The Role of Comprehensive Income as Financial Performance Predictor： Panel Evidence From Italy

The aim of this study is to investigate whether the comprehensive income （CI） and its individual components are useful in assessing the future cash flows for Italian listed companies. In addition, we verify whether the recent requirement of International Accounting Standard （IAS） 1 （r2011） of providing the other comprehensive income （OCI） separates in two sub-totals （recycling and non-recycling items groups） is useful to explain the expected cash flows. We consider a sample of 121 Italian non-financial companies listed on the Italian Stock Exchange for the testing period of 2008-2011, employing a fixed-effect regression model, and we test the relationship between the changes in the variables considered and not the relative absolute value reducing, in this way, the risk of not grasping a report if the independent variable and the response variable do not have the same sign. Our results stress that CI and the two new sub-aggregates are not relevant to explain future cash flows, while net income （NI） and OC1 as a whole seem to be more relevant to make explicit the future financial position. The study contributes, as a sort of post-implementation review, to the current debate on the ability of Cl to predict the future cash flows and on the real usefulness of the CI and the sub-aggregate identified by the IAS 1 revised as well.     

The Role of Overbilling in Hospitals’ Earnings Management Decisions

Abstract

This paper examines the role of overbilling in hospitals’ earnings management choices. Overbilling by hospitals is a form of revenue manipulation that involves misclassifying a patient into a diagnosis-related group that yields higher reimbursement. As overbilling allows hospitals to increase revenues without altering operations, affecting costs, or having to reverse such behavior in the future, I propose and find that overbilling reduces hospitals’ use of managing accruals or cutting discretionary expenditures. Next, I find that hospital managers prefer overbilling to managing accruals (cutting discretionary expenditures) when cutting discretionary expenditures (managing accruals) is constrained, and vice versa. Collectively, my findings suggest that overbilling is an important alternative manipulation tool in hospitals.     

Shareholder Loans and Earnings Smoothing – Empirical Findings from German Private Firms

This paper analyzes the interplay between shareholder loans and earnings smoothing in German private corporations. Shareholders who grant loans have a dual stakeholder role, being both equity holders and creditors. Those loans could be lost, because bankruptcy law requires their subordination in the event of bankruptcy. We therefore expect shareholder loans to mitigate agency problems of debt. This reduces the need for debt covenants and earnings smoothing. Moreover, the interest payments from shareholder loans tend to lower payout volatility which also reduces the need for dividend and earnings smoothing. We expect and find that private firms with shareholder loans exhibit significantly lower levels of earnings smoothing than other private firms. We find that with a 10 percentage-point increase in the shareholder loans to total assets ratio, earnings smoothing decreases by about 10% of the mean value. We also find that this substitution effect usually occurs in case of managerial ownership and tends to be slightly weaker in the event of dispersed ownership. The results are robust for different econometric specifications, including different measures of key variables and propensity score matching. The paper suggests that financial reporting by private firms responds to the dual stakeholder role of shareholder loans.     

On FASB Standard Setting:The Role of Funding Structure and Voting Rule

This study develops and tests hypotheses about organizational characteristics of the Financial Accounting Standards Board(FASB)and captures the effects of some recent changes on the operations of the Board in standard setting.I establish a methodology to quantify the complex work of the FASB through factor analysis and condense various proxies into three meaningful performance metrics:thoroughness,timeliness,and consensus.These performance measures are used as dependent variables in a regression analysis to capture how the work of the FASB varies with respect to funding and voting changes.I find evidence that a change in FASB funding from private donations to mandatory accounting support fees is associated with an improvement in Board consensus but no significant change in thoroughness or timeliness.I also find the change in voting rules from supermajority to simple majority is associated with improvements in timeliness but a decline in thoroughness and consensus.Overall,the results suggest that the work of the FASB is multidimensional and that the improvement of one area may come at the cost of another.     

