Organizational Characteristics and Small Firms’ Performance Revisited

1989 ◽  
Vol 13 (2) ◽  
pp. 49-64 ◽  
Author(s):  
Paul B. Cragg ◽  
Malcolm King
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Small Firm ◽  
Small Firms ◽  
Causal Model ◽  
Organizational Characteristics ◽  
Future Research ◽  
Firm Financial Performance ◽  
Mixed Support ◽  
Research Studies

Numerous studies have attempted to gain a greater understanding of small firm performance with the intent of isolating factors which are important for success. The studies, some with serious limitations, suggest that many different variables are Important to success. A further study of 179 small, metal goods manufacturers enabled some of the specific relationships to be re-examined, but with mixed support for previous findings. Various suggestions are made for future research studies. A causal model of small firm financial performance is proposed.

Effects of Formal Strategic Planning on Financial Performance in Small Firms: A Meta-Analysis

1993 ◽  
Vol 17 (3) ◽  
pp. 53-64 ◽  
Author(s):  
Charles R. Schwenk ◽  
Charles B. Shrader
Keyword(s):  
Firm Performance ◽  
Strategic Planning ◽  
Financial Performance ◽  
Small Firm ◽  
Small Firms ◽  
Sampling Error ◽  
Meta Analysis ◽  
Firm Financial Performance ◽  
And Performance ◽  
First Time

Researchers have been examining the effects of formal strategic planning on small firm financial performance for more than twenty years. Reviewers of prior studies have drawn differing conclusions as to whether formal planning improves small firm performance. We have applied meta-analysis for the first time to the results of previous studies on formal strategic planning and small firm performance. The results suggest that even though the size of the effects for planning for individual studies Is not large, the overall relationship between formal planning and performance across studies Is positive and significant. Much of the variance in the size of the effects, however, Is not explained by sampling error, Indicating the potential for other variables to moderate the effects of planning on the performance of small firms. It is concluded, in general, that strategic planning is a beneficial activity for small firms.

scholarly journals Corporate social responsibility and firm financial performance: A literature review

2020 ◽  
Vol 4 (3) ◽  
pp. First
Author(s):  
Tien Thu Thuy Nguyen ◽  
Chi Ha Lien Nguyen
Keyword(s):  
Corporate Social Responsibility ◽  
Firm Performance ◽  
Social Responsibility ◽  
Financial Performance ◽  
Developed Countries ◽  
Emerging Countries ◽  
Future Research ◽  
Firm Financial Performance ◽  
Wide Range ◽  
Corporate Social

This paper aims to investigate the literature on Corporate Social Responsibility (CSR) to provide a comprehensive overview of whether CSR would make a difference to organisational financial outcomes. The paper also provides a closer focus on CSR research in Vietnam. Through an extensive analysis of 86 most recent empirical studies from 2015 to 2020, we found that the contribution of CSR to firm financial performance has received significant support from the literature. Yet the overall findings are still inconsistent, and the majority of evidence is mainly from developed countries. The current literature on CSR and firm performance highlights some important issues, ranging from theoretical background, CSR measures, methodological issues, the need to consider intervening factors in CSR-firm performance relationship, and the need to extend this literature further in developing and emerging countries. The literature on CSR-firm performance research in Vietnam closely resembles these problems. Research in this country domain is still scarce in both quantity and quality, reflecting in a number of issues including the limited number of international publications, the absence of theory-driven research, and the less rigorous research design. Building on these findings, we recommend future research to (i) adopt the multi-theoretical approach for a more extensive view on whether and how CSR contributes to firm performance; (ii) obtain more rigorous methodological approaches to measure a wide range of CSR dimensions and address the issue of endogeneity in CSR-firm performance causal relationship; (iii) open the Pandora box to explore why and through which channels CSR can improve firm financial performance with the presence of situational factors; and (iv) build the literature with more evidence from different country contexts and from developing and emerging countries.

scholarly journals Corporate social responsibility and firm financial performance: A literature review

