Vision salience and strategic involvement: Implications for psychological attachment to organization and job

Managers' perceptions of their involvement in strategic planning were hypothesized to be positively related with their feelings of organizational commitment, job satisfaction, and job involvement. Further, it was also hypothesized that the relationship between strategic involvement and these work-related attitudes would be enhanced to the extent that the managers' felt that a salient strategic vision was guiding the company. We tested these two hypotheses using a sample of upper level managers in a large corporation undergoing a major strategic transformation. With the exception of finding no evidence that vision salience moderated the positive relationship between strategic involvement and job involvement, both hypotheses were supported. With regard to managers' psychological attachment to the organization, the results suggest that there are advantages afforded by involving them in the strategy making process, and that these advantages are magnified to the extent that the involvement occurs within the context of a salient strategic vision.     

Capitalization of local fiscal differentials: Inferences from a disequilibrium market model

This study analyzes tax capitalization within the framework of a disequilibrium market model. In particular, this study examines whether local fiscal differentials influence the rate of change in neighborhood house prices over time. Local fiscal differentials existing in 1970 are found to have no influence on the rate of change in neighborhood house prices over the period 1970–1972; therefore, the study concludes that, other things being equal, these local fiscal differentials have been completely capitalized in price levels.     

The Influence of Large Stake Family Control on Performance: Is It Agency or Entrenchment?

Agency theory posits that the greater degree of control by those with decision-making authority, the greater the overall organizational performance. Conversely, entrenchment theory implies that at extremely high levels of inside control by those with decision authority, organizational performance decreases. Using a nationwide sample of 2,631 privately held and publically traded family businesses, we examined if the relationship of percent family ownership is an agency or entrenchment relationship and found the latter. Specifically, there was a statistically significant negative relationship between percent of family control and sales growth as well as a strong inverse relationship between percent of family controlling the top management team and all measures of financial performance.     

An Empirical Investigation of the Growth Cycle Theory of Small Firm Financing

This paper empirically tests the financial growth cycle model for small and medium-sized enterprises (SMEs), which postulates that as firms become larger, older, and more informationally transparent, their financing options become more attractive. We add to the literature by providing one of the first empirical tests of the model using a large, cross-sectional data set. Our results partially support the financial growth cycle model. Specifically, our results show larger firms, as measured by total number of employees, are more likely to use public equity funding or long-term debt as opposed to insider funding.     

Work Family Conflict in New Business Ventures: The Moderating Effects of Spousal Commitment to the New Business Venture

The creation of new business ventures (NBVs) is considered to be a central element of entrepreneurship theory and research. The processes by which individuals set intentions, gather resources, build organizations, and manage exchanges between the organization and external groups (which include family members) are important processes in the creation of NBVs. The more NBVs do these activities, the more likely they will succeed. Different research agendas have examined the factors that influence the new business venture operator's (NBVO) success in forming a NBV. One of the more recent streams of research has focused on the NBVO's human and social capital. Human capital in the form of education and experience appears to be an important asset to the NBVO. Social capital as a NBVO resource is less widely studied. Davidsson and Honig suggest that simply having a spouse is an important resource for NBVOs. Previous research suggests that spousal social support may be helpful for several reasons. First, some spouses may provide unpaid work to help the business succeed. They may provide financial resources which reduce the urgency of cash flow problems or facilitate the entrepreneur's abilities to acquire loans. Finally, they may provide emotional encouragement and support. Together, these spousal resources may help NBVOs to overcome the liabilities of newness. However, others have suggested that spouses may be a liability and that work and family conflict may become a resource constraint for married NBVOs. There is a limited but growing body of research empirically demonstrating that married NBVOs are likely to experience strain from work and family conflict (WFC). Married NBVOs may have complex family dynamics, and spouses may act in ways that create strain on the NBVO. From a social capital perspective, social capital needs to be maintained which can be a resource drain. If so, then those spousal actions are likely to draw on the NBVOs resources to manage family dynamics. This resource drain could negatively affect the success of the NBV. Based on Sustainable Family Business Theory II, this paper investigates the degree that the NBVO's spouse is a constraint on the creation of a NBV. In particular, we focus on NBVO strain as there is significant evidence that NBVOs experience more strain than individuals in other types of gainful employment. Furthermore, this strain has some debilitating effects that may threaten the viability of any business venture. This could be most critical in the start‐up phase when the survival of the firm is most at risk. Using Sustainable Family Business Theory II as a foundation, we investigate the degree that WFC creates NBVO strain both directly from NBVO's perceptions of WFC and the degree that spouse may be a liability by passing spousal strain from WFC to the NBVO. Furthermore, we investigate how a spouse who is committed to the NBVO may exacerbate the liability of newness. We test these relationships on a sample of 110 new small businesses provided through two different state Small Business Development Center offices. This sample represented a diversity of industries and diversity by gender. The results suggest that when a spouse experiences WFC, a spouse is likely to be a resource constraint that creates NBVO physiological strain. Furthermore, spousal commitment to the NBV is likely to exacerbate this relationship. These results imply that, first, a spouse is not inherently a resource or a constraint in the creation of NBVs. The degree of spousal WFC is likely to expand or constrict NBVO resources to be successful. Thus, more research is needed to investigate WFC linked to NBV creation.     

