Impact of Financial Risk Ratios on Profitability of Multinational vs. Domestic Pharmaceuticals in India

2014 ◽  
Vol 3 (2) ◽  
pp. 54-68
Author(s):  
Kaushik Chakraborty
Keyword(s):  
Pharmaceutical Industry ◽  
Strong Evidence ◽  
Corporate Strategy ◽  
Business Environment ◽  
Multinational Companies ◽  
High Tech ◽  
Financial Leverage ◽  
The Relationship ◽  
Domestic Companies ◽  
Indian Pharmaceutical Industry

The impact of financial leverage on the profitability position of the business firms under different financing alternatives and with varying levels of overall profitability is one of the most crucial issues in modern finance to sustain continuous improvement in financial performance. In fact, framing an appropriate capital structure with flexible equity and disciplined debt financing is an integral part of the entire corporate strategy to gain shareholder confidence and stakeholder support to achieve long run sustainability. No firm can ignore this aspect in the context of today's high-tech competitive business environment. Unfortunately this issue has not been addressed with due importance in India and in particular, no significant study exists on the pharmaceutical sector comparing the linkage between financial leverage and profitability of multinational companies with that of the domestic companies. The pharmaceutical industry is acknowledged as one of the most promising industries in India; therefore this study should make a significant contribution to the practice. This paper examines the relationship between financial leverage and profitability of the Indian pharmaceutical industry during the period of March 2002 to December 2011 (N=20). The researcher compared the relationship between financial leverage and profitability of multinational companies with that of the domestic companies in the Indian pharmaceutical industry. The research found strong evidence of the negative contribution of financial leverage towards improving profitability for multinational and domestic firms. Hence, these results provide strong evidence of positive contribution of financial leverage towards improving profitability in a substantial portion of the sample companies during the study period.

Assets Management of the Indian Pharma Sector in the Changing Socio-Cultural and Business Environment of Post-Liberalization Era

2016 ◽  
pp. 47-66
Author(s):  
Kaushik Chakraborty
Keyword(s):  
Pharmaceutical Industry ◽  
Rapid Change ◽  
Business Environment ◽  
Wealth Maximization ◽  
Financial Applications ◽  
Tools And Techniques ◽  
The Relationship ◽  
Domestic Companies ◽  
Indian Pharmaceutical Industry ◽  
Assets Management

Efficiency of assets management is an absolutely unavoidable issue in accomplishing the wealth maximization objective of business. In India, the changing scenario in the front of demographic, social and cultural made a prominent impact on the growth of pharmaceutical industry. In fact, during the last two decades the changing socio-cultural and business environment of India witnessed a rapid change in various managerial as well as financial applications of the Indian pharma sector. Assets management is no doubt a vital part of the overall strategy for achieving financial objectives of any industry. In this backdrop, the present study empirically investigates the relationship between the efficiency of assets management and profitability of the Indian pharmaceutical industry during the period 1998-99 to 2012-13 and also examines whether its findings conform to the theoretical arguments. Besides this, the paper also tries to make a comparison, in respect of the efficiency of assets management, between multinational and domestic companies in the Indian pharmaceutical industry during the same period to know whether changing socio-cultural and business environment gives an age to domestic companies in respect of assets management or not. The sample size of the study consists of ten pharmaceutical companies by taking five multinational and five domestic companies from the Indian pharmaceutical industry. The issues analyzed in this study have been tackled using relevant statistical tools and techniques.

Linkage between Efficiency of Assets Management and Profitability in Selected Companies in Pharmaceutical Industry

2014 ◽  
pp. 207-221
Author(s):  
Kaushik Chakraborty
Keyword(s):  
Pharmaceutical Industry ◽  
Sample Size ◽  
Asset Management ◽  
Pharmaceutical Companies ◽  
Statistical Tools ◽  
Tools And Techniques ◽  
The Relationship ◽  
Domestic Companies ◽  
Indian Pharmaceutical Industry ◽  
Assets Management

This chapter empirically investigates the relationship between the efficiency of asset management and profitability of the Indian pharmaceutical industry during the period 2002-03 to 2011-12. The chapter also tries to make a comparison, in respect of the efficiency of assets management, between multinational and domestic companies in the Indian pharmaceutical industry during the same period. The sample size of the study consists of 20 pharmaceutical companies by taking 10 multinational and 10 domestic companies from the Indian pharmaceutical industry. The issues analyzed in this study have been tackled using relevant statistical tools and techniques.

