Critical reading in accounting

The wave of postmodernism has reached accounting studies. With it that wave has brought new thought provoking and inspiring ideas such as: the local determination of meaning and the proposition that meaning of signs comes from other signs, not from reality. However, if these ideas are left abstract, they may not inspire accounting education with their full potential. Hence, this paper offers a three-stage framework of analysis, the so-called strategy of critical reading, which draws upon ideas of postmodernism and hermeneutics. The framework suggests how the reading of accounting texts could find new insights from postmodern ideas, without lapsing into a linguistic idealism that would deny the world any external reality independent of language.     

Moving mountains

What could be more fundamental to management, or more difficult, than motivating people? After all, a manager, by definition, is someone who gets work done through others. But how? A typical recipe for motivation calls for a mixture of persuasion, encouragement, and compulsion. Yet the best leaders, we suspect, need no recipe: They get people to produce great results by appealing to their deepest drives, needs, and desires. And so we discovered when we asked a dozen of the world's top leaders to describe how they each met a daunting challenge in motivating an individual, a team, or an organization. Their answers are as varied as human nature. Some of the leaders appeal to people's need for the rational and the orderly: Mattel's Robert Eckert emphasizes the reassuring power of delivering a consistent message, and HP's Carly Fiorina focuses on facing hard truths on setting step-by-step goals. Some, like celebrated oceanographer Robert Ballard, Pfizer CEO Hank McKinnell, and BP America president Ross Pillari, see the powerful motivating effects of asking people to rise to difficult challenges. Others focus more on the human spirit, appealing to the desire to do something, as BMW's Chris Bangle puts it, "rare, marvelous, and lasting." And quite a few inspire through example, as Dial chairman Herb Baum did when he donated $1,000 from his bonus to each of the company's 155 lowest-paid people. "If you draw the line on your own greed, and your employees see it," he says, "they will be incredibly loyal and perform much better for you." And he has the numbers to prove it. "Right now," he adds, "we're experiencing our lowest level of attrition in 11 years, and we're tracking toward another banner year because people are happy."     

Product markets and industry‐specific training

We develop a product market theory to explain why firms provide their workers with skills that are also useful to their competitors. Firms first decide whether to invest in industry‐specific training, then make wage offers for each others’ trained employees and finally engage in imperfect product market competition. Equilibria with and without training can emerge. If competition is soft, firms invest in training if others do. Thereby, they avoid having to pay high wages for trained workers. Furthermore, we draw welfare conclusions from the analysis. Finally, we discuss how our ideas apply to supplier relationships and to general training.     

The Effect of the Real Option to Transfer on the Value of Guaranteed Minimum Death Benefits

Variable annuity contracts frequently have many options and option‐like features embedded in the contracts. Some are obvious, such as guaranteed minimum death benefits (GMDBs), while others are less obviously option‐like. In this article, we consider the effect of the real option to transfer funds between fixed and variable accounts. If a GMDB rider is considered in isolation, it is sometimes in the policyholder's interest to transfer to the fixed fund if the fixed fund earns less than the variable fund in a risk‐neutral world. On the other hand, the option to transfer will not be used if the entire annuity and rider are considered together.     

Beyond budgeting or budgeting reconsidered? A survey of North-American budgeting practice

Budgets have historically played a key role in management control; however, recently they have become the subject of considerable criticism and debate. Some argue that the problems with budgeting stem from the way budgets are used (Horngren et al., 2004) while others argue that budgeting processes are fundamentally flawed (Hope and Fraser, 2003a). Hansen et al. (2003), among others, have called for a systematic examination of these issues against empirical evidence. In this paper, we present the results of two surveys of mid- to large-sized North-American organizations to 1) update the literature on North-American budgeting practices, 2) collect empirical evidence to assess the criticisms, and 3) begin to identify strong tendencies or patterns in budgeting practice to inform future academic research. Overall, we find for the majority of firms that budgets continue to be used for control purposes and are perceived to be value-added. While problems exist with budgets, organizations are adapting their use to account for these problems rather than abandoning budgets altogether.     

Does Idiosyncratic Risk Matter for Individual Securities?

