An earnings-return model for strategic market planning / BEBR No. 869

Includes bibliographical references (p. 38-39).Few models currently exist which aid managers in their strategic market planning. The models or frameworks which do exist have a variety of shortcomings, a major one being an inadequate linkage to a business organization's dominant goals for existence -- earnings and return on investment. This paper develops a planning model based on a firm's present levels of earnings and return designed to provide a partial foundation on which its managers can base their strategic market planning. Depending upon the firm's placement in the model, different organizational objectives and strategies exist for improving future performance

The impact of innovativeness on supply chain performance: is supply chain integration a missing link?

© Emerald Group Publishing Limited. Purpose - This purpose of this paper is to study the impact of innovativeness on supply chain integration (SCI) and supply chain performance (SCP) and the role of SCI in mediating between innovativeness in the supply chain and SCP. Innovativeness is an accepted driver to leverage firm performance. SCI and SCP require innovativeness in the supply chain, but their interrelationships have rarely been researched empirically.P Design/methodology/approach - A questionnaire survey and structural equation modelling were used in this work. After a structural and measurement model was devised from existing supply chain literature, the main data were collected in a web-based questionnaire survey of South Korean manufacturers. Structural equation modelling was applied to test proposed hypotheses on the associations between variables, following a hierarchical analysis process.P Findings - Innovativeness in the supply chain had a positive impact on both SCI and SCP. However, the direct impact of innovativeness on SCP disappeared when the model included SCI as a mediator. In specific, internal and supplier integration fully mediated innovativeness-SCP relationships, whereas customer integration had no mediating role on those relationships. The findings suggest that innovativeness can influence SCP only when the manufacturer’s level of SCI is sufficiently effective in developing necessary supply chain practices.P Research limitations/implications - In this work, innovativeness in the supply chain effectively influenced SCP through the mediation of SCI. However, cross-sectional analysis in one nation using one response per organisation invites validation embracing other geographical areas and longitudinal studies.P Practical implications - Design of an innovative culture within a firm and along a supply chain can enhance SCI practices by stimulating innovativeness. A high level of SCI should be pursued to effectively transform innovativeness into performance.P Originality/value - This work seminally examines the effect of innovativeness in the supply chain on SCI and SCP as well as the mediating role of SCI in the relationships between innovativeness and SCP

Финансовая составляющая механизма международных производственных сетей оборонно-промышленного комплекса

