Strategy, capabilities, and business group performance

2020 ◽  
Vol 58 (1) ◽  
pp. 76-97
Author(s):  
Shan-Huei Wang ◽  
Chung-Jen Chen ◽  
Andy Ruey-Shan Guo ◽  
Ya-Hui Lin
Keyword(s):  
Group Performance ◽  
Business Groups ◽  
Business Group ◽  
Organizational Capabilities ◽  
Diversification Strategy ◽  
Content Type ◽  
Endogenous Role ◽  
Industry Diversification ◽  
Two Step Estimation

Purpose The purpose of this paper is to examine the relationships among choice of industry diversification, capabilities and business group performance, as well as to point out the potential concern about endogenous role of industry diversification. Design/methodology/approach Using data from the top 100 business groups in Taiwan from TEJ database. This study uses Heckman’s two-step estimation procedure and contingency model to achieve unbiased results and examine our hypotheses. Findings The results of this study find that if business groups’ marketing or operational capabilities are strong they should adopt a high level of diversification strategy and if business groups’ R&D capability is strong they should adopt a low level one. The results of this study also show that the endogenous problem of industry diversification exists, and needs to be considered. Moreover, our finding confirms the importance of capability–strategy fit, which, in turn, can achieve better performance. Practical implications On average, high industry diversification groups perform better than low industry diversification groups after controlling for endogeneity issues. Business groups can achieve better performance if their strategy choices match the capabilities they encounter. Managers should pay attention to strategy-capability fit issues. Specifically, they should review their organizational capabilities as well as check their strategies within firms. Originality/value This study is one of the first that attempts to explore the endogenous role of diversification strategy choices, and empirical examine strategy-capability fit on business group performance.

scholarly journals The Diversification Strategy and Business Groups’ Performance in Poland

2019 ◽  
Vol 11 (1) ◽  
pp. 23-45
Author(s):  
Wioletta Mierzejewska ◽  
Patryk Dziurski
Keyword(s):  
Group Performance ◽  
Empirical Studies ◽  
Business Groups ◽  
Group Development ◽  
Value Added ◽  
Business Group ◽  
Diversification Strategy ◽  
Diversification Strategies ◽  
Desk Research ◽  
Theory Review

Abstract Objective: The aim of the study is to identify the scope in which business groups in Poland apply the diversification strategy and examine it influence on the performance of a business group. Methodology: The research method is a critical analysis of academic literature as well as documents analysis (desk research). Authors applied also statistical inference. Findings: Conducted research on business groups in Poland showed that business groups in Poland are moderately diversified. The study showed also that the diversification strategy does not differentiate the performance of business groups. Value Added: The paper is a unique summary of the researches about diversification strategy and business group performance. The theory review and empirical studies deepen research on business groups and their strategies. Recommendations: It is recommended for business groups to explore the diversification strategies in the context of performance as implementing it may be crucial for further business group development.

Coordination, control, or charade? The role of board interlocks among business group members

2019 ◽  
Vol 57 (10) ◽  
pp. 2630-2652 ◽  
Author(s):  
Fabio Zona ◽  
Brian Keane Boyd ◽  
Katalin Takacs Haynes
Keyword(s):  
Structural Equation ◽  
Resource Dependence ◽  
Business Groups ◽  
Business Group ◽  
Equation Model ◽  
Central Position ◽  
Interlocking Directorates ◽  
Content Type ◽  
Board Interlocks

