Organizational competencies and dynamic Accounting Information System capability: Impact on AIS processes and firm performance

Accounting information systems (AIS) capture and process accounting data and provide valuable information for decision-makers. However, in a rapidly changing environment, continual management of the AIS is necessary for organizations to optimise performance outcomes. We suggest that building a dynamic AIS capability enables accounting process and organizational performance. Using the dynamic capabilities framework (Teece 2007) we propose that a dynamic AIS capability can be developed through the synergy of three competencies: a flexible AIS, having a complementary business intelligence system and accounting professionals with IT technical competency. Using survey data, we find evidence of a positive association between a dynamic AIS capability, accounting process performance, and overall firm performance. The results suggest that developing a dynamic AIS resource can add value to an organization. This study provides guidance for organizations looking to leverage the performance outcomes of their AIS environment.

Following fashion: Visible progressiveness and the social construction of firm value

A central tenet underlying studies on management fashions is that the diffusion of novel forms, models and techniques is driven by an institutional norm of progress, which is the societal expectation that managers will continuously use 'new and improved' management practices. We add to the literature on management fashions by arguing that, if the display of progressiveness in the manner of managing and organizing is expected of organizations, firms that are visibly progressive would be evaluated more positively by organizational audiences following this institutional prescription. Using article counts of co-occurrences of firms and various fashionable management practices in Wall Street Journal, we hypothesize positive effects of such associations on security analysts' evaluations of these firms. Results support this hypothesis. Our study enriches the management fashion literature by highlighting the consequential relevance of organizational adherence to the norm of progress.

Oligarchs, political regime changes, and firm valuation

This paper examines the impact of a regime shift on the valuation of politically powerful oligarch firms. Focusing on the Yeltsin-Putin regime shift in Russia, we find that the valuations of outside shareholders claims are significantly higher under the Putin regime than under the Yeltsin regime after controlling for industry and time effects. The findings suggest that the increasing cost of extracting private benefits outweigh the reduction in the value of political connections following the political regime change. The results are also consistent with changes in the risk of state expropriation. Our results show that effects driven by the political regime change complement the traditional view stating that increased ownership concentration improved the performance of Russian oligarch firms.

A Model for Creating Strategic Alliances. A Study of Inter-firm Cooperation in the North European ICT Sector

In this study, it is argued that the view on alliance creation presented in the current academic literature is limited, and that using a learning approach helps to explain the dynamic nature of alliance creation. The cases in this study suggest that a wealth of inefficiency elements can be found in alliance creation. These elements can further be divided into categories, which help explain the dynamics of alliance creation. The categories –combined with two models brought forward by the study– suggest that inefficiency can be avoided through learning during the creation process. Some elements are especially central to this argumentation. First, the elements related to the clarity and acceptance of the strategy of the company, the potential lack of an alliance strategy and the elements related to changes in the strategic context. Second, the elements related to the length of the alliance creation processes and the problems a long process entails. It is further suggested that the different inefficiency elements may create a situation, where the alliance creation process is –sequentially and successfully– followed to the end, but where the different inefficiencies create a situation where the results are not aligned with the strategic intent. The proposed solution is to monitor and assess the risk for inefficiency elements during the alliance creation process. The learning, which occurs during the alliance creation process as a result of the monitoring, can then lead to realignments in the process. This study proposes a model to mitigate the risk related to the inefficiencies. The model emphasizes creating an understanding of the other alliance partner’s business, creating a shared vision, using pilot cooperation and building trust within the process. An analytical approach to assessing the benefits of trust is also central in this view. The alliance creation approach suggested by this study, which emphasizes trust and pilot cooperation, is further critically reviewed against contracting as a way to create alliances.

