To boldly go where no man has gone before: integrating cognitive and physical features in scenario studies

A recent surge in the literature shows that scenario studies are very much back in vogue. The revival of the scenario approach to strategic planning, however, also shows that the method has developed rather one-sidedly both in theory and practice. The dominant trend in scenario thinking is that scenario construction is used primarily as a cognitive exercise, involving mental processes only. In this paper we aim to complement this development by arguing for a more integrated approach, involving both cognitive and “physical” features. Such an approach combines more traditional cognitive elements of scenario studies with, for example, organizational experiments, deliberately made small mistakes, and external corporate ventures. Moreover, we introduce a typology of scenario studies based on two salient assumptions that characterize the field.     

Strategy and accounting in a U.K. conglomerate

This paper sets out to explore various aspects of the relationship between the use of accounting information for performance reporting and control and the formulation and implementation of business and corporate strategy. It does this by means of a case study of the acquisition and subsequent management of “ELB Ltd” by “Conglom Inc.” The case gives an account of the structuring of relationships both between the Corporate centre and ELB senior management, and within ELB itself. A very complex picture of the relationship between strategy and accounting emerges. Although accounting results are often taken as a proxy for the relative success of strategy, the case suggests that in this respect accounts typically conceal as much as they reveal. Especially with a conglomerate structure it is quite possible for corporate financial “success” to be realized at the expense of the long term strategic positioning of individual unit companies. The paper illustrates how the sharing and integration of market knowledge required for the successful formulation and implementation of strategy can conflict with the conformity and distorted communication encouraged by the hierarchical use of accounting controls. It also describes some of the positive effects that can be realized from deliberate attempts to integrate strategic decision making with routine accountability.     

Planning with scenarios : The banking world of 1985

Scenarios are widely used in large organisations as a planning tool. The success of this tool, however, depends on its ability to link macroviews of economic, social, and political events to the unique operating experience of a specific type of organisation. This article describes a formal linking procedure for assessing the impact of several scenarios on a large bank. The goal is to define those sets of economic, technological, and regulatory conditions which are most favourable (a “best scenario”) and those which are least favourable (a “worst scenario”).     

The Global Century

No people, however they define themselves, can claim the 21st century as theirs; it can only be dubbed The Global Century. A sweep of the horizon at the end of the twentieth shows ten transformations going on at once — all related to the global spread of knowledge. We can't know what will happen or when, but we already know why. The “information environment” is changing our thinking about globalization, diversity, community, the world economy, the rich-poor gap, and education. Nobody can be in charge, so everybody is partly in charge. The implications for learning are huge, from pre-school to higher education. Education for the Global Century must help citizens think about “the situation as a whole”, think about how to “get it all together”.     

Financialized accounts: Share buy-backs, mark to market and holding the financial line in the S&P 500

In recent years the US corporate sector has deployed more cash from operations to finance the repurchase of outstanding share capital for treasury stock. Shares repurchased for treasury stock can help flatter earnings per share, fund senior management share option compensation schemes and finance corporate acquisitions. In financialized accounts these are now significant transactions which, it is argued, serve the financial interests of managers and investors.The US Financial Accounting Standards Board (FASB) is now demanding a “greater use of fair value measurements in financial statements” with the result that share options and corporate acquisitions will be “marked to market”. This will force a financialized ratchet because managers in the S&P 500 will need step up cash extraction if they are to hold the financial line.     

Meanings of the term ‘sustainable development’ in Finnish corporate disclosures

There is an on-going discursive struggle over how the social and environmental problems related to modern societies should be understood and resolved. Sustainable development has become a pre-eminent concept in these discussions and businesses are increasingly employing the term in their communications. However, sustainable development means “different things to different people in different contexts” [Bebbington, J. (2001). Sustainable development: A review of the international development, business and accounting literature. Accounting Forum, 25(2), 128–157; see p. 129]. Thus, there have been recent calls in the literature to analyse what the companies are actually saying in their disclosures [Thomson, I., & Bebbington, J. (2005). Social and environmental reporting in the UK: A pedagogic evaluation. Critical Perspectives on Accounting; Kolk, A. (1999). Evaluating corporate environmental reporting. Business Strategy and the Environment, 8, 225–237]. Subscribing to the social construction of reality, this study critically assesses how the term ‘sustainable development’ is constructed in the disclosures of Finnish listed companies.

