The changing nature of UK construction professional service firms

Professional services firms (PSFs) have been the subject of much attention in the literature in recent years, ranging across a number of distinct but related disciplines including economics, sociology, organization and management studies. Analysis has tended to concentrate on law and accounting firms in particular, and although there is a growing academic interest in construction/built environment professional services firms (CPSFs), these have received much less scrutiny. However, many of the changes taking place among PSFs – in particular, growth in firm size, moves towards external ownership and greater service/geographical diversification – are also taking place among the larger CPSFs. The CPSF sector is not especially well documented and there is little understanding of the motives for, and implications of, these changes in the firms, their clients and wider society. CPSFs are reviewed in the context of the more general PSF literature and a set of questions is posed for future research on CPSFs. These questions include the need to understand the implications of firm type on performance, the form of ownership that might confer the greatest financial benefits for different stakeholder groups, and the wider societal consequences of continuing growth in size and diversification of CPSFs.

The tenant as a customer: can good service improve real estate performance?

Customer Relationship Management (CRM) theory suggests that good customer service results in satisfied customers, who in turn are more likely to remain loyal and recommend the service provider to others. Proponents of good customer service for tenants claim that landlords should see a return on any investment in their customer service, in the form of enhanced real estate performance. This paper begins by reviewing research on customer service returns in other industries. Through consideration of the characteristics of real estate markets, the paper explains how factors such as (inter alia) lease terms, property market cycles, and property type, might determine the relationship between customer service and real estate performance. The paper concludes that further research is needed to isolate specific aspects of customer service that are most appreciated by customers. It suggests that the financial returns which accrue to landlords adopting a customer-focused approach might indeed be quantified, and suggests an appropriate method for such future research.

The role of Investment Management Systems in regulatory compliance: a Post-Financial Crisis study of displacement mechanisms

The financial crisis of 2007–2009 and the resultant pressures exerted on policymakers to prevent future crises have precipitated coordinated regulatory responses globally. A key focus of the new wave of regulation is to ensure the removal of practices now deemed problematic with new controls for conducting transactions and maintaining holdings. There is increasing pressure on organizations to retire manual processes and adopt core systems, such as Investment Management Systems (IMS). These systems facilitate trading and ensure transactions are compliant by transcribing regulatory requirements into automated rules and applying them to trades. The motivation of this study is to explore the extent to which such systems may enable the alteration of previously embedded practices. We researched implementations of an IMS at eight global financial organizations and found that overall the IMS encourages responsible trading through surveillance, monitoring and the automation of regulatory rules and that such systems are likely to become further embedded within financial organizations. We found evidence that some older practices persisted. Our study suggests that the institutionalization of technology-induced compliant behaviour is still uncertain.

When rules and principles are not enough: insiders’ views and narratives on the global financial crisis

Much has been written about Wall Street and the global financial crisis (GFC). From a fraudulent derivatives market to a contestable culture of banking bonuses, culpability has been examined within the frames of American praxis, namely that of American exceptionalism. This study begins with an exploratory analysis of non-US voices concerning the nature of the causes of the GFC. The analysis provides glimpses of the globalized extent of assumptions shared, but not debated within the globalization convergence of financial markets as the neo-liberal project. Practical and paradigmatic tensions are revealed in the capture of a London-based set of views articulated by senior financial executives of financial service organizations, the outcomes of which are not overly optimistic for any significant change in praxis within the immediate future.

Service oriented approach to facility management using extended building information modelling

Facility management (FM), from a service oriented approach, addresses the functions and requirements of different services such as energy management, space planning and security service. Different service requires different information to meet the needs arising from the service. Object-based Building Information Modelling (BIM) is limited to support FM services; though this technology is able to generate 3D models that semantically represent facility’s information dynamically over the lifecycle of a building. This paper presents a semiotics-inspired framework to extend BIM from a service-oriented perspective. The extended BIM, which specifies FM services and required information, will be able to express building service information in the right format for the right purposes. The service oriented approach concerns pragmatic aspect of building’s information beyond semantic level. The pragmatics defines and provides context for utilisation of building’s information. Semiotics theory adopted in this paper is to address pragmatic issues of utilisation of BIM for FM services.

Transcending borders with international top management teams: a study of European financial multinational corporations

This paper investigates how changes in firm degree of internationalization are associated with the configuration of top management teams (TMT) based on a dataset of 41 large European firms in the banking and insurance industry, including detailed career profiles of the 264 executives that were serving on the TMTs of these firms at year-end 2002. Our findings suggest firms tend to match top executive profiles to their strategies. Entry into new foreign markets and new cultural zones was found to be associated with higher levels of international capacity at TMT level, whereas changes in international posture per se are not related to TMT international capacity. We discuss the interplay between firm strategies and internal structures in the context of firm internationalization and suggest directions for future research on TMTs

The effect of financial leverage on real and accrual-based earnings management

Past research has documented a substitution effect between real earnings management (RM) and accrual-based earnings management (AM), depending on relative costs. This study contributes to this research by examining whether levels of (and changes in) financial leverage have an impact on this empirically documented trade-off. We hypothesise that in the presence of high leverage, firms that engage in earnings manipulation tactics will exhibit a preference for RM due to a lower possibility—and subsequent costs—of getting caught. We show that leverage levels and increases positively and significantly affect upward RM, with no significant effect on income-increasing AM, while our findings point towards a complementarity effect between unexpected levels of RM and AM for firms with very high leverage levels and changes. This is interpreted as an indication that high leverage could attract heavy outsider scrutiny, making it necessary for firms to use both forms of earnings management in order to achieve earnings targets. Furthermore, we document that equity investors exhibit a significantly stronger penalising reaction to AM vs. RM, indicating that leverage-induced RM is not as easily detectable by market participants as debt-induced AM, despite the fact that the former could imply deviation from optimal business practices.

