Risk‐Adjusted Measures of Value Creation in Financial Institutions

Abstract Many financial institutions assess portfolio decisions using RAROC, the ratio of expected return to risk (or ‘economic’) capital. We use asset pricing theory to determine the appropriate hurdle rate, finding that this varies with the skewness of asset returns. We quantify this discrepancy under a range of assumptions showing that the RAROC hurdle rate differs substantially, being higher by a factor of five or more for equity which has a right skew compared to debt which has a pronounced left skew, and also between different qualities of debt exposure. We discuss implications for both financial institution risk management and supervision.     

Allied Breweries and the Development of the Area Manager in British Brewing, 1950-1984

Brewing in the United Kingdom in the years following 1950 sawa shift from a production to a retailing orientation. As partof this shift, the role of the area manager started to movefrom production and sales discipline to retail development.This article explores the job of the area manager during theperiod, seeking to demonstrate the weakness in recent accountsthat suggest that area managers serve only as an "informationrelay" between senior managers and unit managers. Although theevidence is limited, because of problems with the survival ofrecords, it suggests a more complex picture, which has implicationsfor area managers in retail and service industries more generally.     

Experiments on lotteries for shrouded and bundled goods: Investigating the economics of fukubukuro

Fukubukuro (or lucky bag) is a familiar institution in Japan and elsewhere in which the exact contents of a New Year sales item are hidden from the consumer before purchase. Motivated by the fukubukuro example and the lack of evidence on risk attitudes in lotteries involving goods, we conduct a laboratory experiment in which the outcomes are bundled or unbundled goods. The implied gains to a monopoly seller for marketing goods in lottery form rather than separately are only clearly positive for lotteries where there is a higher probability of obtaining the more highly valued good.     

Managerial Values and Rationality in the UK National Health Service

The reforms of the National Health Service arising from the White Paper Working for Patients , were predicated on a particular view of management and the implementation of the changes heralded by this act relied heavily on the actions of the managers charged with carrying them through. This article reports on work undertaken to discover how middle managers responded to this challenge. The views of middle managers concerning the values that guide their work are explored in the context of managing in the reformed NHS. Data were collected by means of a focused ethnography and analysed thematically. This process was informed, in part, by recourse to Weber's conceptualization of rationality. It was found that managers are struggling to reconcile the demands inherent in their role that arise from contrasting and often competing rationalities, which is a reflection of conflict over priorities in the wider health policy environment.     

A metaphorical analysis of The Love Song of J. Alfred Prufrock by T. S. Eliot

Using the theory of conceptualisation of metaphor, this study analyses the imagery created by accounting metaphors of The Love Song of J. Alfred Prufrock. The paper applies a typology of metaphors as the basis of metaphorical analysis for the detection of accounting in Eliot’s poem. The results of the study suggest that the poem relies on accounting metaphors that use either unstated vehicle concepts, unstated tenor concepts or both to convey dense messages of accounting. An implication arising from the results is that considerable transfers of meaning from one epistemic element to another are needed to unlock Eliot’s accounting messages.     

Retirement Reforms: Occupational Strain and Health

A concurrent increase in the demand for state age pensions and health care has led to reforms in delaying retirement. We employ thirteen waves of longitudinal data to examine the mental and physical health effects of Australian men and women at “early” and “traditional” retirement. We use before and after propensity score matching (PSM) estimates between treatment and control groups of retired and not retired individuals aged 60 and 65 years. The results indicate a negative health effect according to occupational strain for both genders but a positive mental health effect for retirees with access to self‐funded retirement.     

IMag[in]ing annual reports

Visual images are integral elements within corporate annual reports. Yet, these visual images have been largely ignored in accounting research. We begin to explore the significance of selected visual images appearing in U.S. annual reports during the late 1980s and early 1990s. Our intent is not to produce a general survey of images, but rather to offer different “ways of seeing” images and through these “ways of seeing” to encourage a critical dialogue that focuses upon the representational, ideological and constitutive role of images in annual reports. Our first way of seeing views the image as transparently conveying an intended corporate message. The second way of seeing draws upon neo-Marxist aesthetic literature and considers the ways in which images in annual reports may be mined for their ideological content and may also reveal society's deep structures of social classification, institutional forms and relationships. Finally, we employ critical postmodernist art theory to see images in terms of their constitutive role in creating different types of human subjectivities and realities. We argue that this way of seeing creates the potential for new voices to be heard and the possibility to subvert the dualisms typical of the totalizing theories of modernity.     

The Navajo documents: a study of the economic representation and construction of the Navajo

In the mid 1930s, surveyors and other agents from the Bureau of Agricultural Economics and the Soil Conservation Service descended on the Navajo Reservation in the southwest USA. During their short stay, the surveyors produced detailed reports on the extent of overgrazing and soil erosion on the reservation. The reports, which contained maps, tables of numbers, accounts, and photographs claimed to depict and represent the real. As part of social survey research, popular in the UK and US from the turn of the century until World War II, the Navajo documents, as we refer to them, used a form of family budget or income and expenditure report to construct the Navajo economically. Indeed, Navajo families were referred to as consumption units or groups. The economic construction of the Navajo permitted the construction of an economic solution to the Navajo problem. In effect it was demonstrated economically, that the impact of stock reductions, thought necessary to prevent further soil erosion, could be offset by increased agriculture. In contrast to the economic claims, the stock reductions were an economic and social disaster for the Navajo. We approach the economic construction of the Navajo in and through the notion of representation. We draw upon the heightened discussion of this term in art theory in the 1970s and 1980s. We frame our analysis in terms of three relationships — namely, the relationship between representation and depiction, the relationship between representation and the copy and the relationship between representation and the real.