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Article
Publication date: 8 August 2016

Minkyun Kim and Sangmi Chai

The purpose of this paper is to investigate how business uncertainty affects the implementation of supply chain integration (SCI). More importantly, this research divides…

Abstract

Purpose

The purpose of this paper is to investigate how business uncertainty affects the implementation of supply chain integration (SCI). More importantly, this research divides business uncertainty into four dimensions and SCI into three dimensions to examine the role of each dimension. In addition, it investigates the moderating effects of manufacturing approaches, such as push and pull, in the relationship between SCI and performance.

Design/methodology/approach

Through a structured survey, this study collected 259 responses from supply executives, and supply and purchasing managers of US manufacturing firms. The empirical data analysis was done by using the partial least squares technique.

Findings

The results empirically support the findings that business uncertainty positively affects implementation of SCI. Among the four dimensions of business uncertainty, dynamism and hostility significantly affect implementation of internal integration, integration with suppliers, and integration with customers. In addition, manufacturing approaches, such as push and pull, have a moderating effect on the relationship between SCI and performance.

Practical implications

This study collected survey responses from a manufacturing firm in the supply chain to assist managers to find a solution while dealing with business uncertainty through the implementation of SCI. It also emphasizes manufacturing approaches, such as push and pull, in implementing SCI to improve performance. Thus, supply and purchasing managers should consider the business uncertainty that they are dealing with while developing their supply chain strategy.

Originality/value

To the best of the authors’ knowledge, this study is the first to provide meaningful insights on the effects of SCI toward dealing with business uncertainty. More importantly, by dividing the dimensions of business uncertainty and SCI, this study presents empirical evidence of the significant role of supply chain practices in uncertain business conditions. In addition, this study addresses the gap in extant literature and shows that managers need to consider their manufacturing approach in SCI to improve business performance.

Details

The International Journal of Logistics Management, vol. 27 no. 2
Type: Research Article
ISSN: 0957-4093

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Article
Publication date: 1 October 2019

Dianwicaksih Arieftiara, Sidharta Utama, Ratna Wardhani and Ning Rahayu

This study aims to examine the contingent fit between business strategies and environmental uncertainty and its effect on corporate tax avoidance.

Abstract

Purpose

This study aims to examine the contingent fit between business strategies and environmental uncertainty and its effect on corporate tax avoidance.

Design/methodology/approach

This study uses a two-stage linear regression method comprising multinomial logistic regression and panel data regression.

Findings

This study finds that under highly uncertain conditions, the contingent fit of prospector strategy is higher than the contingent fit of other two strategies, i.e. defender and analyzer strategy. The study fails, however, to demonstrate that under highly uncertain conditions, this study finds that under highly uncertain conditions the contingent fit of a “prospector” strategy is higher than for “defender” and “analyzer” strategies. The study fails, however, to demonstrate that under highly uncertain conditions the contingent fit of a defender strategy is higher than that of an analyzer strategy. The study also finds that the contingent fit between prospector strategy and environmental uncertainty has a positive effect on tax avoidance, and this effect is higher than for the misfit strategies. Moreover, in such environments the fit level of a defender strategy has a negative effect on tax avoidance while environmental uncertainty has a positive effect on tax avoidance.

Research limitations/implications

This study estimated competition uncertainty using the Herfindahl index to measure competitive intensity in an industry. However, only the data from public listed companies was used due to a lack of data availability for non-public companies. Consequently, further study is recommended to include the total number of companies within an industry as a proxy of competitive intensity.

Practical implications

The results implied that managers, not only in Indonesia but also in other countries as well, specifically emerging countries (generally the environmental uncertainty in emerging countries is high) should consider the contingent factors when making business strategy decisions. Managers must be aware of the contingent fit with environmental uncertainty, and therefore, must assess external conditions prudently. Furthermore, the results of this study showed that managers should pay more attention to the effects of their decisions on corporate tax avoidance, while aligning their business strategy decisions with corporate tax planning strategy to obtain an optimal outcome for the company.

Social implications

The Directorate General of Taxes and Board of Fiscal Policy, as regulators, need to comprehend environmental uncertainty to issue various policies that can ease the burden of the taxpayer to remain in business, particularly during the turbulence environment so that can prevent the companies doing illegal practices and will eventually reduce the number of tax avoidance.

Originality/value

This study developed alternative measure of tax avoidance, which is tax avoidance latent variable score (TAXLVS). The TAXLVS was derived from confirmatory factor analysis of previous existing tax avoidance measurements. This study is also the first that analyzes the effect of business strategy on tax avoidance using contingency approach.

