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Article
Publication date: 27 September 2021

Alex Johanes Simamora

This paper aims to examine the effect of managerial ability (MA) on real earnings management and the effect of real earnings management by higher ability managers on future…

Abstract

Purpose

This paper aims to examine the effect of managerial ability (MA) on real earnings management and the effect of real earnings management by higher ability managers on future profitability, at a different level of the crime rate.

Design/methodology/approach

The research sample includes 864 manufacturing firms-years listed on the Indonesian Stock Exchange. MA uses an efficiency score by data envelopment analysis. Real earnings management is measured by abnormal activities. The crime rate is measured by logarithm natural of the number of crimes per 100.000 citizens in the region where the firm is headquartered. Data analysis uses fixed-effect regression.

Findings

MA increases real earnings management in the region where the firm is headquartered with a higher crime rate while MA will reduce real earnings management in the region where the firm is headquartered with a lower crime rate. Also, real earnings management by higher-ability managers gives a signal of better future profitability in the region where the firm is headquartered with a lower crime rate.

Originality/value

This research contributes to filling the previous gap of managerial characteristics ability-related on real earnings management by providing regional crime rate as a determinant factor of managers’ ethical behavior. This research is the first one to considers the regional crime rate treatment to the relationship between MA and real earnings management especially in Indonesia. This research also provides new evidence of efficient real earnings management for a lower crime rate group of samples to give a signal of better future profitability.

Details

Corporate Governance: The International Journal of Business in Society, vol. 22 no. 2
Type: Research Article
ISSN: 1472-0701

Keywords

Open Access
Article
Publication date: 28 March 2019

Wenting Zou, Saara A. Brax, Mervi Vuori and Risto Rajala

To build a more comprehensive understanding of factors affecting the success of service contracting, the purpose of this paper is to investigate the influences of service…

6868

Abstract

Purpose

To build a more comprehensive understanding of factors affecting the success of service contracting, the purpose of this paper is to investigate the influences of service complexity, contract structure and contracting process on the buyer-perceived supplier performance in business-to-business (B2B) services.

Design/methodology/approach

A research model is developed based on transaction cost economics and the research on service contracting. The model is tested by the survey data collected. Professional focus groups on LinkedIn are used to generate the list of potential respondents. The sample consists of 177 purchasing professionals from 25 countries.

Findings

The results indicate that three major contract dimensions and follow-up management practices positively influence buyer-perceived supplier performance. Furthermore, service complexity amplifies the effects of incentives designed in the contract and the buyer’s follow-up contract management on perceived supplier performance.

Research limitations/implications

The sample consists of respondents from 25 countries and provides good geographic coverage. However, the results should be generalized with caution because not all countries were represented equally.

Practical implications

The study suggests a framework and guidelines for purchasing managers to improve the design and management of service contracts to secure good performance from their supplier.

Originality/value

This paper contributes to understanding the performance-enhancing aspects of designing and monitoring service contracts in B2B contexts. It also adds to the knowledge of the role of service complexity in successful B2B service purchasing.

Details

International Journal of Operations & Production Management, vol. 39 no. 4
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 29 April 2020

Hasan Uvet, Hasan Celik, Sedat Cevikparmak and Saban Adana

Despite the significant increase in the adoption of performance-based contracting (PBC) in various industries, the primary value drivers of it are still not clear. Considering a…

Abstract

Purpose

Despite the significant increase in the adoption of performance-based contracting (PBC) in various industries, the primary value drivers of it are still not clear. Considering a lack of empirical evidence for PBC, this study investigates the effects of collaboration between the suppliers to understand the value offerings created in PBC by empirical findings. The purpose of this paper is to examine how supply chain collaboration (SCC) affects PBC benefits.

Design/methodology/approach

Using data from 381 survey participants who hold the title of manager or above, hypotheses are tested using structural equation modeling (SEM).

Findings

The results reveal that a strong and positive relationship between SCC and PBC benefits.

Research limitations/implications

One of the limitations of this research is the collection of data through the Amazon Mechanical Turk online service. The experience level of participants in PBC and the absence of validation of these scale items by industrial experts are other limitations of this study. Nonetheless, the authors found convincing evidence that SCC has a positive effect on PBC benefits.

Practical implications

The findings highlight the importance of SCC to increase financial, operational and non-financial benefits of PBC for practitioners. The findings offer guidance for managers aiming to increase PBC benefits through SCC.

Originality/value

This is the first study to empirically examine the impact of SCC for better PBC and contributes to the body of knowledge by providing empirical findings in a PBC context. This research also develops valid and reliable instruments to measure PBC benefits through rigorous empirical and statistical analysis that can be used in future studies.

