Faculty Publication Summaries
Maria Roxas, Ph.D.
2012 School of Business Faculty Research Gold Award
Roxas, Maria. (2011). Financial statement fraud detection using ratio and digital analysis. The Journal of Leadership, Accountability and Ethics. 8(4): 56-66
Financial statement fraud has had the most significant monetary impact for companies as compared with other categories of fraud. Over half of financial statement fraud has been committed through improper revenue recognition, and a major motivation for financial statement fraud is earnings management. When companies intentionally violate generally accepted accounting principles (GAAP) through earnings manipulation, it is considered fraudulent financial reporting. There are three main reasons why management manipulates earnings: debt obligations, executive bonuses, and meeting stock analysts’ expectations. Detecting earnings manipulation is important because earnings management adversely affects the economic decisions of external users of the financial statements: investors and creditors. In contrast to other categories of fraud, financial statement fraud does not necessarily involve the removal of cash. This does not necessarily mean that this type of fraud is any less harmful than others, as illustrated by the high profile fraudulent activities of Enron, WorldCom, and so on.
The purpose of this study was to analyze whether two analytical procedures described in fraud examination textbooks correctly identify known earnings manipulators. The effectiveness of ratio analysis and digital analysis was evaluated using the financial statements of companies identified by the SEC as having revenue recognition problems. Beneish’s probit model was used for the ratio analysis and Benfield’s law was used for digital analysis. Beneish’s model identified more earnings manipulators than Benford’s law.
Although neither method identified all of the earnings manipulators, these tools are easy to use and interpret and can be used to quickly identify companies that might need further investigation. Knowledge of the company, its management/employees, internal control procedures, and the environment will also be necessary for determining whether financial statement fraud is taking place. This study demonstrates to students and professionals that financial statement fraud can be detected using the tools described in fraud examination textbooks and manuals.
Kwangsoo Kevin Lim, Ph.D.
Associate Professor, Accounting
2012 School of Business Faculty Research Silver Award
Lim, Kwangsoo (2012). Value-Relevance of Bank Regulatory Capital, Accounting Capital, and Market Capital at the Time of Financial Distress. Journal of Global Business and Development
The adequacy or inadequacy of bank capital dramatically affects the global economy, as shown in the 2008 financial crisis and 2011 European sovereign debt crisis. The survival of a bank largely depends on maintaining the minimum requirement of regulatory capital. This study is motivated by how regulatory capital differs from accounting and market capital, and the purpose is to investigate the value relevance of bank regulatory capital vis-à-vis accounting capital and market capital to the returns of commercial banks.
The study results indicate that accounting or market capital is as value-relevant to the returns of commercial banks’ common stock as the regulatory capital measured as Tier 1 or 2 capital by international regulatory standards. This study also finds that the value relevance of the capital of bigger banks is significantly greater than that of smaller banks, and the value relevance of capital at the time of a recession is significantly greater than it is during the post-recession period. The policy implication for bank regulation is a call for shifting the measurement of regulatory capital from a criteria-based measurement to a market- or accounting-based measurement.
Zakri Bello, Ph.D.
Associate Professor, Finance
Bello, Z. (2011). The effects of portfolio concentration on investment performance of actively managed domestic equity mutual funds, 1990 to 2010. Global Journal of International Business Research, 4(4), 34-47.
In this paper, I investigated the relation between portfolio concentration and the investment performance of 940 domestic equity mutual funds from 1990 to 2010, focusing on both the percentage of the fund’s portfolio invested in its top-ten holdings (TOPTEN) and its number of portfolio holdings (as alternative measure of portfolio concentration). When sorting the data on the TOPTEN, I found that the less concentrated (i.e., the more diversified) the fund was, the larger its net assets and number of holdings, on average, and the better the fund’s investment performance, which is suggestive of economies of scale in mutual fund operations. This suggests that portfolio concentration negatively affects investment performance. However, when I resorted the data on the number of portfolio holdings, instead of the TOPTEN, I found the opposite results. That is, portfolio concentration had a positive effect on investment performance. Therefore, I investigated the joint effect of the TOPTEN and number of holdings on investment performance and found that the less concentrated portfolios (those with larger holdings) outperformed portfolios that were more concentrated (those with a smaller number of holdings). I concluded that portfolio concentration is in fact not beneficial, which is evident only when the TOPTEN is used with the number of securities held, as joint measures of portfolio concentration.
Bello, Z. (2011). The Performance Of An Equity Mutual Funds During Bull and Bear Markets. Global Journal of Finance and Banking Issues, 5(5), 13 - 26.
In my second paper, I used three measures of portfolio performance to investigate 2,978 domestic equity mutual funds from February 1990 to January 2010. I found that the average mutual fund outperformed the stock market (as represented by the S&P 500 Index) during the study period. The three measures of portfolio performance independently provided the same results, thus reinforcing one another. I then separated the sample into two periods marked by extreme stock market volatility. The period from January 2003 to September 2007 was marked by excessive investor exuberance and the stock market rose substantially. The period from October 2007 to January 2010, however, was marked by extreme pessimism on the part of investors and the stock market declined considerably. Investment performance for the October 2007 to January 2010 period was substantially worse than that for the January 2003 to September 2007 period, as indicated by the funds’ excess returns. However, when portfolio performance was adjusted for market risk, the period from October 2007 to January 2010 unexpectedly turned out to be remarkably better irrespective of the size of the fund under management. Moreover, in each of the two sub-periods and for the sample as a whole, performance improved significantly with the size of the funds’ assets under management, suggesting that economies of scale indeed exist in mutual fund operations.
Steven Cavaleri, Ph.D.
Professor, Management & Organization
Cavaleri, S. (2011). Toward a More Pragmatic Knowledge Management: Toyota's Experiences in Advancing Innovation. In Farley Simon Nobre, David Walker, and Robert Harris (Ed.), Technological, Managerial, and Organizational Core Competencies: Dynamic Innovation and Sustainable Advantage(pp. 327-346). Hershey, PA: IGI Global - IDEA Group.
Managers often adopt unduly limited methods with a focus on technology rather than focusing on improvement and innovation processes. Toyota has avoided falling into this narrow trap by creating a unique business strategy, as its system is rooted in the principles of the scientific method of analysis. In this chapter, I described how Toyota has used this strategy to achieve superior results. Today, Toyota has achieved the holy grail of business: lower costs, superior quality, and world-class innovation.
From a broader perspective, this approach can be seen as employing an alternate paradigm for innovation. It suggests a strategy based on the logic of scientific reasoning that spurs innovation by radically improving the quality of knowledge held by an organization’s members. This is based on the principle holding that reliably effective actions can only come from high-quality knowledge.
The originator of this perspective was an American scientist, Charles Peirce, who proposed that when we act pragmatically to solve problems we must first imagine how the effects of our actions will change the problem. Next, we must learn how to change our mind to appreciate the effects of these changes. Toyota’s managers learned about this approach from total quality management (TQM) guru W. Edwards Deming.
Integrating these principles into its improvement processes enables Toyota to operate more scientifically. Steve Spear, an MIT scholar, argues that at Toyota, “Problem solving is done in a disciplined fashion. Assumptions about cause and effect are made explicit and stated clearly, then they are tested in rigorous fashion so improvement efforts both make processes better and deepen process knowledge.”