The impact of stock option incentives on investment and firm value

This paper analyzes the relations among firm-level stock option portfolio incentives, investment, and firm value based on a sample of Finnish firms during the time period 1987 – 2000. Utilizing exact and complete information regarding stock option portfolio characteristics, we find some evidence that firm investment is increasing in the incentives to increase stock price (delta) and risk (vega). Furthermore, we find strong evidence of a positive relation between both incentive effects and firm value (Tobin’s Q). In contrast, when we allow for stock option incentives, investment, and firm value to be simultaneously determined, we find no evidence that investment is increasing in incentives. However, even after controlling for endogeneity, we find that both incentive effects arising from stock option compensation display a positive and significant effect on firm value. Finally, in contradiction to earlier findings, we observe that neither Tobin’s Q nor investment drives incentives.

Corporate Governance Mechanisms and Firm Performance:Evidence from Finland

This paper examines the association between corporate governance attributes and firm performance of Finnish firms during 1990 – 2000. The empirical results suggest that corporate governance matters for firm performance. First, univariate test results indicate that firms characterized by a high (efficient) level of corporate governance have delivered greater stock returns, are higher valued based on the measure of Tobin’s Q, and exhibit higher ratios of cash flow to assets, on average, in comparison to their counterparts characterized by a low (inefficient) level of corporate governance. Second, controlling for a number of well-known determinants of stock returns, we find evidence that firms categorized by inefficient corporate governance have delivered inferior returns to shareholders during the investigation period. Finally, after controlling for several common determinants of firm value, we find that firms characterized by efficient corporate governance have been valued higher during the investigation period, measured by Tobin’s Q.

Secure Concurrency Control in Firm Real-Time Database Systems

Many real-time database applications arise in electronic financial services, safety-critical installations and military systems where enforcing security is crucial to the success of the enterprise. For real-time database systems supporting applications with firm deadlines, we investigate here the performance implications, in terms of killed transactions, of guaranteeing multilevel secrecy. In particular, we focus on the concurrency control (CC) aspects of this issue. Our main contributions are the following: First, we identify which among the previously proposed real-time CC protocols are capable of providing covert-channel-free security. Second, using a detailed simulation model, we profile the real-time performance of a representative set of these secure CC protocols for a variety of security-classified workloads and system configurations. Our experiments show that a prioritized optimistic CC protocol, OPT-WAIT, provides the best overall performance. Third, we propose and evaluate a novel "dual-CC" approach that allows the real-time database system to simultaneously use different CC mechanisms for guaranteeing security and for improving real-time performance. By appropriately choosing these different mechanisms, concurrency control protocols that provide even better performance than OPT-WAIT are designed. Finally, we propose and evaluate GUARD, an adaptive admission-control policy designed to provide fairness with respect to the distribution of killed transactions across security levels. Our experiments show that GUARD efficiently provides close to ideal fairness for real-time applications that can tolerate covert channel bandwidths of upto one bit per second.

External support and innovation performance of SMEs in Bangalore: Role of firm level factors

This paper probes the role of internal factors in SMEs in obtaining external support and achieving innovation performance in the context of auto component, electronics and machine tool industries of Bangalore in India. Using step-wise logistic regression analysis, the study found that only if SMEs have internal technical competence in terms of technically qualified entrepreneur, an exclusive design centre, and innovate more frequently, they will be able to obtain external support. Further using step-wise multiple regression the study concluded that SMEs which have come up to implement innovative ideas or exploit market opportunities and which have obtained external support with technically qualified entrepreneurs are able to exhibit better innovation performance.

Interaction between a strategic mass media firm and a government

Resumen: Este artículo intenta teorizar acerca de la dinámica entre los medios masivos de comunicación y los gobiernos de los países latinoamericanos. Si bien en la última década los gobiernos atacaron públicamente a los medios de comunicación, se afirma que no se dio por las razones que dicen, sino más bien por asuntos económicos. Por lo tanto, se ha diseñado un modelo utilizando el método de “principal” vs “incumbente”, donde se alcanzará un equilibrio de Nash perfecto en subjuegos. Además de esto, se realiza un repaso por la literatura conocida, y concluye señalando las fortalezas y debilidades del modelo propuesto.