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This paper shows that local mutual funds lead firms to engage in corporate social activities locally – corporate community investment (CCI).

Using an extensive US sample of 3,691 firms for the period of 2005–2018, we find that mutual funds investing in local firms tend to increase CCI. To address endogeneity concerns, we employ an instrumental variable (IV) approach with the S&P 500 Index and Russell 1000/2000 Indexes, which suggests a causal effect of local mutual funds on CCI. Our robustness tests include alternative measures of CCI and local ownership as well as different samples using sole-HQ firms, time lags and a matching sample analysis. In addition, we employ alternative approaches for causality tests.

We find that mutual funds investing in local firms tend to increase CCI. In addition, our results indicate that CCI tends to increase firm performance measured with Tobin’s Q and operating cash flow, especially in the consumer-oriented industries where customer relations are critical. The findings imply that CCI is considered as building reputational and relationship capital in communities (i.e. strategic intangibles related to stakeholders). Local mutual funds can help firms develop such strategic intangibles that promote shareholder value.

Our study is the first to investigate the role of local institutional shareholders as a driving force of a firm’s community investments.

Cross-functional teams engage in developing platform projects which become the basis of many smaller projects. The purpose of this paper is to examine how project teams engage in front-end plan formulation and backend work implementation. This paper shows the critical linkage role of platform product practices.

This study examines the conceptual framework and research model by using a survey questionnaire for the target respondents of product development managers from the USA and Korea. After refining processes, this study determines the items for each variable for the large-scale survey.

Results suggest that when heavy-manager and customers are jointly or separately involved with a project team for the formation of shared team purpose and mission, then there would be differences in terms of information quality, shared team purpose and mission and the project outcomes. If the primary roles of heavyweight leadership and customer involvement are to improve information quality in terms of reduction of uncertainty and equivocality, then the project team is empowered enough to work on the formation of shared team purpose and mission on their own. Platform product practices are a linkage between front-end planning and back-end work doing which guides more specific projects with shared purpose and performance goals.

As the data collection was limited to the USA and Korea, generalizability across diverse contexts requires caution. However, the findings provide meaningful insight on how to manage projects in an environment of increasing complexity and ambiguity.

This study provides interesting insight into how project teams approach platform product development. Based on the empirical test, this study shows how cross-functional teams integrate front-end project plan formulation and back-end project work implementation. This study also presents how heavyweight manager and customer involvement addresses the front-end information challenges and influence platform product practices.

This study empirically tests the role of fuzzy front planning in impacting project team success. In particular, this study highlights the dynamic relationships between heavyweight managers and customer involvement, information quality (i.e. uncertainty and equivocality), and the nature of team purpose and mission which are all crucial for effective cross-functional teamwork.

We investigate the information content of legal contingency disclosures in corporate filings, specifically their usefulness in predicting settlement amounts and mitigation of market response to litigation resolution news.

Using a hand-collected sample of disclosures for settled US securities class action lawsuits, we analyze the contents of the contingent liabilities disclosure before future settlements and classify them into two categories: “pessimistic” and “optimistic” disclosures. We examine whether the tone of disclosure is associated with litigation outcomes, such as settlement amounts and likelihood of incurring material losses, and its effect on market reaction to settlement announcements.

Disclosures with optimistic views on lawsuits are settled for lower amounts, whereas those with more pessimistic views result in higher settlements. Furthermore, while, on average, investors react negatively to litigation resolutions, the market reaction is attenuated (exacerbated) when a prior legal liability disclosure was pessimistic (optimistic). Additionally, investors value disclosure consistency when a litigation outcome is aligned with its legal contingency disclosure. Finally, disclosure consistency is positively associated with managerial ownership as well as the largest shareholder ownership.

This study highlights that the overall tone in legal contingency disclosures is informative and has valuation implications for capital markets. It also highlights the benefits of consistent disclosure, i.e. litigation disclosure aligned with litigation outcomes, as it is viewed positively by investors.

Charities in the United States contribute to the public good by delivering a broad range of services and by promoting civic engagement and social change. Though these dual roles are widely acknowledged, a relatively few studies explore advocacy among service-providing nonprofits. Analyzing a random sample of charities in the San Francisco Bay Area, the authors conceptualize nonprofits as institutionally embedded formal organizations and actors. The authors find that a majority of service providers blend advocacy and service provision. Organizational rationalization constructs nonprofits as goal-oriented actors working to benefit their constituents and society at large, increasing the likelihood that nonprofits will embrace advocacy. Moreover, collaboration embeds nonprofits in networks of mobilization and information for advocacy and facilitates engagement in political and social change activities. By contrast, embeddedness in the market is negatively associated with advocacy. These results reinforce the salient role of service-providing nonprofits in collective civic action and demonstrate how nonprofit embeddedness in multiple institutional influences affects engagement in advocacy.

Increasingly, healthcare providers are implementing lean practices to achieve quality results. Implementing lean healthcare practices is unique compared to manufacturing and other service industries. The purpose of this paper is to present a model that identifies and defines the lean implementation key success factors in healthcare organisations.

The model is based on an extant literature review and a case illustration that explores actual lean implementation in a major USA hospital located in a Midwestern city (approximately 300,000 people). An exploratory/descriptive study using observation and follow-up interviews was conducted to identify lean practices in the hospital.

Lean practice key drivers include growing elderly populations, rising medical expenses, decreasing insurance coverage and decreasing management support. Effectively implementing lean practices to increase bottom-line results and improve organisational integrity requires sharing goals and processes among healthcare managers and professionals.

