Showing papers on "Opportunism published in 2022"
TL;DR: In this paper, the effect of internal governance in curbing earnings management in Islamic and conventional banks has been investigated for a global sample of 14 countries operating on a dual banking system between the years 2007−2015.
19 citations
TL;DR: In this article , a three-dimensional model of relational space (fairness,opportunism, sharing, control, and engagement-rivalry) is developed to investigate the paradoxical interplay between cooperation and competition through eight operationalizable configurations.
17 citations
TL;DR: In this article , the impact of capital structure on environmental, social and governance (ESG) performance in the context of Jordanian companies was explored by using the content analysis approach and the longitudinal data generated from the annual reports of 51 industrial companies listed on the Amman Stock Exchange for the period 2012-2020.
Abstract:
Purpose
This study aims to explore the impact of capital structure (CS), including total debts, short-term debt, long-term debt and total shareholder equity, on environmental, social and governance (ESG) performance in the context of Jordan.
Design/methodology/approach
To achieve the study’s objectives, the authors used the content analysis approach and the longitudinal data generated from the annual reports of 51 industrial companies listed on the Amman Stock Exchange for the period 2012–2020.
Findings
The findings show that debt financing enhances ESG performance in all dimensions, while financing by equity did not affect ESG. Consequently, Jordanian companies’ managers are trying to reduce agency costs by investing in ESG activities. In addition, companies are focusing on debt financing instead of equity to achieve their financial as well as nonfinancial goals. This is because the opportunism of new shareholders will likely lead to a focus on maximizing their value at the expense of the broader group of stakeholders, and this will adversely affect companies’ ESG performance. Therefore, debt financing limits shareholder control.
Originality/value
To the best of the authors’ knowledge, this is the first examination of the impact of CS financing choices on ESG performance. Thus, this study has important implications for the decisions of executives, policymakers, shareholders and lenders, as it enables them to better understand the linkage between CS and ESG.
12 citations
TL;DR: In this paper , the authors developed a framework explaining how an external shock such as the COVID-19 pandemic can trigger a change in family firms' motives and revealed how digital innovation originates as a result of a process of entrepreneurial action.
Abstract: ABSTRACT Few external shocks have had as severe an impact on organisations as COVID-19. To date, research on how management can respond to such a trigger event is lacking. Due to their economic relevance, family firms, which are typically resource-constrained and rely on idiosyncratic resource allocation behaviour, are of particular interest in this regard. Based on a multicase study of German family firms and building on longitudinal insights from 112 semistructured interviews, we develop a framework explaining how an external shock such as the COVID-19 pandemic can trigger a change in family firms’ motives. Linking adapted motives of family firms (i.e. survival, utilisation, and opportunism) with their resource allocation behaviour during the crisis (in terms of resource preservation, resource recombination, and social boundary resource development), we reveal how digital innovation (digital process innovation, digital product innovation, and digital business model innovation) originates as a result of a process of entrepreneurial action.
12 citations
TL;DR: In this article , the effect of power and communication in buyer-supplier relationships is explored and the results indicate that different types of communication between buyers and suppliers have different effects on the relationship between non-coercive power and opportunism, whereas social communication is more effective at reducing opportunism.
10 citations
TL;DR: In this paper , the effect of internal governance in curbing earnings management in Islamic and conventional banks has been investigated for a global sample of 14 countries operating on a dual banking system between the years 2007−2015.
10 citations
TL;DR: Li et al. as mentioned in this paper investigated the relationship between the complexity of the above functions and different types of opportunistic behavior, and found that obligatoriness has a negative effect on strong-form opportunistic behaviour.
Abstract: Contracts are crucial for curbing opportunism, a common phenomenon in construction projects. This article differentiates among the contractual mechanisms of obligatoriness, monitoring, and coordination, and studies the relationships between the complexity of the above functions and different types of opportunistic behavior. Using data from 262 clients (i.e., the parties issuing contracts) in the Chinese construction industry, this article reveals that contractual obligatoriness has a negative effect on strong-form opportunistic behavior. At the same time, contractual monitoring and coordination have positive and negative effects, respectively, on weak-form opportunistic behavior. Furthermore, we find that goodwill trust mediates contractual coordination's effect on weak-form opportunistic behavior. This article contributes to both the contract management literature and the interorganizational relationship governance literature by providing more nuanced findings that speak to the debate surrounding the relationship between contractual governance and opportunistic behavior, elaborate the mediation mechanism, and provide insights into the contractual function view.
