The role of the upper echelon in the value chain management

2014 ◽  
Vol 24 (3) ◽  
pp. 240-255 ◽  
Author(s):  
Arpita Agnihotri
Keyword(s):  
Value Chain ◽  
Emerging Market ◽  
Secondary Data ◽  
Top Management Teams ◽  
Top Management ◽  
Tobit Regression ◽  
Upper Echelon ◽  
Content Type ◽  
The Impact

Purpose – The purpose of this study was to analyze the impact of top management teams on firms' value chain action intensity and value chain activity heterogeneity. Design/methodology/approach – The study was conducted from an emerging market perspective. The sample was based on the secondary data collected from three fast-growing industries in India: automobile, pharmaceutical and fast-moving consumer goods over the three-year period from 2009 to 2012. The Panel Poisson and Tobit regression have been used to conduct this study. Findings – Drawing upon the upper echelon theory, the author found that a top management team's educational level, functional heterogeneity and total organizational tenure influence value chain action intensity and value chain activity heterogeneity. Originality/value – The author introduces the concept of value chain action intensity and value chain action heterogeneity and investigates the role of the upper echelon in influencing intensity and heterogeneity.

Managers ability and investment dynamics during the global financial crisis: an emerging market context

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rehana Naheed ◽  
Bushra Sarwar ◽  
Rukhsana Naheed
Keyword(s):  
Global Financial Crisis ◽  
Stock Exchange ◽  
Emerging Market ◽  
Investment Policy ◽  
Managerial Ability ◽  
Content Type ◽  
Crisis Period ◽  
Managerial Talent ◽  
The Impact

Purpose Many scholars have developed several theories and empirics to study issues related to investment policy. However, there are still some unexplored issues in the field of finance that require further analysis and investigation, particularly in the corporate governance literature such as the role of managerial talent in the firms. This study investigated the impact of managerial ability on investment decisions of the firms. Design/methodology/approach The study first uses firm efficiency and managerial ability by using data envelope analysis (DEA) proposed by Demerjian, Lev and McVay, 2012. Data is collected for the firms listed in Shenzhen and Shanghai stock exchange for an emerging market of China during the crisis period with 1,640 number of observations. Findings The study reveals that the presence of more managerial talent in a firm is significant for the strategic decisions of the firms. Findings follow a resource-based view and identify that more talented managers help the firms in the acquisition of resources specifically during financial distress. The study subdivides the firms based on: ownership structures and financial constraints. Results generated from propensity score matching imply that the role of high-talented managers is significantly different from that of low-talented managers. Originality/value The study reveals managerial ability as a determinant of investment policy. To the researchers’ best knowledge, none of the previous studies have been conducted in emerging market literature during the crisis period.

Is top-management remuneration influenced by board characteristics?

2015 ◽  
Vol 23 (1) ◽  
pp. 60-79 ◽  
Author(s):  
Sebastien Deschenes ◽  
Hamadou Boubacar ◽  
Miguel Rojas ◽  
Tania Morris
Keyword(s):  
Corporate Governance ◽  
Academic Research ◽  
Top Management Teams ◽  
Top Management ◽  
Management Compensation ◽  
Content Type ◽  
Board Characteristics ◽  
Good Corporate Governance

Purpose – The purpose of this article is to examine if certain board characteristics have an impact on the total remuneration of top management and the ratio of stock-based remuneration to total top-management remuneration. Design/methodology/approach – The study draws on data from the largest public Canadian companies, the constituents of the TSX/60 index. The study controls for firm size and profitability. Findings – The authors concludes that total remuneration of top management is directly linked to board-member total remuneration and the board average number of director-tenure years. The study also shows that the ratio of stock-based to total top-management remuneration is positively affected by the percentage of independent directors, total remuneration of board directors, the ratio of stock-based remuneration of directors to their total remuneration and the average number of tenure years of the board of directors. Practical implications – If regulators are determined to curb the excesses in top-management remuneration by means of promoting boards with certain characteristics, they should implement measures facilitating the control of directors’ remuneration and tenure, to discourage cronyistic behavior. Good corporate governance requires that the board act as a counterbalance to top management, ensuring that a substantial percentage of top-executive total compensation is variable, and not fixed. According to our findings, the boards that are the most likely to hold managerial avoidance of variable pay in check are those favoring director independence, variable director remuneration and longer director tenures. Social implications – The present article examines specifically the latter aspect, namely, the role of board characteristics (independence, size, compensation, board director ownership and tenure, etc.) in the determination of top-management compensation. This relationship is important because it allows us to further the analysis of corporate governance. If the above-mentioned traits of boards have a meaningful relationship with the compensation of the top management, one might conclude that certain practices in the composition of boards could influence good corporate governance practices. This is relevant for regulatory agencies, for investors and for corporations. Originality/value – The article adds to the extant literature in a number of ways. Firstly, it considers the role of the traits of the board in the determination of the compensation of the top-management teams, and not only of the chief executive officer, as is the focus of previous literature. Secondly, the article focuses on the power interplay between boards and managers, and, more particularly, on the ability of boards to be an effective mechanism of corporate governance. Finally, the article examines the potential impact of board traits in the determination of top-management compensation in the context of Canadian firms, a subject that has received less attention from academic research, which has mostly concentrated on analyzing the issue in the US context.

