Do sources of occupational community impact corporate internal control? The case of CFOs in the high-tech industry

2019 ◽  
Vol 32 (4) ◽  
pp. 957-983 ◽  
Author(s):  
Junli Yu ◽  
Shelagh M.R. Campbell ◽  
Jing Li ◽  
Zhou Zhang
Keyword(s):  
Decision Making ◽  
Internal Control ◽  
High Tech ◽  
Upper Echelons ◽  
High Tech Industry ◽  
Content Type ◽  
Group Memberships ◽  
Different Sources

Purpose The Chief Financial Officer (CFO), despite being a critical organization member responsible for ensuring quality of financial reporting, audit and compliance, is under-researched. Grouped as a member of top management teams (TMS) in studies, factors influencing decision making in this group rely on static measures of characteristics without regard for dynamic and longitudinal influences of career trajectories and industry occupational group memberships. The relationship between the high-tech industry as a site of notable reported internal control (IC) weakness and influences on CFOs requires closer examination. The paper aims to discuss these issues. Design/methodology/approach The study draws together the upper echelons theory and occupational communities (OCs) to explore the impact of shared values and behavioral norms from different sources on executive decision making. Internal and external sources of OC are proposed and their influence on activities with respect to corporate IC is tested. The sample of 1,573 firm/year observations includes high-tech firms listed on major US exchanges was developed using data from five distinct databases. Executives’ biographic information was manually collected. Findings Results indicate that senior financial executives belong not only to their firm and its culture but also to OCs that extend beyond the firm. Membership in professional credential granting occupational groups has less impact on effective IC than experience in the high-tech industry. In combination, multiple OCs show evidence of compound and counteracting effects on IC. The OC that arises in the high-tech industry makes a measurable positive difference in the quality of IC in sample firms, in contrast with the OC among credentialed accounting and financial professionals. Research limitations/implications This quantitative study of OC reveals the differential impact of different sources of OC and contributes to the literature on TMS a new framework for examining decision making. OC is typically studied through qualitative methods and, thus, potential exists to further explore the specific nature and dynamics of the OCs identified in this study. Practical implications The study highlights the role of broad affiliations and networks among senior financial executives which may have bearing on their ability to effectively manage IC. The role of these networks may also partially explain instances of CFO failure and thus dismissal. Knowledge of the role of OC may help boards of directors in the selection and promotion of senior financial officers of the firm. Originality/value The paper offers a different perspective on professional accounting expertise in one specific industry where incidence of IC weakness is high relative to other industries. Study results expand recent research on TMS to include sociological impacts of cohort groups. Despite generally weaker IC in the high-tech sector, this study demonstrates the value of exploring group membership within the industry as an important predictor of behavior. The result is a new perspective to CFO decision making which illustrates the relevance of OCs among upper echelons. The implications of findings for CFO recruitment and promotion are borne out in recent instances of senior financial executive failure in the sector.

The role of heuristic-driven biases in entrepreneurial strategic decision-making: evidence from an emerging economy

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maqsood Ahmad ◽  
Syed Zulfiqar Ali Shah ◽  
Yasar Abbass
Keyword(s):  
Decision Making ◽  
Emerging Economy ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Decision Making Process ◽  
Strategic Decisions ◽  
Content Type ◽  
The Relationship

PurposeThis article aims to clarify the mechanism by which heuristic-driven biases influence the entrepreneurial strategic decision-making in an emerging economy.Design/methodology/approachEntrepreneurs' heuristic-driven biases have been measured using a questionnaire, comprising numerous items, including indicators of entrepreneurial strategic decision-making. To examine the relationship between heuristic-driven biases and entrepreneurial strategic decision-making process, a 5-point Likert scale questionnaire has been used to collect data from the sample of 169 entrepreneurs who operate in small- and medium-sized enterprises (SMEs). The collected data were analyzed using SPSS and Amos graphics software. Hypotheses were tested using structural equation modeling (SEM) technique.FindingsThe article provides empirical insights into the relationship between heuristic-driven biases and entrepreneurial strategic decision-making. The results suggest that heuristic-driven biases (anchoring and adjustment, representativeness, availability and overconfidence) have a markedly negative influence on the strategic decisions made by entrepreneurs in emerging markets. It means that heuristic-driven biases can impair the quality of the entrepreneurial strategic decision-making process.Practical implicationsThe article encourages entrepreneurs to avoid relying on cognitive heuristics or their feelings when making strategic decisions. It provides awareness and understanding of heuristic-driven biases in entrepreneurial strategic decisions, which could be very useful for business actors such as entrepreneurs, managers and entire organizations. Understanding regarding the role of heuristic-driven biases in entrepreneurial strategic decisions may help entrepreneurs to improve the quality of their decision-making. They can improve the quality of their decision-making by recognizing their behavioral biases and errors of judgment, to which we are all prone, resulting in a more appropriate selection of entrepreneurial opportunities.Originality/valueThe current study is the first to focus on links between heuristic-driven bias and the entrepreneurial strategic decision-making in Pakistan—an emerging economy. This article enhanced the understanding of the role that heuristic-driven bias plays in the entrepreneurial strategic decisions and more importantly, it went some way toward enhancing understanding of behavioral aspects and their influence on entrepreneurial strategic decision-making in an emerging market. It also adds to the literature in the area of entrepreneurial management specifically the role of heuristics in entrepreneurial strategic decision-making; this field is in its initial stage, even in developed countries, while, in developing countries, little work has been done.