This paper investigates the relationship between idiosyncratic risk and returns for individual securities within a generalized autoregressive conditional heteroskedascticity (GARCH)‐in‐mean framework. We demonstrate that, on average, 15% of stocks exhibit a significant relationship between returns and risk, of which 9% are positive. These proportions vary over time and with model specifications. Some characteristics influence the probability of a positive and a negative relationship, while others appear to affect only one, but not the other. This evidence implies that the factors that explain a positive connection between idiosyncratic risk and returns are different from the factors that explain a negative connection.     

The effects of corporate bailout on firm performance: International evidence

Not all corporate bailouts are the same. We study corporate bailouts from around the world during 1987–2005. Among these bailed-out firms, some firms are economically distressed while others are financially distressed. Some firms are bailed out with cash (either as equity or as loans) while others are bailed out with debt relief. Some firms are bailed out by the government while others are bailed out by other stakeholders. We examine these firms’ operating performance before and after their bailouts, but specifically across different bailout types, and we also measure their stock returns surrounding their bailout announcements.     

Credit risk transfer and contagion

Some have argued that recent increases in credit risk transfer are desirable because they improve the diversification of risk. Others have suggested that they may be undesirable if they increase the risk of financial crises. Using a model with banking and insurance sectors, we show that credit risk transfer can be beneficial when banks face uniform demand for liquidity. However, when they face idiosyncratic liquidity risk and hedge this risk in an interbank market, credit risk transfer can be detrimental to welfare. It can lead to contagion between the two sectors and increase the risk of crises.     

新型农村社会养老保险参与决策中的同群效应

我国于2012年实现了社会保障在制度上的全覆盖。然而,对于自愿参与型社会保障项目,政策目标人群的参保率过低,无法充分发挥社会保障体系的风险分担和福利保障作用。2020年,党的十九届五中全会将健全社会保障体系作为“十四五”时期经济社会发展主要目标之一。分析政策目标人群的参保决策,有针对性地提高群众参保率,对于充分发挥社会保障制度的功能和健全社会保障体系具有重要意义。本文以新型农村社会养老保险(新农保)为例,使用家庭调查数据和工具变量方法,考察同群效应在社会保障项目参与决策中的作用。研究发现:同村居民参与新农保的比例每增加10个百分点,个体参保概率显著增加4.24个百分点;同村居民之间的信息传递以及其内部形成的社会规范是同群效应发挥作用的重要渠道;男性的参保行为具有更强的示范效应。本文的研究结论表明,加强基层政策宣传和提高政策透明度,以及有针对性地提高特定群体的参保率是提高社会保障项目整体参与率的有效手段。     

Resurrection of traditional communities in postmodern societies

Modern societies seem to have recognised the importance of communities and the community capacity to be self reliant, and to reduce burden on the state, at least to some degree. Thus it is hardly surprising that several western countries’ current policies have been reverberating with the idea and vision of community responsibilities, participation and decision making. What kind of communities do these policies envision? Can western societies resurrect traditional communities in postmodern societies? To address such questions, this paper argues that though highly challenging, it is possible to rebuild some elements of traditional communities in postmodern societies. In fact, such creation is an ideal world to live in. For that to occur western societies should give adequate time, resources and commitment to it, as they did to create modern societies. Most importantly, they also need to somewhat alter their ‘life style’: “When you throw ‘individuals’ from the window, communities rush in through the door”.     

Accounting in Babel? Constructing social accounting as a multi-logical performance