Female directors and CSR disclosure in Bangladesh: the role of family affiliation

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pallab Kumar Biswas ◽  
Helen Roberts ◽  
Rosalind Heather Whiting
Keyword(s):  
Family Firms ◽  
Emerging Market ◽  
Annual Reports ◽  
Content Type ◽  
Female Directors ◽  
Csr Disclosure ◽  
Female Director ◽  
Corporate Social ◽  
The Impact

Purpose This paper aims to investigate the impact of female director affiliations to governing families on corporate social responsibility (CSR) disclosures in the context of Bangladeshi firms. Design/methodology/approach This study uses a quantitative empirical research method grounded in Socioemotional Wealth (SEW) theory. Data was sourced from Bangladeshi publicly listed non-financial sector companies’ annual reports and stock exchange trading and publication reports and consists of 2,637 firm-year observations from 1996 to 2011. Pooled multivariate regression models are used to test the association between corporate social and environmental disclosure and female directors, and the family affiliation (or not) of those directors. Findings The findings provide strong evidence that female directors who are affiliated to the governing family, founders and other board members reduce CSR disclosure in family firms; unaffiliated female board directors enhance CSR disclosure, and this effect is significant in both family and non-family firms. Research limitations/implications Definitions of family firms and affiliated directors may lead to over-generalization in the results. Originality/value The study highlights variation in the nature of female board appointments in emerging market family-controlled firms. The findings bring attention to the role of affiliated female director appointments in family ownership structures and speak directly to family business owners, advisors and policy makers about the importance of unaffiliated female directors as catalysts of improved CSR disclosure in family and non-family firms.

A new sustainability model: engaging the entire firm

2014 ◽  
Vol 35 (2) ◽  
pp. 4-12 ◽  
Author(s):  
Wayne McPhee
Keyword(s):  
Value Chain ◽  
Business Models ◽  
Resource Constraints ◽  
Emerging Market ◽  
Firm Strategy ◽  
Chain Model ◽  
Activity Model ◽  
Content Type ◽  
Emerging Issues ◽  
The Impact

Purpose – The sustainable activity model re-envisions Porter's value chain to reflect the emerging impact of sustainability on firm strategy. The model helps to convert high level sustainability vision statements into a new set of actions that can create value from emerging issues like climate change, resource constraints, and a smaller, more connected world. Design/methodology/approach – The emergence and growth of sustainability, provides an opportunity to rethink traditional business models to better reflect current and emerging market conditions. Porter's value chain was adapted to reflect that: the value of a firm is based on more than just the profit margin and includes reputation, brand value and license to operate; sustainability can generate value by improving both internal and external engagement and collaboration; and the impact that the firm has on the outside world need to be included in firm strategy and decision making. Findings – The sustainable activity model is useful for focusing strategy on the material impacts of the firm rather than focusing on the issues that are most prevalent in the media or where managers have a particular interest. The model allows the firm to clearly set out new actions and new behaviors that change how the firm interacts with the world and how value is created. Originality/value – The sustainable activity model adapts the traditional value chain model to better fit the business issues that have emerged over the last 25 years and to prepare for a future that will continue to change at an ever increasing rate. Applying the model to strategy and business decisions will encourage new ways of thinking about value and generate new activities for creating value and enhancing the resilience of the firm against future changes as the sustainability trend continues to evolve.

