Management accounting innovations for rationalizing the cost of services: The reassessment of cash and accrual accounting

ABSTRACT

Management accounting can be a useful tool in austerity government because it produces information about the costs of public services and can be used for informed decision-making. Spanish local governments are required to submit data on the cost of their services to central government, which publishes this information online. The calculation of costs is based on budgetary cash accounting instead of accrual accounting; therefore cash accounting is being used for decision-making and accrual accounting has no role in this process. This paper critically analyses the innovation from three perspectives: the use assigned to the cost information in the legal framework; the opinion of academics and experts; and the perception of professionals about the usefulness of the information produced with the new system.     

Integrating Servant Leadership into Managerial Strategy to Build Group Social Capital: The Mediating Role of Group Citizenship Behavior

Recently, various studies have suggested that ethical leadership offers an important antecedent of fluid internal workplace relationships, which are conducive of internal social capital. Yet existing research has neither inquired into potential mediators of this relationship nor addressed the role of other distinct leadership strategies in encouraging such a valuable capital. This study advances previous research by examining if servant leadership, which seeks to put followers’ interests and needs first, can account for social capital variance within the work group, which is the building block of organizations. New to the literature, we also investigate whether group citizenship behavior mediates this relationship. A sample of 352 work groups, spanning 187 hotels located in Spain, reveal that group citizenship behavior partially mediates the positive influence of servant leadership on group social capital. Managers can use these findings to lead their businesses in a more socially friendly direction while also building group social capital, which can improve the competitiveness of their work groups, and the entire business.     

The Influence of Organizations’ Tax Avoidance Practices on Consumers’ Behavior: The Role of Moral Reasoning Strategies,Political Ideology,and Brand Identification

Journal of Business Ethics - This study adopts moral reasoning strategies (moral rationalization and decoupling) to investigate why consumers support companies involved in ethical transgressions....     

Does quality management improve performance or vice versa? Evidence from the hotel industry

This paper has several aims: (a) to identify an empirical taxonomy of quality management (QM), (b) to assess whether more advanced QM hotels achieve better performance levels and (c) to analyse whether hotels with better performance levels have more advanced QM levels. This paper contributes to identify a taxonomy of QM in hotels showing the association between a particular level of QM and different performance dimensions. In addition, the paper sheds light on the possible selection effect in the hotel industry. The study finds that hotels with higher QM levels have better hotel guest satisfaction and employee satisfaction, efficiency and better business performance. It also shows that hotels with better performance levels develop QM to a greater extent. Accordingly, QM level is one factor among others that explain better performance levels in hotels. Also, good performance can facilitate the implementation of QM practices.     

Preventing rather than punishing: An early warning model of malfeasance in public procurement

Is it possible to predict malfeasance in public procurement? With the proliferation of e-procurement systems in the public sector, anti-corruption agencies and watchdog organizations have access to valuable sources of information with which to identify transactions that are likely to become troublesome and why. In this article, we discuss the promises and challenges of using machine learning models to predict inefficiency and corruption in public procurement. We illustrate this approach with a dataset with more than two million public procurement contracts in Colombia. We trained machine learning models to predict which of them will result in corruption investigations, a breach of contract, or implementation inefficiencies. We then discuss how our models can help practitioners better understand the drivers of corruption and inefficiency in public procurement. Our approach will be useful to governments interested in exploiting large administrative datasets to improve the provision of public goods, and it highlights some of the tradeoffs and challenges that they might face throughout this process.     

A note on the implied volatility of floating strike Asian options

Decisions in Economics and Finance - In this paper, we study the short-time behavior of the implied volatility for short-time floating strike Asian options. Our method is based on Malliavin...     

SOCIAL CAPITAL,GOVERNANCE AND PERFORMANCE OF ETHIOPIAN COFFEE COOPERATIVES

ABSTRACT: The performance of agrarian cooperatives strongly depends on the interaction between internal cohesion and external exchange. Empirical assessments of social capital and trust within cooperatives suggest that market involvement could enhance collective action. This relationship may not hold, however, under circumstances of heterogeneous membership and strong state control. We use field data from a comparative sample of 500 coffee farmers belonging to five cooperatives of Sidama Cooperative Union, Ethiopia to outline how differences in economic performance are related to the structure of social networks. We identify clear trade‐offs between bonding and bridging social capital that favour remotely located cooperatives.     

