Showing papers by "Texas Christian University published in 2008"

Corporate governance in emerging economies: A review of the principal-principal perspective: Review paper

Abstract: Instead of traditional principal–agent conflicts espoused in most research dealing with developed economies, principal–principal conflicts have been identified as a major concern of corporate governance in emerging economies. Principal–principal conflicts between controlling shareholders and minority shareholders result from concentrated ownership, extensive family ownership and control, business group structures, and weak legal protection of minority shareholders. Such principal–principal conflicts alter the dynamics of the corporate governance process and, in turn, require remedies different from those that deal with principal–agent conflicts. This article reviews and synthesizes recent research from strategy, finance, and economics on principal–principal conflicts with an emphasis on their institutional antecedents and organizational consequences. The resulting integration provides a foundation upon which future research can continue to build.

Entrepreneurship in Emerging Economies: Where Are We Today and Where Should the Research Go in the Future

Abstract: Emerging economies are characterized by an increasing market orientation and an expanding economic foundation. The success of many of these economies is such that they are rapidly becoming major economic forces in the world. Entrepreneurship plays a key role in this economic development. Yet to date, little is known about entrepreneurship in emerging economies. This introductory article to the special issue on entrepreneurship in emerging economies examines the literature that exists to date in this important domain. It then reviews the research that was generated as part of this special issue on this topic. The article concludes with a discussion of the critical future research needs in this area.

Lean Manufacturing, Non-Financial Performance Measures, and Financial Performance

Abstract: In the last 30 years, many U.S. firms have adopted lean manufacturing strategies. Despite evidence of variation in firms' success with lean strategies, few studies have examined firms' management accounting systems (MAS) as a potential source of the variation. This study uses structural equation modeling to examine whether one MAS component - the use of non-financial manufacturing performance (NFMP) measures - mediates the relationship between lean manufacturing and financial performance. Consistent with the view that firms' MAS must fit their operational strategies, the results indicate that lean strategies' financial performance effects are indeed mediated through the utilization of NFMP measures. The study also reports confirming results from regression-based tests examining the mediating role of the use of NFMP measures in the lean manufacturing/financial performance relationship.

Individual differences in judging deception: accuracy and bias.

Abstract: The authors report a meta-analysis of individual differences in detecting deception, confining attention to occasions when people judge strangers' veracity in real-time with no special aids. The authors have developed a statistical technique to correct nominal individual differences for differences introduced by random measurement error. Although researchers have suggested that people differ in the ability to detect lies, psychometric analyses of 247 samples reveal that these ability differences are minute. In terms of the percentage of lies detected, measurement-corrected standard deviations in judge ability are less than 1%. In accuracy, judges range no more widely than would be expected by chance, and the best judges are no more accurate than a stochastic mechanism would produce. When judging deception, people differ less in ability than in the inclination to regard others' statements as truthful. People also differ from one another as lie- and truth-tellers. They vary in the detectability of their lies. Moreover, some people are more credible than others whether lying or truth-telling. Results reveal that the outcome of a deception judgment depends more on the liar's credibility than any other individual difference.

Female Presence on Corporate Boards: A Multi-Country Study of Environmental Context

Abstract: A growing body of ethics research investigates gender diversity and governance on corporate boards, at individual and firm levels, in single country studies. In this study, we explore the environmental context of female representation on corporate boards of directors, using data from 43 countries. We suggest that women’s representation on corporate boards may be shaped by the larger environment, including the social, political and economic structures of individual countries. We use logit regression to conduct our analysis. Our results indicate that countries with higher representation of women on boards are more likely to have women in senior management and more equal ratios of male to female pay. However, we find that countries with a longer tradition of women’s political representation are less likely to have high levels of female board representation.

When does entrepreneurial self-efficacy enhance versus reduce firm performance?

