Age diversity and firm performance in an emerging economy: Implications for cross‐cultural human resource management

This study tests the effect of age diversity on firm performance among international firms. Based on the resource‐based view of the firm, it argues that age diversity among employees will influence firm performance. Moreover, it argues that two contextual variables—a firm's level of market diversification and its country of origin—influence the relationship between age diversity and firm performance. By testing relevant hypotheses in a major emerging economy, that is, the People's Republic of China, this study finds a significant and positive effect of age diversity and a significant interactive effect between age diversity and firm strategy on profitability. We also find a significant relationship between age diversity and firm profitability for firms from Western societies, but not for firms from East Asian societies. The paper concludes by discussing the implications of this study's findings. © 2011 Wiley Periodicals, Inc.     

Does the Diversification–Firm Performance Relationship Change Over Time? A Meta‐Analytical Review

We study the relationship between diversification and firm performance in the context of the decline in levels of diversification over time. We argue that the pressure to reduce diversification may have more strongly affected those firms whose diversification strategies were most detrimental to firm performance. We employ meta‐analytical regression (MARA) in order to test our hypotheses, using a total of 267 primary studies containing 387 effect sizes based on 150,000 firm‐level observations from over 60 years of research on the diversification–firm performance relationship. The findings suggest that levels of unrelated diversification have decreased, whereas levels of related diversification have increased since the mid‐1990s, following an initial decrease in the 1970s and 1980s. Furthermore, we find that the relationship between unrelated diversification and firm performance has improved significantly over time, whereas the relationship between related diversification and performance has remained relatively stable.     

The role of human capital philosophy in promoting firm innovativeness and performance: test of a causal model

In the present study, we developed and tested a causal model of the relationships between firm strategy, industry environment, human capital philosophy, innovativeness, and firm performance. Our results indicate that a differentiation-oriented strategy influences the relative use of an empowerment-oriented human capital philosophy of the firm, moderated by a firm's industry environment. Moreover, firms' human capital philosophies moderated the relationship between strategy and firm innovativeness. We also found support for the proposition that innovativeness mediated the relationship between human capital philosophy and firm performance. In addition, results also indicate that industry dynamism influences new product sales directly and industry survival difficulty moderates the relationship between firm strategy and new product sales. Survival difficulty also had a negative effect on firm profit. Overall, we found support for the mediating roles of human capital philosophy and innovativeness in the relationships between firm strategy, industry environment and firm performance. Implications are discussed.     

多元化经营、财务杠杆与过度投资

基于我国上市公司实行多元化经营战略的背景,从公司过度投资的视角对财务杠杆的治理效应进行了理论分析,并以2004-2009年的非金融上市公司为样本,检验了多元化经营对财务杠杆抑制企业过度投资治理效应的影响.结果发现,财务杠杆对我国上市公司的过度投资行为有明显的抑制作用,但是多元化经营会削弱这种抑制作用.进一步研究还发现,财务杠杆由于抑制过度投资,对公司绩效起到了正面的影响.而多元化经营同样会弱化财务杠杆对公司绩效的正面作用.研究结论不仅对于理解我国多元化经营的上市公司财务杠杆治理效应与投资效率之间的关系具有重要意义,同时也为我国上市公司多元化经营会降低公司经营业绩提供了新的证据.     

Corporate environmental performance,environmental management and firm risk

Using a sample of 1,632 U.K. firm‐year observations from 2002 to 2013, this paper investigates the impact of multidimensional corporate environmental performance (CEP) on firm risk. Considering two dimensions of CEP, namely environmental management performance (EMP) and environmental operational performance (EOP), we find that EMP serves as an effective mechanism in reducing firm risk, and such an effect is mainly driven by the manufacturing sector. Meanwhile, there is no clear association between EOP and firm risk. However, our findings highlight a moderating effect of EOP on the relationship between negative EMP and firm risk. This provides new insights into the value of multidimensional CEP and suggests that the complex relationship between outcome‐ and process‐based environmental performance is important for understanding the real effects of CEP on firm risk. Our results have important implications for managerial decision‐making in strategy and risk management, as well as for policymaking in environmental regulation.     

Diversification strategy,CEO management style and firm performance: an application of Heckman’s two-stage method

This paper aims to explore whether CEOs’ management style as agents or as stewards, which depends on their psychological and situational characteristics, moderates the effect of the diversification strategy on firm performance. After applying Heckman’s two-stage method to control econometrically for endogeneity bias in empirical work, results demonstrate that the relationship between diversification and profitability varies significantly depending on the management style of the diversifying CEO.     

