Small and Medium sized Enterprises’ Collaborative Buyer-Supplier Relationships: Boundary Spanning Individual Perspectives

Boundary-spanning individuals (BSIs) play a critical role in supply chain management, especially in small and medium sized enterprises (SMEs) where interactions with buyers and suppliers can depend heavily on just a few individuals. This study, utilizing data from Korean manufacturing-sector SMEs, explores whether cooperative social value orientations of SMEs’ BSIs influence the effects of collaborative buyer-supplier initiatives. The results suggested that the performance implication of decision-sharing initiative increases when BSIs have a high level of cooperative social value orientation. However, it also negatively moderates the relationship between risk/benefit sharing (involving financial losses or gains) and performance suggesting possible negative side-effects. However, we found that such orientation also negatively moderates the relationship between risk/benefit sharing (involving direct financial losses or gains) and relationship performance suggesting possible negative side-effects

Multiple bank lending relationships in Italy: their determinants and the role of firms’ governance features

The aim of this paper is to analyze the determinants of multiple-bank lending - one of the main features of the bank-firm relationships in Italy. The analysis suggests that multiple bank lending is significantly and importantly linked with firms’ governance characteristics. In particular, it emerges that firms adopting a less formalised model of governance - which could denote lower informational transparency or, more in general, lesser degree of protection of third creditors - are characterised by a greater level of multiple-bank lending. In this respect multiple-bank lending may be the consequence of a risk averse attitude of banks and thus constitutes a sort of insurance mechanisms whereby banks overcome difficulties in assessing their customer firms.bank firm relationships, multiple-bank lending, corporate governance

A primer on governance and performance in small and medium-sized enterprises

This paper is a primer on corporate performance, corporate governance, and their interrelationships and measurement systems, with particular focus on Small and Medium- Sized Enterprises (SMEs). This is the first report of a larger on going research project. In the domain of performance measurement the paper describes the trend from financial to non-financial measures, as well as a taxonomy of measures and the impact of the TQM movement on measurement practices. In the domain of governance, governance as a general concept is presented, followed by the more specific concept of corporate governance. Four theories of corporate governance are explained, along with literature findings on the relationship between corporate governance and corporate performance, with reference to both works on large firms and works on SMEs.Corporate governance, corporate performance, measurement, small and medium-sized enterprises (SMEs)

Finance, economic development and the transition: the East German case

The role of banks in the transition concerns three issues: the bad loans problem, the role of banks in providing a solution to the problems of corporate governance of privatized enterprises and the access of new enterprises to finance for investment. This paper shows how the combination of early privatization of the banking system plus financial restructuring of enterprises by the Treuhand prevented the development of a 'bad loans' problem in East Germany. The merits of banks as large stakeholders in privatized enterprises has been frequently debated in Eastern Europe. Although the role of banks as owners of non-financial companies in West Germany is frequently exaggerated, there was a widespread public expectation that they would play a considerable role in the restructuring of East German enterprises. We show that their role in acquiring stakes in privatized firms in East Germany has been negligible and suggest reasons for this outcome. East Germany is characterized by a very high level of investment and the second part of the paper investigates how the financial system can affect the relationship between investment and growth. It has been argued that the inefficiencies of both development and commercial banking in the Italian Mezzogiorno have contributed to the failure there of high levels of investment to translate into growth. The efficiency characteristics of development and commercial banking in Southern Italy are contrasted with those in East Germany. Considerable attention is given to the extent of competition in commercial banking and to the delegation by the development banks of screening and monitoring activities to the commercial banks, which characterizes the German system. It is argued that the German banking system which has been transferred to East Germany does not suffer from the inefficiencies found in Italy. Evidence is provided for the convergence of the structure of banking in East and West Germany. Nevertheless, in spite of the extensive access of East German firms to development bank finance, evidence is provided that the financial system does not foster investment in intangibles such as in marketing and in R&D. This has serious consequences for those firms which are not owned by Western firms and hence do not have access to the retained earnings of the owner, nor to the ability of the owner to guarantee loans from the banking system. -- Die Rolle der Banken im Übergangsprozeß in Mittel- und Osteuropa umfaßt vor allem drei Aspekte: das Problem fauler Kredite, ihre Rolle bei der Lösung des corporate governance-Problems privatisierter Unternehmen und das Problem des Zugangs neuer Unternehmen zur Finanzierung ihrer Investitionen. In dem Papier wird dargelegt, wie die Kombination von früher Privatisierung des Bankensystems und der Wiederaufbau einer finanziellen Basis in den Unternehmen durch die Treuhand ein Faule-Kredite-Problem in Ostdeutschland verhinderten. Die Verdienste der Banken als große Anteilseigner in privatisierten Unternehmen sind in Osteuropa viel diskutiert worden. Auch wenn die Rolle der Banken als Eigentümer von Unternehmen in Westdeutschland häufig überschätzt wird, gab es eine verbreitete öffentliche Erwartung, daß die Banken eine bedeutende Rolle bei der Umstrukturierung der ostdeutschen Unternehmen spielen würden. In der Analyse wird gezeigt, daß ihre Rolle bei der Übernahme von Anteilen privatisierter Unternehmen in Ostdeutschland sehr gering ist und es wird versucht, die Gründe für diese Entwicklung darzulegen. In Ostdeutschland herrscht ein hohes Investitionsniveau. Der zweite Teil des Papiers untersucht daher, wie das Finanzsystem die Beziehung zwischen Investitionen und Wachstum beeinflussen kann. Bezogen auf die Entwicklung im Mezzogiorno in Italien wurde häufig argumentiert, Ineffektivitäten der Förder- wie der Geschäftsbanken hätten verhindert, daß ein hohes Investitionsniveau zu Wachstum geführt habe. Die Leistungsmerkmale der Förder- wie der Geschäftsbanken in Süditalien werden mit der Situation in Ostdeutschland kontrastiert. Dabei wird besonderes Augenmerk auf das Ausmaß des Wettbewerbs im Geschäftsbankensektor gelegt sowie auf die Auswahl- und Überwachungsfunktion der Geschäftsbanken, die sie im Auftrag der Förderbanken übernehmen, eine für das deutsche System typische Konstellation. Die Analyse kommt zu dem Schluß, daß das nach Ostdeutschland übertragene westdeutsche Bankensystem nicht an den Ineffektivitäten leidet, wie sie für Italien's Mezzogiorno festzustellen sind. Die Bankenstruktur in Ostdeutschland hat sich schnell derjenigen in Westdeutschland angenähert. Es ist offensichtlich: Auch wenn jedes Unternehmen in Ostdeutschland problemlosen Zugang zu Förderbanken- Krediten hat, bleibt die Kreditwürdigkeit von Investitionen in immaterielle Aktivitäten wie Marketing oder Forschung und Entwicklung wegen mangelnder Realsicherheiten problematisch. Dies hat ernsthafte Auswirkungen für solche Unternehmen, die nicht westdeutschen Unternehmen gehören und die von daher weder auf thesaurierte Gewinne noch auf die Kreditwürdigkeit ihrer Eigentümer zurückgreifen können.