Abstract: The entrepreneurial self-efficacy of lead founders has been generally considered to be a robust predictor of the performance of their firms. Few studies, however, have considered variables that might moderate this relationship. The current study attempts to fill this gap in the literature by examining two possible moderators of the effects of entrepreneurial self-efficacy on firm performance: dispositional optimism and environmental dynamism. Results indicate that these factors do indeed moderate the effects of entrepreneurial self-efficacy; in fact, a three-way interaction between self-efficacy, optimism, and environmental dynamism was observed with respect to firm performance. Consistent with predictions, in dynamic environments, the effects of high entrepreneurial self-efficacy on firm performance were positive when combined with moderate optimism, but negative when combined with high optimism. In stable environments, in contrast, the effects of self-efficacy were relatively weak, and were not moderated by optimism. Overall, results suggest that high self-efficacy is not always beneficial for entrepreneurs and may, in fact, exert negative effects under some conditions. Copyright © 2008 Strategic Management Society.

Affective mechanisms linking dysfunctional behavior to performance in work teams: a moderated mediation study.

Abstract: The present study examines the association between dysfunctional team behavior and team performance. Data included measures of teams' dysfunctional behavior and negative affective tone as well as supervisors' ratings of teams' (nonverbal) negative emotional expressivity and performance. Utilizing a field sample of 61 work teams, the authors tested the proposed relationships with robust data analytic techniques. Results were consistent with the hypothesized conceptual scheme, in that negative team affective tone mediated the relationship between dysfunctional team behavior and performance when teams' nonverbal negative expressivity was high but not when nonverbal expressivity was low. On the basis of the findings, the authors conclude that the connection between dysfunctional behavior and performance in team situations is more complex than was previously believed--thereby yielding a pattern of moderated mediation. In sum, the findings demonstrated that team members' collective emotions and emotional processing represent key mechanisms in determining how dysfunctional team behavior is associated with team performance.

Supply chain capital: the impact of structural and relational linkages on firm execution and innovation

Abstract: Firms invest millions of dollars annually in developing their supply chains, with the broad goal of increasing their own performance. However, despite the significant resources deployed for supply chain development, the extent to which initiating, maintaining, and managing supply chain relationships contributes to firm success remains unclear. The current article provides conceptual development supporting the valuation of firm-to-firm supply chain connections from the perspective of the focal firm. Based on the social network and economics literatures, the article introduces the concept of supply chain capital, which comprises the value of both the structural configuration and relationship content of the firm's supply chain network. Following theoretical development, a non-exhaustive set of propositions are constructed illustrating multiple ways that supply chain capital can be accrued and exploited for firm-level benefit. Managerial recommendations for investment in supply chain capital are included, as are future directions for research in the area of supply chain networks.

Regulatory focus and new venture performance: A study of entrepreneurial opportunity exploitation under conditions of risk versus uncertainty

Abstract: Research on cognitive fit suggests that entrepreneurs will be most successful at leading their firms when approaching the entrepreneurial process through the self-regulatory mode that most closely matches the requirements of their environment and its accompanying perspective on the nature of entrepreneurial opportunities. Consistent with the discovery view of entrepreneurial opportunities, it is suggested that a prevention focus will be the most effective self-regulatory mode for entrepreneurs leading their firms within stable industry environments, which are characterized by risk. Building from the creation view of entrepreneurial opportunities, it is argued that a promotion focus will be the most effective self-regulatory mode for entrepreneurs leading their firms within dynamic industry environments, which are characterized by uncertainty. These arguments are tested using a national (United States) random sample of 201 lead entrepreneurs. The findings indicate that in dynamic environments, entrepreneurs' promotion focus is positively associated with venture performance (i.e., lagged measures of revenue and employment growth), while entrepreneurs' prevention focus is negatively related to performance in such environments. In both cases, these effects are found to be fully mediated by deviation from firms' original business concepts. In stable environments, however, no significant relationships between entrepreneurs' promotion or prevention focus and new venture performance were observed. These results suggest that low cognitive fit (a mismatch between entrepreneurs' mode of self-regulation and the decision-making context in which they operate) is more damaging in dynamic environments (i.e., a context of uncertainty) than in stable environments (i.e., a context of risk). Copyright © 2009 Strategic Management Society.