Impact of CEO narcissism and hubris on corporate sustainability and firm performance

To explore the personality traits and corporate strategy of chief executive officers (CEOs), this study investigates how narcissistic and hubristic tendencies in CEOs affect the relationship between corporate sustainability practices (CSP) and firm performance. The primary purpose is to examine whether CEO narcissism and hubris can moderate the effect of corporate sustainability on firm performance. We investigate the influence of corporate sustainability on firm performance in three dimensions: economic, environmental, and social. The relationship between the mechanisms of supervision and agency theory is explored to assist investors in decision making. The results of this study show that compared to narcissistic CEOs, hubristic CEOs will further enhance the positive influence of CSP on corporate performance, especially in the environmental and social dimensions. This research strengthens the literature on CEO narcissism and hubris by demonstrating that CEO personality traits influence the relationship between corporate sustainability practices and firm performance.     

Information technology and firm performance: the role of supply chain integration

This study analyzes the correlation among integrative information technology (IT), supply chain integration (SCI), and firm performance. The results show that integrative IT is positively associated with firm performance through SCI. However, the results of this study show that integrative IT does not have a positive correlation directly with firm performance. It is considered that in the relationship between integrative IT and firm performance, a new approach such as business process-oriented view arguing that performance is yielded through the primary influence of IT is necessary rather than a traditional view that sets up their direct correlations. The findings have the following implications. First, this study presents an endeavor to investigate the consequences of integrative supply chain strategy. Second, this study provides implications in decision making so that supply chain managers can use IT in an effective way.     

R&D strategy and Australian manufacturing industry: an empirical investigation of emphasis and effectivness

This research investigates the degree of emphasis placed by the Australian manufacturing industry on Research and Development (R&D) strategy as well as on other organisational strategies such as marketing, HRs (HR), technology, and operations at the functional level. The research extends further to investigate whether the emphasis on R&D strategy differs with contextual factors such as firm size, firm’s generic strategy, type of market, firm’s life cycle stage, etc. A mail survey was carried out to collect information from manufacturing firms across Australia. This was followed by an on-site interview of some of the senior managers of manufacturing firms from three Australian states: South Australia, Victoria and New South Wales.The study found that although the emphasis on R&D strategy has received a high priority in the past few years, it has not been as effective as the operations strategy and the technology strategy. The operations strategy has been accorded the highest importance in the past few years and this will continue in the future. The study also indicated that firms, which adopt a differentiation generic strategy, put more emphasis on R&D than the firms, which adopt cost leadership and focus generic strategies. The results did not indicate any evidence of a relationship between firm size and the R&D strategy although large firms are found to put more emphasis on operations and marketing strategies. Relatively higher emphasis was placed on the R&D strategy by businesses: at the growth stage; involved in the manufacture of consumer goods as opposed to industrial goods; involved in exports with a higher sales growth in export markets; and having a higher growth rate relative to their industry.     

Exploring environmental,social, and governance disclosure effects on the S&P 500 financial performance

Much of the literature measuring the relationship between environmental, social, and governance (ESG) scores and firm performance treats the score as a measure of sustainability performance. In this study, we treat a firm's ESG score as a demonstration of strategic choice in the level of transparency that results in increased firm performance as measured by Tobin's Q and return on assets. Performance differences are a result of choice moderated by the size of the firm as measured by employees and sales. We analyze 467 firms in the S&P 500 from 2009 to 2015. Applying legitimacy and stakeholder theory, we find that there is significant difference between groups with respect to disclosure and performance. The results of quartile analysis by sales, capitalization, and Tobin's Q are relevant to understand the influence that the ESG score has on financial performance. ESG influences on Tobin's Q are greatest for large firms as measured by sales, as opposed to the ESG affects on Tobin's Q and return on asset for smallest firms as measured by market capitalization.     

Corporate Governance and Performance of Indian Firms: The Effect of Board Size and Ownership

The paper reviews international literature on corporate governance and firm performance and investigates the relationship in the Indian context, taking into account the endogeneity in the relationship. Governance parameters include board size, directors’ shareholding, institutional and foreign shareholding, while the fragmentation in shareholding is captured by public shareholding. A simultaneous equation regression model for Tobin’s Q, as a measure of firm performance, is attempted using these variables, while controlling for industry effects and other non-governance variables. The data corresponds to a panel of 340 large, listed Indian firms for the period 1997–2001 spread across 24 industry groups.     

