ajm 17(1) master-lulu-revised.pdf 76 american journal of management vol. 17(1) 2017 high deductible health plans and health savings accounts: potential problems for taxpayers, opportunities for policy makers sheldon r. smith utah valley university this paper discusses high deductible health plans and health savings accounts. the paper also details a potential problem taxpayers may face when using a health savings account with a high deductible health plan, especially if they have adult children under age 27 who are insured under the plan but who are not tax dependents. the issue discussed also has policy implications which are relevant to tax policy makers (smith, 2015b). introduction employers that offer high deductible health plans to their employees may also give their employees an option to participate in a health savings account. a health savings account can reduce the after-tax cost for healthcare costs paid by the employee. however, with employer-sponsored health plans that may now cover employees� children up to age 26 because of the requirements of the patient protection and affordable care act (p.l. 111-148) and the health care and education reconciliation act of 2010 (p.l. 111-152), sometimes referred to together as the affordable care act, use of a health savings account may be more complicated than anticipated. this paper discusses a potential problem taxpayers may face when using a health savings account with a high deductible health plan. taxpayers who may face this potential problem would want to consider it as they contemplate the use of a high deductible health plan and a health savings account. the issue discussed also has policy implications which are relevant to tax policy makers. high deductible health plans smith (2015a) gives some background on both traditional insurance plans and high deductible health plans. potential tax benefits related to these different plans are also mentioned. a high deductible health plan is one which requires a relatively large deductible to be met before the insurance company starts to pay toward the medical costs. high deductible health plans are increasing in popularity. many people are opting for the high deductible plans because of the lower premiums. of course, one would expect, because of the nature of insurance and deductibles, that a plan with a high deductible would have lower premiums. this occurs because the risk to the insurance company is mitigated if the insured has to first meet the deductible. in addition, it is likely that insured parties may be more careful with their choice and use of medical services if they are paying the entire cost of the services up to the point that the deductible has been met. american journal of management vol. 17(1) 2017 77 high deductible health plans may have an out-of-pocket maximum amount that must be paid by the insured which is smaller than the out-of-pocket maximum in a traditional health plan. therefore, the two groups most likely to choose a high deductible plan would be those who expect minimal health service needs during the year and those who may have major health service needs during the year. the first group may benefit by paying a lower premium and minimal costs toward the high deductible, making their total cost of health care coverage less than in a traditional plan. the second group may benefit by paying a lower premium and having a lower total out-of-pocket cost even though the deductible and out-of-pocket maximum may both be paid during the plan year. health savings accounts if a high deductible health plan meets certain criteria, an employer can choose to give employees an option to contribute to a health savings account to help pay for the deductible, co-payments, and coinsurance costs of medical services (irc, section 223). a health savings account is owned by the individual and is portable if the individual switches employers. the amounts in a health savings account can be invested and earn interest. the contributions and earnings are not taxed if used for qualified medical expenses. amounts contributed through an employer to a health savings account are excluded from taxes, both income taxes and employment taxes. a health savings account can also be funded directly by an employee who qualifies with a high deductible health plan. these contributions can then be deducted on an individual tax return, but they will not be exempt from employment taxes. for 2017 the criteria qualifying a high deductible health plan to be eligible for a health savings account are as follows: (1) the deductible must be at least $1,300 for single coverage or at least $2,600 for family coverage, and (2) the maximum out-of-pocket expenses for the plan must not exceed $6,550 for single coverage or $13,100 for family coverage. the maximum contribution that can be made to a health savings account in 2017 is $3,400 if the health plan is for single coverage and $6,750 if the health plan is for family coverage (irs, 2016c). an additional contribution of $1,000 is allowed in 2017 for those who are at least 55 years old. although contributions to a health savings account can only be made while an individual is covered under a qualifying high deductible health plan, the amounts accumulated in that account do not have to be spent in the same year when they are contributed. they can be spent for current medical expenses or for future medical expenses, even those incurred after the individual is no longer insured under a high deductible health plan. if an individual incurs medical costs while insured under the high deductible health plan, he/she can choose to pay for those costs outside of the health savings account and claim a reimbursement for those expenses from the health savings account many years in the future. of course, that would require more money now�enough to pay for current medical costs as well as the contributions to the health savings account�but would potentially allow for more tax-free earnings to be withdrawn from the account in the future. if amounts are withdrawn from a health savings account for non-qualified expenses, they are subject to federal income taxes. if these non-qualified expenses are withdrawn before the health savings account holder reaches age 65, they are also subject to a 20 percent penalty (the penalty was 10 percent prior to 2011) (p.l. 108-173, p.l. 111-148). amounts withdrawn from health savings accounts for qualified medical expenses are not subject to federal income taxes. �qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction� (irs, 2016b, p. 8). to be a qualified medical expense with respect to a health savings account for a specific taxpayer, the expense must have been incurred by (1) the taxpayer or the taxpayer�s spouse, (2) a dependent claimed on the taxpayer�s return, or (3) a person the taxpayer could have claimed as a dependent except that (a) the person filed a joint return, (b) the person had gross income in excess of the exemption amount ($4,050 for 2016), or (c) the taxpayer (or spouse if filing jointly) could be claimed as a dependent on another tax return for the tax year (irs, 2016b). 78 american journal of management vol. 17(1) 2017 discussion �the affordable care act requires group health plans and health insurance issuers that provide dependent coverage of children to continue to make such coverage available for an adult child until age 26� (irs, 2010). the affordable care act also makes changes to some sections of the tax code. these changes provide an exclusion from taxpayers� income for employer payments related to insurance plans and medical costs for adult children of the taxpayer who are not yet 27 but who may now be covered under the group health plan of a parent. the internal revenue service also interpreted these changes to apply to health flexible spending arrangements (irs, 2010). a health flexible spending arrangement is a tax-advantaged plan an employer may offer in conjunction with a more traditional health plan. it is usually funded by employee contributions on a pretax basis through a salary reduction agreement between the employee and the employer. the flexible spending arrangement amount can then be used by the employee to pay for deductibles, co-payments, and coinsurance under the traditional health plan. the irs interpretation of the affordable care act changes means money from a health flexible spending arrangement can be used for medical expenses for a taxpayer�s child who is not yet 27 even if he/she is not a tax dependent. however, no such change or interpretation was made with respect to health savings accounts. many taxpayers who are now choosing or contemplating high deductible health plans, potentially with an associated health savings account, have children who are not yet 26 years of age but who also do not qualify as tax dependents (or as those who would have been tax dependents but for the exceptions listed above for a health savings account reimbursement). this means that the medical costs paid through a high deductible plan for these adult children who are not tax dependents cannot be reimbursed through the health savings account. to be a tax dependent, an individual has to meet the tax code requirements as (1) a qualifying child, or (2) a qualifying relative (irc, section 152). to be a tax dependent as a qualifying child, several requirements must be met: (1) the individual must be a child who has a specifically defined relationship to the taxpayer, (2) the individual must be under age 19 and younger than the taxpayer(s) or under age 24 if a student and younger than the taxpayer(s) or permanently and totally disabled, (3) the individual must not have provided over half of his or her own support, (4) the individual must not be filing a joint return or only doing so to claim a refund of withheld or estimated tax payments, (5) the individual must have lived with the taxpayer for more than half of the tax year, (6) the individual must be a u.s. citizen, a u.s. national, a u.s. resident, or a resident of canada or mexico, and (7) the individual (or his/her spouse if filing jointly) must not be claimable as a dependent on another tax return. to be a tax dependent as a qualifying relative, several requirements must be met: (1) the individual must either have a specific relationship to the taxpayer (wider scope than for qualifying child) or have lived with the taxpayer for the entire year (without violating local law), (2) the individual must not have been a qualifying child of any taxpayer, (3) the individual must have gross income less than the exemption amount ($4,050 in 2016), (4) the taxpayer must have provided over half of the support of the individual, (5) the individual must be a u.s. citizen, a u.s. national, a u.s. resident, or a resident of canada or mexico, and the individual (or his/her spouse if filing jointly) must not be claimable as a dependent on another tax return (irs, 2016a). as can be determined by looking at the requirements above for a tax dependent, there are many cases where an adult child may not qualify as a tax dependent (or for one of the exceptions) even if he/she qualifies as an insurance dependent under the affordable care act. in many of these cases, the adult child is somewhat independent but may not be totally independent financially. the parent taxpayers may be providing some of the support for the child, including payment of some or all of the out-of-pocket medical expenses that are not covered directly by the insurance company. implications for parents with adult children if parents with adult children who qualify for the insurance plan but who are not tax dependents have a choice between a traditional health plan and a high deductible plan, the tax implications of a high american journal of management vol. 17(1) 2017 79 deductible health plan with a health savings account should be considered before the choice is made. the tax benefit of a health savings account may be the tipping point which makes the high deductible health plan preferable to a traditional plan. however, if adult children are involved, the tax benefit may not be the same as if there are no adult children insured on the policy. if an adult child who is not a tax dependent has unexpected surgery or a visit to the emergency room early in the insurance plan year, these costs could meet most or all of the deductible and some of the additional out-of-pocket cost required under the insurance policy. these costs would then not be eligible for reimbursement through the health savings account. if amounts had already been contributed to the health savings account, these amounts could be used for future health care costs for qualified individuals, but that might be in a future year. this would not leave the money available to cover the current deductible and coinsurance for the adult child. that money would have to come from another source. of course, if other money is available, the amounts in the health savings account could simply be used for future health care costs. however, if other money is not available, the taxpayer might need to discontinue contributing to the health savings account that year in order to have the money available for the medical services for the adult child. although the amount contributed to a flexible spending arrangement is determined before the plan year starts and that amount cannot be adjusted unless there is a change in family status, a health savings account is on a calendar year (to match most taxpayers� tax years), and the amount contributed can be adjusted during the year. however, if the insurance plan year starts in the middle of the year, the health savings account may already be one-half funded for the year before it becomes known that an adjustment might be desired based on an adult child having medical services for which the cost applied toward the high deductible. if the parents are actually paying the out-of-pocket medical costs for their adult children, the following things should be considered: 1. consider the likelihood that the adult child(ren) will have medical services that will be applied to the deductible or out-of-pocket maximum. use this likelihood in determining how much money to contribute to the health savings account (unless the parents can afford to fund both regardless). 2. for medical services which can be planned in advance, have the taxpayer, the spouse, and tax dependents plan to receive medical services first during the plan year so those costs will be reimbursable through the health savings account. one potential drawback even with this planning is that the deductible and out-of-pocket maximum are charged by the insurance company based on when claims are processed, not necessarily when the medical services were received. so sometimes even the best efforts at planning cannot achieve the desired outcome. 3. if unexpected medical expenses arise for adult children that will apply to the deductible or out-ofpocket maximum, consider adjusting the health savings account contributions if necessary. of course, this would reduce the tax benefit if something less than the maximum contribution is made to the health savings account. otherwise, if the taxpayer can afford it, the health savings account can continue to be fully funded even though the amounts contributed might then be used for future expenses of qualifying individuals. if the adult children who are not tax dependents but who are covered under the parents� high deductible health plan are going to pay their own out-of-pocket costs, the following things should be considered: 1. the adult children would want to be aware of the potential costs if they require medical services that will be applied to the deductible or the out-of-pocket maximum. this would be true if the medical services are planned or if they are unexpected. 2. the parents may want to consider contributing less than the maximum amount to the health savings account if they expect that their adult child(ren) might help pay the deductible or out-of-pocket maximum. however, if the parents can afford it, they may still want to contribute the maximum to the health savings account to use for future medical costs. 3. the parents may want to ignore the possibility that their adult child(ren) may pay some or all of the out-of-pocket maximum initially when determining how much to contribute to the health savings account. 80 american journal of management vol. 17(1) 2017 the contributions could then be adjusted if the out-of-pocket maximum is at least partially paid by an adult child. assuming there is still part of the calendar year left to adjust their contributions. implications for policy makers while it would not be revenue neutral to the government to allow a parent�s health savings account to be used to pay for medical costs for children under age 27 who are not tax dependents, this would make the tax laws applicable to health savings accounts more consistent with the requirements of the affordable care act. it would also make the tax benefits under a health savings account more consistent with the interpretation that the internal revenue service has made that money from a flexible spending arrangement can be used for a child under age 27 even if the child is not a tax dependent. this change to the tax law would also reduce the complication of families with high deductible health plans and health savings accounts having to plan their medical expenses during the insurance plan year to maximize the portion of the out-of-pocket maximum paid by tax dependents while trying to postpone medical costs for adult children who are not tax dependents. conclusion policy makers should consider whether a change in the tax law with respect to health savings accounts (and medical savings accounts) would make sense. the potential change in the law could allow a taxpayer to pay for medical costs for children under age 27, regardless of whether they are tax dependents, from a health savings account. the cost of such a policy should be estimated so it can either be funded or offset if the tax law is changed. until such a change is made in the law, taxpayers with adult dependents covered under their high deductible health plan who are not tax dependents should carefully consider the effects on their high deductible health plans and health savings accounts. some of implications to be considered were detailed in this paper. references internal revenue code (title 26). subtitle a�income taxes, chapter 1-normal taxes and surtaxes, subchapter b-computation of taxable income, part v-deductions for personal exemptions, section 152-dependent defined. internal revenue code (title 26). subtitle a�income taxes, chapter 1-normal taxes and surtaxes, subchapter b-computation of taxable income, part vii-additional itemized deductions for individuals, section 223-health savings accounts. internal revenue service. (2010). notice 2010-38, internal revenue bulletin 2010-20, may 17. internal revenue service. (2016a). form 1040 instructions�2015, january 5. internal revenue service. (2016b). publication 969, health savings accounts and other tax-favored health plans, january 13. internal revenue service. (2016c). revenue procedure 2016-28, internal revenue bulletin 2016-20, may 16. public law 108-173. (2003). medicare prescription drug, improvement, and modernization act of 2003, december 8. public law 111-148. (2010). patient protection and affordable care act, march 23. public law 111-152. (2010). health care and education reconciliation act of 2010, march 30. smith, s. r. (2015a). tax and other implications of traditional health insurance plans versus highdeductible health plans, journal of business and behavioral sciences, 27, (2), 102-111 smith, s. r. (2015b). high deductible health plans and health savings accounts: potential problems for taxpayers, opportunities for policy makers, decision sciences institute annual meeting proceedings, http://www.decisionsciences.org/portals/16/proceedings/am-2015/index.html. american journal of management vol. 17(1) 2017 81 author mailing information: sheldon r. smith acct. dept., mail stop 103 utah valley university 800 w. university parkway orem, ut 84058 (801) 863-6153 ajm 17(3) web_master.pdf american journal of management vol. 17(3) 2017 89 bounded rationality: effect on international m&a performance of mnes xiaoruo xu illinois institute of technology chuandi jiang saint louis university from a transaction cost economics perspective, this study builds a model to explain how the bounded rationality suggested by transaction cost economics affects the cross-cultural management capability, which in turn influences multinational enterprises� (mnes) performance of international mergers and acquisitions (m&a). we explain the moderating effects of cultural distance, cultural intelligence and global mindset in the relationship between bounded rationality and mnes� performance, and argue that cultural distance has a negative impacts on mnes� post m&a performance and cultural intelligence and global mindset are positively associated with the cognitive capability of managers to deal with crosscultural issues. introduction today it is commonly accepted that an important competitive advantage of mnes is their superior ability to transfer and combine capabilities across geographically dispersed units. in the past 30 years, m&a, especially the cross-border m&a, had been more and more popular in corporate development. here we define cross-border m&a as those involving an acquirer firm and a target firm whose headquarters are located in different home countries. technological development and globalization have deeply contributed to the popularity of m&as and cross-border m&as. gross-border m&a activities have continued to increase at a torrid pace during the past a few decades, to the point that it has become a major strategic tool for growth of multinational corporations. 2015 has been a record year for m&as. globally, m&a activities reached a volume of $4.9 trillion, beating the record of $4.6 trillion set in 2007, according to statistics from dealogic. this can be attributed to the dynamic nature of international trade. the consolidations of industries and regions have also contributed to the overall number and value of m&a worldwide to continuously increase. cross border m&as are an implementation instrument for the firm�s international diversification strategy (internationalization) and have been motivated by the necessary search for new opportunities across different geographic locations and markets in a turbulent and continuously changing environment. given the increasing number of cross-border m&as and their growing importance in the global market, a better understanding of the factors that affect the performance of cross-board m&a is meaningful. 90 american journal of management vol. 17(3) 2017 theorerical foundation transaction cost economics and bounded rationality origins. h.a. simon created the beginnings of a theory of bounded rationality. he described decision making as a search process guided by aspiration levels. an aspiration level is a value of a goal variable which must be reached or surpassed by a satisfactory decision alternative. in the context of the theory of the firm one may think of goal variables like profit and market share. decision alternatives are not given but found one after the other in a search process. in the simplest case the search process goes on until a satisfactory alternative is found which reaches or surpasses the aspiration levels on the goal variables and then this alternative is taken. simon coined the word satisficing for this process. often satisficing is seen as the essence of simon�s approach. however, there is more to it than just satisficing. aspiration levels are not fixed once and for all, but dynamically adjusted to the situation. they are raised, if it is easy to find satisfactory alternatives and lowered if satisfactory alternatives are hard to come by. this adaptation of aspiration levels is a central idea in simon�s early writings on bounded rationality. three features characterize simon�s original view of bounded rationality: search for alternatives, satisficing, and aspiration adaptation. this is the how rationality comes out. bounds of rationality. full rationality requires unlimited cognitive capabilities. fully rational man is a mythical hero who knows the solutions of all mathematical problems and can immediately perform all computations, regardless of how difficult they are. human beings are very different. their cognitive capabilities are quite limited. for this reason alone the decision behavior of human beings cannot conform to the ideal of full rationality. it could be the case that in spite of obvious cognitive limitations the behavior of human beings is approximately correctly described by the theory of full rationality. confidence in this conjecture of approximate validity explains the tenacity with which many economists stick to the assumption of bayesian maximization of subjectively expected utility. however, there is overwhelming experimental evidence for substantial deviations from bayesian rationality. people do not obey bayes� rule. their probability judgments fail to satisfy basic requirements like monotonicity with respect to set inclusion, and they do not have consistent preferences, even in situations involving no risk and uncertainty. the cognitive bounds of rationality are not the only ones. a decision maker may think that a choice is the only rational one, e.g. to stop smoking, but nevertheless not take it. conclusions reached by rational deliberations may be overridden by strong emotional impulses. the lack of complete control over behavior is not due to motivational bounds of behavior rather than to cognitive ones. in a word, �bounds� are limitations and show the directions for analyzing m&a performance. organizational management theory. in the organization management theory, bounded rationality is a way to represent how real managers make decisions in real organizations. it is the rationality that takes into account the limitations of the decision maker in terms of information, cognitive capacity, and attention as opposed to substantive rationality, which is not limited to satisficing, but rather aims at fully optimized solutions. therefore, in organization management theory, �bounds� here are explicitly defined. transaction cost economics theory origins. transaction cost economics was originally introduced by coase (1937) who tried to explain the existence of firms. williamson (1975; 1985) then developed the idea further and elaborated the dependency of firms on outside partners the term �partners� here comprises the business relationship between service supplier and client leading to disadvantages due to transaction costs, opportunism and uncertainty. transaction costs can be looked at from a macro and from a micro level (noteboom 1992). the interactions between organizations or between different actors in organizations are governed by implicit rules, norms or values that are developed and exchanged (ouchi 1980). from a macro american journal of management vol. 17(3) 2017 91 perspective, transaction costs evolve due to institutional arrangements and bilateral interaction between organizations. such arrangements have to be made so that a single institution does not have to specialize at a very high degree, which would in turn result in soaring internal transaction costs (north 1990). the rules and norms that govern institutional interactions are based on individual interaction patterns. thus on a more micro level, frequently repeated activities result in habitualization, a quasi-substitute for institutional rules or norms. habitualization provides psychological relief with which cognitive capacity of the individual can be economized. an individual�s interaction patterns cause less transaction costs if they are governed by habitualization (berger & luckmann 1966) because it replaces external coordination mechanisms. that is the reason why scripts are of such high significance: they represent a type of habitualization but they focus on the process characteristics which are particularly important in terms of the service production and delivery process. scripts in contrast to other forms of simple habitualization comprise not only the role of the acting individual but also other aspects that are relevant in relation to interaction patterns and the performance of the service transaction. we can see transactioncost economics is an interdisciplinary undertaking that joins economics with aspects of organization theory. transaction cost economics focuses on the organization of transactions that occur whenever a good or service is transferred from a provider to a user across a technologically separable interface. when transactions occur within an organization, the transaction costs can include managing and monitoring personnel and procuring inputs and capital equipment. the transaction costs of buying the same good or service from an external provider can include the costs of source selection, contract management, performance measurement, and dispute resolution. thus, the organization of transactions, or �governance structure,� affects transaction costs. it can be considered as the basic theoretical framework that analyzes the relation between the service provider and the customer process; thus, the theory embeds and governs both sides of the process. therefore, with reference to the efficiency aspect of the service, the transaction cost theory not only represents the link between those two processes but it also offers an explanation of why they have to be understood as a comprehensive process entity. in economics, bounded theory is the source of transaction cost economics. hypotheses development following the logic, this study develops a model to explain the relationship between bounded rationality and the m&a performance. figure 1 shows the conceptual framework of this study, which is a moderated moderation model. the model shows that the culture-related factors including cultural distance, cultural intelligence, and global mindset moderated the impacts of cross-cultural management capabilities on the relationship between bounded rationality and m&a performance. 92 american journal of management vol. 17(3) 2017 figure 1 the conceptual model according to the bounded rationality theory, cross cultural management capability has some �bounds� (limitations). here we collect the bounds as the factors to affect the cross cultural management capability including cultural distance, cultural intelligence and global mindset. we will analyze the details of these bounds later. proposition 1: cross-cultural management capability moderates the relationship between bounded rationality on m&a performance. for cross-board m&a, because it relates to different nations and culture, how to deal with cultural diversification is significant. cross cultural management capability involves the capabilities managing work teams in ways that considers the differences in cultures, practices and preferences of consumers in a global or international business context. managers possess cross cultural management capability ensures effective communication, and the three bounds we listed will affect the cross-board m&a performance. to be specific, a manager with cross cultural capability will apply their cross-cultural knowledge skillfully to develop context-specific actions that lead to organizational effectiveness. from a global perspective to obtain information about the world, use the information experimentally, and also apply it in a complex environment. the role of cross-cultural management capability has three categories: first, bridging differences in a meaningful way, by actively managing differences between people, values and cultures. these differences are bridged when a conflict in values can nonetheless lead to productive cooperation and action. second, leveraging differences and synergies integrates the disparate elements in an increasingly complex world. and third, managerial capability plays a coordinating role, more than a controlling one, because managers spend most of their time and resources in improving coordination and cooperation between the various elements of the worldwide system. the cross-board m&a process is a process of transferring the property rights between the acquirer firm and target firm. both sides have to pay transaction costs. we have to consider some kinds of costs incurred in the m&a process, such as costs for preparing, costs for negotiation and contracting, costs for transfer property right, costs for framework developing, costs for situation analysis, and costs for integration designing and implementing. during m&a process, transaction costs can be measured and analyzed for choosing merger target, designing m&a mode and contract, lower costs and higher success rate. how to deal with these kinds of transaction costs provides a framework for understanding and strategic implications to the cross-board m&a performance. culture, in general, is the homogeneity of characteristics that separates one human group from another. culture provides a society�s characteristic profile with respect to norms, values, and institutions that affords understanding of how societies manage exchanges. at the national level, culture is an bounded rationality m&a performance cross cultural management capability cultural distance cultural intelligence global mindset american journal of management vol. 17(3) 2017 93 aggregate of individual values. as personal experiences and shared societal values shape the views of individuals equally, there might be variation in their value priorities. the concept of culture at the national level attempts to capture the typical individual value priorities in a society, which reflect the central thrust of their shared enculturation. differences in national culture systems or the relative cultural distance between countries have been an important concern in the study of mne strategies and organizational characteristics. cross-border business transactions involve interaction with different societal value systems. although national boundaries do not always correspond with homogeneous value systems, there are strong forces within nations to create and maintain a shared culture. adapting to local cultural values that are transmitted through nations� political economy, education, religion, and language may create an additional burden for mne operating in different countries. in the organization level, multinational corporations may need to possess a diverse set of routines and repertoires if they are to compete in a diverse world. routines and repertoires are often dependent on the multinational corporation�s unique institutional and cultural environment, and are therefore not imitated easily by other firms. in the context of a cross-border m&a, national cultural distance represents distance in the norms, routines and repertoires for organizational design, new product development, and other aspects of management that are found in the acquirer�s and the target�s countries of origin. national cultural distance between countries has also been associated with significant differences in their legal systems, incentive routines, administrative practices and working styles. as multinational companies increasingly acquire targets in more culturally distant countries, they face new challenges in managing their external environment. in an uncertain environment, it is difficult for managers to know what routines and repertoires will provide sustainable competitive advantage and performance over time. given the difficulty of forecasting valuable future routines and repertoires, it may be in a multinational firm�s best interest to access a relatively large and diverse pool of routines and repertoires, thus increasing the probability that it will possess those that prove to be valuable in the future. what�s more, the impact of national culture can result in the nationalistic bias of organizational members. these are some barriers of national cultural distance on cross border m&a performance. proposition 2: cultural distance negatively moderates the impacts of cross-cultural management capabilities. the definition of �intelligence� is culture bound. in the west, it is seen as linked to the speed of making correct judgments. in many african cultures, it is linked to the person�s behavior conforming to the desires of the elders. behavior that is considered intelligent in the west is seen as typical of people who are �crazy� by some native american tribes. with rapid advances in transportation and information technologies, firms are coming into greater intercultural contact than ever before. intercultural contact is necessary and unavoidable in international business ventures such as offshore outsourcing. firms with capabilities to manage intercultural contact (i.e., culturally intelligent firms) will outperform firms that are �less intelligent.� cultural intelligence, defined as an individual�s capability to function and manage effectively in culturally diverse settings, is consistent with schmidt and hunter�s definition of general intelligence as �the ability to grasp and reason correctly with abstractions (concepts) and solve problems.� although early research tended to view intelligence narrowly as the ability to solve problems in academic settings, there is now increasing consensus that intelligence may be displayed in places other than the classroom. this growing interest in �real world� intelligence includes intelligence that focuses on specific content domains such as social intelligence, emotional intelligence and practical intelligence. cultural intelligence acknowledges the practical realities of globalization and focuses on a specific domain � intercultural settings. thus, following schmidt and hunter�s definition of general intelligence, cultural intelligence is a specific form of intelligence focused on capabilities to grasp, reason and behave effectively in situations characterized by cultural diversity. the better a firm is at learning and generating new knowledge, the more intelligent the firm. huber 94 american journal of management vol. 17(3) 2017 defined organizational intelligence as an organization�s capabilities to acquire, process, and interpret information external to the organization and is an input to the organization�s decision makers. although all organizational decision making involves some aspects of intelligence, leidner and elam distinguished organizational intelligence from organizational decision making. intelligence is viewed as an input to the organization�s decision makers. thus, better intelligence should lead to better decisions and promote the performance of cross-board m&a performance. proposition 3: a higher level of cultural intelligence increases the cross-cultural management capability of mnes to operate in international m&a context. in our globalizing and interconnected world, more and more executives need to perform �global work.� global work can be defined as interacting across different cultures and markets, and it can be done either virtually or in person. this entails dealing with complexity as the context changes on several levels � e.g. environment, stakeholders � and at varying speeds, not to mention the interdependence or ambiguity that exists when operating in different locations. in this background, managers need global mindset. global mindset means the ability to influence individuals, groups, organizations, and systems that have different intellectual, social, and psychological knowledge or intelligence from your own. but, more than the old adage, �think globally and act locally,� it�s now �think and act both globally and locally� at the same time. this means not only recognize when it is beneficial to create a consistent global standard, but also deepen the understanding of local and cultural differences, crossing cultures and changing contexts. it requires simultaneously recognizing situations in which demands from both global and local elements are compelling, while combining an openness to and awareness of diversity across cultures and markets with a willingness and ability to synthesize across this diversity. a firm�s management with global mindset has some features such as focus on big picture and changes in the corporation�s environment, strong confidence in vision and organizational processes, high value of multicultural teams, diversity seen as a source of opportunities, constantly challenging own experiences and assumptions and open to change. a manager with a global mindset is able to effectively lead across borders, serving a multitude of diverse shareholders in an ever-changing, uncertain, complex and ambiguous environment. a global mindset helps the manager to innovate in foreign cultures, become an early mover in the global marketplace, coordinate across different subsidiaries and regions, and understand trade-offs between global standardization and local customization. therefore, managers with global mindset are indispensable in cross-board m&a process. proposition 4: a higher level of global mindset increases the cross-cultural management capability of mnes to operate in international m&a context. conclusion the model presented in the article assumes that the m&a is a cross-board m&a, which the managers confront the problems of the cultural diversification. therefore, in order to get better cross-board m&a performance, the management have to grasp the cross cultural capability and concern for the transaction costs during the process of cross-board m&a. american journal of management vol. 17(3) 2017 95 references negandhi, a. (1983). cross-cultural management research: trend and future directions, journal of international business studies, vol. 14, no. 2, pp. 17-28 young-ybarra c., & wiersema m. (1999). strategic flexibility in information technology alliances: the influence of transaction cost economics and social exchange theory, organization science. shimizua k., hittb m., vaidyanathc d., & pisanod v. (2004). theoretical foundations of cross-border mergers and acquisitions: a review of current research and recommendations for the future, journal of international management. ang s., van dyne l., koh c., ng k., templer k., tay c., & chandrasekar, n. (2007). cultural intelligence: its measurement and effects on cultural judgment and decision making, cultural adaptation and task performance, management and organization review. cohen s. (2010). effective global leadership requires a global mindset, industrial and commercial training. chen y., su x., & zhao x. (2012). modeling bounded rationality in capacity allocation games with the quantal response equilibrium, management science. pi s. (2013). transaction cost approach in mergers and acquisition process, communications in information science and management engineering. an exploratory investigation of explanations for the relative effectiveness of employee recruitment methods mel schnake valdosta state university employee recruitment has become increasingly important to managers in recent years as some occupations face severe shortages and others experience surpluses. both types of human resource gaps place more pressure on recruitment to provide the right numbers of employees with the required knowledge and skill sets. this increased importance to practioners has led researchers to pay more attention to it as well (billsberry, 2007; breaugh, macan & grambow, 2008). previous research suggests that informal recruiting methods (e.g., employee referrals, walk-ins) are more effective than more formal recruiting methods. two explanations have been offered for the relative effectiveness of recruiting methods. the “realistic information hypothesis” suggests that employees recruited via the more effective methods may have acquired a greater quantity of information, more accurate information, and/or more realistic information (breaugh, 1981; zottoli & wanous, 2000). according to the “individual difference hypothesis” (saks, 2005), different recruiting methods may attract different types of applicants (schwab, 1982). there is some empirical support for both hypotheses. blau (1990) suggested that employees hired via different recruiting methods may be treated differently after hire. barber (1998) reported that she could find no empirical tests of this hypothesis. research on the post-hire treatment hypothesis is clearly needed. the purpose of this study is to provide an initial test of the “differential management treatment hypothesis.” background employee recruitment has become increasingly important to managers in recent years as some occupations face severe shortages and others experience surpluses. both types of human resource gaps place more pressure on recruitment to provide the right numbers of employees with the required knowledge and skill sets. this increased importance to practioners has led researchers to pay more attention to it as well (billsberry, 2007; breaugh, macan & grambow, 2008). research on employee recruitment has focused on recruiting methods or sources, recruiter effects and realistic job previews (rynes, bretz & gerhart, 1991; barber, 1998). these factors influence different phases of the recruitment process. barber (1998) has identified three phases of recruitment: generating applicants, maintaining applicant status, and influencing job choice. different recruiting activities influence different phases of recruitment. for example, choice of recruiting methods (i.e., job fairs, newspaper advertisements) influence the numbers and types of applicants. tracking and communicating with applicants influence maintaining applicant status. within the generating applicants phase of recruitment, one of the most important decisions is choice of recruiting method. research shows that bureau of national affairs study (1988) found that the most 40 american journal of management vol. 16(2) 2016 commonly used recruitment methods are newspaper advertisements, employee referrals, direct applications, and recruiting at schools (bureau of national affairs study (1988; kalleberg, knoke, marsden & spaeth, 1996; vecchio, 1995). several studies have found the relative effectiveness of different recruiting methods to vary across several outcome measures including turnover, absenteeism, job performance, and work attitudes. ullman (1966) found that employees recruited via informal recruitment sources had lower turnover than employees recruited via formal sources (newspaper ads, employment agencies). gannon (1971) found that rehires, walk-ins, and employee referrals had lower turnover than employees recruited via other methods. decker and cornelius (1979) also found employee referrals to be associated with lower turnover than newspaper ads and employment agencies. breaugh (1981) found job performance to be higher for employees hired via advertisements in professional journals and conventions than for employees hired through college placement and newspaper ads. absenteeism was higher for employees hired via newspaper ads. employees hired through college placement had more negative work attitudes than employees hired via other sources. taylor and schmidt (1983) examined the relative effectiveness of several recruiting methods and found that rehires had lower turnover and absenteeism than employees recruited via other methods (referrals, newspaper ads, radio ads, television ads, walk-ins, and public employment agency). breaugh and mann (1984), in a survey of social workers, found that direct applicants (walk-ins) had high job performance and lower voluntary turnover than employees recruited via other sources (newspaper ads and employee referrals). in a study of bank tellers, blau (1990) also found walk-ins to have higher performance than employees recruited through other sources (newspaper ads, employee referrals and employment agencies). williams, labig and stone (1993) found no recruiting method effects on turnover and job performance in a study of nurses. these studies suggest that informal recruiting methods (e.g., employee referrals, walk-ins) are more effective than more formal recruiting methods. two explanations have been offered for the relative effectiveness of recruiting methods. the “realistic information hypothesis” suggests that employees recruited via the more effective methods may have acquired a greater quantity of information, more accurate information, and/or more realistic information (breaugh, 1981; zottoli & wanous, 2000). for example, employee referrals may provide applicants with a more accurate and realistic picture of the job and the employer. according to the “individual difference hypothesis” (saks, 2005), different recruiting methods may attract different types of applicants (schwab, 1982). there is some empirical support for both hypotheses. for example, kirnan, farley and geisinger (1989) sound that employees recruited via informal sources (employee referrals) were of higher quality than those recruited via formal sources. williams, labig and stone (1993) concluded that informal recruitment sources reached applicants with more job experience and education which resulted in higher job performance. breaugh and mann (1984) conducted a competitive test of these two hypotheses. they examined relationships between recruitment method and performance and turnover. they found that direct applicants performed better and had lower turnover than applicants recruited via other methods (newspaper advertisement, employee referrals). they also measured individual differences including demographics, applicant quality and perceived easy of movement. they also measured employees’ perceptions of how realistic their information about the job and company was at the time of hire. they found that direct applicants reported more realistic information than applicants recruited via newspaper advertisements or employee referrals. in a study of bank tellers, blau (1990) found that direct applicants had higher performance than applicants recruited via newspaper ads, employment agencies, and employee referrals. supporting the individual difference hypothesis, he found that direct applicants had higher ability scores than applicants recruited from other sources. williams, labig and stone (1993) found no differences in turnover and job performance by recruitment sources (employee referral, previous rotation/internship, rehires, campus visits, newspaper advertisements and direct applications). they did, however, find that new hires difference in experience by recruiting source providing some support for the individual differences hypothesis. they also found that new hires differed in terms of pre-hire information, providing some support for the realistic information hypothesis. werbel and landau (1996) examined relationships between recruitment sources (newspaper advertisements, self-initiated contact, american journal of management vol. 16(2) 2016 41 corporate recruiters, employee referrals, and college placement) and turnover and performance. they found that college placement office hires tended to perform better than employees hired via newspaper advertisements. no other differences in performance or turnover were detected. comparing new hires’ job expectations with opinions of current employees (a test of the realistic information hypothesis) showed that employee referrals had less realistic expectations than did direct applicants or agency hires. griffeth, hom, fink, and cohen (1997) used structural equation modeling to conduct a competitive test of the two hypotheses. using a more complete measure of realistic information (expectations, role clarity and coping skills) they found that recruitment source was related to both individual differences and realistic information. however, only realism was associated to post-hire outcomes. they also found that recruitment methods had direct impact on post-hire outcomes beyond the effects of realism, suggesting that the two hypothesis do not explain all the variance in post-hire outcomes. additional hypotheses which have been suggested but have not received much research attention include the motivational differences hypothesis and the labor market mobility hypothesis. the motivational differences hypothesis suggests that different recruiting sources may produce applicants with differences in motivation to apply. for, example, it is very easy to apply through an employer’s web page which results in many applicants who may not be highly motivated to apply or to seek employment with a specific organization. other methods, such as direct applications may require greater effort on the part of the applicant suggesting a higher level of motivation to apply for a job with a particular employer. decker and cornelius (1979) suggested that employees hired via different recruiting methods may have different perceptions about their ability to find alternate employment. some recruiting methods may expose applicants to more employment opportunities, leading these applicants to believe they can more easily find another job which, in turn, leads to higher turnover. finally, blau (1990) suggested that employees hired via different recruiting methods may be treated differently after hire. barber (1998) reported that she could find no empirical tests of this hypothesis. research on the post-hire treatment hypothesis is clearly needed. two theories explain differential treatment of employees by leaders. the pygmalion effect or selffulfilling prophecy suggests that leaders develop expectations of employees which then affect how the leader reacts to those employees (eden, 1991). when leaders have high(low) performance expectations of employees they somehow convey those expectations to employees via subtle behaviors, such as spending more time with them, giving them more challenging assignments, and providing more feedback. employees then work up (or down) to these expectations so that the leader’s expectations are fulfilled. the leader-member exchange theory of leadership suggests that leaders classify employees into “ingroups” or “out-groups.” in-group members receive more of the leader’s time and attention, better task assignments, and more information. the leader-member exchange (lmx) model of leadership developed out of the vertical dyad linkage model of leadership and suggests that leaders classify followers into either an “in-group” or an “out-group” (dansereau, graen & hagen, 1975; dinesch & liden, 1986; graen, novak & sommerkamp, 1982; vecchio & gobdel, 1984). leaders tend to distinguish between in-group and out-group members very early in their relationship, and often on the basis of very little information (phillips & bedeian, 1994). this classification would therefore typically take place soon after the recruitment and selection of the employee. if the leader had beliefs or biases about the effectiveness of various recruitment sources, this could influence the leader’s classification of the employee as well as the leader’s expectations of the employee. lmx theory suggests that leaders interact differently with members of the two groups. ingroup members receive more time, information, and attention from the leader, greater resources, and more mentoring and support than do out-group members (scandura & schriesheim, 1994). research has shown that in-group members have higher job performance, engage more in organizational citizenship behaviors, express higher levels of job satisfaction and are less likely to turnover compared to out-group members (iles, nahrgang & morgeson, 2007 ; chen, lam & zhong, 2007). 