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Article
Publication date: 6 September 2011

Nonna Martinov‐Bennie, Jeffrey Cohen and Roger Simnett

The purpose of this paper is to examine the potential impact of two affiliation factors, as encapsulated by the chief financial officer's (CFO) prior organizational (alumnus vs…

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Abstract

Purpose

The purpose of this paper is to examine the potential impact of two affiliation factors, as encapsulated by the chief financial officer's (CFO) prior organizational (alumnus vs non‐alumnus) and professional background (audit vs non‐audit ex‐partner), on auditor independence in post‐Enron and post‐HIH era.

Design/methodology/approach

The study is a 2×2 factorial between subjects experimental design with 52 audit partners and managers as participants. The two manipulated independent variables are client CFO prior firm affiliation (alumni vs non‐alumni) and professional background (audit partner vs non‐audit partner providing taxation, accounting and other non‐audit services).

Findings

The results of the study do not appear to signal loss of independence and professional skepticism in auditors' judgment when dealing with an alumni or ex‐auditor CFO. On average, auditors' endorsement of the client's preferred aggressive accounting treatment is low and the audit adjustment is material and significantly greater than the client's proposed adjustment.

Originality/value

The 2001 corporate collapses of Enron in the USA and HIH in Australia have reshaped the auditing profession. HIH, the most publicized corporate fraud in Australia resulting in estimated losses of $5 billion, was partly blamed on Arthur Andersen yielding to management's aggressive accounting policies and failure to display independence as a result of close relationships between the former partners and the audit team. As distinct from a number of prior studies conducted pre‐Enron and pre‐HIH, the results of this study, conducted with experienced audit professionals in Australia, do not support a loss of independence and professional skepticism by auditors in the current post‐Enron and post‐HIH environment and are consistent with the findings of the only other recent experimental study by Kerler III and Killough examining the closeness of the auditor‐client relationship. The results are also consistent with results of recent archival studies which find a decline in earnings management behavior, either because of reduced management incentives or reduced auditor willingness to consent. The evidence of this study lends supports to the latter explanation.

Details

Managerial Auditing Journal, vol. 26 no. 8
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 1 February 2011

Carol Kaufman‐Scarborough

The purpose of this paper is to extend and apply the systems model of the household proposed by Dixon, his colleagues, and his students to situations in which vulnerable consumers…

Abstract

Purpose

The purpose of this paper is to extend and apply the systems model of the household proposed by Dixon, his colleagues, and his students to situations in which vulnerable consumers are not able to follow the purely rational models of economics. The case of homeless families is examined.

Design/methodology/approach

The paper presents a literature review, an introduction of Baker et al.'s concepts of consumer normalcy and consumer vulnerability, and an application of expanded model to consumer studies of homeless persons published by Ronald Hill and his colleagues.

Findings

The same household systems models might be used to unfold the complex problems that can undermine the functioning in a household, causing it to be unproductive and potentially fail. Applications of the concepts of “consumer normalcy” and “consumer vulnerability” provide a useful platform to develop public policy recommendations, the example of homeless persons will be considered as an illustration.

Research limitations/implications

The extension and application is limited in that it is applied to analyze data collected approximately 20 years ago. The research should be extended to actual homeless households in the present day, and to additional “types” of households who are likely to encounter vulnerabilities as consumers (e.g. persons with disabilities).

Practical implications

The four levels of household processes (employment, purchasing, home‐production, and consumption) provide a useful framework for examining households in which vulnerabilities occur. This approach is useful in identifying the gaps in the household processes that can slow down productivity and instead introduce confusion and demoralization, plus continue the spiral of economic deprivation.

Social implications

For over 50 years, the work of Goffman has played an important role in identifying individuals and households that did not fit societal norms, resulting in their possibly experiencing conditions of stigmatization. Examining specific household types in terms of the functionality or dysfunctionality of their use of inputs may allow researchers to recommend various types of support, training, or assistance related to the household as a system, rather than focusing on the individual without considering the household dynamics.

Originality/value

This paper takes a general systems approach in applying the concepts of consumer normalcy and consumer vulnerability, both based in behavioral theories in the social sciences, to the economic approach to the household emphasizing rational decision making and orderly production functions.

Details

Journal of Historical Research in Marketing, vol. 3 no. 1
Type: Research Article
ISSN: 1755-750X

Keywords

Article
Publication date: 28 March 2023

Hardeep Singh Mundi

The paper aims to examine the effect of CEOs' social networks on capital structure complexity (CSC) and firm performance.

