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.

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.

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.

Business strategy and tax aggressiveness in Brazil

2019 ◽  
Vol 12 (4) ◽  
pp. 522-535
Author(s):  
Antonio Lopo Martinez ◽  
Bruno Afonso Ferreira
Keyword(s):  
Business Strategy ◽  
Stock Exchange ◽  
Content Type ◽  
Tax Aggressiveness ◽  
Strategy Type ◽  
Clear Result ◽  
The Usa ◽  
Reactor Types ◽  
Using Data ◽  
The Relationship

Purpose The purpose of this paper is to analyse the relationships between company business strategy type and tax aggressiveness for companies listed on the Brazilian Bovespa stock exchange. Design/methodology/approach Following the concepts of Miles and Snow (1978, 2003), we classified company strategies into four types, analyser, defender, prospector and reactor, using data from 2012 to 2016. The authors excluded financial companies due to a differential tax regime. Next, prospector and defender companies were identified, and the relationship of these strategies with tax aggressiveness assessed using regression analysis; analyser and reactor types were not included as these are defined as a combination of the prospector and defender type, or non-strategic, respectively. To assess aggressiveness, the authors used effective tax rates on corporate profits, as well as a metric that captures tax burden in terms of all taxes paid by a company. Findings Most Brazilian companies were analysers (76.66 per cent), with prospector companies being a minority, and defenders representing a little over 21 per cent. Unlike the findings of Higgins et al. (2015), the authors found that defender companies also have a tendency to practice aggressive tax planning. Practical implications The authors found the Brazilian defender companies similar to prospectors, tended to be more tax aggressive or to take higher tax risks. Thus, findings in economies such as the USA may not be generalizable to other countries, such as Brazil, Russia, India or China (i.e. the BRICs), for example. The particularities of each country, such as ease of access to the capital market, tax deductibility of investment in research and development and legal issues must be considered before applying generalized prognostics. Originality/value This paper offers original empirical evidence from Brazil of the relationship between company strategy type and the tax aggressiveness, offering a clear result that differs in part from results from American companies. It therefore encourages further studies on this topic.

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.

Empirical analysis of integration practices among agribusiness firms

2019 ◽  
Vol 25 (7) ◽  
pp. 1696-1715
Author(s):  
Michael Kwamega ◽  
Dongmei Li ◽  
Eugene Abrokwah
Keyword(s):  
Supply Chain ◽  
Structural Equation ◽  
Direct Interaction ◽  
Mediating Effect ◽  
Data Set ◽  
Content Type ◽  
Internal Customer ◽  
Using Data ◽  
The Relationship ◽  
Positive Effect

Purpose The purpose of this paper is to investigate the mediating effect of information sharing (IS) on the link between supply chain integration (SCI) practices (internal, customer and supplier) and internal process performance (IPP) by using selected agribusiness firms from an emerging economy, Ghana. Design/methodology/approach To determine the effect of IS on the nexus between SCI practices and IPP, a research framework was developed and tested using data amassed from 156 agribusiness firms for the study. The data set was assessed and hypotheses were tested using structural equation modelling. Findings The outcomes revealed that both INI and CI positively and significantly influenced IS. However, the results disclosed that SI has no significant positive effect on IS among the Ghanaian agribusiness firms. The findings of the study further discovered that IS fully mediates the relationship between INI, CI and IPP, whereas SI has a direct interaction with IPP. Originality/value This study contributes to the existing supply chain management research by empirically authenticating IS as the mediator between SCI practices and IPP. From the viewpoint of a developing economy, this paper identifies the significant connection that exists between SCI practices, IS and IPP. The outcomes recommend that IS is a core driving facilitator to reinforce the correlation between SCI practices and IPP.

Assessing the mediating effect of sustainable competitive advantage on the relationship between organisational innovativeness and firm performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vural Çağlıyan ◽  
Melis Attar ◽  
Aleem Abdul-Kareem
Keyword(s):  
Firm Performance ◽  
Competitive Advantage ◽  
Customer Value ◽  
Business Performance ◽  
Mediating Effect ◽  
Survey Method ◽  
Sustainable Competitive Advantage ◽  
Content Type ◽  
Theoretical Contribution ◽  
The Relationship