Purpose How do business groups manage their internal processes? The purpose of this paper is to explore how board interlocks between members serve as control and coordination mechanisms within business groups. The authors propose that centrality of groups’ affiliates in the group network of interlocking directorates is shaped by agency and resource dependence forces. In particular, the authors examine the role of international board ties as a resource and information conduit. Design/methodology/approach This study leverages proprietary information on firm-to-firm transaction ties among all 155 affiliates belonging to a large Italian business group. The authors use network analysis to develop multiple measures of the centrality of each group member, and link these to resource transactions, ownership patterns and geographic distributions. The authors test the hypotheses in a structural equation model using LISREL. Findings The results demonstrate that both resource exchanges and the presence of cross-national relations increase an affiliate’s central position in the group’s network of board ties. In contrast, ownership ties between members were unrelated to affiliate centrality. Originality/value Internal governance mechanisms of business groups are rarely studied. While groups are often portrayed as inefficient or value-destroying, the analysis of proprietary firm data suggests a very different scenario: inter-unit ties are much more supportive of a model of business groups as strategic portfolios, using internal ties to share information and resources.

Keeping it all in the Family: The Role of Particularistic Relationships in Business Group Performance during Institutional Transition

2005 ◽  
Vol 50 (3) ◽  
pp. 404-439 ◽  
Author(s):  
Xiaowei Luo ◽  
Chi-Nien Chung
Keyword(s):  
Social Relationships ◽  
Group Performance ◽  
Social Ties ◽  
Business Groups ◽  
Family Members ◽  
Business Group ◽  
Personal Contact ◽  
Positive Contribution ◽  
Institutional Transition

We examine the role of particularistic relationships (such as family and prior social ties) in business groups during institutional transition and test how particularistic ties between top leaders affect business group performance in Taiwan, where such ties have been central to the functioning of business groups. We propose that during market-oriented transition, family and prior social ties could improve group performance by providing informal norms that strengthen the intermediation within business groups and that family relationships could reduce strategic restructuring and generate performance benefits. Results of a longitudinal study over 24 years show that market transition enhanced the contribution of family and prior social relationships but not that of common-identity relationships, such as being from the same hometown, which do not involve prior direct personal contact. We also found that during transition, the positive contribution of family members would rise up to a threshold, after which additional family members tended to derail group performance, possibly due to informational disadvantages and a legitimacy discount in the eyes of foreign investors. The study helps to make sense of different predictions about the role of particularistic ties in business group performance and makes an initial attempt at revealing how social structure affects performance. Our findings have implications for research on the value of business groups in institutional transition, interorganizational relationships, and the contingencies of social relationships.

Linking ethical leadership to administrative innovation in Ethiopian banks: the mediating role of knowledge process capabilities

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Gedif Tessema Sinshaw ◽  
Atul Shiva ◽  
Manjit Singh
Keyword(s):  
Ethical Leadership ◽  
Structural Equation ◽  
Banking Sector ◽  
Organizational Capabilities ◽  
Equation Modeling ◽  
Mediation Model ◽  
Knowledge Process ◽  
Content Type ◽  
Mediating Role

PurposeThis paper aims to examine the mediating role of knowledge process capability (KPC) between ethical leadership (EL) and administrative innovation (AI) in the banking sector of Ethiopia.Design/methodology/approachThe study was conducted by a standardized questionnaire survey to collect the data from 266 employees of Commercial Bank of Ethiopia in 93 branches. The study employed structural equation modeling approach with Analyzing Moment of Structures 23.0 to test the hypothesized mediation model.FindingsThe results of this investigation disclose that EL has a significant and direct effect on AI and KPC. KPC also influences AI significantly.Originality/valueThe study revealed that KPC plays a partial mediating role in linking EL to AI, which is a new contribution to the existing literature of EL. This dimension can provide new dimensions to design organizational leadership which is based on sustainability paradigm. This can strengthen the organizational capabilities aiming to increasing innovative behaviors in order to have a deep-seated strategy.

