The role of a municipality’s financial health in a firm’s siting decision

When deciding where to locate a new facility, a firm needs to consider the financial health of the municipality where its activities will take place. Unless it sites its facility in a financially viable community, a firm is putting a substantial investment at risk. Despite the importance of this issue, many firms pay insufficient attention to a municipality’s financial condition. Instead, they focus on matters such as the tax rate, the quality of the school system, or the absence of regulatory constraints. All of these features are important, but unless a municipality is financially healthy, they can evaporate before a company has attained its expected return on investment. There are 5 financial statements and 10 financial ratios that can be used to create a financial health template, which can help a firm to assess a municipality’s financial strength, or its counterpart financial weakness. The template goes beyond the debt-repayment focus of credit rating agencies to matters such as financial autonomy, cash flows, and borrowing capacity. We use data from three cities—Barcelona, Dublin, and Detroit (pre- and post-bankruptcy)—to demonstrate the template’s ability to facilitate comparisons among cities that are in different countries and that use different accounting systems.     

The entrepreneur’s mode of entry: the effect of social and financial capital

This article uses a French database of firms set up in 1998 to investigate the determinants of takeovers versus startups as a mode of entry. It focuses on two determinants that previous research has not fully analyzed: social capital and financial capital. Our findings suggest social capital affects the mode of entry. They show that entrepreneurs with social capital are more likely to create new firms from scratch than to take over existing firms. We confirm the effect of financial capital on the mode of entry. Bank loans are more often associated with takeovers than with startups and low initial wealth is more often associated with startups than with takeovers. These results show that finance affects the mode of entry.     

Corporate social responsibility and employee’s desire: a social influence perspective

Corporate social responsibility (CSR) is an increasingly important topic in management, especially in organizational behavior field across the globe; however, this concept is still in its infancy in Pakistan. In this study, we examined the effect of employees’ perceptions about CSR on their Desire to have a Significant Impact through Work (DSIW). We suggested the serial mediation of organizational identification and organizational pride in this relationship. The time-lag data of middle managers were collected from a well-known Pakistani firm that is actively engaged in CSR. The data consist of 187 observations and were analyzed using structural equation modeling in AMOS software. The results show that CSR positively affects employees’ identification that in turn make employees proud of their organizational membership and finally pride leads to employees’ DSIW. The study contributes in CSR and organizational behavior literature and provides managerial implication to enhance the positive psychological state of employees.     

The influence of social institutions on managers’ concept of trust: Implications for trust-building in Sino-German relationships

Trust has predominantly been seen as a universal construct. Recent research suggests that members of different cultures vary in their understanding of trust. These variations are mostly attributed to the national institutional environment. In describing China and Germany's institutional environments, we emphasize the fundamental institutional differences reflected in their managers’ conceptualizations of trust. Based on 45 interviews with Chinese and German managers, we identify shared elements in their concepts of trust that are likely to foster Sino-German trust development, but also two important dissimilarities which can hinder the development of trust in these relationships.     

Disruptive innovation and the creation of social capital in Indonesia’s urban communities

Abstract

Existing research on social capital has primarily focused on examining the outcomes of social capital, whether these are about individual, organizational or even societal outcomes. However, much research is still needed in terms of examining how social capital is created. We contribute to filling this gap by examining the ways in which social capital is created in urban communities in an emerging economy. Social capital, in this study, is viewed as being created as a consequence of an organization’s disruptive innovation. We analyse the context of Go-Jek, a rather newly established service firm in Indonesia, and examine how the disruptive innovation of Go-Jek’s service provision influences the creation of social capital in terms of social connectedness, trust, and shared understanding, in Indonesia’s urban communities.     

The impact of firm and industry characteristics on small firms’ capital structure

We study the impact of firm and industry characteristics on small firms’ capital structure, employing a proprietary database containing financial statements of Dutch small and medium-sized enterprises (SMEs) from 2003 to 2005. The firm characteristics suggest that the capital structure decision is consistent with the pecking-order theory: Dutch SMEs use profits to reduce their debt level, and growing firms increase their debt position since they need more funds. We further document that profits reduce in particular short-term debt, whereas growth increases long-term debt. We also find that inter- and intra-industry effects are important in explaining small firms’ capital structure. Industries exhibit different average debt levels, which is in line with the trade-off theory. Furthermore, there is substantial intra-industry heterogeneity, showing that the degree of industry competition, the degree of agency conflicts, and the heterogeneity in employed technology are also important drivers of capital structure.     

