Virtual vs physical platform: organizational capacity and slack, strategic decision and firm performance

2020 ◽  
Vol 35 (12) ◽  
pp. 1983-1995 ◽  
Author(s):  
Hang Lee ◽  
Yung-Chang Hsiao ◽  
Chung-Jen Chen ◽  
Ruey-Shan Guo
Keyword(s):  
Firm Performance ◽  
Empirical Support ◽  
Organizational Capacity ◽  
Strategic Choice ◽  
Retail Industry ◽  
Content Type ◽  
Using Data ◽  
Virtual Platform ◽  
The Relationship ◽  
Better Than

Purpose This study aims to examine the relationship between organizational capacity, slack resource, platform strategic choice and firm performance. It also tackles the endogenous issues regarding the strategic choice of platform types. Design/methodology/approach This study uses Heckman’s two-stage procedures to examine the relationship between the variables. The sample in this study comes from Compustat annual company and segment files. The sample used in the main analysis consists of 252 individual corporations globally and 3,528 firm-year observations from 2004–2017. Findings The empirical results suggest that: (1) firms are more likely to develop physical platforms than virtual platforms when they possess higher levels of available slack, potential slack, research and development (R&D) capacity and marketing capacity; (2) in general, firms developing physical platforms perform better than firms developing virtual platforms after the endogeneity bias are controlled; and (3) firms that choose to develop physical platforms perform better than if they had chosen to develop virtual platforms. Research limitations/implications This study contributes to the platform research literature by proposing the endogenous role of platform type choice in firm performance in the context of the retail industry. Prior conceptual and theoretical platform studies have seldom focused on the retail industry through a strategic choice perspective. Furthermore, one of the contributions of this study is the derivation of empirical support for the research’s prediction using data from actual firms carried out by global physical and virtual platform companies. This study also presents many opportunities for further explorations on the relationship between firm strategic choice and firm performance in the context of platform retail industry. Practical implications The findings of this study suggest that firms must realize that their performance is not necessarily affected by these platform type choice determinants in terms of potential slack, available slack, R&D capacity and marketing capacity. By contrast, they should pay more attention to developing physical platforms if it is possible. The study findings indicate that although virtual platforms have grown rapidly because of the development of technology, firm performance is at all times superior when firms choose to develop physical platforms. Originality/value Prior platform studies have focused on the topic of network structure, platform architecture, pricing strategy, platform leadership and platform design and governance within the context of video game industry, software industry, hardware industry and telecommunications industry. Seldom of them focus on other industries through a strategic choice perspective. Furthermore, one of the contributions of this study is the derivation of empirical support for the research’s prediction using data from actual firms carried out by global physical and virtual platform companies.

Servitization and digitalization in manufacturing: the influence on firm performance

2019 ◽  
Vol 35 (3) ◽  
pp. 564-574 ◽  
Author(s):  
María-Luz Martín-Peña ◽  
José-María Sánchez-López ◽  
Eloísa Díaz-Garrido
Keyword(s):  
Firm Performance ◽  
Business Strategy ◽  
Mediating Effect ◽  
Linear Regression Models ◽  
Analysis Model ◽  
Industrial Firms ◽  
Content Type ◽  
Emerging Trends ◽  
Using Data ◽  
The Relationship

Purpose This paper aims to present a comprehensive framework that integrates the emerging trends of servitization and digitalization in manufacturing. The influence between digitalization and servitization is defined and quantified. Their contribution to firm performance is analyzed. Design/methodology/approach This paper presents a theoretical model that captures the relationships between the analyzed variables. Drawing on the Spanish Business Strategy Survey, hypothesis testing is conducted using data on 828 Spanish industrial firms. Linear regression models are built to capture the effect of each variable on firm performance and the type of interaction between the variables. Findings Servitization and digitalization are positively related to firm performance. Digitalization positively mediates the relationship between servitization and firm performance. The mediating effect of digitalization contributes to differentiating between the direct and indirect effects of servitization on firm performance. Practical implications The paper provides a useful analysis framework for firms to evaluate servitization and digitalization as success strategies. It is proposed that firms must simultaneously commit to digital transformation and the incorporation of services to create value, especially in business-to-business settings. Servitization and digitalization interact to exert a greater influence on performance. Originality/value The paper contributes to the theory on service strategy by providing an analysis model that includes digitalization as a mediator of the relationship between servitization and firm performance. Digitalization may provide a mechanism to unlock the benefits of servitization and thereby enhance firm performance.