Kuan-Pin Chiang, PhD
Associate Professor, Marketing
Chiang, K.P., Jackson, A. Consumer Vulnerability in the Context of Direct-to-Consumer Prescription Drug Advertising. International Journal of Healthcare Management.
Despite the rapid growth of Direct-to-Consumer Advertising (DTCA) and more than a decade of DTCA along with repeated calls in the literature for more consumer-oriented DTCA research, the effects of DTCA on consumer attitudes, intentions, and behaviors are still inconclusive. The explosion in DTCA is fueling the trend toward better-informed consumers, and the argument for using DTCA is that the information in ads has an educational benefit. This view considers only ordinary or normal consumers and gives little attention to vulnerable consumers, or those who may be susceptible or disadvantaged. Vulnerable consumers fail to understand their own preferences and/or lack the knowledge, skills, or freedom to act on them. In this study, we identified conditions and groups considered to be vulnerable.
Health illiteracy applies to many of the vulnerable groups identified in this study and poses a threat to their health and wellbeing. As nearly half of the population has difficulty understanding and using health information, they represent a large vulnerable group. The elderly population represents a large potentially vulnerable group, with nearly two third of them being health illiterate. The idea of health illiteracy affects those who are from non-English speaking countries or are poorly educated.
Because the size of the population deemed as health illiterate is almost half of the population in the United States, it becomes necessary to protect these consumers even though they may be unaware that DTCA is affecting them. In the intricate and continuing public policy debates stemming from the rapid growth of DTCA, our inquiry adds a unique perspective and opens a dialogue to address this concern. If the intent of DTCA policy is to increase awareness and promote consumer wellbeing, it is important that regulatory changes be guided by further studies that comprehensively address all concerns.
Monique O. Durant, JD, CPA, LLM
Associate Professor, Accounting
Durant, M. (2011). The Changing Landscape of Conservation Easements. The Tax Advisor.
On December 17, 2010, the President signed the 2010 Tax Relief Act into law. This act provided, among other things, the retroactive two-year extension (for tax years beginning after December 31, 2009, and before January 1, 2012) of enhanced incentives for the contribution of appreciated real property for conservation purposes, otherwise known as “conservation easements.”
This article discusses the requirements that a contribution of a conservation easement must meet to be a qualified conservation contribution (which therefore allows the landowner a charitable contribution deduction for federal and state income tax purposes), how the amount of the contribution deduction is determined, and the appraisal and substantiation requirements for taking the deduction.
Substantial confusion exists among practitioners and landowners alike, regarding the federal tax law on conservation easements, due to the following:
- Recently enhanced substantiation requirements of conservation easements,
- Heighted IRS scrutiny of compliance and easement valuations,
- Recent court cases on the subject; and
- Proposed changes to the federal income tax regulations which would increase qualified appraisal standards, raise the education and experience requirements to be considered a qualified appraiser, and increase valuation misstatement penalties.
At the same time, enhanced federal tax incentives provide that a taxpayer’s qualified conservation contribution deduction is permitted up to the excess of 50% of the taxpayer’s contribution base (100% for qualified farmers and ranchers) over the amount of all other charitable contributions, with a 15-year carryover period of such contributions in excess of the applicable limitation.
This article contains a comprehensive study of the current and prospective status of conservation easements, along with advice to practitioners and landowners in implementing a conservation easement which will successfully defend against IRS scrutiny.
The published article contains 8,563 words with an online appendix of over 3,000 words containing briefs of recent landmark court decisions.
Joseph Farhat, PhD
Associate Professor, Finance
Cotei, C., Farhat, J., Miranda, M. (in press). The Information and Wealth Effects of Earnings Surprises in the U.S. Insurance Industry. Journal of Insurance Issues.
This article examines the role of information asymmetry on insurer price adjustments in response to earnings surprises and the effects of competing measures of earnings surprises on the value of insurers during the 1998-2007 period. Using the surprise portfolio approach, we find that investors in insurance stocks react to "street earnings" rather than accounting earnings. Our results support the differential information hypothesis, which states that smaller insurers, those with higher residuals in daily stock returns, and those followed by fewer analysts convey more information to market participants, generating higher cumulative abnormal returns in response to earnings surprises. In addition, we find that property-casualty insurers with lower asset transparency and life-health insurers with extensive use of reinsurance have more informative earnings announcements.
Cotei, C., Farhat, J. (2010). An Application of the Two-Stage Bivariate Probit-Tobit Model to Corporate Financing Decisions. Review of Quantitative Finance and Accounting.
In this second article, we model the firms as making two separate, but not necessarily independent, decisions. Thus, a firm may issue either debt, equity, or a combination of the two. Using a two-stage bivariate probit–tobit model, the first stage examines the factors affecting the firms’ choice of the form of financing (repurchase) using a bivariate probit model. The second stage simultaneously examines the factors that affect the size of issue (repurchase) given that the firm decides to use a particular form of financing (repurchase). The results show that factors that affect the choice of financing (repurchasing) form and the size of issue (repurchase) support the notion that the trade-off and pecking order theory are not mutually exclusive.
David Fearon, PhD
Professor, Management & Organization
Fearon, D., Cavaleri, S. (2006). Inside Knowledge: Rediscovering the Source of Performance Improvement. Quality Press of the American Society for Quality
This book I co-authored with CCSU colleague Steven Cavaleri deepened my instruction in the Peircean philosophy of pragmatism. Quoting this summarized paper, “Charles Peirce, widely considered as America’s greatest philosopher, had a simple vision of possibilities. He married the principles of scientific inquiry with philosophy’s precepts to envision a framework capable of guiding people and intelligent systems toward more effective action based on knowledge and sound reasoning.” The main thread in my writings, teaching, and community engagement (EDGE and reSET) is that efficacy at the point of action is our goal for management learners, or that “…all members are enjoined in this managerial work – that of continually improving the performance of their organization from every possible vantage point and level of situational awareness.” Accordingly, my students engage in actual managerial work to master the subject of my courses, design for pragmatic learning that is continually improved as learners discover and apply concepts of how one knows what to do with others at critical points of action. The “rub” is static nature of conservation management thought - friction of mind sparking several years of weekly phone conversations with Steve and our Peircean expert, Fred Reed. Time so drastically, since management was framed for easily routinized organizational behavior in the eras before technology connected the globe, that what we in the field of management need is a history lesson than preparation for efficacy are the rate of internet-speed action. On this point, we first wrote this paper for the Eastern Academy of Management meeting, which was held in May 2012. Reviews ranged from extolation to damnation, but our research was not barred from the meeting. Here is the abstract:
Imagine a “barred conversation about our discipline -- management”? Barred by whom, you say? Could any topic be so inflammatory to any group on the planet so as to be disallowed as a topic of causal discussion among otherwise friendly colleagues? Surely, anything goes among inquiring management scholars. Perhaps not. What if the hegemony of the 96-year-old Henri Fayol-born roots of conventional management thinking denies admitting just how management practice has come from what the early founders of our discipline first envisioned. Even the mere questioning of basic assumptions underlying our field serves to raise a number of thorny questions, as listed below.
- Could today’s new age, one transformed by technology and cultural evolution, actually render conventional management thinking and practices ineffective?
