Managerial discretion in distressed firms

This study examines the earnings management behaviour of 455 distressed US firms that filed for bankruptcy during the period 1986-2001. We examine (a) possible earnings management during the years prior to bankruptcy-filing, (b) whether qualified audit opinions cause conservative earnings management behaviour, (c) whether earnings management differs between firms that discontinued operations and firms that survived thereafter, and (d) the effect of earnings management on subsequent stock returns. Our results are consistent with downwards earnings management 1 year prior to the bankruptcy-filing. Results also show that (a) firms receiving unqualified audit opinions 4 or 5 years prior to the bankruptcy-filing event manage earnings upwards in subsequent years, consistent with Rosner [2003. Earnings manipulation in failing firms. Contemporary Accounting Research 20, 361-408], (b) more conservative earnings management seems to be related to the qualified audit opinions rendered in the preceding year, (c) firms with long-term negative accruals the year of bankruptcy-filing have a greater chance to survive thereafter, and (d) more pronounced (negative) earnings management is associated with more negative (next year's) subsequent returns. © 2007 Elsevier Ltd. All rights reserved.

Validating the organizational climate measure:links to managerial practices, productivity and innovation

This paper describes the development and validation of a multidimensional measure of organizational climate, the Organizational Climate Measure (OCM), based upon Quinn and Rohrbaugh's Competing Values model. A sample of 6869 employees across 55 manufacturing organizations completed the questionnaire. The 17 scales contained within the measure had acceptable levels of reliability and were factorially distinct. Concurrent validity was measured by correlating employees' ratings with managers' and interviewers' descriptions of managerial practices and organizational characteristics. Predictive validity was established using measures of productivity and innovation. The OCM also discriminated effectively between organizations, demonstrating good discriminant validity. The measure offers researchers a relatively comprehensive and flexible approach to the assessment of organizational members' experience and promises applied and theoretical benefits. Copyright © 2005 John Wiley & Sons, Ltd.

Between a rock and a hard place:exploring women's experience of participation and progress in managerial careers

Purpose – The growth of women in management has been argued to offer a route to reduce organizational and social inequality. The purpose of this paper is to explore the careers and experiences of female managers from a variety of organizations operating in the West Midlands region of the UK. Design/methodology/approach – This study is based on 56 interviews conducted with women managers within various sectors. The interviewees also completed pictorial careers maps, which along with interview recordings were analyzed. Findings – The key themes to emerge from this research centre upon the factors that draw women into management (which we term seductive elements) as well as some of the hindering practices that prevent women from progressing. Significantly, we find that managerial careers are associated with gendered assumptions and practices (e.g. facilitating and developing people) which contribute to construct management (done by women) as bounded-up characteristically with “feminized” behaviours. Research limitations/implications – The research is based upon a relatively small sample that is multi-sectorial. Wider studies that increase population size, together with deeper studies that hold sectorial variables constant would further add weight to the findings presented here. Practical implications – The paper draws attention to the “lived reality” of doing management, which, we argue often, for women in particular involves the reconciliation of contradictions and conflicting pressures. We draw attention to the lack of “alternative models” of organization and highlight the potential for gender-focus mentoring and management education. Originality/value – The paper is of value in giving voice to a selection of women managers by allowing them to reflect upon and explore their experience of management. The paper also documents the day-to-day reality of women's managerial careers that require the re-enactment and reproduction of stereotypical gender norms.

Strategic information systems at the Colombian President's Office (1990-1992) : a managerial cybernetic approach

This research studies the issue of using strategic information technology for improving organisational effectiveness. It analyses different academic approaches explaining the nature of information systems and the need organisations feel of developing strategic information systems planning processes, to improve organisational effectiveness. It chooses Managerial Cybernetics as the theoretical foundation supporting development of a "Strategic Information Systems Planning" Framework, and uses it for supporting the analysis of a documented story about the process lived by the Colombian President's Office, in 1990-1992. It argues that by analysing the situation through this new analysis framework we may enlighten some previously unclear situations lived, and not yet properly explained through other approaches to strategic information systems planning. The documented history explains the organisational context and strategic postures of the Colombian President's Office and the Colombian Public Sector, at that time, as well as some of the strategic information systems defined and developed. In particular it analyses a system developed jointly by the President's Office and the National Planning Department, for measuring results of the main national development programmes. Then, it reviews these situations, in the light of the new framework and presents the main findings of the exercise. Finally, it analyses the whole research exercise, the perceived usefulness of the chosen frameworks and tools to enlighten the real situations analysed that were not clear enough, and some open research paths to follow for future researchers interested in the issue.