Managing factoring in banking groups

On the market for factoring services independent suppliers coexhist with companies affiliated with banking groups. The last ones can be oriented in their decision processes by the policies of their parent company, usually a bank. They could also benefit from synergies among the different units of the group. The main benefits are linked to cost reduction, better skill-based resources allocation and a higher amount of financial coverage. If such interdependencies are found and developed, factors belonging to banking groups could attain a competitive advantage towards independent intermediaries. To assess the impact of the group structure we have to evaluate the degree of substitutability between factoring and other financial services supplied by the group, the synergy effects that could arise in each step of the production and delivery processes and eventually organizational challenges faced by the group. In our analysis we find evidence of complementarity among factoring and other financial products, we consider the possibile sinergies in some steps of the production process and we propose a methodology to assess the level of group cohesion and the kind of control exercised by the parent company.factoring; group organizations; institutional models

Socio-Economic Sourcing: Benefits of Small Business Set-Asides in Public Procurement

Purpose Small businesses are critical to economic health and encouraged in government spending by set-asides – annual small business sourcing goals that often are not attained. Little research has explored the negative and risky stigmas associated with small business sourcing. Design/methodology/approach This research explores reduced transaction costs of small business sourcing to government buyers. A survey of 350 government source selections reveals lower transaction costs derived from lower perceived risk of receiving a bid protest and via more efficient source selection processes. Findings Contrary to common bias, the performance level of small businesses is no less than that of large business. Thus, small businesses engender lower transaction costs for correcting supplier’s performance. On the basis of these findings, managerial and theoretical implications are discussed

Learning from local economic development experiences: Observations on Integrated Development Programmes of the Free State, Republic of South Africa

The aim of this paper is to assess the degree to which the components of the Rural Economic and Enterprise Development (REED) framework have been incorporated into integrated development planning (IDP) or into strategic local economic development (LED) plans. The paper also provides an evaluation of two local municipal level IDPs in the Free State, Republic of South Africa. The evaluation is considered on an ex-ante basis in terms of contemporary LED and REED approaches. We also consider IDP efficacy and potential impact in terms of achieving enterprise development, poverty reduction and growth.Rural Economic and Enterprise Development, economic development,

Corporate Governance and Ownership Structure in the Transition: The Current State of Knowledge and Where to Go from Here

The purpose of the paper is to present the current state of knowledge on both theoretical models and empirical evidence of interrelations between emerging corporate governance mechanisms and ownership structure of privatized enterprises in post-Communist countries. Section 2 contains extensive literature review on the subject. In Section 3, the results of the research coordinated by CASE on post-privatization changes in ownership structure of Polish, Czech and Slovenian enterprises are presented. In Section 4, the Authors present conclusions and a few suggestions for policy makers.corporate governance, privatization, enterprise restructuring, transition economy