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1 – 10 of over 17000Weiwei Wu, Zhou Liang and Qi Zhang
Nowadays, faced with increasingly dynamic and fierce competition, knowledge is considered to be the core to survive and maintain competitive advantages in both managerial…
Abstract
Purpose
Nowadays, faced with increasingly dynamic and fierce competition, knowledge is considered to be the core to survive and maintain competitive advantages in both managerial practices and academia. Against this background, this study analyzed the influence of technological capabilities (TC) and technology management (TM) on corporate economic performance in the contexts of corporate internal governance mechanisms and external institutional environment from the institutional perspective.
Design/methodology/approach
This study collected data on Chinese publicly listed manufacturing firms in Shenzhen and Shanghai stock markets from 2008 to 2017 and the final data included 3,679 firm-year observations. Ordinary least square regression was used in both regression analysis and robustness tests.
Findings
The empirical results showed that the interaction between TC and TM was positively related to corporate economic performance and both corporate incentives and monitoring mechanisms strengthened this positive relationship; the positive moderating effects of corporate governance were stronger under a more developed corporate external institutional environment.
Originality/value
This research provides a better understanding of the economic effect of TC and TM from the perspective of knowledge integration by indicating that the interaction between TC and TM can enhance corporate economic performance and delimiting the boundaries of this relationship from the institutional perspective.
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Juri Matinheikki, Katri Kauppi, Alistair Brandon–Jones and Erik M. van Raaij
Contemporary supply chain relationships inherently rely on delegation of work between organizations and, thus, are subject to agency problems for which a wide range of governance…
Abstract
Purpose
Contemporary supply chain relationships inherently rely on delegation of work between organizations and, thus, are subject to agency problems for which a wide range of governance mechanisms exist. This review of agency theory (AT), across four distinct fields, explains the connection between governance mechanisms and supply chain relationship types.
Design/methodology/approach
The study uses a systematic literature review (SLR) of articles using AT in a supply chain context from the operations and supply chain management, general management, marketing, and economics fields.
Findings
The authors categorize the governance mechanisms identified to create a typology of agency relationships in supply chains.
Research limitations/implications
The developed typology provides parsimonious theory on different forms of supply chain agency relationships and takes a step towards a “supply chain-oriented agency theory” explaining and predicting relationship types and governance in supply chains. Furthermore, a future research agenda calls for more accurate measuring of agency costs, to examine residual gains alongside residual losses, to take a dual-sided perspective of agency relations and to adopt AT to examine more complex supply networks.
Practical implications
The review provides a menu of governance mechanisms and describes situations under which these mechanisms could be deployed to guide managers when developing their supply chain relationships.
Originality/value
The first review to combine and elaborate views from four major disciplines using AT as a lens to supply chain relationships. Expanding the traditional set of governance mechanisms provides academics and practitioners with a bigger “menu” of options to consider.
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Feng Zhang, Lei Zhu and Liqun Wei
Whether shareholders’ involvement in management benefits the organization’s performance remains inconclusive. The purpose of this study is to reconcile the conflicting results by…
Abstract
Purpose
Whether shareholders’ involvement in management benefits the organization’s performance remains inconclusive. The purpose of this study is to reconcile the conflicting results by exploring whether and under which contexts shareholder involvement may impact firm innovation performance.
Design/methodology/approach
This study attempts to combine previous theoretical views (reactance and agency theories) to examine a curvilinear effect of shareholder involvement on firm innovation performance based on governance related to cost-benefit analysis. Drawing on data from 174 Chinese manufacturing firms, the hierarchical regressions were used to test the hypotheses.
Findings
The study finds that shareholder involvement has a U-shaped relationship with firm innovation performance. Moreover, ownership incentive strengthens the U-shaped relationship, while monitoring weakens it.
Originality/value
Examination of the U-shaped main effect of shareholder involvement and these contingent factors further explains the mixed empirical results concerning the link between shareholder activism and firm-level performance.
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Thanida Chitnomrath, Robert Evans and Theo Christopher
This research seeks to investigate the role of key corporate governance mechanisms in determining a firm's post‐bankruptcy performance following reorganisation.
Abstract
Purpose
This research seeks to investigate the role of key corporate governance mechanisms in determining a firm's post‐bankruptcy performance following reorganisation.
Design/methodology/approach
The study is based on agency theory and uses a unique sample of 111 filing companies whose reorganisation plans have been confirmed by the Thai Central Bankruptcy Court during the period 1999‐2002.
