The impact of strategy communications, incentives and national culture on balanced scorecard implementation

Professionals are challenged daily with difficult decisions. Capital budgeting decisions are one type of difficult decision, especially in firms that embrace a Balanced Scorecard management philosophy. In these firms, the decision maker frequently must choose among multiple options on the basis of multiple criteria with no one option dominating across all criteria. Not only must the decision maker evaluate each option on each criteria, the decision maker also must weigh the relative importance of each criteria when making a final judgment. When faced with difficult decisions, decision makers will resort to various coping behaviors, such as decision avoidance or delay, status quo bias, deferral to others' preferences, or reliance on decision aids. In a Balanced Scorecard environment, one important type of decision aid is the strategy map. The ambiguity introduced by multiple options and multiple criteria also creates a condition in which the subjective biases of the decision-maker can easily manifest in the absence or despite decision aids. Among those potential biases are self-interests and national culture. In this study we examine the effects on capital budgeting decisions of two common types of strategy maps as well as incentive effects and national culture. An objective of Balanced Scorecard management practices is to overcome a common North American fixation on short-term financial outcomes. Recent research submits that an appropriate strategy map will facilitate that end by overcoming certain other cognitive limitations (such as fixation on common metrics). Our inquiry will examine whether biases related to self-interests and national culture persist in the presence of two common strategy maps. A behavioral experiment was conducted in which 140 MBA students from Spain and the U.S. with average work experience of 10 years participated. Findings were that significant fixation on short-term financial outcomes persists in the presence of one common strategy map, but not in the presence of an alternate common strategy map, and that incentive and national culture biases persist in the presence of both. In addition, all three experimental variables exhibited significance and equivalent influence, although prior research has only addressed the influence of incentives.     

Decomposition of progressivity and inequality indices: Inferences from the US federal income tax system

Vertical equity is an important criterion in evaluating a tax system. Vertical equity has two elements: progressivity and income equality. In this paper, we analyze the vertical equity effects of the US income tax system during 1995–2006 and show that income inequality increased substantially during the period combined with a significant reduction in real progressivity.     

On Compliance with Ethical Standards in Tax Return Preparation

The Statements on Responsibilities in Tax Practice (SRTPs) provide guidance to the CPA when making decisions in tax practice. Many of these decisions are ethical in nature and have implications for tax compliance. In this study, a survey methodology is used to test whether the SRTPs affect decisions that CPAs make. The findings suggest that a clear majority of CPAs follow the SRTPs when making ethical decisions relating to tax return preparation and that CPAs follow the SRTPs more often than unlicensed preparers on half the issues tested. However, a statistically significant number of CPAs do not follow the SRTPs and, CPAs do not follow the SRTPs any more often than unlicensed tax preparers on three issues.     

Retailers' major ethical decision making constructs

The major constructs of the Ferrell and Gresham [Ferrell OC, Gresham L. A Contingency Framework for Understanding Ethical Decision-Making in Marketing. J Mark 1985; (Summer): 87-96.], Hunt and Vitell [Hunt SD, Vitell S. A General Theory of Marketing Ethics. J Macromark 1986; 6 (Spring): 5-16.], and Ferrell et al. [Ferrell OC, Gresham L, Fraedrich JP. A Synthesis of Ethical Decision Models for Marketing. J Macromark 1989; 9(2) (Fall): 55-64.] models were tested using LISREL. Our findings suggest that Friends, Superiors, Business Associates, and Formalization of the Organization are more significant than Moral Philosophy. A new construct Ethicalness, comprised of individual, organizational, and societal value structures yielded a tight multi-dimensional fit that supports Kerlinger's domain theory and is dissimilar to Reidenbach and Robin's (1991) multi-dimensional scale. This research is one of the first to test as many ethical decision making constructs while explaining the multi-dimensional conundrum of ethical/unethical and legal/illegal practices within retailing.     

