Growth options and relative performance evaluation

2016 ◽  
Vol 24 (1) ◽  
pp. 38-55
Author(s):  
Jianhui Huang ◽  
Ling Liu ◽  
Ingrid C. Ulstad
Keyword(s):  
Ceo Compensation ◽  
Performance Comparison ◽  
Managerial Compensation ◽  
Growth Options ◽  
Cross Sectional ◽  
Content Type ◽  
Compensation Committee ◽  
Performance Sensitivity ◽  
Non Linear ◽  
High Level

Purpose – The purpose of this study is to investigate the cross-sectional associations between growth options and the peer pay–performance sensitivity of CEO compensation. Design/methodology/approach – This study includes analytical analysis and multivariable regression analysis. Findings – It is predicted in this study that there is a non-linear concave relation between peer pay–performance sensitivity and a firm’s growth options. Results based on the executive compensation data from ExecuComp are consistent with the hypothesis presented in this study. Research limitations/implications – Future scholars need to consider the non-linear impact of growth options on peer pay–performance sensitivity when they conduct research related to CEO compensation by differentiating the company’s growth options to be at a low, medium and high level. In an industry, when a compensation committee decides on the peers for performance comparison purposes, the committee needs to make sure that the peer firms they select have similar operational environments, for example, they face similar growth options (e.g. low, medium or high) and idiosyncratic variances. Practical implications – This study contributes to the managerial compensation literature by revealing the important role growth options, as well as idiosyncratic variances, play on peer pay–performance sensitivity. The results of this study have implications for both future researchers as well as industrial practitioners. Social implications – It gives guidance on designing CEO compensation contracts. Originality/value – This is an original work from the coauthors listed on this study.

Relational asymmetry, trust, and innovation in supply chain management: a non-linear approach

2019 ◽  
Vol 30 (1) ◽  
pp. 303-328 ◽  
Author(s):  
Marek Michalski ◽  
Jose Luis Montes ◽  
Ram Narasimhan
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Institutional Environment ◽  
Least Squares Method ◽  
Cross Sectional ◽  
Chain Management ◽  
Content Type ◽  
Relationship Analysis ◽  
Novel Approach ◽  
Non Linear

PurposeThe purpose of this paper is to examine the non-linear aspects of the asymmetry-performance relationship under varying conditions of trust and innovation. Its novel approach is useful for addressing the strategic elements of supply chain management (SCM) relationships based on trust and innovation decisions.Design/methodology/approachResults are based on a study of 90 managers from small- and medium-sized firms in Spain. Instead of a classical linear relationship analysis, the authors performed a non-linear analysis, using polynomial modeling and Warp 3 partial least squares method, which provides a more nuanced view of the data and constitutes an original approach to empirical research in SCM.FindingsThis study adds a new viewpoint on SC relationships by suggesting that not all trust and innovation development leads directly to performance improvement. The principal finding is, in varying trust and innovation contexts, that the influences of asymmetry on performance have uneven characteristics and follow non-linear paths.Research limitations/implicationsThis study focuses on only one particular institutional environment in one country. The data are also cross-sectional, which makes it difficult to empirically test causality.Practical implicationsThe findings provide rational insights to managers on when it is appropriate to reduce (or not) asymmetric relationships with partners.Originality/valueTrust and innovation are important and ones of the key requirements of supply chain relationships in any environment, this study argues that the interactions of key SCM elements that drive members to better performance are more complex and non-linear.

Poverty prevalence and negative spillovers in Sub-Saharan Africa: a focus on extreme and multidimensional poverty in the region

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olumide Olaoye ◽  
Cleopatra Oluseye Ibukun ◽  
Mustafa Razzak ◽  
Naftaly Mose
Keyword(s):  
Generalized Method Of Moments ◽  
Spillover Effect ◽  
Multidimensional Poverty ◽  
Sub Saharan Africa ◽  
Cross Sectional ◽  
Spatial Error ◽  
Content Type ◽  
The Sustainable Development ◽  
Sub Saharan ◽  
High Level

PurposeThe paper analyses the prevalence of extreme and multidimensional poverty in line with the sustainable development agenda. In addition, the paper examines the drivers of extreme poverty while accounting for the potential spillover effect of poverty in the region.Design/methodology/approachThe study adopts the pooled OLS with Discroll-Kraay robust standard errors to control for cross-sectional dependence. In addition, given the strong potential for endogeneity of poverty index, the authors also employ the generalized method of moments (GMM), which accounts for simultaneity and endogeneity problems, and the spatial error and lag models to control for all forms of spatial and temporal dependence since the factors that affect poverty disperse across borders.FindingsThe study finds that in addition to the traditional drivers of poverty (unemployment, low per capita GDP growth and public debt), poverty in Sub-Saharan Africa is a symptom of a deeper structural problem (lack of access to water and sanitation, high level of corruption and low level of financial development, and frequent economic busts). Likewise, the results from the spatial econometric specification show, consistently across all the specifications, that there is a substantial spillover effect of poverty across the region.Originality/valueThe main novelty of the paper is that the authors investigate the “economic shrinkage hypothesis,” and examined the potential negative spillover effect of poverty in the region.

