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Article
Publication date: 1 June 1999

Patrick McNamee, Kathleen Greenan and Brendan McFerran

The economic contribution that small firms make is being increasingly recognised. Consequently robust strategic benchmarks for small firms must be extremely valuable not…

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2924

Abstract

The economic contribution that small firms make is being increasingly recognised. Consequently robust strategic benchmarks for small firms must be extremely valuable not just for the firms themselves but also for the wider economic community. The Competitive Analysis Model (CAM) is a new approach to the strategic benchmarking of small firms. Currently this model comprises 893 firms on which are held 320 separate data items. These data items are used to provide individual firm reports so that participating firms can benchmark their performance in terms of measures such as: growth rates, internal performance measures, external performance measures and strategic priorities. The benchmarks are provided in two major manners: sectoral comparisons so that a firm can benchmark its performance with others of a similar size in the same industry sub‐sector and cross‐sectional comparisons so that a firm can benchmark its performance with others of similar size irrespective of the industry in which they operate. This article describes the operation of CAM and illustrates its operations through a typical CAM report.

Details

Benchmarking: An International Journal, vol. 6 no. 2
Type: Research Article
ISSN: 1463-5771

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Article
Publication date: 1 June 2002

Brendan J. Gray, Sheelagh Matear and Philip K. Matheson

Although there are a growing number of studies which have investigated links between market orientation and performance in service firms, there has been limited research…

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3491

Abstract

Although there are a growing number of studies which have investigated links between market orientation and performance in service firms, there has been limited research which compares the market orientations of goods and service firms. The results of this study, based on a large multi‐industry sample of New Zealand companies, suggest that to improve business performance service firms should develop information systems to track profitable customers and products, develop a corporate culture which emphasises the needs of stakeholders, and develop policies to encourage ethical conduct. To improve marketing performance firms should improve their levels of market orientation, develop a corporate culture which emphasises the marketing concept and innovation, adopt more proficient new product development processes and explore the possibilities of electronic commerce.

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Journal of Services Marketing, vol. 16 no. 3
Type: Research Article
ISSN: 0887-6045

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Book part
Publication date: 6 September 2019

Robert A. Peterson and David Altounian

This chapter reports the results of an empirical study on the “gender–performance gap,” the alleged difference in business performance between firms started or owned by…

Abstract

This chapter reports the results of an empirical study on the “gender–performance gap,” the alleged difference in business performance between firms started or owned by females and males. Although numerous studies have compared the business performance of firms started by or owned by female and male entrepreneurs, most research to date has employed financial performance metrics and has often produced inconsistent results. The present research compared gender-based business performance by examining self-perceptions of a large sample of female and male Black and Mexican-American entrepreneurs. As such, the present study overcame several limitations of prior gender–performance gap research and addressed entrepreneurial groups seldom studied. While there were no perceptual differences between female and male entrepreneurs surveyed regarding the performance of their respective businesses, Mexican-American entrepreneurs surveyed perceived the performance of their business as being better than Black entrepreneurs surveyed, and this result held for both females and males. Findings from the study provide insights into the perceptions held by Black and Mexican-American female and male entrepreneurs and provide a context for further race and gender studies.

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Article
Publication date: 6 July 2010

K. Ramakrishnan

Even though there is a vast body of research on the performance of mergers in the developed markets, many issues are still unresolved. There is almost negligible research…

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2908

Abstract

Purpose

Even though there is a vast body of research on the performance of mergers in the developed markets, many issues are still unresolved. There is almost negligible research in the form of published papers on the performance of merged firms and the strategic factors impacting this performance, in the context of Indian industry. This study aims to address this gap in knowledge.

Design/methodology/approach

The study uses a quantitative method and statistically analyses secondary data.

Findings

The study finds that merged firms demonstrate better operating performance as compared to both their industries and their pre‐merger performance. Merging firms belonging to unrelated industries appear to be performing better in the long‐term as compared to the related firms. Mergers which witness transfer of corporate control demonstrate a better performance than the ones that do not. Sick acquired firms negatively impact long‐term performance.

Research limitations/implications

The first limitation of the study is that the financial sector has not been included since it follows different accounting norms. The second limitation is that the findings apply broadly across Indian industry and the limited sample size does not facilitate an industry‐specific focus. The study points towards further research using a longer time frame that might help understand longitudinal variations in merged firm performance. It also encourages future finer‐grained studies on each of the factors which impact merged firm performance.