Purpose This study aims to assess the mediating effect of sustainable competitive advantage (SCA) on the relationship between organisational innovativeness (OI) and performance of small- and medium-sized enterprises (SMEs) operating in Konya, Turkey. Design/methodology/approach A survey method is used to collect the necessary data for this research. A total of 264 respondents from 83 SMEs partook in the study. In choosing the sample size, both purposive sampling and simple random techniques are used. The data gathered are analysed using SPSS program and Hayes PROCESS macro v.3.4.1. Findings The results of the analyses reveal that OI has a statistically significant positive effect on SCA and firm performance (FP). Moreover, SCA is found to have a mediating effect on the relationship between OI and FP. Practical implications Policymakers and management of SMEs need to show great commitment to innovativeness and relate it to SCA to create superior customer value, thereby leading to a holistic and long-term FP. Originality/value This study brings to the fore empirical evidence on how SCA serves as a mediator between OI and FP. It also contributes to the literature by focusing on three distinct but related variables. The study makes theoretical contribution by highlighting the role of the resource-based theory in enhancing business performance and SCA through strategic internal resources and innovative activities.

Mediating effect of organizational learning and moderating role of environmental dynamism on the relationship between strategic change and firm performance

2019 ◽  
Vol 12 (2) ◽  
pp. 275-297 ◽  
Author(s):  
Haruna Isa Mohammad
Keyword(s):  
Organizational Learning ◽  
Firm Performance ◽  
Strategic Change ◽  
Developed Countries ◽  
Mediating Effect ◽  
Environmental Dynamism ◽  
Content Type ◽  
The Relationship ◽  
Moderating Role

Purpose With the materialization of literature on strategic change, it is clear that organizational learning and organizational dynamism have been among the most notable areas of study. The purpose of this paper is to extend the literature on strategic management by examining the mediating effects of organizational learning and the moderating role of environmental dynamism on the relationship between strategic change and firm performance. Design/methodology/approach A survey questionnaire was administered to 650 respondents who were both corporate and business-level managers of 22 main deposit money banks (commercial banks) and their branches across the country. In total, 630 questionnaires were returned and 587 were used after following all the processes of data preparation. Path analysis was employed to test the hypotheses in this study using Smart PLS 3. Findings The study found a significant mediating effect of organizational learning on the relationship between strategic change and firm performance. Although no significant moderating role of environmental dynamism was found, the directions of the path coefficients are consistent with the hypothesis. All the relationships between the constructs are significant. Research limitations/implications It is paramount for managers to understand the type of environment and learning that fits diverse kinds of strategic changes in order to improve firm performance. It is evident that changes that are not proactive and generative organizational learning may seem dangerous for a firm. However, organizations should learn to incorporate the change to be able to compete in a dynamic competitive environment. Originality/value Prior studies on strategic change, environmental dynamism and organizational learning have mainly focused on manufacturing and construction industries in the developed countries, but less has been done in the service sector, particularly the banking organizations in developing countries. Nigeria is one of those countries. Therefore, this study focuses on the links between strategic change and firm performance, moderating role of environmental dynamism and the mediating effect of organizational learning within the context of the Nigerian deposit money banks.

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.

Corporate social responsibility and firm performance through the mediating effect of organizational trust in Chinese firms

2014 ◽  
Vol 8 (4) ◽  
pp. 577-592 ◽  
Author(s):  
Yanni Yu ◽  
Yongrok Choi
Keyword(s):  
Firm Performance ◽  
Organizational Performance ◽  
Organizational Trust ◽  
Well Being ◽  
Mediating Effect ◽  
Chinese Firms ◽  
Content Type ◽  
Corporate Social ◽  
The Relationship

Purpose – The purpose of this paper is to investigate the mediating effect of organizational trust on the relationship between perceived corporate social responsibility (CSR) practices and firm performance. Design/methodology/approach – A total of 674 questionnaires were sent randomly to Chinese firms to obtain a total of 168 reliable responses. A confirmatory factor analysis was conducted for a validity test, and structural equation modeling was employed to test the mediating effect of organizational trust. Findings – The empirical results show that perceived CSR practices of firms had significant direct effects on employee well-being and organizational performance and that organizational trust partially mediated the relationships of CSR practices to employee well-being as well as to organizational performance. Research limitations/implications – The data may not fully represent a generalized survey of all industries with CSR management. In this regard, future research should focus on a specific Chinese industry. The results suggest that firms should more actively promote the role of employees in CSR strategies to better build organizational trust. Originality/value – Previous CSR studies have generally focused on customers’ perceptions, paying little attention to employees’ viewpoints. This study provides the first empirical analysis of the relationship between CSR and firm performance from the perspective of employees in Chinese firms. In addition, the study examines the mediating role of trust in CSR, which has been rarely considered in the context of Chinese firms.

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