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- Management Dynamics : Journal of the Southern African Institute for Management Scientists
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- Volume 23, Issue 1, 2014
Management Dynamics : Journal of the Southern African Institute for Management Scientists - Volume 23, Issue 1, 2014
Volume 23, Issue 1, 2014
Source: Management Dynamics : Journal of the Southern African Institute for Management Scientists 23, pp 2 –25 (2014)More Less
This study introduces, for the first time, two new terms to the capital structure literature, namely 'operational optimal capital structure' and 'discounted value premium'. Operational optimal capital structure is defined as the capital structure that allows a firm the financial flexibility to enable it to access and restructure its financing at minimal cost. Discounted value premium is defined as the spread between the value of the firm at theoretical optimal and operational optimal leverages. The study documents, again for the first time, that manufacturing, mining and retail firms listed on the Johannesburg Stock Exchange (JSE) have a significant positive discounted value premium. The discounted value premium is greatest for mining firms and smallest for retail firms. It is also greatest for medium-sized firms and smallest for small firms. These results imply that the operational optimal capital structure is lower than the theoretical optimal capital structure, and hence a positive discounted value premium.
Source: Management Dynamics : Journal of the Southern African Institute for Management Scientists 23, pp 26 –57 (2014)More Less
Attempts to develop actuarial selection decision-rules to select employees for specific positions, as well as attempts to validate clinical or subjectively developed mechanical selection procedures, are frequently thwarted because of the inability to obtain adequate predictor and criterion data for a sufficiently large sample. The root of the problem lies in the assumption that the constitutive definition of the criterion construct is unique for each specific job. If this were the case, separate validation studies would have to be conducted for each job, utilising a job-specific performance measure as the criterion. The problem, however, is that quite often the number of employees that hold the specific position is too small to technically develop and justify a selection decision-rule in a validation study. The situation could be salvaged if the constitutive definition of the criterion construct were not unique to each and every job. If a family of jobs shared a common constitutive definition of performance, it would then become possible to derive an actuarial decision-rule for all the jobs that are part of the family, and to psychometrically evaluate the resultant decision-rule in terms of fairness and utility if a valid and reliable measure of the generic performance construct could be developed. In this study, a generic non-managerial performance construct is constitutively defined based on previous studies in the area of generic performance measurement. The development and validation of a multi-rater, generic, non-managerial performance measure is thus the purpose of the study.
Planning flexibility and entrepreneurial orientation : a focus on SME performance and the influence of environmental perceptionsSource: Management Dynamics : Journal of the Southern African Institute for Management Scientists 23, pp 58 –73 (2014)More Less
Recognising the importance of an entrepreneurial orientation (EO) to the survival and performance of a firm this study's contribution is to empirically test the linkage between planning flexibility, EO and firm performance. Moreover, it is argued that this relationship is influenced by environmental perceptions, since small and medium-sized enterprises (SMEs) are usually more vulnerable than larger firms when facing a dynamic external environment. Using a structured questionnaire, a sample of 133 SMEs was surveyed. Regression analysis was used to address the proposed hypotheses. The results reveal a weak but positive relationship between planning flexibility, EO and performance. Additionally, the EO dimension of proactiveness was positively related to SME performance, resulting in the relationship being more positive when the environment is perceived as more munificent and hostile. Practical implications are that owner-managers need to understand and leverage the practice of planning flexibility in a manner that will lead to higher levels of EO.