42 american journal of management vol. 16(2) 2016 method a questionnaire was administered to 165 employees of a small manufacturing plant in the southeastern united states. the average length of service of these employees, who worked in production and maintenance jobs, was 11 years. their average age is 31 and 47% are female. sixty-seven employees returned useable questionnaires for a response rate of 41%. the questionnaire initially asked employees to indicate which recruiting method was used to recruit them into their job. company management indicated that they used walk-ins/direct application, employee referral, a company job site web page, job posting, and general internet job sites (e.g., monster.com) so these recruiting methods were listed on the questionnaire. short two to three item subscales were created to measure various aspects of differential treatment by supervisors based on pygmalion effect and leader-member exchange theories. help from supervisor was measured with three items: my supervisor checked on me regularly, my supervisor frequently asked if he/she could help me, and my supervisor made sure i had what i needed to get my job done. coefficient alpha reliability for this subscale was .78. supervisor performance expectations was measured with two items: “my supervisor expects me to perform well,” and “my supervisor made it clear he/she expects me to be a high performer” (coefficient alpha = .77). supervisor praise/recognition was measured with two items: “my supervisor recognizes me for my good work,” and “my supervisor praises good job performance” (coefficient alpha = .82. feedback from supervisor was measured with two items: “i received a great deal of feedback on my performance from my supervisor,” and “my supervisor lets me know how well i am performing” (coefficient alpha = .80). clear and difficult goals was measured with two items: “i have clear and specific work goals,” and “my work goals are quite difficult to accomplish” (coefficient alpha = .66). autonomy was measured with three items: “i am free to do my job the way i think best,” “i have ample opportunity for independent thought and action,” and “i am able to make a lot of decisions on my own” (coefficient alpha = .89). intent to turnover was included as an outcome variable to assess whether any of the recruiting methods produced applicants who were less likely to leave their jobs. three items assessed intend to turnover: “i will actively look for another job in the next year,” “i often think about quitting,” and “i will probably look for a new job next year” (coefficient alpha = .87). results analysis of variance was used to test for differences on intent to turnover by recruiting method. a significant main effect (f = 9.45, p = .00) was observed for intent to turnover. employees recruited via walk-ins/direct application and employee referrals reported a significantly (scheffe post hoc test = .05) lower intent to turnover than employees hired via other recruiting methods. analysis of variance was used to test the differential treatment hypothesis. significant differences were observed for supervisor praise recognition (f = 2.60, p = .05), and supervisor help (f = 5.09, p = .001) which are consistent with the leader-member exchange theory. a significant difference was also observed for supervisor expectations (f = 16.77, p = .00) which is consistent with a pygmalion effect explanation. supervisor feedback approached significance (f = 2.28, p = .07). there were no significant differences for autonomy or goal difficult/specificity. scheffe post hoc tests (p = .05) were used to more fully explore the significant differences by recruiting method. the scheffe test did not detect any significant difference between recruiting methods for supervisor praise/recognition. employees recruited via employee referrals reported significantly higher levels of supervisor help than employees recruited via an internet job search (e.g., monster.com). other recruiting methods were not significantly different from employee referral in terms of supervisor help. employees recruited via employee referral and walk-in/direct application reported significantly higher supervisor expectations than employees recruited via other methods. american journal of management vol. 16(2) 2016 43 discussion this exploratory study provides some support for the differential treatment hypothesis for explaining the relative effectiveness of different recruiting methods. at a small manufacturing company, employee referrals and walk-ins/direct application produced employees who reported lower levels of intent to turnover. this is consistent with previous research on the relative effectiveness of recruiting methods. informal recruiting methods, primarily employee referrals and walk-ins/direct applications, have consistently been found to be more effective than other recruiting methods in terms of intentional to turnover, turnover, absenteeism, job performance, and employee attitudes. research to date has examined primarily two explanations for the differential effectiveness of recruiting methods: the realistic information hypothesis and the individual difference hypothesis. the current study provides some initial support for a third explanation, the differential treatment hypothesis. consistent with the pygmalion effect theory, employees recruited via employee referral and walkin/direct application reported higher supervisor expectations of performance than employees who were recruited via other methods. consistent with the leader-member exchange theory, employees recruited via employee referrals reported higher levels of help from supervisor than employees recruited via other methods. this differential treatment by supervisors may stem from the corporate culture. if a company has had more success with applicants from a particular recruiting method in the past, a common belief may develop concerning the relative effectiveness of that recruiting source. that belief that a particular recruiting method produces better employees may then translate into supervisor behavior resulting in different expectations and/or classification into an “in-group.” leader-member exchange theory research has produced evidence that employees classified to an in-group receive preferential treatment by their supervisor. one limitation of the current study is the relatively small sample size. the sample may not have been large enough to detect some differences (e.g., supervisor feedback). a second limitation is the relatively short subscales employed in the questionnaire. more complete measures may be able to detect additional differences between recruiting methods. the current study does provide some initial evidence for the differential treatment hypothesis. future research on explanations for the differential effectiveness of recruiting methods should include this hypothesis along with the individual difference hypothesis and the realistic information hypothesis. references barber, 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(1998). recruiting employees: individual and organizational perspectives. thousand oaks, ca: sage publications. billsberry, j. (2007). experiencing recruitment and selection. hoboken, nj: john wiley & sons. blau, g. (1990). exploring the mediating mechanisms affecting the relationship of recruitment source to employee performance. journal of vocational behavior, 37: 303-320. breaugh, j.a. 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(1995). the impact of referral sources on employee attitudes: evidence from a national sample. journal of management, 21: 953-965. werbel, j.d. & j. landau (1996). the effectiveness of different recruitment sources: a mediating variable analysis. journal of applied social psychology, 26: 1337-1350. williams, c.r., c.e. labig, & t.h. stone ((1993). recruitment sources and post hire outcomes for job applicants and new hires: a test of two hypotheses. journal of applied psychology, 42: 163-172. zitoli, m.a. & j.p. wanous (2000). recruitment source research: current status and future directions: human resource management review. 10: 353-383. american journal of management vol. 16(2) 2016 45 ajm 17(4) web_master.pdf 70 american journal of management vol. 17(4) 2017 evm2�a new look at the earned value management model gary l. richardson university of houston the project management world of earned value (ev) analysis is due for a major shakeup. we are now entering the broad acceptance stage for this topic and the availability of computer software to spit out misunderstood or meaningless ev parameter values threatens to ruin the validity of this model. there is an old adage that says �to err is human, but to really screw up requires a computer.� that statement matches the thesis of this paper. the goal of this paper is to outline some of the key issues that will distort the proper interpretation of computed ev parameter values. **author note: contribution credit is recognized for charu behl and rafael ribeiro (federal university of vicosa, brazil) who provided significant research and computational support related to this paper. brief ev history historical acceptance and usage of ev in commercial projects has been rocky since its most formal publication in the mid-1960s via the cost/schedule control systems criteria (c/scsc) as part of the dodi 5000.1 project management specification. (richardson, 2015, p.435) this early contractor requirement was focused on improving various aspects of project management; however at this point in time government contractors essentially rejected the concept based on the operational maturity level that was required to produce these status parameters. the next thirty years were essentially marked by evolutionary maturation of organizational project management processes and by the 1990s mature organizations, primarily dod related, had improved their operational infrastructure and management processes sufficient to produce valid ev status parameters. christensen�s research showed that the ev parameters being produced provided a robust tool set for evaluating both current status, as well as forecast cost and schedule values (christensen, 1998, p. 13). as a result of this type validation the project management institute (pmi) included a brief overview of earned value mechanics in the 1987 edition of its project management body of knowledge (pmbok ®guide). also, private industry in 1998, through the sponsorship of the national defense industrial association (ndia) formally recognized acceptance of ev through the publication of ansi/eia-748 standard for earned value management (fleming and koppelman, 2006). these milestone steps along with improvement in desktop project management software has stimulated broader acceptance of ev along with its promised analytical value. following this long conceptual formulation and acceptance phase a second evolutionary wave occurred. this stage was primarily associated with explaining the underlying computational processes in understandable terms using various vendor products to produce the parameters. one of the main implementation support procedural steps came from fleming and koppelman who described ten understandable operational steps that would satisfy parameter production for most commercial american journal of management vol. 17(4) 2017 71 applications (carstens et al, 2013, p.261-262). also, various software vendors such as microsoft and oracle added popular software utilities that purported to contain the ability to produce all of the traditional ev parameters. at this point the stage was set for broader usage of the ev parameters to describe current and forecast project status. as with most silver bullet (perfect answer) items this one also comes with a hidden hazard that has not yet become visible in popular industry literature. ev in use today song�s excellent overview of earned value usage internationally outlines a complex user profile (song 2009). based on this reported data it is difficult to provide a single usage profile since actual levels vary greatly across industry and geographical boundaries. however, there is one trend that seems consistent. that is, use of earned value is increasing as computer software has eased the calculation complexity. at the same time, there is an old adage that says �to err is human, but to really screw up requires a computer.� that statement matches the thesis of this paper. we see this phenomenon in action through software utilities such as microsoft project, which is in use by about most commercial project environments, with much of the remaining market supported by oracle�s primavera. in both cases ev parameters can be automatically generated essentially with a click of the mouse--problem solved! while its output capability is mechanically accurate, the actual operational accuracy of the output is now in question. it is the goal of this paper to highlight some essentially hidden issues in the use of these parameters, such that traditional parameter values do not represent necessarily what the current literature leads one to believe. on one positive side, ev parameters offer the most robust status metrics available to the project manager, but conversely these can be misleading if not understood. to that end the current computerized output taken at face value is potentially misleading and may actually indicate an erroneous status. that is a strong statement and one that needs to be justified. used properly, the ev model does in fact offer the best status tracking capability of all known methods. the user challenge then is how to make best use of the model and subsequent output. as the organizational ev operational infrastructure and associated methodologies have evolved through the past forty or so years a great deal of maturity has been added to the project manager�s process. for instance, the ev model has introduced several three letter parameter acronyms such as spi, cpi, eac and vac. each of these are touted as a predictor of present or future project performance. however, as user experience has evolved the calculated results often do not properly answer the promised measures for either current of forecast outcomes. as a result of this there is danger that the ev process will be dropped as a poor tool. the data presented here will show that this process needs to be better understood as to what it represents and adjust the calculations accordingly. one might interpret these statements as rejecting the traditional ev model, but we prefer to state this situation as �we come not to bury caesar, but to praise him.� by this we mean that the existing popular literature has not focused at the electron level of ev usage, but rather more on macro level parameter calculations that do not offer the level of granularity needed for root cause type project management decision support. in order to add this capability we now need to understand how the lower level driver components actually impact the output interpretation. one very recognized public example of this has been pioneered by walt lipke in his derivation of earned schedule (es), which was derived to correctly interpret errors in the spi parameter calculation (lipke, 2009). this correction factor is now well understood and will not be focused on here, but it does show how the model needs to be tweaked for operational accuracy. interested readers should review other sources related to the es topic. for this paper the main focus is on the cost analysis side of ev parameter calculations. ev parameter calculations as indicated earlier, typical ev computer generated parameters may well produce suspect management oriented values for both current and forecast calculations. realize that the project manager�s control focus is on the status of various resource areas and each of these need to help in evaluating corresponding elements of current baseline deviations and forecast values for the project. research results 72 american journal of management vol. 17(4) 2017 reported here will show how the traditionally calculated metric can create significant distortions through failure to recognize this level of granularity. assuming this conclusion is valid, one might well also conclude that ev may become judged as a poor management measure and fall into misuse. given this recognition the time is right to dedicate focus on this situation in the same manner that lipke�s es-based schedule correction has logically shown a correction without destroying the overall approach. the goal here is to duplicate that strategy for the cost side of the parameter set, as well as highlighting the resource granularity issues. additionally, it is also important to recognize that at this point there is no visible sign that either microsoft or primavera are working to deal with any of these issues and in fact are guilty of perpetuating the problem. so it is going to be up to the user community to understand how to extract the appropriate data views until more robust commercial solutions emerge. some of the more obvious ev parameter data and mechanical issues involved will be described here and the remainder of this paper will outline various characteristics of these components as they relate to the ev cost status environment. earned value infrastructure the stated project management role for ev is to produce parameter values that will quantify current and forecast cost and schedule status. space here does not allow a full review of ev mechanics, but a brief summary will be offered to show the fundamental parameters involved. essentially, a suite of ev model parameters are defined for current cost and schedule performance variance (cv and sv), run-rate indices (cpi and spi) and completion forecast parameters (e.g., eac, vac and etc). the basic role of each parameter group can be summarized as follows: cv and sv�current baseline status variance measures for cost and schedule cpi and spi�current index measures to show relative index performance for cost and schedule. for example, a 0.90 index value would indicate that performance is 90% of planned baseline value eac, vac and etc�these parameters represent forecast estimates for the project at completion; eac is cost estimate at completion, vac is cost variance at completion compared to the baseline budget and etc is the estimated dollar amount required to complete the project. popular literature clearly defines what each of these parameters represents. the challenge here is to highlight whether that definition is valid and under what circumstances. fleming and koppelman (2006) studied the required operational infrastructure required to produce valid ev (traditional) parameters and from this they derived ten process oriented steps necessary for the model to work as advertised. seven of these process items fit well into this discussion and are summarized here with a brief interpretation as follows: (richardson, chapter 15, 2013) 1. define the project scope. one common method for doing this is to use a work breakdown structure defining the project scope with well defined, small work packages. 2. define the performing organization responsible for each work package and an integrated detail plan specifying items such as task sequence and make versus buy options. 3. an estimate of the resources required to support the defined work packages. 4. develop an approved and baselined work schedule that integrates planned time, budget, and work resources for the various work units. 5. define how actual work accomplishment will be measured for each work package. 6. establish a formal performance measurement baseline (pmb) that incorporates the items above. this essentially defines a time-phased cost plan for the project. 7. record actual costs incurred at a status control point for each work package (or more accurately a control point in the structure). the remaining three definitional items outlined relate to management of the ongoing process in regard to monitoring, forecasting, and scope control. american journal of management vol. 17(4) 2017 73 developing the examples a base point for this discussion starts with figure 1 showing a simplistic abstract work breakdown structure (wbs) that is used to represent the project scope. at the lowest levels of this structure are work packages (wps) that collectively represent the total scope of work planned for a project. the role of the wbs is to compartmentalize the overall work required into manageable work units that are then timephased and used to evaluate status. figure 1 project work breakdown structure (wbs) proper scope definition lies at the heart of these calculations and are fundamental to any measurement process. failure to achieve this level of work definition sabotages any subsequence ev parameter calculation regardless of the methodology used. in order to produce ev parameters for each work package, three data items are required as illustrated in figure 2. the driving measurement data values are actual costs (ac), baseline planned cost (pv) and a measure of actual work accomplished or earned value (ev). for this conceptual example we will ignore deviations created by resource collection errors and scope changes. but recognize that both of these items could be added to the causal list of interpretation errors. they are omitted hereto simplify the fundamental comparison analysis. ac and pv values are deterministic from the original approved plan. for example, ac values are taken from the formal resource accounting system and pv is the baselined cost value for the associated wbs work units. ev values are then calculated by multiplying the work unit pv by the estimated level of completion for that unit. using these three driving values all of the related ev parameter values outlined above can be computed. traditional ev literature says that the suite of ev parameters define the status of the project. this in fact is accepted as a global indicator of status; however, from a management viewpoint there are certainly other aspects of analytical concern. figure 2 ev data items for the moment we might accept the fact that a composite ev calculation does in fact define the overall project status and does represent a worthwhile set of key performance indicators (kpis). however, beyond this high level view a manager is most often concerned with identifying the source of variances at a more granular level. with this goal in mind this research effort has identified seven common �parameter distortion� situations. these are: 74 american journal of management vol. 17(4) 2017 1. unit labor rates of the project team human resources 2. third party vendor contractual roles 3. level of effort (loe) resources�typically service agreement type assets 4. dollar expenses (non hr and non-product; i.e., travel expenses) 5. material cost at the work package level 6. labor rate variances (compared to plan values) 7. padding of planned work package estimates in order to use ev successfully for management and forecasting purposes these groupings need to be isolated for analysis and then synthetically combined based for an interpretive review. as a starting point recognize that the project manager most controllable element is his internal team productivity, but combining the various other resource groupings with this group can hide the team�s actual performance. likewise, mixing all of the groups into a single assessment hides away the management decision analysis value of the ev parameters. as noted, none of the major software packages separate project data into groupings of this type, so that type of granularity is lost with current utilities. yet another analysis aspect of the traditional parameter calculation is to assume the current trends will continue through the life cycle. this assumption may be true, may not be true, or may vary across the various groups. in any case there is no reason to assume that all of these groups trend the same way. for example, loe resources tend to bill on a constant preset basis regardless of actual work level. obviously this may not be the same for the internal team, contractors, expense type dollars, and material charges? even more complex to analyze is the labor rate variation impact on parameter values. in this category, ev assumes a rate value used by initial pv estimates and that is highly likely to be inaccurate. forecasts for eac and vac are then based on this static assumption. as an example of this assume that a higher priced resource is used? this may result in the work getting done quicker, or it may have little effect. in any case, actual labor rate variances will distort the interpretation of the calculated cost parameters. a project assessment process needs to understand the effect of actual rates versus the planned rate used in calculating pv and not just the fact that the resulting cost parameter is different from the baseline plan. for detailed analysis, deeper understanding of the underlying drivers is needed for improved understanding. also, the forecasting model computation must also be redone as a synthesis of the various resource types and not a singular computation as viewed today. this is the essence of the more granular view that must be developed to keep ev as a valid analysis and forecasting tool. in order for this required level of granularity to be achieved it will be necessary to separate the project planned and actual data into proper groups and then reconstitute the parameters into a more holistic grouping for improved forecast projections. thus, the desired goal for ev is to not only to accurately quantify the current status of the project but to help identify where the real variances lie across defined resource groups such as those shown above. simple example in order to help make the point that resource types can impact ev parameters a high level excelbased phase grouped example is shown here in figure 3. in this simplified model the various resource types have been segregated and performance status maintained for each group. american journal of management vol. 17(4) 2017 75 figure 3 simple grouped resource example to help decipher the ev calculation logic shown in this simplistic example the january task elements shown in figure 3 are exploded into a more visible granular format in figure 4. each of the simulated work packages in this plan contains a separate pv and ac for each of the six resource groups. as total status is calculated for baselined activities through july (see figure 3) the various ev parameters can be computed for each resource grouping as shown in table 1. a review of these results shows how the various resource groups can produce different ev performance characteristics for the overall project as well as for individual work packages. this same phenomenon is observed in various projects, but note how using just the overall ev values produced in traditional software models will lead to the wrong interpretation for the lower level resource units. in this example case, it appears that the root performance issue lies primarily in the material and contractor resource group variances and not team productivity. figure 5 highlights the resource group variability for resource level cpi values in graphical format. 76 american journal of management vol. 17(4) 2017 figure 4 january elements exploded view activity jan pv feasibility analysis 400 contracts 0 loe 20 direct dollars 60 internal team 300 materials 20 table 1 july status results group ac ev pv cpi overall 5,400 4,340 4,700 0.80 contracts 1,471 1,058 1,140 0.72 loe 545 545 545 1.00 direct dollars 420 348 380 0.83 internal 2,000 1,809 1,940 0.90 materials 984 599 695 0.61 ** cpi values are computed as ev/ac, while spi. a graphical view such as shown in figure 5 this makes a nice presentation format for use in cost status performance discussions. from this resource data view collection, forecast estimates to completion can be derived by calculating an eac parameter for each resource group and combining that into a total project view. from this point an independent assessment of trend continuity is needed to decide how to forecast that resource. once this review is completed the total project eac would be the sum of the individual eac components, or eacgroups. a more sophisticated example project plan can be produced, but previous research has shown the same characteristics as exhibited here for the resulting ev cost parameters. american journal of management vol. 17(4) 2017 77 figure 5 cpi variability across resource groups from this example we have numerically demonstrated that the traditional cost ev calculations are flawed at least by the following scenarios: a. project internal team cost performance is hidden by values of other resource groups, thus distorting actual performance results b. project internal team cost performance is distorted by values of other resource groups, thus leading to an erroneous conclusion as to actual team performance. c. there is no reason to believe that each of the resource types has the same variability characteristic and this in turn will create different ev values for each. calculation engine early research determined that these new ev calculations would be overly cumbersome without a supporting calculation engine. it is also important to point out that existing project modeling utilities such as microsoft project or oracle primavera will adequately handle aggregate traditional ev parameter calculations assuming the user is properly disciplined in data and underlying process. also, these modeling tools provide needed interim schedule and tracking logic that should not be duplicated externally. so the design challenge is to use portions of the existing utilities and use some form of external process to supplement them with these new calculations. an initial design strategy explored ways to embed the new calculation logic inside of a modified microsoft project (msp) view using dummy variable fields, macros, etc. however, the internal design of msp makes it difficult to organize the data as needed, although successful tests were made in splitting out labor, material and dollars within a work package. also, contractor, loe and labor rate issues were found to be more numerically complicated to deal with and no viable internal based solution was found. based on these results a second design phase effort was made oriented towards keeping all of the granular data external and feeding it into project to handle status tracking and producing traditional ev parameters. from this base point the raw status data would be extracted and moved to some external calculation process. the needed granular data would then be combined in the external utility model and formatted according to the new rules. required data flows between project and the external ev calculation engine, plus a data base design to support this process have now been completed. excel has been used to verify the calculation algorithms. work has also been completed on the physical design of a prototype analytical engine connected to microsoft project. this engine is designed to support the level of data granularity required to properly produce the modified parameters. eventually, a production version would serve the interface role of 78 american journal of management vol. 17(4) 2017 moving required data into and out of ms project. in other words it would feed the same planning data used today, but would house offline lower level detail data required to produce the new ev parameters. all of the resource groups outlined in the test examples described would be contained in the engine�s data base. in addition to the planning data, actual resource consumption data would be captured at the required level of analysis. this means that actual low level resource consumption by work package or cost control accounts would be needed. in operation, the calculation engine would feed ms project needed data to generate the traditional project plan (i.e., wbs, task, duration, and predecessor). these input data are sufficient to create the project baseline and ongoing schedule, but would not produce cost values. at status time msp values would be sent back to the calculation engine for decomposition and parameter generation. interpretation and project status analysis would occur based on the values created in the calculation engine. at this point the research design effort hit a philosophical decision point. that is, will msp be the system of record for all status reporting, or is that to be moved to the calculation engine? the conclusion reached is that ev calculations must be handled external given the logic flaws evident in the commercial model. conversely, msp contains valuable work unit status calculated that should not be duplicated, so for the first phase all cost data will be external. conceptually, the calculation engine has the advantage of being more flexible that the commercial vendor products. from the phase one design the future expansion should be in the directions of easier user interface and interpretative support of the output data. at least three sets of data values would need to be extracted from msp. these are: a. wbs id b. task names c. baseline performance for active work packages (pv,% complete, etc.) the ev engine would then use this collection of data along with its stored granular supporting data to produce the modified values of ev for each work package (or control account), as well as producing the aggregate and forecast parameter views for both cost and schedule. analysis engine prototype figure 6 shows a design schematic of the analysis engine prototype currently under development by the author. figure 6 ev analysis utlity the role of this prototype utility is to collect necessary planning data for insertion into microsoft project, then extract project status data for manipulation according to the groupings outlined here. trend assumptions will be made for each resource group and used in the later status interpretation. ev parameter calculations will be driven by lower level data resource values and assumed trend directions for each resource group. as an example, what is the anticipated future material costs trend for the remainder american journal of management vol. 17(4) 2017 79 of the project? this assumption will then be used to calculate the eac for material. similar assumptions would be made for the other resource groups. from this process the utility would produce a cost at completion forecast for each group and then aggregate this into a forecasts for the total project. conclusion from the early research there is high confidence that the calculation thesis as stated is valid. ev parameters have high potential to be distorted when only looking at the macro resource level as outlined in traditional literature. additionally, current computer software is useful (with proper operational discipline) for tracking overall plan versus actual work status, but is suspect in accurately evaluating internal project performance for the various resource types. at this research stage it seems logical to conclude that producing an erroneous ev parameter using the traditional techniques will make the model less effective operationally and potentially erode trust in the technique itself. logic also suggests that if ev calculations do not accurately validate current or forecast status project managers will lose confidence and seek out other alternatives. a summary of these research conclusions follows: 1. project status is best understood by increased granularity of resource data within a work package. it is important to recognize that some resource variables are outside the control of the internal project and these external resources can distort the actual project internal status. 2. there is no reason to suspect that each resource type has the same forward trend projection and this variability needs to be recognized in the parameter calculation. 3. access to lower level data granularity lies at the heart of the solution. work package estimates have to be made in such a way that individual resource trends can be assessed at that level, then combined for an overall view. 4. there is research evidence that project culture is established somewhat early, but that assumption does not hold for all variables. failure to account for this can easily distort the calculation interpretation. 5. a more recognized evaluation step for each resource type seems to be required for effective forecasting. this means that specific focus on trend assumptions for each resource becomes more important in the process. current ev literature suggests that project performance becomes somewhat static relatively early in the life cycle. that assumption may well be weak when looking at the lower level resource issues. 6. the level of complexity involved in this type analysis requires computational support that cannot be handled within traditional utilities such as msp and the process illustrated is to labor intensive to handle with spreadsheet manual processing. a broader summary set of conclusions found during this research effort is summarized below: 1. blindly extracting ev parameters from a computer model is worse than not using them at all (false indicators) and will erode credibility of the ev metric as a meaningful indicator for performance or forecast. 2. using zero variance or a 1.0 ev index parameter values as indicators of on-plan performance is an erroneous indicator for the reasons outlined here. 3. a wbs dictionary oriented data store is needed to provide flexible work package data views for various ev oriented analysis. 4. percent (%) complete is a fundamental component of the ev parameter calculation, yet this measurement approach is one of the most error prone process elements. the most significant conclusion uncovered in this analysis is that poor performance by a single resource area can drag down an overall ev cost performance metric and hide away the root cause of this situation. for example, if the internal team has a 0.99 cpi value but the overall project cpi measure is 0.80, the team�s performance is not properly reflected by the 0.80 value. it is important to recognize that in many situations other resource group�s performance is external to the control of the project manager and certainly does not reflect the actual performance level of the team. would it not be more useful to know that the material or contractor overruns were causing the poor result and the project team was doing 80 american journal of management vol. 17(4) 2017 great? if one were trying to analyze a corrective action strategy this level of status visibility is needed. failure to understand this and stay at the traditional macro level makes such analysis difficult if not impossible to derive. the traditional macro-level parameter calculations limit the proper usage of ev as a project level performance interpretation and are not of great value in root causal analysis. in order to be the robust analytical tool it promises, ev calculations must go to the lower resource view. if this can be achieved the model should evolve into the promised best-of-class project performance metric. from a prescriptive view, the following items are offered as advice for the project manager attempting to use ev: 1. recognize the need for low level analysis of wp performance to evaluate various aspects of project current status and forecasting. 2. work package time and cost padding will affect accuracy of the calculated project critical path and result in an inaccurate plan, as well as distorting the subsequent ev parameters computed from this data. 3. ev parameter calculation is dependent on the current status date. work performed in advance of the plan is not used in the calculation, but it can also distort the ev calculations. 4. actual cost of a task is independent of task duration, so cost data must be externally collected and not derived from an �effort driven� calculation based solely on duration. 5. project resource labor resource rate analysis is a key project management productivity analysis consideration and this requires a lower level granularity of data analysis. 6. lipke�s research has highlighted the flaws in sv and spi formulas after the 70th life cycle percentile. his earned schedule (es) modified calculations should be used throughout as a schedule status measure. 7. recognition of the role of tcpi (likelihood to complete parameter) calculations are now being recognized as another aspect of ev and this can also be distorted by using wrongly produced values. more research is needed in this area as well. this paper has highlighted sample ways in which traditional ev parameter calculations can yield erroneous conclusions when compared to traditional methods outlined in the published literature. proper analysis requires a more granular resource data view. the examples shown here have illustrated selected samples to how the current popular computer models produce values that do not represent what the traditional literature implies. also, the traditional parameter calculations have been shown to not accurately support management status analysis requirements. references carstens, deborah, et al, (2013), project management tools and techniques, isbn 978-1-4665-1562-8, boca raton, fl, crc press. christensen, d.s., (1998). the cost and benefits of the earned value management process, defense acquisition university, http://www.dau.mil/pubs/arq/98arq/chrisevm.pdf (accessed october 17, 2008). fleming, q.w. and j.m. koppelman, (june 16, 2006), start with �simple� earned value on all your projects, crosstalk, www.stsc.hill.af.mil/crosstalk (accessed october 17, 2008). lipke, w.h., (2009). earned schedule, isbn 978-0-557-17738-7, north charleston, sc, lulu publishing,. richardson, gary l. (2015), project management theory and practice, 2nd ed., isbn 978-1-4822-54952, press, boca raton, fl, crc press. song lingguang, (2010), earned value management�a global and cross-industry perspective on current evm practice. isbn 978-1-935589-8, project management institute, newtown square, pa. can organizational practices inadvertently silence potential whistleblowers? keith r. credo university of louisiana at lafayette susie s. cox university of arkansas at little rock curtis f. matherne, iii university of louisiana at lafayette patricia a. lanier university of louisiana at lafayette this study examines how employee perceptions of organizational ethics, safety practices, and managersubordinate relationships might influence employees’ silence in regards to workplace hazards using a sample of 178 workers in the mining, manufacturing, and petrochemical industries. the findings support a model in which employee perceptions of endangerment by their organization and fear of retaliation for whistleblowing mediate the relationship between manager-subordinate relationships and the practice of withholding negative (and sometimes vital) information from organizational management. results suggest that even with high quality superior/subordinate relationships, employees may still withhold important information due to the overall perception of the current safety climate. "every day in america, 12 people go to work and never come home. every year in america, 3.3 million people suffer a workplace injury from which they may never recover. these are preventable tragedies that disable our workers, devastate our families, and damage our economy." – secretary of labor hilda solis, april 28, 2011 in the wake of a string of tragedies including the deepwater horizon disaster, massey energy mine collapse, and recent west texas fertilizer plant explosion, the current state of workplace safety is an area of concern for many. the safety and welfare of the employees at work is a major concern for organizations. it is often considered that the responsibility of promoting and maintaining a safe work environment is an ethical responsibility of managers. although this statement may appear to some as a given, there has been little research in this area (credo, armenakis, field, & young, 2010). managers’ actions and reactions concerning safety issues may build a culture that either encourages or discourages employees to take an active role in ensuring a safe workplace (zohar & luria, 2005). the identification and reporting of safety issues is the primary method of preventing safety incidents in the workplace, yet american journal of management vol. 16(3) 2016 9 employees often fail to report unsafe conditions, choosing instead to keep silent. the behavior of silence is sometimes categorized as the mum effect, which occurs when an individual attempts to avoid, omit or sugarcoat a negative message (rosen & tesser, 1970). in fact, ramingwong and sajeev called the mum effect the ‘code of silence’ (2007). the current study explores employee silence in the context of organizations’ ethical culture. specifically, this study examines the extent to which employees’ exchange relationships with superiors can influence those employees’ tendency to keep silent, and how employee fear of management retaliation and management’s placing of employees in harm’s way can influence that link. background though there appears to be little empirical evidence for the relationship between employee-supervisor relations, ethics-related employee perceptions, and silence, there is no shortage of anecdotal evidence. for example, on january 28, 1986, when the space shuttle challenger exploded shortly after liftoff, killing all seven crew members, there were immediate concerns about the causes of the explosion. testimony by roger biosjoly and other engineers working at morton-thiokol, inc. (mti), the booster contractor, revealed that mti management had been alerted to the cold weather adversely affecting the o-ring booster joints well in advance of the decision to launch (biosjoly, curtis, & mellican, 1989). employees reported that the seals would not be functional in cold weather, but mti management classified the document as company private so it never reached nasa (biosjoly et al., 1989). not only did mti management disregard safety warnings from its engineers, it retaliated against these organizational whistleblowers by ordering them to keep quiet and eventually firing employees who tried to blow the whistle. this example illustrates an organizational practice of coercing employees to remain silent using fear of retaliation. situations like these call to question how organizational culture, and more specifically, the relationship with management, may influence employee willingness to share negative or undesirable information. more recently, bp, the british multinational oil and gas-company, has been in the spotlight after putting employees in harm’s way and ignoring repeated safety warnings from employees. after years of noncompliance, an osha investigation in 2004 revealed dangerous levels of pipeline corrosion in bp’s prudhoe bay pipeline, as well as management pressure for employees to falsify data (lustgarten & knutson, 2010). the report also warned against an aggressive management style that put pressure on contractors to avoid reporting unfavorable safety metrics. rather than address the report, bp continued its usual practices. as a result, the prudhoe bay pipeline burst in 2006, spilling over 200,000 gallons of petroleum product into a protected area of alaskan wilderness (lustgarten & knutson, 2010). another bp explosion in 2008 blew a 28-foot section of gas line over 1000 feet in the air. this time, bp had fired an inspector just weeks after reprimanding him for reporting what bp alleged was a minor and superficial crack in the line (lustgarten & knutson, 2010). aggressive organizational cultures like bp’s that punish employees who blow the whistle may contribute to employee fear of management retaliation against whistleblowers. using this example, it may be reasoned that bp’s deepwater horizon catastrophe in the gulf of mexico, which killed 12 employees and caused immeasurable damage to the fragile gulf coast ecosystem, could have been prevented if employees weren’t conditioned to be afraid to speak up and sound the alarm or blow the whistle when they first learned of a safety risk or dangerous situation. the current study is aimed at identifying constructs affected by an employee’s organizational perceptions, particularly perceptions of organizational leadership and safety culture, and how these perceptions may influence an employee’s tendency to remain silent or withhold information. employees may be reluctant to share negative information when there is a weak manager-employee exchange relationship. we also examined employee endangerment and whistleblower retaliation to assess employee perceptions of management safety-based ethics practices. these may be possible mediators between employee-management relations (in the form of leader-member exchange) and employee withholding of negative information (credo et al., 2010). 10 american journal of management vol. 16(3) 2016 employee silence of growing concerns for organization is when individuals are not willing to report negative information to those that may have the ability to remediate the situation or halt the project before disastrous outcomes. instances of employee silence have been empirically studied in a variety of contexts. keil and robey (2001) found that software engineering project failures may in part be due to silence developed from an escalation of commitment. additionally, keil and robley (2001) stated “many internal auditors remain mum instead of asserting their responsibility to report bad news” due to the potential risks associated with speaking up (p. 92). while keeping silent may be a mechanism of self-preservation, there are many situations when quite the opposite is true. in the case of safety matters, employee silence may have serious or even deadly consequences. some of the more disastrous examples of the consequences of employee silence, as mentioned previously, include the bp deepwater horizon catastrophe and the space shuttle challenger incident. despite the apparent connections between the mum effect and safety breeches, no previous studies have quantitatively explored this link. lmx and employee silence a common framework for mum research has focused on the relationship between employees and superiors (cox et al., 2011). based on this framework, leader-member exchange (lmx) is a variable of primary interest in the current study. lmx research revolves around the idea that different types of relationships exist between leaders and subordinates (dansereau, graen, & haga, 1975). according to lmx theory, relationships between supervisors and subordinates range from low quality to high quality, with the quality of the relationship increasing with mutual liking, trust, respect, and influence (bernerth, armenakis, feild, giles, & walker, 2007; dansereau et al., 1975). since organizational leaders are direct representatives and shapers of the organizational culture to employees and mum behaviors are more prevalent in negative organizational settings (marler et al., 2012), there should be a strong relationship between levels of lmx and the degree of employee silence. furthermore, trust and respect are essential to open communication, particularly upward communication from employee to supervisor, and thus, situations with low levels of trust and communication (measured in lmx) may lead to a greater likelihood that employees will withhold information. for example, with both nasa and bp, upward communication was kept mum when subordinates failed to report safety issues because of the culture, particularly the ethical culture, of the organization. these instances highlight the importance of organizational culture, particularly in regards to ethics, in the reporting or failure to report negative, but sometimes crucial, information. when an organization suffers from a string of successive unethical decisions, it is more likely that an organization is defined by a culture that fails to prioritize ethics. an organization that assumes ethics is not a priority will likely reflect this attitude through its value system; in such situations, employee value systems may put a negative emphasis on reporting problems, especially when the deeper organizational assumptions deny the importance of reporting safety problems (schein, 2006). credo et al. (2010) proposed that an organization’s safety culture may be integrally related to its ethics culture. in such a scenario, employee assumptions about management attitudes towards employees who report safety problems are likely to eventually manifest themselves as mum behaviors in employees. the unfortunate consequence of employee silence is a communication breakdown between management and the very individuals who could prevent a safety breech or loss of life. additionally, credo et al., (2010), describe safety-based ethical culture as having six dimensions, all of which are perceived by employees as representative of an organization’s ethics, particularly in work environments where safety is an everyday concern. in addition to dimensions assessed in previous ethical culture and climate scales, such as dishonesty, favoritism, management rule-breaking, and management responsibility neglect, the scale includes the unique dimensions of whistleblower retaliation and employee endangerment. of particular interest in the current study are the two latter dimensions, due to their unique applicability to the operative-type work environments targeted in this study. american journal of management vol. 16(3) 2016 11 the influence of employee endangerment when organizations put employees in harm’s way, employees tend to develop a unique set of perceptions about the organization’s underlying motives (zohar & luria, 2005). particularly, managers and supervisors are the direct organizational agents responsible for conveying a message to employees of what standards are acceptable in terms of day to day safety practices. there is a paucity of research linking employee perceptions of endangerment with employee perceptions of overall support (dickson, smith, grojean, & ehrhart, 2001). dickson et al. (2001) observed a positive association between ethical work climates and positive employee attitudes including morale. in addition, credo, armenakis, ianuzzi, and wright, (2010b) found a positive relationship between employee perceptions of ethics and employee perceptions of organizational support. these studies demonstrate a negative relationship between employee perceptions of being put in harm’s way and perceptions of overall support from the organization. these employee perceptions of being put in harm’s way, or employee endangerment (ee), may be affected by additional elements of an organization’s underlying culture, including employeesupervisor relations. the support an organization’s leadership gives its employees may come in a variety of forms, including availability of appropriate safety equipment, adequate levels of safety instructions and training, and reasonable time constraints to avoid pressure to cut corners or take unsafe shortcuts. an effort by leaders to minimize perceptions by subordinates of employee endangerment (ee) is likely to be viewed by employees as supportive, so the more employees are aware of actions by supervisors to ensure its employees are safe from physical harm, the higher the levels of leader-member exchange should be. an effort by management to minimize perceptions by employees of employee endangerment is likely to be viewed by employees as positive, which should increase employee openness about communication, and decrease employee mum behaviors. additionally, since organizational leaders are primarily responsible for the delivery of the message concerning ee, employee perceptions of ee may mediate the relationship between lmx and employee silence. hypothesis 1: perceptions of employee endangerment will mediate the relationship between leader-member exchange and employee silence. the influence of whistleblower retaliation whistleblower retaliation measures expectations of repercussions after divulging information about unsafe or unethical situations (i.e., blowing the whistle) in an organizational setting (credo et al. 2010b). organizational repercussions for whistleblowers can be as mild as a negative sentiment from members of an individual’s organization or as severe as losing a job or being blacklisted in an industry (credo et al., 2010b). regardless of these responses, it is not unusual for employees to seek ways to avoid these negative consequences. one such avoidance strategy is keeping quiet. if employees believe that the act of whistleblowing will result in some form of retaliation, employees may be more likely to decide to keep quiet about the negative news. numerous studies have shown negative organizational outcomes as a result of low levels of employee perceptions of support from their managers and supervisors, but no studies have empirically examined the link between employee fears of whistleblower retaliation with employee attitudes concerning manager-subordinate exchanges. (bernerth et al., 2007; rhoades & eisenberger, 2002). as discussed above in relation to the employee endangerment dimension of safety-based ethical organizational culture, managers and supervisors are primary communicators of the safety and ethics message from the organization to employees. this role of managers may similarly influence employee expectations of fear of whistleblower retaliation. employees with positive exchange relationships with their supervisors may be less likely to fear retaliation from that same supervisor after reporting negative news. we therefore expect employee fear of whistleblower retaliation to mediate the relationship between lmx and employee silence. hypothesis 2: whistleblower retaliation will mediate the relationship between leadermember exchange and employee silence. 