Linking Key Performance Indicators to New International Venture Survival

2016 ◽  
Vol 15 (3) ◽  
pp. 31-48
Author(s):  
Yasheng Chen ◽  
Johnny Jermias
Keyword(s):  
Life Cycle ◽  
Performance Measures ◽  
Early Stage ◽  
Bankruptcy Prediction ◽  
New Venture ◽  
Business Success ◽  
Employee Productivity ◽  
Financial Measures ◽  
Start Up ◽  
Financial Performance Measures

ABSTRACT Based on the four major challenges firms face in the early stage of their life cycle, we identify and use financial and non-financial performance measures to predict the survivability of new international ventures. We use a sample of 3,729 new manufacturing ventures from the Chinese Foreign Invested Enterprises Database. The study sample consists of wholly owned ventures of multi-national corporations (MNCs) and joint ventures between pairs comprising foreign and local investors in China. The results are consistent with the study's hypotheses. Using the Cox (1972) survival model, we find that employee training, employee productivity, accounts receivable collection period, export intensity, and sales growth are positively related to new venture survival. This study contributes to the existing business venturing and accounting literature in three ways. First, it fills the gap in the existing literature on bankruptcy prediction by focusing on firms in the early stage of their life cycle. Second, it uses survivability as a measure of business success. Survivability is a more comprehensive measure of firm performance than traditional financial measures during the start-up stage because during this stage firms tend to carry large losses that make financial measures inappropriate. Finally, this study has the potential to help new venture managers improve a firm's chances of success by using customized performance measures that fit its unique situation. JEL Classifications: D21; G32; M41.

scholarly journals The Mechanisms of Transition from Effectual to Causal thinking in Entrepreneurial Contingency

2017 ◽  
Vol 12 (5) ◽  
pp. 51
Author(s):  
William Lin
Keyword(s):  
Decision Making ◽  
Life Cycle ◽  
Transaction Cost Economics ◽  
Cognitive Styles ◽  
New Venture ◽  
Causal Thinking ◽  
Start Up ◽  
Decision Making Processes ◽  
Breakeven Point ◽  
Depth Interviews

Most entrepreneurial research has not addressed the phenomena of entrepreneurial teams adjusting their cognitive styles based on the different challenges they face during the new venture life cycle under startups, accelerators and incubators. Our objective in this article is to attempt to investigate the mechanism between effectuation and causation over the life cycle of ventures; and to explore the consequences of this transition and these mechanisms. Drawing on data from 64 in-depth interviews with 28 executive members, we recorded 172 key decisions chronologically and examined the pattern of decision-making processes. According to our observations and interviews, many companies remain at the survival stage for some time even when they know their breakeven point is reachable. We found that the remaining decision, the decision to remain below breakeven, is a signal of cognitive style transition from a dominantly effectual model of decision-making and action to a causation model. Our examination supported the mechanisms with effectuation principles and explored how the transitions between the two decision-making processes impact start-up teams. Our study not only extends effectuation research by examining the significant timing for transition timing, but also sheds light on entrepreneurial research by integrating and synthesizing transaction cost economics.

Zandinger!

2003 ◽  
Vol 28 (2) ◽  
pp. 193-204 ◽  
Author(s):  
George H. (Jody) Tompson
Keyword(s):  
Life Cycle ◽  
Industry Structure ◽  
New Venture ◽  
Board Game ◽  
Ground Zero ◽  
Target Marketing ◽  
Start Up ◽  
Successful Business ◽  
Toy Industry

Most cases in entrepreneurship address strategic or operating difficulties of recently formed organizations. The case study presented here addresses an organization in its earliest stage of the life cycle: pre start–up. The case is about an entrepreneur who is planning to create a new venture based on a board game invented by his uncle. Accordingly, the case requires students to prioritize the tasks to create a venture from ground zero. The entrepreneur in this case already owns another successful business, has good marketing skills, and has received accolades from an expert in the toy industry. He seems to have a potentially successful product but is uncertain about what to do next. The case presents information for assessing industry structure and competitiveness, manufacturing options, and target marketing.

