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Financial Statement Comparability and the Efficiency of Acquisition DecisionsAccounting & Management Control
Daniel W. Collins
Financial Statement Comparability and the Efficiency of Acquisition Decisions , University of Iowa
4 July 2014 - Room S210 - From 2:00 am to 4:00 am
This study examines whether acquirers make better acquisition decisions when target firms’ financial statements exhibit greater comparability with industry peer firms. We predict and find that acquirers’ make more profitable acquisition decisions when targets’ financial statements are more comparable—as evidenced by higher merger announcement returns, higher acquisition synergies, and better future operating performance. We also find that post-acquisition goodwill impairments and post-acquisition divestitures are less likely when target firms’ financial statements are more comparable. Finally, we find the effect of targets’ comparability is more pronounced when acquirers’ ex-ante information asymmetry is higher and when acquisitions are accomplished via tender offers to target shareholders. In total, our evidence suggests targets’ financial statement comparability helps acquirers make better acquisition-investment decisions and fosters more efficient capital allocation.
GREEN SUPPLY CHAIN MANAGEMENT: ORGANISATIONAL IMPLICATIONS AND POLICY INSIGHTS FROM THE AUSTRALIAN CARBON TAXINGOperations Management & Information Technology
Associate Professor of Supply Chain Management , The University of Sidney Business School
23 June 2014 - HEC - Building S - Room S122 - From 11:00 am to 12:30 pm
Carbon emissions are receiving greater scrutiny in many countries due to international forces to reduce anthropogenic global climate changes. Having the world's highest per capita carbon dioxide emissions, Australia has debated the merits of introducing various governmental carbon policies for over two decades. Various Australian studies on the economic implications of carbon pricing focused on whether a determined tax rate on carbon emissions is more effective than free market trading. Initial simulation results revealed that a carbon tax in Australia can cut emissions across the economy effectively, but will cause a mild economic contraction. In 2011, for the first time in Australian history, carbon pricing legislation passed the Australian Federal Parliament and as a result a carbon tax was introduced in July 2012. Since then, empirical policy investigations have tended to focus on the impact of the scheme on the national economy and emission reductions.
From an organisational perspective, the focus has been placed on how best to respond to the new carbon regulatory policy and jointly improve the organisational economic and environmental performance. In particular, determining how the scheme would influence supply chain decisions; for example, when and on what supply chain processes to invest to minimise the economic impacts of the scheme while concurrently improving the emission performance. Using a set of supply chain planning and optimisation case studies, this presentation will discuss our empirical findings on the organisational implications of carbon taxing in Australia and the related policy insights that can be gained from these outcomes.
Performance Management in UK Higher Education Institutions: The Need for a Hybrid ApproachAccounting & Management Control
Performance Management in UK Higher Education Institutions: The Need for a Hybrid Approach , Cranfield University
20 June 2014 - Room X118 - From 2:00 am to 4:00 am
This research investigates current practice and trends in the institutional performance management of UK Higher Education Institutions (HEIs).
We adopt a holistic view of institutional performance management – we understand it as a package or a system of the formal and informal mechanisms an institution uses to facilitate the delivery of its mission. Individual performance development reviews or appraisals are just one small component of an institutional performance management system.
• Traditionally, HEIs have seen themselves as stewards of knowledge and education, focusing on long-term scholarly goals comprising the development of knowledge and the greater good for society at large.
• This view of HEIs is changing, as they are currently becoming more short-term and results/outputs driven due to the increased pressures to perform (e.g., international competition, reduced financial resources, research assessment frameworks, rankings).
• HEIs are intensifying their use of performance management mechanisms at all levels to facilitate the delivery of their goals.
• Nevertheless, we know little about the type of performance management mechanisms used in UK HEIs and the influence these mechanisms have on the wellbeing of staff and the performance of HEIs as a whole. This research was designed to address these gaps in our knowledge.
• We used case studies to look at the performance management mechanisms in six universities. Three Russell Group and three post-1992 universities were involved and the research focused on both academic and administrative staff. This included interviewing 110 key informants from across institutions, from vice chancellors to front line staff in central services and in four schools/faculties (Education, Math, Business & Management, and Art).
• We also surveyed staff working in 162 UK HEIs through an online survey obtaining over 1000 usable responses. The results from the survey were combined with other publicly available data, from the National Student Satisfaction survey, the last Research Assessment Exercise, the Higher Education Statistics Agency (HESA), and the Universities and College Union’s (UCU) academic staff wellbeing survey.