Managerial cognitions in technological innovation processes:a study of interpretative processes

In this research, conceptualizations of the links between technological innovation and organizational change are explored and recommendations in the literature concerning such changes are reviewed and criticized. Such recommendations do not usually address the details of social interactions by which organizational changes take place. As a consequence, the issue of how these recommendations become relevant for the actors who would carry them out is not addressed. The complexity of organizational change processes highlights the role of actors' interpretations of organizational reality. Interpretations take place through the use of language in the interaction between actors. Theoretical contributions and recommendations concerning organizational changes should be seen therefore as discourses which contribute to these interpretations. They will influence the process of change only if they become relevant for organizational actors'. A method for analysing discourse in organizations is presented. It is used to identify the variety of discourses which are put forward in organizations, and to describe the structure of their distribution among actors. The structures of discourses in three companies suggest that knowledge about technological innovation processes becomes relevant to the extent that it contributes to political/discursive processes maintained by actors attempting to secure or change their role definitions. It follows that recommendations concerning planned organizational change should take into account these processes explicitly. It is therefore suggested that the analysis of discourse can be a valuable instrument for monitoring change processes. Suggestions for further research are made, concerning (i) the development of the method itself and its use in real situations (ii) the study of how discourse structures evolve over time and episodes of change.

A longitudinal study of Chinese managerial behaviour:an inside view of decision-making under the economic reform

This research compared decision making processes in six Chinese state-owned enterprises during the period 1985 to 1988. The research objectives were: a) To examine changes in the managerial behaviour over a period of 1985 to 1988 with a focus on decision-making; b) Through this examination, to throw light on the means by which government policies on economic reform were implemented at the enterprise level; c) To illustrate problems encountered in the decentralization programme which was a major part of China's economic reform. The research was conducted by means of intensive interviews with more than eighty managers and a survey of documents relating to specific decisions. A total of sixty cases of decision-making were selected from five decision topics: purchasing of inputs, pricing of outputs, recruitment of labour, organizational change and innovation, which occurred in 1985 (or before) and in 1988/89. Data from the interviews were used to investigate environmental conditions, relations between the enterprise and its higher authority, interactions between management and the party system, the role of information, and effectiveness of regulations and government policies on enterprise management. The analysis of the data indicates that the decision processes in the different enterprises have some similarities in regard to actor involvement, the flow of decision activities, interactions with the authorities, information usage and the effect of regulations. Comparison of the same or similar decision contents over time indicates that the achievement of decentralization varied according to the topic of decision. Managerial authority was delegated to enterprises when the authorities relaxed their control over resource allocation. When acquisition of necessary resources is dependent upon the planning system or the decision matter is sensitive, because it involves change to the institutional framework (e.g. the Party), then a high degree of centralization was retained, resulting in a marginal change in managerial behaviour. The economic reform failed to increase decision efficiency and effectiveness of decision-making. The prevailing institutional frameworks were regarded as negative to the change. The research argues that the decision process is likely to be more contingent on the decision content than the organization. Three types of decision process have been conceptualized, each of them related to a certain type of decision content. This argument gives attention to the perspectives of institution and power in a way which facilitates an elaboration of organizational analysis. The problems encountered in the reform of China's industrial enterprises are identified and discussed. General recommendations for policies of further reform are offered, based on the analysis of decision process and managerial behaviour.

