Management control systems and organizational ambidexterity

Developing structural modelling of inter-partner factors of international joint ventures performance

Purpose

The study aims to identify, analyse and develop a model for measuring the inter-relationship and interaction among the inter-partner factors. International joint ventures (IJVs) literature has scantly studied the interactions and inter-relationships among the inter-partner factors of IJVs performance. To address this gap, this research creates a hierarchical relationship framework among the inter-partner factors of IJVs performance.

Design/methodology/approach

The comprehensive literature review is used to identify the factors and possible relationships between the factors and IJVs performance. M-TISM (modified total interpretive structural modelling) methodology is used to examine the relationship among the factors of IJVs performance.

Findings

This study highlights 12 inter-partner factors that affect IJVs performance. The results suggest that size asymmetry, commitment, goal incongruency, competitive overlap, trust, control, the interdependency of resources, cooperation, economic distance, cultural distance, geographical distance and administrative distance significantly impact IJVs performance. Commitment is found to be a linkage variable as it has high dependence and driving power. Goal incongruency and competitive overlap have high driving power.

Research limitations/implications

This study gives a proposed list of critical inter-partner factors for policymakers and practitioners to consider when developing rules or recommendations to improve IJVs performance. The focus of policymakers should be on economic and geographical distance, followed by cultural distance, competitive overlap, goal incongruency, size asymmetry and administrative distance to improve inter-relationship among the partners in IJVs. The work contributes to the academician by presenting a modified TISM model that highlights the significance of ambidexterity in driving the performance of IJVs.

Originality/value

This study fills a gap in the literature by analysing the interactions among the inter-partner parameters that influence the performance of IJVs. It offers insights into the variables, such as driver dependence and the relationships between the variables.

Financial managers and organizational ambidexterity in the German Mittelstand: the moderating role of strategy involvement

Relying on the upper-echelons perspective, this paper investigates the effect of financial managers’ characteristics on the level of organizational ambidexterity reached in German Mittelstand firms. These firms are often depicted as highly innovative and able to compete on worldwide markets despite significant resource constraints. We theorize that skilled financial managers are very important in making the optimal use of Mittelstand firms’ scarce resources and, in particular, for balancing exploitation and exploration, thus reaching high levels of ambidexterity. Our findings from a survey of German Mittelstand firms broadly confirm our expectations and show that financial managers’ individual entrepreneurial behavior correlates positively with the firms’ level of organizational ambidexterity. In addition, we find that firms with financial managers having enjoyed business education are more likely to reach high levels of ambidexterity if these financial managers are heavily involved in strategy development. Overall, these results indicate that well-suited financial managers are an important human resource for Mittelstand firms. In addition, our findings are among the first to show that financial managers not only influence finance and accounting choices, but also innovation-related outcomes such as organizational ambidexterity.

Knowledge Management and Performance Measurement Systems for SMEs’ Economic Sustainability

This paper aims to explore the relationships between knowledge management (KM), performance measurement systems (PMSs), and small and medium enterprises’ (SMEs) economic sustainability in knowledge-intensive sectors. The literature demonstrates that SMEs are often characterized by unstructured KM approaches and limited PMS implementation, being at the same time affected by scarce profitability and financial issues. Adopting the knowledge-based view of the firm and the contingency theory of PMSs, we tested the impact of two alternative KM approaches (exploitation and exploration) on SMEs’ economic sustainability, measuring the moderating effect of PMS use (diagnostic and interactive). Through an ordinary least squares (OLS) regression of data collected for 219 Italian medium firms operating in knowledge-intensive sectors, this study provides evidence on how a specific KM approach supports the SME economic sustainability and how a consistent implementation and use of PMS amplify the relationship between KM and economic sustainability. Data analysis confirms the relevance of some key concepts of the knowledge-based view of the firm, especially the positive impact of the KM exploration approach on economic sustainability. Additionally, the paper extends empirical evidence for the PMS moderating effect on the KM–performance relationship. To the best of our knowledge, this is the first time that a study provides evidence for the relationships among KM, PMSs, and economic sustainability in the SME setting. Moreover, our findings lead to some managerial implications, especially they encourage SME entrepreneurs and managers to design a coherent KM approach and to implement an adequate PMS in order to support economic sustainability.

