This study aims to clarify the relationship between ethical orientation and earnings management perception phenomenon in the organization. It discusses to what extent…
This study aims to clarify the relationship between ethical orientation and earnings management perception phenomenon in the organization. It discusses to what extent earnings management is considered as a strategic adaptation or deliberate manipulation in an organization. The study also aims to expand the domain of ethical perspective of earnings management by considering mediating and moderating role of investor sentiment and corporate social responsibility (CSR) as inward pressure and outward commitment surrounding the organization, adopting a combined perspective of strategic management and also accounting discipline than is normally found in the ethics and earnings management literature.
The study opted for literature synthesis to define key concepts surrounding ethics and earnings management perception in the organization. Besides, it attempted to identify influential mediators and moderators in explaining the earnings management phenomenon in the organization. Consequently, the study identified the gaps in current research to draw upon a more holistic conceptual framework. The rationale for the research was justified within the body of research.
The study suggested research propositions based on the literature synthesis in view of ethics and earnings management perception in the organization. More specifically, it has proposed a conceptual framework, explaining the relationship between ethical orientation and a multi-dimensional view of earnings management perception. It is envisaged that the mediating and moderating role of investor sentiment and CSR incorporated in this conceptual study will improve the predictive value of the proposed framework and offer additional insights about factors that inhibit or advance ethical orientation and earnings management practices in the organization.
This paper suffers from the obvious limitation of lacking empirical investigation. However, it does provide a theoretical rationale for the argument that alteration of earnings can be controlled if ethical orientation is emphasized in the organization apart from insulating internal and external pressures to manage such phenomenon from happening in the organization. Perhaps, the most important direction for future research is further extension and validation of this framework by performing an empirical investigation to produce newer insights into this phenomenon.
This conceptual study is different from previous studies on the grounds it has considered unexplored issues linking inward pressures and outward commitments in explaining this phenomenon further. To bridge the critical knowledge gap of earnings management phenomenon, a mediating effect of investor sentiment as an inward pressure and a moderating role of CSR as an outward commitment are also integrated within the model. The proposed model neither formulated nor tested empirically in previous studies locally or, perhaps, globally, therefore, stands out as an original contribution in the study of ethical orientation and earnings management perception.
The learning objectives of using this case are as follows: to understand the concepts of organizational structure, organizational culture and organizational change; to…
The learning objectives of using this case are as follows: to understand the concepts of organizational structure, organizational culture and organizational change; to expose students to the problems that may encounter organization when it intends to bring changes in culture; to stimulate students’ understanding of the necessity to build positive organizational culture; to advance students’ knowledge about oil and gas industry; to develop students’ understanding of using Levin’s model of cultural change; and to illustrate the challenges that an organization might face while changing its existing culture.
This case teaches about the importance of boosting positive organization culture to accept organizational change. Stardust was established in 2013 as Petronas Carigali Sdn Bhd’s subsidiary. The company was established to manage small and marginal field in Malaysia which was under the oil and gas field that had smaller reservoir and lasted for four to five years. On 2014, Stardust was given an opportunity to take over one of the fields to manage. However, during the process of handing over the facility and field from the parent to the new company, the tanker caught fire in one of its pump in the pump room. The fire resulted substantial damage to the pump room; two out of four pumps were totally damaged. It delayed the oil production for more than a month. Total estimated damage due to the fire incurred RM19m losses. Direct cost included replacing two new 400 kW pumps, repairing the damaged pump room with new manifolds and painting, and cost of shutdown production for 40 days. Investigation was initiated to identify the causes of the fire which revealed that human error, mostly peoples’ negligence was one of the major reasons along with location, equipment and procedure. The Health, Safety and Environment department of the company was given the task to create ‘Living Safety’ culture among the crew. Being the head of this department, Tarmizi found it very challenging to inculcate the culture ‘Action Today, Perfect Day Tomorrow’ and was thinking how to instill this culture with zero failure by the end of the calendar year which is December 2016. The time was running fast as the parent company emphasized to handle the situation urgently and to ensure that the similar incident will not happen in the future. If it re-occurs, it will jeopardize the trustworthiness of Stardust with the other parties involved and also the parent company might not allow the company to operate other facilities, which will put the company at stake to remain competitive in the oil and gas business.
Complexity academic level
This case is suitable to use in advanced undergraduate level, MBA and MSc to teach organizational behavior and organizational theory courses.
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CSS 7: Management Science.
Researchers in the field of leadership are increasingly turning their attention to the concept of emotional intelligence (EI) to better understand how aspects of…
Researchers in the field of leadership are increasingly turning their attention to the concept of emotional intelligence (EI) to better understand how aspects of individual difference may help to explain variations in leadership behavior. Importantly leadership practices that foster positive affectivity have been found to be associated with important job- and work-related outcomes. This study aims to investigate whether EI moderates the relationship between a measure of leader–member exchange (LMX) and important work-related outcomes within Malaysia. LMX was found to be positively associated with organizational citizenship behavior, job satisfaction, organizational commitment, psychological well-being (PWB), and in-role performance. However, the relationship between LMX and job satisfaction, LMX and organizational commitment, LMX and PWB, and LMX and in-role performance was also found to be moderated by EI. The findings suggest that EI can help leaders and subordinates to facilitate stronger identification and emotional attachments with each other.
In this overview, the editors trace the history of 10 books they have helmed in what has become the legacy of the Emonet conferences. From the seeds planted in 1998 by a…
In this overview, the editors trace the history of 10 books they have helmed in what has become the legacy of the Emonet conferences. From the seeds planted in 1998 by a small group of international scholars assembled together at the first Emonet conference, the shift of the study of emotions in organizational studies from the almost “undiscussable” to mainstream scholarship is traced. Following this historical analysis, the story of “What have we learned? Ten years on,” the latest volume in the Emonet book series, is given. In a brief summary of each chapter in the current edition, the editors draw attention to eight topic areas to showcase the remarkable and broad-ranging advances in the field of organization studies that have been enabled by attention to the role of emotions in theory and practice in 10 years since the first publication in the book series. From advances in our knowledge and understanding of work, workers and consumers, to team behavior, leader-member exchange, and In Extremis work contexts, and methodological contributions in the assessment of noncognitive traits through to advances in knowledge of positive work environments, the reader is left in no doubt that organizational scholarship and practice has been deeply enriched through bringing emotions center stage.