An illustration explains the model and the study provides a sound foundation for empirical work. Practical implications are included. Lean practices minimise waste and unnecessary hospital stays while simultaneously enhancing customer values and deploying resources in supply systems. Leadership requires clear project targets based on sound front-end planning because initial implementation steps involve uncertainty and ambiguity (i.e. fuzzy front-end planning). Since top management support is crucial for implementing lean practices successfully, a heavyweight manager, who communicates well both with top managers and project team members, is an important success factor when implementing lean practices.

Increasingly, green orientation and sustainability initiatives are phrases that replaced lean practices. Effective results; e.g. waste reduction, employee satisfaction and customer values are applicable to bigger competitive challenges arising both in specific organisations and inter-organisational networks.

Healthcare managers are adopting business practices that improve efficiency and productivity while ensuring their healthcare mission and guaranteeing that customer values are achieved. Shared understanding about complex goals (e.g. reducing waste and enhancing customer value) at the front-end is crucial for implementing successful lean practices. In particular, this study shows that nursing practices, which are both labour intensive and technology enabled, are good candidates for lean practice.

Enterprise resource planning (ERP) is intended to integrate all facets of a company’s business operations encompassing production planning, material purchasing, inventory control, logistics, accounting, finance, marketing, and human resource management by creating a single depository of the database that can be shared by the entire organization and its trading partners. Through an empirical study, the purpose of this paper is to identify a multitude of drivers that facilitate or hinder the implementation of ERP in business environments. Also, this paper determines its role in supply chain operations and assesses its impact on supply chain performances.

To examine which factors drive the ERP adoption and gauge the level of the ERP success, the authors develop a research framework based on two well-known theories in the strategy literature: a contingency theory; and a resource-based view of the firm. This research framework allowed us to develop a series of hypotheses regarding the use of ERP for strategic sourcing. To test hypotheses, the authors carried out the study in three phases: a pre-pilot; a pilot; and a large-scale questionnaire survey. In the pre-pilot phase, the authors generated potential survey items through theory development and a literature review. In the pilot phase, the authors develop a structural equation model along with the identification of valid constructs based on structural interviews and the Q-sort method. At the last stage, the authors conducted a large-scale survey via mail questionnaires primarily targeting the Korean industry comprised of manufacturers and their suppliers and customers.

The firm’s ERP adoption and implementation decision is mainly affected by its internal environment. Defying the conventional wisdom, the firm’s external environment has little influence on its decision to adopt and implement ERP. However, through the mediating role of an internal environment, an external environment still indirectly influences the ERP adoption and ERP implementation decision. Also, the authors found that ERP could enhance the ERP adopter’s organizational capability and supplier capability.

This study is one of a few attempts to investigate the role of ERP in the supply chain and identify important determinants influencing the ERP adoption and implementation decisions. Especially, in contrast with the previous literature which often gauged the benefits of ERP from an ERP adopter’s standpoint, this paper is one of the few to assess the benefits of ERP from the ERP adopter’s supply chain partners standpoints. Also, it is one of the first to assess the impact of ERP on supplier capability, organizational capability, and customer value.

This study investigates the impact of business strategy on earnings management practices for financial and non-financial firms in Oman. To assess the research objective, 430 firm-year observations from 2015 to 2019 were employed in the study. Using regression analysis, the findings suggest that differentiation strategy positively affects earnings management in financial sector firms. In addition, cost leadership strategy positively affects earnings management in non-financial sector firms. This indicates that business strategy is associated with company leaders managing their earnings while they are trying to survive through competition. These findings are useful for regulators, as they can introduce mechanisms to curb earnings management practices and instil more faith in investors.

This study aims to investigate the impact of business strategy on the classification shifting practices of Indian firms.

The study considered cost leadership and differentiation strategy. Two forms of classification shifting, namely, expense misclassification and revenue misclassification have been examined in this study. Panel data regression models are used to analyze the data for this study.

The results show that managers of cost leadership strategy firms are more likely to be engaged in expense misclassification, whereas firms following differentiation strategy are likely to be engaged in revenue misclassification. Subsequent tests of this study suggest that firms following a hybrid strategy (mix of cost leadership and differentiation) prefer revenue misclassification over expense misclassification for reporting inflated operating performance. These results imply that firms prefer the shifting tool based on the ease and need of each shifting strategy. These results are consistent with several robustness measures.

The results suggest that investors should understand business strategy before developing insights about the accounting quality of firms. Investors should conduct a comprehensive review of income statement items before using items for portfolio evaluation.

To the best of the authors’ knowledge, this is the first study to examine the association between business strategy and classification shifting.

The purpose of this study is to explore the relationships among business strategy, market competition and earnings management.

This paper uses 2,037 Chinese A-share listed firms from 2010 to 2012 to test the research questions using regression analyses.

The firms that follow cost leadership strategy (cost leaders) are more likely to have a higher level of real earnings management. The firms that follow differentiation strategy (differentiators) are less likely to use real earnings management. For cost leaders, the market competition further increases the level of real earnings management, whereas the level of earnings management of differentiators is not significantly impacted by the market competition.

Results of this study indicate the feasibility of differentiation strategy in China and suggest that management should be encouraged to use such a strategy or to use a hybrid strategy to achieve its operational and financial goals.

The study contributes to the research of earning management by providing evidence on that business strategy has significant impacts on earnings management. It also shows an incremental influence of market competition on earnings management through its impacts on business strategy.