The mediator role of learning capability and business innovativeness between total quality management and financial performance

The concept of total quality management (TQM) has attracted many researchers from a variety of disciplines. In particular, the literature has addressed the impact of TQM on a firm’s operations and performance. However, disparate perspectives on the relationship between TQM and a firm’s financial performance have emerged. In this paper, we suggest an interconnected relationship among TQM, organisational learning capability (OLC), business innovativeness, and a firm’s financial performance and propose that OLC and business innovativeness mediate the relationship between TQM and a firm’s financial performance. By studying 193 firms in Turkey, we found that: (1) TQM affects OLC and a firm’s business innovativeness, (2) OLC influences a firm’s business innovativeness and (3) a firm’s business innovativeness affects its financial performance. Also, we found that OLC and business innovativeness in a firm mediate the relationship between TQM and the firm’s financial performance.     

Psychic Distance,Innovation, and Firm Performance

Previous research suggests that internationalization improves a firm’s ability to innovate, but the effect of internationalizing into specific target markets or destinations on the innovation ability of firms has not been fully investigated. This study examined whether the psychic distance between target market and home market affects firms’ propensity to innovate. The starting assumption was that perception of a high degree of differences and subsequent environmental uncertainty when expanding into psychically distant markets triggers strategies for interacting and integrating with the market environment. These include producing and adopting innovations to processes and products and to organizational strategy, structure, and administrative procedures to cope with the new environment and overcome uncertainties. These innovations and the associated competitive advantages can improve firm performance. Hypotheses regarding the relationships between psychic distance, innovation, and firm performance were tested here by structural equation modeling using data from 186 export ventures into 23 international markets by Swedish companies. The results indicate that the link between psychic distance and firm performance is mediated by innovation.     

How does firm size affect technology licensing? Empirical evidence from China

Technology licensing is viewed as the key factor for activating the sleeping patents. This study re-examines the relationship between the firm size and its technology licensing activity. The empirical results show that there is a U-shaped relationship between the firm size and technology licensing. However, this U-shaped relationship appears only in the markets with high competition, which confirms a moderate role of the technology competition in the relationship between the firm size and technology licensing. Chinese firms lag behind developed countries in terms of the licensing strategies. e.g., Chinese firms have fewer patents that are cross licensed. China’s export-oriented firms show relatively more positive licensing propensity, where large, small and medium sized firms do not show essentially different willingness to license out their patents compared with non export-oriented firms. China’s state owned firms are less likely to license out their patents compared with that of private firms. Policy implications are presented at the end of this study.     

Which firms use trademarks? Firm-level evidence from Germany on the role of distance,product quality and innovation

ABSTRACT

Trademarking firms are more productive, generate higher profits, and have a better survival rate. Trademarking firms are in one word more successful, which might motivate non-trademarking firms to adopt a trademark strategy. But this does not seem to be the case. The proportion of trademarking firms in the German business sector amounts to just 18%. This figure is quite low, given that nearly each firm has reputation to protect. But why does the vast majority of firms not have registered trademarks? Using a representative sample of German firms, the present paper links certain firm characteristics to a firm’s propensity to register trademarks. The empirical results point to circumstances under which trademarks are significantly more often used: this is the case where a large distance between a firm and its customers exists, a firm’s product quality is difficult to assess, a firm’s products are characterised by a limited (but not strong) substitutability, and where a firm is engaged in R&D and introduces innovative products. Trademarks are considerably less frequently used if none of this is the case.     

Collaborative ties and ambidextrous innovation: insights from internal and external knowledge acquisition

ABSTRACT

Building collaborative ties has become an increasingly important strategy for influencing firms’ ambidextrous innovation in transition economies, we examine the relationship between collaborative ties and ambidextrous innovation—with a focus on the mediating effect of knowledge acquisition using firm-level data in China. The empirical results reveal several important findings. First, collaborative ties among partners have a positive effect on firms’ ambidextrous innovation. Second, collaborative ties among partners are more beneficial to the firm’s external knowledge acquisition than internal knowledge acquisition. Lastly, the mediating effect of internal knowledge acquisition on the relationship between collaborative ties and ambidextrous innovation of firms is higher than that of external knowledge acquisition. These findings contribute to the literature on ambidexterity theory. Moreover, these findings also extend our understanding of the importance of the integration of internal and external knowledge acquisition in collaborative relationships, and enrich knowledge management literature within the collaborative ties framework.     