9 citations
TL;DR: In this article , a framework for integrating low-carbon ecological transformation from linear to sustainable circular interorganizational networks is presented, where sustainability makes it necessary to integrate and control organizations throughout the supply chain to avoid eco-opportunism and to economize transaction costs.
Abstract: Abstract Ownership and control have been the strategic focus of organizational analyses to achieve performance. The emergence of sustainable strategies has, however, confronted conventional organizational theory because performance has become a complex concept containing both social elements and environmental dimensions together with conventional economic aspects. Increased climate change, temperature risk, and environmental hazards, as well as intertwined social consequences, create a need for new theoretical insights to understand the emerging circular organization of product lifecycle networks. The ongoing climate crisis calls for new institutional approach that challenges future organizational structures. We present a framework for integrating low-carbon ecological transformation from linear to sustainable circular inter-organizational networks. The global and circular economy increases performance ambiguity, the uncertainty of eco-opportunism, information asymmetry, and transaction costs. Consequently, sustainability makes it necessary to integrate and control organizations throughout the supply chain to avoid eco-opportunism and to economize transaction costs.
8 citations
TL;DR: In this paper , the authors investigate how a supplier's national culture influences the effectiveness of two bases of inter-firm power, coercive and expert power, on a form of opportunism that has been anecdotally observed in practice.
7 citations
TL;DR: In this article , five potential antecedents of supply chain fraud are considered and compared with reported losses due to interorganizational fraud, including product quality fraud, pricing/invoicing fraud and corruption.
Abstract: Interorganizational fraud, or fraud that occurs between organizations, is a critical component of supply chain fraud and supply chain relational risk, yet empirical evidence on the scale of interorganizational fraud and its antecedents remains scant. Despite its hidden nature, interorganizational fraud can have major implications for supply chain performance. Based on the theories of transaction cost economics, agency theory, and the fraud triangle, widely used in accounting and auditing research, five potential antecedents of supply chain fraud are considered and compared with reported losses due to interorganizational fraud. The data collected via a survey questionnaire with a sample of 151 supply chain employees in manufacturing demonstrate that informants estimated median losses due to interorganizational fraud to be 9% of their firm's total revenue. The most common types of fraud reported include product quality fraud, pricing/invoicing fraud, and corruption. Using a two-step generalized method of moments technique for estimation, the results found that transactional complexity, competitive pressures facing the supply chain, and weak firm ties were significantly related to interorganizational fraud, and that supply chain monitoring and ethical sourcing were not significantly related to interorganizational fraud. These findings contribute to the research on relational risk, supply chain risk management, and opportunism.
TL;DR: In this paper , the authors introduce and validate a model whereby socially embedded commitments mediate the effects of investment in suppliers on supply chain outcomes, and demonstrate that supplier development not only improves buyer performance, but also simultaneously increases supplier opportunism.
TL;DR: In an analysis of the Renault-Nissan Alliance, the authors abduce a theory of equity-trust by drawing on microfoundations theory and four types of organizational justice, and identify five practices that motivate distributive, procedural, informational, and interactional justice.
TL;DR: In this article , the authors present an approach to dental contract reform taking by NHS England since March 2021, which is a classic type of policy problem which can be understood in terms of the properties of wicked problems where stakeholders see the problem differently.