Post M&A innovation in family firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdul-Basit Issah
Keyword(s):  
Design Methodology ◽  
Family Firms ◽  
Empirical Support ◽  
Data Set ◽  
Resource Based View ◽  
Content Type ◽  
External Resources ◽  
Merger Wave ◽  
The Relationship ◽  
Better Than

PurposeThe paper empirically investigates how family firms appropriate acquired resources to become more innovative in the context of merger waves. It draws on resource-based view and the theory of first mover (dis)advantages to examine the implications of the timing of acquisitions on innovation in family firms.Design/methodology/approachThe paper uses a panel data set of Standard & Poor's (S&P) 500 manufacturing firms followed over a period of 31 years.FindingsThe study finds empirical support for the predictions that family firms are more able to utilize acquired resources better than nonfamily firms. Furthermore, targets acquired during the upswing of a merger wave are more valuable to family firms and associated with more innovation than for nonfamily firms.Originality/valueThe paper establishes that resources acquired during the upswing of a merger wave are more valuable, provide better resource synergies and impact innovation positively in family firms than nonfamily firms. Second, the paper makes an empirical contribution that family firms absorb external resources markedly differently and more efficiently than nonfamily firms. Third, the paper enhances a better understanding of the influence of family ownership on the relationship between acquisitions and innovation outputs.

Integrative capability, business model innovation and performance

2019 ◽  
Vol 22 (3) ◽  
pp. 541-561 ◽  
Author(s):  
Changwei Pang ◽  
Qiong Wang ◽  
Yuan Li ◽  
Guang Duan
Keyword(s):  
Firm Performance ◽  
Business Model ◽  
Business Strategy ◽  
Business Model Innovation ◽  
Mediating Effect ◽  
Business Strategies ◽  
Cross Sectional ◽  
Content Type ◽  
Using Data ◽  
The Relationship

Purpose The purpose of this paper is to examine how business model innovation (BMI) mediates the relationship between integrative capability, business strategy and firm performance. Design/methodology/approach A literature review provides the model and hypotheses. Using a sample of 165 Chinese firms, the authors conduct the examination using a theoretical model and hypotheses following standard analysis methods. Findings The results show that BMI positively mediates the relationship between integrative capability and firm performance. Moreover, a differentiation strategy positively moderates the link between BMI and firm performance, while a cost leadership strategy presents a significantly negative moderating effect. Research limitations/implications First, the authors test the hypotheses using data from China; thus data from other emerging economies should be tested. Second, the authors use cross-sectional data in this study making it impossible to verify the dynamic developed in the process of BMI; a longitudinal study could provide a more comprehensive understanding. Third, the authors consider one intermediate mechanism to test the relationship of integrative capability and firm performance; additional factors may link integrative capability and firm performance. Practical implications The mediating effect of BMI suggests managers should pay more attention to BMI to improve firm performance, and they should understand that BMI’s role varies across different business strategies. Originality/value The paper is original in its investigation of the effect of integrative capability and BMI on firm performance using data from China and demonstrates the mediating effect of BMI on the relationship between integrative capability and firm performance.

Environmental proactivity and firm performance: a fuzzy-set analysis

2015 ◽  
Vol 53 (3) ◽  
pp. 648-667 ◽  
Author(s):  
Kaja Primc ◽  
Tomaž Čater
Keyword(s):  
Comparative Analysis ◽  
Firm Performance ◽  
Fuzzy Set ◽  
Qualitative Comparative Analysis ◽  
Past Research ◽  
Content Type ◽  
High Performing ◽  
New Perspective ◽  
Using Data ◽  
The Relationship