2021 ◽  
Author(s):  
AISDL
Keyword(s):  
Corporate Social Responsibility ◽  
Firm Performance ◽  
Social Responsibility ◽  
Financial Performance ◽  
Developed Countries ◽  
Emerging Countries ◽  
Future Research ◽  
Firm Financial Performance ◽  
Wide Range ◽  
Corporate Social

This paper aims to investigate the literature on Corporate Social Responsibility (CSR) to provide a comprehensive overview of whether CSR would make a difference to organisational financial outcomes. The paper also provides a closer focus on CSR research in Vietnam. Through an extensive analysis of 86 most recent empirical studies from 2015 to 2020, we found that the contribution of CSR to firm financial performance has received significant support from the literature. Yet the overall findings are still inconsistent, and the majority of evidence is mainly from developed countries. The current literature on CSR and firm performance highlights some important issues, ranging from theoretical background, CSR measures, methodological issues, the need to consider intervening factors in CSR-firm performance relationship, and the need to extend this literature further in developing and emerging countries. The literature on CSR-firm performance research in Vietnam closely resembles these problems. Research in this country domain is still scarce in both quantity and quality, reflecting in a number of issues including the limited number of international publications, the absence of theory-driven research, and the less rigorous research design. Building on these findings, we recommend future research to (i) adopt the multi-theoretical approach for a more extensive view on whether and how CSR contributes to firm performance; (ii) obtain more rigorous methodological approaches to measure a wide range of CSR dimensions and address the issue of endogeneity in CSR-firm performance causal relationship; (iii) open the Pandora box to explore why and through which channels CSR can improve firm financial performance with the presence of situational factors; and (iv) build the literature with more evidence from different country contexts and from developing and emerging countries.

State Ownership and Political Connections

2019 ◽  
Vol 45 (6) ◽  
pp. 2293-2321 ◽  
Author(s):  
Laszlo Tihanyi ◽  
Ruth V. Aguilera ◽  
Pursey Heugens ◽  
Marc van Essen ◽  
Steve Sauerwald ◽  
...  
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Global Economy ◽  
State Ownership ◽  
The State ◽  
Strategic Decision ◽  
Political Connections ◽  
Future Research ◽  
Firm Level ◽  
Firm Financial Performance

The influence of the state on firms in the global economy is alive and well. States have become dominant owners of companies in many countries around the world. Firms have also increasingly established political connections to access resources and improve their competitive positions. Nonetheless, our understanding of how state ownership and political connections affect firm performance remains limited and marked by conflicting findings. Using meta-analytical techniques on a sample of 210 studies spanning 139 countries, we examine two key research questions: (a) How do state ownership and political connections affect firm strategies and financial performance? and (b) How does firm-level strategic decision making mediate the relationships between state ownership, political connections, and firm financial performance? Our findings show that state ownership has a small negative effect on firm financial performance and that political connections have no direct consequences for performance. However, we find evidence that both state ownership and political connections have a profound effect on the strategies firms pursue, such as financial leverage, R&D intensity, and internationalization, and that these strategies play a mediating role in the state ownership–firm performance relationship. We conclude with some suggestions for fruitful future research in further connecting these two important and timely research fields.

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.

Small firm performance: an empirical analysis in Malaysian housing construction industry

2017 ◽  
Vol 10 (1) ◽  
pp. 50-65 ◽  
Author(s):  
Rosman Mahmood ◽  
Ahmad Suffian Mohd Zahari ◽  
Najihah Marha Yaacob ◽  
Sakinah Mat Zin
Keyword(s):  
Firm Performance ◽  
Small Firm ◽  
Business Strategy ◽  
Small Firms ◽  
Growth Potential ◽  
Construction Sector ◽  
Internal Factors ◽  
Content Type ◽  
Entrepreneurial Capital ◽  
And Training

