scholarly journals Employee equity, incentive compensation, and growth in entrepreneurial firms

2004 ◽  
Vol 7 (1) ◽  
pp. 15-25 ◽  
Author(s):  
J. B. Arbaugh ◽  
Larry W. Cox ◽  
S. Michael Camp
Keyword(s):  
Firm Growth ◽  
Incentive Compensation ◽  
Entrepreneurial Firms ◽  
Industry Effects ◽  
Equity Compensation ◽  
Top Managers ◽  
Employee Equity ◽  
Privately Held Firms ◽  
The Relationship ◽  
Equity Incentive

We examined the relationship between employee equity compensation, incentive compensation, and firm growth using a sample of 480 privately held firms from the Ewing Marion Kauffman Foundation’s database of Ernst & Young Entrepreneur Of The Year (EOY) winners. Using frameworks from agency and motivation theories, we argued that larger percentages of both equity- and incentivebased compensation allocated to top managers and employees would be associated with firm growth. After controlling for firm and industry effects, the results of the study showed that while the firms in the sample preferred providing incentive compensation, providing equity compensation for employees was a positively significant predictor of firm growth over a three-year period. These findings suggest that prescriptions for growth in larger firms developed from agency theory also may be applicable to entrepreneurial firms, and founder/CEOs seeking to grow their firms should consider using equity compensation to motivate their current employees and to attract new ones.

A MULTI-COUNTRY COMPARISON OF PERCEIVED ENVIRONMENTAL CHARACTERISTICS, INDUSTRY EFFECTS, AND PERFORMANCE IN ENTREPRENEURIAL FIRMS

2005 ◽  
Vol 13 (02) ◽  
pp. 105-126 ◽  
Author(s):  
J. B. ARBAUGH ◽  
S. MICHAEL CAMP ◽  
LARRY W. COX
Keyword(s):  
Firm Performance ◽  
North American ◽  
Entrepreneurial Firms ◽  
Environmental Perceptions ◽  
Industry Effects ◽  
Entrepreneurship Research ◽  
Country Comparison ◽  
And Performance ◽  
The Relationship ◽  
International Entrepreneur

This paper examines the relationship between industry effects, environmental perceptions, and firm performance in a multi-country sample of entrepreneurial firms. Using a sample of 1045 finalists in Ernst & Young's International "Entrepreneur of the Year" competition, we examined whether environmental constructs that have been studied and validated in North American entrepreneurship research were generalizable to firms in fifteen countries located in Europe, Asia, and Africa. Using measures common to North American entrepreneurship research; we identified two environmental dimensions in subsamples of North American (United States and Canada) and non-North American firms: dynamism and hostility. However, while the constructs were identified in both subsamples, they also were not significantly associated with firm performance. We conclude the paper by suggesting this lack of environmental perception-firm performance relationship may be attributable to an entrepreneurial mindset that focuses on identifying and recognizing specific opportunities rather than responding to general characteristics of the external environment.

scholarly journals The influence of entrepreneurial orientation on firm growth among Iranian agricultural SMEs: the mediation role of entrepreneurial leadership and market orientation

2021 ◽  
Author(s):  
Asef Karimi ◽  
Mahmood Ahmadpour Daryani ◽  
Soma Rahmani
Keyword(s):  
Market Orientation ◽  
Entrepreneurial Orientation ◽  
Structural Equation ◽  
Firm Growth ◽  
Critical Role ◽  
Equation Modeling ◽  
Entrepreneurial Leadership ◽  
Mediating Role ◽  
Top Managers ◽  
The Relationship

AbstractEntrepreneurship orientation is a fundamental topic both in entrepreneurship and in management that has a critical role in the development of the firm. The purpose of this paper is to study the relationship between entrepreneurial orientation (EO) and firm growth, specifically, how entrepreneurial leadership and market orientation mediate the relationship between EO and firm growth. The population of this study is agricultural small- and medium-sized enterprises (ASMEs) across Tehran Province. The survey instrument is questionnaires that were sent to 240 owners and/or top managers of ASMEs as a sample. Validity of the questionnaires has been verified in two ways of face and construct, and its reliability has been verified using Cronbach’s alpha. The collected data has been analyzed by using the structural equation modeling. The results reveal that EO significantly influences firm growth in ASMEs. Notably, entrepreneurial leadership (EL) and market orientation (MO) perform a mediating role in the relationships between EO and firm’s growth in ASMEs.

OUTSOURCING INTENSITY, STRATEGY, AND GROWTH IN ENTREPRENEURIAL FIRMS

2003 ◽  
Vol 11 (02) ◽  
pp. 89-110 ◽  
Author(s):  
J. B. ARBAUGH
Keyword(s):  
Firm Size ◽  
Firm Growth ◽  
Firm Strategy ◽  
Entrepreneurial Firms ◽  
Entrepreneurial Leadership ◽  
Growth Strategies ◽  
High Performing ◽  
The Relationship

This study examines the relationship between outsourcing practices, firm strategy and growth in SMEs. The sample for this study was the Entrepreneur of the Year (EOY) database co-developed by the Kauffman Center for Entrepreneurial Leadership and Ernst & Young. I found that while 83% of the firms engaged in some outsourcing practice, 71.5% of the firms outsourced three or fewer activities. Differing activities were significantly associated with growth depending on whether firm growth was measured in relative or absolute terms, suggesting that outsourcing preferences may be highly influenced by firm size. The results of this study suggest that while outsourcing is commonly practiced among high-performing SMEs, it is generally done to allow the firm to focus on its core activities rather than directly supporting their growth strategies.