Top management team’s innovation-related characteristics and the firm’s explorative R&D: an analysis based on patent data

This study investigates the relationship between characteristics of the firm’s top management team (TMT) and its research and development (R&D) activities. Specifically, this research analyzes how observable characteristics of the TMT, such as functional experiences or educational background, and average tenure affect the firm’s proportion of explorative R&D activities. From the perspective of the upper-echelon theory, we hypothesize that the TMT’s functional experiences with R&D or science or engineering educational backgrounds increase the firm’s tendency towards explorative R&D. Moreover, we propose that the average tenure of TMT members with innovation-related experiences would have a positive moderation effects on these relationships. The hypotheses are tested using a dataset containing biographical information of the TMT members, financial, and patent data of 89 firms in U.S. high-tech industries from 2006 to 2009. Firm’s explorative R&D activities are analyzed using data on patent citations, patent classes, and non-patent references. The empirical analysis shows that the top managers’ educational background in science or engineering as well as their previous functional experiences with R&D have a positive effect on the firm’s explorative innovation activities. We also find that the size of these effects increases with a longer tenure of these TMT members. Our findings provide implications related to the effects of organizational characteristics on the establishment of a R&D strategy and highlight the role of TMT members with innovative experiences in directing a firm’s R&D activities and outcomes.     

Intergenerational dynamics of digital transformation in family firms

The integration of digital technologies and processes presents a multifaceted and complex challenge for family firms, as they must navigate new technologies while maintaining their unique familial attribute. Moreover, the issue of intergenerational inheritance adds an additional layer of complexity, as succession must be effectively executed to ensure the continued success and survival of the family firm in the digital age. Together, these challenges pose a significant threat to the sustainability and competitiveness of family firms. To gain a deeper understanding of how these challenges can be effectively addressed, the study utilizes data from the 2016 Chinese Private Enterprises Survey to identify the factors influencing family firms' digital transformation and the role of entrepreneurs' characteristics in this process. From the perspective of intergenerational inheritance, the study finds that both the willingness of entrepreneurs to hand over power and the willingness of their children to take over firm power have a moderating effect on the relationships between entrepreneurs' characteristics and firms’ digital transformations. This study also verifies the heterogeneous effects from the type of business digitalization, location of the firm, and educational level of the children.     

Does Board Co-Working Experience Influence Directors’ Decisions Toward Internationalization?

Despite the importance of board capital in a firm’s corporate strategic orientation and the high degree of international expansion that many firms have experienced in recent years, little or no research has explored how board capital affects a firm’s internationalization decision. Drawing upon resource dependence theory, this study argues that board capital may help increase the firm’s degree of internationalization and that board co-working experience may facilitate the contribution of directors with human and social capital to firm internationalization. The results indicate that board capital (directors’ international experience, directors’ industry-specific experience and directors’ board appointments) is positively associated with internationalization and that board co-working experience has a positive moderating influence on the board capital-internationalization relationship. One important implication of the empirical evidence is that firms trying to expand internationally should consider nominating directors with rich human and social capital to the board because such directors can provide strategic advice and facilitate access to critical information and valuable resources needed for internationalization. Additionally, those international firms might be advised to consider board tenure when appointing board directors because board co-working experience allows directors to integrate their knowledge of the firm’s internal affairs with their expertise in the area of international strategy and to combine their knowledge properly to address firm-specific issues, consequently enabling them to address international issues effectively.     

An empirical investigation of supply chain strategy typologies and relationships to performance

We propose a typology of supply chain management strategies based on data from a large sample of US firms. The resulting typologies and their relationships with firm performance are tested. The result of set correlation analysis on the data revealed six distinct supply chain management typologies, and showed significant statistical relationships with performance. Additional analysis revealed that two of the typologies describe the ideas of velocity, variability, and visibility of supply chains. The paper also discusses the relationship between product life cycle and the supply chain management initiatives that comprise the strategy typologies.     

How big data and analytics reshape the wearable device market – the context of e-health

The wearable device can be a key link between health care and big data and analytics (BDA). The benefits of BDA in health care have been widely acknowledged, but the uncertainty of the implementation of BDA has led some firms to hesitate in adopting this technology. In this research, we are keen to answer the key questions of whether the wearable device firms would adopt the BDA strategy, and how much effort they would put into it. We propose a competition model between the wearable device firms with and without BDA strategies, and consider the consumer’s preference towards BDA and network effects. Our model demonstrates that the investment on BDA directly affects the firm’s equilibrium price, market share and profit and at the same time, this strategy also affects the rival’s performances. When the firm with BDA strategy adopts different competition strategy: conservative or expansive, the outcomes of market are different. We also find that different market structures, fully covered and partially covered, have different impacts on the firms’ competition when the consumers have heterogeneous preference on BDA strategy.     

