Positive business: doing good and doing well

This article investigates the meaning of doing good and doing well in positive business. It examines the relationship between the two expressions and discusses their relevance, shedding new light on the significance of ‘positive’ in positive business and positive organizational scholarship (POS). Thus, this article illuminates the ultimate end of positive states and practices. ‘Positive’ primarily represents values and assumptions. These lead to the creation of beneficial situations and marked improvements, which put individuals and organizations on an upward trajectory toward achieving excellent functioning, assuring profitability in addition to sustainability and social well-being. Doing well, with reference to economic performance and profits, is partly constitutive of doing good. This presents a new approach regarding the role of economic outcomes in positive business and POS. It means that financial criteria do not have priority. Profits are considered vital and necessary, but the final ‘raison d'être’ of positive states and practices is the overall well-being of the stakeholders.     

Moderating effect of discriminatory attributions on repatronage intentions

This research investigates the role of social context at the time of a service failure. The negativity of the service failure has the potential to escalate when consumers who are part of a traditionally stigmatized group believe the service failure to be a purposeful event brought on by physically observable differences in appearance. A small exploratory study and two large scale data collections are conducted to validate a measure of transaction specific attributions of discrimination (TSAD) to enhance our understanding of the issue. The moderating effect of TSAD is demonstrated on repatronage intentions to the service firm.     

The impact of agricultural innovation system interventions on rural livelihoods in Malawi

This study, conducted in central Malawi, assessed the way a research intervention using an agricultural innovation system affected rural livelihoods. Propensity score matching was used to establish one village as a control, against which the impact of the intervention on two study villages [0]could be measured. Using the Enabling Rural Innovation intervention as a case study, it was established that rural livelihood outcomes pertaining to crop and livestock production, household income, asset ownership and fertiliser use were significantly improved by this intervention. In-depth analysis, however, demonstrated that although the participating households had more robust livelihoods during the intervention, when the research programme was phased out the effect was reduced. The authors recommend that local agricultural extension officers should receive more capacity building and budgetary support to ensure proper understanding of agricultural innovation systems concepts and correct application so as to sustain their positive effects.     

What's wrong with executive compensation? A roundtable moderated by Charles Elson

The value that many superpaid CEO superstars supposedly created has largely disappeared, and the likelihood that it will be recovered anytime soon seems remote. On top of that, a good number of top executives treated their companies like ATMs, awarding themselves millions of dollars in corporate perks. It's hard to dispute the idea that executives were corrupted by the sums of money dangled in front of them. What's wrong with executive compensation, and what can we do about it? HBR and the University of Delaware's Center for Corporate Governance convened a round-table of compensation experts last October on the university's campus in Newark, Delaware. The 12 panelists, from CEOs to investors, from the professionals who advise them to a chief justice who rules on their disputes, provided an extraordinary diversity of viewpoints. The panelist began by debating ways to align the interests of the senior executives with the long-term interests of the company-weighing the relative benefits of stock options versus stock grants, for instance. But the discussion expanded to cover broader questions of corporate governance and company values. "The main reason compensation increases every year is that most boards want their CEO to be in the top half of the CEO peer group," said Ed Woolard,Jr., a former CEO of DuPont. And compensation lawyer Joe Bachelder pointed out the danger of structuring pay in such a way that it dampens risk taking among executives. It was a lively and wide-ranging discussion of one business's most pressing issues.     

Switching to Continuous Trading and its Impact on Return Behavior and Volume of Trade

The study investigates changes that occurred following the transfer of 29 stocks in Israel from a single daily auction to a more continuous-like trading system. On average, the standard deviation of daily market model residuals decreased, and trading volumes increased. This suggests that continuous trading promotes end-of-day price efficiency and better suits investors' trading-mechanism preferences. An interesting phenomenon observed is that the noisiness of end-of-day prices decreases immediately after the transfer, while volume rises only later on. This constitutes evidence that adding rounds of trade contributes to price accuracy even when trading volumes do not increase.     

Substituting one risk increase for another: A method for measuring risk aversion

This paper defines the rate of substitution of one stochastic change to a random variable for another. It then focuses on the case where one of these changes is an nth degree risk increase, and the other is an m  th degree risk increase, where n>m?1$n>m?1$. The paper shows that the rate of substitution for these two risk increases can be used to provide a broader definition and two additional characterizations of the nth degree Ross more risk averse partial order. The implications for local intensity measures of nth degree risk aversion are also examined. The analysis organizes the existing results as well as generates new ones.     

Determinants and Consequences of a Voluntary Turn Away from IFRS to Local GAAP: Evidence from Switzerland

Abstract

We examine determinants and consequences of a turn away from International Financial Reporting Standards (IFRS) to local generally accepted accounting principles (GAAP), thereby exploiting a unique feature of the Swiss setting in which listed firms are allowed to switch from IFRS to Swiss GAAP, all else being equal. We posit that net benefits of IFRS are less for small firms with higher insider ownership. In addition, we predict that the net benefits of IFRS are not constant over time because of changes in IFRS and/or changes in firm-specific circumstances. To the extent that the switching firms’ costs of IFRS reporting outweigh its benefits, we do not predict adverse capital-market effects after a switch. Consistent with predictions, we find that (a) small firms with higher insider ownership and fewer foreign investor holdings are more likely to switch, (b) increasing reporting costs as well as changes in firm-specific circumstances affect switching propensity, (c) switching firms substantially reduce their disclosures after they switch, and (d) switching firms neither experience a decrease in liquidity nor negative announcement returns. Overall, our findings are important for standard setters and securities regulators in shaping (future) reporting requirements for listed firms.     

Stages of Organizational Transformation in Transition Economies: A Dynamic Capabilities Approach

How do organizations previously dominated by the state develop dynamic capabilities that would support their growth in a competitive market economy? We develop a theoretical framework of organizational transformation that explains the processes by which organizations learn and develop dynamic capabilities in transition economies. Specifically, the framework theorizes about the importance of, and inter‐relationships between, leadership, organizational learning, dynamic capabilities, and performance over three stages of transformation. Propositions derived from this framework explain the pre‐conditions enabling organizational learning, the linkages between types of learning and functions of dynamic capabilities, and the feedback from dynamic capabilities to organizational learning that allows firms in transition economies to regain their footing and build long‐term competitive advantage. We focus on transition contexts, where these processes have been magnified and thus offer new insights into strategizing in radically altered environments.