12 american journal of management vol. 16(3) 2016 methodology participants the data collection service zoomerang was utilized, which recruits from a diverse population of over 30 million us-based respondents. although zoomerang includes safeguards to avoid low-quality data, we also included specific items to verify that respondents were not randomly responding and actually worked in a job role and organization that met our criteria. all participants worked in the mining, manufacturing and drilling industries. procedure the sample of 178 participants was 53% female and the average age was 48.5 years. the race-ethnic makeup of the participants was predominately caucasian (90%), followed by african american (5%) and asian (3%). the industry makeup was predominantly manufacturing and mining related. all information collected was anonymously provided. measures we administered a questionnaire designed to assess participants’ feelings about their organization, jobs, and supervisors. responses to the scales included in the study were recorded using a five-point likert-type response format, with 1 = strongly disagree, 2 = somewhat disagree, 3 = neither agree nor disagree, 4 = somewhat agree, and 5 = strongly agree. a four-item scale was used to measure employee endangerment. items were taken from the employee endangerment subscale in credo et al.’s (2010b) ethics safety scale (e.g., “you are asked to do things that are not safe”). coefficient α for the four-item scale was .91. a five-item scale was used to measure whistleblower retaliation. items were taken from the whistleblower retaliation subscale in credo et al.’s (2010b) ethics safety scale (e.g., “you may be retaliated against for reporting ethics violations”). coefficient α for the five-item scale was .94. leader-member exchange (lmx) was measured with the graen and uhl-bien (1982) lmx-7 scale (e.g., “you have an effective working relationship with your supervisor”). the scale is designed to assess relationship quality between supervisors and subordinates. coefficient α for the scale was .72. to assess employee silence, three items from cox, marler, simmering, and totten’s (2011) mum scale were used. the scale is designed to assess an individual propensity to omit or avoid sharing negative information. in this study, the focus was on sharing information concerning safety (e.g., “when i have negative information to share at the workplace, i find ways to get out of telling the information”). coefficient α for the scale was .90. table 1 presents the means, standard deviations, correlations, and coefficient alphas for all variables included in the model. a correlation matrix was generated to test the strength of relationships between variables. all expected correlations were significant. table 1 descriptive statistics and correlations variables mean sd 1 2 3 4 1. employee silence 2.59 .92 (.90) 2. leader member exchange 3.70 .88 -.26** (.72) 3. whistle blower retaliation 2.33 1.14 .45** -.46** (.94) 4. employee endangerment 2.18 1.10 .47** -.47** .80** (.91) n= 178; **p<.00; alphas are reported on the diagonal. american journal of management vol. 16(3) 2016 13 analyses we took a two-step approach to investigating the data. examination of the bivarate correlations revealed a negative correlation between leader-member exchange (lmx) and employee silence (r = .26, p < .01). further investigation revealed the ee (r = -.47, p < .01), wr (r = -.46, p < .01) were significantly negatively correlated with the independent variable, lmx. significant positive correlations between the dependent variable, employee silence and both hypothesized mediating variables, ee (r = .47, p < .01) and wr (r = .45, p < .01). figure 1 hypothesized model for the multiple mediation test, we used the recommendations of preacher and hayes (2008), allowing us to test all mediation effects simultaneously. with this method, the statistical significance of the indirect effect of the predictor variable on the outcomes variable through the mediator(s) are evaluated; whereby, a, b, c, and c’ represent unstandardized regression coefficients. for our model, ai represents the direct association between lmx and each mediator variable; bi represents the direct association between each mediator and employee silence; c represents the total effect between lmx and employee silence; and c’ represents the direct effect between lmx and employee silence. the product, ai bi represents the indirect effect between lmx and employee silence operating through ee and wr. full mediation is said to be present when c is reduced by ai bi to a nonsignificant c’. the boot strapping technique was utilized to compute bias-corrected confidence intervals at the 95% level for the indirect effect through each mediator using z = 5000 bootstrap samples. b2 employee endangerment whistleblower retaliation employee silence leader-member exchange b1 a1 b1 14 american journal of management vol. 16(3) 2016 results following preacher and hayes’ (2008) method for multiple mediation, we found that the model tested was fully mediated. we examined the confidence intervals for each mediator. the indirect effect is significant and mediation can be said to present if zero falls outside of the 95% confidence interval. the confidence interval for the mediating variable ee (-.22, -.04) excluded zero, which is evidence of a significant indirect effect and mediation. the confidence interval for the mediating variable wr (.25, .01) excluded zero, which is also evidence of a significant indirect effect. in addition, the mediation analysis shows that indirect effects of ee (a1b1 = -.11, s.e. = .04, p <.05) and wr (a2b2 = -.10, s.e. = .06, p <.05) were significant. the direct effect (c’) from lmx to employee silence was -0.3 with a standard error of 0.7. (p = .72). this non-significant result suggests that the mediating variables fully mediate the relationship between lmx and employee silence (adj. r2 = .25). therefore, support is present for hypotheses 1, in that ee mediates the relationship between lmx and employee silence. hypothesis 2 is supported in that wr was found to be a significant mediator of lmx and employee silence. common method variance (cmv) was assessed with the harman single-factor test, described by podsakoff, mackenzie, lee, and podsakoff. (2003). this test involves a factor analysis to determine whether all factors load onto one single factor. results showed that cmv did not account for associations between variables of interest. furthermore, we followed podsakoff et al.’s (2003) suggestions to assure participants that their anonymity would be protected. discussion as of yet, no simple technique that has been developed to examine the drivers of employee silence and the mum effect. one contribution of the current study is the introduction of several possible antecedents to the such withholding of information. the findings from this study reveal that employees’ tendency remain silent may be directly related to their perceptions of the supervisors’ ethical values concerning safety. organizational leaders at all levels can take heed of these findings and act conscientiously in regards to the ethical and safety perceptions, as well as the level of quality of exchanges between employees and organizational leadership. additionally, perhaps the most important outcome of this study is the increased understanding of some of the problems associated with reporting channels for whistleblowing. while these hotlines and “anonymous” reporting systems may seem to protect employee interests at first glance, there can be unforeseen consequences to the whistleblowers if the utmost care is not used with the investigation process. management should consider first the value of anonymity and then the creation of a climate that allows employees to raise concerns without fear of losing face or retaliation. as with any study, this study is not without its weaknesses. although measures were taken to ensure a representative sample, the procedure inherently involved a level of randomness and potential bias. the responses are from single sources which may increase the study’s risk of common method variance. additionally, the sensitive topics included in the study may have increased participant fear of open and honest responding; however, the use of an online anonymous survey was intended to minimize this risk and enable respondents to truthfully answer all questions. future research on employee silence and the entire spectrum of the mum effect and its relationship with ethical safety cultures is warranted. one area to examine may be the relationship of reported safety incidents to the prevalence of the mum effect. a second area of research may involve the evaluation of supervisors’ safety-related intentions compared to employee perceptions of those supervisors’ safetyrelated attitudes. self-awareness among managers may be a catalyst for driving change in the ethical safety culture of an organization. the authors hope the current study can help spur continuing research in the area of ethical and safety-focused organizational cultures. american journal of management vol. 16(3) 2016 15 conclusion this study is valuable to academics and practitioners alike as it elucidates the sometimes fragile process of whistleblowing. even with a strong leadership presence, our results show that employees may still be apt to remain silent on issues when there are retaliation or endangerment concerns. in sum, organizational leaders must look beyond just the relationships with subordinates in creating an environment conducive for employee voice. the results herein support the consideration of a culture that promotes not only physical safety, but also emotional well-being. references bernerth, j. b., armenakis, a. a., feild, h. s., giles, w. f., & walker, h. j. 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(2005). a multilevel model of safety climate: cross-level relationships between organization and group-level climates. journal of applied psychology, vol. 90 no. 4: 616-628. american journal of management vol. 16(3) 2016 17 ajm 17(7) web_master.pdf ajm 17(3) web_master.pdf american journal of management vol. 17(3) 2017 77 the conceptual model for agile tools and techniques todd haines university of maryland university college efosa c. idemudia arkansas tech university mahesh s. raisinghani texas woman�s university there have been limited studies that have developed agile techniques model that adequately compared the pros and cons of various types of agile techniques. this research study develops a conceptual model that provides insights and understanding on agile techniques and methods to top management team members, software developers, project managers, and researchers. it develops the agile techniques model to help investigate the pros and cons of various types of agile techniques. the theoretical background for our research model is the stakeholder theory. the results from our model support the conclusion that the agile project quality management method developed in the last fifteen years has proven to be useful, if not more useful, compared to the traditional method. however, the key objective of this research is to follow up on both the positive and negative factors to further test its probability. the information described in our model, proves that the agile project quality management method demonstrates both pros and cons on the techniques used within a project. the case studies from the literature in our research reiterate that agile methods increase productivity on the products for customers, but lacking communication is a common negative factor that stands out among all the cons. introduction the emergence of the agile methods commenced in the mid-1990s (highsmith 2002). generally, agile methods improve product development performances (sommer et al. 2015). today we are living in a fast paced society with quick communication activities and demands. traditional methods of project management are unidirectional and do not take into account a customer�s wants and needs. however, the customer is ultimately the one to determine success or failure. agile techniques on the other hand are dynamic getting regular input from the customer�s. based on research conducted, and according to jamieson and fallah (2012), the types of agile techniques will not only complete the requirements compared to other methodologies, but also improve the quality of the product(s), satisfy the customer(s), and display effective projects (p. 12). parsons et al. (2007) argue that for the past three decades, the popularity of agile software have increased drastically worldwide. agile software has improved outcomes relating to competitive advantages, quality, satisfaction, and productivity for software development projects (parsons et al. 2007). however, there have been limited studies that have developed 78 american journal of management vol. 17(3) 2017 agile techniques model that adequately compared the pros and cons of various types of agile techniques. to address these issues, our conceptual model provides insights and understanding on agile techniques to top management, software developers, project managers, and researchers. these agile techniques are not competing techniques, they just implement agility and ambidexterity in different scenarios. for instance, user acceptance testing is not competing with pair programming, instead both can be used to complement each other. in actual practice, multiple techniques are used simultaneously in projects the theoretical background for our research model is the stakeholder theory. also, as a project manager, one may want to consider a method that highly values the customer feedback. throughout our paper, we will highlight the techniques of agile management and point out the pros and cons that one should consider. a brief overview of the pros and cons of agile techniques is illustrated in table 1. table 1 pros and cons of agile techniques technique pros cons team involvement customer�s role is increased more satisfaction and motivation further interactions failure to agree on project goals communication continuous customer feedback help initiate important information scrum which helps improve a product for a customer extreme programming (xp) that formulates teams in regularly doing rework wrong individual working with the project team presenting the wrong information not attempting for customer feedback obtaining comments too late pair programming individuals and interactions act above different types of processes and tools improves product quality teams will show knowledge and courtesy teaming up two individuals with the same expertise teaming an expert programmer with an average programmer one partner relying heavily among there other partner automated acceptance testing provides an understanding of any system needs reduces the rates of defects concurrence on the requirements communication among customers may not recognize failure difficulty to achieve automation refactoring code design structure is changed developers can understand the system avoids errors no clue when it needs to be used time is undetermined can be costly american journal of management vol. 17(3) 2017 79 technique pros cons user acceptance testing customer(s) determine if the software is ready guaranteed higher quality software requirements are up-to-date cost-effective procedure user stories are not developed wrong input into a system and will be more costly customer doesn�t lead the testing meetings members share what they have accomplished projects can finish sooner rather than later develops quality for both the current project and any future projects no commonality among each member on the team meetings are extended longer than planned not communicating poor management note. information for the pros and cons on the techniques are from alshehri & benedicenti (2014), biju (2008), bjarnason, wnuk, & regnell (2012), denning (2012), dimitrijevic, jovanovic, & devedzic (2015), el-attar & miller (2010), foster (2013), ghourbanpour & yektaie (2011), grapenthin, poggel, book, & gruhn (2015), gupta, bhattacharya, & singha (2013), hasnain & hall (2008), haugset & stalhane (2012), hoda, noble, & marshall (2011), jamieson & fallah (2012), nanau (2010), olsson, alahyari, & bosch (2012), plonka, sharp, van der linden, & dittrich (2015), randall (2014), tessem (2014), unterholzner (2014), van waardenburg & van vliet (2013), and yu & petter (2014). literature review and synthesis the importance of agile project quality management has grown significantly in the project community, as forecasted by the software developers who discussed the beginning of the agile methodology back in february 2001. according to tessem (2014), the agility proponents combined have constituted the development processes that are different compared to the traditional method, and appear to provide higher quality in software at a cheaper cost (p. 873). individuals that lead an agile project team help set the direction, align individuals, obtain all resources, and provide motivation. in addition, �agile teams are self-organizing teams� (hoda et al., 2011, p. 522). these teams consist of individuals that control their own work, adjust work based on needs, and communicate with team members on decisions. the main focus in the agile method is customer satisfaction (parsons et al 2007). according to biju (2008), the agile method is based on the following standards: �individuals and interactions over processes and tools; working software over comprehensive documentation; customer collaboration over contract negotiation; responding to change over following a plan� (p. 97). even though there are positive outcomes of the agile method, there are also disadvantages (gregory et al. 2014; tomanek et al. 2014). using this method for the first time is challenging to the project team because it requires members to change their existing process/methodology and learn new rules of this agile methodolody (biju, 2008, p. 101). in addition, more rework may be involved among the project team members, but it can be avoided if requirements analysis is performed properly (biju, 2008, p. 101). the framework proposed in this paper aims to address the pros and cons of the techniques mentioned below that are used within the agile methodology. to supplement the research of agile methodology developed by the software developers in february 2001, this paper proves that the agile methodology can be beneficial and challenging in certain circumstances for software project management. 80 american journal of management vol. 17(3) 2017 the stakeholder theory our research model is shown in figure 1 and the theoretical background for our research model is the stakeholder theory. stakeholder theory posits that a firm�s performance depends on how management and key decision makers address stakeholders� interests (donaldson and preston 1995; freeman 2010; frooman 1999; mitroff and linstone 1993). in their work, mitroff and linstone (1993), argue that stakeholder theory is a critical theory that should be used to study all managerial and organizational issues because all decisions involve assumption analysis. hence, the stakeholder theory can be used to study important managerial and organizational issues such as selecting the best strategy to improve technology effectiveness, making effective use of data resources, developing is human resources, improving systems quality, improving service quality, and evaluating software and hardware effectiveness all through the lens of the stakeholders� interests (i.e., employees, customers, communities, governments, and suppliers). stakeholder theory gives management and key decision-makers the opportunity to challenge, question, and critique their assumptions before selecting the best strategy (donaldson and preston 1995; mitroff and linstone 1993). stakeholder theory provides management and ceos with insights on how to respond to external crises such as global recession and the resultant credit crunch. phillip (2004) argues that stakeholder theory helps management and key decision-makers in mis firms to select the best strategy by addressing the following managerial issues: 1) why should managers and key decision makers pay interest and attention to the stakeholders of information technology (it) firms? 2) what do it/management information systems (mis) stakeholders� desire and need? 3) how should the desires, requests, and needs of all stakeholders in the it/mis firms be ranked and prioritized? 4) are the morals, principles, values, ethics, and beliefs of the it/mis firms good or bad? overall, the stakeholder theory gives management and key decision makers the opportunity to develop strategies to adapt to stakeholders� interests and influences. the agile techniques model our research model posits that agile techniques are most effective and efficient if all the techniques are considered before selecting any specific technique and project. the arrows in figure 1 are multidirectional, meaning that if any of the constructs change (i.e., agile techniques), the project management, processes, people, and procedures must adapt to those changes. failing to adapt to the changes leads to an execution gap. keziere (2006) defines an execution gap as the gap between a company�s execution and management goals. keziere (2006) argues that the execution gap hinders managements� performances because of their companies� inability to respond to the market, which decreases both the company�s market share and profits. in conclusion, changes in any of the stakeholder�s interests affect the whole structure as shown in figure 1. below we are going to present all the components and techniques that make up our research model. american journal of management vol. 17(3) 2017 81 figure 1 the agile techniques model team involvement team involvement includes regular participation among each team member in five ways. participation includes the following: members decide how their work is done, make suggestions for improvement, set goals, planning, and monitor their performance (�what is employee involvement?,� 2015). team involvement is a beneficial concept because if all individuals are actively involved in a process then it�s likely that the team will master it (andries and czarnitzki 2014). pros. according to hoda et al. (2011) customers involved in a software development project are vital and is one of the major factors in agile software development (p. 521). this method helps spread out the customers� roles within the whole development process (hoda et al., 2011, p. 521). the interaction between the customer and the developer demonstrates good team involvement. another pro in team involvement is empowerment (tessem 2014). empowerment is considered to be �central to agile software development organization�s overall approach� (tessem, 2014, p. 874) and with each individual on the team being empowered, he/she will achieve more job satisfaction and be more motivated (tessem, 2014, p. 873). another benefit of having team involvement is including further interactions with the customer(s), which will improve the requirements definition and project scope definition/management (jamieson & fallah, 2012, p. 15). cons. even though there have been a large number of projects adopting and successfully applying agile techniques, it seems complicated for teams to connect them to traditional techniques (jamieson & fallah, 2012, p. 12). one negative aspect of team involvement is by the stakeholders failing to agree on the overall project goals, which can cause an excessive burden on the scope of the project (bjarnason, wnuk, & regnell, 2012, p. 1108). in addition, communication among team members and other colleagues is another negative aspect involved in agile project quality management (bjarnason et al. 2012). according 82 american journal of management vol. 17(3) 2017 to van waardenburg & van vliet (2013, p. 2159), communication is very difficult, especially if individuals are geographically separated, not in the same country, and/or speak different languages. continuous customer feedback continuous customer feedback includes information that is provided by the customer and they provide either their liking or frustration with a finished project. the comments and complaints provided by the customer(s) to a project team are vital to improve and concentrate on the desires and requests of the customer(s). customer feedback can be obtained through written or oral surveys, online forms, emails, letters, phone calls, or face-to-face meetings to the project team (�what is customer feedback?,� 2015). pros. according to jamieson and fallah (2012), feedback provided by customers on a continuous basis is beneficial by allowing relay of important information to the team on new requirements, verifying that the requirements are executed properly, and any probable issues that arise (p. 15). this technique easily helps project teams adapt and improve the applications to meet the needs of all customers (jamieson & fallah, 2012, p. 15). in agile project quality management, a management framework method called scrum is a set of rules that project teams follow and based on customer feedback; improve a product for a customer (randall, 2014, p. 27). another method to obtain continuous customer feedback is called extreme programming (xp). this method formulates teams in regularly doing rework to the project by obtaining feedback from the customer(s) (biju, 2008, p. 98). cons. one of the negative aspects of customer feedback is potentially having the wrong individual interacting with the project team and presenting inaccurate information (jamieson & fallah, 2012, p. 15). projects based on inaccurate information will ultimately lead to unsuccessful development. in addition to this negative phase, another unhelpful outcome of continuous customer feedback is failing to see what the customer(s) exactly wants (denning, 2012, p. 24). not allowing the customer to speak during the project will cause the team to develop unusable products. lastly, another con with continuous customer feedback is having a team obtain feedback from customers too late in the project (olsson et al., 2012, p.393). if the team does not receive the feedback from the customer(s) in a timely fashion, the project will not be successful. pair programming pair programming, which can also be called peer programming, involves two programmers that work together in one area (�pair programming,� 2015). one individual writes the code, while the other individual overlooks every line of the code. each individual will commonly switch their roles throughout the project. the individual that is writing the code focuses all of their concentration on the characteristics of completing the current task while using the other individual as a backup. the individual that is overlooking the code can also judge the strategic direction of the work being performed, by coming up with the ideas for improvement and possible future problems to address (�pair programming,� 2015). pros. according to gupta et al. (2013), pair programming within agile project quality management involves having individuals and interactions act above different types of processes and tools (p. 108). this principle creates a more professional environment allowing two people to work better together. in addition, another positive aspect of pair programming is that this technique can improve product quality by having fewer defects in comparison to the output by an individual working alone (jamieson & fallah, 2012, p. 15). one dimension of quality that demonstrates improvement on a product is quality assurance. according to foster (2013), quality assurance is when individuals demonstrate knowledge and courtesy to the customer, and build trust and confidence with that customer (p. 6). cons. one negative aspect among pair programming within agile project quality management is teaming up two individuals with the same expertise as this will cause counter-productive work among one another (plonka, sharp, van der linden, & dittrich, 2015, p. 67). in addition, another pessimistic fact of pair american journal of management vol. 17(3) 2017 83 programming is by placing an expert programmer with an average programmer. an expert programmer could help increase the skill level of an average programmer, but if that individual is not interested in increasing this/her knowledge, conflict/s could arise (alshehri & benedicenti, 2014, p. 2469). lastly, one may find a partner relying heavily on the other, which could potentially keep one from learning new methods (gupta et al., 2013, p. 112). automated acceptance testing by definition, this technique is a formal description on the behavior of a software product, which can be articulated as a model or a procedure (�guide to agile,� 2013). a different number of details and approaches can be used for such models or procedures, but in many situations, the goal is to execute tests using a software tool, either ad-hoc to the project development team or an off-the-shelf product (�guide to agile,� 2013). an acceptance test is generally understood to have a pass or fail result. pros. according to haugset and stalhane (2012), one development method within agile project quality management that has been expanding is automated testing (p. 5289). with this method used, it helps provide an understanding of system needs and automatically tests software at a company level. another positive factor of automated testing will be that it helps reduce the rate of tracing and fixing defects (jamieson & fallah, 2012, p. 16). this aspect will also help keep the project moving at the right pace. in addition, this type of testing allows both the customer and the developer to agree on the requirements written during the testing phase (haugset & stalhane, 2012, p. 5294). by agreeing on the requirements, this method would decrease the uncertainty and enhance the stability of the tests (haugset & stalhane, 2012, p. 5294). cons. one negative aspect of automated testing is communication among customers (haugset & stalhane, 2012, p. 5294). all customers focus on different topics and if they do not discuss this with the developers, then the system will not work properly. another shocking negativity is that this tool may not recognize when tests fail (nanau, 2010, p. 185). in the event that this happens, a project could keep going forward until the customer(s) passes it to the attention of the project team. at this point, the project may fall behind schedule if the problem is discovered later in the process. finally, another negative aspect of automated testing on agile project quality management could be its difficulty to achieve automation (nanau, 2010, p. 187). if this is to occur, the testing effort and time will increase. refactoring code this technique is a process to reform the present computer code without changing the exterior performance. refactoring will help improve the nonfunctional characteristics of the software being used (�code refactoring,� 2015). the advantages of this technique �include improved code readability and reduced complexity, which can improve source code maintainability and create a more expressive internal architecture or object model to improve extensibility� (�code refactoring,� 2015). pros. according to jamieson and fallah (2012), refactoring code on an agile project is where a design structure is changed, but the aspect of the code is not changed which can be accomplished more successfully as compared to a traditional project (p. 17). by changing the structure, developers have a better understanding of the system, are able to interpret it and maintain it better, and utilize it more efficiently (ghourbanpour & yektaie, 2011, p. 6). in addition to those positive factors, another constructive feature of refactoring code is it helps reduce a developer�s effort and also avoids errors (unterholzner, 2014, p. 70). this effort is accomplished by manually changing the code of the design structure. cons. one drawback of this technique is that programmers may not know when to apply it (ghourbanpour & yektaie, 2011, p. 6). the uncertainty of its use may restrict programmers to utilize the refactoring code. another negative feature is the uncertainty of the required time involved for a 84 american journal of management vol. 17(3) 2017 programmer to change the structure. time involved would be based on the programmer�s experience and the type of programming language that is being used (ghourbanpour & yektaie, 2011, p. 6). lastly, this type of technique can be costly if it is done incorrectly. user acceptance testing in this technique, the users of the software test the software to ensure it can withstand the needed tasks in real-world scenarios, and within the specifications (�what is user acceptance testing?�, 2015). user acceptance testing also is one of the last and most significant software project techniques that must take place before new developed software is put to the market (�what is user acceptance testing?�, 2015). lastly, �user acceptance testing is also known as beta testing, application testing or end user testing� (�what is user acceptance testing?�, 2015). pros. within agile project quality management, this technique involves having the customer(s) determine if the software is ready to be released to the company (jamieson & fallah, 2012, p. 17). this is one positive method that all companies should use when developing an agile project. in addition, this technique should be used in several sessions throughout the project to guarantee higher product quality. stakeholders also provide regular feedback during testing which ensures that software requirements are up-to-date and useful throughout the whole process (dimitrijevic, jovanovic, & devedzic, 2015, p. 353). this technique is a cost-effective procedure because it allows the customer(s) to articulate the requirements for a system through testing (el-attar & miller, 2010, p. 285). this will help the developers build a better system that can meet the customer�s expectations and requirements. cons. one negative aspect of user acceptance testing is that if the users do nott include their user stories and the testing only includes stories that the development team has created, then this tool will be unsuccessful. another pessimistic feature of this technique is if the team injects the wrong input into a system, different output will be produced (el-attar & miller, 2010, p. 292). obviously, the user(s) will not accept what has been produced, but it will be more costly to develop the proper system. lastly, this technique will not be successful if the customer does not lead this testing (jamieson & fallah, 2012, p. 17). meetings meetings are considered to be formal or informal planned assemblies of individuals to ponder on particular issues and problems, and to make final choices (�what is meeting?,� 2015). formal meetings have a specific agenda and are more structured with a definite time, place, and duration. meetings can be divided into two groups, an organizational meeting or an operational meeting. an organizational meeting involves shareholders and management whereas an operational meeting involves management and team members (�what is meeting?,� 2015). pros. when a team is using agile project quality management, one thing they need to do in order to be successful is conduct regular meetings. this continuity will allow the team members to share their project contributions and resolve any issues that may interfere with them not achieving their objectives (jamieson & fallah, 2012, p. 18). according to grapethin et al. (2015), there is one agile model that helps teams construct projects into iterations, and that is called scrum (p. 1). scrum consists of the following four steps: iteration planning, implementing and testing a certain product increment, results being presented to the stakeholders, and each member on the team revealing the work they have accomplished to improve future sprints (grapethin et al., 2015, p. 1). the last step seems to be the most crucial one of all. all members of the team need to reveal the work they have accomplished in order to complete the project on schedule. by each member of the team doing this step, they will be able to develop quality for both the current project and any future projects (jamieson & fallah, 2012, p. 18). american journal of management vol. 17(3) 2017 85 cons. one of the negative aspects of holding team meetings is by having no commonality among each member on the team (yu & petter, 2014, p. 912). this would include members not knowing what tasks they have been assigned and relationships among each member. another unconstructive method of holding meetings is if the meetings are extended longer than planned. individuals not communicating in the meeting and or wrongful information presented during the meeting could also cause a challenge (yu & petter, 2014, p. 915). in addition to those negative elements of holding meetings, another one would be poor management. poor management would involve holding the meetings where the developers would not be able to get their point across, but according to hasnain and hall (2008), �developers now have them so [they] know what�s going on� (p. 1), but management is not involved. this would adversely affect the project management because they would not know what was being discussed. implications for research contributions of this study the information compiled in our study gives a general overview of the agile techniques model and the pros and cons of the agile techniques used within agile project quality management. our conceptual model provides insight, understanding, and reference for program managers, top managements, project managers, and researchers to utilize the techniques mentioned. in today�s workforce, team involvement is a huge factor in regular business interactions. generally, in most careers, the assignments, meetings, and interactions performed have always been group focused. in addition, team involvement has helped individuals achieve more satisfaction with the job and obtain more motivation. another major element in today�s workforce is continuous customer feedback. in our current jobs, we constantly communicating with customers to improve and address the needs and wants they currently have on products and services. however, there have been times when communication hasn�t occurred between some organizations/companies and their customers, and this has led to unsuccessful projects. lastly, we feel in today�s environment, meetings being held are crucial for any company or organization to succeed. in our current work roles, our offices are constantly conducting meetings. the meetings help all individuals share their contributions and solve any issues that arise. if our offices didn�t conduct weekly meetings, we feel projects wouldn�t be successful. limitations of this study based on our research, there were several limitations. our study on the pros and cons on the types of agile techniques was limited on a small trial size. the trial size could have been increased by collecting the data earlier which would have enlarged the amount of information presented and benefited the results. also, we did not test the bidirectional arrows in our research model, the agile techniques model, and we encourage future researchers to empirically validate our research model. directions for future research based on the agile method being used for only the last 15 years, researchers interested in this topic should do further research. areas that require in depth research should include the following: conducting surveys, performing lab tests, researching other individuals� papers, and communicating with large and small companies that have attempted this method to see if it has succeeded or failed. researchers should focus heavily on these techniques, but also see if any others can be used within this process. in addition, individuals should see if one outcome outweighs the other. finally, researchers should empirically validate our model and rank the constructs in our model based on their importance and significant. 86 american journal of management vol. 17(3) 2017 implications for management key takeaways managers need to be aware that the agile method in our model is rarely new, and that there are both pros and cons upon this method being utilized. however, managers also need to realize that this method requires the following: self-organizing teams to complete work based on the customers� needs, teams that interact regularly with the customers, work being performed is preceded in a repetitive technique, and is progressed towards meeting the fulfillment of the customers� needs (denning, 2015, p. 11). if one or more of these suggestions is not used, then this method will be difficult to accomplish a successful project. also, top managers, project managers, and software developers should know that the agile projects should adapt to these techniques (i.e., if the agile project changes then the technique should adopt to those changes). lessons learned based on our research, we learned a decent amount of information on both the pros and cons of the techniques used within the agile method. the number one positive factor on the techniques mentioned was increased productivity on the products for customers. a few pros that help increase the productivity is having the customers more involved, communicating further with customers, and having better involvement among the team members. as for the negative factor, there seems to be one that stands out among all the cons stated throughout the paper, and that is lack of communication. the first stage of communication begins with the team and if the members don�t speak to one another, then the project will fail in the very beginning. in addition, if the customers are not communicated with on a regular basis, then there will be a finished product, but that product will most likely be refused by the customers. based on the research conducted, agile project quality management has both the positive and negative factors. this methodology should be researched more among corporations to view if it is a better tool to use compared to the traditional methodology used by the company. conclusion due to the agile method being used within the last 15 years, and the information provided throughout our paper, individuals should conduct research about this method by applying the following techniques mentioned above: team involvement, continuous customer feedback, pair programming, automated acceptance testing, refactoring code, user acceptance testing, and meetings. from our research, we highlighted both the pros and cons of certain techniques used within the agile method. the pros of agile project quality management identified during the research demonstrates that customer�s roles are increased from the beginning to the end of a project, product quality is improved, the defect rate is reduced, errors are avoided, cost-effective procedures are performed, and projects can be completed on schedule. some of the negative factors may include lack of communication/customer feedback, partnering with the wrong individuals for requirements definition, increased project costs, and poor project management. with the information gathered, every project team should look into both the agile project quality management method and the traditional methods. by doing so, the team can view which method will be most beneficial in obtaining quality improvement on the 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(2014). understanding agile software development practices using shared mental models theory. information and software technology, 56, 911-921. doi:10.1016/j.infsof.2014.02.010 ajm 17(3) web_master.pdf 64 american journal of management vol. 17(3) 2017 measurement of patient satisfaction with servqual model of private hospitals: sem approach tarana azmi school of business, uttara university, bangladesh md. hafizur rahman dutch bangla bank limited mohitul ameen ahmed mustafi school of business, uttara university, bangladesh md. rafiqul islam school of business, uttara university, bangladesh patient satisfaction study can help identify ways of improving nursing and health care services. the aim of this study is to assess service quality dimensions to determine patient satisfaction with doctors, nurses and staffs care in private hospitals of bangladesh. this study has been conducted on 400 patients with a structured questionnaire and using simple random sampling method. for analyzing data, both descriptive and inferential statistics has been used. by using structural equation modeling, the study has found assurance, empathy, reliability, responsiveness and tangibility as influential factors; and is significantly related to the overall patient satisfaction in private hospitals. this study suggests that for ensuring better patient satisfaction, variables like: emergency patients, lab-report�s accuracy, timely and appointment based patient observation, hygienic environment, and timely report delivery, etc. should be provided. introduction bangladesh is a country of 160 million people & it is the 7th largest country in the world. in terms of population, more than 54% of preschool-age children, number of children amounts equivalent to more than 9.5 million, are stunted, 56% are underweight and more than 17% are wasted. since all administrative divisions were affected by child malnutrition and there were highly significant differences in the prevalence�s of the three anthropometric indicators. the manifestation of underweight children ranged from 49.8% in khulna to 64.0% in sylhet, which also showed the highest prevalence of stunting (61.4%) and wasting (20.9%) (food and agricultural organization, 2016). so, health care is one of the biggest concerns during few decades and few steps have been taken to create the structure of health care facilities in our country. also, quality is one of the key parameters in order to measure the performance of american journal of management vol. 17(3) 2017 65 a product or service and consequently it is a strong building block for improving organizational performance. in healthcare organization customers are the key player, who played a significant role to measure the quality of the product or services. products are tangible in nature and quality of the products can be easily measured whereas due to intangible in nature, it is very difficult to measure the quality of any services due to its high dependency on customer expectations and perceptions (samson & parker, 1994).the perceptions of expected service and the quality of service that are delivered to the patients should fulfill or exceed their expectations and perceptions (zeithaml, berry & parasuraman, 1993). like the other service organizations, healthcare organization has become a highly competitive and very rapidly growing service industry in bangladesh. in healthcare, patient perceptions are considered to be the major determinant to assess the service quality of a healthcare organization (cronin & taylor, 1992). this interprets that customer satisfaction is the prime indicator for critical decision making in selecting a healthcare service. this study is intended to investigate the level of quality healthcare services that are delivered to patients by the private hospitals. for this purpose �servqual� instrument as well as five service quality dimensions; assurance, empathy, tangibility, reliability and responsiveness were used to measure the patient�s perceptions about the service quality of private hospitals in bangladesh. literature review to differentiate from competitors, the quality of service is mainly considered as a critical success factor for hospitals. previously, several research studies have been accomplished to determine relative factors of service quality. for instance, several studies have found that service quality can influence the level of customer satisfaction (muslim& isa, 2005). customer satisfaction will influence to repurchase or reuse from the same service provider (eshghi et al., 2008); as a result, company revenue will go up in the long run. variations in service performance may provide opportunities to service quality, and customer satisfaction. service quality service quality is a measurement of how satisfactorily a delivered service can fulfill the standard or the client�s expectations. service operators often measure the service quality to improve their services, to quickly determine problems, and to better assess client satisfaction. according to grönroos (2001), service quality is a comparison of expectations of the customer with performance & the difference between what customer expectations are and their perceptions. (parasuraman et al., 1988; irfan & ijaz, 2011). service quality has become an important topic due to its significant relationship to profit, cost saving and market share (devlin and dong, 1994). service marketing researchers have developed nineteen service quality models from 1984 to 2003 (seth, deshmukh & vrat, 2005). the single primary goal of these models is to offer managers an understanding into the components of service quality for the better improvement of organizational offerings. service quality model measurement of service quality has been one of the key priorities and task of various service organizations and the servqual model proposed by parasuraman et al. (1985) has been used in a number of studies to measure the customer�s service related perceptions and expectations towards the provider�s performance (zarei et al., 2012; ladhari, 2009). favorable customer perception regarding service quality will have a positive impact on overall customer satisfaction. this will influence customer�s behavioral intention; repeated purchase and willingness to recommend the service to others (parasuraman et al., 1988). parasuraman et al. (1985) took a number of research projects that results into the service quality model, namely "servqual". previously, the model was based on 10 dimensions of service quality and then reduced to 5 dimensions, as: tangibility (equipment, appearance and physical facilities), reliability (accurate and independent service providing ability), responsiveness (willingness in help customers and providing prompt services), empathy (caring and individualized attention towards customers, covering access to and understanding of the customers) and assurance 66 american journal of management vol. 17(3) 2017 (service providers' knowledge, ability and courtesy to show trust and confidence). the servqual model have 22 pairs of likert scale questions that are designed to measure customers' expectation from a service and the customers' perception and attitude towards a service provided by a service provider organization. to assess a service quality, the perception score and expectation score found from each question is compared to figure out a gap. the positive gap score means that customers' expectations are fulfilled or exceeded, while the negative score means the opposite. other study mentioned that service quality is divided into two main components; namely: functional and technical quality (gronroos, 1984). combined with some modification or additional operational assessment, the servqual model have been used to gauge service quality in a variety of service industries like: banking (roig et al., 2006), sports and tourism (kouthouris and alexandris , 2015), retail business stores (eastwood et al., 1999), library setting (ho and crowley, 2003), local government authority (wisniewski, 2001), professional accounting service (aga and safali, 2007), education (arambewela and hall, 2006), airlines service (prayag, 2007), mobile telecommunications (lai et al., 2007), and services based on website (kuo et al., 2005). according to parasuraman et al. (1985), the servqual model was based on the fifth gap that converted the original ten service quality dimensions into five consolidated dimensions of service quality: tangibility, reliability, responsiveness, assurance and empathy. parasuramanet al. (1985), described these dimensions as: tangibility is the physical evidence of the service, for instance, the appearance of the tools, equipment and physical facilities, used to provide the service. reliability is the ability to perform the promised service in an accurate manner. responsiveness is the readiness and willingness of employees to assist customers by providing prompt timely services. assurance is the knowledge of employees and their ability to have trust and confidence towards customers. empathy is the caring, individualized and customized attention provided to customer. patient satisfaction in private hospitals bangladesh is a developing country; in addition to that healthcare is one of the major sectors of the economy. a number of steps have been taken by government of bangladesh and management body of hospitals to improve the quality services for patients coming to a hospital. quality care can be defined as the features and characteristics of a service that has the ability to satisfy a given need (bauer je, duffy gl, westcott, 2006).the amount of budget allocated to healthcare is now improved. very recent literature in developed countries focused upon needs and wants of patients and their thoughts. according to (youssef et al., 1996) hospitals usually provide same types of services but their level of quality as a service varies from hospital to hospital. according to (bergman and klefsjo, 1994) the best way to assess service quality is to measure the level of satisfaction of customers because they are the ultimate benefit taker of quality service. according to (o�connor et al 1994; andaleeb, 2000) renewed attention is given from patients� perspective now-a-days and their perceptions are thought as crucially important instead of focusing only on hard aspects of quality. according to meredith & siu (1995) hospital authority must consider and give importance to patient�s opinion to improve the overall quality of services delivered by hospitals. relationship between service quality model and patient satisfaction the health care industry in the arabic gulf region, jabnoun, rasasi, & aisha (2005) studied the relationship between transformational leadership and the level of service quality in six uae hospitals. the findings showed that patients were generally satisfied with the level of quality services provided by their hospitals, and a positive relationship was explored between service quality and all dimensions of transformational leadership. tangibles dimension of service quality had the lowest point of expectation of all five dimensions. mostafa (2005) analyzed patients' perceptions toward quality service in egypt's hospitals. the results showed three factor based solution that is inconsistent with the five american journal of management vol. 17(3) 2017 67 elements associated with servqual model. in the perspectives of developing countries, andaleeb (2001) tested a five dimension based instrument for measuring perception of patients toward hospital services in bangladesh. the results showed that there exists a significant relationship between the five factors and patients� satisfaction. baker, akgun and assaf (2008) used an improved servqual scale to measure patients attitudes toward health service in turkey. data collected from 472 patients showed that patient�s perceived service quality scores are higher than their expected service quality scores for ordinary hospitals and lower than their expected scores for modern hospitals. however, rohini and mahadevappa (2006) measured patients' satisfactions of service quality in bangalore hospitals of india. the collected data from 500 patients explored that expectations exceeded their perceptions in 22 items of service quality. conceptual framework the objective of this study is to assess service quality dimensions to determine patient satisfaction with doctors, nurses and staffs care in private hospitals of bangladesh, on the basis of different factors like assurance, empathy, tangibility, reliability, and responsiveness. the theoretical model is presented in figure 1. figure 1 conceptual framework of the relationship between service quality and patient satisfaction objectives of the study the prime objective of this study is to assess service quality dimensions to determine patient satisfaction with doctors, nurses and staffs care in private hospitals. the other objectives are (i) to identify the significant factors that can influence patient satisfaction, (ii) to analyze the factors that affect the satisfaction of patients, and (iii) to give some suggestions for the improvement of the patient satisfaction level of private hospitals of bangladesh. 