Market Orientation,Generative Learning,Innovation Strategy and Business Performance Inter‐Relationships in Bioscience Firms

We propose conceptual arguments to establish relationships between market orientation and generative learning and their respective impact on exploitative innovation strategy and explorative innovation strategy. We then consider the ambidextrous association between both forms of innovation strategy and business performance. This model is subject to an empirical test using data generated from 160 bioscience firms. Using structural equation modelling, two mutually exclusive paths are specified where market orientation leads to exploitative innovation strategy, while generative learning leads to explorative innovation strategy. We then find that the ambidexterity exhibited by firms in the form of exploitative innovation strategy and explorative innovation strategy significantly explains improvements in firms’ business performance. Discussion is given to these findings and managerial implications are presented along with avenues for further research.     

The globalization of Chinese telecom corporations: strategy,challenges and HR implications for the MNCs and host countries

This paper investigates the motives of internationalization of two leading Chinese multinational corporations, their entry strategy and strategic responses to overcome internationalization barriers. In particular, we explore the political strategy and the corresponding political behaviour these two firms adopt to facilitate their internationalization process. We also examine the business strategy and human resource strategy they deploy in their internationalization endeavour and what impacts these may have on host country development, including human capital development and employment creation.     

Managerial Agency Costs of Socialistic Internal Capital Markets: Empirical Evidence from China

This study provides empirical evidence of managerial agency costs in socialistic internal capital markets. Listed Chinese companies are required to disclose the amount of resources that are reallocated to other firms of the parent company, which provides us with a direct measure of the socialistic subsidization of weak member firms by strong member firms within a business group. We hypothesize that in strong member firms, managerial compensation is less sensitive to firm performance because cross‐subsidization makes it difficult for group CEOs to hold the managers in strong firms accountable for their own firms' performance, and also increases the noise in performance measures. We also hypothesize that socialistic cross‐subsidization results in an increase in managerial agency costs of strong member firms due to the low pay‐performance sensitivity and low incentive to work hard. We document empirical results that are consistent with these two predictions.     

How and when matter: Exploring the interaction effects of high‐performance work systems,employee participation,and human capital on organizational innovation

Existing research on the relationship between high‐performance work systems (HPWS) and organizational innovation has paid insufficient attention to the boundary effects of employee participation and human capital. Bridging the human resource management (HRM) and employment relations literature, this study contributes to the contingency view of HRM and China‐specific research by investigating how human capital and employee participation, direct voice mechanism, and corporate governance participation jointly moderate the relationship between HPWS and organizational innovation. We test our three‐way interaction model using a sample of 108 firms and 1,250 employees in China. The results suggest that HPWS are positively associated with organizational innovation when employees with relatively less human capital are coupled with more direct voice mechanism or less corporate governance participation. In contrast, HPWS are negatively related to organizational innovation when employees possessing greater human capital are coupled with more direct voice mechanism. The theoretical and managerial implications and future research directions are discussed.     

Exploring entrepreneurs’ human capital components and effects on learning orientation in early internationalizing firms

This study aims to enhance our understanding of the role of entrepreneurs’ human capital components and the influences on learning orientation in early internationalizing firms. Drawing from the integration of human capital theory, resource-based view theory, learning theory, and on the literature of international entrepreneurship and strategic management, a research model is proposed and consists of five constructs, namely international business skill, international business knowledge, entrepreneurial competence, managerial competence and learning orientation. The empirical analysis was carried out on a sample of 158 early internationalizing firms in a food industry in Thailand. Partial least square technique was conducted to test the structural equation models and hypotheses. This followed by some illustrative case studies as supplementary to the empirical findings. The results confirm our hypotheses and support the proposed research model. This study yielded interesting findings in which an entrepreneur’s skill and knowledge in international business enhance entrepreneurial and managerial competencies. These competencies, in turn, play an important role in influencing a firm’s strategic learning orientation     

Quality and cost? The evolution of Walmart's business strategy and human resource policies and practices in China and their impact (1996–2017)

This study responds to calls for more in‐depth and qualitative studies, the return to a focus on external factors, and the inclusion of business strategy and industrial relations in human resource management (HRM) research, as well as more research in the retail sector in the Chinese context. We examine the coevolution of the business strategy and HR strategy of Walmart (China) in the last two decades and identify tensions in the context of intensifying competition in the Chinese retail market. We highlight the interactive effect of business and HR strategies through a historical lens. Our study reveals a shift from the original employee‐oriented win–win strategy through rent sharing between the firm and the employees to a win–lose strategy through the introduction of more cost conscious HR policies and practices. Findings of our study challenge the conventional wisdom that firms adopt either the cost or quality strategy and, along with it, the suggestion of matching the quality strategy with employee‐oriented HR policies and practices, and cost leadership with a transactional approach to HRM. We argue a cost and quality business strategy may be adopted, which requires the support of employee‐oriented, rather than cost‐oriented, HR policies and practices.     

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.     

