A multiple criteria evaluation system for bankruptcy prediction of small and medium-sized enterprises

The global financial crisis has shown the ability to predict bankruptcy to be a vital management skill, and that the methodologies used for that purpose should be as close to reality as possible. This study aims to develop a multiple criteria system to predict bankruptcy in small and medium-sized enterprises (SMEs). It combines cognitive mapping with the measuring attractiveness by a categorical based evaluation technique (MACBETH), resulting in a more complete and transparent process for evaluating SMEs (and their risk of bankruptcy). What differentiates this framework from previous ones is the fact that it is based on information obtained directly from managers and bank analysts who deal with this type of adversity on a daily basis. The results highlight the importance of financial and strategic aspects, among others; and demonstrate how cognitive mapping can improve the understanding of the decision situation at hand, while MACBETH facilitates the calculation of trade-offs among evaluation criteria.info:eu-repo/semantics/acceptedVersio

How the Input-Process-Output Model Affects the Decoding of Internal Strategic Financial Communication by Non-Financial Branch Managers

The purpose of this instrumental case study was to explore how non-financial branch managers at US mortgage companies processed the decoding of internal strategic financial communication (ISFC) when the message was encoded by the language of numbers (LON). The LON includes Generally Accepted Accounting Principles (GAAP). A non-financial branch manager is an individual who manages a mortgage company branch office and may not possess LON decoding proficiency. This lack of LON decoding proficiency could result in ISFC decoding errors, potentially resulting in unintended financial consequences. Financial miscommunication is connected to the failure of over 50% of new small businesses each year. Business failure creates significant emotional and financial consequences for the individual employees impacted by the dissolution of the business. The central research question identified as CRQ/RQ1 asks: How does a receiver decode internal strategic financial communication when the receiver is unfamiliar with the encoding scheme? The data collection methods included interviews, questionnaires, and observational methods to generate codes and themes that were analyzed through a qualitative approach. The seven participants provided the findings that suggest noise from the LON-encoded message resulted in a communication transmission error. The implications suggest that an alternative delivery format and an appreciation of the identified relationship between message complexity and receiver motivation might improve communication

An exploration of New Institutional Economics for the strategic analysis of e-business with reference to transformational change

This thesis was submitted for the degree of Docter of Business Administration and awarded by Brunel University on behalf of Henley Management CollegeThis research applies institutional economics theory to management challenges arising in connection with e-business related transformational change. The research was carried out in response to widely recognised problems in managing IT-enabled change in complex organisations. A cyclic approach builds researcher competence in both the chosen theory, New Institutional Economics (NIE), and its application through a series of four contrasting case studies. The case situations, which derive from the researcher’s work as a technology management consultant, are treated as action research experiments which investigate e-business related transformational change in financial services, retail and government settings. A constructivist stance is adopted within the case situations with the researcher acting as a participant observer. Reflective practice is used to improve the experimental method for the case studies through the course of the research, leading to the use of participatory action research (PAR) for the final case. A literature review of NIE shows it to be loosely defined as a theory, so an analytic NIE framework is created to provide a cognitive model. This model is then modified and extended to produce a final theoretical framework. In parallel, a conceptual map of NIE is created from the research as a practical aid to illustrate NIE concepts and linkages. These two models, the theoretical framework and the conceptual map, evolve through the four case situations which were selected from a range of e-business consulting opportunities available to the researcher over the period of the research. The second case study drives the main development of the two models and draws out the necessary and complementary contributions of both transaction cost economics (TCE) and agency theory (AT) as parts of NIE, neither of which is sufficient on its own. The final case study demonstrates application to practice. The overall sequence of case studies shows the researcher’s cognitive growth from being a novice in the theory and its application in the first case through to a level of proficiency in applying NIE to the rigours of e-business practice in the final case. The research makes several contributions to knowledge. It makes a significant methodological contribution by bringing research methods developed for other forms of professional practice to the management discipline. It also makes a significant contribution to theoretical knowledge. It develops two theoretical models of NIE – a conceptual map and a theoretical framework – which present a way of linking NIE concepts in a meaningful way, and a structure by which NIE can be used in the analysis of highly complex organisational situations. These models clarify the complementary roles of TCE and AT, and indicate a reason why so many studies limited to TCE alone have been inconclusive. Applying NIE to the rigours of e-business management produces, in turn, a contribution to IT strategy formulation. The research makes a practical contribution by showing how NIE can be applied to e-business practice, subject to a number of significant caveats. NIE, as a descriptive theory, is shown to provide a powerful conceptual framework when combined with PAR, although both require deep knowledge and skill. In particular, adopting PAR as a case study method depends on an experienced, skilled and committed practitioner for its effective use. Finally, the research finds that NIE’s strengths as a framework for strategic analysis of large scale and complex e-business situations involving transformational change, which make it unduly sophisticated for less challenging situations, mean that NIE is suited to use by highly skilled, specialist consultants rather than by general managers

