Business ethics and the free market

Contrary to popular opinion, business ethics properly understood does not justify any kind of government interference with the free market. By highlighting the distinctive nature of business, and precluding coercion, business ethics actually provides essential support for free markets.     

Discretionary disclosure and the market reaction to restatements

This paper presents evidence that management’s disclosure choices related to a restatement are associated with the market reaction at the time the restatement is announced. The two aspects of pre-restatement disclosure choice we examine are the amount of disclosure, hypothesized to reduce information asymmetries, and the tone of disclosure, hypothesized to exacerbate the effect of subsequently-disconfirmed market expectations. Our results provide support for both hypothesized effects, controlling for characteristics that previous research has shown to affect market reaction to restatements—financial attributes of restatements, and concurrent disclosure choices such as prominence of the announcement. We also find that concurrent and prior disclosure characteristics have equivalent and complementary power in explaining market reaction to restatements, while interactive effects indicate that pre-restatement disclosure choices reduce the marginal market impact of concurrent disclosure characteristics.     

The Impact of AASB 8 Operating Segments on Analysts’ Earnings Forecasts: Australian Evidence

This paper evaluates the impact of firms’ adoption of AASB 8 segment disclosure rules on analysts’ earnings forecasts. It examines whether providing more disaggregated segment information following the adoption of AASB 8 is associated with an increase in analysts’ ability to forecast earnings. We find that analysts’ earnings forecasts have not improved significantly after adopting AASB 8 in Australia, regardless of whether firms disclosed more disaggregated segment information. Our use of control firms provides assurance that the results are due to AASB 8 and not to some other events concurrent with the adoption of AASB 8. Overall, our results imply that the benefits associated with the management approach as experienced by financial analysts in the United States have not been realised by financial analysts in Australia. This suggests that the successful adoption of an accounting standard in one country should not be the justification for recommending adoption in other countries. Further, our results raise questions about whether the enhanced disclosures required in the new standard are more for the other users of financial statements, such as investors, rather than analysts.     

The impact of persistence with therapy on inpatient admissions and emergency room visits in the US among patients with multiple sclerosis

Objective:

Disease-modifying therapy (DMT) for multiple sclerosis (MS) can reduce relapses and delay progression; however, poor adherence and persistence with DMT can result in sub-optimal outcomes. The associations between DMT adherence and persistence and inpatient admissions and emergency room (ER) visits were investigated.

Methods:

Patients with MS who initiated a DMT in a US administrative claims database were followed for 1 year. Persistence to initiated DMT was measured as the time from DMT initiation to discontinuation (a gap of >60 days without drug ‘on hand’) or end of 1-year follow-up. Adherence to initiated DMT was measured during the persistent period and was operationalized as the medication possession ratio (MPR). Patients with an MPR <0.80 were considered non-adherent. Claims during the 1-year follow-up period were evaluated for the presence of an all-cause inpatient admission or an ER visit. Adjusted odds ratios (AORs) for inpatient admission or ER visit comparing persistent vs non-persistent and adherent vs non-adherent patients were estimated using logistic regression models adjusted for patient characteristics.

Results:

The final sample included 16,218 patients. During the 1-year follow-up period, 35.3% of patients discontinued their initiated DMT and 13.9% were not adherent while on therapy. During that same period, 10.0% of patients had an inpatient admission and 24.9% had an ER visit. The likelihoods of inpatient admission and ER visit were significantly decreased in persistent patients (AOR [95% CI]?=?0.50 [0.45, 0.56] and 0.65 [0.60, 0.69], respectively) and in adherent patients (AOR [95% CI]?=?0.83 [0.71, 0.97] and 0.86 [0.77, 0.95], respectively).

Conclusions:

Persistence and adherence with initiated DMT are associated with decreased likelihoods of inpatient admission or ER visit, which may translate to improved clinical outcomes.     