Corporate growth,corporate strategy,and the choice of capital structure

The interaction between a firm's strategic decisions and its financial policies has become an increasingly frequent topic in the managerial economics literature. We examine here a dimension of that interaction that has not previously been addressed, and suggest a new framework for defining the manner in which choices of strategy and choices of capital structure might be jointly determined, in an environment where upward pressures on factor costs and product prices are the norm.     

Managerial Compensation and Capital Structure

We investigate the interaction between financial structure and managerial compensation and show that risky debt affects both the probability of managerial replacement and the manager's wage if he is retained by the firm. Our model yields a rich set of predictions, including the following: (i) The market values of equity and debt decrease if the manager is replaced; moreover, the expected cash flow affirms that retain their managers exceeds that affirms that replace their managers, (ii) Managers affirms with risky debt outstanding are promised lower severance payments (golden parachutes) than managers affirms that do not have risky debt. (Hi) Controlling for firm's size, the leverage, managerial compensation, and cash flow of firms that retain their managers are positively correlated, (iv) Controlling for the firm's size, the probability of managerial turnover and firm value are negatively correlated, (v) Managerial pay-performance sensitivity is positively correlated with leverage, expected compensation, and expected cash flows.     

Evaluating human capital: an exploratory study of management practice

The article explores the development of systems of human capital evaluation in a number of large UK firms. Human capital is a much used term in business literature, and it is widely recognised that firms need to develop mechanisms to determine the value of their employee base. An extensive human capital literature has developed in which the authors propose elaborate systems for measuring a firm's human assets. This article does not seek to offer yet another human capital model. Rather, the aim is to examine the management practices through which human capital evaluation is undertaken. The article is based on an exploratory study of such practices in 11 major firms in the UK. The findings are highlighted as follows. First, we note the preference for internal over external (static accountancy‐based) reporting. Secondly, we highlight the diverse nature of human capital evaluation systems that exist across UK business. Thirdly, we explore the relationship between practices of evaluation and the role and position of the HR function within the firm. Finally, in conclusion, we address the implications of the human capital perspective for practitioners, arguing that there is no single formula that can be applied to its evaluation. We go on to suggest that the importance of the human capital concept and its measurement may lie in its ability to re‐frame perceptions of the relationship between the contribution of employees and the competitive performance of the business.     

The Structuring of Interfirm Exchanges in Business Know-How: Evidence from International Collaborative Ventures

This study investigates the effect of transaction cost considerations on the apportionment of residual bearing, and the assignment of managerial control between two firms involved in the exchange of business know-how. Data were collected from contractual agreements between multinational enterprises and indigenous firms that formed collaborative ventures in developing countries. A simultaneous-equation model was employed to test hypotheses that were derived under a theoretical framework based on the new institutional economics. The empirical results are supportive of the hypotheses. © 1997 John Wiley & Sons, Ltd.     

Operations strategy in an emerging economy: the case of the Ghanaian manufacturing industry

Operations strategy and its development have received a lot of attention in the operations management literature. However, as noted by Ward et al. (1995), an understanding of the factors that influence operations strategy development has not been widely studied. Further, how managers of firms in underdeveloped countries develop operations strategy has yet to receive any significant attention among researchers. This paper takes a look at the development of operations strategy in an underdeveloped economy, Ghana. Specifically, the paper examines the relationships between the business environment and the operations strategy choices made by firms in Ghana. The paper seeks to understand the influence that specific business environmental factors have on the operations strategy choices of low cost, quality, flexibility, and delivery dependability.A survey of manufacturing firms was carried out in 1998. The respondents (production managers in those firms) were asked to indicate the extent to which business costs, labor availability, competitive hostility, and environmental dynamism were of concern to them. They were also asked to indicate their extent of emphasis on the operations strategy choices of quality, cost, flexibility and delivery dependability. This paper presents the result of the analysis of the relationships between the environmental factors and the operations strategy choices. The data indicate that, among firms in Ghana, the two strongest factors that influence the degree of emphasis placed on operations strategy choices are perceived business costs and competitive hostility. Results are presented for both large and small firms, and for firms that are completely locally owned as well as for joint venture firms.     

Environmental sustainability engagement of firms: The roles of social capital,resources, and managerial entrepreneurial orientation of small and medium enterprises in Vietnam

How firms in transition economies demonstrate their strategic engagement in sustainable environmental management given their limited resources and capabilities is less understood in the literature. This study explores how small and medium enterprises (SMEs) in Vietnam, an exemplar of a country in transition from a closed and socialist economy to an open and liberal market, draw on their external social capital to access critical resources that are leveraged by the entrepreneurial orientation or capabilities of the firms' top management towards engagement in business-wide environmentally sustainable practices. Drawing on a database of more than 2000 firms from a large-scale survey of firms in Vietnam, this study tests the relationships between two facets of social capital, environmental management resources and environmental sustainability engagement. This study further contends that managerial entrepreneurial orientation moderates by enhancing the strategic utilisation of resources to enable firms in Vietnam to engage in environmental sustainability. The results offer novel theoretical insights and timely managerial or practical implications as well as promising directions for future research on the resources, strategies and capabilities of firms in transition economies.     

