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Article
Publication date: 19 November 2006

H. Young Baek, Soonhong Min and Sungmin Ryu

We introduce agency and team production theories to explain the international joint venture (IJV) phenomenon. We regard IJV partners as participants in a team production and…

670

Abstract

We introduce agency and team production theories to explain the international joint venture (IJV) phenomenon. We regard IJV partners as participants in a team production and identified agency conflicts among partners as well as between parents and IJV affi liates. We empirically test the stability of IJVs with such determinants as the existence of monitoring principal, the history of repeated exchanges between partners, the efficiency of mutual monitoring by partners, the effi ciency of affiliate monitoring by parent firms, and the degree of international experience of the partners. The test results show that the existence of monitoring principal and the degree of international experience prove to be significant factors for IJV stability.

Details

Multinational Business Review, vol. 14 no. 3
Type: Research Article
ISSN: 1525-383X

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Article
Publication date: 1 February 2011

Sungmin Ryu, Eun‐Ju Lee and Won Jun Lee

This study seeks to introduce the concept of collectivism, and to assess its impact on interfirm commitment in both high and low collectivist countries.

2459

Abstract

Purpose

This study seeks to introduce the concept of collectivism, and to assess its impact on interfirm commitment in both high and low collectivist countries.

Design/methodology/approach

In evaluating the effects of bilateral power structures on commitment, the paper utilizes polynomial regression and the response surface approach.

Findings

Collectivism influenced a manufacturer's commitment to the relationship with its supplier only in Korea, but collectivism did not influence a manufacturer's commitment to the relationship with its supplier in the USA. On the other hand, for the USA sample, significant main effects of manufacturer power and supplier power, as well as a significant interaction between manufacturer power and supplier power on interfirm commitment were detected.

Research limitations/implications

The results demonstrate that the bilateral power magnitude between a manufacturer and its supplier was germane to the manufacturer's commitment. An increase in the supplier's power contributes to manufacturer's commitment, particularly under high bilateral power conditions. Under low bilateral power conditions, manufacturers were shown to become less committed to a relationship.

Practical implications

It is important for global companies to understand the prevailing national culture. US companies operating in Eastern countries, such as Korea, should consider these cultural differences and manage their interfirm relationships on the basis of their long‐term perspectives.

Originality/value

This study facilitates a greater understanding of the influence of national culture on inter‐organizational commitment. Specifically, it evaluates the relative influences of collectivism and interfirm power structures on interfirm commitment in both high and low collectivistic cultures.

Details

Journal of Business & Industrial Marketing, vol. 26 no. 2
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 1 January 2008

Sungmin Ryu, Soonhong Min and Nobuhide Zushi

The purpose of this paper is to verify the moderating role of trust in the relationships between environmental uncertainty and a manufacturer's propensity for vertical control…

3348

Abstract

Purpose

The purpose of this paper is to verify the moderating role of trust in the relationships between environmental uncertainty and a manufacturer's propensity for vertical control over its supplier, and between environmental uncertainty and the manufacturer's satisfaction with the supplier performance. It also confirms a threshold effect of trust, i.e. the moderating role of trust is present up until a threshold value of trust is reached.

Design/methodology/approach

Survey research was conducted to collect data from manufacturers; structural equation modeling was used to purify measurement scales, and multiple regression was conducted to test the hypotheses.

Findings

This study confirmed that a manufacturer's perception of a supplier's trustworthy behavior weakens the justification for a higher degree of vertical control over its supplier's key decisions. Trust also reduces the manufacturer's discontent with its supplier's performance.

Research limitations/implications

Traditional transaction cost analysis (TCA models) put too much emphasis on rationality and seldom consider the complexity of inter‐firm control in social contexts. This study demonstrates that considering trust in TCA supplements the explanations offered by TCA on buyer‐seller behaviors.

Practical implications

Manufacturers should determine the level of needed vertical control after assessing the level of inter‐firm trust to avoid unnecessary vertical control, which is as costly as, if not costlier than, supplier opportunism. Manufacturers should also realize the importance of formalizing continuous, two‐way information flow to further reduce supply market uncertainty, which cannot be done by trust beyond the threshold value.

Originality/value

This study considers both social embeddedness and TCA to enhance the explanatory power of the TCA framework. Additionally, this study shows that the moderating effect of trust is statistically significant at lower levels while the effect fades away at higher levels of trust.