The persistence of gender discrimination in China – evidence from recruitment advertisements

In this paper we present an analysis of recruitment advertisements that suggests that Chinese employers frequently discriminate on gender grounds, both directly and indirectly. We illustrate how employers continue to use entrenched stereotypes and perpetuate highly segregated expectations of men and women's roles at work, predominantly to the detriment of women and hindering their progress in the labour market. The paper concludes that while employers’ recruitment practices are not the only cause of women's continued labour-market disadvantage – and are in themselves a function of the wider of economic, socio-cultural and ideological factors that underlie it (Kitching 2001; Patrickson 2001; Leung 2003; Cooke 2005) – a change to employer behaviour in this area is a necessary and potentially achievable step forward towards greater equality.     

Narrating strategy in the flow of events – Illusion and disillusion in strategy-making

Narrative strategy-making is useful in the mobilization of strategies because narratives impart coherence and linearity to our understanding of organizational events. Our paper examines the relation between narrative strategy-making and the flow of events. We present a longitudinal, participatory study of a software company seeking global growth. Specifically, we followed events preceding and succeeding construction of the strategic ‘success stories’ used by the software company’s managers in investor negotiations. We conceptualize the point of illusion and disillusion underlying the temporal construction and use of strategy narratives and show how the former enables strategy-making, while the latter constrains it. We add to narrative strategy research by elaborating the relation between the construction of strategy narratives and the flow of organizational events.     

The role of interpersonal affect in performance appraisal: evidence from two samples – the US and India

The interpersonal affect, a li ke–dislike relationship between a supervisor and his/her subordinate, has traditionally been conceptualized as a source of bias in performance appraisals. However, some researchers have argued that the interpersonal affect may not be a bias, especially where it develops as a result of past performance. In this field study, using data from 190 supervisors in the US, and 113 supervisors in India, we delineate the relationship between interpersonal affect and performance ratings. In both samples, interpersonal affect and performance level were found to have significant effects on performance ratings. Results from the US sample indicated that raters are able to separate their liking for a subordinate from actual performance when a ssigning performance ratings, suggesting that the interpersonal affect does not operate as a bias in the appraisal process. Results from the Indian sample, however, suggest that supervisors inflate ratings of low performers, suggesting that local cultural norms may be operating as a moderator.     

On startups and doublethink – resistance and conformity in negotiating the meaning of entrepreneurship

Startup entrepreneurship is – in the literature, in the discourse of those engaging in it, and in cultural representations of the same – presented both as resistance against prevailing corporate logics and as a path towards becoming a corporate entity. Resistance, claimed or otherwise, is not just a reaction to a perceived outrage or a power imbalance, but is in itself a constitutive part of contemporary entrepreneurship, particularly as this is culturally constructed. We study this paradox, where a discourse of resistance becomes a productive part of entrepreneurial culture, by way of a case study of a successful startup. We analyze the manner in which people working in the startup utilize ‘doublethink’ to portray the organization both as resistance to an assumed, more corporate, ‘Other’ and also as a budding corporation unto itself. By doing so, we highlight how a discourse of resistance works as a value in entrepreneurship culture as well as a productive element of the same. In our case, resistance and corporate conformity come together in a way that defies easy classification; one where notions of resistance exist as easy-to-adopt identity positions and where doublethink becomes a productive way of dealing with corporate success.     

Hybrid Collaborative Arrangements: The welfare administration in Norway – between hierarchy and network

Abstract

This paper uses a survey to analyse how administrative executives perceive coordination following the reform of the Norwegian Labour and Welfare Administration. Applying a structural and cultural perspective, it examines the relationship between coordination mechanisms, cultural features and perceived coordination quality. The executives identify strongly with finding joint solutions and getting public organizations to work together. Coordination by hierarchy and networks co-exist, but the hierarchical dimension dominates. Vertical coordination is regarded as quite good, while horizontal coordination is seen as rather poor. The relationship between coordination mechanisms, cultural features and coordination quality are rather ambiguous and loose, however.     