Details

Meditari Accountancy Research, vol. 28 no. 1
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 16 November 2015

George Blazenko and Wing Him Yeung

This paper aims to investigate two related questions on business research and development (R & D) simultaneously. First, does R & D create or resolve…

Abstract

Purpose

This paper aims to investigate two related questions on business research and development (R & D) simultaneously. First, does R & D create or resolve uncertainty? Second, does uncertainty encourage or discourage business R & D?

Design/methodology/approach

This paper uses the three-stage least squares regression method and a system of simultaneous equations to examine the two research questions simultaneously. Instrumental variables overcome the econometric endogeneity problem.

Findings

The results are consistent with the hypothesis that R & D creates rather than resolves uncertainty. Why then do risk-averse business managers undertake R & D? This paper argues that in creating uncertainty, R & D also creates “shadow options” for supplementary business investment not envisaged by business managers in the original objective for R & D. Rather, managers unexpectedly uncover shadow options in R & D’s inherent knowledge discovery process, which encourages business R & D in the first instance. Consistent with this real options interpretation, this paper reports evidence that volatility encourages R & D.

Originality/value

This paper differs from the current literature in the sense that it investigates the two related R & D questions simultaneously rather than individually. The authors argue that the two related questions are inextricably interrelated, and investigating the two questions simultaneously would provide results that can possibly solve conflicting empirical results in the current literature. The results are also particularly useful for business managers who make decisions on whether to undertake R & D projects or not.

Details

The Journal of Risk Finance, vol. 16 no. 5
Type: Research Article
ISSN: 1526-5943

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Article
Publication date: 29 April 2021

Gabriel Caldas Montes and Fabiana da Silva Leite Nogueira

This study estimates the effects of political uncertainty and economic policy uncertainty on business confidence. Moreover, it also examines business confidence as a…

Abstract

Purpose

This study estimates the effects of political uncertainty and economic policy uncertainty on business confidence. Moreover, it also examines business confidence as a transmission channel of political uncertainty and economic policy uncertainty to investment.

Design/methodology/approach

The study addresses the Brazilian case from May 2004 to December 2017. Brazil experienced situations of political instability and public distrust in government and its policies, which reflected on the economic environment. The study uses two business confidence indicators that capture entrepreneurs' sentiment in relation to their business and the economy. All models are estimated using ordinary least squares and generalized method of moments.

Findings

The estimates reveal that increases in both political uncertainty and economic policy uncertainty reduce business confidence. The findings also indicate that business confidence acts as a transmission mechanism, i.e. uncertainties affect investments through business confidence.

Practical implications

The findings point to the following practical implications related to the existence of uncertainties in the Brazilian economy: different institutional difficulties and government indecisions have blurred the political scene and caused political uncertainties. In addition, the same aspects that blurred the political scene also caused uncertainties in relation to economic policy that undermined business confidence, and affected investment.

Originality/value

There is a vast literature on business confidence, as well as studies addressing the relationship between business confidence and investment. This study differs from other studies as follows: in addition to the political uncertainty, it also analyzes the effect of economic policy uncertainty on business confidence; it uses different measures to capture political instability, and it analyzes whether business confidence acts as a transmission channel of both uncertainties to investments.

Details

Journal of Economic Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 7 September 2020

Annoch Isa Hadjikhani and Cecilia Lindh

This study aims to hypothesize that the implementation of information technology (IT) in industrial business relationships entails both positive and negative effects for…

Abstract

Purpose

This study aims to hypothesize that the implementation of information technology (IT) in industrial business relationships entails both positive and negative effects for the relationship’s continuation. The purpose is to study the digitalization of business relationships with a focus on effects on commitment in context with uncertainty and cooperation.

Design/methodology/approach

Hypotheses are tested with data from 353 customer relationships in the industrial market. The model suggests the impact of IT on business relationship commitment.

Findings

The results show that IT use in industrial relationships has a direct impact on commitment, as well as an indirect effect via uncertainty and cooperation, which both can increase as a result of IT use. When IT use increases uncertainty, it negatively impacts commitment, and when it increases cooperation, the effect on commitment is positive.

Research limitations/implications

IT use in industrial relationships has a direct impact on commitment, as well as an indirect effect via uncertainty and cooperation, which both can increase as a result of IT use. When IT use increases uncertainty, it negatively impacts commitment, and when it increases cooperation, the effect on commitment is positive.

Practical implications

Awareness of the effect of IT use and the factors involved entails working with cooperative activities to counteract the negative impact there may be if the IT leads to increased uncertainty. Companies need to have knowledge regarding the effect of IT use in each of their business relationships to manage them according to their given situation.

Originality/value

This study contributes to industrial marketing by demonstrating that digitalization can increase uncertainty and cooperation (differently), and they have different effects on commitment, thus that there is a “bright,” as well as “dark” side to it, evident in the business relationship dynamics.