Purpose – The purpose of this paper is to explore causal complexity in the relationship between environmental proactivity and firm performance. Using data collected from 27 Australian firms and controlling for the organizational life cycle, type of industry and external contingencies, the study empirically examines environmental proactivity in high-performing firms from polluting industries. Design/methodology/approach – The data were analyzed using fuzzy-set qualitative comparative analysis. Findings – In general, the results of the analysis imply that environmental proactivity is not always associated with high firm performance, and that environmental proactivity is not as important as the other causal conditions for high-performing firms in highly polluting industries. Research limitations/implications – The study addresses the relationship between environmental and firm performance more holistically by including a number of the firm’s external and internal factors identified as important in past research. Second, it offers a new perspective on the relationship with its systematic comparative analysis of complex cases. Next, it identifies different combinations of conditions (paths) leading to a high firm performance and, finally, the core complementary model allows an exploration of which factors are essential and which are less important or even irrelevant to high-performing firms. Practical implications – Based on the findings, firms from highly polluting industries can determine in which circumstances, if any, the adoption of environmental proactivity will result in a positive firm performance. Originality/value – The study is valuable because it contains a rich set of measures of the firm’s external and internal environment, thus allowing a more holistic examination of the relationship between environmental proactivity and firm performance.

Intra- and inter-regional expansion: a nonlinear model

2019 ◽  
Vol 57 (7) ◽  
pp. 1554-1566
Author(s):  
Hua Zhang ◽  
Gongming Qian ◽  
Lee Li ◽  
Zhengming Qian
Keyword(s):  
Firm Performance ◽  
Design Methodology ◽  
Secondary Data ◽  
Current Debate ◽  
Content Type ◽  
Managerial Implications ◽  
Using Data ◽  
Regional Diversification ◽  
The Relationship ◽  
Shed Light

Purpose The purpose of this paper is to differentiate between intra- and inter-regional diversification and explore how each affects firm performance. Existing studies show that both intra- and inter-regional expansion provide benefits and incur costs but the findings are mixed. This study aims to explain the mixed findings. Design/methodology/approach This study uses secondary data and quantitative methodologies to test hypotheses. Findings Using data from 663 Canadian firms over a six-year period (2006–2011), the authors find that the relationship between firm performance and the depth and width of intra-regional expansion is nonlinear. The authors also find a sigmoid-shaped relationship between firm performance and inter-regional diversification, i.e., performance initially increases with home regional diversification, decreases with bi-regional diversification and finally increases again with multi-regional diversification. Originality/value The findings of this study shed light on the current debate on the merits of inter- and intra-regional diversification and have important theoretical and managerial implications.

Does supply chain finance improve SMEs performance? The moderating role of trade digitization

2018 ◽  
Vol 26 (1) ◽  
pp. 150-167 ◽  
Author(s):  
Zulqurnain Ali ◽  
Bi Gongbing ◽  
Aqsa Mehreen
Keyword(s):  
Supply Chain ◽  
Firm Performance ◽  
Small And Medium Enterprises ◽  
Risk Mitigation ◽  
Content Type ◽  
Supply Chain Finance ◽  
Using Data ◽  
Medium Enterprises ◽  
The Relationship

Purpose A growing need for financing in small and medium enterprises (SMEs) has become a significant obstacle to the development of firms. To remove this barrier, the purpose of this paper is to examine how supply chain finance (SCF) assists the firms to improve their performance by utilizing the resource-based view (RBV). Furthermore, the present study also pursues to test the effect of trade digitization as a moderating variable in the relationship between SC finance and the firm performance. Design/methodology/approach Using data from the textile sector, the authors run confirmatory factor analysis in AMOS 24 and hierarchical linear regression model in SPSS 23 to measure the proposed model and hypotheses, respectively. Findings The study suggests that SCF significantly improves the SMEs performance. Moreover, trade digitization strengthens the relationship between SCF and SMEs performance. Thus, the current study significantly describes the firm RBV through SCF and trade digitization to predict the SMEs performance. Practical implications SMEs entrepreneurs or executives can optimize the working capital through SCF and enhance the visibility of transactions through digitization for improving SMEs performance. Moreover, SCF protects the SMEs due to its nature of risk mitigation strategy. Originality/value This study covered the unexplored gap in the previous literature of supply chain management by establishing the relationship between SCF and the firm performance empirically while identifying the role of trade digitization as moderating variable in the context of textile SMEs by employing RBV theory.

