Search results

Scandal is the disruptive publicity of alleged misconduct and it is important for organizations because of its severe consequences. Distinguishing between single-actor scandals, i.e., scandals that result from publicity of misconduct by a single actor, and multiple-actor scandals, i.e., scandals that result from publicity of misconduct of a similar type by multiple actors, we develop a framework for studying scandal dynamics that draws a distinction between how scandals start (single-actor or multiple-actor) and how they end (single-actor or multiple-actor). We focus specifically on spillover scandals (from single to multiple actors) and scapegoating scandals (from multiple to single actors) and identify several mechanisms that affect the likelihood of these two important types of scandals. We conclude by developing a research agenda that builds upon the central contribution of our framework: the distinction between single- and multiple-organization scandals and the transitions that result in spillovers and scapegoating.

The purpose of this paper is to examine the impact the US Supreme Court's Tellabs decision has had on Section 10 (b) cases generally and on cases related to subprime mortgage‐backed securities.

The paper provides background including provisions of Section 10(b) of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act (PSLRA) of 1995. Analyzes the decision in Tellabs, Inc. v. Makor Issue & Rights, Ltd, recent decisions since Tellabs by the the Second, Seventh, and Ninth Circuits, and decisions in two recent subprime securities cases in which defendants moved to dismiss pursuant to Tellabs; and draws preliminary conclusions from cases that have applied Tellabs so far.

The PSLRA raised the bar for pleading scienter by requiring a “strong inference”, but the courts of appeals have differed in applying the standard. The Tellabs decision asserted that the PSLRA requires consideration of competing inferences in determination of whether scienter is adequately pleaded. The Supreme Court's “prescription” said the inference of scienter must be more than merely “reasonable” or “permissible”; it must seem to a reasonable person to be at least as cogent and compelling as any opposing inference. One lesson of Tellabs and the Seventh Circuit's decision on remand is that the “plausibility” of scienter allegations requires a fact‐specific inquiry. The Ninth Circuit court found that “deliberate recklessness” is sufficient to allege scienter. In one of the subprime cases, In re 2007 Novastar Financial, Inc., a district court found that a deterioration of a company's business was not evidence of wrongdoing. It is difficult – and premature – to draw firm conclusions from cases that have applied Tellabs so far, but requiring courts to consider competing inferences, requiring the pleadings in question to satisfy more “adjectives”, and requiring the “weighing” of inferences at the pleadings stage would all appear to help defendants. However, Tellabs could help plaintiffs by reversing previous practice in which a “tie” between competing inferences automatically resulted in a victory for the defendant.

The paper offers practical guidance by experienced securities lawyers.

A first responder to a crisis acts by stabilizing the situation and preventing further losses to victims. The purpose of this paper is to explore the issue of whether auditors can act as first responders to a financial fraud.

This paper reviews Securities and Exchange (SEC) regulations and auditing practice pronouncements to identify the role of digital evidence in those statements.

Auditors will act as first responders if such a role is required in SEC regulations or under the auditors' professional practice guidelines. Recent SEC regulations and practice guidelines are reviewed to determine if any such role exists. The effectiveness of a first responder to financial frauds is dependent on the tools they use to evaluate the crisis.

In order for auditors to act effectively, they must carefully take into consideration fraudulent digital documents.

The purpose of this paper is to investigate performance measurement practices in the Tanzanian Local Government Authorities (LGAs). It seeks to understand the performance measurement practices in the context of new public management (NPM) (Hood, 1991, 1995). Specifically, the paper focuses on the annual performance assessment (the local government development grant system), which operated in the Tanzanian LGAs as a base for accessing grants from the central government.

The study executed a grounded theory strategy for data collection and analysis. Fieldwork was undertaken in three Tanzanian LGAs.

The findings revealed how performance measurement practices were involved in the process of managing legitimacy, and consequently, in the acquisition of grants from the central government. Dialogue and learning about the performance measurement exercise and the production and manipulation of evidence were the two strategies employed by LGAs in the management of legitimacy.

In practice, efficiency in organizations may be achieved through the appropriate design of systems, and by understanding, and addressing problems which emerge during their implementation. Learning is a significant strategy used by actors, and this needs to be taken into consideration by reformers when designing and implementing reforms.

The paper contributes to existing research by providing a framework for managing legitimacy. The framework supports and extends Oliver’s (1991) typology of strategic responses to institutional processes and Suchman (1995) legitimation strategies. It identifies dialogue and learning as other forms of significant strategy in actors responses to institutional pressures. The study also provides additional evidence of the responses to the accounting changes and the NPM reforms.

The purpose of this paper is to explore the effects of total assets, stock performances, CEOs’ tenures, ages, and board sizes on total CEO compensations of 249 publicly listed US companies over a nine-year period from 2004-2012.

Pedroni’s panel cointegration, generalized method of moments, and dynamic ordinary least squares methodologies are applied.

All variables are non-stationary in log-levels. The findings show significant positive effects of total assets and stock performances on total CEO compensations. The effects of CEO’s tenure and age as well as board size on total CEO compensation deem negative. However, short-run net interactive feedback effects are generally positive with some exceptions.

The above variables matter in rewarding the CEOs. They should be carefully weighed in for proper formulation of CEO compensation policy.

This paper applies relatively new econometric tools for a large panel data set. This work considers some new variables for determining CEO compensation in USA. The findings are relatively new with empirical originality.

In this paper, we investigate the process by which social control agents define wrongdoing over time and the principles they employ in drawing the boundary between right and wrong. We empirically examine how Italian state actors sought over four decades to categorize behaviors in the so-called “gray area,” i.e., the conduct of individuals supportive of the mafia organization Cosa Nostra and its criminal aims, but not members of the organization. Based on an archival analysis of texts produced since the 1960s, we reconstruct how state actors started from a preliminary definition of wrongdoing, moved to stigmatize the behaviors in question on moral grounds, and ultimately criminalized them with legal sanctions. We conceptualize the main principles behind this evolving categorization as intentionality of conduct, freedom of choice, and scope of harm. The paper contributes to the debate on the factors and conditions shaping the definition of wrongdoing over time and the contribution that social control agents provide to this aim.