The characteristics and business impact of children’s electronic word of mouth in marketing communications

Abstract

Leading digital technology companies have shown a strong interest in enabling children to send electronic word of mouth (eWOM). Recasting children from passive to active participants in marketing communications, this shift expands children’s marketing practices from how companies influence children via traditional marketing communications, to how children influence companies’ marketing practices through eWOM. We apply the value-capacity-vulnerability framework for children’s expressive rights to the context of children’s eWOM. Using a dataset of Amazon customer reviews written by children under the age of 13, we examine the characteristics and business impact of children’s eWOM. We find that the volume and variance of children’s eWOM are smaller than that of adults’. Children’s eWOM increase the overall diversity of opinions. Although receivers perceive children’s eWOM as less helpful, children’s eWOM valence (i.e. average rating) correlates with that of adults’. Children’s eWOM volume has a product-category-dependent association with product sales: positively in children’s product categories, while negatively in general categories. Children’s eWOM valence and variance are positively associated with product sales in both product categories. Receivers are less likely to criticize children’s eWOM compared to that of adults’, suggesting an underlying protective behaviour towards children among eWOM receivers. These results show that children have the capacity to engage in eWOM of social and business value, with receivers typically mindful of children’s vulnerability in social interactions.     

Small and medium size firm’s marketing competitive advantage and environmental initiatives in the Middle East

The paper explores Small and Medium Size Enterprises (SMEs) in Saudi Arabia within the context of environmental sustainability. The objective of the study is to examine whether SME’s sustainable marketing competitive advantage through environmental initiatives can positively associate to a firm’s environmental (green) best practices and stakeholder influences; similarly, it also identifies if best practices mediate environmental costs and competitive advantage. A sample of 181 responses are obtained and are analysed using factor analysis, multiple regression and their interaction effects. The findings show that the association between firms that have competitive advantage due to environmental initiatives were found to be significant for best practices and indirect stakeholder influences. Furthermore, the results identified that by using environmental best practices, SMEs can lower their environmental costs to gain marketing competitive advantage. These findings highlight the function of environmentalism and how it can influence practitioners.     

The effect of technology management capability on new product development in China’s service-oriented manufacturing firms: a social capital perspective

Abstract

Technology management capability (TMC) and new product development (NPD) are important for China’s service-oriented manufacturers to achieve competitive advantage. In this study, TMC is conceptualized as comprising of four sub-level capabilities: searching, selecting, implementation and learning capabilities. Drawing from the theory of social capital, we hypothesize that social capital plays a role in the relationship between TMC and NPD performance. Our findings indicate that NPD performance and social capital are influenced by all the four sub-capabilities of TMC but the effect of each capability of TMC varies. Selecting capability is more significantly and positively related with NPD performance, while learning capability exerts the most significant positive effect on social capital. Moreover, our empirical findings indicate the partial mediating role of social capital in the process of TMC influencing NPD performance. This study makes a particular contribution to the literature by providing a more complete understanding of how social capital plays a role in the relationship between TMC and NPD performance. In terms of managerial implications, our results indicate that improving TMC is essential in enhancing a service-oriented manufacturing firm’s NPD performance. Managers should also pay particular attention to nurturing social capital as a pathway to realize the true value of TMC.     

The significance of human capital and social capital: professional–client relationships in the Asia Pacific

Professionals working in professional service firms rely on their human capital and social capital to deliver value in their service provision and delivery to clients. However, research to-date is limited regarding investigations into the relationship between human capital and social capital at the level of professional–client relationships, particularly in the context of the Asia Pacific where changes in business environment, professional jurisdiction and ways of working have been commonplace for many firms operating in this region. In this study of Australian corporate law firms and client organizations, our results reveal significant evidence of relationships between social capital and human capital in the form of knowledge acquisition, where social capital facilitates professionals’ capacity to acquire knowledge from clients and increases the overall amount of knowledge acquired. More research on social capital and knowledge acquisition has the potential to advance our understanding of the influence of professional–client relationships on human capital development in the Asia Pacific.     

Evaluating social marketing’s upstream metaphor: does it capture the flows of behavioural influence between ‘upstream’ and ‘downstream’ actors?

