Bank and Business Performance Measurement

Given the objective of maximizing the wealth of existing shareholders, this paper discusses some of the issues that arise in attempting to measure the performance of individual businesses within a bank. The paper describes two return measures – return on assets within a business and the return on the 'equity' of an individual business – and discusses the appropriate bench–marks. The paper ends with a discussion of the cost of unused allocated capital and the appropriate performance metric.
(J.E.L.: G30, G31).     

Proportionate Growth and the Theoretical Foundations of Financial Ratios

The article proposes a theoretical framework for understanding financial ratios, showing that the multiplicative character of the financial variables from which financial ratios are constructed is a necessary condition of valid ratio usage, not just an assumption supported by evidence. Also, by assuming that firm size is a measurable statistical effect, the article offers an informed reappraisal of the limitations of financial ratios, particularly the well–known limitation of proportionality. The article is divided into two parts, one where ratio components are viewed as deterministic vari– ables and the other where they are random. Such an approach allows the characteristics of ratios to be more easily understood before generalizing the relationship between ratio components to encompass randomness. In the second part, when variability introduced by firm size is treated as a random effect, it is shown that if the accounting variables Y and X used to calculate a financial ratio Y/X are exponential Brownian motion, and if continuous growth rates are equal and proportionate to firm size, this may lead to ratios which are asymmetric but which do not necessarily drift.     

Shop-floor attitudes to industrial relations change

Whilst the shop-floor workers interviewed showed a high degree of interest in, and knowledge of, the Industrial Relations Bill, there were deep divisions over the necessity of introducing the law into the industrial relations system and of the results of doing so.     

Spillover effects of human service facilities in a racially segmented housing market

Previous studies of human service facility spillovers on residential property values have been inconclusive, and have failed to take into account the effects of racial segmentation of housing markets. Likewise, studies of racial discrimination in urban housing markets and price differentials between white and nonwhite areas of the city have failed to consider the impacts of service facilities on prices. This study develops an hedonic price model of housing services in a racially segmented housing market, which considers a variety of human service facilities and their spillover effects. Model results for Oakland, California in 1976 indicate that facilities significantly affect housing prices both positively and negatively, and that these effects vary by racial submarket. Implications of these findings for the interpretation of past discrimination studies, facility impact studies, and social policy are considered.     

Crafting a public image: An empirical study of the ethics of ghostwriting

Ghostwriting is viewed by some as a necessary element for crafting an effective public image. Defenders of ghostwriting see no ethical dilemma in the practice because the audience knows the speechgiver is not necessarily the speechwriter. Alernatively, those regarding ghostwriting as unethical view the practice as deceitful. This group argues that the audience does not recognize the employment of a speechwriter and thus a speechgiver relies on the words of another to fortify personal ethos. This article examines several positions regarding the ethics of ghostwriting and discusses an empirical study testing three major positions found in ghostwriting literature. Findings from the study indicate that respondents do recognize the use of speechwriters by certain individuals in certain circumstances.Linda A. Riley is a College Associate Professor in the Department of Marketing, College of Business Administration and Economics at New Mexico State University. She also serves as the Director of the Center for Economic Development Research and Assistance in the College of Business Administration and Economics.Stuart C. Brown is Assistant Professor of Rhetoric and Professional Communication in the English Department at New Mexico State University.     

An Application of Keaveney's Model of Service Switching Behaviour to GP Fundholders

The introduction of competition within the National Health Service (NHS), with the purchasers having a degree of choice among providers, has raised a variety of issues for buyer-supplier relationships. Purchasers, especially GP fundholders, have power in relation to their provider in the sense that they may ultimately take their custom elsewhere and by transferring their business, or part of their business, from one trust provider to another. As GP fundholders increase in number, and in confidence, this practice seems likely to grow. Using evidence from commercial markets, this article explains why fundholders might switch provider and the implications this has for hospital trusts.