scholarly journals Too Many Products: Decentralized Decision Making in Multinational Firms

2011 ◽  
Vol 3 (1) ◽  
pp. 280-306 ◽  
Author(s):  
Catherine Thomas
Keyword(s):  
Decision Making ◽  
Western Europe ◽  
Multinational Firms ◽  
Consumer Preferences ◽  
Laundry Detergent ◽  
Market Outcomes ◽  
Firm Level ◽  
Product Range ◽  
Country Level ◽  
Decentralized Decision Making

I analyze country-level product ranges offered by multinational laundry detergent manufacturers in Western Europe. Observed product range variation across countries exceeds the optimal firm-level response to differences in consumer preferences and retail environments. Counterfactual analysis reveals that increased product range standardization would reduce firm costs and increase profits. These findings are consistent with theory models of local agency, where decentralized decision making can be the constrained optimal organizational form despite the resulting lack of coordination across divisions. My analysis suggests that organizational structure affects product market outcomes and firm performance. (JEL D23, F23, L21, L25, L65)

scholarly journals The impact of terrorism on international mergers and acquisitions: Evidence from firm-level decisions

2020 ◽  
pp. 002234331990020
Author(s):  
Babet Hogetoorn ◽  
Michiel Gerritse
Keyword(s):  
Host Country ◽  
Multinational Firms ◽  
Merger And Acquisition ◽  
Sample Standard Deviation ◽  
Firm Level ◽  
Standard Deviation Increase ◽  
Country Level ◽  
The Face ◽  
International Mergers ◽  
The Impact

Does terrorism inhibit a country’s ability to attract international direct investment? If so, terrorism may have large costs in terms of employment losses, macroeconomic instability, and missed development opportunities. However, do investors fear terrorism because of direct risks to their assets, or because the opportunities in the host country deteriorate? And how do they adjust investments? We study the impact of terrorism on merger and acquisition decisions of 8,872 firms over 116 countries over 16 years. The firm-level perspective allows the isolation of host-country terrorism from firm-level characteristics such as size or experience as an explanation, by comparing decisions for the same firm across destinations. It also allows separation of investment responses into reductions or entire withholding of investment. A sample standard deviation increase in terrorism reduces merger and acquisition investment by around 30%. Firms do not generally reduce the size of their investment in the face of terrorism – instead, they decide not to enter the country altogether. We find no evidence to suggest that multinational firms are more sensitive to attacks on local business assets. A country-level analysis, which necessarily does not control for firm-level characteristics, yields materially different conclusions.

An Analysis of Segment Disclosures under SFAS No. 131 and SFAS No. 14

2000 ◽  
Vol 14 (3) ◽  
pp. 287-302 ◽  
Author(s):  
Don Herrmann ◽  
Wayne B. Thomas
Keyword(s):  
Decision Making ◽  
Geographic Area ◽  
Segment Reporting ◽  
Internal Organization ◽  
Country Level ◽  
Reporting Requirements ◽  
Geographic Segment Disclosures ◽  
Segment Disclosures ◽  
Number Of Firms ◽  
Segment Information

The purpose of this paper is to compare the segment reporting disclosures under SFAS No. 131 with those reported the previous year under SFAS No. 14. Under SFAS No. 131, firms are required to report segments consistent with the way in which management organizes the business internally. In addition, the accounting items disclosed for each segment are defined consistent with internal segment information used to assess segment performance. For many companies, this represents a significant change from the approach used to report segments under SFAS No. 14. Under SFAS No. 14, firms were required to disclose segment information by both line-of-business and geographic area with no specific link to the internal organization of the company or the measurements that were used for internal decision making. As a result, many complained that the resulting disclosures were highly aggregated and of limited use for decision-making purposes. We find that the change in segment reporting requirements under SFAS No. 131 has made a relatively significant impact on the disclosure of segment information. Over two-thirds of the sample firms have redefined their primary operating segments upon adopting SFAS No. 131. There has also been an increase in the number of firms providing segment disclosures and companies are disclosing more items for each operating segment. For enterprise-wide disclosures, the proportion of country-level geographic segment disclosures has increased, while the proportion of broader geographic area segment disclosures has decreased. However, the number of firms reporting earnings by geographic area has declined greatly as this item is no longer required to be disclosed for firms reporting on a basis other than geographic area.

scholarly journals EXPRESS: Marketers Project Their Personal Preferences onto Consumers: Overcoming the Threat of Egocentric Decision Making

2021 ◽  
pp. 002224372199837
Author(s):  
Walter Herzog ◽  
Johannes D. Hattula ◽  
Darren W. Dahl
Keyword(s):  
Decision Making ◽  
Consumer Preferences ◽  
Research Question ◽  
Pilot Studies ◽  
Low Level ◽  
Marketing Managers ◽  
False Consensus Effect ◽  
False Consensus ◽  
High Level

This research explores how marketing managers can avoid the so-called false consensus effect—the egocentric tendency to project personal preferences onto consumers. Two pilot studies were conducted to provide evidence for the managerial importance of this research question and to explore how marketing managers attempt to avoid false consensus effects in practice. The results suggest that the debiasing tactic most frequently used by marketers is to suppress their personal preferences when predicting consumer preferences. Four subsequent studies show that, ironically, this debiasing tactic can backfire and increase managers’ susceptibility to the false consensus effect. Specifically, the results suggest that these backfire effects are most likely to occur for managers with a low level of preference certainty. In contrast, the results imply that preference suppression does not backfire but instead decreases false consensus effects for managers with a high level of preference certainty. Finally, the studies explore the mechanism behind these results and show how managers can ultimately avoid false consensus effects—regardless of their level of preference certainty and without risking backfire effects.

