The influence of accountability on overconfidence and resistance to change: A research framework and experimental evidence

This paper presents a research framework and demonstrates how commitment to a particular course of action might lead to information search that is biased in favour of the chosen alternative. The framework also incorporates accountability as a strategy for mitigating overconfidence and resistance to change.An experiment was conducted to test the predictions of the proposed framework. Results of the experiment indicate that commitment to a particular cost allocation system leads to increased desirability of the chosen system and decreased desirability of the rejected alternative. The results also show that managers who are committed to a particular cost allocation system become too conservative and overconfident in their preferred system, which leads to high resistance to change. These effects, however, were attenuated by making the managers accountable for the negative consequences of their decisions.     

An appropriate development strategy for Southern Africa∗

The limited successes achieved with development in the Third World and the national states in Southern Africa have necessitated a considerable change in development thinking and practice. The conventional developmental approach, which is based on growth models, is inappropriate for the conditions in the LDCs. A new development approach, coupled with an appropriate development strategy, has culminated in the development literature.

In this article the poverty problem in Southern Africa is outlined as a general background, whereafter the new development approach and a few guidelines for an appropriate development strategy is discussed. The application of the new strategy in the circumstances of Southern Africa is highlighted.     

Minimum Pay Scale and Career Length in the NBA

We use data from the National Basketball Association (NBA) to analyze the impact of minimum salaries on an employee's career length. The NBA has a salary structure in which the minimum salary a player can receive increases with the player's years of experience. The NFL has a similar minimum wage policy; research suggests that the introduction of this system shortened career length in the NFL. Using duration analysis, we fail to find evidence that the new multi‐tiered minimum wage scale in the NBA increased the probability of exit.     

Income and Price Elasticities of Demand in South Africa: An Application of the Linear Expenditure System

This paper investigates the expenditure patterns of South African households using detailed cross‐sectional expenditure and price data that varies across region and time. Linear expenditure system parameter estimates are used to calculate income and price elasticities for a number of product categories at different points of the income distribution. We find substantial variation in the price and income elasticities of demand for items across the income distribution, with the bottom quartile being extremely sensitive to increases in the price of food and clothing items, and the top quartile being as sensitive as households in developed countries.     

The Effects of Psychobiological Motivational Traits on Memory of In‐Game Advertising Messages

This study examined the influence of psychobiological motivational traits related to individual approach and avoidance tendencies on cognitive processing of in‐game advertising. Participants played a custom‐built video game containing billboard advertisements. After playing the game, participants’ approach, positivity offset (PO), and avoidance, negativity bias (NB), traits were measured using the motivation activation measure (MAM). Recognition and recall memory were greater for high PO and low NB trait individuals. The findings of this study imply that advertising in first‐person‐shooter (FPS) video games may be most effective when targeting individuals with simultaneously high PO and low NB, risk takers, but least effective for those with low PO and high NB, risk avoiders.     

Supplier–supplier relationships in buyer–supplier–supplier triads: Implications for supplier performance

A growing number of studies and evidence from industries suggest that, besides managing the relationship with its suppliers, a buyer needs to proactively manage the relationships between those suppliers. In a buyer–supplier–supplier relationship triad, the buyer, as the contracting entity, influences the suppliers’ behaviors and the relationship between them. By considering the relationships in such a triad, we are able to gain a richer and more realistic perspective of buyer–supplier relationships. In this study, our goal is to examine supplier–supplier relationships in buyer–supplier–supplier triads, focusing on how such relationships impact the supplier performance. We frame the supplier–supplier relationship as co-opetition—one in which competing suppliers work together to meet the buyer's requirements. We investigate the role of the buyer on such relationships, and how the buyer and co-opetitive supplier–supplier relationships affect supplier performance. We find mixed empirical support for our hypotheses. However, we are able to demonstrate the dynamics of supplier–supplier co-opetition in the buyer–supplier–supplier triad. We point out the need for further studies in this area.     

Strategic management accounting in close inter-organisational relationships

This paper provides a conceptual comparison between the ‘mainstream strategic management accounting’ literature, the ‘accounting and strategising’ literature and ‘strategic management accounting (SMA) in close inter-organisational relationships’. It concludes that ‘SMA in close inter-organisational relationships’ shares some important characteristics with the ‘accounting and strategising’ literature. Important differences were found, too, though. These mainly concerned the need to understand individuals working for close partners as preparers of strategic information; the need for disaggregated accounting information about unique connections to close partners and about the role of indirect benefits that follow from close connections and the need for the company to not only collect information but also disperse diverse information within close inter-organisational relationships. Through an intensive case study of a global robot manufacturer, Robotics, this paper also provides novel empirical evidence on ‘SMA in close inter-organisational relationships’. For instance, SMA practices included indirect benefits, something mainly neglected in the existing literature on SMA. These indirect benefits involved a close customer's willingness to invest time and effort in Robotics’ technological development, thereby contributing to Robotics’ ability to attain revenue gains in its interactions with other customers. Our findings also have important implications for the ‘inter-organisational accounting’ literature, for instance, by highlighting the need to link more explicitly strategic decision-making with the current interest in the role of accounting in inter-organisational dynamics.     

The relative influence of competitive intensity and business strategy on the relationship between financial leverage and performance

This study empirically investigates the effects of competitive intensity and business strategy on the relationship between financial leverage and the performance of firms. Based on a sample of US manufacturing firms, this study confirms the hypothesis that the cost of debt is higher for product differentiation firms than cost leadership firms. Furthermore, the results indicate that competitive intensity has a negative effect on the leverage-performance relationship, suggesting that competition acts as a substitute for debt in limiting manager's opportunistic behavior. These findings reinforce the need to consider moderating factors such as strategic choice and the environment in which a firm operates when investigating the effects of leverage on performance.     

The Effects of Strategy–Management Control System Misfits on Firm Performance

The purpose of this study is to investigate the effects of misfits between business strategy and management control systems on performance. We address the following research question: Do firms that align their management control systems with the specific requirements of their business strategy perform significantly better than those that do not achieve the required match? We define a misfit as the degree to which management control systems deviate from empirically derived optimal configurations for a given type of business strategy. We use the two‐stage approach proposed by Ittner and Larcker (2001) to measure misfit and to investigate the impacts of misfit on performance. Based on a questionnaire survey of executives from 109 banks, we hypothesize and find that the strategy–control systems misfit has a significantly negative correlation with both self‐rated and publicly available performance measures.