The use of marketing and financial metrics in Japanese firms

ABSTRACT On November 4, 2011, Groupon Inc. went public with an initial market capitalization of $13 billion. The business was formed a couple of years earlier as an offshoot of “The Point.” The business grew rapidly and increased its reported revenue from $14.5 million in 2009 to $1.6 billion in 2011. Soon after going public, prior to its announcement of its first-quarter results, the company's auditors required Groupon to disclose a material weakness in its internal controls over financial reporting that impacted its disclosures on revenue and its estimation of returns. This case uses Groupon to motivate discussion of financial reporting issues in e-commerce businesses. Specifically, the case focuses on (1) revenue recognition practices for “agency” type e-commerce businesses, (2) accounting for sales with a right of return for new products, and (3) use of alternative financial metrics to better convey the intrinsic value of a business. The case requires students to critically read, analyze, and apply authoritative accounting guidance, and to read and analyze communications between the Securities and Exchange Commission (SEC) and the registrant.

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Why do state-owned utilities become subject to financial logics? The case of energy distribution in Flanders

Competition & Change ◽

10.1177/10245294211025948 ◽

2021 ◽

pp. 102452942110259

Author(s):

Laura Deruytter ◽

Griet Juwet ◽

David Bassens

Keyword(s):

Investment Fund ◽

Market Making ◽

Chinese Investment ◽

Causal Mechanisms ◽

Financial Metrics ◽

Return On Capital ◽

Owned Company ◽

Financial Equity ◽

Energy Grid ◽

Regulatory Models

According to political economists, the state’s governance of infrastructure is becoming prone to processes of financialization. To date, however, research on how state owners of infrastructure enable and react to the entry of financial logics into such domains remains limited. This paper mobilizes the case of Eandis, a Flemish energy grid company, as a typical case to examine the causal mechanisms involved when state-owned utilities become subject to financial logics. During the 2000s, Flemish municipalities increased their ownership of Eandis, while the company deepened its debt exposure to optimize return on capital. In 2016, Eandis aimed to attract private financial equity and selected a Chinese investment fund as a potential co-shareholder. Although this buy-in was blocked, the conditions under which the state-owned company became increasingly entangled with financial markets remain unchanged and warrant a deeper examination. To explain this trajectory, we identify two causal mechanisms in the fields of market-making and ownership strategies by the multiscalar state. First, we show how regulatory models caused Eandis to focus on financial metrics such as credit ratings, subjecting management to financial market disciplines. Second, we find that budgetary constraints, combined with top-down utility governance, have made municipalities dependent on financial returns on utilities. The interaction between market-making and financial ownership strategies institutionalizes a financialized gridlock, in which municipal shareholders’ interests conflict with the need for low consumer fees and green grid investment. We argue that reforming the regulatory framework and strengthening fiscal solidarity across state layers would allow states to develop non-financialized strategies.

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The hollowing out of the workforce: what potential for organisational learning?

Human Systems Management ◽

10.3233/hsm-2001-20104 ◽

2001 ◽

Vol 20 (1) ◽

pp. 7-18

Author(s):

John Kidd ◽

Frank-Jürgen Richter

Keyword(s):

Enterprise Resource Planning ◽

Middle Management ◽

Resource Planning ◽

Organisational Learning ◽

Human Resource Managers ◽

Joint Effort ◽

Strategic Networks ◽

Japanese Firms ◽

Resource Managers ◽

Strategic Networking

The study of organisational networking has suggested that a joint effort applied to some task is often to the advantage of both parties. Recent studies have indicated that many strategic networks of Japanese firms have been both strategic and also permeable – to the extent that each firm takes on some of the characteristics of the other in order to fulfil a task. However the emergent characteristic of ‘downsizing’, which hit the Western firms a decade ago, has now moved to Japan where their reluctant human resource managers have begun to ‘hollow out’ their workforce – and much of the effect falls upon the middle management cadre. In turn we are seeing in Europe, across the Japanese production subsidiaries, that they have embraced the precepts of Enterprise Resource Planning (ERP) in the form of applications programmes promoted by SAP, Oracle, Baan, PeopleSoft and others – so as to be better informed of the data in their pan-European enterprise. Our thesis is that the effects of the hollowing out needs to be very carefully managed in both the single enterprise and between multi-enterprises. And the implementation of ERP needs precise management in multi-national firms in general, and Japanese firms in particular, if they are to engage in strategic networking with any degree of permeability – since they will have little resultant organisational slack to generate new organisational learning.

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