scholarly journals Institutions, Strategic Posture and Performance of Micro, Small and Medum Enterprises

2021 ◽  
Author(s):  
◽  
Hernan G. Roxas
Keyword(s):  
Institutional Theory ◽  
Significant Influence ◽  
Informal Institutions ◽  
Business Environment ◽  
Service Performance ◽  
Human Interaction ◽  
Organisational Performance ◽  
Formal Institutions ◽  
Strategic Posture ◽  
Product Service

<p>The thesis of this study is that perceptions of formal and informal institutions permeating the business environment in a city in an emerging economy have significant influence on the strategic posture of micro, small and medium enterprises (MSMEs); and that strategic posture is viewed to have significant influence on the firms' overall organisational performance. The study emphasises the mediating role of strategic posture, being the conduit through which perceptions of sub-national institutions exert their influence on organisational performance. Institutional theory, which considers institutions as 'the rules of the game' that govern human interaction, serves as the study's theoretical foundation. An extensive review of the literature was undertaken in the areas of institutional theory, strategic management, organisational performance, investment or business climates, MSME/entrepreneurial development, decentralisation and local economic development at the city level. The study adopts an empirical-deductive research design through which a survey generated a total sample of 900 MSMEs located in two cities in the south-eastern region of the Philippines. Hierarchical multiple regression modelling, using ordinary least squares method with confirmatory robust technique, was applied to test the hypotheses. Results suggest that all of the five formal institutions and two of the five informal institutions had positive relationships with an entrepreneurial strategic posture, which in turn, was shown to be positively associated with higher levels of product/service, strategic and financial performance. Moreover, strategic posture was shown to partially mediate the relationships between three formal institutions and two facets of organisational performance. However, when the five formal institutions and five informal institutions were aggregated into two sets of indices, mediation analysis revealed that the index of formal institutions - product/service performance relationship was partially mediated by strategic posture. The index of formal institutions - strategic performance relationship was shown to be fully mediated by strategic posture. On the other hand, the index of informal institutions - product/service performance relationship was shown to be fully mediated by strategic posture. Overall, the empirical results offer acceptable level of support to the main thesis of the study.</p>

scholarly journals Institutions, Strategic Posture and Performance of Micro, Small and Medum Enterprises

2021 ◽  
Author(s):  
◽  
Hernan G. Roxas
Keyword(s):  
Institutional Theory ◽  
Significant Influence ◽  
Informal Institutions ◽  
Business Environment ◽  
Service Performance ◽  
Human Interaction ◽  
Organisational Performance ◽  
Formal Institutions ◽  
Strategic Posture ◽  
Product Service

<p>The thesis of this study is that perceptions of formal and informal institutions permeating the business environment in a city in an emerging economy have significant influence on the strategic posture of micro, small and medium enterprises (MSMEs); and that strategic posture is viewed to have significant influence on the firms' overall organisational performance. The study emphasises the mediating role of strategic posture, being the conduit through which perceptions of sub-national institutions exert their influence on organisational performance. Institutional theory, which considers institutions as 'the rules of the game' that govern human interaction, serves as the study's theoretical foundation. An extensive review of the literature was undertaken in the areas of institutional theory, strategic management, organisational performance, investment or business climates, MSME/entrepreneurial development, decentralisation and local economic development at the city level. The study adopts an empirical-deductive research design through which a survey generated a total sample of 900 MSMEs located in two cities in the south-eastern region of the Philippines. Hierarchical multiple regression modelling, using ordinary least squares method with confirmatory robust technique, was applied to test the hypotheses. Results suggest that all of the five formal institutions and two of the five informal institutions had positive relationships with an entrepreneurial strategic posture, which in turn, was shown to be positively associated with higher levels of product/service, strategic and financial performance. Moreover, strategic posture was shown to partially mediate the relationships between three formal institutions and two facets of organisational performance. However, when the five formal institutions and five informal institutions were aggregated into two sets of indices, mediation analysis revealed that the index of formal institutions - product/service performance relationship was partially mediated by strategic posture. The index of formal institutions - strategic performance relationship was shown to be fully mediated by strategic posture. On the other hand, the index of informal institutions - product/service performance relationship was shown to be fully mediated by strategic posture. Overall, the empirical results offer acceptable level of support to the main thesis of the study.</p>

scholarly journals An Institutional Theory of Tax Non- Compliance in Bulgaria: a Tax Morale Approach

2020 ◽  
pp. 33-49 ◽  
Keyword(s):  
Institutional Theory ◽  
Firm Size ◽  
Representative Sample ◽  
Political Instability ◽  
Informal Institutions ◽  
Formal Institutions ◽  
Tax Morale ◽  
Economic Decision ◽  
Face To Face ◽  
Nationally Representative