The impact of national cultures and interpersonal factors on managerial communication

This study was undertaken for two primary purposes. The first was to discover whether or not two of the four cultural dimensions depicted by Hof-stede (1980), namely Power Distance and Uncertainty Avoidance, could be repeated using samples from seven organizations operating in three distinct cultural settings. The second was to assess the degree to which these dimensions affect superior-subordinate communication across the culturally-different groups. Also, the impact of the three interpersonal factors: Trust in Superior, Upward Influence and Mobility Aspirations was investigated cross-culturally. Participants were 291 managers from seven organizations; four Sudanese, two white British and an organization in Britain run by a group of British citizens of Pakistani extraction. It was hypothesized that the Power Distance and Uncertainty Avoidance of the three groups would replicate Hof-stede's. Specific implications of these dimensions for organizational communication and in particular for superior-subordinate communication were also hypothesized. Multiple regression analyses were performed with items of the two cultural dimensions and the three interpersonal factors (each in turn) forming the independent variables, while the organizational communication aspects formed the dependent variables. T-tests between means were also used to compare and contrast issues such as directionality of information flow across organizations operating in these settings. Work-related values of each of the three cultural groups provided support for Hofstede's model. However, only tentative support was given to the hypothesized relationships between the cultural dimensions and organizational communication. Similarly, weak associations were found between the three interpersonal factors and superior-subordinate communication behaviour. Some practical and theoretical implications are offered. An evaluation of the study and recommendation for further research are also given.

An investigation of managerial skills:Implications for personnel policy

This research explores the conceptual basis in adopting a skills approach to management development. The literature reveals a number of development approaches but only a limited appreciation of how the manager does his job i.e. of the skills that he needs. An investigation of managerial skills was conducted with 10 manager s mainly occupying middle and senior positions. The principal source of evidence was the manager's thoughts on what he did and how he did it, although the interviews were supplemented by formal and informal observation. There was also a dialectic value from discussions with other analysts/managers and empathy between analyst and practitioner also played a part. Each manager was invited to comment upon his own skills analysis as a check upon validity. The study supports the view that the manager similar to other skilled practitioners, is conceptually a model builder and operationally a navigator (Singleton 1978b) . The manager variously holds enactive, pictorial, symbolic and hybrid models that enable him to understand his world and act in it. The universal managerial function is decision making and the study presents a preliminary nomenclature in classifying decision processes or perceptual skills. Managerial skills are also reflected in interpersonal interaction where the hallmark is mutual construction and attribution and in 'self-management’ where the requirement is to cope with the inner rather than the outer world. Differences between the managers are most evident in perceptual skills, the more senior manager requiring increasing ability to process abstract information and take account of environmental uncertainty. He will also make greater use of 'off- line’ information. The practical purpose in studying managerial skills is to facilitate the improvement of managerial performance and the implications of the research for training, selection and appraisal are explored.

Managerial job satisfaction:a longitudinal study

The study examines the job satisfaction of supervisors and managers in four organisations over time. It also considers the importance which they attached to different facets of their job. The major objectives were: To examine the constituent dimensions of job satisfaction at intervals over one year. To examine reasons for change inthe level of job satisfaction at intervals over one year. To provide information on job satisfaction for those concerned with job satisfaction policies. The sample consisted of one hundred and eight people. Each was interviewed on at least three occasions over the course of a year. Interviews took place at predetermined time intervals. The study shows that job satisfaction is dynamic over a relatively short period of time. The ratings which supervisors and managers gave to aspects of their job did not, however, all change by equal amounts or in the same direction. Changes in job satisfaction were associated with events experienced but it was the meaning of those events to correspondents which appeared to be particularly important. People tended to adopt a localised frame of reference when considering their work situation. Certain job variables, such as variety, were consistently and positively correlated with job satisfaction. With some other variables, the relationship varied across time. Frequently, age and job level moderated the association between independent variables and job satisfaction. Links were found between the quality of life and job satisfaction. There was a consistent positive association between job satisfaction and life satisfaction. However, the job was rarely considered to be the main factor contributing to a person's quality of life. The research highlights the difficulties and desirability of introducing standardised job satisfaction policies in the light of individual differences. In addition, it demonstrates that merely correlating variables with job satisfaction at one point in time may conceal complex relationships and meanings. A new measure of job satisfaction - whereby facets are assessed and rated relative to each other was also developed as part of this study.

