Showing papers on "Organizational capital published in 2006"

Productivity and ICT: a review of the evidence

Abstract: We survey the micro and macro literature on the impact of Information and Communication Technologies (ICTs) on productivity. The “Solow Paradox” of the absence of an impact of ICT on productivity no longer holds, if it ever did. Both growth accounting and econometric evidence suggest an important role for ICTs in accounting for productivity. In fact, the empirical estimates suggest a much larger impact of ICT on productivity than would be expected from the standard neoclassical model that we focus on. We discuss the various explanations for these results, including the popular notion of complementary organizational capital. Finally, we offer suggestions for where the literature needs to go.

Information and Communications Technology as a General-Purpose Technology: Evidence from US Industry Data

Abstract: . Many people point to information and communications technology (ICT) as the key for understanding the acceleration in productivity in the United States since the mid-1990s. Stories of ICT as a ‘general-purpose technology’ suggest that measured total factor productivity (TFP) should rise in ICT-using sectors (reflecting either unobserved accumulation of intangible organizational capital; spillovers; or both), but with a long lag. Contemporaneously, however, investments in ICT may be associated with lower TFP as resources are diverted to reorganization and learning. We find that US industry results are consistent with general-purpose technology (GPT) stories: the acceleration after the mid-1990s was broad-based – located primarily in ICT-using industries rather than ICT-producing industries. Furthermore, industry TFP accelerations in the 2000s are positively correlated with (appropriately weighted) industry ICT capital growth in the 1990s. Indeed, as GPT stories would suggest, after controlling for past ICT investment, industry TFP accelerations are negatively correlated with increases in ICT usage in the 2000s.

Organizational capital as competitive advantage of the firm

Abstract: Purpose – The elements that constitute the organizational capital or capital of the firm, namely its culture, structure, organizational learning, can be a source of competitive advantage. This paper is an attempt to assess organizational capital from the resource‐based view.Design/methodology/approach – From an extensive literature review, an assessment framework for intellectual capital is developed.Findings – By means of this framework organizational capital can be depicted as a set of: valuable assets; difficult to imitate; to replace; to transfer; with a prolonged life expectancy; and with a feasible rent appropriation.Originality/value – Building of such an evaluation framework allows further research about other components of the intellectual capital of the firm, bridging the literatures focused on the resource‐based view and on intangible assets or intellectual capital.

Human and organizational capital: typologies among Spanish firms

Abstract: This paper uses survey data on 965 Spanish manufacturing firms to examine the implementation of innovative management practices and the relationship of this with the organization of work and human resource management. The paper takes into account transformations in technology, quality management and the organization of work. Using cluster analysis, we identify the different paths that firms are following in order to improve their performance, finding that simultaneous transformations in several dimensions lead to greater success than partial transformation, or none at all.

Intellectual Capital and Corporate Performance in Knowledge-Intensive Smes

Abstract: Purpose: In recent years a significant number of Intellectual Capital (IC) metrics has been developed and applied in many organizations. However, there is still a strong need to specify the relations among the different categories of intellectual assets that exist in the context of a SME, and to determine the way these assets affect financial performance. This paper has a dual scope; firstly, to specify these relations, and, secondly, to explore the impact of IC on corporate performance.Methodology/Approach: Our hypotheses are tested through a survey conducted on Greek knowledge-intensive SMEs of the service sector. We combined firms' perceptions regarding Intellectual Capital categories, which were measured through the answers given on a structured questionnaire, and accounting data that was gathered from financial databases.Findings: Our findings indicate that the interaction of certain categories of intellectual assets in SMEs is in some aspects different from the pattern evidenced in other surveys that analyze large companies. Also, our empirical data provides supportive evidence that certain categories of intellectual capital positively contribute to corporate performance.

Information and Communications Technology as a General-Purpose Technology: Evidence from U.S Industry Data

Abstract: Many people point to information and communications technology (ICT) as the key for understanding the acceleration in productivity in the United States since the mid-1990s. Stories of ICT as a 'general purpose technology' suggest that measured TFP should rise in ICT-using sectors (reflecting either unobserved accumulation of intangible organizational capital, spillovers, or both), but with a long lag. Contemporaneously, however, investments in ICT may be associated with lower TFP as resources are diverted to reorganization and learning. We find that U.S. industry results are consistent with GPT stories: the acceleration after the mid-1990s was broadbased - located primarily in ICT-using industries rather than ICT-producing industries. Furthermore, industry TFP accelerations in the 2000s are positively correlated with (appropriately weighted) industry ICT capital growth in the 1990s. Indeed, as GPT stories would suggest, after controlling for past ICT investment, industry TFP accelerations are negatively correlated with increases in ICT usage in the 2000s.

Measuring Firm-Specific Organizational Capital and its Impact on Value and Productivity: Evidence From Japan

Abstract: In this study we used Japanese firm-level data in order to explore the productive impact of organizational capital by isolating the effect of other intangibles like R&D, brand, human and social capital. Fixed-effect and random-effect panel methodology are proposed to assess specific-organizational capital at firm level. Our results suggest that in monetary terms the value of firm-specific organizational capital stock is significant when compared to traditional assets. Findings suggest that firms building up higher stocks of organizational capital not only increase their productivity but also their value.

