Environmental sustainability orientation,competitive strategy and financial performance

Extant research has established that environmental sustainability orientation (ESO) has a positive influence on performance outcomes. Nevertheless, several contingencies tend to affect the strength of this relationship. In this study, we draw on natural resource‐based theory to introduce competitive strategies as moderators in the ESO–performance nexus. Using time‐lagged data obtained from 269 firms in Ghana, this study finds that firms pursuing the differentiation strategy can positively boost performance outcomes with ESO than without differentiation strategy. We also find that firms can use the low‐cost or the integrated strategy to get higher impact on performance with ESO, respectively. Based on the results, firms in Ghana do not need differentiation strategy in order to boost the effect of ESO on financial performance. Theoretical and practical implications are discussed.     

Environmental sustainability orientation and performance of family and nonfamily firms

Despite the growing research evidence on the effect of environmental sustainability orientation (ESO) on firm outcomes, contingent factors that may influence the strength of this relationship have received little scholarly attention. In this study, we use insights from the literature on ESO and family business to introduce family status and firm age as moderators in the ESO‐performance linkage. Using time‐lagged data from 253 small and medium‐sized enterprises in Ghana, we found the impact of ESO on firm performance is amplified for nonfamily firms but not significant for family firms. Our evidence suggests it is stronger among older firms than younger ones. Implications and directions for future research are discussed.     

Employment relations in small- and medium-sized enterprises: insights from Ghana

This study examines employment relations in small- and medium-sized enterprises (SMEs) in Ghana. This is done through in-depth case studies of three private firms in the service sector. A review of the extant literature on SMEs revealed a dearth of knowledge on employment relations in SMEs in Africa. Previous research into SMEs in developing countries – and Africa in particular – has focused on economic policy initiatives, problems in raising capital and obstacles to the development of SMEs. In an attempt to fill the gap in the literature, this study uses recruitment, selection and retention, remuneration, discipline and welfare practices to explore the nature of employment relations, the factors that influence and shape them, and the extent of informality involved. The findings cast doubt on the stereotype: small implies/equals informal employment relations in SMEs in Ghana. The study also identifies the factors that influence employment relations and, in addition, reveals that under competitive pressures, SMEs have developed employment relations systems that enable them to have a competitive advantage in their product market/service delivery.     

Privatisation,corporate control and employment growth: Evidence from a panel of large Polish firms, 1996–2002

Using data on Polish firms this paper examines the relationship between corporate control structures, sales growth and the determinants of employment change. Privatised and de novo firms are the main drivers of employment growth; in the case of de novo firms, it is foreign ownership which underpins the result. Being privatised has a positive impact on employment but this is concentrated within a range of 3–6 years after privatisation. There are no systematic differences in employment response to negative sales growth across the ownership categories. Employment in state firms is less responsive to positive sales growth. From these results we infer that the behaviour of state firms is affected by both insider rent sharing and binding budget constraints.     

Identifying the effects of firing restrictions through size-contingent differences in regulation

We study the effects of the more stringent employment protection legislation (EPL) that applies in Italy to firms with over 15 employees. We consider firms' propensity to grow when close to that threshold and changes in employment policies when they pass it. Using a comprehensive matched employer–employees dataset, we find that the probability of firms' growth is reduced by around 2 percentage points near the threshold. Using the stochastic transition matrix for firm size, we compute the long-run effects of EPL on the size distribution, finding that they are quantitatively modest. We also find that, contrary to the implications of more stringent firing restrictions, workers in firms just above the threshold have on average less stable employment relations than those just below it. We document that this might be because firms above the threshold make greater use of flexible employment contracts, arguably to circumvent the stricter regulation on open-end contracts.     

Hunting while working: An expanded model of employed job search

Major theoretical models of job search fail to consider the changing nature of careers, the influence of the internet as a job search tool, and the diverse objectives for employed job search. Consequently, the study of employed job search has been largely confined to turnover research. We add to existing theory by providing a typology of employed search objectives based on modifying employment conditions (separation-seeking, change-seeking, leverage-seeking), contagion (mimetic-seeking) and employability (knowledge-seeking, network-seeking) and offer propositions related to the antecedents and implications for each objective. This classification offers an alternative explanation for previous research findings, provides a framework for future study, and has practical implications for employee retention and recruitment.     

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.     