68 american journal of management vol. 17(3) 2017 methodology of the study this study has been based on both primary and secondary data. primary data were collected by surveying of 400 hospital employees, nurses, patients from the 3 hospitals located in uttara, dhaka city. to determine the sample size of patient, published formula of university of florida was used as a reference. according to this formula, the sample size for the more than 10 lac population size with 95% confidence level and ±5% precision level are approximately 400 using the following formula yamane, t (1967): n= ; where, n = sample size, n = the population size, and e = the level of precision questionnaire design and test of reliability a structured questionnaire with the 5-points scale was developed for the items related to impact of perceived service quality on private hospitals in bangladesh. simple random sampling technique was used to select respondents for the study. to confirm the responses of the sample respondents, a structured questionnaire was used. five points likert scale ranging from 1 (strongly disagree) to 5 (strongly agree) was used to collect data from the respondents. four demographic variables, namely, age, gender, and education level were taken to ensure the variability of different variables. respondents were asked to respond about their perceptions of the quality of services provided by private hospital in bangladesh in terms of the above five services quality dimensions. the secondary data were collected from the journals, periodicals, website, etc. to make the study more informative. table-3 shows that the reliability coefficient of the questionnaire. it shows that the cronbach�s alpha, composite reliability, average variance extracted of the questionnaire as shown table-2 which is at the acceptable limit as per nunnally and berstein (1994), hair et al. (1998), fornell & larcker, (1981); henseler, ringle, & sinkovics, (2009) respectively. data collection and data analysis a survey has been conducted different three hospitals at uttara in bangladesh with the assistance of bba students of uttara university. the interviewers were properly trained on the items representing the questionnaire for data collection before resuming the interview. along with descriptive statistics, inferential statistical techniques such as factor analysis, and structural equation modeling were used to analyze the data by using spss (statistical package for social science) and smartpls (statistical software) respectively. structural equation modeling was conducted to identify the influential factors; those factors have been affected on perceived service quality of those hospitals. statistical tools used both descriptive and inferential statistics were used to analyze the data. inferential statistics like factor analysis (fa) was used to separate the factors related to perceive service quality of those hospitals in bangladesh. partial least square method was also used to identify the significant factors from the factors identified through factor analysis. measurement model both reliability/ internal consistency and validity criteria were used to test the measurement model. to analyze the reliability model, this study used the cronbach�s alpha coefficient and composite reliability (cr) value. table 3 shows all cronbach�s alpha values are above 0.60 cutoff values as suggested by nunnally and berstein (1994). standardized cronbach's alpha formula is given below. = (n. / ( + (n-1). )) american journal of management vol. 17(3) 2017 69 here, n is equal to the number of items, c-bar is the average inter-item covariance among the items and v-bar equals the average variance. validity analysis to validate the measurement model, two basic approaches were used: convergent validity, and discriminant validity. convergent validity the measurement model was tested for convergent validity, which is the extent to which multiple items to measure the same concept are in agreement (mackinnon, 2008). according to hair et al. (1998) convergent validity could be accessed through factor loadings, composite reliability and the average variance extracted. the results of the measurement model show that the loadings (table 3) for all items exceeded the recommended value of 0.5 (hair et al. 1998). composite reliability (cr) values ranged from 0.794 to 0.875 which exceeded the recommended value of 0.7 (hair et al. 1998)(table 3). average variance extracted all values of the average variance extracted (ave) that measures the variance captured by the indicators relative to measurement error were greater than 0.50 (table 3) to indicate acceptability of the constructs (fornell and larcker, 1981; henseler, ringle, and sinkovics, 2009). the table 3 indicates that these indicators satisfied the convergent validity of the constructs. discriminant validity this study also validated the discriminant validity of the instrument. the discriminant validity represents the extent to which measures of a given construct differ from measures of other constructs in the same model (mackinnon, 2008). in a pls, the most important criteria for adequate discriminant validity is that a construct shares more variance with its items than it is shared with other constructs in a given model (hulland, 1999). it was assessed by examining the correlations between the measures of potentially overlapping constructs. items loads more strongly on their own constructs in the model, and the square root of the average variance extracted for each construct is greater than the levels of correlations involving the construct (fornell and larcker, 1981). as shown in table 3, the square root of the average variance extracted for each construct is greater than the items on off-diagonal in their corresponding row and column, thus, indicating the adequate discriminant validity. the inter-construct correlations show that each construct shares larger variance values with its own measures than with other measures. in sum, the measurement model demonstrated adequate convergent validity and discriminant validity. table 01 discriminant validity of servqual model 1 2 3 4 5 1. assurance 0.804 2. empathy 0.689 0.822 3. reliability 0.701 0.548 0.758 4. responsiveness 0.724 0.477 0.729 0.878 5. tangibility 0.016 0.15 0.025 0.564 0.904 coefficient of determination: the reliability also finds that the coefficient of determination r2 value of service quality construct is 0.619 suggesting that 61.9% of the variance in service quality was explained by assurance, empathy, reliability, responsiveness, and tangibility. the value of r square adjusted is 61.4% for service quality dimensions to patient satisfaction (table 4). 70 american journal of management vol. 17(3) 2017 hypothesis in the literature, the related studies suggest that the types of factors in servqual model applications in different hospitals are assurance, empathy, tangibility, reliability, and responsiveness. therefore, the following hypotheses have been developed: h01: there is no significant relationship between assurance and patient satisfaction. h02: there is no significant relationship between empathy and patient satisfaction. h03: there is no significant relationship between tangibility and patient satisfaction. h04: there is no significant relationship between reliability and patient satisfaction. h05: there is no significant relationship between responsiveness and patient satisfaction. demography table 2 show that 87.2% of the respondents are male and 12.8% of the respondents are female. table 2 shows the educational qualification of the respondents where 39.5% respondents are having bachelor or masters degree; that means about 40% respondents has higher education. the ultimate effect is that our research has a certain level of very accurate responses as this part of respondents understood the survey question clearly and responded accurately. the age distribution of respondents as shown in table 2 indicates that the majority of respondents 177 (44.2 %) whose age between 24-32 years and smallest number of respondents 55 (13.8%) whose age 40 years and above. majority age group 24-32 indicates that most of the respondents are young who have good knowledge about modern medical technologies and facilities. that�s why this age group can assess the service quality of private hospitals according to the modern world. table 2 socio-demographic profile of respondents frequency percent gender male 349 87.2 female 51 12.8 level of education secondary 102 25.5 higher secondary 140 35.0 bachelor degree 104 26.0 masters� degree 54 13.5 age of respondents 17-24 years 76 19.0 24-32 years 177 44.2 32-40 years 92 23.0 40 years and above 55 13.8 results of exploratory factor analysis a total of 400 usable survey responses were analyzed in this section. the factor analysis technique has been applied to examine the relationship between different factors of service quality and patient satisfaction. the five factors that are found from the rotated factor matrix (table: 3) are given below: factor-1 (assurance): this includes two variables like: accuracy of lab reports, and special attention to emergency patients. so, it provides a basis for conceptualization of a dimension which may be identified as assurance factor. factor-2 (empathy): this includes three variables like: doctors have genuine concern about patients, doctor cares their patients, and staff and nurses care the patient has the principal factors. so, it provides a basis for conceptualization of a dimension which may be identified as empathy factor. american journal of management vol. 17(3) 2017 71 factor-3 (reliability): this includes three variables like: patients are observed to appointment, delivery of reports on time, doctor/staff observed the promised time has the principal factors. so, it provides a basis for conceptualization of a dimension which may be identified as reliability factor. factor-4 (responsiveness): this includes three variables like: efficiently respond to patient, willing to help/ facilitate patient, and feedback mechanism has the principal factors. so, it provides a basis for conceptualization of a dimension which may be identified as responsiveness factor. factor-5 (tangibility): this includes four variables like as hygienic conditions at the hospital, waiting facilities for patient, healthy environment, and lab and pharmacy facilities have the principal factors. so, it provides a basis for conceptualization of a dimension which may be identified as tangibility factor. table 3 measurement model analysis factors variables factor loading ave composite reliability cronbach' s alpha assurance special attention to emergency patients 0.871 0.717 0.835 0.708 accuracy in lab reports 0.822 empathy doctor care their patients 0.791 0.573 0.801 0.730 doctors have genuine concern about patients 0.744 staff and nurses care the patient 0.735 reliability doctors/staff observe the promised time 0.864 0.701 0.875 0.790 patients are observed according to appointment 0.829 on time delivery of reports/services 0.818 responsiveness good feedback mechanism 0.757 0.563 0.794 0.712 doctors/staff efficiently respond to the patients 0.749 doctors/staff are willing to help/facilitate the patients 0.744 tangibility hygienic conditions at hospital 0.819 0.620 .867 0.796 cleanliness in wards/rooms (sheets, floor) 0.789 healthy environment at hospital 0.775 waiting facilities for attendants and patients 0.765 note: ave>0.50(fornell&larcker, 1981; henseler, ringle, &sinkovics, 2009), composite reliability>0.70(hair et al. 1998), cronbach�s alpha>0.60(nunnally and berstein , 1994) results of multivariate analysis pertial least square (pls) a multivariate analysis technique like partial least square was used to identify the significant relationship between patient satisfaction and the factors identified through service quality factors (assurance, empathy, reliability, responsiveness, and tangibility). path diagram (table 4 and figure 2) revealed that assurance ( = 0.158; t = 3.795, empathy ( = 0.128, t = 3.368), tangibility ( = 0.089, t = 2.239), reliability ( = 0.135; t = 3.032), and responsiveness ( = 0. 474; t = 8.829) were found to be 72 american journal of management vol. 17(3) 2017 related to patient satisfaction, with the evidence that the five formulated hypotheses exceeded the recommended value, 1.96 (< 0.05), hence, assurance, empathy, reliability, responsiveness, and tangibility have relationship with patient satisfaction. table 4 also shows that the items of the constructs (assurance, empathy, reliability, responsiveness, and tangibility) were valid measures of their respective constructs based on their loadings values (standardized estimates) and statistical significance (chow & chan 2008). the t value of every factor indicates that four factors like as assurance, empathy, reliability, and responsiveness, whose values are greater than 2.58 and that is significant at 1% level of significance. this means that they are highly significant to the patient satisfaction. on the other hand remaining one factor like: tangibility whose value is greater than 1.96 and that is statistically significant at 5% level of significance. this means that it is statistically significant and related to the patient satisfaction. figure 2 relative importance of the service quality factors to patient satisfaction of private hospitals hypotheses testing table 4 presents the results of hypothesis testing. the table shows that the hypotheses h1, h2, h3, h4, and h5were not supported as the t-value is more than 1.96 at the 5% level of significance. this means that null hypotheses are rejected and alternative hypotheses are accepted. as a result, assurance, empathy, reliability, responsiveness, and tangibility have significant relationship with patient satisfaction american journal of management vol. 17(3) 2017 73 table 4 summary results of the model constructs original sample sample mean standard deviation t statistics p values supported assurance -> patient satisfaction 0.158 0.157 0.042 3.795 0.000 yes empathy -> patient satisfaction 0.128 0.129 0.038 3.368 0.001 yes reliability -> patient satisfaction 0.135 0.134 0.044 3.032 0.003 yes responsiveness -> patient satisfaction 0.474 0.477 0.054 8.829 0.000 yes tangibility -> patient satisfaction 0.089 0.087 0.040 2.239 0.026 yes r square 0.619 adjusted r square 0.614 discussion assurance to patient satisfaction (h1) whichever the hospital is, the prime task of the hospital will be to ensure satisfaction of the patient or the patient�s family by providing enough quality services. this is the prime concern of assurance. the factors that are covered under this part are: doctor�s ability and efficiency, regular examination of patient, accuracy of the report, taking advice from expert doctors, special caring for emergency patients, etc. according to our study, patients are satisfied with the services provided by private hospitals. the study found that assurance to patient satisfaction is highly significant at the 1 % level of significance. this means that private hospitals in bangladesh can provide enough quality services. empathy to patient satisfaction (h2) the factors that are considered by any patient to have a positive impression on any hospital, empathy is one of them. the factors that are covered under this part are: exact perception of doctors on patients, take care of patients by staff and nurses, maximum effort of hospital authority to cure patient, etc. this study found that empathy to patient satisfaction is highly significant at the 1 % level of significance. this means that private hospitals in bangladesh have a positive impression with the level of services to the patients. tangibility and patient satisfaction (h3) tangibility focuses on infrastructural facilities. the factors that are covered under tangibility are: hygiene and health condition, proper seating facilities for visitors, cleanliness of toilets, cleanliness of the patient room, facilities of hospital�s research, pharmacy facilities, overall tangible infrastructure, etc. this study found that tangibility to patient satisfaction is statistically significant at the 5 % level of significance. this means that private hospitals in bangladesh have a significant impact of infrastructural tangible facilities on patient satisfaction. reliability and patient satisfaction (h4) the reliability service quality dimension refers to how the company is performing and completing their promised service, quality and accuracy within the given set requirements between the company and the customer. reliability is just as important as a goof first hand impression, because every customer wants to know if their supplier is reliable and fulfill the set requirements with satisfaction. this means the ability to perform the promised service dependably and accurately. the factors that are covered under 74 american journal of management vol. 17(3) 2017 reliability are: handling customer service issues, providing services for the first time; offering services on time, and maintaining a record of error-free, fulfilling right order ; keeping accurate records; ensuring accurate quote; performing right in the bill. this study found that reliability to patient satisfaction is highly significant at the 1 % level of significance. this means that private hospitals in bangladesh have a significant level of accuracy in delivering quality services. responsiveness and patient satisfaction (h5) responsiveness means the willingness to help customers and provide prompt service. it can also be stated as speed and timeliness of service delivery. the factors that are covered under tangibility are: processing speed and service capabilities to respond promptly to customer service requests, willingness or readiness of employees to provide services, understanding the needs and requirements of the customer, ensuring easy operation time, providing individual attention by the staff, and also giving attention to the problem and customers' safety in their dealings. this study found that responsiveness to patient satisfaction is highly significant at the 1 % level of significance. this means that private hospitals in bangladesh have a very strong positive performance for patient satisfaction by providing prompt and timely services to the patients. conclusions and recommendations the aim of this study was to assess service quality dimensions to determine patient satisfaction with doctors, nurse and staff care in private hospitals of bangladesh. in this study, five important factors were identified through factor analysis for patient satisfaction of private hospitals. here, four of them (assurance, empathy, reliability, and responsiveness) were found highly significant to patient satisfaction and another one (tangibility) was found statistically significant. the study tried to compose a conceptual model that would better predict and explain service quality dimensions to patient satisfaction in the health care context. the model was evaluated based on data collected from 400 respondents. the patient satisfaction accounted for 61.9 percent of the variance explained. this study finds that the patients are concerned about getting special attention to emergency cases, doctors, staffs and nurses� care the patient as special treatment is very crucial to emergency cases. they seek accuracy in lab reports, on time delivery of reports, desire to be observed at promised time, and appointment based treatment as people want their time being valued. people who visit private hospitals are usually solvent. that�s why, timeliness and accuracy is being highly valued by them. patients also think in terms of emotions as they observe whether doctors have genuine concern about patients, or whether they efficiently respond to the patients, or whether they are willing to help the patients. most importantly patients seek good hygienic conditions, cleanliness in wards/rooms (sheets, floor), and healthy environment at hospitals. environmental cleanliness is needed in every hospital, but when patients are in private hospitals, they seek these cleanliness related factors significantly. in addition to that they want good feedback mechanism, and waiting facilities for attendants and patients as they want to remain pressure free physically and mentally. this study suggests that for ensuring better patient satisfaction, factors like: special attention to emergency patients, accuracy in lab reports, doctors/staff observe patients timely, appointment based observation, hygienic environment, and on time delivery of reports should be provided as all these factors has more than 0.8 loadings (table 4). scope for future study this study was conducted based on three hospitals only. therefore, there is an ample scope to conduct further study by taking more variables into account for more accurate results of patient satisfaction of 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(1993). the nature and determinants of customer expectations of service. journal of the academy of marketing science, 12(1), 1-12. ajm 18(5) master (r).pdf ajm 17(1) master-lulu-revised.pdf american journal of management vol. 17(1) 2017 57 local minimum wages and local business conditions: survey results from oakland, california sepi aghdaee the san francisco foundation carolyn sherwood call lorry i. lokey school of business and public policy, mills college in march 2015 oakland, california increased its minimum wage from $9 to $12.25 per hour. this paper presents a survey that asked oakland businesses both about general business conditions and about their responses to the higher minimum wage. the survey finds widespread effects on employment, wages, and prices, with particularly significant effects in the food service sector. while the minimum wage hike appears to have been a significant factor in driving these changes, other challenges were more significant for survey respondents. these changes occurred in a city that is experiencing an influx of wealthy new arrivals and rising property values. introduction in recent years, increased income inequality and rising costs in many large urban areas have motivated a nationwide movement toward higher pay for low-wage workers. one result has been minimum wage ballot measures and legislation at the state and local levels of government. for example, in los angeles the city council and mayor approved a plan to raise the minimum wage to $15 per hour by 2020, with the first increase in july 2016 to $10.50 (county of los angeles, 2016). both new york and california recently enacted laws to gradually increase their state minimum wages to $15 (deschenaux, 2016). in november 2014, oakland, california became a part of this movement when oakland voters passed a ballot measure increasing the city�s minimum wage from $9 to $12.25 per hour. there is a rich economics literature, spanning decades, exploring the impact of federal and state minimum wages on employment and economic activity (see, for example, neumark and wascher 2000, card 1992). in recent years, as many cities have explored or imposed municipal minimum wages, several studies have used econometric techniques to analyze the impacts of local minimum wages (for example, card and krueger 1994, reich, jacobs and bernhardt 2014, the seattle minimum wage study team 2016). before the vote on oakland�s minimum wage, two independent organizations produced prospective studies about how measure ff would affect economic variables such as employment, wages, and prices in oakland (reich, jacobs, bernhardt, and perry 2014; hausrath economics group, 2014). in this paper, we take a different approach, directly asking oakland businesses about their experiences with the minimum wage in the context of the overall environment facing oakland businesses. this approach provides a useful complement to data-driven analysis, and reveals key concerns and pressures facing businesses in oakland. the survey finds that effects on employment, wages, and prices 58 american journal of management vol. 17(1) 2017 were widespread following imposition of the minimum wage, with particularly significant effects in the food service sector. while the minimum wage hike appears to have been a significant factor in driving these changes, other challenges were more significant for survey respondents. background on oakland�s minimum wage in november 2014, oakland, california voters overwhelmingly backed measure ff, which increased the city�s minimum wage from $9 to $12.25 per hour. more than 80% of oakland voters favored the measure, which increased oakland�s minimum wage by 36% in one step, with no phase-in or smallbusiness exemption. in addition, the law requires oakland businesses to provide 1 hour of sick leave for every 30 hours worked. measure ff also provides for annual increases in the minimum wage based on changes in the consumer price index (cpi) (city of oakland city administration, 2015). for most cities, data on employment, wages, and prices are scant and, when available, released with a considerable time lag. the current survey provides a methodology for gathering early and highly localized information about how local businesses responded to the minimum wage, and the relative importance of the minimum wage compared with other factors in driving business� decisions about wages, employment, prices, expansion, and location. on march 2, 2015, when measure ff took effect, oakland�s minimum wage was significantly higher than that in neighboring cities. since then, several nearby cities, as well as the state of california, have increased their minimum wages. thus, the difference between oakland�s minimum wage and that of other nearby locations decreased significantly during the year after oakland�s minimum took effect (see figure 1). san francisco voters approved a measure raising the city�s minimum wage gradually to $15 per hour by 2018 (san francisco office of labor standards enforcement, 2015). berkeley raised its minimum wage to $12.53 per hour in october 2015 (berkeley department, housing and community services, 2015). in june of 2015 the emeryville city council and mayor approved a plan to raise wages in july 2015 to $12.25 (the same as oakland) with additional increases to come yearly. emeryville�s minimum wage ordinance included a sick leave mandate similar to oakland�s law (emeryville economic development department, 2015). (both berkeley and emeryville share borders with oakland.) figure 1 comparing minimum wages of neighboring cities in march 2015 and march 2016 $12.25 $11.05 $9 $10 $9 $12.55 $12.25 $12.25 $11 $10 $0 $2 $4 $6 $8 $10 $12 $14 oakland san francisco emeryville berkeley california h ou rly w ag e march 2015 minimum wage march 2016 minimum wage american journal of management vol. 17(1) 2017 59 oakland�s minimum wage increase was enacted in the context of a local economy that is, by many measures, booming. housing prices provide a simple metric that captures local economic trends. the san francisco-oakland bay area has seen huge increases in its already-high housing prices. in march 2015, when measure ff went into effect, the median house price in oakland was $510,000, up from $300,000 in march of 2012 (oakland home prices & values, 2016) but still about half of the $1.03 million median in san francisco (san francisco home prices & values, 2016). the influx of money into oakland from san francisco means that some oakland businesses benefit from the increased incomes of their customers, while for others the predominant effect is upward pressure on costs. in general, a minimum wage has the potential to affect business decisions in several ways. the higher minimum could cause businesses to reduce employment or increase the prices they charge. when a community�s minimum is higher than its neighbors�, these effects can be amplified. businesses may relocate to nearby communities with lower minimum wages or go out of business entirely. we did not attempt to sort out these effects, since they are complicated both by the context of overall strong growth in the local economy and by the fact that the minimum wages in nearby locations changed shortly after oakland�s minimum wage hike. rather, we focused on gathering information about business� actions following the minimum wage hike and their motivations for those actions. survey methodology distribution the survey was conducted online using surveymonkey. it was distributed via email and posted on townsquared, an online social network platform connecting local businesses. since the researchers did not have a comprehensive mailing list of oakland businesses, the survey link was sent to contacts at the oakland chamber of commerce, the sustainable business alliance (an association of locally-owned businesses, with most members located in oakland), and all ten oakland business improvement districts (bids) and community benefit districts (cbds). the survey was sent out to corresponding email lists by the oakland chamber, the sustainable business alliance, the lakeshore/lake park bid, koreatown/northgate cbd, downtown cbd, and lake merritt/uptown cbd. the researchers monitored responses and, after the first week, noted that there were few responses from the fruitvale and temescal neighborhoods. therefore, they used online resources to compile a supplemental email list with 94 businesses including 29 businesses in fruitvale and 31 businesses in temescal. the survey went online on july 1st, with the deadline of july 17th. it remained open and responses were collected until july 27th. one hundred thirteen oakland businesses responded to the survey. survey design the survey was designed to be easy for businesses to complete within 10 minutes. a small number of businesses participated in a pilot survey to verify ease of response and to provide input on survey methodology prior to wider distribution of the survey. questions about general business conditions in oakland preceded specific questions about the minimum wage hike in order to decrease bias regarding the minimum wage increase. the survey included 25 questions aimed at assessing current and future business conditions in oakland with focus on the minimum wage increase. the full text of the survey is provided in the appendix. the survey respondents were assured that their responses would be confidential and anonymous, so the results below are compiled in a way that preserves the anonymity of respondents. limitations conducting the survey online and distributing it via email was far less costly in both dollars and time than a phone or mail survey. however, an online survey excludes potential respondents who do not use email for communication, or whose owners/managers are less likely to connect online. we expect that the online nature of the survey reduced the response rate amongst some targeted businesses, but given the limited time and funds for this project, online surveying was the best option for this study. with 113 60 american journal of management vol. 17(1) 2017 responses, the survey responses clearly are not representative of all businesses in oakland. nevertheless the survey provides useful insights regarding businesses� responses to the minimum wage. characteristics of survey respondents industries represented the industries with the highest representation in the sample of respondents were food services making up 26% (29/113) and retail trade with 22% (25/113) of respondents. health and social services made up 10% (9/113) of the respondents. the remaining categories had fewer respondents ranging between 1% and 4% and included administrative and waste management services, arts entertainment and recreation, manufacturing, professional scientific and management, public administration, real estate rental and leasing, educational services, finance and insurance, information and communications, wholesale trade and construction. the �other� category, which makes up 8% (11/113) of the total respondents, includes religious services, personal care, repair/maintenance, design, childcare, and photography businesses. additionally 10% (11/113) of the total respondents reported that their organizations were nonprofits. nonprofit respondents included health, arts, education, religious, and cultural organizations. geographical distribution the number of responses to the survey varied greatly based on zip code. downtown (94612) at 29% (35/120) is the zip code with the largest number of responses. this is consistent with downtown�s large share of oakland businesses. the west oakland and embarcadero neighborhoods (94607) follow at 14% (17/120). 94610 which represents adams point, grand avenue, and lakeshore had 13% (15/120) of respondents. twelve percent (14/120) of responses came from 94609, which includes parts of north oakland, lower rockridge, and temescal. zip codes representing the remaining neighborhoods account for between 1% and 8% of responses. a number of respondents reported locations in multiple zip codes, as such the sample size for zip codes is 120 which is greater than the total survey sample size of 113. length of time in business respondents were asked how long they have been in business and could choose between the answers listed in the first column of table 1. most of the business are well established, with 70% (79/113) of respondents reporting that they have been established for 5 years or longer. table 1 length of time in business how long in business? count percentage more than 5 years 79 69.9% 3 to 5 years 10 8.8% 1 to 3 years 20 17.7% less than 1 year 4 3.5% total 113 100% changes from november 2014 to july 2015 number of employees a majority of respondents employed 10 or fewer employees. the questions comparing size between november 2014 (before the measure ff went into effect) and july 2015 (when the survey was completed) were intended to determine whether there has been significant shrinkage or growth in size of businesses. as shown in the first column of table 2, the responses were recorded in size classes rather than specific american journal of management vol. 17(1) 2017 61 numbers. as such, the question does not capture businesses that experienced changes within a given size class. amongst businesses surveyed there is evidence of growth as 10% moved to a larger size class, while only 2% moved to a smaller size class. eighty eight percent reported no change. table 2 number of businesses by size class (measured by number of employees) size class (# employees) count november 2014 (# businesses) count july 2015 (# businesses) 0-10 68 62 10-20 16 17 20-50 14 17 50-100 4 3 100-300 4 5 300 or more 1 3 total 107 107 number of full-time employees most respondents had 4 or fewer full-time workers (who worked 35 hours or more), as shown in table 3. of the 97 respondents who answered this question, 17% reported that they moved into a larger size class between november 2014 and july 2015, 79% reported no change, while 4% reported moving to a smaller size class. the respondents were given the categories shown in the first column of table 3 to choose from, so a business could have grown (for example, from 6 full-time workers to 8) but would remain in the same size class. table 3 number of businesses by size class (measured by number of full-time employees) size class (# full-time employees) count november 2014 (# businesses) count july 2015 (# businesses) 0-4 68 65 5-9 9 11 10-14 8 7 15-19 2 1 20-24 2 5 25-29 2 2 30 or more 5 6 total 97 97 changes in payroll costs seventy percent (72/103) of respondents reported an increase in their payroll costs between november 2014 and july 2015 with 32% (33/103) reporting payroll increases of 10% or more. thirty percent (31/103) of respondents reported payroll increases between 2% and 10%. eight percent (8/103) reported decreased payroll, while 22% (23/103) reported no change at all. 62 american journal of management vol. 17(1) 2017 tables 4 and 5 provide detail for the businesses that reported increases in their payrolls. respondents were provided with a list of possible components and could choose only one. as shown in table 4, of those who reported increase in payroll 69% (50/72) chose �change in hourly pay,� which is consistent with the higher minimum wage. respondents were given space to provide open-ended responses explaining the reason for the change in their payroll costs. table 5 displays the reasons cited by 72 respondents who reported their payroll costs increasing. some of these respondents provided multiple reasons in response to this question. thirty three percent of respondents (24/72) cited the new minimum wage law as a reason, and 17% (12/72) of respondents cited increase in employee compensation (not mentioning minimum wage) as a reason for their payroll costs increasing. table 4 components of payroll increase components of payroll increase count percentage change in hourly pay 50 69.4% change in number of workers 18 25.0% change in hours per worker 2 2.8% payroll costs have not changed in the past 6 months 1 1.4% no response 1 1.4% totalincrease payroll 72 100% table 5 reasons for payroll increase reasons for payroll increase count percentage minimum wage increase 24 33.3% increase in employee compensation 12 16.7% additional employees 10 13.9% other 9 12.5% no response 28 38.9% note: total number of reasons is greater than the number of respondents as respondents could provide multiple reasons for the payroll increase. tables 6 and 7 provide detail for businesses that reported decreases in their payrolls. table 6 shows that for 38% (3/8) of respondents who reported decreases in their payroll, �change in the number workers� was the chosen component. thus, a handful of firms reduced the number of workers after the minimum wage took effect. one respondent (out of 8) who reported a decrease in payroll cited laying off employees due to the minimum wage increase. table 6 components of payroll decrease components of payroll increase count percentage change in hourly pay 2 25.0% change in number of workers 3 37.5% change in hours per worker 1 12.5% payroll costs have not changed in the past 6 months 1 12.5% no response 1 12.5% total increase payroll 8 100% american journal of management vol. 17(1) 2017 63 table 7 reasons for payroll decrease reasons for payroll decrease count percentage reduced staff or cut hours 4 55.6% minimum wage increase 1 11.1% other 1 11.1% no response 2 22.2% changes in price fifty four percent (55/102) of respondents reported an increase in their prices since november with 32% reporting price increases of 5% or more. seven percent (7/102) reported decrease in prices and 39% (30/102) of respondents reported no changes in prices. table 8 summarizes these findings. by way of comparison, the san francisco area consumer price index increased by 2.6% during the year from august 2014 to august 2015 (consumer price index, san francisco area, 2015). businesses that increased their prices were asked an open-ended question about the reasons for the increase. of the 55 businesses with price increases 20% (11/55) cited the new minimum wage law in the comments as a reason. table 9 lists all of the reasons businesses gave for raising their prices. the total number of responses is greater than the number of respondents because some respondents provided multiple reasons for increasing their prices. forty four percent (24/55) of those who reported raising prices did not specify a reason. table 8 price comparison between november 2014 and july 2015 price comparison count percentage up more than 10% 12 11.8% up 5-10% 20 19.6% up 2-5% 10 9.8% up 0-2% 13 12.7% no change at all 40 39.2% down 0-2% 1 1.0% down 2-5% 2 2.0% down 5-10% 2 2.0% down more than 10% 2 2.0% total 102 100% table 9 reasons for price increase reasons for price increase ** count percentage minimum wage increase 11 20.0% increase in non-labor costs of business 11 20.0% keep up with going rate 7 12.7% rent 3 5.5% other 3 5.5% no response 24 43.6% note: total number of reasons is greater than the number of respondents as respondents could provide multiple reasons for the price increase. 64 american journal of management vol. 17(1) 2017 business environment anticipated future changes when asked if respondents expected to make changes in their prices, employment, or wages during the next six months, 59% (66/111) answered yes, and 40% (45/111) said no. respondents were asked to provide open-ended explanations of the anticipated future changes. of those who plan to make changes, 27% (18/66) expect to increase their prices. fifteen percent (10/66) reported plans to increase wages and 14% (9/66) plan to add more employees or increase hours. some respondents expect to make multiple changes in the future. table 10 summarize these results. table 10 explanation for expected changes in prices, employment, or wages in the next six months explanation if yes count percentage price increase 18 27.3% wage increase 10 15.2% more employees or added hours 9 13.6% reduced staff or cut hours 7 10.6% other 17 25.8% no response 11 16.7% note: total number of explanations is greater than the number of respondents as respondents could provide multiple explanations in their response. future move or expansion outside oakland forty seven percent (53/112) of respondents stated that they had considered either moving or expanding outside of oakland. the question did not distinguish between those who wanted to leave oakland and those who wanted to establish additional locations outside of oakland. of those who said yes (to either moving or expanding) 26% (14/53) indicated expansion in their open-ended comments as one reason for a possible future location outside of oakland. 15% (8/53) would consider moving due to the high cost of doing business. 11% (8/53) cited crime and 11% (8/53) believe oakland is not a business friendly city. four percent (2/53) of respondents cited the minimum wage increase as a reason for a potential move or expansion outside of oakland. some respondents provided multiple explanations for a possible move or expansion. table 11 displays these results. american journal of management vol. 17(1) 2017 65 table 11 explanation for considered move or expansion outside of oakland explanation if yes count percentage expansion 14 26.4% high cost of doing business 8 15.1% crime 6 11.3% oakland not business friendly 6 11.3% increasing wages 4 7.5% high rents 3 5.7% minimum wage increase 2 3.8% other 12 22.6% no response 14 26.4% note: total number of explanations is greater than the number of respondents as respondents could provide multiple explanations in their response. challenges facing oakland businesses respondents were asked to provide open-ended responses describing their biggest challenges. table 12 shows the results. need for a more business friendly city and crime and safety were cited as top challenges. marketing and advertising, employee recruitment, training and retention, high cost of doing business, and high rents were other top challenges. six percent (7/113) of respondents cited minimum wage as one of their biggest challenges. the total number of responses to this question exceeds the sample size of the survey as many participants cited more than one challenge in their answer. table 12 biggest challenges facing oakland businesses biggest challenges count percentage need for a more business friendly city 17 15.0% crime and safety 16 14.2% marketing and advertising 14 12.4% employee recruitment, training and retention 14 12.4% high cost of doing business 13 11.5% high rent 12 10.6% high taxes 10 8.8% homelessness 8 7.1% street façade, graffiti, trash and blight 8 7.1% increasing competition 7 6.2% minimum wage increase 7 6.2% inconsistent sales/ profits 5 4.4% oakland's poor reputation 5 4.4% parking 5 4.4% 66 american journal of management vol. 17(1) 2017 lack of access to capital 4 3.5% inconsistent pedestrian traffic 3 2.7% lack of business connections 3 2.7% other 10 8.8% no response 21 18.6% note: total number of challenges cited is greater than the number of respondents as respondents could reference multiple challenges in their response. findings regarding minimum wage (measure ff) after asking general questions about business conditions and city government services and support, respondents were asked specifically about the impact of measure ff on their businesses. changes made in response to minimum wage law forty five percent (47/105) of respondents answered yes when asked if they had made any changes as a result of the minimum wage hike. of the business that made changes due to measure ff, 45% (21/47) reported raising their prices, 26% (12/47) reduced their staff or hours of operation, 11% (5/47) added paid sick leave, 9% (4/47) adjusted their pay structure and 9% (4/47) changed their hiring and scheduling practices. the categories listed in the first column of table 13 are based on open-ended answers. some respondents reported more than one change as a result of the minimum wage hike. table 13 explanation for changes made in response to minimum wage law explanation if �yes� to making changes count percentage increased price 21 44.7% reduced staff or cut hours 12 25.5% added paid sick hours 5 10.6% adjusted pay structure 4 8.5% changed hiring and scheduling practices 4 8.5% changed tip scale 2 4.3% other 5 10.6% no response 5 10.6% note: total number of explanations is greater than the number of respondents as respondents could reference multiple explanations in their response. reactions to the minimum wage law recognizing that the minimum wage can be an emotionally charged issue, we asked respondents about their response to the minimum wage hike in addition to asking questions about how the minimum wage hike has affected their business decisions. a majority (53%, or 25/47) of those who indicated they had made changes in response to the minimum wage increase expressed a negative reaction to the law. some stated that the increase was significant and sudden, thus raising their costs significantly. others would have liked more engagement and discussion between city government and the business community. businesses expressed worry over customer reaction to raised prices and its effect on their profits. american journal of management vol. 17(1) 2017 67 thirty two percent (15/47) of respondents who made changes expressed a mixed response. respondents with mixed reactions expressed personal views that are aligned with higher wages for employees, however they also expressed great concern for the viability of their businesses. amongst those who said no to having made any changes in response to the law, 52% (30/58) expressed a positive reaction to the higher minimum wage requirement. these respondents expressed their approval of the change at a time of rising rents and living expenses in oakland. others expressed their own personal belief that employees should be earning higher than the old minimum wage. table 14 summarize these results. table 14 reported reactions to the minimum wage law �yes� to making changes count percentage �no� to making changes count percentage positive reaction 4 9% positive reaction 30 52% negative reaction 25 53% negative reaction 7 12% mixed reaction 15 32% mixed reaction 6 10% neutral 2 4% neutral 14 24% no response 1 2% no response 1 2% totalyes 47 100% totalno 58 100% findings by industry in this section, survey results for selected question are analyzed by industry. retail trade and food services are well represented in the sample of respondents as compared to other industries. as such these two industries are compared to all others, which are combined into one category called �other industries.