Part (1): #Management and Future Research on Creating a New Future for #Business (Hahn, Kolk and Winn, 2010)
In their review of research on business and sustainability, Kallio and Nord-berg (2006) reached the discouraging conclusion that—despite the growing volume of research on organizations and the natural environment—“the environmental dimension has thus remained more or less an appendage” (p. 453) to standard management approaches and research. They argue that adopting environmental issues in current research mainly serves to legiti-mize business-as-usual approaches, but that “the fundamental orientation of the discourse has not essentially changed” (p. 453) Reflections on the discipline and on what a (more) meaningful research agenda could look like were already offered fifteen years ago. Gladwin, Kennelly, and Krause (1995), for example, argued for a new paradigm for management theory and research, positing that “it is possible that our theories have tacitly encouraged organizations to behave in ways that ultimately destroy their natural and social life-support systems” (p. 896). These and other authors’ arguments and pleas for fundamentally rethinking the foundations of management research have, however, been acted upon only sporadically. There are many reasons for this inaction, some of which are noted in Goodall’s (2008) investigation of why leading journals in management have failed to respond to climate change. One important reason according to Goodall is that promotion incentives for scholars in business schools are skewed toward incremental additions to established knowledge.
More recently, the occurrence of corporate scandals, particularly as they also involved supposedly leading socially responsible companies, has given rise to contemplation of what “organizational goodness” entails and what role there is for managerial motivations and moral agency (Heugens, Kaptein, & Van Oosterhout, 2008; see also Muller & Kolk, 2010). The question is whether such calls will help management research move beyond incremental adaptation of existing approaches and generate sufficient responses to the changes and challenges that companies and society are facing. While published in general management journals, many of the authors discussed previously specialize in corporate social responsibility and thus are more likely to be attentive to these issues. It remains to be seen to which degree such new directions will filter through to the mainstream more broadly.
It is beyond the scope of a single special issue to cover the full variety of economic, environmental, and social challenges and adequate business responses for sustained environmental and social life-supporting systems. In the call for papers, we argued that research is needed to develop and discuss novel approaches that define the role and purpose of business and management in the light of challenges such as mitigating climate change, alleviating poverty, coping with migration, dealing with resource scarcities, or securing social cohesion. The research articles in this special issue are important efforts toward integrating notions like resilience, embeddedness, and complex adaptive systems with economic viability of business, and across the four contributions, they offer implications for both management theory and strategy. Many other issues, such as conceptions of fairness, equity, and ethics, however, still require a fundamental revisiting of the theoretical foundations of business. In what follows, we touch on several additional areas that seem important for building fruitful further research.
One issue of prime relevance in this context is the question of the role and objective function of businesses. The predominant focus on shareholder wealth creation seems to have aggravated rather than alleviated the crisis we are currently facing (Figge & Hahn, 2008), although no clear alternative approaches have emerged either. It appears doubtful that the shareholder wealth thinking that dominates both the academic and the practitioner discourse is well suited for all types of business and entrepreneurial activities, given that listed companies, though often large and prominent, represent only a very small proportion of ventures (Hahn & Scheermesser, 2006; Reynolds, 1997). Together with the short-term focus of corporate strategy and decision making (Laverty, 1996; Mosakowski & Earley, 2000), which is difficult to reconcile with the longer-term focus of sustainable development (Held, 2001), rethinking the role and objective function of businesses in a wider environmental and societal context appears inevitable. Even if the notion of value creation and growth is still deeply rooted in the thinking of many mainstream management and even ONE and BAS scholars, it appears more doubtful than ever that enlightened business case thinking (Jensen, 2001) can bring novel insights or any real remedies to the situation. On the other hand, there seems to be tremendous potential for research off the beaten track of whether it pays to be green or socially responsible, as well as research that extends to business fields beyond management.
And though our focus here is on business organizations, this focus also brings up questions about whether fundamentally different public policy and market regulation are needed to change the rules of the game, in order to ensure that business conduct is more in line with societal needs. We offer one final set of reflections on the challenges of doing research associated with the topic covered in this special issue. Even though one of the articles (that of Kearins, Collins, and Tregidga) draws on case studies of real businesses to develop its arguments, the contributions in this special issue are predominantly conceptual pieces. This conceptual emphasis is not surprising, considering the early state of this type of research. But we suggest another, perhaps more fundamental, reason for this focus. An inherent dilemma in the rules for empirical research in management studies specifically, and business studies generally, is that the predominant methodologies are descriptive. Both quantitative and qualitative research methods thus necessarily build on the study of what can already be observed—a significant problem if the argument is that, whether in light of climate change, the financial crisis, or other systemic problems, current approaches appear not to work.
PART (2) How to Achieve the Best #Finance Operations #Success (Controller’s Report, 2014)
Here is what the best-practice organizations studied by The Hackett Group did to achieve world-class financial status:
1.Realign talent.
Partner with HR to develop a workforce plan that defines short- and long-term needs and highlights critical gaps in talent. Develop competency models, learning and development programs, and performance management processes to close any gaps.
2.Redesign processing models.
Standardize across all key finance processes, particularly in the transactional areas. For example, by deploying a single set of standard processes in general accounting and external reporting, world- class organizations achieve transaction costs that are 50 to 60 percent lower than those at typical companies.
3.Retool operations with technology.
Automate transactions and improve information-delivery capabilities. Hackett reports that finance operations that have automated processes:
- Receive 2.5 times more supplier invoices electronically in accounts payable than typical companies;
- Have a 53 percent greater automated match rate on remittances in accounts receivable; and
- Have more self-service access to key management information than at typical companies.
4.Allocate resources for planning and strategy.
