Sea-Jin Chang and Philip M. Rosenzweig
This chapter provides an empirical investigation into the process by which subsidiaries in multinational firms add capabilities in a given line of business. We describe the…
Abstract
This chapter provides an empirical investigation into the process by which subsidiaries in multinational firms add capabilities in a given line of business. We describe the process of subsidiary capability development as a non-recursive relationship between the parent's transfer of decision-making power and capability development, which then affects subsidiary performance. The empirical results from survey data confirm such mutually reinforcing mechanisms and highlight the importance of both external and internal forces that facilitate or impede the developmental process.
Chang Li, Philip Chang, Shanming Li and Xinxiang Shi
Cross-border M & A is one of the most important ways of international capital flows, and scholars have paid a lot of attention to this area, but a general explaining model…
Abstract
Purpose
Cross-border M & A is one of the most important ways of international capital flows, and scholars have paid a lot of attention to this area, but a general explaining model has still not been generated. The purpose of this paper, based on Lambrecht (2004) and Bolton et al. (2013), is to build a general explaining model in this area and use the new model to explain some real world issues.
Design/methodology/approach
The model work in this paper is based on Lambrecht’s (2004) real option model, which is the classical modeling method in this area, and take the economic crisis method of Bolton et al. (2013) into consideration; the authors also use the relative market condition to illustrate the motivation and market timing of cross-border M & A in this paper to connected the bidders’ markets and targets’ markets together to build the general explaining model for cross-border M & A.
Findings
By analyzing the new model the authors build in this paper, the authors get three conclusions. Conclusion 1: when the bidders’ technologies are more advanced than the targets’, the bidders prefer market-seeking cross-border M & A, and the relatively higher the bidders’ technologies are, the stronger the preference is; when the bidders’ technologies are less advanced than the targets’, the bidders prefer technology-seeking cross-border M & A, and there exists an optimal relative technology ratio at which the bidders have the strongest motivation to exercise the technology-seeking type cross-border M & A. Conclusion 2: host country’s high economic growth helps attracting market-seeking cross-border M & A, conversely host country’s low economic growth helps attracting technology-seeking cross-border M & A. Conclusion 3: the bidders prefer to exercise the technology-seeking cross-border M & A when the home markets are stable or when economic crises happen in targets markets; and the bidders prefer not to exercise the market-seeking cross-border M & A when economic crises happen in home markets; and the relationship between the motivation for bidders to exercise market-seeking cross-border M & A and the possibility of the happening of economic crisis in home countries presents an inverse N-shape curve.
Originality/value
In this paper the authors first use the relative market condition to illustrate the motivation and market timing in the cross-border M & A research area and build a general model based on current literatures.
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Chang Li, Wei Zheng, Philip Chang and Shanmin Li
As literatures argue that managers’ personalities will affect both corporate governance structures and corporate performance, the correlation between them is a mixed result. The…
Abstract
Purpose
As literatures argue that managers’ personalities will affect both corporate governance structures and corporate performance, the correlation between them is a mixed result. The purpose of this paper is to separate different routes leading to the mixed correlation, and name the separated routes as regime effect and signal effect.
Design/methodology/approach
By theoretical analysis, the authors list three routes leading to the correlation between corporate governance and corporate performance. Routes 1 and 2 show that governance can directly and indirectly change the performance; while route 3 shows that both the governance and performance are results of managers’ personalities, and the governance has no influence onto the performance, which means the correlation led by route 3 is fake. By design a new econometric methodology, this paper separates the mixed correlation between corporate governance and performance, and names the correlation led by routes 1 and 2 as the regime effect and the correlation led by route 3 as signal effect.
Findings
By an empirical research on Chinese listed corporates, the authors find that the correlations between Chinese listed corporates’ market value and main corporate governance factors can be separated into regime effects and signal effects; and the authors also find that some factors (Share of Institutional Investors, Share of Real Controller and the Squared, Dummy of Identical CEO and Chairman, Ownership Concentration) only show regime effects, some factors (Separating Extent of Ownership and Controlling Right, Dummy of Provincial State-Owned Firms) only show signal effects, and some factors (Dummy of Republic State-Owned Firms, Scale of Board) show both. What’s more, the authors find out an interesting result that the state-owning has no negative regime effect on China SOEs’ performance but very significantly negative signal effect; in this paper, the authors suggest that this means the key negative factors of Chinese SOEs is not state-owning ownership structure but the managers’ corruption.
Practical implications
As only the factors with regime effects can directly and indirectly affect corporates’ performance and the factors with signal effects show that there’re some managers’ personalities affecting both the governance and performance, the separation method in this paper can help shareholders knowing which governance factors will be helpful to improve the performance and which others will show managers’ hard-working or corruption intention.
Originality/value
Separate the regime effect and the signal effect from the correlation between corporate governance and performance.
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One of the major conceptual dilemmas of international management has been issue of the liability of foreignness. The multinational enterprise (MNE), as it expands internationally…
Abstract
One of the major conceptual dilemmas of international management has been issue of the liability of foreignness. The multinational enterprise (MNE), as it expands internationally, faces two fundamental problems: does it continue to do abroad what it does well at home, or does it change its approach to adapt to the differing conditions in its new markets? Additionally, the option of changing its approach confronts a major constraint: how to cover the costs of organizational complexity brought on by multinationality. Together, these problems and this constraint imply that multinationals face complexity and strategic-fit costs that quickly overwhelm the gains from economies of scale and scope that are derived from moving abroad into what are, for them, new markets. We know by the fact that multinationals exist and thrive that they are able to overcome these concerns. However, the question of why and how remains something of a mystery, although one we can conceptually work around this with a bit of theoretical and semantic legerdemain.
