Factors Associated With Performance And Growth Of Firms In The Tech Industry

The business environment is in a process of continuous change, with companies looking for ways to adapt, remain competitive, and improve their performance. Rajapathirana & Hui (2018) suggest that the dynamics of the business environment demand of firms to be more flexible, agile, goal oriented and innovative in order to perform well in the ever-changing business scope.  Specifically, companies in the tech industry are most affected by changing business paradigms. Research has found that firm performance is associated with a number of factors which include organizational leadership, partnerships, financial management as well as government policy among others (Loecker & Goldberg, 2014).

Researchers, policy-makers, and practitioners have all turned to business ecosystems as a topic to study the development and Growth Of Tech Companies. In order to better understand how to support entrepreneurial growth in different types of economies, a number of studies have examined the nature, networks, institutions, and dynamics of entrepreneurial ecosystems. Rohrbeck & Kum (2018) investigated the variation in business ecosystems and suggested that the future requires of firms to expand the ecosystem’s boundaries beyond just the scope of internal operations and the traditional way of doing things.

This paper seeks to identify and explore some of the factors associated with the performance of companies in the tech industry with the help of agility and strategy. The paper’s focus is on two interviews conducted where David Solomon, the Chairman and CEO of Goldman Sachs provided his responses to a series of questions relating to companies in the tech space. Based on the interview responses, the paper seeks to identify and evaluate themes relating to company firm performance and growth. The identified themes provide an understanding of the factors associated with the performance and growth of tech companies.

In order to draw meaningful insights from the interviews, the research utilized coding as aa means of capturing all important information pertaining to the research topic, in this case the factors associated with performance and growth of firms in the tech industry. The coding process entailed two steps. The first step was concerned with reading through the interview transcripts and assigning codes to the main responses thought to provide answers to the research question. Responses which were similar in the sense of the aspect they sought to answer were awarded the same codes. The information represented by the codes represented the themes found in the interview transcripts. In this step, a total of 20 themes were identified. Therefore, there were 20 codes, each attached to each of the themes.

Findings

The second step of the coding process involved regrouping of codes with similar attributes or themes into a smaller number of codes which represent smaller and broader topics or themes of discussion. This process ensured that we had a manageable number of themes containing several topics. For example mergers % acquisitions, partnerships, collaborations and startups which were all identified as topics of discussion under coding step 1 were all grouped together into a larger and broader theme named mergers & acquisitions and partnerships. The different codes for the different topics in coding process 1 were all folded into one code representing one theme. Under this process, a total of 5 broad themes were identified. Therefore, the study ended up with only five codes each attached to each of the five themes. 

Writing memos is an important process of ensuring that all major points contained an interview transcription are captured. Memos were written on regular basis to capture and group all similar information. The memoing process was done after the coding process was complete. This was to ensure that the information attached to each of the codes was well coded.

Contrary to the process which was done in two rounds, the memoing process was only done in five rounds. The process involved the reading through the interview transcript to capture all information related to each of the five codes identified during the coding process. The first round of the memoing process involved noting down information from the interview transcripts associated with code 1 and the first theme. The second step involved writing down all necessary and important information related to code 2 and the second theme. This process went on till all necessary and important information associated with code 5 was captured.

The written memos were in line with the codes and themes identified from the interview transcripts. In total, a total of five memos were written on diverse dates between March 24^th and March 28^th. The memoing process was rather easy since it entailed picking up of only the relevant and important information from the excerpts attached to the identified codes. There was no grouping of memos since they were done based on already grouped codes.

The identified codes and generated memos played an integral part in helping identify the study’s main findings. Since each of the generated codes represented a main theme, it was an easy task identifying what opinions the interview had concerning the research question under study. These opinions were identified and evaluated by reading the generated memos since each memo contained information associated with each of the identified codes and themes. Further, the analysis involved the reading of interview excerpts associated with each of the different codes in order to really understand what the interview had to say in relation to the different questions associated with different topics of study.

Interpreting the study data is important and reasonable due to two main reasons. The first reason that it points out to the fact that the interview transcript was well understood in relation to the purpose of the research. Secondly, the analysis depicts findings to the study’s research question. Interpretation of the findings presents meaningful information to the management of tech companies on how to improve their performance and how to achieve growth. The research findings could also be used by the government in order to make information on how best to protect the interests and provide a favorable working environment for firms.

Upon analyzing the interview transcripts, it was found that a number of factors associated with the performance and growth of tech companies were identified. Based on the analysis of generated codes, five main themes were identified. These themes represented several factors of firm performance. The five main themes identified in the interview transcripts are; firm agility, mergers & acquisitions and partnerships, organizational leadership, government and foreign policy, and conflict resolution. The major findings are as discussed below;

Firm agility is found to be one of the factors associated with firm performance and growth. David Solomon suggests that firms ought to change and adapt to changing times. From the interview intercepts, he suggests that “one of the reasons Goldman Sachs has been around for 150 years is it’s had lots of periods of time where it’s faced pressure and it’s found ways to evolve and become something slightly different.” He also suggests that firms should go public in order to increase their capital and liquidity base. Another aspect of change suggested is that firms should digitize their operations. Citing an example, David Solomon suggests that a credit card which is as a result of going digital helps firms in the digital management of finances. He also suggests that going global, diverse investments, a proper risk management system and the utilization of data analytics are other aspects of firm agility associated with organizational growth and performance.

