Efficiency of Operations: Case Study of UnitedTechnologies Corporation

In this paper, efficiency of operations was examined for United Technologies which is a leading U.S.-based multinational corporation. Using both Johansen's cointegration and Granger's causality tests it is evident that efficient management of cost of goods sold is more important and if these expenses are managed well it could provide greater flexibility to United Technologies to bring about superior operating performance. For instance, if United Technologies deliberately increase SGA and RD expenses it would lead to higher future operating profitability.

Keywords

Operating and financial efficiency; Cointegration; Granger's causality

References

Anderson, M., R. Banker, R Huang and S. Jankiraman (2007). Cost Behavior and
Fundamental Analysis of SG&A Costs, Journal of Accounting, Auditing and
Finance, 22, 1, 1-28.
ii. Anderson, M., R. Banker, R Huang and S. Jankiraman (2003). Are Selling, General
and Administrative Costs “Sticky”? Journal of Accounting Research, 41, 1, 47-63.
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Likelihood Principle, 2nd International Symposium on Information Theory, B.N.
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in Supply Chains.” International Journal of Productivity and Performance
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O’Marah, K. (2012), “The influence of supply chain management competency on
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How to Cite

Prof. Prashanth N. Bhardwaj , Prof. Mukesh Chaudhry, Prof. Suneel Maheshwari . (2021). Efficiency of Operations: Case Study of UnitedTechnologies Corporation. DIAS Technology Review, 17(2), 32-36.

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[1] Anderson, M., R. Banker, R Huang and S. Jankiraman (2007). Cost Behavior and

[2] Fundamental Analysis of SG&A Costs, Journal of Accounting, Auditing and

[3] Finance, 22, 1, 1-28.

[4] ii. Anderson, M., R. Banker, R Huang and S. Jankiraman (2003). Are Selling, General

[5] and Administrative Costs “Sticky”? Journal of Accounting Research, 41, 1, 47-63.

[6] iii. Akaike, H. (1973). Information Theory and the Extension of the Maximum

[7] Likelihood Principle, 2nd International Symposium on Information Theory, B.N.

[8] Petrov and E Csaki, eds., Budapest.

[9] iv. Banker, R., R. Huang and R. Natarajan (2006). Does SG&A Expenditure Creates a

[10] Long Lived Asset? Working Paper.

[11] v. Banker, R., R. Huang and R. Natarajan (2011). Equity Incentives and Long-Term

[12] Value Created by SG&A Expenditure. Contemporary Accounting Research, 28, 3,

[13] 794-830.

[14] vi. Bharadwaj, P. (2015), “The Success of Global Supply Chains: An Exploratory

[15] Analysis,” Competition Forum.

[16] vii. Brenner, R. J.and K.E Kroner. (1995). Arbitrage, Cointegration, And Testing

[17] TheUnbiasedness Hypothesis In Financial Markets.Journal of Financial and

[18] Quantitative Analysis, v30(1), 23-42.

[19] viii. Cuthbertson, R. and Piotrowicz, W. (2011). “Performance Measurement Systems

[20] in Supply Chains.” International Journal of Productivity and Performance

[21] Management Vol. 60 No. 6, pp. 583-602.

[22] ix. Doukas, J. and A. Rahman. (1987). Unit Roots Tests: Evidence From The Foreign

[23] Exchange Futures Market. Journal of Financial and Quantitative Analysis, v22(1),

[24] 101-108.

[25] x. Ellinger, A., Shin, H., Magnus Northington, W., Adams, E, Hofman, D. and

[26] O’Marah, K. (2012), “The influence of supply chain management competency on

[27] customer satisfaction and shareholder value’, Supply Chain Management, Vol.17

[28] No.3, pp. 249-262.

[29] xi. Engle, R.E, and C. W. J. Granger. (1987). Co-integration and Error Correction:

[30] Representation, Estimation, and Testing. Econometrica, 55, 251-276.

[31] xii. Friis, O., Holmgren, J. and Eskildsen, J. (2016), “A strategy model — better

[32] performance through improved strategy work’, Journal of Modelling in

[33] Management, Vol.11 No.3, pp. 742-762.

[34] xiii. Hussein, J. and Davis, M. (2018). Improving Operational and Financial Efficiency

[35] with Product ID Rationalization—Cisco’s Experience. Journal of Business

[36] Forecasting. Spring, v37 (1), 4-10.

[37] xiv. Johansen, S. and K. Juselius. (1992). Testing Structural Hypotheses In A

[38] Multivariate Cointegration Analysis Of The PPP And The UIP For UK. Journal of

[39] Econometrics, v53(1/2/3), 211-244.

[40] xv. Kaplan, R.S. and Norton, D.P. (1996), The Balanced Scorecard, Harvard Business

[41] School Press, Boston, MA.

[42] xvi. Kaplan, R.S. and Norton, D.P. (2001), The Strategy-focused Organization,

[43] Harvard Business School Press, Boston, MA.

[44] xvii. MarketLine (2019). United Technologies Corporation: SWOT Analysis, Retrieved

[45] from www.marketline.com, 9/23/2019.

[46] xviii. McPhee, W.and Wheeler, D. (2006), “Making the case for the added value chain’,

[47] Strategy &Leadership, Vol.34 No. 4, pp. 39-46

[48] xix. Perron. (1988). Testing for a Unit Rootin Time Series Regression. Biometrica, ,

[49] 75: 335-46.

[50] xx. Porter, M. (1985), “Technology and Competitive Advantage,” Journal of Business

[51] Strategy, Vol. 5 No. 3, pp.

[52] xxi. Sakuramoto, C., Di Serio, L. and Bittar, A. (2019), “Impact of supply chain on the

[53] competitiveness of the automotive industry,” RAUSP Management Journal, Vol.

[54] 54 No. 2, pp. 205-225.

[55] xxii. Supply Chain Operations Reference Model (2020). Retrieved from https://

[56] www.apics.org/apics-for-business/frameworks/scor on 3/21/2020.

[57] xxiii. Wisner, J.D., Tan, K. and Leong, G.K. (2019), “Principles of Supply Chain

[58] Management: A Balanced Approach,’ | 5th Edition, Independence, KY: Cengage.