The Impact of Ethical Tools on Aggressiveness in Financial Reporting

The proposed adoption of International Financial Reporting Standards (IFRS) in the United States has ignited a debate as to whether the principles‐based nature of these standards better serves the interests of investors. While it is argued that these principled‐based standards will encourage more transparent financial reporting than the current rules‐based U.S. standards, critics argue that IFRS will invite more aggressive financial reporting through the liberal exercising of professional judgment. This empirical study aims to understand what individual and organizational factors may affect aggressiveness when making accounting judgments. In particular, we examine the influence that prior ethics training, codes of ethics and an individual's predominant moral reasoning schema have on adherence to company policy in an accounting‐related (depreciation) judgment. Results of the study show that respondents with prior ethics training are more likely to adhere to company accounting policy than those who have not had formal ethics education. Respondents presented with a company ethics code also were less aggressive in their accounting judgments than those who were not presented with a code prior to reading the scenario. Finally, decision aggressiveness was moderated by individuals who used conventional moral reasoning schemas.     

Interface,Inc.: Taking the lead toward sustainability

Four years ago, CEO Ray Anderson of Interface began to confront his company's impact on the environment. The factories and suppliers of his interior furnishings company used 1.2 billion pounds of raw materials to produce $802 million in products. Of these materials, two thirds were exhaustible fuels. Anderson has set Interface on a mission—to became a sustainable enterprise. However, rather than dictating specific initiatives from the top down, his corporate strategy has been to use a seven-point program to provide guidance for each plant and business to create its own agenda. CES continues its exploration of what defines environmental leadership by exploring how Anderson has implemented this new type of corporate direction, and how Interface measures its progress towards this ambitious mission.     

A Framework to Analyze Cash Supply Chains

The Federal Reserve System of the United States is making changes to its cash recirculation policy to reduce depository institutions' (banks') overuse of its cash processing services. These changes will affect operating policies and costs at many institutions having large cash businesses and, in turn, impact cash transportation and logistics providers. This study provides the framework to study the cash supply chain structure and analyzes it as a closed‐loop supply chain. Additionally, it describes the cash flow management system used by banks in the U.S.     

Precautionary Regulation in Europe and the United States: A Quantitative Comparison

Much attention has been addressed to the question of whether Europe or the United States adopts a more precautionary stance to the regulation of potential environmental, health, and safety risks. Some commentators suggest that Europe is more risk-averse and precautionary, whereas the United States is seen as more risk-taking and optimistic about the prospects for new technology. Others suggest that the United States is more precautionary because its regulatory process is more legalistic and adversarial, while Europe is more lax and corporatist in its regulations. The flip-flop hypothesis claims that the United States was more precautionary than Europe in the 1970s and early 1980s, and that Europe has become more precautionary since then. We examine the levels and trends in regulation of environmental, health, and safety risks since 1970. Unlike previous research, which has studied only a small set of prominent cases selected nonrandomly, we develop a comprehensive list of almost 3,000 risks and code the relative stringency of regulation in Europe and the United States for each of 100 risks randomly selected from that list for each year from 1970 through 2004. Our results suggest that: (a) averaging over risks, there is no significant difference in relative precaution over the period, (b) weakly consistent with the flip-flop hypothesis, there is some evidence of a modest shift toward greater relative precaution of European regulation since about 1990, although (c) there is a diversity of trends across risks, of which the most common is no change in relative precaution (including cases where Europe and the United States are equally precautionary and where Europe or the United States has been consistently more precautionary). The overall finding is of a mixed and diverse pattern of relative transatlantic precaution over the period.     

Exploiting logistic potentials with a simulation-aided test of PPC methods

In order to guarantee company competitiveness, the cost-effectiveness and efficiency of the production process must be continuously enhanced. In practice, PPC systems are implemented for this purpose, but frequently do not meet expectations. Reasons may be an inadequate selection of PPC methods as well as an unsuitable configuration of PPC parameters. By making use of a simulation-aided test bed it becomes possible to check and reconfigure a PPC system with regard to its specific application in a company. This gives access to logistic potentials which have remained unused so far. The paper introduces the concept of a simulation-based PPC tester and describes one application of the system in a medium-sized mechanical engineering company. An example taken from that investigation shows how to generate warehouse logistics operating curves with the help of simulation and how this knowledge could be used to select suppliers and to determine the 'appropriate' stock-on-hand level.     