scholarly journals Information related service trade within firms: evidence from firm-level data in Germany

2021 ◽  
Author(s):  
Kurt A. Hafner ◽  
Jörn Kleinert
Keyword(s):  
Multinational Firms ◽  
Economies Of Scope ◽  
It Services ◽  
Firm Level ◽  
It Service ◽  
Level Data ◽  
Related Service ◽  
Foreign Affiliates ◽  
Knowledge Intensive ◽  
Parent Companies

AbstractMulti-unit firms have productivity advantages over competitors because of their use of a non-rival asset—firm-specific knowledge—in several units. Using knowledge-intensive services leads to economies of scope in production by multi-unit firms. Such headquarter are usually supplied by parent companies and serve to link different firm units. Headquarter services are difficult to quantify in statistics or surveys, except when they cross-borders and the exchange of services between MNEs and their offshore subsidiaries becomes apparent. This study therefore focuses on IT service imports to explain productivity differences among foreign affiliates of multinational firms in Germany. The authors base the analysis on the population of foreign multinational firms active in Germany and analyze what effect the import of IT services has on their productivity. They find that IT headquarter service flows have significant impacts on foreign affiliates’ productivity in general and US affiliates in particular. As the average IT-service flows (per firm and partner) from parent countries are significantly higher for US affiliates than non-US affiliates, they conclude that the import of IT services from the parent-company is a source of the productivity advantages of US affiliates in Germany.

scholarly journals Financial constraint, trust, and export performances: firm-level evidence from Africa

2021 ◽  
pp. 1-23
Author(s):  
Maty Konte ◽  
Gideon Ndubuisi
Keyword(s):  
Financial Constraints ◽  
Interpersonal Trust ◽  
Negative Relationship ◽  
Financial Constraint ◽  
African Countries ◽  
Firm Level ◽  
Country Level ◽  
The World Bank ◽  
Negative Effect ◽  
Enterprise Surveys

Abstract Several existing studies have documented a negative relationship between firm financial constraint and export activities but do not attempt to examine factors that could attenuate this relationship in Africa. In this paper, we examine the effect of financial constraint on exports in Africa and explore how the level of trust in countries where firms are located shapes this relationship. We combine the World Bank Enterprise Surveys with different measures of country-level personal and interpersonal trust computed from the Afrobarometer surveys of 19 African countries. Our results show that financial constraints negatively affect export activities. However, this negative effect is attenuated for firms that are located in trust-intensive societies. These findings are robust to different specifications. Interestingly, we find that small and medium-sized enterprises in Africa are more likely to be affected by financial constraints but also more likely to benefit from a higher level of both personal and interpersonal trust, while for larger firms only interpersonal trust matters.

scholarly journals Framing the difficulties resulting from implementing a Participatory Management Model in a public hospital

2012 ◽  
Vol 20 (6) ◽  
pp. 1142-1151 ◽  
Author(s):  
Andrea Bernardes ◽  
Greta Cummings ◽  
Yolanda Dora Martinez Évora ◽  
Carmen Silvia Gabriel
Keyword(s):  
Decision Making ◽  
Public Hospital ◽  
Communication Process ◽  
Management Model ◽  
Participatory Management ◽  
Bolman And Deal ◽  
Job Descriptions ◽  
Team Members ◽  
Decentralized Decision Making ◽  
Innovative Management

OBJECTIVE: This study aims to address difficulties reported by the nursing team during the process of changing the management model in a public hospital in Brazil. METHODS: This qualitative study used thematic content analysis as proposed by Bardin, and data were analyzed using the theoretical framework of Bolman and Deal. RESULTS: The vertical implementation of Participatory Management contradicted its underlying philosophy and thereby negatively influenced employee acceptance of the change. The decentralized structure of the Participatory Management Model was implemented but shared decision-making was only partially utilized. Despite facilitation of the communication process within the unit, more significant difficulties arose from lack of communication inter-unit. Values and principals need to be shared by teams, however, that will happens only if managers restructure accountabilities changing job descriptions of all team members. CONCLUSION: Innovative management models that depart from the premise of decentralized decision-making and increased communication encourage accountability, increased motivation and satisfaction, and contribute to improving the quality of care. The contribution of the study is that it describes the complexity of implementing an innovative management model, examines dissent and intentionally acknowledges the difficulties faced by employees in the organization.

The Factors Affect Company Performance in Renewable Energy Industry

2017 ◽  
Vol 5 (6) ◽  
pp. 188-204 ◽  
Author(s):  
YINLIN TSAI ◽  
Johnny Tung
Keyword(s):  
Renewable Energy ◽  
Capital Intensity ◽  
Performance Measure ◽  
Energy Industry ◽  
Long Term Results ◽  
Company Performance ◽  
Firm Level ◽  
Country Level ◽  
Performance Determinants ◽  
Renewable Energy Industry

Concerns about global warming and climate change are generating interest in renewable energy measures with the purpose to minimize environmental impact. Promoting renewable energy production becomes indispensable since its represent a tiny fraction of energy consumed. The purpose of this study is to identify the performance determinants are divided in country specific advantages and firm specific advantages. Companies were selected from Bloomberg and filtered due to its information ava ilability from COMPUSTAT to construct a Panel Data structure. The results proved that both country level (shares of renewable and energy consumption) and firm level (market capitalization, employee growth rate and capital intensity) determinants were signi ficant in the renewable energy industry. Through the analysis, it’s possible to realize that return on assets it’s a performance measure with long term results, but unlike it, gross profit margin is variable that demonstrate short term results. We conclude that renewable energy industry has a great potential due to its results performed.

Sign in / Sign up

Export Citation Format

Share Document