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Article

Véra-Line Montreuil, Martin Lauzier and Stéphane Gagnon

The purpose of this paper is to provide a portrait of the main managerial and organizational determinants of organizational capability to innovate (OCI). Despite its…

Abstract

Purpose

The purpose of this paper is to provide a portrait of the main managerial and organizational determinants of organizational capability to innovate (OCI). Despite its importance, research on the subject seems limited, and little attempt has been made, over the years, to offer an in-depth and simultaneous analysis of these particular determinants, as well as an exploration of the underlying and complex mechanisms explaining their relationships to OCI.

Design/methodology/approach

A systematic review of articles published between 1991 and 2018 was conducted in ProQuest (ABI/INFORM Collection) and Scopus databases. A total of 64 articles were selected and analysed through the use of a coding grid.

Findings

Results highlight five key OCI determinants, namely: leadership, support, communication, culture, and learning. By using the dynamic capabilities theory (DCT) as a framework, this research suggests ways to better understand the dynamic action of these determinants as well as their contributions to OCI. Findings also suggest that OCI should be defined at the confluence of three perspectives (human, procedural and environmental aspects) to embrace the multiple facets of this complex construct. Proposals for future research are provided on how OCI can be better examined.

Originality/value

This research helps to understand the five core determinants through an integrated and holistic view and represents the first attempt to systematically analyse the scientific literature on OCI through the DCT lens.

Details

European Journal of Innovation Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1460-1060

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Article

Frendy and HU Dan Semba

The Accounting Standards Board of Japan (ASBJ) proposed a new set of endorsed International Financial Reporting Standards in June 2015. ASBJ claims that non-recycling of…

Abstract

Purpose

The Accounting Standards Board of Japan (ASBJ) proposed a new set of endorsed International Financial Reporting Standards in June 2015. ASBJ claims that non-recycling of other comprehensive income (OCI) items decreases the information usefulness of earnings in a proposed comprehensive income standard. There has been no existing empirical evidence which supports the ASBJ’s statement and the purpose of the study is to test whether OCI recycling improves information usefulness of net income from six perspectives: relative and incremental value relevance, persistence, variability, operating cash flow and net income predictive power.

Design/methodology/approach

This paper is an empirical work using a listed Japanese firms sample of 5,385 firm-years from fiscal year 2012-2014.

Findings

The results challenge the ASBJ’s claim that recycling improves the general information usefulness characteristics of net income. The empirical results show that OCI recycling improves net income’s relative value relevance characteristic of financial firms. However, recycling information by itself does not improve the incremental value relevance, and the predictive power of operating cash flow and net income. The authors also find that the inclusion of recycling decreases the persistence and increases the variability of net income.

Research limitations/implications

This paper has two research limitations. First, this study is constrained to analyze a limited OCI recycling data that is recently disclosed by listed Japanese firms. Second, the results of this study have limited external validity to capital markets with OCI reclassification standards that deviate from Japanese GAAP.

Originality/value

This study provides initial empirical evidence that examines information usefulness of OCI recycling in Japan. The findings of this study are relevant for accounting standards setters aiming to increase the information usefulness of earnings for capital market investors.

Details

Asian Review of Accounting, vol. 25 no. 3
Type: Research Article
ISSN: 1321-7348

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Article

Ning Du, Kevin Stevens and John McEnroe

This paper aims to understand the effects of different presentation formats on nonprofessional investors’ judgments. Both International Financial Reporting Standards and…

Abstract

Purpose

This paper aims to understand the effects of different presentation formats on nonprofessional investors’ judgments. Both International Financial Reporting Standards and US Generally Accepted Accounting Principles require an entity to present items of net income and other comprehensive income (OCI) either in one continuous or in two separate, but consecutive, statements but limited understanding exists about their differential effects on evaluation of company performance.

Design/methodology/approach

To investigate this research question, we used a two (Financial Position) x two (Format) randomized between-subjects experiment. Ninety-four graduate students assumed the role of investor and participated in this study.

Findings

Results of the experiment suggest that participants are more likely to incorporate OCI information presented in the one-statement format than in the two-statement format. Further analysis suggests that participants both assign more weight to OCI and perceive OCI to be relatively more important in the one-statement format than in the two-statement format, especially when the entity suffers an economic loss.

Originality/value

Results from this study provide evidence to the Financial Accounting Standards Board and International Accounting Standards Board that should be useful in evaluating the effectiveness of alternative comprehensive income reporting formats and should be of interest to accounting rule-making bodies, investors, publicly traded entities and financial analysts, among others.

Details

Accounting Research Journal, vol. 28 no. 3
Type: Research Article
ISSN: 1030-9616

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Article

Louis Banks, Allan Hodgson and Mark Russell

This paper aims to test whether a change in the reporting location of income, and other comprehensive income (OCI) components, in a statement of comprehensive income…

Abstract

Purpose

This paper aims to test whether a change in the reporting location of income, and other comprehensive income (OCI) components, in a statement of comprehensive income (SoCI) under International Financial Reporting Standards affects their value-relevance and use by financial analysts.

Design/methodology/approach

The study tests the associations between CI, OCI, share returns and financial analyst forecast revisions.