Career commitment and subjective career success: the moderating role of career-enhancing strategies

2020 ◽  
Vol 41 (8) ◽  
pp. 1287-1305
Author(s):  
Emre Burak Ekmekcioglu ◽  
Mahmure Yelda Erdogan ◽  
Alptekin Sokmen
Keyword(s):  
Career Success ◽  
Career Commitment ◽  
Full Time ◽  
Cross Sectional ◽  
Content Type ◽  
Subjective Career Success ◽  
High Level ◽  
The Relationship ◽  
Moderating Role

PurposeThe purpose of this study is to test the moderating role of career-enhancing strategies (CESs) in the relationship between career commitment (CC) and subjective career success (CS).Design/methodology/approachData were collected from 217 full-time employees working for three different sectors in Ankara, Turkey. The participants were asked to respond to a self-reported survey. The hypotheses were tested using a hierarchical regression analysis.FindingsThe results indicated that CC had a significant and positive effect on subjective CS. Furthermore, the positive relationship between CC and subjective CS was stronger for employees with a high level of self-nomination and for employees with a high level of networking. However, creating career opportunities did not moderate the effects of CC on subjective CS.Research limitations/implicationsBecause this study had a cross-sectional research design, causality cannot be established among the study variables.Practical implicationsThe findings suggest a better understanding of the way CC is able to affect subjective CS through the networking and self-nomination CESs.Originality/valueThis study is original, in that no previous studies have investigated the moderating role of CESs in the relationship between CC and subjective CS.

The profitability of herding: evidence from Taiwan

2018 ◽  
Vol 44 (7) ◽  
pp. 919-934 ◽  
Author(s):  
Chun-Da Chen ◽  
Riza Demirer
Keyword(s):  
Design Methodology ◽  
State Space Model ◽  
Investment Strategy ◽  
Investment Strategies ◽  
Past Performance ◽  
Absolute Deviation ◽  
Cross Sectional ◽  
Content Type ◽  
Space Model ◽  
High Level

Purpose The purpose of this paper is to show that the level of herding in an industry can be the basis for a profitable investment strategy. Design/methodology/approach The authors apply three different herding measures in the paper, including cross-sectional standard deviation, cross-sectional absolute deviation and non-linear model – state–space model. Findings The authors find that industries that experience a high level of herding yield higher subsequent returns regardless of their past performance. Consequently, the authors show that a herding-based investment strategy generates significant profits, even after adjusting for risk. The findings also show that the herding effect when combined with past performance as part of a conditional investment strategy yields significant profits regardless of the formation and holding periods. The findings suggest that the level of herding could serve as a systematic driver of returns and could be exploited for profitable investment strategies. Originality/value To the best of authors’ knowledge, this is the first study in the literature to show that herding by itself can serve as a determinant of returns regardless of past performance.

Executive options with inflated equity prices

2014 ◽  
Vol 10 (3) ◽  
pp. 266-292 ◽  
Author(s):  
Linus Wilson ◽  
Yan Wendy Wu
Keyword(s):  
Boards Of Directors ◽  
Stock Price ◽  
Design Methodology ◽  
Ceo Compensation ◽  
Managerial Compensation ◽  
Equity Prices ◽  
Content Type ◽  
Closed Form Solutions ◽  
Compensation Package ◽  
Applied Game Theory

Purpose – The purpose of this paper is to solve the optimal managerial compensation problem when shareholders are either naïvely optimistic or rational. Design/methodology/approach – The paper uses applied game theory to derive the optimal CEO compensation package with over optimistic shareholders. Findings – The results suggest that boards of directors should decrease option grants to CEOs when equity is likely to be irrationally overvalued at the date when the CEO's options vest. Research limitations/implications – The implications of the model are consistent with the available empirical evidence. In addition, the model generates new testable predictions about managerial stock price manipulation, the number of options granted, and the magnitude of the options’ strike prices that have not yet been formally tested. Originality/value – This is the only paper to derive closed-form solutions to optimal CEO compensation when shareholders are naïvely optimistic.