Everyday dramas of conscience: navigating identity through creative neutralisations

ABSTRACT

The paper seeks to recuperate autonomy within debates around identity as the discursive construction of self through exploring the ‘greening’ of intensive mothering discourse and the emergence of new subject positions and practices of accountability. It argues that facets of ideologies of ethical and sustainable consumption are inscribed within this discourse, authorising identity work and furnishing everyday provisioning routines with significance and urgency; and that related social practices that are marked for ‘greening’ diligence or negligence are not merely situated and productive, but transformative of mothering identities, roles and norms. We report the findings of a study of a group of professional working mothers as they negotiate competing and conflictual spaces of doing ‘green’ mothering. This opens an analytical window on the diversity of signifying practices that characterise how informants play with boundaries and ambiguity in creative ways, using images of responsible consumption and sustainable living to negotiate appeals to social well-being while authorising claims to ‘greening’ competence. Our interviews capture discursive events that rearticulate social messages, mixing them with brand appeals and media content that situate the invention of ‘new’ mothering with regard to flows of ‘greening’ discourse. Inventive appeals and related subject positions speak of a repertoire of strategic messaging practices, themselves consistent with a heightened reflexivity shaping content and presentation through practices we understand as modes of neutralisation – forms of self-governance and accountability that seek to generate resources of resilience that help reinforce green mothering identity claims made to self and others. Through socialising ‘sustainability’ in this way, we contribute to our understanding of the social surrogacy of brands and its problematics.     

Ethics in Tax Practice: A Study of the Effect of Practitioner Firm Size

While much of the empirical accounting literature suggests that, if differences do exist, Big Four employees are more ethical than non-Big Four employees, this trend has not been evident in the recent media coverage of Big Four tax practitioners acting for multinationals accused of aggressive tax avoidance behaviour. However, there has been little exploration in the literature to date specifically of the relationship between firm size and ethics in tax practice. We aim here to address this gap, initially exploring tax practitioners’ perceptions of the impact of firm size on ethics in tax practice using interview data in order to identify the salient issues involved. We then proceed to assess quantitatively whether employer firm size has an impact on the ethical reasoning of tax practitioners, using a tax context-specific adaptation of a well-known and validated psychometric instrument, the Defining Issues Test.     

Data pruning in consumer choice models

Common, if not ubiquitous, Marketing practice when estimating models for scanner panel data is to: (a) observe the data, (b) prune the data to a “manageable” number of brands or SKUs, and (c) fit models to the remaining data. We demonstrate that such pruning practice can lead to significantly different (and potentially biased) elasticities, and hence different managerial/practical outcomes, especially in the context of model misspecification. We first justify our claims theoretically by writing the general problem in a classic missing-data framework and demonstrate that commonly used pruning mechanisms (gleaned from current academic Marketing literature) can lead to a nonignorable missing data mechanism. Secondly, we summarize an extensive set of simulations that were run to understand the driving factors of that bias. The results indicate much greater pruning bias in those cases where model fit is poor (small ), random utility errors are correlated with the covariates, or the model is misspecified (e.g., a homogeneous logit is specified when a mixed-logit is true). Empirically, we also demonstrate our findings on the well-cited and highly utilized fabric softener data of Fader and Hardie (1996). Our empirical findings suggest a number of estimates that vary according to the way in which the data is pruned including the magnitude of market mix and attribute elasticities, and purchase probabilities, but that the pruning effect is smaller for better fitting models.

Issue Information

The international human resource management (IHRM) field naturally lends itself to spotlighting the importance of internal and external organizational contexts to help understand how to manage employees in organizations effectively. However, we argue that the range of opportunities that the field creates to understand this context has not yet been fully embraced by IHRM scholars. To address this gap, this special issue explores: (a) the variety of approaches to theorizing how contexts promote or constrain organizational practice; and (b) relevant methodologies that might allow us to unearth novel context-dependent theory in international HRM. We propose a distinction between variable-oriented theorizing (that explains the effects of internal and external contexts on the phenomena under study) and context-dependent theorizing (that requires researchers become intimately familiar with the setting under study to understand context as a shaper of meaning). This editorial also highlights how the articles in the special issue contribute to stimulating further context-dependent IHRM research.