article · Business Process Management Journal
Competitive strategies, specifically designated as CLS and DS strategies, positively influence the working capital management efficiency of companies. Analysis of 235 non-financial companies across eight active industries in the United States between 2016 and 2020 demonstrates that working capital management efficiency varies significantly according to business size and sector. Larger enterprises and firms operating within the communication services industry achieve higher efficiency levels. Furthermore, the efficiency of working capital management showed no notable difference when comparing the period before the COVID-19 pandemic to the period during it. These insights provide corporate decision-makers with empirical evidence on how distinct competitive approaches and firm characteristics affect operational efficiency across diverse market environments.
Managing short-term capital effectively is essential for enterprise stability and continuous operational improvement. By showing how specific competitive strategies and corporate scale influence working capital efficiency, this research helps corporate leaders and financial managers align strategic positioning with day-to-day resource management, regardless of broader external shocks like the COVID-19 pandemic.
The insights can be applied by corporate strategists, financial planners, and operational consultants seeking to benchmark and improve working capital performance based on firm size and industry sector. As an empirical analysis of historical corporate data from the United States, the work offers strategic guidance rather than a commercial product, positioning it as an applied analytical framework ready for direct managerial consideration.
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Purpose This study examines the effects of CLS and DS on companies' WCME and analyses the differences in WCME at company and market levels. Design/methodology/approach This study adopts the DEA approach, regression, differences, and additional analyses to achieve its objectives. This study employs 235 non-financial companies and 1,175 company-year observations from eight active industries in the United States from 2016 to 2020. Findings The findings indicate that CLS and DS strategies positively influence companies' WCME. Additionally, WCME differed across size categories and industries, with large companies and those operating in the communication services industry showing better WCME. By contrast, WCME did not differ between the periods before and during the COVID-19 pandemic. Practical implications This study scrutinizes the impact of CLS and DS strategies on companies' WCME to bridge the gap in this field. It extends the investigation of competitive strategies as explanatory variables for a company's WCME and examines the differences in companies' WCME at the company and market levels, which may assist decision-makers in improving their strategies and efficiencies for continuous improvement. Originality/value This study enhances current knowledge by uncovering the influence of CLS and DS strategies on improving companies' WCME, an underexplored topic. It also explores companies' WCME trends and patterns regarding company size, industry type, and the pandemic period to draw interesting conclusions about the essence of WCME.
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DOI: 10.1108/bpmj-12-2023-0953
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