External growth strategies and organizational performance in emerging markets

Abstract

Purpose Inter-organizational trust has a vital role in any external trade relationship. However, there are not many studies relating to growth strategies and inter-organizational trust in firms in emerging markets. The purpose of this paper is to identify and compare the effect of external growth strategies on the organizational performance of companies and to examine the mediating role of inter-organizational trust between growth strategies and organizational performance. Design/methodology/approach Data were collected from 240 senior managers from public listed companies (PLCs) in Malaysia and were analyzed using analysis of a moment structures. Findings The findings indicate that growth strategies have a significant effect on organizational performance. Strategic alliances and acquisitions also have significant effects on organizational performance. Moreover, inter-organizational trust fully mediates the effect of growth strategies on organizational performance. Research limitations/implications As purposive sampling was used, selecting only managers with experience of the issues concerned, any common findings are likely to be generalizable to managers in similar situations. Practical implications Building inter-organizational trust among companies and relying on strategic alliance and acquisition, rather than merger, will sharpen their competitiveness and enable them to survive and thrive. Social implications The increase in organizational performance of PLCs will have a significant effect on employment and on gross domestic product (GDP), which will have a beneficial effect on citizens. Originality/value Studies that are related to these variables in emerging economies are still in their infancy. This study compared the effect of external growth strategies and contributed to the literature in the area of trust and external growth strategies.

Quality of Tax Services, Moderated by Trust in State Internal Revenue Service and Voluntary Tax Compliance Behaviour among Individual Taxpayers in South-West, Nigeria

“…This is more prominent in developing countries than developed. In developing countries all over the world, tax non-compliance has become a major challenge facing government and tax administrators as this affects revenue performance and government incapability to perform and provide the essential developmental projects and programmes as expected by the citizenry (Alaaraj, Mohamed, & Ahmad Bustamam, 2018). According to Terkper (2003) tax revenue loss in a developing country as a result of non-compliance is proportionately higher than what is obtainable in developed countries because of the large number of the informal sectors operators which can be regarded as hard to tax sector.…”

Leadership Style and Turnover Intention: The Moderating Role of Supervisor Trust

“…Organizations invest in employees and develop their skills and capabilities to create competitive advantage and improve their Organizational performance (OP). Researchers pointed out those employees are the source of resource and capabilities and their knowledge has a major impact on the competitive advantage and the OP of organizations [6], [20], [22], [27]. Therefore, when some employees leave voluntarily their jobs, part of the resources and the capabilities of the organizations will go with them and this will impact the competitive advantage as well as the performance of these organizations [28].…”

“…In social relations, individuals attempt to maximize the ratio of profits to costs [47]. Trust is the fundamental principle of social exchange and the backbone of interpersonal and inter-organizational relationships [27] [48]. [49] pointed out that trust is a key element of the social exchange theory and used the theory to explain the relationship between trust and uncertainty and their effect on the performance of alliance.…”

Organizational Justice and Turnover Intention: The Mediating Role of Quality of Working Life

“…Organizations invest in employees and develop their skills and capabilities to create competitive advantage and improve their organizational performance (OP). Researchers pointed out that employees are the source of resource and capabilities and their knowledge has a major impact on the competitive advantage and the OP of organizations [12]- [15]. Therefore, when some employees leave voluntarily their jobs, part of the resources and the capabilities of the organizations will go with them and this will impact the competitive advantage as well as the performance of these organizations [16].…”