The Impact of Managing Director Changes and Financial Distress on Audit Qualification and Auditor Switching

Abstract:   This study examines the interactive effects of change in managing director/chief executive officer (MD) and financial distress together with five control variables (type of audit firm; audit fees; gearing; time; and company size) on first, audit opinion and secondly on auditor switching. Based on a sample of 297 UK listed companies between 1987 and 2001, we find that companies that are financially distressed and change their MD are most likely to receive a qualified audit report, ceteris paribus . In addition, we find evidence of both familiarity and intimidation threats and that the probability of a switch increases with the severity of qualification.     

The Influence of the Keiretsu on Japanese Corporate Disclosure

This paper represents a contribution to testing whether the extent of disclosure in Japanese corporate annual reports varies according to group structure. Consideration is given to keiretsu (group interfirm networks) classification and the mechanism for monitoring by a main bank or main company. This topic is of interest because the Japanese system of corporate governance is fundamentally different from those prevailing in Anglo-Saxon countries and this distinction may impact on corporate disclosure policy. Attention is focused on the exclusionary theory of corporate disclosure in which information is disseminated within group members but specifically excludes others. Regression analysis is undertaken to assess the importance of group structure in explaining variability in the extent of disclosure after controlling for known factors such as size, stock market listing, industry, borrowings, and type of business. The results suggest that companies within a keiretsu with a main-bank or main-company monitor and which are therefore less subject to capital market discipline do not disclose less information than other companies in their annual reports. It appears that whatever type of corporate governance mechanism is adopted in Japan there exists a monitor that places approximately equal demands on information disclosure in corporate annual reports.     

A Growth Accounting Analysis of Cost Efficiency in Milk Production for Six Northern States in the United States

This paper reports on the use of a growth accounting approach to calculate and decompose cost efficiency indices into technical change, regional competitive advantage stemming from spatial effects, and economies of size. Dairy farm data for Connecticut, Maine, Vermont, Michigan, New York and Pennsylvania for the years 1968, 1970, 1977, 1980 and 1988 are utilized in the analysis. The results show that technological change yielded a 1.8% average annual rate of cost reduction over the period studied. In addition, medium and large farms were, on average, 12% to 20% more efficient than small farms. Pennsylvania had a distinct competitive advantage (13.8%), while Maine exhibited a clear competitive disadvantage (−18.2%) in producing milk relative to New York.     

Harnessing the Firm-specific Knowledge of the Maintenance Workforce for Organizational Competitiveness

This paper argues, with the support of the empirical data from five case-study firms, that maintenance workers can play a key role in advancing technology used by their firm and contributing to its long-term competitiveness. Maintenance workers can contribute their firm-specific knowledge which they gain from their experience of working with the equipment in two ways: by providing feedback on asset performance to other departments/firms who design, select or install new technology/equipment; and by making the newly introduced and/or existing technology more suitable to the working environment. Yet, this valuable potential of maintenance employees is rarely appropriated by firms, of which many are enthusiastically seeking additional competitiveness. If 'learning by doing' is an important way for firms to learn and to compete, then this wider role of the maintenance workforce should be harnessed by firms that seek long-term competitiveness.     

The Denial of Slavery in Management Studies

abstract American slavery has been wrongfully excluded from histories of management. By 1860, when the historical orthodoxy has modern management emerging on the railroads, 38,000 managers were managing the 4 million slaves working in the US economy. Given slaves’ worth, slaveholders could literally claim ‘our people are our greatest asset.’ Yet a review of histories of management shows ante‐bellum slavery excluded from managerial modernity as pre‐capitalist, unsophisticated in practice, and without non‐owner managers identified as such. These grounds for exclusion are challenged. First, it is shown slavery is included within capitalism by many historians, who also see plantations as a site of the emergence of industrial discipline. Second, ante‐bellum slavery is demonstrated to have been managed according to classical management and Taylorian principles. Third, those doing the managing are shown to have been employed at the time as ‘managers’. In the idea of the manager, and of scientific and classical management slavery has therefore left an ongoing imprint in management practice and thought. A strong argument is made for not just for postcolonialist accounts of management, but for management histories in which anti‐African‐American racism is a continuing strand. The fundamental significance of the article however is its identification of slavery as of intrinsic, but hitherto denied, relevance to management studies.     