Impacts of Agrifood Market Transformation during Globalization on the Poor's Rural Nonfarm Employment: Lessons for Rural Business Development Programs

Abstract: This paper presents emerging evidence pointing to the transmission to developing countries' rural spaces of the impacts of agrifood market transformation occurring at national and global levels. That transmission takes place via retail chains penetrating intermediate cities and rural towns, and urban-based food manufacturers selling products to those chains as well as to traditional shops. The paper presents and justifies three main hypotheses concerning the impacts of that penetration. (1) The direct effect is that the modern retailers and modern-sector processed products directly compete with, and present potentially major challenges to, the processed foods, farm inputs, and commercial services already being undertaken in the RNFE sector by the rural poor among others. (2) The indirect effects is that modern sector firms tend, once they have "modernized" their procurement systems, to prefer larger suppliers if available, and/or small suppliers that have the requisite levels of capital assets. This further translates to a potential labor substitution bias, in particular of unskilled labor, although it may drive skilled labor demand. (3) The production and consumption linkage effects of the above impacts on RNFE firms, laborers, and farmers, all else equal, probably implies greater demand for non-tradeable goods and services in the RNFE that correspond to the demand patterns of the upper stratum of rural consumers. Faced with the above, what can business development programs do? (1) Given the change in the market context, it will be increasingly undesirable and "un-strategic," except in the most remote, hinterland areas, to maintain the separation between competitiveness and nonfarm employment programs. At least for RNF activities that supply processed products, farm inputs, and retail commerce, RNF enterprises will need to face the same general challenge that exporters in their country face on the global market, and urban firms face, which is to compete on cost and quality. (2) Second, maintaining the analogy to international competitiveness, it will be necessary go beyond a generic competitiveness approach, to employ a "customized competitiveness" strategy (a term used by Reardon and Flores 2006 for export programs, but applicable here). Such an approach focuses on understanding the specific requirements of transformed markets and building the capacity of particular groups to respond to those requirements (as suppliers) or match cost and quality and compete for specific niches. The capital assets that programs should building include market intelligence capital, organizational capital, technology capital, and financial (and risk reduction) capital. (3) In the economic transformation, this time in the rural space, the poorest, those with least assets, are again vulnerable. Special attention should be paid to equipping those households and firms to participate in the increasingly challenging rural nonfarm economy.

How do firm-specific organizational capital and other intangibles affect sales, value and productivity? evidence from japanese firm-level data

Abstract: Over the past decades, the diffusion of new technological innovations has transformed the economies. In particular, the strategic emphasis shifted from efficient management of tangibles assets to innovation and effective usage of intangible assets. In this study we explore how the various combinations of sort of intangibles assets, like firm-specific organizational capital (FSOC), technology, brand, human and social capital affect the firm's corporate performance. The results suggest that regardless of the firms' type, those with higher stocks of FSOC, human and social capital outperform firms with higher stocks in only one dimension, suggesting a high degree of complementarity between them. The results also indicate that intangibles like FSOC and human and social capital are more likely to impact on productivity, whereas R&D and advertising are more likely to impact on the firm's value.

Innovation Capabilities: The Knowledge Capital Behind the Survival and Growth of Firms

Abstract: This paper summarizes the findings of a research program aimed at outlining the importance to the firm growth process of competencies that arise from investments in intangible assets. The program has consisted of two parts. First, longitudinal databases have provided a rich set of studies on entry, exit, mergers and other aspects of dynamics related to growth and decline in firm populations. These studies have shown the pervasiveness of growth and decline in the firm population. By themselves, these studies do not demonstrate what strategies differentiate the most successful from the least successful. To do so, we have built a set of firm surveys that allowed profiles to be developed of the type of competencies that stem from investments in organizational capital. In turn, these are linked to administrative data that allow us to classify firms as either growing or declining. We then asked how differences in competencies were related to the performance of firms.

The Survivability Principle: IT Enabled Dispersal of Organizational Capital

Abstract: Overview The horrific terrorist attacks carried out on September 11, 2001, and the ensuing aftermath are driving managers to reconsider organizational risk. While organizational design experts and IT strategists have been aware of centralization's potential risks for years, the collapsing towers moved the survivability principle from the hypothetical to the shockingly real. It was astounding that a single event could destroy so much life and infrastructure in technically advanced countries. In this environment, organizations would benefit from an updated enterprise risk mitigation strategies that include new design objectives such as: (1) more geographically distributed organizations, (2) a move from redundant to distributed IT capabilities as the risk mitigation strategy of choice, and (3) more stringent security and survivability demands on enterprise IT infrastructures and network service providers. Although individual firms' strategies will vary in the extent and type of decentralization, the overall tendency may be toward further distribution of people, technology, and physical assets. The result of these changes should be a shift away from the risk of more centralized IT organizations to a more distributed IT infrastructure and the networks that interconnect these geographically disparate sites. We present here a compelling logic for decentralization supported by a technical risk analysis. While the fundamental groundwork for the general case is offered here, details about how this high level strategy can be implemented to assure interoperability, efficient operations, and other tactical matters need to be the subject of further research, on the one hand, and of further analysis by the contingency planners within individual organizations. With this heightened awareness about the sea change that, in our opinion, has taken place, we must all take appropriate, informed steps to mitigate future catastrophes.