• The performance management mechanisms UK HEIs use can be classified into two categories: stewardship-based and agency-based.
• Stewardship approaches focus on long-term outcomes through people’s knowledge and values, autonomy and shared-leadership within a high trust environment.
• Agency approaches focus on short-term results or outputs through greater monitoring and control.
• Most UK HEIs adopt a combination of stewardship and agency performance management mechanisms but most institutions are moving towards an increased adoption and greater use of agency mechanisms.
• Institutions with a mission that is focused on long-term and highly complex goals, which are difficult or very costly to measure (e.g., research excellence, contribution to society) are likely to benefit from relying on stewardship performance management mechanisms to convey their mission.
• Institutions with a mission that is focused on short-term and low complex goals, which are often easy or economical to measure (e.g., cost-reduction, surplus maximization) are likely to benefit from relying on agency performance management mechanisms to convey their mission.
• Institutions with a diverse mission including goals with various degrees of complexity and time orientation will benefit from relying on a hybrid performance management approach.
• Most people in professional, administrative and support roles find agency performance management mechanisms helpful as they provide greater clarity and focus.
• Most people in academic roles find agency performance management mechanisms such as individual performance reviews as unhelpful and dysfunctional.
• Institutions’ use of stewardship mechanisms is associated with higher levels of staff wellbeing as well as higher student satisfaction.
• Institutions’ use of agency mechanisms is associated with lower levels of staff wellbeing as well as lower levels of institutional research excellence.
• High staff wellbeing is associated with higher HEI’s research excellence, students’ satisfaction, students’ employability, and financial results.
The report suggests that there is not a ‘once size fits all’ performance management approach for all institution and for all staff. Institutions need to adopt and use those performance management mechanisms that are ‘fit for purpose’. The current missions of HEIs are highly diverse comprising long-term outcomes as well as short-term results/outputs. The roles in their own context required for delivering the different HEIs missions require the co-existence of both stewardship and agency mechanisms. Thus the challenge for UK HEIs is to craft a hybrid performance management approach that will allow them to deliver across the breadth of their mission.
SUPERSTAR SUBSIDIARIES AND INNOVATION IN MULTINATIONAL COMPANIESOperations Management & Information Technology
Professor and Head of the Entrepreneurship Department , Uppsala University
12 June 2014 - Ecole des Mines de Paris - 60 Bd Saint-Michel 75006 Paris - From 5:00 pm to 7:00 pm
A multinational corporation MNC can be modeled as a network of differentiated units internationally dispersed.
However, there are variations in the technological and strategic contributions of the subsidiaries. Among them, some take on strategic roles for the MNC globally and play a crucial role in designing new technology of significant importance for the development of the entire group. A very small number have consistent and highly significant technological contributions to the multinational group. We label them “superstar subsidiaries”.
Based on the evolution of two foreign subsidiaries of two Swedish multinational companies - the German subsidiary of ball bearing manufacturer SKF and the U.S. subsidiary of agricultural equipment producer Alfa Laval- the presentation will highlight what differentiates superstar subsidiaries from others in the multinational company, and in particular the origins and underlying drivers of these differences. A longitudinal investigation into the technological, business, and organizational development of both firms suggests that a number of factors need to coincide for a foreign subsidiary to develop superstar status. These factors include large and munificent local markets, high relative profitability, autonomy within the overall multinational group, as well as dynamic interrelationships between these factors.
Trust and Corporate Social Responsibility:Evidence from the 2008-2009 Financial CrisisAccounting & Management Control
Trust and Corporate Social Responsibility:Evidence from the 2008-2009 Financial Crisis , LES London School of Economic
6 June 2014 - From 2:00 am to 4:00 am
We study whether the intensity of a firm’s corporate social responsibility (CSR) activities affects valuation during the 2008-2009 financial crisis. We find that high-CSR firms experience significantly higher crisis-period stock returns than low-CSR firms. Further, while in the booming-economy years leading up to the crisis high-CSR firms underperformed low-CSR firms, the difference in return performance between the high and low-CSR firms disappears in the post-crisis period, suggesting that either CSR activities are now fairly priced by investors or that, in recovering economic times, the benefits of CSR are commensurate with the costs. Overall, our evidence is consistent with a theme in which the perceived value of CSR investment depends upon the prevailing economic conditions and investors’ assessment of risk. Firms’ investments in, and positive attitudes toward, a broad set of stakeholders are not viewed as value-enhancing by investors when firms are delivering high performance in aggregate. However, when firms are subject to a shock that arguably threatens their very own survival, CSR activities are viewed positively by investors as a signal that (i) the company can be trusted as not being fraudulent, and (ii) stakeholders will trust and support the company throughout the crisis as a reward for its broader social objectives.
