Ownership influences on corporate social responsibility in the Indian context

The empirical evidence from the extant literature has been equivocal regarding the influence exerted by different ownership types on corporate social responsibility (CSR), especially in developing countries such as India characterized by institutional voids. We use a longitudinal panel dataset of 500 large Indian companies to test a model of corporate ownership forms as key determinants of CSR engagement in India. Based on neo-institutional theory, our model of CSR determinants investigates the roles of three salient aspects of ownership namely multinational ownership/affiliation, state ownership and family ownership and control, after controlling for the influence of firm size, firm age, leverage, the availability of slack resources, profitability and various governance attributes. Our ordered logit regressions indicate strong support for the role of multinational ownership and family control and management in promoting higher levels of CSR engagement. Contrary to expectations, public sector ownership appeared to negatively impact CSR engagement. We offer our conjectures on this anomalous finding and the research possibilities it opens up.     

Network Characteristics and Firm Performance: An Examination of the Relationships in the Context of a Cluster

The study examined the impact of spatial relationships on firm performance. It also assessed the impacts of network structural and relational characteristics on performance, as well as the moderating effects of these variables on the spatial relationship to performance linkages. The sample comprised 252 firms located in a mold industry cluster in the Zhejiang province of China. Both in‐cluster ties and extra‐cluster ties positively impacted performance. However, the effects of distant ties were more pronounced. Tie stability had a positive effect whereas tie quality had a negative effect on performance. Network centrality, tie strength, and tie stability strengthened the relationship between in‐cluster ties and performance. By contrast, all network tie characteristics weakened and changed the form of the relationship between extra‐cluster ties and performance. The findings suggest the need for cluster firms to consciously cultivate distant linkages in their network ties in order to neutralize the tendencies for lock‐in and to arrest entropic deterioration in their respective clusters.     

STRATEGIC ORIENTATION, STRATEGIC PLANNING SYSTEM CHARACTERISTICS AND PERFORMANCE*

This article examines the differences in strategic planning system characteristics such as planning implementation, market research competence, key personnel involvement, degree of assistance provided by the planning staff and innovativeness of strategies between the Prospector and Defender strategic archetypes. the study also tests whether deviations from a defined ideal profile of strategic planning system characteristics has implications for performance within each strategic archetype. the findings reveal significant differences in strategic planning system characteristics between Prospectors and Defenders, as well as suggest negative performance implications for deviating from a defined ideal profile of strategic planning system characteristics among Prospector organizations.     

Knowledge,Skills, and Abilities for the Market Economy: An Investigation of Student Perceptions Before and After China's WTO Entry

This exploratory study conducted in the People's Republic of China sought to determine the managerial knowledge, skills, and abilities (KSAs) that are perceived as important for the Chinese market economy. Questionnaire responses were collected from 145 business students in 2001 (before China's WTO entry) and 141 business students in 2006 (after China's WTO entry). The identified set of eight managerial knowledge, skills, and abilities included: business area knowledge and skills, communication skills, creativity/adaptability, ethics, leadership, problem solving, teamwork, and work habits. For each time period examined, the mean score for “importance” of each KSA was significantly higher than the mean score for “presence.” The differences between the importance mean and the presence mean for each KSA was denoted as a “gap.” This study revealed that five of the eight KSAs had a significantly smaller gap in 2006 than in 2001. This suggests that the business education system in China is enabling the development of more effective managers for the Chinese market economy.     

Top Management Compensation and Shareholder Returns: Unravelling Different Models of the Relationship

In order to further examine the relationship between executive pay and company performance, this paper investigates the linkage between two separate components of executive compensation (i.e. cash compensation and stock options) and market return performance, among a selected sample of US pharmaceutical company CEOs and COOs. In the surveyed sample, changes in cash compensation were found to exhibit a between-firm relationship with lagged market returns, while Δ stock option grants displayed a within-firm relationship. The former result suggests a commonality in practices across all firms, while the latter denotes idiosyncratic firm-specific practices. These contrasts represent different degrees of the agency problem in the contracts for cash compensation as compared to the stock option components. Levels of cash compensation were affected primarily by firm size. Market returns were not instrumental influences on the levels of both compensation components     

Variations in ownership behavior and propensity to diversify: a study of the Indian corporate context

The relationship between ownership and diversification has been the focus of renewed debate between financial economists and strategic management scholars. While financial economists hold that manager‐controlled firms tend to reflect higher levels of diversification, strategy researchers argue that ownership and diversification are not systematically related. In throwing light on this debate, this study uses a fine‐grained definition of ownership groups to explore how the different objectives and monitoring predispositions of distinct ownership groups might influence diversification strategy. The empirical examination is set in India to offer a striking contrast from the predominantly U.S.‐based studies that have shaped the ongoing debate. Findings show that diverse ownership groups adopt different postures in monitoring and/or influencing organizational diversification. While some ownership groups are closely associated with focused strategies, and some encourage diversification, others are quite indifferent. These results suggest that the context‐specific variation among ownership groups is germane to our understanding of diversification strategy. Copyright © 2002 John Wiley & Sons, Ltd.     

Particularistic and system trust among small and medium enterprises: A comparative study in China's transition economy

Guanxi, a type of particularistic trust observed in Confucian societies has mostly been viewed as a static phenomenon. It is not clear how the role of guanxi changes over time during institutional transitions. This field study of twenty one small and medium enterprises (SMEs) located in two large cities in Western China examines the changes in SME behaviors since the beginning of economic reforms in 1979. Based on neo-institutionalist trust perspectives, the article argues that the role of guanxi also arose from the paucity of market system trust created by the absence of well-established market institutions during China's transition from a centrally planned to a market economy. Guanxi became relatively less important when market system trust based on well-established institutions was firmly established. Regardless of past practices, the dynamics of institutional transitions leading to the establishment of system trust inevitably reshapes managerial as well as business behaviors, with adaptation occurring to the new rules of the market economy.