Consequences of earnings management for corporate reputation

2016 ◽  
Vol 29 (4) ◽  
pp. 457-474 ◽  
Author(s):  
Lázaro Rodriguez-Ariza ◽  
Jennifer Martínez-Ferrero ◽  
Manuel Bermejo-Sánchez
Keyword(s):  
Earnings Management ◽  
Corporate Reputation ◽  
Family Firms ◽  
Negative Impact ◽  
Corporate Image ◽  
Social Consequences ◽  
Negative Effects ◽  
Content Type ◽  
Family Control ◽  
International Panel

Purpose Based on earnings management (EM) practices, the purpose of this research is to analyze their market social consequences on corporate reputation. Moreover, this paper illustrates this impact in the context of family firms which are led and controlled by family members, whose main interest is the long-run survival through succession. Design/methodology/approach A sample comprising 1,169 international listed companies for the period 2006-2010 was used. Findings The empirical evidence shows the negative impact of these discretionary accounting practices on corporate image. However, family firms have more incentives for controlling and monitoring managerial decisions, avoiding information asymmetries and, thus, EM behavior and their subsequent loss of reputation. Therefore, fewer negative effects on corporate reputation are observed in highly concentrated ownership structures as a result of the negative link between family control and EM. Originality/value This study presents a number of contributions because of its focus on specific discretionary practices and on family firms. This study contributes to previous literature on family firms, as previous papers do not tend to focus on EM issues. Moreover, in contrast to most of the studies that have focused on only one country, we use an international panel database. This leads to potentially more powerful and generalized results. In addition, this paper is the first attempt (to the authors' knowledge) to study the possible impact of EM on corporate reputation in the family firm context.

The bright and dark sides of humorous response to online customer complaint

2020 ◽  
Vol 54 (8) ◽  
pp. 2013-2047 ◽  
Author(s):  
Hyunju Shin ◽  
Lindsay R.L. Larson
Keyword(s):  
Negative Impact ◽  
Service Failure ◽  
Traditional Approach ◽  
Service Recovery ◽  
Experimental Studies ◽  
Corporate Image ◽  
Negative Effects ◽  
Content Type ◽  
Customer Complaints ◽  
Customer Complaint

Purpose Displaying a sense of humour provides various interpersonal benefits including reducing tension and promoting conflict resolution, but should a firm use humour in response to publicly viewable online customer complaints after a service failure? The purpose of this study is to demonstrate that a firm’s use of humour in response to negative online consumer reviews has both positive and negative effects on perceptions of corporate image from a customer-as-onlooker perspective. Design/methodology/approach Three experimental studies are conducted and analysis of variance is used to empirically test the hypotheses. Findings Although humorous responses have an unfavourable influence on perceived trustworthiness of the firm, they have a favourable influence on perceived excitingness of the firm. The former influence is tied to lower perceived firm sincerity, whereas the latter is tied to higher perceived firm innovativeness and coolness. Furthermore, humour within the customer complaint itself is shown to moderate the influence of humorous responses on perceptions of the firm. Finally, regardless of the type of humour used (i.e. affiliative or aggressive humour) in the humorous response, the positive effect of humorous response remains strong, although aggressive humour further aggravates the negative impact of humorous response on trustworthiness. Research limitations/implications The experimental set-up may limit external validity of the study, and the research is limited to the variables examined. Practical implications Humorous response is identified as a non-traditional approach to online customer complaints that poses a double-edged sword for managers of service organizations. Firms should avoid using humour in online service recovery if perceptions of trustworthiness are critical or if complaints are written in a neutral tone. However, such responses may be successfully used when a firm wants to position itself as exciting and if complaints are also humorous. Finally, firms are advised to avoid aggressive humour. Originality/value The present research represents one of the few studies in marketing to examine the potential of injecting humour into complaint management and service recovery. In addition, this study considers the consumer-as-onlooker perspective inherent in social media.

