Carolin Berlich, Felix Daut, Anna C. Freund, Andrea Kampmann, Benedict Killing, Friedrich Sommer and Arnt Wöhrmann
Deutsche Bahn AG (Deutsche Bahn hereafter) was the former German railroad monopolist until deregulation in 1996. It was a well-known company that operated in worldwide markets for…
Abstract
Synopsis
Deutsche Bahn AG (Deutsche Bahn hereafter) was the former German railroad monopolist until deregulation in 1996. It was a well-known company that operated in worldwide markets for transport and logistics at the time of the case (late 2013). The case “Deutsche Bahn AG: a former monopoly off track?” focuses on the opportunities and challenges faced by Deutsche Bahn with regard to its position in the German individual transportation market. On the one hand, Deutsche Bahn is facing external problems. Increasing competition in short- and long-distance traffic threatens its strong business position. The competition emerged from a growing long-distance bus market and the increase in private railway companies. During the last few years before 2013, Deutsche Bahn has lost several public tenders for individual passenger travel in Germany. On the other hand, Deutsche Bahn has internal problems that endanger its image as a service company. A lack of service quality and the technical condition of its trains has led to rising numbers of customer complaints. In addition, staffing and punctuality problems have exacerbated the situation. One of the main technical issues the company faces is that ordered trains have not been delivered on time. Given the focus on Deutsche Bahn’s domestic challenges, its international business activities are tackled only briefly. While regulatory and political events have an impact on Deutsche Bahn, these are not the main subjects of the case.
Research methodology
This case has been written from public sources. Consequently, no company release is provided. None of the information has been disguised in any way.
Relevant courses and levels
The case is intended for use in a 90-minute strategic management class attended by students at the end of their undergraduate studies or in postgraduate study. Although the case relates to issues in strategic management, the special regulatory environment and some of the issues covered could make the case a useful complement in other classes as well, such as classes in supply chain management (procurement) or the management of public companies. Therefore, students should have basic knowledge in developing strategies, management, marketing, human resource management, and finance.
Theoretical bases
Strategic Analysis and Strategic Management, Railroad Logistics, Deregulation of a former Monopoly, Stakeholder Theory.
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Ivo Schedlinsky, Friedrich Sommer and Arnt Wöhrmann
In the aftermath of the financial crisis, the influence of competitive compensation systems on employee risk taking has gained increasing attention. As the renouncement of such…
Abstract
Purpose
In the aftermath of the financial crisis, the influence of competitive compensation systems on employee risk taking has gained increasing attention. As the renouncement of such incentive schemes might entail severe disadvantages regarding employee motivation, standard setters have proposed adding nonmonetary instruments of control. This paper aims to examine the influence of two of the most common instruments: a risk-sensitizing code of conduct and justification.
Design/methodology/approach
A laboratory experiment with 136 business students is conducted to test the hypotheses and answer the research question. The presence and absence of a risk-sensitizing code of conduct and a justification system is manipulated between subjects. The experiment consists of ten rounds, with round as the third factor manipulated within subjects.
Findings
Consistent with the paper’s hypothesis and the underlying theory, both instruments are found to offset higher risk taking. The paper shows that the motivation of individuals triggered by justification depends on a risk-sensitizing code of conduct, and insights into the psychological mechanisms behind the findings are provided.
Practical implications
As justification is considered more costly than a risk-sensitizing code of conduct, establishing the latter instead of the former seems preferable in most situations. However, if organizational citizenship behavior is unlikely to evolve, justification can substitute it for managing employee risk taking.
Originality/value
This paper identifies the risk-sensitizing code of conduct as an informal instrument of control for managing risk taking. Prior research mainly focuses on potentially more costly formal instruments of control.
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Niklas Kreilkamp, Maximilian Schmidt and Arnt Wöhrmann
The purpose of this paper is to investigate if and how firms approach debiasing and what determines its success. In particular, this study examines if debiasing is effective in…
Abstract
Purpose
The purpose of this paper is to investigate if and how firms approach debiasing and what determines its success. In particular, this study examines if debiasing is effective in reducing cognitive decision biases. This paper also investigates organizational characteristics that determine the effectiveness of debiasing.
