Search results

1 – 10 of over 1000
Book part
Publication date: 10 December 2018

Thomas Keil, Pasi Kuusela and Nils Stieglitz

How do organizations respond to negative feedback regarding their innovation activities? In this chapter, the authors reconcile contradictory predictions stemming from behavioral…

Abstract

How do organizations respond to negative feedback regarding their innovation activities? In this chapter, the authors reconcile contradictory predictions stemming from behavioral learning and from the escalation of commitment (EoC) perspectives regarding persistence under negative performance feedback. The authors core argument suggests that the seemingly contradictory psychological processes indicated by these two perspectives occur simultaneously in decision makers but that the design of organizational roles and reward systems affects their prevalence in decision-making tasks. Specifically, the authors argue that for decision makers responsible for an individual project, responses given to negative performance feedback regarding a project are dominated by self-justification and loss-avoidance mechanisms predicted by the EoC literature, while for decision makers responsible for a portfolio of projects, responses to negative performance regarding a project are dominated by an under-sampling of poorly performing alternatives that behavioral learning theory predicts. In addition to assigning decision-making authority to different organizational roles, organizational designers shape the strength of these mechanisms through the design of reward systems and specifically by setting more or less ambiguous goals, aspiration levels, time horizons of incentives provided, and levels of failure tolerance.

Book part
Publication date: 4 July 2019

Ercan Özen and Gürsel Ersoy

Introduction – Markowitz (1952) argues that individuals act rationally in their financial decisions. In contrast, Kahneman and Tversky (1979) claim that the psychological…

Abstract

Introduction – Markowitz (1952) argues that individuals act rationally in their financial decisions. In contrast, Kahneman and Tversky (1979) claim that the psychological characteristics of people significantly affect financial decisions. In making these decisions, factors such as age, gender, and educational status may have an impact.

Purpose – The purpose of this study is to determine whether financial literacy has an impact on individuals’ cognitive biases related to financial investments.

Methodology – A sample of 444 individuals were surveyed.

Findings – In the results of study (1) it was determined that financial literacy leads to differences in cognitive biases; and (2) cognitive biases of individuals who do not receive finance education are different from individuals who receive finance education and professionals in the business world. The findings indicate that the increase in the level of financial literacy of individuals will reduce the cognitive biases and heuristics, and therefore will have a positive effect on the investor behavior in financial markets.

Details

Contemporary Issues in Behavioral Finance
Type: Book
ISBN: 978-1-78769-881-9

Keywords

Book part
Publication date: 27 January 2014

Secil Varan and Cagnur Kaytmaz Balsari

The purpose of the study is to present evidence on the International Financial Reporting Standards (IFRS) adoption and earnings quality relationship on an emerging country context…

Abstract

Purpose

The purpose of the study is to present evidence on the International Financial Reporting Standards (IFRS) adoption and earnings quality relationship on an emerging country context focusing on firm characteristics.

Design/methodology/approach

To measure loss avoidance, the earnings distribution approach is followed. Data includes all the nonfinancial firms listed on the Borsa İstanbul (BIST) for the period covering 1998–2010. The sample is divided into subsegments according to size and leverage, considering the potential impact of different financial reporting incentives. Furthermore, mandatory and voluntary adopters are examined separately.

Findings

The results indicate lower loss aversion in the post-IFRS period. Furthermore, we found that incentives dominate accounting standards in determining financial reporting quality. The decrease in loss aversion after IFRS adoption is more significant for large firms compared to small firms, low leverage firms compared to high leverage firms, and for mandatory IFRS adopter firms compared to voluntary IFRS adopters.

Originality/Value

Research provides inconsistent evidence on the relationship between IFRS adoption and earnings quality. Turkey represents an interesting environment to test the impact of IFRS adoption, as the Turkish accounting system has followed a historical path from a Continental European accounting system to an Anglo-Saxon accounting system. The current Turkish accounting system exhibits features of both these systems. Additionally, IFRS adoption was optional in 2003 and mandatory in 2005 in line with EU regulations, and the changes in the reporting environment are supported by the regulatory developments and institutional changes in Turkey.

Details

Accounting in Central and Eastern Europe
Type: Book
ISBN: 978-1-78190-939-3

Keywords

Book part
Publication date: 21 November 2016

Philip J. Corr, Neil McNaughton, Margaret R. Wilson, Ann Hutchison, Giles Burch and Arthur Poropat

Neuroscience research on human motivation in the workplace is still in its infancy. There is a large industrial and organizational (IO) psychology literature containing numerous…

Abstract

Neuroscience research on human motivation in the workplace is still in its infancy. There is a large industrial and organizational (IO) psychology literature containing numerous theories of motivation, relating to prosocial and productive, and, less so, “darker” antisocial and counter-productive, behaviors. However, the development of a viable over-arching theoretical framework has proved elusive. In this chapter, we argue that basic neuropsychological systems related to approach, avoidance, and their conflict, may provide such a framework, one which we discuss in terms of the Reinforcement Sensitivity Theory (RST) of personality. We argue that workplace behaviors may be understood by reference to the motivational types that are formed from the combination of basic approach, avoidance, and conflict-related personalities. We offer suggestions for future research to explore workplace behaviors in terms of the wider literature on the neuroscience of motivation.