Corporate Social Responsibility and Earnings Management: The Moderating Role of Family Ownership

2019 ◽  
Vol 12 (1) ◽  
Author(s):  
Asif Saeed ◽  
Aijaz Mustafa Hashmi ◽  
Attiya Yasmin Javid
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Earnings Management ◽  
Family Firms ◽  
Negative Impact ◽  
Stock Exchange ◽  
Least Square ◽  
Family Ownership ◽  
Corporate Social ◽  
The Impact

This study aims to explore the impact of family ownership on the relationship among corporate social responsibility (CSR) and earning management (EM) in Pakistan. Data is collected from nonfinancial listed firms on Pakistan Stock Exchange (PSE) for the period 2009-2017. Our results of pooled ordinary least square regression indicate that CSR has significant negative impact on EM. Furthermore, results also indicate that association between CSR and EM is moderated by family ownership. Family firms which perform CSR activities are less involved in EM as compare to nonfamily firms perform CSR activities. This variation in behavior of EM in family and non-family firms can possibly be explained by socioemotional wealth theory. Keywords: Corporate Social Responsibility, Earnings Management, Family Ownership

Incongruent influences: joint effects on the job attitudes of employees with psychological contract breach in the MENA region

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Naveen Jain ◽  
Danilo Le Sante ◽  
Chockalingam Viswesvaran ◽  
Rakesh Belwal
Keyword(s):  
Psychological Contract ◽  
Corporate Reputation ◽  
Ecological Validity ◽  
Job Attitudes ◽  
Psychological Contract Breach ◽  
Negative Effects ◽  
Mena Region ◽  
Contract Breach ◽  
Content Type ◽  
Multiple Variables

Purpose The psychological contract breach (PCB) literature has documented the negative effects of PCB on employee job attitudes and the variables that moderate (accentuate or mitigate) this relationship. Given that multiple variables together influence a subordinate’s PCB – job attitudes relationship, this paper aims to investigate a three-way interaction between corporate reputation, supervisor’s and subordinate’s PCBs on the job attitudes of the latter. Design/methodology/approach The authors collected a dyadic sample of 227 employees and their 79 supervisors from some of the well-known companies in Oman. The authors used SPSS (version 25) to examine the three-way interaction of focal employee PCB, supervisor PCB and corporate reputation on employee job attitudes. Findings The results indicated that depending on the perception of corporate reputation, the extent of the supervisor’s PCB perception has a differential influence on the employee PCB – job attitudes relationship. Originality/value By investigating the joint (sometimes conflicting) influences of multiple moderators which enhances the ecological validity, this paper makes an original and important contribution to the PCB literature.

Earnings management when firms face mandatory contributions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yiyi Qin ◽  
Jun Cai ◽  
Steven Wei
Keyword(s):  
Earnings Management ◽  
Negative Impact ◽  
Investment Strategy ◽  
Fiscal Year ◽  
Management Behavior ◽  
Indicator Variable ◽  
Stock Market Returns ◽  
Content Type ◽  
Early Results ◽  
Reported Earnings

PurposeIn this paper, we aim to answer two questions. First, whether firms manipulate reported earnings via pension assumptions when facing mandatory contributions. Second, whether firms alter their earnings management behavior when the Financial Accounting Standard Board (FASB) mandates disclosure of pension asset composition and a description of investment strategy under SFAS 132R.Design/methodology/approachOur basic approach is to run linear regressions of firm-year assumed returns on the log of pension sensitivity measures, controlling for current and lagged actual returns from pension assets, fiscal year dummies and industry dummies. The larger the pension sensitivity ratios, the stronger the effects from inflated ERRs on reported earnings. We confirm the early results that the regression slopes are positive and highly significant. We construct an indicator variable DMC to capture the mandatory contributions firms face and another indicator variable D132R to capture the effect of SFAS 132R. DMC takes the value of one for fiscal years during which an acquisition takes place and zero otherwise. D132R takes the value of one for fiscal years after December 15, 2003 and zero otherwise.FindingsOur sample covers the period from June 1992 to December 2017. Our key results are as follows. The estimated coefficient (t-statistic) on DMC is 0.308 (6.87). Firms facing mandatory contributions tend to set ERRs at an average 0.308% higher. The estimated coefficient (t-statistic) on D132R is −2.190 (−13.70). The new disclosure requirement under SFAS 132R constrains all firms to set ERRs at an average 2.190% lower. The estimate (t-statistic) on the interactive term DMA×D132R is −0.237 (−3.29). When mandatory contributions happen during the post-SFAS 132R period, firms tend to set ERRs at 0.237% lower than they would do otherwise in the pre-SFAS 132R period.Originality/valueWhen firms face mandatory contributions, typically firm experience negative stock market returns. We examine whether managers manage earnings to mitigate such negative impact. We find that firms inflate assumed returns on pension assets to boost their reported earnings when facing mandatory contributions. We also find that managers alter earnings management behavior, in the case of mandatory contributions, following the introduction of new pension disclosure standards under SFAS 132R that become effective on December 15, 2003. Under the new SFAS 132R requirement, firms need to disclose asset allocation and describe investment strategies. This imposes restrictions on managers' discretion in making ERR assumptions, since now the composition of pension assets is a key determinant of the assumed expected rate of return on pension assets. Firms need to justify their ERRs with their asset allocations.

