Disclosure and Managerial Use of Regulatory Information in the Energy Industry: Evidence from Italy and the European Union

In recent times, energy companies have received increased attention in societal and political discourse. Climate change, environmental pollution, and rising electricity prices are some pressing concerns that have brought them into “the public eye”, putting pressure to become more accountable towards multiple stakeholders, from investors to the broader community. Despite these challenges, too little effort has been devoted to investigating disclosure practices and the managerial use of regulatory information in this sector. This study addresses this gap by focusing on the electric sector, an intriguing context for investigation due to the convergence of three main characteristics. First, the electric industry is highly regulated at both European and national levels, requiring companies to produce detailed quantitative and qualitative information for regulatory purposes. This aligns with the compliance logic. Second, electric companies also embrace the principles of the business logic. They compete in a competitive market environment, employing strategies akin to those of the private sector, driven by the pursuit of maximising financial value. Lastly, given their role as essential public service providers, electric companies engage with the community logic, which mandates their active involvement in environmental and societal matters, reflecting their broader commitment to social responsibility. Based on these arguments, this thesis is organized into four parts. The initial part provides an overview of the sector. Section I explores the managerial use of accounting information produced for regulatory purposes in an Italian setting. The subsequent two sections extend the discussion to the European Union energy context. Section II presents empirical evidence on the quantity and quality of forward-looking disclosure, drawing insights from cross-industry comparisons, specifically energy and steel companies. Lastly, Section III centers its attention on Sustainable Development Goals (SDGs) reporting and control. The first section examines whether Italian energy utilities use regulatory information for internal decision-making and control. It adopts an institutional lens to explore the extent to which the regulatory information imposed by the Italian Regulatory Authority for Energy, Networks, and Environment (ARERA) and used for decision-making and control influence their management control systems. Based on data from surveys and complementary semi-structured interviews with Italian energy utilities, the findings reveal that the large majority of the sampled firms use regulatory information for decision-making and control, though there are differences according to firm size and operating activity. Large-sized utilities and energy distributors use the regulatory information for performance monitoring, benchmarking analysis, and investment decision-making. On the contrary, medium-sized utilities and energy traders produce the information solely for compliance and do not use it in their day-to-day activities, suggesting a tendency to couple formal structures and internal behaviors loosely. Further, this paper unveils that the regulatory requirements affected the control systems of energy utilities either radically or incrementally, leading to improved cost accounting systems, the creation of internal routines, and loop learning processes. These findings extend the managerial use of accounting information, providing novel insights from the Italian energy sector. To the best of my knowledge, this is the first attempt to explore the internal use of regulatory information in the Italian energy industry. The findings also enrich the institutional management accounting research by showing that external regulatory pressure has either a radical or an incremental influence on the management control systems of energy utilities. Overall, the findings highlight the regulator’s role as a driver of performance control and improvement within the energy industry. The second section examines the quantity and quality of forward-looking information within annual reports of European Union electric utilities, comparing them to those of steel companies for the period 2018-2021. Using a balanced panel of 200 firm-year observations, this paper investigates the impact on forward-looking disclosure of two factors: i) the release of relevant regulatory statements related to risk preparedness, environmental, and climate change in 2019, and ii) industry-specific regulatory pressures. Results from fixed-term panel analysis reveal that both electric and steel companies increased their forward-looking disclosure following the publication of the regulations. However, electric utilities surpassed steel companies in both the quantity and quality of forward-looking disclosure. These findings contribute to the existing literature on forward-looking disclosure by presenting contemporary and comparative insights on the level and quality of future-oriented information across two industries, namely the electric and steel sectors. Furthermore, the findings contribute to the forward-looking literature by confirming the positive influence of regulatory initiatives in triggering increased responsiveness among firms towards the future, ultimately leading to improvements in the quantity and quality of forward-looking information. In conclusion, the findings of this study can inform policy decisions to formulate supportive policies aimed at promoting the dissemination of forward-looking information and nurturing a future-oriented culture. Finally, the third section serves a dual purpose. First, it investigates how comprehensively do electric utilities report on SDGs. Second, it investigates which management control instruments and mechanisms these companies employ to manage and control their contribution to SDGs. The findings show that electric utilities already incorporate the SDGs into their reporting, although some goals receive more comprehensive coverage than others. Electric utilities primarily address SDGs related to industry innovation and biosphere preservation, while those related to societal well-being tend to receive less attention. Additionally, a more comprehensive SDGs reporting was observed among private-owned electric utilities than among public-owned ones, and electric utilities in developed markets showed higher SDG reporting levels than those in emerging markets. Regarding management control instruments and mechanisms used, the study reveals that electric utilities predominantly rely on administrative controls to address the SDGs, often combining administrative and cultural controls on one side and planning, cybernetic, and reward and compensation controls on the other. However, while the analysis suggests that electric utilities are on track to a more holistic approach to management controls for sustainable development, it also indicates room for improvement in governance structure, operational planning, and financial metrics. Overall, the findings contribute to the evolving SDGs literature by providing insights from the energy sector in the European Union, not only in terms of reporting but also in terms of control practices applied, thus enriching the ongoing discourse on the alignment between rhetoric and practical actions. The findings offer insights for guiding policy and managerial decisions. Policymakers can benefit from these insights to further encourage SDGs contributions, with initiatives for public-owned electric utilities and those in emerging markets. Meanwhile, managers can use these findings to improve SDGs reporting and better integrate controls to govern their progress toward sustainable development. With its findings, this thesis enriches the existing body of literature on energy utilities by addressing research questions with practical implications. Firstly, it sheds light on whether regulatory requirements serve a practical purpose for firms in their internal decision-making and control processes. This insight can inform regulatory authorities in taking necessary actions to stimulate the internal use of regulatory information as well as uncover the reasons behind the underutilization of such information by some utilities. Secondly, it provides policymakers with insights into the level and quality of forward-looking disclosure by electric companies operating in the European Union, thereby encouraging the communication of forward-looking information and fostering a future-oriented culture. Furthermore, the findings provide critical insights into the active engagement of electric companies in discussions and actions related to their contribution to SDGs and recommend policy initiatives for a more responsive economy

