Firm Performance

E-commerce not only has tremendous potential for growth but also poses unique challenges for both incumbents and new entrants. By examining drivers of firm performance in e-commerce from a capabilities perspective, the authors conceptualize three firm capabilities that are critical for superior firm performance in e-commerce: information technology capability, strategic flexibility, and trust-building capability. The extent and nature of market orientation is conceptualized as a platform for leveraging e-commerce capabilities. The authors test the effects of e-commerce capabilities on performance (e.g., relative profits, sales, return on investment) using data from 122 e-brokerage service providers. The results indicate that information technology capability and strategic flexibility affect performance given the right market orientation.

The universalistic perspective of human resource management practices perceives that a set of practices can achieve competitive advantage and firm performance. This study sought to investigate the relationship between best human resource practices and firm performance. A descriptive survey
research design was used to gather primary data using self-administered questionnaire. The study population (n=312) was comprised of non-executives, executives, managers, and top management from seven major insurance firms at headquarters in the Klang Valley, Malaysia. The study found that performance appraisal, internal communication, SHRM alignment in the organization, and career planning were the human resource management best practices.

Theory at both the micro and macro level predicts that investments in superior human capital generate better firm-level performance. However, human capital takes time and money to develop or acquire, which potentially offsets its positive benefits. Indeed, extant tests appear equivocal regarding its impact. To clarify what is known, we meta-analyzed effects drawn from 66 studies of the human capital-firm performance relationship and investigated 3 moderators suggested by resource-based theory. We found that human capital relates strongly to performance, especially when the human capital in question is not readily tradable in labor markets and when researchers use operational performance measures that are not subject to profit appropriation. Our results suggest that managers should invest in programs that increase and retain firm-specific human capital.

This study sought to examine the relationship of strategic management practices and firm performance in Postbank. The study was guided by the following specific objectives: (i) to determine the competitive strategies adopted by Postbank; and (ii) to establish the relationship between the competitive strategies used by Postbank and its performance. A review of the relevant literature was undertaken in order to eliminate duplication of what has been done and provide a clear understanding of existing knowledge base in the problem area. The literature review is based on authoritative, recent, and original sources such as journals, books, thesis and dissertations. A case study design was used to undertake the study. The population comprised Postbank top revenue drivers, namely operations and marketing/customer service departments, which are divided into regions covering the whole country. A semi-structured questionnaire was used to collect primary data from the respondents. Statistical Package for Social Sciences (SPSS), version 19.0 was used as an aid in the analysis. Data pertaining to the profile of respondents were analyzed by employing content analysis while determining the link between the competitive strategies and organizational performance; the strategy related items were subjected to a factor analysis to test whether the strategic practices were naturally grouped into the various competitive strategies. The findings show that the strategies adopted by Postbank so as to cope with the competitive environment include vigorous pursuit of cost reductions, providing outstanding customer service, improving operational efficiency, controlling quality of products/services, intense supervision of frontline personnel, developing brand or company name identification, targeting a specific market niche or segment, and providing specialty products/services. The findings also show a significant relationship between the strategies adopted by Postbank in Kenya and their respective performances with respect to the following objective performance indicators: total revenue growth, total asset growth, net income growth, market share growth and overall performance or growth.

This article analyzes the relationship between the usage of Internet-based technologies, different types of innovation, and performance at the firm level. Data for the empirical investigation originates from a sample of 7,302 European enterprises. The empirical results show that Internet-based technologies were an important enabler of innovation in the year 2003. It was found that all studied types of innovation, including Internet-enabled and non-Internet-enabled product or process innovations, are positively associated with turnover and employment growth.