European business schools and global leadership: an examination of the admission criteria of the european master in management programs ranked by the Financial Times 2010

O aumento de empresas que operam internacionalmente requer o desenvolvimento de líderes mundiais para colocar as estratégias em prática. Embora este processo de desenvolvimento é importante para o mundo corporativo, muitos futuros executivos são graduados de escolas de administração de empresas que estão intimamente ligados ao mundo de negócios e, portanto, desempenhão um papel importante no processo. Esta pesquisa examina se os programas europeus “Master in Management” classificado pelo Financial Times em 2010 selecionam aqueles candidatos que são mais adequados para o desenvolvimento de liderança global. Portanto, três anteriores meta-estudos são sintetizados para produzir um perfil de competências classificadas de um líder global. Então, informações sobre os critérios de admissão dos programas de mestrado são coletadas e comparadas com este perfil. Os resultados mostram que seis competências são medidas por mais da metade dos programas: proficiência em Inglês, capacidade analítica (racionamento lógico e quantitativo), capacidade de comunicação, conhecimento do negócio global, determinação para alcançar, motivação e capacidade interpessoal. Além disso, as habilidades operacionais requerentes pelos líderes globais não são significativas no processo de admissão e o foco é sobre as habilidades analíticas. Comparação dos resultados com o perfil anteriormente desenvolvido abrangente indica que uma quantidade significativa de programas pode subestimar o significado de habilidades pessoais e características para o desenvolvimento de líderes globais.

Board of directors and top management team: a study on CEO relative power and financial return

Best corporate governance practices published in the primers of Brazilian Securities and Exchange Commission and the Brazilian Corporate Governance Institute promote board independence as much as possible, as a way to increase the effectiveness of governance mechanism (Sanzovo, 2010). Therefore, this paper aims at understanding if what the managerial literature portraits as being self-evident - stricter governance, better performance - can be observed in actual evidence. The question answered is: do companies with a stricter control and monitoring system perform better than others? The method applied in this paper consists on comparing 116 companies in respect to the their independence level between top management team and board directors– being that measured by four parameters, namely, the percentage of independent outsiders in the board, the separation of CEO and chairman, the adoption of contingent compensation and the percentage of institutional investors in the ownership structure – and their financial return measured in terms return on assets (ROA) from the latest Quarterly Earnings release of 2012. From the 534 companies listed in the Stock Exchange of Sao Paulo – Bovespa – 116 were selected due to their level of corporate governance. The title “Novo Mercado” refers to the superior level of governance level within companies listed in Bovespa, as they have to follow specific criteria to assure shareholders ´protection (BM&F, 2011). Regression analyses were conducted in order to reveal the correlation level between two selected variables. The results from the regression analysis were the following: the correlation between each parameter and ROA was 10.26%; the second regression analysis conducted measured the correlation between the independence level of top management team vis-à-vis board directors – namely, CEO relative power - and ROA, leading to a multiple R of 5.45%. Understanding that the scale is a simplification of the reality, the second part of the analysis transforms all the four parameters into dummy variables, excluding what could be called as an arbitrary scale. The ultimate result from this paper led to a multiple R of 28.44%, which implies that the combination of the variables are still not enough to translate the complex reality of organizations. Nonetheless, an important finding can be taken from this paper: two variables (percentage of outside directors and percentage of institutional investor ownership) are significant in the regression, with p-value lower than 10% and with negative coefficients. In other words, counter affirming what the literature very often portraits as being self-evident – stricter governance leads to higher performance – this paper has provided evidences to believe that the increase in the formal governance structure trough outside directors in the board and ownership by institutional investor might actually lead to worse performance. The section limitations and suggestions for future researches presents some reasons explaining why, although supported by strong theoretical background, this paper faced some challenging methodological assumptions, precluding categorical statements about the level of governance – measured by four selected parameters – and the financial return in terms of financial on assets.

Public debt management, monetary policy and financial institutions

Despite the large size of the Brazilian debt market, as well the large diversity of its bonds, the picture that emerges is of a market that has not yet completed its transition from the role it performed during the megainflation years, namely that of providing a liquid asset that provided positive real returns. This unfinished transition is currently placing the market under severe stress, as fears of a possible default from the next administration grow larger. This paper analyzes several aspects pertaining to the management of the domestic public debt. The causes for the extremely large and fast growth ofthe domestic public debt during the seven-year period that President Cardoso are discussed in Section 2. Section 3 computes Value at Risk and Cash Flow at Risk measures for the domestic public debt. The rollover risk is introduced in a mean-variance framework in Section 4. Section 5 discusses a few issues pertaining to the overlap between debt management and monetary policy. Finally, Section 6 wraps up with policy discussion and policy recommendations.