To explain tax non-compliance, the dominant approach has been to view noncompliance as a rational economic decision taken when the benefits outweigh the costs. However, many remain compliant even when non-compliance is the rational economic decision. The outcome has been the emergence of a new tax morale approach. Grounded in institutional theory, this asserts that formal institutional failings lead to an asymmetry between the laws and regulations of a society’s formal institutions and the beliefs of the population that constitute its informal institutions. The greater is this asymmetry (measured by the level of tax morale), the greater is the prevalence of tax non-compliance. Until now, studies have analysed the tax morale of citizens. This paper evaluates the tax morale of entrepreneurs and identifies the formal institutional failings that lead to lower tax morale among entrepreneurs. Reporting 456 face-to-face interviews with a nationally representative sample of entrepreneurs in Bulgaria, it is revealed not only that the tax morale of entrepreneurs varies by sector and firm size, but also that the formal institutional failings significantly associated with low tax morale include a perceived lack of tax fairness, corruption and political instability. The implications for theory and policy are then discussed.

scholarly journals Social Policy: Issues of the Modern Conceptualization of Institutionalism

2020 ◽  
pp. 120-142
Author(s):  
S. A. ROMANIUK
Keyword(s):  
Public Policy ◽  
Social Development ◽  
Institutional Theory ◽  
Development Policy ◽  
Public Life ◽  
Informal Institutions ◽  
Business Environment ◽  
Point Of View ◽  
Comparative Institutionalism

Th e article is devoted to the systematization of modern theoretical views on the role of institutions in social development. Th e relevance of the topic is determined by the need for a thorough analysis of modern views on the role and place of institutions in social development in the conceptualization of diff erent approaches to the development of institutional theory. Th e novelty of the work lies in the substantiation of the directions of use in domestic science and practice of modern approaches to institutionalism in general and various institutions in particular in order to improve the economic and social development of the country, its regions and communities. Th e purpose of the article is to summarize the main latest theoretical views on institutional theory and the practical use of its components in the formation of state development policy in various spheres of public life. Іn the process of preparing the article, such basic research methods as systematic and multidisciplinary, as well as comparative analysis were used, the joint application of which allowed to fully explore and generalize the multifaceted and complex nature of the components of institutional theory and its use. Scientifi c approaches to key components of institutional theory are considered. Th e main characteristics of the concept of institutions as a common phenomenon in the social, political and economic spheres are highlighted. Emphasis is placed on the coordinating role of institutions, the importance of studying the impact on public policy-making of both formal and informal institutions. Th e approach to the analysis of institutions from the point of view of rational and sociological behavioral models is systematized. Various scientifi c interpretations of institutional theory on an interdisciplinary basis — from the point of view of organizational institutionalism, institutional economics and comparative institutionalism — are characterized and analyzed. Th e author identifi ed provisions of these theoretical approaches, which seem relevant and are of greatest interest to scientists, politicians, practitioners in the framework of institutional analysis. In particular, the importance of socially responsible investment in the development of person, separate territory, country as a whole, as interconnected and interdependent processes that characterize the development of self-regulation of the business environment as a form of informal institutions. It is found that from the point of view of formation and implementation of public policy by authorities of diff erent territorial levels, it is important to use the ideas of comparative institutionalism, in particular on the mutual conditionality and interdependence of institutions in diff erent spheres of public life. Th e generalization of research on the implementation by countries of various institutional forms for the improvement of development policy is out, on the basis of which the importance of complementarity of institutions, dialectically interconnected, is determined. In this context, the key functions of institutions that are critical for the formation and implementation of development policy are described. Th e introduction of such an approach to evaluating the eff ectiveness of institutions as “institutional distance” is analyzed.

scholarly journals Explaining and tackling envelope wages in the Baltic Sea region

2015 ◽  
Vol 10 (3) ◽  
pp. 295-312 ◽  
Author(s):  
Colin C Williams ◽  
Ioana Alexandra Horodnic
Keyword(s):  
Institutional Theory ◽  
Baltic Sea ◽  
Informal Institutions ◽  
Formal Institutions ◽  
The Baltic Sea ◽  
Content Type ◽  
Baltic Countries ◽  
Baltic Sea Region ◽  
The Baltic ◽  
Laws And Regulations