Asian Management Research: Status Today and Future Outlook

Abstract: This paper reviews the existing management research on Asia. The findings highlight that Asian management research not only builds the understanding of Asia, but also makes a critical contribution to the broad domain of management studies. In particular, Asian-focused research allows researchers to extend and revise theories through the consideration of new contextual variables. This enables researchers to fine-tune theories by developing context-specific conditions and operationalization of key constructs, which in turn allows researchers to develop new theories and constructs which are generalizable to research in other contexts. This systematic examination will help to lay the foundation for the further expansion of the understanding of both Asia and of management research in general.

A Critical Analysis of Research on Reading Teacher Education.

Abstract: The authors provide a review and critique of 82 empirical investigations conducted in the United States on teacher preparation for reading instruction. These studies were chosen from a pool of 298 based on the authors' coding of research quality indicators. Applying an inductive paradigmatic analysis of the 82 studies, this review suggests that in recent years reading teacher preparation programs have been relatively successful in changing prospective teachers' knowledge and beliefs, and a smaller number of studies documents that under certain conditions pedagogical knowledge influenced actual teaching practice. As in earlier reviews, there were very few studies that included pupil achievement as a measure. In addition, the review suggests that university teaching practices that benefit applications of pedagogical knowledge provide explicit explanations and examples, demonstrations of practices, and opportunities for guided practice of teaching strategies in practicum settings with pupils. This analysis builds on more general teacher education research reviews by identifying contributions and limitations of reading teacher education research and providing recommendations for future research. [Note: Victoria Risko discusses the research presented in this article in a podcast presented by the “Voice of Literacy”: http:www.voiceofliteracy.orgposts28688]. يقدم المؤلفون مراجعة ونقدا لـ82 اختبارا تجريبيا أجري في الولايات المتحدة بصدد تحضير الأساتذة لتعليم القراءة. وقد تم اختيار هذه الأبحاث من مجموعة تبلغ 298 بحث على أساس تصنيف مؤشرات جودة الأبحاث التي عملها المؤلفون. إذ توضح هذه المراجعة وبتطبيق تحليل نموذجي استقرائي على الدراسات الـ82 أن في السنوات الأخيرة حققت برامج تحضير الأساتذة لتعليم القراءة نجاحا نسبيا في تغيير معرفة الأساتذة المستقبلين ومعتقداتهم وعدد أقل من الدراسات يؤكد أن تحت ظروف معينة أثرت معرفة كيفية التعليم على الممارسة التعليمية الحقيقية. وكما ذكرت المراجعات السابقة، كان هنالك عدد ضئيل جدا من الدراسات التي اشتملت على إنتاج الطالب كمؤشر. وبالإضافة إلى ذلك تبين هذه المراجعة أن ممارسات التعليم الجامعي التي تفيد تطبيقات معرفة كيفية التعليم توفر شرحا وأمثلة مبينة وعروض الممارسات وفرصا للتدرب الموجه على التخطيطات التعليمية في مواقف تجريبية مع الطلاب. وتبني هذا التحليل على مراجعات الأبحاث التي تسعى لإغناء الأساتذة علما من خلال تحديد المساهمات والحدود لأبحاث تعليم الأساتذة القرائية وتقديم مقترحات للأبحاث المستقبلية. [Podcast: http:www.voiceofliteracy.orgposts28688]. 本文作者回顾和评论82个有关在美国阅读教师职前教育的实验研究。这82个研究是从一批为数289个有关研究中，根据本文作者所订定的研究质量指标挑选出来的。这82个研究，经归纳性研究典范分析法分析后的结果显示，近年来的职前教育课程在改变教师的学识和信念方面都相当成功，其中有少数研究更记录了在某种情况下，教学知识影响到真实的教育实践。正如以往的研究回顾所发现一样，很少研究会把学生成绩列为一种考量。此外,本回顾认为，有利于教学知识应用的大学教育实践，会提供明显的解说与事例、教学示范、以及在有学生的实习环境下，给予指导练习教学技巧的机会。本分析建基于较为一般性的教师教育研究回顾，从其中找出阅读教师教育研究的贡献与局限性，并提供将来在这方面研究的建议。 [Podcast: http:www.voiceofliteracy.orgposts28688]. Les auteurs procedent a une revue critique de 82 recherches conduites aux Etats-Unis sur la formation des maitres a l'enseignement de la lecture. Ces etudes ont ete choisies au sein d'un ensemble de 298 recherches, a partir d'un code d'indicateurs de qualite de recherche elabore par l'auteur. En effectuant une analyse inductive paradigmatique de ces 82 recherches, cette revue de question suggere qu'au cours des dernieres annees les programmes de formation des maitres en lecture ont eu un succes relatif pour ce qui est du changement des connaissances et des croyances des futurs maitres, mais que quelques etudes d'etudes montrent que dans certaines conditions les connaissances pedagogiques ont eu un effet sur les pratiques actuelles d'enseignement. Comme dans les etudes anterieures, tres peu d'etudes incluaient une evaluation des resultats des eleves. Cette revue de question suggere de plus que les pratiques d'enseignement universitaire qui beneficient d'applications des connaissances pedagogiques sont celles qui apportent des pratiques d'enseignement et des exemples, des demonstrations de pratiques, et d'occasions de pratique guidee de strategies d'enseignement en situation concrete avec les eleves. Cette analyse repose sur des revues de recherche plus generales sur la formation des maitres en identifiant les apports et les limites des recherches sur la formation des maitres en lecture et en fournissant des recommandations sur des recherches a effectuer. [Podcast: http:www.voiceofliteracy.orgposts28688]. Авторы предлагают обзор и критический анализ 82-х эмпирических исследований подготовки учителей чтения, проведенных в Соединенных Штатах. Эти исследования были выбраны из общей базы, состоявшей из 298 работ, на основании предложенной авторами кодировки индикаторов качества исследования. Применив индуктивный парадигматический анализ 82-х исследований, авторы обзора пришли к выводу, что в последние годы программы подготовки преподавателей чтения сравнительно успешно формируют и влияют на знания и установки будущих учителей. Небольшое количество изученных текстов свидетельствует о том, что при некоторых условиях педагогическое знание влияет на реальную практику обучения. Как и в предыдущих обзорах, отмечено очень мало исследований, использующих достижения учеников как критерий качества преподавания. Кроме того, в обзоре указывается, что университетские методы обучения, основанные на педагогических знаниях, всегда предлагают подробные объяснения и примеры, демонстрируют их практическое применение и дают студентам возможность пройти педагогическую практику в школах под руководством наставников. Данный анализ основан на более общих обзорах исследований, посвященных подготовке учителей, в нем освещены достоинства и ограничения исследований, связанных с подготовкой учителей чтения, и предлагаются рекомендации для будущих исследований. [Podcast: http:www.voiceofliteracy.orgposts28688]. Los autores proporcionan una revision y una critica de 82 investigaciones empiricas llevadas a cabo en los Estados Unidos sobre la preparacion de maestros para ensenar a leer. Estos estudios se escogieron de un total de 298 basados en un codigo, establecido por los autores, de indicadores de la calidad de investigacion. Poniendo en practica un analisis paradigmatico inductivo, este estudio sugiere que, en los ultimos anos, los programas para preparar a los maestros para ensenar lectura han tenido cierto exito en cambiar el conocimiento y las creencias de los presuntos maestros, y un numero menor de estudios documenta que, bajo ciertas condiciones, el conocimiento pedagogico influyo en la manera de ensenar. Como se ha visto en estudios anteriores, son pocos los que incluyen los logros academicos de los estudiantes como medida. Ademas, nuestro estudio sugiere que las practicas de ensenanza al nivel universitario que benefician la aplicacion de conocimiento pedagogico proveen ejemplos y explicaciones explicitas, demuestran las practicas, y ofrecen oportunidades para mejorar las destrezas de los futuros educadores en el aula. Este analisis va mas alla que otras revisiones mas generales sobre la investigacion de la ensenanza de maestros al identificar las contribuciones y limitaciones de dichas investigaciones pedagogicas en cuanto a los futuros maestros de lectura, y al proveer recomendaciones para hacer mas investigacion en el futuro. [Podcast: http:www.voiceofliteracy.orgposts28688].

