Showing papers in "Problems and perspectives in management in 2011"

Impact of audit committees with independent financial experts on accounting quality

Abstract: This paper presents the findings from a study, based on the annual reports’ analysis of German corporations listed in the DAX30, TecDAX, MDAX and SDAX, that investigates whether the implementation of audit committees and independent members with financial expertise leads to higher accounting quality (lower earnings management and accounting errors). The analysis of regressions conducted states a significant negative link between the independence and financial expertise of its members, earnings management and accounting errors. Significant results cannot be achieved if less than 50% of the audit committee members are independent financial experts.

From traditional operational research to multiple criteria decision analysis: basic ideas on an evolving field

Abstract: This paper presents the most recent evolutionary lines in operational research, through a review of the basic principles that guide this field of research. In broad terms, some emphasis is given to the fact that Multiple Criteria Decision Analysis (or Aid) (MCDA) takes into account that decision-making processes are complex and composed of several actors with different perceptions and value systems, stressing that this approach highlights the limits of objectivity, and considers the possibility that some problems may not have an optimal solution. In this vein, it is beyond the scope of this paper to discuss the modeling of particular problems or to present empirical results. Instead, our study aims to consider, share points of view and/or promote a deeper discussion among researchers who use MCDA. By highlighting some of the main characteristics of MCDA and contributing to the MCDA diffusion, this paper might be a starting point to forecast potential developments in the field.

Impact of capital and ownership structure on corporate governance and performance: Evidence from an insider system

Abstract: The purpose of this paper is to present evidence on the impact of capital and ownership structure on corporate governance and firm performance of 80 German listed firms in HDAX index of Deutsche Borse Group in 2007. Based on agency and institutional theory, content analysis and simultaneous equation analysis are conducted. We find that debt ratio positively affects market to book ratio of equity and the extent of free-float negatively affects market to book ratio of equity and total shareholder return. The author provides insights regarding the extent that policies concerning debt, investment, risk, growth and ownership affect key performance measures. Our findings can be helpful to managers for selecting and implementing the appropriate business policies. Besides, analysts and investors might find the results of this study useful to identify the key corporate governance mechanisms and value/performance drivers in the developing stock exchange of the German insider system.

Human capital scenario analysis as an organizational intelligence tool for performance management

Abstract: This article describes a method for human capital scenario analysis, one that may be used as an organizational intelligence (OI) tool capable of supporting management decision-making. Here, scenario analysis supports a knowledge management based (KM-based) decisional method for integrating human resource (HR) and fiscal data in performance measurement. This OI scenario analysis tool may be used in strategic management, organizational development, performance measurement, and HR-related risk mitigation. The aim is to strengthen decisional capacity with regard to the management of human capital and in general with regard to the advancement of organizational performance and productivity goals. The approach taken is that of human capital scenario analysis using system dynamics methods. Scenario analysis equations are developed on the basis of empirically-grounded research that has been conducted for several years at private companies and municipal organizations in Finland. The scenario analysis (SA) tool successfully integrates organization-level human resource knowledge management with business scorecards, thereby assisting management decision-making. Through their use of the SA tool, managers can advance organizational learning and improve strategic decision-making. Human resource and organizational competencies are considered together, so that managers may consider key factors affecting future performance comprehensively, in their long-range decision-making. The SA model was developed during a period of steady economic growth in Finland. While the model was created using the most germane literature and empirically grounded research, contextual factors such as relative economic prosperity may limit generalizability to other contexts. The article describes how human resource metrics and competencies may inform performance measures, in particular business scorecards. The development of key competencies improves organizational performance and performance outcomes. As suggested by game theory, and by models of tacit communications, organizational competencies can be developed and performance outcomes enhanced by using “tacit signals” that are conducive to the realization of desired scenarios.

Using activity-based costing to manage private universities in South Africa

Abstract: The measurement of success of any organization requires evaluating various aspects of their operations, such as the quality of their product and services, operational efficiency and the way in which costs are managed, to name a few. South African private universities do not receive any government funding like their public counterparts and, hence, need to depend on student fees as their main source of funding. This limited source of funding makes it difficult to compete with the State funded universities, as the cost of their courses is far more expensive than those of public universities. It is not possible to manage the income side of their budget and therefore private universities need to manage the cost side of their budget. A survey was carried out in 2005, to examine the costing systems of forty-five registered private universities in South Africa. The study revealed that these institutions were still relying on traditional costing systems. In 2010, a paper by this author indicated that the cost to implement a new system far exceeds the benefits. However, since then many private universities have merged and established partnerships which enabled them to compete against the public universities. This paper suggests a new approach to manage costs at private universities using an activity-based costing approach.

