Facilitating knowledge transfer during SOX-mandated audit partner rotation

Audit teams are responsible for the discovery of the true financial state of a business. The ramifications of the quality of these efforts ripple throughout our economy. Requirements of Section 203 of the Sarbanes-Oxley Act of 2002 (SOX)—which mandates rotation of the audit team member who bears primary responsibility for the audit—began to take effect as recently as 2007-2008. The potential for knowledge loss within the audit team via this mandated rotation comes with great costs and risks for all stakeholders, as audit team members possess perhaps the most intimate knowledge of businesses. To aid in the prevention of knowledge loss and the facilitation of knowledge transfer from the outgoing to the incoming partner, we suggest four primary knowledge transfer approaches which may be used together in the post-SOX environment. These approaches are: (1) adequate planning of member rotation far in advance of the deadline for each partner; (2) consideration of strategic fit among the incoming partner, the client, the industry, and the team; (3) improved documentation of the outgoing partner's knowledge to be shared with the incoming partner; and (4) increased interaction among the rotating partners—outgoing and incoming—and the client to assist in the sharing of critical, yet difficult to transfer, tacit knowledge.     

Perceptions of ethical work climate and person-organization fit among retail employees in Japan and the US: A cross-cultural scale validation

International retailers can only be successful if they understand similarities and differences between cultures. This study compares retail employees' perceptions of ethical work climate and person-organization fit in the U.S. with those of the same employee type in Japan. The results can help retailers understand employee perceptions of their relationship with the firm. An important aspect of this research involves testing the cross-cultural validity of the ethical work climate (EWC) and person-organization fit (POF) scales. Findings suggest that these scales are valid in both different national contexts and can also be used to compare differences between the cultures. Significant differences were noted in the EWC and POF between retail employees in Japan and the U.S. The relationship between EWC and POF varies significantly for employees in Japan and the U.S.     

CEO succession and firms’ internationalization processes: Insights from German companies

This article analyses the relationship between CEO succession events and German firms’ internationalization processes, which is represented by the degree of internationalization (DOI) growth and internationalization rhythm. Based on a theoretical framework combining elements of agency theory, institutionalism and upper echelons approach, we propose a longitudinal model to examine the relationships of both process variables with the number of CEO changes and succession type (internal vs. external succession), respectively. The results of our study of 102 German firms over 23 years (1990–2012) show an inverted U-shaped impact (no impact) of the number of CEO changes (succession type) on the DOI growth and a positive (negative) monotonic effect on the rhythm of internationalization.     

Is the more always better? A comparative study of internal and external integration practices in new product and new service development

This study investigates the relationship between internal and external integration practices and innovation success of new products and new services. Building on the idea that key success drivers in new product and new service development may have implementing costs besides their obvious benefits, this article examines the possibility that a nonlinear relationship in the shape of an inverted U exists between innovation success and the antecedents examined in this research. The present study also addresses scholars' call for research to investigate differences in the drivers of new product and new service success. The findings suggest that differences exist in the nature of the relationship—that is, linear versus nonlinear—between cross-functional integration, customer integration, and interfirm collaboration and innovation success in a new product versus new service setting.