How U.S. and Japanese CEO's spend their time

Managing Directors (CEOs) in a number of large U.S. and Japanese corporations were asked to write a detailed diary of a typical working day, and they were asked what kind of information was useful for certain kinds of decisions. Some of the results of the survey are described in this article. It was found that the average age of the CEOs in the two countries was about the same—60 years old, but CEOs in the United States stayed longer in the position than Japanese CEOs because they were promoted at a younger age. CEOs in the United States worked a longer day than the Japanese. American chief executives spent about 3 hours longer in meetings than their Japanese counterparts. In Japanese corporations the information is distributed and the negotiating is done beforehand, so meetings tend to be shorter. In America contacts with businessmen outside the company were important sources of information, for strategic decisions in particular.     

A Study of the Financial Reporting Dichotomy of Managers' Perceived Usefulness of the Value Added Statement

The value added statements' (VAS) literature has been overwhelmingly normative and generally strongly suggested companies should produce a VAS, as did the Nigerian Accounting Standards Board in its Statement of Accounting Standards (NASB, 1984). This study investigated whether the perceived usefulness of the Nigerian VAS conformed to what the managers, as preparers, had envisioned the VAS to accomplish. Using methods pioneered in the empirical literature about the effects of information provision on managers, senior managers in two companies were interviewed about their past, current, and future views concerning the VAS. One company produced a VAS while the other did not produce one even when the Nigerian government made it mandatory. Empirical research about VAS is rare, especially the reasons for nonproduction of a VAS. The collection of interview data at the individual manager level enabled the findings to be compared with various aspects of the VAS literature, including emerging economies, finance studies in the United States, and normative literature in South Africa and UK studies. The non‐VAS company respondents strongly considered the government to be the main user, compared with the employees as main users in UK studies. Our findings had some strong support for shareholders as did the United Kingdom. The majority of the VAS‐producing respondents noted that a VAS might not be useful to employees, but could be used to measure productivity, demonstrating the function of VAS as a complementary performance indicator. The non‐VAS company respondents did not know if a VAS measured productivity, as it was merely a rearrangement of the Income Statement and thus similar to UK views. The paper also provides suggestions for further research with both VAS and other financial representatives.     

A Perspective: Risk Analysis as a Tool for Reducing the Risks of Terrorism

The destruction by terrorists of the twin towers of the World Trade Center and major damage wrought to the Pentagon on September 11, 2001, followed closely by the bioterrorist anthrax attacks via the mails raised the question of whether risk analysis might have a place in defending the United States against terrorist attacks. After first reviewing the multifaceted nature of terrorism and the reasons it is likely to become endemic in world society in the long term, just as other areas of crime are endemic, this article surveys several fields of risk analysis, finding possible short- and long-term uses of risk analysis. The areas chiefly considered are: risk communication and chemical, biological, and technological risk analysis. Broad policy and other uses are also considered. The author finds that risk analysis has already played some role, perhaps informally, but he sees the possibility for a much larger, formal one, a role that is centrally important for the present and future of the United States and the world.     

The Contrast Between Risk Assessment and Rules of Evidence in the Context of International Trade Disputes: Can the U.S. Experience Inform the Process?

Risk assessment provides a formalized process to evaluate human, animal, and ecological responses associated with exposure to environmental agents. The purpose of risk assessment is to answer two related questions.

• ? How likely is an (adverse) event to occur?
• ? If it does, how severe will the impact be?