An Investigation to an Enabling Role of Knowledge Management Between Learning Organization and Organizational Learning

2011 ◽  
pp. 1579-1594
Author(s):  
Juin-Cherng Lu ◽  
Chia-Wen Tsai
Keyword(s):  
Knowledge Management ◽  
Organizational Learning ◽  
Learning Organization ◽  
Current Knowledge ◽  
Business Environment ◽  
High Tech ◽  
Management Processes ◽  
Exploratory Investigation ◽  
The Relationship

This chapter is an exploratory investigation of the relationship and interaction between the learning organization and organizational learning in terms of an enabling role of knowledge management. In the severe and dynamic business environment, organizations should respond quickly to their rivals and environment by transforming into a learning organization. A learning organization could provoke innovation and learning through its structure, task and process redesigns, and evermore adapt gradually toward the eventual goal of organizational learning. Therefore, the dynamic process between the learning organization and organizational learning is an important issue of current knowledge management and practice — that is, the enabling role of knowledge management could enhance the interaction between learning organization and organizational learning. Furthermore, the authors will explore the relationship and interaction between the learning organization and organizational learning in terms of knowledge management processes in business. Two cases, TSMC and Winbond, the semiconductor and high-tech firms in Taiwan, will be studied to illustrate the findings and insights for the study and the chapter.

The Intervening Effect of Corporate Strategy on the Relationship between Transformational Leadership and Enterprise Risk Management Adoption by Commercial State Corporations in Kenya

2022 ◽  
Vol 6 (1) ◽  
pp. 26-42
Author(s):  
Disterius Ondieki Nyandika ◽  
◽  
Paul Machoka ◽  
Michael Ngala ◽  
◽  
...  
Keyword(s):  
Risk Management ◽  
Transformational Leadership ◽  
Corporate Strategy ◽  
Strategic Plan ◽  
Business Environment ◽  
Enterprise Risk Management ◽  
Mediation Effect ◽  
Primary Data ◽  
Enterprise Risk ◽  
The Relationship

In today’s dynamic and competitive business environment, organizations are adopting the enterprise risk management framework to address the inadequacies in risk management in entities. Operating in today’s dynamic and competitive business environment organizations are faced with ever evolving risks as they implement their strategic objectives in order to create value. This study examined the intervening effect of corporate strategy on the relationship between transformational leadership and enterprise risk management adoption. This research adopted a positivist research philosophy and cross-sectional survey design approach. The target population comprised all the Commercial State Corporations in Kenya listed in the register of State Corporations Advisory Committee (SCAC) as at January 2021. The unit of analysis was the 52 Commercial State Corporations and unit of observation was top management of each entity. The study used primary data which was collected through structured questionnaires. The Statistical Package for Social Sciences (SPSS version 22) was used in regression modeling for prediction and causal inferences between study variables. The study findings indicated a partial mediation effect on the mediating role of corporate strategy on the relationship between transformational leadership and ERM adoption. The objective was achieved. The study recommends that the commercial state corporations should anchor the ERM adoption activities and other management programmes in the corporate strategic plan for effective execution. In addition, the corporate strategic plan should be cascaded to stakeholders to enhance ownership and design policy to ensure the implementation of the corporate strategic plan is effectively monitored. Keywords: Corporate Strategy, Transformational Leadership, Enterprise Risk Management & Commercial State Corporations

The mediating role of decentralization between strategy and performance

2019 ◽  
Vol 32 (4) ◽  
pp. 409-425 ◽  
Author(s):  
Qinglan Chen ◽  
Tor Eriksson
Keyword(s):  
Empirical Analysis ◽  
Structural Equation ◽  
Online Survey ◽  
Corporate Strategy ◽  
Group Analysis ◽  
Business Environment ◽  
Content Type ◽  
Mediating Role ◽  
The Relationship

Purpose The purpose of this paper is to empirically examine the mediating role of decentralization in the relationship between a firm’s strategy and its performance in the context of an advanced economy where the chief corporate strategy is differentiation. Design/methodology/approach The study uses data collected by an online survey targeting a stratified sample of 1,238 private firms operating in Denmark. The empirical analysis was carried out by estimating a structural equation model. Findings The key finding was that a decentralized organization (DO) can act as a mediator between a firm’s differentiation strategy and its performance. A multi-group analysis revealed that the mediating impact of decentralizing was affected by contingency factors such as firm size, strategic clarity, degrees of business environment risk and industry competition. Thus, a DO can be said to play a more important role in larger firms, in firms with less strategic clarity, and in companies with multiple plants. Research limitations/implications Although the study offers empirical evidence from a relatively large and representative sample of firms, the specificity of the context should be noted. In particular, firms in Denmark, while facing strong competition, do not compete with low costs. Clearly, studies of the mediating role of decentralization in low-cost strategy environments would be an important next step. Practical implications Several implications of the findings for organizational design and creation of beneficial conditions for strategy implementations are discussed. Originality/value The novel contribution of the study lies in the focus on decentralization as a mediator in the strategy–performance relationship. While previous research has shown that strategy is related to decentralization, and that decentralization is associated with higher performance, an empirical analysis of the relationship between the factors in the strategy-decentralization-performance path had not previously been undertaken.