- Have we reached the outer limits of what we have come to know as the practice of management?
- Could it be that the management educators teaching conventional thinking resist engaging in unsettling conversations with unencumbered colleagues who are prone to think differently about our discipline?
- Is management thinking based on the tenets of a list of key administrative functions (e.g., planning, organizing, command, coordination, and control) really at the root of a growing schism among various management theorists, educators, and practitioners?
- What if a dialogue ensued among mutually-respected colleagues who critically examined the body of knowledge that has come to be known as management?
This paper portrays how such an interdicted conversation might unfold in a more casual environment where people are more prone to frankly speak their minds, the local bar. We, the innocent bystander, watch as the ensuing conversation slowly unfolds. In truth, this conversation is drawn from notes of an actual two-year phone colloquy of three men with a deep interest in the art and science of management. We came together seeking refreshment by drinking liberally from the wellspring of lesser known ideas, such as philosophical pragmatism and systems theory.
My other sample demonstrates how pragmatism influences the ways in which I engage learners to be enterprising in their managerial work. It was published in the Proceedings of the 2010 Eastern Academy of Management Meeting in the Experiential Learning Association track
Fearon, D. (2010). Concept on a Stick: a simple exercise to express complex ideas. Portland, Maine: Eastern Academy of Management.
This exercise in managerial learning is emblematic of those I design for each unit of the course with the purpose of drawing the learners’ minds into the point of real-time action where efficacy is the question. The exercises are, essentially, pragmatic experiments whereby teams test hypotheses (theories of action) on the fly, seeing what comes out in fast, iterative attempts to get closer to the truth of the matter. “Concepts on a Stick” was created for students to collaborate in social learning to discover what emergent practical theories about a complex question might resemble when boiled down into a graphical representation (on a stick).
The abstract: How do you express the elegance of harmony - people working in concert, attuned to each other, agreeing, and mutually confident about their collective ability to perform to achieve a higher purpose? Put it on a stick. Alternatively, what are the intricacies of culture or the atmospherics of power? To explore this, have teams put these concepts on a stick. Playing off ventriloquist/comedian Jeff Dunham’s hilarious puppet Jose Jalapeno (“I am Jose, a chili pepper on a stick”), teams use colored pipe cleaners and dowels to render any complex OB concert - on a stick.
The set up: Peruse the index of any management or organizational behavior textbook and take note of how many concepts are covered. Hundreds. They are “covered”, but are they grasped? Are they incorporated by learners into ongoing ways of witnessing social phenomena? “So many concepts, so little time to spend on each on the fly,” we hope the students are getting it and will be able to retrieve it from memory at the point of action. To check, management educators enact standardized ways of measuring the extent of the penetration of our coverage of topical concepts. This generates somewhat objective data for assurance of learning. Tested proving of efficiencies in knowledge acquisition is not to be confused with proof of effectiveness. We know there is so much more richness that might have been tapped and absorbed than what is revealed in the patterns of test-taking. Accordingly, some management educators carve out the time to organize high-impact, engaging events, or experiential learning exercises, to place the meanings of selected concepts into the real-life stories of their learners. Exercises are used to garner deeper meanings for selected concepts around which learners may organize their own re-conceptions as products of more intensive mental activity. A key concept selected for an experiential learning exercise acts as a nexus by which learners may connect formal and personal pragmatic knowledge into a newly nuanced worldview.
The gist of the exercise: Once the pivotal concept for your unit is identified, highlighted, and defined in whatever manner you choose to present it, you proceed to “test” your learner’s grasp of its fuller meaning. Their objective is the same as yours. The learners do not yet know what they think or what others may think. They need a catalytic event to compose their minds on the role this concept (in this instance, harmony) plays in their capacity to lead and manage. Again, in this instance, the learners’ purpose in the exercise it to recognize elements of harmonizing as the brand of teamwork most likely to blend several voices (ideas) into one pleasing whole. The catalytic event is to use only the materials provided to creatively craft a simulacrum, an interpretative likeness of what comes to mind when evoking the concept _____ [fill in the blank]. Further instruction tells the learners to have serious fun while doing it. After all, we are talking about putting important ideas on a stick. It goes on to instruct the adopter on using a variety of colored pipe cleaners, with each team having a 3-inch dowel upon which to fashion a creation representing the meanings to be made of the assigned concept or problem.
The wrap-up includes the following suggested debriefing questions:
- What are some key messages to provide users of this concept about its fuller nature?
- Are there common threads running through some or all of these renderings?
- Which image(s) is most likely to stay with you as you go forward into practice?
- As you improvised the story depicted by what you put on the stick, what do you recall tapping into for ideas about the nature of this concept? From your experience? From the readings?
- Why the stick? Why not have the freedom to make this with pipe cleaners without limiting it to the constraint of the stick?
- As you grappled with this concept, were you actually using it to achieve this common purpose?
- What else do you find yourself wanting to know about this concept now that you have brought it to life, like Señor Jose Jalapeno, on a stick?
Lisa Frank, PhD
Associate Professor, Finance
Frank, L. A. C., Ghosh, C. (in press). Does Firm Governance Affect Institutional Investment? Evidence from Real Estate Investment Trusts. Applied Financial Economics.
When the interests of managers differ from those of shareholders, managers may have an incentive to take actions that benefit themselves to the shareholders’ detriment. Corporate governance efforts mitigate these agency costs, suggesting there is value added to firms with better governance. We ask whether the existence of beneficial governance mechanisms is important in determining which Real Estate Investment Trusts (REITs) attract institutional investment.
We document a preference for larger REITs, consistent with institutions seeking more liquid firms with less information asymmetry. Although managers with greater access to free cash flow may invest in non-value added projects, we find that institutions prefer to invest in REITs with greater cash flow. Furthermore, we document a preference for lower dividend payouts. These two results point to a trade-off between the agency cost reductions associated with less free cash flow and the need for REITs to retain more cash in order to take advantage of investment opportunities.
Agency theory predicts that highly leveraged firms are better governed given that the financial markets regularly assess the firm. However, we find that institutional investment is negatively related to debt. Although REITs do not realize the tax advantages of debt, they must compete in the capital markets with firms that do, making debt relatively more expensive for REITs.
Institutional investment is greater when boards of directors are busier, consistent with the extant evidence that busier boards are better monitors and provide a wider network, more expertise, and a greater commitment to their firms. We document a preference for shorter director tenures, suggesting that REIT directors may become entrenched and influenced by managers at the expense of shareholders. Institutions prefer lower levels of CEO ownership, which is associated with greater board governance and is indicative of reduced CEO influence over the board.
Frank, L. A. C., Campbell, R. D., Feng, Z. (2011). Corporate Exit Strategies: Evidence from REITs. Financial Decisions.
Real Estate Investment Trusts (REITs) are corporations that invest in real estate and enjoy favorable tax status given specific regulatory requirements. There are 200 equity REITs on the NAREIT member list of 1996, but only 135 REITs in 2006, reflecting a decline of 65 REITs. However, these numbers obscure the true degree of change in the REIT population. Of the 200 REITs appearing on the 1996 list, only 73 reappear in 2006. This means that 127 REITs, or over one half of the original 1996 population, have exited the REIT cohort. These numbers imply that the process of exiting from the REIT population has important implications for REIT management as well as for investors.