Overall, in the disclosures, sustainable development is constructed as a win-win concept, which allows society to enjoy economic growth, environmental protection and social improvements with no trade-offs or radical restructurings in the social order. However, behind the usual business rhetoric, there is very little evidence of anyone actually walking this talk. Accordingly, this research calls for further discussion on companies’ role in achieving sustainable development and on the business interpretation of sustainable development in general.     

The ambiguities of globalization

Current discussions of globalization are flawed by confusing two issues: (1) the economic competition among sovereign nation states—so-called “global competitiveness”—which is used as an excuse to reduce social support budgets; and (2) the value of worldwide international organizations set up on a non-state basis—humanitarian, environmental or human rights NGOs, professional, sporting, labor or whatever. Opposition to “globalization” in the first sense is no obstacle to support for the second (NGO) development: on the contrary, NGOs can be the best instrument for countering inhuman governmental policies. The cogency of these economic arguments rests, this paper argues, on confusing two interpretations of the terms “global” and “globalization”. In multinational businesses or other global enterprises, these terms imply that the economic role of governments will be reduced, and global competition will take place between corporations: Fuji vs Kodak, Boeing vs Airbus, Compaq vs Toshiba. In governments, by contrast, the same terms imply a continued—even, enhanced—economic role for governments, so that global competition takes place, rather, between countries: Britain vs Germany, Japan vs the United States, Europe vs America. Business and Government talk at cross-purposes. The steps that multinational corporations take to reduce other “non-wage” labor costs—notably, their taxes—are seen by politicians and journalists as unpatriotic. Rather than follow business onto the global stage, defenders of environmental and labour interests retreat to the domestic stage, and leave governments to bring the corporations into line. If tackled on this level alone, the economic arguments are, indeed, hard to undercut: addressed “one nation state at a time” (so to say) matters of “comparative advantage” tempt rival governments to engage in competitive cost cutting, and the costs of social services are an obvious target for cost cutting, e.g. in France or Sweden. Tackled on a wider (“global”) level, however, the same issues can be stated in terms less damaging to labour and environmental interests. A Global Labour Office capable of looking the World Trade Organization in the eye, for instance, could set standards protecting those interests as strongly as those insisted on by international agencies for “transparency” in accounting, “fair” competition and the like. Excessive cutbacks in social protections, indeed, can then be judged to be “unfair” competition, and penalized as such.     

Genetic counselling: ethical mediation of eugenic futures?

This paper examines some proposals concerning the involvement of genetic counsellors in reproductive decisionmaking. This involvement represents the future situation as being shaped decisively by the “relevant” knowledge of powerful medical and other political interests. The paper deconstructs and reorders this proposed knowledge in order to make it problematic. The projected involvement of genetic counselling backed by claims of ethical expertise is rendered denaturalised and particular, opening a conceptual space for the emergence of other futures. An alternative future in which public communication, not private medical decisions, is given as the primary ethical focus.     

An “American Dream” theory of corporate executive Fraud

In this paper, we first describe a “Broken Trust” theory that was introduced by Albrecht el al. [Albrecht, W. S., Albrecht, C. C., & Albrecht, C. O. (2004). Fraud and corporate executives: Agency, Stewardship and Broken Trust. Journal of Forensic Accounting, 5, 109–130] to explain corporate executive Fraud. The Broken Trust theory is primarily based on an “Agency” theory from economic literature and a “Stewardship” theory from psychology literature. We next describe an “American Dream” theory from sociology literature to complement Albrecht el al.'s (2004) Broken Trust theory. Like the Broken Trust theory, the American Dream theory relates to a “Fraud Triangle” concept to explain corporate executive Fraud. Finally, we provide some anecdotal evidence from recent high profile corporate executive Fraud to explore the American Dream theory. We conclude our thoughts on corporate executive Fraud from a teaching perspective.     

The transmodern hypothesis: towards a dialogue of cultures

For a Brussels Seminar at the European Commission, a “double hypothesis” was proposed: that we are in transition to a transmodern way of thinking that combines intuition and spirituality with rational brainwork; and that 21st century conflicts will likely be not between religions or cultures but within them, between premodern, modern, and transmodern worldviews. Non-Western thinkers find this framework useful: it opens a door to criticism of the worst aspects of modernity without being “anti-Western”. Western reactions are more mixed, some critics wanting to maintain a high fence between religion and governance, others welcoming the transmodern concept as helpful in relating states to religions, and in analyzing conflicts involving beliefs about belief. “Transmodernity” turns out to be a rich tool of analysis, with important implications for European foreign policy in the century to come.     