ABSTRACT Interest in third-party logistics has been steadily increasing over the last two decades. Recently, increased focus by researchers has produced a solid literature base of academic research. In this article, a meta-analytic approach is employed to provide a quantitative review of the empirical literature and examine relevant constructs. Fifty-four samples across 69 peer-reviewed journal articles, yielding a total of 9,386 observations, were obtained and analyzed. We used transaction cost economics and the resource-based view as lenses to hypothesize a structural model of the relationships among relational governance structure, logistics customer service, and firm performance. Additional relationships were also found and analyzed, helping to clarify the mixed existing findings in the literature. The paper concludes by mapping out future directions for 3PL research, based on the study's findings. This article is protected by copyright. All rights reserved.

This study explores how innovations surrounding supply chain communication systems (SCCS) affect channel relationships and market performance. Drawing on the resource-based view of the firm, the study hypothesizes that certain SCCS innovations can be viewed as firm resources that enhance channel capabilities, which in turn affect a firm’s market performance. The empirical research is based on 184 responses from a survey with U.S. supply chain and logistics managers using structural equation modeling as the analytic method. The results suggest that the effect of applied technological SCCS innovations on channel capabilities is mediated by interfirm systems integration. In contrast, administrative SCCS innovations enhance information exchange and coordination activities directly. Furthermore, the influence of applied technological innovations for SCCS is not strong enough to affect either responsiveness of the partnership or firm performance, whereas administrative innovations for SCCS affect both.

The objectives of this exploratory study are to develop a scale that best capture the perception of the practitioners related to activitybased (ABC) costing, and subsequently, develop a model that predicts the impact of perception of ABC on overall firm performance. The Cronbach's alpha shows apparent superiority of the scale. The factor analysis finds four dimensions, namely, overall performance, strategic cost allocation method, increased efficiency and increased effectiveness having the factor loadings of over ±0.3. The regression results are positive and significant at the 5% level. This study suggest that the developed scale can have significant implications to capture the perception of ABC and that the perception of ABC in terms of strategic cost allocation method, increased efficiency and increased effectiveness has significant effect on firms' performance.

Emerging technologies and innovative developments cause the supply chain management to change dramatically. Therefore the subjects regarding trust have become important. Trust established in Supply Chain causes effective relationships among definitive numbers of suppliers in the long-run. The effect of trust in supply chain on firm performance and the contribution of agility to this relation have been supported in the literature. In this research, the role of agility in the effect of trust in supply chain on firm performance will be investigated. According to the results of hypotheses tests, there are positive and significant relations between supply management integration and trust in supply chain, between trust in supply chain and supply chain agility, and between supply chain agility and firm performance.

This study investigated the relationship between the use of 12 human resource management (HRM) practices and organizational performance measured by turnover rates for managerial and non-managerial employees, labor productivity, and return on assets. The results of regression analyses indicated that companies implementing HRM practices such as labormanagement participation program, incentive plans, and pre-employment tests are more likely to experience lower turnover rates for non-managerial employees.

Using a comprehensive panel data set of China's state-owned enterprises, we investigate the impacts of privatization, of different time sequences and extent of non-state ownership, on social welfare and firm performance. Attention has been focused on the sources of gain in the firm performance and the long-run impacts of privatization. It is found that privatization of China's state-owned enterprises was achieved with limited compromise on the social welfare responsibilities, and much gain in firm performance was obtained by motivating the management and reducing the agency cost at the management level. 3 enterprise themselves or delegate the management to professionals. Any agency cost arising from the separation of ownership and management as in the case of publicly held firms could be dealt with through monitoring by the board members, proxy fights by the shareholders, or corporate takeovers in the capital market. State-owned enterprises in China are very much like the publicly held firms of the developed economies in the sense that their ownership is widely held by all people in the society, but the de facto control of the state-owned enterprises is held by the State Assets Agency -the equivalent of the board of the directors. What is different in China is that the owners (all people in the society) do not have the direct authority in choosing the members of the State Assets Agency and appointing the management of the state-owned enterprises. The State Assets

This paper examines the relationship between human and financial capital and firm performance for women-and men-owned small firms in the service and retail sectors. Results indicate that human capital variables, including education and experience, had a positive impact on the profitability of women-owned firms, whereas measures of financial capital had a greater impact of the profitability of men-owned firms. The ability to secure financial capital also had a positive impact on the growth rate of men-owned firms, but did not appear to affect the growth rate of womenowned firms. These findings suggest that the growth aspirations for women-owned firms may be driven by factors other than human capital or the ability to secure external capital.