The Politics of Partnership? Innovation in Employment Relations in the Scottish Spirits Industry

Perspectives that emphasize links between workplace innovation and broader HR policies, particularly of a 'mutual gains' nature, have become increasingly influential. This paper analyses the links and tensions between workplace change and industrial relations systems in the context of attempts to create a shop-floor politics of partnership during a period of corporate restructuring in two spirits companies. We argue that interface tensions between the employment relationship, the labour process and organizational governance are inextricably linked to the outcomes of partnership initiatives. While there are positive outcomes to more integrated approaches to partnership, a range of industrial relations issues, notably the ambivalent position of shop-stewards, remains problematic.     

Reciprocity in the workplace

Using combined experimental and survey data, this paper provides empirical evidence that firm productivity is related to worker’s pro-social behavior in the workplace. At the firm level, we find a strong positive relationship between firm productivity and reciprocating behavior among workers. Investigating workers’ individual behavior we find a similar, strong relationship when regressing earnings, a proxy for productivity, on reciprocity. To address simultaneity we use an instrumental variable approach and find that the initial estimate was upwards biased, presumably because it did not take into account the positive feedback from earnings to reciprocity. The new coefficient remains substantially above zero, but it is statistically insignificant.      

Manpower restructuring in the state-owned railway industry of China: the role of the state in human resource strategy

Twenty years after it first opened its door to foreign enterprises, one of the greatest challenges facing the Chinese government today is the reform of the state-owned enterprise sectors (which make up half of the country's GDP) in order to make them more efficient. This paper intends to describe and then critically assess a number of major human resource policies introduced in the state-owned railway enterprise (one of the biggest enterprises) in China in its recent manpower reform (downsizing). Through the case of the railway company, a wider picture is revealed of the country's changing employment policy and practice as well as its emerging labour market. In particular, problems relating to human resources such as skill, remuneration, and training are highlighted at both organization and national level. As the reality of 'life-long employment' comes to an end, the notion of 'life-long learning' has been given a high profile in government policy decisions. What, then, has been and is the role of the state in 'creating' and resolving these problems as an employer and as a state governor?     

Outsourcing HR as a competitive strategy? A literature review and an assessment of implications

HR outsourcing as an organizational strategy has increased substantially over the last decade. However, this trend has attracted little academic attention regarding how outsourcing decisions are made, the manner in which these decisions are implemented, how outsourcing effectiveness is measured, and its impact on organizational performance. In this article, we provide a critical review of the reasons for, the processes involved in, and the perceived effectiveness of HR outsourcing.We investigate the implications of HR outsourcing for the role of the HR function and for the various groups of people affected by this strategy. We argue that organizations should apply both the resource‐based view and institutional theory when making outsourcing decisions. © 2005 Wiley Periodicals, Inc.     

Economic and health effects of fruit and vegetable advertising: Evidence from lab experiments

This study investigates consumer response to various types of advertising for fruits and vegetables—a food category which health officials uniformly agree is significantly under-consumed in the United States. Using an adult, non-student subject pool of 271 participants in an economic experiment, consumers’ response to different types of fruit and vegetable advertising is measured empirically. This study finds that broad-based advertising, which is generic advertising for the entire fruit and vegetable category, increases consumer willingness to pay by an average of 24.6%. The simulation model shows that broad-based advertising for fruits and vegetables, either alone or as a hybrid with individual commodity-specific campaigns (e.g., apple advertising), would reduce average caloric intake per person by approximately 1800 kcal per year. The results of this study may contribute to new public policy initiatives that aim to reduce diet-related illnesses and obesity, which have become increasingly prevalent in the United States.