Relationship archetypes in aftermarkets#

Aftermarket sales and profits have become an increasingly important part of an Original Equipment Manufacturer’s (OEM) business model. The attractiveness of the after-sales business, however, has also been recognised by other parties (e.g. competitors, suppliers) who try to capture a share of the aftermarket. A highly profitable aftermarket creates a strong incentive for the supplier to disintermediate the established supply chain and sell directly to the OEM’s aftermarket customers. To counter this threat, OEMs must be aware of the activities and actors on their aftermarket, and should understand and systematically analyse the existing or changing business relationships among the incumbent and emergent actors in the aftermarket ecosystem. In this exploratory study we use case study research with 29 companies (customer, OEM, supplier, or competitor) and draw on social network theory – in particular the concepts of structural embeddedness, structural hole and supply chain disintermediation – to examine and discuss triadic and tetradic relationship constellations (archetypes) in aftermarkets. Recognising these relationship archetypes in aftermarkets can help firms to adapt their after-sales strategies and protect the competitive advantage, revenues and profits stemming from their after-sales business.     

How high-tech entrepreneurial ventures cope with the global crisis: changes in product innovation and internationalization strategies

The global crisis that began in the second half of 2008 abruptly changed the business context, inducing firms to react by modifying their strategies. This paper examines changes in innovation and internationalization strategies that high-tech entrepreneurial ventures implemented to react to the crisis. Relying on insights from the behavioural theory of the firm and threat-rigidity theory, we explore the antecedents of firms’ investments in development of new products and in expansion in international markets and the consequences of these changes on firms’ growth performance. Econometric results from a sample of 140 Italian high-tech entrepreneurial ventures support the view that the stock of resources accumulated by larger firms, firms’ innovation and internationalization investments in the pre-crisis period and firms’ cash flow determine the extent of the two changes. The effects of these changes on firms’ short-term growth performance are positive only for investments in development of new products.     

The fit between environmental management systems and organisational learning orientation

With the significant increase in the adoption of environmental management systems (EMSs), it is important to evaluate whether EMSs can improve the business value for organisations that adopt them. However, less is known about whether or not EMSs lead to improved firm performance with only few studies evaluating the broad link between an organisation’s environmental strategies and its business performance. Furthermore, previous studies are inconsistent in their findings about the relationship between environmental strategies and firm performance. We attribute this inconsistency to the misfit between environmental strategies and organisational learning orientation which results in operational inefficiency within the firm. This study tries to find out the proper fit pattern between EMSs and organisational learning orientation by investigating their joint effect on firm performance. Based on survey data from 214 Chinese manufacturing companies, we found that the interactions between EMSs and four dimensions of organisational learning orientation have positive impacts on firm performance. Thus, the proper organisational learning orientation for efficiency and effective EMSs is characterised by high levels of commitment to learning, shared vision, open-mindedness and knowledge sharing.     

Internationalization Speed and Firm Performance: A Study of the Market-Seeking Expansion of Retail MNEs

Existing research is divided on whether firms that rapidly expand their overseas operations perform better than firms that internationalize slowly. Drawing on Penrose’s theory of the growth of the firm, we argue that the positive effects of rapid internationalization give way to negative effects with increasing internationalization speed, leading to an inverted U-shaped association between internationalization speed and firm performance. We analyze the market-seeking expansion of 110 retailers over a 10-year period (2003–2012) and find support for a curvilinear relationship between internationalization speed and firm performance that is moderated by the geographic scope of firms’ internationalization path and firms’ international experience. Our study contributes to resolving conflicting views on the link between internationalization speed and firm performance.     