Do managerial strategies influence service behaviours? Insights from a qualitative study

Based on a review of the extant literature, a conceptual framework for analyzing the associations between managerial strategies (internal communications, empowerment, supportive leadership and professional development), employee job attitudes (organizational commitment and job satisfaction) and prosocial service behaviours (PSBs) is developed. The authors explore the relevance of the proposed conceptual model and testable propositions regarding the associations between managerial strategies, employee attitudes and PSBs by conducting in-depth interviews of FLEs in a travel service organization. Based on the findings of the in-depth interviews, the relationships between managerial strategies, job attitudes and PSBs in the conceptual framework are largely supported.

Pre-entry organisational identification:considering the theoretical and managerial implications of future members’ identification with an organisation

From a Social Identity Theory perspective, organisational identification arises through a cognitive process of self-categorisation. As a consequence a person need not have a formal relationship with an organisation in order to identify with it. In this conceptual paper, the authors draw on this proposal to argue that future members are capable of identifying with an organisation prior to entry, and that this initial pre-entry identification could contribute to a person’s subsequent post-entry organisational identification. The paper further suggests that because no distinction need be drawn between organisational identification in current and future members, we might expect to find the same antecedents of identification in both instances. The group engagement model (Tyler and Blader 2003) is called on to propose that when a future member experiences pride in, and respect from, an organisation before they join, this should positively influence their pre-entry organisational identification. The authors explore the managerial implications of these propositions, and argue that an organisation’s actions and practices that have been shown to influence a post-entry organisational identification should have an equivalent impact on future members’ organisational identification when observed during the pre-entry period. Two examples of such practices, organisational support and organisational communication, are used to illustrate this suggestion and a number of ways are discussed through which these practices may be experienced by a person before they join an organisation.

Revisiting the role stress-commitment relationship:can managerial interventions help?

Purpose: The purpose of this paper is to investigate the moderating influences of empowerment and professional development on role stress-commitment relationships, while examining and confirming the effects of role stress on organisational commitment. Design/methodology/approach: The results are drawn from a cross-sectional survey of 184 front-line employees (FLEs) from a travel service organization. Multiple and moderated regression analyses were employed to test the hypothesised direct and interaction effects. Findings: The results show that role stressors influence affective organizational commitment in FLEs negatively. Role ambiguity did not, unexpectedly, influence continuance commitment positively, but role conflict did. Professional development and empowerment are important management tools that can be used to combat the detrimental effect of role stress on organizational commitment. The paper finds empowerment to be particularly useful in combating the dysfunctional effects of role ambiguity on affective commitment, while professional development is a key tool that helps to combat the dysfunctional effects of role conflict on affective and continuance commitment. However, there are caveats associated with the implementation of these management tools. Practical implications: It is important for management to understand role stress from the FLE perspective, and strategically use intervention tools to help moderate the effects of role stress on organizational commitment components. Originality/value: This study adds further support to the literature that role ambiguity and role conflict should be studied as distinct components of role stress because treating role stress as a single construct may result in suboptimal outcomes for managers, and misleading findings for researchers. In this context, the paper contributes to literature by investigating the moderating impact of empowerment and professional development on the role stress-affective commitment/continuance commitment relationships. The findings suggest that different managerial strategies are required to combat the effect of each of these role stressors on the affective and continuance components of commitment respectively. © Emerald Group Publishing Limited.

Real options in multinational decision-making:managerial awareness and risk implications

This paper addresses the theme of real options decision-making in multinational corporations (MNCs) and stresses the role of real options attention and managerial learning in company performance. Using a sample of 278 large MNCs with categorised degrees of managerial real options awareness, we examine the risk implications of switching options in multinational operations, and explore the extent to which the real options logic can be classified as “best practice” in decision-making and risk management. Our results reveal that MNCs which have high managerial awareness about their real options are able to reduce their downside risk through multinationality, organisational slack and other firm characteristics. This finding does not apply fully to MNCs without evidence of such an awareness. Also, although real options awareness does not systematically guarantee lower downside risk from operations, supplementary results indicate that MNCs with evidence of significant investment in the acquisition of real options knowledge tend to outperform competitors that are unaware of their real options. This suggests that if real options are explored and exploited appropriately, real options decision-making can result into superior performance for MNCs in the long-term.