The Value Relevance of Equity Method Fair Value Disclosures

We assess the valuation implications of the fair value disclosures made for publicly traded securities accounted for under the equity method. We test the association between investors' stock price metrics and fair value disclosures while controlling for book values on a sample of 172 investor firm-years during 1993–1997. Our results indicate that the information in the fair value disclosures is incremental to the information provided by both an investment's equity method book value and equity method reported income. This suggests that there is nothing unique about investments in publicly traded common stock that involve significant influence that makes the fair value disclosures irrelevant for firm valuation.     

Environmental reporting in Australia: current practices and issues for the future

This briefing addresses a number of current practices in environmental reporting in Australia. It is limited to consideration of mandatory and voluntary initiatives at the national level (rather than state or territory levels). Three initiatives are explored. Two of these are mandatory requirements—section 299 corporate disclosures required under the 2001 Corporations Act and section 516 disclosures by Commonwealth government organizations under the Environmental Protection and Biodiversity Conservation Act 1999. One other initiative is voluntary—Public Environmental Reporting—and is aimed at all organizations. Links with the Global Reporting Initiative are considered, followed by a brief comment on incentives and users of environmental reports. The briefing concludes by raising three issues that need to be addressed in the future—sustainable development; education, training and communication; and environmental accounting. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment     

Six Sigma: Definition and underlying theory

Six Sigma has been gaining momentum in industry; however, academics have conducted little research on this emerging phenomenon. Understanding Six Sigma first requires providing a conceptual definition and identifying an underlying theory. In this paper we use the grounded theory approach and the scant literature available to propose an initial definition and theory of Six Sigma. Our research argues that although the tools and techniques in Six Sigma are strikingly similar to prior approaches to quality management, it provides an organizational structure not previously seen. This emergent structure for quality management helps organizations more rigorously control process improvement activities, while at the same time creating a context that enables problem exploration between disparate organizational members. Although Six Sigma provides benefits over prior approaches to quality management, it also creates new challenges for researchers and practitioners.     

Systematic Design Methods and the Creative Performance of New Product Teams: Do They Contradict or Complement Each Other?

Can organizations exert control and provide structure for NPD activities while at the same time encouraging and managing creative performance? Any new product development (NPD) project requires some level of creative effort. In new product development, creative performance is of preeminent importance. Most NPD projects are executed with the NPD team as the organizational nucleus. As a result, managing creativity in NPD thus implies managing the creativity of NPD teams. Besides having to manage creative performance, companies are generally also concerned with improving the efficiency and effectiveness of the NPD process. Modern NPD projects therefore have the need for an approach that can be planned, optimized, and verified. As a consequence, systematic design methods have become widely used in NPD. In this article conceptual model is developed of the effect of modern design methodology on the creative performance of NPD teams. First, it is argued that the effect of systematic design methodology on NPD team creativity is mediated by the communication patterns of the NPD team. It is then proposed that four principles underlie modern design methodology: hierarchical decomposition, systematic variation, satisficing, and discursiveness. These principles affect NPD communication by, respectively, influencing the establishment of subgroups, the frequency of communication, the level of agreement or disagreement in the team, and the level of centralization of communication. Next, arguments are presented of how each of these four communicational characteristics shapes the creative performance of NPD teams. This second part of the conceptual model is tested empirically. This is done by studying the communication patterns in 44 NPD teams, employing social network analysis tools. These patterns of communication are then related to team‐level creative performance through a set of regression analyses. The main conclusion of the article is that the design principles work together and need to be considered as an integrated whole: the creative performance of NPD teams can only effectively be managed by using and aligning all four of them.