The CSR Surprise Effect: When Unexpected CSR Activity Enhances Brand EvaluationsMarketing
H. ONUR BODUR
Professor of Marketing , John Molson School of Business Concordia University
22 May 2014 - Room T022 - From 1:00 pm to 2:30 pm
The CSR Surprise Effect: When Unexpected CSR Activity Enhances Brand Evaluations
H. ONUR BODUR
This research examines the influence of the expectancy of corporate social responsibility
(CSR) activities on brand evaluations. We define expectancy of a CSR activity as the extent to
which a specific brand’s CSR activity deviates from consumers’ mental schema regarding
brands’ CSR activities. A deviation from a mental schema (i.e., unexpected information)
increases elaboration and influences evaluations. Exposed to unexpected CSR activities,
consumers scrutinize CSR information. Earlier research on CSR activities documents negative
effects of elaboration. Building on earlier work, we investigate to what extent expectancy of the
CSR activity prompts elaborations and whether the nature of elaborations positively influences
subsequent brand evaluations.
In three experiments, we examine the role of CSR expectancy and show a positive effect
of unexpected CSR activities when CSR fit is high. We also consider the underlying mechanism
of the positive influence of the unexpected CSR: When CSR fit is high, greater elaboration due
to unexpected CSR activity makes perceived sincerity of the brand’s motivation for CSR
involvement more salient, which enhances brand evaluations. The amount of elaboration does
not increase when the CSR activity is expected and consumers use simple heuristics. Finally, we
provide a boundary condition: Consumers who are generally involved in brands’ CSR activities
are not differentially affected by varying levels of CSR expectancy. However, a positive effect
of the unexpected CSR activity emerged for consumers with low levels of CSR involvement,
suggesting unexpected CSR can especially help attract those consumers who are less involved.
*Ali Tezer is doctoral student, Marketing Department, Concordia University. H. Onur Bodur is
Associate Professor, Marketing Department, Concordia University. Bianca Grohmann is
Associate Professor, Marketing Department, John Molson School of Business, 1455 De
Maisonneuve Blv. W., Montreal, QC, H3G 1M8 (Canada). The authors acknowledge the support
of Centre for Multidisciplinary Behavioural Business Research (CMBBR) and David O’Brien
Centre for Sustainable Enterprise (DOCSE) at Concordia University.
Building Social Media IntelligenceMarketing
David A. Schweidel
Professor of Marketing , Emory University
20 May 2014 - Room T027 - From 3:00 pm to 4:30 pm
Building Social Media Intelligence
In the world of Facebook, Twitter and Yelp, water-cooler conversations with co-workers and backyard small talk with neighbors have moved from the physical world to the digital arena. In this new landscape, organizations ranging from Fortune 500 companies to government agencies to political campaigns continuously monitor online opinions in an effort to guide their actions. Are consumers satisfied with our product? How are our policies perceived? Do voters agree with our platform?
But measuring online opinion is more complex than just reading a few posted reviews. Social media is replete with its share of noise and chatter that can contaminate monitoring efforts. But by knowing what shapes online opinions, we can better uncover the valuable insights hidden in the social media chatter – insights that can inform our organization’s strategy. In this workshop, we discuss how organizations can move beyond the current practice of social media monitoring to develop social media intelligence that can drive marketing decisions.
Explaining the changing properties of GAAP earnings: Insights from comparing GAAP to NIPA earningsAccounting & Management Control
Ilia D. Dichev
Explaining the changing properties of GAAP earnings: Insights from comparing GAAP to NIPA earnings , Goizueta Business School Emory University
16 May 2014 - Room T304 - From 2:00 am to 4:00 am
The U.S. Bureau of Economic Analysis produces a measure of aggregate corporate profits (NIPA earnings), which is an integral component of the accounting for GDP. The key advantage of NIPA earnings is rigorous determination with no earnings management and no political meddling; other advantages include double-checks from independent sources and consistent rules over time. Thus, NIPA earnings provide a useful benchmark for corporate profitability, especially in examining the reasons for the great temporal increase in volatility and decrease in persistence of GAAP earnings. Using a sample of aggregate GAAP and NIPA earnings over 1950-2010, the main findings are as follows. GAAP and NIPA earnings are in remarkable sync in the early years, with similar means and standard deviations, and with earnings changes correlating at 0.89 during 1950-1980. This close relation substantially deteriorates, however, during the second half of the sample, 1981-2010. While the behavior of NIPA earnings remains roughly the same, the volatility of GAAP earnings increases ten-fold, and the correlation between GAAP and NIPA earnings changes falls to 0.35. Additional tests reveal that the increase in the volatility of GAAP earnings is mostly due to rapid earnings reversals, and especially the effect of large transient items during economic downturns. The frequency and severity of such downturns, however, are roughly the same across the two examined periods. Overall, this evidence points to little change in economic fundamentals over time, and suggests that changing GAAP rules and perhaps changing managerial behavior are significant factors in the changing properties of GAAP earnings.
