Can environmentally oriented CEOs and environmentally friendly suppliers boost the growth of small firms?

The core question addressed in the natural resource‐based view (NRBV) of the firm is how to develop and exploit resources beneficial for both the natural environment and firm performance. Due to the resource constraints and increased competition facing small manufacturing firms, achieving this is a challenge for such companies. Building on the NRBV and resource orchestration literatures, we examine the relationship between green purchasing capabilities (GPCs), CEO's environmental orientation (EO), and firm growth. Results from 304 Swedish small manufacturing firms indicate a significant relationship between GPC and growth, and this relationship is positively moderated by the EO of the CEO.     

The behavioural gap between entrepreneurial SME’s and high growth: evidence from Canada

Entrepreneurial orientation (EO) describes a firm’s attitude towards entrepreneurial activity; however, it does not measure the specific behaviors likely to contribute to high growth. This research applies the resource-based and dynamic capabilities views to propose a mediation model between EO and high growth. The theoretical framework is drawn from the strategic management and entrepreneurship literature. Competing models are tested against a sample of Canadian SMEs to validate the proposed explanation for the presence of high-growth firms among the population. The study finds that the relationship between EO and high growth is perfectly mediated by innovation performance, a behavioral measure of innovation. This research contributes to firm growth theory while providing further insight into the drivers of high growth useful to policy makers endeavoring to stimulate, and overcome barriers to, entrepreneurship and innovation. Determining the factors associated with firm growth can have implications for management as well as policy. If a firm’s goal is to grow it must be able to focus its limited resources using a strategy appropriate for growth.

     

Human resource involvement,job-related factors,and their relation with firm performance: experiences from Greece

A great deal of debate exists regarding the relationship between human resource (HR) practices and firm performance. The purpose of this paper is to examine the relationship between HR involvement in firm's strategic planning, job-related constructs (job characteristics, workplace characteristics, and satisfaction), and their impact on firm performance. A new research model is proposed exploring the above-mentioned relationships. The validity of this model is tested using data from 106 chief executive officers (CEOs), top managers, and managing directors of Greek small medium enterprises (SMEs)), using the structural equation modeling approach. The results indicate that job characteristics and workplace characteristics directly affect satisfaction and firm performance, while HR involvement has a direct impact on job characteristics and workplace characteristics and an indirect effect on satisfaction and firm performance. It is suggested that managers should emphasize on the HR involvement in the process of strategic planning which actually affects the job-related constructs, in order to improve employees' satisfaction and achieve higher firm performance levels.     

External cooperation and entrepreneurial orientation in industrial clusters

ABSTRACT

The aim of this paper is to examine the relationship between external cooperation and entrepreneurial orientation (EO). This relationship is explored in cluster environment, wherein entrepreneurial organizations compete and cooperate simultaneously to pursue opportunities. The following hypothesis is tested: External cooperation is positively correlated with entrepreneurial orientation. The hypothesis is tested with a correlation analysis on a sample of 77 small-sized enterprises operating in the Malopolska region in Poland, wherein several clusters are active. Additionally, the regression analysis is conducted to examine the associations between inter-organizational cooperation and EO dimensions. The findings confirm that external cooperation is positively correlated with EO. This observation is confronted with a pro-competitive approach that is a constitutional element of the entrepreneurship concept. Moreover, the findings show that the correlation between external cooperation and a firm’s performance is stronger than between some other EO dimensions and performance. Additionally, the findings show the important role of relationships between organizations and their clients. In the paper, several remarks for development of the theory are discussed, including the need for incorporating inter-organizational cooperation into a set of entrepreneurial traits and reflecting it in entrepreneurial orientation scales. The findings confirm the importance of that direction of theory development that focuses on inter-organizational collaboration in the context of entrepreneurship.     

Market orientation as determinant of entrepreneurship: An empirical investigation on SMEs

Entrepreneurial Orientation (EO) and Market Orientation (MO) are considered key factors in ensuring firm longevity in the new competitive landscape. Despite extensive research during the past decade, most of the studies use samples that exclude small and medium enterprises (SMEs), which represent the majority of economic activity worldwide. Some studies do investigate this relationship in small companies but place little importance on the subtle differences between SMEs and large companies when measuring MO. This study empirically investigates the relationship between MO and EO on a sample of 2500 Swedish SMEs. A new measure of MO that takes into consideration SMEs specific conditions has been developed and used. Findings suggest that MO is the main determinant of EO in SMEs.     

