Corporate performance and the measures of value added

In recent years, managers have turned their attention to the ways increasing the value of their companies. A number of competing measures have been developed and marketed by investment and consulting firms. This paper considers the ways in which value can be created or destroyed in a firm and looks at how to calculate the cost of capital used to measure the opportunity cost of investing funds in one particular business instead of others with equivalent risk. Next, we have a look at the four most widely used value enhancement measures including Economic Value Added, Cash Flow Return on Investment, Market Value Added, Cash Value Added and use an example to think of where these approaches yield similar results and where differences might occur. In conclusion, we summarize the new or unique points in these competing measures, establish the information they can give and explain how to use it when managing and creating shareholder value. First published online: 27 Oct 201

Investment Efficiency Evaluation of Customer Relationship Management System: Theoretical and Practical Aspects of Return on Investment Methodology Application

Customer relationship management (CRM) has been increasingly adopted by companies as the core of IT – driven business strategy and firms have started to invest in CRM. However, the rate of successful CRM implementations is about 30%. Many enterprises pursue expensive CRM initiatives without first understanding of the challenges and costs involved. This approach often results in CRM projects that fail to meet measurable benefit objectives. Evaluating costs and benefits associated with CRM systems acquiring and implementation and applying financial measurement methodologies can help a company make the right CRM investments solution and build a compelling justification for its CRM project. Return on investment (ROI) financial measurement methodology, its theoretical and practical aspects are analyzed in this study. Authors of this paper provide a detailed list of CRM cost categories, which can assist an organization to easily calculate its CRM system acquisition and ongoing spending. Also the authors of this paper present survey results of CRM system costs and investment efficiency evaluation in Lithuanian companies

Customer relationship management as business strategy appliance: Theoretical and practical dimensions

The main purpose of this article is to provide an integral and managerially useful view of customer relationship management (CRM) as business strategy. The key objectives are: to analyze CRM origins, development and changes that have occurred over time and to provide its future directions, to rank the variety of CRM definitions and determine CRM definition, which reflects CRM essence most accurately, to analyze components of CRM, to provide a framework, which ensures that CRM is approached on a strategic, balanced and integrated basis, to determine CRM strategy definition, and to identify CRM strategy position in the whole of companies strategies. The article provides best practices of CRM strategy appliance. The methods used: analysis and generalization of scientific and practical works and statistical data. First Published Online: 14 Oct 201

Nacionalinio konkurencingumo politikos formavimo praktika

Governments of different countries understand the importance of collaboration between public, private and academic sectors and have established national competitiveness councils with functions related to national competitiveness policy formation. Because of the relatively short practice of these councils there is a lack of scientific research improving their functionality, showing their role in policy formation process and estimating the efficiency and validity of used methodic. The article analyses the national competitiveness policy formation practice in different countries. Most attention is given to the role of the national competitiveness council. The analysis of national competitiveness councils acting in different countries showed that they are playing an important role in the national competitiveness policy formation process. The most important functions carried out by these councils are in the policy planning stage: national competitiveness estimation, priorities establishment and presentation of recommendations to the policy makers.The preparation of the strategy and its implementation action plans are usually drafted in other institutions during the usual strategic planning activity. National competitiveness councils are using different methods for the national competitiveness estimation. The analysis of the methodic base disclosed essential problems existing in the estimation process: no definition of the object estimated; estimation methods without a strong theoretical base; not enough informative recommendations; weak role of the councils in strategy formation activity. These problems cannot ensure the validity and soundness of the established priorities, purposes, they misrepresent recommendations and can influence wrong policy creation. According to the analysed problems, the improvement of the national competitiveness policy formation process could be improved with the clear national competitiveness definition, strong and valid theoretical base of estimation methodic, quantitative based recommendations and expansion of the national competitiveness councils activities ranges.Įvairių šalių vyriausybės suprasdamos viešojo, privataus ir akademinio sektorių bendradarbiavimo svarbą steigia viešosios ir privačiosios partnerystės pagrindu veikiančias nacionalinio konkurencingumo tarybas, kurioms patiki atitinkamas funkcijas, glaudžiai susijusias su nacionalinio konkurencingumo politikos formavimu. Dėl santykinai trumpos šių tarybų veiklos praktikos trūksta mokslinių tyrimų, įrodančių jų funkcionalumą, atskleidžiančių atliekamą vaidmenį politikos formavimo procese ir įvertinančių naudojamos metodikos, vykdant savo funkcijas, efektyvumą ir pagrįstumą. Straipsnyje atliekama pasirinktų šalių nacionalinio konkurencingumo politikos formavimo praktikos analizė, didžiausią dėmesį skiriant nacionalinio konkurencingumo tarybų vaidmeniui šiame procese