Findings

Results show that comprehensive income is less value-relevant than net income, regardless of reporting location. Changing the reporting location of OCI components to the SoCI does not provide incremental improvement for financial analysts or stock prices. Finally, the paper finds that analysts use OCI components to revise forecasts.

Originality/value

The paper addresses the question of which OCI components should be reported, and the importance of reporting location. The paper extends the examination of OCI components to financial analysts as expert financial report users.

Details

Accounting Research Journal, vol. 31 no. 4
Type: Research Article
ISSN: 1030-9616

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Article

Claire Eckstein, Ariel Markelevich and Alan Reinstein

The purpose of this paper is to examine the impact of firms using derivatives applying Statement of Financial Accounting Standards (SFAS) No. 133. It aims to measure the…

Abstract

Purpose

The purpose of this paper is to examine the impact of firms using derivatives applying Statement of Financial Accounting Standards (SFAS) No. 133. It aims to measure the magnitude of cumulative effects of changes in accounting principle from the income statement in the year of adoption, market reaction to earnings announcements, and key financial ratios effects.

Design/methodology/approach

Search of the Compustat Industrial database for firms reporting a cumulative effect of a change in accounting principle in their annual income statements for fiscal years ending after 15 June, 2000. We then examine the impact of firms using derivatives applying SFAS No. 133.

Findings

The sampled firms reported an absolute cumulative effect on income of $6.8 billion, 65 per cent of which was negative. Significant negative unexpected returns were observed around earnings announcement dates. Abnormal returns correlated with the cumulative effect, rather than with change in earnings per share from operations, showing that the surprise related to the accounting change. Ratio analyzes and regressions results show sampled firms with material unrealized gains and losses related to hedging with derivative instruments. Earnings‐related ratios, return on assets (ROA), return on equity (ROE) and measures of other comprehensive income decreased significantly from 2000 to 2001 after experiencing prior period significant increases.

Practical implications

The results presented in the paper should lead to further research on the effect on new authoritative standards on the financial reporting process.

Originality/value

Rather than judge SFAS No. 133's relative merits and shortcomings, the Standard's actual (rather than predicted) effects were analyzed. Focus was on the magnitude of the impact of SFAS No. 133 and the effect on key financial ratios. The impact of adopting the Standard was analyzed and it was found that it violated a basic tenet of financial accounting pronouncements: a “value neutral” basis was examined.

Details

Review of Accounting and Finance, vol. 7 no. 2
Type: Research Article
ISSN: 1475-7702

Keywords

Content available
Book part

Alexandra McCormick and Seu’ula Johansson-Fua

Through the ideas of and within Oceania that we outline, and within which we locate architecture and institutions for CIE regionally, we illustrate the identified turning…

Abstract

Through the ideas of and within Oceania that we outline, and within which we locate architecture and institutions for CIE regionally, we illustrate the identified turning points through analysis of dynamic and intersecting trajectories of the Oceania Comparative and International Education Society (OCIES), formerly the Australia and New Zealand Comparative and International Education Society (ANZCIES), and the Vaka Pasifiki, formerly the Rethinking Pacific Education Initiative for and by Pacific Peoples (RPEIPP) project. We offer initial responses to an over-arching theme in posing the question: how, and through what processes, have these groups influenced understandings of ‘regionalism’ for CIE within Oceania? This involves examining the conferences, financing, membership, the Society journal/publications and aspects of CIE education of the two bodies.

Details

Comparative and International Education: Survey of an Infinite Field
Type: Book
ISBN: 978-1-78743-392-2

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Article

Pierre A. Balthazard, Robert A. Cooke and Richard E. Potter

This paper aims to describe how organizational culture is manifested in behavioral norms and expectations, focusing on 12 sets of behavioral norms associated with…

Abstract

Purpose

This paper aims to describe how organizational culture is manifested in behavioral norms and expectations, focusing on 12 sets of behavioral norms associated with constructive, passive/defensive, and aggressive/defensive cultural styles.

Design/methodology/approach

The organizational culture inventory, a normed and validated instrument designed to measure organizational culture in terms of behavioral norms and expectations, was used to test hypotheses regarding the impact of culture. Data are summarized from 60,900 respondents affiliated with various organizations that have used the instrument to assess their cultures. Also presented is a brief overview of a practitioner‐led assessment of four state government departments.

Findings

The results of correlational analyses illustrate the positive impact of constructive cultural styles, and the negative impact of dysfunctional defensive styles, on both the individual‐ and organizational‐level performance drivers. The results clearly link the dysfunctional cultural styles to deficits in operating efficiency and effectiveness.

Originality/value

The concept of organizational culture is derived from research in the field of organizational behavior characterized by use of qualitative methods. Yet, one of the most powerful strategies for organizational development is knowledge‐based change, an approach that generally relies on the use of quantitative measures. Although both methods share the potential for producing cumulative bodies of information for assessment and theory testing, quantitative approaches may be more practical for purposes of knowledge‐based approaches for organizational development generally, and assessing cultural prerequisites for organizational learning and knowledge management specifically.

