Using DEA [data envelopment analysis] in benchmarking

Australian banks are currently generating huge profits but are they sustainable? NECMI AVKIRAN suggests that banks will need to scrutinise the performance of their networks to ensure future profits.

People management issues in Indian KPOs

Purpose: The business process outsourcing (BPO) industry in India is evolving rapidly, and one of the key characteristics of this industry is the emergence of high-end services offered by knowledge processing outsourcing (KPO) organizations. These organizations are set to grow at a tremendous pace. Given the people-intensive nature of this industry, efficient employee management is bound to play a critical role. The literature lacks studies offering insights into the HR challenges involved and the ways in which they are addressed by KPOs. The purpose of this paper is to attempt to fill this gap by presenting findings from an in-depth case study of a KPO organization. Design/methodology/ approach: To achieve the research objective we adopted an in-depth case study approach. The research setting was that of a KPO organization in India, which specialises in offering complex analytics, accounting and support services to the real estate and financial services industries. Findings: The results of this study highlight the differences in the nature of work characteristics in such organizations as compared to call centres. The study also highlights some of the key people management challenges that these organizations face like attracting and retaining talent. The case company adopts formal, structured, transparent and innovative human resource practices. The study also highlights that such enlightened human resource practices stand on the foundations laid by an open work environment and facilitative leadership. Research limitations/implications: One of the key limitations is that the analysis is based on primary data from a single case study and only 18 interviews. The analysis contributes to the fields of KPO, HRM and India and has key messages for policy makers. Originality/value: The literature on outsourcing has in general focused on call centres established in the developed world. However, the booming BPO industry in India is also beginning to offer high-end services, which are far above the typical call centres. These KPOs and their people management challenges are relatively unexplored territories in the literature. By conducting this study in an emerging market (India) and focusing on people-related challenges in KPOs, this study attempts to provide a fresh perspective to the extant BPO literature. © Emerald Group Publishing Limited.

Responding to crisis through strategic knowledge management

Purpose - Many managers would like to take a strategic approach to preparing the organisation to avoid impending crisis but instead find themselves fire-fighting to mitigate its impact. This paper seeks to examine an organisation which made major strategic changes in order to respond to the full effect of a crisis which would be realised over a two to three year period. At the root of these changes was a strategic approach to managing knowledge. The paper's purpose is to reflect on managers' views of the impact this strategy had on preparing for the crisis and explore what happened in the organisation during and after the crisis. Design/methodology/approach - The paper examines a case-study of a financial services organisation which faced the crisis of its impending dissolution. The paper draws upon observations of change management workshops, as well as interviews with organisational members of a change management task force. Findings - The response to the crisis was to recognise the importance of the people and their knowledge to the organisation, and to build a strategy which improved business processes and communication flow across the divisions, as well as managing the departure of knowledge workers from an organisation in the process of being dissolved. Practical implications - The paper demonstrates the importance of building a knowledge management strategy during times of crisis, and draws out important lessons for organisations facing organisational change. Originality/value - The paper represents a unique opportunity to learn from an organisation adopting a strategic approach to managing its knowledge during a time of crisis. © Emerald Group Publishing Limited.

People, technology, processes and risk knowledge sharing

The present global economic crisis creates doubts about the good use of accumulated experience and knowledge in managing risk in financial services. Typically, risk management practice does not use knowledge management (KM) to improve and to develop new answers to the threats. A key reason is that it is not clear how to break down the “organizational silos” view of risk management (RM) that is commonly taken. As a result, there has been relatively little work on finding the relationships between RM and KM. We have been doing research for the last couple of years on the identification of relationships between these two disciplines. At ECKM 2007 we presented a general review of the literature(s) and some hypotheses for starting research on KM and its relationship to the perceived value of enterprise risk management. This article presents findings based on our preliminary analyses, concentrating on those factors affecting the perceived quality of risk knowledge sharing. These come from a questionnaire survey of RM employees in organisations in the financial services sector, which yielded 121 responses. We have included five explanatory variables for the perceived quality of risk knowledge sharing. These comprised two variables relating to people (organizational capacity for work coordination and perceived quality of communication among groups), one relating to process (perceived quality of risk control) and two related to technology (web channel functionality and RM information system functionality). Our findings so far are that four of these five variables have a significant positive association with the perceived quality of risk knowledge sharing: contrary to expectations, web channel functionality did not have a significant association. Indeed, in some of our exploratory regression studies its coefficient (although not significant) was negative. In stepwise regression, the variable organizational capacity for work coordination accounted for by far the largest part of the variation in the dependent variable perceived quality of risk knowledge sharing. The “people” variables thus appear to have the greatest influence on the perceived quality of risk knowledge sharing, even in a sector that relies heavily on technology and on quantitative approaches to decision making. We have also found similar results with the dependent variable perceived value of Enterprise Risk Management (ERM) implementation.