Details

International Journal of Productivity and Performance Management, vol. 70 no. 4
Type: Research Article
ISSN: 1741-0401

Keywords

Article
Publication date: 6 November 2017

Adekunle Sabitu Oyegoke and Naseer Al Kiyumi

Project delay is becoming a problem in the Sultanate of Oman as evidenced by many delayed projects across the country. The purpose of this study is to examine causes and effects…

1223

Abstract

Purpose

Project delay is becoming a problem in the Sultanate of Oman as evidenced by many delayed projects across the country. The purpose of this study is to examine causes and effects of delays in megaprojects in the Sultanate of Oman with recommendations to mitigate same.

Design/methodology/approach

A systematic review of literature identifies through main stakeholders the numerous causes, impacts and methods of mitigating delay from previous studies. A questionnaire survey on Oman was carried out to sample opinions from the practitioners; 53 questionnaires were received and analysed using the relative importance index (RII) method.

Findings

The five most frequent causes of delay in the Sultanate of Oman, in rank order, are: selection of the lowest bid, instead of best bid for the client (RII: 0.698); the financial condition of the main contractor (RII: 0.664); delay in decision-making by the client (RII: 0.656); and poor construction planning by the main contractor (RII: 0.649). Also, the findings indicate that extra cost (RII: 0.754) and project time overrun (RII: 0.724) are the most significant effects of the delay in the Oman megaprojects. The use of experienced contractors and consultant (RII 0.675), efficient construction planning by the main contractor and effective site management and supervision (RII: 0.667) are essential mitigation methods of construction delay in Oman megaprojects.

Originality/value

The study recommends three-part novel solutions to mitigate delay in the Oman construction industry.

Details

Journal of Financial Management of Property and Construction, vol. 22 no. 3
Type: Research Article
ISSN: 1366-4387

Keywords

Article
Publication date: 9 May 2016

Kristijan Mirkovski, Paul Benjamin Lowry and Bo Feng

The purpose of this paper is to better understand how interorganizational relationships influence information and communications technology (ICT)-enabled supply chain (SC…

2222

Abstract

Purpose

The purpose of this paper is to better understand how interorganizational relationships influence information and communications technology (ICT)-enabled supply chain (SC) interactions of small- and medium-sized enterprises (SMEs) in developed versus developing economies through the theoretical lens of transaction cost economics and social exchange theory.

Design/methodology/approach

The paper uses case study data to examine SMEs operating in both a developing economy, the Republic of Macedonia, and a developed economy, the USA.

Findings

Insights reveal that the institutional context (i.e. environmental uncertainty) has significant indirect influence on ICT use by SMEs from rule-based and relationship-based SCs in the wine industry through contractual and relational mechanisms (i.e. contracts and social bonds).

Research limitations/implications

This study contributes to the body of SC knowledge by providing a comparative qualitative analysis of interorganizational factors (i.e. information sharing, collaboration, trust, contractual governance, relational governance and environmental uncertainty) that influence ICT use by SMEs in upstream wine SCs from developing and developed economies.

Practical implications

This paper provides valuable implications for the SC participants (e.g. grape suppliers, wineries and other suppliers) and industries (e.g. Macedonian and American wine industries) related to ICT use and non-use.

Originality/value

This study makes a novel contribution by being the first to qualitatively explore ICT use by SMEs from the wine industry and to identify the importance of legal institutional environment in buyer–supplier exchanges from developed versus developing economies.

Abstract

Details

Agricultural Markets
Type: Book
ISBN: 978-0-44482-481-3

Book part
Publication date: 17 October 2014

Stuart Kauffman

Contemporary Anglo-American economics, which I admire, faces two major obstacles. First, in its drive at least since Milton Freedman to be a positive science free of normative…

Abstract

Contemporary Anglo-American economics, which I admire, faces two major obstacles. First, in its drive at least since Milton Freedman to be a positive science free of normative issues, it ignores its own current intellectual foundations buried at the heart of its analysis of the “advantages of trade”: Fairness. Second, the major driver of economic growth in the past 50,000 years has been the explosion of goods and production capacities from perhaps 1,000 to 10,000 long ago, to perhaps 10 billion goods and production capacities today. Economics, lacking a theory for this explosion, deals with this explosion by ignoring it and treating it as “exogenous” to its theory.

The “Edgeworth Box” carries the heart of advantages of trade, demonstrating for properly curved isoutility curves a region where you and I are better-off trading some of my apples for some of your pears. The ratio of these in trade constitutes price. But spanning the region of advantages of trade is the famous CONTRACT CURVE, where we have exhausted all the advantages of trade. Different points on the curve correspond to different prices. But the Contract Curve is Pareto Optimal, motion on the curve can only make one of us better-off at the expense of the other. Critically, economics has NO THEORY for where we end up on the Contract Curve. Nor, since different points on the curve correspond to different prices, can PRICE settle the issue.

