Market orientation and stock-based incentives

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en Kylmänen, Ville 2015-11-04T13:21:17Z 2015-11-04T13:21:17Z 2015
dc.description.abstract Objective of the study: In my thesis, I study the effect of market orientation on firms' adoption of stock-based incentive compensation in Finland. I also research the nature of the relationships between market orientation and the different types of stock-based incentive schemes. The idea of the study is to contribute to the literature on stock-based compensation determinants as well as the market orientation related literature. I expect to find a positive relationship between market orientation in firms and their adoption of a stock-based incentive, given the broad consensus in agency and pay-for-performance literature that stock-based incentives support risk-taking, are well suited to incentivize the undertaking of long-term projects, and induce effort. Since market orientation has been shown to lead to increased firm performance, and is by its nature an orientation that takes time and the right resources to develop, I find it logical that firms striving for market orientation would employ stock-based compensation among their management and key personnel. Methodology: The thesis uses a novel dataset combining compensation systems and survey data to assess the research questions. The Stratmark strategic management surveys conducted by the Aalto University School of Business Marketing department in 2008, 2010 and 2012 are matched to incentive scheme data from Alexander Incentives and selected control variables, to assess my research questions pertaining to these topics in detail. My sample is comprised of 155 firm-year observations from Finnish stock-listed companies, for which concurrent survey and incentive scheme information is available. Findings and conclusions: I find that highly market oriented firms are in fact more likely to have in place a stock grant incentive scheme. Findings on the use of option schemes, or simultaneous use of both option and stock grants are inconclusive, but hint in the direction of a negative association with market orientation, instead of the hypothesized positive one. en
dc.format.extent 54
dc.language.iso en en
dc.title Market orientation and stock-based incentives en
dc.type G2 Pro gradu, diplomityö fi Kauppakorkeakoulu fi School of Business en
dc.contributor.department Rahoituksen laitos fi
dc.contributor.department Department of Finance en
dc.subject.keyword stock-based incentives
dc.subject.keyword pay-for-performance
dc.subject.keyword market orientation
dc.identifier.urn URN:NBN:fi:aalto-201511054982
dc.type.dcmitype text en
dc.programme.major Finance en
dc.programme.major Rahoitus fi
dc.type.ontasot Master's thesis en
dc.type.ontasot Pro gradu tutkielma fi
dc.subject.helecon rahoitus
dc.subject.helecon financing
dc.subject.helecon palkkiot
dc.subject.helecon remuneration
dc.subject.helecon kannustaminen
dc.subject.helecon incentives
dc.subject.helecon osakkeet
dc.subject.helecon shares
dc.ethesisid 14085 2015-07-16
dc.location P1 I

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