The impact of knowledge and motivation management on creativity

2017 ◽  
Vol 39 (5) ◽  
pp. 732-752 ◽  
Author(s):  
Lucía Muñoz-Pascual ◽  
Jesús Galende
Keyword(s):  
Employee Behavior ◽  
Employee Creativity ◽  
Cross Sectional ◽  
Content Type ◽  
Joint Influence ◽  
Long Term Impact ◽  
High Level ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to analyze the influence that two variables related to human resources (HR) have on employee creativity – namely, knowledge management (KM) and motivation management (MM). Design/methodology/approach The linear regression analyses are based on a sample of 306 employees from 11 Spanish companies belonging to three innovative clusters. In addition, “creativity” is considered an antecedent of technological innovation. Findings KM and intrinsic MM are shown to inform creativity, whereas extrinsic MM has no such effect. Practical implications Although this study is based on cross-sectional data, the findings might induce researchers to investigate the effects of other HR variables, such as the types of relations between employees and their long-term impact on creativity. Management should encourage KM and intrinsic MM across employees, as the results indicate that tacit KM, explicit KM and intrinsic MM encourage a positive attitude toward creativity among employees. Originality/value The main contribution is new empirical evidence on the joint influence of aptitudes (KM) and attitudes (MM) on employee creativity. In addition, the study includes a key measure of employee creativity. The evidence reveals the types of KM and MM that encourage or inhibit creative employee behavior. The results show that once employees have reached a medium-high level of extrinsic MM, creativity will be affected solely by intrinsic MM.

Managerial discretion, say on pay, and CEO compensation

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
J. Samuel Baixauli-Soler ◽  
Gabriel Lozano-Reina ◽  
Gregorio Sánchez-Marín
Keyword(s):  
Executive Compensation ◽  
Ceo Compensation ◽  
Managerial Discretion ◽  
Governance Mechanism ◽  
Global Effect ◽  
Content Type ◽  
Say On Pay ◽  
Negative Effect ◽  
High Level ◽  
The Impact

PurposeThe purpose of this paper is to analyze the influence of managerial discretion on the effectiveness of say on pay (SOP) as a governance mechanism. This goal covers an important gap since the issue of how effective SOP is in promoting more aligned compensation has proved somewhat controversial.Design/methodology/approachThis empirical research opted for a panel methodology for the period 2003–2017, using a sample of large UK listed-companies (specifically, 3,445 firm-year observations). Data were obtained from several sources (Manifest Ltd, BoardEx, Worldscope, Factset Ownership and DataStream).FindingsResults show that managerial discretion plays an important role in the effectiveness of SOP as a mechanism for increasing aligned CEO compensation. While individual discretion (latitude of objectives) exerts a negative effect, contextual discretion (latitude of action) increases SOP effectiveness. The global effect of managerial discretion is positive when there is high level of both individual and contextual discretion.Originality/valueThis empirical study provides evidence concerning an emerging topic in the literature regarding the impact of SOP as a shareholder activism mechanism of corporate governance on executive compensation. By taking managerial discretion into consideration as a relevant moderating factor, it also offers a better explanation of SOP effectiveness as a governance mechanism.

An empirical investigation on lean production system framework in the Indian manufacturing industry

2019 ◽  
Vol 26 (1) ◽  
pp. 296-316 ◽  
Author(s):  
Naga Vamsi Krishna Jasti ◽  
Rambabu Kodali
Keyword(s):  
Production System ◽  
Manufacturing Industry ◽  
Empirical Investigation ◽  
Lean Production ◽  
Cross Sectional Study ◽  
Cross Sectional ◽  
Content Type ◽  
Lean Principles ◽  
Empirical Survey ◽  
High Level

PurposeThe purpose of this paper is to verify the applicability of proposed lean production system (LPS) framework in the Indian manufacturing industry.Design/methodology/approachThe authors conducted a cross-sectional study to collect responses from five major sectors, namely, automobile, process, machines and equipment, electronics and components and textile. They collected 200 responses to perform empirical validation from Indian manufacturing industry. They performed reliability analysis on the proposed framework of LPS in the Indian manufacturing industry.FindingsThe findings revealed that all the elements and sub-elements have a high value in reliability. Subsequently, the study performed principles component analysis on LPS framework. The empirical investigation revealed that the proposed LPS framework has a high level of reliability as well as validity in the Indian manufacturing industry. Hence, the study concluded that the LPS framework is helpful to implement lean principles in a structured manner in any Indian manufacturing industry to achieve excellence in organizational functions.Originality/valueThe authors conducted an empirical survey to verify the applicability of the proposed LPS framework in the Indian manufacturing industry. They observed that many researchers proposed various LPS frameworks, but none of the researchers focused on verifying the proposed frameworks. To overcome, the same limitations, the study verified the proposed framework with the larger sample size.