Findings
The results indicate that monitoring and incentive mechanisms are significant determinants of a firm's post‐bankruptcy performance. The key monitoring mechanism is ownership concentration, measured by shares held by the largest shareholder, whereas the critical incentive mechanisms are cash compensation and percentage of common shares held by the plan administrator. The results indicate that these mechanisms can mitigate agency problems in previously insolvent companies and increase post‐bankruptcy performance over a three year period.
Originality/value
The study is timely given that many organisations are facing rebuilding programs following the impact of the global financial crisis. Prior research in Thailand and elsewhere has not measured bankruptcy reorganisation outcomes in terms of the difference of actual financial performance to predicted performance and in relation to the governance factors of the reorganisation process. Neither has this aspect been considered within an agency theory framework. This provides a unique opportunity to consider these variables based on the theoretical framework of agency theory and to evaluate the importance of governance mechanisms in reorganisation proceedings.
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Yuan Ye, Xiaosong (david) Peng, Raymond Lei Fan and Arunachalam Narayanan
Drawing on transaction cost economics (TCE) theory and organizational information processing theory (OIPT), this study investigates how the alignments between the characteristics…
Abstract
Purpose
Drawing on transaction cost economics (TCE) theory and organizational information processing theory (OIPT), this study investigates how the alignments between the characteristics of service (i.e. task complexity and measurement ambiguity) and governance mechanisms (i.e. contract specificity and monitoring) can affect service performance.
Design/methodology/approach
The paper uses a rigorously designed survey to collect data from professionals who manage service outsourcing contracts in various industries. The respondent pool consists of randomly selected members of the Institute of Supply Management (ISM). The authors’ research question is analyzed using 261 completed and useable responses. Structural equation modeling is adopted to examine the data and test the proposed hypotheses.
Findings
The authors find that both contract specificity and monitoring have a positive impact on supplier performance. Further, for high task complexity services, contract specificity is more effective than monitoring, and for high measurement ambiguity services, the opposite is true. Moreover, the effect of contract specificity is mediated by monitoring.
Practical implications
Service outsourcers should use both contract specificity and monitoring in governing outsourced services and know that the former depends on the latter during execution. Facing resource constraints, they can prioritize crafting detailed contract provisions over implementing monitoring for highly complex services but consider monitoring as the primary governance tool in services whose outcomes are difficult to measure.
Originality/value
This study is the first to couple TCE with OPIT and consider the nature of outsourced services in the choice of governance mechanisms and empirically test the simultaneous effects of contract specificity and monitoring in the context of service outsourcing.
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Jordi Surroca, Miguel A. García‐Cestona and Lluís Santamaria
This paper builds upon recent advances in the corporate governance framework to extend and complement the economic literature on producer cooperatives. We argue that the problem…
Abstract
This paper builds upon recent advances in the corporate governance framework to extend and complement the economic literature on producer cooperatives. We argue that the problem of governance in a cooperative is twofold and consists in designing mechanisms and setting up institutions that (1) encourage workers to define a goal that maximizes workers’ welfare and (2) induce managers to pursue and internalize such a broad goal. When compared to capital‐controlled firms, the agency problems become more complex and harder to solve in the cooperative framework. As empirical evidence of this problem and its corresponding solution, we illustrate the case of the Mondragón cooperatives, explaining in detail the incentive system and the control mechanisms now in place in this successful business group. The study of the governance architecture of Mondragón may help us to propose solutions to traditional problems of the cooperative firm and to reach a better understanding of both the governance of cooperatives and corporate governance in general.
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Jo Evans and Charlie Weir
In large firms the managers who run the business tend not to belarge shareholders. In addition, managers are said to have objectiveswhich differ from those of the owners. Aligning…
Abstract
In large firms the managers who run the business tend not to be large shareholders. In addition, managers are said to have objectives which differ from those of the owners. Aligning these conflicting interests is the basis of the agency problem. Various corporate governance schemes have been introduced to ensure that managers follow profit‐driven policies. Looks at the separation of decision management from decision control, the frequency of meetings between divisional managers and their superiors, performance‐related pay and performance‐related incentives. Examines their impact on firm profitability. Finds that the level of monitoring of divisional managers and the use of divisional performance‐related pay has a significant effect on performance. Finds incentives in general do not affect performance. Finds on average that performance is unaffected by the separation of decision processes, although it does help to achieve very good profitability.
