Gadjah Mada International Journal of Business
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Working Capital Management in Indonesia: An Analysis on Over-investment and Under-investment Firms
Get PDFThis study aims to examine the existence of excess working capital in Indonesian firms and its effect on the firms’ performance and risk. The sample includes 425 firm-year observations of Indonesian manufacturing firms for the period 2010 – 2014. To account for the potential asymmetric relation between excess Net Working Capital (NWC) and firm performance, an asymmetric regression model is employed, allowing the slope coefficient of the excess NWC to be different for positive and negative excess NWC. The results indicate (i) the existence of an optimal level of working capital, (ii) higher excess working capital leads to lower performance and risk, (iii) additional investment in working capital reduces firms’ performance for those with positive excess working capital. It is also documented that (iv) additional investment in working capital reduces firms’ risk for those that have working capital deficiencies. The findings have important implications for corporate managers in determining the optimal level of working capital
The Building of Country Manager's Competence and Its Use to Orchestra Subsidiary's Resources: Empirical Study of Indonesian Subsidiaries in Nigeria
No full textThis study employs resource orchestration model to investigate the influence of country manager’s competence on subsidiary performance in host country. Structural equation model with multisteps approach is operated using Lisrel to analyze 41 data from Indonesian business unit operating in Nigeria. This study found that country managers uses subsidiary absorptive capacity, which is formed by the combination of headquarter and local partner resources, as the dominant source of learning to develop their competence overtime. This competence does not directly influence subsidiary performance, but it is notably used to accumulate the critical assets for their subordinate business units. These assets then become valuable inputs for business units to develop or modify their operational capabilities, which directly influence the performance. One contribution of this study is providing more detail explanation of how headquarter resources invested abroad are transformed into subsidiary performance
Building SMEs’ Competitive Advantage and the Organizational Agility of Apparel Retailers in Indonesia: The role of ICT as an Initial Trigger
Get PDFThe use of Information and Communication Technology (ICT) could make Small Medium Enterprises (SME) capable of capturing future potential markets. This study investigates how the use of ICT affects firms’ agility and finally ends in their competitive advantage. In other words, this study examines how firms’ ICT capabilities directly enhance their competitive advantage. Their ICT capability also affects the firms’ competitive agitlity indirectly by mediating their business agility. This study infers that if small business firms would like to enhance their supply chains and customer relationship management, they should adopt ICT as a tool to transform their businesses. This transformation improves small firms’ competitiveness levels because it allows them to manage all their customers. Meanwhile, the small business firms could enhance their agility due to their suppliers’ closeness. This means that the small business firms have posited the concepts and philosophy suggested by the resources dependent theory
Workplace Fairness, Information Sharing and Employee Performance in a Budget Setting: An Empirical Study
No full textThe importance that workplace fairness and information sharing has on employees’ performance has gained a significant attention from researchers and practitioners. However, no empirical evidence on the combined role of both workplace fairness and information sharing on employee performance has been found so far. Thus, the purpose of this study is to examine the effects of workplace fairness and information sharing on employees’ performance in a budget setting. A set of direct and indirect hypotheses are tested using survey data collected from 108 sub-unit managers from various industries, randomly selected from Bursa Malaysia (the stock exchange of Malaysia). The findings indicate that both workplace fairness and information sharing are positively associated with improved employee performance in a participative budget setting. Furthermore, information sharing mediates the relationship between workplace fairness and employee performance. This suggests that when employees perceive the budgeting process as being fair, they would be more willing to share information, which will then lead to improved employee performance
The Effect of Executive Compensation on Credit Default Swap Spread
Get PDFInvestors have been trying to formulate the optimum composition of executives’ compensation which will incentivize the executives to perform better and act in the shareholders’ best interests. This study aims to find empirical evidence about the impact of executive compensation on the default risk with the Credit Default Swap (CDS) spread as the proxy, using panel data to test the research model, which combines the analysis of cross-section and time series data. The study is conducted based on 1,416 observations of 177 U.S. companies from 2008-2015. The data are mainly collected from Datastream, Compustat, CRSP, and the US SEC’s EDGAR database. The current study provides a contribution by suggesting that executives’ compensation will trigger risk-taking behavior. The results of this study reveal, firstly, both equity-based compensation and debt-like compensation induce risk-taking behavior by the executives. Secondly, the correlation between both the form of the compensation and the CDS spread is weakened in a high information asymmetry environment. Lastly, this study finds that a CFO’s compensation has more influence on the CDS spread, compared to the other board executives, but this condition only occurs when the compensation is awarded in the form of debt-like compensation. To improve the generalization of the results, a further study may consider expanding the sample into several countries
The Effect of Website Design Quality and Service Quality toward Repurchase Intention in the E-commerce Industry: A Cross-Continental Analysis
