scholarly journals Performance Measures and Intra-Firm Spillovers: Theory and Evidence

2017 ◽  
Vol 30 (3) ◽  
pp. 117-144 ◽  
Author(s):  
Jan Bouwens ◽  
Christian Hofmann ◽  
Laurence van Lent
Keyword(s):  
Performance Measures ◽  
Interaction Effect ◽  
The Other ◽  
Business Unit ◽  
Net Income ◽  
Business Units ◽  
Jel Classifications

ABSTRACT We revisit the question of how performance measures are used to evaluate business unit managers in response to intra-firm spillovers. Specifically, we are interested in variation in the relative incentive weightings of aggregated “above-level” measures (e.g., firm-wide net income), “own-level” business unit measures (e.g., business unit profit), and specific “below-level” measures (e.g., R&D expenses) in response to spillover arising from either the focal unit's effect on other business units or the other units' effect on the focal unit. Our theory highlights complementarity between above- and below-level measures and the existence of an interaction between the two directions of spillovers. Based on a survey of 122 business unit managers, we report evidence consistent with an interaction effect and with complementarity between above- and below-level measures. In particular, we show that firms increase the weighting on both above- and below-level measures when they are coping simultaneously with high levels of spillovers on other units and spillovers from other units. JEL Classifications: D23; L22; M12; M4.

Responsibility Centers, Decision Rights, and Synergies

2019 ◽  
Vol 95 (2) ◽  
pp. 1-29 ◽  
Author(s):  
Tim Baldenius ◽  
Beatrice Michaeli
Keyword(s):  
Optimal Allocation ◽  
Incentive Contracts ◽  
The Other ◽  
Risk Averse ◽  
Business Unit ◽  
Decision Rights ◽  
Specific Investments ◽  
Lumpy Investments ◽  
Allocation Of Decision Rights ◽  
Jel Classifications

ABSTRACT We consider the optimal allocation of decision rights over noncontractible specific investments. Risk-averse business unit managers each engage in general (stand-alone) operations and invest in joint projects that benefit their own and other divisions. Which of the managers should have the authority to choose these investments? With scalable investments, we show that decision rights should be bundled in the hands of the manager facing the more volatile environment. With discrete (lumpy) investments, on the other hand, decision rights should be split between the managers, provided they face comparable levels of uncertainty in their general operations. Splitting decision rights better leverages the inherent investment complementarity, counter to conventional wisdom. Our model generates empirical predictions for the equilibrium association of organizational structure and managers' incentive contracts: bundling of decision rights results in pay-performance sensitivity (PPS) divergence across divisions; splitting them results in PPS convergence. JEL Classifications: M41; D23; D86.

Interim Performance Measures and Private Information

2013 ◽  
Vol 88 (5) ◽  
pp. 1683-1714 ◽  
Author(s):  
Christian Hofmann ◽  
Naomi R. Rothenberg
Keyword(s):  
Performance Measures ◽  
Private Information ◽  
Performance Measure ◽  
The Other ◽  
Trade Off ◽  
Jel Classifications ◽  
Forward Looking

ABSTRACT: This study investigates whether having an upstream or downstream agent privately observe an interim performance measure and disseminating this measure to the other agent is valuable to the principal. The signal is informative about the upstream agent's action and positively correlated with output. If the upstream agent privately observes the signal, then there can be a higher cost of the downstream agent if the signal is sufficiently forward-looking. If the downstream agent privately observes the signal, then the trade-off involves rents to the downstream agent versus a reduced cost for the upstream agent. Private observation of an interim signal is valuable to the principal if it is not too forward-looking. The choice between upstream and downstream agent depends nontrivially on the signal's backward-looking quality. The results suggest that the value of observation and dissemination of an interim signal depends on the informativeness of output and the signal about upstream and downstream production. JEL Classifications: D82, D83, L20, M40.

scholarly journals Two Factors in Face Recognition: Whether You Know the Person’s Face and Whether You Share the Person’s Race

Perception ◽  
2021 ◽  
pp. 030100662110140
Author(s):  
Xingchen Zhou ◽  
A. M. Burton ◽  
Rob Jenkins
Keyword(s):  
Face Recognition ◽  
Factorial Design ◽  
Performance Measures ◽  
Recognition Accuracy ◽  
The Other ◽  
Familiarity Effect ◽  
Race Effect ◽  
Two Factors ◽  
Unfamiliar Face

One of the best-known phenomena in face recognition is the other-race effect, the observation that own-race faces are better remembered than other-race faces. However, previous studies have not put the magnitude of other-race effect in the context of other influences on face recognition. Here, we compared the effects of (a) a race manipulation (own-race/other-race face) and (b) a familiarity manipulation (familiar/unfamiliar face) in a 2 × 2 factorial design. We found that the familiarity effect was several times larger than the race effect in all performance measures. However, participants expected race to have a larger effect on others than it actually did. Face recognition accuracy depends much more on whether you know the person’s face than whether you share the same race.

