Essays on supplier responsiveness and buyer firm value - Nyenrode ...

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have their own limitations. Some of these limitations have to do with the way in which data are collected and employee motivation while compiling them. For instance, San Miguel (1997) has argued that they may not be very reliable since many times, the data have been complied by people who do not have sufficient training or familiarity with accounting such data. Furthermore, he argues that some managers may lack interest when such data are being compiled, which may adversely affect their reliability. We also use the definitions delineated in Chapter 2 to define the five variables in the model. 6 This is because the model in Chapter 2 is the basis for comparison of objective and subjective measures in the current study. We only modify the way we measure the variable buyer firm value. For the current model, we use the net income difference between the years 2009 and 2011 in the SEM model instead of the subjective measures used in Chapter 2. 4.2 Intended Theoretical Contribution To our knowledge, this is the first study to examine the issue of objective versus subjective performance measures in the context of supplier responsiveness or market orientation and buyer IdRR. In the current study, we aim to make four contributions. First, we provide evidence that the type of data used for supplier responsivenessidiosyncratic risk-performance analysis can change the strength and direction of the relationships in the Chapter 2 model. We were able to show that to some extent, there is a disconnect between key indicators when subjective and objective data are used. We believe this is because of a lack of metric substitutability rather than a problem with the model itself. Second, we explain why managers’ evaluations may not be in line with the objective data indicators. For example, because objective data are calculated at a macro-organizational level, they may not reflect the performance of the various functions at different levels within the organization. On the other hand, a manager’s heuristic ability can shed light on latent areas of performance that traditional objective performance measures cannot. Third, we explain that financial managers often fail to see the value of marketing initiatives because they do not understand the intangible value such initiatives create. Fourth, from a managerial perspective, our study suggests specific steps that businesses can implement to avoid the dissonance between subjective and objective measures. 4.3 Specific Contribution to Chapter 2 The model in Chapter 2 contributes to the literature by providing evidence that market orientation or supplier responsiveness is negatively related to IdRR. However, since the model is only based on perceptual data (for both market orientation and performance), it remains to be seen whether the model in Chapter 2 is applicable if objective performance data are used in tandem with subjective market orientation data. For any model to be generalizable, its findings should be replicated with both subjective and objective data sources. One of the strengths of a theory is fulfilling this criterion. Our current study elaborates the model in Chapter 2 by testing it using perceptual and objective performance data. We believe that the main hypothesis and 6 One issue is that our perceptual measures for firm value and objective measure of accounting profits are not the same. However, since accounting profits are indicators of the firm’s value, we have used them for this analysis. Moreover, cash flows and accounting profits are positively correlated. Current accounting indicators signal to the market how well the company is doing and would be an incentive for investors to purchase stocks if profits are good. This would in turn drive up the value of the stock because the market would anticipate increased future earnings. 98
theoretical contribution regarding the market orientation-IdRR-performance relationship is supported by objective accounting data. We found differences in the significance of the hypothesis tests in Chapter 2, which we explain these differences by observing that numerous previous studies with arrived at different results between subjective and objective indicators. This may have more to do with the inherently different nature of objective metrics rather than a rationale flaw in the model. In summation, the current study has tested whether the model developed in Chapter 2 is more likely to hold true when subjective performance data are used compared to objective performance data. The rest of this study is organized as follows. We first present the different focuses of previous studies that have examined the market orientation and performance relationship. Next, we present the three categories of previous studies. Then we generate hypotheses from a literature synthesis. We describe our data collection process and analyze the data. We compare our hypothesized model with the model developed in chapter 2. Finally, we discuss the results and the academic contributions and managerial implications of our research. In the end, we describe limitations of our current research and present our conclusions. 4.4 Hypothesis Development In the marketing literature, three kinds of market orientation performance studies exist. The first only use subjective measures, the second only use objective measures, and the third use both objective and subjective measures. The first category often finds that market orientation is positively associated with subjective performance measures (Anderson et al., 1994). Subjective indicators are used most often to validate the market orientation and performance relationship (Gonzalez-Benito & Gonzalez-Benito, 2005). It is expected that if the same respondent is used for perceptual as well as performance measures, these measures should be aligned with one another. Since the model in chapter 2 uses subjective process and performance measures, it falls within this first category of studies. However, this also is a weakness of the model because whether it would hold true if tested with objective data has not been examined. The second category of studies finds that market orientation is positively associated with objective measures (Jaworski & Kohli, 1993). We conducted held informal conversations with B2B managers to find out why objective metrics mattered when measuring the market orientation and performance linkage. Managers believed that objective metrics mattered because they were developed by a rigorous scientific process that was communicable to employees. Furthermore, in their opinion, objective metrics were less susceptible to misinterpretation because of their widespread use. Third, they helped communicate a company’s performance to financial markets, but their relevance within the firm was not of the same magnitude as it was for the financial markets. Fourth, since many objective measures are standardized, they can be used for benchmarking against competitors. Fifth, they believe that objective metrics have greater sway with external stakeholders such as financial institutions. Despite numerous advantages of objective metrics, managers did not believe that objective metrics could truly capture all the intangible nonfinancial value created by marketing investments and maneuvers. The implications of these opinions are that subjective and objective measures will not always reinforce each other. This trend is also reflected within the literature. For instance, Esslemont 99
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ISBN 978-90-8980-055-8 © M. Abrahi
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Examination Committee Supervisor: P
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2.3 DEVELOPMENT OF THE CONCEPTUAL M
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5.1 RESEARCH FINDINGS 114 5.2 OVERA
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List of Tables Table 2.1 Representa
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PREFACE Oscar Wilde once said, “I
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Chapter 1 Introduction to the Thesi
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Figure 1.1 Mckinsey Survey Results
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1.4 Scope PhD thesis This thesis fo
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Netherlands. We used the maximum li
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2.1 Introduction A central tenant o
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only provide an assessment of the s
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Table 2.1 highlights several promin
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other hand, they later argue that m
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Therefore, there is a convergence i
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usiness performance, firms need to
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means is that the more better a str
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Supplier responsiveness or market o
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Naryandas, 1995). Further, idiosync
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They might also include the ease wi
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they ask about intimate supplier in
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Table 2.2 Modified Items of the MAR
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Table 2.2 Modified Items of the MAR
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Page 61 and 62: In the third step, we used maximum
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Page 121 and 122: Summary in English This dissertatio
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9.The supplier seems to have good i
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17. The supplier takes a very long
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25. If the supplier were to find ou
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33.Does your strategic supplier als
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41.To what degree do those specific
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Supplier Brand Value 51.How likely
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Appendix B Scatter Plot Diagrams fo
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