The link between self-managed work teams and learning organisations using performance indicators

Both the learning organization literature and the self-managed work team literature have alluded to the potential links between teamwork and learning. However, as yet the link between these two concepts remains undeveloped. This study uses a survey of a random sample of 200 Australian organizations to empirically examine the relationships between self-managed work teams and the learning organization using performance indicators as a medium. It was found that the learning organization concept displays a moderate to strong link with three measures of performance used in this study: knowledge performance, financial performance and customer satisfaction. Although the self-managed work team concept did not display any significant relationship with performance, the qualitative component of the survey did emphasize that there is a common belief that self-managed teams can increase performance in the right setting. While an insignificant relationship between self-managed teams and the learning organization was also found, this study suggests some methodological concerns for future research into the relationship between self-managed teams and the learning organization.

An exploratory study on internal audit independence in Australia

This study draws on agency and institutional theory to examine the issue of internal audit’s independence through its relationship with components of corporate governance.

The internal audit function is actively considered as one of the four components of corporate governance, along with the board, management and external auditors. It serves this purpose by providing a range of services in its capacity of monitoring and consulting which is actively sought by the other components of corporate governance to satisfy their extended accountability requirements. The integrity of these services is, however, only assured if internal audit maintains its independent status. As such there is a “tension” resulting from the pressure to provide these value added services as perceived by the parties involved and maintaining its independence status.

Based on an extended survey with organisations in the Australian corporate sector, this study critically examines the results of the survey against existing literature and best practice guidelines to determine if internal audit functions operating under this tense environment are operating independently.

The results indicate an interesting analysis. While it indicates a somewhat trend in complying with best practice guidelines for maintaining independence, it also indicates that this is not consistently adhered to as organisations are able to operate in an environment that compromises internal audit independence. A main reason for this appears to be a mix of internal audit structural set ups brought about by a lack of statutory backing to provide for consistency in implementation of best practice guidelines for maintaining independence. This is exacerbated by internal audit being viewed as partner by these parties thus widening the “tension” gap between its advisory role and its independent status. A wider question emerges which questions the ability to maintain this independence concept under a partnership management environment. The concept of internal audit being an independent function as promulgated by the Institute of Internal Auditors through its definition of internal audit is seriously questioned under the totality of this environment.

Optimal range-difference-based localization considering geometrical constraints

This paper proposes a new type of algorithm aimed at finding the traditional maximum-likelihood (TML) estimate of the position of a target given time-difference-of-arrival (TDOA) information, contaminated by noise. The novelty lies in the fact that a performance index, akin to but not identical with that in maximum likelihood (ML), is a minimized subject to a number of constraints, which flow from geometric constraints inherent in the underlying problem. The minimization is in a higher dimensional space than for TML, and has the advantage that the algorithm can be very straightforwardly and systematically initialized. Simulation evidence shows that failure to converge to a solution of the localization problem near the true value is less likely to occur with this new algorithm than with TML. This makes it attractive to use in adverse geometric situations.

A sex difference in the cortisol response to tail docking and ACTH develops between 1 and 8 weeks of age in lambs

It is important to understand factors that may influence responses to stress, as these factors may also influence vulnerability to pathologies that can develop when stress responses are excessive or prolonged. It is clear that, in adults, the sex of an individual can influence the cortisol response to stress in a stressor specific manner. Nevertheless, the stage of development at which these sex differences emerge is unknown. We tested the hypothesis that there are sex differences in the cortisol response to tail docking and ACTH in lambs of 1 and 8 weeks of age. We also established cortisol responses in males when tail docking was imposed alone and in combination with castration at these ages. In experiment 1, 1 and 8 week old male and female lambs were subjected to sham handling, tail docking or, in males, a combination of tail docking and castration. In experiment 2, we administered ACTH (1.0 IU/kg) to male and female lambs at 1 and 8 weeks of age. There were significant cortisol responses to all treatments at both ages. Sex differences in the cortisol responses to tail docking and ACTH developed between 1 and 8 weeks of age, with females having greater responses than males. The data suggest that the mechanism for the sex difference in response to tail docking may involve the adrenal glands. At both ages, in males, the cortisol response to the combined treatment of tail docking and castration was significantly greater than that for tail docking alone.

Retrospective screening program

A peek into the past of an Australian experimental cinema legend. Glorious 16mm film program with sympathetic vibrations by Jon Dale, Joel Stern, Lloyd Barrett & Joe Musgrove.

Valuation and incentive effects of hurdle rate executive stock options

Traditional executive stock options are often criticized for inherently weak links between pay and performance. Hurdle rate executive stock options represent a viable improvement. However, valuing these options presents extraordinary analytic difficulties. With a constant dividend yield the strike price becomes a path-dependent function of the stock price and exact analytic valuation is intractable. To solve this problem, we apply the Monte Carlo valuation approach developed by Longstaff and Schwartz (Rev Financ Stud 4:113–147, 2001) to estimate the value of path-dependent American options. We also extend the methodology to incorporate the theoretical framework by Ingersoll (J Bus 79:453–487, 2006) to permit subjective valuation influenced by an executive’s risk aversion.

The cost of granting executive stock options with strike prices adjusted by the cost of capital

Purpose – The purpose of this paper is to estimate the cost of granting executive stocks with strike prices adjusted by the cost of capital.

Design/methodology/approach – In the paper a Monte Carlo simulation approach developed in Longstaff and Schwartz is used in conjunction with the subjective valuation model developed in Ingersoll to value these executive stock options that are subject to performance hurdles.

Findings – The paper finds that standard European Black-Scholes-Merton option values overstate the true cost to the firm of granting these executive stock options. The option values also decrease with a higher dividend yield, a higher performance hurdle, a longer vesting period, and a shorter maturity.

Research limitations/implications – While the study in the paper is limited to the valuation of executive options, the methodology can be used to study incentive effects of executive stock options that have a performance hurdle.

Practical implications – The approach used in this paper to estimate the cost of granting executive stock options is a clear improvement over standard European option pricing approaches that often result in biased estimates.

Originality/value – This paper presents a first attempt to integrate the Ingersoll utility-theoretic model and the Longstaff and Schwartz least squares Monte Carlo algorithm to estimate the subjective value and the objective cost of executive stock options with a performance hurdle. This valuation approach will be useful in the study of other types of executive compensation.

Hurdle rate : executive stock options

Executive stock options with a rising strike price are a recent innovation in executive compensation in Australia and New Zealand. These options combine a dividend protection feature and a strike price that increases at a hurdle rate set with reference to a cost of capital estimate. With a constant dividend yield, the strike price becomes a path-dependent function of the stock price and exact analytic valuation becomes intractable. However, path-dependent American options can be valued using a Monte Carlo approach proposed in Longstaff and Schwartz (2001). We examine procedures for valuing these options and compare them with Black and Scholes (1973) and Merton (1973) formula valuations.