Статтю присвячено актуальним фінансово-економічним аспектам міжнародного співробітництва в оборонному секторі. Аналіз практики функціонування найбільших оборонних компаній свідчить, що фінансування субпідрядників (зокрема в разі поетапного фінансування за контрактом або бюджетування інвестицій в оснащення) використовується лише в тому випадку, якщо головний підрядник отримує перевагу (наприклад, коли товар із високим попитом доступний лише у невеликого, недокапіталізованого постачальника або коли постачальник «критичної» продукції має фінансові негаразди). Практика фінансування робочого та інвестиційного капіталів визначається більше специфікою того, як компанії отримують платежі від своїх клієнтів, ніж тим, який саме військовий товар вони пропонують. Попри те, що саме товар фірми визначає розмір та часові атрибути її фінансових потреб, чинниками, що обумовлюють потреби у фінансуванні, є тривалість контрактів із клієнтами та конкретні послуги чи товари, які надаються в комплекті. Обґрунтовано систему необхідних заходів на державному рівні та напрями міжнародного співробітництва з метою мінімізації негативного ефекту від завершення розірвання виробничих зв'язків українських компаній із підприємствами оборонної промисловості СНД. Доведено, зокрема, необхідність лібералізації порядку передачі товарів військового призначення та подвійного використання; зміни в системі управління державними підприємствами для позбавлення від неефективних активів, їх корпоратизація та приватизація; потребу в реформуванні системи стандартизації та технічного регулювання в галузі розроблення та виробництва оборонної продукції; необхідність запровадження податкових пільг та обов'язкових платежів для підприємств оборонно-промислового комплексу, які вкладають власні кошти в розвиток виробничої бази. Проаналізовано роль співпраці з НАТО для модернізації оборонної промисловості України та пришвидшення інтеграції підприємств у міжнародні виробничі мережі. Обґрунтовано шляхи позитивного впливу співпраці, зокрема доступ України до різних документів, включаючи військові доктрини, необхідні для підтримки реформ у Збройних Силах України; затвердження пакетів заходів, необхідних для підвищення поінформованості про ситуацію та підтримки партнерів НАТО в Чорному морі; і нарешті, визнання України розширеним партнером у червні 2020 року.Статья посвящена актуальным финансово-экономическим аспектам международного сотрудничества в оборонном секторе. Анализ практики функционирования крупнейших оборонных компаний свидетельствует, что финансирование субподрядчиков (в частности в случае поэтапного финансирования по контракту или бюджетирования инвестиций в оснащение) используется только тогда, когда главный подрядчик получает преимущество (например, при доступности товара с высоким спросом только у небольшого, недокапитализированного поставщика или когда поставщик «критической» продукции имеет финансовые проблемы). Практика финансирования рабочего и инвестиционного капиталов определяется скорее спецификой того, как компании получают платежи от своих клиентов, чем тем, какой именно военный товар они предлагают. Несмотря на то, что именно товар компании определяет размер и временные атрибуты её финансовых потребностей, факторами, которые обуславливают потребности в финансировании, являются продолжительность контрактов с клиентами и конкретные услуги или товары, которые предоставляются в комплекте. Обоснована система необходимых мер на государственном уровне и направления международного сотрудничества, чтобы минимизировать негативный эффект от завершения разрыва производственных связей украинских компаний с предприятиями оборонной промышленности СНГ. В частности, обоснованы необходимость либерализации порядка передачи товаров военного и двойного назначения; изменений в системе управления госпредприятиями с целью избавления от неэффективных активов, их акционирование и приватизация; потребность в реформировании системы стандартизации и технического регулирования в области разработки и производства продукции оборонного назначения; необходимость введения налоговых льгот и обязательных платежей для предприятий оборонно-промышленного комплекса, вкладывающих собственные средства в развитие производственной базы. Анализируется роль сотрудничества с НАТО в модернизации украинской оборонной промышленности и ускорении интеграции предприятий в международные производственные сети. Обоснованы способы позитивного влияния сотрудничества, в частности доступ Украины к различным документам, в том числе к военным доктринам, необходимым для поддержки реформ в Вооружённых силах Украины; утверждение пакетов мер, необходимых для повышения ситуационной осведомлённости и поддержки партнёров НАТО в Чёрном море; и, наконец, признание Украины в качестве расширенного партнёра в июне 2020 года.The article provides insights into financial and economic aspects of international partnerships in the defense sector. A critical review of operational practices of the largest defense companies provides evidence that subcontractor financing (in particular, in case of multi-phase contract financing or investment capital budgeting) is used only if the main contractor gains an advantage (in situations when high demand products are available only from a small, undercapitalised supplier or when a ‘critical’ product supplier faces certain financial difficulties). The findings demonstrate that working and investment capital raising practices refer more to the specifics of how companies accept payments from their customers rather than focusing on the particular military product they offer. Although the company funding needs including capital size and time investment are directly affected by the product type, the factors that drive the company needs in financing are characterised by contract duration and the specific services or products provided to customers in a package. The study suggests a well-reasoned action plan to be implemented at the government level along with specifying the areas of international cooperation to reduce the negative effects from the final severance of value chains between Ukrainian companies and the CIS defense industry. In particular, the study substantiates the need to liberalize the regulatory framework for transferring of military equipment and dual-use goods; the need to change management practices at state-owned enterprises in terms of timely disposal of inefficient assets along with asset corporatization and privatization; the need to reform the standards and technical regulation framework in the area of defense-related product design and manufacturing; the need to implement tax incentives and mandatory payments for defense industry enterprises which invest in production growth. A special emphasis is put on the role of Ukraine – NATO cooperation to modernise the national defense industry and enhance the integration of Ukrainian businesses into global production networks along with demonstrating the benefits gained from international cooperation, in particular this refers to Ukraine's access to important regulatory documents, including military doctrines, which contributes to facilitating reforms within the Armed Forces of Ukraine; approval of the package of measures which are critical to raising awareness and to support NATO partners in the Black Sea region; and finally, the recognition of Ukraine as an Enhanced Opportunities Partner in June 2020

Een etiologie van horizontale internationale ondernemingsexpansie

Internationalization;business economics

Beyond Markets and Hierarchies: Toward a New Synthesis of American Business History

We sketch a new synthesis of American business history to replace (and subsume) that put forward by Alfred D. Chandler, Jr., most famously in his book The Visible Hand (1977). We see the broader subject as the history of the institutions of coordination in the economy, with the management of information and the addressing of problems of informational asymmetries representing central problems for firm- and relationship design. Our analysis emphasizes the endogenous adoption of coordination mechanisms in the context of evolving but specific operating conditions and opportunities. This naturally gives rise both to change and to heterogeneity in the population of coordination mechanisms to be observed in use at any moment in time. In discussing the changes in the population of mechanisms over time, we seek to avoid the tendency, exemplified by Chandler's work but characteristic of the field, to see history of adoption in teleological rather than evolutionary perspective. We see a richer set of mechanisms in play than is conventional and a more complex historical process at work, in particular a process in which hierarchical institutions have both risen and, more recently, declined in significance.

