The Matter of Decision-Making Control Over Operation Processes of Marine Power Plant Systems with the Use of their Models in the form of Semi-Markov Decision-Making Processes

The article presents the possibility to control the real operation process of an arbitrary device installed in the marine power plant based on the four-state semi-Markov process, being the model of the process, which describes the transition process of operational states of the device (ek, k = 1, 2, 3, 4), and the transition process of its technical states (sl, l = 1, 2, 3). The operational states ek (k = 1, 2, 3, 4) have the following interpretation: e1 – active operation state resulting from the task performed by the device, e2 – state of ready-to-operate stop of the device, e3 – state of planned preventive service of the device, e4 – state of unplanned service of the device, forced by its damage. Whereas the interpretation of the technical states sl (l = 1, 2, 3) is as follows: s1 – state of full serviceability of the device, s2 – state of partial serviceability of the device, and s3 – state of unserviceability of the device. All these states are precisely defined for the ship main engine (SG). A hypothesis is proposed which justifies the use of this model to examine real state transitions in marine power plant device operation processes. The article shows the possibility to make operating decisions ensuring a rational course of the device operation process when the proposed model of this process and the dynamic programming method based on the Bellman’s principle of optimality are applied. The optimisation criterion adopted when making operating decisions is the expected profit to be gained as a result of functioning of the device in the time interval [τ0, τm], being the sum of the expected profit gained in interval [τ0, τ1] and to be gained in interval [τ1, τm].

Policy Forum: Independent Platform Costing—Balancing the Interests of the Public and Parties

This article provides an evaluation of the design of independent election platform costing in Canada, as established by the Parliament of Canada Act and the operating decisions of the parliamentary budget officer. The author compares the balance struck between serving the interests of the public and the interests of political parties in Canada with the balance struck in the Netherlands and Australia. Although Canada's legislation is tilted in favour of serving political parties, in practice the costing culture that evolved during the 2019 general election raised the level of debate and produced an amount of information comparable to what would be expected of a service designed to favour the public. The article concludes with a discussion of options for expanding the policy-costing service for future elections.

The Effect of Increased Audit Disclosure on Managers' Real Operating Decisions: Evidence from Disclosing Critical Audit Matters

We investigate whether and how a "critical audit matter" (CAM) disclosure affects managers' real operating decisions in two contexts (issuing a loan that decreases versus increases the average risk profile of loan portfolios, or choosing to hedge versus speculate on commodity risk). We expect a CAM disclosure increases disclosure costs and implies expanded auditor support for both types of activities, but we expect implied auditor support to be valued more highly for risk-increasing than for risk-decreasing activities. As a result, we predict that a CAM disclosure decreases managers' risk-decreasing activities (due to increased disclosure costs) more than managers' risk-increasing activities (as the implied auditor support counteracts the increased disclosure costs). We find evidence consistent with our prediction across multiple experiments. Our study sheds light on unintended consequences of a CAM disclosure and provides insight to relevant parties as the new standard goes into effect.

The Effect of Employee and Customer Religious Beliefs on Business Operating Decisions

Business operating decisions and procedures can differ depending on the religious beliefs of either employees or customers. We provide examples of religion affecting operations in the topical areas of location, layout, shift scheduling, and operational compliance, among others. These issues are especially salient for global corporations extending operations overseas utilizing expatriate management.

A Question-Based Approach to the Design of a Successful “Finance for Non-Financial Managers” Executive Education Program

Many successful non-financial managers aspire to contribute at the larger table of management decision making. To do so necessitates broadening their skills to include financial acumen. For non-financial managers, learning new financial constructs can be daunting, and knowing when to use which tool is challenging. We describe a three-questions-based approach underlying the design and delivery of our successful one-week “Financial Management for Non-Financial Executives” program at the University of Virginia’s Darden School of Business. We use a three-questions-based approach to facilitate the learning process in each of the following four financial arenas that comprise the overarching, larger financial acumen agenda. Modeling the financial effects associated with typical internal operating decision alternatives Assessing the impact of operating decisions on the financial statements produced for external constituents Assessing the impact of operating decisions on popular financial performance metrics used to compare and contrast companies Recognizing and incorporating the basic tax implications applicable to internal operating decision alternatives For each of these four financial arenas, we outline three key questions tailored for each, using one comprehensive example to illustrate the application of our questions-based approach.