Scenarios to challenge strategic paradigms: Lessons from 2025

As a process looking for alternative visions of environment and corporate futures, scenario planning challenges strategic paradigms. In that way, scenario planning is dealing with the different beliefs of the many actors who make the organization and its global and business environments. Among these beliefs, emerging ideologies are one of the main shaping factors for the construction of new visions of corporate environment and corporate futures. To analyse the interaction between scenario planning and emerging ideologies, this paper will first propose a conceptual framework based on the dynamics of strategic paradigms. Second, it will discuss Electricité de France 2025 scenarios longitudinal case study in the context of the diffusion process of the French so called prospective approach to show interests and traps of scenario planning to manage paradigm shifts.     

Exploring client scenarios associated with scenario planning

All scenario planning projects have a ‘client’ and one of the most challenging tasks facing a scenario planner is the client's role or position in the way projects are conceptualized, delivered and received. The scenario planner has to establish and manage a ‘successful client relationship’—but what actually constitutes that for a scenario planning project?The client acts as the conduit between the scenario planner and the organization for which the scenario planning project is being undertaken.The ‘client as conduit’ implies several challenges for the scenario planner including:

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The client's awareness and understanding of scenario planning as a method for their organization to learn from the future [1].

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The client's level of commitment to learning from the future.

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The size and context of the scenario planning project.

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The position of the client within a network of people and/or resources required to run a scenario planning project.

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The client's involvement or position within the scenario building team created in the project.

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The benefits and risks accruing to the client through the execution of the scenario planning project.

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The client organization's capacity to act strategically; its power to perform.

This paper will explore, through storytelling, different pictures of client relationships associated with scenario planning. The stories are developed from a deep and extensive well of scenario practitioner and consulting experience over the last 15 years to explore and discuss these client issues, and how clients for scenario planning projects have evolved, and how they may enhance or restrict scenario planning projects in the future.     

Perceptions of the benefits of the A3 planner in facilitating project-based learning in accounting education

This paper evaluates ways of instilling project management skills into accounting-based learning by the use of an iterative A3 planner to plan, monitor and review assignment progress. The application of an A3 planner to facilitate a project-based learning (PBL) group assignment in undergraduate accounting education has been critically evaluated in terms of both the student and tutor experience. The study uses a mix of qualitative and quantitative data. Quantitative data assisting exploration of perceptions were collected through 100 undergraduate students. A series of focus group discussions were carried out to investigate students’ engagement and tutors’ teaching experiences regarding the adoption of the A3 planner. The results suggest that the A3 planner promotes active planning and effective management of a PBL group assignment. It makes students’ thought processes more visible thereby facilitating and enhancing the tutoring/mentoring process. Moreover a more interactive and transparent approach by doing assignment via the use of an iterative A3 planner has ensured more feedback points and action based efficiency in the doing approach for learners.     

Modelling multiple term structures of defaultable bonds with common and idiosyncratic state variables

In this paper we develop a multi-factor “reduced-form” model that is general enough to capture simultaneously the dynamics of multiple term structures of corporate bonds, each with a different credit rating. In this way, we are able to fully incorporate a number of “stylised facts”, reported on a number of previous empirical studies. More specifically, we are able to estimate the different degrees of covariation between the term structure of each credit rating and the default-free yield curve. Furthermore, we report the differing sensitivities of the credit curves to a number of observable macro-factors that reflect changes in credit conditions, both domestic and international. Finally, the dependence of each credit curve on a number of idiosyncratic state-variables is also documented. Our results are based on two special cases of the model, estimated using US and UK corporate bond data.     

The impact of foreign board membership on firm value

This study examines the effect of foreign (Anglo-American) board membership on corporate performance measured in terms of firm value (Tobin’s Q). Using a sample of firms with headquarters in Norway or Sweden the study indicates a significantly higher value for firms that have outsider Anglo-American board member(s), after a variety of firm-specific and corporate governance related factors have been controlled for. We argue that this superior performance reflects the fact that these companies have successfully broken away from a partly segmented domestic capital market by “importing” an Anglo-American corporate governance system. Such an “import” signals a willingness on the part of the firm to expose itself to improved corporate governance and enhances its reputation in the financial market.     

