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Accounting for stock options is a controversial issue. The FASB recognized that the “intrinsic value” method, which had been used for years, failed to adequately account for the costs involved. To rectify the problem they suggested the use of a “fair value” method. Their proposal met with strong objections from companies, which were concerned with the impact of the proposed standard on their reported profits. Consequently, the board relented and allowed the use of either method. Unfortunately, both the intrinsic value and fair value approaches have deficiencies, particularly in regard to how they measure compensation expense and gains and losses over time. This paper addresses these shortcomings by developing two alternative cost measurement approaches that apply an option‐pricing model on an iterative basis over the life of the option. Both approaches represent specific ways to implement exercise‐date measurement techniques for stock options. The paper argues that both approaches provide more relevant and reliable measures of an option’s cost than either intrinsic or fair value methods.

Recent developments in accounting for stock options have increased interest in the analytical techniques used to value them. Techniques used to value the options of publicly traded companies have been extensively discussed. In contrast, there has been almost no discussion of the valuation procedures of the options for non‐publicly traded companies. This paper addresses this gap. The paper suggests that a straightforward income capitalization model can be used to develop reasonable surrogates for the variables of the Black‐Scholes option pricing model. The paper also discusses how to adjust the income apitalization model for both lack of marketability and lack of control discounts.

The current interest in Enterprise Resource Planning (ERP) software systems is based primarily on the principle of the system: generating real time data, enabling linkages across functional areas and divisions, and, thereby, promoting the integration of information across all of the units of a business at one time. Indeed, in practice, such a system not only cultivates accurate and timely information which is available for all operations in a company, including those in global locations, but also fosters more effective decision making and the attainment of the competitive advantage. This study, therefore, examines the benefits of implementing an ERP system, in general, and SAP R/3, a type of ERP system in particular, in the headquarters of major corporations in the United States, as well as in the factories of these corporations located in Guadalajara, Mexico. More specifically, eight corporations which have adopted SAP R/3 and include AT&T, Compaq, Eastman Kodak, Hershey Foods, Hewlett‐Packard, IBM, Intel, and Motorola are examined, and the benefits and merit of having the same SAP R/3 software system in their installations in Guadalajara, Mexico are explored.

Performance-based contracting (PBC) has been gaining popularity over the years. However, empirical studies investigating the impact of PBC features have been limited. The main purpose of this study is to investigate the effect of PBC features leading to quality investment that fosters financial benefits.

After examining the validity and reliability of scale items through confirmatory factor analysis, this study tested hypotheses using covariance-based structural equation modeling of survey data from 381 supply, logistics and operations managers.

The findings reveal the impact of PBC features (joint knowledge generation, goal congruence and incentive alignment) on financial benefits and the mediation impact of quality investment between these features and financial benefits. The upfront investment for quality enhancement was found facilitator of PBC features to achieve financial benefits. The findings also reveal the importance of collaborative communication and information sharing for knowledge generation that leads financial benefits through quality investment. This study shows that PBC governance strengthens the theory of relational view by empowering collaborative efforts and aligning goals and incentives within downstream suppliers for knowledge generation and quality enhancement.

An analysis of PBC features by industry would be very beneficial in differentiating between and more thoroughly understanding the commonalities and differences across various sectors. Investigating how these change across industries would also help identify any bias in PBC implementation.

This study illustrates that it will be practical and beneficial for suppliers to understand the major drivers of quality investment and the relationship between quality investment and the financial benefits of selecting PBC.

Unlike most previous studies, this research contributes to the literature in that it is one of the relatively few examples of empirical research on PBC features. Overall, the findings of this study will improve our understanding of how PBC features enhance upfront investment in quality and improve financial benefits.

The modern workplace contains many physical and interpersonal hazards to employee physical and psychological health/well-being. This chapter integrates the literatures on occupational safety (i.e., accidents and injuries) and mistreatment (physical violence and psychological abuse). A model is provided linking environmental (climate and leadership), individual differences (demographics and personality), motivation, behavior, and outcomes. It notes that some of the same variables have been linked to both safety and mistreatment, such as safety climate, mistreatment climate, conscientiousness, and emotional stability.

Intercultural dialogue and collaboration are critical to social studies education. Yet over the past 30 years, schools in the USA have grown increasingly segregated by race and class. The purpose of this paper is to offer a possible response based in digital technology.

The authors describe a project called Classes Without Walls that links elementary schools in wealthy suburbs with those in impoverished urban centers. Students at the two schools engage in collaborative activities through online video conferencing.

The authors explore two sample lessons in depth: a virtual town tour and a social demographics scavenger hunt.

Such activities, they argue, can contribute toward cultural understanding and civic dialogue.

Communications regarding this column should be addressed to Mrs. Cheney, Peabody Library School, Nashville, Term. 37203. Mrs. Cheney does not sell the books listed here. They are available through normal trade sources. Mrs. Cheney, being a member of the editorial board of Pierian Press, will not review Pierian Press reference books in this column. Descriptions of Pierian Press reference books will be included elsewhere in this publication.

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Prior research finds that auditors can be distinctively committed to multiple workplace targets (e.g., their audit firm, supervisors, profession, and clients). This study investigates an underexamined target of auditor commitment – engagement teams. Given that these teams are responsible for performing key audit tasks for clients and external stakeholders, we argue that auditors' commitment to their team can affect auditor behavior. Using a sample of 121 auditors, our results indicate that quality social exchange relationships between individual auditors and their engagement teams, activated by perceptions of team fairness, and reciprocated with team commitment, are associated with beneficial group-oriented behavior. Specifically, we posit and find that perceived team fairness predicts perceived team support, perceived team support predicts team commitment, and team commitment predicts citizenship behavior directed toward the engagement team (e.g., helping the team by taking on extra responsibilities during an audit). We also find that the social exchange proxies of perceived team support and team commitment sequentially mediate the positive effect of perceived team fairness on team citizenship behavior, and that team commitment is a stronger predictor of team citizenship behavior than auditors' commitment to their firm.