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Typical organizations comprise members whose behaviors range from the minimum possible to maintain membership, to those discretionarily engaging in job-related behaviors above that expected or required. These discretionary behaviors are beyond the job description and often are not recognized by the formal reward system. Possibly, individuals with high emotional intelligence are more prone to engage in discretionary behaviors. The relationship between the dimensions of emotional intelligence and discretionary citizenship behaviors has not previously been explored. Using samples of nursing and business university professors, this study investigates the relationship between discretionary behaviors of educators and the four branch model of emotional intelligence. Discretionary behaviors comprised a set of traditional organizational citizenship dimensions, and those behaviors beyond the expected unique to higher education. Salovey and Mayer's four branch model was used to assess emotional intelligence. Data were analyzed with correlation analysis and multiple regressions. The regression results indicate that managing emotion (the ability to manage one's emotions and emotional relationships) had the greatest number of significant positive relationships with discretionary behaviors in both samples. Perceiving emotions and understanding emotions produced negative relationships with sportsmanship in the nursing sample. The nursing sample produced more relationships between emotional intelligence and discretionary behaviors than the business faculty sample. Overall results support the idea that emotional intelligence is linked to discretionary citizenship behavior. The study results provide evidence to support the organizational value of emotional intelligence. Also, the results provide ideas for fruitful further research which may hold promise for increasing organizational effectiveness and efficiency.

This paper aims to analyse the use of level of debt as an external control mechanism against an entrenchment strategy based on corporate social responsibility (CSR) practices.

The authors use a database of 1,916 international companies for the years 2002 to 2010.

The evidence obtained confirms in a context of asymmetric information, bounded rationality and divergent interests, the use of debt as a control mechanism of managers’ discretionary comportment. In other words, CSR practices can be used by managers as an entrenchment strategy and self-defence with the aim of decreasing the possibility of being identified by those shareholders and stakeholders whose interests have been damaged. In this context, the market demands higher debt levels to solve agency frictions, playing an active role in monitoring the management. Moreover, the demand of higher debt as a control mechanism that minimises the expropriation risk by managers through CSR is lower in contexts of greater investor protection.

The findings reveal that CSR engagement can be explained by the hypothesis of being a strategy of entrenchment and self-defence. Overall, this study differs from previous literature in this field by taking an alternative approach to CSR practices, in contrast to the conventional wisdom of the benefits of CSR practices. The authors contribute by empirically testing the theoretical model proposed by Cespa and Cestone (2007) who suggest the discretionary use of CSR from an agency perspective. They also give empirical relief showing the use of CSR as an entrenchment strategy. Moreover, they demonstrate that the capital market of debt decreases in a context with a greater degree of investor protection, likewise under CSR promoted as an entrenchment tool, the demand for debt as a disciplinary mechanism is less necessary to control managers. In addition, the study is enriched by the database analysis.

Examines different approaches to the challenge of Australian corporate law enforcement and governance, and discusses success in this area and how it might be determined. Describes barriers to measuring success of regulatory action, and debates what level of law enforcement is appropriate and cost‐effective. Concludes that a more broadly based approach to regulatory action and assessment is of prime importance.

This paper seeks to explore in depth the ways in which the rhetoric of the standard setter responds to comments received during development of a standard.

Previous research has explored the use of rhetorical strategies in accounting standards to construct and persuade as to what is “good” and to silence potential criticisms and alternative proposals. The exploration is extended to the development of an auditing standard and is strengthened by relating the opinions of lobbyists to the rhetoric used in the response.

The analysis shows that, in a situation where the standard setter's position changed significantly during the exposure of proposals to comment, rhetorical strategies in the exposure draft or standard were adapted to match the changing direction of persuasion, with silencing of potential counter‐argument evidenced in the surrounding explanatory material.

The research demonstrates that those using standards should be aware of the normative nature of these documents and the subjectivity inherent in the nature of the text.

The paper builds on Young's 2003 paper by exploring the dynamics of the ways in which the rhetoric of the standard setter responds to comment during the consultation process.

This study, using a longitudinal design, examined the relationship of perceived organizational support (POS) and job satisfaction among hospital‐based nursing staff survivors of significant healthcare restructuring. In addition, the role of both restructuring processes and restructuring stressors in affecting POS, and the potential mediating role of POS in the relationship between both restructuring processes and stressors and job satisfaction, was considered. Data were collected from 393 respondents at two points separated by three years. Levels of POS were relatively low on both occasions and declined slightly over the three year period. POS and job satisfaction were found to have a bi‐directional relationship over time. Both restructuring processes and stressors had significant relationships with POS, positive and negative respectively. POS fully mediated the relationship between restructuring processes and job satisfaction and partially mediated the relationship between restructuring stressors and job satisfaction.

The learning outcomes of this paper is as follows: to understand and analyze the turnaround model of Pearce and Robbins (1993); to familiarize with parameters and actions in the Prompt Corrective Action (PCA) framework of Reserve Bank of India (RBI); to comprehend the probable situation warranting turnaround; to identify the key ratios which signal the financial health of a bank; and to understand the applicability of the turnaround model in bank’s revival.