Experiments on strategic choices and markets

Much of experimental research in marketing has focused on individual choices. Yet in many contexts, the outcomes of one’s choices depend on the choices of others. Furthermore, the results obtained in individual decision making context may not be applicable to these strategic choices. In this paper, we discuss three avenues for further advancing our understanding of strategic choices. First, there is a need to develop theories about how people learn to play strategic games. Second, there is an opportunity to enrich standard economic models of strategic behavior by allowing for different types of bounded rationality and by relaxing assumptions about utility formulation. These new models can help us to more accurately predict strategic choices. Finally, future research can improve marketing practice by designing better mechanisms and validating them using experiments.     

E-satisfaction: a re-examination

E-satisfaction as a construct has gained increasing importance in the marketing literature in recent times. The examination of consumer satisfaction in an online context follows the growing consensus that in Internet retailing, as in traditional retailing, consumer satisfaction is not only a critical performance outcome, but also a primary predictor of customer loyalty and thus, the Internet retailer's endurance and success. The current study replicates the initial examination of e-satisfaction within the U.S. by [Szymanski, David M., & Richard T. Hise (2000). E-satisfaction: An initial examination. Journal of Retailing, 76(3), 309-322] among a sample of online consumers drawn from Germany. The replication was extended to two contexts—consumer satisfaction with Internet retail shopping and consumer satisfaction with Internet financial services sites. The results yield rich insights into the validity of extending the measurement and predictors of e-satisfaction to a trans-national context.     

A field experiment to explore the effects of detection and penalties communications and framing among Washington State retail firms

The Washington Department of Revenue facilitated a field experiment to explore opportunities to increase Use Tax and Business and Occupation (B&O) Tax compliance by retail industry firms. The experiment tested two enforcement strategies (actually put in place by the State of Washington): communication of noncompliance penalties and announcement of an enhanced detection initiative. Of special interest was whether the compliance initiatives would differentially influence firms in divergent financial positions (increasing versus decreasing revenues). Findings were consistent with the gain/loss framing concept of prospect theory: the elevated enforcement initiatives increased both actual reported Washington State Use taxes and B&O Taxes more for firms with declining revenues (loss frame) than for firms with raising revenues (gain frame). Historically the Use Tax has had a low rate of compliance while the B&O Tax has had a high rate of compliance; thus we tested two very different taxes. The results of the experiment suggest that revenue agencies with limited resources may benefit from focusing greater compliance enhancement efforts on firms with declining revenues as more tax dollars will be generated from these taxpayers. For tax researchers, this experiment demonstrates that gain/loss tax framing can occur in nature by means other than withholding.     

Integrating Business Ethics in Classroom Teaching: Some Preliminary Considerations

Some practical suggestions for the integration of business ethics in teaching disciplinary business topics are provided. Primarily, the tensions between ethical theory and disciplinary applications and those between abstract reasoning and practical actions provide the context for an exploration of pedagogical content and methods in teaching business ethics at the disciplinary level. Issues and considerations in the nature of business ethics, their justification and pedagogical tools are discussed along with a recommendation for normative business ethics.     

International Exchanges as the Basis for Conceptualizing Ethics in International Business

Extant business ethics literature available for application to international business demonstrates some variety but no comprehensive principles. While the domains of both international business and business ethics are expanding, they are also becoming increasingly divergent. At the same time, the primacy accorded to the multinational enterprise in both fields ignores the socio-cultural and political embeddedness of economic activities, and multiple agencies in international business (individuals, firms, nations, etc.). Some international business theorists have offered the view that international exchange should be the central building block for theories on international business. In this paper, it is argued that international exchange could be the fundamental unit of analysis for international business ethics as well. The potentially unifying features of exchange norms and ethical principles leads the author to develop some core exchange ethics principles that are tested on three recent international business practices.     

THE INTERACTION OF INTERNAL AND DOWNSTREAM INTEGRATION AND ITS ASSOCIATION WITH PERFORMANCE

The authors study how internal and downstream integration and their interaction affect logistical and financial performance within the firm. The results indicate that internal and downstream integration and their interaction affect logistical performance — that is, the higher the internal integration, the stronger the relationship of downstream integration with logistical performance. The results also suggest that logistical performance directly predicts financial performance. The results suggest that superior performance derives from the firm simultaneously integrating functions, decision‐making, and processes both within the firm and across the supply chain.