Kevin C. K. Lam

Implementing the balanced scorecard using the analytic hierarchy process & the analytic network process

The balanced scorecard (BSC) is a multi-attribute evaluation concept that highlights the importance of non-financial attributes. By incorporating a wider set of non-financial attributes into the measurement system of a firm, the BSC captures not only a firms current performance, but also the drivers of its future performance. Although there is an abundance of literature on the BSC framework, there is a scarcity of literature on how the framework should be properly implemented. In this paper, we use the analytic hierarchy process (AHP) and its variant the analytic network process (ANP) to facilitate the implementation of the BSC. We show that the AHP and the ANP can be tailor-made for specific situations and can be used to overcome some of the traditional problems of BSC implementation, such as the dependency relationship between measures and the use of subjective versus objective measures. Numerical examples are included throughout.

The investment opportunity set, director ownership, and corporate policies: evidence from an emerging market

Abstract This paper provides evidence of the association between a firms investment opportunity set (IOS), director ownership, and corporate policy choices. Using a sample of growth and non-growth firms in an emerging Asian market, we find that the IOS theory has significant explanatory power in the financing, dividend, executive compensation, and leasing aspects of corporate policies. Growth firms have lower debt-to-equity ratios and dividend yields, pay higher cash compensation and bonus amounts to their top executives, and finance a higher proportion of their asset acquisitions through operating leases. We also find that director ownership moderates and counteracts the association between IOS and corporate policies. Our results are consistent with contracting theory predictions that high director ownership mitigates the need for incentive or bonus compensation plans in growth firms.

East Meets East And East Meets West: The Case Of Sino-Japanese And Sino-West Joint Ventures In China

This study tests the effects of cultural differences on the behaviour and performance of joint-ventures. We first study the relationship and predictions of two relevant theories, i.e., the theory about cultural diversity and that about cultural distance. After that, we apply the theories to study the behaviour and performance of Sino-Japanese and Sino-West joint ventures (JVs). Processing data from 2718 such JVs in different parts of China, we show evidence supporting our arguments. Our paper concludes with a discussion on the implications of the findings.

Breaking into China: Strategic Considerations for Multinational Corporations

Abstract International firms can adopt different strategies when breaking into an emerging market such as China. This article studies three strategic choices facing multinational corporations (MNCs): labour-intensive vs. capital- and technology-intensive; coastal vs. inland location; and joint venture vs. wholly-owned investment. Using hierarchical regression analysis on data from 223 large, foreign-invested electronics firms in China, we offer interesting findings as to how and why different strategies affect the performance of foreign direct investment. We show that MNCs pursuing a capital- and technology-intensive strategy in China have a significantly better performance than those pursuing a labour-intensive strategy. Our study also documents significant interaction effects between ownership arrangements and technology intensity on firm performance. On the other hand, the effect of a firms location and ownership arrangements appear insignificant. To compete successfully in China today, firms cannot just focus on cheap labour and the production of low value-added goods; a capital- and technology-intensive strategy is more rewarding.

Firm resource and first mover advantages: A case of foreign direct investment (FDI) in China

This paper examines the relationship between firm resources and first-mover advantages with regard to foreign direct investment (FDI) in China. While this study replicates some previous research on the issue, it also builds on the previous research by developing new theoretical arguments and adopting different research methods. Based on research on the resource-based view of the firm, we hypothesize that firm resources will moderate the relationship between the timing of entry and firm performance. Empirical analyses of data from a sample of MNEs competing in China show evidence supporting our hypotheses.

Changing strategic postures of overseas Chinese firms in emerging Asian markets

One of the most important cultural values in Chinese societies is family‐oriented collectivism. This cultural value has had much impact on the structures and strategies of overseas Chinese firms. Influenced by this cultural value, traditional Chinese firms prefer family ownership and stress hierarchy and centralized decision making, which in turn influence the business strategies of these firms. In recent years, however, the majority of Chinese societies have been in transition, and traditional Chinese culture is also changing. These developments have brought about changes in strategies of the overseas Chinese firms. To study these changes, this paper focuses on the manufacturing industries in a major emerging market, China, and reports evidence of changes in both culture and business strategy of overseas Chinese firms. Concludes with a discussion on the implications of the findings for both researchers and practitioners.

High-tech industries and competitive advantage in emerging markets: A study of foreign telecommunications equipment firms in china

Abstract This paper deals with the issue of competitive advantage among high-tech industries in emerging markets. It is argued that, for high-tech multi-national companies (MNCs) competing in emerging markets, technology leadership generates some very important competitive advantage that past research has not studied sufficiently. Data from 408 foreign-funded firms competing in Chinas telecommunications equipment industry provides convincing evidence supporting this argument. The results of this study highlight the need for high-tech firms to maintain technology leadership in international markets, including emerging markets. The paper concludes with a discussion on the implications of the findings.

Manufacturing firms’ performance and technology commitment – the case of the electronics industry in China

This study deals with one strategic issue for manufacturing firms operating in Asian emerging markets – technology commitment or investment. It compares two different approaches adopted by international manufacturing firms in China, one of the major emerging markets in the world. Analyzing the data from the 100 largest manufacturing firms (in terms of market share) competing in one of China’s manufacturing industries, i.e. electronics, this paper shows an interesting positive relationship between technology investment and firm performance in China’s manufacturing industries. This paper concludes with a discussion on the implications of the findings.

Privatization and Performance: The Experience of Firms in China

This article investigates the effects of privatization on corporate performance in China. We focus on two very different industries: the manufacturing industry--the largest (relatively) competitive industry in China--and the basic material industry--the largest industry protected and closely monitored by the central government. We find that privatization to the domestic public has only a small positive effect on corporate performance for the manufacturing industry, but does not have any effect for the basic material industry, suggesting that privatization does not work when competition does not prevail. We also find that privatization to institutions hurts corporate performance for the manufacturing industry, but not for the basic material industry, suggesting that control by legal person shares often means additional layers of bureaucracy and higher agency costs, unless the central government closely monitors the firms, mitigating the agency problems.

Complete or incomplete information infrastructure, implications for attention-focus in decision-making

To help overcome the difficulty of information overload, we conducted simulations to show the importance of information infrastructure in decision-making. Using simulations based on a NK-model, we show that it makes a difference in results whether decision-makers has a complete information infrastructure. Comparing results from two simulations with or without a complete information infrastructure, we find that the attention structure with a complete information infrastructure is significantly better. We then discuss the issue of developing a complete information infrastructure with some real-world examples.