Cognitive Style and the Management of Small and Medium-Sized Enterprises

2004 ◽  
Vol 25 (2) ◽  
pp. 155-181 ◽  
Author(s):  
Eugene Sadler-Smith
Keyword(s):  
Financial Performance ◽  
Cognitive Style ◽  
Management Development ◽  
Rational Analysis ◽  
Decision Style ◽  
Managerial Action ◽  
Article Analysis ◽  
Environmental Instability ◽  
And Performance ◽  
The Relationship

A long-standing dilemma in theories of management surrounds the question of whether effective managerial action is better served by ‘rational analysis’ or ‘creative intuition’. In the present article, analysis and intuition are conceived within a framework of cognitive style in which a distinction is drawn between the processing of information (rational and intuitive) and the organizing of information in memory (local and global). Such styles are thought to affect a range of management behaviours (including decision-making). The relationship between managers’ cognitive styles and firm performance was examined from a contingency perspective in which environmental instability was hypothesized as moderating the relationship between style and performance. The study was based upon data obtained from owner-managers and managing directors of small and medium-sized firms in two contrasting sectors. There was a positive relationship between intuitive decision style and contemporaneous financial and non-financial performance that did not appear to be moderated by environmental instability. Furthermore, a statistically significant relationship between intuitive decision style and subsequent financial performance was observed. The implications of these findings for theories of cognitive style, the management of small and medium-sized enterprises, and for the practice of management development in such firms are discussed.

Financing Decisions and Performance of Italian SMEs in the Hotel Industry

2018 ◽  
Vol 60 (4) ◽  
pp. 335-354 ◽  
Author(s):  
Marco Botta
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Optimal Level ◽  
Pecking Order ◽  
Optimal Capital Structure ◽  
Financing Decisions ◽  
Medium Enterprise ◽  
Optimal Capital ◽  
And Performance ◽  
The Relationship

This study investigates the existence of an optimal capital structure for small and medium enterprise (SME) hotels through the analysis of the relationship between financing decisions and financial performance in a large sample of Italian hotel SMEs. The results show that hotel SMEs face an optimal capital structure that allows them to maximize returns to investors, while instead having both too little and too much debt reduces their financial performance. This notwithstanding, we show that hotel SMEs are not particularly concerned with optimizing their capital structure, and their funding behavior is deeply connected with the availability of internally available funds, a typical pecking order behavior, and they result extremely slow in converging toward their optimal level of leverage so that they could improve their performance by adopting a more sophisticated financial strategy.

scholarly journals Financial capital, constraints, partners, and performance: An empirical analysis of Indonesia SMEs

2021 ◽  
Vol 18 (2) ◽  
pp. 210
Author(s):  
I Wayan Widnyana ◽  
I Made Dauh Wijana ◽  
Almuntasir Almuntasir
Keyword(s):  
Financial Performance ◽  
Financial Constraints ◽  
Small And Medium Enterprises ◽  
Value Added ◽  
Financial Capital ◽  
Moderation Effect ◽  
And Performance ◽  
Medium Enterprises ◽  
The Relationship

Indonesia's small and medium enterprises (SMEs) are considered the backbone of the national economy. However, the fact that SMEs still contribute less to the national gross domestic product (GDP) in terms of value-added, need to be addressed. While previous studies mainly focused on financial (access) constraints as one of the major constraints faced by small enterprises which affect their growth and performances, this study aims to extend the relationship between capital and financial performance of Indonesia SMEs with the moderating effect of financial constraints and partners. This study is different from others as it uses a bigger panel dataset which is about 4.36 million SMEs in Indonesia and is the first to explore the role of financial partners comprehensively. Moreover, the panel regression model with geographic analysis unit uses as a data analysis method. The results of the study show that financial capital has a positive and significant effect on the financial performance of SMEs. Furthermore, while the moderation role of financial partners on the relationship between financial capital and financial performance of Indonesia SMEs was failed to prove, the negative moderation effect of financial constraints was able to prove in this study.