Do managerial ties support or stifle open innovation?

2014 ◽  
Vol 114 (4) ◽  
pp. 652-675 ◽  
Author(s):  
M. Muzamil Naqshbandi ◽  
Sharan Kaur
Keyword(s):  
Open Innovation ◽  
Survey Method ◽  
High Tech ◽  
Government Officials ◽  
High Tech Industry ◽  
Content Type ◽  
Factors Affecting ◽  
Managerial Ties ◽  
The Impact

Purpose – Research investigating the role of factors affecting open innovation remains scarce. The purpose of this paper is to examine the role of managerial ties in facilitating the two types of open innovation – in-bound and out-bound. Design/methodology/approach – Data are collected using the questionnaire survey method from 339 middle and top managers working in four high-tech industries in Malaysia. Findings – Results show that in most high-tech industries in Malaysia, managerial ties with universities and with government officials facilitate in-bound open innovation, while ties with managers at other firms do not significantly relate to it in any high-tech industry. Further, managerial ties are not found to relate significantly to out-bound open innovation in any high-tech industry except in the aerospace and electronics industries wherein ties with government officials relate negatively and positively to out-bound innovation, respectively. Practical implications – This study provides empirical evidence about the managerial ties practitioners should and should not forge to succeed in the open innovation paradigm. Originality/value – This study is probably the only study so far that gauges the impact of managerial ties on open innovation. The results of this study fill a major gap in the current open innovation theory besides providing insights for practitioners.

Auditing Corporate Governance Statements in Greece – the role of internal auditors

2018 ◽  
Vol 18 (5) ◽  
pp. 1007-1020 ◽  
Author(s):  
Andreas Koutoupis ◽  
Michail Pazarskis ◽  
George Drogalas
Keyword(s):  
Corporate Governance ◽  
Best Practices ◽  
Internal Control ◽  
Internal Audit ◽  
Content Type ◽  
Internal Auditors ◽  
Governance Practices ◽  
Laws And Regulations

PurposeThe purpose of this paper is to examine the role of internal audit with respect to Auditing Corporate Governance Statements based on a practical approach. Moreover, it examines the application of internal control best practices in the Athens publicly listed firms based on a series of related statements.Design/methodology/approachThe authors conducted all large and medium capitalization publicly listed companies via a research questionnaire which forms a basis of a descriptive research analysis. The methodology is based on the best worldwide acceptable practices as represented by the Committee of Sponsoring Organizations internal control – integrated framework, as well as the relevant laws and regulations and best practices with respect to Corporate Governance Statements.FindingsThe research concludes that internal auditors limit their role in verifying compliance with the relevant laws and regulations rather than adopt a consulting role toward the improvement of the content and quality of Corporate Governance Statements information. Also, it contributes to the corporate governance research by verifying that the effectiveness of internal controls contributes to sound corporate governance practices.Practical implicationsInternal auditors depending on the organization they serve may adopt different roles regarding Corporate Governance Statements preparation, review and audit such as consultative which may add value to the quality of Corporate Governance Statements.Originality/valueIt is the first research regarding quality characteristics of the Corporate Governance Statements and the role of internal audit in Greece, and it provides the basis for further research among European Union countries.

scholarly journals Bend Them but Don't Break Them: Passionate Workers, Skeptical Managers, and Decision Making in Organizations

2017 ◽  
Vol 9 (3) ◽  
pp. 100-125
Author(s):  
Omar A. Nayeem
Keyword(s):  
Decision Making ◽  
Moral Hazard ◽  
Decision Maker ◽  
Adverse Selection ◽  
Information Quality ◽  
High Tech ◽  
High Tech Industry ◽  
Frontline Workers ◽  
Knowledge Based

