Three Essays on the Enterprise Strategy for Multinational Firms

The enterprise strategy (ES) of the firm is the overarching organizational strategy which reflects the firm\u27s degree of integration with society. It asks, What do we stand for? Very little is known about the ES; however, it is an important construct which can deepen our understanding of the stakeholder management process and the firm\u27s long-term performance. Unlike much previous ES research, this three-essay dissertation examines both the nature of and the antecedents for ES in a cross-national setting. The introductory essay offers a conceptual model describing the organizational identity orientation effects on the multinational enterprise\u27s (MNE) ES. Additionally, it shows the interactive effects between the organizational identity orientation and the institutional identity orientation on the ES. The second essay utilizes the two theoretically-suggested dimensions of the ES—scope and type—to develop an ES measure. A computer-aided text analysis of 439 stakeholder letters of multinational and US firms revealed the presence of ES language. A reliable and valid ES measure was then constructed. A subsequent analysis produced ES configurations which broadly align with the four ideal ES types of Meznar, Chrisman, and Carroll (1991)—Narrow Defensive, Narrow Offensive, Broad Defensive and Broad Offensive. This research is extended in a third essay examining the impact of the diversity in the MNE\u27s environment on the ES. Using a multi-level analysis, this study first explores the effects of the top management team\u27s (TMT) and the board of directors\u27 (BOD) gender diversity, the TMT functional diversity, and the BOD\u27s stakeholder representation on the levels of the ES integration of 287 MNEs from 30 countries in 2011. The moderating effects on the above relationships emerging from the political culture of an MNE\u27s home country are also tested. According to the findings, gender diversity in the upper echelons positively influences the level of ES integration. This relationship is moderated by the political culture of the home country. The BOD stakeholder representation also positively influences the level of ES integration, but this relationship is not influenced by the MNE\u27s home-country political culture. Finally, the relationship between the top management team functional diversity and the dependent variable is not significant

BOARD DIVERSITY, INDUSTRY SPECIFICITY, AND FIRM PERFORMANCE

Industry specificity is important to affect board diversity-performance relationship. Prior studies are flawed by assuming that Malaysian industries are homogenous, and industry peculiarities might not be captured by the aggregate results of all firms in the country. The ability of board diversity to boost firms’ performance could be affected by a specific nature of the industries. The purpose of this study is to examine the combined effect of board diversity on firm performance. We also examined the moderating role of industry specificity on the board diversity-performance relationship. Data were collected from 180 listed firms in Malaysia for the period of 2012 to 2016 to avoid the implication of the Companies Act 1965 revamp in late 2016 and the latest MCCG reform in 2017. Data were analysed using the random effect panel data regression to test the research hypotheses. The findings suggest that firm performance is influenced by the combined effects of board diversity dimensions. The findings confirmed the importance of industry effect indicated by the variations of board diversity-performance relationship across industries. Other significant factors include firm’s growth, size, and leverage. Thus, different industries in Malaysia should utilize a distinguished corporate governance framework to improve firm performance according to their industry specificities. The findings of this study contribute to the body of knowledge by expanding the role of board diversity in the context of industry specificity.   Keywords: Board diversity, corporate governance, firm performance, Malaysia, sectorial analysis   Cite as: Amin, S. I. M., Rahmat, M. M., & Mohd Asri, A. K. (2019). Board diversity, industry specificity, and firm performance. Journal of Nusantara Studies, 4(2), 45-69. http://dx.doi.org/10.24200/jonus.vol4iss2pp45-6

Corporate Social Responsibility

This Edited Volume Corporate Social Responsibility is a collection of reviewed and relevant research chapters, offering a comprehensive overview of recent developments in corporate behavior. The book comprises single chapters authored by various researchers and edited by an expert in the field. All chapters are complete in themselves but united under a common research study topic. This publication aims at providing a thorough overview of the latest research efforts by international authors and opening new possible research paths for further novel developments

The Impact of Governance Mechanism on Performance and Survival of Entrepreneurial Firms

The dissertation consists of two essays. The first essay studies governance structures and their effectiveness for start-up companies and their survival. We utilize data from the Kauffman Survey, which tracks a sample of firms from their inceptions through their first eight years of existence. We hypothesize and find evidence that a startup\u27s governance system affects its survivability as well as its performance. We show that controlling for the firm size and the industry, cross-sectional variations in the performance of the start-up firms can be explained by governance variables; the presence of one or more independent board member on the board, the separation between the person holding the CEO position and the chair of the board. From the startup survival perspective, we show that the presence of one or more independent board member(s), the separation between CEO and board chair, and external funding are effective factors that promote a start-up\u27s longevity. The second essay studies the direct and indirect relations between Governance and firm survival and performance through Entrepreneurial Orientation. Entrepreneurial orientation (EO) is defined as the attributes, including innovativeness, autonomy, risk-taking attitude, proactiveness, and competitive aggressiveness, that a business organization displays at the time of entry. Several researchers have studied the linkage between EO and organizational performance as well as the survival rate of new firms and find conflicting results. Reasons for the contradictory results might very well be the way the researchers have defined the EO attributes and the data source they use which is based on subjective responses. In the hopes of reducing inconsistent results, we propose that it is the governance factors that influence the performance and survival of these firm via mediating role of entrepreneurial orientation. Governance factors remove the definition as well as data measurement problems. By using the 8-year longitudinal data of 4928 startups, we show that governance system significantly impacts a start-up’s performance and survival via entrepreneurial orientation