Managing service productivity using data envelopment analysis

This chapter provides the theoretical foundation and background on data envelopment analysis (DEA) method. We first introduce the basic DEA models. The balance of this chapter focuses on evidences showing DEA has been extensively applied for measuring efficiency and productivity of services including financial services (banking, insurance, securities, and fund management), professional services, health services, education services, environmental and public services, energy services, logistics, tourism, information technology, telecommunications, transport, distribution, audio-visual, media, entertainment, cultural and other business services. Finally, we provide information on the use of Performance Improvement Management Software (PIM-DEA). A free limited version of this software and downloading procedure is also included in this chapter.

Marketing strategy and new product development in the UK credit card industry

The development of new products in today's marketing environment is generally accepted as a requirement for the continual growth and prosperity of organisations. The literature is consequently rich with information on the development of various aspects of good products. In the case of service industries, it can be argued that new service product development is of as least equal importance as it is to organisations that produce tangible goods products. Unlike the new goods product literature, the literature on service marketing practices, and in particular, new service product development, is relatively sparse. The main purpose of this thesis is to examine a number of aspects of new service product development practice with respect to financial services and specifically, credit card financial services. The empirical investigation utilises both a case study and a survey approach, to examine aspects of new service product development industry practice relating specifically to gaps and deficiencies in the literature with respect to the financial service industry. The findings of the empirical work are subsequently examined in the context in which they provide guidance and support for a new normative new service product development model. The study examines the UK credit card financial service product sector as an industry case study and perspective. The findings of the field work reveal that the new service product development process is still evolving, and that in the case of credit card financial services can be seen as a well-structured and well-documented process. New product development can also be seen as an incremental, complex, interactive and continuous process which has been applied in a variety of ways. A number of inferences are subsequently presented.

E-satisfaction:a re-examination

E-satisfaction as a construct has gained increasing importance in the marketing literature in recent times. The examination of consumer satisfaction in an online context follows the growing consensus that in Internet retailing, as in traditional retailing, consumer satisfaction is not only a critical performance outcome, but also a primary predictor of customer loyalty and thus, the Internet retailer's endurance and success. The current study replicates the initial examination of e-satisfaction within the U.S. by [Szymanski, David M., & Richard T. Hise (2000). E-satisfaction: An initial examination. Journal of Retailing, 76(3), 309–322] among a sample of online consumers drawn from Germany. The replication was extended to two contexts—consumer satisfaction with Internet retail shopping and consumer satisfaction with Internet financial services sites. The results yield rich insights into the validity of extending the measurement and predictors of e-satisfaction to a trans-national context.

Opportunity, fair process and relationship value:career development as a driver of proactive work behaviour

In line with recent findings from organisational justice theory, we hypothesised that employee proactive behaviour and careerist orientation is predicted by the interplay of perceived favourability of career development opportunities, the perceived fairness of the procedures used to decide them, and employee organisational commitment. Employees (N = 325) of a large financial services organisation responded to a self-completion questionnaire. As predicted, when career development opportunities were viewed unfavourably, perceived procedural justice was significantly and positively related to individual proactive behaviour and significantly and negatively related to careerist orientation but only when organisational commitment was high. It appears that high procedural justice may only 'offset' the negative effects of unfavourable career development opportunities when employees identify with, and are committed to, their organisation. Further support is presented for a relational, rather than instrumental, model of procedural justice when reflecting on employee reactions to their employers' policies and decision-making. Implications for theory and practice are discussed.

Loan loss provisions, earnings management and capital management under IFRS:the case of EU commercial banks

Prior research has shown that loan loss provisions are primarily used as a tool for earnings management and capital management by listed banks. Effective 2005 all listed companies in the European Union (EU) are required to comply with International Financial Reporting Standards (IFRS). Adherence to IFRS, it is claimed, should enhance transparency of reporting practices relative to local General Accepted Accounting Principles (GAAP). The overall objective of this paper is to examine the impact of the implementation of IFRS on the use of loan loss provisions (LLPs) to manage earnings and capital. We use a sample of 91 EU listed commercial banks covering a period of 10 years (before and after implementation of IFRS). Since early adopters may have different incentives and motivations relative to those who adopt mandatorily, we dichotomize our sample into early and late adopters. Overall, we find that earnings management (using loan loss provisions) for both early and late adopters while significant over the estimation window is significantly reduced after implementation of IFRS. We also find that, for risky banks, earnings management behavior is more pronounced when compared to the less risky banks, but is significantly reduced in the post IFRS period. Capital management behavior by bank managers is not significant in both pre and post IFRS regimes. Overall, we conclude that the implementation of IFRS in the EU appears to have improved earnings quality by mitigating the tendency of bank managers of listed commercial banks to engage in earnings management using loan loss provisions.

