We investigate whether active involvement of private equity firms in their portfolio companies during the holding period of a later-stage private equity investment is related to…
Abstract
We investigate whether active involvement of private equity firms in their portfolio companies during the holding period of a later-stage private equity investment is related to increased levels in operating performance of these companies. Our analysis of unique survey data on 267 European buyouts and secondary performance data on 29 portfolio companies using partial least squares structural equation modeling indicates that private equity firms, that is, their board representatives, can increase operating performance not only by monitoring the behavior of top managers of portfolio companies, but also by becoming involved in strategic decisions and supporting top managers through the provision of strategic resources. Strategic resources, in particular expertise and networks, provided by private equity firm representatives in the form of financial and strategic involvement are associated with increases in the financial performance and competitive prospects of portfolio companies. Operational involvement, however, is not related to changes in operating performance. In addition to empirical insights into the different types of involvement and their effects, this chapter contributes to the buyout literature by providing support for the suggested broadening of the theoretical discussion beyond the dominant perspective of agency theory through developing and testing a complementary resource-based view of involvement. This allows taking into account not only the monitoring, but also the more entrepreneurial supporting element of involvement by private equity firms.
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Patrick M. Wright, Anthony J. Nyberg and Robert E. Ployhart
Research in strategic human resource management (SHRM) has evolved over the past 30 years to become more theory based and to exhibit greater empirical rigor. However, much has…
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Research in strategic human resource management (SHRM) has evolved over the past 30 years to become more theory based and to exhibit greater empirical rigor. However, much has changed in the external environment that makes the existing theories, approaches, and methodologies inappropriate for addressing the questions that organizations face in managing their human resources today. In this chapter we discuss a number of environmental changes impacting organizations and identify tensions that researchers have faced in exploring how firms seek to manage their people as a source of competitive advantage. We argue that past research has focused on only one side of the tension at a time, thus limiting the usefulness of the answers that research provides. We advocate for research that simultaneously addresses both sides of the tensions in a way that can revolutionize research in SHRM.
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Phillip C. Wright and Gary D. Geroy
Qualitative information‐gathering techniques are focused on todetermine whether they can be adapted or adopted to support strategicgoal‐setting. Much of the literature suggests…
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Qualitative information‐gathering techniques are focused on to determine whether they can be adapted or adopted to support strategic goal‐setting. Much of the literature suggests that if planning is based on information gathered and presented in a manner which managers can understand they are more likely to act on it, and, for this reason, qualitative rather than quantitative techniques are stressed here. Factors which are not amenable to numerate analysis but which are useful to the strategic planner, such as experience, judgement and intuition, are also isolated and analysed. An attempt is made to facilitate the use of qualitative data‐gathering methods and suggestions are made as to where particular techniques may prove beneficial, together with their limitations. Research, from a small (n = 20), in‐depth survey of small business owners/ managers in Canada, is included which shows that they do not use quantitative planning processes but that judgemental techniques were most widely used; in general, the less sophisticated the planning process the higher it would be ranked among the survey participants. The research from other surveys also shows that scientific mathematically based models often do not fit with small business organisational reality and that methodologies should be developed that integrate research into the decision‐making process.
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The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and…
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The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.
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Philip C. Wright and Gary D. Geroy
Outlines how human competency engineering can be used as a change maangement or organizational development tool, based upon studies conducted in Canada, Hong Kong and Indonesia…
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Outlines how human competency engineering can be used as a change maangement or organizational development tool, based upon studies conducted in Canada, Hong Kong and Indonesia. Suggests that a change model based on the practical application of social science and physical science concepts can be applied over several cultures.
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This study critically analyzes the micro-, meso- and macro-level factors that influence the female academics to engage in academic entrepreneurship (AE). The extant literature…
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This study critically analyzes the micro-, meso- and macro-level factors that influence the female academics to engage in academic entrepreneurship (AE). The extant literature, which seeks to understand the female academics engagement in AE mostly revolves around a gender-comparative lens, where women entrepreneurs are understood only in comparison with men. This study examines the association between informal academic entrepreneurship (IAE) and the level of asymmetry between the micro-, meso- and macro-level factors (5M framework). In this study, the author conducted three interviews with female academics in Bangladesh.