scholarly journals Evaluating the impact of corporate logos towards corporate reputation

2017 ◽  
Vol 20 (2) ◽  
pp. 158-180 ◽  
Author(s):  
Pantea Foroudi ◽  
Khalid Hafeez ◽  
Mohammad M. Foroudi
Keyword(s):  
Emerging Markets ◽  
Cultural Values ◽  
Attribution Theory ◽  
Corporate Reputation ◽  
Emerging Market ◽  
Corporate Image ◽  
Customer Relationship ◽  
Corporate Communications ◽  
Content Type ◽  
The Impact

Purpose This paper aims to examine the impact of corporate logos on corporate image and reputation in creating competitive advantage in the context of Persia and Mexico as emerging markets. The paper provides an extensive links between corporate logo and its dimension and internal stakeholders’ attitudes towards advertisement, familiarity and recognisability as intermediaries to corporate image and reputation. Design/methodology/approach A qualitative exploratory approach was undertaken, comprising 12 face-to-face interviews and 14 skype in-depth interviews with graphic designers, design, communication and marketing consultant in Mexico and Persia based on attribution theory. Findings The study posits that the more favorable the name, colour, typeface and design of the company logo, the more favorable the attitude Mexican consumers have towards the corporate logo, corporate image and reputation. However, in comparison for Persia these factors have less effect on customers’ judgment and behaviour, towards the corporate logo, corporate image and reputation. The research findings suggest that the selection of colour in a corporate logo is related to its marketing objectives, cultural values, desired customer relationship levels with the organisation and organisation’s corporate communications. Originality/value Corporate logo has received little attention in marketing literature and rarely researched in the context of emerging market. This is the first research of its kind to find the effect of the compound logo in emerging markets of Persia and Mexico. Therefore, this research makes significant contribution towards the corporate visual identity literature by developing of the sphere of influence of the corporate logo and its antecedents and consequences (corporate image and corporate reputation).

Get connected with your Takaful representatives

2019 ◽  
Vol 11 (5) ◽  
pp. 1175-1200
Author(s):  
Mohsin Abdur Rehman ◽  
Ismah Osman ◽  
Khurram Aziz ◽  
Hannah Koh ◽  
Muhammad Awais
Keyword(s):  
Service Quality ◽  
Relationship Marketing ◽  
Customer Loyalty ◽  
Corporate Reputation ◽  
Cultural Context ◽  
Corporate Image ◽  
Service Industries ◽  
Equation Modeling ◽  
Content Type ◽  
The Impact