� the �other industries� category includes manufacturing, arts entertainment & recreation, public administration, finance & insurance, administrative & waste management services, health & social services, educational services, information & communications and others. changes in payroll costs table 15 compares changes in payroll costs amongst food services, retail trade and other industries. businesses in the food services industry were most likely to experience an increase in payroll costs. eighty five percent (23/27) of food service respondents reported increases in their payroll costs between november 2014 and july 2015, as compared with 75% (18/24) of retail trade businesses. seventy percent (16/23) of respondents in the food services industry identified the minimum wage law as a reason their payroll had increased as compared with 22% (4/18) in retail trade and 13% (4/31) in other industries. table 15 changes in payroll costs by industry food services payroll changes count percentage retail trade payroll changes count percentage other industries payroll changes count percentage total up 23 85.2% total up 18 75.0% total up 31 59.6% total down 1 3.7% total down 1 4.2% total down 6 11.5% no change 3 11.1% no change 5 20.8% no change 15 28.8% total 27 100% total 24 100% total 52 100% 68 american journal of management vol. 17(1) 2017 changes in price table 16 compares price changes amongst the given three categories of industry. seventy eight percent (22/28) of respondents in the food services industry increased their prices as compared with 45% (25/56) in other industries and 35% (8/23) in retail trade. forty five percent (10/22) of those in the food industry cited the minimum wage increase as a reason for increasing prices, as compared to 4% (1/25) in the other industries category and none in the retail trade group. table 16 changes in payroll prices by industry food services price changes count percentage retail trade price changes count percentage other industries price changes count percentage total up 22 78.6% total up 8 34.8% total up 25 44.6% total down 3 10.7% total down 1 4.3% total down 3 5.4% no change 3 10.7% no change 14 60.9% no change 28 50.0% total 28 100% total 23 100% total 56 100% response to minimum wage law table 17 compares the number of businesses in the three given industry groups that reported making changes in response to measure ff. it is shown that businesses in the food services industry made the most changes in response to the minimum wage hike, specifically 74% (20/27) reported making a change as compared with 36% (20/55) in other industries and 30% (7/23) in retail trade. table 17 response to minimum wage law by industry food services made changes? count percentage retail trade made changes? count percentage other industries made changes? count percentage yes 20 74.1% yes 7 30.4% yes 20 36.4% no 7 25.9% no 16 69.6% no 35 63.6% total 27 100% total 23 100% total 55 100% findings on city government services and support contacted/ used city services in response to the minimum wage law twenty one percent (22/104) of respondents reported contacting the city or using city services (workshops, resources, customized business assistance) to respond to the new minimum wage requirements, while 79% (82/104) did not. 14 of the 22 participants who answered yes also gave explanations, which are listed in table 18. some of these respondents provided explanations with multiple parts within their individual answer. seven of the 82 respondents who did not contact or use city services expressed their belief that such services are not useful to businesses, while 4 reported not knowing about any services or points of contact. these results are shown in table 19. american journal of management vol. 17(1) 2017 69 table 18 explanation for contacting or using city services in response to the minimum wage law explanation if �yes� count percentage attended workshops 5 22.7% little or no information at first 2 9.1% used city website 2 9.1% contacted oakland business assistance center 2 9.1% talked to councilmember 1 4.5% got involved with community networks 1 4.5% got an answer to question via email 1 4.5% no response 10 45.5% note: total number of explanations is greater than the number of respondents as respondents could reference multiple explanations in their response. table 19 explanation for not contacting or using city services in response to the minimum wage law explanation if �no� count percentage city services are not useful to businesses 7 8.5% did not know of any services or who to contact 4 4.9% no need 3 3.7% no response 68 82.9% note: total number of explanations is greater than the number of respondents as respondents could reference multiple explanations in their response. ranking of government services respondents were asked to rank eight city services in order of importance. figure 2 shows these services and their corresponding score based on rankings of participants. scores are weighted based on number of respondents and ranking. if all respondents rate a particular service �most important� its score would be 8, whereas if all respondents rate a service �least important� its score would be 1. respondents ranked public safety and blight abatement as the most important city services. the range of scores for the different services is relatively narrow, with all services scoring between 3.4 and 5.9 on a scale of 1 to 8. while employee recruitment and training programs received the lowest score in terms of city services, employee recruitment and training was identified as a major challenge by respondents. a possible explanation for this inconsistency is that some respondents may not see government as the entity to address the challenge of recruiting and training employees. 70 american journal of management vol. 17(1) 2017 figure 2 ranking of government services scale of 1 = least important to 8 = most important ideas for support from the city respondents� ideas for support from the city of oakland are shown in table 20. a total of 137 ideas were recorded with many respondents providing multiple ideas. eleven percent (12/113) identified increased safety and police presence as ways the city could support businesses. seven percent (8/113) identified the need for more support from the city and 6% (7/113) asked for lower taxes and fees. parking was also identified as an area where the city could be more supportive with 5% (6/113) suggesting more short term parking meters, lowering parking tickets and increasing the availability of free parking in dense business areas. table 20 how city can help oakland businesses ideas count percentage make oakland more safe/ more police 12 10.6% more supportive of businesses 8 7.1% lower taxes and fees 7 6.2% parking 6 5.3% engage small businesses 4 3.5% street façade, graffiti, trash and blight 4 3.5% marketing and advertising 4 3.5% make business improvement districts more effective 4 3.5% effectively deal with homelessness 3 2.7% free buses or shuttles to shopping areas 2 1.8% other 36 31.9% no answer 47 41.6% note: total number of ideas for help from the city is greater than the number of respondents as respondents could reference multiple ideas in their response. 3.43 4.02 4.08 4.33 4.61 4.7 5.02 5.9 0 1 2 3 4 5 6 7 8 employee recruitment and training façade improvement grants business assistance/education programs referrals for financing information about local rules and regulations commercial corridor streetscape improvements blight abatement public safety american journal of management vol. 17(1) 2017 71 conclusions the survey results suggest that between november 2014 and july 2015, the period during which the higher minimum wage went into effect, many oakland businesses increased prices and experienced increased payroll costs. seventy percent of respondents reported increased payroll costs, and of those 69% were due to higher hourly pay. of the 8% of respondents who reported decreased payroll costs, 50% reported that their payroll costs had fallen due to a reduction in the number of employees or the number of hours. the minimum wage hike appears to have been a significant factor in driving these changes. when specifically asked whether they had made changes as a result of the minimum wage hike, 45% of respondents answered yes. these changes were particularly prevalent in the food services industry. our results provide no evidence of greater impacts in some neighborhoods than in others. at the same time, when oakland businesses were asked about the greatest challenges that they face, they cited other challenges more frequently than the city�s minimum wage. reflecting a general economic environment of dramatically increasing wealth and property values, nearly half of respondents (47%) have considered moving or expanding outside of oakland. appendix � text of survey this survey is being conducted to assess current and future conditions for businesses operating in oakland. all feedback is greatly valued and will be used to identify the main challenges facing business owners and inform city officials about the overall business environment in oakland. the results of this survey will guide the city�s efforts in supporting oakland businesses. 1. what is the name of your business/organization? 2. what is the street address of your business/ organization? 3. what zip code is your business/organization located in? please check all that apply. answer choices: 94601 94602 94603 94605 94606 94607 94608 94609 94610 94611 94612 94613 94618 94705 4. is your business/organization a nonprofit? answer choices: yes no 72 american journal of management vol. 17(1) 2017 5. please select the industry that best fits your business. if none of the categories apply, choose "other" and explain. answer choices: agriculture, forestry, fishing, hunting, and mining construction manufacturing wholesale trade retail trade transportation, warehousing, and utilities information and communications finance and insurance real estate and rental & leasing professional, scientific, and management administrative and waste management services educational services health and social services arts, entertainment, recreation accommodations food services public administration 6. how long have you been in business? answer choices: less than 1 year 1 to 3 years 3 to 5 years more than 5 years 7. how many workers do you currently employ (as of june 1, 2015)? answer choices: up to 10 10-20 20-50 50-100 100-300 300 or more 8. approximately how many of your current employees worked 35 hours or more a week? 9. how many workers did you employ on november 1, 2014? answer choices: up to 10 10-20 20-50 50-100 100-300 300 or more 10. approximately how many of these employees (november 1, 2014) worked 35 hours or more a week? american journal of management vol. 17(1) 2017 73 11. how does your current total payroll cost compare with the total payroll cost on november 1, 2014? answer choices: down more than 10% down 5-10% down 2-5% down 0-2% no change at all up 0-2% up 2-5% up 5-10% up more than 10% please explain: 12. if your payroll costs have changed since november 1, 2014 what are the reasons? answer choices: change in number of workers change in hours per worker change in hourly pay payroll costs have not changed in the past 6 months please explain: 13. if you have changed your prices since november 1, 2014, by how much? answer choices: down more than 10% down 5-10% down 2-5% down 0-2% no change at all up 0-2% up 2-5% up 5-10% up more than 10% please explain the reasons: 14. do you expect to make changes in your prices, employment, or wages during the next six months? answer choices: yes no if yes, describe what changes you expect to make: 15. have you considered moving or expanding your business/organization outside of oakland? answer choices: yes no please explain the reasons: 16. as a business owner in oakland, what do you see as your biggest challenge(s)? 74 american journal of management vol. 17(1) 2017 17. please rank the following city government services 1 to 8 in order of importance to your business: answer choices: blight abatement business assistance/education programs commercial corridor streetscape improvements (bike lanes, banners) employee recruitment and training programs façade improvement grants information about local rules and regulations affecting businesses public safety referrals for financing, i.e. small business loans 18. do you have any other ideas for how the city of oakland can help businesses such as yours? the minimum wage in oakland rose to $12.25 this year through a voter-approved initiative, which also included paid sick leave and service charge requirements. 19. when you found out that oakland was raising its minimum wage, what was your reaction? 20. have you made any changes to your business in response to the new minimum wage and benefits? answer choices: yes no please explain: 21. have you contacted the city of oakland or made use of any city services (workshops, resources, customized business assistance) to help your business respond to the new requirements? answer choices: yes no please explain: 22. may we contact you if we have any questions regarding your survey responses? answer choices: yes no if answered yes to question 22: 23. please enter your name: 24. what is the best number to contact you? 25. please enter your email address: oakland minimum wage resources: http://www2.oaklandnet.com/government/o/cityadministration/d/minimumwage/oak051451 minimum wage hotline (510) 238-6258, email minwageinfo@oaklandnet.com american journal of management vol. 17(1) 2017 75 references card, d. (1992). using regional variation in wages to measure the effects of the federal minimum wage. industrial and labor relations review, 46 (1), 22-37. card, d., & krueger, a. (1993, october ). minimum wages and employment: a case study of the fastfood industry in new jersey and pennsylvania. national bureau of economic research working paper, no. 4509. city of berkeley, housing and community services department. (2015). minimum wage ordinance (mwo). retrieved october 16, 2015, from http://www.ci.berkeley.ca.us/mwo/ city of oakland city administration. (2015). oakland's new employment law took effect march 2, 2015. retrieved october 16, 2015, from http://www2.oaklandnet.com/government/o/ cityadministration/d/minimumwage/oak051451 consumer price index, san francisco area. (2015, august). western information office. retrieved october 16, 2015, from u.s. bureau of labor statistics: http://www.bls.gov/regions/west/newsrelease/consumerpriceindex_sanfrancisco.htm county of los angeles. 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(1995, august). the effect of new jersey's minimum wage increase on fast-food employment: a re-evaluation using payroll. national bureau of economic research working paper, no. 5224. oakland home prices & values. (2016, july 31). zillow. retrieved september 10, 2016, from http://www.zillow.com/oakland-ca/home-values/ reich, m., jacobs, k., & bernhardt, a. (2014). the impact of oakland�s proposed city minimum wage law: a prospective study. berkeley: uc berkeley institute for research on labor and employment. san francisco home prices & values. (2016, july 31). zillow. retrieved september 10, 2016, from http://www.zillow.com/san-franciscoca/homevalues/,%20accessed%20september%204,%202016/ san francisco office of labor standards enforcement. (2015). minimum wage ordinance (mwo). retrieved october 16, 2015, from http://sfgsa.org/index.aspx?page=411 the seattle minimum wage study team. (2016). report on the impact of seattle�s minimum wage ordinance on wages, workers, jobs, and establishments through 2015. seattle: university of washington. external reviewers’ influence on citations of articles published in pedagogical business journals: holding acceptance rate constant arshad alam prairie view a&m university reginald l. bell prairie view a&m university an analysis of covariance with a 4 x 3 factorial design was used to compare the citation means of 560 articles published in 28 pedagogy journals. the independent variables were four business fields: accounting, economics and finance, general management, and marketing; three levels of external reviewers were used as the other independent variable. the dependent variable was the number of citations of articles. we found that the means differed on the main effects of four levels of business fields and three levels of external reviewers when acceptance rate was a covariate. the number of citations increase as the number of reviewers increases from one to two. introduction in recent decades, there has been a proliferation of journals in all business fields. this is both a reflection of the amount of research being conducted as also of the pressure on members of the academia to publish for tenure requirement. moreover, business schools are continually striving to find adequate ways to maintain their accreditation with the association for the advancement of collegiate schools of business (aacsb) by justifying faculty qualifications. scholarly academic qualified faculty must publish intellectual contributions pertinent to the mission of the school. in aacsb accredited business schools which have teaching missions as their primary focus there is increased pressure on the faculty to publish a portion of their research in pedagogical journals. this has in recent decades contributed to a growth in the number of pedagogical publications in different business fields. there is a good amount of literature that shows bias in the selection of articles business journals publish and that hierarchies exist based on carnegie classifications of institutions within top journals in various fields (bell & chong, 2010; chong & bell, 2012; oswald, 2008). expert opinions are an important indicator of how a business journal is perceived and ranked (mingers & harzig, 2007). stochastic models have shown the inevitable obsolescence and decline in the citation rate of an article over time (mingers & burrell, 2006). the key driver of articles’ citations can be the management journal itself (mingers & xu, 2010). submissions to good quality journals are always peer reviewed or refereed since peer review is expected to serve as a quality check (gorman, 2008). in other words it must be evaluated by an editor/an editorial panel or reviewed by a group of peers considered to be knowledgeable about the subject matter. 18 american journal of management vol. 16(3) 2016 weaknesses in the peer review system have been highlighted by many. external review may not be appropriate in cases for example where the study deals with something new for the reviewer may lack the necessary expertise (armstrong, 1997). furthermore, there may be a bias in editorial decision making which miller (2006, p. 426) describes as “dissensus.” when there is disagreement among the reviewers evaluating a paper the editor will adjudge the negative review as being more valid than a positive review, and this behavior might be at the center of the peer review problem. this is why the peer review process warrants further scrutiny in an attempt to balance tensions among authors, editors and referees (bedeian, 2004). it causes delay in an article’s publication and potentially injects bias in the selection process. reviewers do not necessarily agree with one another (cicchetti, 1991), and many of them spend less than adequate time and do not do quality reviews (armstrong, 1997). peters and ceci (1982) conducted a fraud study. they submitted 12 already published articles, nine of which were papers they sent to the same highly regarded journals which had previously published that same paper. the papers, however, included fictitious names and affiliations. the paper were rejected by eight editors on the basis of negative reviews from 16 of 18 reviewers (p. 188). despite the drawback of the review system the review system is an integral part of the acceptance process in all established journals and is in the interest of all partiesjournals, reviewers and authors (phaman, 2014). authors generally find the reviewers’ suggestions to be reasonable (macnealy, speck & clements, 1994) and it tends to improve quality through feedback; additionally, the competition to ensure acceptance by the reviewers motivates authors to produce their best work (shatz, 1996). as always in any research, the quality of articles published is of much greater importance than the number of articles published on any subject. article quality is however, a nebulous and a debatable issue and for which no metric has been developed. neither the journal in which it is published automatically guarantees quality nor does the quality of an article automatically ensures quality of a journal (chow et al, 2007, smith 2004). an article’s citations is an accepted measure of that article’s influence on the field since citations made by others is indicative of its influence on scholars in the field (podsakoff et al 2005). in his famous february 5, 1676 letter to robert hooke, isaac newton made famous the words, “if i have seen further it is by standing on the shoulders of giants”. citations also enable authors to acknowledge the contributions of others to their own scholarship (van noorden, 2010). while “celebrity” authors appear to influence the number of citations of articles published by top journals (bell, 2013; fei, chong, & bell, 2015; fei & bell, 2013) it would be absurd to argue that a paper cited 5,000 times over a 10-year period is not having an influence on the field. to the contrary, it would be more appropriate to argue that a paper with 5000 citations is groundbreaking, perhaps seminal to a field. recently, google scholar has started to indicate an article’s most recent citations, the author’s hindex. there is now broad support from the academic community for the h-index—an h-index of 5 means an author has 5 articles cited at least 5 times each; google scholar is an earnest alternative to other types of indexes that measures a journal’s impact (delgado-lópez-cózar & cabezas-clavijo, 2013; harzing, & van der wal, 2009). google scholar is now a good source of data for academic institutions to rely on when compiling information on faculty productivity (harzing, 2015; harzing, & van der wal, 2008; harzing, & van der wal, 2009). if the number of citations are being used as a proxy for the quality of a published article and its contribution to a field of study then it is worthwhile to explore the relationship that may exist between citations and other measures of a journal’s acceptance process. various factors have been identified by seglen (1997) as positively impacting citations that include: • articles in the english language; • generalist areas rather than specific applied disciplines; • review articles rather than original research; • cutting edge articles with a short lifespan; • longer rather than shorter articles; • and articles regarding established rather than emerging disciplines. american journal of management vol. 16(3) 2016 19 other studies have also identified factors affecting citations and though there are commonalities among them they tend to differ depending on the field of study. importantly, the probability of being cited may depend on factors, many of which may be difficult to incorporate in a study. it may depend, for example, on a ‘halo’ effect which suggests that well recognized authors are more likely to be cited because of their name recognition than other less well known authors (bell, 2013; peters & raan, 1994) and mediocre research receives much more attention when published in top journals (starbuck, 2005); the perceived quality of journal per se in which an article is published may also have a bearing on the likelihood of it being cited. being difficult to measure with any precision it is difficult to incorporate such factors in a study. furthermore, the inclusion of factors which cannot be measured with precision is likely to lead to misidentification of the individual effect of well-defined factors such as external reviews or acceptance rate, considering that most of the factors in citation studies are interrelated (peters & raan, 1994). such factors are hence not included in this study. the motivation of the study stems from the fact that, while there exists no theory of the editorial process, editors would surely like to maximize the impact of the articles published in their journals (laband & piette, 1994) and identification of factors affecting impact would clearly be relevant. testing the empirical data (the actual citations of articles across pedagogic business journals) is a better measure than the prevailing circular arguments which dominate the reasoning of many who assert that a top journal is a proxy for the quality of an article because it is published in that top journal, or vice versa (chow, haddad, singh & wu, 2007; smith, 2004). macdonald and kam (2008, p. 596) described the circular reasoning in journal (article) quality arguments the following way: once a journal is on one list of quality journals, it is fairly likely to appear on other lists of quality journals. it is a quality journal because it is on a list of quality journals. conversely, journals not on the lists are likely to remain excluded…one characteristic of quality journals in management studies is that authors from top business schools publish in them, but then, which are top business schools is often determined by publication in quality journals. research purpose specifically, this study analyzes data from business journals with a teaching focus, from different disciplines, to analyze the nature of relationships that may exist between citations and other variables of interest such as external reviews and acceptance rate, and to determine whether these relationships vary by discipline. the study was restricted to journals dedicated to pedagogy. consequently, many of the factors identified by others, such as generalist versus applied disciplines, are not relevant for our study. while there have been numerous citation studies in the last two decades thanks to availability of data, to the best of our knowledge there have been none so far devoted exclusively to pedagogical business journals. we must emphasize here that our study was not motivated to determine the quality of journal per se based on the number of citations of articles published in it but rather to see whether the process by which journals decide to accept or reject an article submitted for publication has any relationship on that article’s citation rate and whether these relationships differ by fields of study. data sources and descriptive statistics a total of 28 publications were considered for analysis. data was collected on nature of review i.e. review code (blind peer, double blind peer or editorial), field (accounting, economics, management and marketing), acceptance rate (as self-reported by journals), number of external reviews (one, two and three or more reviewers) and the number of citations (google data) for the period 1989 to 2010. the publication period was categorized in three categories: published in 1989 or before, 1990 to 1999 and 2000 and later. table 1 provides a list of the publications with relevant citation statistics. figure1 provides the list of journals and mean of citations by business field. 20 american journal of management vol. 16(3) 2016 table 1 list of pedagogy journals and citations ranked by means with standard deviations citations journal title mean n std. deviation % of total sum academy of management learning & education 374.450 20 422.3069 24.0% economics of education review 352.300 20 137.3433 22.6% issues in accounting education 201.450 20 632.9288 12.9% journal of management education 136.400 20 77.3750 8.8% journal of marketing education 110.150 20 17.9569 7.1% journal of accounting education 93.550 20 39.9124 6.0% journal of marketing for higher education 53.050 20 26.3348 3.4% journal of economic education, the 47.800 20 22.8924 3.1% marketing education review 31.800 20 15.8500 2.0% accounting education: an international journal 30.600 20 9.2872 2.0% journal of hospitality & tourism education 19.300 20 17.5202 1.2% journal of financial education 16.750 20 12.8468 1.1% journal of leadership education 12.000 20 11.2156 0.8% advances in accounting education 11.100 20 4.3878 0.7% academy of educational leadership journal 10.500 20 4.4069 0.7% journal of entrepreneurship education 9.900 20 9.7165 0.6% journal of strategic management education 7.750 20 11.5707 0.5% global perspectives on accounting education 7.250 20 7.4189 0.5% journal of business ethics education 6.400 20 6.3528 0.4% journal of legal studies education 6.400 20 9.5057 0.4% journal for advancement of marketing education 3.550 20 3.2683 0.2% australasian journal of economics education 3.500 20 4.6848 0.2% journal of economics and finance education 3.250 20 4.4233 0.2% journal of economics and economic education research 2.500 20 5.2666 0.2% advances in financial education 1.950 20 2.0384 0.1% international journal of pluralism and economics education 1.900 20 3.1103 0.1% journal of human resources education 1.250 20 3.5522 0.1% operations management education review 1.100 20 3.1271 0.1% total 55.639 560 173.7875 100.0% american journal of management vol. 16(3) 2016 21 figure 1 pedagogy journals in business fields with means accounting journals (mean = 65.008) accounting education: an international journal advances in accounting education global perspectives on accounting education issues in accounting education journal of accounting education economics and finance journals (mean =56.777) advances in financial education australasian journal of economics education economics of education review international journal of pluralism and economics education journal of economic education, the journal of economics and economic education research journal of economics and finance education journal of financial education general management journals (mean = 71.797) academy of educational leadership journal academy of management learning & education journal of business ethics education journal of entrepreneurship education journal of human resources education journal of legal studies education journal of management education journal of strategic management education operations management education review marketing journals (mean = 12.133) journal for advancement of marketing education journal of hospitality & tourism education journal of leadership education journal of marketing education journal of marketing for higher education marketing education review table 2 provides frequency data relating to type of review policy, number of external reviewers and the respective fields of study. table 2 type of review policy, number of external reviewers and the respective fields of study frequency percent cumulative percent review policy blind 480 85.7 85.7 blind peer 20 3.6 89.3 double blind peer 60 10.7 100.0 total 560 100.0 external reviewers one 80 14.3 14.3 two 260 46.4 60.7 three or more 220 39.3 100.0 total 560 100.0 field accounting 100 17.9 17.9 economics and finance 160 28.6 46.4 management 200 35.7 82.1 marketing 100 17.9 100.0 total 560 100.0 pedagogy journals in business fields 22 american journal of management vol. 16(3) 2016 hypotheses and data analysis the cross tab analysis of external reviews and field (table 3) indicates a significant difference between the count and expected count values which suggests a lack of independence between the two variables. table 3 external reviewers * field cross-tabulation fields t ot al a cc ou nt in g fi na nc e & e co no m ic s m an ag em en t m ar ke tin g external reviewers one count 0 40 20 20 80 expected count 14.3 22.9 28.6 14.3 80.0 % within external reviewers 0.0% 50.0% 25.0% 25.0% 100.0% % of total 0.0% 7.1% 3.6% 3.6% 14.3% two count 60 80 80 40 260 expected count 46.4 74.3 92.9 46.4 260.0 % within external reviewers 23.1% 30.8% 30.8% 15.4% 100.0% % of total 10.7% 14.3% 14.3% 7.1% 46.4% three or more count 40 40 100 40 220 expected count 39.3 62.9 78.6 39.3 220.0 % within external reviewers 18.2% 18.2% 45.5% 18.2% 100.0% % of total 7.1% 7.1% 17.9% 7.1% 39.3% total count 100 160 200 100 560 expected count 100.0 160.0 200.0 100.0 560.0 % within external reviewers 17.9% 28.6% 35.7% 17.9% 100.0% % of total 17.9% 28.6% 35.7% 17.9% 100.0% to test for the independence of external reviews and field we propose the following hypothesis. h1: external reviews and field are not independent. the appropriate test to examine for significant association between two categorical variables from a single population is the chi square test. applying the chi square test for independence to the data resulted in a p-value of 0.0 (table 4) which indicates that the number of external reviews is not independent of the field or discipline i.e. the two variables are related. the relative frequency differs mostly between finance and economics (expected count 22.9, observed count 40) and management journals (expected count 78.6, observed count 100). american journal of management vol. 16(3) 2016 23 table 4 chi-square tests value df asymp. sig. (2-sided) pearson chi-square 53.259a 6 0.000 likelihood ratio 65.778 6 0.000 linear-by-linear association 0.098 1 0.755 n of valid cases 560 a. 0 cells (0.0%) have expected count less than 5. the minimum expected count is 14.29. finance and economics journals account for 50% of the four fields using only one reviewer, as opposed to management journals which accounts for 45.5% of the four business fields that use three or more reviewers in the review process. what is more, notice in figure 2, that the mean citations for management journals (71.797) is larger than the mean citations for finance and economics journals (56.777). this is an important indication that the number of reviewers in the review process merits further investigation. figure 2 mean citations for pedagogy articles by business field we next propose that period and field are not independent. h2: period and field are not independent. results of the cross tab analysis (table 5) and of the chi square test (table 6) once again confirms the hypothesis and we conclude that the variables are related. the pearson chi square test is significant, 24 american journal of management vol. 16(3) 2016 with p-value of 0. the relative frequency differs mostly between accounting journal (expected count 23.6, observed count 37), finance and economics journals (expected count 37.7, observed count 45) and management journals (expected count 152.9, observed count 172). therefore, accounting journals account for 28%, econ and finance journals account for 34.1% of articles published 1999 and before, respectively, among the four business fields. on the other hand, management journals account for 40.2% of the articles published 2000 or after, among all four business fields. this is an indication that the accounting and finance journals are older than management journals, and that these fields have had a pedagogic journals longer than the management field. table 5 period * field cross-tabulation field t ot al a cc ou nt in g fi na nc e & e co no m ic s m an ag em en t m ar ke tin g period 1999 and before count 37 45 28 22 132 expected count 23.6 37.7 47.1 23.6 132.0 % within period 28.0% 34.1% 21.2% 16.7% 100.0% % of total 6.6% 8.0% 5.0% 3.9% 23.6% 2000 and after count 63 115 172 78 428 expected count 76.4 122.3 152.9 76.4 428.0 % within period 14.7% 26.9% 40.2% 18.2% 100.0% % of total 11.3% 20.5% 30.7% 13.9% 76.4% total count 100 160 200 100 560 expected count 100.0 160.0 200.0 100.0 560.0 % within period 17.9% 28.6% 35.7% 17.9% 100.0% % of total 17.9% 28.6% 35.7% 17.9% 100.0% table 6 chi-square tests value df asymp. sig (2-sided) pearson chi-square 22.159a 3 0.000 likelihood ratio 22.340 3 0.000 linear-by-linear association 13.105 1 0.000 n of valid cases 560 a. 0 cells (0.0%) have expected count less than 5. the minimum expected count is 23.57. a priori, we believe acceptance rate is linked to the quality of the published articles. the acceptance rate of a journal is suggestive of how stringent is the review process of the journal. a lower acceptance rate, indicating a rigorous quality check, is likely to lead to better quality articles which in turn would result in higher citations. we thus propose the following hypothesis. h3: acceptance rate and number of citations are negatively related. tables 7 and 8 present the results of the anova analysis which indicates that acceptance rate indeed has a negative effect on number of citations and is significant at 1 % level. american journal of management vol. 16(3) 2016 25 table 7 anovaa model sum of squares df mean square f sig. 1 regression 917877.877 1 917877.877 32.081 0.000b residual 15965097.259 558 28611.285 total 16882975.136 559 a. dependent variable: citations b. predictors: (constant), acceptance rate table 8 coefficientsa model unstandardized coefficients standardized coefficients t sig. b std. error beta 1 (constant) 141.248 16.719 8.448 0.000 acceptance rate -337.612 59.607 -.233 -5.664 0.000 a. dependent variable: citations data on number of citations by field is reported in the table 9 below followed by the non-significant levene’s test (> .05) for homogeneity of variances (table 10). table 9 citations by field n mean std. deviation std. error 95% confidence interval for mean lower bound accounting 100 68.790 287.4550 28.7455 11.753 economics and finance 160 53.744 124.0124 9.8040 34.381 management 200 56.615 174.4700 12.3369 32.287 marketing 100 43.570 41.0900 4.1090 35.417 total 560 55.639 173.7875 7.3439 41.214 model fixed effects 174.0873 7.3565 41.189 random effects 7.3565a 32.228a a. warning: between-component variance is negative. it was replaced by 0.0 in computing this random effects measure. table 10 test of homogeneity of variances levene statistic df1 df2 sig. 2.116 3 556 0.097 the groups are independent based on the non-significant levene’s test, p-value of 0.097. do the number of citations differ among fields? considering that the study is limited to pedagogical journals of different field, we do not expect to see a significant difference in the number of citations by field. we therefore propose the following hypothesis. 26 american journal of management vol. 16(3) 2016 h4: number of citations do not differ by field. the anova results (table 11) indicates the differences between groups i.e. the different fields is not significant, p-value of 0.783. post hoc test results corroborate the anova findings where none of the group differences are significant. however, when we control for acceptance rate as a covariate then both field and acceptance rate turn out to be significant at the 5 % level (table 12). the result that citations differ by field (discipline) once we control for other influencing variables would suggest that comparisons of citations across fields for purposes of evaluation of intellectual contribution of authors is inappropriate. table 11 anova sum of squares df mean square f sig. between groups 32626.187 3 10875.396 0.359 0.783 within groups 16850348.949 556 30306.383 total 16882975.136 559 table 12 tests of between-subjects effects dependent variable: citations source type iii sum of squares df mean square f sig. partial eta squared corrected model 1141765.004a 4 285441.251 10.064 0.000 0.068 intercept 2242443.913 1 2242443.913 79.064 0.000 0.125 acceptance rate 1109138.817 1 1109138.817 39.106 0.000 0.066 field 223887.127 3 74629.042 2.631 0.049 0.014 error 15741210.131 555 28362.541 total 18616584.000 560 corrected total 16882975.136 559 a. r squared = .068 (adjusted r squared = .061) next, we control for the covariate acceptance rate and estimate the marginal means which are reported in table 13. table 13 estimates dependent variable: citations field mean std. error 95% confidence interval lower bound upper bound accounting 65.008a 16.852 31.907 98.110 economics & finance 56.777a 13.323 30.608 82.947 management 71.797a 12.153 47.925 95.670 marketing 12.133a 17.575 -22.390 46.655 a. covariates appearing in the model are evaluated at the following values: acceptance rate = .2536. american journal of management vol. 16(3) 2016 27 further, pairwise comparisons of the mean differences indicate that differences in fields: marketing field differs from all the fields, but none of the other field differ from each other (table 14). the f result of the univariate test also confirms this (table 15). thus, differences exists only with reference to the marketing discipline (group 4); differences among the other groups, namely accounting, accounting & finance, and management are not significant. table 14 pairwise comparisons dependent variable: citations (i) field (j) field mean difference (i-j) std. error sig.b 95% confidence interval for differenceb lower bound upper bound accounting econ/finance 8.231 21.496 0.702 -33.992 50.455 management -6.789 20.848 0.745 -47.739 34.161 marketing 52.876* 24.224 0.029 5.294 100.458 economics & finance accounting -8.231 21.496 0.702 -50.455 33.992 management -15.020 17.968 0.404 -50.314 20.274 marketing 44.645* 22.165 0.044 1.108 88.182 management accounting 6.789 20.848 0.745 -34.161 47.739 econ/finance 15.020 17.968 0.404 -20.274 50.314 marketing 59.665* 21.932 0.007 16.585 102.745 marketing accounting -52.876* 24.224 0.029 -100.458 -5.294 econ/finance -44.645* 22.165 0.044 -88.182 -1.108 management -59.665* 21.932 0.007 -102.745 -16.585 based on estimated marginal means *. the mean difference is significant at the .05 level. b. adjustment for multiple comparisons: least significant difference (equivalent to no adjustments). table 15 univariate tests dependent variable: citations sum of squares df mean square f sig. partial eta squared contrast 223887.127 3 74629.042 2.631 0.049 0.014 error 15741210.131 555 28362.541 the f tests the effect of field. this test is based on the linearly independent pairwise comparisons among the estimated marginal means. we next examine whether the number of citations differ by the number of external reviews. as mentioned in the previous section external reviewers add value to the quality of the article by providing critical feedback to the authors. in the selection of the articles, editors depend on the advice of the external reviewers (coronel & opthof, 1999). a priori we believe therefore that greater number of reviews would positively impact the quality of the published article and hence the number of citations. we propose therefore the following hypothesis. h5: number of external reviews positively affects the number of citations. tables 16 through 18 present the results of the analysis which indicate that the differences in citations based on the number of reviewers are significant. 28 american journal of management vol. 16(3) 2016 table 16 estimates dependent variable: citations external reviewers mean std. error 95% confidence interval lower bound upper bound one 9.775 19.335 -28.203 47.753 two 56.146 10.725 35.080 77.212 three or more 71.718 11.659 48.817 94.620 table 17 pairwise comparisons dependent variable: citations (i) external reviewers (j) external reviewers mean difference (i-j) std. error sig.b 95% confidence interval for differenceb lower bound upper bound one two -46.371* 22.110 0.036 -89.800 -2.942 three or more -61.943* 22.578 0.006 -106.292 -17.595 two one 46.371* 22.110 0.036 2.942 89.800 three or more -15.572 15.842 0.326 -46.689 15.545 three or more one 61.943* 22.578 0.006 17.595 106.292 two 15.572 15.842 0.326 -15.545 46.689 based on estimated marginal means *. the mean difference is significant at the .05 level. b. adjustment for multiple comparisons: least significant difference (equivalent to no adjustments). table 18 univariate tests dependent variable: citations sum of squares df mean square f sig. partial eta squared contrast 225226.212 2 112613.106 3.766 0.024 0.013 error 16657748.923 557 29906.192 the f tests the effect of external reviewers. this test is based on the linearly independent pairwise comparisons among the estimated marginal means. further, pairwise comparisons (table 17) suggest that the difference between number of citations from one reviewer process and that from two and three or more reviewer processes is significant; the difference in citations between a two reviewer and three or more reviewer process is however, not significant for pedagogic business journals. it appears that two external reviews serves as a threshold value. having more than two external reviews does not add to the number of citations but having less than two has a bearing on number of citations. carrying the analysis further we add acceptance rate as a covariate i.e., we wished to see if external review is significant after removing the effect of acceptance rate. the results are given in table 19. number of external reviews turns out to be significant when acceptance rate is used as covariate. this suggests that both these factors uniquely affect the citation rate. american journal of management vol. 16(3) 2016 29 table 19 tests of between-subjects effects source type iii sum of squares df mean square f sig. partial eta squared observed powerb corrected model 1135458.380a 3 378486.127 13.363 0.000 0.067 1.000 intercept 1661798.535 1 1661798.535 58.673 0.000 0.095 1.000 acceptance rate 910232.168 1 910232.168 32.138 0.000 0.055 1.000 external reviewers 217580.503 2 108790.251 3.841 0.022 0.014 .696 error 15747516.756 556 28322.872 observed powerb total 18616584.000 560 1.000 corrected total 16882975.136 559 a. r squared = 0.067 (adjusted r squared = 0.062) b. computed using alpha = 0.05; dependent variable: citations figure 3 presents the plot of the estimated marginal means of citations against the external reviews with acceptance rate as a covariate. it is clearly evident that increasing the external reviews from one to two clearly increases the number of citations while the increase in citations resulting from an increase of external reviews from two to three is marginal and not significant (refer to aforementioned table 17). figure 3 mean citations for pedagogy articles by external reviewers 30 american journal of management vol. 16(3) 2016 discussion citations per se do not represent the “truth embodied in an article or author” but is a measure of the ability of the article to influence the scholarship in the field (johnson, 1997). there is a difference, however, between excellence and influence and the relationship between the two is uncertain (beed & beed, 1996). further, it is plausible, that other authors may have cited an article only to criticize its arguments (ayres & vars, 2000). citations can thus never be projected as an overall objective measure of quality. nevertheless, to the extent that citation count is a measure of quality, it has become the most common proxy for quality. the aim of the study was to determine if there were meaningful differences among the citations of published articles in pedagogical business journals. while numerous factors may have a bearing on the likelihood of an article being cited, this study was limited to analyzing the impact of a few factors, namely, the period of its publication, the field or discipline of study, acceptance rate, and number of external reviews. to summarize, we found that number of external reviews is not independent of the field or discipline i.e., the discipline has a bearing on the number of external reviews. in other words, some disciplines tend to employ more number of reviews. the number of citations, however, does not differ by field when no other factors are taken into consideration. this is as expected and hypothesized since the study is limited to journals of pedagogy. we may make a conjecture here that this finding may not hold true if all journals, and not only pedagogical journals, are considered. interestingly, when we control for acceptance rate as a covariate then both the field (marketing differs from the other fields) and acceptance rate turn out to be significant at the 5 % level. the inference is clear-comparisons of citations across fields are inappropriate. acceptance rate by itself has an effect on number of citations and is significant at 1 % level. this is only to be accepted since a lower acceptance rate implies a more demanding approval process leading to higher quality of articles being published and a resultant increase in citations. more important however, is the finding with respect to the number of external reviews which has practical implications for journal editors. as the pressure to publish increases, editors are faced with ever increasing submissions. would adding more reviewers lead to better article quality and higher citations of published articles? editors are however, also under time constraint and more reviews would likely delay the approval process. as hypothesized, number of external reviews has a significant effect on citations when acceptance rate is held constant. however, pairwise comparisons suggest that more than two external reviews does not add to the number of citations but having less than two has a bearing on number of citations. review by two peers thus, seems to be sufficient to ensure ‘quality’ (as judged by citations) of published articles. it is clear therefore, that the pedagogic journals in all the business fields would prosper from a two-reviewer review process rather than using just one reviewer. in others words, “two heads are better than one.” limitations a possible limitation of the study is that an article’s citations may vary for a variety of reasons. citation density, i.e., the average number of references cited per article, is likely to vary significantly across disciplines. some disciplines by the very nature of their field lend themselves to more citations than others. additionally, if the existing pool of articles is larger in a particular field it can also lead to more citations. future researchers conducting similar studies may try to take this into account by normalizing the data as suggested by garfield (1999). this may not be a serious limitation to our study however, since our dataset is restricted to pedagogical journals. another potential limitation is the implicit assumption of all studies trying to study the impact of external reviews on citations is that the review is objective. but the review process can never be considered fully objective. inspite of the blind process, bias may be injected by a reviewer being able to identify the author (laband & piette, 1994). there may be other unintended biases (stanley, 2007) and to that extent the validity of any findings are affected. finally, it bears noting that no review process can american journal of management vol. 16(3) 2016 31 ensure quality. as pointed out by (shugan, 2007) many great discoveries were initially rejected and the review process did not safeguard against faulty research being published. references armstrong, j. s. 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(2010). metrics: a profusion of measures. nature, 465, 864-866. retrieved from http://www.nature.com/news/2010/100616/full/465864a.html american journal of management vol. 16(3) 2016 33 java plus coffee: a case study in economic sustainability in a non-profit organization george dierberger augsburg college marc mcintosh augsburg college nancy johnson augsburg college java plus is a non-profit case study focusing on the coffee industry. the case deals with business strategy, multiple distribution channels, financial analysis, break-even analysis, operational, sourcing challenges and inventory rationalization. the profits of the company are used to help inner city youth gain experience in business and find a vocation that would support their dreams and aspirations. synopsis the coffee industry is a $100 billion dollar industry. after crude oil, coffee is the second most traded commodity in the world (thurston, 2013). coffee is grown in over 50 countries in asia, africa, south america, central america and the caribbean with 67% of the world's coffee grown in the americas. on a worldwide basis consumers drink annually over 500 billion cups of coffee. arabica and robusto are the two main commercially grown and sold coffee beans. arabica is the more common type of bean grown (70 percent of coffee is arabica), and it's considered more flavorful. robusta is hardier and cheaper, and is most commonly found in instant coffee jars (goldschein, 2011). in response to the increased attention on working conditions for farmers, a new initiative called “fair trade” coffee was instituted to provide growers with better conditions and a higher profit margin (goldschein, 2011). under “fair trade” rules, the coffee importer has a direct relationship with the grower, and pays additional compensation to maintain that relationship. companies such as starbucks, caribou, dunkin' donuts and mcdonald's all carry fair trade coffee. java plus is a non-profit regional coffee business located in minneapolis, minnesota. the company’s mission is to sell premium arabica coffee and other beverages to support programs for inner city youth. the company was founded in 2010 as a means of producing a consistent revenue source to help fund social enterprise programs. java plus employs urban youth, providing many people with their first work experience with the goal of working towards ending the cycle of generational poverty in minneapolis, minnesota. java plus has recently been experiencing financial losses (exhibit 3) impacting the organization’s ability to support youth programs and events. the business needs assistance with a formal business american journal of management vol. 16(4) 2016 65 analysis along with recommendations for improvements. the struggle to generate positive income with the coffee business is perceived to be due to a number of factors: 1) the coffee business is extremely competitive with major brand names such as starbucks and caribou with retail store locations. in addition, they sell their arabica coffee beans in national retailers like target and wal-mart. 2) coffee is being impacted by global warming which could have a negative impact on production and supply, resulting in coffee price fluctuation due to poor weather. 3) java plus has significant challenges selling to large retailers such as target, supervalue, cub foods and local grocery stores. 4) operationally, there are a limited number of local quality roasters available with packaging options for large retailers. this is a constraint for java plus as they look at alternative companies that can roast the arabica coffee beans and provide packaging in quantities significant for the retail channel. 5) the finest coffee beans are arabica beans; the taste and consistency are a higher quality and also more expensive to purchase thus resulting in lower gross margin. arabica beans are the benchmark required to compete against the major brands (thurston, 2013). 6) there are inventory issues pertaining to the significant number of stock keeping units (skus) required to compete based on flavor, and packaging size in the retail market. java recently introduced the new k-cups for the keurig coffee dispensers. learning objectives 1) demonstrate an understanding of the process and operational challenges of the coffee industry. 2) demonstrate a methodology for understanding java plus’s channel strategies by determining the best way for java plus to remain competitive in the coffee business. 3) perform financial analysis of the three channels. this includes horizontal, vertical and margin calculations and analysis business channel. 4) perform an inventory analysis and recommend the stock keeping units (skus) to be offered in units and dollars for the retail market. 