Investigating the Effectiveness of Received Offline Word of Mouth: Role of Acquired and Ascribed Homophily

This research examines how similarities in educational and ethnic backgrounds (status homophily), between word of mouth (WOM) participants, influences the effectiveness of received offline WOM on the recipient’s behavioural intentions. The educational similarity between individuals is conceptualized as acquired homophily, whereas ethnic similarity is defined as ascribed homophily. This study employs scenario-based experiments, and the results suggest that positive and negative WOM received from homophilous sources is more effective in influencing the recipient’s purchase and WOM re-transmission intentions than recommendations received from heterophilous sources. This research expands the literature about offline WOM and the multidimensional status-homophily construct by providing insights on the differential influence of positive and negative recommendations received from WOM sources similar or dissimilar to the WOM recipients in terms of their educational and ethnic backgrounds. This is important from both the theoretical and practitioner perspective as the recent focus of scholarly research is on understanding the relationship between online homophily and e-WOM at the expense of offline WOM-homophily relationship.

Human resources management practice, job satisfaction and affective organisational commitment relationships: The effects of ethnic similarity and difference

Orientation: The study explored how ethnicity affects the expected relationships among human resources management practice (HRMP), job satisfaction and affective organisational commitment.Research purpose: To establish how ethnicity affects the interpretation of organisationally provided HRMP, and how this interpretation affects the relationships among the study variables.Motivation for the study: Interest has moved from HRMP outcomes to how employees attribute meaning to existing HRMP. Hence, there is a need to study the variables that affect the attribution process and their effects on the effectiveness of HRMP.Research approach/design and method: The study was quantitative and utilised cross-sectional research design. Participants consisted of 450 employees from eight organisations in Nigeria.Main findings: Results indicated that HRMP is positively related to job satisfaction and organisational commitment, and ethnicity is negatively related to job satisfaction and organisational commitment. Ethnicity moderated the relationships among HRMP, job satisfaction and organisational commitment.Practical/managerial implications: Ethnicity affected the relationships among HRMP, job satisfaction and affective organisational commitment; hence, organisations may not be deriving the full anticipated benefits of HRMP. It was suggested that organisations should train managers to adopt positive behaviours that would enhance the management of ethnic diversity and reduce the negative effects of ethnicity.Contribution/value-add: Ethnic similarity has cultural significance in Nigeria and is known to affect managers’ and employees’ behaviour and the sharing of organisational benefits in the workplace. However, studies involving its role in HRMP attribution process are lacking. Hence, this study makes a valuable contribution to how ethnicity affects attribution in HRMP studies.

Client and audit partner ethnicity and auditor-client alignment

PurposeThe purpose of this study is to examine the role of ethnic similarity in the audit partner–client manager relationship and its impact on auditor selection and retention decisions.Design/methodology/approachThe authors use name matching analysis to infer ethnicity of audit partners and client managers in the US nonprofit reporting environment. The authors examine the degree of ethnic similarity (co-ethnicity) between the two parties and model auditor selection and retention decisions as a function of co-ethnicity. The authors also model reporting attributes as a function of co-ethnicity.FindingsThe authors find that the ethnic similarity between the client manager and their external audit partner is a significant determinant of auditor-client alignment. Specifically, the authors find that clients are more likely to select and retain an audit partner who is ethnically similar to the client manager. The authors find that co-ethnicity is associated with a lowered propensity to issue a going concern opinion to a financially distressed client and an increased occurrence of underreporting of fundraising and administrative expenses.Research limitations/implicationsTaken together, the evidence suggests that ethnic diversity (the opposite of co-ethnicity) in the auditor-client relationship is associated with higher audit quality. These findings are relevant to client managers, audit committees and public accounting firms as they make auditor selection and reporting decisions.Originality/valuePrior studies have found that co-ethnicity influences the formation and future success of various business partnerships. The auditor-client relationship is a unique setting within the business environment where the two parties must balance their desire to maintain a close relationship with their need to maintain independence. The study is the first to examine the role of ethnicity in the auditor-client relationship.