How much does industry matter, really?

Article Abstract:

A study was conducted to examine how the profitability of firms is influenced by their industry, corporate parents, business characteristics and the year. The sample consisted of 72,742 observations within particular four-digit SIC categories from 1981 to 1994, which translate to an average of 5,196 business segments annually. Findings revealed that 32% of the aggregate variance in profitability was explained by business-specific effects, followed by industry (19%), corporate-parent effects (4%) and year (2%). Results also found that their impacts varied significantly across major economic sectors, with industry effects responsible for a smaller fraction of profit variance in the manufacturing sector but contributing to a larger portion in lodging and entertainment, services, wholesale and retail trade, and transportation. Finally, industry, corporate-parent and business-specific effects were found to be intricately interconnected.

Research, Performance, Profits, Holding companies, Organizational effectiveness, Industry, Industries, Corporate profits

---

Order backlogs and strategic pricing: the case of the U.S. large turbine generator industry

Article Abstract:

A study was conducted to examine the usefulness of game theory for strategic management through a theoretical and empirical analysis of price competition during production backlogs in the turbine generator industry. Strategic and nonstrategic hypotheses about the association between relative prices and backlogs were developed wherein price was modeled as having short-run commitment value. The hypotheses also shared several assumptions, which include short run operations, focus competitor with identical marginal costs, and an inelastic throughput demand. Results indicated that strategic analysis offers a significant explanatory power than non-strategic analysis with respect to the dependence of relative prices on backlog levels in the large turbine generator industry.

Motor and Generator Manufacturing, Motors and generators, Gas Turbine Generators, Management Dynamics NEC, Pricing Policy, Management, Pricing, Management techniques, Factory orders, Gas turbine power plants, Turbine industry, Game theory

---

Comment on "Industry, corporate and business-segment effects and business Performance: A Non-Parametric Approach" by Ruefli and Wiggins

Article Abstract:

The basic purpose of descriptive decomposition techniques is reviewed and the argument stressing that they offer no information about the drivers of business performance or the mechanisms by which performance is generated is discussed. A focus is laid on distortions in estimates that can arise when the underlying sample of data does not represent the population accurately.

United States, Business performance management

Similar abstracts:

• Abstracts: Consequences of measurement problems in strategic management research: The case of Amihud and Lev. Market value effects of acquisitions involving internet firms: a resource-based analysis
• Abstracts: A dominant lethal genetic system for autocidal control of the Mediterranean fruitfly. Transposon-free insertions for insect genetic engineering
• Abstracts: Discussion of 'How does changing measurement change management behaviour? A review of the evidence'. Government concerns and tensions in accounting standard-setting: the case of accounting for the Private Finance Initiative in the UK
• Abstracts: The accuracy of IPO earnings forecasts in Thailand and their relationships with stock market valuation. Is China's securities regulatory agency a toothless tiger? Evidence from enforcement actions

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.