The accounting of interpretations and the interpretation of accounts: The communicative function of “the language of business”

The objectivistic philosophical assumptions which underlie contemporary research in accountancy, as well as economics and elsewhere, are challenged and an interpretive alternative is proposed. A “hermeneutical” view of decision-making is examined, first with regard to science in general, and then concerning the human sciences in particular, and finally with regard to economics. Human decisions are not seen as objective, mechanical or behavioristic but as meaningful utterances of minds, as part of a bidirectional communicative process. That is, scientific decisions, like everyday decisions, are mutually interpretive processes of communication in language. Although it is true that much of mainstream neoclassical economics is incompatible with this interpretive approach, the “Austrian” school can be seen as an interpretive version of neoclassicism. This school of economics indicates a way to understand the communicative function the accounting “language” itself serves in the economic process. The professional judgments made by both accounting researchers and practicing accountants, then, are treated as “matters of interpretation,” but as not, thereby, arbitrary.     

Fearful asymmetry: The consumption of accounting signs in the Algoma Steel pension bailout

This paper examines the role of accounting in society by looking at the consumption of accounting signs during the financial restructuring of a corporation. The paper builds upon insights from prior research on accounting as simulacrum and hyperreality. It examines how accounting numbers serve as reconfigurable signs that construct appropriate “crises”, motivate government intervention, and marshal stakeholders towards solutions. The incident at the heart of this study is the 2001 bailout of the Algoma Steel pension plan by the Ontario government. The incident demonstrates how accounting technologies are required both for the production of accounting signs and for their consumption. The paper asks how the production and consumption of accounting signs is different from that of other communication signs, what role consumers of accounting signs play in determining their meaning, and what difference this makes in how corporate pension plans are protected by government. It concludes that the structures and mechanisms surrounding the consumption of accounting signs enable different stakeholders to influence the production of meaning at the moment when accounting signs are consumed, changing the way that risk and wealth are redistributed, and shaping government intervention.     

Analyst estimation revision clusters and corporate events,Part I

Summary This paper uses periods of unusually heavy earnings estimate revision activity by analysts to assess the relative usefulness of corporate information events (CIEs) in firm valuation. Because accounting information is more readily available, newsworthy and accessible, we hypothesize that CIEs that focus on financial statement information trigger greater analyst revision activity over a shorter period of time than CIEs that offer strategic or “soft” information. Our results are consistent with this hypothesis. In Part II, we examine investor response to revision clusters that accompany different CIEs.We thank the Editor, an anonymous referee, Joe Cooper, Todd Doersch, Tony Greig, Kent Konkol and Marc Sievers for helpful suggestions and discussions. We also thank Mehmet Ozbilgin and James Su for programming during the planning phase of this project, and Jinyoung Park for research assistance during its execution. We are very grateful to Thomson Financial, CCBN and Reuters Data for providing data used in this study. Bagnoli and Watts thank the Krannert Graduate School of Management andPurdue University for financial support.     

The pattern of PPB rejection: Something about organizations, something about PPB

“Pathology” is defined in Webster's dictionary as “… the study of the essential nature of diseases and especially of the structural and functional changes produced by them”. Thus, a pathological study can reveal information concerning both a disease or toxin and the organism to which it is introduced.Planning, programming and budgeting (PPB) was introduced in not-for-profit organizations in order to improve organizational planning and control. It failed. The purpose of this paper is to conduct a study in pathology concerning PPB and the not-for-profit organization. PPB is considered to be the toxin. The not-for-profit organization is considered to be the organism. The scalpels employed in conducting the examination were forged in the organizational, planning and control, and general systems theory literatures.     

Global civil society: lessons from ocean governance

Late 20th century ideas about governance of the world's oceans may provide clues to the role of “civil society” in the 21st century. The UN Convention on Law of the Sea has radically changed traditional ideas about “national sovereignty”, shifting its focus from territorial to functional, imposing on states the duty to cooperate and pay taxes, requiring the sharing of sovereign rights, and transcending sovereignty with the “common heritage” concept. The proliferation of nongovernmental organisations operating on the international stage is empowering all elements of a burgeoning global civil society. In some pioneering experiences in international relations, nongovernmental representatives sit on a par with delegates from governments. Most of the elements of global civil society—NGOs, international business, the community of scientists, worldwide media, and local communities—are not yet focused on the kinds of globalization that can narrow the rich–poor gap and promote sustainable development, but in the new century, a more global civil society can play a more constructive role.