We adopt a risk-taking capability perspective to study the determinants of risk-taking behavior. We introduce the concept of “risk-taking capabilities”—absorptive capacity, network resources, and organizational slacks—arguing that recognition of threat and risk-taking capabilities will influence risk-taking behavior, while the theoretical debate on threat recognition needs to be clarified. Then, drawing from prospect theory, threat rigidity hypothesis, and resource-based views of firms (RBV), we hypothesize that firms’ performance, risk-taking capabilities, and their interaction will positively correlate with risk-taking behavior. We test our hypotheses using the data from Taiwan's high technology industries. Our analyses lend support to the threat rigidity hypothesis, and risk-taking capabilities are indeed positively correlated with firms’ risk-taking behavior and also moderate the relationship between past performance and risk-taking behavior.
This study extends research on downsizing strategies and influences of an economic downturn to examine the relationship between downsizing strategies and firm performance, and to clarify how a firm's downsizing strategies interact with an economic downturn to affect firm performance. Offering models predominantly based on network, efficiency wage and organization theories, this study tests hypotheses using the Taiwan Economic Journal Financial Data Bank to collect data on 436 listed Taiwanese companies from 2005 through 2009 to examine the impacts of three popular downsizing strategies -layoffs, pay cuts and organizational slack reductions -on firm performance. The results indicate that downsizing may not always be the appropriate strategy for improving firm performance because downsizing with layoffs and reduction of organizational slacks may leave the firm at an inappropriate size, thus, negatively affecting firm performance, while downsizing on pay cuts may not negatively affect firm performance, but it may not be an effective strategy to use in the face of an economic downturn. These findings provide researchers and business practitioners with evidence about firms' responses to an economic downturn and the effectiveness of downsizing strategies for improved performance from a multidimensional perspective.
This study aims to examine whether the compliance of environmental policies can sustain firm economic performance, and whether a timing issue is relevant to firm economic sustainability in pursuit of eco-friendly efforts. Offering models predominantly based on the institutional theory, this study tests hypotheses using data from 284 companies in the electronics sector in Taiwan during the period from 1997 to 2010. The findings reveal that the execution of environment policies mostly improves firm economic sustainability and some joint green efforts can even strengthen such sustainability; however, firms aiming to sustain their economic performance should not hasten to undertake eco-friendly efforts, implying that first movers may not be guaranteed firm economic performance. Thus, managers should carefully strategize their green efforts to comply with environmental policies, and execute them in due course to prevent disadvantages, such as market uncertainty and complexity of green practices, while conquering organizational inertia.
This study examines the efficacy of the smiling curve, and clarifies the relationship between downsizing strategies (advertising, marketing, and research and development, respectively) and firm performance specifically in an economic downturn. This study tests hypotheses using 1996–2010 data from theTaiwan Economic Journalon 436 listed Taiwanese companies. The results indicate that the benefits for firms to follow the smiling curve may not occur in the short term and that downsizing strategies may not always be the appropriate strategy to improve firm performance. During an economic downturn, downsizing strategies do not appear to enhance firm performance, that is, the smiling curve should not frown during an economic downturn to enhance firm performance.
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