Abstract: Dental contracts are required to simultaneously satisfy three seemingly unreconcilable requirements: access based on need and not ability to pay (equity); minimisation of costs per unit output (efficiency); and paying for it all without breaking the bank (cost). In dentistry, further tensions exist, such as how to incentivise prevention while maintaining optimal efficiency and minimising opportunism, even though the dividing line between what is too much or too little treatment is often blurred. This is a classic type of policy problem which can be understood in terms of the properties of wicked (or stubborn) problems where stakeholders see the problem differently. There is no obvious solution and every attempt at a solution leaves a mark. This means that it is inappropriate to be talking about a new dental contract as the one perfect resolution to a problem which has eluded us since the 1990s, but rather we need to seek a 'better' arrangement achieving an acceptable equilibrium balancing various tensions. These types of policy problems also tend to be a 'cluster of interlocked problems with interdependent solutions'. We need to recognise that while dental contracts can shape system outputs, outputs are also determined by a range of wider system factors, such as culture and team-working, which determine how the system works, what is produced and for whom. Thus, we should be talking about the dental system, rather than dental contract reform. Further lessons from health policy are that the process of reform can be as complex as the content of reforms. Success in reform is dictated more by how the process is applied rather than purely on what contents are formulated, so implementation is key and a staged or incremental approach to reform is advised. This paper outlines the approach to dental system reform taken by NHS England since March 2021.
TL;DR: In an analysis of the Renault-Nissan Alliance, the authors abduce a theory of equity-trust by drawing on microfoundations theory and four types of organizational justice, and identify five practices that motivate distributive, procedural, informational, and interactional justice.
TL;DR: In this article , the authors argue that the logics of transaction cost economics and relational exchange theory are not fundamentally irreconcilable; instead, they suggest a perspective combining the calculative logic of TCE within the relationship logic of RET such that they jointly affect opportunism changes.
Abstract: Despite the prominent role of asset specificity in buyer–supplier exchanges, its influence on opportunism remains controversial. While transaction cost economics (TCE) addresses its potential to encourage opportunism, relational exchange theory (RET) highlights its role in discouraging opportunism. We extend this debate by considering (1) the effects of asset specificity asymmetry, (2) changes in supplier opportunism over time, and (3) the moderating roles of supply market uncertainty and prior exchange history. We argue that the logics of TCE and RET are not fundamentally irreconcilable; instead, we suggest a perspective combining the calculative logic of TCE within the relationship logic of RET such that they jointly affect opportunism changes. Our propositions are supported by the results of a matched sample of 193 buyer–supplier relationships at two time points.
TL;DR: In this paper , Wu et al. studied the relationship between contract design and the use of governance mechanisms within interfirm relationships and found that ex ante contract completeness reduces ex post strong form opportunism while increasing weak form opportunisms in a curvilinear manner, suggesting a match between forms of opportunism and types of enforcement.
21 Oct 2022
TL;DR: In this paper , a survey of 380 buyer-supplier exchanges in China, the authors examined the relationship between dependence and opportunism, then assessed the contingent role of boundary spanners' guanxi and further tested how unfairness perception and legal inefficiency alter the role of guanixi in managing dependence.
Abstract: PurposeInterorganizational dependence is considered as a liability for each firm and needs to be managed properly. Rather than exploring the opportunistic outcome of dependence, the authors focus on the moderating role of supply chain boundary spanners' guanxi. This study tends to uncover the way and the conditions under which boundary spanners' guanxi influences dependence-opportunism relationships.Design/methodology/approachUsing a survey of 380 buyer–supplier exchanges in China, this study first examines the relationship between dependence and opportunism, then assesses the contingent role of boundary spanners' guanxi and further tests how unfairness perception and legal inefficiency alter the role of guanxi in managing dependence.FindingsThis study finds that buyer dependence increases supplier opportunism while supplier dependence lowers supplier opportunism. Boundary spanners' guanxi weakens the opportunism-facilitating impact of buyer dependence and mitigates the opportunism-restricting effect of supplier dependence. However, unfairness perception would attenuate the value of guanxi in restricting depended sides' opportunism but strengthen the value of guanxi in motivating depending sides' opportunism; legal inefficiency would amplify the value of guanxi in facilitating depending suppliers' opportunism.Originality/valueFirst, the study enriches supply chain dependence studies by incorporating interpersonal guanxi into the investigation of dependence-opportunism relationships. Second, the study adds to the supply chain management literature by uncovering a contrasting role of guanxi in influencing the dependence-opportunism relationship. Third, the study incorporates an agency view to uncover two boundary conditions under which guanxi is mobilized for personal interest seeking or for organizational purposes.