CEO compensation comprises of lucrative fees, salary, bonuses, and pension scheme. It is an important topic to be studied because evidence indicates that CEO compensation is positively associated with firm performance. Recently, the incidents of CEOs being paid excessively compared to services they do have been reported in both developed and developing countries. This motivates this study to examine the factors determining Malaysian CEOs compensation. The sample of this quantitative study is Top 80 Malaysia public listed companies based on market capitalization. The results of multiple regression analysis on data of 400 observations show that CEO compensation is negatively affected by the level of board of directors' independence, but not affected by firm performance, CEO ownership and leverage. Additionally, we detect that CEOs with high compensation and low compensation are different in term of their firms' board independence and leverage. We suggest future studies should at least examine the effect of CEO characteristics like tenure, education and family ownership on their compensation.

Design/methodology/approach – The paper used a mail-survey of companies listed in the Directory of the Federation of Malaysian Manufacturers (FMM), year 2003. The FMM Directory provides a database of over 2,000 manufacturing firms of various sizes producing a broad range of ...

An examination of the executive compensation structure of 153 randomly-selected manufacturing firms in 1979-1980 provides evidence supporting advocates of incentive compensation, and also suggests that the form rather than the level of compensation is what motivates managers to increase firm value. Firm performance is positively related to the percentage of equity held by managers and to the percentage of their compensation that is equity-based. Moreover, equity-based compensation is used more extensively in firms with more outside directors. Finally, firms in which a higher percentage of the shares are held by insiders or outside blockholders use less equity-based compensation.

Investments in Information Technology (IT) are an increasing part of organizational expenditures in spite of the fact that there is little evidence in the existing literature that suggests these investments are related to the organization's performance. The uncertainty of IT investment payoff should be reflected in other managerial decisions. This research examines Rozeff's (1982) agency cost/transaction cost tradeoff model to determine if IT investments are related to dividend payout ratios for an organization. A dividend payout model including an IT investment variable is estimated. The estimation results suggest that a significant positive relationship exists between dividend payout and a firm's IT investments.

The paper aims to bridge the gap between the literature on optimal capital structure and the literature on finance-output-growth nexus. On the basis of the trade-off theory of capital structure, we posit a non-linear relationship between leverage and productivity growth at the firm level. We test this hypothesis using both standard and IV threshold regression models, which in contrast to conventional estimates, allows us to endogenously determine optimal leverage despite firms' temporary deviations from the optimum. Estimates for a sample of Central and Eastern European countries confirm a non-linear hump-shaped relationship between leverage and productivity growth, thus endogenously identifying an optimal leverage ratio. We show how our paper relates to and contributes to the literature on optimal capital structure and finance-outputgrowth literature.

The main objective of this paper is to investigate the relation between the foreign ownership and firm performance. The study was conducted for the companies listed on Bucharest Stock Exchange, in the first, second and third categories. The financial companies and the credit institutions were excluded from the sample. The final sample included 63 companies. Return on Assets and Return on Equity are used for measuring the financial and economic performance of the firm. The foreign ownership is measured by the percentage of shares held by foreign investors. Econometric tools like linear regression analysis are used for analysis. The results of the study suggest that there is no significant link between firm performance and the existence of foreign capital.