EU structural support and its impact on Lithuania's progress

During the last years the changes of social ‐ economic situation have been fast, however, according to individual macroeconomic indexes Lithuania is still significantly below the average of EU countries. To decrease these discrepancies the EU grants the structural support, the use of which is anticipated to establish strong and competitive economy, to train qualified labour force and stimulate social and economic cohesion. The efficient and expedient use of the EU support would enable Lithuania to implement the national Lisbon strategy programme and contribute to the implementation of the very Lisbon strategy guidelines. However, the investigations showed that the use of the support is not sufficient enough to secure the efficient progress of the country. The article analyses the aspects of the EU regional policy financing and the expected results of implementing the Lisbon strategy actions; it analyses economic, social, environmental, and other indexes of the economies of Lithuania and EU countries and assesses the result of the country's progress in implementing the Lisbon strategy. The research on the expedience of using the EU structural support and its impact on the country's progress was carried out. The research made on the use of the EU support and its impact on the country's progress suggests that about two thirds of the measures correspond to the national programme for implementing the Lisbon strategy but only few indicators have a complex influence on the progress indexes. Therefore, while preparing the programmes of the EU support use for 2007–2013 and coordinating them with the EU Commission a better harmonization of this support use measures with the national programme for implementing the Lisbon strategy is necessary, and the measures have to be implemented in a complex manner, as well as the horizontal compatibility of the measures has to be maintained. First Published Online: 14 Oct 201

Does firm’s higher innovation potential lead to its superior financial performance? Case of CEE countries

Innovation is one of the most commonly used word in the business and academic world. Naturally the firms are willing to innovate to leverage on future profits and growth generated by the new products and supported by temporary monopolistic positions on the market. However, the question is about how much the companies should invest to record higher profitability. The authors tried to answer this question analyzing the companies within the Central and Eastern European region taking intangible assets as innovation proxy. It was concluded that the companies having higher investments in the intangible assets are able to generate higher margins. However, positive effect of possibly higher innovation potential is seen only if investments in intangibles are substantial, i.e. over 10%

A credibilistic mean-semivariance-PER portfolio selection model for Latin America

Many real-world problems in the financial sector have to consider different objectives which are conflicting, for example portfolio selection. Markowitz proposed an approach to determine the optimal composition of a portfolio analysing the trade-off between return and risk. Nevertheless, this approach has been criticized for unrealistic assumptions and several changes have been proposed to incorporate investors’ constraints and more realistic risk measures. In this line of research, our proposal extends the mean-semivariance portfolio selection model to a multiobjective credibilistic model that besides risk and return, also considers the price-to-earnings ratio to measure portfolio performance. Uncertain future returns and PER ratio of each asset are approximated using L-R power fuzzy numbers. Furthermore, we consider budget, bound and cardinality constraints. To solve the constrained portfolio optimization problem, we use the algorithm NSGA-II. We assess the proposed approach generating a portfolio with shares included in the Latin American Integrated Market. Results show that this new approach is a good alternative to solve the portfolio selection problem when multiple objectives are considered

Illicit Financial Flows in Export Operations with Agricultural Products

The purpose of this paper is deal with possible ways of illegal profit shifting abroad, in particular through export trade of agricultural products. In order to test the hypothesis on asymmetry between indicators of exports/imports between Ukraine and its trading partners, there was carried out a comparative analysis by means of the mirror statistics method. The comparison of indicators of products exports/imports by the method of mirror statistics confirmed the hypothesis regarding the asymmetry of these indicators in international trade. There have been analyzed the world experience in combating tax evasion and profit shifting abroad as well as the steps taken by Ukraine in this area, in particular the introduction of transfer pricing as a barrier to the hidden capital outflow from the country. The authors’ main contributions are discovered asymmetry of mirror data such as price, trade value and weight of Ukrainian grain. As a result, the mirror prices of imports of the partner country are significantly higher than the export prices of Ukrainian grain (IAp – 1,20-1,67), whereas for the USA, France, Germany revealed a lack of significant difference between mirror prices for some largest trading partners (IAp – 1,02-1,15). This is a confirmation of shifting profits from Ukraine in order to place them in more reliable jurisdictions and evidence base for the introduction of more stringent measures such as transfer pricing

Pursuing Organizational Innovation Capability Through Human Resource Management Practice and Knowledge Management: Mediating Role of Individual Creativity

Purpose – the relationship between human resource management practice in improving organizational innovation capabilities is still unclear, irrespective of the extensive influence of knowledge management and creativity on organizational innovation capability. Therefore, this research examines the interaction between human resource management practice and knowledge management with creativity to influence organizational innovation capability in small and medium enterprises

Organizational Innovation Capability: Integrating Human Resource Management Practice, Knowledge Management, and Individual Creativity

CC BY-NC-ND 4.0Despite the work of several researchers in revealing organizational innovation capability, research that integrates human resource management practice (HRMP) and the knowledge management (KM) model in building creativity is still underdeveloped. Therefore, this study examines the nexus between HRMP, KM, and creativity, and its influence on organizational innovation capability in small and medium enterprises (SMEs). This study analyzes data collected from 405 respondents from the managerial level of 135 woodcraft SMEs in Indonesia by employing the partial least square SmartPLS 3.2.7 method. The results show that HRMP, KM , and creativity significantly influence organizational innovation capability. Meanwhile, KM has no significant influence on organizational innovation capability. Another important finding is that creativity is a double mediator in the mediation mechanism tested in this research. Furthermore, this research helps managers to: optimize HRMP when seeking creative employees to boost innovation capability; develop analytical skills to improve KM practices; and realize that KM not only signifies knowledge acquisition, but also greatly establishes metacognitive strategies for adopting, disseminating, and creating new ideas. This research also discusses the associated limitations