Have Chinese universities embraced their third mission? New insight from a business perspective

Have Chinese universities, after enormous investment over the past decade, embraced the university’s third mission—contributing to industrial and technological progress? The literature has not sufficiently addressed this question. This study intends to advance understanding of this issue by empirically addressing this question from a business perspective in a bold and unconventional way. Unlike prior studies that simply used contingent and institutional factors to describe the link between Chinese universities and industrial firms by measuring such aspects as patent licensing, co-patenting, and co-authoring, our work goes further and applies longitudinal analysis to examine the ways firms access university-level knowledge and the impact of such knowledge on firm innovation outputs. We propose that if Chinese universities embraced their third mission, then we would observe a positive effect of university–industry collaborations on firms’ subsequent innovation outputs. Empirical results based on a sample of the top 100 Chinese electronic firms in terms of output value support our hypothesis. Specifically, university patent licensing and co-patenting between universities and firms was found to positively affect firm innovation outputs. Moreover, we found that geographical distance and collaboration dominance moderate the co-patenting–innovation output relationship.     

Towards theory building in manufacturing flexibility

This study consolidates and extends previous research to propose a theoretical framework of manufacturing flexibility. The framework proposes antecedent roles for manufacturing flexibilities in supporting a range of agility-related manufacturing priorities; suggests how such manufacturing flexibilities can be developed; and relates the effects of alignment between flexibility-facilitated manufacturing outcomes and business strategy on firm performance. A questionnaire was administered to 1700 senior level managers in manufacturing firms, with 322 valid surveys returned for data analysis. The results support the framework, and suggest that different manufacturing priorities can be facilitated through the development of specific manufacturing flexibilities. The results also indicate that these manufacturing flexibilities can be acquired through the development of purchasing competence in a firm. The data provide partial support for a relationship between congruity in manufacturing and business goals, and firm performance.     

Foreigness-induced Cognitive Disorientation

This study uses cognitive categorization theory to explain why exposure to foreign cultures and environments results in difficulties for exporting firms. The phenomenon is labeled “foreignness-induced cognitive disorientation” (FICD). The study investigates how FICD affects the establishment and maintenance of cross-border business relationships. An instrument to measure FICD is developed using survey data from exporters. Then, FICD’s negative impact on interfirm trust and export performance is assessed with structural equations modeling. Furthermore, a moderation test shows that when FICD is high, the influence of trust on the performance of exporting firms becomes negative. In addition, the analysis of a longitudinal data set with logistic regression verifies how FICD is negatively associated with the survival of export relationships. Finally, using a small but rare dyadic data set, the research shows how the FICD of one exchange party has an indirect negative influence on its overseas partner’s trust. Drawing on cognitive categorization theory, this research shows how the basic processes of the human brain are the roots of most intercultural issues. The study provides a fundamental explanation of how FICD is a major disturbance to the initiation and maintenance of cross-border business relationships. It questions current methods to mitigate foreignness in international business and opens the way to new investigations that should facilitate cross-cultural interactions for international firms and their staff.     

Pricing strategies for information products with network effects and complementary services in a duopolistic market

In this paper, we model a fully covered duopoly market in which two firms offer a differentiated information product that exhibits positive network effects and a complementary premium service to consumers. For each firm, there are two marketing strategies: the freemium strategy and the bundling strategy. We find that, under the market equilibrium, a firms’ decision whether to employ the freemium strategy or not depends largely on the quality of the information product compared to its rival. When the information product quality is similar and the products’ intrinsic values are sufficiently large, both firms will be better off by adopting the freemium strategy, while the bundling strategy will prevail if the products’ intrinsic values are sufficiently small. Additionally, when the magnitude of complementary effects or network effects exceeds a given threshold, both firms’ profit can be enhanced by an increase in the degree of product complementarity or in the intensity of network effects. We also demonstrate that a firm can benefit from an increasing market size only if the intrinsic value of its information product is sufficiently large. Finally, we extend our model to the uncovered market and derive the equilibrium prices and profits.     

Top management team diversity,ambidextrous innovation and the mediating effect of top team decision-making processes

Until now, the amount of evidences for and discussions of how a top management team (TMT)’s composition influences ambidextrous innovation are very limited. This article develops and tests a model that connects task-related TMT diversity and TMT decision-making processes to explain the heterogeneity in a firm’s strategic focus on ambidextrous innovation. The paper is based on a questionnaire survey/analysis with sample of 179 TMTs from high-tech firms in China. The conclusion exhibits that TMT task-related diversity has a strong effect on a firm’s strategic focus on ambidextrous innovation through strategic decision-making activities. The findings suggest that the TMT debate and decision comprehensiveness can mediate the relationship between TMT task-related diversity and a firm’s strategic focus on ambidextrous innovation. Overall, these results suggest that involvement in debate and comprehensiveness of strategic decision activities may bring out the potential of a TMT’s diversity in enabling them to focus on ambidextrous innovation strategy.