Market inefficiency in person-to-person betting: examining 'Known Loser' insider trading on the exchanges

Applying the Shin z measure of market efficiency to the relatively new person-to-person internet betting exchanges, Smith, Paton, and Vaughan Williams found "significantly lower market biases" compared to bookmaker-dominated markets. A reduced favorite-longshot bias is interpreted as evidence that insider trading on the exchanges "is not widespread" and "not as commonplace... as is sometimes portrayed in the media." Given that the Shin measure assumes "betting with bookies," whereas the exchanges represent "betting without bookies," the present study employs the notion of 'significant mover' to empirically test for the presence of 'known loser' insider trading on the exchanges where traditional notions of bookmaking do not apply. Findings indicate that, far from being less problematized by insider trading compared to racetrack betting, activity aimed at profiting from "known losers" may be potentially commonplace on the exchanges. This includes profiting from horses that are unplaced. This study offers new insight into the efficiency of betting markets

Value systems as a mechanism for organizational change

Purpose – The purpose of this paper is to investigate the role played by value systems as mechanisms for organizational change. Three issues are examined: purpose; implementation; and effects, intended and unintended, that may arise from using values systems as a management control mechanism to effect organizational change. Design/methodology/approach – The research is based on evidenced garnered from an in-depth, longitudinal study of a major UK based organization which operates in the “global communications industry”. Data are collected from a range of sources, but particularly interviews and a questionnaire survey involving a broad cross-section of the company's managers. Findings – Findings suggest that, in terms of purpose, top management may use value systems as a management control mechanism to effect organizational change by espousing a new set of normative values which should inform managers' decisions and actions, particularly in trade-off situations. Communication and implementation of value systems may involve a multitude of formal and informal information-based mechanisms and procedures, including mission statements, newsletters, email, “strategy days”, “roadshows” and similar social events. Implementation may rely on change agents creating a drive for change. However, the results of a questionnaire survey suggest that value systems may be only partly successful in securing their intended purpose of mobilising attitudes around a particular set of normative values. Various unintended effects may arise which, in the present case, include increasing project redundancy, decreasing project scrutiny, a re-distribution of social esteem within the firm, polarisation of attitudes towards budgetary control, and a general reduction in the exercise of hierarchical management control. Overall, it argued that the use of value systems as a mechanism of organizational change may be as problematic to the firm as it is beneficial. Practical implications – The results of the present study may help firms devise more appropriate value systems for “maintaining or altering patterns of organizational behaviour”. Originality/value – The present study contributes further insight is through evidence which suggests value systems may be used to communicate a set of quite specific values; and adds to a knowledge of the range of procedures which may be involved in using value systems to effect organizational change

Coping with ambiguity through the budget: the positive effects of budgetary targets on managers' budgeting behaviours

Much consideration has been given over the years to what may be described as the 'negative' aspect of budgeting; that budgets may constrain innovation and learning, and that budgetary pressure may lead to unintended behavioural side effects. In contrast to this, the present study examines the extent to which budgets have a more positive, 'comforting' role to play in the individual's work experiences. We argue that managers confronted with uncertainties associated with role ambiguity may respond by becoming positively committed to achieving budgetary targets as budgets offer a source of structure and certainty. We find that the use of budgets as an antidote to role ambiguity is a powerful influence on the manager's budgeting behaviour. We test the strength of this effect and we find that budgetary commitment brought on by the experience of role ambiguity may over-ride the potential for recognised explanatory variables such as leadership style, the expectations of the superior, and occupational socialisation, to inform managers' budgeting behaviours in these circumstances. Budgets, it seems, may be as useful to the individual as they are problematic

Examining the human cost of multiple role expectations

We examine the potential human cost of multiple role expectations. Based on a survey of middle-level managers, and drawing on role theory to develop testable hypotheses, we show that expecting innovation and empowerment alongside budget-goal attainment may increase levels of role conflict, leading to a decrease in performance. Through field research we explore the coping strategies that may be invoked to deal with such psychological role conflict. We find that coping may be assisted by having responsibility for discretionary budgets, which allows managers to make tradeoffs involving the budget in response to multiple role expectations. In addition, we show that high-performing managers are better able to cope with simultaneous expectations of innovation, empowerment, and budget-goal attainment than low-performing managers. Overall, our analysis suggests that positive outcomes may result from establishing forces for ''creative innovation'' alongside ''predictable goal attainment'' (Simons 1995), but only for a subset of managers who are able to cope with multiple, conflicting role expectations

Encouraging strategic behaviour while maintaining management control: multi-functional project teams, budgets, and the negotiation of shared accountabilities in contemporary enterprises

Recent work [e.g. Simons, R., 1995. Levers of Control: How Managers use Innovative Control Systems to Drive Strategic Renewal. Harvard Business School Press; Simons, R., 1999. Performance Measurement and Control Systems for Implementing Strategy. Prentice-Hall, Englewood Cliffs, NJ] suggests that traditional management control systems such as budgetary controls are being 'embedded' within a wider control framework which top management may use to influence and support both the formation and implementation of strategy. A further stream of literature points to significant changes in current organizational arrangements and management practices, involving boundary-spanning activities and the greater use of multi-functional project teams, which problematise notions of cybernetics, individual-level controllability and management-by-exception on which traditional approaches to management control are based [Ansari, S.L., 1979. Towards an open systems approach to budgeting. Acc. Organ. Society 4 (3), 149-161]. Consequently, managers increasingly find themselves having to balance their continued exposure to traditional budgetary controls and imperatives which measure progress towards predetermined financial targets, with the more broadly based but no less intense demands imposed by the need to pursue strategic initiatives. Drawing on evidence garnered from an intensive case study of a multinational organization, this paper explores the ways in which these potentially incompatible roles are reconciled within a framework of management control. Findings indicate that, while elements of the formal control structure, in particular budgetary controls, remain wedded to notions of cybernetics, individual-level accountability and management-by-exception, managers in attempts to pursue their strategic forcing roles become involved in interdependencies and team working which blur line responsibilities and accountabilities. The study suggests that the resulting tensions and issues created by these competing concepts tend to be managed through formally directed procedures, and informal channels of social interaction, both hierarchically and horizontally. In particular, the study highlights how managers appear able to address, through reference to the company's broad framework of control, the accepted lack of controllability by a variety of 'negotiated' arrangements for 'sharing' the discharge of individual accountabilities

Performance measures and short-termism: an exploratory study

We examine the relationship between performance measurement systems and short‐termism. Hypotheses are tested on a sample of senior managers drawn from a major telecommunications company to determine the extent to which the diagnostic and interactive uses of financial and non‐financial measures give rise to short‐termism. We find no evidence to suggest that the use of financial measures, either diagnostically or interactively, leads to short‐term behaviour. In contrast, we find a significant association between the use of non‐financial measures and short‐termism. Results suggest that the diagnostic use of non‐financial measures leads managers to make inter‐temporal trade‐off choices that prioritise the short term to the detriment of the long term, while we find interactive use is negatively associated with short‐termism. We find an imbalance in favour of the diagnostic use over the interactive use of non‐financial performance measures is associated with short‐termism. Overall, findings highlight the importance of considering the specific use of performance measures in determining the causes of short‐termism