Do sustainability practices buffer the impact of self-efficacy on organisational citizenship behaviour?

2020 ◽  
Vol 12 (4) ◽  
pp. 509-528
Author(s):  
Rabindra Kumar Pradhan ◽  
Lalatendu Kesari Jena ◽  
Nrusingh Prasad Panigrahy
Keyword(s):  
Self Efficacy ◽  
Feedback Mechanism ◽  
Full Time ◽  
Cross Sectional ◽  
Public And Private ◽  
Content Type ◽  
Moderation Effect ◽  
Sustainability Practices ◽  
High Level ◽  
The Impact

Purpose Sustainability is seeking for a new approach to bolster organisational success as it is expected to be mobilised through collaborative efforts of employees and management. The present study aims to examine the moderating role of sustainability practices between self-efficacy and organisational citizenship behaviour (OCB). Design/methodology/approach A total of 527 full-time executives employed in Indian public and private manufacturing industries were surveyed. Harman’s single-factor test was carried out using analysis of moment structures (AMOS 20.0) to test the bias associated because of common method variance (CMV). Moderated regression analysis was used through hierarchical models to test the proposed hypotheses. Findings The results indicate a positive relationship between self-efficacy and OCB. The significant moderation effect was observed in the interaction graph, as the simple slope analysis indicated relatively high level of sustainability practices and self-efficacy and they were found to be positively associated with OCB. Research limitations/implications The cross-sectional sample of executives employed in Indian manufacturing organisations limits the generalisation of the findings. The study has not figured the temporal effects and hence longitudinal studies have also been proposed for the assessment of causality. Practical implications Organisations are expected to foster inclusiveness and open channel of communication with their employees to execute best sustainable practices. HR department need to create awareness among their employees and establish an ongoing feedback mechanism to promote such psychological drives. Originality/value The proposed model and the subsequent findings of the study extend the literature on the relationship among self-efficacy, OCB and sustainability practices. The outcome of this work can be used by HR functionaries and senior management practitioners while formulating and implementing the sustainability strategies.

Entrepreneurial competencies, entrepreneurial orientation, entrepreneurial network, government business support and SMEs performance. The moderating role of the external environment

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Buba Musa Pulka ◽  
Azahari Ramli ◽  
Armanurah Mohamad
Keyword(s):  
Entrepreneurial Orientation ◽  
External Environment ◽  
Survey Method ◽  
Cross Sectional ◽  
Content Type ◽  
Business Support ◽  
Entrepreneurial Competencies ◽  
Multistage Sampling ◽  
High Level ◽  
The Relationship

PurposeThe purpose of this study is to examine the moderating influence of the external environment on the relationship between entrepreneurial competencies, entrepreneurial orientation, entrepreneurial network, government business support and SMEs performance. The objectives of the study are achieved using the resource-based view and dynamic capability theory.Design/methodology/approachThe survey method of research was used by personally administering questionnaires to the respondents. Multistage sampling techniques are used in selecting 470 SMEs owners/managers that participated in the survey. SPSS 24 and PLS-SEM 3.0 were used in the analysis of the data.FindingsIn the Nigerian context, the findings indicated that EC, EO and GBS directly influence the SMEs performance. Surprisingly, SMEs performance is not influenced by EN. Similarly, EE significantly moderated the relationship between EC, GBS and SMEs performance. On the contrary, EE does not have any moderating influence on the relationship between EO, EN and SMEs performance.Research limitations/implicationsThe study is limited to northeastern Nigeria. The study is limited to the EC, EO, EN GBS EE and SMEs performance and the use of cross-sectional data. The findings imply that SMEs owners/managers need a high level of entrepreneurial competencies and government business support to achieve a better performance especially in an external environment that is characterised by dynamism, diversity, complexity and hostility. Hence, providing support for both RBV and DCT.Practical implicationsThus, the study offers additional empirical evidence from Nigeria and also expands knowledge and understanding in this field. The findings offer owners/managers, government agencies, financial institutions and other stakeholders of SMEs strategies EC, EO, GBS and EE to achieve a better SMEs performance.Originality/valueThe conceptual framework of the study is unique, and the study was conducted in northeastern Nigeria which is grossly underrepresented in the literature. It also provided understanding on the moderating influence of EE on the framework.

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