Get PDFThe purpose of this study is to examine and understand the effect of website design quality and service quality toward consumers’ repurchase intention in the Asian, European, American, and Australian e-commerce industry. This research implemented survey method, in which questionnaires were chosen as instruments for data collection. A total of 1000 questionnaires were electronically distributed to the respondents across four continents, in which a total of 869 were deemed usable. Out of 869 questionnaires, a total of 200 questionnaires collected from respondents living in the Asian continent, 189 questionnaires collected from respondents living in the American continent, 243 questionnaires collected from respondents living in the European continent, and 237 questionnaires collected from respondents living in the Australian continent. This research implemented PLS-SEM method to analyze and generate findings from the data. Based on the results generated from the analysis of the data, it could be concluded that in the Asian, Australian, and European continents, service quality played a more important and significant role in affecting consumers’ repurchase intention in the e-commerce industry compared to website design quality. In contrast, the results generated in this research also concluded that website design quality played a more important role in affecting consumers’ repurchase intention in the American e-commerce industry. Furthermore, customer satisfaction mediated the relationship between website design quality and service quality toward consumers’ repurchase intention in the Asian, Australian, European, and American e-commerce industry
Impact of Manufacturing Flexibility on Business Performance: Malaysian’s Perspective
Get PDFThis research aims to investigate the impact of manufacturing flexibility on business performance. The manufacturing flexibility dimensions are mix, new product, labor, machine, material handling, routing and volume flexibility. The measures for the business performance are product market performance, customer satisfaction and profitability. The impact of manufacturing flexibility on business performance has been tested using a cross sectional study employing survey methodology, conducted within five manufacturing industries in Malaysia. Data were obtained from 137 returned questionnaires, which were analyzed using correlational and regression analyses. The results of the correlation analyses indicated that the manufacturing flexibility dimensions were positively and highly correlated among themselves, thus suggesting that the dimensions were interdependent. Meanwhile, the findings of the regression analyses provided support for the idea that manufacturing flexibility has a positive and significant impact on business performance. In other words, manufacturing flexibility improves business performance. In conclusion, this empirical research provides insights and a better understanding about the relationship between manufacturing flexibility and business performance. This research allows researchers/practitioners to gain in-depth knowledge about the concept of manufacturing flexibility and its impacts
Acceptance and Use of Information Technology: Understanding Information Systems for Indonesia’s Humanitarian Relief Operations
Get PDFDisaster management includes distributing logistical assistance to disaster victims. The implementation of this distribution must occur at the right time, at an appropriate location, on target and be appropriate to the needs of the victims. This research aims to design an information system to improve the performance of disaster relief operations by managing the information while monitoring and evaluating humanitarian relief operations.Consequently, understanding the primary determinants of user acceptance behavior has become a vital aspect in the successful implementation of the information system. The Unified Theory of Acceptance and Use of Technology (UTAUT) model is a tool to investigate and give a better understanding of the factors that affect the potential users’ acceptance and use of an information system. This research used 131 different informants from different groups of potential users to measure performance expectancy, effort expectancy, social influence, and facilitating conditions. The results have shown strong relationships between four aspects of the measurements for the acceptance of all parties involved in humanitarian relief operations
Big Five Trails: A Critical Review
Get PDFThis study seeks to provide a broad and thorough review of the literature on the big five traits (BFT) and its major developments through a long history of conceptual and applied studies in many areas that have been conducted on large samples of individuals, groups and countries. The BFT is the most widely accepted and most prominent model to describe the structure of personality traits, so this study sought to identify them in order to achieve a better understanding as well as for consideration by researchers in their future studies. This review focused on the eight key observations related to the BFT. These observations are as follows: meaning of the traits; the history of the BFT model; unity or hierarchy of traits; number of the traits; three perspectives on BFT; BFT questionnaires; BFT and performance; and the need for a sixth trait. The results of the study clearly confirmed that there are problems with universal models that tend to generalize a limited number of dimensions in order to interpret personality across borders and cultures. This generalization of the models is accompanied by the numerous observations and problems mentioned in the above eight points
How Does a Salesperson Improve their Performance? The Importance Role of Customer Smart Response Capability
No full textA salesperson is the part of a company who will always meet its customers. A salesperson should have the capability of responding to the customers. This research aims at examining the importance of the salesperson’s customer smart response capability for the insurance industry in Indonesia. The respondents in this research are 317 salespeople who work in the insurance industry. This research uses structural equation modeling to process its data. The results of this research show the importance of the customer smart response capability in the insurance industry. This customer smart response capability can improve a salesperson’s performance. Additionally, the customer smart response capability mediates the influence of customer sensing on the salesperson’s performance and mediates the influence of sales training’s effectiveness on the salesperson’s performance