Value of Values for Practicing Managers and Leaders

Abstract: The aim of this article is to increase the awareness of and practical knowledge about values and their impact on management practices and behavioral and performance outcomes in organizations. It explores the meaning of values by using "preferences and priorities" and by differentiating values from other closely related concepts such as ethics, attitudes,needs, and morals. It also highlights some important evolving value patterns pertaining to customers, organizations,and employees belongs to three generations: Boomers, Generation X, and Generation Y. Another interesting aspect of the article is the exploration of evidence with regard to impact of values as an independent, moderator, and dependent variable on management practices and employee's behavior and performance. This review is supported by the fact that how the knowledge about degree of intensity and relative importance of value orientations can be used by managers and decision-makers. The discussion of implications of values for practicing managers is also supplemented by the arguments that "values can be modified" and "values should not always be in mesh in organizations". The article concludes by presenting numbers of sayings made by leaders and managers highlighting value of values in their personal and work life.

Leadership entrapment: the other side of discretion

Abstract: Despite the challenge of precisely defining the nature of entrapment, this paper seeks to collect contrasting perspectives of this less attractive side of leadership and sets out to find a cure, or rather prevention, for falling into its grasp. Following a literature review of the entrapment to which leaders succumb, the results of a focused and intimate case study based on the experiences of highly respected leaders highlight four approaches by which they have been entrapped. Extracts of interviews with an international sample of chief executive officers (CEOs) reveal a distinctly human experience of these study participants from which no one is exempt. The idiosyncratic nature of response to entrapment positioned each study participants’ experience as unique. The paper concludes that leaders need to adopt specific measures in order to control and reduce the darker human tendencies. This paper combines the experiences of study participants into a four-part case study, providing insight into their experiences whilst also protecting their identity. The authors drew study participants from a sample of global manufacturing companies. The concepts will require validating in other organizations of different demographic profiles. The paper presents a leadership entrapment model that provides the reader with insight into the entrapment process. Insight enables the authors to then offer suggestions on possible strategies leaders can adopt to guard against entrapment.

Advice seeking network structures and the learning organization

Abstract: Organizational learning can be described as a transfer of individuals’ cognitive mental models to shared mental models. Employees seeking the same colleagues for advice are structurally equivalent, and the aim of the paper is to study if the concept can act as a way to organizational learning. It is argued that the mimicking of colleagues’ advice seeking structures will induce structural equivalence and transfer the accuracy of individuals’ cognitive mental models to shared mental models. Taking a dyadic level of analysis the authors revisit a classical case and present novel data analyses. The empirical results indicate that the mimicking of advice seeking structures can alter cognitive accuracy. The paper also discusses the findings’ implications for organization learning theory and practice.

Performance measurement - does ERP systems measure up?

Abstract: The development of performance measurement methods and integrated information systems, such as enterprise resource planning (ERP), can be seen as being mutually dependent on each other. In light of this, it is interesting to study the extent to which modern ERP systems are capable of providing management control and performance measurement users demand for information. This study focuses on describing the areas that management control and performance management needs access to information and the extent to which ERP systems are able to provide the information. The study begins with an examination of the areas that are essential for modern management control and performance management. It, then, continues by comparing these areas with four major ERP systems. The result shows that most of the software suppliers work with pre-defined software packages and the unique needs of businesses (demand) come secondary.

Managing capital investments at South African private universities

Abstract: Private universities in South Africa face the daunting task of securing funds to meet their short-term operating costs and their long-term investments in capital projects. The purpose of the paper is to investigate the process in which private universities make capital investment decisions against the backdrop of direct competition from government funded public universities. A theoretical and empirical study was carried out in this investigations. A brief overview of the higher education market in South Africa is presented and a review of the literature on capital investment decisions and techniques is undertaken. A research questionnaire was send out in November 2005 to forty-five registered private universities focussing amongst other things on appraisal techniques used in capital investment decision- making and sources of long-term funds. The study revealed that more than half of the respondents never used the simpler discounted payback method, instead relying heavily on the more complicated method of internal rate of return and net present value. Further to this, private universities were reluctant to invest in capital projects, and cautiously invested in short-term less risky capital projects. It was not surprising to note that private universities relied solely on student fees, bank loans and donors as their main source of funds, as they received no funding from the government. There is a perceived gap with the practise at private universities and the theory. This study will prove to be useful to prospective foreign countries that wish to invest in private universities in South Africa and other emerging economies.

Management, markets and politics : statistical screening for historical footprints in Arctic coal mining

Abstract: We look at the economic performance of the main (coal mining) company operating inSvalbardbased on time series data from 1922 to 2006 and use statistical techniques to detect structural breaks in e ...