We examined this cohort of 200 REITs and found the most popular exit strategy to be public-public merger, in which a public REIT merges with a public non-REIT. We conducted regression analyses to test the likelihood of exit, and found that the most likely candidates for exit are smaller REITs with lower debt ratios, lower profit margins, and a traditional REIT structure rather than the complex UPREIT structure.
We measured returns to shareholders around the announcement of exit from the REIT population. Returns were positive for exit announcements and greatest when firms merged with private non-REIT firms or liquidated. Consistent with the existing literature, we found that shareholder returns around the announcement of exit by public-public merger were positive. We add to the literature by finding that abnormal returns from the announcements of merging private firms are very high at about 14 percent, and that returns from announcements of liquidation are in the 11 percent range. We interpret the result related to merging private firms as evidence that restrictions on operational flexibility that are part of the REIT institutional environment can outweigh the advantages of access to public capital.
Michael Gendron, PhD
Professor, Management Information Systems
Gendron, M. (2012). Business Driven Data Communications. In Robert Horan, Ashley Santora, Ashlee Bradbury, (Ed.), (1st ed., pp. 412). Upper Saddle River, New Jersey: Pearson Education Inc., publishing as Prentice Hall. bddc.gendron.info
Business Driven Data Communications was designed to address the needs of business students in an information systems program who need to learn how to motivate management in their quest for competitive advantage through technology. Many networking and telecommunications books and courses teach the technical side of these topics. However, a paradigm shift is occurring, which necessitates that students not only have a technical understanding of telecommunications but also must have business skills that allow them to convert business imperatives into technologically sound recommendations to enhance both the operational and competitive positioning of the enterprise. This book is being distributed internationally through Pearson Prentice Hall. The key assumption underpinning this book is that all technology infrastructures must support the enterprise’s drive to achieve competitive advantage.
Gendron, M., Swarr, R. S. (2012). Defining Cloud Architectures: What attributes should an application or service have?. In Daniel Beimborn, University of Bamberg, Germany, firstname.lastname@example.org; Konradin Maier, Vienna University of Economics and Business, Austria, email@example.com (Ed.), (pp. 15). Vienna: 2012 International Conference on Information Resources Management. conf-irm2012.wu.ac.at/
Cloud computing has been called everything from media hype to software available over the Internet. It has been compared to software that runs on your local PC, and is often seen as an addition to the creation of Internet applications. Cloud computing is frequently described in the media and is often incorporated into an organization’s marketing material. However, a firm definition of cloud computing is lacking. This research attempts to create a firm definition grounded in the consumer’s perspective. A standard list of attributes required for software to be considered cloud computing does not exist in the existing literature, and in this paper we propose such a list. This list is part of, and adds to, the international discussion about cloud computing.
Larry Grasso, DBA
Maskell, B. H., Baggaley, B., Grasso, L. (2012). Practical Lean Accounting (second edition). Boca Raton, Florida: CRC Press.
Lean management is increasingly popular, but conventional accounting fails to support lean management. Lean management identifies customer value and focuses on creating that value with the “least waste.” The central tenets of lean management are continuous improvement and respect for people. Processes are continually improved to increase value creation, improve flow, and eliminate waste. Respect for people refers in particular to employees, who are the source of continuous improvement. In lean management, all employees must be innovators and problem solvers, not order takers. As compared with conventional management, lean management is a completely different way of looking at business. Lean accounting is needed to support lean management, but accounting practice has been slow to respond to the needs of the new management philosophy, and few accountants have training in lean accounting. This book provides practitioners with a guide to creating accounting measures and processes that support lean management in order to apply the lessons learned to their organizations.
Organizations adopting lean management or engaging in a lean transformation want to hire accountants who understand lean accounting and the problems caused when conventional accounting is used with lean management practices. Accounting students have difficulty getting this training because nobody currently teaches lean accounting. A lack of material on lean accounting that is suitable for classroom use is a major barrier to greater availability of lean accounting courses. It’s the chicken and egg phenomenon: Textbook publishers do not offer books and materials on lean accounting because nobody is teaching it, and nobody teaches lean accounting because there are no instructional materials available. The latest edition of this book provides an extensive set of discussion questions, problems, and exercises so students in a classroom setting have the opportunity to apply the lean accounting techniques and concepts. This book can be instrumental in providing accounting students with the training they need to support lean management.
Grasso, L., Tilley, P., White, R. A. (2009). The Ethics of Earnings Management: Perceptions after Sarbanes Oxley. Management Accounting Quarterly, 11(1), 45-69.
Earnings management involves choosing an action primarily for its effect on reported earnings rather than for its inherent value to a customer or the organization. There are two basic types of earnings management. First, accounting manipulations alter the way business results are classified and reported. For example, a firm could reduce the estimate of bad debts to lower an expense or hold the books open to record early 2012 sales in 2011. Second, operating manipulations change the timing or choice of events, such as delaying schedule maintenance on machinery to avoid the expense.
In this study, we explored how views of the acceptability of earnings management practices have changed since the financial reporting scandals of the early 2000s and the subsequent adoption of the Sarbanes Oxley Act (SOX). Prior to the crash in 2008, we asked management accountants, graduate management students, and undergraduate accounting students to judge the acceptability of 14 scenarios in a survey instrument developed by Ken Merchant that has been used in studies in the 1990s. We compared our responses to similar populations from the 1990s.
In general, our respondents judged the actions more harshly (more unethical behavior) than respondents in the 1990s. Overall, the high profile scandals appeared to have a greater effect than SOX. Surprisingly, professionals and managers who are very familiar with SOX and those reporting that their companies had high ethical standards rated operational manipulations less harshly than other respondents. This could be evidence of a rules-based approach to ethics (as long as it’s within the law, it’s OK).
Replacing accounting manipulations with operating manipulations results in more truthful reporting, but the accounting manipulations don’t hurt “real” activities. For example, postponing maintenance can lead to breakdowns and poorer future performance. A more favorable view toward operating manipulations may be an unfortunate result of the scandals and an unintended consequence of SOX.
Henry Greene, PhD
Associate Professor, Management & Organization
Suh, M., Rho, T. , Green H. (2012). Relationship Behavior between customers and Service Providers in Demarketing Situations: What makes customers try to improve their relationships. Database Marketing & Customer Strategy Management, 19(March), 1-17
This paper investigates the concept of demarketing from a business perspective. The term demarketing was introduced by Kotler and Levy in 1971, and whereas marketing is designed to communicate positive messages to a consumer audience, demarketing discourages some type of action. Traditionally, demarketing communication has encouraged consumers to stop or avoid making socially negative behavioral choices. Social agencies sent out demarketing messages such as: “Just Say NO to Drugs”, “Only You Can Prevent Forest Fires”, “Don’t Drink and Drive”, and so on. Prior research on demarketing focused on government and non-profit organizations, while in this paper we investigate demarketing in a profit-making business setting.
Rationale: If the 80:20 rule applies to a business, where 20% of the customers contribute 80% of the revenue, then surely there are nonproductive customers who should be eliminated or transformed. Different demarketing stimulations are investigated: price and product and strength of stimulation. A third condition, consumer orientation (promotion versus prevention), is also investigated.
