Showing papers in "Management Dynamics : Journal of the Southern African Institute for Management Scientists in 2014"

Precursors and outcomes of satisfaction in business relationships : a replication study

Abstract: This study examines the proposition that in business-supplier relationships, trust and commitment generate satisfaction; these in turn influence transaction cost outcomes of specific investments, opportunism and formalisation. Data were collected from 223 large companies in South Africa using a structured questionnaire. The findings show that trust and commitment relate positively to satisfaction. They also show that satisfaction, empowered by trust and commitment, relates positively to formalisation, negatively to opportunism, and had no significant influence on willingness to invest in specific assets. These results support the argument that business managers should devote resources to creating satisfactory supplier relationships based on trust and commitment. The findings contribute to an enhanced understanding of the causes and outcomes of satisfaction in business relationships in the South African context, and help to validate findings reported in other countries.

Testing Main and Interaction Effects in Structural Equation Models with a Categorical Moderator Variable

Abstract: Moderation and mediation analyses are useful approaches to understand how third variables influence the relationships between two variables, X and Y. Moderation is present when a third variable changes the relationship between X and Y. On the other hand, mediation has an explanatory role: it explains why there is a correlational relationship between X and Y. Mediation therefore explicates or expresses the mechanism for the structural relationship that produces the correlation between X and Y, and thereby provides the rationale for the underlying correlation. On the other hand, moderation is often modelled as an interaction term in regression modelling. The analytical method that was traditionally used for mediation and moderation is multiple regression; but the specific steps differ substantially between a moderation and mediation analysis. However, Structural Equation Modelling (SEM) offers advantages over multiple regression methods. The main disadvantage of using multiple regression methods when latent variables are involved is that multiple regression does not account for measurement error, which is a major problem in social research. Ignoring measurement error in research could threaten the validity of statistical conclusions derived from the study. SEM accommodates measurement error, and this makes SEM approaches for mediation and moderation superior to others. In addition, it is possible within the SEM framework to make use of Means and Covariance Structure Analysis (MACS) over multiple groups, which is very useful for investigating moderation when the moderation variable is a grouping variable. An additional advantage of the MACS approach is that, if measurement invariance is tenable in the measurement model, moderation in the structural part of the model can be easily tested on a more fundamental premise of measurement equivalence across groups. This study proposes a detailed stepwise approach to evaluate moderating effects when the moderation variable is a discrete contextual or grouping variable. The suggested method includes the main effects of the grouping variable on the exogenous and the endogenous variables, a specific matter that has largely been ignored in current literature. The advantage of including the main effects in the testing of moderation is that it offers a more complete assessment of the role of the moderating variable on the outcome or endogenous variable as well as on the exogenous or independent predictor variable. Thus it offers a more rigorous understanding of the effect of the contextual variable on the exogenous and the endogenous, and of the relationship between the exogenous and endogenous variables. Model fit approaches in multiple group contexts, as discussed in the literature, are presented and summarised, and an example is provided to demonstrate the proposed approach.

The influence of relationship intention on cell phone users’ satisfaction, loyalty and retention after service recovery

Abstract: South African cell phone network providers are bound to fail customers' expectations sometimes, as the occasional service failure is almost inevitable. This failure, if it occurs, may lead to switching behaviour. Cell phone network providers thus need to consider all influences on post-recovery customer behaviour. One possible influence on post-recovery customer behaviour that has not been fully explored is that of customers' relationship intentions. To address this gap in the literature, the purpose of this study was to assess the influence of relationship intention on cell phone users' satisfaction, loyalty and retention after service recovery. Convenience sampling was used to capture 605 respondents' satisfaction, loyalty and retention after two hypothetical service recovery scenarios. The results indicate that the relationships between respondents' relationship intentions and satisfaction, loyalty and retention were significantly higher after a combination of restorative and apologetic service recovery strategies, rather than after a restorative service recovery strategy alone. Managerial implications are presented based on these results.

The development and evaluation of a generic individual non-managerial performance measure

Abstract: Attempts to develop actuarial selection decision-rules to select employees for specific positions, as well as attempts to validate clinical or subjectively developed mechanical selection procedures, are frequently thwarted because of the inability to obtain adequate predictor and criterion data for a sufficiently large sample. The root of the problem lies in the assumption that the constitutive definition of the criterion construct is unique for each specific job. If this were the case, separate validation studies would have to be conducted for each job, utilising a job-specific performance measure as the criterion. The problem, however, is that quite often the number of employees that hold the specific position is too small to technically develop and justify a selection decision-rule in a validation study. The situation could be salvaged if the constitutive definition of the criterion construct were not unique to each and every job. If a family of jobs shared a common constitutive definition of performance, it would then become possible to derive an actuarial decision-rule for all the jobs that are part of the family, and to psychometrically evaluate the resultant decision-rule in terms of fairness and utility if a valid and reliable measure of the generic performance construct could be developed. In this study, a generic non-managerial performance construct is constitutively defined based on previous studies in the area of generic performance measurement. The development and validation of a multi-rater, generic, non-managerial performance measure is thus the purpose of the study.