TL;DR: In this article , the authors investigated the relationship between CSR performance, climate for innovation, and opportunism within architectural design firms (ADFs) in a single integrative model.
Abstract: PurposeThe purpose of this research is to expand a better understanding of how corporate social responsibility (CSR) initiatives affect climate for innovation and opportunism within architectural design firms (ADFs).Design/methodology/approachThe literature review and discussions with industry practitioners identified an initial list of variables. A questionnaire survey was developed, validated and delivered to employees working in ADFs. 226 valid responses were collected. Then, the structural equation modeling (SEM) method was employed to empirically investigate the relationships between CSR performance, climate for innovation and opportunism in a single integrative model.FindingsThe results empirically support that CSR performance has a positive effect on climate for innovation and a negative effect on opportunism. In addition, climate for innovation shows a negative effect on opportunism.Research limitations/implicationsThis research highlights that CSR performance is essential for ADFs to better achieve sustainable development. By doing CSR activities, climate for innovation in ADFs is expected to be improved, and a sense of opportunism is mitigated. The findings of this paper are explicitly delivered in the context of Vietnamese ADFs and could not be straightforwardly generalized or translated to the construction industry or other sectors in different research contexts.Practical implicationsThe findings show that a climate for innovation is crucial in ADFs. Business managers are encouraged to employ CSR initiatives to foster an innovation climate and reduce a sense of opportunism within ADFs.Originality/valueThis study is one of the first attempts to investigate the relationships between CSR performance, climate for innovation, and opportunism within ADFs. While the findings highlight the critical role of CSR performance, the study argues that CSR should be carefully implemented because there are no “one-size-fits-all” CSR strategies for different business contexts.
Abstract: Value destruction is intertwined with value co-creation in the technology alliances and ecosystems; this is a key reason that most partnerships fail in the real world. Managers and policymakers will be enabled to identify destructive behavioral signals right from the onset drawing on our findings that opportunism, unjust appropriation of rents, shirking, exploitation of asymmetric power, and undue dependence can initiate the value destruction process. For the partners in an ecosystem, our findings underscore that opportunistic and exploitative behaviors do not pay off in the long run as these result in collateral and unintended losses for all. Dominant partner’s opportunism and exploitation of power asymmetry could give rise to a proverbial “pack of wolves,” a collective of resentful partners, for “challenging/killing the lion”—replacing the hub firm itself. In this vicious cycle, original intent of value co-creation gets lost with multidimensional losses on multiple fronts to the extent that opportunities open up even for the competitors with the help of hub’s former resentful complementors. Equipped with this knowledge, leaders can proactively manage ecosystem relationships keeping them on the path of originally intended value co-creation by remaining alert toward catching the signals of value destruction and reverting it deftly toward value co-creation.
TL;DR: In this article , the authors employed a cross-sectional survey data collected from 200 U.S. firms and analyzed the collected data with SPSS and AMOS, the two statistical software, for reliability, validity, confirmatory factor analyses and structural equation modeling.
Abstract: Purpose Firms often struggle with opportunistic behavior from supply chain partners. Relying on Transaction Cost Economics and its extensions, this study developed a conceptual model theorizing the antecedence, consequences and conditional factors of opportunism within a buyer–supplier–supplier triadic relationship. Design/methodology/approach This study employed a cross-sectional survey data collected from 200 U.S. firms. The collected data were analyzed with SPSS and AMOS, the two statistical software, for reliability, validity, confirmatory factor analyses and structural equation modeling. Findings First, opportunism negatively influences operational performance and business performance, and such an effect is fully mediated by relationship stability. Second, this study classified power asymmetry as asymmetrical power discrepancy and asymmetrical power advantage with these two forms playing different roles in influencing opportunism. Results indicate that asymmetrical power discrepancy induces opportunism while asymmetrical power advantage strengthens the negative influence that opportunism has on relationship stability. Additionally, the mediated moderating effect of asymmetrical power advantage by relationship stability is confirmed. Originality/value The results provide significant academic and managerial insights that can guide managerial efforts in distinguishing types of power asymmetry, controlling opportunism and further mitigating the consequences of opportunism within a triadic relationship.