Purpose – The purpose of this paper is to advance a new way of explaining and tackling the illegitimate wage practice where employers pay their employees an undeclared (envelope) wage in addition to their formal salary. Drawing upon institutional theory, it is here proposed that envelope wages result from the lack of alignment of a society’s formal institutions (i.e. the codified laws and regulations) with its informal institutions (i.e. the socially shared unwritten understandings which reflect citizens’ norms, values and beliefs). Design/methodology/approach – To evaluate this, data are reported from a 2013 Eurobarometer survey involving 1,738 face-to-face interviews with formal employees in four Baltic countries, namely, Estonia, Latvia, Lithuania and Poland. Findings – The finding is that the greater is the asymmetry between the formal and informal institutions (i.e. the level of disagreement of citizens with the codified laws and regulations of formal institutions), the higher is the propensity to pay envelope wages. This is the case at both the individual- and country levels. Practical implications – To reduce the prevalence of envelope wages, the resultant argument is that the values of employers and employees need to be aligned with the formal institutions. This requires alterations not only in the informal institutions, using measures such as tax education, awareness raising campaigns and normative appeals, but also changes in formal institutions so as to improve trust in government by fostering greater procedural justice, procedural fairness and redistributive justice. Originality/value – This is the first paper to apply institutional theory to explaining and tackling envelope wages in the Baltic Sea region.

scholarly journals Trusting in indigenous institutions: exporting SMEs in Nigeria

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kingsley Obi Omeihe ◽  
Amon Simba ◽  
David Rae ◽  
Veronika Gustafsson ◽  
Mohammad Saud Saud Khan
Keyword(s):  
Developing Country ◽  
Informal Institutions ◽  
Business Environment ◽  
Formal Institutions ◽  
Trade Associations ◽  
Content Type ◽  
Western Africa ◽  
Indigenous Institutions ◽  
Depth Study ◽  
Cross Case Analysis

PurposeThe purpose of this article is to develop new insights into the interplay between trust, indigenous institutions and weak/dysfunctional formal institutions using the Nigerian context – a developing country in Western Africa. It advances new understanding on how Nigerian entrepreneurs trust in their indigenous institutions such as family ties, kinship, chieftaincy, religion, cooperatives and trade associations to resolve disputes arising from their exporting activities as opposed to dormant formal institutions in their country.Design/methodology/approachThis exploratory study adopts an interpretive research paradigm, and it utilises a case study strategy. Data collected through observations, archival records and qualitative conversations with 36 exporting Nigerian small and medium-sized enterprises (SMEs) is analysed by utilising a combination of within and cross-case analysis techniques. Doing so enabled an in-depth study of the methods their owner-managers use in order to take advantage of the relationships they established through their long-standing cultural institutions in the place of weak formal institutions in their country.FindingsIndigenous institutions have evolved to replace formalised institutions within the business environment in Nigeria. They have developed to become an alternative and trusted arbiter for solving SMEs' export issues because of weak/dysfunctional formal institutions in the Western African country. The owner-managers of exporting SMEs perceive formal institutions as representing a fragmented system that does not benefit their export businesses.Practical implicationsThe findings demonstrate that there is need for policymakers to consider the role of informal institutions in the Nigerian context. Such an approach is essential given the economic importance and increasing number of SMEs that trade and export their goods through informal structures in Nigeria.Originality/valueThe study indicates that it is not just the void or absence of institutions that exist in a developing country such as Nigeria, but weak/dysfunctional formal institutions have been replaced by culturally embedded informal institutions. Thus, the study provides a new theoretical avenue depicting the concept of trusting in indigenous institutions.

scholarly journals Formal institutions and the development of entrepreneurial activity – the contingent role of corruption in emerging economies

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Arezou Harraf ◽  
Hasan Ghura ◽  
Allam Hamdan ◽  
Xiaoqing Li
Keyword(s):  
Emerging Economies ◽  
Corporate Entrepreneurship ◽  
Informal Institutions ◽  
Entrepreneurial Activity ◽  
Future Research ◽  
Formal Institutions ◽  
Business World ◽  
Content Type ◽  
Formal And Informal Institutions ◽  
Control Of Corruption

PurposeThe paper aims to analyse the interplay between formal and informal institutions' and their impact on entrepreneurship rates in emerging economies.Design/methodology/approachThis study expands previous research in examining the moderating effect of control of corruption on the relationship between formal institutions and the development of the entrepreneurial activity. The study utilizes longitudinal analyses of a dataset from 41 emerging economies over 11 years (2006–2016).FindingsFindings provided robust support for the study's hypotheses. The results suggested lower levels of corruption positively moderate the effects of a country's number of procedures and education and training on the rates of entrepreneurial activity, while negatively moderating the effects of firm-level technology absorption on the rates of entrepreneurial activity.Research limitations/implicationsThe study has considered only one particular aspect of high-growth entrepreneurship, which is newly registered firms with limited liability. Although newly registered firms are recognized as one of the critical drivers of entrepreneurial activity. Future research should seek to examine other aspects of growth-oriented entrepreneurship such as activities involving a high level of innovation, corporate entrepreneurship or technology developments.Practical implicationsThis study advanced the existing theories in the field of entrepreneurship and institutional economics as it merged the two theories as a driving framework in the design of the study in the context of emerging economies.Social implicationsThe study tested a theoretical model by expanding the number of emerging economies in the study and found comparable findings that explain factors that may influence the likelihood of individuals entering entrepreneurship.Originality/valueThis article adds to the current literature as it highlights the importance of the interplay of formal and informal institutions in determining their impact on entrepreneurship rates in emerging economies. This is of particular importance to policy-makers, and the business world as the empirical results of this study show the benefits of control of corruption in boosting entrepreneurial rates in these economies, which strive for economic diversification in their developmental endeavours.