Details

Journal of Business & Industrial Marketing, vol. 23 no. 1
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 19 June 2007

Sertan Kabadayi and Sungmin Ryu

The article seeks to explain the impact of the adoption of control mechanisms by a manufacturer as a safeguard against the betrayal of trust, which could consequently have…

967

Abstract

Purpose

The article seeks to explain the impact of the adoption of control mechanisms by a manufacturer as a safeguard against the betrayal of trust, which could consequently have performance implications for its relationship with its supplier.

Design/methodology/approach

This study was conducted within the context of the relationship between a manufacturer and its major supplier and the framework was tested by survey data collected from 174 manufacturers. LISREL was used in the testing of the hypotheses.

Findings

This study reflects that a manufacturer may reduce the risk associated with trusting its suppliers by either monitoring them directly or adopting the norm of information sharing. Alternatively, it could seek to reduce risk by adopting both types of control mechanism simultaneously. Conversely, the results of this study indicate that control mechanisms, when used individually, are not effective in increasing supplier performance. However, when used in combination as plural control mechanisms, increased supplier performance can be attained.

Practical implications

A high level of trust placed in an exchange partner does not necessarily ensure greater success of the relationship. What this means is that firms cannot take performance for granted where trust plays a key role within the professional relationship. Therefore, firms still need to put mechanisms in place to ensure that, in the event of betrayal, their assets are protected. Among the different types of control mechanisms, the plural control mechanism results in enhanced supplier performance.

Research limitations/implications

This study uses factual performance data but does not use perceptual performance measures. The ideal way to measure channel performance is to measure both perceptual and factual performance data to increase reliability.

Originality/value

There has been little research on control mechanisms that guarantee the protection of the trustor. This study clarifies which control mechanisms manufacturers rely on to protect themselves from breach of trust, and investigates the effects of control mechanisms on supplier performance when used as a safeguard against the betrayal of trust.

Details

Journal of Business & Industrial Marketing, vol. 22 no. 4
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 2 January 2024

Grace Il Joo Kang, Kyongsun Heo and Sungmin Jeon

This paper aims to examine the extent to which sell-side analysts efficiently incorporate firms’ corporate social responsibility (CSR) activities into their earnings forecasts. In…

379

Abstract

Purpose

This paper aims to examine the extent to which sell-side analysts efficiently incorporate firms’ corporate social responsibility (CSR) activities into their earnings forecasts. In addition, this paper also investigate the CSR information efficiency of analysts vis-à-vis that of investors.

Design/methodology/approach

This paper measures CSR activities by using CSR strength and CSR concern scores from the Morgan Stanley Capital International Environmental, Social and Governance database. This paper uses analysts’ earnings forecast errors and dispersion as proxies for their information efficiency. To compare the CSR information efficiency of analysts to that of investors, this paper uses the Vt/Pt ratio, which is the equity value estimates inferred from analysts’ earnings forecasts (a proxy for analysts’ CSR information efficiency) to the stock price of the focal company (a proxy for investors’ CSR information efficiency).

Findings

The regression analysis indicates that analysts’ earnings forecasts are optimistically biased and more dispersed for firms with positive CSR activities. The paper also finds that analysts’ forecasts are more optimistically biased than investors in interpreting CSR activities.

Practical implications

The lack of standardized protocols in CSR reporting and activities has raised the risk of mispricing by analysts, threatening the stability of sustainable investments. This paper suggests that regulators and standard-setters should establish a uniform framework governing firms’ CSR activities, along with their reporting and measurement, to ensure more consistent and reliable evaluations of CSR practices.

Social implications

Analysts’ mispricing of CSR activities may distort sustainable investing, as it can overly focus on the positive impacts of stakeholder theory, overlooking agency theory’s warnings about managerial self-interest. Investors need to assess CSR efforts with a dual perspective, acknowledging their societal value but also examining their alignment with shareholder interests.

Originality/value

To the best of the authors’ knowledge, this research is the first to assess the efficiency of analysts versus investors in processing CSR information amidst growing sustainable investment interests. Furthermore, building on Dhaliwal et al. (2012), which found that voluntary CSR disclosures correlate with more accurate analyst forecasts, this research provides fresh perspectives on the evolving nature of how analysts assimilate CSR information over time.

Details

Sustainability Accounting, Management and Policy Journal, vol. 15 no. 2
Type: Research Article
ISSN: 2040-8021

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