Employee ownership heterogeneity and firm performance in China

Employee ownership (EO) has gained increasingly significant attention from both business practitioners and policy makers in China. Through the examination of the implementation of EO by China's listed firms from 1992 to 2017 with a total of 3,396 firms and 36,559 firm‐year observations, we explored the relationship between EO implementation and firm performance. In general, we found that over time, EO firms outperform non‐EO firms in China, and the influence of EO is only different in nuanced aspects in different time periods according to the change of policies. The data from the most recent period, that is, 2014–2017, indicate that EO adopters have higher performance than matched non‐EO firms both before and after adoption, but the relative performance does not increase after adoption. We further examined the interactive effect between EO and executive stock ownership (ESO) schemes and found that the adoption of ESO weakens the positive relationship between EO and firm performance. Regarding different types of EO, we found lower performance in companies with high return rights but no control rights, and we found better performance when high return rights are combined with control rights. We suggested policy and managerial implications on the basis of the findings.     

Customer service-focused HRM systems and firm performance: evidence from the service industry in Taiwan

Abstract

This study adopts a resource-based view, attraction–selection–attrition theory and a focused approach to examine the link between service-focused human resource management (HRM) systems and firm performance. Internally, we examine employee competency as the ‘black box’ between service-focused HRM systems and firm performance. Externally, we examine the effect of the interplay of a service-focused strategy and service-focused HRM systems in predicting firm performance. We collect data from different sources (i.e. executives, human resource members, and line managers). Using a final sample included 2120 respondents from 175 firms in the service industry in Taiwan, the results show that customer service-focused employee competency transmitted 53% of the effect of customer service-focused HRM systems on firm performance. In addition, when a firm implements a less service-focused business strategy, service-focused HRM systems leads to significant improvement in firm performance. Implications for research are discussed.     

Commitment to Sustainability in Small and Medium‐Sized Enterprises: The Influence of Strategic Orientations and Management Values

Ecosystem degradation and social sustainability have become important issues in the corporate sphere during the last few decades. However, research discussing corporate social responsibility and related concepts has often focused on larger companies, sometimes neglecting the specifics of small and medium‐sized enterprises (SMEs). The main purpose of this study is to examine the relationships between two common strategic orientations, market orientation (MO) and entrepreneurial orientation (EO), in relation to sustainability commitment, sustainability practices and management values in SMEs. Questionnaire responses from 450 Swedish SMEs were analyzed, confirming the influence of MO, EO and sustainability practices on commitment to sustainability, implying that firms committed to sustainability see both market and entrepreneurial advantages of sustainability. The results also show that different parts of MO and EO differ in importance for commitment to sustainability among SMEs. Implications concern the importance for firms and policymakers to work with sustainability issues using both internal and external perspectives. © 2015 The Authors. Business Strategy and the Environment published by ERP Environment and John Wiley & Sons Ltd     

The U-shaped effect of R&D intensity on employee downsizing: evidence from Spanish manufacturing firms (1994–2010)

Abstract

This study explores an empirically untested issue: the relationship between the level of a firm’s R&D intensity and employee downsizing. Basing our conceptual development on the Resource-Based View of the firm, we argue that a linear relationship is a poor approximation of the proposed relationship. Instead, we find theoretical insights supporting the logic that employee downsizing decreases as firms shift from low to moderate levels of R&D intensity but increases as firms change from moderate to high levels. This prediction suggests that a U-shaped link is a better representation of the way in which a firm’s R&D intensity can affect downsizing. This hypothesis is tested and confirmed using a sample of Spanish manufacturing firms during the 1994–2010 period. We also propose a novel empirical tool (i.e. dynamic probit models) that is especially useful for addressing the potential endogeneity and simultaneity problem in studying this relationship. Implications for future research and practice are presented along with the conclusions of our findings.     