5) draw meaningful conclusions and make final recommendations. company structure the board of directors consists of 7 members: five members are from the business community and the remaining two are from the non-profit world. the board is very aggressive and committed to the current distribution channels (corporate, religious and retail market) because they believe the java plus brand will benefit from the exposure in all three areas. aboard member was instrumental in getting the product into target and cub foods and is convinced the retail channel is critical to sustainability. each board member is very supportive and dedicated to the mission. another board member, who works at a fortune 500 company, has even supported java plus by providing free creative marketing services for packaging and other marketing materials. the board is very dedicated and wants to see java plus succeed in the market place. in addition to the part-time youth employed, there are 5 full-time employees: a managing director, internet coordinator, sales representative, marketing coordinator and an office manager. they currently rent a small, 1000 square foot office in downtown minneapolis. java plus outsources the manufacturing and distribution process. current situation analysis for the fiscal year ended 2015, java plus experienced a financial loss of $239,000 on revenues of $1,054,348. in fiscal year 2016, they experienced a financial loss of approximately $15,289 on revenue of $1,071,806 (exhibit 3) resulting in an inability to contribute financial support to the youth programs and 66 american journal of management vol. 16(4) 2016 events. as mentioned previously, java plus sells products through three main channels of distribution: major retail stores, corporate accounts and religious groups. the following synopsis provides details for each channel. retail channel the retail market consists of fortune 500 companies such as target, cub foods, supervalu, and smaller regional grocery chains including kowalski’s, byerlys and lunds. the retailers currently sell major brands in their coffee aisles including starbucks, caribou, dunking donuts and peace coffee. in this market, inventory is referred to as a stock keeping unit (sku) and analyzed on the turnover (sell through) of each unit. the majority of the java plus skus at the retail level include bags of coffee and newly introduced k-cups. the typical retail price for the competitors is $ 7.95 for a 12 ounce bag of coffee; java plus sells the same 12 ounce bag for $8.95. the new k-cups for keurig have only been sold to the retail channel. the competitive brands roast their own coffee and are fully integrated with control over roasting, packaging and distribution. java outsources the roasting process and is therefore subject to other constraints in the manufacturing processes: higher processing costs, quantity and size of roasting runs, timing dependencies at the roaster, competitive product being manufactured and packaging supplies. recently, target and cub foods have communicated their disappointment with the sku turnover of individual packages and k-cups which are currently less than one pack per store per week. the standard sku turnover rate for the coffee category is 7-10 units per store per week and at lower retail prices. the java plus retail price point was 10-15% higher than the major brands due to a higher cost of goods sold (cogs) price from the local roasting outsourced partner. in retail, mark-down money is used by the retailer to offer a “special price” to the shopper. in the coffee category, a normal mark-down would be a $1 dollar per bag which helps match the major brands at $7.95 for a 12 ounce bag. when the java plus brand is on mark-down, the skus increase but still fall short of the required turnover required by the retail partners. when products are marked down, the money is charged back to java plus and netted against revenue having a negative impact on gross margin and profitability (exhibit 3, total discounts). coffee product gross margin requirements for companies in the retail channel range from 35% to 40% as such, price adjustments have not been an option for java plus. another challenge is obsolescence of product. due to the disappointing inventory turnover, the product was consistently getting close to or exceeding its expiration date which negatively impacted the taste of the product. the end result was a higher priced product, with a poor consumer tasting experience; not a winning formula at retail. the highly competitive coffee market makes it challenging to hold market share in the retail sector due to the number of national brands that have established consumer loyalty. java plus and its board believe in the retail market due to its consumer exposure for the brand and the mission of the organization. the board believes that the retail marketplace represents the greatest potential revenue and can greatly assist in creating economies of scale with the other channels that have lower revenue streams. the retail market also is perceived to have the opportunity to reach the largest audience. the retail channel positions the brand in front of the consumer through accounts that are already established. with retail stores being so highly competitive and saturated with coffee brand options, this marketplace unfortunately represents lower gross margins when compared to other channels of distribution. this is a combination of meeting retailer requirements, along with the higher cost of goods sold for the smaller packages. in addition, contributing to the profitability issues in the retail marketplace is the amount of staff time required for managing these retail accounts. the retail group consumes a large amount of staff time and is not meeting the demanding retail unit turnover requirements for the coffee category. religious channel there are several mega church groups in the twin cities area of minneapolis and st. paul (twin cities) which purchase coffee from java plus for member meetings and services. they prefer to buy in american journal of management vol. 16(4) 2016 67 bulk packages of 5 pound bags and 8 ounce portion packs designed for large coffee urns. they also sell hot chocolate mix, miscellaneous items (styrofoam cups, stir sticks, napkins and brand merchandise). the board of directors believes the religious organizations represent a significant opportunity to expand the reach of the java plus’s core mission outside of the twin cities market. the relationships have been beneficial to the organization and its brand image. some of the church groups have 5,000 or more members in their congregations and have become large customers for java plus. thus the religious accounts are an identified market opportunity that can reach a potentially large, influential consumer population. the overall revenues java plus realizes from this channel continue to increase, with very little promotional effort, as there is no required use of markdown dollars to provide incentives to purchase. thus historically the religious organizations have offered higher gross margins than the retail channel (exhibit 3). in summary, the religious accounts provide an environment that is easier to do business with as it is not as competitive and saturated as the retail environment. there is more emphasis placed on relationships and mission than in the other distribution channels. it should be noted, that there may be a small sales risk in selling to religious organization due to the number of days that the organization would have a need for coffee and related products. corporate channel in the twin cities, there are several large fortune 500 corporations that purchase coffee from java plus for their cafeterias and coffee shops including best buy and general mills. historically the corporate channel has been a very loyal group of customers who, like the religious channel, are extremely supportive of the mission, the brand, and its cause. the board of directors believes the corporate accounts represent a significant opportunity to expand into other organizations and potentially offer a small scale retail environment within the existing main campus buildings. this channel could be a growth opportunity for java plus as they look to expand to 3m, delta airlines, medtronic, boston scientific, st. jude medical, local, state government and others. the corporate accounts will also positively impact customers and expose them to the java plus brand. the java plus sales staff is dedicated to nurturing these relationships given the competitive nature of the coffee industry. the risk is that employees of the corporations may potentially request a different brand or brands be sold based on support of the corporate mission or they may prefer specific big coffee brands based on taste requirements. the corporate sales channel reflects lower cost of goods with the product being sold in five pound bulk, eight ounce pre-portion bags for large coffee urns. they also sell hot chocolate mix, and miscellaneous items (ie styrofoam cups, stir sticks, napkins and brand merchandise). the larger portion sku’s result in more favorable gross margins (exhibit 3). this sales channel requires more initial relationship development and sales efforts to establish the accounts, but over time this amount is significantly decreased due to customer loyalty. financial analysis java plus is classified as a 503c non-profit organization for tax purposes. there has been turnover in the accounting and finance functions and the current controller has corporate but not non-profit financial acumen. internally the interim financials are organized as modified profit and loss and statement of financial position to allow for detailed financial analysis (exhibit 3 & 4). in the most recent year 2016, java plus had over 140 customers and total revenues of $1,071,806. once discounts from promotions, damaged, and expired product and cost of goods sold are deducted, java plus’s gross profit of $358,437 was not enough to cover their $367,500 in fixed costs, leaving them with a net loss of $15,289. java plus’s has three separate channels: corporate, religious organizations, and a retail category. analysis has not been perform to determine which of the channels (corporate, religious, retail) have a higher contribution margin. all business financial activities pertaining to revenue and cost of goods sold are tracked by division (corporate, religious and retail), and all shared expenses are combined into selling and administrative 68 american journal of management vol. 16(4) 2016 (sg&a). cost of goods sold includes product and roasting costs. sg&a includes wages salaries, marketing, interest on debt, etc. all net profits are defined as revenues less cost of goods sold less sg&a, and are donated to the youth organizations discussed previously thus resulting in a net income or loss of zero. for the past two years, java plus has realized negative net profits and thus has not been able to support the organization financially. the statement of financial position (exhibit 4) reflects the current net asset position of the organization. java plus admittedly has issues with is operating processes struggling to collect on receivables, creating cash flow issues currently impacting the ability to pay the accrued donations to the sponsored organization. inventory continues to increase as well, at times in relation to the sequencing and batch size requirements placed upon java plus at the outsourcing roasting partner. these issues have resulted in a reduced ability to stay current on payables, however the organization is current on its short and long term debt. as a non-profit there are no retained earnings or stock components. competitive analysis the four major local competitors to java plus in the retail and wholesale marketplace include: caribou coffee, equal exchange, stillwater coffee, and peace coffee. the four competitors were taken into consideration based on their location, venues of sales, and their mission statements. starbucks was not considered a local competitor given their global reach and their seattle based headquarter location. caribou coffee is a midwest based company now owned by jab holdings which also owns einsteins bagels and peet’s coffee. they have a strong presence in retail with over 273 company owned stores and 127 licensed coffee shops locations in over 22 states and over 4,600 employees. they also have coffee shops in 10 other countries. their sales at the end of 2012 were over $500 million; they were taken private by jab holdings in 2013. they sell their coffee wholesale to the majority of the major retailers and have expanded their partnerships with kemps ice cream and keurig coffee cups. their coffee and espresso beans are 100% rainforest alliance certified. caribou coffee is also dedicated to giving back to charity organizations supporting breast cancer, children’s literacy, and the environment. equal exchange is unique in the coffee industry. the company is a cooperative and is worker-owned, faith based and maintains a strong retail and wholesale presence. they started in 1986 and have on-going relationships with small farmers that grow their coffee beans. they believe in sustainability by promoting organic agricultural practices for their farmer/partners. they offer coffee for church groups and focus on giving back to the farmers and all of the supply chain partners. equal exchange offers a variety of beverages (coffee, tea, and hot cocoa) and miscellaneous snacks (trail mix, product, and chocolate, among others). their focus is on their farmers, interfaith, and fair trade partners. all of their beans are fair trade and they are looking for additional locations outside of boston and seattle. stillwater coffee was founded in 1980 in minnesota. they have a presence in 48 states and recently signed a private label contract with costco. its estimated sales are over $40 million annually. they have their own private label brand of coffee and they have focused on the grocery and club channels as a method of growth. they are primarily a wholesale coffee company. they roast their coffee in house for retail sales but also roast, package and distribute for other companies private label brands. they have a strong presence in local grocery stores and have an extensive online store. they purchase their beans from one of the largest bean suppliers in north america and control all aspects of the roasting, packaging, processing and inventory of the products. stillwater coffee private labels for java plus and also competes against them with their own brands. peace coffee is based in minneapolis and started by the institute for agriculture and trade policy. their mission is to promote a community of fair trade, trading with small scale farmers at industry leading prices and to promote living wages through-out the company. they are committed to environmental sustainability, such as having bike courier services and using eco-friendly van for delivery. peace coffee uses its business plan as a part of marketing for their coffee. their product line includes at home coffee blends as well as coffee shops both local and franchise shops. american journal of management vol. 16(4) 2016 69 strengths-weaknesses-opportunities-threats (swot) java plus has multiple strengths within their organization. the dedicated staff are some of their primary strengths. the java plus brand is a strength, as is the retail packaging, that was co-developed with the help of the marketing team at general mills. the cause-related marketing theme is a strength with the profits used to help inner city children and adults. the customer base for java plus has been extremely supportive of their mission and has helped create brand loyalty with corporate, religious organizations and retailers. this is important since the coffee business is a competitive market and the channels help provide diversification and cash flow to java plus. the expansion into the keurig™ cup business has helped position java plus with certain customers that have changed to that method of making coffee. the internal weaknesses facing java plus are significant. the first weakness are the challenges operating in the retail sector: retail packaging, mark down dollars, and the number of stock keeping units (which are the number of items java plus sells to its customers). a number of stock keeping units (sku), were brought in at the request of a single retail client without the benefit of analysis or a firm understanding of the rate of consumption. in addition, one of the challenges is the lack of control over manufacturing costs. java plus is not large enough to dictate with its manufacturing partner when items should be manufactured. due to the quantities and the type of packaging (retail versus bulk) they need to produce. because of this lack of control over manufacturing, the minimum manufacturing runs (5000 pieces at a time for example) required by stillwater coffee created inventory that might last over a year; thus impacting taste and quality. the retail presence is also a weakness due to the higher cost of doing business with large retailers, their operational and logistical requirements (edi, smaller case quantities, point of sale data, gross margin, the need to pay a commission to an outside sales rep and the minimum inventory turnover requirements). the limited ability to control cost of goods sold is a significant weakness with java plus purchasing finished goods from a local roaster. many of their competitors are more vertically integrated and have the ability to source and roast their own coffee. java plus does not control the raw material, roasting, and packaging costs. in terms of opportunities, java plus is well positioned to take advantage of the continued growth in the coffee market and some of the new drinks that can be sold through their channels of distribution. the java plus brand has a great opportunity to grow and expand across all three channels and expansion into new customers. the emerging keurig cup business is a significant opportunity for java plus to expand its product line and possibly enhance its gross margins. in reviewing the organization threats, virtually all of the competitors have stronger brand awareness and spend a significant amount of money on marketing (starbucks, caribou, dunn brothers, stillwater coffee). the major competitors are vertically integrated with control over the arabica bean sourcing, roasting (multiple locations) packaging and distribution. many have their own stores as well which helps maintain higher gross margins and brand identity. this is a threat as java plus does not have the same brand awareness as their major competitors, nor do they have retail outlets which helps with production demand, inventory management, sales and customer loyalty. the organization must always be aware of times when rising raw material costs for the raw arabica green bean due to demand or weather issues cause the beans to rise in costs. our swot analysis in highlighted in exhibit 1. 70 american journal of management vol. 16(4) 2016 exhibit 1 operational challenges there are several operational challenges for java plus. the most pressing challenge is they do not control their supply chain for raw materials and their distribution center. java plus is a growing brand but without the capital assets of a roasting facility and distribution center. the flow chart below (exhibit 2) indicates the sales and purchase process for java plus: 1) café import raw materials (arabica coffee beans) are ordered. 2) stillwater coffee roasts and packages the product and in some cases delivers to retail accounts if they have a direct relationship. 3) edina couriers is sent product for church, corporate and some retail accounts. 4) intermix and trudeau are another distribution point for lunds and byerlys grocery stores. 5) van paper and other suppliers provide paper cups and other products for corporate and church clients. java plus has the following challenges: 1) they rely on café imports for their arabica raw coffee beans; the beans are purchased through their roaster, stillwater coffee. 2) they use an outside logistics company for storage and shipment. the logistics company has some challenges accepting orders via electronic data interchange (edi); a requirement for most retail accounts. 3) they have to meet certain minimum production runs at their roaster which can lead to delayed manufacturing and overstock on items. 4) retail packaging is expensive and a number of sku’s at the retail shelf were old packaging. 5) obsolete inventory on a number of sku’s due to poor retail turns. 6) too many sku’s that do not sell well at retail and create obsolescence. american journal of management vol. 16(4) 2016 71 7) changing consumer needs for taste and delivery. the new keurig cups are an excellent example of change. exhibit 2 item and stock keeping unit (sku) analysis as shown in exhibit 5, the sku’s are separated by quantity, revenue, net profit, profit per unit, cost per unit, and return on investment (roi). the purpose of this analysis was to identify the inventory with the highest margin in an effort to increase earnings and focus vital staff time on the best product inventory items. an analysis of the data will help determine the highest returns on investment coffee inventory, which items to keep and which items to potentially rationalize. the analysis, will also identify the sku’s stocked as part of the inventory but do not sell well; these items may have provided a specific niche offering to a customer or a marketing and sales opportunity at one time. the analysis will help determine which items are loss leaders that do not appear to provide large value to the sales efforts. the sku’s are listed below broken down by the channel of distribution. based on the analysis, our consulting team must make a recommendation for the final number of sku’s. by focusing on the most profitable items, it should improve the gross margin and improve cash flow through reduced inventory. instructions and key deliverables using the information provided in this case students are to assume the role of consultants hired by the board of directors to perform analysis and provide constructive recommendations for the future. the following deliverables should be prepared for presentation. 72 american journal of management vol. 16(4) 2016 deliverable learning objective report: prepare a detailed report to the board of directors with your recommendations for improvement. this report should be founded on the items you prepare for #2 below. include a detailed explanation of how you would you improve the operations of the business. the recommendations must also include a suggested sequencing and specific timelines for implementation (10 to 15 pages) 1. demonstrate an understanding of the process and operational challenges of the coffee industry 2. demonstrate a methodology for understanding the channel strategy by determining the best way for java plus to go to market financial statement modeling and analysis: prepare a professional excel based model to include but not be limited to the following: 1) horizontal, vertical and margin analysis of the statement of operations for past three years. include analysis of the gross margin by distribution channel. 2) inventory assessment including analysis and rationalization of the number of skus along with specific recommendations for expansion and contraction. analysis of distribution channels along with a recommendation for which the organization should utilize going forward. your position must be supported with data analysis. 3) breakeven analysis for the company with all three channels of distribution and then for each scenario. 3. ability to perform financial analysis of the three channels of distribution. this includes horizontal, vertical and ratio calculations and analysis, and breakeven analysis by business channel. 4. perform an inventory analysis and recommend the stock keeping units (skus) to be offered in units and dollars for the retail market presentation items: 1. professional power point summarizing the key recommendations 2. executive summary – a one page, bullet point synopsis of the key findings and recommendations (instructor note): for online courses these items could be placed in a shared file location, and delivered via an online forum such as skype or google hangout. 5. draw meaningful conclusions and make professional recommendations and presentations. american journal of management vol. 16(4) 2016 73 exhibit 3 exhibit 3: statement of operations fy 20x4 fy20x5 fy20x6 revenue bulk sales (corporate) 40110 · bulk cocoa 22,400$ 22,624$ 23,076$ 40310 · bulk coffee 82,600 85,491 88,911 40130 · other products (tea, merch, cups, filters) 27,013 27,553 27,553 40320 · portion packs (8 oz) 171,484 175,772 181,045 40350 · single serve (2.5 3 oz ) 28,892 29,470 30,501 total bulk sales (corporate ) 332,389$ 340,910$ 351,086$ bulk sales ( religious) 40110 · bulk cocoa 28,600 29,458 30,636 40310 · bulk coffee 81,617 86,106 91,273 40130 · other products (tea, merch, cups, filters) 33,016 33,676 34,518 40320 · portion packs (8 oz) 209,592 215,880 225,595 40350 · single serve (2.5 3 oz ) 35,313 36,019 37,279 total bulk sales ( religious) 388,138$ 401,139$ 419,301$ retail sales 40330 · retail 12 oz bags 295,500 301,410 296,889 40120 · retail k cups 6,400 9,737 40600 · revenue other products 118,107 119,878 121,676 40390 · total discounts (112,400) (118,582) (126,883) total retail sales 301,207$ 309,106$ 301,420$ total net revenue 1,021,734$ 1,051,155$ 1,071,806$ cost of goods sold cogs -bulk (corporate) 50110 bulk cocoa 2,410 2,507 2,607 50310 bulk coffee 20,371 21,593 22,564 50130 other products (tea, merch, cups, filters) 16,302 17,117 18,144 50320 portion packs (8 oz) 92,723 95,505 99,325 50350 single serve (2.5 3 oz ) 39,355 39,749 40,544 total · cogs bulk (corporate ) 171,161$ 176,470$ 183,184$ cogs -bulk (religious) 50110 bulk cocoa 3,077 3,201 3,329 50310 bulk coffee 20,128 21,336 22,296 50130 other products (tea, merch, cups, filters) 19,925 20,921 22,176 50320 portion packs (8 oz) 113,328 116,728 121,397 50350 single serve (2.5 3 oz ) 48,101 48,582 49,553 total · cogs bulk ( religious) 204,559$ 210,767$ 218,751$ cogs retail 50330 12 oz retail bags 168,280 181,742 194,464 50120 retail k cups 18,390 19,126 19,891 50340 expired product & other coffee 3,500 3,745 4,063 50600 other products&shipping 86,000 89,010 93,015 total cogs retail 276,170 293,623 311,434 total cogs 651,891$ 680,861$ 713,370$ gross profit 369,843$ 370,294$ 358,437$ operating expenses total sg&a expenses 367,500 373,726 373,726 net profits 2,343$ (3,432)$ (15,289)$ donations to youth 2,343 net income or loss -$ (3,432)$ (15,289)$ 74 american journal of management vol. 16(4) 2016 exhibit 4 exhibit 4: statement of financial position fy20x6 assets cash 42,050$ restricted cash (donations) trade receivables 65,220 inventory 95,413 other current assets 17,201 total current assets 219,884 property plant & equipment, net 113,200 intangible assets, net 48,100 total long term assets 160,562 total assets 380,446$ liabilities accounts payable 124,030$ donations payable 37,500 short term debt 75,230 total current liabilities 199,260 long term debt 130,000 other liabilities 51,186 total long term liabiliities 181,186 total liabilities & net assets 380,446$ american journal of management vol. 16(4) 2016 75 exhibit 5 item description cost 20x6 retail 10-110-12-100gr 12oz java blend, ground 3.43$ 42,172$ 10-110-12-1100wb 12 oz whole bean decaf espresso 3.75$ 37,955$ 10-110-12-1200gr 12oz lake street blend, ground rainforest alliance 3.43$ 37,955$ 10-110-12-1300gr 12oz french roast, ground rainforest alliance 3.43$ 37,955$ 10-110-12-1300wb 12oz french roast, whole bean rainforest alliance 3.43$ 37,955$ 10-110-12-200wb 12oz sumatra, whole bean 3.43$ 29,520$ 10-110-12-400gr 12oz dark roast sumatra, ground 3.43$ 33,737$ 10-110-12-500gr 12oz decaf colombian, ground 3.43$ 22,773$ 10-110-12-600wb2 12 oz whole bean guatemalan decaf 3.71$ 8,434$ 10-110-12-900gr 12oz highlander grogg, ground 3.43$ 8,434$ 296,889$ k-cups keruig k-kup reusable 18.79$ 590$ keurig machine keurig machine 150.00$ 1,475$ k-10-110-12-100gr 12oz java blend, ground 6.50$ 1,475$ k-10-110-12-1100wb 12 oz whole bean decaf espresso 6.50$ 1,180$ k-10-110-12-1200gr 12oz lake street blend, ground rainforest alliance 6.50$ 1,180$ k-10-110-12-1300gr 12oz french roast, ground rainforest alliance 6.50$ 1,475$ k-10-110-12-1300wb 12oz french roast, whole bean rainforest alliance 6.50$ 2,360$ subtotal k-cups 9,737$ other revenue 121,676$ 76 american journal of management vol. 16(4) 2016 item description cost 20x6 corporate and religious bulk products 10-120-18-2.5-100 18 count (2.5 oz bags) per case; java blend 12.78$ 1,807$ 10-120-18-2.5-300 18 count (2.5 oz bags) per case; french roast 12.78$ 7,230$ 10-120-18-2.5-400 18 count (2.5 oz bags) per case; dark roast sumatra 12.78$ 7,230$ 10-120-18-2.5-600 18 count(2.5 oz bags) per case; decaf dark roast 12.78$ 7,230$ 10-120-18-2.5-700 18 count (2.5 oz bags) per case; vanilla 12.78$ 1,807$ 10-120-18-2.5-800 18 count (2.5 oz bags) per case; hazelnut 12.78$ 5,422$ 10-120-18-2.5-900 18 count (2.5 oz bags) per case; highlander grogg 12.78$ 3,615$ 10-120-18-3-100 18 count (3 oz bags) per case; java blend 15.30$ 3,615$ 10-120-18-3-300 18 count (3 oz bags) per case; french roast 15.30$ 7,230$ 10-120-18-3-400 18 count (3 oz bags) per case; dark roast sumatra 15.30$ 5,422$ 10-120-18-3-600 18 count (3 oz bags) per case; decaf dark roast 15.30$ 5,422$ 10-120-18-3-700 18 count (3 oz bags) per case; vanilla 15.30$ 5,422$ 10-120-18-3-800 18 count (3 oz bags) per case; hazelnut 15.30$ 5,422$ 10-120-18-3-900 18 count (3 oz bags) per case; highlander grogg 15.30$ 904$ 67,781$ 10-120-18-8-100 portion packs (8 oz bags) per case; java blend 39.78$ 91,453$ 10-120-18-8-300 portion packst (8 oz bags) per case; french roast 39.78$ 265,942$ 10-120-18-8-301 portion packst (8 oz bags) per case; sumatra 40.78$ 49,244$ 406,639$ cocoa cocoa 10 oz double dutch hot cocoa individual foil pack 10oz bag 1.09$ 5,245$ cocoa 10 oz bulk double dutch hot cocoa 40 10oz bags per case 43.75$ 5,245$ cr-01-1000 powdered creamer packets 22.98$ 2,835$ dd-06-(6)2-01 double dutch cocoa mix (6 count) 2lb bags 18.90$ 20,456$ dd-06-10-01 double dutch hot cocoa mix (6) count 10 oz bags per 10.94$ 10,490$ dd-06-10-01:dd-06-10-01* double dutch hot cocoa mix 10 oz bag 1.27$ 9,441$ subtotal chocolate and cookies 53,713$ bulk coffee 10-130-2-3000 4 (2lb bulk bags) per case, java dark roast; ground 29.68$ 20,433$ 10-130-4-100 4 (4lb bulk bags) per case; java blend wb 15.26$ 14,860$ 10-130-4-1000 4 (4lb bulk bags) per case; espresso, wb 15.26$ 18,576$ 10-130-4-1100 4 (4lb bulk bags) per case; decaf espresso, wb 15.26$ 16,718$ 10-130-4-400 4 (4lb bulk bags) per case; dark roast sumatra, wb 15.26$ 16,718$ 10-130-4-600 4 (4lb bulk bags) per case; decaf dark roast wb 15.26$ 11,145$ 10-130-5-100 5 lb whole bean java blend 23.85$ 24,148$ 10-130-5-1000 5 lb whole bean espresso 24.75$ 11,145$ 10-130-5-400gr 5 lb ground dark roast sumatra 28.10$ 18,576$ 10-130-5-400wb 5 lb whole bean dark roast sumatra 28.10$ 18,576$ 10-130-5-600 5 lb whole bean guatemalan decaf 24.65$ 9,288$ bulk coffee subtotal 180,183$ american journal of management vol. 16(4) 2016 77 recommendations and conclusions the recommendations and salient points we recommend in this case study include distribution, sku rationalization, operational challenges, channel strategy, current financial assessment and a pro-forma income statement with the recommended changes. a successful implementation of the strategies identified will provide an opportunity for java plus to move into a profitable position. distribution • future expansion and growth in the corporate and religious sectors, along with an increased brand recognition and consumer loyalty will help poise java plus for future focused on its core mission by focusing expansion in the corporate and religious channels. • phasing out of the retail sector due to low gross margins, high competition and lack of turnover at retail • by increasing corporate sales by 15%, adding 20 new religious accounts under the current average sales of religious accounts, or by pursuing a licensing fee under the retail sector, java plus will move into a positive net income position. finance and inventory inventory reduction of product sku’s: • sku reduction plan o improves gross margin o focus on most profitable items o remaining sku’s have a combined gross margin of only 22.89% o improves cash flow through reduced inventory • reduce the total number of product sku’s be reduced to the top xxx based on the sales-to-profit ratio marketing • exploring licensing options which could be valued at 10% of the annual sales. • social media o research current customer trends o continue focus on sharing youth success stories o sharing upcoming events through different social media venues (ex: facebook, twitter, and instagram) o further research on competition operations • maintain out-sourcing operations until the business is stabilized. • once the business is profitable then management should explore roasting and packaging the product internally, 78 american journal of management vol. 16(4) 2016 exhibit 6 exhibit 6: statement of operations solution key horizontal and vertical amount % of rev amount % of rev amount % of rev amount % revenue bulk sales (corporate) 40110 · bulk cocoa 22,400 2.2% 22,624 2.2% 23,076 2.2% 452 2.0% 40310 · bulk coffee 82,600 8.1% 85,491 8.1% 88,911 8.3% 3,420 4.0% 40130 · other products (tea, merch, cups, filters) 27,013 2.6% 27,553 2.6% 27,553 2.6% 0.0% 40320 · portion packs (8 oz) 171,484 16.8% 175,772 16.7% 181,045 16.9% 5,273 3.0% 40350 · single serve (2.5 3 oz ) 28,892 2.8% 29,470 2.8% 30,501 2.8% 1,031 3.5% total bulk sales (corporate ) 332,389$ 32.5% 340,910$ 32.4% 351,086$ 32.8% 10,177 3.0% bulk sales ( religious) 40110 · bulk cocoa 28,600 2.8% 29,458 2.8% 30,636 2.9% 1,178 4.0% 40310 · bulk coffee 81,617 8.0% 86,106 8.2% 91,273 8.5% 5,166 6.0% 40130 · other products (tea, merch, cups, filters) 33,016 3.2% 33,676 3.2% 34,518 3.2% 842 2.5% 40320 · portion packs (8 oz) 209,592 20.5% 215,880 20.5% 225,595 21.0% 9,715 4.5% 40350 · single serve (2.5 3 oz ) 35,313 3.5% 36,019 3.4% 37,279 3.5% 1,261 3.5% total bulk sales ( religious) 388,138$ 38.0% 401,139$ 38.2% 419,301$ 39.1% 18,162 4.5% retail sales 40330 · retail 12 oz bags 295,500 28.9% 301,410 28.7% 296,889 27.7% (4,521) -1.5% 40120 · retail k cups 0.0% 6,400 0.6% 9,737 0.9% 3,337 52.1% 40600 · revenue other products 118,107 11.6% 119,878 11.4% 121,676 11.4% 1,798 1.5% 40390 · total discounts (112,400) -11.0% (118,582) -11.3% (126,883) -11.8% (8,301) 7.0% total retail sales 301,207$ 29.5% 309,106$ 29.4% 301,420$ 28.1% (7,687) -2.5% total net revenue 1,021,734$ 100.0% 1,051,155$ 100.0% 1,071,806$ 100.0% 20,652 2.0% cost of goods sold cogs -bulk (corporate) 50110 bulk cocoa 2,410 0.2% 2,507 0.2% 2,607 0.2% 100 4.0% 50310 bulk coffee 20,371 2.0% 21,593 2.1% 22,564 2.1% 972 4.5% 50130 other products (tea, merch, cups, filters) 16,302 1.6% 17,117 1.6% 18,144 1.7% 1,027 6.0% 50320 portion packs (8 oz) 92,723 9.1% 95,505 9.1% 99,325 9.3% 3,820 4.0% 50350 single serve (2.5 3 oz ) 39,355 3.9% 39,749 3.8% 40,544 3.8% 795 2.0% total · cogs bulk (corporate ) 171,161$ 16.8% 176,470$ 16.8% 183,184$ 17.1% 6,714 3.8% cogs -bulk (religious) 50110 bulk cocoa 3,077 0.3% 3,201 0.3% 3,329 0.3% 128 4.0% 50310 bulk coffee 20,128 2.0% 21,336 2.0% 22,296 2.1% 960 4.5% 50130 other products (tea, merch, cups, filters) 19,925 2.0% 20,921 2.0% 22,176 2.1% 1,255 6.0% 50320 portion packs (8 oz) 113,328 11.1% 116,728 11.1% 121,397 11.3% 4,669 4.0% 50350 single serve (2.5 3 oz ) 48,101 4.7% 48,582 4.6% 49,553 4.6% 972 2.0% total · cogs bulk ( religious) 204,559$ 20.0% 210,767$ 20.1% 218,751$ 20.4% 7,984 3.8% cogs retail 50330 12 oz retail bags 168,280 16.5% 181,742 17.3% 194,464 18.1% 12,722 7.0% 50120 retail k cups 18,390 1.8% 19,126 1.8% 19,891 1.9% 765 4.0% 50340 expired product & other coffee 3,500 0.3% 3,745 0.4% 4,063 0.4% 318 8.5% 50600 other products&shipping 86,000 8.4% 89,010 8.5% 93,015 8.7% 4,005 4.5% total cogs retail 276,170 27.0% 293,623 27.9% 311,434 29.1% 17,811 6.1% total cogs 651,891$ 63.8% 680,861$ 64.8% 713,370$ 66.6% 32,509 4.8% total sg&a expenses 367,500 36.0% 373,726 35.6% 373,726 34.9% 0.0% net profits 2,343$ 0.2% (3,432)$ -0.3% (15,289)$ -1.4% (11,857) 345.5% donations to youth 2,343 0.2% 0.0% 0.0% #div/0! net income or loss -$ 0.0% (3,432)$ -0.3% (15,289)$ -1.4% (11,857) 345.5% horizontal fy 20x4 fy 20x5 fy 20x6 change 20x5 to 20x6 vertical american journal of management vol. 16(4) 2016 79 references goldschein, e. (2011, november 14th). eleven incredible facts about the coffee industry. retrieved from business insider magazine: http://www.businessinsider.com/facts-about-the-coffee-industry2011-11#looking-for-other-sources-of-energy-13 thurston, r. w. (2013). coffee: a comprehensive guide to the bean, the beverage and the industry. plymouth, england: rowan and littlefield. 80 american journal of management vol. 16(4) 2016 ajm 17(2) master-lulu-revised.pdf american journal of management vol. 17(2) 2017 9 an assessment of the impact of lean interventions within the uk police service harry barton nottingham business school rupert matthews nottingham business school the police service in england and wales continues to face intense pressures to manage and reduce budgets while simultaneously maintaining and improving levels of service. in achieving reform, attention has been directed towards the implementation of proven operational improvement frameworks, such as �lean thinking� taken from the automotive industry. this research draws on contemporary views of �lean� as a knowledge creation process that is integrated into an absorptive capacity theoretical perspective. the work provides a new perspective on operational improvement within police forces and new insight into how such a reconceptualization may contribute to more successful police transformation. introduction an effective and legitimate police service represents a fundamental cornerstone of a developed nation. however, such services need to be located within a new age of public sector finances that calls for budgetary responsibility, moving towards greater levels of efficiency and a need to acknowledge the value for money of services (radnor and osborne 2013). such change has been further motivated, accelerated and required by global economic changes in public sector finance, resulting in the uk government�s comprehensive spending reviews of 2010 and 2015. this has applied increased external pressures on previously protected public services, requiring tangible changes in service structure in order to deliver significant cost savings. in addition to reductions in central funding, service complexity has also been added by the continuing evolution of the communities being served by the police forces in england and wales. rather than the not inconsequential tasks of providing similar services while making significant cost savings, there is also a need to radically reimagine what police forces deliver, what they look like and how they operate (barton 2013). over the last 30 years, private sector manufacturing has seen large-scale transformations, similar to those currently required in public sector. during the 1970s and before, british manufacturing was categorized as difficult to manage and reform, with changes actively resisted by a strong union presence and part public ownership. products manufactured in britain were viewed as having poor quality, poor reliability, while at the same time being high cost. it was only when competition was introduced from overseas (specifically japan), there was a realization that dramatic improvement was needed if british manufacturing was to endure. while successive governments were able to slow the encroachment of competitors through quotas and local manufacturing requirements, overtime, competition increased. 10 american journal of management vol. 17(2) 2017 transplant factories and joint ventures both overcame barriers for local manufacturing, while also illustrating advantages were of non transferrable, company specific advantages (hamel 1991, inkpen 1998). the result of such changes was a realization, not only in the uk, but globally, that fundamental changes needed to take place. at the heart of the transformation was a realization of the key role of quality management practices to systematically develop operational and product development capabilities (garvin 1988). based on a range of context specific characteristics, such as limited access to capital and close involvement of worker-based organizations, japanese firms developed their own unique approach to quality management (xu 1999, womack et al. 1990). to explore the extent to which automotive practices were different globally, a large scale benchmarking exercise was undertaken, that identified key practices, that were later defined a �lean� manufacturing techniques (womack et al. 1990, holweg 2007). facilities that operated in a �lean� manner were identified able to produce products with performance characteristics that had been viewed a mutually exclusive, or required trading off against each other. these included high reliability with low cost, customized products with short lead times or quick response with low levels of inventory (ferdows and de meyer 1990). these performance characteristics allowed lean facilities to operate much more efficiently with greater productivity, being able to produce more products with fewer workers, with the associated knock-on effects on return on investment (womack et al. 1990). with increasing levels of pressure to reduce public service budgets (radnor and osborne 2013), public service organisations (pso) have looked enviously upon the transformations of private sector manufacturing, seeing the potential for them to make similar improvements to their own operations. through the effective implementation of �lean� techniques to the development �lean� service organisations (swank 2003), there was a view that similar improvements could be made to public service. however, difficulties have been experienced within the implementation of �lean� in the public sector (radnor et al. 2012, radnor and osborne 2013), with a need to focus attention on the complexity and context of public service operations management. questions are then rightly raised in terms of whether lean is the right strategy for the public sector environment or question if it was the implementation of the framework that was flawed (radnor and osborne 2013). questions can also be raised in terms of the need to critically reflect on lean techniques and for the public sector to better understand what the implementation process is aiming to achieve. this leads to the presentation of the research question that will begin to be addressed in the work: rq: how does the implementation of lean techniques need to be reconceptualized within english and welsh policing to improve its relevance? this research takes a critical perspective towards the implementation of �lean� and, more generally, operational improvement within the context of police forces in england and wales. through a critical deconstruction of �lean�, the aim of a lean initiative is presented as a means of developing awareness of the need to change as well as the actual changes in practice. the process of lean implementation will be interpreted from a knowledge based perspective, and employ the theoretical lens of absorptive capacity. harvey et al. (2010) identified absorptive capacity as an appropriate perspective for use within the public sector, due to the need for pso accept information from users and external sources. consistent with radnor and osborne (2013), processes of learning and knowledge accumulation were also identified as important for realizing change in pso. absorptive capacity, as defined by zahra and george (2002), is utilized within the current research to conceptualize how particular firms identify the need to make improvements and accept new approaches to working. importantly, drawing from rashman et al. (2009), absorptive capacity will need adaptation for use in the public service domain. following the presentation of literature on process improvement in the public sector and the development of the conceptual framework, the research methods applied within the work will be presented before findings from the case studies. the findings will be analysed through the lens of absorptive capacity before the presentation of research implications on further police reform, opportunities for further research and conclusions. american journal of management vol. 17(2) 2017 11 improvement frameworks and their impact on public service organisations the global success and influence of lean techniques (womack and jones 1996, holweg 2007) has resulted in lean being identified as a potential means for realising improvement within the public sector. lean is able to realise change through focusing on waste reduction, listening to the customer and continually improving operational processes through reducing unwanted variation. to realise such change, lean has been defined as a range of operational tools and technniques that support changes in organisational processes in order to realise improvement goals. however, work in the public sector has highlighted limitations of applying tools developed within a manufacturing context to a significantly more complex public service environment (newell et al. 2003, radnor et al. 2012). this has resulted in lean being considered a �failed theory for public services� (radnor and osborne 2013), unable to delivery the same results as were possible within a private sector, manufacturing context. however, while lean is often conceptualised as the removal of waste, reducing unwanted variation and systematic improvement (womack and jones 1996), less attention is given to more subtle elements that truly differentiate lean from non-lean practices. womack et al. (1990) spoke of the impact of lean thinking on the manufacturability of products, that made them inherently �leaner� to manufacture. furthermore, hines et al. (2004) stated that easily learnt, operational improvements tools based elements of lean, while able to provide some significant short-term improvements were unable to provide firms with a sustainable competitive advantage. furthermore, berry (2009) spoke of the dangers of the pursue of short term cost savings rather than continuous improvement driven by a true cultural shift. consequently, it was not the refining and improvement of existing practices, but the ability to make more dramatic changes to organisational systems, or kaikaku (womack and jones 1996), that determine whether organizational can become lean. this limitation has been identified within the literature on the implementation of lean in police forces where it is not the refinement of existing processes but �a requirement to fundamentally review how police services are delivered� (barton 2013, p.222). rather than simply undergoing operational refinement, greater attention is needed on strategic improvement, aligned with long term organisational aims, rather than short term cost savings. contemporary work into lean thinking identifies similar limitations, where too great a focus on cost reduction can limited more extensive change, ultimately limiting the scale of improvement (de treville and antonakis 2006). while the work within the policing sector on operational improvement is limited, greasley (2004) provides a useful counter point to discussions focused upon lean. by acknowledging the fundamental limitations of existing systems related to the police human resource division, processes was re-engineered from the ground up. hammer and champy (1993), in �re-engineering the corporation�, spoke of the need to fundamentally reimagine organisations in order to deliver services for the modern environment. they spoke of a new way to conceptualise organisational structures, away from the traditional hierarchies that developed during much less dynamic times. within the new york police context, sugarman (2010) identified similar issues, where over focus on the improvement of key performance measures limited the extent of changes. by instead focusing on more inclusive, bottom-up learning approaches, sugarman (2010) presented how more innovative practices could be developed and implemented. such insights are consistent with barton and barton (2011), who emphasised the need to involve the workforce when attempting to implement police reform. while limitation were present with the single case, secondary data evidence of sugarman�s (2010) work, it illustrated organisational learning (ol) as an appropriate theoretical framework for analysing police services. the following section explores thinking and theory related to process improvement and lean. following from the identification of lean as an appropriate theory for use in researching police reform, complementary theories will be identified and used to develop a conceptual framework to direct the empirical element of the work. 12 american journal of management vol. 17(2) 2017 theoretical development while changes based on trial and error may result in gradual improvements, without understanding how deliberate changes lead to the desired outcomes, it may be difficult to sustain and repeat improvements (fiol and lyles 1985). at an individual level, unless those affected understand why they are changing practices, they may be unwilling to change, resist external support and even act to undermine improvement activities (ackroyd and thompson 1999). from this knowledge-based perspective, rather than attempting to transfer lean tools and techniques directly from a manufacturing environment, lean techniques can be viewed as means of developing understanding about organisational issues. such a perspective allows those affected by organisational change to develop an awareness of the need to change, reducing the likelihood that implemented practices will be rejected. consequently, following radnor and osborne (2013, p.271) lean �is about building a more fundamental understanding of the underlying principles of lean through their application�. the accumulation of knowledge has been identified as the key compenent of competitive advantage in a modern environment (grant 1996). previous research in operations improvement initiatives has illustrated how knowledge represents a key output of improvement projects (anand et al. 2010). this perspective accounts for the changes in practices that realise immediately from process changes, but also how the knowledge created in projects can motivate and benefit subsequent improvement activities. this may include the development of perspectives at an individual level that accept the use of revised procedures or help individuals identify further improvement opportunities. hines et al. (2004) applied a knoweldge creation perspective specifically within the context of lean, conceptualising lean as an ol process. drawing from fiol and lyle (1985, p.803), they presented lean as �a process of improving action through better knowledge and understanding�. this perspective supported hines et al. (2004) in illustrating how the creation of new knowledge enables lean to provide firms with a sustainable competitive advantage. although knowledge creation activities during operational improvement activities is important for developing a competitive advantage within a lean initiative, attention is also needed on the �front end� of problem solving (marzec and tan 2011). before operational improvement activities can be carried out, critical knowledge acquisition activities need to take place that have a potentially critical impact on later activities. within the police context, there is a degree of homogeneity due to similar training programmes, institutions and doctrin. forces also have access to similar information about the need for improvement based on national data and imposed budget cuts. in addition to access to similar information about the need to improve, forces have also had access to similar resource to make changes (quest 2011). these resources may focus upon building cultures of continuous improvement, that has been identified as the essense of process improvement (flanagan 2008). however, withstanding these similarities, police forces have drawn from performance data and support in differing ways. as a result, a conceptual model for exploring the implementation of lean activities within police forces needs to account for the mechanisms that initiate improvement activities, as well as the organisational change activities themselves. viewing operational improvement activities as an ol process, where knowledge is acquired that results in changes to organisational systems, insight can be gleaned on why external performance measurement data does not always initiate improvement. while there may be an awareness of a need to change, fiol and lyle (1985) illustrated that it may require the onset of a organisational crisis sufficient to initiate the �unlearning� process. within the automotive industry, this required the unlearning of established production and new product development mechanisms that had become outdated. however, while an awareness of a need to change is necessary, the information needs to be interpreted and disseminated throughout the organisation in order to affect subsequent behaviour and realise change (huber 1991). alternatively, unless key individuals within organisations accept the need to support organisational changes processes, firms may be able to resist realising change through ol (lawrence et al. 2005). to better understand the process of integrating new knowledge, we draw from march (1991), who conceptualised the process of accepting new information as the introduction of new organisational american journal of management vol. 17(2) 2017 13 members that were either slow and fast learners. if an organisation regularly introduced new members, who did not necessarily accept established approaches to working (slow learners), they were able to adapt organisational processes to account for their ways of working. however, if the majority of new members were fast learning or there was not a regular introduction of new members, an organisation would become unwilling or unable to adapt to account for the introduction on new members (or new information). this was stated as resulting in firms that were unable to adapt to account for changes in the environment or make use of opportunities for improvement. march (1991) stated that such firms tended towards persuing changes that resulted in immediate benefits (refining existing processes), rather than improvements that required more fundamental changes. critically, with police introducing new organisational members at lower levels, while there is the introduction of new ideas, new members have insufficient power to realise organisational change. within the context of policing, such phenomena can be interpreted as an organisation focusing internally, looking to make adaptations to existing processes. with training taking primarily a practice based, social learning approach (seely-brown and duguid 1991), emphasis is given to the maintenance of established operational practices, processes, institutions and doctrin. by focusing attention on community based approaches to learning, the values and beliefs present within police forces become embedded and difficult to change. rashman et al. (2009) illustrated that ol theories needed to account for such characteristics of pso. by developing and institutionalising organisational codes of practice, the police are potentially less likely or able to accept new knowledge originating from external sources. cohen and levinthal (1990, p.133) presented this as rejecting knowledge that was �not-invented-here� resulting from a lack of related knowledge. cohen and levinthal (1990) define the ability of accepting knowledge that originated outside an organisation as absorptive capacity, with firms with low levels unable to innovate and create new knowledge based on external stimulous. poor absorptive capacity can also result in the rejection of new knowledge, due to a lack of related knowledge meaning the potential value or importance of the new knowledge is not appreciated. this leads to the identification of two key learning processes that determine how organisations, and specifically police forces, engage in learning, organisational improvement and potentially reform. firstly, how police forces identify the need to change and which sources of information they accept and use to initate subsequent changes. secondly, how they implement change to account for the information they acquired. this second process not only relies on the knowledge within the organisation to motivate and make changes, but also the ability to accept externally originating knowledge or resources to support change activities. this process may take the form of accepting external support necessary for facilitating and enabling change. zahra and george (2002) conceptualised this as a two stage model of absorptive capacity. the first part of the process was defined as potential absorptive capacity, where it was necessary to have access to and realise the value in that knowledge or information. the second part was how the acquired knowledge was integrated into the organisation in order to realise benefits from the acquired knowledge, termed realised absorptive capacity. zahra and george (2002) presented social integration mechanisms as determining the how much potential was translated to realised absorptive capacity, affected by barriers that resisted change. in their review of ol and knowledge in pso, rashman et al. (2009) highlighted the limited work carried out on pso. however, with harvey et al. (2010) presented absorptive capacity as an appropriate theory for use in piblic sector research, by acknowledging the need to accept knowledge and develop new approached to operating informed by the external environment. hodgkingson et al. (2012) also demonstrated how accesss to market information could support performance improvement in pso. they also illustrated how the greater complexity of pso could reduce the impact of absorptive capacity, providing weight to rashman et al. (2009), who called for the development of new ol theories for pso. similar insights were provided by newell et al. (2003), who identified the barriers associated with the highly professionalised context, where task based knowledged inhibited interactions across functional boundaries. consequently, the knowledge created during improvement activities that enabled interactions between functions played a key role in implementing new �best practices�. 