This paper uses a unique dataset from Denmark to investigate the impact of family characteristics in corporate decision making and the consequences of these decisions on firm performance. We focus on the decision to appoint either a family or external chief executive officer (CEO). The paper uses variation in CEO succession decisions that result from the gender of a departing CEO's firstborn child. This is a plausible instrumental variable (IV), as male first-child firms are more likely to pass on control to a family CEO than are female first-child firms, but the gender of the first child is unlikely to affect firms' outcomes. We find that family successions have a large negative causal impact on firm performance: operating profitability on assets falls by at least four percentage points around CEO transitions. Our IV estimates are significantly larger than those obtained using ordinary least squares. Furthermore, we show that family-CEO underperformance is particularly large in fast-growing industries, industries with highly skilled labor force and relatively large firms. Overall, our empirical results demonstrate that professional, non-family CEOs provide extremely valuable services to the organizations they head.

This article compares the effects of board size, proportion of female directors, proportion of outside directors and average age of directors on firm performance in Japanese and Australian firms. We found that board size and age of directors were negatively associated with the performance of Japanese firms. For Australian firms, outsider ratio and female director ratio were positively associated with performance.

Laws and regulations are essential parts of the institutional environment. Consequently, they significantly influence-among other things-firm performance. In this paper it is argued that in order to study this dynamic interrelation over time, a combination of concepts from new institutional and evolutionary economics is required. The variation mechanisms and the relevant selection environment are linked to the Williamsonian levels of economizing. The proposed theoretical framework, applied to the evolution of the Greek cooperative law and its impact on the performance of Greek agricultural and urban cooperatives, generates several hypotheses. Using historical data, a first assessment of the usefulness of the new analytical framework is performed.

The article studies the linkages between industrial relations, organizational innovation and economic performance for the firms of the Emilia-Romagna food-industry. The aim is the investigation of: (i) interactions between union delegates and top management; (ii) adoption of organizational and HRM practices; (iii) linkages between industrial relations, innovations, and firm performance. The analysis suggests a role played by industrial relations in stimulating organizational changes. Industrial relations are also important for firm performances: the linkage proves to be mediated by positive effects of informative, consultative and bargaining practices on organizational changes. The analysis shows a "virtuous circle" between performance and organizational innovations, for firms with good industrial relations. Sommario Il lavoro si occupa delle relazioni tra innovazione organizzativa, relazioni industriali, performance economiche nelle imprese alimentari dell'Emilia-Romagna. L'obiettivo è indagare: (i) l'interazione tra rappresentanze sindacali e management dell'impresa; (ii) l'adozione di innovazioni organizzative e pratiche di gestione delle risorse umane; (iii) i legami tra innovazione organizzativa, relazioni industriali e risultati economici. L'analisi evidenzia l'importanza di relazioni industriali votate al dialogo tra le parti sociali ai fini delle performance economiche. Tale legame è mediato dal mutamento organizzativo il quale, favorito dalla qualità delle relazioni industriali, ha impatto positivo sulle performance. Si riscontra un circolo virtuoso tra innovazione organizzativa e risultati economici delle imprese, in un contesto di buone relazioni industriali.

Capital subsidization is a widespread instrument of regional and industrial policy in Europe. A number of recent works have examined the influence of capital subsidization on the total factor productivity of recipient sectors and firms, and have provided strong evidence of neutral or even negative effects. The present study examines the effect of capital subsidization on four dimensions of the financial performance of firms, that is efficiency, profitability, capital structure, and growth, and provides evidence that capital subsidization affects solely firm growth.

This study examines the performance implications of an integrated supply chain strategy, with customer service performance followed by financial performance as performance constructs. Two major components of an integrated supply chain strategy are identified and defined: (1) integrative information technologies, which is modeled antecedent to (2) supply chain integration. The research model was tested using data from a sample (n = 57) of the top 150 independent first tier automotive suppliers to the Big 3 in North America. The results showed positive direct relationships between (1) integrated information technologies and supply chain integration, (2) supply chain integration and customer service, and (3) customer service and firm performance. The relationship of supply chain integration to financial performance was indirect, through customer service; i.e., customer service was found to fully (as opposed to partially) mediate the relationship between supply chain integration and firm performance for first tier suppliers in the automotive industry.