Another factor found to be linked to firm performance and growth is M&A, partnerships and collaborations. The findings of the analysis of the interview transcripts suggests that M & A helps firms in creating a scale for purposes of maintaining their position in the market. From the analysis, it is evident that companies seeking to get into partnerships should have similar goals and objectives of entry into the partnership as evidenced by the case of Apple and Goldman Sachs. David Solomon in a response to the question of collaborations suggests that this should be the future of tech companies.

The analysis identified leadership as another factor associated with the performance and growth of tech firms. From a series of interview excerpts, there exists several pointers to organizational leadership and they include; employee welfare, workforce diversity, transparency and teamwork. For the case of Goldman Sach, David suggests that the company has a flexible dress code and rules to work over the weekend in order to promote employee welfare. He also suggests that the workforce is diverse in the sense that the company is now considering putting women in leadership positions. He further says that the company exercises transparency by giving the market information about what they are doing and how they are progressing. Further, he suggests that he is surrounded by a great leadership team which ensures that the company performs well.

From the interview analysis, it is identified that government and foreign policy is another factor associated with the performance, growth and entry of firms into new markets. David Solomon suggests that tariffs aren’t good for businesses and the economy. Further, negative bilateral relations as evidenced by the case of China and the USA has a negative impact on firm performance.

The interviewee suggests that for a company to perform well, there is a need that companies should adopt proper conflict resolution protocols. From the interview excerpts, David Solomon suggests that accountants and company lawyers are best placed to handle conflicts associated with the management of finances in a company or partnership.

For well performance, there is a need that companies find ways of getting themselves out of financial crises. David Solomon suggests there is a need to listen to others as well as taking criticism but not letting the criticism define how the company is going to operate.  

Conclusion

Findings of the analysis have demonstrated that agility is one of the main drivers of organization growth and performance. As suggested by Teece et.al (2016), there is a need for organizations to adapt to the changing market paradigms as well as innovate ways of expanding their market base and improving competitiveness. The analysis also found that mergers, acquisitions, partnerships, and collaborations provide a scale for maintaining the company’s market position and brand. The findings also suggest that other factors associated with firm performance are the ability to resolve conflicts and get out of tough situations, organizational leadership, and government and foreign policy.

Based on the research findings, the study provides a number of recommendations that should be implemented by executives at Goldman Sachs: First, Asia should be viewed as a potential market for expansion. Due to the unfavorable foreign policy between the USA and China, the company should explore markets in Malaysia, Singapore and other markets in the region. Further, the study recommends that the company looks into the issue of leadership. There still exists a gender gap in leadership due to the low levels of conformity between gender and taking up leadership roles in given sectors. More women should be trained and offered leadership positions in the company. Finally, the study recommends that the executives focus more on mergers, acquisitions, and partnerships as that is the future of the financial, investment and tech industries.

The findings and recommendations will not only be useful to Goldman Sachs but will also be useful to other companies. The findings will provide insights and recommendations on what should be done by companies in order to improve their performance and growth. Companies should focus on the discussed factors (agility, leadership, M & A and partnerships, financial crises resolution and government & foreign policy) in order to make decisions concerning their future. The findings of the study could also be used as a basis for future research work. Building on the limitations of the present study which only utilized interview transcripts from the CEO of one company, future researchers should seek to analyze what the CEOs of other companies in the same or different industries have to say regarding organizational growth and performance.

Coding and memoing played an integral part in analyzing the study data. The generation of codes was a bit tiresome as it entailed identifying every important information related to the study topic. This process led to the identification of numerous issues associated with the research topic and thus several codes were generated. Owing to the cumbersome nature of dealing with numerous codes, the study had to adopt a second step of coding which involved regrouping of codes with similar issues in terms of answering the research question into a smaller and manageable number of codes. During this process, some issues were left out as they could not align well with any of the major themes identified upon recoding. The writing of memos was a rather easy process since it capitalized on interview excerpts relating to the different codes identified during coding. This process ensured that all important information associated with the generated codes was captured. Any overlap in information was considered and all irrelevant intercepts aligned with the themes they sought to reflect.  

In order to capture all important information for analysis, I planned to conduct write each memo on a different day in order to ensure that all excerpts associated with each of the identified themes were identified. However, it was difficult keeping up with the deadline of the project. I, therefore, had to write two memos on one particular day, which could have had an impact on the accuracy and amount of relevant information captured in the memos. Another challenge encountered is that I had anticipated using a qualitative data analysis software for analyzing the interview transcripts, specifically NVIVO. Due to my limited knowledge of the software and the lack of time to learn how to use it, I had to manually generate my codes using MS Word. Further, I had anticipated finding meaningful information regarding the research topic from both interviews. However, interview 2 contained limited information and just focused on Gold Sach’s focus in the Asian market. Most of the analysis was therefore conducted based on information derived from interview 1 transcripts.  

References

De Loecker, J. and Goldberg, P.K., 2014. Firm performance in a global market. Annu. Rev. Econ., 6(1), pp.201-227.

Rajapathirana, R.J. and Hui, Y., 2018. Relationship between innovation capability, innovation type, and firm performance. Journal of Innovation & Knowledge, 3(1), pp.44-55.

Rohrbeck, R. and Kum, M.E., 2018. Corporate foresight and its impact on firm performance: A longitudinal analysis. Technological Forecasting and Social Change, 129, pp.105-116.

Teece, D., Peteraf, M. and Leih, S., 2016. Dynamic capabilities and organizational agility: Risk, uncertainty, and strategy in the innovation economy. California management review, 58(4), pp.13-35.