This paper explores the useful but delicate role of managerial skepticism in hierarchical knowledge-based organizations. In these settings, the decision-maker principal seeks advice from managers, who instruct expert frontline workers to acquire information. Given unverifiable information quality and private-valued agents, moral hazard and adverse selection arise with workers and managers, respectively. Pairing extremely passionate workers with moderately skeptical managers alleviates both problems; however, the degree of managerial skepticism must be finely tuned: too little skepticism fails to improve workers' incentives, while too much skepticism destroys workers' incentives altogether. Case studies from the high-tech industry support these insights. (JEL D23, D82, M12, M51)

scholarly journals The Role of Internal Control in Firms’ Coping with the Impact of the COVID-19 Pandemic: Evidence from China

2021 ◽  
Vol 13 (11) ◽  
pp. 6294
Author(s):  
Peiqing Zhu ◽  
Jianbo Song
Keyword(s):  
Internal Control ◽  
Manufacturing Industry ◽  
Firm Heterogeneity ◽  
Negative Impact ◽  
Risk Prevention ◽  
High Tech ◽  
Obvious Effect ◽  
The Difference ◽  
The Impact

Internal control plays a role in risk prevention for firms when dealing with serious emergencies, which ensures the sustainable development of firms during a crisis. Based on the rapid outbreak of COVID-19 in China, this paper empirically tests whether internal control alleviates the negative impact of the pandemic on firm performance. Using a sample of Chinese listed firms from the first quarter of 2019 to the third quarter of 2020 and employing the difference-in-difference (DID) method, we find that the firms with a higher quality of internal control achieve better financial performance during the pandemic period; the more serious the pandemic is, the more obvious effect internal control plays. Furthermore, we consider the industry heterogeneity and firm heterogeneity of the risk resistance effect of internal control. In the manufacturing industry, which is a “disaster zone” of the pandemic, and the non-high-tech industry with a low degree of digitization, internal control can play a more important role in firms’ performance. Moreover, for state-owned enterprises, and firms with strong financing constraints, the role of internal control is more prominent. The above results provide empirical evidence for the risk prevention function of internal control and shed new light on the measures for firms to resist emergencies in the future.

The role of agency in project initiation decisions

2014 ◽  
Vol 7 (3) ◽  
pp. 518-535 ◽  
Author(s):  
Mark Mullaly
Keyword(s):  
Decision Making ◽  
Decision Rules ◽  
Personal Characteristics ◽  
Decision Makers ◽  
Organizational Dynamics ◽  
Substantive Theory ◽  
Content Type ◽  
The Subject ◽  
Board Level

Purpose – The purpose of this paper is to explore the role of decision rules and agency in supporting project initiation decisions, and the influences of agency on decision-making effectiveness. Design/methodology/approach – The study this paper is based upon used grounded theory methodology, and sought to understand the influences of individual decision makers on project initiation decisions within organizations. Data collection involved 28 participants who were involved in project initiation decisions within their organizations, who discussed the process of project initiation in their organization and their role within that process. Findings – The study demonstrates that the overall effectiveness of project initiation decisions is a product of agency, process effectiveness or rule effectiveness. The employment of agency can have a direct influence on decision-making effectiveness, it can compensate for organizational inadequacies of a process or political nature, and it can be constrained in the evidence of formal and effective organizational practices. Research limitations/implications – While agency was recognized by all participants, there are clearly circumstances where actors perceive the ability to exercise agency to be externally constrained. The study is exploratory, contributing to the development of substantive theory. Theory testing as well as a more in-depth investigation of the underlying drivers of agency would be valuable. Practical implications – The study provides executives and individuals supporting the initiation of projects with insights on how to effectively influence the effectiveness of project initiation decisions, and the degree to which personal characteristics influence organizational dynamics. Originality/value – Most discussions of agency has been framed the subject as an executive- or board-level phenomenon. The current study demonstrates that agency is in fact being perceived and operationalized at all levels. Those demonstrating agency in the majority of instances in this study do so in exercising stewardship behaviours. This has important implications for how agency is perceived by executives, and by how agency is exercised by actors at all levels of the organization.

scholarly journals Exploring the role of anticipated emotions in product adoption and usage

2018 ◽  
Vol 35 (3) ◽  
pp. 300-316 ◽  
Author(s):  
Debora Bettiga ◽  
Lucio Lamberti
Keyword(s):  
Decision Making ◽  
Conceptual Model ◽  
Structural Equation ◽  
Consumer Products ◽  
Product Adoption ◽  
Radical Product ◽  
Content Type ◽  
Product Decision ◽  
Anticipated Emotions