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Salman Ahmad, Ciaran Connolly and Istemi Demirag
The purpose of this paper is to explore how localized (organization-level) actors of policy initiatives that are inspired by neoliberal ideologies use management accounting and…
Abstract
Purpose
The purpose of this paper is to explore how localized (organization-level) actors of policy initiatives that are inspired by neoliberal ideologies use management accounting and control practices. Specifically, it addresses the operational stages of a case study Private Finance Initiative (PFI) contract within the United Kingdom's (UK's) transport sector of roads for embedding government objectives in the underlying project road.
Design/methodology/approach
This paper adopts Dean's (2010) analytics of government to unpack the accounting-based control practices within the case study contract in order to articulate how, at the micro level, the government's objective of improving road-users' safety is enacted, modified and maintained through such regimes.
Findings
Drawing on a content-based analysis of UK government PFI policy and extensive case study-specific documents, together with interviews and observations, this research provides theoretical insights about how control practices, at a distance without direct intervention, function as forms of power for government for shaping the performance of the PFI contractor. The authors find that the public sector's accounting control regimes in the case study project have a constraining effect on “real partnership working” between the government and private contractors and on the private sector's incentive to innovate.
Research limitations/implications
By analyzing a single road case study PFI contract, the findings may not be generalizable.
Originality/value
This paper provides significant theoretically informed insights about how public service delivery that is outsourced to private contractors is controlled by government at a distance within complex organizational arrangements (e.g. PFI).
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Michael R. Braun and Scott F. Latham
This study aims to examine the governance structure of the firm undergoing a complete buyout cycle (reverse leveraged buyout). Its purpose is to empirically explore the evolution…
Abstract
Purpose
This study aims to examine the governance structure of the firm undergoing a complete buyout cycle (reverse leveraged buyout). Its purpose is to empirically explore the evolution of corporate board structures as a unique source of value creation, in addition to the agency mechanisms of the discipline of debt and incentives of equity participation.
Design/methodology/approach
The authors rely on agency theory and the resource dependence perspective to develop sets of hypotheses that examine changes in the board composition of 65 R‐LBOs and 65 matched continuing firms spanning a 25‐year period (1979‐2004).
Findings
The empirical results reveal numerous insights about why R‐LBOs go private, to what extent boards restructure during the buyout phase, and how those changes relate to firm performance. Taken together, the findings give strong credence to the argument that boards represent a supplemental source of value creation in the buyout process.
Research limitations/implications
For scholars, the study presents a platform for further inquiry into the role of boards of directors in R‐LBOs as well as the inclusion of resource dependence theory to inform on the phenomenon.
Practical implications
The study helps to address this new source of value creation for practical interest. It offers a benchmark for buyout firms to compare their board characteristics by establishing linkages between pre‐buyout deficiencies, post‐buyout modifications, and post‐SIPO performance.
Originality/value
The results shift scholarly attention away from the structural governance tools to the group dynamics of the board. The findings call into question the restricted attention given by buyout researchers to leverage and ownership as value drivers by prompting a closer evaluation of the relationship between buyout board structures and related structuring of debt and managerial equity participation. Furthermore, the inclusion of the resource‐dependency perspective alongside agency theory as an explanatory theory allows for a richer account of the LBO phenomenon and its sources of value creation.
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Maria Aluchna and Bogumil Kaminski
The purpose of this paper is to investigate the links between company ownership structure and financial performance in the context of the largest Central European stock market…
Abstract
Purpose
The purpose of this paper is to investigate the links between company ownership structure and financial performance in the context of the largest Central European stock market. Using the framework of agency theory, the authors address the question of the expropriation effect by dominant owners and the effect of collusion between shareholders of different types on company performance.
Design/methodology/approach
The authors test hypotheses on the relations between ownership concentration and the involvement of different shareholders (state, CEO, industry and financial investors) vs return on assets (ROA). The authors adopt the panel model controlling for endogeneity and sector of operation and analyze the data from the unique sample of 495 Polish non-financial firms listed on the Warsaw Stock Exchange in years 2005-2014 with a total of 3,203 observations.
Findings
The authors identify a negative correlation between ownership concentration by the majority shareholder and ROA, which corresponds with the expropriation rationale of blockholders. The authors also observe negative effects due to ownership concentration by the second largest shareholder, supporting the notion of collusion. The results show that ownership by industry investors is associated with a higher ROA. Ownership by the CEO, state and financial investors proves to have no statistically significant effect on performance.
Originality/value
The paper further develops the nature of ownership-performance relations in the specific economic context of a post-transition, emerging European stock market, weak external corporate governance mechanisms, insufficient investor protection and significant concentration of share ownership. The results add to the understanding of monitoring vs expropriation effects by large owners and the collusion between different types of shareholders.
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