The role of environmental management control systems for ecological sustainability and sustainable performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shafique Ur Rehman ◽  
Anam Bhatti ◽  
Sascha Kraus ◽  
João J. M. Ferreira
Keyword(s):  
Environmental Management ◽  
Management Control ◽  
Organizational Capabilities ◽  
Equation Modeling ◽  
Ecological Sustainability ◽  
Content Type ◽  
Sustainable Performance ◽  
Construction Organizations ◽  
Environmental Strategies

PurposeThe purpose of this study determines how environmental management control system (MCS) packages influence ecological sustainability and sustainable performance through the mediating role of environmental strategies. Furthermore, this applies organizational capabilities as moderating variables between environmental strategies, ecological sustainability and sustainable performance in a sample of 373 construction firms.Design/methodology/approachThe authors apply quantitative questionnaire data from construction firm representatives (from project, sales and construction managers and contract managers, executive directors and engineers) to structural equation modeling and SmartPLS for our analysis.FindingsThe results demonstrate that recourse to environmental MCS packages significantly influence ecological sustainability, sustainable performance and environmental strategies. Additionally, environmental strategies and organizational capabilities significantly influence ecological sustainability and sustainable performance. Moreover, environmental strategies mediate between environmental MCS packages, ecological sustainability and sustainable performance. Organizational capabilities significantly moderate the relationship between ecological sustainability and sustainable performance.Practical implicationsThis research highlights the issue of how the management of construction organizations deploy environmental MCS packages, organizational capabilities and business strategies to measure ecological sustainability and improve their sustainable performance. This study fills a gap in the literature and facilitates the management of construction organizations in strengthening their internal resources in terms of environmental MCS packages, environmental strategies and organizational capabilities able to help improve their ecological sustainability and sustainable performance.Originality/valueThere are few studies building theoretical frameworks for incorporating environmental MCS packages, organizational capabilities, environmental strategies, ecological sustainability and sustainable performance into a single study. Although the influence of various types of intangible resources on ecological sustainability and sustainable performance receive considerable examination in the literature, there is a dearth of attention paid to understanding the role of environmental MCS packages, environmental strategies and organizational capabilities in determining the ecological sustainability and sustainable performance of construction organizations.

scholarly journals Intellectual capital and performance in temporary teams

2019 ◽  
Vol 58 (3) ◽  
pp. 410-427 ◽  
Author(s):  
Maurizio Massaro ◽  
Francesca Dal Mas ◽  
Nick Bontis ◽  
Bill Gerrard
Keyword(s):  
Intellectual Capital ◽  
Organizational Capabilities ◽  
Data Set ◽  
Content Type ◽  
Research Context ◽  
Soccer Teams ◽  
And Performance ◽  
The Relationship ◽  
Temporary Teams

Purpose The purpose of this paper is to deepen resource-based view theory by analyzing how intellectual capital (IC) affects performance in temporary teams and by showing the moderating role of integrative mechanisms. Design/methodology/approach The research context focuses on 153 national teams of football (NTF), also referred to as national soccer teams, as an example of temporary groups. A partial least squares (PLS) methodology was utilized on a data set built from transfermarkt.com and FIFA world rankings. Three main hypotheses were developed and tested using first a PLS and then an OLS approach. Findings The results show how IC contributes to performance, extending the findings of previous studies to the context of temporary teams. Additionally, the results show how some integrative mechanisms such as assembly decisions and team leader experience influence temporary team performance by creating an interaction effect with existing IC. Originality/value This study contributes to IC theories for three reasons. First, it applies IC research to a specific research context: temporary teams, where specific organizational capabilities are required to coordinate resources. Second, the study analyzes the role of integrative mechanisms as moderators of the relationship between IC and performance in temporary teams. Third, the study focuses on NTF as an example of temporary teams.

