This paper discusses the importance of reputational risk in the supply chain. It also explains the ways it can be mitigated via CSR. This is the management baseline that adds tremendous value for theory builders and present and future managers. Having the education of Master students in mind, the authors outline three specific teaching units that bring the conceptual underpinnings alive in an interactive learning environment.
Duarte, Fabio Dias; Gama, Ana Paula Matias; Gulamhussen, Azzim (Springer, 2018)
We investigate the role of (business) collateral and (personal) guarantees alongside small and medium enterprise (SME), lending bank and loan characteristics, macroeconomic conditions, sectors, and geographic locations while controlling for unobserved time effects in predicting default at the peak of the financial crisis. First, we find a positive relation between collateral and default, and a negative relation between guarantees and default. Second, we find a negative relation between the joint influence of collateral and high credit score, and a positive relation between the joint influence of collateral and low credit score and default. We also find a negative relation between the joint influence of guarantees and high credit score. These findings are relevant for SME policies aimed at facilitating access to credit, reducing the cost of borrowing, and decreasing default, risk management of banks, and the application of theories of financial economics in the context of a financial crisis.
Luypaert, Mathieu; Van Caneghem, Tom (John Wiley & Sons Ltd, 2017)
We examine the joint effect of bidder and target information asymmetry and uncertainty on the payment consideration and subsequent wealth effects in a large sample of acquisitions with both listed and private targets. In line with a risk-sharing argument, we find that acquisitions of targets characterized by higher uncertainty are more likely to be settled with stock. In contrast, higher target information asymmetry increases the likelihood of a cash payment, consistent with bidders strategically exploiting superior information. Acquirers of more opaque targets obtain a larger fraction of total acquisition gains and avoid sharing these gains with target shareholders by offering cash.
Manigart, Sophie; Standaert, Thomas (Springer, 2018)
Governments around the world have set up fund-of-fund programs to increase the supply of venture capital financing to young growth-oriented firms. In these programs, a government fund-of-fund acts as limited partner in a venture capital fund. The venture capital investment process is hereby delegated to external investors, which were selected by the government fund-of-fund. We investigate employment growth in 108 portfolio companies that benefited from the ARKimedes fund-of-fund in Flanders. Accounting for the heterogeneity in the types of venture capital investors managing hybrid funds, and the associated goal diversity and resource endowments, we find that portfolio companies backed by hybrid independent venture capital funds show greater employment growth than those backed by hybrid captive or hybrid government venture capital funds. This finding is relevant because it indicates that the financial objectives of hybrid independent venture capital funds are highly compatible with the government's objective of employment growth, as providing companies with superior monitoring and value adding services with the objective of realizing a successful exit creates employment in the process.
Stouthuysen, Kristof; Slabbinck, Hendrik; Roodhooft, Filip (2017)
In this research, we study the use of formal control types (outcome, behavior) across different alliance motivations (exploitation, exploration, ambidextrous) and the effects on alliance performance. This study further examines whether this relationship is moderated by the use of informal controls. Survey data from 236 organizations pursuing strategic alliances indicate that when firms opt for one primary strategic alliance motivation, firms' emphasis on either outcome controls (in exploitation alliances) or behavior controls (in exploration alliances) increases alliance performance. Results also support a complementary relationship between outcome and behavior controls in explaining alliance performance in ambidextrous alliances. Furthermore, our findings reveal that while informal controls enhance the effectiveness of behavior controls in exploration alliances, the benefits of informal controls disappear in the context of outcome controls and exploitation alliances. In ambidextrous alliances, firms need to carefully proportion the informal control level because beyond a moderate level, informal controls seem to negatively affect a control configuration using outcome and behavior controls. Our analysis provides a more nuanced view on how organizations may successfully control alliances with different motivations.
Moges, Helen-Tadesse; Van Vlasselaer, Véronique; Lemahieu, Wilfried; Baesens, Bart (2016)
Decision making processes and their outcomes can be affected by a number of factors. Among them, the quality of the data is critical. Poor quality data cause poor decisions. Although this fact is widely known, data quality (DQ) is still a critical issue in organizations because of the huge data volumes available in their systems. Therefore, literature suggests that communicating the DQ level of a specific data set to decision makers in the form of DQ metadata (DQM) is essential. However, the presence of DQM may overload or demand cognitive resources beyond decision makers' capacities, which can adversely impact the decision outcomes. To address this issue, we have conducted an experiment to explore the impact of DQM on decision outcomes, to identify different groups of decision makers who benefit from DQM and to explore different factors which enhance or otherwise hinder the use of DQM. Findings of a statistical analysis suggest that the use of DQM can be enhanced by data quality training or education. Decision makers with a certain level of data quality awareness used DQM more to solve a decision task than those with no data quality awareness. Moreover, those with data quality awareness reached a higher decision accuracy. However, the efficiency of decision makers suffers when DQM is used. Our suggestion would be that DQM can have a positive impact on decision outcomes if it is associated with some characteristics of decision makers, such as a high data quality knowledge. However, the results do not confirm that DQM should be included in data warehouses as a general business practice, instead organizations should first investigate the use and impact of DQM in their setting before maintaining DQM in data warehouses.
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