Discretionary and transactional human resource practices and employee outcomes: The role of perceived organizational support

Utilizing perceived organizational support (POS) as the mechanism linking HR practices to employee behaviors in the workplace, we examine a broad set of HR practices in order to understand the relative importance of each HR practice (i.e., those that explain incremental variance over other practices) in influencing employee behaviors. We differentiate between discretionary and transactional HR practices to test the discretionary investment requisite of POS theory. The results show that of the eight discretionary practices, only participation and decision making directly influenced the extra‐role behaviors that employees exhibit, and only training and development directly impacted the customer‐oriented behaviors. Furthermore, one of the transactional HR practices was found to have a direct effect on organizational citizenship behavior. Our findings indicate that the performance management process, promotional opportunities, participation, and involvement in decision making affect how employees behave toward the customer and the extra‐role behaviors they exhibit. Furthermore, this occurs through the view employees develop of the organization as a place to work. That is, these four HR practices demonstrate to employees that they are valued, and, in turn, this feeling of being appreciated impacts their commitment to delivering high‐quality service to the customer and going beyond their job responsibilities. Implications for research and practice are discussed. © 2012 Wiley Periodicals, Inc.     

The Value-relevance of Geographic Segment Earnings Disclosures Under SFAS 14

This study examines whether geographic segment earnings as reported under the requirements of SFAS 14 provide value-relevant information. The FASB recently issued SFAS 131, which drastically changes the segment reporting requirements for US firms. Firms are required to disclose segment information by operating segment. For those firms that define operating segments along industry lines, disclosure of geographic segment earnings is no longer required. If geographic segment earnings provide value-relevant information, a potentially valuable source of information may be lost.
In this study, geographic segment earnings coefficients are estimated by (1) regressing unexpected security returns on unexpected geographic segment earnings and (2) regressing leading-period returns on current geographic segment earnings. Leading period returns involve extending the return interval to include the returns for prior years. The results show that unexpected geographic segment earnings relate differentially to unexpected security returns. For the leading-period returns model, little significant evidence is found for the market's differential valuation of geographic segment earnings coefficients for one- and two-year return intervals. When the return intervals extend to three years or more, significant evidence is found that the market values geographic segment earnings differently, which suggests that such disclosures reflect information used by market participants in setting security prices. The FASB may want to reconsider or amend its segment reporting requirements.     

Determining the cost of common equity capital: The direct method

One of the most critical aspects of the corporate capital budgeting process is the determination of a proper “hurdle rate” or “cut-off” rate to employ in the screening of proposed uses of funds. This hurdle rate is now commonly referred to in both industry and the literature of financial management as the cost of capital. General agreement on how to measure the equity component of the cost of capital (i.e., the cost of common equity) has not yet been achieved by either practitioners or theorists. A unique approach that shows considerable promise differs from the abstract mathematical techniques typically used. It involves quizzing directly a sample of the corporation's existing common stockholders as to their dividend and capital gain expectations. Proper interpretation of the responses can provide top corporate management with an estimate of the cost of equity capital, as represented by the returns (expected) by shareholders. Thus, top level management has more complete information from the firm's owners on the returns that are expected from the investment of retained earnings.     

Contracting in the U.S. Pork and Beef Industries: Extent, Motives, and Issues

Contracting has increased significantly in the US livestock-meat sector. Over half of finished hogs and about a third of fed cattle are marketed under some form of contract. Contracting motives vary by type of contract, whether buyer or seller, and by commodity. Several motives for buyers and sellers of finished hogs and fed cattle are identified and discussed. Issues related to contracting per se and the trend toward increased contracting have been raised by contracting opponents, politicians, and economists. Several of these issues are discussed under six headings. Lastly, agricultural economists are encouraged to become actively involved in addressing these issues, especially providing pragmatic education and assistance to those involved in contracting.     

Future Stock Performance of Oil and Gas Firms Conditional on the Imputed Value of Reserves

Review of Quantitative Finance and Accounting - Harris and Ohlson (1990) provide evidence suggesting market inefficiencies in the pricing of oil and gas firms in the 1979–1984 period. This...     

Hybrid strategic groups

The notion of strategic groups has recently emerged as a critical perspective for uncovering firms' strategic postures/recipes and competitive market structures. Firms within strategic groups generally adopt similar strategic recipes and compete more intensely than firms across strategic groups. Building on recent research, the authors develop the concept of hybrid strategic groups, which blend the strategic recipes of more than one group, in contrast to existing conceptualizations of strategic groups, where either firms tightly follow the recipes of a strategic group (i.e., core firms) or firms loosely follow the recipes of a strategic group (i.e., secondary firms). Thus, competition among firms depends not only on the strategic group but also on the overlap of that strategic group with other strategic groups. The authors devise a combinatorial optimization-based classification procedure utilizing a bilinear model that accommodates multiple variable batteries that can estimate hybrid strategic groups. The proposed methodology is illustrated by using archival data on public banks. For this illustration, the hybrid strategic group solution outperforms ordinary cluster analyses and offers critical insights into the nature of competition among firms. Copyright © 2007 John Wiley & Sons, Ltd.     

Recognizing Business Ethics: Practical and Ethical Challenges in Awarding Prizes for Good Corporate Behaviour

There seems to be a proliferation of prizes and rankings for ethical business over the past decade. Our principal aims in this article are twofold: to initiate an academic discussion of the epistemic and normative stakes in business-ethics competitions; and to help organizers of such competitions to think through some of these issues and the design options for dealing with them. We have been able to find no substantive literature – academic or otherwise – that addresses either of these two broad topics and audiences. Our modest aim, therefore, is to suggest an agenda of issues, and to begin to explore and analyse some of the possible arguments for and against various philosophical or practical solutions. Part I explores the challenges facing a prize-organizing committee, including problems derived from what Rawls calls the “fact of pluralism” in democratic societies (reasonable people will always disagree over some basic values, including those relevant to evaluating business practices), and epistemic issues about how we can justify qualitative judgments on the basis of incomplete quantitative data. We also try to identify risks and opportunity costs for ethics-prize granters. In Part II we spell out (a) a range of design options and (b) some advice about how any particular prize-awarding committee might select among these options to best achieve its goals (which typically involve highlighting and publicizing best practices for ethical business).     

Assessing advertising content in a hospital advertising campaign: An application of Puto and Wells (1984) measure of informational and transformational advertising content

The following is a report of a study designed to measure advertising content based on the cognitive and affective elements of informational (i.e., information processing) and transformational (i.e., experiential) content using the measure of advertising informational and transformational content developed by Puto and Wells (1984). A university hospital advertising campaign designed to be high in transformational content did not appear to affect perceived quality of local university hospitals relative to private hospitals or increase the likelihood of choosing a university hospital in the future. Further, experiences with university hospitals that seemed to be in direct contrast to the content of the advertisements based on subject perceptions affected how university hospital advertisements were perceived in terms of content. Conclusions and implications for hospital advertising campaigns are discussed.