Details

Journal of Business & Industrial Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 1 August 2005

S.C.L. Koh, A. Gunasekaran and S.M. Saad

To present the application of a business model for holistic uncertainty management for twenty‐first century manufacturing enterprises.

Abstract

Purpose

To present the application of a business model for holistic uncertainty management for twenty‐first century manufacturing enterprises.

Design/methodology/approach

A questionnaire survey is carried out to UK manufacturing enterprises to collect relevant data, and analysis of variance (ANOVA), correlation analysis and cluster analysis are performed to infer the results.

Findings

It can be concluded that different manufacturing environments suffer different effects of underlying causes of uncertainty on product tardy delivery. The product tardy delivery performance in make‐to‐order (MTO) manufacturing environment is found significantly affected by a wide range of underlying causes of uncertainty. It is interesting to find that mixed‐mode (MM) manufacturing environment has an opposite outcome. Correlation results provide significant evidence that underlying causes of uncertainty do not have linear association with product tardy delivery. This finding reinforces the proposition that the effects of uncertainty are difficult to quantify due to the compound effect. The cluster analyses of the business environmental factors of the manufacturing enterprises in MM, make‐to‐stock (MTS) and MTO environments found that size of enterprise, product variety, product complexity, number of parts, ratio of buy vs make parts, the use of rough‐cut capacity planning, and the use of buffering or dampening techniques in production, influence the effects of underlying causes of uncertainty on product tardy delivery.

Research limitations/implications

Only UK manufacturing enterprises are investigated. The results will be relevant to MTO, MM and MTS manufacturing environments.

Practical implications

The application of the business model has provided useful knowledge to MM, MTS and MTO manufacturing enterprises on which underlying causes of uncertainty are significantly affecting their product tardy delivery performance.

Originality/value

A holistic approach such as the business model has given a solid foundation for the enterprises to evaluate their performance. Using the knowledge of significant underlying causes of uncertainty, the enterprises could then prioritise the effort and devise suitable buffering or dampening techniques.

Details

Benchmarking: An International Journal, vol. 12 no. 4
Type: Research Article
ISSN: 1463-5771

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Article
Publication date: 16 March 2015

John A Parnell, Zhang Long and Don Lester

The purpose of this paper is to investigate linkages among competitive strategy, strategic capabilities, environmental uncertainty, and organizational performance in small…

Abstract

Purpose

The purpose of this paper is to investigate linkages among competitive strategy, strategic capabilities, environmental uncertainty, and organizational performance in small and medium sized enterprises (SMEs) in China and the USA.

Design/methodology/approach

In China, a survey was administered to managers of SMEs in Shanghai and Guangzhou. In the USA, a survey was administered to managers of SMEs in three major cities. Competitive strategy, capabilities, uncertainty, and performance were measured by previously validated scales.

Findings

Findings support the integrity Miles and Snow generic strategic typology. Performance satisfaction was significantly lower in firms employing a reactor strategy as opposed to those employing prospector, defender, or analyzer strategies. Additional support was found for the concept of strategic clarity, as businesses reporting moderate strategic clarity had lower levels of satisfaction with performance than those reporting either a single strategy or a combination emphasis on three equal strategies.

Practical implications

Chinese SMEs tend to prefer cost-based approaches to their local markets. A differentiation market approach is challenging in most local Chinese economies due to the low wages of most jobs in an economy that is still largely centrally planned. In the USA, more disposable income leads to more market opportunities. While this situation is gradually changing in China, it is not at a point where SMEs feel comfortable pursuing totally differentiated strategies.

Originality/value

Several distinctions in competitive strategy, capabilities, and environmental uncertainty between China and the USA are recognized by analysis. Analyzers and defenders in Chinese SMEs tend to follow industry prospectors with lower prices and/or superior service. They might change strategies after gaining a foothold in the market. Performance for SMEs with low strategic clarity often depends on established guanxi with governmental agencies or stated-owned enterprises, a situation very different from that in the USA.

Details

Management Decision, vol. 53 no. 2
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 21 September 2018

Nektarios Tzempelikos and Kaouther Kooli

This paper aims to examine the moderating effect of environmental uncertainty on the impact of the focal constructs of relationship quality and relationship value on…

Abstract

Purpose

This paper aims to examine the moderating effect of environmental uncertainty on the impact of the focal constructs of relationship quality and relationship value on behavioural intentions across the theoretical perspectives of commitment-trust and relationship value. The study examines to which extent the application of these two theoretical perspectives can absorb part of the environmental uncertainty in a buyer/seller relationship.

