The impact of strategy communications, incentives and national culture on balanced scorecard implementation

Professionals are challenged daily with difficult decisions. Capital budgeting decisions are one type of difficult decision, especially in firms that embrace a Balanced Scorecard management philosophy. In these firms, the decision maker frequently must choose among multiple options on the basis of multiple criteria with no one option dominating across all criteria. Not only must the decision maker evaluate each option on each criteria, the decision maker also must weigh the relative importance of each criteria when making a final judgment. When faced with difficult decisions, decision makers will resort to various coping behaviors, such as decision avoidance or delay, status quo bias, deferral to others' preferences, or reliance on decision aids. In a Balanced Scorecard environment, one important type of decision aid is the strategy map. The ambiguity introduced by multiple options and multiple criteria also creates a condition in which the subjective biases of the decision-maker can easily manifest in the absence or despite decision aids. Among those potential biases are self-interests and national culture. In this study we examine the effects on capital budgeting decisions of two common types of strategy maps as well as incentive effects and national culture. An objective of Balanced Scorecard management practices is to overcome a common North American fixation on short-term financial outcomes. Recent research submits that an appropriate strategy map will facilitate that end by overcoming certain other cognitive limitations (such as fixation on common metrics). Our inquiry will examine whether biases related to self-interests and national culture persist in the presence of two common strategy maps. A behavioral experiment was conducted in which 140 MBA students from Spain and the U.S. with average work experience of 10 years participated. Findings were that significant fixation on short-term financial outcomes persists in the presence of one common strategy map, but not in the presence of an alternate common strategy map, and that incentive and national culture biases persist in the presence of both. In addition, all three experimental variables exhibited significance and equivalent influence, although prior research has only addressed the influence of incentives.     

Industry,management capabilities and firms' competitiveness: An empirical contribution

The aim of this paper is to contribute to the knowledge of strategic factors that explain the competitive position reached by firms in their activity sector. We have used a survey carried out in 1999 on 287 executives that belong to the service sector in the province of Santa Cruz de Tenerife. We have analysed the differential factors that distinguish the strategic performance of competitive vis‐à‐vis non‐competitive firms, by jointly assessing the variables representative of the sector (five competitive forces defined by Porter) and variables of an internal feature. Finally, we have moved the level of analysis from the industry to the firm; specifically, we have focused on managerial capabilities due to the significant role played by managers in the strategic decision‐making process. The use of cluster analysis to classify firms depending on their degree of competitiveness and the application of the See5 induction algorithm of rules and decision trees to determine the differential factors that distinguish competitive from non‐competitive firms, provide a methodological framework for the most significant contributions of this work. Copyright © 2004 John Wiley & Sons, Ltd.     

Explaining Firms’ Export Behaviour: R&D,Spillovers and the Destination Market*

We examine the importance of a firm's own R&D activity and intra‐sectoral spillovers on the decision to export and the export intensity using firm level panel data for Spain for the period 1990–98. Own R&D activity is found to be an important determinant of export activity. There is little evidence to suggest that Spanish firms benefit from spillovers of the exporting activity of others. However, there is evidence that R&D spillovers exert positive effects on firms’ export ratios. We find a larger marginal impact of R&D spillovers on export intensity of firms exporting to other OECD countries than those exporting to non‐OECD nations.     

Supporting others and the evolution of influence

In this paper we study environments in which agents can transfer influence to others by supporting them. When planning whom to support, they should take into account the future effect of this, since the receiving agent might use this influence to support others in the future. We show that in the presence of a finite horizon there is an essentially unique optimal support behavior which can be characterized in terms of associated marginal value functions. The analysis of these marginal value functions allows us to derive qualitative properties of optimal support strategies under different specific environments and to explicitly compute the optimal support behavior in some numerical examples. We also investigate the case of an infinite horizon. Examples show that multiple equilibria may appear in this setting, some of which sustaining a degree of cooperation that would not be possible under a finite horizon.     

Separating uncertainty from heterogeneity in life cycle earnings

This paper develops and applies a method for decomposing crosssection variability of earnings into components that are forecastableat the time students decide to go to college (heterogeneity)and components that are unforecastable. About 60% of variabilityin returns to schooling is forecastable. This has importantimplications for using measured variability to price risk andpredict college attendance.     

When hedonic products help regulate my mood

This paper analyzes how affect mechanisms work when consumers form their attitude toward and intention to purchase a hedonic product. The first of two studies shows that when products have the potential to improve moods, affect regulation dominates affective evaluation in forming purchase intentions. In other words, the need to repair one??s mood overrides mood-congruent reviews. However, the affect regulation mechanism is not very stable, and study two shows that introducing a competing source of information, such as product reviews, overwhelms the effect. Results show that when consumers are in a bad mood, product reviews significantly influence their attitude and purchase intention regarding a hedonic product. However, this effect is not significant for consumers in a positive mood because they generate both arguments and counterarguments that compensate for the information received from a third party.     

“Do You Use English in Your Daily Life?” Undergraduate Students’ Perceptions of Their Extramural Use of English

The aim of this research is to analyse the students’ perceptions about their extramural use of English, comparing undergraduates studying their degree in English (EMI) with those studying theirs in their native language (non-EMI) within a span of five academic years. Data collected from a Spanish University suggest that the students´s interest and perception of their possibilities of working abroad in English differ. Results also reveal key differences in the use of extramural English and suggest that exposure to reading books or watching English-language films will eventually contribute to the formation of global mindset in students. The trend of the importance of English during a five year span is also considered, for both strands of students. This study makes a contribution in the field of teaching in international business settings for high education institutions.     

WHAT HAPPENED TO THE WILLINGNESS OF COMPANIES TO INVEST AFTER THE FINANCIAL CRISIS? EVIDENCE FROM LATIN AMERICAN COUNTRIES

In this article we investigate the changes in corporate investment dynamics in the aftermath of the global financial crisis. Using firm-level data from six Latin American countries from 2002 to 2015, we show that firms are less constrained and have greater ability to invest after the crisis. However, the willingness of firms to invest optimally is reduced. This is supported by strong evidence that during the postcrisis period investment–cash flow sensitivity disappears, investment-q sensitivity increases, and the estimated speeds of adjustment for target investment decrease. Moreover, after the crisis, firms notably increase their efforts to attain optimal cash and leverage levels. Our analysis implies that firms may not always be willing to invest optimally. The willingness to invest optimally appears to be time variant and moves together with the dynamics of cash and leverage policies, albeit in opposite directions.