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- Agency theory (2)
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Articles 1 - 11 of 11
Full-Text Articles in Business
The Impact Of Supervisory Monitoring On High-End Retail Sales Productivity, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter, Dhinu Srinivasan
The Impact Of Supervisory Monitoring On High-End Retail Sales Productivity, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter, Dhinu Srinivasan
Gordon Potter
Based on a two-stage analysis of a panel of data on 12 outlets of a high-end retailer for 24 months, we investigate how the level of supervisory monitoring affects retail sales productivity. In the first stage, we use Data Envelopment Analysis (DEA) to compute the relative productivity of retail outlets in using their labor and capital resources to generate store sales. In the second stage, we regress the logarithm of DEA scores on contextual variables to obtain consistent estimators of the impact of contextual variables on productivity (Banker and Natarajan in Operation Research 56:48-58, 2008). Contrary to agency theoretic prediction …
An Empirical Analysis Of Manufacturing Overhead Cost Drivers, Rajiv D. Banker, Gordon S. Potter, Roger G. Schroeder
An Empirical Analysis Of Manufacturing Overhead Cost Drivers, Rajiv D. Banker, Gordon S. Potter, Roger G. Schroeder
Gordon Potter
Empirical validity of the claim that overhead costs are driven not by production volume but by transactions resulting from production complexity is examined using data from 32 manufacturing plants from the electronics, machinery, and automobile components industries. Transactions are measured using number of engineering change orders, number of purchasing and production planning personnel, shop- floor area per part, and number of quality control and improvement personnel. Results indicate a strong positive relation between manufacturing overhead costs and both manufacturing transactions and production volume. Most of the variation in overhead costs, however, is explained by measures of manufacturing transactions, not volume.
A Field Study Of The Impact Of A Performance-Based Incentive Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter
A Field Study Of The Impact Of A Performance-Based Incentive Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter
Gordon Potter
Much management accounting research focuses on design of incentive compensation contracts. A basic assumption in these contracts is that performance-based incentives improve employee performance. This paper reports on a field test of the multi-period incentive effects of a performance-based compensation plan on the sales of a retail establishment. Analysis of panel data for 15 retail outlets over 66 months indicates a sales increase when the plan is implemented, an effect that persists and increases over time. Sales gains are significantly lower in the peak selling season when more temporary workers are employed.
Manufacturing Performance Reporting For Continuous Quality Improvement, Rajiv D. Banker, Gordon S. Potter, Roger G. Schroeder
Manufacturing Performance Reporting For Continuous Quality Improvement, Rajiv D. Banker, Gordon S. Potter, Roger G. Schroeder
Gordon Potter
Recently many plants have implemented the new manufacturing strategy of continuous quality improvement. The central hypothesis in this paper is that the implementation of a policy of continuous quality improvement results in a shift in the management control system. This article tests this hypothesis by examining the shop floor reporting policies of forty-two plants located in the United States. The paper documents that the extent of information concerning the current status of manufacturing, such as charts on defect rates or schedule compliance and productivity information, provided to workers on the shop floor is positively related to the implementation of continuous …
An Empirical Analysis Of Continuing Improvements Following The Implementation Of A Performance-Based Compensation Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter, Dhinu Srinivasan
An Empirical Analysis Of Continuing Improvements Following The Implementation Of A Performance-Based Compensation Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter, Dhinu Srinivasan
Gordon Potter
Performance improvements subsequent to the implementation of a pay-for-performance plan can result because more productive employees self-select into the firm (selection effect) and/or because employees allocate effort to become more effective (effort effect). We analyze individual performance data for 3,776 sales employees of a retail firm to evaluate these alternative sources of continuing performance improvement. The incentive plan helps the firm attract and retain more productive sales employees, and motivates these employees to further improve their productivity. In contrast, the less productive sales employees’ performance declines before they leave the firm.