Can financial inclusion reduce the presence of corruption? Evidence from selected countries in Africa

2020 ◽  
Vol 47 (11) ◽  
pp. 1345-1362
Author(s):  
Folorunsho M. Ajide
Keyword(s):  
Random Effect ◽  
Secondary Data ◽  
Threshold Level ◽  
Financial Inclusion ◽  
Least Square ◽  
African Countries ◽  
Content Type ◽  
The Impact ◽  
Control Of Corruption

PurposeThe purpose of this paper is to evaluate the impact of financial inclusion (FI) on control of corruption in selected African countries.Design/methodology/approachThe study employs secondary data spanning over a period of 2005–2016. These data are sourced from IMF's International Financial Statistics, World Bank Development Indicators, Global Financial Development Database, Transparency International and International Country Risk Guide. The author uses Sarma (2008) approach to construct the FI index for 13 countries in Africa. The author applies random effect, robust least square and instrumental variable (IV) estimations to examine the impact of FI on control of corruption in Africa.FindingsThe author finds that financial inclusion improves the control of corruption. The author tests for possible FI threshold to avoid the case of extreme FI in Africa. The results show that there is a threshold level if reached, FI would have negative impacts in the control of corruption. This may likely happen mainly due to weak institutions in Africa. The results are robust to alternative proxy for control of corruption and various alternative estimation techniques.Practical implicationsThe finding indicates that FI can serve as part of toolkits for reducing corruption in Africa.Originality/valueThis study stresses the important role of FI in the economic system. It is the first paper that empirically suggests the role of FI in controlling corruption in Africa.

Corporate entrepreneurship strategy: an analysis of top management teams in SMEs

2018 ◽  
Vol 13 (4) ◽  
pp. 528-543 ◽  
Author(s):  
Asghar Afshar Jahanshahi ◽  
Khaled Nawaser ◽  
Alexander Brem
Keyword(s):  
Cultural Intelligence ◽  
Corporate Entrepreneurship ◽  
Top Management Teams ◽  
Future Research ◽  
Top Management ◽  
Ambiguity Tolerance ◽  
The South ◽  
Content Type ◽  
East Of Iran

Purpose In order to learn more about the antecedents of strategy at the top management team’s (TMT) level, the purpose of this paper is to investigate the effects of TMT cultural intelligence on corporate entrepreneurship strategy. Then, the authors examine how TMT’s ambiguity tolerance mediates this relationship. Design/methodology/approach The authors tested the hypothesis by collecting survey data from 41 TMTs of small- and medium-sized enterprises in the south-east of Iran. Findings The survey results confirm that a high level of cultural intelligence in TMTs is conducive to corporate entrepreneurship. Furthermore, the result shows that higher levels of cultural intelligence in TMTs relate to a higher level of ambiguity tolerance, which, in turn, enhances the possibility of pursuing corporate entrepreneurship strategy by SMEs. Research limitations/implications The data for this study were obtained from 41 TMTs in the south-east of Iran, which increases the probability that the results may not be directly transferable to certain companies in Western countries. Future research might attempt to test the ideas developed in this paper across different settings and samples. Originality/value Several theoretical and empirical studies have explored possible antecedents of corporate entrepreneurship. But a few papers investigated the role of TMT dispositions on corporate entrepreneurship strategy. By addressing the prominent role of TMT psychological dispositions on corporate entrepreneurship strategy, this paper attempts to fill this gap.

scholarly journals The impact of related party transactions on firm value

2019 ◽  
Vol 17 (3) ◽  
pp. 571-588
Author(s):  
Ahmed A. Diab ◽  
Ahmed Aboud ◽  
Arafat Hamdy
Keyword(s):  
Firm Value ◽  
Design Methodology ◽  
Emerging Market ◽  
Content Type ◽  
Related Party Transactions ◽  
Intermediary Role ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

Purpose The purpose of this study is to address the impact of the related party transactions (RPTs) on firm value. The authors bring evidence from a usually ignored empirical setting: an African emerging market. Design/methodology/approach In particular, the authors focus on companies listed on the Egyptian stock market using a sample of EGX 30 from 2012 to 2017. Findings Unlike the literature, the authors find no significant relationship between RPTs and market value. Practical implications This research provides insights for policymakers and other interested parties concerning the perception of RPTs in Egypt. Originality/value The reported different findings of this study assure the intermediary role of the context and the local culture in the relationship between RPTs and firm value, in contrast to the negative view that is mostly reported in the literature.