Hee-sung BAE, Woo-young LEE and Yang-kee LEE
This research has three objectives: one is to develop measuring criteria for ascertaining performance of customs clearance firms, another is to test reliability and validity of…
Abstract
This research has three objectives: one is to develop measuring criteria for ascertaining performance of customs clearance firms, another is to test reliability and validity of the factors, and the third is to analyze the relationship between customer service and firm performance. This research gathered the data from customs clearance firms. Reliability and validity concerned with the collected data are tested by exploratory factor analysis and confirmatory factor analysis and the relationship between variables is tested by analyzing structural equation modeling. The results are as follows. There are no problems in reliability and validity. According to the result of the analysis, customer service is divided into customer focus, customer needs, customer response and flexibility and performance is classified into customer performance and financial performance. The result of empirical tests is as follows. Customer focus has a positive effect on customer performance and financial performance. Flexibility has a positive effect on both types of performance. This means that firms which have discriminative services and a high level of flexibility through collaboration with customers can achieve high levels of customer performance and financial performance.
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Krishnendu Sen and Ritankar Sahu
Since India became a signatory to the General Agreement on Trade in Services (GATS), it has been increasingly involved in multilateral negotiations for opening up its borders to…
Abstract
Since India became a signatory to the General Agreement on Trade in Services (GATS), it has been increasingly involved in multilateral negotiations for opening up its borders to international trade in services. The GATS was negotiated in the Uruguay Round of multilateral trade negotiations in 1994, and regulates trade in all service sectors between its 149 member countries. Lawyers engaged in providing legal services in foreign countries generally act as ‘foreign legal consultants’ (FLC), providing advice on international law or other non‐domestic laws. India needs to liberalize its policy in foreign trade more in order to avail of the advantages of the globalization of trade in services. This research paper aims at understanding the setbacks to the liberalization of the Indian legal services sector and realizing the potential allowing the entry of FLCs in select areas of the sector and permitting the collaboration of Indian and foreign lawyers/law firms.
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The purpose of this research is to examine an empirical model of marketing strategy and shareholder value through customer satisfaction and financial performance by using a…
Abstract
Purpose
The purpose of this research is to examine an empirical model of marketing strategy and shareholder value through customer satisfaction and financial performance by using a value‐based marketing approach on organisations listed in Amman Stock Exchange Market operating in Jordan.
Design/methodology/approach
A quantitative methodology was employed through conducting two surveys targeting Jordanian organisations' marketing managers and their customers as well as utilising hard measures for financial performance and shareholder value data analysis. A total of 218 marketing managers were involved in the managers' survey and 1,200 customers were involved in the customers' satisfaction survey. A series of exploratory and confirmatory factor analyses were used to assess the research constructs dimensions, unidimensionality, validity and composite reliability. Structural path model analysis was also used to test the hypothesised research model.
Findings
The empirical results indicate that external and internal marketing orientations (IMOs) exerted a positive and significant effect on marketing strategy components, namely: product, price, promotion and distribution strategies. Marketing strategy components exerted a positive and significant effect on customer satisfaction. The findings also indicate that product and price strategies are the strongest drivers of customer satisfaction. Customer satisfaction has a positive and significant effect on financial performance. More importantly, financial performance has a strong positive contribution to shareholder value measured by market value added and earning per share.
Originality/value
This is the first empirical research paper that has investigated a model of marketing strategy and shareholder value through customer satisfaction and financial performance especially in developing countries, e.g. Jordan. This research offered executives and marketing directors empirical evidence on drivers of shareholder value maximisation and how to enhance marketing's strategic influence on strategic decisions which were not available to them before.
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The purpose of this paper is to examine the underlying strategic intent of quality performance. Specifically, the study aimed to examine the individual impact of differentiation…
Abstract
Purpose
The purpose of this paper is to examine the underlying strategic intent of quality performance. Specifically, the study aimed to examine the individual impact of differentiation and cost leadership as well as their interaction effect on quality performance.
Design/methodology/approach
This study employed a data set drawn from 102 managers of Australian manufacturing firms. Multiple regression analysis with moderating effect was used for analysing the relationship between the competitive strategies and quality performance.
Findings
The findings indicated that product quality was predicted by differentiation strategy, but not cost leadership strategy. However, the effect of differentiation on quality was moderated by cost leadership whereby the higher the cost leadership, the stronger the effect.
Research limitations/implications
The small sample size which was dominated by small‐to‐medium sized firms (SMEs) was the major limitation of the study. The sample size and distribution also inhibited the comparison of the results between industry sectors.
Practical implications
The results contribute to a better understanding on how quality can be effectively employed as a base for realising competitive strategy. In particular, the positive interaction between differentiation and cost leadership in predicting quality performance suggests the synergy between the two as well as supporting the cumulative view of competitive strategies.
Originality/value
By testing the interaction effect of differentiation and cost leadership in predicting quality performance, this study advances the previous works on the area which looked at the relationship between quality performance and each of the two competitive strategies separately.
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Various conceptual models are brought together to provide a comprehensive approach for the strategic management of quality at the business level. A synopsis of these models is…
Abstract
Various conceptual models are brought together to provide a comprehensive approach for the strategic management of quality at the business level. A synopsis of these models is given, and these are related to each other. Using strategic planning models, implications are drawn for the management of quality control systems, quality cost procedures and organisational procedures.