Competency in nursing: a concept analysis.

Abstract: Competency is a topic of great interest to educators and administrators in practice disciplines, particularly health care disciplines such as nursing. This article focuses on the role of competency in nursing. Through a concept analysis process, various elements of competency were assessed. The defining attributes of competency are the application of skills in all domains for the practice role, instruction that focuses on specific outcomes or competencies, allowance for increasing levels of competency, accountability of the learner, practice-based learning, self-assessment, and individualized learning experiences. The learning environment for competency assurance involves the learner in assessment and accountability, provides practice-based learning opportunities, and individualizes learning experiences.

Learning by Doing: Cross-Border Mergers and Acquisitions

Abstract: We rely on organizational learning theory and strategic momentum research to examine the international merger and acquisition (M&A) activities of a sample of S&P 500 firms. We hypothesize that the learning associated with a firm's prior acquisition experience increases the likelihood the firm will engage in subsequent international acquisitions. Results from a sample including company-country level data indicate that both prior domestic acquisitions and international acquisitions influence the likelihood of acquisitions in foreign markets by U.S.-based firms. We also find that prior experience with international acquisitions is more predictive of subsequent international acquisitions than prior domestic acquisition experience. Moreover, we find that the acquisition experience within a host country had a stronger influence on subsequent acquisitions within that country than other prior non-host country international acquisition experiences.

Stock and Option Grants with Performance-Based Vesting Provisions

Abstract: While existing literature on equity-based compensation is focused heavily on stock option and restricted stock awards that carry simple time-based vesting restrictions, we find that more complicated performance-based vesting provisions are quite common. We construct and analyze a novel dataset containing 1,013 equity-based awards with performance-vesting features granted by U.S. firms during the period 1995 through 2001. We examine the characteristics of these compensation plans, the economic rationale for adoption, the valuation and incentive effects of these awards, and the effect of the plan adoptions on managerial behavior. First, we find that these awards either (i) require achievement of specific stock market and accounting targets in order to vest or (ii) have a payout and vesting schedule that depends on performance of the firm relative to peers or an index. These performance-vesting conditions are based primarily on either accounting performance or stock market performance, but there is significant variation in plan design. Second, we find evidence that firms grant these equity awards to increase managerial incentives and also may use these awards as a sorting mechanism for managerial talent. For example, these awards are more likely to be adopted following poor performance and when the firm hires a new CEO. Third, we find that the pay-for-performance sensitivities associated with these awards are economically significant and are higher among firms with poorer prior performance and lower overall levels of prior investment expenditures. Both results suggest that firms design these awards to increase incentives. Finally, we find an increase in investment activity and improved firm performance subsequent to the adoption of these plans.

Supply chain security orientation: conceptual development and a proposed framework

Abstract: Purpose – This paper aims to report on an exploratory study investigating supply chain security orientation (SCSO), a firm‐level construct addressing companies' multiple approaches toward mitigation of supply chain security breaches and supply chain risk management.Design/methodology/approach – Structured interviews were conducted with managers who were responsible for firms' supply chain security efforts. The resulting data were content analyzed and critical themes presented depicting SCSO.Findings – Key antecedents, outcomes, and moderating conditions were identified based on the qualitative data. Four primary dimensions of the SCSO concept are revealed.Originality/value – The major contribution of the paper is the delineation of the components of SCSO, which appear to be pervasive across firms. Additionally, several drivers of SCSO are identified, and SCSO is linked to positive financial and customer outcomes, as well as supply chain continuity.

