A comparative study of the adoption and implementation of target costing in the UK, Australia and New Zealand

Most of the studies on target costing (TC) only provide insight into the adoption and perceived benefits of TC, and do not address the levels of implementation of the technique. These studies also assume that TC is only relevant to manufacturing firms and therefore do not investigate the adoption of this technique in service firms, and consequently exclude service firms from their surveys and analysis. Furthermore, most studies do not examine factors influencing the adoption of TC systems. Contributing to these gaps in the literature, this paper reports the results of a survey among CIMA-qualified management accountants working in manufacturing and service firms in the UK, Australia and New Zealand on the adoption and implementation of TC. The study examines the importance of attributes of TC (namely relative advantage, compatibility, ease of use, result demonstrability, trialability) for decision makers to adopt and implement such cost and management accounting innovation. The survey indicates that TC is equally prevalent among manufacturing and service firms while in terms of the levels of implementation there is a significant difference between manufacturing and service firms. The study shows that there is a growing interest in the examination of all cost-reducing strategies at the planning stage and adoption of value engineering to incorporate customer requirements rather than focusing on the adoption of cost-cutting strategies at the production stage.     

Do Aussie markets smile? Implied volatility functions and determinants

If options are correctly priced, the interpretation of volatility in the Black–Scholes model (as identifying the volatility of the underlying asset) is violated. The empirical relation between the model ‘implied volatility’ and the degree to which the option is in-the-money (moneyness) has been reported as resembling a U-shape (or ‘smile’) for options on currencies (and more of a ‘smirk’ for options on equities). In this article, using multivariate time-series analysis and employing an impulse response function, we investigate the structural relationships and dynamics of the volatility smile in relation to the option liquidity, key features of the underlying asset and market momentum. Our findings confirm evidence of a number of biases in the Black–Scholes model consistent with Chou et al. (2011) in regard to liquidity in both the underlying and the option itself, and with Peña et al. (1999) as to the importance of the option time to maturity. As well as delineating such biases as they co-relate both with each other and with the underlying asset volatility and momentum, we find that the pronounced smile is related to the differential sensitivities of in-the-money and out-of-the-money options, which itself suggests an explanation for the characteristic smile shape.     

Islamic business scorecard and the screening of Islamic businesses in a cross‐country setting

Screening of shari'ah compliant firms is incomplete without the inclusion of ethical and social responsibilities. The existing “activity screen” does not directly capture the ethical and social footprints of firms. The purpose of this study is to create and test an Islamic business scorecard that combines activity, ethical, and social responsibilities that Islamic businesses must comply with. This new Islamic business scorecard replaces the existing activity screens and is added to the financial screens to create an integrated business screening mechanism to identify shari'ah compliant firms. This study utilizes data from a sample of 410 shari'ah compliant companies listed with stock exchanges in Malaysia, Pakistan, and Bangladesh. Out of the five newly developed constructs of the Islamic business scorecard, the results indicate Islamic firms are less committed to social responsibilities and tend to push forward economic responsibilities that focus on profitability and growth. Of the three countries, this study reports Malaysian firms have the highest compliance scores, while Bangladesh displays characteristics of the “next‐big shari'ah destination”. Financial screens are more important than the Islamic business scorecard for firms in the construction, industrial, technology, and trading/services sectors. Because of its connection with the economic, ethical, and social dimensions, the scorecard helps to identify the true nature of shari'ah compliance as a useful decision tool for investors and policymakers.     

Machine-Part Cell Formation Problem Using a Group Based League Championship Algorithm

This article proposes a new algorithm for grouping problems that is a grouping version of league championship algorithm (GLCA). We compare the performance of GLCA with several well-known algorithms published in the present literature and select a set of 20 most widely used benchmarks of cell formation sample problems posing as a grouping problem. We used a truncated geometric algorithm to find the number of initial cells. Our computations reveal that GLCA can reach the best-known solution for 17 of the 20 benchmark problems, and improve the solution of three others with a 1.4% average gap.     

Governance Matters and Entrepreneurial Activities

This study uses Global Entrepreneurship Monitor (GEM) and World Bank Group Entrepreneurship Survey data from 40 countries from 2002 to 2008 to examine the linkage between governance matters and entrepreneurial activities. Based on the conceptual model of GEM and by using fixed‐effects panel analysis, the results show that political stability and absence of violence, rule of law, and control of corruption are highly significant determinants of entrepreneurial activities. © 2012 Wiley Periodicals, Inc.     

Investigating Software Piracy in Jordan: An Extension of the Theory of Reasoned Action

Software piracy, the illegal and unauthorized duplication, sale, or distribution of software, is a widespread and costly phenomenon. According to Business Software Alliance (2008), over 41% of the PC software packages installed worldwide were unauthorized copies. Software piracy behavior has been investigated for more than 30 years. However, after a review of the relevant literature, there appears to be two voids in this literature: a lack of studies in non-Western countries and a scarcity of process studies. This study contributes to literature by developing a software piracy model to better understand the decision-making process that underlies this unethical behavior. The model was tested using data collected from a sample of 323 undergraduate business students. Consistent with the Theory of Reasoned Action (TRA), attitudes toward software piracy and subjective norms were significant predictors of intention to pirate software. Also, the results suggested that ethical ideology, public self-consciousness, and low self-control moderated the effect of these variables on intention to pirate software. The results have important practical implications for the software industry and governments hoping to curtail software piracy. Limitations of the study and recommendations for future studies are discussed as well.     

Motivations of Fresh-Cut Produce Firms to Implement Quality Management Systems

A survey of the fresh-cut produce industry (e.g., bagged salads, baby carrots, stir-fry mixes, cut-fruit mixes) shows firms' motivation to adopt quality management systems and the effects of implementation on firms and their relationships with suppliers and customers. Data from surveyed members of the International Fresh-cut Produce Association suggest that system adoption was very widespread. The effects were intra-firm (e.g., improved management and efficiency of quality systems) and inter-firm (e.g., improved identification and facilitation of trade with firms in the supply chain). Satisfaction with adoption of quality management systems was linked to many of the same factors.     

Selection of Nonnested Demand Models

This paper applies the likelihood dominance criterion (LDC), a new method of model selection developed by Pollak and Wales (1991), to four popular demand equation systems, using a set of seasonally adjusted quarterly Canadian data series. the results indicate that the almost ideal demand system (AIDS) dominates various alternative demand systems. the LDC method is useful in assisting demand analysts in selecting the proper demand specification. the paper also includes tests for unit roots and cointegration and, based on these tests, an error corrections model is estimated and tested against the popular but not theoretically plausible linear approximate almost ideal demand system.