without any examination of the firm's presuppositions. In another the presuppositions are shared as well, but only insofar as top management seeks to generate cultic enthusiasm for the ‘corporate family’. In the third scenario the firm's presuppositions are discussed openly by all employees. I argue that only this third scenario embodies the conditions which make it possible for a firm to be moral.