Does investment in innovation impact firm performance in emerging economies? An empirical investigation of the Indian food and agricultural manufacturing industry

2021 ◽  
Vol 13 (2) ◽  
pp. 233-248
Author(s):  
Manogna R.L. ◽  
Aswini Kumar Mishra
Keyword(s):  
Firm Performance ◽  
Manufacturing Industry ◽  
Emerging Market ◽  
Developed Countries ◽  
Emerging Economy ◽  
Content Type ◽  
Agricultural Industry ◽  
Indian Food ◽  
The Impact ◽  
The Relationship

Purpose The study aims to analyze the impact of Research & Development (R&D) intensity on the firm’s performance, measured by growth of sales in the emerging market like India. Innovation strategy and its outcomes for firms may be different in developing countries as compared to developed countries. Thus, a study that focuses on the emerging economy like India, with a majority of the population dependent on agriculture, is of prime importance to the firm performance in the food and agricultural manufacturing industry. For this study, the broader focus will be on one widely recognised factor which may influence the growth rate of firms, i.e. investment in innovations which is in terms of R&D expenditure. Design/methodology/approach The paper investigates the relationship between the R&D efforts and growth of firms in the Indian food and agricultural manufacturing industry during 2001–2019. To empirically test the relationship between firm’s growth (FG) and R&D investments, system generalised method of moments technique has been used, hence enabling to avoid problems related to endogeneity and simultaneity. Findings The findings reveal that investments in innovations have a positive effect on the growth of firms in the Indian food and agricultural manufacturing industry. Investment in R&D also enables the firms to reap benefits from externalities present in the industry. Further analysis reveals that younger firms grow faster when they invest in R&D. More specifically, this paper finds evidence in the case of the food and agricultural industry that import of raw materials negatively affects the FG and export intensity positively affects the growth in the case of R&D firms. Research limitations/implications This study suggests that the government should encourage the industries to invest optimally in R&D projects by providing favourable fiscal treatments and R&D subsidies which are observed to have positive effects in various developed countries. Originality/value To the best of the author’s knowledge, the current paper is the first to analyse the impact of innovation in food and agricultural industry on firm’s performance in an emerging economy context with the latest data. This paper agrees that a government initiative to increase private R&D expenditure would have favourable effects on FG as growing investments in R&D lead to further growth of the firms.

Strategic orientations, firm performance and the moderating effect of absorptive capacity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Manuel-Alejandro Ibarra-Cisneros ◽  
María del Rosario Demuner-Flores ◽  
Felipe Hernández-Perlines
Keyword(s):  
Firm Performance ◽  
Market Orientation ◽  
Absorptive Capacity ◽  
Entrepreneurial Orientation ◽  
Manufacturing Firms ◽  
Moderating Effect ◽  
Equation Modeling ◽  
Content Type ◽  
Strategic Orientations ◽  
The Relationship

PurposeThe purpose of this article is to study the moderating effect of absorptive capacity, defined as the set of organizational routines and processes through which companies acquire, assimilate, transform and exploit knowledge to produce a dynamic organizational capacity (Zahra and George, 2002), in three strategic orientations: market orientation; technology orientation and entrepreneurial orientation and their positive relationship in the performance of the medium and large Mexican manufacturing firms. Likewise, it is determined whether these three combined SOs influence firm performance.Design/methodology/approachThe data was collected from 171 medium and large-sized Mexican manufacturing firms. The proposed hypotheses are tested using partial least square structural equation modeling (PLS-SEM).FindingsDespite the importance of knowledge for the development of firms, the results indicate that the moderating effect of absorptive capacity is only present in the relationship between entrepreneurial orientation and firm performance. That is, firms cannot take advantage of knowledge simultaneously between the three strategic orientations. For their part, market orientation and entrepreneurial orientation exert a positive influence on firm performance.Practical implicationsThe main practical implication for the manufacturing industry is that they must develop mechanisms to detect what kind of knowledge affects each strategic orientation, in this way it can make the absorptive capacity influence the relationships between SO and FP.Originality/valueThe main contribution consists of studying the moderating effect of the absorptive capacity on the relationship between three strategic orientations and firm performance, and not concentrating solely on the simultaneous use of these strategies as is commonly done.

