Exploring alternative strategic management paradigms in high-growth ethnic and non-ethnic family firms

The primary research question examined in this paper is whether ethnic and non-ethnic family firms in the United Kingdom differ in their strategy-making. The paper uses the typology of strategic decision-making produced by Whittington [(1993). What is strategy: and does it matter? New York: Routledge] to derive contrasting predictions of strategy-making by ethnic versus non-ethnic firms. Drawing on a questionnaire study of 76 high-growth family firms, and subsequent in-depth fieldwork with 40 of these, the findings show that the ethnic origin of the controlling family has a significant influence in determining the dominance of a particular strategy paradigm. However, successful high-growth family firms are not associated with any particular school of strategy. The influence of family bonding on strategy-making was greater in ethnic family firms than non-ethnic family firms. The advent of the second generation of South Asians in family firms, and closer integration of immigrant and host communities, has not altered these apparent differences. The findings challenge researchers on family firms to adopt a multiple perspective approach to strategy-making.     

The Foundations of International Business: Cross‐Border Investment Activity and the Balance between Market‐Power and Efficiency Effects

The foundational international business (IB) scholarship grappled with whether multinational enterprises (MNEs) are largely efficiency‐enhancing or market‐power inducing institutions. Contemporary scholarship, however, often associates foreign direct investment (FDI) with efficiency‐enhancing properties and thus neglects the market‐power interpretation of the MNE. Such an imbalance is problematic given that the theoretical and empirical justifications behind the field's embrace of the efficiency interpretation are not fully evident. Instead, both efficiency and market‐power effects are seemingly present in cross‐border investment activity. Based on a comprehensive sample of up to 4,361 cross‐border investments materializing between 1986 and 2010, we present theoretically‐grounded hypotheses with regard to when market‐power effects will tend to dominate efficiency effects. We find that cross‐border investments undertaken by emerging‐market MNEs in both developed and emerging markets tend to involve substantial efficiency effects and minimal market‐power effects when compared with the cross‐border investments undertaken by developed‐country MNEs in both developed and emerging markets.     

Politics of The Ring: Limits to Public Participation in Engineering Practice

How engineering in the context of urban socio‐environmental challenges is practically and effectively mobilized has been the subject of some debate. Numerous professional bodies have encouraged engineers to approach socio‐environmental issues through increased engagement with, and accountability to, the public through effective participatory practices. This article presents a close empirical analysis of a major engineering project in London to argue that engineering has a more complex relationship with social, political and environmental conditions than the idealistic participatory conception supposes. In fact, the spatial, technical and economic arrangements of engineering practice may limit the potential for public participation. Through a detailed analysis of the example of the London Water Ring Main (from around 1988 to 1994), this article shows how myriad sometimes conflicting engineering issues and responsibilities interfered with key elements of effective participation. Therefore, although increased public engagement in engineering may be desirable in theory, substantial professional, institutional and political change may have to occur before this is possible in practice .     

Sudden stops, banking crises and investment collapses in emerging markets

We evaluate whether financial openness leaves emerging market economies vulnerable to the adverse effects of capital reversals (“sudden stops”) on domestic investment. We investigate this claim in a broad sample of emerging markets during the period 1976–2002. If the banking sector does not experience a systemic crisis, sudden stop events fail to have a significant impact on investment. Bank crises, on the other hand, have a significant negative effect on investment even in the absence of a contemporaneous sudden stop crisis. We also find that openness to capital flows worsens the adverse impact of banking crises on investment. Our results provide statistical support for the policy view that a strong banking sector which can withstand the negative fallout of capital flight is essential for countries that open their economies to international financial flows.     

