Trump’s Trade Policy Agenda

President Donald Trump espouses “America First” positions which are commonly interpreted as protectionist. However, a closer reading of Donald Trump’s business interests, of his administration’s published trade agenda and of US trade negotiation history calls into question whether “America First” means protectionism. Trump will use large trade deficits to pressure trading partners to further open up their markets. Companies that are successful in exporting to the US market from those countries will be alarmed by protectionist announcements and will therefore most likely pressure their governments to give in to the demands of the Trump administration.     

The effect of general counsel prominence on the pricing of audit services

We investigate the effect of corporate general counsel (GC) ascension to the senior management team on the pricing of audit services. Prior research suggests that the GC position may have a significant influence in setting the tone at the top by promoting corporate integrity, ethics, and serving as a governance and monitoring mechanism, but also recognizes that prominent GCs may face ethical dilemmas, causing them to disregard professional responsibilities to curry the favor of the CEO and other executives. Using audit fees to proxy for audit engagement risk, we find a negative association between GC ascension to top management and audit fees. We investigate the mechanisms behind this relation and find GC ascension is associated with a reduction in both default risk and financial misstatement risk, which supports auditors’ perceived reduction in client business risk and audit risk, respectively.     

Elementary School Basal Readers and Work Mode Bias

“Students are in constant contact with textbooks and, through these materials, are perhaps influenced by implicit values that eulogize professional and paraprofessional work activities and derogate technical-vocational work activities.” This statement expresses the concern of the authors about the treatment of technical and vocational workers in textbooks used by elementary school children. The study not only gives evidence of bias in the books, but suggests an objective means of analyzing textbooks to determine whether or not bias exists.     

The contribution of 'new boy' phenomena to increasing innovation and improvement in new technology

. The importance of increasing innovation and improvement in support of national priorities and goals is commonly stated, and such importance is, in the main, agreed upon. Conventional wisdom relies heavily upon competition and direct incentives to be the driving force for innovation and improvement. The data presented herein argues in favor of increasing competition by encouraging new producers, socalled ‘new Boys,’ to enter a specific technological application area. This suggests that a ‘new boy’ policy judiciously applied would increase the rate of change of improvement and of innovation and probably would reduce the costs per unit improvement. We present analyses drawn from a single industry over a period of approximately twenty-five years. The study analyzes 237 projects drawn from ten corporations and points to the effects of the ‘new boy’ phenomena at all sections of the technology curve.     

The association between characteristics of audit committee accounting experts,audit committee chairs,and financial reporting timeliness

We investigate the association between audit committee (AC) members' financial expertise and financial reporting timeliness, and extend the discussion by investigating how the source of accounting expertise (e.g., public accounting or CFO) differentially influences financial reporting timeliness. We predict and find that AC accounting financial expertise is associated with timelier accounting information. Further, we find that accounting expertise gained from public accounting experience is associated with timelier financial reporting; however, accounting expertise gained from CFO experience is not. We also find that AC chairs (ACCs) with accounting expertise from public accounting experience are significantly associated with timelier financial reporting while ACCs with CFO-sourced accounting expertise are not. Our results are important for two reasons. First, our results suggest that AC accounting financial expertise contributes to AC effectiveness by improving the timeliness of financial information. Second, our findings highlight how personal characteristics of accounting financial experts influence contributions toward AC effectiveness.     

Control your inventory in a world of lean retailing

As retailers adopt lean retailing practices, manufacturers are feeling the pinch. Retailers no longer place large seasonal orders for goods in advance-instead, they require ongoing replenishment of stock, forcing manufacturers to predict demand and then hold substantial inventories indefinitely. Manufacturers now carry the cost of inventory risk--the possibility that demand will dry up and goods will have to be sold below cost. And as product proliferation increases, customer demand becomes harder to predict. Most manufacturers apply one inventory policy for all stock-keeping units in a product line. But the inventory demand for SKUs within the same product line can vary significantly. SKUs with high volume typically have little variation in weekly sales, while slow-selling SKUs can vary enormously in weekly sales. The greater the variation, the larger the inventory the manufacturer must hold relative to an SKU's expected weekly sales. By differentiating inventory policies at the SKU level, manufacturers can reduce inventories for the high-volume SKUs and increase them for the low-volume ones--and thereby improve the profit-ability of the entire line. SKU-level differentiation can also be applied to sourcing strategies. Instead of producing all the SKUs for a product line at a single location, either offshore at low cost or close to market at higher cost, manufacturers can typically do better by going for a mixed allocation. Low-variation goods should be produced mainly offshore, while high-variation goods are best made close to markets.     