In the United States, the science of risk assessment has evolved out of the necessity to make public health decisions in the face of scientific uncertainty. Its basic propositions have been established over the past three decades and its applications have impacted virtually every aspect of public health and environmental protection in many countries, including the United States. More recently, the World Trade Organization's (WTO) dispute‐settlement process has provided additional incentive for the reliance on risk assessments internationally through the requirement that member countries be able to provide scientific justification, based on a risk assessment, for public health and environmental regulatory measures that are challenged. The purpose of this article is to review the history of risk assessment in the United States, emphasizing the development of both its scientific and policy aspects, as one example of the development of institutional capacity for risk assessment. This article discusses the importance of the social, political, and economic contexts of risk assessment and risk management in shaping the approaches taken while highlighting the reality that the analytic or risk assessment part of the decision‐making process, in the absence of scientific data, can be completed only by inserting inferences, or policy judgments, which may differ among countries. This article recognizes these differences, and the consequent difference between risk assessment that incorporates public health protective assumptions and the rules of evidence that seek to answer questions of causality, and discusses implications for the WTO dispute‐settlement process. It further explores the value of country‐specific risk assessment guidelines to facilitate consistency within a country along with the appropriateness and feasibility of international risk assessment guidelines.     

The future for pharmaceuticals in a health care crisis.

When an industry reaches a turning point, everyone in it is drawn into the turmoil. Not that it happens frequently, but most industries pass more than one major turning point in the course of an executive career of average length. The experience is unsettling--especially if preceded by a general reluctance to anticipate it or its consequences. Corporate strategy is usually concerned above all with the competitive positioning of a company within an industry or, if diversified, in a number of industries. To this two-dimensional picture, which takes the company and its competitors as the main variables, we need to add the changing background of the industry itself: a third dimension that challenges the powers of adaptation of all the competitors. It compels them to acknowledge as real the forces that are unleashed by time as industries mature and society changes. This paper explores the turning points that have occurred during the past 30 years in one particular industry--pharmaceuticals--and seeks to distil from it a number of lessons that may be relevant to industrial strategy in a wider framework.     

Strategic planning for British nuclear fuels Ltd.

This article presents an account of the current state of planning in a Government - owned company. The author describes differences he sees between the planning process in his enterprise and those which are outlined in many planning texts.Since the company is relatively new, the author makes no claims for the success of the total planning operation as he describes it. However, he does indicate areas where advances have been made.Among these are proving the validity of the chosen planning system; the derivation of objectives from the planning process rather than as a starting point, and the acceptance of the planning operation by Top Management.     

Optimal Tracking and Testing of U.S. and Canadian Herds for BSE: A Value-of-Information (VOI) Approach

The U.S. Department of Agriculture (USDA) tests a subset of cattle slaughtered in the United States for bovine spongiform encephalitis (BSE). Knowing the origin of cattle (U.S. vs. Canadian) at testing could enable new testing or surveillance policies based on the origin of cattle testing positive. For example, if a Canadian cow tests positive for BSE, while no U.S. origin cattle do, the United States could subject Canadian cattle to more stringent testing. This article illustrates the application of a value-of-information (VOI) framework to quantify and compare potential economic costs to the United States of implementing tracking cattle origins to the costs of not doing so. The potential economic value of information from a tracking program is estimated to exceed its costs by more than five-fold if such information can reduce future losses in export and domestic markets and reduce future testing costs required to reassure or win back customers. Sensitivity analyses indicate that this conclusion is somewhat robust to many technical, scientific, and market uncertainties, including the current prevalence of BSE in the United States and/or Canada and the likely reactions of consumers to possible future discoveries of BSE in the United States and/or Canada. Indeed, the potential value of tracking information is great enough to justify locating and tracking Canadian cattle already in the United States when this can be done for a reasonable cost. If aggressive tracking and testing can win back lost exports, then the VOI of a tracking program may increase to over half a billion dollars per year.     

Nursing home care: ensuring quality.

There are more than 17,000 nursing homes in the United States providing care for 1.7 million disabled and elderly individuals. Medicare and Medicaid paid $28 billion in 1997 for nursing home services, more than one half of all nursing home expenditures. Improvements in the quality of care in these facilities and ensuring value for public expenditures has been a long sought after goal. Recent actions by the federal government are designed to strengthen state and federal authority and processes to accomplish this goal. Physician leadership in this area is essential to its success.     