Business Groups in Emerging Markets: A Survey and Analysis

Research in the economics, finance, and management literature has sought to describe the predominance of business groups using an economic lens for decades. Yet, theory still falls short of explaining the role of business groups as a substitute for external markets as their influence only increases as countries develop. This article synthesizes the literature and posits that three main problems hinder its explanatory power; the difficulty of defining and identifying business groups, the focus on social welfare implications, and that the embeddedness of the central theories in a decidedly Anglo-American, developed economy perspective. Finally, suggestions for addressing these issues, along with accompanying hypotheses, are presented to further future research.     

Influencing Ethical Development: Exposing Students to the AICPA Code of Conduct

Although the AICPA Code of Professional Conduct emphasizes the importance of education in ethics, very little is known about how and when the Code and the topic of ethics can be presented to enhance the effectiveness of ethics-oriented education. The purpose of this research was to provide preliminary evidence about the ethical development of students prior to, and immediately following, such courses. We found that: (1) accounting students, after taking an auditing course which emphasized the AICPA Code, reasoned at higher levels than students who had not taken the course; (2) there were no differences in moral reasoning levels when accounting and non-accounting majors were compared prior to an auditing course; and (3) there was a significant relationship between the Seniors' levels of ethical development and the choice of an ethical versus unethical action. It was concluded that an auditing course emphasizing the 'spirit' of the Code can have a positive impact on the ethical behaviour of some of the future members of the accounting profession.     

Innovation of entrepreneurial firms

An empirical test is provided of the effect of the degree of obsolescence on the effect of firm size and monopoly profits on a firm's ability to innovate. Recent theory suggests that innovation depends on firm size and monopoly profits only if the firm conducts product improvement as well as new product innovation. This is due to the allocation of limited entrepreneurial attention between improving current products and innovating new products. Current products are subject to obsolescence and innovation requires technological opportunities. The firm conducts product improvement as well as new product innovation only if the degree of obsolescence is sufficiently low relative to the level of technological opportunity. This theory provides an explanation for previously unexplained empirical observations. We find preliminary support for the hypothesis that product improvement reduces the positive effect of firm size on new product innovation and sufficient product improvement may reverse the negative effect of monopoly profits on new product innovations. In addition, product improvement reduces the positive effect of technological opportunity on new product innovation.     

Impacts of the Doha Round on Brazilian,Chinese and Indian agribusiness

The central themes to be addressed during the Doha Round of the world trade negotiations are the reduction of the agricultural production and export subsidies and improved market access for agricultural and non-agricultural goods. The G-20 group wields enough power to press negotiations at the Doha Round toward lower agricultural trade barriers and production and export subsidies. The objective of this study is to determine the impacts of the Doha Round on the economies of Brazil, China, and India. The Global Trade Analysis Project's (GTAP) general equilibrium model and database (version 7) are used. The Doha Round scenarios simulated in this paper consider the WTO agricultural production and export subsidy reduction requirement, and the application of the Harbinson approach, and Swiss formula to reduce import tariffs. Brazil and China present the highest GDP growth rate varying from 0.4 % to 1.4%. India shows a negative GDP growth rate in all scenarios, except in that which replicates the Uruguay Round. The welfare gains are positive, but small, for Brazil, China and India. The GDP loss observed in the economies of the EU25 and the US may make it difficult to reach a trade agreement at the Doha Round.