The influence of multinational enterprises on subsidiaries: context matters

Purpose: This paper examines how differences in the institutional environment of a multinational enterprise (MNE) shape the role of management control systems (MCSs) and social capital in the headquarters-subsidiary relationship of an emerging economy MNE. Design/methodology/approach: A case study design was adopted in this research. Data was gathered by means of semi-structured interviews, document analysis and observations. Interviews were conducted at the Nigerian headquarter (HQ) and United Kingdom (UK) subsidiary of the Nigerian multinational enterprise. Findings: The study found that the subsidiary operated autonomously, given its residence in a stronger institutional environment than the HQ. Instead of the HQ depending on MCSs as a means of coordination and control, it relied on social capital that existed between the HQ and the subsidiary to coordinate and integrate the operation of the foreign subsidiary studied. Originality/value: The reliance on social capital as a means of coordination and control of the foreign subsidiary in this study is significant, given that previous studies have indicated that multinational HQs normally employ MCSs as a means of control of foreign subsidiaries. Also, while previous studies have suggested that MNEs HQs have better expertise which enables them to design and transfer MCSs to foreign subsidiaries, this study found that such expertise relates to the institutional environment from which the HQ is operating from. Through the lens of institutional sociology theory and social capital theory, these findings directly contribute to the literature on the transference of practices and control systems in accounting and international business literatures

African management: concept, content and usability

Purpose While management research in African context is all but invisible in management literature, the notion of "African management" emerges through a piecemeal corpus of literature that has arisen in response to the exclusion and marginalisation of Africa in the broad field of management literature. The idea underlying this reasoning is that the Western management model prevailing so far in Africa is inadequate because of cultural considerations. However, what is meant by “African management” still remains unfamiliar to both researchers and practitioners. Design/methodology/approach The authors conduct a selective review of the fragmented “African management” literature to identify directions it follows. This is carried out through an analytical framework aiming at investigate the usability of the "African management". Findings The paper identifies the key elements underlying the “African management” narrative. It also articulates these elements within a frame which represents an unprecedented attempt to render advocacy of “African management” more insightful. Originality/value The vibrant economic trends of Africa and its forthcoming dynamics are on the spotlight. At the same time, this upturn raises again a central concern about African societies’ development in which organisations are expected to play a pivotal role. Yet the paucity and fragmented nature of the current state of "African management" research do not enable either practitioners or academics to get a deep understanding of African organisations. This article constitutes a major contribution by setting up a scheme of identifying convincingly the analytical parameters that really count in African organisations

The determinants of good corporate governance: The case of Nigeria

This thesis investigates the key (institutional, regulatory, external and specific) determinants of good corporate governance in Nigeria. The study adopted a mix of the following qualitative research methods: in-depth interviews, focus group discussions, direct observations and case studies, to conduct a survey of corporate governance specialists in Nigeria, with sufficient capacity mix and diverse disciplinary and functional backgrounds. The study provides in-depth discussions with regards to the definitive motive of corporate governance and further demonstrates that developing countries face peculiar corporate governance challenges. The author shows how this peculiarity is contingent on certain national and firm-specific institutional environments. Furthermore, whilst there have been recent advocacy at implementing good corporate governance in Nigeria, as a means to re-shape the perceived negative institutional configurations, the author presents a case of institutional maintenance, where changes at the industry level are unable to change the self-reinforcing institutional landscape. As a result, whilst encouraging a deeper and less normative discourse, the author exposes possible challenges in transferring and enacting uniform corporate governance practices across different institutional contexts. Upon this institutionalist background, the thesis further looks exhaustively into the subject of corporate governance regulation in Nigeria (including the role of government), and shows that countries will have to position their regulatory systems to tackle the particular challenges they face. Furthermore, given that the African business infrastructure cannot be separated from past and present external influences, the author provides a cross-examination of the impact and influences of external governance mechanisms and forces on Nigeria. Discussions here have specific relevance for the literature on corporate governance in the USA, the UK, Japan, China and India. Also, the author examines the impact of the varying dimensions of global (as posed, but Anglo-Saxon in principle and character) institutional initiatives, with regards to cross national corporate governance monitoring and development, on Nigeria. Lastly, guided by the ultimate need to promote good corporate governance in developing countries, the author identifies nine specific drivers of good corporate governance in developing countries, whilst taking into account the afore-mentioned determinants. It is anticipated that this thesis augments the budding literature on corporate governance in developing countries, with secondary contributions to the broad literature on comparative corporate governance studies and comparative institutionalism, and presenting implications, not only to the academy but, to the business sector and the polity of developing market economies