The case explores various challenges faced by Mr Prashant Kumar during the turnaround process of Yes bank. The youngest bank started its operation in 2004, and in the first six years of operations, Yes bank registered a compound annual growth rate of 100% on the balance sheet, becoming the fourth-largest private sector bank in the country. However, the irony is that this shine and glitter was a short-lived phenomenon and after the regulatory inspection of 2016, Yes bank collapsed like a house of cards. This case has incorporated the three major phases of Yes bank i.e. the rise, the fall and the revival. The turnaround process led by Mr Kumar was explained using the turnaround model given by Pearce and Robbins (1993) and the PCA framework of the RBI. The conditions which warranted the need for the turnaround in Yes bank and the factors responsible for the same are discussed. The multiple challenges faced by Mr Kumar and the strategic responses adopted by him were incorporated in great detail. What were the outcomes of those strategic choices? Should he continue with similar approaches? Was he successful in stabilizing the bank which was broken from the core? What next if stability is achieved? How Mr Kumar should lift Yes bank to the recovery zone? And most importantly, will Mr Kumar be able to change the poor public image of Yes bank? The reflections of all the above questions are narrated with the actions of Mr Kumar.

The case is intended to be taught in the class of strategic management for postgraduate-, master- or executive-level participants of business administration. As the case is focused on a banking organization, it also can be taught in banking class.

Teaching Notes are available for educators only.

CSS 1: Accounting and Finance.

The Commissioner for the South African Revenue Service has wide discretionary powers. In this article, the meaning, purpose, types, extent and exercise of these powers are examined. Do these powers promote uncertainty and/or unfairness and inconsistency, and if so, which of these powers do so? The extent of the powers given by some of the discretions not specifically subject to objection and appeal is questioned: no discretionary powers involving liability for tax should be allowed, especially not without the right to objection and appeal. Because of the general administrative relationship between the Commissioner and the taxpayer and because exercising a discretionary power constitutes an administrative action, the constitutionality of this power was examined in terms of taxpayers’ right to just administrative action. Only discretionary powers not specifically made subject to objection and appeal are open for constitutional attack.

The inherit complexity of an educational system further complicates the challenge of introducing technology-based educational initiatives into a school environment. Once introduced, the initiative has the potential to become self-sustaining or to cease once the term is over. Such uncertainty makes the use of expensive information technology (IT) in schools “risky business,” which requires school leaders go above and beyond their current routine to extend the system's capacity to sustain the innovation. A discretionary behavior of school leaders and teachers is one of key factors that contribute to or prevent the sustainability of an innovation. A lack of understanding of what encourages an individual's discretionary behavior and how discretion is fostered in school practices contribute to the challenge of innovation's sustainability. If the individuals’ discretion is required to sustain a technology-based educational program within a school, do their actions dwell outside or inside of the school environment? More importantly, how does a discretionary chain of command operate and can it be aligned? In this chapter we use an “ecological model” approach to describe the influential factors, which affect project's sustainability by transforming effective discretionary approaches of school leaders and teachers from policy to practice. We draw our description of the model on the results of the empirical study of Hong Kong schools involved in the design and strategic IT implementation of the e-Leadership Enhancement Project (eLEP).

During the Greenspan‐Bernanke era, the responses of Federal Reserve officials to financial crises resulted in an extraordinary involvement of the US central bank in the non‐banking financial sector. The purpose of this paper is to examine the informal and evolving conceptual framework that allows Federal Reserve officials to pursue a strategy of “constrained discretion” in responding to financial disturbances.

Behavioural economics relies on designed psychological and economic experiments to predict behavioural biases at the group level. As an analogue applicable to understanding biases in the intuitive judgments of individual policymakers, a naïve behavioural economics approach relies on intuitive or naive psychology and the interpretation of historical events as natural experiments to explain why intuitive judgments of Federal Reserve officials will contain biases.

Under the Greenspan‐Bernanke conceptual framework, Federal Reserve officials exercise “constrained discretion” in responding to disturbances arising from macro structural changes in the financial sector. The two key concepts are the Greenspan‐Bernanke doctrine on how the Federal Reserve officials respond to financial asset price bubbles and their collapses, and Bernanke's financial accelerator. Several examples are cited in which policy errors made by Alan Greenspan were attributable to identifiable biases in his intuitive judgment. In addition, Bernanke's response to the financial crisis of 2007‐2009 was based on his interpretation of the Great Depression as a natural experiment. But that interpretation was heavily biased by the influence of Milton Friedman on Bernanke's intuitive judgment. While Federal Reserve officials will need to exercise discretionary judgment in responding to financial crises, the potential for errors due to biases in that judgment can be reduced through regulatory reforms that lessen the potential for financial crises to occur.

While quantitative analyses of the effects of the Federal Reserve's actions on non‐bank financial institutions and the financial markets are ongoing, little attention has been given to the psychological aspects of the intuitive judgment that influences the discretionary decisions of the policymakers.

The learning outcomes are as follows: understand the mechanism of sourcing and allocation of funds in the Indian banking industry; compare financial indicators of Yes bank with the industry average and interpret the hidden stress; understand the role of NPAs in the banking industry and analyze Yes bank’s performance; and identify the possible red signals in the business model of Yes bank.

The case narrated the story of Yes bank which was considered as one of the most promising and rising banks of India. The stock of Yes bank had been the preferred investment choice for many investors because of its outstanding performance in almost all the important parameters of the industry since 2005. Since its inception, investors favored the stock with an assumption that this new generation bank had a unique as well as a sustainable banking model. However, after the year 2016, Reserve Bank of India (Indian central bank and banking regulator) found huge under-reporting of non-performing assets (NPAs) in the three (i.e. 2015–16, 2016–17 and 2018–19) out of its four annual regulatory inspections, casting doubt in the way Yes bank functioned. Risk and aggression seemed to be the two most important aspects of Yes bank’s culture and this case tried to narrate the same through various financial indicators. The ratio comparison with the industry average indicated the possible gray areas of Yes bank, which was once considered as the most promising bank of India. Unfortunately, even the change of guard at the helm of Yes bank did not change the fate of the bank.

MBA/PGDBA/Executive MBA.

Teaching Notes are available for educators only.

CSS 1: Accounting and Finance.