Future time perspective and group performance among students

2020 ◽  
Vol 12 (5) ◽  
pp. 1265-1280 ◽  
Author(s):  
Manish Gupta ◽  
Arnold B. Bakker
Keyword(s):  
Student Engagement ◽  
Task Performance ◽  
Time Perspective ◽  
Group Performance ◽  
Group Cohesion ◽  
Future Time Perspective ◽  
Future Time ◽  
Content Type ◽  
Mediating Role

PurposeThe objective of this study is to understand the mediating role of student engagement between future time perspective and group task performance. In addition, the study examines the interaction effect of group cohesion task with student engagement on group performance.Design/methodology/approachData were collected from 170 (a total of 34 groups of five members each) business management students for three consecutive months. To analyze the data, multi-level modeling was carried out.FindingsThe results of the three-wave multi-level analysis indicate support for the hypotheses and suggest that future time perspective affects group performance through student engagement. Moreover, group cohesion interacts with student engagement to predict group task performance.Research limitations/implicationsThe findings show how the application of engagement theory can help in understanding the relationship between two distant variables, namely, future time perspective and group performance.Practical implicationsThe educators are encouraged to engage students for facilitating the positive impact of future time perspective on group task performance. The findings also imply that the students with future orientation perform well and thus, the educators may need to teach students to have futuristic perspective.Originality/valueThis study in one of its kinds to test the mediating role of student engagement between future time perspective and group task performance as well as the interaction effect of group cohesion task with student engagement on group performance at both the individual and group level over a period of time.

Landmark buildings and diversification opportunities in the residential market

2016 ◽  
Vol 9 (4) ◽  
pp. 429-445 ◽  
Author(s):  
Lucia Gibilaro ◽  
Gianluca Mattarocci
Keyword(s):  
Asset Allocation ◽  
Time Horizon ◽  
Efficient Frontier ◽  
Diversification Strategy ◽  
Content Type ◽  
Risk Return ◽  
Good Investment ◽  
Asset Class ◽  
Housing Investments

Purpose This article aims to analyze the performance and risk of landmark building in the housing sector and to evaluate their usefulness for a diversification strategy. Design/methodology/approach After comparing summary statistics on the performance of landmark building with respect to other types of housing investments, the article evaluates their usefulness for a diversification strategy. The role of landmark buildings is studied using the modern portfolio theory and evaluating the role of this type of asset in the optimal asset allocation. The analysis is performed considering both the risk/return trade-off in a one-year and a multiple-year time horizon. Findings The results show that a landmark building can be a good investment opportunity, especially for high-risk/return investors. A not perfect correlation of the returns of this asset class with other types of housing investments implies the existence of a minimum investment in this asset class for almost all portfolios on the efficient frontier. Results are robust with respect to the length of the investment time horizon. Originality/value The article presents a unique analysis of intra-housing market diversification opportunities focusing on the role of landmark building in the portfolio construction. Empirical evidence supports the hypothesis that real estate investors can take advantage of investing in landmark buildings in the residential sector as well because there are no reasons to limit such investments to trophy buildings in the office and commercial sectors.

When does it make sense to focus business portfolios? A study of business group responses to institutional change in India

2017 ◽  
Vol 11 (4) ◽  
pp. 466-480
Author(s):  
Kannan Ramaswamy ◽  
Saptarshi Purkayastha
Keyword(s):  
Group Performance ◽  
Business Groups ◽  
Ordinary Least Squares ◽  
Performance Outcomes ◽  
Superior Performance ◽  
Market Reforms ◽  
Temporal Dimension ◽  
Content Type ◽  
Performance Consequences ◽  
The Government

Purpose This paper aims to report the findings from a longitudinal study of Indian business groups responding to the pro-market reforms that the government had initiated. It explores their diversification choices at the group level and the group performance consequences of these choices during a period of institutional changes (1990-2008). Design/methodology/approach Ordinary least squares regressions were used to analyze data spanning the 1988-2008 study period for 98 Indian business groups. Findings Results show that business groups that focused their portfolios in the early stages of institutional reforms tended to perform worse than their counterparts that did not do so. However, as market reforms became more established, business groups that made the transition from an unfocused to a more focused portfolio experienced superior performance consequences. Originality/value The findings underscore the temporal dimension of focusing and suggest that both changing strategy by refocusing business portfolio too early or waiting too long to refocus can hurt performance outcomes.

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