Holistiska konkurentspējīgas stratēģiskās vadības modeļa izveidošana

Šajā disertācijā Qeis Kamran ir izmantojis stratēģijas modeļus, jo konkurētspējīgas stratēģijas pasaule ir sarežģīta. To modeļu ierobežojumi, pamatojoties uz kuriem veidotas organizāciju stratēģijas, ir iemesls kompāniju neveiksmēm - Long-Term Capital Management, Lehmann’s Brothers, Nokia, Motorola, Volkswagen tiesas prāva ASV, Toshiba Corporations,Samsung. Krīzes ir iznīcinājušas uzņēmumus un nozares un Maikla Portera The Monitor Group pieteikt bankrota procedūrai Konkurences stratēģijas jomā, ko izstrādājis Porters, promocijas darbā ir Piecu spēku modeļa analīze. Pamatojoties uz Sešu spēku modeli ar lielu empīrisko izlasi ieteikts modelis, kas atbilst mūsdienu vajadzībām. Ir nepieciešams pārliecināties, vai Čandlera tēze Struktūra ir atkarīga no stratēģijas, atbilst precīzam pasaules skatījumam. Lai izveidotu vispārējus jomas modeļus, ir jāpārbauda Čandlera atbilstošā stratēģiskās domas dimensija – autors ir izstrādājis atbilstošāku sešu spēku modeli. Atslēgvārdi: stratēģija, konkurence, dzīvotspēja, piecu spēku modelis, struktūra, kibernētika, holisms un sarežģītībaThe dissertation by Qeis Kamran has unified strategy models as the world of management has become too complex to be dealt with by the application of contemporary models and current scientific worldviews. Thus, this is illustrated by the cases of Long-Term Capital Management, Lehmann Brothers, Nokia, Motorola, the Volkswagen Case in US, Toshiba, Samsung and even Michael Porter’s as the doyen of strategy’s co-founded consultancy firm The Monitor Group to apply for bankruptcy. The dissertation analysis the Five Forces Model as one of the major contributions to Competitive Strategy by Porter. Based on the development of the Sixth Force Model and validation by empirical studies, it is also examined, if Chandler’s thesis Structure follows strategy is still valid. A new model of competitive strategy has been developed to cope with the challenges that today’s turbulence and complexity requires - Six Forces Model. Keywords: Strategy, Five Forces Model, Structure, Holism, and Complexit

Learning from the Anthropocene: Adaptive Epistemology and Complexity in Strategic Managerial Thinking

open access articleTurbulence experienced in the business and social realms resonates with turbulence unfolding throughout the biosphere, as a process of accelerating change at the stratigraphic scale termed the Anthropocene. The Anthropocene is understood as a multi‐dimensional limit point, one dimension of which concerns the limits to the lineal epistemology prevalent since the Age of the Enlightenment. This paper argues that future conditions necessitate the updating of a lineal epistemology through a transition towards resilience thinking that is both adaptive and ecosystemic. A management paradigm informed by the recognition of multiple equilibria states distinguished by thresholds, and incorporating adaptive and resilience thinking is considered. This paradigm is thought to enhance flexibility and the capacity to absorb influences without crossing thresholds into alternate stable, but less desirable, states. One consequence is that evaluations of success may change, and these changes are considered and explored as likely on‐going challenges businesses must grapple with into the future