Agency problems and the value of advertising expenditures in an emerging market: role of product market competition

2020 ◽  
Vol 46 (9) ◽  
pp. 1123-1143
Author(s):  
Omar Farooq ◽  
Zakir Pashayev
Keyword(s):  
Positive Impact ◽  
Emerging Market ◽  
Market Competition ◽  
Agency Problems ◽  
Product Market ◽  
Product Market Competition ◽  
Content Type ◽  
Financial Firms ◽  
The Impact

PurposeThis paper documents the impact of product market competition on the value of advertising expenditures.Design/methodology/approachThe authors use the data for non-financial firms from India and the pooled regression procedure to test their arguments during the period between 2009 and 2018.FindingsThe results show that advertising expenditures of firms operating in sectors with relatively high competition are more valuable than advertising expenditures of firms operating in sectors with relatively low competition. The results of the study are robust across various proxies of advertising expenditures and firm performance. Furthermore, the results also show that the positive impact of product market competition on the value of advertising expenditures is confined only to firms that already have lower agency problems.Originality/valueThe results of the study highlight the importance of product market competition on the value of advertising expenditure in the emerging market setting, where agency problems are supposed to be high.

Doing good across organizational boundaries

2018 ◽  
Vol 38 (12) ◽  
pp. 2389-2412 ◽  
Author(s):  
Hugo K.S. Lam
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Financial Risk ◽  
Theoretical Perspective ◽  
Secondary Data ◽  
Content Type ◽  
Signalling Theory ◽  
The Impact ◽  
Moderating Role

Purpose The purpose of this paper is to theoretically hypothesise and empirically test the impact of sustainable supply chain practices (SSCPs) on firms’ financial risk. Design/methodology/approach This research adopts signalling theory to explain the signalling role of SSCPs and the moderating role of the signalling environment in terms of supply chain characteristics. It collects and combines longitudinal secondary data from multiple sources to test the direct impact of SSCPs on firms’ financial risk and the moderating role of supply chain complexity and efficiency. It conducts various additional tests to check the robustness of the findings and to account for alternative explanations. Findings This research shows that SSCPs help firms reduce financial risk but do not affect their returns. Moreover, the risk reduction of SSCPs is greater for firms with more complex and efficient supply chains. The findings are robust to alternative variable measurements and analysing strategies. Research limitations/implications This research reveals the role of SSCPs in reducing financial risk, urging researchers to pay more attention to the financial risk implications of supply chain practices in general and SSCPs in particular. Practical implications This research encourages firms to engage in SSCPs to reduce financial risk and enables them to assess the urgency of their SSCPs investments in view of the complexity and efficiency of their supply chains. Originality/value This is the first research examining the impact of SSCPs on financial risk, based on longitudinal secondary data and signalling theory. The empirical evidence documented and the theoretical perspective adopted offer important implications for future practice and research on SSCPs.

The antecedents of innovation performance: the moderating role of top management team diversity

2019 ◽  
Vol 14 (2) ◽  
pp. 291-311 ◽  
Author(s):  
Peng-Yu Li ◽  
Kuo-Feng Huang
Keyword(s):  
Critical Role ◽  
Innovation Process ◽  
International Diversification ◽  
Top Management Teams ◽  
Innovation Performance ◽  
Top Management ◽  
Content Type ◽  
D Investment ◽  
Educational Diversity

PurposeThe purpose of this paper is to investigate why firms engaged in R&D investment and international diversification produce different results in innovation performance.Design/methodology/approachThis study is based on a sample of 283 Taiwanese manufacturing firms in the information technology industry.FindingsThe findings showed that in the top management teams (TMTs) with greater tenure diversity there was a stronger relationship between R&D investment and innovation performance. In addition, the TMTs with greater educational diversity enhanced the relationship between international diversification and innovation performance.Originality/valueThis study stresses the vital role of TMT diversity in resource allocation and information processing during the process of innovation. The authors examined the critical role of TMT educational diversity in bringing a wider range of network resources and the role of TMT tenure diversity in the allocation of firm-specific resources. The TMT diversity causes firms to experience different innovation results during the innovation process.

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