The results of the study suggest that a change in price has a more significant impact than a change in product (service offerings), and stronger stimulations have a greater impact than weaker stimulations. In terms of consumer personality, promotion-oriented consumers are more interested in improving than ending their relationship when subjected to product stimulation and are more sensitive to product stimulation than price. Consumers who are prevention focused are less predictable.
Greene, H. (2011). Turning the Advertising Classroom into a Laboratory. International Journal of Arts and Sciences, 4(15), 119-130.
In the last 40 years, a great deal of attention has been devoted to the teaching strategies used by marketing educators. The “traditional” professor lecturing, with students listening and taking notes, is regarded as a less effective teaching strategy than a classroom lecture that incorporates “active,” “experiential,” “business relevant,” and “personally relevant” learning activities. A variety of activities in the literature are designed to make the transfer of knowledge more entertaining, memorable, and engaging. Some of these activities include: simulation games, case studies, role playing, contests in class, guest speakers, field trips, community outreach, team work projects, scavenger hunts, and so on. The purpose of this study is to offer an additional educational activity that is meant to engage students more actively and create a more relevant learning experience: the classroom laboratory experience.
In a consumer behavior or advertising class, several theoretical ideas describing how consumers evaluate and make decisions are typically discussed. Some of these concepts are: the compromise effect, the elaboration likelihood model, the use of puffery in advertising, the value of demographic segmentation in marketing, and the theory of framing and prospect theory. Each of these concepts has received attention in the literature. The purpose of the classroom laboratory is to design experiments both in and out of the classroom that engage students in order to create activities where students are responsible for gathering and analyzing data and testing a theory.
In this paper, I discuss four experiments that were conducted in an advertising class and demonstrate the feasibility of the proposed teaching methodology. Three of the four theories were supported by the experimental results. A future study will include a discussion about the effectiveness of the teaching activity regarding student learning or satisfaction.
Drew Harris, PhD
Professor, Management & Organization
Harris, D., Twomey, T. M. (2011). Privilege and Corruption: A Model for Evaluating Challenges and Developing Strategies for Global Competitiveness. Competition Forum, 9(1), 171-177.
Across the globe, and even within the United States, citizens perceive their governments as corrupt and/or becoming more corrupt (Transparency International 2011). By discouraging investment and making capital less efficient, corruption damages economic development and recovery. It leads to reduced tax revenues, ineffective government services, weaker environmental policies, and reductions in public health. These losses caused by corruption create social, economic, and political instability and reduce global competitiveness.
What dynamics curb corruption? Studies show that more free press, independent judiciary, and ease-of-market-entry reduce the amount of corruption. These independent variables seem to work through mediating variables such as degree of democracy, level of crime, and free markets, which also reduce corruption. Studies have also linked the “natural” (not defined by political processes) variables of distance-from-markets, abundance-of-natural resources, and cultural-acceptance-of-hierarchy to corruption.
Privilege (a right or advantage available to some but not all) figures subtly but centrally in all causes of corruption. For example, limited market entry is a form of privilege (legally constructed impediments). Even “natural” variables such as the abundance of natural resources drive corruption through the process of granting limited access to the natural resources – another privilege. The very definition of governmental corruption – the use of public power for personal gain – suggests privilege.
However, the solution cannot be to simply do away with all privilege, as the access and use of many natural resources requires privileges for efficiency. For example, imagine if use of the electromagnetic spectrum were a free-for-all! Using a model of privilege that categorizes privileges as economically efficient (allowing for efficient use of a resource) or inefficient (creating transfer costs, deadweight losses, etc.) presents a potential solution to corruption: eliminate inefficient privileges but allow and charge for (tax or rent) efficient privileges. This application reveals a path to reduce corruption and develop stronger national economies and democracies.
Khoon Koh, PhD
Koh, K. (2010). Tourism Marketing: Achieving the 3Rs with IORPs. In John R. Walker and Josielyn T. Walker (Ed.), Tourism (pp. Chap. 3, pp. 85-88).
If contemporary business competition is akin to surviving in an ancient Roman gladiator arena, should one fight with 10 fingers, or with 4 or 7 fingers? This article shows that the traditional 4P approach to marketing (product, promotion, place, and price) is inadequate to achieve the 3Rs of marketing (recruiting new customers, retaining existing customers, and building referral of new customers by existing customers). Whereas other scholars have proposed three additional Ps (people, process, and physical evidence), I suggested the addition of six Ps to the marketing mix, leading to the 10 “Right Ps”: Right purchasers, Right product, Right procurement, Right price, Right promotion, Right philosophy, Right performers, Right process, Right psyche, and Right Philosophy.
Koh, K. (Under Review). Museum marketing management: A sampling across place, time, and group. International Journal of Hospitality & Tourism Administration.
To help museums attract and retain visitors, two types of respondents (non-visitors and recent-visitors) were sampled across: (a) three nations (representing different levels of development in the USA, Taiwan, and Malaysia); (b) four years (2007 to 2010), and (c) two sample groups (public sample and university student samples). The findings indicated that there were significant marketing management differences across place, time, and group. Museums must thus practice target marketing and conduct ad hoc market research accordingly.
Chester Labedz, J.D., Ph.D.
Assistant Professor, Management & Organization
Labedz, C., Cavaleri, S., Berry, G. (2011). Interactive knowledge management: Putting pragmatic policy planning in place. Journal of Knowledge Management, 15(4), 551-567.
Collaboration in Research. Collaborating with colleagues and promising students at CCSU can create win-win opportunities. MGT 348 studies how managerial behaviors lead to both the accomplishment of planned objectives and the emergence of undesirable, unintended consequences. During the summer of 2009 the Administration and Congress, desperate to stimulate the American economy, took advice from a prominent economist. They mixed interests of the auto industry and its workforce with environmental concerns to formulate a new cash allowance rebate system law commonly called “Cash for Clunkers.” Within 3 months, our leaders “considered,” enacted, funded, and extra-funded (to a total of $3 billion) taxpayer-funded incentives for Americans to scrap “gas guzzler” vehicles for new cars that offered higher mileage per gallon.
Other scholars, used car dealers, and charitable organizations promptly raised concerns about the unintended consequences of this law. In this paper, we articulated the systemic structure that connects the above-mentioned stakeholders. We positioned our system model within the knowledge management literature in which Dr. Cavaleri has written extensively, and published it in the leading journal in that field. This paper was selected as an
Outstanding Paper Award Winner of the Literati Network Awards for Excellence 2012.
The model involved an actual mathematical simulation in which the predicted pros and cons regarding this stimulus program and others like it might be tested. I keep my eyes open for exceptional talent in my courses, and subsequently invited senior Tao Wang to undertake that work. We secured grant funding to purchase automotive industry data and envision a simulation paper that will receive student-to-student feedback at a conference in the autumn, and ultimately a co-authored journal article that will assist Tao with his graduate school candidacy.
Cavaleri, S., Labedz, C., Stalker, G. H. (2012). Emergent Dynamics of Workforce Program Reductions: A Hybrid Multi-level Analysis. International Journal of System Dynamics Applications, 1(1), 48-107.
Labedz, C., Berry, G. (2012) Emerging systemic-structural threats in workforce diversity: beyond inadequate agency. Organizational Transformation and Social Change.