Impact of Mortgage Characteristics on Retail Mortgage Transaction Completion Time

In the mortgage industry, many mortgage lenders cannot manage mortgage workflow systems while meeting and exceeding organizational objectives. Organizations with an above-industry average turnaround time (ATT) to complete a retail mortgage transaction (RMT) from origination to funding experience revenue losses. Grounded in the proposition that mortgage loan purpose (MLP), mortgage loan type (MLT), and subject property type (SPT) impact ATT to complete an RMT, the purpose of this causal-comparative study was to assess the impact of MLP, MLT, and SPT on ATT to complete an RMT. Using archival data records (N = 146) from a selected mortgage institution in the state of Florida, the results of the 2 x 2 x 2 factorial ANOVA showed that there were no main or interaction effects F(5,140) = 0.42, p = .83. Implications for social change include the possibility for mortgage lenders to implement improved workflow processes to reduce costs and improve efficiency metrics and intrinsic value, thereby benefitting organizational stakeholders such as employees and consumers

An evolutionary theory of systemic risk and its mitigation for the global financial system

This thesis is the outcome of theory development research into an identified gap in knowledge about systemic risk of the global financial system. It takes a systems-theoretic approach, incorporating a simulation-constructivist orientation towards the meaning of theory and theory development, within a realist constructivism epistemology for knowledge generation about complex social phenomena. The specific purpose of which is to describe systemic risk of failure, and explain how it occurs in the global financial system, in order to diagnose and understand circumstances in which it arises, and offer insights into how that risk may be mitigated. An outline theory is developed, introducing a new operational definition of systemic risk of failure in which notions from evolutionary economics, finance and complexity science are combined with a general interpretation of entropy, to explain how catastrophic phenomena arise in that system. When a conceptual model incorporating the Icelandic financial system failure over the years 2003 – 2008 is constructed from this theory, and the results of simulation experiments using a verified computational representation of the model are validated with empirical data from that event, and corroborated by theoretical triangulation, a null-hypothesis about the theory is refuted. Furthermore, results show that interplay between a lack of diversity in system participation strategies and shared exposure to potential losses may be a key operational mechanism of catastrophic tensions arising in the supply and demand of financial services. These findings suggest new policy guidance for pre-emptive intervention calls for improved operational transparency from system participants, and prompt access to data about their operational behaviour, in order to prevent positive feedback inducing a failure of the system to operate within required parameters. The theory is then revised to reflect new insights exposed by simulation, and finally submitted as a new theory capable of unifying existing knowledge in this problem domain

“Pissing in the wind”: racially discriminatory economic policies’ impact on today’s banking status, use of alternative financial services and health outcomes.