This paper develops a framework that links characteristics of top managers to the development of bridging and bonding social capital in top management groups (TMGs), and outlines some of the strategic and environmental contingencies that influence social capital's value to organizations. We argue that social capital is a vital operative mechanism through which links between executive characteristics, strategic choice, and performance occur, and show how a directed application of social capital at the senior management level can shed new light on the social dimensions of top management activities.

The study empirically investigates the relationship between the value creation efficiency and firms' market valuation and financial performance by using data drawn from 22 banks enlisted in the Dhaka Stock Exchange, Bangladesh. More explicitly, by using Pulic's (200b) Value Added Intellectual Coefficient (VAIC) as the efficiency measure of capital employed and intellectual capital, the researchers examine the relationship between corporate value creation efficiency and firms' market-to-book value ratios and explore the relationship between intellectual capital and firms' financial performance. Though correlation and regression analysis failed to establish any strong association between the studied variables, the study underlines the contemporary scenario of the banks about nourishing and practicing the idea of value creation to attain sustainable advantages. The limitation discussed in the study bodes well for future research in alternative and extended contexts.

The role of productivity in firm performance is of fundamental importance to the US economy. Consistent with the corporate finance approach, this paper uses the ownership stake of a firm's managers as an argument in estimating the firm's production function. Accordingly, this paper brings together the corporate finance and productivity literature. Using a large sample of randomly selected manufacturing firms that does not suffer from any survivorship or large firm size biases, we find that managerial ownership changes are positively related to changes in productivity. We also find a higher sensitivity of changes in managerial ownership to changes in productivity for firms who experience greater than the median change in managerial ownership. These results are robust to including lagged estimates of production inputs, year dummies and separate dummies for each firm to control for unobservable firm characteristics. In addition, we find that the stock market rewards firms with increases in firm value when these firms increase their level of productivity. q 1999 Elsevier Science B.V. All rights reserved. JEL classification: G32; G30

Companies attempt to companies are attempting to find ways to improve their flexibility and responsiveness and in turn competitiveness by changing their operations strategy, methods and technologies that include the implementation of Supply Chain Management (SCM) paradigm. Hence, Information Technology (IT) can enhance the agility of SCM. The aspects, however, which IT impact on SCM are not equal. In this paper, we specify the areas that IT affects on supply chain and evaluate it. Since the judgments of Iranians automobile industry are qualitative, the evaluation has been done by fuzzy ranking method.

This paper explores how heterogenous risk drives the firm innovation–survival relationship using a large sample of new entrepreneurial firms in China. Results show that innovation increases the probability of survival, although the impact on firm survival is conditioned by the timing of the innovation, the characteristics associated with the innovation strategy, along with the level of risk embodied in the innovation process. Cautious innovators are found to survive longer and contribute to a higher social welfare via gains in firm efficiency. In contrast, risky innovators are less likely to survive, are less efficient, and are only sometimes compensated for their risk in terms of higher profits. Results therefore show that other factors besides higher payoffs force some firms to engage in riskier innovation strategies.

This article seeks to explore the black box mediating between human resource management practices and firm performance. It is hypothesized that high performance work systems develop organizational human capital, which in turn, positively affect firm performance. Two organizational antecedents are also hypothesized to lead to the implementation of high performance work systems. They are a top management value that sees human resources and human resource management practices as major sources of competitive advantage, and organizational strategy that seeks to differentiate by product or service innovation. These hypotheses were tested by analyzing questionnaires from 62 human resource managers and 206 engineers in 77 information technology companies. Research findings suggest that organizational human capital (employee competencies and commitment) mediates the relationship between high performance work systems and firm performance. Top management human resource values and organizational strategy have a joint effect on the implementation of high performance work systems. This study is exploratory and findings are not conclusive. The implications and limitations of this study are discussed.