THE EFFECT OF EXECUTIVE INCENTIVES ON TECHNOLOGICAL INNOVATION OF DECLINING ENTERPRISES – THE MODERATING EFFECT OF DECLINE DEGREE AND ORGANISATIONAL SLACK

2021 ◽  
Author(s):  
HAIYAN DUAN ◽  
KAMRAN AHMED ◽  
MARTHIN NANERE
Keyword(s):  
Technological Innovation ◽  
Executive Control ◽  
Synergistic Effects ◽  
Moderating Effects ◽  
Executive Incentives ◽  
Different Types ◽  
And Control ◽  
The Relationship ◽  
Equity Incentive

We examine the effects of different types of executive incentives on technological innovation of declining firms and the moderating effects of the degree of decline and organisational slack on executive incentives and enterprise technological innovation. We also assess the synergetic effects of different types of executive incentives on technological innovation of declining enterprises. We find the following: first, executive compensation incentive, equity incentive and control incentives are beneficial to promote technological innovation in declining enterprises. Second, the degree of decline negatively moderates the relationship between equity incentive and technological innovation. Third, organisational slack positively moderates the relationship between equity incentive and technological innovation, as well as the relationship between control incentives and technological innovation, especially for severely declining enterprises. Fourth, there are synergistic effects between executive control incentive and compensation incentive, control incentives and equity incentive on technological innovation. The contributions are as follows: first, taking declining enterprises as sample, we suggest that to increase the role of compensation incentive and equity incentive in promoting technological innovation in declining enterprises, the control incentives should be strengthened. Second, organisational slack should be fully exploited for severely declining enterprises so that executives should have the motivation and conditions to carry out technological innovation and further help declining enterprises to turnaround successfully.

scholarly journals Strategic Alliances And New Product Development In High-Tech Ventures: The Moderating Role Of Alliance Type And Alliance Capability

2019 ◽  
Vol 35 (1) ◽  
pp. 17-28
Author(s):  
Sang-Mi Moon ◽  
Moon-Goo Huh
Keyword(s):  
New Product Development ◽  
Strategic Alliances ◽  
Superior Performance ◽  
High Tech ◽  
Entrepreneurial Firms ◽  
Alliance Management ◽  
Management Capability ◽  
Alliance Management Capability ◽  
The Relationship

Strategy scholars have proposed that capacity for managing alliance can be a source of superior performance. This study focuses on the role of this capacity, and investigates how alliance management capability of entrepreneurial firms affects the relationship between a firm’s allying and its performance. Because the capability is inherently unobservable, we take alliance experience and average duration of each alliance as proxy variables for measuring alliance management capability. An analysis of multiple allies of entrepreneurial ventures in Korean photovoltaic industry indicate that capacity for managing varying allies, and alliance type positively moderate the relation between alliance and its innovation outcomes.

scholarly journals DISONANCIAS ENTRE EL ENTORNO LOCAL DE LOS NEGOCIOS Y LA CULTURA CORPORATIVA EN UN PAIS LATINOAMERICANO

1995 ◽  
pp. 27-39
Author(s):  
Margalit Berlin ◽  
Keyword(s):  
United States ◽  
Corporate Culture ◽  
The United States ◽  
Business Environment ◽  
The Other ◽  
Multinational Company ◽  
Structured Interviews ◽  
Top Managers ◽  
The Relationship ◽  
Rules Set

The article analyzes the relationship between the corporate culture of a multinational company headquartered in the United States, which enjoys great prestige worldwide, and the business environment and practices in Venezuela, where it has an operation. The prevailing culture in the corporation is North American and the top managers come from their country of origin. In Venezuela, on the other hand, most of the companies are family-owned, and personal contacts and influences prevail. The research is oriented to the elaboration of a qualitative diagnosis, through rigorous observation and semi-structured interviews. The results revealed that there is resistance on the part of Venezuelan managers to follow the culture of a strict company governed by rules set in a very different economic and political context. The ambiguity between acceptance and low identification with the values of the parent company leads to think of corporate culture as fragmented.

Does international expansion constrain growth? Business groups, internationalization, institutional distance, and the Penrose effect

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wen-Ting Lin ◽  
Ying-Yu Chen ◽  
David Ahlstrom ◽  
Linda C. Wang
Keyword(s):  
Information Processing ◽  
Firm Growth ◽  
Business Groups ◽  
Adjustment Costs ◽  
Ordinary Least Squares ◽  
Institutional Distance ◽  
Content Type ◽  
Managerial Resources ◽  
Penrose Effect ◽  
The Relationship

Purpose This paper aims to use the institutional and information-processing perspectives to explore their association with between internationalization and the Penrose effect phenomenon for business groups (BGs). Design/methodology/approach The authors use ordinary least squares regression models to test arguments about data pertaining to 101 Taiwanese BGs’ foreign direct investments. Findings The results indicate that greater levels of depth and scope in the process of internationalization during one period may negatively affect rates of growth in the following period. The results further demonstrate that institutional distance moderates the relationship. Research limitations/implications Using the perspective of information-processing demands, the authors provide alternate explanations regarding the relationship between the process of internationalization (depth, scope and rhythm) and the Penrose effect. Originality/value Owners and managers should focus on both the depth and the scope of internationalization. BGs are likely to incur high dynamic adjustment costs, which then limit the rate of BGs’ growth. Managers should balance international market uncertainty with current managerial resources when determining how deeply and broadly to expand internationally and where to enter. In addition, as recent major panel studies suggest, management capabilities and practices can improve significantly, which has a positive effect on firm growth and performance. This does require the careful development and acquisition of the managerial resources needed for internationalization.

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