Practical implications

Managers can prudently utilize mergers to improve firm performance in Indian industry. It appears that firms belonging to unrelated industries bestow better long‐term post‐merger cash flow returns. Managers in India do not thus have to constrain themselves to only horizontal mergers. Managers would be well‐advised to improve on their managerial capabilities since this study points towards a developing market for corporate control in the Indian context.

Originality/value

This is probably the first paper of its kind on research on the performance of merged firms in India.

Details

Business Strategy Series, vol. 11 no. 4
Type: Research Article
ISSN: 1751-5637

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Article
Publication date: 12 July 2013

Stephan M. Liozu and Andreas Hinterhuber

The purpose of this paper is to identify a set of specific activities and a set of competencies associated with above‐average firm performance.

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1705

Abstract

Purpose

The purpose of this paper is to identify a set of specific activities and a set of competencies associated with above‐average firm performance.

Design/methodology/approach

Quantitative survey of 748 respondents.

Findings

It was found that four key competencies differentiate high performing from low performing companies: organizational confidence; pricing capabilities; organizational change capacity; and championing behaviors by top management. The research also identifies a set of specific activities that are linked with superior firm performance: activities directed at the improvement of pricing effectiveness (e.g. trainings, pricing tools; pricing performance reviews); improvements in product differentiation and product quality (e.g. through innovation and research aimed at identifying and creating customer value); increased sense of organizational confidence (e.g. optimism, resilience, “can do”‐attitude); improved support of top management; improved ability to stick to list prices and minimization of discounting behaviors; and finally, enhanced cultural adaptability to respond to changing market conditions.

Research limitations/implications

Through a quantitative research design, the authors document the link between pricing capabilities, organizational confidence and superior firm performance.

Practical implications

The authors identify both specific activities, as well as higher order competencies, practising managers need to develop in order to increase firm performance via pricing. Taking a hypothetical company as example, the authors' data show that, on average, a one point improvement on a seven‐point scale in organizational confidence leads to a 4 per cent improvement in return on sales.

Originality/value

Our research highlights which organizational competencies drive firm performance. Specifically this research is the first quantitative survey which documents a positive relationships between organizational confidence and firm performance.

Details

Journal of Business Strategy, vol. 34 no. 4
Type: Research Article
ISSN: 0275-6668

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Article
Publication date: 1 August 1995

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…

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1903

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.

Details

Management Decision, vol. 33 no. 6
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 6 November 2009

Ibrahim El‐Sayed Ebaid

The purpose of this paper is to empirically investigate the impact of capital structure choice on firm performance in Egypt as one of emerging or transition economies.

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21727

Abstract

Purpose

The purpose of this paper is to empirically investigate the impact of capital structure choice on firm performance in Egypt as one of emerging or transition economies.

Design/methodology/approach

Multiple regression analysis is used in the study in estimating the relationship between the leverage level and firm's performance.

Findings

Using three of accounting‐based measures of financial performance (i.e. return on equity (ROE), return on assets (ROA), and gross profit margin), and based on a sample of non‐financial Egyptian listed firms from 1997 to 2005 the results reveal that capital structure choice decision, in general terms, has a weak‐to‐no impact on firm's performance.

Originality/value

This is the first study that examines the relationship between leverage level and firm performance in Egypt.

Details

The Journal of Risk Finance, vol. 10 no. 5
Type: Research Article
ISSN: 1526-5943

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Article
Publication date: 1 August 1996

Barbara Brockie Leonard and Chandrasekhar Mishra

Long‐term performance contracts are awarded to top management in order to provide incentives to maximize shareholder value. We test the incentive hypothesis using 350 firms

Abstract

Long‐term performance contracts are awarded to top management in order to provide incentives to maximize shareholder value. We test the incentive hypothesis using 350 firms, one half of which has adopted long‐term performance plans over the period 1971–80. The analysis uses performance indicators such as earnings per share (EPS), rate of return on assets (ROA), rate of return on equity (ROE), rate of return on investment (ROI), and stock returns (ASR). In addition to using a control group of firms that did not adopt plans, the test period consists of a control period (six years prior to plan adoption) and a test period (six years following plan adoption). The results support the incentive hypothesis in that all performance indicators for the test firms improved compared to prior performance, but the performance of test firms in the period subsequent to plan adoption when compared to the control firms was not significantly different.