All social practices reproduce certain taken-for-granteds about what exists. Constructions of existence (ontology) go together with notions of what can be known of these things (epistemology), and how such knowledge might be produced (methodology)—along with questions of value or ethics. Increasingly, reflective practitioners—whatever their practice—are exploring the assumptions they ‘put to work’ and the conventions they reproduce. Questions are being asked about how to ‘cope’ with change in a postmodern world, and ethical issues are gaining more widespread attention. If we look at these constructions then we often find social practices: (a) give central significance to the presumption of a single real world; (b) centre a knowing subject who should strive to be separate from knowable objects, i.e. people and things that make up the world; (c) a knowing subject who can produce knowledge (about the real world) that is probably true and a matter of fact rather than value (including ethics). Social practices of this sort often produce a right–wrong debate in which one individual or group imposes their ‘facts’ (and values) on others. Further they often do so using claims to greater or better knowledge (e.g. science, facts …) as their justifications.We use the term “relational constructionism” as a summary reference to certain assumptions and arguments that define our “thought style”. They are as follows: fact and value are joined (rather than separate); the knower and the known—self and other—are co-constructed; knowledge is always a social affair—a local–historical–cultural (social) co-construction made in conversation, in other kinds of action, and in the artefacts of human activities (‘frozen’ actions so to speak), and so; multiple inter-actions simultaneously (re)produce multiple local cultures and relations, this said; relations may impose one local reality (be mono-logical) or give space to multiplicity (be multi-logical). In this view, the received view of science is but one (socially constructed) way of world making, as is social constructionism, and different ways have different—and very real—consequences.In this paper, we take our relational constructionist style of thinking to examine differing constructions of foot and mouth disease (FMD)¹ in the UK. We do so in order to highlight the dominant relationship construction. We argue that this could be metaphorised as ‘accounting in Babel’—as multiple competing monologues—many of which remained very local and subordinated by a dominant logic. However, from a relational constructionist point of view, it is also possible to argue that social accounting can be done in a more multi-logical way that gives space to dialogue and multiplicity. In the present (relational constructionist) view, accounting is no longer ‘just’ a question of knowledge and methodology but also a question of value and power. To render accounting practices more ethical they must be more multi-voiced and enable ‘power to’ rather than ‘power over’.     

Confronting macrosocial worries: Worry about environmental problems and proactive coping among a group of young volunteers

Studies indicate that young people's interest in and worries about global issues, including environmental problems, often are connected with pessimism and inactivity. The purpose of this interview study, therefore, is to explore whether we can learn how to cope proactively with environmental worries from young people who are already actively engaged in environmental and global justice organizations. How do these young volunteers experience and reflect upon their worry? Which individual and collective coping strategies are used? The results are analyzed in relation to existential and emotion theories, and it is concluded that if we want to promote both an active stance towards the global future and psychological well-being among young people, it is not the ability to get rid of worry that should be sought after but rather the capacity to face worry, to learn from it, and to use it for constructive actions. In this regard, cognitive strategies for activating positive emotions and positive aspects of being actively engaged are important to acknowledge, since they could help the young to take on this difficult task.     

The great intimidators

After Disney's Michael Eisner, Miramax's Harvey Weinstein, and Hewlett-Packard's Carly Fiorina fell from their heights of power, the business media quickly proclaimed thatthe reign of abrasive, intimidating leaders was over. However, it's premature to proclaim their extinction. Many great intimidators have done fine for a long time and continue to thrive. Their modus operandi runs counter to a lot of preconceptions about what it takes to be a good leader. They're rough, loud, and in your face. Their tactics include invading others' personal space, staging tantrums, keeping people guessing, and possessing an indisputable command of facts. But make no mistake--great intimidators are not your typical bullies. They're driven by vision, not by sheer ego or malice. Beneath their tough exteriors and sharp edges are some genuine, deep insights into human motivation and organizational behavior. Indeed, these leaders possess political intelligence, which can make the difference between paralysis and successful--if sometimes wrenching--organizational change. Like socially intelligent leaders, politically intelligent leaders are adept at sizing up others, but they notice different things. Those with social intelligence assess people's strengths and figure out how to leverage them; those with political intelligence exploit people's weaknesses and insecurities. Despite all the obvious drawbacks of working under them, great intimidators often attract the best and brightest. And their appeal goes beyond their ability to inspire high performance. Many accomplished professionals who gravitate toward these leaders want to cultivate a little "inner intimidator" of their own. In the author's research, quite a few individuals reported having positive relationships with intimidating leaders. In fact, some described these relationships as profoundly educational and even transformational. So before we throw out all the great intimidators, the author argues, we should stop to consider what we would lose.     

What makes a leader?

Superb leaders have very different ways of directing a team, a division, or a company. Some are subdued and analytical; others are charismatic and go with their gut. And different situations call for different types of leadership. Most mergers need a sensitive negotiator at the helm, whereas many turnarounds require a more forceful kind of authority. Psychologist and noted author Daniel Goleman has found, however, that effective leaders are alike in one crucial way: they all have a high degree of what has come to be known as emotional intelligence. In fact, Goleman's research at nearly 200 large, global companies revealed that emotional intelligence--especially at the highest levels of a company--is the sine qua non for leadership. Without it, a person can have first-class training, an incisive mind, and an endless supply of good ideas, but he still won't make a great leader. The components of emotional intelligence--self-awareness, self-regulation, motivation, empathy, and social skill--can sound unbusinesslike. But exhibiting emotional intelligence at the workplace does not mean simply controlling your anger or getting along with people. Rather, it means understanding your own and other people's emotional makeup well enough to move people in the direction of accomplishing your company's goals. In this article, the author discusses each component of emotional intelligence and shows through examples how to recognize it in potential leaders, how and why it leads to measurable business results, and how it can be learned. It takes time and, most of all, commitment. But the benefits that come from having a well-developed emotional intelligence, both for the individual and the organization, make it worth the effort.     