Emerging dynamics of older workforces. I extended my doctoral research at Boston College on emergent dynamics and published two peer-reviewed journal articles with colleagues, combining three of my greatest research interests: strategic human resource management, systems thinking and dynamics, and collaboration. In the two publications presented here we explored the emergence over time of unintended, undesired consequences within a workforce, triggered by well-intended HR decisions.
What were those undesired and unexpected outcomes? With the intent of reducing the volatile expense of its pension plan, a company’s HR department contemplated reducing the rate at which employees earned future benefits under it. As older workers delayed their retirements in response, however, the company might expose itself to other workforce risks.
I built a system dynamics computer simulation to test these exposures. Usually, compensation and active employees’ health care costs rise proportionally with age, so increases in these HR budget items might partly cancel out the intended pension benefit. Meanwhile, advancement opportunities for junior employees would stall as seniors stayed at work longer, and stalled promotion opportunities might cascade further down into the workforce. This may lead promising but “blocked” mid-level talent to leave for other employers, and the firm’s own initiatives to promote its workforce diversity could be undercut by senior employees’ reluctance to move along. In the second paper listed above, we presented the theory or explanation behind such workforce surprises. In the first paper listed above, we demonstrated the possible dynamics of negative surprises that could emerge in the years following HR intervention.
Lee W. Lee, PhD
Professor, Management & Organization
Mueller, M., Lee, L., Cavaleri, S. (2012). Third-Party Payment system and Cost Containment: Examination of Primary Care Physicians’ Cost Profile and Patient Satisfaction. European Journal of Business Research, 12(1), 71-82.
The interaction between the healthcare provider and the patient is a core component of any health care system. Providers such as physicians or hospitals render services to patients. In return, patients reply on physicians to diagnose and treat their health care needs. The physician making the initial diagnosis treats the condition or refers the patient to another physician, a diagnostic facility, or other providers. Therefore, the physician's initial diagnosis and treatment plan determine the course and the cost of treatment. Because most patients access the health care system through their primary care physicians, they serve as their patient’s most important access point to medical care. This relationship gets complicated by introduction of the third-party payment system. The insurance company (or government) pays the cost of the health care services. Physicians now get pressure by their third-party payer to lower the cost of their services. It has direct and serious impact on quality and patient satisfaction of the health care services.
We had obtained a large number of data from a healthcare plan of large public sector employers in Central Florida area and attempted to test two potentially competing hypotheses. One is 1) a ‘Great-Person’ theory: as an agent of their patients, physicians work for the well-being of their patients regardless of the cost. Another one is 2) an ‘Economic-Person’ theory: as an agent of their payers, physicians attempted to do everything to lower the cost. We examined various physician costs (e.g., primary care physician costs, professional costs, facility costs, and medication costs) and related them to patient satisfaction with treatments (e.g., access to the care, care, wellness, and general satisfaction).
Results of the study generally support a positive association between the primary care physician (PCP) cost profiles and the patient satisfaction. PCP costs and medication costs are significantly contributing to the patient satisfaction in all dimensions; whereas other costs (e.g., facility cost and non-PCP costs) are not directly linked to the patient satisfaction. Although there is strong push for cost containment, particularly by the third-party payers, physicians in the data seem to follow the demand of patients: Perhaps, the cost of Type-II error (i.e., mistaking sick-patients well) is too high for the physicians yet.
Cavaleri, S., Lee, L. (2012). Learning to Leverage Strategic Management Processes. International Journal of Strategic Management, 12(1), 50-65.
Many business courses are narrowly defined and functionally segmented causing students to get bogged down in the functional details without seeing key opportunities to improve firm performance. Strategic management courses are designed to broaden student’s vision and to integrate functional knowledge into a long-term strategic planning process. One way to expand student’s views is by playing strategic computer simulations, e.g.the Capstone simulation. It provides students with a complex environment in which they can develop their own strategic thinking skills.
The purpose of this study is to examine more closely how students make strategic decisions and to explore how their decisions are influenced by their problem solving approach used. In this paper, we develop a robust system dynamics causal model that depicts basic underlying cause-effect links that govern how firm performance results from various business strategies. We used data from hundreds of student decisions in the Capstone simulation. We analyzed them using rigorous statistical tools. We found successful teams learned to effectively use critical management tools in building their firm’s business strategy. For example, developing highly accurate sales forecast, determining appropriate levels of production and inventory, optimizing manufacturing capacity adjustments, and setting competitive prices while still containing costs. Accurate sales forecasts enabled students to determine appropriate levels of production; and positively contribute to improving revenues and market share. Better production level decisions led to higher capacity utilization, and more profits. See the diagram for depiction of specific system elements and their causal relationships included in our model.
Such causal models can distinguish high-leverage policies from low-leverage ones. Importantly, conventional strategic management models do not have such capacities. The result is that students can view problems in ways that are unduly limited. The risks inherent in using conventional models is they break down quickly in complex dynamic environments and lead to unintended consequences that cause new problems.
Joo Eng Lee-Partridge, PhD
Professor, Management Information Systems
Lee-Partridge, J.E., & Partridge, J. (2011) “What Did I Learn?”: An Introduction to Reflective Learning Pedagogy. The Teaching Professor Conference, May 20-22, 2011, Atlanta, GA.
Learning through reflective writing is as old as the diary or journal. Reflective writing allows an individual to personalize experience and information, translating the foreign world of complex ideas and conflicting perspectives into a personal language of order and comprehension. Studies on the effectiveness of reflective writing are numerous and are not limited to composition courses. The body of literature on reflective writing pedagogy shows that it transcends disciplines. Whether it is business students reflecting on their educational experience (e.g., W. Brown, College Teaching, 1998), science students discovering learning patterns (e.g., J. MacDonald, The Science Teacher, 2009), nursing students developing creative thinking skills (e.g., M. Kennison, Nursing Education Perspectives, 2006), or composition students “building connections” (e.g., R. Kock, Academic Exchange Quarterly, 2006), the literature suggests that students who engage in reflective writing activities retain more of what they learn, understand the interconnecting themes and topics covered in a course, and increase awareness of their own educational growth.
In this workshop presented at the Teaching Professor Conference, we introduced participants to the use of reflective writing. We provided specific examples we have used in community college and university courses in the Humanities and Business. For my part, I showed how I used reflective writing in a programming class, an unlikely candidate for reflective writing. Programming is a technical, hands-on class; however, there are many concepts that students have to understand in order to do well in the course. It is this aspect of understanding concepts to which I applied reflective learning in the course. In order to write letters explaining what they are doing in the course and describing the abstract programming concepts, students have to think about the parts of the course and connect the pieces, leading to a better understanding of the course material.
Snyder, J.L., & Lee-Partridge J.E. (2011). Employee Media Choices When Sharing Knowledge in Work Teams: A Test of the Layered Model. Proceedings of the 76th Annual Convention of the Association for Business Communication, October 19-22, 2011, Montreal, Quebec, Canada.