Financial Performance Measures, Efficiency and Indian Banking

2012 ◽  
Vol 1 (2) ◽  
pp. 43-56
Author(s):  
Padmasai Arora
Keyword(s):  
Financial Performance ◽  
Performance Measures ◽  
Bank Performance ◽  
Data Envelopment ◽  
Bank Efficiency ◽  
Policy Makers ◽  
Important Indicator ◽  
Financial Measures ◽  
Financial Performance Measures ◽  
Using Data

Globalization forces are linking banking operations to worldwide markets making them vulnerable to global stress. This fundamental change compels banks to be more robust in terms of sound financial performance. Bankers worldwide compute a large number of financial measures using ratios to gauge bank performance. This paper calculates efficiency, an important indicator of financial performance of banks in India using Data Envelopment Analysis (DEA) for the period 2006-07. Following Jackson (1972), the paper investigates commonality that might exist among financial performance measures computed by banks in India and the estimated bank efficiency scores. Results of Factor Analysis uncovered fewer significant factors and interestingly show that efficiency scores do not cluster with other measures of bank performance despite emerging as one of the significant factor. The present paper argues that bankers and policy makers should not feel contented by looking at the standard performance measures alone. Rather, they should also try to examine bank performance vis-à-vis efficiency based on multiple inputs and outputs to capture the complete picture. A paradigm shift towards measurement of efficiency using sophisticated modeling techniques is recommended for better performance evaluation in banking.

scholarly journals Intrapreneurs and entrepreneurs — Do they differ in Romania?

2017 ◽  
Vol 67 (1) ◽  
pp. 43-61 ◽  
Author(s):  
Annamária Dézsi-Benyovszki ◽  
Tünde Petra Szabó
Keyword(s):  
Theory Of Planned Behaviour ◽  
Early Stage ◽  
Adult Population ◽  
New Venture ◽  
Planned Behaviour ◽  
Individual Level ◽  
Entrepreneurial Behaviour ◽  
Start Up ◽  
Logistic Regressions ◽  
The Individual

This study focuses on the theory of planned behaviour in order to understand and to predict the entrepreneurial behaviour of Romanian early-stage entrepreneurs and intrapreneurs, identifying the main differences among them. We first present the individual level analysis of these new venture creators using the Global Entrepreneurship Monitor (GEM) Adult Population Survey database of Romania from 2011 to 2014, followed by the estimation of logistic regressions in order to test the applicability of the theory of planned behaviour in predicting entrepreneurial behaviour. We aim to contribute to the understanding of differences in start-up activities by broadening the concept of start-up to include intrapreneurship as well. The findings of this study provide partial support of the theory of planned behaviour.

scholarly journals Institutional Change and Early-Stage Start-Up Selection: Evidence from Applicants to Venture Accelerators

2020 ◽  
Author(s):  
Valentina A. Assenova
Keyword(s):  
Developing Economies ◽  
Early Stage ◽  
High Growth ◽  
New Venture ◽  
Institutional Changes ◽  
New Firms ◽  
Institutional Reforms ◽  
Start Up ◽  
Average Probability ◽  
Start Ups

Existing research at the nexus of institutional theory and entrepreneurship suggests that lowering institutional barriers to forming, growing, and exiting new firms can affect the types of start-ups that entrepreneurs found in a region. These institutional changes could influence entrepreneurs’ perceptions of the value of partnering with venture accelerators and potentially improve these sponsors’ capacity to select high-growth start-ups to fund and develop. This study evaluates these ideas by developing and testing three hypotheses. First, institutional reforms improve entrepreneurs’ perceived value of venture accelerators for resources that affect new venture development. Second, they reduce the average probability of being selected for new applicants, due to a surge in the number and heterogeneity of new applicants within accelerators’ local ecosystems. Third, institutional reforms increase the quality of selected cohorts for accelerator managers due to increases in the average quality and human capital of new applicants. To evaluate these hypotheses, I analyze data from 13,770 applicants to venture accelerators over multiple application cycles between 2016 and 2018 in 170 countries. I use a differences-in-differences design to estimate the effects of institutional changes on start-up selection after regulatory reforms that reduced the time and procedures to start new firms, obtain credit, and resolve bankruptcy for entrepreneurs. The findings have valuable implications for how governments, especially those in emerging and developing economies, can support high-growth entrepreneurship.

scholarly journals Non-financial performance measures and pay-performance sensitivity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
MyoJung Cho ◽  
Salma Ibrahim
Keyword(s):  
Financial Performance ◽  
Performance Measures ◽  
Financial Risk ◽  
Shareholder Wealth ◽  
Performance Measure ◽  
Content Type ◽  
Financial Measures ◽  
Performance Sensitivity ◽  
Ceo Pay ◽  
Financial Performance Measures

