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The purpose of this paper is to use China’s World Trade Organization accession as a quasi-natural experiment and examine whether conglomeration affects firmss’ ability to…
The purpose of this paper is to use China’s World Trade Organization accession as a quasi-natural experiment and examine whether conglomeration affects firmss’ ability to respond to a significant increase in competitive pressure. Conglomerate segments have higher sales growth and higher profitability than singlesegment firms, when they face intensified import competition. Conglomerates’ outperformance is not observed when the markets in which segments operate already have high product market competition. Overall, conglomeration encourages competitiveness, and internal resources are allocated to relatively competitive segments.
Presents a considered definition of conglomerates and examines the organizational and marketing problems that have faced these companies. Provides some suggestions for solutions to these problems, noting the significance of individual companies and their relationship with their advertising agencies. Suggests that budget must play a large part in the use of these agencies for marketing to be effective.
Avery and Bergsteiner's updated set of 23 sustainable leadership practices derived from sustainable enterprises and five performance outcomes provides a framework to…
Avery and Bergsteiner's updated set of 23 sustainable leadership practices derived from sustainable enterprises and five performance outcomes provides a framework to examine the business practices of Thailand's largest conglomerate, Siam Cement Group (SCG). The aim of this paper is to build on and expand Kantabutra and Avery's study based on Avery.
The analysis was conducted by grouping Avery and Bergsteiner's principles into six categories, namely taking a long‐term perspective, investing in people, adapting the organizational culture, being innovative, exhibiting social and environmental responsibility, and behaving ethically. Adopting a multi‐data collection approach, research teams supplemented case study data with non‐participant observations from visits to the conglomerate and its training sessions. Multiple stakeholders were interviewed in semi‐structured interviews. Documentation and information supplied by, or published about, the conglomerate was consulted.
All six sets of practices, which sharply contrast with the prevailing business model of short‐term maximization of profitability but are consistent with the 23 sustainable leadership practices, were found to apply in varying degrees to SCG. A total of 19 applied strongly, with three others moderately strong.
Given that sustainable leadership principles are associated with enhanced brand and reputation, customer and staff satisfaction, and financial performance, the new Sustainable Leadership Grid provides corporate leaders with a useful checklist for this purpose.
This paper reports on the first examination of Avery and Bergsteiner's 23 sustainable leadership elements in a developing economy. It shows that even a publicly‐listed company can resist pressures to conform to business‐as‐usual practices and adopt the long‐term, socially responsible principles of “honeybee” sustainable leadership.
Purpose – We develop a theoretical model to analyze the role that financial conglomerates may play in reducing agency costs in target firms.Methodology/Approach – We…
Purpose – We develop a theoretical model to analyze the role that financial conglomerates may play in reducing agency costs in target firms.
Methodology/Approach – We develop a model to analyze the activism of a financial conglomerate (that includes investment banking besides mutual fund management activities) in monitoring the managers of a listed firm. The specific problem we study is this: should the managers of a listed company undertake a new project within the firm or should they develop it outside of the firm with the help of a bank? Should or not the financial conglomerate help the managers undertake the project outside of the existing firm at the expenses of the investors of the mutual fund that it manages, but collecting fees from the investment banking activities?
Findings – It will be attractive to both the financial conglomerate and the managers to develop the project outside of the firm if the fees charged by the financial conglomerate for the provision of investment banking services are within a certain range. However, a more intense reaction to performance from the fund investors will translate to a greater space of converging interests between the conglomerate shareholders and mutual fund investors. Additionally, if fees earned by the mutual fund company are a large source of income for the conglomerate, then the lower will be its tendency to assist the managers.
Social implications – From a regulatory standpoint, the implementation of measures aimed at transferring capital between funds without cost would allow mutual fund investors to intensify their reaction to fund performance, therefore increasing the likelihood of lower agency costs. We also conclude that supervisory authorities should pay special attention to the banking relationships of firms and banks to whom the asset management component is secondary and with smaller direct stakes in the said firm.
Originality/Value of paper – We develop a theoretical framework to explain the absence of activism of institutional investors integrated in financial conglomerates in the governance of listed firms.
The paper aims to investigate organizational variables and develop their relationship with horizontal strategy. The cultural dimensions and organization structure have…
The paper aims to investigate organizational variables and develop their relationship with horizontal strategy. The cultural dimensions and organization structure have been considered as organizational variables. The study also aims to shed light on the implementation horizontal strategy in conglomerates.
A survey was carried out with 122 conglomerate firms for examination. These companies were chosen to be of different sizes and sectors. The multiple regression analysis was utilized to analyze the data.
The results reveal that conglomerate firms also have a horizontal strategy. Additionally, organizational cultural dimensions namely, collectivism, clan culture, market culture and long-term orientation; formal and informal relationship; and horizontal organization structure (HOS) have positive and significant relationship with horizontal strategy. No significant relationship was found between uncertainty avoidance and adhocracy culture, and horizontal strategy.
The major contributions of this study are explicitly identified as horizontal strategy exists in the conglomerate firms where the few organizational variables play a significant role in horizontal strategy implementation.
This study has been done in an effort to make supporting guidelines to fill the gaps in conglomerate firms. This study offers an effective role of cultural dimensions and structure as drivers of horizontal strategy implementation, and this study spells out and extends the literature and proposes a conceptual framework.
