Cultural and Ethical Effects on Managerial Decisions: Examined in a Throughput Model

Financial and cost accounting information is processed by decision-makers guided by their particular need to support decisions. Recent technological advances impacting on information as well as organizations such as the European Community mandating financial reporting requirements for many countries is rapidly changing the landscape for decision making using accounting information. Hence, the importance of individuals' decision making is more important than it was previously. These decisions are also influenced by individuals' ethical beliefs. The Throughput Modeling approach to cultural and ethical concerns provides a way of dealing with accounting information processed through various pathways by decision-makers. This modeling approach captures different philosophical perspectives from which to understand what is involved in "thinking scientifically." In the Throughput Modeling approach, pathways highlight the importance of how different philosophical perspectives may be used by individuals in arriving at a decision. This paper highlights key concepts involved in rethinking the basis of moral decision making in terms of an underlying process, rather than focusing on the application of principles or the development of a virtuous character. Examples are provided from both English and Spanish settings to help emphasize the importance of modeling ethical decision making globally.     

Information brokers and the use of budgetary and financial information by politicians: the case of Portugal

This paper analyses the intermediary role of the technical bodies that support the use of budgetary and financial information by central government politicians in Portugal. The main findings show that information brokers are playing a central role in preparing this information in a credible, simple and understandable way. However, even if not intentionally, the information they present can be biased. Politicians need to be aware that the information brokers they rely on may not be giving them ‘neutral’ information.     

Signalling and the Long‐run Performance of Spanish Initial Public Offerings (IPOs)

Abstract:   Academic research into firms that have gone public has focused on the study of two anomalies: initial underpricing and long‐run underperformance. We analyse Spanish Initial Public Offerings to provide additional evidence on the long‐run performance of IPOs and its relationship with initial underpricing. Results reveal the existence of negative long‐run abnormal stock returns, in line with the international literature. Long‐run performance presents a positive relationship with underpricing and the volume of funds obtained in seasoned offerings, in consonance with the predictions of Allen and Faulhaber (1989) , Welch (1989) and Grinblatt and Hwang (1989) .     

Stakeholder influence on corporate strategies over time

Modern management reporting on its company's performance is influenced by individuals ethical considerations. Stakeholders philosophies have continued to change over the last 75 years affecting reporting systems for companies reporting information internally and externally. These fundamental changes in philosophy have affected how information is conveyed. We are not claiming that only one philosophical viewpoint dominates companies reporting practices, but there does appear to be a changing trend of philosophies building on one another. We use resource dependence theory in relationship to a decision-making model to explain changing stakeholders positions over time. This paper argues that six dominant philosophical theories have influenced the way individuals and organizations report financial and other information. Further, these philosophies then are depicted in a model that helps us to understand what influences companies to present themselves to the outside world. A vignette is used to depict changing philosophical views for several companies management report over 75 years.     

Consumer and retailer perceptions of hypermarkets and traditional retail stores in Portugal

Since its appearance in the mid 1980s, the hypermarket is a symbol of the modernisation of Portugal. It has dramatically changed not only the retailing structure in this country but also Portuguese buying behaviour. To better understand these changes, personal interviews were conducted with 500 Braga consumers. In addition, a mailed survey was administered in the same market to 204 traditional retailers. The results show that, for consumers, the hypermarket is the preferred type of retail store for frequently purchased packaged goods, due to its low prices and convenient one-stop shopping. The perception of traditional retailers is that the hypermarkets affected them negatively. The comparative analysis suggests that, although consumers do not have a negative opinion about traditional retail, they do not share the same favourable opinion that traditional retailers have about themselves.     

Migration and trade: Theory with an application to the Eastern-Western European integration

The remarkable increase in trade flows and in migratory flows of highly educated people are two important features of globalization of the last decades. This paper extends a two-country model of inter- and intra-industry trade to a rich environment featuring technological differences, skill differences and the possibility of international labor mobility. The model is used to explain the patterns of trade and migration as countries remove barriers to trade and to labor mobility. We parameterize the model to match the features of the Western and Eastern European members of the EU and analyze first the effects of the trade liberalization which occurred between 1989 and 2004, and then the gains and losses from migration which are expected to occur if legal barriers to labor mobility are substantially reduced. The lower barriers to migration would result in significant migration of skilled workers from Eastern European countries. Interestingly, this would not only benefit the migrants and most Western European workers but, via trade, it would also benefit the workers remaining in Eastern Europe.     

A Model Capturing Ethics and Executive Compensation

This article develops and applies a knowledge-based framework for understanding and interpreting executive compensation under the rubric of ethical consideration. This framework classifies six major ethical considerations that reflect issues in compensation design. We emphasize that these six ethical considerations are influenced by liberty and equality concepts. This framework helps to highlight areas where executive compensation has not been well spelled out.     

SHEDDING LIGHT ON THE LIGHT BULB PUZZLE: THE ROLE OF ATTITUDES AND PERCEPTIONS IN THE ADOPTION OF ENERGY EFFICIENT LIGHT BULBS

Despite the potential energy savings and economic benefits associated with compact fluorescent light bulbs, their adoption by the residential sector has been limited to date. In this paper, we present a theoretical model that focuses on the agents' ability to perceive the correct cost of lighting and on the role of environmental attitudes as key determinants of the adoption decision. We use original data from Ireland to test our theoretical predictions. Our results emphasize the importance of education, information and environmental awareness in the adoption decision.     

Splitting leagues: promotion and demotion in contribution-based regrouping experiments

The paper reports an experimental study on a promotion-demotion mechanism to mitigate the free-rider problem in a voluntary contribution setting. The mechanism hierarchically splits a group in two; we refer to one subgroup as the Major league and to the other as the minor league. The most cooperative subject of the minor league is switched with the least cooperative subject in the Major league. The results reveal a significant increase of cooperation levels in both leagues relative to the standard voluntary contribution mechanism. We argue that a lack of sequentially-rational beliefs about continuation payoffs in Major and minor leagues leads to higher equilibrium contributions. The data suggest beyond that, the promotion-demotion mechanism regroups subjects deliberately according to their cooperativeness.