Linking entrepreneurial and market orientation to the SME’s performance growth: the moderating role of entrepreneurial experience and networks

Entrepreneurial orientation and market orientation (EO and MO, respectively) have received extensive research attention in the past several decades. Although scholars widely agree that both MO and EO are critical to firms’ performances, a better understanding is still needed about how market and entrepreneurial orientation develop over time as well as their relative impact on the growth of the SME’s performance. This study does not consider MO and EO as generic resources that always positively influence firms’ performances; instead, it tries to explore contingent elements, such as social and business networks and accumulated entrepreneurial experience. The hypotheses were tested on 191 small and medium-sized electronic firms located in an Italian geographical cluster during two periods: 2005 and 2016. This study suggests that SMEs, which develop social networks, may enjoy considerable advantages from entrepreneurial and market orientation, improving their performance benefits. Moreover, our results show that previous entrepreneurial experience, when specific, can reinforce the impact of entrepreneurial and market orientation on firms’ performance growth. This analysis makes several important contributions to the management literature on the strategic orientation of firms, the entrepreneurial experience and network development.

     

The effects of slack resource of R&D professionals on firm performance: evidence from traditional manufacturing firms in an emerging economy

Abstract

As an important component of organizational human resource slack (HR slack), the slack of research-and-development (R&D) professionals has been studied by several authors. However, it remains unclear whether and how this small component of general HR slack, i.e. the slack of research-and-development professionals (RHR slack), may affect overall firm performance in an emerging economy without much R&D tradition or pro-R&D institutions. Based on two organizational theories, i.e. institutional theory and the resource-based view of the firm (RBV), we propose competing hypotheses on the relationship between RHR slack and firms’ accounting performance. We also examine whether the relationship between RHR slack and firm performance should be linear or curvilinear. Finally, we also test the relationship between RHR slack and other dimensions of firm performance. Several interesting findings have been obtained. For instance, neither the perspective based on institutional theory nor that based on RBV can fully predict all types of RHR slack-performance relationships, be these relationships linear or curvilinear.     

The significance of sustained entrepreneurial orientation on performance of firms – A longitudinal analysis

This study focuses on the importance of changes in entrepreneurial orientation (EO) over time for subsequent firm performance, and the significance which inimitable resources (networks, governance system and unique competence) might have in this connection. Hypotheses are developed to test the effects that changes in EO level over a time period and resources have on subsequent firm performance. The study is based on data from 168 Norwegian SMEs, interviewed both in 2000 and 2003. The primary contribution of this study is that a change in EO over time (increased or decreased), may be of importance for a firm's performance represented by performance compared to competitors, and employment growth. A focus on entrepreneurial activities seems to be beneficial in the long run (increasing EO), while the opposite is the case if the EO level decreases. It is especially encouraging to see that firms focusing on EO (increased or the same) are positively associated with employment growth, one of the primary policy goals world-wide. Another contribution from this study is that resources that may be inimitable for firms have some influence on performance compared to competitors. Implications for policy-makers, practitioners and further research are discussed.     

Women directors contribution to organizational innovation: A behavioral approach

This paper aims to analyze the relationships between women directors (a demographic characteristic) and organizational innovation (a predictor of firm performance) by considering the mediating role of the board’s decision-making culture. To scrutinize board processes and behaviors, we use survey data to test our hypotheses on a sample of 341 Norwegian firms. The results suggest that women directors contribute positively and significantly to organizational innovation. Furthermore, the positive relationship between women directors and the level of organizational innovation is mediated by some decision-making culture dimensions: the degree of cognitive conflict and the degree of preparation and involvement during board meetings. Implications for theory and practice and future research directions are discussed.     

The impact of appointment-based CEO connectedness on firms’ performance and profitability

This paper investigates whether the performance variables of newly added intangible capital elements give the appointment relationship a deeper impact on the firms’ performance and profitability. We document that after correcting for endogeneity, when considering intangible capital, Total Q is a better proxy than Tobin’s Q for explaining the effect of appointment-based CEO connectedness on firm performance and profitability. Furthermore, we show that the influence of directors on company performance and profitability is more important than that of executives or managers. We also find that the stronger the appointment relationship, the worse the company’s performance and profitability. We further provide a series of alternative interpretations and robustness test evidence showing that intangible capital is more important for high technology and internet firms than industrial firms. Further, we find that the greater the number of executives appointed by the CEO, the better the firm’s research and development, but the worse the firm’s investment policy.     