王梓木：雪上飞

如果没有人们的后见之明，一些可震烁古今的大事件，原本都平淡无奇。在古代中原与边关的种群冲突中，为什么只要是农耕种群总是负多胜少？历史是势利的，甚至只敬重成则为王的那个人。当努尔哈赤以他坚强的女真族后裔一满族甲士的铁骑，让无数民族在苦难中改变了自己的走向后，后人总是试图从这段历史寻找出种群血性的真相。     

Venice Hospital decision vacated. Key Enterprises of Delaware, Inc. v. Venice Hospital

The United States Court of Appeals for the Eleventh Circuit recently ordered an en banc rehearing of its widely reported hospital downstream diversification antitrust case. The so-called Venice Hospital case had found antitrust liability in the operation of a durable medical equipment (DME) joint venture between a hospital and a DME vendor. The Eleventh Circuit, however, has vacated its prior decision and, pending its en banc opinion, reinstated the district court's decision that the defendants did not violate antitrust law.     

The Conflict between U.S. Patent Protection and Technological Innovation: Analysis and Problem Solving by Means of the Integrated Causal Model for Innovated Ethic

Criticisms of patent laws for technological innovations in the United States reveal a multifaceted milieu of problems centered around the protection of short‐term economic gain and individual property rights. In this article, we consider this a conflict between current patent laws and the innovation capabilities of organizations. We propose a solution that enables the company to assure its long‐term survival in the face of these restrictions. This presumes that the firm will at least maintain its innovation capacities while preserving the company's ethical values and those of its social environment. We offer a theoretical model that is designed to help managers and policymakers reorient their governance strategies for managing the innovation process, using the “ethics of responsibility,” which establishes the link to individual moral values at the beginning of a governance process as well as the consequences of a decision. Our integrated causal model of ethical innovation for patents is presented and implications for global organizations and possible solutions for patent law process failure are offered.     

刘克振:复制核心逻辑 全球化扩张需要具有可拷贝的单一商业模式

研发制造电脑卖给集成商,由集成商卖给最终用户,这是研华的核心模式。     

U.S. government recognizes new institutional form

A new institutional form has been growing in the United States since World War II for helping to accomplish technology-intensive public programs and improve public policy. The form — a so-called “Federally-Funded Research and Development Center” (FFRDC) — has now been officially recognized at a very high level of the Government.This article describes FFRDCs and their history, lists the important roles they can play on public problems, and concludes that the advantages they offer will not be fully utilized if they continue to be treated by some as an anomaly in the institutional makeup of the U.S. economy.     

Judgments of Chemical Risks: Comparisons Among Senior Managers, Toxicologists, and the Public

Nineteen Senior Managers of a major chemical company in the United Kingdom participated in a survey to determine their attitudes, beliefs, and perceptions regarding risks from chemicals. Similar surveys had previously been conducted with toxicologists and members of the general public in the United States and Canada. In general, the Senior Managers tended to judge risks to be quite small for most chemicals. Moreover, they had lower risk perceptions than did members of the British Toxicological Society and even far lower perceptions of risk than a comparison group of members of the Canadian public. The managers held views that were similar to British toxicologists working in industry and government and dissimilar to the views of toxicologists working in academia. The observed differences between views of managers, toxicologists, and the public must be recognized and understood in order to facilitate communication and constructive efforts to manage chemical risks.     

International acquisition performance and experience: A resource-based view. Evidence from French acquisitions in the United States (1988–2004)

Does an acquirer with extensive acquisition experience outperform an acquirer with little or no acquisition experience? Does an acquirer with varied growth mode experience (i.e. a company undertaking not only acquisitions but also joint ventures) outperform a company that has very homogeneous experience (i.e. a company growing exclusively through acquisitions)? The main purpose of our article is to examine these two questions in-depth and to attempt to provide some answers. The questions led us to analyze the valuation effect of the acquirer's experience for 291 French acquisitions in the United States. The results were mixed with regard to the relationship between acquisition performance, acquisition experience and heterogeneous experience. On the one hand we found no relationship between the acquisition performance and heterogeneous experience of French acquirers, which is not consistent with the literature on stock market valuation of homogeneous “experience trajectories” [Singh, H., Zollo, M., 1998. The impact of knowledge codification, experience trajectories and integration strategies on the performance of corporate acquisitions. Working Paper INSEAD, 98,62,SM.]. On the other hand, our findings indicate that the relationship between the acquisition performance and acquisition experience of French acquirers follows a curvilinear (inverted U-shaped) distribution.