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Customer Concentration, Managerial Ability, and Corporate Performance

ABSTRACT: We examined whether and how managerial ability affects the relationship between customer concentration and corporate performance. Based on a novel measure of managerial ability, we found that customer concentration has a significant negative effect on corporate performance, while managerial ability can mitigate this effect. The negative effect of customer concentration is only significant in the subsample of low ability and lower efficiency in asset utilization, while the moderating effect of managerial ability is significant for all levels of asset utilization efficiency and more significant for firms with a lower gross margin. The results are robust to numerous robustness tests and endogeneity concerns. Additional analysis of mechanisms shows that in addition to superior operating ability, competent managers select major customers who are more beneficial to their company and decrease the sensitivity of their research and development (R&D) investment to customers. These findings indicate that the heterogeneity of managerial ability plays an important role in the supplier–customer context when the supplier firm generally faces one or more concentrated customers.

SUBMITTER: Jin G

PROVIDER: S-EPMC8801520 | biostudies-literature |

REPOSITORIES: biostudies-literature

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Project description:Despite widespread adoption of decentralization reforms, the impact of decentralization on health system attributes, such as access to health services, responsiveness to population health needs, and effectiveness in affecting health outcomes, remains unclear. This study examines how decision space, institutional capacities, and accountability mechanisms of the Intensified Mission Indradhanush (IMI) in India relate to measurable performance of the immunization program. Data on decision space and its related dimensions of institutional capacity and accountability were collected by conducting structured interviews with managers based in 24 districts, 61 blocks, and 279 subcenters. Two measures by which to assess performance were selected: (1) proportion reduction in the DTP3 coverage gap (i.e., effectiveness), and (2) total IMI doses delivered per incremental USD spent on program implementation (i.e., efficiency). Descriptive statistics on decision space, institutional capacity, and accountability for IMI managers were generated. Structural equation models (SEM) were specified to detect any potential associations between decision space dimensions and performance measures. The majority of districts and blocks indicated low levels of decision space. Institutional capacity and accountability were similar across areas. Increases in decision space were associated with less progress towards closing the immunization coverage gap in the IMI context. Initiatives to support health workers and managers based on their specific contextual challenges could further improve outcomes of the program. Similar to previous studies, results revealed strong associations between each of the three decentralization dimensions. Health systems should consider the impact that management structures have on the efficiency and effectiveness of health services delivery. Future research could provide greater evidence for directionality of direct and indirect effects, interaction effects, and/or mediators of relationships.

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Customer Concentration, Managerial Ability, and Corporate Performance

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