The Impact of a Company’s Management Strategy on Its Profitability, Stability, and Growth: A Focus on the Information Security Industry

Hyun Kang and Hyung Jong Na ()
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Hyun Kang: Department of Security Management, Kyunggi University, 154-42, Gwanggyosan-ro, Yeongtong-gu, Suwon-si 16227, Gyeonggi-do, Republic of Korea
Hyung Jong Na: Department of Accounting and Taxation, Semyung University, 65, Semyeong-ro, Jecheon-si 27136, Chungcheongbuk-do, Republic of Korea

Sustainability, 2024, vol. 16, issue 12, 1-21

Abstract: This study concentrated on a business report that typically reveals a company’s non-financial information, aiming to uncover its strategic direction. Using text-mining techniques, the research extracted and analyzed the report’s overview sections, identifying key strategic themes categorized into the financial, customer, learning and growth, and internal process perspectives. The empirical analysis applied a two-stage model to assess how shifts in company strategies affect profitability, stability, and growth. This research provided insights into the management strategies and financial metrics within the information security sector, examining how strategic priorities shape financial health. The findings were as follows. Firstly, companies emphasizing financial strategies in their reports tended to exhibit higher profitability. Secondly, those focusing on customer-oriented strategies also reported greater profitability. Thirdly, companies prioritizing internal processes demonstrated increased organizational stability. Fourthly, an emphasis on learning and growth strategies was associated with lower stability but higher growth potential. This paper contributes to the field by offering a method to quantitatively analyze qualitative textual data, providing a more precise approach to understanding management strategies through direct content analysis of business reports. It also highlights the specific financial and strategic characteristics of information security firms, a relatively under-researched area, thereby offering valuable guidance for these companies in terms of strategic planning.

Keywords: management strategy; profitability; stability; growth; information security industry; business report; BSC frame; text mining (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:16:y:2024:i:12:p:5166-:d:1416805

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