Reference points for measuring social performance: Case study of a social business venture

We present a longitudinal qualitative case study to elaborate on how a social venture forms reference points for social performance. Although organizations increasingly use various social performance targets to direct their operations, the scholarly knowledge on social performance reference points remains limited. We make use of the prior accounting literature and draw on the idea of compromising accounts to discuss how provisional and performative metrics can have a significant role in how organizations develop new ways to evaluate their social performance. Given that the social performance reference point criteria are ambiguous and the corresponding referents malleable, performative accounts are helpful as they can intervene in the organizational life by making particular things visible, providing space for interpretations, and facilitating discussion, thus creating temporary settlements and enabling opportunities for productive compromises between different organizational groups and evaluative principles. The recursive feedback loops between reference point referents, criteria and accounting artefacts help the organization to make sense of its own social performance and interpret the associated performance feedback, and thereby provide ground for organizational decisions on further action. Moreover, we discuss how imperfect accounts can be useful for social businesses in their pursuit of developing their activities and achieving social impact.     

BS in the boardroom: Benevolent sexism and board chair orientations

Research Summary: Though research has focused on the ascent and acceptance of female CEOs, the post‐promotion circumstances female CEOs face remain unclear. In this study, we focus on a critical post‐promotion circumstance: the board chair–CEO relationship. Drawing on the gender stereotype literature, agency theory, and stewardship theory, we posit that firms appointing a female CEO are more likely to adopt a collaboration board chair orientation and less likely to adopt a control orientation. We further predict this effect is attenuated by female board representation. Using a sample of new S&P 1500 CEOs, we find support for our predictions regarding the collaboration orientation but not the control orientation. This research provides some evidence of benevolent sexism in the boardroom, with female directors acting as a countervailing influence. Managerial Summary: Whereas the notion that females encounter a glass ceiling on their path toward CEO is well documented, the conditions female CEOs encounter after promotion are less understood. The relationship between the board chair and the CEO is one important post‐promotion condition. Board chairs can focus on monitoring and/or working together with the CEO. We suggest board chairs are more likely to work in close collaboration with female CEOs than with male CEOs. We attribute this to benevolent sexism, which explains that board chairs are more likely to collaborate with female CEOs because they view females as more conducive to, and in need of, this type of relationship. We also suggest this benevolent sexism is less prevalent when there are more females on the board.     

Credit risk,owner liability,and bank loan maturities during the global financial crisis

We relate credit risk and owners’ personal guarantees to bank loan maturities during the global financial crisis. The findings, which remain robust to reverse causality, show that firms rated as low risk, with a strong relationship with the bank, whose owners provided personal guarantees and with large loan sizes obtained longer maturities. Banks with larger nonperforming loans provided loans with shorter maturities. Firms with low‐ and high‐risk ratings that provided owners’ personal guarantees obtained longer maturities. These findings shed additional light on the relationship between risk and loan maturities and the role of personal guarantees in reducing information asymmetries.     

Competition and productivity growth in South Africa

This article shows that mark‐ups are significantly higher in South African manufacturing industries than they are in corresponding industries worldwide. We test for the consequences of this low‐level of product market competition on productivity growth. The results of the paper are that high mark‐ups have a large negative impact on productivity growth in South African manufacturing industry. Our results are robust to three different data sources, two alternative measures of productivity growth, and three distinct measures of the mark‐up. Controlling for potential endogeneity of regressors does not eliminate the findings.     

Innovation,network services and the restructuring of work organisation in customer services

The information and communication technology revolution has had important qualitative effects on the manner in which the output of new products and services is managed. This is in part associated with leveraging the knowledge of a broader group of employees. Through a case study of customer services in a major telecommunications firm, it is shown that integrating broader groups of employees into the innovation process can be vital. However a case is made that transforming work-related institutions in the firm has proved a challenging process, particularly when management are required to broaden the powers of decision making granted to employees, allowing greater discretion at the workplace and changing the manner in which work tasks are enforced.     

