Avinash Shivdas and Sougata Ray
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…
Abstract
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.
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Sougata Ray and Sushanta Mahapatra
The Indian microfinance industry witnessed one of the fastest growths in the recent times. However, the striking feature of this growth is that the Microfinance Institutions…
Abstract
Purpose
The Indian microfinance industry witnessed one of the fastest growths in the recent times. However, the striking feature of this growth is that the Microfinance Institutions (MFIs) are concentrated only in some specific regions of the country. There is a huge geographical skew in the distribution of the MFIs. In this paper, an attempt has been made to explain these geographical skew by using the macro variables of the states. The objective of the study is to identify the causes for this regional disparity in the growth of MFIs.
Design/methodology/approach
We try to explain the level of penetration of microfinance in the states by using regression models.
Findings
Our analysis suggests that state-level macro factors are significant in explaining the geographical skew. MFIs in India have concentrated in states which are richer, have good rural infrastructure, but lack in adequate banking facility, and have low human capital.
Originality/value
The study provides an insight which would help in framing the necessary regulations to ensure that MFIs operate in all regions of the country.
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Abha Chatterjee, Sasanka Sekhar Chanda and Sougata Ray
This paper aims to develop conceptual arguments questioning the efficacy of administration by the transaction cost economics (TCE) approach in an organization undergoing a major…
Abstract
Purpose
This paper aims to develop conceptual arguments questioning the efficacy of administration by the transaction cost economics (TCE) approach in an organization undergoing a major change.
Design/methodology/approach
The focus is on three distinct dimensions of organizational life where, as per prior research, TCE is likely to be inadequate: interdependence across transactions, high reliance on managerial foresight and inseparability of administrative decisions made at different points in time.
Findings
The climate of coercion and surveillance engendered by administration based on TCE approaches – that punishes deviation from goals, even when they are framed on inadequate knowledge – forestalls creative problem-solving that is necessary to address unforeseen developments that arise during change implementation. Fiat accomplishes within-group compliance in the change project sub-teams, but between-group interdependencies tend to be neglected, hampering organizational effectiveness. Moreover, attempts to create independent spheres of accountability for concurrent fiats regarding pre-existing and new commitments breed inefficiency and wastage.
Research limitations/implications
The malevolent aspects of TCE-based administration contribute to organizational dysfunctions like escalation of commitment and developing of silos in organizations.
Practical implications
To succeed in effecting a major organizational change, meaningful relaxation of demands for delivering on prior goals is required, along with forbearance of errors made during trial-and-error learning.
Originality/value
TCE-based administration is deleterious to an organization attempting a major change. Supremacy accorded to resolution of conflicts in distinct hierarchical relationships by the mechanism of fiat fails to address the needs of an organizational reality where multiple groups are engaged in a set of interdependent activities and where multiple, interdependent organizational imperatives need to be concurrently served.
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Sangeetha Gunasekar, Sougata Ray, Saurabh Kumar Dixit and Manoj Raj PA
This study aims to identify the product attributes that influence customer satisfaction related to AI-enabled products with a strong forecast of growth. This study is very timely…
Abstract
Purpose
This study aims to identify the product attributes that influence customer satisfaction related to AI-enabled products with a strong forecast of growth. This study is very timely as the market for AI-based smart home products is still at a nascent stage in emerging economies (Vaishali Dar, 2021). Adding evidence to literature on the experience of customers, identifying the attributes that lead to customer satisfaction and those that lead to dissatisfaction are essential for products that were launched recently during the pandemic. This study makes valuable addition to the existing literature.
Design/methodology/approach
Online reviews (12,326 reviews) for EchoDot products launched by Amazon India during the pandemic were collected for the study. The attributes were identified based on the most frequently discussed attributes in the text reviews. Further review valence was determined to group the reviews under positive reviews indicating customer satisfaction and negative reviews indicating customer dissatisfaction. Logistic regression was used to identify the attributes that significantly impact customer satisfaction/dissatisfaction.
Findings
The results of the study indicate that while EchoDot is seen to add value to the smart home environment (home variable), video (video variable) and speaker (speaker variable) quality also contribute to customer satisfaction. Further, consumers found the product truly worth their money (value for money variable). Other attributes like a complaint about Bluetooth features are seen to increase the probability of customer dissatisfaction.
Originality/value
This study identifies the most important attributes that influence customer satisfaction in AI-enabled product sales on e-commerce platforms in pandemic times for India. Such studies are scarce in the emerging markets where the AI-based home appliance market is still in its nascent stage, and the customers are trying out their experiences with these products. What the customers expect and are these products fulfill these expectations is an important question that needs to be addressed by research. This study addresses this gap and adds to this literature.