How Do Developmental and Accommodative HRM Enhance Employee Engagement and Commitment? The Role of Psychological Contract and SOC Strategies

In the context of the changing workforce, this study introduced two perspectives on HRM and distinguished universalistic developmental HRM from contingent accommodative HRM. We predicted two separate pathways for the effects on two employee outcomes: work engagement and affective commitment. We expected that developmental HRM would universally relate to employee outcomes by rebalancing the psychological contract between the employee and organization into a less transactional to a more relational contract. We also predicted that accommodative HRM would relate to outcomes only when fulfilling specific needs of employees, associated with their selecting, optimizing, and compensating strategies. Results of a multilevel study among 1058 employees in 17 healthcare units fully supported our expectations regarding the role of the psychological contract. Additionally, we found support for the expected roles of selection and compensation, but not for optimization strategy. This study contributes to the literature by demonstrating that HRM relates to employee outcomes through multiple pathways, which can be either universal or contingent.     

The challenge of cyber supply chain security to research and practice – An introduction

The tremendous potential to assist or degrade economic and national security performance make security in the cyber supply chain a topic of critical importance. This is reflected by the tremendous activity in the public and private sector to better understand the myriad of cyber challenges, identifying existing gaps and needs and closing these gaps as quickly and firmly as possible through government policy initiatives, public/private partnerships, and legal/insurance penalty and incentive regimes. However when we examine the academic literature, the research and publications in this area are rather sparse. Consequently, this special issue on Security in the Cyber Supply Chain is intended to act as a resource to practitioners and as a call to research.     

The Potential Role of Organizational Setting in Creating “Entitled” Employees: An Investigation of the Antecedents of Equity Sensitivity

Existing research suggests that the equity sensitivity construct has both theoretical significance and applied value. This study investigates the antecedents of equity sensitivity, focusing on the relationships among organizational setting, personal characteristics (age, sex, work experience), organization tenure, and equity sensitivity. Results based on survey data from 613 individuals employed in ten diverse organizations suggest that organizational setting influences equity sensitivity levels among employees, Evidence of a significant relationship between age and equity sensitivity is also found. However, the relationship between organizational tenure and equity sensitivity found in previous studies is not replicated when adequate controls are included. Theoretical and practical implications of the findings are discussed.     

The mediating effect of psychological empowerment on the relationship between participative goal setting and team outcomes – a study in China

In the late twentieth century, it is popular to research the effect of participative goal setting. The general conclusion is that the relationship between participation and performance is inconsistent and unclear at individual level. With team becoming a more dominant mode in organizing, motivating, and managing, it is worthwhile to investigate the effect of participation in team goal setting. This study aims to test the mediating effect of psychological empowerment (PE) on the relationship between participative team goal setting and team identity and team performance. Executive MBA students (371) in 75 groups from China Europe International Business School in China participated in the study. The data from Business Strategy Game and questionnaire found positive relationship between participative team goal setting and team identification, and team performance is partially mediated by PE. Implications for the goal-setting theory and practice are discussed, and future research directions offered.     

The Development of Accounting Regulation in Extractive Industries in Australia, South Africa and Canada

In view of the economic significance of extractive industries, the special accounting issues raised, and the numerous calls over many years for standardization, there has been less regulation of their accounting than as expected. The development of accounting regulations and practices in the extractive industries in 3 countries is reviewed, which are Australia, South Africa and Canada.     

Re-visiting collaborative behavior in supply networks – structural embeddedness and the influence of contextual changes and sanctions

This study considers decision making beyond a dyadic buyer-supplier context to the network context. Decisions made by firms are shaped by behavioral norms within the supply network as perceived by the decision makers. Firms can perceive themselves to be part of a collaborative regime or one in which the potential for non-cooperation is high. Further, the ability to put sanctions on non-cooperating firms could shape the overall behavioral patterns in the network. To gain further insights into these aspects and their interactive effects on firm behavior, our study investigates decision-making in supply network by means of behavioral experiments. By organizing practicing managers in a supply network, the study investigates the role of structural embeddedness, incentive structure, and sanctioning mechanisms on the level of collaboration. The results of this study confirm that while sanctions are detrimental for collaborative behavior in a supply network, they play an important role when the underlying norms of governance of such a network are perturbed. The results show that structural embeddedness provides a context that aids adaptive collaborative behavior by firms that are part of the supply network. Once the incentive structure is altered such that there is a higher payoff from defection, the adaptive collaborative behavior is replaced by a behavior in which firms try to maximize their returns and forego collaborative decision-making behavior.