Financial disclosure and performance of microfinance institutions

2014 ◽  
Vol 10 (3) ◽  
pp. 314-337 ◽  
Author(s):  
Shakil Quayes ◽  
Tanweer Hasan
Keyword(s):  
Financial Performance ◽  
Least Squares ◽  
Least Squares Method ◽  
Financial Disclosure ◽  
Microfinance Institutions ◽  
Content Type ◽  
Three Stage Least Squares ◽  
And Performance ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to analyze the relationship between financial disclosure and the financial performance of microfinance institutions (MFIs). Design/methodology/approach – The paper utilizes ordinary least squares method to analyze the impact of disclosure on financial performance, an ordered probit model to investigate the possible effect of financial performance on disclosure and utilizes a three-stage least squares method to delineate the endogenous relationship between disclosure and financial performance of MFIs. Findings – The paper finds that better disclosure has a statistically significant positive impact on operational performance of MFIs; second, it also shows that improved financial performance results in better financial disclosure. Keeping the endogenous nature of the relationship between disclosure and performance, the paper uses a three-stage least squares method to show that disclosure and financial performance positively affect each other simultaneously. Research limitations/implications – The paper attempts to delineate a positive association between better disclosure on financial performance of MFIs, which can be used for developing a better disclosure policy by management, formulating more effective guidelines for disclosure by the stakeholders and mandating more appropriate laws and uniform disclosure practice by regulators. Originality/value – This is the first study that uses a large number of MFIs from 75 countries; second, it uses a uniform scale of designating a disclosure rating (assigned by MIX Market) to show the relationship between disclosure and performance. Finally, it uses three-stage least squares method to address the possible endogeneity between disclosure and performance.

Corporate governance and performance of medium-sized firms in Nigeria: does sustainability initiative matter?

2020 ◽  
Vol 20 (3) ◽  
pp. 401-427
Author(s):  
Babatunji Samuel Adedeji ◽  
Tze San Ong ◽  
Md Uzir Hossain Uzir ◽  
Abu Bakar Abdul Hamid
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Financial Reporting ◽  
Structural Equation ◽  
Negative Impact ◽  
Positive Impact ◽  
Mediating Effect ◽  
Content Type ◽  
And Performance ◽  
The Relationship

Purpose The non-existence of the corporate governance (CG) concept for practices by non-financial medium-sized firms (MSFs) in Nigeria informed. This study aims to determine whether CG practices influence firms’ performance and whether sustainability initiative (SI) mediates the relationship between CG and MSFs’ performance in Nigeria. Design/methodology/approach A total of 300 firms were selected on convenience sampling basis from South Western Nigeria using a structured questionnaire. The authors used Statistical Package for Social Sciences for exploratory data analysis and hypotheses were tested using covariance-based structural equation modelling. Findings The results show that CG has a significant positive effect on performance [financial performance (FNP) and non-financial performance (NFP)] and SI. SI has a mixed impact on performance, e.g. a significant positive impact on NFP but insignificant negative impact on FNP. Similarly, SI has a combined mediating effect in the relationship between CG and performance, e.g. fully mediates CG → NFP and does not mediate CG → FNP. Firms are to invest in social and environmental initiatives substantially. CG codes will complement the International Financial Reporting Standards for MSFs. Research limitations/implications This study supports the assumptions of theories (institutional, stakeholder and agency) as the basis for the usage of multiple approaches to determine the outcome of hypotheses, especially in developing climes. Practical implications The study contributes to CG and performance literature by examining the mediating effects of SI. The paper also shows the necessity to emphasise NFP aspect. Policymakers should evolve CG codes to encourage stakeholders to believe more in the corporate existence of MSFs for strengthening capital-base and quality personnel engagement. Originality/value To the best of the authors’ knowledge, this is one of the first empirical attempts showing the evidence on the relationship between CG and NFP in Nigeria.

scholarly journals Do Employees Matter in the Relationship between Corporate Social Responsibility and Financial Performance?