This paper is part of a research stream that I am working on with Snyder. In this research effort, we proposed a layered model to understand what media employees choose when sharing knowledge in work teams. The layered model has four concentric layers, and we describe our model starting from the innermost layer to the outermost layer. The first layer pertains to individual choice characteristics, such as the type of information being shared, the sender’s degree of comfort with technology use, and the sender’s personal preferences. The next layer relates to the availability of media choices and the audience in the information exchange, and includes the ability of the media to provide records and capture rich information as well as the degree of trust among team members. The third layer discusses team diversity, including factors such as embedded practices among the team members and the degree to which knowledge must be transformed to facilitate sharing. Finally, the outermost layer looks at the organizational context within which the teams share their knowledge. Organizational culture is a key factor in this layer.
The purpose of this paper is to test the model proposed. We conducted interviews with 13 employees from a variety of industries. We next coded and reviewed the interviews independently and were able to obtain consistency in coding after several reviews. We refined the layered model using the coding results, and it appears to be a useful way to understand communication choice. Our next step is to further test the refined model, which we are currently working on.
Jean M. Lefebvre, PhD
Lefebvre, J., & Shiba, S. (2006). Collaboration and Trust in the Supply Chain: The Case of FAVI S.A. Supply Chain Forum, An International Journal, 6(2): 90-94.
In this paper, we generate insights on the management of supply chain relationships as it affects performance. We begin with a description of the supply chain relationship practices of FAVI S.A. and then infer tentative systemic explanations for its success. FAVI has been one of the most profitable OEM automobile industry suppliers in Europe, designing and manufacturing transmission shift-forks for Renault, Volvo, VW, Peugeot-Citroen, and Fiat. In a typical year, FAVI designs and produces about 50 shift-forks.
The analysis of verbal data from lengthy and repeated interviews with managers and operators revealed several FAVI systems that contribute to generating trust between the firm and its clients, as shown below.
- Consistent, extreme responsiveness to customers’ requirements involving a hierarchy of responsiveness levels
- Exact responsiveness to the articulated requirements of the customer.
- Quick response to unanticipated turbulence.
- Thoughtful response to the invisible requirements of customers.
- Responsiveness produced by a unique operational level trust system – the “secrets” of FAVI
- A unique work concept that seeks to generate the love of customers and happiness of the operators.
- A design/manufacturing system that seamlessly integrates R&D and manufacturing.
- Effective autonomous mini-plants each focused on one customer.
- A lynch-pin system integrating R&D, mini factories, and suppliers with the client.
- Operational system anchored in a corporate-level trust system. The former creates trust with individuals at clients’ organizations through day-to-day continuous activities and interactions resulting in individual bonds; the latter creates corporate credibility with stakeholders and society at large. More importantly, without the anchor and compass of the corporate trust system, the operational trust system cannot be flexible and consistent in responding to daily changes.
Some of the lessons learned from FAVI:
- Trust is built first between individuals across organizations, not between the organizations themselves. Thus, a high turnover of personnel is an obstacle to trust between organizations.
- Investigations of inter-firm trust building must take into account the processes that lead to: (a) individuals (mis)trusting one another, (b) inter-organizational (mis)trust, and (c) the interactions between both individual and organizational level processes. For instance, can distrusting organizational cultures produce trusting relationships between the firm’s employees and its customers?
- To develop trust between the supplier and client, an effective day-to-day trust-building operational system should be anchored into a corporate-level trust system.
Co-author Shoji Shiba is a world expert on TQM. He was the winner of the Deming Prize for Individuals in 2002, the most prestigious prize in quality management in the world. A Visiting/Adjunct Professor at MIT, he has taught graduate courses in TQM and was part of the Leaders for Manufacturing Program for many years (1990 to 2004). In 1989, he was one of the initiators of the Center for Quality Management, a consortium of New England organizations seeking guidance and support in the implementation of TQM. In 1987, he introduced TQM in all industries in Hungary, and his contributions have continued through the Hungarian IIASA-SHIBA quality award. Two of his recent books are: “Four Practical Revolutions in Management” and “Breakthrough Management.”
Christopher Marquette, PhD
Associate Professor, Finance
My recent research focuses on investment strategies in firms that have a dual class structure. Many firms have two classes of publicly held stock, one with voting rights and one without voting rights, and investors can invest in either class or both classes. In the first study, I offer investment information that is useful for small, private investors for their personal portfolios and in the second study I offer information useful for large institutional investors.
Marquette, C., & Williams, T. (2008). Ownership of Dual Class Shares and Passive Investment Strategies. Corporate Ownership and Control, 6(1): 301-311.
This study offers empirically tested advice for passive investors (i.e., ordinary buy and hold investors who don’t trade actively) on how to increase their returns without increasing their risk when investing in dual class firms. The results indicate that passive investors can increase their returns by over 1% annually, without affecting their risk, by using this advice.
Marquette, C., & Williams, T. (2011). Dual Class Shares and Active Investment Strategies. Journal of Investing, 20(1):43-51.
This paper presents a trading algorithm for active investors to generate riskless profit from mispricings between the two classes of shares of the same firm. The paper demonstrates the returns that the algorithm would have generated each year from 1992 to 2005. These annual riskless returns on investment range from a low of 4.9% in 2004 to a high of 110% in 1994, with most years in the 20-40% range.
I use these studies when teaching the introductory finance class at CCSU to illustrate the concepts of risk, return, pricing models, price equilibria, investment strategies, and the management of hedge funds
Anne Rich, PhD
Rich, A., & Mihalek, P. (2010). In the United States Accounting Profession, Will Minorities Make Different Ethical Decisions?” Journal of Diversity Management, 5(3).
The United States has long been referred to as a melting pot, as people from all cultures bring their traditional values and beliefs to the country. For the past two decades, accounting organizations have strongly supported the education of minorities. Academic research in ethical decision making has attempted to highlight factors that contribute to differences in ethical decision making, and culture has been the key variable examined as a basis for differences in an individual’s ethical decisions. As more and more minorities enter the profession of accounting, an important question is “Will American minorities approach ethical situations similarly to that of their non-minority American peers?” It is reasonable to expect that Americans from different cultural backgrounds may react differently to ethical dilemmas.
We developed a survey to determine if there were differences in ethical values based on ethnicity. The survey used a case involving a student lying on his resume. It asked for answers to seven ethical situations and seven activities. We administered the survey in two different major-level accounting classes: Professionalism, a junior-level course, and Auditing, a senior-level course.
The results of the study showed that all students generally agree on ethical issues and their likely action when a classmate lies on a resume in the process of getting a job. However, there were some interesting differences in the magnitude and direction of the responses by minority and non-minority students. Our findings suggest that minority students are more sensitive to ethical transgressions by their peers and feel more negatively impacted if someone lies in the process of getting a job. The study results suggest that all students should engage in discussions about lying and suggest ways to deal with reporting such unethical behavior to authorities.
Rich, A. (2011). Assessing the Comparative Effectiveness of Teaching Undergraduate Intermediate Accounting in the Online Format. Journal of College Teaching and Learning, 8(9).
Everywhere one looks these days, there are advertisements for online college courses. Some institutions offer programs exclusively online while others provide online courses as an alternative to taking on-campus courses. Technology has developed over the years and there are many ways to deliver on-line courses, including “live” meetings and chats with classmates and professors. In general, faculty members who teach at traditional campuses have been reluctant to offer online courses. One of their biggest concerns is whether or not online students are able to achieve the same learning objectives as their on-campus classmates.