Theorizing accounting and other [calculative] practices in private equity:Experimenting with Schatzki’s ‘site’ ontology

This thesis contributes to social studies of finance and accounting (Vollmer, Mennicken, & Preda, 2009) and the practice theory literatures (Feldman & Orlikowski, 2011) by experimenting (Baxter & Chua, 2008) with concepts developed by Theodore Schatzki and demonstrating their relevance and usefulness in theorizing and explaining accounting and other organizational phenomena. Influenced by Schatzki, I have undertaken a sociological investigation of the practices, arrangements, and nexuses forming (part of) the social ‘site’ of private equity (PE). I have examined and explained the organization of practices within the PE industry. More specifically, I have sought to throw light on the practice organizations animating various PE practices. I have problematized a particular aspect of Schatzki’s practice organization framework: ‘general understanding’, which has so far been poorly understood and taken for granted in the accounting literature. I have tried to further explore the concept to clarify important definitional issues surrounding its empirical application. In investigating the forms of accounting and control practices in PE firms and how they link with other practices forming part of the ‘site’, I have sought to explain how the ‘situated functionality’ of accounting is ‘prefigured’ by its ‘dispersed’ nature. In doing so, this thesis addresses the recent calls for research on accounting and control practices within financial services firms. This thesis contributes to the social studies of finance and accounting literature also by opening the blackbox of investment [e]valuation practices prevalent in the PE industry. I theorize the due diligence of PE funds as a complex of linked calculative practices and bring to fore the important aspects of ‘practical intelligibility’ of the investment professionals undertaking investment evaluation. I also identify and differentiate the ‘causal’ and ‘prefigurational’ relations between investment evaluation practices and the material entities ‘constituting’ those practices. Moreover, I demonstrate the role of practice memory in those practices. Finally, the thesis also contributes to the practice theory literature by identifying and attempting to clarify and/or improve the poorly defined and/or underdeveloped concepts of Schatzki’s ‘site’ ontology framework.

The value of risk reporting:a critical analysis of value-at-risk disclosures in the banking sector

This paper critically reviews the evolution of financial reporting in the banking sector with specific reference to the reporting of market risk and the growing use of the measure known as Value at Risk (VaR). The paper investigates the process by which VaR became 'institutionalised'. The analysis highlights a number of inherent limitations of VaR as a risk measure and questions the usefulness of published VaR disclosures, concluding that risk 'disclosure' might be more apparent than real. It also looks at some of the implications for risk reporting practice and the accounting profession more generally.

Contraprestaciones por los servicios financieros del Consulado de México y sus miembros: los fondos extraordinarios para la guerra contra Gran Bretaña, 1779-1783

Nueva España aportó la mayor parte de los recursos que sostuvieron a las fuerzas armadas españolas durante la guerra contra Gran Bretaña que se desarrolló en el Caribe entre 1779 y 1783. En el artículo se analizan las medidas a las que recurrieron las autoridades reales para obtener recursos extraordinarios del Consulado y varios mercaderes de la ciudad de México. Asimismo se exponen algunas de las contraprestaciones que negociaron a cambio de dichos servicios financieros y se plantean diversas hipótesis acerca de los motivos económicos, sociales y políticos que los llevaron a colaborar con el monarca, teniendo en cuenta los negocios que realizaban durante el conflicto bélico y la forma en que eran afectados por la reciente apertura comercial.

Los retos de la banca móvil en la inclusión financiera en Colombia

La inclusión financiera hace alusión al acceso y la utilización de los productos y servicios financieros por parte de todos los actores económicos de la sociedad, sobre todo los de aquellos sectores que han tenido poco acceso al sistema financiero formal o no lo han tenido -- Justamente por las características de alcance, interactividad, bajo precio y facilidad de uso, la telefonía móvil se promueve como una herramienta idónea para impulsar el acceso y el uso de servicios financieros, para permitirles a las entidades financieras ampliar el rango de la población atendida por su alto grado de penetración y mejorar la eficiencia y la experiencia con los clientes -- Este trabajo plantea una reflexión sobre los retos estratégicos que debe enfrentar la banca móvil para promover servicios financieros apropiados y asequibles para los diferentes grupos de la población