14 american journal of management vol. 17(2) 2017 sun and anderson (2010) provides further insight to zahra and george�s (2002) revised conceptualisation of absorptive capacity by integrating it with crossan et al. (1999) influential ol framework. the structure of absorptive capacity was defined in terms of individuals accepting knowledge and gradually integrating it within the organisation through group level activities, until organisational policies were changed. further work unpacking ol processes provides insights on the drivers and barriers of change identified as barriers to converting potential into realised absorptive capacity. lawrence et al. (2005) acknowledged the key role of power and politics in enabling and driving change. with the impact of established practices within the police force and the hierarchical structure, appreciation of the role of power and politics in realising organisational change appears critical and an area requiring further research (rashman et al. 2009). in summary, these discussions provide an overarching theoretical framework through which to view processes of organisational improvement, change and learning within the context of policing. the conceptual framework, based upon zahra and george�s (2002) revised conceptualisation of absorptive capacity and informed by ol is presented in figure 1. figure 1: conceptual model of police force organisational improvement. research methods to investigate how police force improvement activities have been pursued within a range of individual police forces, in july 2011, funding was secured to finance a pilot study of 5 forces within england and wales. the intention was to collect data on how police forces actually engaged in operational change activities, away from the reported rhetoric surrounding the nature, variety and scope of lean initiatives (waring and bishop 2010). initially 14 chief officers and borough commanders (london) were contacted and 5 agreed to participate in the study. table 1 provides an outline of the forces involved in the research. potential absorptive capacity advice seeking opportunity identification realised absorptive capacity problem solving capitalizaing on opportunities -organizational learning change stimulus stakeholder pressure to make changes lean awareness type of connection with source of information social integration mechanisms internal connections external "lean" support barriers american journal of management vol. 17(2) 2017 15 table 1: case database police force type location welsh constabulary wales metro metropolitan police borough london south small constabulary south england central mid-sized constabulary central england swest small constabulary south-west england interviews focused upon discussing recent improvement activities, with emphasis given to the different stages of the improvement, from the initiating point, parties involved, tools applied and benefit realized from the initiative. while drawing from literature to structure the analysis of collected data, the framework provided discipline for theory construction (weick 1989) and the linking of identified concepts with established frameworks (walsh and bartunek 2011). this approach both gave attention to assessment of the framework identified from literature, helping the development of new context specific theory. the strength of this approach was to explore complex social phenomenon, while helping frame and organize the data (barton and valero-silva 2013). the broad selection criteria, while limiting the ability to confirm insight across cases, allowed the conceptual framework to be explored across a broad selection of operational contexts. the result was the development of potentially more robust theories, with greater external validity (yin 2009). the conceptual framework (figure 1) provided a structure that was broadly consistent with the phases of improvement activities that were discussed in the interviews. this included what initiated the improvement activity, the nature of the connections, the aims of the improvement initiative, tools used and outcomes realized from the initiative. summaries of the case data are presented in table 2. the data was analyzed both in terms of how individual cases related to the different elements of the conceptual frameworks and how approaches taken by the different cases varied across the different phases (yin 2009). although the main topics of the interviews were focused upon the practices of operational improvement, absorptive capacity provided theoretical underpinning to the analysis process. the following section presents findings from the cross-case analysis. cross case analysis across the case forces, there was considerable diversity in the motivators and drivers of lean initiatives. while all forces were operating within the same broader context of budgetary restraint that required cost savings, imposed cost cutting was the motivation for only one of the cases. consequently, the aims of the activities were varied, from developing understanding of operational processes to maintaining staff morale during cuts. rather that explicit cost saving, greater emphasis was given to making changes to processes in preparation for cost savings that would be imposed in the future. as a result, the lean initiatives reported in this work can be viewed as pilot studies, allowing the police forces to build understanding of the relevance of lean to their particular context. to account for the lack of knowledge of operational improvement approaches, one force�s initiative champion engaged in training (swest), while two forces worked with an external change programme (quest)(south and central). in addition to providing knowledge, involvement of external parties also provided additional resources and experience for implementing organisational change. however, within the activities involving the external consultancies, while changes were made to practices and a range of tools were employed, insufficient attention was given to creating and embedding new knowledge and practices into existing processes. this meant that without newly created knowledge becoming embedded, once support was removed, there was insufficient knowledge to sustain changes or promote further changes. 16 american journal of management vol. 17(2) 2017 table 2: case database summary police force driver nature aims tools direct outcomes indirect outcomes welsh following critical external audit by cps, sponsored by local criminal justice board lean review of criminal justice services develop understanding of the process from arrest to summary trials brainstorming, 5 why, value stream mapping, cause effect diagnosis process changes, cost savings, daily team briefings good evidence of cultural change leading to a multi-agency approach metro imposed cost cutting, borough commander not wedded to idea of lean. strategic objectives measured against performance indicators maintain staff morale during cuts visual management no evidence of any adoption of lean methods south chief constable externally supported performance improvement programme (quest) deliver benefits, support senior officers with investment decisions and build continuous improvement training for senior management, visual management, process mapping reduce process times of arrests, doubts about sustainability of initiative, following removal of low hanging fruit central annual policing plan adopted home office quest (lean) programme for productivity and performance improvement ensure people see staff, budgets and all other resources being used wisely to deliver value for money (cross functional workshops, value stream mapping, cause effect, 5 why) from quest chief constable viewed initiative as a success chief constable to review way services are structured, planned savings to be redirected swest funding secured to pursue productivity and performance improvements champions trained in lean management with secured funding initiate lean activities to improve productivity and performance small teams, value stream mapping? job rotation (team disbanded) small savings lean initiative disbanded in comparison to the forces that involved external parties, the force that had trained an initiative champion in lean experienced different problems (swest). without sufficient power to coordinate internal resources, the initiative champion was only able to focus on small scale changes, being unable to implement wider scale change. in comparison to swest, the initiative in central involved the chief constable. while the initiative itself has been unable to realise significant improvements, the chief constable realised the potential of operational improvement activities. following on from the quest intervention, the chief constable integrated findings into a review of services within the annual policing plan. the two forces that drew less extensively from external sources took quite different approaches to engaging in improvement activities. metro attempted to pursue broad aims of cost cutting based on strategic measures while also attempting to maintain staff morale. this broad project definition made it difficult not only to define what the project was aiming to achieve, but also validate whether the improvement activities had been successful. by attempting to achieve a lot, but not carefully defining the american journal of management vol. 17(2) 2017 17 process or drawing from external support, very limited benefits were realised, with no follow up activities. in comparison, the welsh force focused their improvements on a particular operational process, following the receipt of a critical external audit from the crime prosecution service. due to the report directing attention to the force as a whole, there was greater managerial commitment to resolving issues, and illustrate that identified problems had been resolved. based on a review of existing processes, they engaged multiple functions identified by the audit and involved them in multi agency improvement workshops. while not engaging in formal training, multi agency workshops were supported by lean experts from the crown prosecution service. this process helped participants use a range of tools to develop understanding of the process. this process supported the creation of new knowledge that drew from multiple perspectives, allowing the development of new processes that accounted for the requirements of the customer, helping reduce non-value adding activities. with a project of limited scope, the welsh force was able to explore the problem in depth, involve a range of operational staff, allowing them to realise tangible (process changes and cost savings) and intangible (cultural change) benefits, that were embedded and sustained through daily meetings and visual management. while the acquisition of information from external sources could direct improvement activities, and external support (to a degree) supported organisational change, the processes of implementing change can be given further attention by the conceptual framework. while the initiatives as a whole were defined as focusing upon �lean�, each aimed to change and improve operational processes. the implementation activities can thus be conceptualised as the process of translating information and the need for organisational change into realised change at a force level. from this perspective the roles of the different lean tools applied within each initiative can be reinterpreted, in terms of how they translated aims for improvement into changes in practice. consistent with the theoretical framework, this support the perspective of lean tools not being the form of knowledge being acquired in lean initiatives, instead as a means to create new knowledge and enable change. the �lean�, problem solving tools, such as cause-effect diagrams or 5why analysis, provided a means of underearthing embedded assumptions of operational issues, providing a foundation for developing new approaches to operating. through group-level problem solving activities, individuals could begin developing shared understanding and accepting new approaches to operating. tools such as value stream mapping then supported staff to learn about the capabilities and practices of other functions parties, helping develop awareness of how their work impacted end users. finally, the use of visual management, the most widely applied practice across the case forces provided a means of embedding new operational practices overtime, validating change practices and communicating changes to external parties. with considerable attention being given to performance measurement in police forces and a requirement to report performance data, the acceptance of visual management is logical. unfortunately, within many of the cases, insufficient attention was given to the creation of new knowledge, meaning visual management primarily embedded existing practice, rather than newly developer, �leaner� practices. consequently, lean effectively further institutionalised existing practices, adding new non-value adding activities, while incurring costs associated with measurement. in summary, each of the initiatives involved in the research to take the form of pilot activities, oriented around developing understanding of �lean� tools and techniques. such an approach allowed each force to explore the relevance of lean to their operations, potentially helping senior management decide how further improvement activities could be pursued in order to realise cost savings. unfortunately, in some cases, the pilot nature was not explicit, meaning attention was not given to the learning that took place within initiatives, instead focusing on the tangible results that were realised. this meant that specific roles and deliverables were not always defined within activities, making it difficult to assess the success of particular initiatives. without such information, if was difficult for firms to determine whether lean was an appropriate approach, or whether it was the approach taken that failed to provide satisfactory results. the initiatives were then judged in isolation, with the completion of only one initiative formally leading to follow up improvement activities (central). 18 american journal of management vol. 17(2) 2017 discussion the findings provide a broad picture of the practices and parties engaged in improvement initiatives and the potentially critical impact of how improvements are initiated. the source and focus given to improvement activities by how they were initiated appeared to provide achievable goals that could be reflected on, upon completion of activities. within broader operations literature, this has been identified as important for supporting firm in making process improvements. furthermore, training and building commitment for goals, combined with challenging improvement goals can promote motivation to achieve goals, resulting in the improved performance of improvement activities (linderman et al. 2003). the research illustrates the impact of the nature of what initiated improvement, with problems providing motivation to achieve improvements and a means of assessing whether improvements were successful. consequently, the research shows that attention is needed on carefully choosing and defining improvement goals to provide those engaged with improvements a means of driving improvement and gauging the success of activities. the �pilot� nature of the activities included within this work reflect when the research was conducted and the need for further research as the comprehensive spending review moves into its second stage and cost saving pressures increase. drawing from fiol and lyle (1985), until imposed cost savings result in an organizational crisis, police forces maybe be unwilling to engage in full scale organizational reform. consequently, the isolated nature of improvement activities reported in the research are unable to provide evidence of organizational change taking place. consequently, even within the more successful cases, rather than organizational; operational and process level learning are the primary changes that took place. rashman et al. (2009) spoke of this as a key aspect of ol in pso, with all organisations operating within similar political context, suggesting that as external pressures increase, the need for reform will increase across all pso. by viewing the activities reported in this work as pilots, the findings provide a multi case foundation for a framework to inform the structuring of subsequent improvement initiatives. with the second phase of the comprehensive spending review, there will be a requirement for more significant, tangible cost savings, reflecting barton�s (2013, p.222) call to �fundamentally review� policing practices. this identifies the need for greater emphasis on the transformational improvement frameworks, rather than those approaches that may focus on the �low hanging fruit (and windfalls!)� that can be realize by simply removing inefficiencies from existing processes (radnor and osborne 2013, p. 275). reflecting on the work of greasley (2004), police forces may need to comprehensively re-engineer organizational processes. by focusing on making radical, �kaikaku� (womack and jones 1996) forms of improvements, significant cost savings could be realized, while developing services that are more appropriate for the current environment. although business process re-engineering has received some negative press, resulting from the need to enforce changes and discard existing approaches to operating (o'mahoney 2007), this is inconsistent with the original work (hammer and champy 1993). by emphasizing the need to move away from tightly defined tasks, the original work gives attention to handing back autonomy to front line staff, in line with the fundamental principles of policing. the evidence from the current research begins to suggest that lean techniques may provide a useful first step, on a longer road of transformation to a potentially less hierarchical, more flexible form. initial lean activities may provide the understanding to develop potential absorptive capacity, help build awareness of all levels of staff of the need to change and promote acceptance of new approaches to working. increased knowledge of lean techniques may also support those affected by radical changes to make incremental improvements to new processes once implemented. through implementing processes, such a visual management, new approaches to working could be supported in becoming embedded into organizational culture. this was stated by flanagan (2008) as the essence of successful process improvement activities necessary for promoting continued improvement. american journal of management vol. 17(2) 2017 19 conclusion for police forces moving toward the implementation of further change activities, the identified framework of absorptive capacity provides theoretical underpinning to informing further improvement activities. with 4 more years of experience of organizational change, police forces may be better positioned to critically reflect on the services they provide and the effectiveness or role of particular operational improvement techniques. with awareness of the need to make changes, forces may have increased their level of potential absorptive capacity, promoting the initiation of further, operational level improvement projects. forces may also be more willing to acknowledge limitations in their own ability to undergo transformation alone, while appreciating the potential role of external parties to contribute services and support to the re-engineering process. within the framework of absorptive capacity, lawrence et al. (2005) helps locate the key role of management within the case, particularly within the hierarchically structure policing context. the research illustrates that unless improvement activities gain the commitment, support and necessary resources from senior management, it may be difficult realize and sustain benefits from improvement activities. however, rather than management enforcing change, that can increase costs (lawrence et al. 2005), the resources provide those affected with the opportunity to accept the need to change and develop new ways of working. consistent with this, rashman et al. (2009) spoke of the need for management to create a learning environment necessary for accepting change, increasing absorptive capacity. this provides evidence of the need to extend the presented conceptual framework to account for the role of management. while limited work has attempted to integrate the role of leadership within the absorptive capacity framework, sun and anderson (2012) suggest that both top and middle management level play key roles in developing absorptive capacity. the case data also illustrates that the important of engaging in multi-agency activities, to create new knowledge about operational processes, that promote improvements that benefits all parties involved. this finding is consistent with newell et al.�s (2003) on best practice within the nhs, where multi agency activities not only promoted the development of new approaches, but also enabled the development of cross functional knowledge that facilitated use. similar concepts have also been highlighted in work exploring innovation that involved engineers and medical professional. interestingly, yoda (2015) also highlights the importance of leadership at a project level, necessary for developing the level of cross functional absorptive capacity necessary for different professional to work together. the knowledge created from such multi agency teams can then result in new processes that meet the needs of the end users and stakeholders, while reducing waste and increasing ease of use, further promoting their acceptance by those affected. finally, the research illustrated the importance of measuring the impact of improvement activities. while the cases gave emphasis to visual management techniques to help embed practices, measurement also provided a means to demonstrate the results of improvement activities, important for building support for subsequent improvement activities. building on the current research, further research needs to explore how improvement interventions have been embedded and developed. this will help develop a better understanding of how different forces have chosen to pursue organizational reform. following on from the small scale, isolated improvement activities reported in this work, further research that looks at larger scale reform activities will facilitate the further validation of the proposed conceptual framework. the ability to include the dimension of time into future research will also allow the evolution of improvement approaches employed within police forces to be observed. rather than assessing whether lean is an appropriate theory for use within police reform, it may be possible to develop new, police specific improvement frameworks and interpret how these are different to lean in order to account for the specific requirements of the policing context. overall, such research will allow the development of understanding of what 21st century police consists of and whether it can truly be defined as �lean policing�. 20 american journal of management vol. 17(2) 2017 references ackroyd, s. and thompson, p. 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(2002). absorptive capacity: a review, reconceptualization, and extension. academy of management review 27,185-203. 22 american journal of management vol. 17(2) 2017 contact author professor harry barton c/o alison wade, nottingham business school nottingham trent university 8th floor, newton building, 50 shakespeare street, nottingham, ng1 4fq +44 (0)115 941 8418 ajm 18(5) master (r).pdf checking email in the bathroom: monitoring email responsiveness behavior in the workplace william f. paczkowski palm beach state college jason kuruzovich rensselaer polytechnic institute the proliferation of email as a standard method of business communication necessitates research to understand effects on managers and their employees. this research investigates the phenomena of “email responsiveness,” defined as the extent to which individuals in the workplace perceive that they must prioritize how quickly they act in response to receiving an email, and “importance of connectedness,” defined as the priority individuals place on being connected to the organization. we present testable propositions that the social exchange mechanisms of leader-member exchange (lmx) and perceived organizational support (pos) are moderated by connectedness and thereby influence job attitudinal outcomes. introduction the proliferation and changing nature of electronic communications (e.g., email, texting, instant messaging, skype, etc.) as a necessary resource for knowledge requires continuing research in order to understand how these technologies affect relationships among managers and their employees. individuals may feel compelled to engage in behaviors that will conform with organizational “response expectations,” defined as the extent to which individuals in the workplace perceive that they must prioritize how quickly they act in response to receiving an electronic communication (bottom, gibson, daniels & murnighan, 2002; middleton & cukier, 2006; renaud, ramsay & hair, 2006). managing the response expectations of managers and coworkers can take priority over optimal productivity in an effort to maintain relationships or demonstrate proficiency (tyler & tang, 2003; weber, 2004). a high level of importance on remaining connected to their organizations can induce behaviors that demonstrate a virtual obsession with constantly checking for new email communications (marulandacarter & jackson, 2012; turel & serenko, 2010; turel, serenko & bontis, 2011; young, 1998). for example, a study conducted by matusik and mickel (2011) found that several interviewees felt such a strong urge to remain connected that they readily admitted to reading their work-related email messages while in the bathroom. nevertheless, little research has investigated how this behavior, which has become commonplace in organizations, influences important organizational outcomes (renaud et al., 2006; weber, 2004). in order to address this gap in the literature, we seek to address two interrelated research questions. first, we will investigate what mechanisms influence how managers and employees prioritize their american journal of management vol. 16(2) 2016 23 responsiveness to electronic communications. next, we will seek to understand how the perceived importance of connectivity to the organization influences the magnitude of responsiveness expectations on attitudes of job satisfaction, organizational commitment, and stress. the overall conceptual framework describing these influences is set forth in figure 1. figure 1 research model in this paper, we explore how employees’ perception of response expectations affects the levels of social exchange with their managers (i.e., leader-member exchange) and with their coworkers (i.e., perceived organizational support). we propose that at high levels of constructive social exchange, response expectations will increase satisfaction and organizational commitment while reducing intentions to leave the organization. additionally, we propose that individuals’ attribution of the importance of maintaining connectedness with the organization will moderate the impact on job outcomes. the research model contributes to extant literature in three important ways. first, we diverge from prevailing monitoring literature by focusing on how perceived email response expectations influence employee job outcomes rather than through the use of explicit managerial monitoring activities. second, we identify the social exchange mechanisms through which these employee behaviors of responsiveness are manifested. third, we include individual preferences of connectedness enabled by technology that can moderate the impact of these response expectations. our paper proceeds as follows: first, we examine existing literature pertaining to (1) the use of electronic communication in organizations, (2) explicit managerial monitoring practices, and (3) the influence of managerial behavior and cultural norms on responsiveness expectations. second, we discuss how social exchange theory is useful to help understand the influences of email responsiveness expectations. third, we include the perceived importance of organizational connectedness as a moderator. next, we develop propositions in accordance with our research model. we then conclude with limitations and practical applications of our research. literature review electronic communications in organizations computer mediated communication (cmc) such as email has become virtually indispensable in how organizations remain interconnected (matzat, 2009; ou, davison, liang & zhong, 2010; smith & tabak, 2009). despite the capability to enhance productive communication, there can be a propensity for reduced 24 american journal of management vol. 16(2) 2016 performance outcomes resulting from failing to achieve responsiveness expectations (agarwal & rodhain, 2002). electronic communication is pervasive in the workplace because of its capability to increase productivity (orlikowski & scott, 2008; ramsay & renaud, 2011). nevertheless, communication facilitated by electronic means has generated a host of challenges (byron, 2008; flanagin, pearce & bondad-brown, 2009). for example, the ease of use of electronic communications in the workplace has the propensity to cause negative results, including persistent work interruptions (fonner & roloff, 2010; jett & george, 2003) and reduced job satisfaction (taylor, fieldman & altman, 2008). employees may also exhibit behaviors associated with the compulsion to constantly check for new email communications. one study that investigated employees’ reaction to incoming communications found that 70% of the employees opened the application to read messages within six seconds, and 85% within two minutes of receipt (jackson, dawson & wilson, 2003). these behaviors can lead to work/family conflicts (anderson, coffey & byerly, 2002), overload (edmunds & morris, 2000), and stress (barley, meyerson & grodal, 2011). when connectedness importance is at a level where employees determine that it is imperative to read and respond to every organizational communication, employees’ behavior will seek to ensure that each message is processed immediately, regardless of when or where received (gupta, 2007; weber, 2004). the balance between the positive aspects of electronic communication and the potential for negative outcomes highlights the importance of continuing to investigate the impact of electronic communication activity on individual employees (matusik & mickel, 2011; orlikowski & scott, 2008; ramsay & renaud, 2011; weber, 2004). the technology acceptance model (tam) suggests that the extent to which employees perceive that technology is useful to enhance the performance of their job functions will influence their attitudinal responses (davis, 1989; jarvenpaa & staples, 2000; pendharkar & young, 2004; yuan, archer, connelly & zheng, 2010). the culture of organizations to use technology to share information, forge relationships, and bridge geographic barriers also influences the use of electronic communication technology (allen & shanock, 2012; jarvenpaa & staples, 2000; ramsay & renaud, 2011; snyder, 2010; stanton & julian, 2002). accordingly, employees will be likely to utilize electronic communication technology when they perceive that doing so is an engrained component of their work, particularly if this perception is shared throughout the organization. the use of electronic communication technology can also have negative effects on individual worker productivity (kiesler, siegel & mcguire, 1984; mazmanian, yates & orlikowski, 2006). redundant communications, information exchange that is not business-related, costs of maintaining the technology to facilitate the communication may have a net result of reduced overall productivity (duane & finnegan, 2007; gupta, 2007; gupta, sharda, greve & kamath, 2007; sipior & ward 1995). the advances of electronic communications have been found to greatly increase the propensity of continuous interruptions throughout a typical workday resulting in high levels of inefficiency (fonner & roloff, 2010; jett & george, 2003; leonardi, treem & jackson, 2010; mark, voida & cardello, 2012). for example, the ability to “reply to all” recipients of email messages can cause unnecessary interruptions and potentially dilute the efficacy of these communications. the inherent limitations of the electronic communication media, compared to face-to-face interaction (pendharkar & young, 2004), can result in misperception of emotion or tone that can negatively affect relationships among the communicators (baruch, 2005; ducheneaut & watts, 2005; ramsay & renaud, 2011). employee monitoring one of the primary functions of management is to monitor the behaviors of employees within the organization (fairweather, 1999; nebeker & tatum, 1993; samaranayake & gamage, 2011). to a certain extent, employers are compelled to monitor their employees’ behavior to mitigate legal risks, including those resulting from hostile work environment, sexual harassment, theft of intellectual property, and security threats that may be exacerbated by the use of electronic communications (aalberts, hames & thistle, 2009; ball & wilson, 2000; detienne & flint, 1996; friedman & reed 2007; mulligan, 2003; nord, mccubbins & nord, 2006; panko & beh, 2002; riedy & wen, 2010). american journal of management vol. 16(2) 2016 25 the business purpose of monitoring to encourage productivity, provide resource support, and evaluate performance can also lead to negative responses by employees to managerial oversight activities (chalykoff & kochan, 1989; douthitt & aiello, 2001; niehoff & moorman, 1993; smith & tabak, 2009; stanton & weiss, 2000). for example, employees may perceive that monitoring of their electronic communications is an invasion of privacy (alder, schminke, noel & kuenzi, 2008; alge, ballinger & green, 2004; ambrose & schminke, 2003; arnesen & weis, 2007; chalykoff & kochan, 1989; smith & tabak, 2009). the mere presence of managerial monitoring has been found to inhibit employees’ overall use of electronic communications (d’urso, 2006; hodson, englander & englander, 1999; romero, 2009; sipior & ward, 1995). monitoring activities assisted by information technology has become increasingly prevalent in the modern workplace (ariss, 2002; kidwell & kidwell, 1996; samaranayake & gamage, 2011; stanton, 2000). therefore, continuing research on how employees react to electronic communication practices is necessary (chen & park, 2005; duane & finnegan, 2007; snyder, 2010; wells, moorman & werner, 2007). a consideration in how individuals react to email response expectations is the extent to which they perceive that their activity is being monitored. however, there has been little research as to how the use of electronic communications among employees and their managers extend to monitoring. smith & tabak (2010) suggested that managers’ ability to monitor email communications can enhance productivity. for example, employers are finding it more manageable to allow employees to work remotely in order to have more flexibility while maintaining productivity goals (shellenbarger, 2012). however, monitoring can also have the propensity for negative reactions by employees if the monitoring is perceived to be intrusive or an encroachment on privacy (toorn & shu, 2010; wen & gershuny, 2005). prevailing literature regarding the use of technology by managers to monitor and influence behavior has primarily focused on employee reactions to computer assisted monitoring (see, e.g., ariss, 2002; kidwell & kidwell, 1996; samaranayake & gamage, 2011; stanton, 2000; urbaczewski & jessup, 2002). nevertheless, employee reactions to monitoring may not necessarily be a result from explicit practices, but rather from managerial and organizational expectations of behavior. accordingly, there is a gap in monitoring literature in understanding how the use of electronic communication technology as a monitoring mechanism and expectations of email responsiveness influence employee job outcomes. behavioral expectations of email responsiveness a critical deficiency in prevailing monitoring literature is that direct monitoring by managers does not necessarily capture how employees interact in the workplace, their use of electronic communication technology, or the resulting impact on job outcomes. contrary to prevailing literature, we redirect the focus from direct practices and procedures regarding electronic communications and instead evaluate how the behavior of managers influences how employees engage in electronic communication. the quality of work that is measured by direct monitoring is assigned a lower level of importance than the sheer quantity of output measured by the volume and responsiveness to electronic communication activities (stanton & julian, 2002). it has been suggested that the behavior of supervisors has the propensity to influence employees’ activities as opposed to explicit directives (anderson, et al., 2002; stanton & julian, 2002). for example, anderson et al. (2002) found that despite the explicit organizational policies that were established to enable work-family balance, employees did not engage in these flexible work programs due to concerns of negative perceptions of productivity. however, when managers also participated in the flexible work practices, these perceptions were not found. this suggests that employees take their cues from the behavior of their managers in order to evaluate what behavior will be deemed to be appropriate in the organization. arbitrary rules and policies for processing of electronic communications are fraught with difficulty (ramsay & renaud, 2011) and have been found to be counterproductive to enabling employees to conform to shifting temporal requirements of their work (forsyth & jenkins, 2011). as such, employees are often unlikely to follow these policies at all (paschal, stone & stone-romero, 2009). in order to seek 26 american journal of management vol. 16(2) 2016 a balance between the productivity enhancements resulting from electronic communications with the potential from negative outcomes, some organizations have instituted practices to limit the use of these technologies, with varying degrees of success. for example, a policy established by the technology company atos sought to drastically reduce the use of one form of electronic communications (i.e., email), but was circumvented by employees’ use of other forms of information technology to facilitate their communication (kim, 2011). the volkswagen company restricted mobile electronic communications to certain times throughout the day, but found this policy to be untenable in the united states due to employee preferences (mcmillan, 2011). in order to limit distractions, intel attempted to instill “no e-mail fridays,” but found that this practice did not effectively limit employees’ use of electronic communications (mullaney, 2011). we suggest that the perceived expectations of responsiveness by managers and coworkers influences employees’ electronic communication behaviors, potentially to a greater extent than the influences of traditional direct monitoring techniques (allen & shanock, 2012; mackenzie, 2010; matzat, 2009). patterns of use that are exhibited by managers provide guidance to employees as to how they should act in accordance to this behavior (mazmanian, et al., 2006; romm & pliskin, 1999). managers who are particularly adept at responding to emails quickly may elicit the same responsiveness levels in their employees (tyler & tang, 2003). organizational culture reinforces behavior that is of central importance to its members (erdogan, liden & kraimer, 2006; meyer, stanley, herscovitch & topolnytsky, 2002; pee, woon & kankanhalli, 2008). open communication occurs within the context of accepted organizational norms, where continuing interactions generates expectations that similar activities will be maintained (ducheneaut & watts, 2005; ramsay & renaud, 2011). communication behaviors and the associated socialization processes provide insight to employees as to what is the desired behavior within their organization (allen & shanock, 2012). accordingly, the culture of organizations can greatly influence responsiveness expectations and propensity to share information (constant, kiesler & sproull, 1994; matusik & mickel, 2011; middleton, 2007; shin, 2004). employees may adjust their behaviors to conform with responsiveness expectations based on the signals they seek to provide to their managers and their organizations. impression management of managers and coworkers is therefore a key component of influencing behavior (gupta et al., 2007). in the context of electronic communications, it has been suggested that individuals adjust their behaviors in order to cultivate a responsiveness image within their organization (six, 2007; tyler and tang 2003). under relational signaling theory (rst), employees seek to build and maintain relationships with their managers and coworkers by complying with the responsiveness expectations espoused within their organizations (six & sorge, 2008; bottom et al., 2002). email responsiveness prioritization employees will prioritize their responsiveness to electronic communications based on the signals that they seek to give to their managers and employers. these responsiveness signals are based on a variety of reasons: (1) demonstrating proficiency, (2) cultivating relationships, (3) indicating availability, or (4) affective responses to communication activity (gupta et al., 2007). for example, employees who are seeking to demonstrate proficiency will be inclined to immediately respond to communications from their managers irrespective of the intended priority (ramsay & renaud, 2011). proficiency signals are not relegated to managerial communications, since employees may also seek to demonstrate competence to their co-workers. this is particularly the case when communications occur among those in similar workgroups or team environments (matusik & mickel, 2011; mazmanian, et al., 2006). in these instances, prioritization is based on the level of importance the recipient places on satisfying the perceived responsiveness expectations of the initiator of electronic communications. the means by which these responsiveness perceptions are formed can result from the experiences that the employees have had in prior communications. for example, if one employee consistently responds immediately to all communications, then another employee may feel compelled to reciprocate with similar levels of responsiveness (ramsay & renaud, 2011). another influence on responsiveness can american journal of management vol. 16(2) 2016 27 result from the individualized relationships that employees have with each other. that is, employees may be inclined to respond quickly to those with whom they enjoy collegial relationships, and ignore communications from others that have not forged positive relationships or mutual respect (ramsay & renaud, 2011). these interpersonal bonds are particularly salient regarding the use of electronic communications since emotional intentions are so readily misperceived, which can exacerbate strained relationships (byron, 2008). irrespective of the initiator of the communication, content-based influences may also be a contributing factor in responsiveness behaviors. for example, employees may prioritize communications that are specifically indicated as important by the person initiating the contact, are accompanied by additional information (e.g., attachments), contextual clues that indicate importance, continuation of conversations (e.g., multiple “threads”), or explicitly stated that responses is not immediately expected (mazmanian, et al., 2006). however, any of these communication-specific indicators may be ignored if the recipient chooses to use more compelling criteria of signaling proficiency and/or relationship importance as a basis to satisfy responsiveness expectations. these criteria for prioritizing email responsiveness is set forth in table 1. table 1 email response prioritization criteria influences indicators relationship 1) supervisor sent email. 2) supervisor copied on email. 3) history of quick communication 4) in the same work group. 5) long-term working relationship (even if not in same work group). content 1) importance/urgency stated in email text. 2) marked as "important". 3) number of threads/iterations/respondents. 4) contains detailed data, internet links, and/or attached documents. 5) requires a deliverable. time sensitivity 1) time response is required by sender and/or recipient. 2) communicating with people in different time zones. availability 1) away from the office (e.g., at home/travelling). 2) job role of the recipient (e.g., required during traditional workday). 3) availability of the technology that can be used to respond. reduced priority 1) anticipate it may cause additional work. 2) anticipate it may lead to a confrontation. 3) procrastination. 4) general apprehension when sending/receiving email. 