Examining the Antecedents and Consequences of CIO Strategic Decision‐Making Authority: An Empirical Study*

Abstract: Despite the strategic importance of information technology (IT) to contemporary firms, chief information officers (CIO) often still have varying degrees of strategic decision-making authority. In this study, we apply the theory of managerial discretion to define CIO strategic decision-making authority and argue that the CIO's level of strategic decision-making authority directly influences IT's contribution to organization performance. We also draw on the power and politics perspective in the strategic decision-making literature to identify the direct antecedents to the CIO's strategic decision-making authority. A theoretical model is presented and empirically tested using survey data collected from a cross-industry sample of 174 matched pairs of CIOs and top business executives through structural equation modeling. The results suggest that organizational climate, organizational support for IT, the CIO's structural power, the CIO's level of strategic effectiveness, and a strong partnership between the CIO and top management team directly influence the CIO's level of strategic decision-making authority within the organization. The results also suggest that the CIO's strategic decision-making authority in the organization directly influences the contribution of IT to firm performance and that effective CIOs have a greater influence on IT's contribution when provided with strategic decision-making authority.

Further Evidence on the Relation Between Analysts' Forecast Dispersion and Stock Returns

Abstract: Prior research reports seemingly conflicting evidence and interpretations concerning the relation between dispersion in analysts' earnings forecasts and stock returns. Diether et al. (2002) and Johnson (2004) find a negative relation between levels of dispersion in analysts' forecasts and future stock returns. Yet, changes in forecast dispersion are negatively associated with contemporaneous stock returns (L'Her and Suret 1996). We demonstrate that levels and changes in dispersion reflect different theoretical constructs. Changes in dispersion primarily reflect changes in information asymmetry whereas levels of dispersion primarily reflect levels of uncertainty. Further, the uncertainty component of dispersion levels reflects idiosyncratic risk that is negatively associated with future stock returns. These findings provide support for Johnson's (2004) explanation that dispersion levels reflect idiosyncratic uncertainty that increases the option value of the firm and generally refute Diether et al.'s (2002) explanation that dispersion levels reflect information asymmetry. In addition, we reconcile L'Her and Suret's (1996) findings with the findings of Johnson (2004). We find that the negative association between changes in dispersion and contemporaneous stock returns is not due to increased uncertainty but rather increased information asymmetry.

Does Increased Audit Partner Tenure Reduce Audit Quality

Abstract: The Sarbanes-Oxley Act of 2002 requires the lead audit or coordinating partner and the reviewing partner to rotate off the audit every five years so the engagement can be viewed "with fresh and skeptical eyes." Using data obtained from actual audits by multiple U.S. offices of three large international audit firms, we examine whether there is a relationship between evidence of reduced audit quality, measured by estimated discretionary accruals, and audit partner tenure with a specific client. We find that estimated discretionary accruals are significantly and negatively associated with the lead audit partner's tenure with a specific client. Thus, audit quality appears to increase with increased partner tenure. After controlling for client size and engagement risk, we find audit partner tenure significantly and negatively associated with estimated discretionary accruals only for small clients with partner tenure of greater than seven years, regardless of risk level. We also find that tenure is not significantly associated with estimated discretionary accruals for large clients. This suggests that as partner tenure increases, auditors of small client firms become less willing to accept more aggressive financial statement assertions by managers, and that partner tenure does not affect audit quality for large clients or for shorter-tenure smaller clients. Our results relating to audit partner tenure are consistent with the conclusions about audit firm tenure by Geiger and Raghunandan (2002); Johnson, Khurana, and Reynolds (2002);Myers, Myers, and Omer (2003); and Nagy (2005) and extend their findings by focusing on individual audit partners rather than on audit firms.