This article proposes that individual small firms, just like large firms, use different approaches to make strategy. Three processes relevant to small firms are identified: simplistic, participative and adaptive. The article examines how these processes are related to performance, depending on industry life cycle stage. Empirical analysis indicates that all three approaches are related to small firm performance, but that

This paper presents the results of empirical research on the use of management accounting systems in small and medium sized enterprises (SMEs) and the relationship with company performance. The results show that the use of planning and control methods differ significantly according to the size and industry of the firm. Successful companies seem to have more formal long-term plans. While

PurposeThe purpose of the paper is to examine the relationship between corporate social responsibility (CSR) and firm performance, taking into account firm value and financial accounting performance, in an emerging market – Brazil.Design/methodology/approachContent analysis was conducted to extract data from two different sources, one relative to CSR data and another that provided financial data. CSR indexes and financial performance measures were calculated to allow the estimation of regression analysis conducted to examine the relationship between CSR and performance.FindingsThe results indicate that CSR is value destroying in Brazil since a significant negative correlation between CSR and firm value was found. Additionally, a neutral relationship characterises the mutual effect between CSR and financial accounting performance.Originality/valueThe study has examined the relationship between CSR and firm performance in a country where, as in most other non‐developed markets, such a...

This paper presents the first empirical evidence on the nature and effects of human resource practices (HRM) in the Finnish manufacturing sector. In the analysis, we use the novel survey on HRM practices, based on a representative random sample from the population of the Finnish manufacturing firms who had 50 or more employees in 2005. In the sample, we have firm-level information on several HRM and employee participation practices of 398 firms, which is 38% of the firms in the population and almost 50% of the survey respondents. To study how HRM practices affect the level of firm productivity, we first combined the HRM survey data with financial statement data and then estimated crosssectional and panel data estimators for the Cobb-Douglas production functions. We find that both the incidence of employee participation practices and the incidence of HRM tools have increased in the manufacturing sector from 2002 to 2005. The empirical findings support the view of a positive association with the HRM practices and the level of firm productivity. Perhaps more importantly, however, we find that not all forms of employee financial and decision-making participation practices have favorable productivity effects: consultative committee and profit sharing scheme has a positive effect, but other practices do not have statistically significant effects.

This research examines the effect of ownership structure and good corporate governance on firm performance. The research variables used were foreign ownership, institutional ownership, government ownership, size of the board of commissioners, and size of non-financial sector companies on the Indonesia Stock Exchange throughout 2013-2017. This study deployed a quantitative approach through multiple linear regression analysis, with a total sample of 1,650 observations. The research findings were foreign ownership, government ownership; board commissioner size had a significant positive effect on firm performance while institutional ownership and firm size had a significant negative effect on firm performance.

This paper investigates the effect of intra-firm Research and Development expenditure and inter-firm collaboration on firm performance. It is proposed that R&D expenditures enable a company to improve knowledge and assimilate the exchange of information within non-routine collaboration activities. The hypotheses are tested by an empirical study on inter-firm technical collaboration in Japanese Automobile firms during the years 1975–1995, using the method of first-order auto-regression on a panel data set. The findings indicate that R&D expenditure increases performance, but do not allow clear conclusions on the effects of collaborations.

This paper examines the impact of the duration of ERP implementation on firm performance both during and after implementation. Organizations choose either an accelerated implementation approach or a traditional (longer) implementation approach. The former approach gives the organization the advantage of speed, but the disadvantage of fitting its processes to that of a packaged (thus, undifferentiated from competitors) ERP. The latter approach allows the organization to redesign strategy and processes, and thus, search for ways to be unique from its competition. The study uses a regression model to capture the changes in various performance measures during and after implementation between firms that implemented the ERP, using the performance measure of a matched group of firms that did not implement an ERP as a benchmark/ control sample, on the basis of the duration of the implementation. Financial data from Compustat, and data on start date and end date of ERP implementation between 1990 and 2005 for firms in the Oil and Gas industry was collected from an ERP vendor. Results show that measures such as return on sales improved after implementation. However, measures such as inventory turnover, which reflect operational benefits, improve during implementation. We find that accelerated implementation confers both operational and strategic benefits. This study highlights the strategic consequences of the different choices of implementation.