Abstract

Purpose

The paper aims to examine the effect of CEOs' social networks on capital structure complexity (CSC) and firm performance.

Design/methodology/approach

Ordinary Least Squares regression (OLS) and Generalized method of moments (GMM) regression results estimate the effect of CEOs' (Chief executive officer) social networks on capital structure complexity and firm performance. The number of sources of capital (NSC) and concentration ratio estimate the capital structure complexity for the sample firms.

Findings

The results show that CEOs' social networks significantly influence CSC. We suggest that the CEOs' social networks encourage them to make more complex capital structure decisions. This behavior deteriorates firm performance.

Research limitations/implications

There is a lack of systematic conceptual reason for measuring CEO social network. Future research should use other measures of the social network to estimate the relation of the CEO's social network with CSC and firm performance.

Practical implications

The findings support the managerial power approach and social network theory that the observable characteristics of CEOs influence CSC. The results are robust for an alternative explanation.

Originality/value

By investigating the impact of the influence of CEOs' social networks on CSC and performance, the authors extend research on strategic leadership and capital structure and firm performance.

Details

Review of Behavioral Finance, vol. 16 no. 1
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 21 March 2016

Robin Pesch, Ricarda B. Bouncken and Sascha Kraus

Firms build new product development alliances to cope with the demands of continuous and rapid new product development. Such alliances allow surplus access to complementary…

Abstract

Purpose

Firms build new product development alliances to cope with the demands of continuous and rapid new product development. Such alliances allow surplus access to complementary capabilities and knowledge. However, the successful use of specialization advantages requires coordination and effective communication between alliance partners. Communication is vital to alliance success, as it allows a timely flow of information and resources across partners and supports the coordination within the alliance. The aim of this study is to research how divergent communication schemes influence firms’ new product development performance in alliances.

Design/methodology/approach

A paper-and-pencil survey about firms’ collaborative new product development performance in the German medical device industry was conducted. Results are derived from a survey of n = 184 new product development alliances in the medical device industry. To test the hypotheses, structural equation modeling (SEM) using the Mplus 7.0 software was applied.

Findings

The empirical results indicate that divergent communication schemes enhance product innovativeness and speed to market in new product development alliances. The development of new insights and solutions through joint sensemaking builds the theoretical fundament for the supportive effects of divergent communication schemes. Divergent communication schemes go hand in hand with ambiguity, that is, the source of joint dialogues and discussion through which alliance partners refine and adapt their different perspectives and interpretations. However, the supportive effect of divergent communication schemes on speed to market declines with increasing collaboration intensity.

Research limitations/implications

The assessment of divergent communication schemes and new product development performance of the dyadic relationships in this survey is only based on one respondent. Furthermore, the study’s focus on a specific industry sector, albeit one fitting particularly well to the research question, may further limit the generalizability of the empirical findings. Future research should thus strive to take both firms of the dyadic relationship into account and moreover attempt to investigate mediating effects such as joint sensemaking or creativity.

Practical implications

The results indicate that alliance managers should become aware that different ways of communication are not per se dysfunctional. To achieve beneficial effects, they should enhance dialogues and constructive discussions through which the alliance partners develop novel insights and solutions on the fundament of occurring misunderstandings that root in divergent communication schemes. Regular meetings and conferences as well as inter-organizational teams should be applied because they stimulate joint dialogues and discussions in alliances. These instruments also enable learning processes and the development of trust that are both crucial for sensemaking processes in alliances.

Originality/value

Prior research has stressed the importance of interorganizational communication for the success of alliances. However, little is known about the effect of divergent communication schemes in alliances. This study shows theoretically and empirically that divergent communication schemes can improve new product development performance in alliances. The supportive effect of divergent communication schemes is contrary to the argumentation that communication problems and misinterpretations hamper alliance success.

Details

Management Research Review, vol. 39 no. 3
Type: Research Article
ISSN: 2040-8269

Keywords

Article
Publication date: 1 January 1992

ROWAN BOSWORTH‐DAVIES

The purpose of this paper is to examine the attitudes of financial service compliance officers towards the provision of practical training in specific aspects of regulatory…

Abstract

The purpose of this paper is to examine the attitudes of financial service compliance officers towards the provision of practical training in specific aspects of regulatory development, criminal law and procedure which have a significant impact upon their role and function as compliance officers. The paper starts by considering the qualifications of financial service compliance officers, before setting out the aims and contents of a three‐day course designed for compliance officers. After describing the attendees on the course, it gives their assessment of the course and examines their attitudes to what is the proper role of the financial service compliance office.

