Doing qualitative field research in management accounting: Positioning data to contribute to theory

In this paper we argue that theory, method, methodology, and knowledge gains in qualitative field studies are intertwined through the ongoing hypothesis development in the field. We develop our argument through a discussion of specific qualitative field studies in management accounting. We emphasise in particular the distinctive role of theory in qualitative research as relating to expression of a subjective reality more than clarification of an objective one. In considering this subjectivity we discuss the ways in which the doing of qualitative research brings to bear discipline on the researcher allowing us to assess the trustworthiness of their accounts. The intention is to develop a more appropriate basis for judging the plausibility of qualitative field studies than notions borrowed from positivistic methodology.     

Managerial Ownership, Information Content of Earnings, and Discretionary Accruals in a Non–US Setting

This study employs Danish data to examine the empirical relationship between the proportion of managerial ownership and two characteristics of accounting earnings: the information content of earnings and the magnitude of discretionary accruals. In previous research concerning American firms, Warfield et al. (1995) document a positive relationship between managerial ownership and the information content of earnings, and a negative relationship between managerial ownership and discretionary accruals. We question the generality of the Warfield et al. result, as the ownership structure found in most other countries, including Denmark, deviates from the US ownership configuration. In fact, Danish data indicate that the information content of earnings is inversely related to managerial ownership.     

Foreign Factor Ownership and Optimal Tariffs

In the presence of foreign factor ownership tariffs change not only the terms of (goods) trade but also income flows between countries. Assume that only the home country owns factors abroad. Then the optimal tariff is negative if and only if foreign factor ownership entails trade-pattern reversals. Trade-pattern reversals are neither a necessary nor a sufficient condition for a negative optimal tariff if the foreign country owns factors in the home country. Changes in the home country's tariff shift the foreign country's offer curve. This adds a new dimension to optimal tariff analysis.     

MANAGERIAL INCENTIVES AND CORPORATE DIVERSIFICATION STRATEGIES

Because the break-up of conglomerates typically produces substantial increases in shareholder wealth, many commentators have argued that the conglomerate form of organization is inefficient. This article reports the findings of a number of recent academic studies, including the authors' own, that examine the causes and consequences of corporate diversification. Although theoretical arguments suggest that corporate diversification can have benefits as well as costs, several studies have documented that diversified firms trade at a significant discount from their single-segment peers. Estimates of this discount range from 10–15% of firm value, and are larger for “unrelated” diversification than for “related” diversification. If corporate diversification has generally been a value-reducing managerial strategy, why do firms remain diversified? One possibility, which the authors label the “agency cost” hypothesis, is that top executives without substantial equity stakes may have incentives to maintain a diversification strategy even if doing so reduces shareholder wealth. But, as top managers' ownership stakes increase, they bear a greater fraction of the costs associated with value-reducing policies and are therefore less likely to take actions that reduce shareholder wealth. Also, to the extent that outside blockholders monitor managerial behavior, the agency cost hypothesis predicts that diversification will be less prevalent in firms with large outside blockholders. Consistent with this argument, the authors find that companies in which managers own a significant fraction of the firm's shares, and in which blockholders own a large fraction of shares, are significantly less likely to be diversified. If agency problems lead managers to maintain value-reducing diversification strategies, what is it that leads some of these same firms to refocus? The agency cost hypothesis predicts that managers will reduce diversification only if pressured to do so by internal or external mechanisms that reduce agency problems. Consistent with this argument, the authors find that decreases in diversification appear to be precipitated by market disciplinary forces such as block purchases, acquisition attempts, and management turnover.     

Contemporary ethical issues in labor-management relations

Numerous labor-management issues possess ethical dimensions and pose ethical questions. In this article, the authors discuss four labor-management issues that present important contemporary problems: union organizing, labor-management negotiations, employee involvement programs, and union obligations of fair representation. In the authors view, labor and management too often view their ethical obligations as beginning and ending at the law's boundaries. Contemporary business realities suggest that cooperative and enlightened modes of interaction between labor and management seem appropriate.Robert S. Adler is Associate Professor of Legal Studies at the Kenan-Flagler Business School, University of North Carolina at Chapel Hill. He teaches courses in Business Law, Business Ethics, and Regulation. Prior to coming to UNC, Professor Adler served as Counsel to the Subcommittee on Health and the Environment of the Committee on Energy and Commerce of the U.S. House of Representatives.William J. Bigoness is Professor of Business Administration and Director, Center for Management Studies at the Kenan-Flagler Business School, University of North Carolina at Chapel Hill. His professional interests include organizational behavior, human resource management, and labor-management relations. Dr. Bigoness was Visiting Professor of Business Administration at the International Institute for Management Development (IMD) located in Lausanne, Switzerland from 1985 to 1987.