Invest more resources to help your organization deliver on its strategic goals and objectives. At world-class finance organizations, the budget allocated to planning and strategic activities is 38 percent higher, and the amount allocated to transaction processing activities is 25 percent lower, than at typical organizations, reports Hackett.
- Consistently deliver higher-quality services.
For example, world-class organizations have an error rate in customer billing that is 48 percent lower than that of typical companies, which improves the speed at which cash is collected.
“There’s definitely a payback for focusing on finding innovative ways to reinvent your processes,” says Doxey. “However, before you begin, your process improvements should be carefully prioritized. It is also critical to understand the feasibility of a process improvement and determine if a similar company or organization has benefitted. Also realize that a process improvement that works well in an SAP environment may not work well in an Oracle or legacy environment.”
PART (3): R&D Networks with #Strategic #Substitutability (Cui et al., 2014)
Technological progress is one of the major driving forces of economic growth in both developing and developed countries (Savvides and Zachariadis, 2005; Zachariadis, 2004). It can be fulfilled at the firm level by in-house R&D activities and/or through external R&D means [such as foreign direct investment (FDI) and technological trade]. Firms may, however, differ in their attitudes towards building technology through these channels. It depends on their competitive relationships with others, the level of technological complexity involved and endowments. There has been a growing complexity in the technologies used for production and innovation since the 1980s. Firms have increasingly discovered that their in-house innovative capabilities are insufficient for developing these technologies. Thus more and more firms have pursued an open innovation approach, involving the purchase of patents, or forming research joint ventures with other firms. Consequently, a typical firm has two ways to improve its production technology: internal R&D strategy, in which it undertakes independent in-house R&D; and external R&D strategy, where it access R&D knowledge through cooperative or non-cooperative activities.
A voluminous literature has focused on pairwise collaborative links (Goyal and Moraga-Gonzalez, 2001; Goyal and Joshi, 2003). Each link represents an agreement on joint research project by two collaborators. The benefits for collaborating firms arise from sharing knowledge about a cost-reducing technology. This two-way flow of influence has been central to the study of R&D; however, there also exists another strand of research. For example, Billand and Bravard (2004) assume that each firm unilaterally establishes direct links to access other firms’ R&D knowledge. This non-cooperative assumption reflects the situations where firms can purchase other firms’ patents or analyse other firms’ products, by for instance, reverse-engineering, or talk with technology vendors. The present paper follows this approach. We assume that each firm is able to leverage internal and external R&D activities to build and develop its innovative capacity. Internal R&D activity is induced by its in-house R&D efforts, whereas external R&D relies on its ability to establish links with other firms.
Hence each firm’s strategy consists of a level of internal R&D effort and a specification of the set of firms with whom it unilaterally establishes links. The links formed by firms define a non-cooperative R&D network.
Empirical research on complementarity or substitutability between internal and external R&D strategies has been inconclusive. The latest research by Hagedoorn and Wang (2012) shows that there exists a contingent relationship between internal and external R&D strategies. Most of the existing theoretical literature assumes that in-house and external R&D efforts are strategic complements (see, e.g. D’Aspremont and Jacquemin, 1988; Goyal and Moraga-Gonzalez, 2001; Goyal et al., 2008). In this literature, the marginal reduction of unit cost of additional R&D effort is constant and each firm’s payoff function is convex in R&D effort, implying strategic complementarity of R&D efforts for linked firms. The present paper, however, assumes that each firm’s revenue function is strictly concave in R&D effort. That is, in-house and external R&D efforts are strategic substitutes.
The problem of how firms trade off internal (or in-house) R&D efforts and external (knowledge acquisition) R&D efforts had been examined and given that these two strategic options are substitutes. We have found that firm’s trade off investment cost and acquisition cost. These determine whether firms conduct R&D activities and whether firms totally rely on their own in-house R&D efforts. The equilibrium R&D network is empty when investment cost or linkage cost is high. A core–periphery structure will exist when both of them are relatively low, with core firms investing and periphery firms’ free riding. We have also investigated efficiency issues. We have shown that core firms tend to underinvest in Nash equilibrium as they ignore the positive externality of their own R&D effort. Hence, equilibrium and efficiency may be misaligned under some conditions.
The present papers has focused on the interaction of firms operating in their own independent market where linking cost is fixed. There are many ways to extend the analysis. One possible extension is to consider non-cooperative R&D activities among competitors in the same market. Another possibility is to consider hybrid R&D, where core R&D activities are conducted in-house and non-core R&D knowledge can be acquired from other firms. In addition, we can indigenize the cost of linkage.
It means that each firm is more willing to establish a link with another firm with more R&D knowledge.
Reference:
Cui, Z., Li, Z., Zhang, J. and Zu, L. (2014). R&D Networks with Strategic Substitutability. Review of Development Economics, 18(2), pp.340-353.
Hahn, T., Kolk, A. and Winn, M. (2010). A New Future for Business? Rethinking Management Theory and Business Strategy. Business & Society, 49(3), pp.385-401.
‘How the Best Finance Operations Achieve Success’ 2014, Controller’s Report, 2014, 12, pp. 6-7, Business Source Premier, EBSCOhost, viewed 1 July 2015.
About the Author:
Dr.Hisham M Safadi (Hisham Safadi ) BDS & MSc Leadership and Management in Health Care Practice from the University of Salford where his Master dissertation subject is the effect of Emotional Intelligence on improving Dentistry care in Middle East. Born and raised in the Emirates of Ras Al Khaimah, United Arab Emirates. Dr.Safadi had start his professional career as a dentist then turn to the field of managing medical facilities and reforming delivery of health care services. His main interest is business consultancy, leadership and entrepreneurship.
Twitter: @hishamsafadi
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