Details

Journal of Financial Regulation and Compliance, vol. 1 no. 1
Type: Research Article
ISSN: 1358-1988

Article
Publication date: 1 January 1978

The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act…

1363

Abstract

The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act (which has been amended by the Sex Discrimination Act 1975) provides:

Details

Managerial Law, vol. 21 no. 1
Type: Research Article
ISSN: 0309-0558

Article
Publication date: 8 November 2011

Benjamin Wright, Mengyan Dai and Kathryn Greenbeck

The purpose of the current study is to expand the existing knowledge base that seeks to determine which pre‐employment factors can predict which police candidates will…

2263

Abstract

Purpose

The purpose of the current study is to expand the existing knowledge base that seeks to determine which pre‐employment factors can predict which police candidates will successfully complete the training academy.

Design/methodology/approach

The data for this study were collected from application and personnel records of 503 police recruits accepted into the Baltimore County police academy. The dependent variable, success in the academy, was measured as a dichotomous variable (1=graduated; 0=not graduated). The independent variables were routine employment factors.

Findings

A key finding was that general work experience was better at predicting successful completion of the training academy than prior police experience and prior military experience.

Research limitations/implications

In this particular study it was determined that police recruits who had a prior arrest record or prior illegal drug use and also had prior work experience could successfully complete the police training academy. However, these results are limited to those police organizations that give individuals who had a negative encounter with law enforcement a second chance.

Originality/value

Few studies have examined the relationship between background characteristics and successful completion of the police training academy. This study broadens the understanding of the need for police applicants to have a solid record of general work experience.

Details

Policing: An International Journal of Police Strategies & Management, vol. 34 no. 4
Type: Research Article
ISSN: 1363-951X

Keywords

Article
Publication date: 18 May 2015

Dafna Kariv and Susan Coleman

The purpose of this paper is to examine the impact of small loans on new firm performance using data from the second Panel Study of Entrepreneurial Dynamics, a large longitudinal…

6408

Abstract

Purpose

The purpose of this paper is to examine the impact of small loans on new firm performance using data from the second Panel Study of Entrepreneurial Dynamics, a large longitudinal data set of new firms in the USA. Contrary to prior research which suggests that small or microloans primarily benefit entrepreneurs who experience disadvantages in the marketplace, the findings revealed no significant differences in loan source or loan amount by gender, ethnicity, or employment status during the early years of the firm. The findings did reveal, however, that the motivations (push vs pull) of the entrepreneur were a determinant of loan source. From this, the authors begin to develop a theory of financial bricolage based on the premise that small loans secured at key points in time can make a significant difference on firm performance for all types of entrepreneurs, not just those who have traditionally be classified as “disadvantaged.”

Design/methodology/approach

The data for this study was taken from the Panel Study on Entrepreneurial Dynamics (PSED II). The authors focussed on business performance measures over the six years of that study to reassess existing findings on relationships between microfinance and underperformance, especially among women, ethnic and unemployed entrepreneurs, from a financial bricolage perspective. Specifically, the authors will assess the impact of small or microloans on business performance over time by tracking the role of financial sources, amount of money borrowed, background characteristics, and motivation to start a business (i.e. push or pull).

Findings

The results also revealed no significant difference by gender, ethnicity, or employment status in the source of amounts of small loans secured during the first two years of the businesses. Thus, consistent with the theory of financial bricolage, all types of entrepreneurs engaged in seeking out small loans during the early years of their businesses’ existence.

Research limitations/implications

Although using the PSED II has many advantages, it is not protected from methodological pitfalls. One such potential disadvantage is the fact that this database allows the authors to understand the development of US-based nascent entrepreneurs, but overlooks other countries. Future research efforts should be focussed on surveying nascent entrepreneurs from other countries and cultures to expand the understanding of the relations between small loans and financial sources on business performance worldwide. This could be most useful for intensifying research in regions that generate more push and/or pull entrepreneurs. A second disadvantage inherent in the PSED is that interviews in follow-up surveys may have become impossible over time, resulting in missing data. In addition, the reasons for being unable to reach interviewees are not always clear. In the entrepreneurial realm, these reasons have a great impact on the understanding of the development of new businesses. Interviewees’ businesses may have gone bankrupt, merged with other firms and thus changed contact details, gone global and therefore left the country, etc. (Delmar and Shane, 2003); these could bias the results. A final potential weakness in the PSED is that the data are based on entrepreneurs’ self-reports which are known to be prone to many kinds of response bias.