2019 ◽  
Vol 11 (22) ◽  
pp. 6251 ◽  
Author(s):  
Jae Mee Yoo ◽  
Woojae Choi ◽  
Mi Lim Chon
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Employee Commitment ◽  
Micro Level ◽  
And Performance ◽  
Internal Stakeholders ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

This study investigated the mechanism behind the impact of corporate social responsibility (CSR) on firms’ financial performance while focusing on internal stakeholders. Although many studies have examined the effects of CSR few has empirically investigated the underlying process of the mechanism. In addition, previous research has rarely regarded employees as a link between CSR and firms’ outcomes, despite employees implementing CSR policies. This study explored the pathway of the CSR-employees-firm’s performance. Employee commitment was used to explain the relationship between CSR and performance, since it is an important employee-associated micro-level outcome of CSR. The results showed that CSR indirectly influenced a firm’s accounting profitability through enhanced employee commitment, as well as directly affected firm’s profitability. CSR increases employee commitment, which in turn leads to improvements in a firm’s accounting returns. The paper suggests that employees should be considered as an important agent for the effects of CSR initiatives.

scholarly journals Impacto dos Investimentos em Tecnologia sobre a Rentabilidade do Setor Bancário Brasileiro

2021 ◽  
Vol 13 (1) ◽  
pp. 94-111
Author(s):  
Lucas Silva Barreto ◽  
Vinicius Silva Pereira ◽  
Antonio Sergio Torres Penedo
Keyword(s):  
Financial Performance ◽  
Positive Relationship ◽  
Return On Assets ◽  
Expected Return ◽  
It Investments ◽  
Publicly Traded Companies ◽  
And Performance ◽  
Impact Of Technology ◽  
The Impact ◽  
The Relationship

Purpose: To analyze the relationship between investments in technology and the profitability of the five largest Brazilian banks between 2009 and 2018.Theoretical framework: Through correlation analysis and panel data regression, the impact of technology investment on Return on Assets (ROA) was specifically assessed.Design/methodology/approach: Despite the growth in investment in banking technology, the level of disclosure by publicly traded companies in Brazil is still limited, with few details disclosed in corporate reports about the amounts invested, of the types investments made, the expected return and the returns already obtained with previous investments. This disclosure is influenced by factors such as company size and profitability.Findings: In the present study, a positive relationship was identified between investment in T.I and Return on Assets (ROA) of the banks analyzed and, therefore, the presence of a profitability paradox was not found.Originality/value:  There was a positive relationship between investment in IT and performance. There was a significant positive correlation at 5% between IT investments and financial performance, given by the relationship between profit before depreciation and total sales. The regression analysis found that an increase in IT investments raised the company's financial performance (Beta = 0.204 and p 0.1). The increase in the share of IT investments in operating expenses increased the Return on Assets by 0.039 percentage points.Research, Practical Social implications: Gain knowledge in the management of banking organizations in order to guide in the decision-making about technological investments that should be made.

scholarly journals Does social responsibility matter for firm performance? Evidence from Brazil

2012 ◽  
Vol 9 (3) ◽  
pp. 132-141 ◽  
Author(s):  
Thiago Emmanuel ◽  
Andre Carvalhal da Silva ◽  
Marcos Avila
Keyword(s):  
Firm Performance ◽  
Social Responsibility ◽  
Financial Performance ◽  
Firm Value ◽  
Superior Performance ◽  
Social Report ◽  
Points Of View ◽  
And Performance ◽  
The Relationship ◽  
Over Time

This paper analyses the relationship between social responsibility and financial performance of Brazilian companies. This subject has been largely studied and presents many discussions and different points of view. There are a considerably number of research that tries to link social responsibility and financial performance. However, there is not a fully established consensus about the issue. Despite a great number of empirical researches regarding this subject, there are few studies in the Brazilian market. We analyze 515 Brazilian companies listed on BM&FBovespa from 2001 to 2007 and check which companies have disclosed the IBASE social report, which proposes a standardized methodology for social reporting and allows us to compare companies in different sectors over time. Our results indicate that companies that disclose social information have a superior performance when compared with companies that do not disclose. Moreover, financial performance is positively related with social investments. Interestingly, the "voluntary" social investments, which are not mandatory by law, have a strong effect on firm value and performance.