Design/methodology/approach
This study uses survey data from German firms to answer the research questions. Target respondents are individuals in a senior management accounting function.
Findings
In line with the hypotheses, this paper finds that debiasing can reduce cognitive biases. Moreover, this study finds that psychological safety not only directly influences the occurrence of cognitive biases but is also an important factor that determines the effectiveness of debiasing.
Research limitations/implications
This paper provides evidence that debiasing can serve as a powerful management accounting tool and discusses debiasing in the context of recent management accounting literature. This study also adds to the stream of research that investigates the role of psychological safety in organizations by highlighting its importance for successful debiasing.
Practical implications
This paper informs firms that use or intend to use debiasing about crucial determinants to consider when debating its implementation, i.e. psychological safety. This study also identifies risk management as a potential interface for the implementation of systematic debiasing.
Originality/value
While previous research primarily addresses specific cognitive biases and debiasing mechanisms using lab experiments, this is – to the best of the knowledge – the first study investigating cognitive biases and debiasing on a broad conceptual level using survey data.
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Maik Lachmann, Arnt Wöhrmann and Andreas Wömpener
The International Accounting Standards Board and the Financial Accounting Standards Board allow fair value measurement of liabilities. Previous findings from the literature on…
Abstract
Purpose
The International Accounting Standards Board and the Financial Accounting Standards Board allow fair value measurement of liabilities. Previous findings from the literature on recognition versus disclosure indicate that recognition of fair value information better serves investors' needs, because it is more likely to facilitate the incorporation of the information into their judgment. In cases of credit risk changes for own liabilities, however, many authors doubt that fair value measurement is beneficial due to its potential counter‐intuitiveness. The purpose of this paper is to gain insight into non‐professional investors' processing of fair value information for liabilities.
Design/methodology/approach
A between‐subjects laboratory experiment was employed. Subjects received financial information on three different companies. The authors manipulated the accounting treatment of liabilities between the three groups. Subjects ranked three companies according to their economic performance. The authors then compared these rankings to the companies' actual performance.
Findings
The results of the experiment indicate that non‐professional investors are less likely to acquire the information of credit risk changes when liabilities are not measured at fair value. Additionally, evidence was found that fair value measurement is to some extent counter‐intuitive for non‐professional investors.
Research limitations/implications
A main limitation is that our experiment concentrates on liabilities and abstracts from interactions of both sides of the balance sheet.
Originality/value
This is the first study to analyze in detail non‐professional investors' information processing of liabilities measured at fair value.
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Martin R.W. Hiebl, Rainer Baule, Andreas Dutzi, Volker Stein and Arnd Wiedemann
This paper provides an overview of the empirical findings on how relative performance information (RPI) affects employee behavior. Additionally, the review identifies future…
Abstract
Purpose
This paper provides an overview of the empirical findings on how relative performance information (RPI) affects employee behavior. Additionally, the review identifies future research opportunities based on a systematic analysis of the literature that incorporates findings across several disciplines and provides replicable, extensive coverage.
Design/methodology/approach
This paper addresses a research gap via synthesis, drawing on the empirical literature identified and analyzed systematically. A conceptual framework is developed to integrate the studies.
Findings
The effect of RPI on performance through enhanced effort is positive; moreover, publicity and performance-dependent compensation strengthen the effect. However, RPI has also been found to increase sabotage among employees, and it can lead to less honest reporting. Future research could examine critical mediators and moderators of the RPI-performance relationship and thus complement the findings. Additionally, the effects of group-based RPI remain underrepresented. Future work could help to assess in greater detail how RPI interacts with culture and norms and whether RPI is due to personal expectations. There is also room for further research regarding the effects of RPI on cooperation, its consequences for learning, how it affects budgeting decisions and its implications for risk taking.
Originality/value
This paper presents the first literature review in the field of RPI. It provides synthesized knowledge about whether RPI is beneficial or detrimental to organizational performance.