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There are two problems when a principal invests capital and hires an agent to do the work. The problems relate to inducing the agent to exert the optimal effort and to…
There are two problems when a principal invests capital and hires an agent to do the work. The problems relate to inducing the agent to exert the optimal effort and to effect an optimal risk sharing arrangement. This paper introduces the concepts and enumerates the fundamental solutions to this agency problem. This approach is very useful in the managerial accounting area of determining the value of accounting information for setting performance evaluation and incentive payment schemes.
In this paper, it is established that the error and error derivative can be reduced to zero simultaneously and in the shortest possible time with at most one switching reversal of the relay, provided the initial values of error and error derivative fall in a controllable region.
Compare and contrast how the accounting, organizational behavior and other literatures analyze sunk costs. Sunk costs form a key part of the decision-making component of…
Compare and contrast how the accounting, organizational behavior and other literatures analyze sunk costs. Sunk costs form a key part of the decision-making component of the management accounting literature, which generally include previously incurred and unrecoverable costs. Management accountants believe, since current or future actions cannot change sunk costs, decision makers should ignore them. Thus, ongoing fixed costs or previously incurred sunk costs, while relevant for matters of accountability such as costing, income determination, and performance evaluation are irrelevant for most short- and long-term decisions. However, the organizational behavior literature indicates that sunk costs affect decision makers’ actions – especially their emotional attachments to the related project and the asymmetry of attitudes regarding the recognizing of losses and gains. Called the “sunk cost effect” or “sunk cost fallacy,” this conflict in sunk costs’ underlying nature reflects one element of incoherence in contemporary accounting discourse. We discuss this sunk cost conflict from an accounting and a philosophical perspective to denote some ambiguities that decision usefulness and accountability introduces into accounting discourse.
Review, summarize and analyze the above literatures
Managerial accountants can apply many lessons from the various literature sources.
We also show how differing opinions on how to treat sunk costs impact a firm’s decision-making process both economically and socially.
The traditional view of quality treats it as an economic good which can be developed by incurring costs. Proponents of total quality management have rejected the…
The traditional view of quality treats it as an economic good which can be developed by incurring costs. Proponents of total quality management have rejected the traditional view and stress the complementary nature of cost and quality. Reconciles these two views as different manifestations of the same underlying phenomenon within the same strategic framework. This requires precise definitions of quality concepts such as conformance and performance quality. The organization first examines its current position within this framework. The definitions of quality help sharpen the formulation of strategic objectives and the framework helps in mapping out a policy for moving the firm from the current position to the desired position. In addition, also determines the operating systems of quality management by how quality is defined in the organization. In conjunction with the strategic direction, the operational management procedures facilitate the process of cost management.
The chapter discusses Corporate Social Responsibility (CSR) with appropriate theoretical framings with the intent of creating a deeper understanding and application of CSR…
The chapter discusses Corporate Social Responsibility (CSR) with appropriate theoretical framings with the intent of creating a deeper understanding and application of CSR theories in Ibero-America’s hospitality industry. The research method is a qualitative research approach relying on critical review of scholarly articles on CSR theories. The sourced articles were critically discussed and analysed to fit the needs of the hospitality industry in Ibero-America. The shareholder/agency, stakeholder, legitimacy, instrumental, social contract, conflict, green and communication theories were identified as the eight dominant theories of CSR with diverse applications in the hospitality industry. The CSR theories discussed are not exhaustive, as there are emerging theories that explicate CSR in different contexts. The implication is that better understanding and application of CSR theories would strengthen conceptual, theoretical and empirical research in Ibero-America. The CSR theories are useful sources of information for practitioners for designing corporate CSR policies as well as providing scholars with sound theoretical framework for academic research. The chapter is a novel attempt at bridging theory and practice in the field of CSR, as well enriching the understanding of this concept among both practitioners and scholars in Ibero-America.
In today’s global competition, supply chain quality management is the key to a firms’ competitiveness. However, managers find that making sound quality and pricing…
In today’s global competition, supply chain quality management is the key to a firms’ competitiveness. However, managers find that making sound quality and pricing decisions under a complex multi-echelon in the current competitive electronic commerce environment is daunting and challenging. The purpose of this paper is to examine the optimum quality strategies under different cooperative mechanisms and investigate its effects on channel members’ profits.
This paper is a result of a China-UK collaborative research effort, involving researchers with expertise in information systems, quality management, supply chain management, pricing, and game theory models. The authors consider the quality decisions of a single product in a supply chain system that consists of a supplier and two competing manufacturers. The authors examine the optimum quality strategies under different cooperative mechanisms and investigate its effects on channel members’ profits. A modified Nerlove-Arrow model is employed to investigate the quality levels on goodwill and product sales.
The results reveal that the traditional cooperative program is not very effective in the horizontal competitive market; and each channel member may have a profit improvement when the supplier integrates with a manufacturer.
The authors believe that this paper will contribute to the existing body of knowledge. Moreover, the paper provides insights for managers to better manage their supply chain quality management in an information-centric context.
Forces of globalization have driven international convergence in corporate governance and accounting considerably over the past few decades. Nevertheless, despite the global trend, convergence of corporate governance and financial reporting remains a subject of debate. This research monograph critically examines whether China’s convergence with Anglo-American corporate governance principles and the International Financial Reporting Standards (IFRS) is likely to produce the expected outcomes of improving the transparency and comparability of accounting information in Chinese firms. In this chapter, we discuss the motivation for and the significance of the study; describe the issues associated with the adoption of internationally acceptable standards and principles in China; explain the theoretical framework used to inform the study and research methodology; and present the aim and objectives of the monograph.
Recently, performance measurement and management (PMM) has received increasing attention from both the academic and industrial environments. Companies that try to use PMM…
Recently, performance measurement and management (PMM) has received increasing attention from both the academic and industrial environments. Companies that try to use PMM systems report experiencing implementation problems including goal incongruence. Based on a discussion of the state of the art of PMM, this paper aims to provide research guidelines for building a PMM system through a reference framework, and to identify major design challenges.
At a macro level, the evolution of research is analyzed using citation and co‐citation analysis techniques. Further, the evolution of PMM systems in the last 20 years is traced. The feasibility and applicability of these frameworks/models are analyzed by considering five milestones that a performance measurement system should have. Based on this, an integrated framework is proposed as a basis for designing a cohesive PMM system.
The research on the subject is quite diverse. In fact, the research appears to be quite mature in terms of publications and citations, while PMM systems developed do not meet the PMM challenge faced in the current environment. The framework proposed for PMM system design integrates five systems: a performance system, a cost system, a capability evaluation system, a benchmarking system and a planning system. Integration among the five systems is to be viewed as the driver to address the PMM challenge.
The proposed framework is a starting point for PMM system design and it provides important guidelines for successful implementations of PMM initiatives for various types of companies in the current global business environment. However, further empirical studies are needed before the concepts described here can be assessed to ascertain its applicability.
The paper provides a literature review of PMM research, discusses the mutual consistency of models and frameworks therein, and explores how the framework proposed might be implemented and improved, as well as the major challenges facing researchers. Practical implication and benefits of the proposed framework adoption are highlighted through an example.
Research in PMM has become increasingly important given the significant impact it can have on competitive strategy and operations of firms in the present global business environment. This paper demonstrates the need of an holistic approach to PMM, which requires an intensive and deep comprehension of the key activities in the company and their related drivers.