多元化经营对公司绩效的影响研究

本文假设企业规模在多元化经营与企业绩效的影响关系中具有中介作用,提出"多元化程度—公司规模—公司绩效"的变量模型;利用中国制造业上市公司2008～2010年的数据,通过横截面分析和面板数据分析对该模型进行实证检验。横截面分析结果表明,多元化经营对公司会计绩效产生负向影响,并且公司规模在其中具有部分中介作用,但对公司市场价值并不产生显著影响;面板数据分析结果显示,多元化经营对公司会计绩效和市场价值的影响都不显著。     

Corporate Carbon Strategies in Responding to Climate Change

With climate change emerging as one of the most important issues affecting the business circle, companies have begun considering the carbon issue in their overall strategic positioning. However, few studies have examined the corporate carbon strategies in developing and advanced developing countries, where climate change regulation is extensive and market uncertainty is relatively high. In addition, there has been growing interest among researchers and practitioners concerning the relationship between the carbon strategy and firm performance. This paper presents a framework for identifying the corporate carbon strategy. The cluster analysis of 241 Korean companies indicates six types of corporate carbon strategy: ‘wait‐and‐see observer’, ‘cautious reducer’, ‘product enhancer’, ‘all‐round enhancer’, ‘emergent explorer’ and ‘all‐round explorer’. This study empirically examines whether there are differences between these carbon strategy types in terms of the sector, firm size and firm performance. The results indicate a significant relationship between a firm's carbon strategy and its sector and size but a significant relationship between the carbon strategy and firm performance is not confirmed. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Business portfolio restructuring,prior diversification posture and investor reactions

This study examined firm performance in market reaction to two types of business portfolio restructuring announcements: refocusing and repositioning. We predicted that market performance effects for these two types of strategic restructurers would be moderated by prior diversification posture. The theory behind these expectations was built on a general premise that restructuring strategy would be more favorably viewed by the market as performance enhancing when it offered greater potential for organizational transformation. Results showed strong support for our conclusion that prior diversification posture poses a significant contingency factor in restructuring firms' strategic choices. Further, the market tended to respond more favorably with this sample to repositioning restructuring choices. Copyright © 2003 John Wiley & Sons, Ltd.     

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.     

Strategy,core competence,and HR involvement as determinants of HR effectiveness and refinery performance

This study examines the impact of strategy, core competence, and involvement of HR executives in strategic decision making on the refinery managers' evaluation of the effectiveness of HR and on refinery performance among 86 U.S. petrochemical refineries. Survey results indicated that higher involvement of HR in organizational strategy was strongly related to perceptions of HR effectiveness, and that the relationship was strongest to the extent that refineries pursued a product innovation strategy and viewed skilled employees as their core competence. HR involvement was unrelated to refinery performance but was actually negatively related when refineries emphasized efficient production as their core competence. © 1998 John Wiley & Sons, Inc.     

高管控制权、资本扩张与企业财务风险——来自国有上市公司的经验证据

本文基于委托代理理论,以2004～2009年的国有上市公司为研究样本,对高管控制权与企业资本扩张行为的关系及其对企业财务风险的影响进行了探讨。实证结果发现:高管控制权与企业的投资扩张及多元化扩张行为存在显著的正相关关系,而且当企业拥有充裕的现金流时,其正相关程度更大。基于联立方程模型的研究结果表明,控制权较强的高管所实施的多元化扩张战略会加大企业陷入财务困境的可能性。     

RELATIONSHIPS AMONG CORPORATE LEVEL DISTINCTIVE COMPETENCIES, DIVERSIFICATION STRATEGY, CORPORATE STRUCTURE AND PERFORMANCE

Recent evidence suggests that large multibusiness firms can enhance performance by developing and exploiting corporate level distinctive competencies. In this study of 185 industrial firms, the relationships between corporate level distinctive competencies and performance were examined across firms using different diversification strategies and having different corporate structures. The corporate level distinctive competencies/performance relationships were found to vary by type of diversification strategy but not by type of corporate structure. In addition, only a small relationship was found to exist between diversification strategy and corporate structure. The specific relationships between corporate level distinctive competencies and performance and their normative implications are explored.     

Human resource management and the performance of Western firms in China

The study examines the relationship between human resource management and organizational performance in sixty-two manufacturing Chinese-Western joint ventures and wholly owned subsidiaries located in different parts of the People's Republic of China. A positive relation was found between firm performance and the extent to which firms used a 'high-performance' HRM system as well as the degree to which they engaged in the integration of HRM and firm strategy.     

Corporate diversification and innovation: Managerial myopia or inefficient internal capital markets?

Which is more innovative: the decentralized, diversified firm, or the centralized, more narrowly focused firm? The economics and finance literatures argue that diversified firms have innovation advantages as their operating units have access to an internal capital market. In contrast, the strategy and entrepreneurship literatures argue that managers of these firms suffer from “managerial myopia,” discouraging them from investing in projects with long-term, uncertain payoffs. We take a fresh look at the relationship between innovation and diversification using a comprehensive sample of diversified and nondiversified firms and a novel approach that teases out the mechanisms influencing the relationship between diversification and innovation. Consistent with conceptual and empirical work in strategy, we find a robust negative correlation between diversification and R&D intensity, suggesting that diversification reduces innovation by discouraging investment. However, our analysis suggests that internal capital market inefficiencies, rather than managerial myopia, is responsible for this observed negative relationship.