中国服务外包业现状、问题与对策：基于中国与ORN数据的比较分析

离岸服务外包产业发展的好坏在当前我国实现经济转型深化改革开放的关键阶段有重要的战略意义。但未来整个行业的发展则依赖于服务外包企业在竞争日益加剧的全球离岸服务外包市场中竞争优势的建立和强化。本研究通过交大一杜克中关全球外包联合研究中心平台,就中国服务外包企业和国际服务外包企业的竞争力、业务状况及未来发展预期和增长与创新战略意愿等进行了调查研究。对比分析发现,中国服务外包企业存在整体规模偏小、服务外包经验不足、业务标准化程度不高、成本优势不显著等问题。我们分析了问题产生的原因及后果,并从企业和政府的角度提出了有关的对策建议。     

The performance effects of human resource managers' and other middle managers' involvement in strategy making under different business-level strategies: the case in Hong Kong

We first developed theory arguing that HR managers' and other middle managers' involvement during strategy making would have different effects on performance for firms pursuing different business-level strategies. Then, our empirical study tested the hypotheses in the context of HR managers and middle managers in the Hong Kong Special Administrative Region, People's Republic of China. We found that HR manager involvement during strategy making was positively related to perceptions of future business performance. The use of a differentiation strategy was also positively associated with future performance. Neither the use of a cost leadership strategy, however, nor involvement by other middle-level managers, was directly related to perceived future performance. Interestingly, pursuit of a cost leadership strategy, combined with either high HR manager involvement or high middle manager involvement, produced high business performance. Thus, we found a positive and significant interaction such that increasing levels of manager involvement in strategy and a cost leadership strategy was associated with much higher levels of performance. Lower levels of manager involvement combined with the cost leadership strategy, however, were related to much lower performance. No such interaction effect was apparent for differentiation strategies.     

管理者过度自信与权益资本成本——来自我国证券市场的经验证据

以深圳证券市场A股上市公司为样本,研究了管理者过度自信与权益资本成本之间的关系。研究发现,高管层过度自信的心理特征是通过影响企业的投资行为造成过度投资,进而影响到投资与融资现金流之间的敏感性,导致激进融资,使企业权益资本成本增加。     

Bank capital regulation,loan contracts,and corporate investment

This paper studies the link between bank capital regulation, bank loan contracts and the allocation of corporate resources across firms’ different business lines. Credit risk is lower when firms write contracts that oblige them to invest mainly into projects with highly tangible assets. We argue that firms have an incentive to choose a contract with overly safe and thus inefficient investments when intermediation costs are increasing in banks’ capital-to-asset ratio. Imposing minimum capital adequacy for banks can eliminate this incentive by putting a lower bound on financing costs.     

The impact of purchasing strategy-structure (mis)fit on purchasing cost and innovation performance

The organizational design literature strongly supports the notion of “structure follows strategy”, and suggests that a misfit between the two has a negative effect on performance. Building on this line of argument, we examine to what extent the (mis)fit between purchasing strategy and purchasing structure impacts purchasing performance. We focus on cost and innovation purchase category strategies, and examine how the deviation from an ideal purchasing structure defined along three dimensions (centralization, formalization, and cross-functionality) impacts purchasing performance. Analysing data collected from 469 firms in ten countries, we demonstrate that a strategy-structure misfit negatively impacts purchasing performance in both cost and innovation strategies. We also find that purchasing proficiency is a mediator in this relationship between misfit and performance. Our findings aid managerial decision making by empirically validating the necessity of having the right purchasing structure for successfully executing different purchasing strategies.     

Business behaviour and management structure—1: A case study comparison of managerial initiative and control in four industrial enterprises

This is the first of two papers in this issue on how business decisions are made. The origins of corporate strategy and policy and the involvement of senior and junior management in such activities are theoretically difficult to generalize about. In these papers four well-known British firms are examined in depth. Their evolution over time is analysed and how managerial behaviour and perceptions changed is discussed. The conclusion is drawn that firms have been decentralizing in the last two decades in order to provide greater scope for managerial initiative, training and entrepreneurship at all levels. Part 2 contains the detailed evidence: some readers may prefer to consider it immediately after Section 1 below.     

Firms' human capital,R&D and performance: a study on French and Swedish firms

This paper studies the effects of human and technological capital on productivity in a sample of large French and Swedish firms. While the role of technological capital as measured by R&D has been intensively investigated, almost no work has been done on the role of human capital as measured by firm-sponsored training and even less its interaction with technological capital. The level of intangible capital may also have a lasting effect on productivity growth, as emphasised by some endogenous growth models in a macroeconomic setting.The study uses data from two panels of large French and Swedish firms for the same period (1987–1993). It constructs measures of a firm's human capital stock, based on their past and present training expenditures. The results confirm that firm-sponsored training and R&D are significant inputs in the two countries, although to a different extent, and have high returns. However, except for managers and engineers in France, we do not find evidence of positive interactions between these two types of capital. Finally, growth effects at the firm level do not appear.