Search results

Aim – This empirical study explores the association between competition, business strategy, and the uses of a multiple performance measurement system in Bangladesh manufacturing firms.

Design/methodology – The study uses a questionnaire survey of 50 manufacturing companies. Data were analyzed using multiple regression analysis and other descriptive statistics.

Findings – The results suggest that greater emphasis on multiple measures for performance evaluation is associated with businesses that are facing high competition. The practices of multiple performance measures are also significantly related to the types of business strategy being followed. Specifically, firms pursuing a prospector strategy have relied more on multiple performance measures to rate business performance than the firms pursuing a defender strategy.

Practical implications – The article notes that the designers of performance measurement systems need to consider contingent factors that affect an organizations’ control system.

Originality/value – Substantiating the connection between contingent variables and the use of multiple performance measures in manufacturing firms facilitate a better acceptance of firms’ tendency toward new measurement tools. The study contributes to the performance measurement and contingency literature since it presents empirical evidence of the state of multiple performance measures with organizational contingent variables using a developing country's manufacturing sector data.

The European Union’s Digital Markets Act (DMA) calls for far-reaching changes to the way economic activity will occur in EU digital markets. Before its remedies are imposed, it is critical to assess their impacts on individual markets, the digital sector, and the overall European economy. The European Commission (EC) released an Impact Assessment in support of the DMA that purports to evaluate it using cost/benefit analysis.

An economic evaluation of the DMA should consider its full impacts on dynamic competition. The Impact Assessment neither assesses the DMA's impact on dynamic competition in the digital economy nor evaluates the impacts of specific DMA prohibitions and obligations. Instead, it considers benefits in general and largely ignores costs. We study its benefit assessments and find they are based on highly inappropriate methodologies and assumptions. A cost/benefit study using inappropriate methodologies and largely ignoring costs cannot provide a sound policy assessment.

Instead of promoting dynamic competition between platforms, the DMA will likely reinforce existing market structures, ossify market boundaries, and stunt European innovation. The DMA is likely to chill R&D by encouraging free riding on the investments of others, which discourages making those investments. Avoiding harm to innovation is critical because innovation delivers large, positive spillover benefits, driving increases in productivity, employment, wages, and prosperity.

The DMA prioritizes static over dynamic competition, with the potential to harm the European economy. Given this, the Impact Assessment does not demonstrate that the DMA will be beneficial overall, and its implementation must be carefully tailored to alleviate or lessen its potential to harm Europe’s economic performance.

This study uses county-level property tax data to assess alternative theories for government interaction in setting tax rates. Tests of the two theories, tax competition and yardstick competition, incorporate data for both mobile and immobile property. Using spatial econometrics, results show a statistically significant, positive effect of neighbor rates on local rates for mobile property, consistent with both forms of competition. However, similar statistically significant positive effects for immobile property are consistent only with yardstick competition. The results have implications for decision making in the competitive environment government authorities face.

The competition and regulatory economics literature has developed indicators that detect whether a vertically integrated provider (VIP) is engaging in market exclusion in the form of an anticompetitive price squeeze and non-price discrimination leading to sabotage of downstream competitors. Weisman integrates these indicators by developing a safe-harbor range within which a profit-maximizing VIP engages in neither form of market exclusion. Downstream retail competition that depends on the VIP’s inputs imposes upward pricing pressure on the downstream prices, with the amount of such pressure increasing as the downstream products become more homogeneous (closer substitutes). We analyze the implications of upward pricing pressure for antitrust evaluations of a duty to deal, regulatory policies mandating wholesale inputs for entrants, and vertical mergers. We find, for example, no basis to oppose a merger in which the VIP was previously required to supply inputs to rivals at unregulated prices.

It is now widely accepted that the institutional interventions of states are a foundational influence on the dynamics of organizational forms. But why do states act? In this chapter, we apply the behavioral theory of the firm to develop an explanation of state actions based on the fact that they are boundedly rational rivals. The instrument of state competition we examine is the founding of business incubators, a primary tool in the entrepreneurial strategy of economic development. We predict that business incubators are more likely to be founded in a state when (1) the state falls behind comparable states in the indicators of economic development; (2) the state falls behind its own historical trajectories of economic development; (3) the state has slack resources in the form of budget surpluses; (4) comparable and rival states adopt incubators as a development strategy. Our analysis of incubator foundings in New York, New Jersey, and Pennsylvania throughout 1980–2004 supports all of these propositions.

The fragmentation can either lead to an all-out civil war as in Sri Lanka or a frozen conflict as in Georgia. One of the main characteristics of fragmentation is the control of group members by their respective leaders. The chapter applies standard models of non-cooperative game theory to explain the endogenous fragmentation, which seeks to model the equilibrium formation of rival groups. Citizens become members of these rival groups and some sort of clientelism develops in which political leaders control their respective fragments of citizens. Once the divisions are created, the inter-group rivalry can trigger violent conflicts that may seriously damage the social fabric of a nation and threaten the prospect of peace for the people for a very long time. In other words, our main goal in this chapter is to understand the formation of the patron–client relationship or what is called clientelisation.

Organizations create their environments by constructing interpretations and then acting on them as if they were true. This study examines the cognitive spatial boundaries that managers of Manhattan hotels impose on their competitive environment. We derive and estimate a model that specifies how the attributes of managers’ own hotels and potential rival hotels influence their categorization of competing and non-competing hotels. We show that similarity in geographic location, price, and size are central to managers’ beliefs about the identity of their competitors, but that the weights they assign to these dimensions when categorizing competitors diverge from their influence on competitive outcomes, and indicate an overemphasis on geographic proximity. Although such categorization is commonly conceived as a rational process based on the assessment of similarities and differences, we suggest that significant distortions can occur in the categorization process and examine empirically how factors including managers’ attribution errors, cognitive limitations, and (in)experience lead them to make type I and type II competitor categorization errors and to frame competitive environments that are incomplete, erroneous, or even superstitious. Our findings suggest that understanding inter-firm competition may require greater attention being given to the cognitive foundations of competition.

Firms with linear pricing offer their customers the same price for each unit of a good or service. Anything else is nonlinear pricing. Nonlinear pricing in imperfect markets indicates a fundamental asymmetry in information between firms and consumers. Consumers are commonly expected to exhibit quality- or quantity-preference differences and have different reservation values for different product attributes. The firms, however, cannot observe consumers' preferences. When complete information regarding preferences is not observable, nonlinear pricing strategies with firms offering a menu or schedule of prices allow consumers to sort themselves according to their own preferences, resulting in market segmentation.

This study provides evidence on how changes in management accounting and control systems (MACS) associate with competition, organizational capacity to learn, decentralization, and firm size. In doing this, it replicates (and extends) Libby and Waterhouse’s (L&W) Canadian study in the context of Australian manufacturing firms.

Drawing on contingency theory, the study uses data from a mail-out survey of a sample of Australian manufacturing firms.

Change in MACS was found to be significantly and positively associated with greater organizational capacity to learn and a more intensely competitive environment. Firm size and decentralization were not highly significant with changes in MACS. Additional analysis of the data indicated the generalizability of the L&W model across divisions of large corporations, but not across stand-alone firms and local market-oriented firms.

The results contribute to the field of management accounting change by suggesting that when an organization experiences changes in its business environment its management control systems need changes too.