Relearning from the old masters: Lessons of the American System of Manufacturing

Nineteenth and early twentieth century America witnessed the development of a spectacularly successful manufacturing infrastructure that propelled the United States into the forefront of the world's economic powers. The “American System of Manufacturing, ” a term once used exclusively by historians to describe the progress of the firearms and other light metalworking industries in early nineteenth century New England, has been recast in this paper to describe the advances in management practice, work force attitudes, and process technology that characterized American industry from 1800 through the 1930s.The managers responsible for building the American System of Manufacturing addressed themselves to the extraordinary opportunities made possible in their day by an unprecedented season of technological ferment. Their insights and managerial responses, which are the focus of this paper, led to the establishment of product quality and reliability, and excellence in technology-driven manufacturing, as the cornerstones of American industry.The comfortable maturity into which American industry drifted during the 1950s and 1960s disrupted the evolutionary progress of the American System. Confident that the age-old “problem of production” was firmly in check, American managers redirected their efforts away from the shop floor and towards marketing and finance. The ensuing absence of innovation in product and process innovation, and in the management of the work force, created a competitive vacuum that has been exploited by aggressive foreign producers. The heightened challenge to America's basic industries posed by these foreign competitors has induced lengthy debate among academics, industry officials, and practicing managers, concerning the steps that need to be taken to redress America's declining industrial capacity. Our contribution to this re-examination has two objectives. First, we will attempt both to categorize the types of management issues and production problems that since 1800 have confronted American managers, and to identify the practical responses these issues elicited. Second, we will combine the insight garnered from our historical examination with our knowledge of contemporary management issues to detail the lessons of the American System and to identify areas in the realm of production and operations management where change is most needed.Our inquiry has revealed that changes in the character of American industry occurred as workers and managers instituted new approaches to better manage technology. The succession began with the concept of manufacturing as a sequential flow process. Later, this basic notion was expanded as managers used advances in both process and product technology to provide for the competitive continuity of their firms. The rapid pace of technological diffusion in nineteenth century America not only fostered the growth of external, technology-based suppliers, but also complicated the task of production management by requiring firms to coordinate their internal resources with the actions of suppliers. This change necessitated, of course, that managers keep abreast of a bewildering array of changes in production and process technology.The management developments that emerged in response to the appearance of technology-oriented suppliers were the most advanced expressions of American manufacturing at the end of the nineteenth century. These advances are of interest to us for yet another reason, however, because the existence of a skilled manufacturing infrastructure helped prepare the ground for the first generation of automobile manufacturing. Although the first car producers were by and large assemblers who put together in rented shops components supplied by others, their efforts rested on a, by then, well-developed and widely diffused competence in manufacturing. Only because a host of other non-automotive shops and companies had mastered the full range of skills, technical and organizational, pioneered during the nineteenth century, could the first generation of work on automobiles proceed.Driven by the scale economies associated with capital-intensive, high-volume operations, relationships between auto producers and suppliers shifted in focus and emphasis as the car industry matured. In particular, the growing requirements of specialization and coordination in the auto industry demanded an increasingly bureaucratic form of organization and, by extension, the development of managerial skills appropriate to that form. The mastery of a genuine “flow” system of production at high-volume levels defined the organizational competence on which would rest the great manufacturing achievements of twentieth century American industry.With the development of a dominant product design and the production base responsible for building it, American industry had by the outbreak of World War II achieved unquestioned dominance in the work of manufacturing. Or had it? Industry certainly thought so for the post-war decades were to see a redirection of effort away from production management. The search for greener managerial pastures left untapped, however, the potential to be reached by diligent and relentless concentration on the work of production, and obscured gains attainable from better training and utilization of the work force. The task now facing American producers in a hotly contested global struggle for industrial ascendancy is to begin to understand and to extend the lessons that emerge from their now dormant industrial heritage.     

Strategies for deveIopment projects: an empirical study*

This paper summarizes results from a study of strategy choices and outcomes in one government laboratory over a fifteen-year time period. Several considerations associated with the effectiveness of a parallel strategy are presented and discussed. These include different types of uncertainty encountered in a given problem and their effect on the rate of learning. Contrary to observations in other studies, the present results suggest that the rate of learning is often slow and may not be facilitated by the use of many parallel approaches in only early project stages. In many instances major uncertainties are not reduced until the product is evaluated in the operational environment.