scholarly journals Actuarial Risk Management Practices, Underwriting Risk and Performance of P & C Insurance Firms in East Africa

2017 ◽  
Vol 13 (22) ◽  
pp. 207
Author(s):  
Caren B. Angima ◽  
Mirie Mwangi ◽  
Erasmus Kaijage ◽  
Martin Ogutu
Keyword(s):  
Risk Management ◽  
Financial Performance ◽  
East Africa ◽  
Management Practices ◽  
Ripple Effect ◽  
Loss Ratio ◽  
Insurance Firms ◽  
Actuarial Risk ◽  
And Performance ◽  
The Relationship

The purpose of the study was to establish the intervening effect of underwriting risk (loss ratio) on the relationship between actuarial risk management practices (ARMP) and performance of property and casualty (P & C) insurance underwriters in East Africa. Findings from primary and secondary data gathered from 82 general insurers from Kenya, Uganda and Tanzania show that there is a significant positive relationship between ARMP and non-financial performance and that loss ratio significantly mediates this relationship. The relationship with financial performance was however insignificant. The implication is that P & C insurance firms should keenly watch their loss ratios in order to improve their non-financial performance by correctly underwriting, pricing and reinsuring their risks in order to influence their claims ratio and also have a strategic claims management program in place that controls costs and leads to better firm reputation, which in turn will have ripple effect in increasing business volumes and performance. It is recommended that further empirical studies be carried out to establish other factors that especially influence financial performance.

scholarly journals Strategic Management and Firm Performance

2019 ◽  
Vol 7 (03) ◽  
Author(s):  
Dr. Sadudin Ibraimi
Keyword(s):  
Firm Performance ◽  
Strategic Management ◽  
Financial Performance ◽  
Empirical Studies ◽  
Business Strategies ◽  
Firm Financial Performance ◽  
And Performance ◽  
In The Beginning ◽  
The Relationship

This paper discusses the relationship between business strategies of firms and their performances. In the beginning the strategic aspects of the concept are presented, then competition and performance and their linkage to strategy is discussed. This is followed by the discussion of several empirical studies on the determinants of firm financial performance. Researches confirm that firms within the same industry differ from one another, and that there seems to be an inertia associated with these differences.

CSR INITIATIVES: THE PREDICTOR OF FINANCIAL PERFORMANCE IN ENERGY SECTOR

2020 ◽  
Vol 8 (11) ◽  
pp. 36-42
Author(s):  
. Haudi ◽  
Aseh Khairi ◽  
Kamal Kenny ◽  
P. Ravindran Pathmathan
Keyword(s):  
Financial Performance ◽  
Research Question ◽  
Energy Sector ◽  
Return On Equity ◽  
Operational Risks ◽  
Financial Metrics ◽  
And Performance ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

The purpose of this research was to investigate the relationship between Corporate Social Responsibility (CSR) and the financial performance for publicly-traded firms operating in the energy sector.  The energy sector has a unique role to play in global CSR efforts because of the size of the firms within that industry, the impact on the environment, and the operational risks that come with energy production. Previous research has been conducted on the relationship between CSR engagement and financial performancein various contexts, but this research has shown mixed outcomes– in some cases there is a positive relationship between CSR and performance while in other studies the research is non-existent or marginal. Thus, the research question for this study addresses a significant gap in the understanding of this topic by exploring the relationship between CSR and firm performance in a contextualized setting of the energy sector.    The dependent variable was a series of three financial metrics –returnon assets (ROA), return on equity (ROE), and EBITDA.  This study looked into convenience sampling method and the population in this study was employees who were currently employed in an energy sector company in Malaysia.

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