Integrating sustainability and resilience in the supply chain: A systematic literature review and a research agenda

Sustainability has emerged as an important industrial strategic outlook expanding beyond organizational boundaries to include the supply chain. Simultaneously, the industry has also been faced with supply chain resilience concerns. Research on the intersection of supply chain sustainability and resilience is nascent and is a consequence of their observed mutual influences. However, confusion about concepts, implementation methods, and measurements of sustainable and resilient supply chains remains. This study completes a systematic literature review that critically examines several major observations and directions. We find the concept of sustainable supply chains is more established, and general agreement on its theoretical foundations exists. Supply chain resilience is relatively less mature. The nexus and relationships between the two topics are often incoherent: there is confusion on sustainable and resilient supply chains establishment; there is no clarity on what practices could jointly advance both areas. A major conflict exists since sustainability generally focuses on efficiency, while resilience seeks effectiveness. We recommend studies to analyze implementation relationships and impact. We also observe that performance measurement systems should be developed to assess supply chain sustainability and resilience performance taking with explicit consideration time horizons considered in these measures.     

The Effect of Moral Philosophy and Ethnocentrism on Quality-of-Life Orientation in International Marketing: A Cross-Culturaal Comparison

This paper examines the effects of moral philosophy and ethnocentrism on quality of life orientation in international marketing. It also provides a cross-cultural comparison of ethical values between Koreans and Americans. International quality-of-life (IQOL) orientation refers to marketers' disposition to make decisions to enhance the well-being of consumers in foreign markets while preserving the well-being of other stakeholders. It is hypothesized that marketers' moral philosophy and ethnocentrism influence the development of marketers' IQOL. Specifically, the higher the IQOL orientation of international managers, the higher their moral idealism, the higher their moral relativism, and the lower their ethnocentrism. Also, it is hypothesized that American managers are likely to score higher on moral relativism but lower on moral idealism compared to their Korean counterparts. Also, Korean managers are expected to be more ethnocentric than American managers. Data were collected from business professionals who enrolled in professional MBA courses both from the U.S. and Korea. The results provided support for the hypothesized relationships. Managerial implications of these relationships are discussed.     

Bridging the Gap Between Strategy and Performance: Using Leadership Style to Enable Structural Elements

Successful leaders create structural elements in order to achieve the performance objectives set forth by organizational strategy. Supply chain oriented structural elements are reflected in an organization's relationships, both within the firm and with supply chain partners. In this research effort, we examine how such structural elements can be created as a means through which to enhance performance. Our hypothesized model is rooted in strategy‐structure‐performance theory and integrates elements of servant leadership theory and social exchange theory to explain how building organizational commitment via servant leadership behaviors can ultimately impact performance. We use a survey method to collect data from 158 motor carriers. The results of our structural equation model support our hypotheses and serve to extend the discussion of supply chain structural elements and the role of leadership style in achieving organizational performance.     

Determinants of the components of bid-ask spreads on stocks

In this paper we show that George et al. (GKN, 1991) estimators of the adverse selection and order processing cost components of the bid-ask spread are biased due to intertemporal variations in the bid-ask spread. We use alternative estimators that correct this bias and that are applicable to individual securities, and estimate these cost components empirically using data on NYSE/AMEX stocks. As expected, our results indicate that on average adverse selection costs account for approximately 50% of the bid-ask spread, sharply higher than the estimates of 8-10% obtained by GKN for NASDAQ stocks and 21% that we obtain for NYSE/AMEX stocks using GKN's estimators. We then conduct cross-sectional regressions designed primarily to determine whether adverse selection costs vary across specialists after controlling for firm size and other factors. Consistent with previously established hypotheses, we find that adverse-selection costs vary across specialists, and that this variation is related to the number of securities that the specialist handles.     

Insurance Derivatives: A New Asset Class for the Capital Markets and a New Hedging Tool for the Insurance Industry

The number and severity of natural catastrophes has increased dramatically over the last decade. As a result, there is now a shortage of capacity in the property catastrophe insurance industry in the U.S. This article discusses how insurance derivatives, particularly the Chicago Board of Trade's catastrophe options contracts, represent a possible solution to this problem. These new financial instruments enable the capital markets to provide the insurance industry with the reinsurance capacity it needs. The capital markets are willing to perform this role because of the new asset class characteristics of securitized insurance risk: positive excess returns and diversification benefits.
The article also demonstrates how insurance companies can use insurance derivatives such as catastrophe options and catastrophe-linked bonds as effective, low-cost risk management tools. In reviewing the performance of the catastrophe contracts to date, the authors report promising signs of growth and liquidity in these markets.