Purpose Marketing investigations on the concomitant variables of both service quality and relationship marketing are very scarce. Hence, the purpose of this study is to examine the customers’ perception of the Takaful (Islamic insurance) in relation to service quality and relationship marketing. More importantly, the examination of the impact of both service quality and relationship marketing on corporate image is further established. Accordingly, corporate reputation and customer loyalty were further evaluated, along with these respective interactions. Design/methodology/approach A self-administered survey was conducted from 350 Malaysian customers of Takaful products and services. The purposive sampling was used to collect data from the existing customers of Takaful service operators in the Klang Valley, an area in Malaysia. The questionnaire was constructed through measures of PAKSERV for service quality, as well as other measures related to relationship marketing and other constructs in this study. Structured equation modeling was used in the analysis of data. Findings The current study is the first one of its kind to examine perceptions of customers of relationship marketing and service quality as predictors of corporate image, which drives corporate reputation and ultimate customer loyalty from the perspective of the Takaful industry in Malaysia. Service quality dimensions (tangibility, reliability and personalization) and relationship marketing dimensions (Islamic ethical behavior and structural bond) positively influence corporate image of the Takaful organizations. Moreover, customer loyalty can be predicted, mainly through corporate reputation as well as corporate image. Research limitations/implications The present study is focused on the existing Malaysian Takaful customers as the population frame. Accordingly, future research studies may evaluate the same model, but perhaps in another different cultural context where the Takaful industry can grow and expand in other countries, including Saudi Arabia, Sudan and Pakistan. More importantly, the same variables may be verified to different service industries in future studies, especially those constructs related to relationship marketing because many products and services at present can be attained without face-to-face interactions through online transactions without having brick and mortar businesses. Practical implications It is important for Takaful service operators to focus on connecting the social and financial bonds to ensure the fulfilment of customers’ needs. They also need to improve the qualities related to tangibility, reliability and personalization to be able to increase their market share, especially in this present highly competitive market. Indeed, Takaful generally provides financial protection and risk management; nevertheless, the religious and ethical values need to be embraced in totality unlike conventional insurance, which has the element of gambling, uncertainty and the imposition of interest. Hence, this study aims to assist the Takaful operators toward achieving corporate reputation and apparently customer loyalty for them to remain relevant in this industry. Originality/value The model used in this study is based on the cultural context of Malaysia from the perspective of the Takaful industry. It attempts to explain customer loyalty through the incorporation of service quality and relationship marketing dimensions, where it is associated with the elements of the values of Islamic ethics especially in business transactions. More importantly, these dimensions were put together to identify its impact on corporate image, corporate reputation, and ultimately, customer loyalty, thus illustrating a distinct set of outcomes of the present study.

The bidirectional relationship between ESG performance and earnings management – empirical evidence from Germany

2019 ◽  
Vol 10 (4) ◽  
pp. 322-338 ◽  
Author(s):  
Patrick Velte
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Negative Impact ◽  
Social Performance ◽  
Negative Influence ◽  
Content Type ◽  
Thomson Reuters ◽  
Tier System ◽  
Bidirectional Relationship ◽  
The Impact

Purpose This study aims to focus on environmental, social and governance (ESG) performance as a whole and individually in its three pillars and their influence on earnings management. Design/methodology/approach Companies listed on the German Prime Standard (DAX30, TecDAX and MDAX) for the business years 2011-2017 (548 firm-year observations) are included in the empirical quantitative study. A correlation and regression analysis is conducted to analyze the impact of ESG performance as determined by the Asset4 database of Thomson Reuters on accruals-based earnings management (AEM) and real earnings management (REM). Findings ESG performance has a negative influence on AEM but not on REM. Moreover, by dividing the three different factors of ESG performance, governance performance has the strongest negative impact on AEM in comparison to environmental and social performance. This study also suggests a bidirectional relationship between ESG performance and earnings management. Originality/value The analysis makes a key contribution to research as the link between ESG performance and their three components and earnings management are analyzed for the German two-tier system for the first time. Corporate practice, regulators and researchers should recognize that ESG performance and financial reporting should be discussed together.

Reduction of tension effects on partner evaluation

2018 ◽  
Vol 36 (4) ◽  
pp. 425-439
Author(s):  
Ossi Pesämaa ◽  
Peter Dahlin ◽  
Christina Öberg
Keyword(s):  
Structural Equation ◽  
Negative Impact ◽  
Equation Modeling ◽  
Negative Effects ◽  
Data Set ◽  
Content Type ◽  
Business Partners ◽  
Positive Side ◽  
Tension Management ◽  
Business To Business

Purpose The purpose of this paper is to examine how tension management as a means of achieving compromise and overcoming minor conflicts reduces the effects of the opportunism and bargaining costs of relationships on the evaluation of business partners. The paper proposes and tests a theoretical model with a full-information approach using structural equation modeling. Design/methodology/approach The data set was based on 312 observations from a unique survey based on a business-to-business relationship sample in Sweden. The measurements reflect the effects of partner opportunism, bargaining costs, and tension management on partner evaluations. Findings The findings corroborate that partner opportunism and bargaining costs have a negative impact on partner evaluation. In addition, the model shows that tension management weakens the negative effects of opportunism and bargaining costs on the evaluation. Originality/value This study offers evidence on how negative effects are reduced through intervening constructs. With most studies focusing on the positive side of relationships, this paper makes an important contribution to the literature through not only describing negative effects, but also how these can be decreased.