A NEW ERA FOR MANAGEMENT ACCOUNTANTS IN NIGERIA: A GUIDE TO ACHIEVEMENT OF ENHANCED ORGANIZATIONAL PERFORMANCE AND SUCCESS

2021 ◽  
Vol 1 (1) ◽  
pp. 35-43
Author(s):  
MARYAM ABDULLAHI HABIB
Keyword(s):  
Organizational Performance ◽  
Business Environment ◽  
Current Situation ◽  
Organisational Performance ◽  
New Era ◽  
Secondary Sources ◽  
Management Accountants

Management accountants, in the conventional and contemporary age, have contributed to the development of organisations with regards organisational performance and success which has proven to be latent in Nigeria. The differences in development of organisational performance are dependent of the factors which have influenced both facets of roles of management accountants in Nigeria. This study compares the conventional and contemporary roles of management accountants and their contribution towards enhanced organisational performance and success in Nigeria. Secondary sources were analysed and information was gathered in the bid to produce literature on the issue of concern. The study shows that even with its current situation, management accountants, to varying extents, contribute to organisational performance and success. The study serves as a steer to academicians, potential employees, practicing management accountants and students in ensuring that these roles move with changes in the business environment for the sake of organisational performance and success.

scholarly journals Social Trust, Safety and the Choice of Tourist Destination

2016 ◽  
Vol 4 (1) ◽  
pp. 1 ◽  
Author(s):  
Susanne Jensen ◽  
Gert Tinggaard Svendsen
Keyword(s):  
Legal System ◽  
Social Trust ◽  
Public Spaces ◽  
Informal Institutions ◽  
Destination Choice ◽  
Control Mechanisms ◽  
Formal Institutions ◽  
Tourist Destination ◽  
Policy Makers ◽  
Police Authority

Does social trust influence safety and tourists’ destination choice? Our claim is that the roots of safety may take two forms: either formal institutions or informal institutions. Formal institutions concern how society can build up control mechanisms through the legal system, police authority and military. The problem is that high visibility of police and military in public spaces may give the tourist the impression of an unsafe and insecure destination. Instead, social trust through self-enforcements of social norms for behaviour may be important because the informal institutions guarantee the safety of tourists (and locals) without signalling a problem with safety. Building social trust may further enhance the feeling of safety and thereby attract even more tourists. Thus, our trust-safety theory may guide the active use of social trust by tourist officials and policy makers.

Institution building and institutional voids

2016 ◽  
Vol 11 (1) ◽  
pp. 18-41 ◽  
Author(s):  
Sheila M. Puffer ◽  
Daniel J McCarthy ◽  
Alfred M Jaeger
Keyword(s):  
Economic Growth ◽  
Institutional Theory ◽  
Market Economy ◽  
Emerging Economies ◽  
Emerging Market ◽  
Institution Building ◽  
Institutional Voids ◽  
Formal Institutions ◽  
Content Type ◽  
Bric Countries

Purpose – The purpose of this paper is to present a comparative analysis of institutions and institutional voids in Russia, Brazil, and Poland over the decades of the 1980s through to 2015. The paper asserts that Russia and Brazil could learn much from Poland regarding formal institution building and formal institutional voids that cause problems like corruption and limit economic growth. Design/methodology/approach – A comparative case study approach is utilized to assess the relative success of the three emerging market countries in transitioning to a market economy, viewed through the lens of institutional theory. Findings – Poland’s experience in building successful formal institutions and mitigating major institutional voids can be instructive for Russia and Brazil which have shown far less success, and correspondingly less sustained economic growth. Research limitations/implications – This paper demonstrates the value of applying institutional theory to analyze the progress of emerging economies in transitioning to a market economy. Practical implications – This country comparison can prove valuable to other emerging economies seeking a successful transition to a market economy. Social implications – Since institutions are the fabric of any society, the emphasis on institutions in this paper can have positive implications for society in emerging markets. Originality/value – This paper is an original comparison of two BRIC countries with a smaller emerging economy, utilizing institutional theory. Factors contributing to Poland’s success are compared to Russia and Brazil to assess how those countries might be positively informed by Poland’s experience in building and strengthening sustainable formal institutions as well as avoiding institutional voids and their associated problems.

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