Purpose The purpose of this paper is to evaluate the importance of innovation for the performance of small firms in the construction sector. Furthermore, this paper also examines the influence of several factors related to entrepreneurial capital (entrepreneurial value, business strategy, experience and training) on small firm performance in the sector. Design/methodology/approach This study uses primary data of 255 small firms in the construction sector under the category of small contractors (G1). Stratified sampling method was utilized for data collection, which is then analyzed using the descriptive and multiple regression analysis to achieve the objectives of the study. Findings The findings showed that the factor of innovation and several factors related to entrepreneurial capital (entrepreneurial value, business strategy and business experience) have a significant positive relationship with the performance of small firms in the construction sector. However, factor of training indicated a significant negative correlation with small firm performance. Research limitations/implications Although this study found a significant impact in explaining the factors that affect performance, particularly in the construction sector, it only takes into account only some internal factors (entrepreneurial capital and innovation). Proposed future research should consider a variety of other factors mainly related to external factors, such as economic development, growth potential, industry structure, internal social capital and government policy. Practical implications This study provides clear implications related to the theory and contributions to the literature related to research in the construction sector. The study also provides invaluable insightfulness to various stakeholders including policy makers, institutional support and small contractors about the importance of innovation and entrepreneurial capital in determining the performance of small firms in the sector. Originality/value The results provide supportive evidence that entrepreneurial values and business strategy are important internal factors in determining the performance of a firm, which is consistent with the theory of resource-based view. Experience and training factors, as indicators of firm performance, are articulated in the theory of human capital. Hence, the findings not only can strengthen both the theories but also make a significant contribution to the literature of the study, particularly in the construction sector.

scholarly journals Government institutional support, entrepreneurial orientation, strategic renewal, and firm performance in transitional China

2019 ◽  
Vol 25 (3) ◽  
pp. 433-456 ◽  
Author(s):  
Chengli Shu ◽  
Dirk De Clercq ◽  
Yunyue Zhou ◽  
Cuijuan Liu
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Entrepreneurial Orientation ◽  
Transition Economy ◽  
Institutional Support ◽  
Equation Modeling ◽  
Content Type ◽  
Strategic Renewal ◽  
Firm Financial Performance ◽  
The Relationship

PurposeThe purpose of this paper is to examine how entrepreneurial orientation (EO) and strategic renewal (as a critical dimension of corporate entrepreneurship) might transmit government institutional support and thereby enhance firm performance in a transition economy.Design/methodology/approachMulti-respondent data were collected from 230 Chinese-based firms. The hypotheses were tested with structural equation modeling, in combination with a bias-corrected bootstrap method, to assess the significance of the theorized direct and indirect relationships.FindingsGovernment institutional support enhances EO and strategic renewal individually, yet EO also fully mediates the relationship between government institutional support and strategic renewal. Moreover, strategic renewal fully mediates the relationship between EO and firm financial performance, and it partially mediates the relationship between EO and firm reputation.Originality/valueThis study contributes to entrepreneurship literature by testing an organization-level model of entrepreneurial phenomena in established firms that identifies EO and strategic renewal as two distinct mechanisms through which government institutional support in a transition economy can enhance organizational effectiveness, which entails the firm’s financial performance and reputation. In doing so, this study provides an extended understanding of how EO and strategic renewal might influence a firm’s financial and nonfinancial outcomes in different ways.

scholarly journals Debt Financing and Firm Performance: Evidence from an Emerging South-Asian Country

2019 ◽  
Vol 10 (1) ◽  
pp. 40
Author(s):  
Mohammad Mazibar Rahman ◽  
Umme Khadija Kakuli ◽  
Shahnaz Parvin ◽  
Ayrin Sultana
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Financial Performance ◽  
Negative Influence ◽  
Short Term ◽  
Return On Assets ◽  
Return On Equity ◽  
Firm Financial Performance ◽  
Total Debt

This paper aims to empirically investigate the impact of capital structure choice on the firm performance of the firms listed under the Dhaka Stock Exchange of Bangladesh. Multiple regression has been employed in this research to determine the relationship between the capital structure and the firm’s financial performance. Three ratios of financial performance, i.e., return on assets, return on equity, and gross margin, have been used as a sample of non-financial Bangladeshi companies, selected from 2010 to 2015. The study records numerous findings. First, the result shows a significant negative influence of long-term debt (LTD) and total debt (TTD) on firm financial performance measured by return on assets (ROA), but no significant relationship is found between short-term debt (STD) and this measure of firm’s financial performance. Moreover, the research found that there is no significant effect of short-term debt, long-term debt and total debt on the firm financial performance measured by return on equity (ROE). Finally, the result shows that a significant negative influence of short-term debt and total debt on firm performance measured by GM, but no significant relationship was found between long-term debt and financial performance. In general terms, the results of this study may suggest that capital structure has a negative influence on firms’ financial performance in Bangladesh.

