Monitoring and incentives of executives in risky firms : a test of the association with firm performance

This study investigates the relationship between a firm's risk and the effectiveness of the firm's corporate governance practices. Previous research investigating the relationship between corporate controls and firm performance has been mixed and often weak. Therefore, this study sets out to determine the efficiency of monitoring and incentive contracts given certain characteristics of the firm. That is, the study sets out to determine whether risk firms with higher monitoring and levels of incentives are associated with higher firm performance.
The results of this study of 282 firms demonstrate how the relationship between firm risk and performance is associated with the monitoring and incentive contracts used by these firms. In particular, the results of this study showed that the negative association between risk and firm performance is weakened when firms have stronger monitoring and incentive mechanisms. The particular contribution of this study is to show that the role of corporate governance variables infirm performance should be evaluated in the context of the firm's risk.

An analysis of the association between firms' investment opportunities, board composition and firm performance

The purpose of this paper is to identify the variables that influence the board structure adopted by firms and the subsequent relationship to the firm's performance. The results of this study of 229 Australian firms show that firms' investment opportunities are strongly associated with a higher proportion of executive directors ("EDs") on the board. The results also show that the negative relationship between a firm's investment opportunity set ("IDS") and firm performance is weakened at higher levels of non-executive director board domination. These results have implications for policy setters and managers of firms with investment opportunities

An Analysis of the Association Between Firm Risk, Executive Share Options and Accounting Performance: Some Australian Evidence

This paper examines whether the financial performance of the firm is associated with the risk-taking propensity of executives, which is inferred from the structure of their share option portfolio. The objective of this paper is to determine if executives have greater risk bearing preferences when they have more share options than shares in their firm. In turn, executives' risk-taking preferences suggest that these decision-makers adopt value-increasing strategies. The results of this study support this notion. The results of the study of 182 Australian firms demonstrate that the negative relationship between firm risk and firm performance is weaker when executives hold a higher proportion of share options than shares in their investment in the firm. These results hold implications for executives' compensation contracts. That is, executives who share in their firms' risk via share options are more likely to undertake risky activities with high-expected performance outcome.

Impact of board size and board diversity on firm value: Australian evidence

The aim of this paper is to provide a preliminary analysis of the relationship between firm market value and the size and gender diversity of a board of directors for a sample of publicly listed Australian firms. Our results show that smaller boards appear to be more effective in representing the shareholders as smaller boards are associated with higher firm value. As board size increases firm value declines, however at a decreasing rate suggesting that the relationship between board size and firm value is not strictly linear. Our findings further indicate that gender diversity promotes shareholders' value as the presence of women directors is associated with higher firm value.

Knowledge transfer in enterprise information technology support using web-based self-service systems

This paper explores Critical Success Factors (CSFs) in the transfer
of after-sales support-oriented knowledge from Information Technology (IT)
support organisations to enterprise customers, using Web-based self-service Systems (WSS). As it appears that best-in-class companies are ahead of the academic work in this area, we approached the topic through an exploratory CSF study of a best-in-class multinational IT services firm and identified 26 CSFs. Key findings from the study indicate that best-in-class IT service organisations may be cognisant of a range of factors relating to supporting customers, but are less aware of what is needed to support their own frontline support agents. Such organisations also lack an understanding of what is needed to provide enterprise support in the later stages of knowledge transfer, where enterprise customers can experience problems attempting to integrate resolutions. The study further showed that many aspects that might be characterised as encompassing socio-technical issues relating to the provision of web-based self-service are still poorly understood.

Market research effectiveness and strategy : the buyer's perspective

The study proposed that broad firm strategies should be related to the implementation and perceived performance of the market research function within the firm. The study involved a sample survey of market research buyers who evaluated their most recent market research project. It was found that specialist "market research" or "insights" managers believed market research to be more effective and to provide greater value than did buyers more generalist roles. It was found that the Prospector strategy firms were the most likely strategic group to rate their market research as effective. No relationships were found between the action-orientation or knowledge enhancing dimensions of the market research USER scale and business strategies, suggesting these dimensions aid all strategy types.

Do outsider-dominated boards and large board sizes curtail firm enterprise activities?

Recent literature recognizes the need for corporate governance to encompass mechanisms for motivating managerial behaviour towards enhancing enterprise activities or increasing wealth of the firm. Agency theory and current regulatory activity advocate increasingly greater roles for outsiders on the board of directors of publicly-traded firms. The literature also put forward that board size affect firm activities independent of other board attributes. Lipton and Lorsch (1992) also propose limiting board sizes to enhance communication and coordination on the board of directors as well as increase the ability of the board of directors to control top management of firms. This suggests that there are biases as board size grows. This paper, therefore, studies the implications of outsider-dominated board of directors and board size on firm enterprise activities. The paper finds that outsider dominated board of directors have a negative impact on firm enterprise activities. Board size was found to have a positive effect on firm enterprise activities.

Consumer choice, information product quality, and market implications

The paper concerns with the peculiarities of consumer choice in information product markets. This is a multidisciplinary study based on both information system research and microeconomic theory. An extension is introduced to the conventional general theory of consumer choice for explicitly taking into account the impact of information product quality on consumer behaviour. Multiple quality characteristics, considered against the price of product, are an essential reason for consumer choice of high tech product in general and information product in particular. We assume that consumers are able to aggregate their preferences of multiple product characteristics into a product preference order. On the supply side, the product quality characteristics incur costs. In the case of information product, those costs are the costs of the first copy, and marginal costs are near zero. All of the above constitute the distinctive characteristics of the competitive mechanism in the digital economy and in information product markets. A model, based on the game theory is used to consider two special cases. The first one deals with monopolistic competition for a share of the market with a limited number of customers. Conditions are derived for IT firm survival. The second one considers conditions at which a monopoly is able to successfully introduce a new version if its information product.