Purpose This study aims to examine whether chief executive officer (CEO) pay-performance sensitivity to shareholder wealth is related to the use of non-financial performance measures in incentive contracts. Design/methodology/approach Using hand-collected performance measure data in a sample of S&P 500 firms across the period 1994–2010, this study investigates the sensitivity of CEO bonus and cash pay to shareholder wealth of firms that use non-financial performance (NFPM) measures of varying types and contractual weights in their bonus contracts along with financial measures (NFPM firms) in comparison to that of firms using financial measures only (FPM firms). Findings This study finds evidence that the pay-performance sensitivity is stronger in NFPM firms than in FPM firms. These results are driven by the use of CEO individual goals and operational efficiency. Furthermore, when using environmental, social and governance factors, the pay-performance sensitivity is stronger in terms of accounting performance only. This study also finds that using NFPM enhances pay-performance sensitivity more as their contractual weights increase and as financial risk increases. Practical implications These findings are important to stakeholders, and especially regulators in understanding incentive effects of alternative performance measures. This study also sheds light on what types of non-financial measures are better in helping firms align CEOs’ incentives to shareholders’ interests. Originality/value This study contributes to prior research on benefits of non-financial information within the context of executive compensation. This study presents original results about the effects of contractual weights of non-financial measures and financial risk on CEO pay-performance sensitivity. This study also presents new insights regarding how different types of non-financial measures affect CEO pay-performance sensitivity.

The Roles of Organizational Politics and Fairness in the Relationship between Performance Management Systems and Trust

2015 ◽  
Vol 27 (1) ◽  
pp. 25-53 ◽  
Author(s):  
Chong M. Lau ◽  
Glennda Scully
Keyword(s):  
Performance Management ◽  
Performance Measures ◽  
Organizational Politics ◽  
Measurement Systems ◽  
Fairness Perceptions ◽  
Mediating Role ◽  
Perceptions Of Fairness ◽  
Performance Measurement Systems ◽  
Financial Performance Measures ◽  
The Relationship

ABSTRACT Organizational politics is ubiquitous in organizations. Yet to date, no prior research has investigated, in a systematic empirical manner, the mediating role of organizational politics in performance measurement systems. The primary purpose of this research is to investigate if perceptions of organizational politics mediate the relationships between performance measures and employees' trust in their superiors. As organizational politics may also affect employees' perceptions of fairness, a model is used to investigate (1) if performance measures affect organizational politics; (2) if organizational politics, in turn, affects procedural and interpersonal fairness; and (3) if fairness perceptions subsequently affect trust in superiors. Based on a sample of 104 responses, the partial least squares results indicate that organizational politics and fairness perceptions significantly mediate the nonfinancial performance measures and trust relationship. In contrast, the results indicate that the mediating effects of organizational politics and fairness on the relationship between financial performance measures and trust are generally insignificant.

scholarly journals The effect of metabolism on the course of labor and the postpartum period in highly productive cows

2020 ◽  
Vol 17 ◽  
pp. 00256
Author(s):  
Murat Baimishev ◽  
Sergey Eremin ◽  
Kirill Plemyashov ◽  
Hamidulla Baimishev ◽  
Igor Konopeltsev ◽  
...  
Keyword(s):  
Lipid Metabolism ◽  
Postpartum Period ◽  
Early Stage ◽  
Antioxidant Properties ◽  
Antioxidant Systems ◽  
Dry Period ◽  
Blood Samples ◽  
Start Up ◽  
Significant Difference ◽  
Duration Of Pregnancy

The purpose of the research is to determine the etiopathogenesis of reproductive dysfunction in highly productive cows. For this, one group of cows was formed on the principle of paranalogs in the amount of 37 animals inseminated in the first sexual hunt after calving, followed by taking blood samples from them using the Monovet system, considering the duration of pregnancy. During the start-up period, blood was taken 1–4 days before calving and on the first day after calving. A total of 253 blood samples were examined. Subsequently, depending on the effectiveness of insemination, animals were divided into two groups. The first group included inseminated cows after the first insemination (20 animals), the second group included 17 unfertilized cows after the first insemination. Subsequently, blood was taken from animals considering the course of childbirth and the postpartum period. Blood counts were studied according to generally accepted methods using certified equipment. The study found that at an early stage of pregnancy, cows have a significant difference in lipid metabolism and in their peroxidation, in the state of antioxidant systems compared to unstable animals. In the process of pregnancy development in cows, there is a decrease in the level of total lipids and their class, and the accumulation of products of transoxidation of lipids is reduced. In animals with retention of the placenta, a low lipid metabolism and a higher level of peroxidation were established already in the dry period. After calving, this difference increases. The obtained data can be used to develop an algorithm for the prevention of postpartum complications in cows by using substances with antioxidant properties.

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