Skill Archetypes of Successful IT Project Managers: A Repertory Grid InvestigationOperations Management & Information Technology
Dr Felix B TAN
Professor of Information Systems and Head - Department of Business Information Systems - Faculty of Business and Law , Université de Technology Auckland Nouvelle Zélande
7 May 2014 - Salle du Conseil bâtiment V - From 2:00 pm to 3:30 pm
Both the academic and practitioner literature agree that competent Information Technology (IT) project management plays an important role in IT project success. Although effective project management is critical to better project outcomes, little empirical research has investigated skill requirements for IT Project Managers (PMs). This study addresses this gap by asking nineteen practicing IT PMs to describe the characteristics of both competent and incompetent IT PMs. A semi-structured interview method known as the repertory grid technique is used to elicit these skills. These skills are further sorted into nine skill categories: client management, communication, general management, leadership, personal integrity, planning and control, problem solving, systems development, and team development. This study complements existing research by providing a richer understanding of several skills which were narrowly defined (e.g., client management, planning and control, and problem solving) and by introducing two new skill categories which had not been previously discussed (e.g., personal integrity and team development). Analysis of the individual repertory grids reveals four distinct ways in which study participants combined skill categories to form skill archetypes for effective IT PMs. We describe these four skill archetypes -- general manager, problem solver, client representative, and balanced – and discuss how this knowledge can be useful for practitioners, researchers, and educators. The presentation concludes with suggestions for future research
Dr Felix B Tan is Professor of Information Systems and Head of the Business Information Systems department in the Faculty of Business and Law at Auckland University of Technology, New Zealand. He served as the Editor-in-Chief of the Journal of Global Information Management from 1998-2012. He was on the Council of the Association for Information Systems between 2003 and 2005.
Dr. Tan is internationally known for his work in the global IT field. His research interests fall broadly in 2 categories: IT user behavior and the management of IS. Dr Tan has published in MIS Quarterly, Information & Management, Information Systems Journal, Journal of Information Technology, IEEE Transactions on Engineering Management, International Journal of Electronic Commerce, Communications of the AIS, Communications of the ACM as well as other journals and refereed conference proceedings.
Operational Advantages and Optimal Design of Threshold Discounting OffersOperations Management & Information Technology
11 April 2014 - HEC Paris - Jouy en Josas Campus - Building T - Room T022 - From 11:00 am to 12:30 pm
We study the use of threshold discounting, the practice of offering a discounted price service only if at least a given number of customers show interest in it. In recent years, firms like Groupon and others in the newly created multi-billion-dollar online deals industry have popularized this approach. We model a capacity-constrained firm servicing a random-sized population of strategic customers in two representative time periods, a desirable hot period and a less desirable slow period. A comparison with the more traditional approaches typically employed in these circumstances (slow period discounting and closure) reveals that threshold discounting boosts the firm's operational performance on account of two advantages. First, the contingent discount incentivizes slow period consumption when the market for the service is large and reduces supply of the service when the market is small, in effect allowing the firm to respond to the service's unobserved market potential. Second, activation of the threshold discount signals the market state to strategic customers, supplying them with additional information on service availability, and inducing them into self-selecting the consumption period to one that improves the firm's capacity utilization and profit. Unlike in a typical setting with strategic customers, strategic behavior in our setting helps the firm, and a higher fraction of strategic customers in the population increases the firm's profits. When threshold discounts are offered through an intermediary, we find that the arrangements most used in practice distort the incentives of the intermediary, which can diminish the advantages of threshold discounting. We consider alternate deal designs, and we find that the best designs compromise the service provider's flexibility in order to provide strategic customers with clear offer terms.