ABSTRACT

Metaphors are powerful forms of communication that can both facilitate and constrain disciplinary discourse, so the choice of metaphor used to explain concepts of disciplinary importance should not be undertaken lightly. A single case study methodology involving an ‘upstream’ firm considering whether to manufacture products with environmental attributes was consequently used to test three previously unexamined assumptions associated with the upstream/downstream metaphor, a metaphorical distinction that continues to have sway within the social marketing discipline. Contrary to these assumptions, the flows of behavioural influence between ‘upstream’ and ‘downstream’ actors were found to be bidirectional (rather than unidirectional), interactive (rather than independent), and distinctive (rather than non-distinctive). These findings suggest the need for alternative models that can better reflect the complex, multidirectional relationships responsible for the emergence of many social issues.     

‘The knowledgeable marketing practitioner’: practice and professional knowing in marketing work

ABSTRACT

This paper examines the knowledge constructs that professionals draw upon when engaging in marketing work. Our conceptual approach stems from a critical analysis of marketing work foregrounding the practitioners’ professional knowledge and practice of marketing work. We identify 13 pertinent knowledge constructs–some of which are illustrated by vignettes–showcasing the shared and multifaceted nature of professional knowledge in a small- and medium-sized enterprise. By exploring how practitioners deploy their knowledge of marketing in practice, we conclude what the marketing discipline can learn from professional knowing. We contribute to the marketing work literature by considering the ontological role of professional knowing in dereifying marketing work from textbook knowledge along with its implications for the critical understanding of the perceived gap between marketing theorising and practice.     

The “ins” and “outs” of product and services marketing: The influence of consonant wanderings in consumer decision-making

The established preference for words featuring consonants ordered inward in the oral cavity—the in–out effect, may assist marketeers when naming new products and services. To investigate the conditions under which this effect may affect consumer preference we conducted four experiments (N = 818) examining the influence of consonant wanderings in the evaluation of different professionals and food products. While inward articulation direction selectively biased warmth judgments about workers who are perceived as relatively neutral on both warmth and competence, for professionals traditionally associated with either a warmth or a competence dimension inward-wandering usernames systematically presented a competitive advantage. In the same way, hypothetical food products with inward-wandering names were judged as more hedonic and more utilitarian. The present evidence supports the potential of the in–out effect to market products and services and highlights the relevance of exploiting this and other oral kinematics phenomena as an asset for managerial practice.     

Consumers’ forgiveness after brand transgression: the effect of the firm’s corporate social responsibility and response

Abstract

In this article we examine the interplay between the severity of a brand transgression, consumers’ prior awareness of the firm’s corporate social responsibility (CSR) initiatives, and the firm’s response (apology vs. apologia) on the rates of forgiveness among consumers. Results of two experiments show that consumers’ prior awareness of the firm’s CSR initiatives significantly differentiates apologia from apology, with the effect of apology on consumer forgiveness being more apparent when brand transgression severity is mild. Results also show that consumer forgiveness mediates the effect of brand transgression severity, firm response, and consumer awareness on repurchase intentions. In this way, the study enables managers to determine whether or not an apology or apologia will be sufficient to solicit consumer forgiveness, using information about the levels of awareness of CSR among consumers.     

From restricted to complex exchange and beyond: social marketing’s change agenda

ABSTRACT

The forward thinking body of social marketing knowledge, rooted in commercial marketing tools, suffers from two potentially interlinked crisis of identity. First, there is the question of behavioural change to address difficult social problems. This embraces the development of co-ordinated multi-domain approaches for large scale social transformation. Second, there is the concept of exchange, the defining characteristic of social marketing yet problematic and the least researched of its benchmark criteria. Recognising the centrality of exchange, we address the broadening social marketing discourse, suggesting a focus beyond restricted to complex exchanges. This paper presents the insights from the application of Interactive Management, a system-based methodology, embracing a systemic change and a complex exchange agenda. Our case study finds the contexts for restricted and complex exchanges through barriers as well as structural and influence maps. Understanding complex exchanges closes the gap between the theoretical and practical debates surrounding contemporary social marketing and the role and function of exchange theory.     

