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This study aims to examine the effect on audit efficiency of outsourced internal audit function (IAF) providers with industry and/or firm-specific expertise. Drawing on relevant studies from external and internal audit literature, the authors assume that such IAF providers are associated with greater audit efficiency as proxied by audit report lag and audit fees.

Based on a sample of firms listed on the Omani capital market during 2005–2019, the pooled regressions are used to test the developed hypotheses. The authors use the market share approach to identify outsourced IAF industry expertise providers and tenure to measure the firm-specific expertise of outsourced IAF providers.

The authors find that industry outsourced IAF providers are not associated with shorter audit report lag and lower audit fees. The authors also find that firm-specific expertise outsourced IAF providers are associated with a greater reduction in audit report lag and audit fees. These conclusions are robust under a battery of analyses. The significant contribution of firm-specific expertise outsourced IAF providers to audit efficiency is incremental when abnormal audit report lag and audit fees analysis is conducted.

The results are the first to attest to the contribution of outsourced IAF with firm-specific expertise. They also show that industry expertise held by outsourced IAF providers does not contribute to audit efficiency.

Financial analysts' forecasts serve as a proxy for market earnings expectations, and research provides mixed evidence of the relation between financial analysts' expertise and forecast accuracy. The judgment and decision-making (J/DM) literature suggests that those with more expertise will not perform better when tasks exhibit either extremely high or extremely low complexity. Expertise is expected to contribute to superior performance for tasks between these two extremes. Using archival data, this research examines the effect of analysts' expertise on forecasting performance by taking into consideration the forecasting task's complexity. Results indicate that expertise is not an explanatory factor for forecast accuracy when the forecasting task's complexity is extremely high or low. However, when task complexity falls between these two extremes, expertise is a significant explanatory variable of forecast accuracy. Both results are consistent with our expectations.

While extant literature has advanced our understanding of senior and middle managers in corporate entrepreneurship, studies have only recently attended to the role of non-managerial employees (NMEs). These organizational members bring ideas, resources and energy to the pursuit of innovative opportunities, yet the determinants of their entrepreneurial behavior are poorly understood.

The authors performed a systematical literature review on the subject of NMEs in corporate entrepreneurship to identify gaps and recommend an agenda for future research.

The review revealed gaps regarding (1) the distance of NMEs from decisions on corporate strategic intent, (2) agentic choices made by NMEs to use their subject matter expertise for their employers' benefit, and the influences of (3) job characteristics and (4) organizational infrastructural support of entrepreneurial behavior.

The authors present a theoretical framework and directions for future research.

We examine personnel policies and careers in public agencies, particularly how wages and promotion standards can partially offset a fundamental contracting problem: the inability of public-sector workers to contract on performance, and the inability of political masters to contract on forbearance from meddling. Despite the dual contracting problem, properly constructed personnel policies can encourage intrinsically motivated public-sector employees to invest in expertise, seek promotion, remain in the public sector, and work hard. To do so requires internal personnel policies that sort “slackers” from “zealots.” Personnel policies that accomplish this task are quite different in agencies where acquired expertise has little value in the private sector, and agencies where acquired expertise commands a premium in the private sector. Even with well-designed personnel policies, an inescapable trade-off between political control and expertise acquisition remains.

In addition to their profit maximization objective, firms are often challenged to meet environmental and social demands. The purpose of this paper is to test whether a firm’s macroeconomic environment moderates the efficiency of its social and environmental disclosures.

The study uses the Bloomberg database to collect data on the FTSE 350 listed firms for the years 2007-2012. The sample is split into crisis and post-crisis periods, to study the investor reaction to social disclosures under different economic conditions.

The results suggest that the effect of corporate social responsibility (CSR) disclosure on future firm performance depends on the surrounding macroeconomic environment. During tight economic situations, market participants become more self-centered and penalize firms diverting scarce resources toward non-profitable societal engagements. Moreover, the findings indicate that firms with a high participation of outside directors and low accounting profit experience negative future performance when engaging in social disclosures during times of crisis.

Corporate governance is a system of interconnected practices that is affected by various firm and environmental characteristics. The results are in line with the premise that, depending on macroeconomic changes and specific firm attributes, CSR reporting may have dissimilar implications across different situations and conditions. Social disclosures and engagements are not always favorable, and should only be utilized in non-recessionary periods by firms possessing certain characteristics in terms of board composition and accounting profitability.

This study identifies key moderating variables which present additional obstacles for firms engaging in CSR during adverse economic conditions. Outsiders’ inferior firm-specific expertise, along with the firm’s poor accounting performance, present additional financial constraints for firms engaging in CSR activities during economic downturns.

The purpose of this paper is to consider the dynamics of customer education by exploring the relationship between education and customer expertise and their combined effects on customer loyalty in a high involvement investment services context. The paper also considers the service context within which customer education initiatives are delivered. More specifically, it explores the moderating effects of increasing levels of customer expertise (the outcome of customer education) on the relative importance of technical service quality (what is delivered) and functional service quality (how it is delivered) in determining the loyalty decision. In doing so, the paper aims to provide implications for the investment service firm for managing the service offering as customers develop expertise over time.