The Impact of Governance Mechanism on Performance and Survival of Entrepreneurial Firms

The dissertation consists of two essays. The first essay studies governance structures and their effectiveness for start-up companies and their survival. We utilize data from the Kauffman Survey, which tracks a sample of firms from their inceptions through their first eight years of existence. We hypothesize and find evidence that a startup\u27s governance system affects its survivability as well as its performance. We show that controlling for the firm size and the industry, cross-sectional variations in the performance of the start-up firms can be explained by governance variables; the presence of one or more independent board member on the board, the separation between the person holding the CEO position and the chair of the board. From the startup survival perspective, we show that the presence of one or more independent board member(s), the separation between CEO and board chair, and external funding are effective factors that promote a start-up\u27s longevity. The second essay studies the direct and indirect relations between Governance and firm survival and performance through Entrepreneurial Orientation. Entrepreneurial orientation (EO) is defined as the attributes, including innovativeness, autonomy, risk-taking attitude, proactiveness, and competitive aggressiveness, that a business organization displays at the time of entry. Several researchers have studied the linkage between EO and organizational performance as well as the survival rate of new firms and find conflicting results. Reasons for the contradictory results might very well be the way the researchers have defined the EO attributes and the data source they use which is based on subjective responses. In the hopes of reducing inconsistent results, we propose that it is the governance factors that influence the performance and survival of these firm via mediating role of entrepreneurial orientation. Governance factors remove the definition as well as data measurement problems. By using the 8-year longitudinal data of 4928 startups, we show that governance system significantly impacts a start-up’s performance and survival via entrepreneurial orientation

Determinants and results of Corporate Social Responsibility as a stakeholder engagement tool

Dada la relevancia que han ido adquiriendo las actividades de Responsabilidad Social Corporativa (RSC) en el mundo empresarial, acentuadas en el año 2015 con la definición de los 17 Objetivos de Desarrollo Sostenible (ODS), se entiende la necesidad de estudiar la implicación y el efecto que tienen estas actividades en los stakeholders que lo rodean. Para ello, y con el objetivo de analizar los determinantes y resultados de la RSC como una herramienta de stakeholder engagement, se realiza un estudio en el que, además de conocer el estado de la literatura sobre el tema, se plantea el papel de la RSC como mecanismo para mejorar ciertas actitudes de los trabajadores, se estudian cómo las diferentes características idiosincráticas de los CEO pueden influir en el nivel de divulgación de los ODS y, finalmente, qué efecto tiene la RSC en el rendimiento empresarial

Innovation’s governance and investments for enhancing competitiveness of manufacturing SMEs

To become innovative and competitive manufacturing contractors, SMEs have to be capable to supply manufacturers with advanced equipment, components, and tools for improved manufacturing and engineering operations. Besides, despite their foremost numbers and importance in job creation, traditionally SMEs encounter difficulty in obtaining formal credit or equity. Maturities of commercial bank loans extended to SMEs are often limited to a period far too short to pay off any sizeable investment. Many European governments and international financial institutions have tried to address the problems of high transaction costs and risks by creating subsidized credit programmes and/or providing loan guarantees. Such projects have often fostered a culture of non-repayment or failed to reach the target group or achieve financial self-sustainability. Further, it tries to understand what are the main barriers for SMEs with respect to the realisation of their innovative potential and their capacity to improve internal processes by the adoption of innovative manufacturing techniques and a graduated organizational change. They are becoming particularly important for achieving greater productivity, lower operational costs, and higher revenues (usually characterized by reduced access to external finance, unavailability of wider distribution channels, low internationalization, etc.). The purpose of this article at last is to clarify how on-line training on automation and innovation fields can bring economic and organizational benefits. Innovative training contents can improve manufacturing knowledge of managers and employees, especially on industrial automation systems.To become innovative and competitive manufacturing contractors, SMEs have to be capable to supply manufacturers with advanced equipment, components, and tools for improved manufacturing and engineering operations. Besides, despite their foremost numbers and importance in job creation, traditionally SMEs encounter difficulty in obtaining formal credit or equity. Maturities of commercial bank loans extended to SMEs are often limited to a period far too short to pay off any sizeable investment. Many European governments and international financial institutions have tried to address the problems of high transaction costs and risks by creating subsidized credit programmes and/or providing loan guarantees. Such projects have often fostered a culture of non-repayment or failed to reach the target group or achieve financial self-sustainability. Further, it tries to understand what are the main barriers for SMEs with respect to the realisation of their innovative potential and their capacity to improve internal processes by the adoption of innovative manufacturing techniques and a graduated organizational change. They are becoming particularly important for achieving greater productivity, lower operational costs, and higher revenues (usually characterized by reduced access to external finance, unavailability of wider distribution channels, low internationalization, etc.). The purpose of this article at last is to clarify how on-line training on automation and innovation fields can bring economic and organizational benefits. Innovative training contents can improve manufacturing knowledge of managers and employees, especially on industrial automation systems.Articles published in or submitted to a Journal without IF refereed / of international relevanc