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The time is right for renewed and updated attention to the relationship between public relations (PR) and human resources (HR) departments in the context of corporate social…
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The time is right for renewed and updated attention to the relationship between public relations (PR) and human resources (HR) departments in the context of corporate social responsibility (CSR) and sustainability. For too long, conflict between the two practice areas has obscured opportunities for collaboration which benefits organizations and stakeholders. This chapter offers theoretical underpinnings for examining an interdepartmental, cross-unit working relationship between HR and PR – and advances a vision for why it is needed now.
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Purpose – Although there is extensive work on labor mobility, research on entrepreneurial mobility is fragmented and many aspects are largely neglected. We develop a framework for…
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Purpose – Although there is extensive work on labor mobility, research on entrepreneurial mobility is fragmented and many aspects are largely neglected. We develop a framework for analysis that integrates different perspectives on entrepreneurial mobility to provide a broad agenda for future research.
Design/methodology – We build upon the strategic entrepreneurship, entrepreneurial behaviour theory, resource-based theory and other literatures, to distinguish four quadrants involving high and low geographical mobility and high and low organizational mobility.
Findings – Within each quadrant we identify different types of entrepreneurial mobility, specifically habitual entrepreneurs, management buyouts, university spin-offs, returnee entrepreneurs and transnational entrepreneurs. Issues concerning the development of research programs and methods, with particular emphasis on datasets, are discussed.
Originality/value – It is hoped that this chapter will spur entrepreneurship and strategy scholars to recognize that the scope of the entrepreneurial mobility concept is considerably greater than hitherto appreciated, providing interesting new avenues for theoretical and methodological development in this area.
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Hanieh Khodaei, Victor Scholten, Emiel Wubben and Onno Omta
Recent studies have questioned the direct relationship between entrepreneurial orientation (EO) and firm performance (e.g., Rauch, Wiklund, Lumpkin, & Frese, 2009; Wales, Gupta, &…
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Recent studies have questioned the direct relationship between entrepreneurial orientation (EO) and firm performance (e.g., Rauch, Wiklund, Lumpkin, & Frese, 2009; Wales, Gupta, & Mousa, 2013). Following this stream of research, this study examines this relationship by identifying the intermediate steps between these two variables (Alegre & Chiva, 2013; Wales, 2016; Zahra, Sapienza, & Davidsson, 2006). EO is considered essential for new market entry and new business foundation, which is why this study focuses on startups. Startups search for viable business opportunities, and this search is highly dependent on organizational learning (Kreiser, 2011). Previous studies suggest that organizational learning mediates the relationship between EO and performance (e.g., Real, Roldan, & Leal, 2014; Wang, 2008). This study investigates the role of organizational learning in this relationship by analyzing how EO and absorptive capacity (AC) interact. We propose a more direct and fine-grained measure of entrepreneurial success by developing a conceptual model that includes opportunity identification as an early outcome measure for startups. Drawing on a sample of 95 academic spin-offs in the Netherlands, this study examines the mediating role of AC and market readiness in the relationship between EO and market opportunities. The findings indicate that AC and market readiness mediate the direct effect of EO on market opportunity identification. By using opportunity identification as an outcome measure for EO, this study adopts a more direct measure for firm performance, resonating with recent discussions on the main effect of EO for organizations. These findings suggest that academic spin-offs’ AC leads entrepreneurial efforts to achieve a better product-market fit, and in return, helps to identify more market opportunities.
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The field of entrepreneurial education has struggled with fundamental questions in regards to the subject’s nature and purpose – to whom and for what means are educational agendas…
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The field of entrepreneurial education has struggled with fundamental questions in regards to the subject’s nature and purpose – to whom and for what means are educational agendas ultimately directed; these questions have become of central importance to policy makers, practitioners and academics alike in the context of the dynamic nature of the business world. Concerns have been expressed about University Business schools engaging more critically with the lived experiences of practicing entrepreneurs through alternative pedagogical approaches and methods, seeking to account for and highlighting the social, political and moral aspect of management practice. For example, in the United Kingdom where funding in higher education has become increasingly dependent on student fees there are renewed pressures to educate students for management practice as opposed to educate them about management and what it does. This latter point will be the main focus of this workshop and one which demands the inclusion of critique. Government and EU policies are calling on Business Schools to develop and enhance entrepreneurial skill sets, in order to meet these challenges entrepreneurial focused education programs must be more proactive in providing innovative educational practices that helps and facilitates life experiences and experiential learning.