An Investigation to an Enabling Role of Knowledge Management Between Learning Organization and Organizational Learning

2011 ◽  
pp. 278-298 ◽  
Author(s):  
Juin-Cherng Lu ◽  
Chia-Wen Tsai
Keyword(s):  
Knowledge Management ◽  
Organizational Learning ◽  
Learning Organization ◽  
Current Knowledge ◽  
Business Environment ◽  
High Tech ◽  
Management Processes ◽  
Exploratory Investigation ◽  
The Relationship

This chapter is an exploratory investigation of the relationship and interaction between the learning organization and organizational learning in terms of an enabling role of knowledge management. In the severe and dynamic business environment, organizations should respond quickly to their rivals and environment by transforming into a learning organization. A learning organization could provoke innovation and learning through its structure, task and process redesigns, and evermore adapt gradually toward the eventual goal of organizational learning. Therefore, the dynamic process between the learning organization and organizational learning is an important issue of current knowledge management and practice — that is, the enabling role of knowledge management could enhance the interaction between learning organization and organizational learning. Furthermore, the authors will explore the relationship and interaction between the learning organization and organizational learning in terms of knowledge management processes in business. Two cases, TSMC and Winbond, the semiconductor and high-tech firms in Taiwan, will be studied to illustrate the findings and insights for the study and the chapter.

scholarly journals India's pharmaceutical industry: hype or high tech take-off?

2004 ◽  
Vol 28 (2) ◽  
pp. 182 ◽  
Author(s):  
Prabodh Malhotra ◽  
Hans Lofgren
Keyword(s):  
Pharmaceutical Industry ◽  
World Trade Organization ◽  
World Trade ◽  
Large Scale ◽  
Global Markets ◽  
High Tech ◽  
Competitive Strength ◽  
The World ◽  
Low Costs ◽  
Indian Pharmaceutical Industry

India has built a large pharmaceutical industry through an array of measures in support of domestic firms. The absence of product patents enabled Indian companies to become world leading producers of generic versions of patented drugs. Low costs and a strong engineering tradition continue to sustain competitive strength. The implementation of the World Trade Organization patent regime in 2005 is driving a transformation of the industry. Key elements of the present shake-up include the return of ?big pharma? companies on a large scale and the emergence of several Indian firms that aim to become fullyfledged research-based multinationals. This article provides a description of the development and structure of the Indian pharmaceutical industry and explores questions and challenges arising from its integration into global markets.

Research and development efforts in Indian pharmaceutical industry: How much does it matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Avinash Shivdas ◽  
Sougata Ray
Keyword(s):  
Firm Performance ◽  
Pharmaceutical Industry ◽  
Research And Development ◽  
Negative Impact ◽  
Positive Impact ◽  
Business Environment ◽  
Content Type ◽  
Research Activities ◽  
The Impact ◽  
Indian Pharmaceutical Industry

Purpose The economic value generated by a firm is determined by the efficient management of its resources within a given business environment. The Indian pharmaceutical industry is highly competitive and has attracted huge investments in research and development (R&D), including financing of biotechnological ventures, clinical trials, contract research activities in addition to traditional product development and filing of regulatory requirements. This study aims to identify the specific resources that are significant drivers of performance. Design/methodology/approach Data analysis uses panel regression based on an extended version of the Cobb-Douglas production function, where the dependent variable firm performance is measured using annual sales whilst the independent variables include labour, capital, R&D investments and marketing efforts. This study uses data spanning a period of 7 years (2012–2018) collected from 151 Indian pharmaceutical firms. Findings Contrary to the general understanding that R&D investments tend to create profitable opportunities, it is observed that R&D expenditures have a negative impact on sales in the short to medium time period. This study also highlights the finding that in addition to the positive impact of labour and capital, marketing efforts are more likely to have a greater positive influence on firm performance than R&D. Originality/value The uniqueness of the paper lies not only in the counterintuitive findings but also in the methodology used to capture the impact of the lagged effect of R&D investments on firm performance. Specifically, a regression model-based both on panel data and time-series averages is used to examine the said impact.

scholarly journals An Examination of India's Pharmaceutical Industry Through the Lens of Dependency Theory

2021 ◽  
Author(s):  
Bashar AbuAlghanam
Keyword(s):  
Pharmaceutical Industry ◽  
Third World ◽  
Developed Countries ◽  
Consumer Products ◽  
Dependency Theory ◽  
The Past ◽  
Life Saving ◽  
History Of ◽  
The Relationship ◽  
Indian Pharmaceutical Industry

Dependency theory portrays certain countries as core countries and others as periphery countries. It portrays the relationship between the core and the periphery as a parasitic, and controlling, one. This paper examines global pharmaceuticals through the lens of dependency theory, which would predict that core countries try to exert control over the pharmaceutical industry in periphery countries through patents, licensing, capital controls or other means. They also extend their activities to conducting pharmaceutical testing of dangerous drugs in Third World (or periphery) countries. Evidence suggest that there is a history of major multinational pharmaceutical companies, which are headquartered in developed countries, monopolizing life-saving drugs and marketing unnecessary medical consumer products in periphery third world countries. The case of India, however, took a different discourse that cannot be fully explained within the framework of dependency theory; the Indian pharmaceutical industry has witnessed an impressive growth over the past several decades.

Sign in / Sign up

Export Citation Format

Share Document