Determinants of Sales Revenue In the South Korean Interior Design Industry

Purpose: Our study aims to address three questions: Why have project management practices remained the same in the last decade? Why are innovative strategies not adopted? Why are strategic planning for improvements not pursued? Design/methodology/approach: This study explores the industrial structure and effective management strategies of the South Korean ID industry by analysing the impact of management strategies on income from 2013 to 2022. To address endogeneity, we use the Arellano-Bond model and nine years of balanced panel data. Findings: Our results reveal that companies employing multiple strategies experience a decrease in sales revenue, indicating that concentrating on core business activities (cost leadership) is crucial. The importance of human resources is highlighted. The positive relationship between labour cost per employee and sales per employee illustrates the characteristics of the ID industry, that is, in a project-based industry, securing and managing top talent is crucial for sales growth. Research limitations/implications: First, the study's sample size is small. This may limit the generalisability of our findings, particularly for small-scale companies or those limited to specific regions may not be adequate. Additionally, the old residential building market differs from the newly developed commercial building market. Originality/value: First, it uses panel data to capture changes over time, thereby maximising the strengths of the model. Second, applying the Arellano-Bond model to address endogeneity enhances the reliability of the results. Third, by segmenting diversification strategies into categorical and continuous variable specifications, this study identifies the specific effects of each strategy. Fourth, by including variables related to managerial characteristics, we identify the influence of management on corporate performance and offer significant insights into corporate leadership and management strategy development.