TL;DR: Wang et al. as discussed by the authors proposed a theoretical framework to understand the impact of BIM capability imbalance on opportunistic behavior and to identify the boundary conditions, and provided managerial suggestions for parties involved in BIM-enabled construction projects.
Abstract: Although building information modeling (BIM) is believed to have the potential to curb opportunistic behavior, opportunism is observed in some BIM-enabled projects surprisingly often. One possible reason is that, in current practice, the BIM capabilities of project participants are often imbalanced. This study proposes a theoretical framework to understand the impact of BIM capability imbalance on opportunistic behavior and to identify the boundary conditions. Two influential factors, BIM application scope and trust, are considered as moderators. Based on data collected from 296 responses to an electronic questionnaire survey sent to construction companies in China, the effect of BIM capability imbalance on opportunistic behavior was examined from the perspective of the Chinese construction market, and the moderating roles of BIM application scope and trust were explored. The survey results revealed that (1) BIM capability imbalance is positively related to opportunistic behavior (both strong-form and weak-form); (2) BIM application scope can enhance the positive effect of BIM capability imbalance on opportunistic behavior (both strong-form and weak-form); and (3) trust weakens the positive effect of BIM capability imbalance on opportunistic behavior (both strong-form and weak-form). This research contributes to the existing literature on the application of BIM by investigating the effects of BIM capability imbalance on opportunistic behavior and its boundary conditions, which helps to provide a better understanding of the opportunistic risk brought by BIM. This study also enriches the existing literature of information technology application and governance, as it provides empirical evidence in a construction project context for the moderating role of technology application scope and trust. Moreover, this research offers managerial suggestions for parties involved in BIM-enabled construction projects to better govern such projects by choosing partners with balanced BIM capability, determining an appropriate scope for BIM application, and implementing trust mechanisms.
TL;DR: In this paper , a theoretical framework for studying social norms is proposed, which links normative beliefs and punishment strategies, which allows us to study what determines recipients' punishment choices after they are shown normative beliefs of their dictators, and they experimentally test this idea in the Dictator game with second-party punishment.
Abstract: When people with different normative beliefs interact, moral opportunism—or the tendency to follow the norm that brings the highest material benefit—can arise. Our conjecture is that this behavior is a consequence of expected norm-dependent utility maximization under uncertainty. Using a novel theoretical framework for studying social norms, we experimentally test this idea in the Dictator game with second-party punishment. The theory links normative beliefs and punishment strategies, which allows us to study what determines recipients’ punishment choices after they are shown normative beliefs of their dictators. We corroborate the theory and find that many recipients indeed act in accordance with the maximization of expected norm-dependent utility that has a negative flavor of moral opportunism. We also find that some of the recipients are excessive punishers: they punish a lot, but not according to their normative beliefs. Excessive punishment is exhibited by recipients from Southern Europe, but not by recipients from the rest of Western Europe.
TL;DR: In this paper , the authors examine whether the audit process facilitates one particular form of opportunism: informed trading by corporate insiders, and find an increase in trading around the audit report date and that the increase is abnormally large for firms that subsequently report modified opinions.
Abstract: Abstract While the shareholder benefits of audits are well documented, evidence on whether audits can facilitate opportunistic behavior by corporate insiders is scarce. In this paper, we examine whether the audit process facilitates one particular form of opportunism: informed trading by corporate insiders. We focus our analysis on insider trading around the audit report date. We find an increase in trading around the audit report date and that the increase is abnormally large for firms that subsequently report modified opinions. The abnormal increase in trading is concentrated among officers and non-audit committee independent directors, and most pronounced in first-time modified opinions and modified opinions in years where financial results are subsequently restated. These trades are highly opportunistic: they predict restatements, and as a consequence, we show they avoid significant losses. Collectively, our findings provide novel evidence that insiders appear to exploit private information about the audit process––a process ostensibly designed to protect shareholders––for opportunistic gain.
