Editorial: ‘. . . the most lightly regulated labour market . . .’ The UK’s third statutory recognition procedure 1

This editorial, which is followed by a second contribution from a perceptive North American observer, discusses the problems of workability and perceived fairness of the new procedure, the alternatives to it, and some of its wider implications for the relationship between the trade unions and the Labour Party.     

Novelty in Theme Park Physical Surroundings: An Application of the Stimulus–Organism–Response Paradigm

Many theme parks and other “facility-driven” leisure services seek to market and differentiate themselves through the creation and recreation of their physical surroundings. This study examines the extent to which the physical surroundings are perceived as novel influences the shopping values and revisitation behaviours of theme park visitors. This empirical investigation explored two types of theme park. The findings indicate that the more theme park visitors perceive physical surroundings as novel, the higher the level of shopping values (utilitarian and hedonic value) and the stronger their intention to revisit. The researchers propose a number of theoretical and managerial implications.     

Determining Meaningful Sales Relational (Mix) Variances

Further separation of the volume variance component of a multi-product firm's revenue variance into mix and quantity variances is regularly advocated by management accounting educators. Techniques used to achieve this separation are generally an extension of the analytical techniques used in the traditional flexible budget step-down? approach to variance determination. The analysis in this paper suggests that such an extension in most multi-product situations is inappropriate and generates useless and misleading results. Specific situations in which relational (in lieu of mix) variances may be appropriate do exist and applicable techniques are developed.     

The Interpretation And Resolution Of Resource Allocation Issues In Professional Organizations: A Critical Examination Of The Professional-Manager Dichotomy*

Professional organizations have long been depicted as rife with conflict between professionals, who are assumed to represent the interests of their profession, and managers, who are assumed to represent the potentially competing interests of the organization. This study examines the validity of this assumption. Based on past research on both professional organizations and knowledge structure development, we predict that to the extent that professionals and managers conflict, they may do so because they interpret 'identical' issues differently. The results of a study of resource allocation decision preferences with 350 chief financial officers, chief medical officers, and physicians revealed strong support for our issue interpretation predictions, and virtually no support for the simple professional–manager dichotomy. Specifically, using structural equation modeling, we found that: (1) single resource allocation issues could be interpreted in multiple ways; (2) issue interpretations were strong predictors of decision preferences; (3) professionals and managers tended to interpret issues differently, although many of the differences were not consistent with past theorizing about professionals; (4) the interpretations and decision preferences of professionals who occupied management positions were like those of other professionals but different from those of managers; and (5) decision maker status (i.e., professional and/or manager) was only modestly related to decision preference. Our findings suggest that the sources and manifestations of a professional–manager dichotomy are more complex than previously reported.     

Pension-Plan Real Estate Investment in an Asset–Liability Framework

This study explores the role of pension-plan real estate investment in an asset–liability framework. By assuming that the pension-plan manager wishes to have assets of at least equal value to the liabilities at all points in time, an asset selection process is derived which depends on both the asset's covariance with other assets and its covariance with the liability stream. We generally find real estate not to be highly correlated with pension-plan liabilities. This finding is of general interest, since it helps to explain why pension-plan real estate investment is extremely limited and much smaller than one would expect if pension-plan investors cared only about the mean and variance of the real return to their invested wealth.     

Comment: Regulatory procedures,investment opportunities,and stock valuation

Several recent studies of the effect of accounting treatment on the valuation of electric utilities have concluded that investors appear to favor normalizing firms by pricing equities of such firms relatively higher than the equities of flow-through firms. The observed higher price/earnings ratios (P/E ratios) for normalizing firms have usually been credited to the benefits of normalization, as perceived by investors. This article presents evidence that the observed preference for normalization companies is unrelated to accounting treatment. Rather, this preference is related to the fact that firms that obtain normalization benefits typically have lower costs than those which do not have such benefits. This characteristic of normalization firms results in their relatively higher P/E ratios.