Social security and economic performance in Portugal: after all that has been said and done how much has actually changed?

This paper provides an empirical estimate of the macroeconomic effects of the Portuguese pay-as-you-go social security system based on data for the period 1970?C2007 and on VAR estimates using GDP, the unit cost of labor, the unemployment rate, the savings rate and social security spending. The major findings are twofold. First, growing social security spending has had detrimental effects on all of the private sector variables under consideration suggesting the existence of sizable inefficiencies. Second, these inefficiencies persist despite the successive reforms that took place over the last two decades. These results highlight the need for structural reforms of the pay-as-you-go system thereby addressing the sources of these inefficiencies, regardless of whether or not the system is financially sustainable. Furthermore, any reforms designed to address sustainability concerns cannot ignore these inefficiencies or risk making them even worse and thereby hindering the quest for sustainability itself.     

CSR Disclosure Items Used as Fairness Heuristics in the Investment Decision

The growth in demand for corporate social responsibility (CSR) information raises the question of how various CSR disclosure items are used by investors, an important stakeholder group driven by instrumental, moral, and relational motives. Prior research examines the instrumental motive to maximize individual shareholder wealth and the moral motive to actualize personal stewardship interests. We contribute to the literature by examining investors’ relational motive to realize positive stakeholder relationships within and between organizations and communities. The relational motive arises when investors look at a company’s treatment of other stakeholder groups as a heuristic to form a perception of how fairly they will also be treated by that company in the future, and thus invest in the company they perceive as fair. Fair treatment in the future matters to the investor who purchases stock from the company or via the capital markets in exchange for becoming a shareholder and thus a residual claimant of the company. As such, the investor expects future cash flows from holding and/or reselling the stock and expects to be treated fairly by the company in the future. We propose that investors, use as a fairness heuristic, CSR disclosure items—CSR investment level or CSR assurance—that represent the company’s commitment to its stakeholders, and that the resulting fairness perception affects the extent to which the CSR disclosure items influence their investment decision. Using responses from 113 investors in an online experiment, we find that fairness perceptions are higher when CSR investment is above (versus below) the industry average, and that fairness perceptions partially mediate the impact of the CSR investment level on investment amount allocations. We do not find that the presence (versus absence) of CSR assurance is used by investors as a fairness heuristic. Our results are robust to controlling for preferences for financial performance and hence investors’ instrumental motive, and to controlling for individual environmental attitudes, and hence investors’ moral motive. Implications for future research and public policy are discussed.     

The Effects of Current Income Attributes on Nonprofessional Investors’ Say-on-Pay Judgments: Does Fairness Still Matter?

The say-on-pay (SOP) regulation in the Dodd-Frank Act (Public L. no. 111–203, H.R. 4173 2010) requires publicly-traded U.S. firms to hold a nonbinding, advisory shareholder vote on executive compensation. Advocates claim that SOP voting gives shareholders a mechanism to hold managers and boards more accountable. Critics contend that SOP votes may simplistically reflect shareholders’ reactions to the overall value of CEO compensation or the firm’s net income. However, based on prior research, we contend that market participants’ SOP votes are likely to consider current income attributes. For example, the market punishes firms that do not meet or beat benchmarks such as analyst earnings expectations, and that shareholders scrutinize the quality of the income sources of firms that consistently meet/beat analyst expectations. We thus expect that more shareholders will provide ‘agree’ SOP votes for a firm that consistently meets/beats analyst forecasts and does so when net income does not include (rather than includes) nonrecurring gains. Further, we consider whether perceptions about the fairness of CEO compensation play a mediating role in the relationship between the interaction of these two current income attributes and SOP votes. Results from an experiment using evening MBA students as participants indicates that the two current income attributes significantly interact with respect to the percentage of agree SOP votes, and that compensation fairness perceptions fully mediate this relationship. Further, the mediating effect of compensation fairness perceptions is robust to including CEO-level and other determinants found in prior research. We conclude with a discussion of our findings and their implications for public policy and research.