1. Introduction and Overview. 2. Detecting Influential Observations and Outliers. 3. Detecting and Assessing Collinearity. 4. Applications and Remedies. 5. Research Issues and Directions for Extensions. Bibliography. Author Index. Subject Index.

Regression Diagnostics: Identifying Influential Data and Sources of Collinearity

https://bura.brunel.ac.uk/bitstream/2438/10379/1/Fulltext.pdf

Innovation and Creativity in Organizations A State-of-the-Science Review, Prospective Commentary, and Guiding Framework

Manuscript Type: Empirical

Research Question/Issue: This paper investigates the relationship between internal governance structures and financial performance of Indian companies. The effectiveness of boards of directors, including board composition, board size, and aspects of board leadership including duality and board busyness are addressed in the Indian context using two theories of corporate governance: agency theory and resource dependency theory.

Research Findings/Insights: The study used a sample of top Indian companies taking into account the endogeneity of the relationships among corporate governance, corporate performance, and corporate capital structure. The study provides some support for aspects of agency theory as a greater proportion of outside directors on boards were associated with improved firm performance. The notion of separating leadership roles in a manner consistent with agency theory was not supported. For instance, the notion that powerful CEOs (duality role, CEO being the promoter, and CEO being the only board manager) have a detrimental effect on performance was not supported. There was some support for resource dependency theory. The findings suggest that larger board size has a positive impact on performance thus supporting the view that greater exposure to the external environment improves access to various resources and thus positively impacts on performance. The study however failed to support the resource dependency theory in terms of the association between frequency of board meetings and performance. Similarly the results showed that outside directors with multiple appointments appeared to have a negative effect on performance, suggesting that “busyness” did not add value in terms of networks and enhancement of resource accessibility.

Theoretical/Academic Implications: The two theories of corporate governance, namely agency and resource dependence theory, were each only partially supported, by the findings of this study. The findings add further to the view that no single theory explains the nexus between corporate governance and performance.

Practitioner/Policy Implications: This study demonstrates that corporate governance measures utilized in developed economies related to boards of directors have some synergies and relevance to emerging economies, such as India. However, the nature of business structures in India, for example the large number of family businesses, may limit the generalizability of the findings and signals the need for further investigation of these businesses. The evidence related to multiple appointments of directors suggests that there may be support for restricting the number of directorships held by any one individual in emerging economies, given that the “busyness” of directors was negatively associated with firm performance.

Board Structure and Firm Performance: Evidence from India's Top Companies

Thinking About Entrepreneurial Decision Making: Review and Research Agenda

Empirical research was conducted to investigate retrenchment as an integral component of the overall turnaround process. An industry study provided an anchored operational definition of a turnaround situation, indications of its internal and external causes, and an application of an absolute measure of its severity. The research further produced an empirical discrimination between retrenchment as a stand-alone response to financial decline and retrenchment as an initial phase of a turnaround strategy, and an identification of activities that can be used to classify entrepreneurial vs. efficiency emphases in a turnaround firm's recovery response.

Turnaround: Retrenchment and recovery

We consider four scenarios that can unfold when organizations either innovate or respond rigidly to organizational decline Two of the scenarios are downward spirals that threaten an organization with possible death, and two of the scenarios are turnarounds These scenarios are important because they can determine the fate of an organization—survival or death We explore the conditions under which each of these scenarios is likely to emerge, developing original theory and specifying propositions about those conditions In developing this theoretical framework, we distinguish between flexible and inflexible innovations as factors in turnaround success or failure Our model extends current theory on organizational decline to highlight the feedback effects of the consequences of decline and to explain the circumstances in which particular feedback effects are likely to occur

Organizational Decline and Innovation: Turnarounds and Downward Spirals

Using the competing agency theoretic and stewardship theory perspectives, we empirically examine the relationship between CEO duality and firm performance in family-controlled public firms (FCPFs). We find that duality by itself does not influence firm performance in FCPFs. However, our results show that the relationship between duality and performance is contingent on the family's ownership stake in the firm. In nondual firms, performance is inversely related to family ownership level. Dual FCPFs do not exhibit any changes in performance dependent on family ownership levels. Our findings reveal, in short, that when family ownership is low, the separation of CEO and board chair roles is beneficial in terms of shareholder returns. Having different persons occupy the CEO and board chair positions is a useful governance control as the risk of family entrenchment increases.