Asymmetric information and target firm returns

This article examines the relationship between asymmetric information and target firm returns in mergers and acquisitions (M&As). We argue that if managers possess favourable (unfavourable) asymmetric information, they will offer, ceteris paribus, a high (low) premium, affecting target firm returns accordingly. We propose several proxies of asymmetric information. The empirical evidence strongly supports our hypothesis as we find that target firm returns are significantly negatively related to asymmetric information regarding synergy gains. Our results are robust after controlling for several target and deal characteristics.     

Social planning and coercion under bounded rationality with an application to environmental policy

We develop a theory of social planning with a concern for economic coercion, which we define as the difference between consumers’ actual utility and the “counterfactual” utility they expect to obtain if they were able to set policy themselves. Reasons to limit economic coercion include protecting minorities and preventing disenfranchised groups from engaging in socially costly behavior, or political economy considerations. If consumers are fully rational, we show that limiting coercion is equivalent to placing more welfare weight on coerced consumers at the expense of others. If, however, consumers’ rationality is bounded, counterfactual utility becomes endogenous to current policy, and the welfare loss associated with limiting coercion increases. We set up a numerical version of our model and find that the bias-related welfare loss can be substantial.     

英汉委婉语的比较

It seems that language has an inconceivable and supernatural magic, it can not only help people exchange thoughts and feelings but also arouse people's imagination of all kinds, even though there is no close relationship between words and the things they refer to. However,when some words and terms are used, the images of things they refer to will appear before our eyes vividly. It is certain that it will arouse our reaction psychologically. For example, when some pleasant, wonderful words are uttered, it makes the hearer feel comfortable and happy.Meanwhile when some ugly or terrible words are used, it makes the hearer feel distressed, disturbed and terrified. So, people try their best to avoid using the unpleasant words directly, they use euphemism to re-place the words and phrases that sound no good.     

Managing your boss: a compatible relationship with your superior is essential to being effective in your job

Good managers recognize that a relationship with a boss involves mutual dependence and that, if it is not managed well, they cannot be effective in their jobs. They also recognize that the boss-subordinate relationship is not like the one between a parent and a child, in that the burden for managing the relationship should not and cannot fall entirely on the boss. Bosses are only human; their wisdom and maturity are not always greater than their subordinates'. Effective managers see managing the relationship with the boss as part of their job. As a result, they take time and energy to develop a relationship that is consonant with both persons' styles and assets and that meets the most critical needs of each.     

Selection bias and the perils of benchmarking

To find the secrets of business success, what could be more natural than studying successful businesses? In fact, nothing could be more dangerous, warns this Stanford professor. Generalizing from the examples of successful companies is like generalizing about New England weather from data taken only in the summer. That's essentially what businesspeople do when they learn from good examples and what consultants, authors, and researchers do when they study only existing companies or--worse yet--only high-performing companies. They reach conclusions from unrepresentative data samples, falling into the classic statistical trap of selection bias. Drawing on a wealth of case studies, for instance, one researcher concluded that great leaders share two key traits: They persist, often despite initial failures, and they are able to persuade others to join them. But those traits are also the hallmarks of spectacularly unsuccessful entrepreneurs, who must persist in the face of failure to incur large losses and must be able to persuade others to pour their money down the drain. To discover what makes a business successful, then, managers should look at both successes and failures. Otherwise, they will overvalue risky business practices, seeing only those companies that won big and not the ones that lost dismally. They will not be able to tell if their current good fortune stems from smart business practices or if they are actually coasting on past accomplishments or good luck. Fortunately, economists have developed relatively simple tools that can correct for selection bias even when data about failed companies are hard to come by. Success may be inspirational, but managers are more likely to find the secrets of high performance if they give the stories of their competitors'failures as full a hearing as they do the stories of dazzling successes.