Corporate Debt Issuance and the Historical Level of Interest Rates

Abstract: Using a sample that comprises more than 14,000 new issues of corporate debt for the period 1970-2001, we examine the relation between debt issues and the level of interest rates relative to historical levels Consistent with recent survey evidence, we find that companies issue more debt, more debt relative to investment spending, and more debt compared to equity when interest rates are low relative to historical rates The effects continue to hold when we control for other variables that influence debt issuance and when we account for refinancing In the neoclassical theory of investment, a drop in the cost of capital results in increased investment spending As firms increase their investments, all else equal, they also tend to issue new debt to finance a portion of those investments Thus, debt issuance can be a function of the level of capital investment by firms Alternatively, firms may try to time debt issuance if they believe that interest rates are advantageous relative to where rates were previously We define “timing of interest rates” as the practice of issuing debt, relative to financing needs and capital expenditures, when interest rates are low compared to historical levels We provide evidence that links debt issuance to changes in interest rates relative to their historical levels To distinguish between a timing theory and a more standard neoclassical story, we ask whether firms issue more debt relative to their investment plans (capital expenditures) or relative to equity issuance, following changes in interest rates We find that past interest rates have prominent effects on the issuance of debt: when current interest rates are low relative to historical levels, firms tend to issue more debt These effects occur even after we account for other factors that can lead to debt issuance, such as capital expenditures, refinancing, firm size and profitability, the level of corporate cash flow, interest rate spreads, and equity valuation

Competency development in new registered nurse graduates: closing the gap between education and practice.

Abstract: The gap between a new registered nurse graduate's education for practice and actual practice requirements of new registered nurses has long been an accepted fact in nursing. This article describes the development of an intervention from the academic side of the gap to improve the competency of nursing students before graduation. The intervention is noteworthy because it was developed collaboratively between academia and practice. The three-pronged intervention included development of learning modules based on the top 10 high-risk, high-volume patient conditions; faculty and staff educator development in learning strategies to enhance competency development; and sharing of products with the 84 schools of nursing in Texas.

Designing systems for adaptability by means of architecture options

Abstract: The value of a system usually diminishes over its lifetime, but some systems depreciate more slowly than others. Diminished value is due partly to the increasing needs and wants of the system's stakeholders and partly to its decreasing capabilities relative to emerging alternatives. Thus, systems are replaced or upgraded at substantial cost and disruption. If a system is designed to be changed and upgraded easily, however, this adaptability may increase its lifetime value. How can adaptability be designed into a system so that it will provide increased value over its lifetime? This paper describes the problem and an approach to its mitigation, adopting the concept of real options from the field of economics, extending it to the field of systems architecture, and coining the term architecture options for this next-generation method and the associated tools for design for adaptability. Architecture options provide a quantitative means of optimizing a system architecture to maximize its lifetime value. This paper provides two quantitative models to assess the value of architecture adaptability. First, we define three metrics—component adaptability factors, component option values, and interface cost factors—which are used in a static model to evaluate architecture adaptability during the design of new systems. Second, we enhance a dynamic model to evaluate architecture adaptability over the maintenance and upgrade lifetime of a system, formulating a Design for Dynamic Value (DDV) optimization model. We illustrate both models with quantitative examples and also discuss how to obtain the socio-economic data required for each model. © 2008 Wiley Periodicals, Inc. Syst Eng

Country of Origin and Foreign IPO Legitimacy: Understanding the Role of Geographic Scope and Insider Ownership:

Abstract: Foreign firms from emergent economies are increasingly seeking equity capital in developed economies like the United States. Utilizing institutional, signaling, and agency theories this research examines the legitimacy of foreign IPOs (initial public offerings) in the United States. Employing the population of foreign IPOs listed on U.S. stock exchanges between 1997 and 2004, it is demonstrated that firms from countries with governmental policies and institutional practices that protect the economic freedom of its citizens are significantly less underpriced than IPOs of firms originating from countries experiencing lower levels of economic freedom. The evidence further indicates that firms from emerging economies can overcome negative country perceptions associated with lower levels of legitimacy by increasing their international scope of operations prior to beginning the IPO process as well as by retaining acceptable levels of ownership in their respective firms.