Independent directors’ human and social capital,firm internationalization and performance implications: An integrated agency-resource dependence view

Despite the importance of internationalization for many firms and the substantial roles of independent directors as monitors and resource providers in corporate strategic orientation, few, if any, studies have investigated how independent directors with human and social capital contribute to firm internationalization. Drawing upon agency and resource dependence theories, this study argues that independent directors with human and social capital provide firms with strategic advice and adequate resources for internationalization, thereby increasing firm willingness to internationalize. Using 173 Taiwanese electronics firms and a weighted linear fixed-effects regression approach, the results indicate that independent directors’ industry-specific experience, international experience and interlocking directorate ties are positively associated with internationalization and that an inverted-U relationship exists between independent directors’ tenure overlap and internationalization. One implication is that international firms may consider appointing independent directors with human and social capital to the board because they will provide firms with resources necessary for successful internationalization.     

The dyadic structure of exchange partners' governing-agency social capital and opportunism in buyer–supplier relationships

Extant literature on opportunism examines its antecedents in dyadic relationships in business networks. With firms also developing relationships with government agencies, these connections can influence firms' propensity for opportunism in business exchanges. This study investigates how the governing-agency social capital on both sides of the buyer–supplier relationship affects firms' opportunism tendency toward their counterparts. In particular, we divide the governing-agency social capital of both parties into two dimensions: the asymmetry of governing-agency social capital and joint governing-agency social capital. We postulate that both the asymmetry of governing-agency social capital and joint governing-agency social capital promote the focal firm's propensity for opportunism through dyadic power and network power, respectively. Moreover, we propose that both dimensions interact to magnify each other's impact on the focal firm's propensity for opportunism. We test the hypotheses using 322 matched data of buyer–supplier dyads in China. Empirical results provide support for the research hypotheses.     

The role of social network websites in the consumer–brand relationship

Building and leveraging the brand community on a social network website (SN) such as Facebook is one of the popular social media strategies that companies employ to build a consumer–brand relationship. This research empirically tests a theoretical argument that the perceived benefits of a brand׳s social network website (BSN) influence the consumer׳s relationship with the brand׳s SN, which in turn leads to loyalty behavior. After qualitative exploration of the community to understand the practice of BSN, a quantitative method was utilized to test the hypothesized relationships. The results provide general support for the positive effect of BSN benefits on outcome variables. Specifically, experiential and functional benefits of a brand׳s SN positively influence the consumer׳s perception of relationship investment made by the brand, resulting in both brand relationship quality and the willingness to spread good words about the brand׳s SN. In addition, experiential benefits of BSN positively influence BSN relationship quality, which in turn leads to brand relationship quality, while the effect of functional benefits on BSN relationship quality is not found. The findings provide practical managerial suggestions to marketers and theoretical implications for future studies.     

Do strategic marketing and social capital really matter in regional clusters? Lessons from an emerging economy of Latin America

This research explores the relationship between geographic proximity and the building of social capital and inter-firm cooperation in strategic marketing. By emphasizing social interactions and the building of social capital, we extend the research on industry clusters beyond traditional economic perspectives and factors motivating cooperation between firms. The empirical study is based on a survey of 90 senior managers from three natural resources-based industries (two non-clustered and one clustered) in Chile. The results show that managers in clustered versus non-clustered industries differ in terms of the perceived value of location, the perceived value of building social capital, their involvement in activities that build social capital, their attitudes toward cooperative marketing, their history of involvement in cooperative marketing activities, and their intentions for engaging in cooperative marketing activities in the future. Trade associations in clustered versus non-clustered industries play different roles in regard to creating social capital. The article concludes by discussing the implications of these findings for researchers, managers and policy makers.     

Learning from own and others’ previous experience: the contribution of the venture capital firm to the likelihood of a portfolio company’s trade sale

The objective of this paper is to examine to what extent different venture capital firms contribute to the likelihood that the portfolio company in which they invested will realize a trade sale. We use arguments from learning theory to hypothesize the relationship between vicarious, experiential and congenital learning of the venture capital (VC) firm and the trade sale hazard of its portfolio companies. Based on our analysis of 206 VC-backed UK start-ups, we find that both trade sale experience of the VC and learning from syndicate partners with trade sale experience significantly increase the trade sale hazard. The routines and procedures learned from experienced syndicate partners complement experience accumulated through trial and error. Congenital trade sale experience of the investment managers on the contrary has no significant influence on the acquisition hazard.