Organizational slack as an enabler of internationalization: the case of large Brazilian firms

In this paper, we address an empirical puzzle. We note that a deliberate and serious drive to internationalize has occurred rather late in the evolution of large Brazilian firms. Meanwhile, and despite their late internationalization, these Brazilian firms expanded rapidly and intently. Despite the rich literature on Emerging Market Multinational Enterprises (EMNEs), there is still much contention on what drives rapid EMNE internationalization, particularly for the less explored firms from Latin America. Using an inductive case study of five leading Brazilian MNEs, we bring new insights on this neglected question. We unveil that the existence of organizational slack (of operational, managerial, and financial nature) can indeed facilitate rapid internationalization, particularly when triggered by unique home country conditions (e.g., regulation; rising cost of doing business at home; exhaustion of profitable growth opportunities in the domestic market)

Revisiting the firm, industry, and country effects on profitability under recessionary and expansion periods: a multilevel analysis

Despite voluminous past research, the relevance of firm, industry, and country effects on profitability, particularly under adverse contexts, is still unclear. We reconcile institutional theory with the resource‐based view and industrial organization economics to investigate the effects of economic adversity, such as the 2008 global economic crisis. Using a three‐level random coefficient model, we examine 15,008 firms across 10 emerging and 10 developed countries for the 2005–2011 period. We find that firm effects become stronger under adversity, whereas industry effects become weaker, as well as country main and interaction effects, particularly among the emerging economies. These findings confirm our assumptions that the firm's own fate is, to a great extent, self‐determined; a reality that is even more pronounced during periods of extreme economic hardship

Defying the industry trend: factors for countering the negative impacts of operating in declining industries

Downturns are part of the industrial life-cycle; all industries suffer from fluctuations in the demand for their products and services imposing serious challenges for firms operating within. Yet not all firms are affected equally during industrial downturns. In fact, the observation of firms operating in declining industries, which not only manage to survive but over-perform against the odds, reveals that there are ways to defy negative trends and rise above them. In this book, we examine the managerial, human and social capital attributes as well as the strategies of 25 high-growth SMEs operating in long declining industries in the UK

Teaching entrepreneurship with the use of a simulated business game

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Organisational slack and post-merger performance: evidence from domestic and international takeovers

We focus on the role of organizational slack on post-merger performance of domestic and cross-border acquirers. By employing a comprehensive sample of 9,345 M&A deals by US firms during the period 1995-2014, we examine the impact of different types of organizational slack - unabsorbed, absorbed, high and low discretion slack - on the acquirers’ post acquisition performance. We find that on average acquisitions lead to the destruction of significant value for the bidder. However, organizational slack that is not readily available, may aggravate the negative effects of a takeover, leading to further losses in market value. On the contrary, readily available slack, in particularly the abundance of cash reserves, mitigates the challenges associated with a large corporate takeover and acts as a defense mechanism against acquirers’ losses. The above influences of organizational slack on post-merger performance are amplified in the case of international acquisitions. Therefore organizational slack is not only an important motivator for international activities as suggested in the past, but may also act as a facilitator for the success of cross-border investment decisions

Defying the trend: strategies for countering the negative impact of operating in declining industries and markets

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[Blog] How best to use a company’s resources

Using a company’s resources effectively and efficiently is, or at least should be, the focus of C-suite managers. Companies have to be cost-sustainable, value-chain efficient, and marketplace effective. What many managers fail to understand is that an emphasis on the slack resources per se rather than their configuration is fraught with pitfalls. We report the results for 3,851 large acquisitions, and the best use of a company’s resources in the M&A

How childhood ADHD-like symptoms predict selection into entrepreneurship and implications on entrepreneurial performance

This study advances research on mental health and entrepreneurship through the examination of Attention Deficit Hyperactivity Disorder (ADHD)-like symptoms, associated with hyperactivity/impulsivity and inattention. We examine the impact of these symptoms at age 10 on entrepreneurial performance as an adult. We find that while ADHD-like symptoms in childhood may have a positive impact on entrepreneurial selection, they negatively impact on survival and performance, with a variant effect by each symptom, predominantly among males. We find that high levels of inattention predict business failure and lower take-home income, while high levels of hyperactivity/impulsivity contribute to overall negative earnings' growth

Firm, industry and country effects on performance: a multi-level analysis of emerging vs. developed country firms in the global economic crisis

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Firm, industry and country effects on performance in the global economic crisis

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