The Effects of Online Assignments and Weekly Deadlines on Student Outcomes in a Macroeconomics Course

2020 ◽  
pp. 056943452096825
Author(s):  
Laurie A. Miller ◽  
James R. Schmidt
Keyword(s):  
Student Retention ◽  
Adaptive Learning ◽  
Student Outcomes ◽  
Knowledge Retention ◽  
The Other ◽  
Student Knowledge ◽  
Final Exam ◽  
Online Assignments ◽  
Positive Effect ◽  
Jel Classifications

This study examined how weekly, externally set deadlines affected the completion of adaptive learning assignments and student outcomes in an introductory macroeconomics course. We imposed different deadline schemes for the same adaptive learning assignments in two sections of the course. One section was given flexible deadlines and the other section was given rigid weekly deadlines. We found that weekly deadlines did not affect assignment completions or total points earned on unit exams. We investigated how the adaptive learning assignments affected student retention of material. A measure of staying on pace in the course provided a positive effect on the comprehensive final exam for students with weekly deadlines. The weekly deadlines may not have influenced assignment completions but consistent engagement with the flow of topics through the course increased student knowledge retention. Regardless of deadline type, completions of adaptive learning assignments positively affected outcomes on the unit exams and final exam. JEL Classifications: A20, A22

scholarly journals Optimized Traffic Grooming through modified PSO based Iterative Hungarian algorithm in Optical Networks

2021 ◽  
Vol 50 (3) ◽  
pp. 546-557
Author(s):  
J. KUMARNATH ◽  
K. BATRI
Keyword(s):  
Performance Analysis ◽  
Optical Networks ◽  
Performance Measures ◽  
Shortest Path ◽  
Optical Network ◽  
Traffic Grooming ◽  
Pso Algorithm ◽  
Propagation Delay ◽  
The Other ◽  
Modified Pso

Due to huge size of the data and quick transmission of data between the nodes present in the optical network, a condition of network traffic is created among the nodes of the network. This issue of traffic can be overcome by employing numerous traffic grooming techniques. In this research paper, the best suitable shortest path is determined by the multi objective modified PSO algorithm and an innovative visibility graph based Iterative Hungarian Traffic grooming algorithm is implemented to reduce the blocking ratio through improving the allocation of bandwidth between the users. Then finally the performance analysis is carried out by means of performance measures such as traffic throughput, transceivers count, average propagation delay, blocking ratio, and success ratio. It can be inferred that the proposed work obtains enhanced outcomes when compared to the other existing techniques.

scholarly journals PENGARUH MENGIKUTI UNIT BISNIS TERHADAP PENINGKATAN KETERAMPILAN DAN MOTIVASI BERWIRAUSAHA PADA SANTRI

2020 ◽  
Vol 1 (01) ◽  
Author(s):  
Deni Anggrayani ◽  
Ari Susanto ◽  
Safiruddin Al Baqi
Keyword(s):  
Extracurricular Activities ◽  
Education System ◽  
Business Students ◽  
Boarding School ◽  
Holistic Education ◽  
Business Unit ◽  
Academic Skill ◽  
Religious Knowledge ◽  
Senior Student ◽  
Business Units

As education systems, Islamic boarding school has several advantages such as teaching religious knowledge, science and various extracurricular activities. Modern Islamic Boarding School of Darussalam GontorInodonesia is a boarding school that has a holistic education system, which is not only educate the academic skill but also educate students in developing entrepreneurship skills. This study aims to determine the effect of joining the business unit to the motivation and ability of entrepreneurship among students. This research used ethnography method with interviews and observations in business units in Darussalam Gontor. The results of this study indicate that Darussalam Gontoris a boarding school which implements 24-hour education system with various activities, such as praying togather, muajjah, learning in class, sports, mahkamatullughohand others. Differences of Darussalam Gontor with other boarding school is because Darussalam Gontor requires senior student to be responsible for business unit, such as Darussalam Press, Wisma Darussalam, La Tansa bookstore and other units. Result of this study shows that after joining the business unit, students become more motivated to develop their own business. Students also get enough knowledge to start a business or become an entrepreneur. The data showed that many alumni who have success become entrepreneurs. The entrepreneur character is heavily influenced by the role of alumni as a student of Darussalam Gontor. The alumni's businesses include production of songkok, ice cream, bookstore, travel agent, garment businessman and others. Keywords: Business unit, education system, entrepreneurship, Islamic boarding school, Islamic education