Valuation effects of earnings management on hotel firm value

This study investigates the valuation effects of earnings quality on a hotel’s firm value between 1991 and 2017. A unique perspective from the financial crisis period is utilized to explore the changes further when hotel firms face financial distress. We adopt the ordinary least squares (OLS) regression method in this study. Generalized Least Squares (GLS) regression and Petersen’s Clustered Standard Error Model to confirm the validity of results. Seemingly unrelated regressions (SUR) analysis is adopted to compare the impact of the financial crisis on subsamples of low and high Altman Z-scores and subsamples of non-Big-4 and Big-4 firms. Substantial evidence supports our assertion that increased discretionary accruals and earnings management bring down earnings quality and, in turn, decrease a hotel’s firm value. Results reinforce that the 2008 financial crisis had an impact on the relationship between earnings management and hotel firm value. The negative effect that discretionary accruals and earnings management have on hotel firm value is mitigated for hotel firms with low credit strength or not audited by one of the Big-4 firms. Stockholders of hotel firms should be aware of the impact and enforce additional measures to control earnings management activities during a financial crisis.     

Lasting lending relationships and technical efficiency. Evidence on European SMEs

Linking the theoretical predictions of the research on lending relationships with those of the literature on managerial incentives, we investigate whether the duration of credit relationships impacts on SMEs’ technical efficiency. Our hypothesis is that the balance between costs and benefits of enduring banking relationships might have heterogeneous effects on managers’ incentives depending on the level of firms’ indebtedness. Using a large sample of European SMEs, observed in the period 2001–2008, and adopting both parametric and non-parametric measures of efficiency, we find that the positive impact of longer lending relationships on efficiency decreases as indebtedness increases, suggesting that moral hazard problems may endanger firms’ technical efficiency.     

The mediating role of speed in the global sourcing decision process

The principal aim of this study is to provide theory and testing to elucidate the role of decision-maker's decision process and speed during the global sourcing decision-making process (GSDP). In order to achieve this goal, we examine the behavior of a sample of 202 decision-makers belonging to Italian SMEs in the manufacturing sector. Our main finding suggests that faster decisions during the GSDP process lead to superior financial and non-financial performance of the selected supplier. Moreover, we find support for dual processing theory wherein rationality and intuition of the GSDP are associated with increased supplier performance both directly and through their effects on decision speed. Results are discussed in terms of the GSDP, SME and strategic decision-making literatures and practical implications for managers in SMEs.     

Strategizing Environmental Policy and Compliance for Firm Economic Sustainability: Evidence from Taiwanese Electronics Firms

This study aims to examine whether the compliance of environmental policies can sustain firm economic performance, and whether a timing issue is relevant to firm economic sustainability in pursuit of eco‐friendly efforts. Offering models predominantly based on the institutional theory, this study tests hypotheses using data from 284 companies in the electronics sector in Taiwan during the period from 1997 to 2010. The findings reveal that the execution of environment policies mostly improves firm economic sustainability and some joint green efforts can even strengthen such sustainability; however, firms aiming to sustain their economic performance should not hasten to undertake eco‐friendly efforts, implying that first movers may not be guaranteed firm economic performance. Thus, managers should carefully strategize their green efforts to comply with environmental policies, and execute them in due course to prevent disadvantages, such as market uncertainty and complexity of green practices, while conquering organizational inertia. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment     

Rethinking organizational resilience and strategic renewal in SMEs

ABSTRACT

Building on work that associates organizational resilience with crisis recovery and strategic renewal, I examine how small- and medium-sized enterprises (SMEs) vary in the formalisation of activities intended to achieve strategic growth and activities to enhance resilience against acute operational interruptions. Drawing on data from 265 SMEs in the United Kingdom, the main argument of this paper is that variations in formalisation activities reflect differences in firm location, personal networks, the influence of external crisis events, and entrepreneurs’ attitudes towards the prevention of crises. The resulting typology identifies four clusters: Attentive Interventionists, Light Planners, Rooted Strategists and Reliant Neighbours. These findings contrast with prior theorizations of firms as either resilient or vulnerable and further illuminate our understanding of SME resilience and how this is shaped by historical, developmental and strategic factors. The study further develops associations between resilience and social capital, examines how locational choices generate a proximity premium, and develops a growth-survival-maturity perspective on SME resilience. Data reveals an interplay between an ensemble of entrepreneurial activities and decisions about planning, networks, learning, and location. Thus, the study offers a rethinking of prior theorizations about organizational resilience and strategic renewal.