The Impact of Control Fraud on the Banking System: Evidence from a developing Country

Recent global financial crisis have awakened the need to regulate corporate governance across the world. The fall of multi-national companies like Enron in the USA and Bank of Credit and Commerce International (BCCI) in the United Kingdom have brought to the fore the impact of fraud in corporate governance regulation. In Nigeria, fraud in the banking sector has reached epidemic levels contributing to the Nation’s economic depression. This research tests the hypothesis that the inadequacy of corporate governance regulation in the banking sector creates the opportunity for a web of financial crimes where the company is used as a fraud mechanism. This type of fraud, known as control fraud mainly involves people who are in ‘control’ of the company, particularly directors using their position as a weapon to defraud. The evidence collected from 5 banks involved in the recent banking crisis in Nigeria in 2008 and 2009 financial years supported this hypothesis. The research adopts a socio-legal methodology to assess the link between corporate governance regulation and control fraud. The research further suggests that control fraud is a peculiar challenge of Nigerian banks and there is therefore the need for regulatory involvement that takes into consideration the peculiarities of the country and addresses the institutional challenges faced in the system, particularly corruption and regulatory enforcement It is important that corporate governance regulation is specifically designed to meet the needs of a particular jurisdiction as opposed to transplanting western norms

Investment in Fixed Assets and Firm Profitability: Empirical Evidence from the Nigerian Banking Sector

The study examined the effect of investment in fixed assets on profitability of selected Nigerian banks. It also analyzed the significant components of fixed assets investment of selected Nigerian Commercial Banks. Data were obtained from annual reports and accounts of selected Nigerian commercial Banks. Pearson product moment correlation and multiple regressions were employed to analyze the relationship between the dependent variable (Net profit) and independent variables (Building, Land, Leasehold premises, fixtures and fitting, and investment in computers.). Findings show that there is a significant relationship between dependent variable (Net Profit) and the independent variables (Building, information communication and technology, machinery, leasehold, land and fixture and fitting) with the adjusted R2 @ 96%. Therefore, investments in fixed assets have strong and positive statistical impact on the profitability of banking sector in Nigeria. In order to improve bank profitability through efficient management of fixed assets, Nigerian banks should increase fixed assets investments in form of ICT. Fixed assets utilization and productivity needs to be monitored to boost profitability for shareholders’ satisfaction

Chief Financial Officer Overconfidence and Stock Price Crash Risk

Numerous studies have shown the prevalence of overconfidence among Chief Financial Officers (CFOs). Surprisingly, the real effect of CFO overconfidence is under-researched. Using data from a large sample of US-listed firms over the period 1993-2019 and adopting an eclectic theoretical approach, we find that overconfident CFOs are more likely to increase stock price crash risk than non-overconfident CFOs through risk-taking and bad news hoarding. These findings pass a series of robustness tests. Furthermore, departing from most overconfident studies that merely examine one type of top managers (i.e., Chief Executive Officer (CEO)), we consider the influence of CEO and CFO overconfidence jointly. Interestingly, we find that CFO overconfidence outweighs CEO overconfidence in influencing stock price crash risk. Moreover, the overconfidence effect is intensified when overconfident CFOs collaborate with overconfident CEOs, thus raising stock price crash risk. However, stronger governance and a transparent information environment constrain overconfident CFOs' effect on stock price crash risk. Overall, our findings highlight the importance of CFO overconfidence in determining stock return tail risks