Analysis of the M x/G/1 queue by N-policy and multiple vacations

1994 ◽  
Vol 31 (02) ◽  
pp. 476-496
Author(s):  
Ho Woo Lee ◽  
Soon Seok Lee ◽  
Jeong Ok Park ◽  
K. C. Chae
Keyword(s):  
Performance Measures ◽  
Queue Length ◽  
Time Distribution ◽  
Queueing System ◽  
Random Variables ◽  
System Size ◽  
The Other ◽  
Waiting Time Distribution ◽  
Multiple Vacations ◽  
Linear Cost

We consider an Mx /G/1 queueing system with N-policy and multiple vacations. As soon as the system empties, the server leaves for a vacation of random length V. When he returns, if the queue length is greater than or equal to a predetermined value N(threshold), the server immediately begins to serve the customers. If he finds less than N customers, he leaves for another vacation and so on until he finally finds at least N customers. We obtain the system size distribution and show that the system size decomposes into three random variables one of which is the system size of ordinary Mx /G/1 queue. The interpretation of the other random variables will be provided. We also derive the queue waiting time distribution and other performance measures. Finally we derive a condition under which the optimal stationary operating policy is achieved under a linear cost structure.

Driving Performance in the Retail and Banking Industries: The Consequences of Dysfunctional Management Control Systems at W. T. Grant and Wells Fargo

2020 ◽  
Author(s):  
Allyson A. Heitger ◽  
Dan L. Heitger ◽  
Lester E Heitger
Keyword(s):  
Control System ◽  
Control Systems ◽  
Performance Measures ◽  
Driving Performance ◽  
Management Control ◽  
The Other ◽  
Management Control Systems ◽  
Managerial Accounting ◽  
Management Control System ◽  
Strategy Performance

Management control systems-strategy, performance measures, and incentives-play a vitally important role in the success or failure of organizations. As such, management control systems represent one of the foundational topics in managerial accounting. However, as the case illustrates, developing, implementing, and continuously enhancing a management control system to be effective often proves very challenging. Therefore, the case develops students' ability to critically assess the interrelationships between these three management control system elements. In particular, students are immersed into two dysfunctional management control systems-one at W. T. Grant in the 1970s and the other at Wells Fargo in the 2010s-to highlight the complexities, challenges, and power of such systems to elicit both positive and negative behavioral and decision impacts on employees, customers, regulators and, ultimately, shareholders. In so doing, the case also increases students' interest in studying managerial accounting, as well as their realization of its importance to an organization's success or failure.

The Trend in Firm Profitability and the Cross-Section of Stock Returns

2017 ◽  
Vol 92 (5) ◽  
pp. 1-32 ◽  
Author(s):  
Ferhat Akbas ◽  
Chao Jiang ◽  
Paul D. Koch
Keyword(s):  
Risk Factors ◽  
Stock Returns ◽  
Cross Section ◽  
The Other ◽  
Analyst Forecast ◽  
Forecast Errors ◽  
Earnings Surprise ◽  
Firm Profitability ◽  
Earnings Momentum ◽  
Jel Classifications

ABSTRACT This study shows that the recent trajectory of a firm's profits predicts future profitability and stock returns. The predictive information contained in the trend of profitability is not subsumed by the level of profitability, earnings momentum, or other well-known determinants of stock returns. The profit trend also predicts the earnings surprise one quarter later, and analyst forecast errors over the following 12 months, suggesting that sophisticated investors underreact to the information in the profit trend. On the other hand, we find no evidence of investor overreaction, and our results cannot be explained by well-known risk factors. JEL Classifications: G12; G14.

scholarly journals Valuation of firms with multiple business units

2020 ◽  
Author(s):  
Stefan Dierkes ◽  
Ulrich Schäfer
Keyword(s):  
Firm Value ◽  
Large Scale ◽  
Simulation Analysis ◽  
Cash Flows ◽  
Driver Model ◽  
Business Unit ◽  
Growth Strategies ◽  
Business Units ◽  
The Cost ◽  
Constant Growth

Abstract Corporate valuation often relies on the assumption of a constant and homogenous growth rate. However, large firms frequently (re)balance their activities by diverting cash flows from some business units to fund investments in other units. We develop a value driver model of terminal value for a firm with two units. The model relaxes common assumptions and allows for cross-unit differences in the return on invested capital. We consider intra-unit and cross-unit investments and show their implications for firm value and the long-term development of key accounting variables. Our results help characterize business unit strategies that can be reconciled with popular firm strategies such as the constant payout and constant growth strategies. We find that popular valuation methods that assume both constant payout ratios and constant growth rates (e.g., Gordon and Shapiro, Manage Sci 3:102–110, 1956) constitute a restrictive special case of our model and should only be applied to firms with homogenous business units. We use a simulation analysis to compare our results with alternative valuation models and to illustrate the economic relevance of our findings. The simulation shows that an accurate depiction of business unit strategy is particularly useful if firms plan large-scale cross-unit investments into business units with high returns and if the cost of capital is low.

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