Details

Journal of Managerial Psychology, vol. 21 no. 8
Type: Research Article
ISSN: 0268-3946

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Article

M. Humayun Kabir and Fawzi Laswad

The purpose of this paper is to investigate the properties of net income (NI) and total comprehensive income (TCI) of listed companies in New Zealand (NZ). Four properties…

Abstract

Purpose

The purpose of this paper is to investigate the properties of net income (NI) and total comprehensive income (TCI) of listed companies in New Zealand (NZ). Four properties of TCI and NI are examined: persistence, variability, predictive ability, and value relevance. Whether the value relevance of TCI depends on its reporting location is also investigated.

Design/methodology/approach

A cross‐sectional research design is used with data on TCI reported by NZ listed companies in 2010 under the new disclosure requirement in IAS 1. Ordinary least squares (OLS) regressions are used with a sample of 86 firms to test for persistence, variability, and predictive ability, and 81 firms to test for value relevance of NI and TCI.

Findings

The study finds: NI is potentially more persistent than TCI and potentially explains contemporaneous stock returns better than TCI; no significant difference in the variability and predictive ability of NI and TCI; little evidence that the value relevance of TCI depends on its reporting location; other comprehensive income (OCI) has incremental ability to predict one‐year‐ahead CFO, although the incremental ability of OCI to predict one‐year‐ahead NI is not statistically significant; and OCI is not incrementally value relevant.

Practical implications

The findings would be of interest to securities analysts and other users in valuing firms and when earnings are used in contractual settings (e.g. management compensation). Further, the results would also be of potential interest to standard‐setters.

Originality/value

The literature on comprehensive income is growing. However, the authors are not aware of any study that investigates the properties of NI and TCI in accordance with the new requirement to report comprehensive income in the amended IAS 1 which came into effect in NZ on January 1, 2009. The paper adds current evidence on the properties of NI and TCI under IFRS to the international literature.

Details

Accounting Research Journal, vol. 24 no. 3
Type: Research Article
ISSN: 1030-9616

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Article

Angela L.J. Hwang and Robert E. Jensen

This paper explains the concepts of underhedging and overhedging in interest rate swaps and demonstrates how overhedged and underhedged swaps might be accounted for under…

Abstract

This paper explains the concepts of underhedging and overhedging in interest rate swaps and demonstrates how overhedged and underhedged swaps might be accounted for under Statement of Financial Accounting Standards No. 133 (FAS 133) and international Accounting Standard No. 39. To illustrate, we use an interest rate swap with receive‐fixed, pay‐fixed swap leg foreign currency to explain the un derlying differences between overhedging and underhedging on foreign exchange risk. We further clarify that when both legs of an interest rate swap are specified with the same currency as in the situation of FAS 133 ‐ Example 5 beginning in Paragraph 131, accounting for overhedging or underhedging will be no different because there is no foreign exchange overhedging or underhedging risk that impacts swap valuation.

Details

Managerial Finance, vol. 31 no. 9
Type: Research Article
ISSN: 0307-4358

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Article

Kriengsak Panuwatwanich, Rodney A. Stewart and Sherif Mohamed

The paper is an extension to a previous empirical study that models the process of innovation diffusion in Australian architectural and engineering design (AED) firms…

Abstract

Purpose

The paper is an extension to a previous empirical study that models the process of innovation diffusion in Australian architectural and engineering design (AED) firms. This paper aims to utilise explanatory case studies to assist in the verification of this empirical model that depicts pathways that explain the role of enabling “climate for innovation” constructs in determining the level of innovation diffusion outcomes (IDO), and subsequent business performance (BPM) in Australian AED firms.

Design/methodology/approach

This paper presents the latter of a two‐stage sequential mixed method research design: quantitative empirical study; and qualitative explanatory case studies. Specifically, this stage extracts findings from five explanatory case studies using a qualitative pattern matching analysis technique. Interview‐based data collected from the case studies are analysed to formulate the relationship patterns between constructs, which are then compared with those predicted by the empirical model. This approach affords a determination on the extent to which the case‐based findings (i.e. work‐setting phenomena) explains (i.e. validated) the empirical model.

Findings

The results of the case studies on five Australian AED firms indicate that the model can be adequately explained by the actual phenomena. This is evident in four of the cases providing a good to perfect match, and one showing a partial match to the predicted patterns of relationships between the model constructs. Thus, the paper presents verified empirical pathways for AED firms, which suggest that, by increasing the level of leadership for innovation, the level of team climate and organisational culture for innovation can be improved. The improved culture for innovation will then heighten the level of IDO, which can in turn, result in an enhanced BPM.

Originality/value

This paper expands and improves upon the current understanding of how the diffusion of innovation can be accelerated within the AED firm context. By focusing on the socio‐psychological processes, the paper depicts the pathways to improve IDO and BPM through fostering a robust climate for innovation. These pathways have been constructed empirically and are verified in this paper under real‐work settings. Based on the validated model and the specific insights derived from the explanatory case studies, the paper also highlights a number of strategic implications for AED firms seeking to enhance their BPM through improving innovation diffusion practices.

Details

Construction Innovation, vol. 9 no. 4
Type: Research Article
ISSN: 1471-4175

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