The role of co-managers in reducing flotation costs: Evidence from seasoned equity offerings

We examine the effect on expected flotation costs of including co-managers in the underwriting syndicate. We consider five components of SEO flotation costs: announcement returns, underpricing, the probability of withdrawals, offering delays, and underwriting spreads. The results show that the characteristics of co-managers participating in syndicates have significant effects on flotation costs, while the effect of the number of co-managers is largely insignificant. Our results are consistent with the notion that highly reputable underwriters and commercial banks serving as co-managers serve a certification role, reducing information asymmetries and, as a result, lowering SEO flotation costs.     

The costs of organization structure: Dispelling the myths of independent divisions and organization-wide decision making

For theoretical and methodological convenience, accountants often assume that the divisions of an organization are largely independent of one another and that divisional managers therefore can make decisions consistent with global optimality. Along with these assumptions, accountants have taken the structure of an organization as fixed and not changeable. This paper suggests a framework and method for assessing the costs resulting from non-independent divisions, as a component of organization productivity. Also offered is a methodology for changing the structure of organizations so that these hidden “conversion costs” first will be exposed and then can be managed for productivity improvements. Structural change thus becomes an alternative to designing elaborate information/control systems as a way of managing interdependency problems. Furthermore, as organizations are redesigned to make divisions more independent, accountants can concentrateon more intermediate matters, such as procedures for optimally determining joint-cost allocation and transfer prices, with minimal interference from the divisional structure of the organization.     

Financial crises: reducing pro-cyclicality

The swing in favour of markets weakened regulation, created incentives for excessive risk-taking, and reduced transparency and diversity. As a result, financial markets became more pro-cyclical. The right combination of regulation and markets is required to reverse this. Principle-based reform should aim to change behaviour rather than forbid activity. Central Bank accommodation has been blamed for the crisis, but excessive leverage due to lax regulation was of a much greater magnitude than any monetary imbalance. Capital's mobility and arbitrage in response to regulation, implies changes must be adopted globally. A diversity of voice and power is essential to enable implementation of the core set of proposals that can make financial markets more robust.     

Hospital-physician alignment: making the relationship work

CFOs can take four steps to help their organizations align successfully and cost-effectively with physicians: Understand the type of alignment required for the organization. Determine the right strategies for strengthening the organization's alignment gaps. Execute successfully. Monitor consistently and systematically.     

Retiree health care costs: a workable plan

Thirty-three million retired Americans have taken for granted the warm security that health care would be provided throughout their retirement--by Medicare, by their employers, certainly by someone, because it must be an inalienable right. As the financial aspects of retiree health care are examined, however, it is important to keep in mind who will pay for it and how much we are willing to spend. This raises three important questions: Are we ready to spend that much? Is that sum enough to produce the system we want? Will we get our money's worth or just start another round of health care inflation? This article suggests two programs, one for addressing this staggering problem and another to deal with the financing of retiree health care.     

SOA:敏捷响应,世界变平

SOA是"面向服务架构"的英文缩写,是一种企业信息管理应用框架,它着眼于日常的业务应用,并将它们划分为单独的业务功能和流程,即所谓"服务"。形象地说,这些"服务"就像大小不一的乐高玩具中的积木,它们间的灵活组合可适应不同的业务敏捷管理需要。这将成为业务信息化管理的新模式,从而极大推动电信、银行、零售和政府等部门的业务敏捷性,提升竞争力,以带来更快捷便利的顾客响应。     

Genetic testing: affected parties and decision making

The network of issues around information obtained from genetic testing is wide and complex. While risk assessment, awareness and discussion are often public driven, and in many instances, including that of nuclear power, are allied with democratic principles, the case of gene technology and genetic testing appears to be different. The opportunity for risk assessment by gene testing is rejected by many, and this rejection is supported by the claim of the right not to know. This article discusses the background to this development, and argues that decisions that consider issues related to genetic testing should be taken with the participation of affected parties.     

Accounting aggregation: User preferences and decision making

This experiment tests the effects of alternative aggregations of accounting data in a simulated portfolio task. Certain entropy-based aggregation criteria were used to prepare differentially aggregated financial statements for use in the task. Subjects made allocations of initial edowments between hypothetical firms, disclosed confidence in their allocation decisions and reported on specific characteristics of the financial statements. Differences in reported usefulness of statement sets furnished were found to be associated strongly with measured information content. The results also provide limited evidence that decisions and judgments of subjects were affected by the information content of the accounting aggregations provided.     

Culture's consequences in controlling agency costs: Egyptian evidence

This study examines the business environment of Egypt, a nation at the beginning of its transition to a market economy, to determine whether national culture is associated with the use of accounting-based debt covenants in debt agreements. As a country's economy develops, agency problems occur. One method of reducing agency costs is the use of accounting-based debt covenants. While there has been extensive research on agency theory, most of this research has focused on developed nations. We examine three periods of Egyptian economic development using 140 Egyptian debt agreements. The use of accounting-based debt covenants increased significantly during each successive period of development. Proxies for each of (Hofstede, G. (1980). Culture's consequences—International differences in work-related values. Beverly Hills, London: Sage Publications) cultural dimensions are significantly different between the three periods, suggesting that national culture changes with economic development. Three of the four cultural dimensions are significant when regressed on the number of accounting-based debt covenants in debt agreements. This indicates that as a country develops, national culture is associated with the control and understanding of the business process.     

Strategic investment decision making practices: A contextual approach

This paper proposes a contextual approach to explaining differences in strategic investment decision (SID) making practices. First, a systematic contextual framework is developed from the existing research literature. Then this framework's potential for explaining differences in SID making practices is explored through 14 case studies of U.K., U.S. and Japanese companies from both stable and dynamic business sectors. Our findings suggest substantial SID differences across our four contextual categories of market creators, value creators, refocusers and restructurers. The differences relate to the emphasis on strategic versus financial considerations, the thoroughness and rigidity of financial analysis, the attitudes towards incorporating less easily quantifiable factors and the level of hurdle rates.