Should the CEO Also Be Chair of the Board? An Empirical Examination of Family-Controlled Public Firms

Managerial Risk, Innovation, and Organizational Decline

Purpose – Despite the episodic pervasiveness of recessions and their destructive impact on firms, a void exists in the management literature examining the intersection between recessions, strategy, and performance. This paper seeks directly to address this research void by reviewing relevant literature spanning the past 20 years and building an integrative framework for future research efforts.Design/methodology/approach – The paper systematically reviews and compartmentalizes articles on the intersection between firm strategy and economic recession published between 1991 and 2010 in widely recognized management and entrepreneurship journals. Concurrently, a theoretical framework is proposed which identifies distinct constructs and linkages related to economic recessions, strategy, and performance.Findings – The findings are twofold. First, the review distils disparate scholarly works on firm behavior and recessions to provide a systematic appraisal and review of what people know and do not know about man...

Economic recessions, strategy, and performance: a synthesis

Much has been written in the strategic management literature on whether slack resources help or hinder the successful management of the firm (e.g., O'Brien, 2003; Cheng and Kesner, 1997; Nohria and Gulati, 1996, 1995; Singh, 1986; Bourgeois, 1981; Cyert and March, 1963). In general, scholars have identified four major functions of firm slack (Tan and Peng, 2003). First, it alleviates goal conflict within the firm by providing necessary means to solve resource problems (Cyert and March, 1963). Second, it improves information processing within the organization by reducing interdependences between subunits (Galbraith, 1973). Third, slack represents a catalyst for strategic change by facilitating innovation, including new product development and new market entry (Nohria and Gulati, 1995; Hambrick and Snow, 1977; Bourgeois, 1981). Lastly, slack smoothes a firm's environmental adaptation by offering a buffer in face of environmental turbulence (Cheng and Kesner, 1997; Meyer, 1982; Bourgeois, 1981; Thompson, 1967). While all four perspectives have received ample attention, some scholars have recently returned focus on furthering an understanding of how organizational slack affects the firm in different environments (Martinez and Artz, 2006; O'Brien, 2003; Cheng and Kesner, 1997). When considering the relationship between slack and firm performance, these researchers maintain, context matters. As in the more general literature on slack resources, these environment-specific arguments indicate that slack can be a double-edged sword. On one hand, it provides what Bourgeois (1981: 30) refers to as a "shock absorber" that can help firms cope with shifting environmental demands (Tan and Peng, 2003; Cheng and Kesnet, 1997; Cyert and March, 1963). On the other, however, this cushion can slow a firm's reaction by insulating managers from the immediate requirements relating to environmental discontinuities (Yasai-Ardekani, 1986; Litschert and Bonham, 1978). A particular situation representing one of the most significant environmental threats to a firm's viability and continued profitability and purported to make critical use of slack is economic recession (Pearce and Michael, 2006; Mascarenhas and Aaker, 1989). As sales decline, margins decrease and credit dries up, a firm's slack is deemed to become increasingly scarce and thus critically valuable; in fact, Cheng and Kesner maintain that "the presence of slack resources serves a positive role by helping firms withstand severe economic recessions" (1997: 3). While Cheng and Kesner's assertion may seem intuitively apparent, its empirical validation is warranted for the following reasons. For one, findings on the impact of organizational slack on firm performance remain inconclusive (see meta-analysis by Daniel et al., 2004). As a consequence, researchers (Tan and Peng, 2003; Cheng and Kesner, 1997) suggest a contingency approach that stipulates the potential influence of certain environments on the nature of the slack performance relationship. Thus, while any given firm may indeed have an optimal level of organizational slack (Sharfman et al., 1988), it may be that these levels vary depending on specific circumstances encountered by the firm. Also, previous empirical studies on the slack-performance relationship gravitate toward cross-sectional inquiries, with less emphasis on its changing characteristics over the course of environmental disruptions. By drawing attention to the role of firm slack over the course of context-specific time periods, research on the link between firm adaptability, decision making, and performance can be greatly enhanced. Our study is an attempt to better understand the previously proposed role of slack under circumstances of extreme environmental duress. We investigate the interplay between slack and firm performance during economic recession to answer the following research question: To what extent, if at all, does organizational slack at the onset of a recession help or hinder the subsequent performance of the firm during the recession and recovery? …

Michael Braun

Papers

Organizational Decline and Innovation: Turnarounds and Downward Spirals

Should the CEO Also Be Chair of the Board? An Empirical Examination of Family-Controlled Public Firms

Managerial Risk, Innovation, and Organizational Decline

Economic recessions, strategy, and performance: a synthesis

The Performance Implications of Financial Slack during Economic Recession and Recovery: Observations from the Software Industry (2001-2003) *