Previous research related to the effectiveness of online classes was focused on student satisfaction but not on outcomes. In education, there are several key variables that impact the learning experiences of students. These include, for example, the instructor’s influence, the personal characteristics of students, and the available technology. In our research we controlled for these variables because we focused on one instructor who taught three sections of a specific intermediate accounting course at CCSU, using the same syllabus, with students drawn from a similar demographic pool.
The research objective was to assess if online learners demonstrated similar outcomes in achieving the objectives of the course, and we used three measurements of whether or not students performed equally well: (1) problem-type homework problems delivered online through the publisher’s website, (2) an essay on professionalism graded by the instructor, and (3) students’ self-reported progress towards seven course objectives. The results clearly show that for all of the assessments, the students enrolled in the online intermediate accounting course achieved similar results to the students enrolled in the on-campus intermediate accounting course.
Jason Snyder, PhD
Assistant Professor, Management Information Systems
Snyder, J.L., Claffey, Sr. G.C., & Cistulli, M.D. (2011). How Similar are Real Estate Agents and Human-Service Workers? A Study of Real Estate Agents’ Responses to Distressed Clients. Journal of Business Communication, 48: 300-318.
When employees feel burned out, they act with callousness toward others, feel inadequate in one or more phases of their work, and become emotionally drained. Job burnout research has focused primarily on the causes and outcomes of burnout for workers who hold human-service jobs, such as social workers. Communication with people distress represents one major cause of job burnout. In order to avoid burning out, workers develop a sense of detached concern for distressed others because burnout leads workers to be less committed to their organization, to experience reductions in their work performance, and to leave their organizations.
In this research study, we proposed that job burnout is a problem for workers from a variety of jobs outside of the human-services industry. Given the declining nature of the housing market, we thought that real estate agents might be vulnerable to burnout because of their frequent interactions with both distressed sellers whose property values were in decline and prospective buyers who were having difficulty getting a mortgage.
A survey of 287 full-time real estate agents in Connecticut confirmed our belief. Agents who were unable to feel a sense of detached concern for distressed clients were less able to communicate effectively with their clients. This lack of appropriate communication led agents to feelings of job burnout and intentions to leave their organization.
Based on the results, we recommend that brokers consider training their agents about emotional communication. In particular, agents need to learn strategies for maintaining a sense of detached concern for their clients. We also recommend that agents receive training to develop effective coping strategies for dealing with their feelings of burnout. For example, agents need to: (a) understand their own limitations for intervening in their clients’ problems, (b) seek friendly support from colleagues and family, and (c) change the way they interpret their own negative feelings.
Snyder, J.L. (2010). E-mail Privacy in the Workplace: A Boundary Regulation Perspective. Journal of Business Communication, 47: 266-294.
In this study, I looked at employees’ feelings of privacy when using e-mail at work and the unintended consequences of reduced privacy caused by workplace e-mail monitoring. According to communication boundary management theory, people maintain their privacy by establishing boundaries around information they believe to be private. People control boundaries by deciding what they will share with others. When boundaries are violated, people grow angry and suspicious of those who violated the boundaries. Given the nature of monitoring, employees are unaware of when it is happening, which makes it difficult for employees to control the boundaries around their workplace e-mail. This may cause employees to believe that their companies are violating their privacy boundaries. In this study, I proposed that reduced privacy would be related to feelings of distrust in the workplace.
A total of 324 employees from various organizations took part in a questionnaire. The results were in line with my expectations. To the extent that employees believed their workplace e-mail was being monitored, they felt reduced levels of e-mail privacy. Those employees who felt less e-mail privacy also reported lower levels of trust for their coworkers, supervisors, and top management.
The study results indicated that employees saw coworkers as less trustworthy because the employees believe that their coworkers’ untrustworthy behavior has led to the implementation of e-mail monitoring. Employees saw top management as untrustworthy because they developed the e-mail monitoring policy. Finally, employees saw their immediate supervisors as less trustworthy because they implemented the policy.
Based on the study results, I recommend that organizations write, and make employees aware of, clear e-mail use and monitoring policies. Organizations should also understand how to nurture trust. Finally, poorly managed e-mail monitoring policies and practices can affect workplace relationships and have real consequences on the bottom line through the costs associated with replacing disgruntled employees.
Jane Stoneback, PhD
Roxas, M., Stoneback, J., & Roxas, J. P. (2011). Status of International Accounting Courses. Competition Forum, 9(2), 292-304.
The FASB has initiated a convergence project to bring U.S. GAAP in conformance with international standards (IFERS). As a result, international standards are being covered in intermediate financial accounting courses. Traditionally, a considerable amount of time is devoted to this in International Accounting courses. Our research involves looking into what has become of international accounting courses. Are they being offered and what do the international accounting books cover? Data on AACSB schools with accounting accreditation were collected, and we also conducted a content analysis of international texts and a meta-analysis of previous research findings on the topic. The results show that, even with IFERS coverage, there is still a need for coverage of many international accounting topics. However, it is offered mainly as an elective by only 60% of the AACSB schools accredited in accounting. Of those offering it, 30% have not offered it in the last year.
While IFRS and foreign currency translation are two of the most important international topics, studies show that comparative/differences and financial statement analysis are also important as well as transfer pricing and managerial evaluation and control issues. Of the five most important international accounting topics, three of the topics are not financial accounting issues. There is general consensus among those surveyed (academics and practitioners) that the international environment, harmonization, auditing, taxation, MAS/AIS, and ethics are important. The international textbooks tend to support most of these topics with the exception of MAS/AIS and ethics. It can be concluded that the international accounting course is still relevant.
If the international accounting course is relevant and important, why does it continue to have an elective role in the curriculum? The answer seems to be that there is no room in the curriculum to require another course or to integrate these topics in existing courses to any great extent. There is no impetus to include international content and exclude existing content if there is no coverage on the CPA or CMA exams, if there is no emphasis on it in doctoral programs, and if there is not budgetary support for more coverage. The barriers tend to stifle initiatives.
Stoneback, J. (2011). Group Exercise: Introductory Chapter of Cost Managerial Effective Learning Strategies. Denver, CO: American Accounting Association.
Finalist, 2011 George Krull/AICPA Teaching Innovation Award.
I developed a group exercise for the introductory chapter of Cost/Managerial that acts as an ice breaker and stimulates student thinking about business decisions. The teaching objectives are to:
- Examine roles of managerial accounting accountants in planning, directing, control, and decision making.
- Introduce systems thinking and value creation by creating a simple industry value chain.
- Discuss the factors affecting cost management.
- Motivate topics covered in the course (i.e., budgeting, product costing, activity based management, cost structure, responsibility accounting, and transfer pricing).
The exercise consists of:
- Students reading a short industry note on the sneaker industry.
- Students answering questions on how they use and buy sneakers, and discussing the importance of customer orientation, target markets, and competition.
- Outlining, in groups, how value is created for the customer by identifying activities necessary to make and sell sneakers. (Groups report findings and the results are combined into a simple industry value chain.)
- Discussing global aspects of these activities (i.e., location advantages, outsourcing).
- Researching New Balance or Nike and reporting on their specific activities, noting differences.
- Introducing the topics covered in the course.