Corporate social responsibility as obligated internalisation of social costs

We propose that corporations should be subject to a legal obligation to identify and internalise their social costs or negative externalities. Our proposal reframes corporate social responsibility (CSR) as obligated internalisation of social costs, and relies on reflexive governance through mandated hybrid fora. We argue that our approach advances theory, as well as practice and policy, by building on and going beyond prior attempts to address social costs, such as prescriptive government regulation, Coasian bargaining and political CSR

USPOREDBA PROCJENE EKONOMSKE KORISTI ZEMLJANIH BAZENA RIBNJAKA I BETONSKIH SPREMNIKA U AKVAKULTURNOM PODUZETNIŠTVU DRŽAVE OYO U NIGERIJI

The study focused on the comparative evaluation of economic benefits of earthen fish ponds and concrete tanks in aquaculture enterprises in Ibadan, Oyo state. Primary data were collected with the aid of structured interview schedule, administered through personal interviews and observations to elicit information from 100 fish farmers using purposive and convenience sampling procedure. Data collected were analyzed using descriptive, budgetary and inferential statistics. The study revealed that the mean age, male, married, household size, educated and fish farming experience were 41 years, 83.0%, 87.0%, 5 persons, 96.0% and 8 years, respectively. Earthen fish ponds users earned mean revenue of N3,322,189.85 with gross margin of N2,188,397.89 while concrete tank users earned N2,412,271.08 with gross margin of N1,413,299.46. The results showed profitability indices (0.61 and 0.47), Variable Cost ratio (0.35 and 0.30), Benefit Cost Ratio (2.55 and 1.89), Gross ratio (0.40 and 0.54) and Expenses structure ratio (0.13 and 0.23) for both the earthen ponds and concrete fish tanks, respectively. There were significant differences (t = 42.53, p≤0.05) between the profit level of earthen fish ponds and concrete tanks. Major constraints affecting economic status of the respondents were high cost of quality feed, insufficient funds, poaching and poor marketing channel. In conclusion, aquaculture is a more profitable and viable business regardless of the culture system. Government should assist the fish farmers by subsidizing feeds cost, granting and monitoring of loan.Temelj ovog istraživanja bila je usporedba procjene ekonomske koristi zemljanih bazena ribnjaka i betonskih spremnika u akvakulturnim poduzećima grada Ibadana u državi Oyo. U izboru 100 uzgajivača ribe korištena je kombinacija svrsishodnog i praktičnog uzorkovanja, a uzgajivači su bili podvrgnuti strukturiranom intervjuu radi prikupljanja primarnih podataka u svrhu deskriptivne statistike, proračunske tehnike i inferencijalne statistike. Istraživanje je rezultiralo sljedećim podacima: prosječna životna dob bila je 41 godina, muškaraca je bilo 83,0%, oženjenih 87,0%, u većini slučajeva bilo je 5 članova kućanstva, obrazovanih je bilo 96,0%, a iskustvo uzgoja riba kod ispitanika bilo je 8 godina. Korisnici zemljanih bazena ribnjaka imali su srednji prihod od N3,322,189.85 s bruto maržom od N2,188,397.89, dok su korisnici betonskih spremnika zaradili N2,412,271.08 s bruto maržom od N1,413,299.46. Indeks profitabilnosti bio je 0,61 i 0,47, varijabilni omjer troškova 0,35 i 0,30, omjer troškova i koristi 2,55 i 1,89, bruto omjer 0,40 i 0,54, a omjer strukture troškova bio je 0,13 i 0,23. Značajna je razlika između razine profita od zemljanih ribnjaka i betonskih spremnika (t = 42,53, p ≤ 0,05). Glavne prepreke koje utječu na ekonomski status ispitanika bili su visoki troškovi kvalitetne prehrane, neadekvatnost fondova, krivolov i loš marketing. Zaključno, akvakultura je isplativo i održivo područje poduzetništva, bez obzira na kulturni sustav. Vlada bi trebala pomoći uzgajivačima ribe subvencioniranjem troškova prehrane, odobravanjem i praćenjem kredita