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Navneet Bhatnagar, Kavil Ramachandran and Sougata Ray
New venture (NV) creation is critical to the growth and long-term survival of business groups. The purpose of this paper is to investigate the NV creation process in family…
Abstract
Purpose
New venture (NV) creation is critical to the growth and long-term survival of business groups. The purpose of this paper is to investigate the NV creation process in family business (FB) context and examine the influence of familial socio-political considerations and dynamics on venture creation processes.
Design/methodology/approach
The paper employs a triangulation technique drawing from the extant literature, observations from 25 in-depth interviews of FB leaders and insights from two FB practitioners and abductive reasoning to theorize on the NV creation process and the influence of socio-political considerations and dynamics within family.
Findings
The results show that there are four distinct stages of the NV creation process in FB context. Familial socio-political considerations and dynamics greatly influence the NV creation process. These considerations and dynamics vary according to the socio-political clout enjoyed by the proposer. Leadership’s predisposition to the proposer and the proposer’s socio-political clout in the family determine whether an NV proposal leads to venture creation.
Research limitations/implications
The study extends NV creation literature by suggesting that in addition to the economic rationale, socio-political considerations play a critical role in venture creation decisions. Future research can validate the findings with quantitative analysis.
Practical implications
FB members must garner strong socio-political support for their NV proposal. FB leaders must ensure that their NV proposal evaluation and resource allocation decisions are not unduly influenced by the proposer’s socio-political clout.
Originality/value
The study views the NV creation process in FB context from the lens of familial forces at play. It identifies four distinct stages of the NV creation process and examines the role played by familial socio-political considerations and dynamics during each stage.
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Post-independence, the rural credit market in India has undergone significant structural changes in order to enhance the availability and efficient use of credit. The purpose of…
Abstract
Purpose
Post-independence, the rural credit market in India has undergone significant structural changes in order to enhance the availability and efficient use of credit. The purpose of this paper is to understand the challenges and changes in the Indian rural credit market in the post-independence period.
Design/methodology/approach
Using data from the All India Debt and Investment Survey conducted by the National Sample Survey Organisation of the Government of India from 1971–1972 to 2012 and Reserve Bank of India in 1951–1952 and 1961–1962, the study focuses on three important aspect of rural credit market, i.e. the availability, sources and uses of credit. The analysis is based on both the national and state level data and uses the decadal growth rates to explain the changes in the rural credit market.
Findings
Availability of credit, in terms of volume and number of households indebted, has increased substantially. However, the sharp rise in outstanding debt is a matter of concern. The share of credit from institutional agencies has seen a continuous decline post liberalisation. The non-institutional agencies, particularly the professional moneylenders, continue to be the most preferred sources of credit owing to their flexible nature of operation. Interesting, microfinance has emerged as a major source of credit particularly for the poor rural households. The rise in credit usage for non-income generating activities amongst poor households is another important concern.
Originality/value
The study highlights some of the most important features and characteristics associated with the Indian rural credit market. An understanding of these issues would provide valuable insight for shaping the future policy responses.
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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:
This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.
Findings:
Heavy and unrestrained investment in R&D in the Indian pharmaceutical industry can negatively impact the performance and revenues of such firms.
Originality:
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.
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Charlotte Norrman and Magnus Klofsten
In the international arena, there is an ongoing debate over the lack of newly started businesses in general and over how to obtain sustainable growth in these businesses in…
Abstract
In the international arena, there is an ongoing debate over the lack of newly started businesses in general and over how to obtain sustainable growth in these businesses in particular. Policy-makers in Europe have sought to ease this problem of paucity of new firm's start-ups, which is mainly caused by a lack of financial resources for new innovative ideas as problematic (European Commission (2007–2013); Groen, Jenniskens, & van der Sijde, 2005). Consequently, during the latest decade, there has been an increase in the number of public sector financial schemes designed to promote entrepreneurship in very early-stage businesses (COM, 2005, 2006). These efforts have, however, escaped criticism. Those who promote public financing believe that with the right tools and governance this type of support is an important complement to the private sector financial market (Oakey, 2003). However, bankers and venture capitalists often state that the main issue is not the lack of available capital but the inability of entrepreneurs to convince investors of the merits of their business ideas (Mason & Harrison, 2002). There have also been arguments against the socioeconomic efficiency (Storey, 1994).