Robustness-based multi-objective optimization for repetitive projects under work continuity uncertainty

2020 ◽  
Vol 27 (10) ◽  
pp. 3095-3113
Author(s):  
Lihui Zhang ◽  
Guyu Dai ◽  
Xin Zou ◽  
Jianxun Qi
Keyword(s):  
Monte Carlo Simulation ◽  
Monte Carlo ◽  
Negative Impact ◽  
Project Performance ◽  
Project Managers ◽  
Multi Objective Optimization ◽  
Negative Effects ◽  
Content Type ◽  
Multi Objective ◽  
New Type

PurposeInterrupting work continuity provides a way to improve some project performance, but unexpected and harmful interruptions may impede the implementation. This paper aims to mitigate the negative impact caused by work continuity uncertainty based on the notion of robustness.Design/methodology/approachThis paper develops a float-based robustness measurement method for the work continuity uncertainty in repetitive projects. A multi-objective optimization model is formulated to generate a schedule that achieves a balance between crew numbers and robustness. This model is solved using two modules: optimization module and decision-making module. The Monte Carlo simulation is designed to validate the effectiveness of the generated schedule.FindingsThe results confirmed that it is necessary to consider the robustness as an essential factor when scheduling a repetitive project with uncertainty. Project managers may develop a schedule that is subject to delays if they only make decisions according to the results of the deadline satisfaction problem. The Monte Carlo simulation validated that an appropriate way to measure robustness is conducive to generating a schedule that can avoid unnecessary delay, compared to the schedule generated by the traditional model.Originality/valueAvailable studies assume that the work continuity is constant, but it cannot always be maintained when affected by uncertainty. This paper regards the work continuity as a new type of uncertainty factor and investigates how to mitigate its negative effects. The proposed float-based robustness measurement can measure the ability of a schedule to absorb unpredictable and harmful interruptions, and the proposed multi-objective scheduling model provides a way to incorporate the uncertainty into a schedule.

You reap what you sow: knowledge hiding, territorial and idea implementation

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Xianmiao Li ◽  
William X. Wei ◽  
Weiwei Huo ◽  
Yi Huang ◽  
Manyi Zheng ◽  
...  
Keyword(s):  
Hierarchical Linear Modeling ◽  
Creative Process ◽  
Negative Impact ◽  
Territorial Behavior ◽  
Linear Modeling ◽  
Negative Effects ◽  
Content Type ◽  
High Level ◽  
Knowledge Hiding ◽  
Moderating Role

PurposeThis study aims to build a research model from the perspectives of knowledge hiding and idea implementation to examine what factors influence idea implementation and the cross-level moderating role of team territory climate.Design/methodology/approachData were collected from universities, 52 (R&D) teams in China via a two-wave survey. The final sample contained 209 team members and their immediate supervisors. Hierarchical linear modeling was used to test hypotheses.FindingsThe results indicated that individuals’ knowledge-hiding behavior had a significantly negative impact on idea implementation and creative process engagement, which played a mediating role. Team territorial climate played a cross-level moderating role between knowledge hiding and idea implementation. If team territorial climate was at a high level, then the negative connection between knowledge hiding and idea implementation would be weaker.Research limitations/implicationsUnder the perspective of territorial behavior in Chinese cultural, it can help to distinguish territorial behavior and be preventive at individual and team levels. This study not only enables managers to clearly understand the precipitating factors of idea implementation but also provides constructive strategies for alleviating the negative effects of knowledge territoriality on creative process engagement and idea implementation.Originality/valueThis study constructs a cross-level model to explore the relationship among knowledge hiding, creative process engagement and idea implementation at individual and team levels in the context of Chinese R&D enterprises. Additionally, the study analyzes the influence of territoriality on idea implementation under boundary conditions.

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