TAX, TUNNELING ACTIVITIES, CORPORATE GOVERNANCE AND TRANSFER PRICING DECISION

Multinational firms consider several factors to decide transfer prices in a-related party transaction. The Purpose of this study was to determine the effect of tax, tunneling activities, and corporate governance on transfer pricing with cash holding as mediating variable. This research used a quantitative approach and panel data analysis by taking data samples from 53 manufacturing companies listed on the IDX in 2013-2019, which met the research criteria as previously set. The result stated that tunneling activities and corporate governance have a significant positive effect on transfer pricing, while the tax has negative effect on transfer pricing. Tax, tunneling activities and corporate governance has no effect on cash holding. Thus, the effect of cash holding cannot intervene the effect of tax, tunneling activities and corporate governance on transfer pricing. In the future, tax authority can narrow the scope of transfer pricing investigation by examinating elements in financial report.  Keywords: cash holding; corporate governance; transfer pricing; tax; tunneling activitie

Is There Hope for Change? The Evolution of Conceptions of Good Corporate Governance

To provide a useful perspective on corporate governance today, this Article examines the evolution of conceptions of “good” corporate governance that have successively revolutionized the corporate landscape. By the use of “evolution,” I do not mean some natural evolution, but changes in the beliefs of managers concerning how to run their businesses effectively. “Good” corporate governance refers to what is perceived as good from the point of view of firm managers and may or may not translate into what is good for society. This Article shows that corporate decision making was influenced over the years by successive, rationalized ideals of good corporate governance. Changes in conceptions were precipitated by crises and environmental changes. They were reasoned, if often flawed, responses to complex macroeconomic forces, competitive conditions, regulations or the lack thereof, and other environmental factors. More importantly, they were reflections of the culture and thinking of the time, influenced by the views of successful business leaders, the business press, investors, and academics

The Effects of Corporate Diversification and Control on Division Risk-Taking Strategy and Performance

This research explored two major functions of corporate strategic management, corporate diversification (core-business relatedness) and corporate control, and their implications for divisional strategic management. Four research questions were raised to address these issues: (1) does core-business relatedness matter to division performance? (2) how does core-business relatedness influence corporate control? (3) how does core-business relatedness influence division risk-taking strategies and performance? and (4) how does corporate control influence division risk-taking strategies and performance? Adopting the resource-based view and organizational learning theory, this study proposed that core-business related divisions would outperform unrelated divisions and that core-business related divisions would have higher commitment to risk-taking strategies than would unrelated divisions. From a strategic management perspective, it was hypothesized that corporate control would be differentiated by core-business relatedness. Viewing the relationship between a corporate office and its divisions from an agency theoretical perspective, this study suggested that corporate control would influence division risk-taking strategy. Finally, from a strategic management perspective, this study proposed the moderating effects of core-business relatedness and corporate control on the relationship between division risk-taking strategy and performance. Korean business groups were selected as samples because they provided objective divisional performance data. Data was collected from 57 affiliated companies of 32 Korean business groups. Two indicators of risk-taking strategy were used to test the hypotheses: R&D investment and internationalization. T-test, analysis of variance, analysis of covariance, and multiple regression analysis were used to test the hypotheses. The results show that core-business relatedness positively influences division performance. Core-business relatedness was found to positively affect divisional R&D investment but not divisional internationalization. Corporate control was found to be not differentiated by core-business relatedness. The moderating effect of core-business relatedness on the relationship between division risk-taking strategies and performance was not found. The results show that decentralized corporate control positively influenced division R&D investment. In contrast, centralized corporate control positively influenced division internationalization. The moderating effect of corporate control was not found

SEARCH AND INNOVATION: HOW FIRMS DISTRIBUTE LEARNING AND PATTERNS OF SEARCH

This dissertation follows the research tradition that looks at firm change from the behavioral perspective. After an introduction and initial literature review, the dissertation proceeds with three studies on related topics. First, based on the BTOF perspectives on how performance patterns affect search and change, and psychology literature on risk taking, I develop theoretical arguments regarding the performance feedback process in multidivisional organizations. I found that the feedback learning process can be influenced by the multidivisional structure, resulting in different risk taking behaviors in large complex organizations. Given this insight, I looked into the details of the search process inside large organizations as they adopted a new technology, blockchain. This second study demonstrated that the search process can take multiple steps. This insight led to a related question for the third study: given that search is motivated by goals, how do goals evolve in the search process? In this study, I found an iterative process of search and goals, in which initial goals motivate search, and those goals evolve as the search filters through the goal hierarchy. Importantly, the filter influences whether the use of the adopted technology explores new options for strategy, or exploits legacy options. Overall, my dissertation contributes to the BTOF and search perspective. First, my dissertation extends this classic theory into the context of diversified and multidivisional firms. I show that the response to performance attainment discrepancy varies when firms are more or less diversified. Second, I look into the “black box” of search, and uncover a multiple step process of search that might be more typical in complex corporations. I contribute to better understanding of this process of search and how the search influences innovation decisions by focusing on three key aspects of search: the divisionalization of firms, how search is distributed in firms, and search and subsequent organizational goals. My dissertation also contributes to the large literature on how firms change, and suggest new paths forward on understanding inertial and novel forms of change.Doctor of Philosoph