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Macroeconomic Correlates of Organizational Growth

This presentation by Rupert Rhodd, PhD, and William Lawrence, DBA, explores the relationship between macroeconomic variables and organizational growth in Jamaica. It delves into economic and organizational growth definitions, examines relevant data, and analyzes the implications of correlation studies. Key macroeconomic indicators, such as GDP growth, inflation, and interest rates, are assessed for their impact on company revenue and return on equity. The discussion highlights corporate growth strategies emerging from the Jamaican market and addresses future directions for research in the context of economic conditions.

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Macroeconomic Correlates of Organizational Growth

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  1. Macroeconomic Correlates of Organizational Growth Rupert Rhodd, PhD William Lawrence, DBA

  2. Outline of Presentation • Introduction • Economic Growth • Organizational Growth • A Look at the Data • Macroeconomic Variables • Implications from Correlation Analysis • Where do we go from Here?

  3. A Crucial Question Do certain macroeconomic variables promote or impede organizational growth in Jamaica?

  4. Real GDP Growth

  5. Average Inflation rate

  6. Exchange Rate Variable

  7. Interest Rates: 6 Month T-Bills & Lending Rate

  8. Main Market: Firms listed = 84 Firms reporting losses = 49 Firms recovered = 25 Corporate growth strategies: Product diversification = 47 Mergers/Acquisitions = 23 International Expansion = 12 Vertical Integration = 8 JAMAICA STOCK EXCHANGE (1969-2011)

  9. Case Studies

  10. Company Growth Orientation

  11. CHANGING BUSINESS PORTFOLIOS • 1985 • BNS – banking • DG – brewed products, soft drinks, wines, spirits, printing • GLNR – newspapers, forms, books • 1990 • BNS – banking • DG – brewed products, soft drinks, wines, spirits, printing, exporters of agri products • GLNR – newspapers, forms, books, Gleaner UK • 1995 • BNS – banking, building society • DG – brewed products, soft drinks, wines, spirits, printing, exporters of agri products • GLNR - newspapers, forms, books, Gleaner UK, Gleaner N.A. • 2000 • BNS - banking, building society, insurance • DG – brewed products • GLNR - newspapers, forms, books, Gleaner UK, Gleaner N.A. • 2005 • BNS - banking, building society, insurance • DG – brewed products, Mktg UK • GLNR - newspapers, books, radio, Gleaner UK, Gleaner N.A. • 2010 • BNS - banking, building society, insurance, wealth • DG – brewed products, Mktg UK • GLNR - newspapers, radio, Gleaner UK, Gleaner N.A.

  12. Company Revenue Growth

  13. Company Return on Equity

  14. Descriptive Statistics N = 37 (Data from PIOJ and Company Annual Reports)

  15. Interest Rates and Exchange Rate as Correlates of Real Growth of Firm Revenues Revenue Growth Adjusted for inflation * p < .05, ** p < .01 N = 37, Spearman two tailed tests

  16. Interest Rates and Exchange Rate as Correlates of Return on Equity (ROE) Return On Equity (ROE) * p < .05, ** p < .01 N = 37, Spearman two tailed tests

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