Recounting a difficult past : a South African accounting firm's "experiences in transformation"

This article examines the role of oral history in the social construction of collective memory and forgetting. The article presents a case study of a South African public accounting firm's attempt to document the history of race relations within the firm through the publication of a collection of oral histories. The research draws from the sociology of memory and recent scholarship on individual and collective memory in South Africa to analyze the firm's account of its experiences in making the transition from Apartheid to a multiracial democracy. The analysis finds that the firm's portrayal of its history reflects a narrative of reconciliation and redemption that minimizes the deep social and economic divisions that characterize South Africa's past, their relevance to accounting history, and the continuing salience of race to employment in public accounting.

Knowledge management in a major construction firm in Tawian: a case study-examining the impacts of KM initiatives within the firm.

This paper addresses knowledge management (KM) in a project management organisation through a case study. The case study organisation is a small- edium sized Taiwanese-owned construction company (staff size of approximately 50) with an annual turnover of approximately TWD50 (AUD$1.85) billion. Approximately one half of the company comprised project-related staff (e.g. construction project management, project documentation, estimation, procurement, and design), while the other comprised administrative and business-related staff (e.g. office administration and management, business development, and finance and accounting). The researcher undertook a series of surveys and one-on-one interviews whilst ‘embedded’ for several months with the organisation. As part of a larger research project, this case study was one of four case studies conducted in major construction organisations in Singapore, Taiwan, and Australia. The study revealed the recognition, importance and commitment of organisational culture to KM, and the effects the knowledge management initiatives have on the organisation’s ability to manage knowledge across its projects and deliver the projects at various ‘levels’ of the organisation (individual, project, departmental, and corporate). It concludes that a technologically and functionally sound KM infrastructure does not necessarily assure an organisation with a capability to manage knowledge. Organisations need to ensure that the KM repository is made up of quality and relevant contents (not just quantity), and that corporate culture (especially the willingness of individuals to share what they know) is a critical determining factor to the organisation’s ability to share, apply and create knowledge (i.e. low sharing capability leads to low application and creation capabilities).

Institutional ownership and firm performance: evidence from Finland

This paper investigates the relationship between different classes of institutional investors and firm performance. Using industry level data from Finland, which is characterized by various institutional investors who own multiple ownership stakes in different firms across a broad spectrum of industries, the paper exhibits two novelties. First, unlike previous studies which treated institutional investors as a monolithic group, we segment them in classes. Second, we recognize the joint determination of firm performance and institutional ownership. We account for this issue in the context of a system of equations, using three stage least squares methodology. The empirical results suggest a significant two-way feedback between firm performance and institutional equity ownership. However, this effect is not symmetric. We find that institutional investors with likely investment and business ties with firms have adverse (negative) effect on firm performance and the impact is very significant in comparison to the negative effect of firm performance on institutional ownership.

Are knowledge management infrastructructures capable of managing knowledge?: Case study of a major construction firm in Taiwan

This paper addresses knowledge management (KM) in a project management organisation through a case study.

The case study organisation is a small-medium sized Taiwanese-owned construction company (staff size of approximately 50) with an annual turnover of approximately TWD50 (AUD$1.85) billion. Approximately one half of the company comprised project-related staff (e.g. construction project management, project documentation, estimation, procurement, and design), while the other comprised administrative and business-related staff (e.g. office administration and management, business development, and finance and accounting).

The researcher undertook a series of surveys and one-on-one interviews whilst ‘embedded’ for several months with the organisation. This study is part of an on-going international comparison involving major construction organisations in Singapore, Australia, and Taiwan.

This study examines the recognition, importance and commitment of organisational culture to KM, and the effects the knowledge management initiatives have on the organisation’s ability to manage knowledge across its projects and deliver the projects at various ‘levels’ of the organisation (individual, project, departmental, and corporate).

It concludes that a technologically and functionally sound KM infrastructure did not necessarily assure that an organisation had a capability to manage knowledge. Organisations need to ensure that their KM repository is made up of relevant and quality contents (not just quantity), and that corporate culture (especially the willingness of individuals to share what they know) is a critical determining factor to the organisation’s ability to share, apply and create knowledge (i.e. low sharing capability leads to low application and creation capabilities).

Encouraging small firm up-take of SCM using education: a future research agenda

The success of supply chain management (SCM) practices often depends on small firms in the supply chain adopting these practices, yet they are often reluctant to do so. The existing literature mostly explores SCM adoption barriers rather than approaches to encourage adoption. This paper argues that an educational perspective has promise, and proposes a research agenda which should guide future studies by all researchers studying small firm SCM up-take. The agenda encompasses the diversity of small firms, the major educational players, appropriate types of education approaches and the theoretical framework to underpin this research. The paper then gives an example of how this research agenda can be applied to a specific research project which will explore the impact of the Supply Chain Knowledge Centre (SCKC), a state of the art SCM education facility developed by GS1 Australia, on small firm SCM up-take.