The relationship of individual spirituality and organizational spirituality with meaning and community at work

2017 ◽  
Vol 38 (7) ◽  
pp. 986-1003 ◽  
Author(s):  
Badrinarayan Shankar Pawar
Keyword(s):  
Empirical Support ◽  
Workplace Spirituality ◽  
Moderating Effect ◽  
Direct Effects ◽  
Empirical Examination ◽  
Content Type ◽  
Individual Spirituality ◽  
Effect Model ◽  
Organizational Spirituality ◽  
The Relationship

Purpose The purpose of this paper is to carry out an empirical examination to assess the nature of effects an employee’s individual spirituality and organizational spirituality have on the employee’s experience of meaning in work and community at work facets of workplace spirituality. Design/methodology/approach This paper specifies and examines, using a cross-sectional survey research design, the empirical support for two alternative models – a direct effects model and a moderating effect model – of the likely influences of an employee’s individual spirituality and organizational spirituality on the meaning and community facets of workplace spirituality. Findings The findings indicate considerable support for the direct effects model but no support for the moderating effect model. Within the direct effects model, organizational spirituality had much stronger association than employees’ individual spirituality with the workplace spirituality facets of meaning and community. Research limitations/implications This study may encourage future research to examine other antecedents of workplace spirituality, and the moderators and mediators of the relationship between organizational spirituality and workplace spirituality. Practical implications It suggests to the practitioners that for enhancing employee experiences of workplace spirituality, organizational spirituality implementation is a more effective way than developing employees’ individual spirituality. Social implications The study indicates that employees’ spiritual needs of meaning and community at work can be better fulfilled through organizational spirituality implementation than through individual spirituality development. Originality/value This is an original empirical examination and its value partly comes from its research implications and practice implications.

Intellectual capital in Ugandan service firms as mediator of board governance and firm performance

2014 ◽  
Vol 5 (3) ◽  
pp. 300-340 ◽  
Author(s):  
Stephen Korutaro Nkundabanyanga ◽  
Joseph M. Ntayi ◽  
Augustine Ahiauzu ◽  
Samuel K. Sejjaaka
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Predictor Variable ◽  
Mediating Effect ◽  
Board Governance ◽  
Content Type ◽  
Firm Financial Performance ◽  
Starting Point ◽  
The Relationship

Purpose – The purpose of this paper is to examine the mediating effect of intellectual capital on the relationship between board governance and perceived firm financial performance. Design/methodology/approach – This study was cross-sectional. Analyses were by SPSS and Analysis of Moment Structure on a sample of 128 firms. Findings – The mediated model provides support for the hypothesis that intellectual capital mediates the relationship between board governance and perceived firm performance. while the direct relationship between board governance and firm financial performance without the mediation effect of intellectual capital was found to be significant, this relationship becomes insignificant when mediation of intellectual capital is allowed. Thus, the entire effect does not only go through the main hypothesised predictor variable (board governance) but majorly also, through intellectual capital. Accordingly, the connection between board governance and firm financial performance is very much weakened by the presence of intellectual capital in the model – confirming that the presence of intellectual capital significantly acts as a conduit in the association between board governance and firm financial performance. Overall, 36 per cent of the variance in perceived firm performance is explained. the error variance being 64 per cent of perceived firm performance itself. Research limitations/implications – The authors surveyed directors or managers of firms and although the influence of common methods variance was minimal, the non-existence of common methods bias could not be guaranteed. Although the constructs have been defined as precisely as possible by drawing upon relevant literature and theory, the measurements used may not perfectly represent all the dimensions. For example board governance concept (used here as a behavioural concept) is very much in its infancy just as intellectual capital is. Similarly the authors have employed perceived firm financial performance as proxy for firm financial performance. The implication is that the constructs used/developed can realistically only be proxies for an underlying latent phenomenon that itself is not fully measureable. Practical implications – In considering the behavioural constructs of the board, a new integrative framework for board effectiveness is much needed as a starting point, followed by examining intellectual capital in firms whose mediating effect should formally be accounted for in the board governance – financial performance equation. Originality/value – Results add to the conceptual improvement in board governance studies and lend considerable support for the behavioural perspective in the study of boards and their firm performance improvement potential. Using qualitative factors for intellectual capital to predict the perceived firm financial performance, this study offers a unique dimension in understanding the causes of poor financial performance. It is always a sign of a maturing discipline (like corporate governance) to examine the role of a third variable in the relationship so as to make meaningful conclusions.

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