Using the Ultimatum Game I will show that FAIRNESS typically drives where we settle on the Contract Curve, as long as we do not have to trade with one another. Thus ethics enters economics at its foundation, yet cannot be mathematized, so is ignored in Freedman’s name of a positive science.

Perhaps more important, unlike physics, no laws entail the evolution of either the biosphere or the “econosphere.” There are no laws of motion whose integration would entail that evolution. Lacking an entailing theory of the growth of the economy in diversity, often of new goods and production capacities, economists ignore the most important feature of economic growth, wrongly treating it as “exogenous.”

The failures above are likely to play major roles in the lapse to mere greed in our major financial institutions, and in our inadequate capacities to help drive growth in much of the poverty-struck world.

Article
Publication date: 10 December 2019

Mirghani N. Ahmed

The purpose of this paper is to present a case study on the use of performance-based contracting in the outsourcing of a reliability-centered maintenance program of a Gulf oil…

1133

Abstract

Purpose

The purpose of this paper is to present a case study on the use of performance-based contracting in the outsourcing of a reliability-centered maintenance program of a Gulf oil refinery.

Design/methodology/approach

A case study method is used whereby data are collected through semi-structured interviews, informal discussions with executives from the participant companies, in addition to official documents and secondary materials.

Findings

The case analysis reveals the use of a risk–reward payment scheme and key performance indicators (KPIs) deployed to support the management of the outsourced maintenance function. The financial incentive scheme was clearly designed to motivate the outsourcing contractor to achieve more financial benefits when meeting a defined set of KPIs while also delivering operating cost savings and other qualitative benefits to the outsourcing company. Managing the outsourced function also involved the use of routine budgetary control systems, in addition to other informal control mechanisms such as trust, knowledge sharing, mutual understanding and co-operation between the two collaborative partners.

Practical implications

The evidence presented in the case description and analysis may assist in increasing the understanding of how outsourcing relationships in maintenance business are managed and evaluated. The case findings may also provide the opportunity for further research investigating the use of performance measurement systems and incentive-based schemes in a variety of maintenance contracts.

Originality/value

The case study presents new empirical evidence on the use of performance risk–reward payment schemes in the management of an outsourcing relationship. Findings reported in the study will add to the existing literature on maintenance performance measurement and management practices in outsourcing relationships.

Article
Publication date: 1 August 1997

Willie Seal and Peter Vincent‐Jones

The enabling role of accounting in supporting classical contractual exchange has been extensively analysed in agency theory. In contrast, analyses the role of accounting in…

3637

Abstract

The enabling role of accounting in supporting classical contractual exchange has been extensively analysed in agency theory. In contrast, analyses the role of accounting in enabling empirically important and welfare‐enhancing long‐term relations which rely on trust and co‐operation rather than legal remedies. Under what circumstances does accounting strengthen, weaken or even destroy the trust which underpins relations both within and between organizations? What are the implications for accountability? Explores these general questions in the contrasting contexts of compulsory contracting policies in UK local government and the transition from socialism in Eastern Europe.

Details

Accounting, Auditing & Accountability Journal, vol. 10 no. 3
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 1 August 2004

Nutavoot Pongsiri

In countries with large or potentially large oil and gas deposits, the resource and its extraction tend to become vital cornerstones of the economy. However, uncertainties…

7062

Abstract

In countries with large or potentially large oil and gas deposits, the resource and its extraction tend to become vital cornerstones of the economy. However, uncertainties involved in finding commercial quantities of oil and gas and the intensive capital required for undertaking exploration and production result in significant business risks. The petroleum fiscal systems in many developing countries are now opting for production‐sharing contracts (PSC) as a new model of agreement for the exploration and production of oil and gas resources. This paper extends the principal‐agent theory to foster understanding of partnership between the host government and its foreign contractor in the realm of PSC. The theory highlights the importance of moral hazard and adverse‐selection problems. To avoid these uncertainties and asymmetric information, the principal (national oil company) needs to design an incentive contract that induces the agent (international oil company (IOC)) to undertake actions that will maximise the principal's welfare. Under a PSC, the state has to offer contract terms that are attractive enough for the IOC to enter into an agreement. At the same time, the terms must allow the state to receive maximum economic returns from the venture.

Details

International Journal of Public Sector Management, vol. 17 no. 5
Type: Research Article
ISSN: 0951-3558

Keywords

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