Does Corporate Culture Affect Bank Risk-Taking? Evidence from Loan-Level Data

Using comprehensive corporate and retail loan data, we show that the corporate culture of banks explains their risk-taking behaviour. Banks whose corporate culture leans towards aggressive competition are associated with riskier lending practices: higher approval rate, lower borrower quality, and fewer covenant requirements. Consequently, these banks incur larger loan losses and make greater contributions to systemic risk. The opposite behaviour is observed among banks whose culture emphasizes control and safety. Our findings cannot be explained by heterogeneity in a bank's business model, CEO compensation incentives or CEO characteristics. We use an exogenous shock to the US banking system during the 1998 Russian default crisis to support a causal inference

The influence of family and institutional ownership on merger & acquisition investments and the role of corporate entrepreneurship

This study draws on a sample of 108 private and publicly listed German companies that completed at least one M&A deal in 2007-2015. Thereby it investigates the difference between the degree of family and institutional ownership and its respective influence on corporate strategic investment decisions, specifically focusing on merger and acquisition (M&A) investments. Furthermore, based on previous research, revealing similar innovative characteristics and benefits of corporate entrepreneurship and M&As, this study investigates how corporate entrepreneurship moderates the aforementioned relationships respectively. Thereby the study strives to ascertain whether both corporate entrepreneurship and M&As are either mutually exclusive or co-existing in corporations. Eventually, the results suggest no significant relationship between family ownership and the degree of M&A investments. Additional investigations further reveal that a family’s supplementary involvement in the corporate management board neither constitutes a significant negative moderation. In other words, this means that the relationship is not negatively amplified when family members have a majority ownership stake in the company while simultaneously operating in the corporate management board likewise. Contrary to the generally assumed paradigm of institutional investors’ passive behavior in strategic decision matters, their increasing ownership stakes negatively influence the degree of M&A investments. Furthermore, corporate entrepreneurship, measured in terms of R&D intensity and patents, reveals incoherent but significant findings and thereby illustrates its widespread influencing components in different corporate settings. In particular, R&D intensity negatively moderates the relationship between family ownership and M&A investments but constitutes no significant moderation on the relationship with institutional ownership. Patents, however, moderate the relationship with family ownership positively, while having a negative moderating effect on the relationship between institutional ownership and the degree of M&A investments

The mediating effect of organizational commitment and moderating role of strategic implementation in the relationship between high performance work practices and organizational performance

Many studies on strategy and strategic human resource management have utilized resource-based view to explain the process through which organizations can gain sustainable competitive advantage and improve their performance. This viewpoint has overlooked the important role of managers in structuring, bundling and leveraging organizational resources to create superior value for owners and customers. However, there is still limited attention to how such role can be utilized to determine the performance of banks in Nigeria. Specifically, the study investigated the mediating role of organizational commitment and the moderating role of strategic implementation on the effect of high-performance work practices on the performance of Nigerian banks. The study employed a cross-sectional design to collect data from 400 participants using mail and personally administered questionnaires. A total of 258 usable questionnaires were retrieved to test five hypotheses. The results of Partial least square structural equation modelling analysis revealed that extensive training and development, recruitment and selection, organizational commitment, and strategic implementation had a direct and significant effect on bank performance in Nigeria. The study did not show a direct effect of job security, empowerment, compensation, and performance appraisal. Furthermore, the study demonstrated an indirect effect of extensive training and development, compensation, recruitment and selection and performance appraisal through the mediating role of organizational commitment. In line with scholarly suggestion for incorporating a moderator in the organizational level relationship between organizational commitment and organizational performance, this study confirmed the moderating role of strategic implementation. The study also contributes to the literature on how resource management model contributes to resource-based view by integrating the role of managers. Finally, the study addresses a call for a reflective-formative assessment of organizational performance as a multifaceted construct, discusses the implications and limitations, and suggests areas for future research