This study aims to examine the role of returnee managers that can affect the strategic-divestment decision of emerging-market firms (EM firms). Drawing on arguments from the upper…
Abstract
Purpose
This study aims to examine the role of returnee managers that can affect the strategic-divestment decision of emerging-market firms (EM firms). Drawing on arguments from the upper echelons theory and international human resource mobility perspectives, this study aims to propose that returnee managers influence corporate divestitures when the business outlook is negative. In addition, this study aims to examine the interplay between returnee managers and CEOs, whose characteristics can foster or undermine the efforts of returnee managers to engage in corporate divestments.
Design/methodology/approach
This study examines 278 firms from nine emerging economies. The negative binomial regression was employed to estimate the model. In the robustness checks, the logistic regression was adopted to confirm the earlier findings.
Findings
The empirical results support the notion that returnee managers strengthen the relationship between firm performance and divestments. Because of the limited liabilities of foreignness and outsidership, returnee managers can gain social trust and credibility through communication and social interaction. Furthermore, the results provide mixed support for the moderating effect of CEO characteristics on the performance–divestment relationship.
Practical implications
This study reveals that returnee managers are a great asset for EM firms that aim to find synergies and upgrade their capabilities through asset reconfiguration, which is an essential activity of emerging market firms to integrate themselves into the global competition. Meanwhile, CEO characteristics can foster (through their education level) or hinder (due to their age) divestment attempts, influenced by returnee managers.
Originality/value
This study explores an understudied phenomenon in international business (IB): strategic divestment of EM firms. The literature that examines strategic divestment and corporate refocusing in emerging markets is extremely limited. Furthermore, this study explores the novel topic that intersects the international business (IB) and international human resource management (IHRM) research areas. Specifically, this study investigates the impact of returnee managers on strategic divestments.
Details
Keywords
Varaporn Pangboonyanon and Kiattichai Kalasin
The purpose of this paper is to investigate how within-industry diversification affects the financial performance of small- and medium-sized enterprises (SMEs) in emerging markets…
Abstract
Purpose
The purpose of this paper is to investigate how within-industry diversification affects the financial performance of small- and medium-sized enterprises (SMEs) in emerging markets (EMs). The authors draw on both the resource-based view and the institutional perspective and argue that within-industry diversification can enhance the financial performance of SMEs in EMs. Due to institutional voids in emerging economies, SMEs can gain additional benefits from scope economies, as well as from market returns, by filling product market voids and gaps in business ecosystems, while also enjoying low input and labor costs that reduce the coordination costs of diversification. This, in turn, enhances benefits of within-industry diversification, thereby resulting in higher financial profitability.
Design/methodology/approach
This study employs panel data econometrics to estimate the model. The authors test hypotheses on 195 firms, originating from five countries in Southeast Asia, during the period of 2009–2014.
Findings
The empirical results support the arguments. Within-industry diversification has a positive impact on the performance of SMEs in EMs. These effects become weaker when the institutional contexts are more developed. Nevertheless, such effects become stronger when SMEs in EMs are more efficient.
Research limitations/implications
The relationship between within-industry diversification and performance is a positive linear pattern, which differs from the pattern in advanced economies. In addition to unrelated diversification, the related diversification is preferable for firms in EMs.
Practical implications
The paper provides implications for SMEs that aim to enhance their performance by engaging in single product lines and within-industry diversification.
Originality/value
This paper examines the different ways within-industry diversification can enhance SMEs performance in EM contexts.
Details
Keywords
This study aims to examine how senior foreign executives in a top management team catalyse strategic change in firms that originated from emerging markets (EMs). It further…
Abstract
Purpose
This study aims to examine how senior foreign executives in a top management team catalyse strategic change in firms that originated from emerging markets (EMs). It further examines the moderating effects of organisational size and uncertainty avoidance (UA) on the positive relationship between senior foreign manager and strategic change in an organisation.
Design/methodology/approach
The panel data econometrics and multilevel analyses were adopted to run the model. The author tests hypotheses on 263 emerging market firms (EMFs), originating from nine EMs.
Findings
Empirical results reveal that senior foreign managers are active agents who can promote and implement strategic change in an organisation. They possess a different set of values, knowledge and experiences that can trigger strategic change. In addition, firm size and UA weaken the relationship between senior foreign manager ratio and strategic change of a firm..