The non-uniform pricing effect of employee stock options using quantile regression

Issuing employee stock options (ESOs) transfers equity claims from current stockholders to employees, and thereby dilutes existing shareholder interests. Because employees are motivated to exert additional effort toward better performance, the value of transferred ownership claims proxied by ESO expense represents a cost of generating firm value. There are several econometric issues, most notably including the fact that the disclosed ESO expense is an endogenous variable. Without controlling for the simultaneity problem, inferences based on results from OLS analyses may be misleading. More importantly, a considerable amount of ESO expense data is censored at zero. Such a censoring problem can make the population distribution severely skewed, resulting in estimation bias. Therefore, we need to take into account the censored data issue. No prior studies have considered these two issues simultaneously. Failure to control for both censoring problem and endogeneity could explain the inconsistent results documented in prior studies. In this paper, we use the two-stage quantile regression (QR) proposed by Amemiya (1982) and Powell (1983) to examine possible nonlinear relationships, especially whether conditionally higher-stock price (or better performing) firms show a stronger negative pricing effect of ESO expense (that is, the relation between ESO expense and share price) than conditionally lower-share price firms. Our results suggest that the linear regression model greatly underestimates this negative pricing effect at higher quantiles, so the nonlinear relationship is obscure when using the standard linear model. We also consider alternative interpretations as to why heterogeneity exists in the pricing effect of ESO expense and assess whether our results concur with these explanations.     

On the Real Effect of Financial Pressure: Evidence From Firm‐Level Employment During the Euro‐Area Crisis

Using a large panel of mainly unquoted euro‐area firms over the period 2003–2011, this paper examines the impact of financial pressure on firms’ employment. The analysis finds evidence that financial pressure negatively affects firms’ employment decisions. This effect is stronger during the euro area‐crisis (2010–2011), especially for firms in the periphery compared to their counterparts in non‐periphery European economies. When we introduce firm‐level heterogeneity, we show that financial pressure appears to be both statistically and quantitatively more important for bank‐dependent, small and privately held firms operating in periphery economies during the crisis.     

Last in,first out?: Estimating the effect of seniority rules in Sweden

In this paper we investigate whether a relaxation in seniority rules (the “last-in-first-out” principle) had any effect on firms' employment behaviour. Seniority rules exist in several countries, but consequences of seniority rules on firms' employment behaviour have not been examined previously. The “last-in-first-out” principle in Sweden was reformed in January 2001 such that employers with ten or fewer employees were allowed to exempt two workers from the seniority rule. Using an employer–employee unbalanced panel data for the period 1996–2005, we find that both hires and separations increased in small firms relative to large firms by 5%. This also implies that there were no effects on firms' net employment. Our results show that firms reacted to changes in the seniority rules, but we argue that the effects are not overwhelmingly large.     

Being pro-environmentally oriented SMEs: Understanding the entrepreneur's explicit and implicit power motives

The increased number of environmental problems caused by business activities put higher pressures on entrepreneurs to implement pro-environmental policies within their businesses. However, studies show that SMEs are less engaged with sustainable and pro-environmental policies. Hence, it is important to understand the barriers and drivers of implementing a pro-environmental strategy in SMEs from an entrepreneur's perspective. In a study with Indonesian SME owners, we find that environmental sustainability orientation (ESO) is driven by an entrepreneur's explicit and implicit power motives. Using polynomial regression with surface analysis, we also reveal that a high level of SME's ESO is affected by power motive discrepancy. We discuss implementations for policymakers, entrepreneurs, and educational programs in entrepreneurship.     

HRM in entrepreneurial firms: A systematic review and research agenda

This review aims at synthesizing and assessing the literature on human resource management (HRM) in entrepreneurial firms. Our review over the time period 2004–2020 is relevant as entrepreneurial firms have a central role in the economy and are important for technological advancement and employment. Furthermore, managing entrepreneurial firms differs significantly from managing established firms. Using a systematic review method, we develop a framework of HRM in entrepreneurial firms, in which we present the current state of the literature, accounting for antecedents, outcomes, and the organizational context. Importantly, we also offer a compelling research agenda for future work on HRM in entrepreneurial firms.     

Pricing executive stock options under employment shocks

We obtain explicit expressions for the subjective, objective and market value of perpetual executive stock options (ESOs) under exogenous employment shocks driven by an independent Poisson process. Previously, we obtain the executive's optimal exercise policy from the subjective valuation that is necessary for the objective one, or fair value. The perpetual ESO is compared with the true finite maturity ESO finding that the approximation is reasonably good. To illustrate the usefulness of the objective valuation for accounting purposes, we analyze the statistical distribution of the fair value when there is uncertainty about the employment shock intensity. Finally, the role of ESOs in the design of executives’ incentives is also discussed.     

The re-examination of the relationship between employee stock ownership and voluntary employer change intention in Taiwan

Although past literature had provided inconsistent conclusions as to whether or not employee stock ownership (ESO) can serve the function of employee retention, this paper proposes that the reason for such inconsistency lies in the inability to clarify ESO characteristics. Therefore, this study examines the relationship between ESO and voluntary employer change intention from the viewpoint of vested and portable characteristics. Study results indicated that vested ESO achieves the function of employee retention. However, when vested ESO is also portable, employees tend to spend more efforts searching for external ESO alternatives, which reinforce their voluntary employer change intention.     