Purpose This study aims to explore the role of positive and negative anticipated emotions on adoption and continued usage of consumer products. The components of value eliciting anticipated emotions are investigated as well. Design/methodology/approach The conceptual model proposed is tested in two empirical studies, one focussing on functional and hedonic products and one on incremental and radical product innovations. Data are collected through online surveys on consumers and are analysed using structural equation modelling. Findings Results confirm the ability of anticipated emotions to influence product decision-making process. Moreover, anticipated emotions mediate the influence of value perceptions on product attitude. Findings show that these relationships vary greatly between initial adoption and further usage of the product. Practical implications Findings from this study may help marketers in the development of the right brand strategies and communication campaigns, aimed at building emotional connections with the consumer which prompt product adoption and usage. Originality/value Anticipated emotions, the predictions about the emotional consequences of a behaviour, have been acknowledged as strong drivers of consumer choices. Despite that, the role of anticipated emotions in product decision-making has not been explored yet. The present research, by means of a novel conceptual model, uncovers the role of anticipated emotions in both product adoption and continued usage decisions and depicts the components of value arousing such anticipated emotions.

Great minds think alike: does leader-follower similarity in construal level of the work enhance leader-member exchange quality?

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sevgi Emirza ◽  
Alev Katrinli
Keyword(s):  
Mental Representation ◽  
Current Knowledge ◽  
Interpersonal Relationship ◽  
Survey Study ◽  
Construal Level ◽  
Leader Member Exchange ◽  
Content Type ◽  
Member Exchange

PurposeThe purpose of this study is to investigate whether leader-follower similarity in construal level of the work, which indicates the degree of abstraction applied to mental representation of the work, influences the quality of interpersonal relationship at work.Design/methodology/approachFirst, an interview study was conducted to adapt the work-based construal-level (WBCL) scale. Then, a survey study was conducted for hypothesis testing. Data collected from 245 matched supervisor-subordinate dyads were analyzed using multi-level modeling.FindingsResults revealed that dyadic similarity in work-domain construal level is positively related to leader-member exchange (LMX) quality. As a leader and a follower become similar to each other in terms of mental representation (i.e. construal level) of work, they experience higher relationship quality.Originality/valueThis study enhances the current knowledge of the role of cognition and cognitive similarity in leadership processes.

The role of transformative healthcare technology on quality of life during the COVID-19 pandemic

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohammad Asif Salam ◽  
Saleh Bajaba
Keyword(s):  
Quality Of Life ◽  
Health Care ◽  
Saudi Arabia ◽  
Service Delivery ◽  
Health Care System ◽  
Service System ◽  
Content Type ◽  
Care System

Purpose The purpose of this study is to investigate the role of the COVID-19 health-care system quality (HSQ) and its impact on the individual (satisfaction) and social (quality of life [QOL]) outcomes in the context of a transformative health-care delivery system using service-dominant logic (SDL). Design/methodology/approach A sample consisting of 1,008 individuals who have experienced the COVID-19 health-care system was drawn from four different regions of Saudi Arabia using the simple random sampling technique. The survey was conducted using an online survey and 1,008 respondents answered, based on their experience and knowledge of the COVID-19 health-care system. Partial least squares structural equation modeling was applied to test the proposed research model. Findings The study findings suggest that service system satisfaction (SAT) significantly mediates the role of the HSQ in delivering and enhancing the QOL. HSQ also has a significant role to play on the SAT as well as the QOL. These findings contribute to the body of knowledge on SDL in the context of HSQ in understanding the significant role of technologies can play in enhancing service satisfaction and better QOL during a crisis such as COVID-19. This study also improves the understanding of the importance of customer-centricity, real-time visibility through tracking and tracing of service flow, agile decision-making, fewer but better-defined service objectives, and finally shaping mindsets and behaviors of all the relevant parties involved in the HSQ service delivery process. Research limitations/implications One of the major limitations of this study is that, although COVID-19 is an ongoing global pandemic, cross-sectional data were collected in only one country. The findings may not be generalizable across subsequent waves of the pandemic. The best practices of HSQ could be studied around the globe and the results used to support continuous improvement. Originality/value This study advances the understanding of the SDL in the context of a transformative health-care system for a transitional economy by focusing on individual and social well-being during an unexpected crisis such as the COVID-19 pandemic. This study also contributes toward the understanding of the roles of enabling technologies to improve the service delivery system which results in an improved SAT, as well as better QOL for the society at large. Based on SDL this research validates the HSQ model, relevant measures and its overall impact on SAT and QOL in the context of a transformative health-care service system in Saudi Arabia.

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