Practical implications
This study indicates that recruiting committees of EMFs should consider hiring senior foreign managers to foster a higher degree of strategic change. Nevertheless, firm size and UA may impose implementation difficulties for senior, foreign managers. As a result, the focal firm should be flexible and open to change.
Originality/value
This study aims to contribute to strategic change and top management team internationalisation literature by promoting the role of senior foreign managers and national culture on strategic change.
Details
Keywords
Varaporn Pangboonyanon and Kiattichai Kalasin
The purpose of this paper is to investigate how within-industry diversification affects the financial performance of small- and medium-sized enterprises (SMEs) in emerging markets…
Abstract
Purpose
The purpose of this paper is to investigate how within-industry diversification affects the financial performance of small- and medium-sized enterprises (SMEs) in emerging markets (EMs). The authors draw on both the resource-based view and the institutional perspective and argue that within-industry diversification can enhance the financial performance of SMEs in EMs. Due to institutional voids in emerging economies, SMEs can gain additional benefits from scope economies, as well as from market returns, by filling product market voids and gaps in business ecosystems, while also enjoying low input and labor costs that reduce the coordination costs of diversification. This, in turn, enhances benefits of within-industry diversification, thereby resulting in higher financial profitability.
Design/methodology/approach
This study employs panel data econometrics to estimate the model. The authors test hypotheses on 195 firms, originating from five countries in Southeast Asia, during the period of 2009–2014.
Findings
The empirical results support the arguments. Within-industry diversification has a positive impact on the performance of SMEs in EMs. These effects become weaker when the institutional contexts are more developed. Nevertheless, such effects become stronger when SMEs in EMs are more efficient.
Research limitations/implications
The relationship between within-industry diversification and performance is a positive linear pattern, which differs from the pattern in advanced economies. In addition to unrelated diversification, the related diversification is preferable for firms in EMs.
Practical implications
The paper provides implications for SMEs that aim to enhance their performance by engaging in single product lines and within-industry diversification.
Originality/value
This paper examines the different ways within-industry diversification can enhance SMEs performance in EM contexts.
Details
Keywords
This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.
Abstract
Purpose
This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.
Design/methodology/approach
This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.
Findings
If a firm can characterize its upper echelon with creativity, innovation, and foreign knowledge, it will find far more success outside the local market.
Originality/value
The briefing saves busy executives, strategists and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy- to-digest format.
Details
Keywords
Pollawat Chumnangoon, Anukal Chiralaksanakul and Asda Chintakananda
This study aims to investigate the impacts of geographical proximity on social capital development through the inter-relationship between three social capital dimensions…
Abstract
Purpose
This study aims to investigate the impacts of geographical proximity on social capital development through the inter-relationship between three social capital dimensions (structural, relational and cognitive dimension) and the knowledge sharing between small- and medium-sized enterprises (SMEs). The authors empirically test a main hypothesis that the mechanism of social capital development that subsequently results in tacit knowledge sharing is different for SME buyer-supplier partners across their different geographical distances.
Design/methodology/approach
Multiple-group analysis in structural equation modeling (SEM) was conducted to test the research hypotheses using data collected from approximately 200 SMEs in Thailand’s food industry.
Findings
At a great geographical distance, the structural dimension impacts the cognitive dimension only in an indirect way through a relational dimension, which subsequently leads to knowledge sharing between SME buyer-supplier partners. At close geographical proximity, while the indirect impact of structural dimension on cognitive dimension through a relational dimension is still presented as it is in a great geographical distance, structural dimension has a positive and direct impact on the cognitive dimension as a complementary way to jointly reinforce knowledge sharing between SME partners. Among distant SME partners, the relational dimension shows a stronger impact on the cognitive dimension. In contrast, the direct influence of structural, relational and cognitive dimensions on knowledge sharing is identical, regardless of geographical distance.
Practical implications
The managers of SMEs can design their network-building approach in such a way that different location partners can enhance knowledge sharing. Policymakers could consider these results as a guideline when imposing SME development policies and geographical cluster policies in emerging economies.
Originality/value
This study provides empirical evidence that demonstrates how geographical proximity between SME partners in an emerging economy influences their social proximity through the lens of social capital development mechanism and thus leads to knowledge sharing between them.