Details

Recent Developments in Neuroscience Research on Human Motivation
Type: Book
ISBN: 978-1-78635-474-7

Keywords

Abstract

Details

The Handbook of Road Safety Measures
Type: Book
ISBN: 978-1-84855-250-0

Book part
Publication date: 10 April 2006

Mike Barnes, John Warner, David Hillis, Liana Suantak, Jerzy Rozenblit and Patricia McDermott

This chapter addresses adaptation to dynamic, novel and uncertain military environments. These environments require a shift from a maneuver warfare paradigm to an asymmetric world…

Abstract

This chapter addresses adaptation to dynamic, novel and uncertain military environments. These environments require a shift from a maneuver warfare paradigm to an asymmetric world where shifting alliances, questionable civilian loyalties, opaque cultures, and the requirement to maintain peace one day and combat the next makes for a particularly confusing situation. This new warfare paradigm requires adaptation to an uncertain, complex environment.

The initial section discusses a general cognitive model of visualization called RAVENS and its importance for adaptation developed specifically to address complex military environments. RAVENS posits that humans are inherently flexible decision makers and situation awareness depends on the ability of humans to create narrative visualizations that capture the overall context of complex military environments. Using the framework as a guideline, we will examine two important visualization research programs whose purpose is to allow military operators to rapidly adapt to volatile situations. The first program investigates cognitive effects such as the framing bias and their possible interactions with a variety of display concepts during a series of missile defense simulations. The experimenters presented risk as a spatial representation of uncertainty and target value that emphasized either expected population lost or expected population saved. The second program investigated the feasibility of using visualizations generated from Scheherazade (a coevolutionary algorithm) to aid MI analysts in predicting emergent tactics of terrorist groups during urban operations. Finally, we discuss the value of these approaches for providing coherent narrative understanding as called for in the RAVENS model.

Details

Understanding Adaptability: A Prerequisite for Effective Performance within Complex Environments
Type: Book
ISBN: 978-1-84950-371-6

Book part
Publication date: 21 May 2021

Peterson K. Ozili

Purpose: This chapter discusses how pandemics affect the nature of financial reporting especially for financial and non-financial institutions that were deeply affected by the…

Abstract

Purpose: This chapter discusses how pandemics affect the nature of financial reporting especially for financial and non-financial institutions that were deeply affected by the 2020 coronavirus (COVID-19) outbreak.

Method: This chapter presents a reflective discussion of the accounting practices and financial reporting options for firms during a pandemic, ­focusing on the interface between financial reporting and pandemics.

Findings: Accounting practices or techniques such as fair value accounting, big-bath accounting, loss avoidance, and income smoothing t­echniques can help to dampen the effect of a pandemic on firm performance.

Practical Implications and Significance: Some implications about the merits and risks of accounting during pandemics are highlighted and discussed.

Originality: Although the coronavirus COVID-19 crisis is, to some extent, still unfolding, there is limited empirical evidence on the implication for accounting.

Abstract

Details

Operational Risk Management in Banks and Idiosyncratic Loss Theory: A Leadership Perspective
Type: Book
ISBN: 978-1-80455-223-0

Book part
Publication date: 3 February 2015

Sean Yarborough and Patrick T. Hester

A discussion of call center agent work selection preferences is presented in the context of what is referred to herein as the accept–avoid decision. In call centers where agents…

Abstract

A discussion of call center agent work selection preferences is presented in the context of what is referred to herein as the accept–avoid decision. In call centers where agents are given autonomy to select calls from a shared queue for work without a standard routing mechanism, it is likely that each agent uses a different set of criteria and has different preferences which influence their decision to accept a call or avoid it. In order to understand such preferences, simple heuristics are developed and implemented into an additive linear model as an example to estimate the derived utility an agent may receive from the decision to accept a call. The game theoretic implications of such decision making by a group or team of agents are also discussed to illustrate the dilemma of the universally avoided call, and how agents may compete for acceptance or avoidance of particular calls.

Details

Applications of Management Science
Type: Book
ISBN: 978-1-78441-211-1

Keywords

Book part
Publication date: 3 July 2017

Alan Reinstein, Mohamed E. Bayou, Paul F. Williams and Michael M. Grayson

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…

Abstract

Purpose

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.

Methodology/approach

Review, summarize and analyze the above literatures

Findings

Managerial accountants can apply many lessons from the various literature sources.

Originality/value

We also show how differing opinions on how to treat sunk costs impact a firm’s decision-making process both economically and socially.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-78714-530-6

Keywords

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