Fdi and Performance of Taiwanese Family Firms in China: A Resource-Based Perspective

Abstract: Data from 276 family-owned Taiwanese manufacturing firms that invest in China were utilized to assess the effect of firm resources in Taiwanese firms on FDI performance in China. Firm-specific advantages like firm size, RD Das; 2000, Rugman, 2002). Resourcebased proponents have studied such firm-level issues as transaction costs, economies of scope, and organizational culture (Fiol, 1991). Key business-level issues include the analysis of competitive imitation (Rumelt, 1984), informational asymmetries (Barney, 1986), causal ambiguities (Reed & DeFillippi, 1990), and the process of resource accumulation (Dierickx & Cool, 1989). A firm's resources may include physical capital resources (technology, plant, equipment, geographic location, and access to raw materials), human capital resources (training, experience, judgment, intelligence, relationships, insights, and overall quality of managers and employees), and organizational capital resources (planning, controlling, and organizing systems). To the resource-based theorist, ignoring firm-specific resources believed to be transitory substantially reduces the precision of the analysis and is therefore unjustified. However, accepting the transitory nature of resources that lead to competitive advantage further complicates the research process for the resource-based theorist (Huilin & Yeh, 2004; Robins & Wiersema, 1995). Recent research highlights the importance of relationship-based resources on relational assets or social capital (Dyer & Singh, 1998), such as the bases of relationships in a firm's network of relationships with other organizations including firms, governments, and joint venture partners (Choi & Beamish, 2004). …

Corporate Turnaround: An Empirical Study on Chinese Small Sized Companies

Abstract: For decades, researchers have been reporting theoretic models or case studies suggesting that the turnaround strategies and actions can help companies to survive decline in performance. But they have not been applied to small business decline. We close this gap by investigating the small turnaround and non-turnaround companies listing on the stock market from 1997 to 2004 and examining the determinants resulted in their turnaround which is defined to the successful result of the actions to improve performance. The result of multivariate logistic regression indicates that the changes of the CEO, the industry structural problems, the substitute of the board members, net organizational capital (NOC) and the strategic change can be helpful in explaining turnaround.

Impacts of Agrifood Market Transformation during Globalization on the Poor's Rural Nonfarm Employment: Lessons for Rural Business Development Programs

Abstract: This paper presents emerging evidence pointing to the transmission to developing countries' rural spaces of the impacts of agrifood market transformation occurring at national and global levels. That transmission takes place via retail chains penetrating intermediate cities and rural towns, and urban-based food manufacturers selling products to those chains as well as to traditional shops. The paper presents and justifies three main hypotheses concerning the impacts of that penetration. (1) The direct effect is that the modern retailers and modern-sector processed products directly compete with, and present potentially major challenges to, the processed foods, farm inputs, and commercial services already being undertaken in the RNFE sector by the rural poor among others. (2) The indirect effects is that modern sector firms tend, once they have "modernized" their procurement systems, to prefer larger suppliers if available, and/or small suppliers that have the requisite levels of capital assets. This further translates to a potential labor substitution bias, in particular of unskilled labor, although it may drive skilled labor demand. (3) The production and consumption linkage effects of the above impacts on RNFE firms, laborers, and farmers, all else equal, probably implies greater demand for non-tradeable goods and services in the RNFE that correspond to the demand patterns of the upper stratum of rural consumers. Faced with the above, what can business development programs do? (1) Given the change in the market context, it will be increasingly undesirable and "un-strategic," except in the most remote, hinterland areas, to maintain the separation between competitiveness and nonfarm employment programs. At least for RNF activities that supply processed products, farm inputs, and retail commerce, RNF enterprises will need to face the same general challenge that exporters in their country face on the global market, and urban firms face, which is to compete on cost and quality. (2) Second, maintaining the analogy to international competitiveness, it will be necessary go beyond a generic competitiveness approach, to employ a "customized competitiveness" strategy (a term used by Reardon and Flores 2006 for export programs, but applicable here). Such an approach focuses on understanding the specific requirements of transformed markets and building the capacity of particular groups to respond to those requirements (as suppliers) or match cost and quality and compete for specific niches. The capital assets that programs should building include market intelligence capital, organizational capital, technology capital, and financial (and risk reduction) capital. (3) In the economic transformation, this time in the rural space, the poorest, those with least assets, are again vulnerable. Special attention should be paid to equipping those households and firms to participate in the increasingly challenging rural nonfarm economy.