The China effect: Evidence from data at firm level in Thailand

This study investigates how competition with Chinese imports affects firms in Thailand. Using World Bank data on Thailand and United Nations trade data from 2003 to 2006, the empirical results show that there is no significant impact of Chinese import competition on employment, wages, or labor income share. However, further checks show that for firms with lower productivity, the impact on employment and labor income share is more likely to be negative. The impact of Chinese import competition on profit margins is significantly positive. Considering the impact on labor income share and profit margins, we conclude that because of Chinese import competition, income distribution possibly goes in disfavor of labor. Our study shows that the impact of Chinese import competition on the skilled labor ratio is positive and significant. This result suggests that Thai firms are on the path to skill upgrading as a result of Chinese import competition, which is helpful for Thailand’s long-run economic growth. As firms with low productivity are more likely to be negatively affected by Chinese import competition, improving productivity is still an efficient way to counter such competition.     

Human resource barriers to partnership sourcing in China

Building on previous research on both buyer–supplier relations and human resource management in the PRC, interviews with managers in each of 47 UK-owned PRC subsidiaries were undertaken. The majority of firms are actively pursuing close and cooperative relationships with local suppliers, but there are substantial human resource barriers to the establishment of partnership sourcing arrangements. Grounded analysis reveals key HR barriers to partnership sourcing in the form of difficulties in staff recruitment and retention, problems in cross-cultural communication, poor working practices in supplier firms, and corrupt staff behaviour. This paper describes and analyses these problems, discusses measures that are being taken in an attempt to overcome the problems, and comments on the progress being made towards ‘ideal type’ partnership sourcing arrangements.     

Financial Crisis and Changes in Firm Governance,Corporate Structure,and Boundaries

The paper researches the effects of the 2008 financial crisis on various measures of firm governance, including the impact on firm boundaries such as buyer–supplier relationship, capital structure, and employment effects. Using a unique data set of 1686 Eastern European firms, we examine how the crisis affected the financial and employment decisions of different industrial and service sector firms. As these firms faced a steep decline in sales and capacity utilization, as well as credit constrains, they were forced to make significant and far reaching changes in various aspects of their operations. We discuss the implications of these changes. Copyright © 2013 John Wiley & Sons, Ltd.     

Inside the black box of high-growth firms in a crisis-hit economy: corporate strategy,employee human capital and R&D capabilities

In an attempt to open the black box of high-growth firms within turbulent economic environments, this paper explores the role of corporate strategy, employee human capital and R&D capabilities in achieving exceptional growth performance in a crisis-hit economy. Relative and absolute growth measures based on both employment and sales are computed utilizing survey data on 1500 firms in the midst of the Greek crisis. Our findings indicate that adopting a geographical diversification strategy significantly increases the likelihood of becoming a fast-growing firm, irrespective of the growth metric used. Entering in diverse product markets and taking advantage of R&D capabilities appear to additionally contribute to relative employment change in HGFs of smaller size. Based on the absolute employment growth indicator, we provide some evidence that HGFs of larger size are able to grow fast through product diversification, acquiring other firms or by investing on training low-skilled employees. Nevertheless, hiring already highly educated persons seems to matter only for sales HGFs, while research collaborations are found to negatively affect the probability of growing fast in terms of sales.

     

Revisiting the objectives of worker-managed firms: An empirical assessment

This paper provides new evidence on the objectives pursued by worker-managed firms (WMFs). The basic neoclassical model assumes that WMFs maximizes net income per member instead of total profits (Ward, 1958). Even though it has been largely criticized, the Ward model has dominated the self-management literature. Alternative models suggest that WMFs are not only concerned about income per worker but also about the level of employment. However, the empirical content of these competing theoretical models has been rarely analyzed. This paper contributes to fill this gap by estimating the parameters of a generic welfare function, following the methodology proposed by Craig and Pencavel (1993). These parameters determine the relative importance that a WMF places on income per worker vis-a-vis the level of employment. Estimates are based on a long micro-panel of Uruguayan firms covering the entire population of Uruguayan worker-managed firm and conventional firms in 31 3-digit sectors over the period April 1996-December 2005. Following a strictly neoclassical framework, but simply allowing a more general specification of the WMF goals, we show that the assumption of the basic neoclassical model of the WMF is misleading. Our results support the view that WMFs are concerned with both employment and income per worker.     

Labour scarcity and the survival of small firms: a resource‐based view of the road haulage industry

This article is concerned with the problem of labour scarcity in the road haulage industry and how it affects small firms. The recruitment and retention of lorry drivers is critically important for the industry because driving is no longer seen as an attractive occupation, and there are worries that there is an insufficient supply of new recruits to replace the experienced drivers who are leaving the industry. In order to investigate this issue, we make use of a modified version of the resource‐based view (RBV) of the firm, focusing on the notion that a minimum set of ‘table stakes’(HR practices) is necessary for the continued survival of small firms. Drawing on longitudinal data from seven small road haulage companies, we argue that owner‐managers have developed an astute combination of path‐dependent and socially complex networking abilities, embedded within an extensive understanding of both product and local labour markets. We conclude that the RBV needs extending to make greater allowance for different ownership goals and diversity in markets, and to consider the forces that promote similarity rather than difference among firms within an industry.