The Mediating Role of Business Strategies between Management Control Systems Package and Firms Stability: Evidence from SMEs in Malaysia

The aim of the current study was to ascertain the influence of a management control systems (MCS) package on a firm’s sustainability with the help of mediating variables such as differentiation and cost leadership strategy in Malaysian small and medium enterprises (SMEs). Data were collected from managers working in Malaysian SMEs. A total of 384 questionnaires was finally used for analysis using SmartPLS 3.8.2. Area cluster sampling was used for data collection, and seven out of sixteen clusters were selected randomly. These included Selangor, Johor, Kuala Lumpur, Sabah, Penang, Sarawak, and Perak because these seven states cover 73.9% of total SMEs. Structural equation modeling (SEM) was used to test the hypotheses. Confirmatory factor analysis (CFA) was also used to examine the reliability and validity, and structural model assessment was used to test the relationship between variables. Findings revealed that an MCS package had a positive influence on a firm’s sustainability, cost leadership, and differentiation strategy. Moreover, cost leadership and differentiation strategy have a significant and positive influence on a firm’s sustainability. In addition, cost leadership strategies and differentiation strategies significantly mediate between the MCS package and a firm’s sustainability. This research assesses the influence of the MCS package through cost leadership and differentiation strategy on a firm’s sustainability of Malaysian SMEs. It helps top management to focus on the MCS package and business strategies in attaining a firm’s long-term sustainability. Finally, research recommendations discuss that the present study helps future researchers and academicians.

EFFECT OF LEADERSHIP STYLES ON FINANCIAL PERFORMANCE: MEDIATING ROLES OF EXPLOITATIVE AND EXPLORATORY INNOVATIONS CASE OF KNOWLEDGE-INTENSIVE FIRMS

The purpose of this research is to investigate the effect of transformational and transactional leadership styles on firms’ financial performance in a context of knowledge-intensive firms and the mediating role of exploitative and exploratory innovations in this relationship. To achieve this purpose, a quantitative research was conducted on 201 top executives working in knowledge-intensive firms in the context of an emerging country, namely Tunisia. The data analysis was performed via the structural equation modelling method. As a result, the empirical study revealed that the transformational leadership style is a key determinant of exploitative and exploratory innovations and firms’ financial performance. In this perspective, the two types of innovation partially mediate the link between transformational leadership and financial performance. However, transactional leadership affects only exploitative innovation. This original study offers a better understanding of the contribution of the transformational and transactional leadership styles on exploitative and exploratory innovations and the firms’ financial performance in a context of firms’ intensive knowledge. It offers a reading grid for managers of knowledge-intensive firms to better lead and identify key elements that may boost the firms’ innovation ambidexterity and performance.

Efeitos do Exploration, Exploitation e Ambidestria no Desempenho das Organizações de Software

Resumo A literatura apresenta lacunas da utilização das competências, recursos e capacidades (exploitation) em conjunto com a exploração de novas competências (exploration) para o alcance do desempenho. Pouco se conhece sobre como as dimensões de exploitation e exploration deveriam ser analisadas, tais como separadamente, por meio de continuum, em sequência, por meio interativo ou por (in)congruência. Dado à ausência de comprovação de como essas duas dimensões podem elucidar a performance, o problema que surge é: Como a congruência das dimensões de ambidestria podem elevar o desempenho? O objetivo do trabalho foi examinar como a congruência entre dualidades afeta o desempenho. Por meio de um levantamento com 227 empresas de software, nós testamos hipóteses relacionadas à congruência e interação dos dois fatores da ambidestria. Os resultados mostraram que (a) as dimensões de exploration e exploitation; (b) a ambidestria média e (c) a ambidestria por meio de um continuum explicam o desempenho, que (d) a interação exploitation × exploration não tem relação com o resultado da organização e que (e) a convergência de ambas as dimensões aumenta o resultado organizacional. Os achados são coerentes com a tese de Gibson e Birkinshaw (2004) e rejeitam as teses de Gupta, Smith e Shalley (2006) e Cao, Gedajlovic e Zhang (2009).