Option Awards for Australian CEOs: The Who, What and Why

The compensation structure for Australian CEOs, and especially the extent to which they receive executive stock options, is explored. Evidence suggests that the award of executive stock options is common in Australia, but not in as systematic a manner as has been documented for US CEOs. Where ESOs are awarded, they form a significant component of total compensation, even allowing for limitations in the way we approximate their value. Modelling the use of ESOs shows relatively few empirical regularities, other than a positive association between firm size and ESO use. This is consistent with a view that ESOs are a form of "rent extraction" by CEOs, but it may also reflect a bias towards their use created by accounting rules.     

Organizational Differentiation through Badging: Investors in People and the Value of the Sign

This paper explores the meaning of the state–sponsored initiative for people management, Investors in People (IiP), through deconstruction of the signifiers that represent its articulation. Semiotic analysis is employed in order to consider the sign–value that is associated with IiP and to explore the symbolic meaning of cultural artefacts, such as 'the badge' and 'the flag', which feature in the experience of managers and employees in six case study organizations. This post–structuralist approach enables us to focus on the discursive construction of textual meaning surrounding IiP as a 'readerly' as well as a writerly project. It is suggested that organizations are subject to a process of image production and consumption. This process requires them to seek differentiation from other organizations by acquiring quality initiatives that constitute a system of objects. In particular, the meaning of IiP signifiers as emblems of achievement is explored and the extent to which these become simulacra is considered. It is argued that there is a significant gap between writerly intentions as to what quality initiatives ought to signify and their organizational, context–bound, indeterminate meanings. By elucidating the conditions of IiP's signification it is shown that this discourse has the potential to undermine the very philosophy it asserts. Finally, drawing on this analysis, we outline the way that badge acquisition develops over time through processes of accumulation and adaptation.     

Education: High Potential Not Yet Realized

Knowledge is not easily plucked from the stream of existence and social scientists have to offer the sobering suggestion that while 'What matters is what works', what matters first is how we find out what works. If a blind lurching from one good idea to yet another fashion is to be avoided, the task of finding out what works must be central. The widespread use of systematic monitoring (performance indicators) in education in England provides the kind of data stream needed to make it likely that the occasional dramatic outcome will be noticed, particularly by teachers. This article explains the problems and possibilities of using evidence-based information to improve education.     

Nonaudit Services and Earnings Conservatism: Is Auditor Independence Impaired?*

We examine whether the provision of nonaudit services (NAS) by incumbent auditors is associated with a reduction in the extent to which earnings reflect bad news on a timely basis (that is, news‐based conservatism). Reduced conservatism is expected to occur if relatively high levels of NAS result in reduced auditor independence and, ultimately, lower‐quality auditing. Because client‐specific demand for NAS is expected to vary, our proxy for the auditor‐client economic bond is the extent to which NAS purchases (relative to audit fees) are greater or less than expected. Using several different methods for identifying news‐based conservatism, we consistently find that higher than expected levels of NAS are not associated with reduced conservatism. This result is robust to allowing for endogenous NAS demand, as well as several explicit factors that may be associated with differences in conservatism. Similar conclusions arise from tests that use alternative measures of the economic bond between auditors and their clients, as well as in tests confined to either the Big 6 or non‐Big 6 audit firms. Our results are consistent with factors such as market‐based incentives, the threat of litigation, and alternative governance mechanisms offsetting any expected benefits to the audit firm from reducing its independence. We therefore conclude that recent legislative intervention aimed at restricting the supply of NAS is unlikely to result in increased independence in fact, although independence in appearance may be improved.     

Mixed Strategy Pricing Behaviour in the UK Package Tour Industry

In a market, such as that for package tours, in which products are weakly differentiated and information is fuzzy, consumers may adopt search behaviour such that effectively, they play mixed strategies in the selection of the product that they choose to purchase. Tour operators' best response to this behaviour is mixed strategy pricing. Mixed strategy pricing is likely to mean that the variances of prices will be different at different points during the season for each operator. A simple model is formulated to illustrate the sequence of moves and the behaviour of variances. Brochure data for the summer seasons of 1982 and 1995 is analysed to investigate whether variances differ at different times during the season and thus differ systematically with the level of demand. The weight of evidence generally supports the view that operators adopt mixed strategies when setting brochure prices, even if achieved unconsciously through the application of rules of thumb. Strong evidence is found of the form that one operator, at least, produced a pattern of variances that is statistically significant and that could not result from the method of analysis adopted in the paper or from an ad hoc allocation of its fixed costs.     

Investors in People: Market-led Voluntarism in Vocational Education and Training

Introduced in the UK in 1991, Investors in People (IiP) provides a benchmark for good training practice. It has become a central feature of the UK government's vocational education and training policy. This article aims to broaden the debate relating to IiP in two ways: first, by reviewing the existing evidence on recognition rates and its impact on training activity; and second, by exploring the new directions that IiP is taking in terms of its redesign and its overseas adoption. Finally, we consider the research agenda and the policy implications that arise from the review.     

Teaching beliefs of non‐formal consumer educators: a perspective of teaching in home improvement retail stores in the United States

The purpose of this qualitative study was to explore the teaching beliefs of instructors who provide consumer education clinics (e.g. tile laying, faux painting, faucet replacement) in home improvement retail stores. Research in adult and higher education and the K‐12 field demonstrate that beliefs about teaching and learning and their relationship to practice are quite significant. Only recently have teaching beliefs begun to receive attention in the field of consumer education. Using participatory observations and in‐depth interviews a complex picture was revealed about non‐formal consumer education representative of a customer‐centred approach, an emphasis on transmission model of education, a fostering of fun and informal communication, minimal learner expectations and an epistemology rooted in personal experience. The implications are important for training future adult educators who practise in non‐formal consumer education settings.     

Does Price Discreteness Affect the Increase in Return Volatility Following Stock Splits?

Stock return volatility tends to increase significantly following stock splits. One potential cause of this is the trading of stocks in discrete price intervals called ticks. This study provides a direct test of price discreteness as a determinant of this phenomenon by examining variance increases before and after the 1997 date when the exchanges reduced the tick size from 1/8 to 1/16. Results generally show that the post-split variance increase was unaffected by the reduction in tick size even after controlling for other factors. AMEX stocks proved the exception, with slightly lower variance increases following the tick size reduction.     

Competition on the London Stock Exchange

This paper investigates the determinants of the level of competition on the order–driven market organised by the London Stock Exchange. In contrast to previous empirical market microstructure studies, we treat the level of competition as an endogenous variable. The statistical nature of the measures of competitive activity used in this paper necessitate use of a count regression model. Using a sample 50 stocks, we find that users of the system tend to follow the lead of other users (termed the 'herding effect') and that competition is greater during the period when the US exchanges are open (termed the 'US effect'). In addition, the level of competition is positively related to the bid–ask spread pertaining to a particular stock (termed the 'spread effect'). The latter result is most likely due to traders following a strategy where trade immediacy is traded off against price advantage. Finally, we find that the magnitude of the herding effect, the spread effect, and the fit of the count regression models (termed the 'fit effect') vary in a predictable manner across the liquidity of stocks.