The paper proposes a conceptual model that formalises the research objectives as a series of testable hypotheses. This is followed by an outline of the research design and method. The hypotheses are tested using a sample of 1,268 high value clients from a global investment services firm. An analysis of the model and the results is presented.

Customer loyalty was found to be positively and significantly related to technical service quality, functional service quality, and customer education. Contrary to expectations, however, customer expertise was not negatively related to customer loyalty. Customer education was found to be positively associated with customer expertise. The main effect of customer education on loyalty was significant; however it did not diminish when customer expertise was entered into the third equation. In other words, the conditions for partial mediation were not satisfied. Finally, the positive and significant interaction coefficient between technical service quality and expertise implied that the positive effect of technical service quality on consumer customer loyalty was indeed stronger when customer expertise was high. Conversely, and consistent with expectations, the interaction term between functional service quality and customer expertise was significant and negative, indicating that the positive relationship between functional service quality and customer loyalty is diminished as customer expertise increases.

Where there is a significant amount of research on customer knowledge and expertise, there is relatively less understanding of how customers acquire such knowledge. It is hoped that this paper can shed some additional light on the subject of customer education, its impact on customer expertise and, ultimately, on the way in which service quality is perceived.

This case explores the context in which decisions related to the composition of the board of directors are made at a company with a strong, participatory culture and strong values of accountability, responsibility, and community.

This case study seeks an in-depth understanding of a 100% ESOP company’s (Carris Reels, Inc.) values, culture, and processes related to broad-based employee participation in decision-making and governance of the company. Data were collected from formal and informal interviews and discussions with Carris Reels’ employees, observation, and company archival data, including newsletters, meeting minutes, and announcements.

Goals may be sufficiently different at highly participatory, majority employee-owned ESOP companies such that regulatory guidelines for board structure for public or privately held companies that are not employee-owned should be evaluated in the context of that company’s stakeholders.

A trend toward external members for boards of directors should be given careful consideration in the case of majority ESOP companies whose employee-owned and governed status is central to the company’s vision.

This case study provides an in-depth look at a company’s board of directors’ composition-related decision-making in the context of broad-based participatory processes and the desire to maintain a profitable and fully employee-owned and governed enterprise.

The purpose of this paper explains how the framework on motives of foreign direct investment (FDI) needs to be rethought when analyzing emerging market multinational enterprises (EMNEs). It argues that the weak position of emerging market firms and their interdependent relationship with lead firms in global value chains (GVCs) modify the selection of internationalization motives.

The arguments are illustrated through a critical review of the literature on FDI motives and a discussion on how the literature can be extended from looking through the lens of emerging market multinationals, particularly those with early development as suppliers in global value chains.

The weak position of emerging market firms and their interdependent relationship with lead firms in global value chains modify the selection of internationalization motives on two aspects. First, internationalization decisions of EMNEs in GVCs are not undertaken in an independent manner. Rather, decisions are influenced by the initial position along the value chain and the dynamic relationships that these EMNEs have with lead firms. Second, the selection of FDI motives of these EMNEs reflects both their international expansion strategy and the upgrading effort they wish to pursue to undertake higher value-adding activities along the GVCs.

These implications addressed in this paper add more nuances to the interpretation of FDI motives. Previously viewed mainly from the perspective of lead firms, FDI decisions are considered as independent alternatives that multinational enterprises (MNEs) can undertake to fulfill their internationalization strategy. Revisiting the FDI motives from the perspective of EMNEs reveals further insights on the interdependent nature of their internationalization, particularly reflecting the weaker position of EMNEs and their interdependent relationship with lead firms in their industry.

Independent directors (IDs) in India are required to qualify for the online proficiency self-assessment test to acquire or retain their position on the corporate boards. The purpose of this paper was to examine the perceived positive and negative aspects of the new mandate for the overall quality of corporate boards in India.

This study used a qualitative methodology and applied the interpretative phenomenological analysis approach. Data was collected from board members using semi-structured interviews.

This study revealed the positive and negative perceived aspects of the mandatory policy prescription of proficiency test for IDs. It was found that the participants emphasized training and mentoring programs for the IDs.

Drawing upon the actual board experiences of the participants, this study has the potential to assist policymakers in making regulations that are more effective in enhancing the quality of corporate boards. The example of action taken as well as the criticism or positive aspects pointed out can generate interest in other legislators.

The concept of proficiency test for IDs is unique to India. A review of literature did not reveal the existence of any regulatory provisions for a mandatory uniform test for examining the proficiency of IDs, in any corporate law jurisdiction apart from India.

We examine how knowledge‐intensive firms modify their organizational knowledge bases in the context of mobility of researchers. Building on a dynamic capabilities perspective, we propose a conceptual model of firm knowledge base dynamics that clearly distinguishes between two mechanisms: (1) changes in a firm’s pool of researchers and (2) a firm’s ability to reconfigure knowledge. Our model posits that these two mechanisms interact to affect the type of variation in a firm’s knowledge base and elucidates how firms deploy knowledge from different domains.