TL;DR: In this paper , the authors analyzed previously unmeasured effects of a response to a service incident called "benevolent" within the customer-firm relationship and found that the response interpreted as benevolence or opportunism has an effect that merely positive or negative events do not.
Abstract: PurposeThis paper analyzes previously unmeasured effects of a response to a service incident called “benevolent” within the customer –firm relationship.Design/methodology/approachA questionnaire was administered to telecommunication customers in a Western European country, and the model was estimated using partial least squares (PLS).FindingsThis study shows that the customer–firm relationship is surprisingly affected by the response to expected incidents that the customer interprets as acts of benevolence or opportunism. This research also shows that the firm's incident response interpreted as benevolence or opportunism has an effect that merely positive or negative events do not. Acts of benevolence response towards an incident positively affect customer–firm relationship quality, and expectations of such acts may lead to an upward spiral in customer commitment.Originality/valueWhile benevolence trust has been proposed and studied before, the response to incidents interpreted as benevolent or opportunistic and their consequences have been under-studied, hence exhibiting a research gap.
TL;DR: In this paper , the authors investigated the effect of IT investment on firm performance in Malaysia and found that IT investment incurred in the current study displayed a positive but weakly significant impact upon firm performance.
Abstract: Abstract This paper aims to investigate the effect of Information Technology (IT) investment on firm performance in Malaysia. The data of this study were collected from 231 firms listed on Bursa Malaysia from 2010 to 2019. A dynamic model was built, and estimation was carried out by using the Generalized Method of Moments (GMM) that controls the endogeneity nature of the equity value multiple model. As predicted, IT investment incurred in the current study displayed a positive but weakly significant impact upon firm performance. This result provides valuable information for investors, stakeholders, and the public in general and encourages the companies to implement IT to its benefit in improving the firms’ performance. Thus, the findings confirm the significance of future studies that could suggest other variables to further understand whether they support or oppose managerial opportunism to enhance the relationship. Consistent with this suggestion, the result of the present study could help researchers and practitioners identify the key factors to making the right IT investment decision.
TL;DR: In this paper , the authors present the first archival analysis of non-GAAP revenues using a large, hand-collected sample of disclosures from 2015 to 2018, and find that approximately one in five earnings announcements contains a nonGAAP revenue disclosure, focused on revenue growth.
Abstract: ABSTRACT Most research on non-GAAP financial measures focuses on earnings or earnings per share, although non-GAAP revenue disclosure has recently attracted SEC scrutiny. It is unclear ex ante what non-GAAP adjustments could improve revenue's usefulness because, unlike earnings, revenue is a top-line number related primarily to core (i.e., persistent) business activities. We present the first archival analysis of non-GAAP revenues using a large, hand-collected sample of disclosures from 2015 to 2018. Approximately one in five earnings announcements contains a non-GAAP revenue disclosure, focused on revenue growth. Our evidence suggests that firms disclose non-GAAP revenue when GAAP revenue is incomparable with prior periods, and not to compensate for poor GAAP performance. Furthermore, non-GAAP revenue growth predicts future revenue growth better than GAAP revenue growth, and the market responds to this information. Overall, non-GAAP revenue disclosures are motivated by economic fundamentals rather than opportunism, on average, and they provide investors with relevant information.
01 Jan 2022
TL;DR: In this paper, the authors discuss the role of incentivization in dispute minimization in construction disputes and suggest that incentivization can provide ex post relational governance that moderates ex ante risk and power asymmetry.
Abstract: The uncertainties found by construction projects render practice of opportunism ex post. Typically, disputes are raised to capitalise on unplanned happenings. This study discusses the role of incentivization in dispute minimization. Through literature review, it was found that unfair treatment of contractual parties is one of the underlying causes of construction disputes. When incentivization serve as ex post (i) reallocation of risks; (ii) investment in relation and (iii) patching perception of fairness, dispute can be minimized. It is therefore suggested that incentivization provide ex post relational governance that moderates ex ante risk and power asymmetry.
TL;DR: In this paper , the authors explore the influence of the distribution voice on channel relationship quality and find that it has an inverted U-shaped effect on the quality of the channel relationship.