Fruits of Gregory Bateson’s epistemological crisis: embodied mind-making and interactive experience in research and professional praxis

Background: The espoused rationale for this special issue, situated “at the margins of cybernetics,” was to revisit and extend the common genealogy of cybernetics and communication studies. Two possible topics garnered our attention: 1) the history of intellectual adventurers whose work has appropriated cybernetic concepts; and 2) the remediation of cybernetic metaphors. Analysis: A heuristic for engaging in first- and second-order R&D praxis, the design of which was informed by co-research with pastoralists (1989–1993) and the authors’ engagements with the scholarship of Bateson and Maturana, was employed and adapted as a reflexive in-quiry framework.Conclusion and implications: This inquiry challenges the mainstream desire for change and the belief in getting the communication right in order to achieve change. The authors argue this view is based on an epistemological error that continues to produce the very problems it intends to diminish, and thus we live a fundamental error in epistemology, false ontology, and misplaced practice. The authors offer instead conceptual and praxis possibilities for triggering new co-evolutionary trajectories

Channel Overload: Can Less be More?

This qualitative research study used a thematic approach and semi-structured interviews to explore the phenomenon of Channel Overload. The Cybernetic Tradition frames the study and Systems Theory guides the data analysis and the fundamental underpinnings of how communication functions. Systems Theory is used as the guiding theory as it provides a framework to evaluate how different systems work together, influencing each other and creating noise. This study shows the impact of Channel Overload on individuals and organizations. Further implications include concepts of organizational Channel Overload and suggest the need for internal strategic organizational communication policies to protect people and organizations from the adverse effects of Channel Overload. Future studies that examine Channel Overload should examine the impact of interventions and could include case studies and ethnographic studies examining the consequences of internal strategic organizational communication policy implementation

A Content Analysis of Non-Profit Organizations Social Media: Through the Lens of Compliance-Gaining & Persuasion

Non-profit organizations utilize social media platforms like Instagram to reach the community, fundraise, convey their mission and vision, establish themselves, and educate others. This study examined whether the communication artifacts of selected nonprofit organizations employed Cialdini\u27s (2021) compliance-gaining strategies through an eight-week qualitative digital content analysis on Instagram to address the problem of understanding how non-profit organizations use Instagram tools to influence and persuade their audience. Compassion International (@compassion), CARE (@careorg), and Direct Relief (@directrelief), the three non-profit organizations chosen in this study, demonstrated the usage of Cialdini’s (2021) compliance-gaining strategies within their digital media communication strategy. Non-profit organizations operate in a highly competitive environment, with many organizations vying for attention and resources from donors and supporters. They must understand how to effectively use Instagram and compliance-gaining theory to influence and persuade their audience, ultimately increasing their impact and reach. How are these three non-profit organizations engaging and mobilizing their audience through this influence and persuasion to support their respective cause? Are there commonalities in how each non-profit organization is using Cialdini’s (2021) compliance-gaining framework? This study showed that the three non-profit organizations chosen effectively used Cialdini’s (2021) compliance-gaining framework on Instagram to influence and persuade their audience, while also contributing to the existing literature on social media marketing, compliance-gaining theory, and digital content analysis. The analysis provided valuable insights for communication professionals, marketers, and non-profit organizations seeking to create compelling social media campaigns

Modern software cybernetics: new trends

Software cybernetics research is to apply a variety of techniques from cybernetics research to software engineering research. For more than fifteen years since 2001, there has been a dramatic increase in work relating to software cybernetics. From cybernetics viewpoint, the work is mainly on the first-order level, namely, the software under observation and control. Beyond the first-order cybernetics, the software, developers/users, and running environments influence each other and thus create feedback to form more complicated systems. We classify software cybernetics as Software Cybernetics I based on the first-order cybernetics, and as Software Cybernetics II based on the higher order cybernetics. This paper provides a review of the literature on software cybernetics, particularly focusing on the transition from Software Cybernetics I to Software Cybernetics II. The results of the survey indicate that some new research areas such as Internet of Things, big data, cloud computing, cyber-physical systems, and even creative computing are related to Software Cybernetics II. The paper identifies the relationships between the techniques of Software Cybernetics II applied and the new research areas to which they have been applied, formulates research problems and challenges of software cybernetics with the application of principles of Phase II of software cybernetics; identifies and highlights new research trends of software cybernetic for further research