On the conservation of distance in international trade

Using disaggregated bilateral trade data, we find that the elasticity of trade to distance increased (in absolute value) by about 10% since 1985. To explore the reasons for this shift, we decompose the change in the distance elasticity of trade into the part due to a shift in the composition of trade among industries and the part due to a change in the distance sensitivity within industries. We find that adjustment in the composition of trade had little effect, but for 40% of industries distance became more important, with nearly all of the remaining industries showing no significant change. We explore alternative hypotheses as to why the elasticity of trade to distance increased in some industries. We find that homogeneous goods, bulky goods, and high tariff goods became significantly more distance sensitive. In contrast, the evidence implies that changes in tariffs and freight costs have reduced the importance of distance on trade. We conclude that the increase in the importance of distance over time is related to the substitutability of goods and the level of trade costs, but not to changes in tariffs or freight costs.     

Sraffa,Keynes and 'The Years of High Theory'

This paper argues that Shackle's interpretation of 'the years of high theory' is flawed. Shackle (1967) sees Sraffa's critique of the Marshallian theory of value only as a step in the development of the theory of imperfect competition. In the same vein, Shackle reduces the message of Keynes's General Theory to the claim that unemployment results from the existence of uncertainty and irrational expectations. Thus, Shackle leaves open the possibility that both Sraffa's critique of Marshall and Keynes's theory of effective demand do not question the internal coherence of neoclassical theory, but instead merely assert that market imperfections render it irrelevant for the analysis of the real world. This paper argues, in contrast, that the theories of Sraffa and Keynes should be interpreted as radical departures from marginalism, and represent a return to the surplus approach of classical political economy.     

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.     

Exchange Rate Depreciation,Wage Resistance and Inflation in Argentina (1882–2009)

This paper describes some of the main alternatives to the dominant neoclassical theories of inflation, according to which inflation is always a monetary phenomenon. The model develops a cost‐push approach, in which rising costs are mainly related to external constraints. Not only is inflation seen as resulting from balance of payments crises, but fiscal crises also are the result of the initial balance of payments crises within this framework. Fiscal deficits, and all other excess demand pressures, are absent, so that high levels of inflation are compatible with an economy that is below full employment, and stabilization is independent of fiscal adjustments. The model is then tested using a Vector Autoregression model and finds strong evidence for alternative theories of inflation over the monetarist theory. The empirical section tests both the long period (1882–2009) and the modern period (1990–2007) analyzing the impact of wages, the nominal exchange rate, the output gap and the monetary base on inflation. The results show that the exchange rate (external constraints) has been the primary cause of inflation. Wages are a causal factor in both models, and the monetary base and output gap show low causality in the long period, and ambiguous results for the modern period.     

Modeling catastrophic deaths using EVT with a microsimulation approach to reinsurance pricing

Recently, a marked Poisson process (MPP) model for life catastrophe risk was proposed in Ekheden & Hössjer (2014). We provide a justification and further support for the model by considering more general Poisson point processes in the context of extreme value theory (EVT), and basing the choice of model on statistical tests and model comparisons. A case study examining accidental deaths in the Finnish population is provided. We further extend the applicability of the catastrophe risk model by considering small and big accidents separately; the resulting combined MPP model can flexibly capture the whole range of accidental death counts. Using the proposed model, we present a simulation framework for pricing (life) catastrophe reinsurance, based on modeling the underlying policies at individual contract level. The accidents are first simulated at population level, and their effect on a specific insurance company is then determined by explicitly simulating the resulting insured deaths. The proposed microsimulation approach can potentially lead to more accurate results than the traditional methods, and to a better view of risk, as it can make use of all the information available to the re/insurer and can explicitly accommodate even complex re/insurance terms and product features. As an example, we price several excess reinsurance contracts. The proposed simulation model is also suitable for solvency assessment.