Centuries of discriminatory policies and practices in the United States have created racially segregated, resource-poor urban communities. Differential benefits of banking and housing legislation were among the consequences of these policies as they contributed to drastic racial inequities in wealth. Today, racial differences in banking status and financial practices persist. However, a void exists in the literature exploring what alternative financial services (AFS) are used in lieu of banks by Black Americans, why those services are used, the thoughts and beliefs of Black Americans about the use of those services, the impact of bank locations on financial behavior patterns, and how these factors may relate to health outcomes. As such, the current study posed three distinct research questions: 1. To what extent does the density of community banks in a census tract relate to prevalence of heart disease, prevalence of cancer, and homicide in that census tract? 2. What alternative banking methods are utilized by Black West Louisville residents and for what purposes? 3. What factors influence the Black community’s banking and financial practices? A mixed-methods study design using ordinary least squares and zero-inflated Poisson regression was used to assess research question one, while qualitative interviews were used for research questions two and three. The findings show: 1.There is no significant relationship between the density of banks in a census tract and homicide, prevalence of heart disease, or prevalence of cancer. 2. Consumers recognize the financial harm caused by the use of AFS, but still opt to utilize alternative financial services considering them the best of many less than ideal choices. Participants expressed that banks were not a viable option due to racial discrimination, expensive overdraft fees, and hidden fees which led to general feelings of distrust regarding traditional banking institutions. 3.The findings indicate that banks exist as one of many predatory, structurally violent institutions that disproportionately harm Black Americans, particularly those in lower income brackets

Classifying residential real estate based on their exposure to crime: a research agenda

Criminality and sense of security in residential areas are always present in the mind of citizens, and directly affect the work of police authorities, real estate agents and society at large. This study proposes the development of a multiple criteria model for the classification of residential areas based on their exposure to crime. By combining cognitive mapping with the Measuring Attractiveness by a Categorical Based Evaluation Technique (MACBETH), we also aim to increase transparency in the classification process of residential real estate, allowing improvement initiatives to be applied and crime rates to be reduced. The major difference between our proposal and the extant literature is the fact that the information collected from criminal, urbanism and real estate experts, who deal with crime adversities on a daily basis, will be analyzed and discussed during presential group meetings, allowing realism to be incorporated into the evaluation mechanism. The current proposal is a research agenda, and results will not yet be presented

Setting rents in residential real estate: a methodological proposal using multiple criteria decision analysis

The real estate sector has been negatively affected by the recent economic recession, which has forced structural changes that impact property value and price. Recent pressures have also motivated reduced liquidity and access to credit, causing a drop in property sales and, thus, boosting the rental housing market. It is worth noting, however, that the rental housing segment is not with-out difficulties and complexity, namely in terms of legislation and rental value revaluation. In light of this reasoning, this study aims to develop a multiple criteria decision support system for calculation of residential rents. By integrating cognitive maps and the measuring attractiveness by a categorical based evaluation technique (MACBETH), we also aim to introduce simplicity and transparency in the decision making framework. The practical implications, advantages and shortfalls of our proposal are also analyzed

A Didactic Reconstruction of the Financial and Economic Crisis

Theoretical approaches to constructivism have put learner autonomy into the spotlight of didactic discourse. Apart from the matter of pedagogic actions on how (constructivisticly) organised education might be arranged, this paper focuses on the perspective of didactic reconstruction. Thus, an observation-based research perspective is being adopted in this paper. The epistemic beliefs that have emerged over the course of the global financial and economic depression are reconstructed. The goal of the paper is to provide an insight into these different interpretations. In order to do this, university students were surveyed regarding this topic and the results of this qualitative study on these epistemic beliefs will be represented in this article. The paper tries to give answers on how students, who have been experiencing the financial and economic depression for nearly three years now, define its causes and what subsequent actions they would recommend. The results show that the main issue is not misinterpretation of political and economic knowledge but rather incomplete constructs based on only approximate knowledge

A fuzzy knowledge-based framework for risk assessment of residential real estate investments

Risk analysis of residential real estate investments requires careful analysis of certain variables (or determinants). Because real estate is a key sector for economic and social development, this risk analysis is seen as critical in supporting decision processes relating to buying or selling residential properties, partly due to the pressures caused by the current economic environment. This study aims to develop a conceptual reference model for risk assessment of residential real estate using fuzzy cognitive mapping. This fuzzy model allows cause-and-effect relationships between determinants to be identified and better understood, which in turn allows for better informed investment decisions. The results show that the use of cognitive maps reduces the number of omitted criteria and favors learning with regard to how the criteria relate to each other, holding great potential and versatility in structuring complex decision problems. Practical implications, strengths and weaknesses of our proposal are discussed.info:eu-repo/semantics/publishedVersio