Details

Managerial Finance, vol. 22 no. 8
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 12 October 2015

Rosemary Muange and Loice C. Maru

The purpose of this paper is to determine the effect of strategic alliances on firm performance and the moderating effect of firm size in retail firms in Nairobi County in…

Abstract

Purpose

The purpose of this paper is to determine the effect of strategic alliances on firm performance and the moderating effect of firm size in retail firms in Nairobi County in Kenya.

Design/methodology/approach

Resource Dependency Theory was used to guide the study. The study adopted explanatory research design. Questionnaires were used to collect data from sample of 216 respondents through stratified and simple random sampling technique. The study used inferential statistics to test hypotheses.

Findings

Study findings indicated that joint marketing alliances, procurement-supplier alliances, joint manufacturing alliances and technology development alliances have significant and positive effect on firm performance. Based on the findings, creating a joint marketing, procurement-supplier, joint manufacturing and technology development alliances mostly enhance firm performance.

Research limitations/implications

The study considered only one county out of 47, although this county hosts the capital city, where most of the firms considered are located. It therefore is representative of all counties and firms considered in this study. It also considered top management staff and thus may have an effect since the lower cadre staff were not considered. However, most of the required information was expected from top management since these are the ones who make decisions, and hence most affected by strategic alliances.

Practical implications

This study has practical implication on firm performance because it has established that strategic alliance improves on overall firm performance. This manifests itself in terms of improve productivity, production efficiency and profitability. It also helps in the availability of products to the end users.

Social implications

Through improved productivity, efficiency and profitability, this translates to improved terms of payment of staff and hence improved quality of lives of their families and communities within which they live. It also enables the firms to participate more in corporate social responsibility projects which in turn improves the standard of living of the communities around them.

Originality/value

The study has provided an empirical insight on the importance of strategic alliance on firm performance. This is the first study done in the Kenyan context concerning strategic alliances formed by firms to improve on their performance especially on retail firms.

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Article
Publication date: 15 February 2013

Carolin Schellhorn and Rajneesh Sharma

The purpose of this paper is to evaluate firm financial success across a broad range of performance measures and identify areas of the performance spectrum for which…

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947

Abstract

Purpose

The purpose of this paper is to evaluate firm financial success across a broad range of performance measures and identify areas of the performance spectrum for which positive results were most difficult to achieve. Simultaneously, the authors identify the firms that most frequently ranked among the top five in terms of composite financial performance.

Design/methodology/approach

The dichotomous Rasch model was applied to 13 financial ratios for two industries for the years 2002‐2011. Of these ratios, the authors identify those that are consistent with the requirements of the Rasch model and suitable for ranking composite firm financial performance in each industry during the sample years. Ratio difficulty rankings are obtained, along with firm rankings reflecting managers' ability to achieve broad‐based financial success.

Findings

For the Foods and Aerospace/Defense industries during 2002‐2011, above average performance was most difficult to achieve in the areas of liquidity, financial leverage, and market valuation. Above average profitability and returns on investment seem to have been easier performance targets during this sample period. The authors also list the ticker symbols of firms with managers who consistently achieved top overall financial performance.

Research limitations/implications

The performance data for each industry and time period have to fit the requirements of the Rasch model. In addition, it must be possible to translate continuous metric readings into binary measures without losing relevant information. Future research might explore the use of more sophisticated Rasch models, measures of non‐financial firm performance dimensions, additional industries and time periods.

Practical implications

This research offers managers, investors and regulators a fresh perspective on the evaluation of firm financial performance and managerial ability.

Social implications

Rasch models are widely used in the human sciences. Application of this methodology to firms offers a more comprehensive view of firm performance and may reveal factors relevant to firm valuation that have previously been ignored, thus possibly impacting the allocation of capital across firms and industries.

Originality/value

To the authors' knowledge, this research represents a first attempt to apply the Rasch approach to an evaluation of managerial ability as reflected in a firm's overall financial performance.

Details

Managerial Finance, vol. 39 no. 3
Type: Research Article
ISSN: 0307-4358

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