Design/methodology/approach

The study used empirical data from UK manufacturers from different sectors to test the hypotheses developed. The sample ranged from small enterprises to multi-billion companies. A structured questionnaire was used as a research instrument.

Findings

The effects of relationship quality and relationship value on behavioural intentions are not found, to a large extent, to be moderated by environmental uncertainty. The findings support that the commitment-trust and relationship value perspectives can absorb part of the uncertainty firms face in business markets.

Research limitations/implications

The current study investigates the customer perspective only. Future dyadic research will be able to offer a more holistic view of the focal constructs and their performance outcomes.

Practical implications

The findings indicate that firms may find it productive to invest in more relationship marketing efforts in markets with higher levels of uncertainty to improve performance.

Originality/value

Although the role of environmental uncertainty as a key exogenous factor in relationship effectiveness should not be overlooked, the theoretical perspectives of commitment-trust and relationship value suggest that relevant approaches in explaining how favourable behavioural intentions can be generated succeed in absorbing part of the uncertainty that organizations can face in business relationships.

Details

Journal of Business & Industrial Marketing, vol. 33 no. 7
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 13 November 2019

Ryall Carroll and R. Mitch Casselman

Uncertainty in the early development of digital business startups can benefit from data-driven testing of hypotheses. Startups face uncertainty not only in product…

Abstract

Purpose

Uncertainty in the early development of digital business startups can benefit from data-driven testing of hypotheses. Startups face uncertainty not only in product development, but also over the structure of the business model and the nature of the customer or market to address. The authors conceptualize a new model, the Lean Discovery Process (LDP), which focuses on market-based testing from the early business idea through to fully realized product stages of an innovation. The purpose of this paper is to highlight a methodology to help digital business reduce uncertainty and apply lean principles as early as possible in the development of a business concept.

Design/methodology/approach

Examining literature in lean startups, lean user experience and lean software development, the authors highlight underlying assumptions of existing lean models. The authors then examine the LDP using the case of raiserve, a social entrepreneurship startup that focuses on the management of cause-based voluntary service.

Findings

Existing literature focuses on product development against an assumed customer base. Early hypothesis testing can be applied to business concept development to substantially reduce cost and time to market.

Research limitations/implications

Further investigation of different forms of uncertainty in digital startups can open up opportunities to further apply lean methodologies. A more extensive empirical study to measure the potential impact is warranted.

Originality/value

The authors conceptualize the minimum viable customer and support early testing with concepts from market research and collective intelligence. The authors demonstrate early opportunities to apply lean principles and rigorous hypothesis testing in an LDP that results in significant reductions in time and expense of product development.

Details

Journal of Small Business and Enterprise Development, vol. 26 no. 6/7
Type: Research Article
ISSN: 1462-6004

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Article
Publication date: 25 September 2019

Kussudyarsana Kussudyarsana, Soepatini Soepatini, Muhammad Halim Maimun and Ram Vemuri

The purpose of this study is to investigate factors that influence the application of governance mechanism in family small and medium-sized enterprises (SMEs) in Indonesia.

Abstract

Purpose

The purpose of this study is to investigate factors that influence the application of governance mechanism in family small and medium-sized enterprises (SMEs) in Indonesia.

Design/methodology/approach

This study used multiple regression analysis to examine the hypothesis. For data collection, questionnaires were distributed to 337 owners and managers of SMEs around 7 districts in Java Island in Indonesia.

Findings

The result indicates that uncertainty influences the application of formal governance in family SMEs in Indonesia. Meanwhile, asset specificity has impact on both formal and relational governance in the context of firms. Financial and non-financial objectives did not impact both formal and relational governance.

Research limitations/implications

Though this research was carried out in a particular cultural context, this study was not specifically designed to examine the interaction between cultural variables and family corporate governance variables. In the future, there is need for a study that examines how culture can influence the practice of formal and relational governance in family business.

Practical implications

The study will give guidance to owners or managers of family business in terms of governance mechanism when uncertainty increases. This evidence suggests that family firms need to adopt formal governance within family firms when uncertainty exists.

Social implications

The research finding indicated that uncertainty influenced the application of formal governance in family SMEs in Indonesia. This research finding suggests that family firms need to adopt formal governance when uncertainty exists. The adoption of formal governance, however, may implicate to some others organizational areas in family firms such as leadership, recruitment and selection and corporate culture.

Originality/value

This study is one of the few on family SMEs, which applied the transaction cost theory. Most of the studies use agency theory for investigating governance mechanism in the family business. This study is one of the few on family SMEs, which applied the transaction cost. This study provides an explanation about a factor that influences a family firm to choose formal and relational governance within the firm.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 12 no. 2
Type: Research Article
ISSN: 2053-4604

Keywords

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