An Empirical Analysis Of Performance Impacts Resulting From Conversion To Franchise Operations, James Hesford, Mina Pizzini, Gordon S. Potter
An Empirical Analysis Of Performance Impacts Resulting From Conversion To Franchise Operations, James Hesford, Mina Pizzini, Gordon S. Potter
Gordon Potter
Franchising is an important form of organizational control. Possible benefits of franchising include its ability to reduce agency costs that increase with costly monitoring, and provide incentives for the use of local information by onsite managers. However, these benefits may come at a cost, as franchisees may reduce quality by choosing to free ride. While many studies have investigated the reasons for franchising, few studies have documented the impacts of franchising on unit level operating performance. Using time-series data from a number of lodging properties that were converted to franchisee control from company control, this study documents the performance impacts …
Accounting Research In The Cornell Quarterly: A Review With Suggestions For Future Research, James W. Hesford, Gordon S. Potter
Accounting Research In The Cornell Quarterly: A Review With Suggestions For Future Research, James W. Hesford, Gordon S. Potter
Gordon Potter
An analysis of accounting-related articles published in the Cornell Hospitality Quarterly shows a shift from prescription to description, with an increasing use of scientific research methods. The authors found that the literature has examined the industry’s use of the Uniform System of Accounts, cost management, and management control systems, including the effects of nonfinancial measures and the balanced scorecard. Although a uniform system of accounts offers consistency, it may limit a hotel manager’s ability to match costs with departmental revenues. Budgeting and capital budgeting are particularly difficult issues for the hospitality industry, due to the fact that most hotels involve …
The Impacts Of Variety On The Costs And Profits Of A Hotel Chain’S Properties, Cathy A. Enz, Gordon S. Potter
The Impacts Of Variety On The Costs And Profits Of A Hotel Chain’S Properties, Cathy A. Enz, Gordon S. Potter
Gordon Potter
In the hotel industry, undistributed operating expenses represent a significant portion of the operating costs for a hotel. Exactly how most of these expenses arise is not well understood. Using data from more than 40 hotels operated by a major chain, the authors examine the links between the variety of a hotel’s products and customers and its undistributed operating expenses and revenues. Their findings show that undistributed operating expenses are related to the extent of the property’s business and product-services mix. The results suggest that although increasing a property's product-service mix results in higher undistributed operating expenses, the incremental costs …
Association Of Nonfinancial Performance Measures With The Financial Performance Of A Lodging Chain, Rajiv D. Banker, Gordon S. Potter, Dhinu Srinivasan
Association Of Nonfinancial Performance Measures With The Financial Performance Of A Lodging Chain, Rajiv D. Banker, Gordon S. Potter, Dhinu Srinivasan
Gordon Potter
A test of nonfinancial measures used as part of a management-incentive program by a U.S.-based, full-service hotel chain found that improvements in the nonfinancial measures were followed shortly by increases in revenue and profit. The two nonfinancial measures are customer satisfaction as measured by guests’ comment card indications of likelihood to return and level of complaints. The lag between the nonfinancial measures and changes in revenue and operating profit was six months in this case. While the test applies directly to that one chain, the lesson is important to the rest of the hotel industry.
An Empirical Examination Of The Impacts From Termination Of A Performance-Based Incentive Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter, Dhinu Srinivasan
An Empirical Examination Of The Impacts From Termination Of A Performance-Based Incentive Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter, Dhinu Srinivasan
Gordon Potter
This paper reports on the financial impacts from the termination of a pay for performance plan for the salesforce at a retail establishment. Using monthly panel data spanning more than eight years for 15 outlets of a major retailer, this study documents that store-level sales and operating profits decrease after the incentive plan is terminated. Individual performance data are then investigated to help identify the role of effort and selection effects in explaining the documented decrease. The analysis of the individual employee sales data reveals that virtually all of the declining store level sales can be explained by selection effects.
Serving More Segments And Offering More Products: What Are The Costs And Where Are The Profits?, Cathy A. Enz, Gordon Potter, Judy A. Siguaw
Serving More Segments And Offering More Products: What Are The Costs And Where Are The Profits?, Cathy A. Enz, Gordon Potter, Judy A. Siguaw
Gordon Potter
Making more money involves more than targeting new customer segments and offering new services.