Relationship-specificity and real activities manipulation

Purpose The purpose of this paper is to examine whether and how product market relationships are related to firms’ real activities manipulation (RAM), which refers to managers’ aggressive operating practices. Given the importance of suppliers’ relationship-specific investments to a firm’s competitiveness, the need for suppliers’ relationship-specific investments is expected to influence a firm’s RAM. Design/methodology/approach This paper adopts Nunn’s (2007) proxy for relationship-specificity and four proxies for RAM. It employs an ordinary least squares regression model to test whether a firm decreases RAM when it has greater need for supplier relationship-specific investments. It also uses an instrumental variable approach to address endogeneity and conducts cross-sectional analyses. Findings This study finds that, with the exception of RAM through sales manipulation, the importance of relationship-specific investments by suppliers is negatively associated with firms’ aggressive operating decisions. It also finds that the association between relationship-specificity and RAM is less pronounced for firms that have a greater market share but more pronounced for firms that are relatively young, consistent with the notion that a firm is more likely to be under pressure from its suppliers to reduce RAM when it has less competitive advantages. The results suggest that product market relationships play an important role in influencing managers’ aggressive operating decisions. Practical implications This study complements earlier work on earnings quality and has important implications for investors, regulators and other stakeholders who are concerned with corporate earnings quality. Originality/value This paper contributes to the literature on product market relationships and earnings quality and on financial reporting quality and investment efficiency.

Understanding the Effect of an E-Hailing App Subsidy War on Taxicab Operation Zones

Understanding taxicab operation behaviors under various management or market policies (i.e., subsidies) is critical to making informed operating decisions for e-hailing companies and for government surveillance. This paper investigates the change of taxicab operation zones in context of an e-hailing app subsidy war in China, which is an important perspective that reflects changes in taxicab behavior, such as how the operation zones of taxicabs under the e-hailing app subsidy war change and how this change affects their trip distance and cruising time. To investigate this issue, this paper utilizes three indexes to elucidate the change of taxicab operation zones, namely, the repetition ratio of operation zone pairs, the area, and the degree of dispersion in the spatial distribution. A case study using taxicab trajectories during all of the important periods of the e-hailing app subsidy war in Shenzhen, China, was conducted and produced several valuable findings; for example, with respect to taxicabs as a whole, the proportion of habitual operation zone pairs among operation zone pairs in neighboring periods is relatively stable under any subsidy policy, and changes in the operation zones have little effect on changes in the average daily trip distance and average daily cruising time. Four groups of taxicabs divided according to initial change patterns in the operation zones present different change patterns during the subsidy war. By comparing these changes before and after the subsidy war, this paper finds that the subsidy war influences the taxicabs in groups I and II, while it has little influence on the taxicabs in groups III and IV, although all groups were affected during the subsidy war. For the taxicab groups in the period with the highest subsidy, the average daily trip distance and average daily cruising time decreased, whereas, in other periods, they presented different patterns.

STRATEGIC MANAGEMENT OF A COMPANY UNDER THE CONDITIONS OF A CHANGING ENVIRONMENT

The functioning of enterprises in the changing environment is exposed to high risks. Ability to respond appropriately to changes is associated with the need to develop the right strategy. Managing a business is a big challenge for managers. Distinguishing strategic and operating decisions is a crucial element of planning and organising activity. Define objectives and indicators depicting their implementation is the basis for strategic management. These problems are discussed in this article.