The chapter addresses the unique aspects of Brazil’s news agencies and the Brazilian news syndication market. It reveals the pattern of Brazil’s two prevailing business…
The chapter addresses the unique aspects of Brazil’s news agencies and the Brazilian news syndication market. It reveals the pattern of Brazil’s two prevailing business models regarding the wire services industry: that of the State, particularly the federal government, which invested little in a nationwide distributor to peripheral and alternative media; and that of major media conglomerates, which set out their syndication services labeled as “news agencies” in order to multiply profits with no extra labor. In the latter case, an asymmetrical relationship of dependency and circularity ensues between these major conglomerates and regional media groups, who rely on these “news agencies” to perpetuate their dominance in local markets. The chapter also assesses a few causes for this unique model and describes the main players in Brazil’s news agency sector. A concise historical background is presented (Molina, Morais, Saroldi & Moreira) and provides context for the present-day players in the news agency business in Brazil, including the institutional framework they form with their customers, predominantly smaller newspapers. The chapter analyzes attributes of the Brazilian news agency ecology, including the parallel reach of distribution networks belonging to the private and state-owned agencies; the adaptation of conglomerate agencies to challenges entailed by the digital convergence (shrinking newsrooms, multitasking staff); and the prevalence of the interconglomerate model within the Brazilian news syndication industry.
Some strategy authors suggest that in an emerging market a local conglomerate enjoys certain potential advantages over a smaller focused firm. It can leverage its…
Some strategy authors suggest that in an emerging market a local conglomerate enjoys certain potential advantages over a smaller focused firm. It can leverage its corporate image to build customer loyalty and raise funds from the capital market. It can mobilise resources from within the group companies to invest in enhancing the corporate image, in developing its own management‐training centre, and for liaison with the government and bureaucracy. It can also avoid retrenchment of surplus employees by transferring them across the group companies. The authors, however, contend that many of the advantages mentioned above cannot be realised in practice and the top management finds it difficult to effectively manage a large conglomerate. They suggest a model, which will help a conglomerate decide which businesses to retain or divest. They also highlight certain strategies adopted by Indian firms to combat foreign competition in the domestic market.
In this observation study the theory of conglomerated conflict behavior is tested. The impact of seven conflict behaviors on substantive and relational conflict outcomes…
In this observation study the theory of conglomerated conflict behavior is tested. The impact of seven conflict behaviors on substantive and relational conflict outcomes is examined through multiple independent observations of 103 Dutch nurse managers handling a standardized conflict. Results show that process controlling is most important for achieving substantive outcomes, whereas problem solving, confronting, and forcing are most important for relational outcomes. In addition, substantive and relational outcomes are positively related. Implications for managerial practice and training are discussed.
Undergraduate final year or MBA.
This teaching case describes the journey undertaken by Yoma Strategic Holdings (YSH) Ltd, a Singapore-listed company that operates predominately in Myanmar, to become a successful and highly profitable conglomerate business empire in Myanmar. The case provides a rich contextual description of how YSH leveraged upon its partnerships and capabilities, especially with its parent and sister companies, to pursue its conglomerate business model. To facilitate the discussion that this teaching case aims to generate among lecturers and students, we have provided a summary of the latest developments in Myanmar since the 2010 general election. This helps to give students an appreciation of the challenges involved in creating a successful business in Myanmar.
Expected learning outcomes
The learning outcomes that this teaching case hopes to achieve in students are as follows: Understand the concept of “economies of scope” in corporate strategy; identify and explain the various corporate strategies (i.e. diversification and vertical integration) that can be implemented to develop a conglomerate business model; recognize the organizational and managerial issues arising from implementing these corporate strategies and understand the circumstances that influence its success; and assess the relative advantages of managing a business in a conglomerate business model and advise a company on whether a particular activity should be undertaken internally or outsourced.
Teaching Notes are available for educators only. Please contact your library to gain login details or email firstname.lastname@example.org to request teaching notes.
The purpose of this paper is to investigate the previous mixed findings in the relationship between diversification and firm performance. Using international and…
The purpose of this paper is to investigate the previous mixed findings in the relationship between diversification and firm performance. Using international and industrial conglomerates, the paper introduces productivity as a moderating variable to ascertain whether the mixed views in the diversification-performance nexus is due to variations in productivity. The findings in both proxies of performance (q and return on asset (ROA)) show that productivity is not a significant moderator in the diversification-performance link, except that under industrial conglomerates productivity enhances ROAs significantly. Meanwhile, the results show that diversification either has no significant value on firm performance or relates negatively with performance – a contrasting result to the hypothesis of this study.
This study adopts diversification measurement, categorisation approach and the methodology used in the work of Fauver et al. (2004) and the subsequent modification by Lee et al. (2012). This study, however, investigates the moderating effect of productivity on diversified firms and not ownership as shown in the previous studies. Performance is measured by two proxies to show robustness of the study. ROA is an accounting tool and Tobin’s q reflects a market-based performance of the firm.
The results show that productivity has no moderating impact on a market-based performance of a diversified firm. Regarding ROA, results show a split in finding by showing that productivity has no significant impact on international diversification; however, for industrial diversification, results show significant impact.
The paper adds to knowledge of finance by ruling out the view that the inconsistencies in the diversification and performance nexus in emerging economies could be due to vagaries in productivity. It is confirmed that productivity technically does not strengthen the link between diversification and performance: suggesting that factors other than productivity could establish a maximal impact on that link to minimise the inconsistencies in the findings on diversification-performance link.