scholarly journals The South African code of corporate governance. The relationship between compliance and financial performance: Evidence from South African publicly listed firms

2015 ◽  
Vol 12 (2) ◽  
pp. 149-169 ◽  
Author(s):  
Jonty Tshipa ◽  
Thabang Mokoaleli-Mokoteli
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
Firm Performance ◽  
Financial Performance ◽  
South African ◽  
Small Firms ◽  
Large Firms ◽  
Board Size ◽  
Tobin's Q ◽  
Listed Firms

Using both Return On Assets (ROA) and Tobin’s Q as proxies for performance, the study seeks to explore if better governed firms exhibit greater financial performance than poorly governed firms. The paper employs a panel study methodology for a sample of 137 Johannesburg Stock Exchange (JSE) listed firms between 2002 and 2011. The results show that the compliance levels to corporate governance in South Africa (SA) has been improving since 2002 when King II came into force. However, the compliance level in large firms appears to be higher than in small firms. Further, the findings show that the market value of large firms is higher than that of small firms. These results largely support the notion that better governed firms outperforms poorly governed firms in terms of financial performance. Notably, the empirical results indicate that board size, CEO duality and the presence of independent non-executive directors positively impact the performance of a firm, whereas board gender diversity, director share-ownership and frequency of board meetings have no impact on firm performance. This suggests that greater representation of independent non-executive director, a larger board size and the separation of CEO and Chairman should be encouraged to enhance firm performance. Unexpectedly, the presence of internal key board committees, such as remuneration, audit and nomination, negatively impact firm performance. Similar to UK, South Africa has a flexible approach to corporate governance, in which listed firms are required to apply or explain non-conformance to King recommendations. This study has policy implications as it determines whether the flexible corporate governance approach employed by SA improves corporate governance compliance than the mandatory corporate governance approach as employed by countries such as Sri Lanka and US, and whether compliance translates into firm performance. The significant finding of this study is that compliant firms enjoy a higher firm performance as measured by ROA and Tobin’s Q. This implies that compliance to corporate governance code of practice matters, not just as box ticking exercise but as a real step change in the governance of South African listed firms. This paper fulfils an identified need of how compliance to corporate governance influences firm performance in South Africa. The findings have implications to JSE listing rules, policy, investor confidence and academia.

scholarly journals Stakeholder Networks and Strategy: The Influence of Network Consistency and Network Diversity On Firm Performance

1970 ◽  
Vol 30 (2) ◽  
pp. 120-144
Author(s):  
Richard Peters ◽  
Peggy Golden
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Corporate Reputation ◽  
Social Performance ◽  
Relationship Management ◽  
Time Span ◽  
Firm Financial Performance ◽  
Network Diversity ◽  
External Stakeholders ◽  
Network Consistency

As academic and practitioners continue to demand greater stakeholder acknowledgementand engagement, firms must seek ways to move beyond dyadic interactionsand treat internal and external stakeholders as components of a holisticnetwork. This paper introduces two new constructs, Network Diversity and NetworkConsistency, proposing that both the variety of stakeholder partners (Network Diversity)as well as the uniformity of social performance across multiple stakeholderconstituencies (Network Consistency), will influence Corporate Reputation (CR)and ultimately, firm financial performance. Using a sample of 158 firms, across afive year time span,we find that while Network Diversity has no significant relationshipto CR, Network Consistency is in fact related to Corporate Reputation. Further,high levels of Network Diversity may actually detract from, rather than enhancefinancial performance, via increased cost and relationship management complexity.

Sign in / Sign up

Export Citation Format

Share Document