Practical implications

By offering practical education aimed at enhancing the financial performance of entrepreneurs, the authors believe that they can meet the challenges posed by the research (e.g. Du Rietz and Henrekson, 2000; Parker, 2004; Pfeiffer and Reize, 2000; Reynolds et al., 2002) on performance gaps between entrepreneurs with different background characteristics and those embarking on entrepreneurship with different motivations (push vs pull). In line with the financial bricolage theory, the results may aid governmental bodies, educational and academic institutions oriented toward entrepreneurs, and small businesses, in constructing programs that will train entrepreneurs to be attentive to the diverse range of potentially available resources, including small loans and different financial sources.

Originality/value

The research challenges the necessity-opportunity simplistic categorization and builds upon prior work in the field of bricolage, or the practice of “making do with whatever is at hand,” to begin developing a theory of “financial bricolage.” It is the contention that all new businesses are resource-constrained due to challenges posed by asymmetric information. Thus, new businesses, in general, do not have access to a full range of funding alternatives. In light of this, small loans may be critical for the survival and success of not only necessity-based businesses but opportunity-based businesses as well. The results and findings bear this out.

Details

Journal of Small Business and Enterprise Development, vol. 22 no. 2
Type: Research Article
ISSN: 1462-6004

Keywords

Open Access
Article
Publication date: 7 December 2023

Torgeir Aadland, Gustav Hägg, Mats A. Lundqvist, Martin Stockhaus and Karen Williams Middleton

To increase the understanding of how entrepreneurship education impacts entrepreneurial careers, the purpose of the paper is to investigate the role that a venture creation…

Abstract

Purpose

To increase the understanding of how entrepreneurship education impacts entrepreneurial careers, the purpose of the paper is to investigate the role that a venture creation program (VCP) might have in mitigating or surpassing a lack of other antecedents of entrepreneurial careers. In particular, the authors focus on entrepreneurial pedigree and prior entrepreneurial experience.

Design/methodology/approach

Data from graduates of VCPs at three universities in Northern Europe were collected through an online survey. Questions addressed graduate background prior to education, yearly occupational employment subsequent to graduation and graduates' own perceptions of entrepreneurial activity in employment positions. The survey was sent to 1,326 graduates and received 692 responses (52.2% response rate).

Findings

The type of VCP, either independent (Ind-VCP) or corporate venture creation (Corp-VCP), influenced the mitigation of prior entrepreneurial experience. Prior entrepreneurial experience, together with Ind-VCP, made a career as self-employed more likely. However, this was not the case for Corp-VCP in subsequently choosing intrapreneurial careers. Entrepreneurial pedigree had no significant effect on career choice other than for hybrid careers.

Research limitations/implications

Entrepreneurial experience gained from VCPs seems to influence graduates toward future entrepreneurial careers. Evidence supports the conclusion that many VCP graduates who lack prior entrepreneurial experience or entrepreneurial pedigree can develop sufficient entrepreneurial competencies through the program.

Originality/value

This study offers novel evidence that entrepreneurship education can compensate for a lack of prior entrepreneurial experience and exposure for students preparing for entrepreneurial careers.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 30 no. 11
Type: Research Article
ISSN: 1355-2554

Keywords

Article
Publication date: 1 December 1998

Kathryn Watson, Sandra Hogarth‐Scott and Nicholas Wilson

This empirical study investigates the characteristics of a cohort of 166 small businesses which were set up during a period of recession by founders, all of whom had experienced a…

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Abstract

This empirical study investigates the characteristics of a cohort of 166 small businesses which were set up during a period of recession by founders, all of whom had experienced a period of unemployment prior to start‐up. These new ventures were appraised and supported by their local Training & Enterprise Council (TEC) prior to start‐up and in their formative months. This paper analyses the appropriateness and success of support services in the light of an empirical investigation of the factors which appear to impact on survival/failure and growth prospects of surveyed businesses. Comparisons are made between those businesses which are still trading and those which have ceased trading and between businesses with high and low growth expectations. Factors which are investigated include the founders’ personal background and experience; reasons put forward for start‐up; early problems encountered in running a business; business objectives and expectations.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 4 no. 3
Type: Research Article
ISSN: 1355-2554

Keywords

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