Corporate ethical identity as a determinant of firm performance : a test of the mediating role of stakeholder satisfaction

In this article, we empirically assess the impact of corporate ethical identity (CEI) on a firm’s financial performance. Drawing on formulations of normative and instrumental stakeholder theory, we argue that firms with a strong ethical identity achieve a greater degree of stakeholder satisfaction (SS), which, in turn, positively influences a firm’s financial performance. We analyze two dimensions of the CEI of firms: corporate revealed ethics and corporate applied ethics. Our results indicate that revealed ethics has informational worth and enhances shareholder value, whereas applied ethics has a positive impact through the improvement of SS. However, revealed ethics by itself (i.e. decoupled from ethical initiatives) is not sufficient to boost economic performance.Publicad

The role of power in financial statement fraud schemes

In this paper, we investigate a large-scale financial statement fraud to better understand the process by which individuals are recruited to participate in financial statement fraud schemes. The case reveals that perpetrators often use power to recruit others to participate in fraudulent acts. To illustrate how power is used, we propose a model, based upon the classical French and Raven taxonomy of power, that explains how one individual influences another individual to participate in financial statement fraud. We also provide propositions for future research

Management control systems in innovation companies: A literature based framework

Past research has traditionally argued that management control systems (MCSs) may present a hindrance to the creativity of innovation companies. This theoretical paper surveys the literature to focus an investigation on the MCSs of innovation companies. Within the object of control paradigm the paper develops and presents a theoretical model of the impact of eleven external, organisational and innovation related contingency factors on the MCSs in companies that engage in innovation activities. We also suggest measures for further empirical research. By formulating hypotheses on 43 potential interactions the model predicts contradictory influences on two direct control categories, results and action control, but stresses the importance of two indirect categories, personnel and cultural control. More specifically, the high levels of technological complexity and innovation capability in this type of company are expected to be negatively associated with the application of results and action control, whereas personnel and cultural seem to be more appropriate. Furthermore, important sources of finance, venture capital and public funding, are both hypothesised to be positively associated with the application of results, action and personnel control; whereas only public funding is predicted to be positively related to the application of cultural control. The principal contribution of this paper lies in synthesising the literature to provide a model of the impact of a unique set of eleven contingency factors for innovation companies on a broad scope of controls. In addition, the contingency model, if empirically validated, would add value by inferring the particular forms of management control which would be beneficial in innovative company settings. © 2014 Springer-Verlag Berlin Heidelberg

Removing the fuzziness in medical device manufacturing R&D

Ensuring regulatory compliance plays a significant part in the cost of research and development (R&D) in any sector where the work is inherently unstructured, or fuzzy. This includes aircraft manufacturing, pharmaceuticals, and the medical device industry, which produces instruments for use in medical procedures. A study of a medical device manufacturer gives insight into the problem of fuzziness in the R&D phase and shows how interconnecting the different functions of the business can contain costs. Doing so entails nurturing strong supplier‐customer relationships, sharing knowledge, and fostering a fulfillment‐oriented organizational culture that values lifelong learning