A comparative study of the entrepreneurial orientation of small family and small non-family businesses

Abstract: Despite several studies that have empirically examined either entrepreneurial orientation (EO) or its related dimensions, there is still some uncertainty about whether family businesses are more entrepreneurially orientated than non-family businesses. This uncertainty is of interest to family business researchers. The objective of this study is twofold: firstly, to compare the levels of EO of small family to small non-family South African businesses in terms of the five dimensions of EO; and secondly, to investigate the relationships between the five dimensions of EO and perceived business performance among these small businesses. The data collected from 172 family and 145 non-family small business owner-managers were subjected to statistical analyses. Exploratory factor analyses were undertaken and Cronbach's alpha coefficients were calculated to assess the validity and the reliability of the measuring instrument. T-tests were conducted to identify significant differences, and Cohen's d statistics were calculated to assess practical significance. Multiple regression analyses were undertaken to investigate the influence of the five dimensions of EO on perceived business performance. Small family businesses reported lower levels of autonomy than small non-family businesses. This finding was found to be of statistical significance, but of small practical significance. No differences were returned for the other dimensions of EO. The findings also show that the different dimensions of EO relate differently to perceived business performance, and vary across the small family and small non-family business contexts. Given the importance of entrepreneurial behaviour, this study provides insights into the EO of small family and small non-family businesses in South Africa.

Liquidity as an investment style : evidence from the Johannesburg Stock Exchange

Abstract: In the mid-1980s it was suggested that liquidity might be a factor influencing stock returns. However, in the South African equity market, studies of this so-called liquidity effect are still limited. This study analysed liquidity as a risk factor on the Johannesburg Stock Exchange (JSE) during the period 1996 to 2012, using different methodologies from those employed in previous South African studies. In contrast to most United States-based studies, this study found that liquidity is not a significant risk factor affecting broad market returns. Instead, the effect is significant in small- and low-liquidity portfolios only. However, the study found that including a liquidity factor improved the Fama-French three-factor model in capturing shared variation in stock returns. Finally, incorporating a liquidity style into two passive portfolio strategies yielded weak evidence of enhanced risk-adjusted performance.

The Impact of Cross-Channel Cognitive Evaluations on the Continued Use Intentions of Mobile Banking

Abstract: Although most banks offer their clients multi-channel service delivery options, very little is known about mobile banking usage in a multi-channel service context. It is believed that in a concurrent channel usage context, bank clients' beliefs about internet banking can influence their continued use intentions of mobile banking; so this study investigates the influence of cross-channel cognitive evaluations from the internet banking channel on the formation of the continued use intentions of mobile banking. Data were collected from 487 concurrent users of internet and mobile banking. The results of the study revealed that cross-channel evaluative synergies and dissynergies do indeed impact salient beliefs influencing the continued use intentions of mobile banking. The results suggest that the convenience and time-saving benefits that concurrent users experience when using internet banking strongly impact on their mobile banking usefulness perceptions. On the other hand, mobile banking trust, risk and self-efficacy beliefs may be more pertinent in the continued use of mobile banking.

Planning flexibility and entrepreneurial orientation : a focus on SME performance and the influence of environmental perceptions

Abstract: Recognising the importance of an entrepreneurial orientation (EO) to the survival and performance of a firm this study's contribution is to empirically test the linkage between planning flexibility, EO and firm performance. Moreover, it is argued that this relationship is influenced by environmental perceptions, since small and medium-sized enterprises (SMEs) are usually more vulnerable than larger firms when facing a dynamic external environment. Using a structured questionnaire, a sample of 133 SMEs was surveyed. Regression analysis was used to address the proposed hypotheses. The results reveal a weak but positive relationship between planning flexibility, EO and performance. Additionally, the EO dimension of proactiveness was positively related to SME performance, resulting in the relationship being more positive when the environment is perceived as more munificent and hostile. Practical implications are that owner-managers need to understand and leverage the practice of planning flexibility in a manner that will lead to higher levels of EO.

A customer-based corporate reputation scale : a study of a clothing retailer's customers

Abstract: Corporate reputation is an intangible multi-stakeholder concept resulting from the perceptions that diverse stakeholder groups - such as customers and suppliers - have of a firm. Stakeholders' perceptions of corporate reputation are formed by different expectations of and experiences with a firm. Therefore, the dimensions that constitute corporate reputation can also be expected to differ among different stakeholder groups. The continual measurement of the dimensions relevant to a particular stakeholder group is important to detect areas that need timely adjustment. The primary objective of this study was to validate the shortened version of the customer-based corporate reputation (CBCR) scale of Walsh, Beatty and Shiu (2009) on a sample of customers of a national clothing retailer. The findings only support two of the five dimensions of the scale, namely 'customer orientation' and 'a reliable and financially strong company'. Both these dimensions are strongly associated with outcome variables such as 'trust', 'loyalty', 'repatronage intention' and 'overall reputation'. The secondary objective of this study was to investigate respondents' awareness of the retailer's involvement in social responsibility programmes. It was found that many of the retailer's customers who participated in the study were unaware of the retailer's support of social causes. The study concludes that caution should be exercised when scales measuring corporate reputation are used in an environment dissimilar to the one where the scale was originally developed.

The impact of the 2008 financial crisis on the performance of general equity unit trusts

Abstract: This study evaluates the effect of the 2008 market crash on general equity unit trusts' performance persistence and performance relative to fund size. Fund performance relative to fund expenses after the 2008 market crisis is also assessed. Overall, managers' ability to remain in the same ranking quartile decreased after the 2008 market crash. The findings contradict the conclusion of previous studies that performance persistence decreased as lengthier subsequent periods were considered before and after 2008. Performance persistence patterns over six and 12 months changed significantly after the 2008 crisis. It is concluded that the total expense ratio of the funds should not be considered as an indication of expected performance. Contrary to the negative relationship between performance and unit trust size reported by studies before the crisis, this study did not reveal any significant relationship after the crisis. The largest funds proved to have the most stable quartile rankings after the 2008 financial crisis.