28 american journal of management vol. 16(2) 2016 responsiveness expectations are therefore incumbent upon the relationships among the communicators to a greater extent than the content of the specific communication. that is, the “sender” of the communication is ascribed greater importance than what is sent. employees adjusting behaviors based on signaling compliance with responsiveness expectations can result in important messages being ignored, and thereby causing suboptimal outcomes to electronic communication activities (ramsay & renaud, 2011; weber, 2004). accordingly, it is important to take into consideration these behaviors, and the mechanisms that drive them, in order to understand the overall effects on employees within their organizations (smith & tabak, 2009). social exchange and electronic communication the nature of electronic communication methods in organizations is that it inherently requires at least two individuals (i.e., the send and the recipient), and facilitates the inclusion of multiple parties to a conversation more readily than other forms of written or verbal communication (gupta, 2007; renaud, et al., 2006). interactive sharing of information engenders trusting relationships and expectations of reciprocity for behaviors that are favorable to all who participate in the interaction (jarvenpaa & staples, 2000; six, 2007; tyler & tang, 2003). social exchange theory provides insight for identifying the mechanisms that drive these perceived reciprocal response expectations (mackinnon, fairchild & fritz, 2007; wayne, shore & liden, 1997). leader member exchange (lmx) refers to the relationship between employees and their managers where obligations and experiences create an expectation of reciprocal responses to behaviors in order to achieve desired outcomes (ballinger & schoorman, 2007; scandura & pellegrini, 2008; tekleab, takeuchi & taylor, 2005; graen & uhl-bien, 1995). both parties in the interactions are motivated not only by the benefits that are sought, but also in signaling the value of a trusting relationship (agrifoglio & metallo, 2010; scandura, 1999; straiter, 2005; yukl, o’donnell & taber, 2009). relations-oriented behaviors increase levels of trust that is manifested in high-quality communication behaviors, which in turn promote higher levels of lmx (connell, ferres & travaglione, 2003; schriesheim, castro & cogliser, 1999; timmerman & harrison, 2005), and influence the overall relationship between employees and their leaders. however, there has been limited research as to how task-oriented behaviors, such as that which is required to facilitate electronic communications, are antecedents of lmx (yukl et al., 2009). the intangible aspects of electronic communication are particularly salient for the facilitation of high levels of lmx (erdogan, et al., 2006). for example, managers who lead by example of meeting response expectations will set standards of their employees’ behavior who seek to embrace similar values and standards (huang, 2002; yukl et al., 2009). high levels of lmx encourage communication, since a trusting relationship allows employees to seek more information without concerns of negative management response (harris, 2003). therefore, the use of electronic communication among leaders and their subordinates is contingent upon the levels of social exchange encompassed in lmx, and shapes the responsiveness expectations that managers help create. when managerial actions and expectations encourage imitation throughout the organization, these expectations evolve into organizational norms among employees as well (mazmanian, et al., 2006). the level of perceived organizational support (pos) will be enhanced when employees are rewarded for their desire to emulate behaviors that conform to the norms of their organization (bagraim & hime, 2008; eisenberger, armeli, rexwinkel, lynch & rhoades, 2001; lynch, eisenberger & armeli, 1999; serva, fuller & mayer, 2005). further, the belief that the organization (and its management) values its employees and supports their success is another important determinant of pos. the degree to which compliance with norms of responsiveness behavior correspond with how employees are perceived by their organization is a measure of pos (cable & derue, 2002; matzat, 2009; zweig & webster, 2002). for example, employees who signal a willingness to respond to electronic communications at a level of immediacy commensurate with organizational norms will result in high levels of pos (aubé, rousseau & morin, 2007; tekleab, et al., 2005). conversely, failing to achieve responsiveness norms resulting from inefficient use of electronic communication among employees will inhibit pos (whittaker & sidner, 1996). american journal of management vol. 16(2) 2016 29 propositions in that organizational norms of responsiveness expectations can be generated by managerial behavior, and these norms become pervasive throughout an organization, it is important to understand the influence of the social exchange mechanisms of both lmx and pos (fonner & roloff, 2010; taylor, et al., 2008). where the responsiveness expectations of managers diverge from that of the normative expectations of fellow employees, job outcomes can be influenced at differing levels (wayne, et al., 1997). expectations of immediate responsiveness to electronic communications can negatively influence employees’ job outcomes. electronic communication practices have been found to decrease levels of job satisfaction resulting from stress in the workplace (barley, et al., 2011; taylor, et al., 2008). for example, an empirical study conducted by renaud et al., (2006) in a university setting, the perception that immediate responses to electronic communications resulted in an increase in the perceived levels of stress. additionally, studies have found that job satisfaction suffers when response expectations frequently result in excessive interruptions (gupta, 2007), sacrifices that create work/family conflict (anderson et al., 2002), and overall reduction in the ability to signal productivity or efficiency (ramsay & renaud, 2011; taylor et al., 2008; tyler and tang 2003). the findings of research by friedman and currall (2003) suggested that delayed response times negatively influenced organizational commitment because disputes within the organization remained unresolved. conversely, consistently high levels of timely communication among employees enhance organizational knowledge that can increase employees’ commitment to the organization (edmunds & morris, 2000). additionally, where the responsiveness expectations of managers and the norms of an organization are at odds with employees’ capabilities, there is a heightened propensity for overall stress in the workplace (allen & shanock, 2012; anderson, et al., 2002). the sheer volume of electronic communications that are dispersed throughout organizations can collectively result in decreased satisfaction, organizational commitment, and increase the likelihood that employees will leave their jobs (pendharkar & young 2004; ramsay & renaud, 2011). enormous amounts of information contained in electronic communications, often unsolicited, results in “information overload” (barley, et al., 2011; edmunds & morris, 2000). demands of managers and normative expectations throughout the organization to achieve responsiveness expectations can outstrip abilities, resulting in high levels of strain and reduced productivity (zeldes, sward & louchheim, 2007). despite this information overload that is so prevalent in workplaces and university settings (ward, 2004), there has been little direct research into its implications (forsyth & jenkins, 2011; gwizdka, 2004.). several studies have found that lmx facilitated by electronic communications mediates the relationship between job-related tasks and job satisfaction (golden, 2006; graen & uhl-bien, 1995; harris, 2003; janssen & van yperen, 2004). further, lmx has been found to be a mediator of communication behaviors and levels of organizational commitment and stress (agrifoglio & metallo, 2010; ballinger & schoorman, 2007; morrow, suzuki, crum, ruben & pautsch, 2005; wayne, shore, bommer & tetrick, 2002). the perceived responsiveness expectations derived from managerial electronic communication behaviors induces employees to engage in similar behavior in order to enhance levels of lmx. when there are high levels of a trusting relationship among leaders and their employees, expectations of responsiveness are not as high. for example, managers will be more likely to consider actual productivity rather than the immediate responses to electronic communications as indicators of efficiency. accordingly, employees may direct their efforts on completing their work rather than suffering continuing interruptions in checking for incoming messages from their managers. electronic messages are more likely to be perceived as showing support for employees rather than intrusive monitoring. moreover, communications are more likely to be undertaken in order to reciprocate positive behaviors rather than avoiding negative consequences of failing to reply. in turn, this reciprocation of positive exchange among managers and their employees generates a reinforcing mechanism of a continuing trusting relationship. in short, electronic communications are undertaken because employees determine that it is a benefit rather than a detriment to their performance capabilities. we propose that this positive reinforcement will serve as a mechanism that will enhance job satisfaction and commitment to the organization. in addition, 30 american journal of management vol. 16(2) 2016 communications are less likely to become such a burden that they will feel compelled to leave their organization. accordingly, we expect: proposition 1: lmx mediates the relationship between responsiveness expectations and employee job satisfaction (p1a) and organizational commitment (p1b). research models that include multiple mediators have been found to more accurately assess overall mediating effects (mackinnon, et al., 2007). in that social exchange theory incorporates the relationship with leaders (lmx) as well as the relationships among all employees in an organization (pos), it is important to evaluate these potential influences separately. pos has been consistently found to influence job satisfaction (tekleab, et al., 2005), organizational commitment (allen, shore & griffeth, 2003; mowday, steers & porter, 1979; randall, cropanzano, bormann & birjulin, 1999; wayne et al., 1997). in the context of electronic communication in organizations, employees are less likely to interpret delayed responsiveness in a negative light. there will be an inclination to assume that their coworkers are engaged in work that will be mutually beneficial and are unable to respond to communications for legitimate reasons. ulterior motives will not be presumed. instead, a mutually trusting culture will enable employees to focus on their work rather than expending effort to manage the expectations of their fellow employees. accordingly, we propose that the responsiveness expectations perpetuated by organizational culture will influence the social exchange mechanism of pos, with an overall impact on job outcomes. we propose: proposition 2: pos mediates the relationship between responsiveness expectations and employee job satisfaction (p2a) and organizational commitment (p2b). importance of connectedness the importance that employees place on remaining connected to their organizations can amplify the social exchange mechanisms associated with responsiveness expectations. perceptions of importance of activities within an organization have been noted in research as potential moderators (caldwell, herold & fedor, 2004; edwards, 1996). the moderating effects of importance on lmx and pos therefore warrant further investigation (yukl, et al., 2009). the mobility of information technology can facilitate electronic communications that enables employees to remain perpetually connected to their organizations. mobile technology has the propensity to create heightened expectations of responsiveness, and the culture of organizations can reinforce these expectations where employees determine that it is important to embrace these capabilities (mazmanian, et al., 2005; middleton & cukier, 2006; matusik & mickel, 2011). further, employees who not only feel that the use of mobile technology is important, but also are comfortable in using this technology, are more likely to have positive attitudes regarding its use to remain connected to their organizations (ahluwalia, gimpel & varshney, 2010; jarvenpaa & staples, 2000; minsky & marin, 1999). employees may feel this connectedness is important to demonstrate efficiency and conformance to organizational responsiveness expectations. fender (2010) identified the level of connectedness facilitated by mobile technology as “electronic tethering” that employees can determine is a positive influence in reinforcing relationships and enhancing their performance. in particular, employees found that connectivity was important since it allowed expeditious responses to potential problems at work before they escalated into crises (fender, 2010). in a study conducted by mazmanian et al., (2005), employees described their use of mobile communication devices over the weekend, while on vacation, or in nonwork settings (e.g., golf courses) as monitoring their organization, rather than being monitored by managers or coworkers. employees may determine that organizational connectedness is an invaluable asset for accomplishing tasks, signaling efficiency to managers and coworkers, and maintaining positive collaborative relationships (mazmanian et al, 2005; middleton & cukier, 2006). conversely, employees may determine that failing to remain connected to their organization would violate the expectations of responsiveness american journal of management vol. 16(2) 2016 31 imposed upon them by their managers or coworkers (bawden & robinson, 2009; gwizdka, 2004). regardless of the reasons, higher levels of social exchange resulting from the perceived importance of connectivity can exacerbate the impact of communication expectations on job outcomes. as was suggested earlier in our paper, an environment of high trust and anticipation of reciprocal benefits between employees and their managers will result in higher satisfaction and increased organizational commitment. in an environment where lmx is at high levels, employees are more likely to determine that remaining connected with their managers will facilitate great productivity. in particular, greater responsiveness regardless of when the communications are initiated will enable both managers and their employees to address concerns and perpetuate solutions before crises occur. moreover, there will be a greater incentive to interact because communications will be anticipated to be a source of support rather than oppression. when connectivity is increased at these high levels of lmx, we propose that there will be a positive effect on job outcomes. accordingly: proposition 3: employees’ perceived importance of connectedness will moderate the strength of the mediated relationship between responsiveness expectations and job satisfaction (p3a) and organizational commitment (p3b) outcomes via lmx, such that the relationship will be stronger under high levels of perceived importance than under low levels of perceived importance. employees may have a greater level of connectedness preferences with others in their organization rather than with their managers. this is more likely the case when responsiveness is driven by the desire to conform with organizational norms than with signaling competence to a manager. for example, employees will be inclined to respond to communications from their coworkers as quickly as possible in order to provide mutual support. this may be particularly important when there are shared goals within teams. failing to respond quickly would potentially detriment the needs of their fellow employees. higher levels of connectedness at all times may be perceived as necessary to provide resources to help everyone within their organization achieve their work tasks. where this is the organizational environment, we propose that pos will not only be a more influential mediator, but will also be intensified by the perceived importance of being highly connected with others in their organization. accordingly, we propose: proposition 4: employees’ perceived importance of connectedness will moderate the strength of the mediated relationship between responsiveness expectations and job satisfaction (p4a) and organizational commitment (p4b) outcomes via pos, such that the relationship will be stronger under high levels of perceived importance than under low levels of perceived importance conclusion and opportunities for further study it is critically important to understand how the ubiquity of email communication affects the business environment. managerial monitoring of email behavior can result in employees seeking to manage response expectations rather than focusing on their work. doing so often can cause reduced performance, decreased job satisfaction, increased overload and stress and reduced organizational commitment. the social exchange mechanisms of leader-member exchange (lmx) and perceived organizational support (pos) have the propensity to influence how the responsiveness expectations influence job attitudinal outcomes. accordingly, we propose that when the level of social exchange is comparatively high, there is a favorable influence on job outcomes. the importance that individuals place on remaining connected to their organizations amplifies the magnitude of the email responsiveness expectations in the context of social exchange. when employees feel that using email is necessary to manage response expectations, there can be a compulsive need to constantly check email, regardless of when (and where) the messages are received. conversely, if email 32 american journal of management vol. 16(2) 2016 connectedness is not perceived to be important to the individual, expectations of responsiveness will have a reduced influence on the level of social exchange and job attitudes. other influences on these outcomes will prevail. therefore, we propose that email connectivity is a significant moderator of the leadermember exchange and perceived organizational mediating mechanisms incumbent in the usage of email communications. the phenomenon of email usage and responsiveness yields many opportunities for further study. while our proposed research model provides a useful framework to conceptualize email responsiveness in the context of monitoring, it will be instructive to empirically develop the construct of responsiveness expectations. additional theoretical lenses beyond social exchange may shed additional light on the influences on job outcomes, including response signaling theory, power distance, social networks, trust, and ethical considerations of monitoring behavior. moreover, a myriad of communication theories offer tremendous opportunities for interdisciplinary research. the importance of email connectedness could be studied using concepts of narcissism, technology acceptance, work interruptions, and addiction. responsiveness expectations in the context of monitoring are proposed to influence the social exchange within organizations. the importance that individuals attribute to email contributes to understanding why individuals may read and respond to email messages so compulsively. accordingly, our proposed research model suggests a useful framework to further the understanding the phenomenon of 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(2002). where is the line between benign and invasive? an examination of psychological barriers to the acceptance of awareness monitoring systems. journal of organizational behavior, 23(5): 605–633. american journal of management vol. 16(2) 2016 39 ajm 17(4) web_master.pdf american journal of management vol. 17(4) 2017 81 ceo characteristics and the decision to include non-financial performance measures in compensation contracts melloney c. simerly western kentucky university huiqi gan school of business university of massachusetts lowell this study examines how ceo characteristics influence the decision to use non-financial performance measures (nfpm) in compensation contracts. using logistic and ols regression methods, we examine the ceo characteristics: gender, age, and tenure. we provide limited evidence that female ceos are positively associated with the use of nfpm and ceo tenure is negatively associated. we also document descriptive information indicating industries that are more likely to use nfpm, and the most common types of nfpm employed. the results of this study further the understanding for the use of nfpm and provide information regarding specific managerial characteristics that influence ceo compensation decisions. introduction the use of non-financial performance measures (nfpm) in compensation contracts has been gaining popularity among firms. nfpm include performance indicators such as market share ratios, efficiency and productivity metrics, quality indicators, and innovation measures along with customer and employee satisfaction scores (ittner, larcker, & rajan, 1997). these performance indicators include constructs not incorporated in traditional financial performance measures such as revenue, earnings, or some form of net income (murphy, 1999; kaplan & atkinson, 1998). kaplan and atkinson (1998) argue that adopting both financial and non-financial measures for the design of compensation contracts engenders decisions that are based on a long-term perspective, thus decreasing short-term incentives that are not aligned with shareholder interests. the extant literature provides evidence that using nfpm can lead to several benefits that include: better strategic alignment (kaplan & norton, 1996; ittner et al. 1997; ittner & larcker, 1998a, 1998b; banker, potter, & srinivasan, 2000; chenhall, 2003; ittner, larcker, & randall, 2003b), improved performance (amir & lev, 1996; ittner & larcker, 1998a; banker et al. 2000; maines et al. 2002; said, hassabelnaby, & wier, 2003; hassabelnaby, mohammad, & said, 2010; van der stede, chowand, & lin, 2006; hauser, simester, & wernerfelt, 1994; sedatole, 2003), expanded opportunity to assess managerial ability (kaplan & norton, 1996; johnson & kaplan, 1987; eccles, 1991), increased robustness in performance measurement (singleton-green, 1993; hassabelnaby et al., 2010), and more timely feedback, as well as reduction of risk and noise inherent in financial measures (lambert & larcker, 1987; bruns & mckinnon, 1993; bushman, indjejikian, & smith, 1996; feltham & 82 american journal of management vol. 17(4) 2017 xie, 1994; hemmer, 1996; davila & venkatachalam 2004). however, many companies do not use nfpm in the design of chief executive officer (ceo) compensation contracts (ittner & larcker, 1998b, 2003). thus, it is important to understand the factors that lead to the decision to use nfpm. prior literature highlights the importance of managerial characteristics in firm decisions regarding compensation. bertrand and schoar (2003) use panel data to investigate firm level effects resulting from the characteristics of individual managers by using manager mobility across firms. they identify patterns that signal differences in managerial styles and substantiate that managerial fixed effects make a difference in firm level compensation and governance outcomes. alternatively, by using fixed effects regression methods to separate time invariant effects from the influence of individual managers, graham, li, and qiu (2012) find that manager fixed effects explain a major portion of the variation in levels of executive pay, and they quantify the importance of the influence of managerial characteristics on total executive compensation. this research provides evidence that individual ceos matter regarding executive pay decisions. in addition, specific ceo traits can affect firm pay structures and corporate governance decisions (bertrand & schoar, 2003; graham et al. 2012). however, this body of literature does not identify what particular ceo characteristics are germane. after reviewing the extant literature pertaining to ceo characteristics in relation to ceo pay structure, we speculate that gender, age, and tenure may influence the decision to use nfpm. the purpose of this study is to provide empirical evidence regarding this supposition. research using trait theory suggests that the characteristics of leaders and the resultant attributions have repercussions for leadership roles (derue, nahrgang, wellman, & humphrey, 2011). in relation to gender, derue et al. (2011) contend that attributions made based on perceived differences between men and women can affect leadership outcomes (derue et al., 2011). the management literature provides evidence in support of this premise documenting a more negative abnormal stock return after the announcement of a new female ceo compared to the announcement of a new male ceo (lee & james, 2007). moreover, prior literature provides evidence that women tend to be more risk averse than men when making financial decisions (cullis, jones, & lewis, 2006; barber & odean, 2001; barua, davidson, rama, & thiruvadi, 2010). since nfpm can reduce the risk inherent in financial measures (bruns & mckinnon, 1993; feltham & xie, 1994) we predict that female ceos will be more positively associated with firms that adopt nfpm. age and tenure are also consequential to leadership roles and are both influential in the context of compensation structure (lewellen, loderer, & martin, 1987; finkelstein & hambrick, 1989; mehran, 1995; ryan & wiggins, 2001). prior studies regarding ceo age and compensation suggests that both younger and older ceos have a short-term horizon perspective (finkelstein & hambrick, 1989; ryan & wiggins, 2001). younger ceos are motivated to build their reputation with projects that provide expedient results and older ceos want to experience the benefits of their labor before they retire. alternatively, the mixed evidence concerning ceo age and equity compensation suggests that managerial power may impede the optimal contracting environment as ceos progress through their career (mehran, 1995; lewellen et al., 1987; yermack, 1995). we agree that firms have incentive to include nfpm in ceo contracts for younger and older ceos due to their short-term horizon perspective. however, we contend that managerial power theory impedes the optimal contracting environment for older and more tenured ceos (bebchuk, fried, & walker, 2002). this may result in the failure of contracts to include nfpm that engender a long-term horizon perspective. as a consequence, we conclude that ceo age and tenure may be negatively associated with the adoption of nfpm. in addition to hypothesis testing concerning the association of ceo characteristics to the inclusion of nfpm in ceo compensation, we provide data summaries describe the increasing popularity of nfpm and weights applied to nfpm, the industries that are more likely to use nfpm, and the popularity of specific types of nfpm. we test the hypotheses concerning ceo characteristics and the use of nfpm using logistic regression with a dichotomous variable for the inclusion of nfpm as our main dependent variable and ordinary least squares (ols) regression methods using the weight applied to nfpm as an alternative variable. we offer limited evidence that female ceos are more likely to opt into compensation american journal of management vol. 17(4) 2017 83 contracts that include nfpm. in addition, we document evidence that ceos may increasingly adopt a short-term perspective as they age and we find that tenure has a negative relation to nfpm. this study makes several contributions. first, it extends prior literature on nfpm (e.g., kaplan & norton, 1996; ittner et al., 1997; ittner & larcker, 1998a, 1998b; banker et al., 2000; ittner et al., 2003b; amir & lev, 1996; said et al., 2003; hassabelnaby, said, & wier, 2005; van der stede et al., 2006; hauser et al., 1994; sedatole, 2003) by showing that managerial characteristics and preferences can impact firms� choice of using nfpm. in addition, this research is valuable to those who hire ceos and to those who design compensation contracts such as the board of directors (bod) and compensation committee members by demonstrating that ceo power may impede the optimal contracting environment for more tenured ceos. bods may want to insist on the inclusion of nfpm to motivate more tenured ceos to make decisions based on a more forward-looking perspective in order to better align manager and shareholder interests. furthermore, this investigation assists stakeholders in providing more information about the true nature and focus of a firm. the remainder of this paper is organized as follows. in the next section (section ii), we discuss previous literature and develop our hypotheses. we discuss the research design in section iii and empirical results in section iv. we conclude the paper in section vi. literature review and hypothesis development prior literature offers insight on many key managerial traits and characteristics that may influence executive compensation decisions. these characteristics emerge in the extant literature as linked to various risk preferences or differences in managerial horizon perspectives that may be associated with decisions to use nfpm. in our study, we focus on three demographic ceo descriptors: gender, age, and tenure. gender byrnes, miller, and schafer (1999) conduct a meta-analysis of both self-reported and observed data in the psychology literature and provide evidence that men are less risk-averse than women. specifically, they find that women are less likely to engage in risky behaviors associated with smoking, using drugs or alcohol, driving, and gambling. additionally, psychology researchers contribute insight on differences between men and women regarding leadership. in a meta-analysis conducted by derue et al. (2011), they conclude that leadership styles differ between men and women, however, gender effects seem to disappear once intelligence and personality differences are considered. nonetheless, derue et al. (2011) contend that the attributions others make about the perceived differences between genders may affect leadership outcomes. consistent with this premise, the management literature documents a larger negative abnormal stock return after the announcing a new female ceo compared to the announcement of a new male ceo (lee & james, 2007). the behavioral economics literature offers further insight on decision-making and risk tolerance for men and women. in a computerized laboratory experiment, powell and ansic (1997) examine gender differences pertaining to risk preferences and strategic choices in making financial decisions. they manipulate task framing and task familiarity by using an insurance coverage decision (familiar task) and a currency market decision (unfamiliar task). they also vary the amount of money participants can earn as a result of managing costs and the ambiguity associated with the tasks. powell and ansic (1997) demonstrate that women are less likely to take risks, irrespective of task framing or the amount of uncertainty associated with the task. this study supports the notion that men and women adopt different strategies for financial decisions. however, these differences do not necessarily affect performance. the behavioral economics literature also offers evidence that men and women adopt different strategies in the financial decision context. barber and odean (2001) find that, on average, men trade stock more than women. although this behavior did not affect performance, they conclude that the increased trading behavior for men may be the result of overconfidence and/or differences in risk tolerance. additionally, in the accounting literature, barua et al. (2010) report that cfo gender leads to 84 american journal of management vol. 17(4) 2017 differences in accrual accounting decisions. their analysis provides evidence that companies with female cfos have lower performance-matched absolute discretionary accruals and lower absolute accrual estimation errors. barua et al. (2010) argue that this is likely due to different risk preferences based on gender. this study indicates that not only are women more risk-averse than men, but they are also less likely to engage in earnings manipulation, a consequence of a short-term perspective. nfpm promote a long-term managerial perspective, thereby decreasing short-term actions that are not aligned with shareholder interest (johnson & kaplan, 1987; kaplan & atkinson, 1998; singletongreen, 1993; kaplan & norton, 1996, 2001; bushman et al., 1996; hemmer, 1996). in addition, nfpm can decrease risk inherent in noisy financial measures and can be a safeguard for managers against circumstances beyond their control (bruns & mckinnon, 1993; feltham & xie, 1994). given the evidence that women are more risk-averse than men and exhibit a more long-term perspective when making accounting decisions (byrnes et al., 1999; powell & ansic, 1997; barber & odean, 2001; cullis et al., 2006; barua et al., 2010), it follows that women may be more likely to be associated with the use of nfpm in compensation contracts. furthermore, the compensation structure offered may differ depending on the attributions made for female ceos versus male ceos (lee & james, 2007; derue et al., 2011). based on the preceding arguments, we propose the following hypothesis: h1: female ceos will be more positively associated with the firms that adopt nfpm for compensation contracts than male ceos. age and tenure prior literature suggests that ceo age and tenure are also underlying factors in determining ceo remuneration. finkelstein and hambrick (1989) investigate the effect of age and tenure on ceo pay levels and find an inverted u-shaped relationship. they explain that this is likely due to changes in the ceo�s personal circumstances. younger and newer ceos may have more need for current cash incentives (e.g., mortgage obligations, child rearing expenses, etc.) and this grows as they attain tenure up to a point, then they begin to prefer other types of compensation. firms also respond to the diverse ceo motivations related to age and tenure. based on the premise that younger ceos have an incentive to choose projects with short-term payoffs in order to bolster their reputations and older ceos have incentive to choose projects that pay off before they retire, ryan and wiggins (2001) document that firms pay fewer bonuses to the youngest and oldest managers. they argue that this occurs in order to encourage a long-term decision making for these executives. the results for the relationship between ceo age and equity compensation are mixed. mehran (1995) finds that older ceos have less equity pay while, lewellen et al. (1987) document the opposite. yermack (1995) specifically tests the relationship between ceo age and the number of stock options awarded. using agency theory and incorporating horizon problem explanations, he contends that ceos approaching retirement will avoid investment in long-horizon projects that will only reward their successor. to mitigate this issue, firms increase the amount of performance-based compensation for older ceos in order to align their interests with firm value maximization. contrary to theory, yermack (1995) finds no specific relationship between ceo age and the number of stock options awarded. we contend that this may be due to increasing ceo power. bebchuk et al. (2002) point out that ceos often have considerable influence over the appointment of directors and frequently serve on the compensations committee giving them substantial influence over compensation structure decisions and impeding the optimal contracting process. the extant literature reports that ceo tenure is accompanied by competing forces. on one hand, tenure can be an indication of managerial quality. bushman et al. (1996) document evidence regarding the impact of ceo tenure on performance incentives by examining the relationship between individual performance evaluation and several explanatory variables, including tenure. they find that the importance of individual performance evaluation is positively associated with tenure. moreover, davila and venkatachalam (2004) investigate the role of nfpm in compensation contracts for the airline industry using ceo tenure as a proxy for quality. their results indicate that passenger load factor (a non-financial american journal of management vol. 17(4) 2017 85 performance measure) is an important determinant for ceo pay and that ceo tenure is associated with higher levels of both cash and total compensation. on the other hand, tenured ceos can become entrenched and compensation packages may increasingly reflect ceo influence rather than stockholder interests. ceos can gain control over boards by replacing board members with new directors (finkelstein & hambrick, 1989) or by controlling the flow of information to compensation committees (coughlan & schmidt, 1985). hill and phan (1991) argue that ceo tenure may act as a proxy for the ceo�s ability to exert influence over the bod in making compensation decisions. they report that both the absolute levels of and changes in ceo cash compensation are decreasingly associated with abnormal stock returns as ceo tenure increases. considering that prior literature predicts that both ceo age and tenure are associated with a shortterm horizon perspective (finkelstein & hambrick, 1989; ryan & wiggins, 2001) and there are opposing forces (entrenchment and quality) at play concerning ceo tenure (ryan & wiggins, 2001). we consider managerial power for the prediction concerning the relation of both age and tenure with the use of nfpm (bebchuk et al., 2002). we argue that ceo power increases with both age and tenure resulting in compensation structure that reflects a short-term horizon perspective for older and more tenured ceos. as a result, we offer the following hypothesis concerning ceo tenure and age: h2: ceo age and tenure will be negatively associated with the firms that adopt nfpm for compensation contracts. methodology data and sample selection the firms included in the analyses are comprised of 1,017 firms listed on the standard and poor�s 500 index (s&p 500) at least once from 1991-2012. the s&p 500 is a valid indicator of firm behavior and performance for the u.s. economy (fama & french, 2002). we then hand collect the nfpm information by reviewing proxy statement disclosures listed in the u.s. securities and exchange commission electronic data-gathering, analysis, and retrieval (edgar) database for the years 2000-2014. this results in 9,734 firm-year observations. we then obtain data for the independent variables of interest and control variables using the excecucomp, risk metrics directors and compustat databases. missing data reduce the sample to 5,909 firm-year observations. empirical model to test the link between the adoption of nfpm and ceo characteristics, we use the following logistic regression model to test the relation of ceo characteristics to the adoption of npfm. p(nfpmi,t =1) = 0 + 1ceogenderi,t + 2ceoagei,t + 3ceotenurei,t + 4roai,t + 5leveragei,t + 6sizei,t + 7distressi,t + 8strategyi,t + 9qualityi,t + 10mktnoisei,t-1 thru t-5 + 11 percinsbodi,t + 12bodsizei,t +µi + t + i,t, (1) where: i = observation for each firm; µ = indicator variables for each industry; v = indicator variables for each year; nfpm = binary variable coded as 1 if the firm indicates the use of nfpm in the ceo compensation contract for the year and 0 otherwise; ceogender = a binary variable coded as 1 for female ceos and 0 for male ceos; ceoage = the age of the ceo in years ceotenure = the current year minus the year an individual assumed the ceo position; 86 american journal of management vol. 17(4) 2017 roa = income before extraordinary items divided by lagged total assets; leverage = ratio of total debt divided by total stockholder equity; size = natural logarithm of net firm sales; distress = probability of bankruptcy computed for the previous five years using ohlson�s (1980) model; strategy = composite score for organizational strategy using three variables: ratio of research and development to sales, market-to-book ratio, and ratio of number of employees to sales averaged over previous five years; quality = indicator variable coded as 1 if a firm is a quality award winner listed on fortune world�s most admired list, and 0 otherwise; mktnoise = composite measure using fisher z-scores for the correlations between return on assets, return on equity, and return on sales, with stock market returns for the five years prior to each proxy date; percinsbod = percentage of the board with insider affiliation (employee of the firm or one of the firm affiliates); bodsize = number of directors. measures dependent variable the information for the dependent variable was collected by reviewing proxy statements listed on edgar for each firm year. following ittner et al. (1997), firms are identified as using nfpm by searching for the keywords: " non-financial," "nonfinancial," "customer satisfaction," "employee satisfaction,� "employee morale," " employee motivation," "quality process," �improvement," " individual objectives," "reengineering," "new product development," diversity," "market share," "productivity," "efficiency," "safety," "innovation," "operational, " "measure," "operational performance," "strategic objectives," "individual performance," and "individual goals." then, the ceo compensation report was reviewed to ensure that the keyword(s) is used in the appropriate context as a part of ceo remuneration. firms using both financial and nfpm are coded as one. firms disclosing only the use of financial performance measures are coded as zero. in addition, the data for the weights placed on nfpm was collected to use as an alternative dependent variable. independent variables of interest the information on ceo gender is available in the risk metrics directors database. female ceos are coded as one and male ceos are coded as zero. ceo age and tenure are obtained from the execucomp database. the computation for the tenure variable is the difference between the current year and the year the ceo position was assumed. control variables we include several firm level controls highighted by prior research to be associated with the use of nfpm. firm performance, leverage and size are key determinants for the use and retention of nfpm (said et al., 2003; hassabelnaby et al., 2005). moreover, financial distress results in a lower likelihood that a firm will adopt nfpm (hassabelnaby et al., 2005). as a result, we include roa to represent performance, a leverage ratio and net firm sales as a proxy for size. additionally, we include ohlson�s (1980) bankruptcy probability measure as an indicator of financial distress. previous studies offer evidence that firm decisions to retain nfpm are significantly associated with a prospector firm strategy and firms with strong quality initiatives (ittner et al., 1997; said et al., 2003; hassabelnaby et al., 2005). to account for these factors we follow ittner et al. (1997) in computing a composite score to represent firm strategy and include an indicator variable for firms that are listed on fortune world�s most admired list for the sample period. davila and venkatachalam (2004) document that the noise in financial performance measures influences the association between nfpm and ceo compensation. moreover, the use of nfpm are american journal of management vol. 17(4) 2017 87 positively related to the amount of noise inherent in financial measures (feltham & xie, 1994; ittner et al., 1997). consequently, we follow ittner et al. (1997) by including a variable to account for market noise by using the firm level correlations between accounting returns and stock market returns (ittner et al., 1997; lambert & larcker, 1987). this measure is constructed by obtaining the fisher z-score for the correlation between return on assets and stock market returns for the five years prior to each proxy date core, holthausen, and larcker (1999) use ceo compensation as a proxy for assessing board effectiveness because it is observable. moreover, the bod has significant power over the level and structure of ceo compensation. specifically, core et al. (1999) find that the percentage of inside board members has a negative relation with ceo total compensation, a signal for optimal compensation contracting. accordingly, the proportion of inside directors may influence whether the bod approves a ceo compensation package that includes or excludes nfpm. core et al. (1999) also document that total ceo compensation is positively related to board size. thus, we include a measure for the percentage of inside board members and board size obtained from the risk metrics directors database. alternative dependent variable prior research concerning the use of nfpm demonstrates that firms introducing nfpm will need to reduce the weight placed on accounting income for compensation contracts (hemmer, 1996). this is consistent with predictions made by kaplan and atkinson (1998), that firms may come to rely more on long-term indicators of performance (i.e., nfpm) and less on short-term financial measures. following other studies that investigate the use of nfpm, we also collected information from the firm sample proxy statements concerning the weights applied to nfpm, and then used these as an alternative dependent variable in an analysis examining the relation of the weighted nfpm to ceo characteristics (ittner et al., 1997; said et al., 2003; hassabelnaby et al., 2005; hassabelnaby et al., 2010). this analysis is conducted using the following ols regression model: weightnfpmi,t = 0 + 1ceogenderi,t + 2ceoagei,t + 3ceotenurei,t + 4roai,t + 5leveragei,t + 6sizei,t + 7distressi,t + 8strategyi,t + 9qualityi,t + 10mktnoisei,t-1 thru t-5 + 11 percinsbodi,t + 12bodsizei,t +µi + t + i,t (2) where, weightnfpm = weight placed on the npfm if used in ceo compensation contracts. the independent variables for model (2) are the same as defined for model (1). results descriptives table 1 contains the 9,734 observations for the full sample collected from the edgar database by year (2000-2014), comparing the number of firms that have adopted and the number of firms that have not adopted nfpm for ceo contracting. the graph in figure 1 supports our assertion that the use of nfpm is on the rise, demonstrating that the percentage of firms adopting nfpm has increased since the early 2000s from less than 250 firms in the sample to over 400 firms in 2014. 88 american journal of management vol. 17(4) 2017 table 1 nfpm distribution by year figure 1 frequency of nfpm adopters by year table 2 lists the distribution of the full sample for adopters of nfpm and non-adopters in each industry identified by two-digit sic code. there are several industries in which all firms in the sample year nonadopters adopters % of nfpm adopters total firms 2000 455 232 33.77% 687 2001 435 251 36.59% 686 2002 436 250 36.44% 686 2003 408 282 40.87% 690 2004 388 293 43.02% 681 2005 358 324 47.51% 682 2006 322 342 51.51% 664 2007 249 402 61.75% 651 2008 215 428 66.56% 643 2009 192 438 69.52% 630 2010 162 460 73.95% 622 2011 152 465 75.36% 617 2012 149 454 75.29% 603 2013 155 447 74.25% 602 2014 159 431 73.05% 590 total 4,235 5,500 56.50% 9,734 american journal of management vol. 17(4) 2017 89 2-digit sic code industry nonadopters adopters % of nfpm adopters total firms 1 agricultural production 14 100.00% 14 10 metal mining 19 31 62.00% 50 12 coal mining 13 49 79.03% 62 13 oil and gas extraction 178 260 59.36% 438 14 mining and quarrying of nonmetallic minerals 7 100.00% 7 15 building cnstrctn general contractors & operative builders 25 44 63.77% 69 16 heavy cnstrctn, except building construction contractors 23 19 45.24% 42 17 construction special trade contractors 11 36.67% 30 20 food, beverage 158 221 58.31% 379 21 tobacco products 10 41 80.39% 51 22 textile mill products 5 3 37.50% 8 23 apparel and other textile products 54 34 38.64% 88 24 lumber and wood products 33 36 52.17% 69 25 furniture and fixtures 34 11 24.44% 45 26 paper and allied products 47 80 62.99% 127 27 printing and publishing 51 49 49.00% 100 28 chemicals and allied products 274 422 60.63% 696 29 petroleum 14 70 83.33% 84 30 rubber 45 35 43.75% 80 31 leather and leather products 17 20 54.05% 37 32 stone, clay, & glass products 24 14 36.84% 38 33 primary metal industries 62 58 48.33% 120 34 fabricated metal products 61 32 34.41% 93 35 industrial machinery and computer equipment 262 390 59.82% 652 36 electronic and other electric equipment 249 373 59.97% 622 37 transportation equipment 91 184 66.91% 275 38 instruments and related products 144 280 66.04% 424 39 miscellaneous manufacturing 38 7 15.56% 45 40 railroad transportation 30 40 57.14% 70 41 local, suburban transit & interurbn hgwy passenger transpo 3 1 25.00% 4 42 motor freight transportation 26 19 42.22% 45 44 water transportation 8 7 46.67% 15 45 transportation by air 7 60 89.55% 67 47 transportation services 8 17.78% 45 48 communication 134 184 57.86% 318 49 electric, gas and sanitary services 180 507 73.80% 687 nfpm have adopted nfpm. these include agricultural production (sic code 1) and mining and quarrying of nonmetallic minerals (sic code 14). however, the number of firms in our sample representing these industries is small. among industries with more than 500 firms represented, electric, gas and sanitary services (sic code 49) is the industry in which the adoption of nfpm is most popular with almost 74% of firms adopting nfpm followed by chemicals and allied products (sic code 28) where almost 61% of firms in the sample have adopted nfpm. table 2 sample distribution for the use of nfpm by industry 90 american journal of management vol. 17(4) 2017 2-digit sic code industry nonadopters adopters % of nfpm adopters total firms 50 wholesale�durable goods 50 26 34.21% 76 51 wholesale�non-durable goods 30 47 61.04% 77 52 building matrials, hrdwr, garden supply & mobile home de 17 27 61.36% 44 53 general merchandise store 90 86 48.86% 176 54 food stores 20 22.47% 89 55 automotive dealers and gasoline service stations 38 34 47.22% 72 56 apparel and accessory stores 105 42 28.57% 147 57 home furniture, furnishings and equipment stores 44 24 35.29% 68 58 eating and drinking 56 43 43.43% 99 59 miscellaneous retail 106 47 30.72% 153 60 depository institutions 220 249 53.09% 469 61 nondepository credit institutions 59 60.82% 97 62 security & commodity brokers, dealers, exchanges & service 102 132 56.41% 234 63 insurance carriers 217 208 48.94% 425 64 insurance agents, brokers and service 15 15 50.00% 30 65 real estate 2 18 90.00% 20 67 holding and other investment offices 140 135 49.09% 275 70 hotels, rooming houses, camps, and other lodging places 9 29 76.32% 38 72 personal services 25 9 26.47% 34 73 business services 343 451 56.80% 794 75 automotive repair, services and parking 18 12 40.00% 30 78 motion pictures 4 9 69.23% 13 79 amusement and recreation services 24 14 36.84% 38 80 health services 41 73 64.04% 114 82 educational services 16 23 58.97% 39 87 engineering and management services 12 30 71.43% 42 99 nonclassifiable establishments 29 16 35.56% 45 total 4,235 5,500 56.50% 9,734 table 2 (continued) sample distribution for the use of nfpm by industry table 3 tabulates the distribution for the number of nfpm adopted for each firm observation collected from edgar. most firms adopt one or two nfpm for ceo compensation. american journal of management vol. 17(4) 2017 91 table 3 yearly distribution for the number of nfpm adopted table 4 contains the distribution for the types of nfpm adopted for the full sample of 9,734 firm year observations. the most popular nfpm is strategic objectives, consistent with numerous studies highlighting strategic alignment as a benefit of using nfpm (kaplan & norton, 1996; ittner et al., 1997; ittner & larcker, 1998a, 1998b; banker et al., 2000; chenhall, 2003; ittner et al,. 2003b). the second most popular type of nfpm is operational performance, followed by safety and customer satisfaction. figure 2 is a graphical display of this information. year 0 1 2 3 4 total 2000 454 145 48 26 14 687 2001 435 157 52 26 16 686 2002 436 151 49 29 21 686 2003 408 165 51 36 30 690 2004 388 162 63 42 26 681 2005 357 165 82 48 30 682 2006 320 173 87 54 30 664 2007 248 172 127 56 48 651 2008 215 185 110 78 55 643 2009 190 180 107 84 69 630 2010 161 184 121 94 62 622 2011 152 161 144 91 69 617 2012 149 150 137 95 72 603 2013 155 149 133 101 64 602 2014 159 166 131 78 56 590 total 4,227 2,465 1,442 938 662 9,734 number of nfpm adopted 92 american journal of management vol. 17(4) 2017 table 4 types of nfpm adopted by firms nfpm type number of firms customer satisfaction 1070 employee satisfaction 219 quality process 108 re-engineering or reengineering 3 new product development 136 diversity 754 market share 952 productivity 574 efficiency 618 safety 1169 innovation 713 operational measure 113 operational performance 1352 strategic objectives 2029 nonfinancial goals (unspecified) 988 american journal of management vol. 17(4) 2017 93 figure 2 types of nfpm adopted by firms table 5 describes that data collected for our alternative dependent variable, the weight placed on nfpm. the percentage of the weight applied to nfpm is tabulated by year. given the descriptive results presented in table 1 and table 5, the data collected demonstrate not only an increase in the adoption of nfpm among firms listed on the s&p 500 but also an increase in the relative weight applied to these measures. 94 american journal of management vol. 17(4) 2017 table 5 nfpm weight distribuion by year hypotheses testing we begin our analysis of the relation between nfpm and ceo characteristics by examining the descriptive statistics for the available sample after matching the data collected from proxy statements (9,734 observations) to the excecucomp, risk metrics directors and compustat databases leading to a sample of 5,909 firm-year observations for our regression analyses. table 6 panel a contains the descriptive statistics. the mean for nfpm is 0.609; consequently, over half of the firm year observations report the use of both financial and nfpm for ceo remuneration. with respect to the independent variables of interest, 2.2 percent of the sample are female ceos. the median for age is 56 years and average ceo tenure is slightly more than 7 years. panel b of table 6 contains the difference tests and descriptive statistics for the variables of interest and the control variables comparing firms that have adopted nfpm with firms that do not include nfpm in ceo compensation structure. according to the univariate tests, more women are associated with firms that use nfpm (p < 0.001). the two groups of firms have ceos with relatively the same age, however, firms that use nfpm employ ceos that have significantly less tenure. panels c, d and e of table 6 contain the frequency of using nfpm by gender, by the median of age, and by the median of tenure. we also test the mean difference and median difference using t-tests and wilcoxon tests. these analyses show that the female group is significantly more likely to be associated with adopters of nfpm and the weights applied to nfpm compared to the male group. however, there are no significant differences for age for both the mean and median groups that are either above or below the mean/median. the difference in the frequency of using nfpm between the tenure below median group and the tenure above median group for the frequency of nfpm adoption and the weights assigned to nfpm for ceo compensation is significant. according to these comparisons, more tenured ceos are less likely to opt into contracts that include nfpm. year nonadopters adopters % for weight nfpm adopters total firms 2000 667 20 2.91% 687 2001 662 24 3.50% 686 2002 665 21 3.06% 686 2003 663 27 3.91% 690 2004 646 35 5.14% 681 2005 634 48 7.04% 682 2006 607 57 8.58% 664 2007 558 93 14.29% 651 2008 539 104 16.17% 643 2009 517 113 17.94% 630 2010 507 115 18.49% 622 2011 502 115 18.64% 617 2012 486 117 19.40% 603 2013 484 118 19.60% 602 2014 500 90 15.25% 590 total 8,637 1,097 11.27% 9,734 american journal of management vol. 17(4) 2017 95 panel f of table 6 contains the correlations for the dependent variable (nfpm), the variables representing ceo characteristics, and the control variables. as expected, nfpm is significantly and positively related to ceogender, indicating the women are more risk-averse than men (byrnes et al., 1999; powell & ansic, 1997; barber & odean, 2001; cullis et al., 2006; barua et al., 2010). age is not significantly correlated with nfpm. alternatively, nfpm is negatively correlated with tenure, indicating that as ceos gain tenure they may begin to take on a short-term perspective. table 6 panel a: descriptive statistics for regression sample nfpm = binary variable coded as 1 if the firm indicates the use of nfpm in the ceo compensation contract for the year and 0 otherwise; weightnfpm = weight placed on the npfm if used in ceo compensation contracts; ceogender = a binary variable coded as 1 for female ceos and 0 for male ceos; ceoage = the age of the ceo in years ceotenure = the current year minus the year an individual assumed the ceo position; roa = income before extraordinary items divided by lagged total assets; leverage = ratio of total debt divided by total stockholder equity; size = natural logarithm of net firm sales; distress = probability of bankruptcy computed for the previous five years using ohlson�s (1980) model; strategy = composite score for organizational strategy using three variables: ratio of research and development to sales, market-to-book ratio, and ratio of number of employees to sales averaged over previous five years; quality = indicator variable coded as 1 if a firm is a quality award winner listed on fortune world�s most admired list, and 0 otherwise; mktnoise = composite measure using fisher z-scores for the correlations between return on assets, return on equity, and return on sales, with stock market returns for the five years prior to each proxy date; variable n mean std. dev. 25th percentile median 75th percentile min max nfpm 5909 0.609 0.488 0.000 1.000 1.000 0.000 1.000 nfpmweight 5909 0.038 0.113 0.000 0.000 0.000 0.000 1.000 gender 5909 0.022 0.148 0.000 0.000 0.000 0.000 1.000 age 5909 55.847 6.620 51.000 56.000 60.000 34.000 82.000 tenure 5909 7.060 6.094 3.000 5.000 9.000 1.000 51.000 roa 5909 0.070 0.095 0.031 0.066 0.110 -1.747 0.610 leverage 5909 0.570 0.199 0.443 0.576 0.697 0.032 1.800 size 5909 8.856 1.261 7.934 8.784 9.754 4.873 12.757 distress 5909 0.165 0.146 0.049 0.125 0.241 0.000 0.983 strategy 5909 0.004 0.169 -0.081 -0.040 0.032 -0.140 6.164 quality 5909 0.189 0.392 0.000 0.000 0.000 0.000 1.000 mktnoise 5909 -0.042 0.923 -0.636 -0.049 0.529 -3.793 4.575 percinsbod 5909 0.754 0.148 0.667 0.786 0.875 0.000 1.000 bodsize 5909 10.246 2.393 9.000 10.000 12.000 4.000 34.000 96 american journal of management vol. 17(4) 2017 percinsbod = percentage of the board with insider affiliation (employee of the firm or one of the firm affiliates); bodsize = number of directors. table 6 (continued) panel b: descriptive statistics for nfpm adopters (non-adopters) n mean median n mean median t-test wilcoxon gender 2312 0.013 0.000 3597 0.028 0.000 0.000 0.000 age 2312 55.812 56.000 3597 55.870 56.000 0.745 0.451 tenure 2312 7.850 6.000 3597 6.552 5.000 0.000 0.000 roa 2312 0.065 0.066 3597 0.074 0.066 0.001 0.371 leverage 2312 0.548 0.558 3597 0.583 0.589 0.000 0.000 size 2312 8.408 8.354 3597 9.144 9.105 0.000 0.000 distress 2312 0.167 0.126 3597 0.164 0.124 0.439 0.104 strategy 2312 0.024 -0.033 3597 -0.008 -0.046 0.000 0.000 quality 2312 0.151 0.000 3597 0.214 0.000 0.000 0.000 mktnoise 2312 -0.017 0.006 3597 -0.058 -0.080 0.090 0.020 percinsbod 2312 0.711 0.750 3597 0.782 0.818 0.000 0.000 bodsize 2312 9.881 10.000 3597 10.480 10.000 0.000 0.000 the variable definitions are the same as those defined in panel a. adopters difference testsnon-adopters american journal of management vol. 17(4) 2017 97 table 6 (continued) table 6 (continued) panel f: correlation matrix for dependent variables, independent variables of interest and control variables tests of h1 and h2 hypothesis 1 states that female ceos will be more positively associated with the use of nfpm in compensation contracts than male ceos while hypothesis 2 predicts that both age and tenure will be negatively associated with the adoption of nfpm. using model 1 and including gender, age and tenure as independent variables of interest, the estimated coefficient for gender is not compelling. thus, hypothesis 1 is not supported. additionally, the coefficient for age is also not significant. however, the coefficient for tenure is negative and significant (p < 0.01). therefore, more tenured ceos are less likely to opt into compensation contracts that include nfpm and firms are less likely to include these measures for after controlling for gender and age. table 7 contains the results. difference tests mean median mean median t-test wilcoxon frequencies of nfpm use 0.605 1.000 0.773 1.000 0.000 0.000 weightnfpm 0.037 0.000 0.058 0.000 0.038 0.000 difference tests mean median mean median t-test wilcoxon frequencies of nfpm use 0.604 1.000 0.613 1.000 0.453 0.453 weightnfpm 0.038 0.000 0.038 0.000 0.919 0.951 panel e: frequencies of nfpm use by below v.s. above median tenure mean median mean median t-test wilcoxon frequencies of nfpm use 0.651 1.000 0.576 1.000 0.000 0.000 weightnfpm 0.044 0.000 0.033 0.000 0.000 0.000 panel c: frequencies of nfpm use by gender panel d: frequencies of nfpm use by below v.s. above median age low high male female low high difference tests nfpm 1 weightnfpm 0.2681* 1 gender 0.0508* 0.0270* 1 age 0.0042 0.0001 -0.0636* 1 tenure -0.1039* -0.0490* -0.0596* 0.3839* 1 roa 0.0438* -0.0243* 0.0005 0.0596* 0.0802* 1 leverage 0.0851* 0.0231* 0.0890* 0.0392* -0.1304* -0.1790* 1 size 0.2849* 0.1291* 0.0526* 0.1214* -0.0598* -0.0914* 0.2492* 1 distress -0.0101 -0.0166 0.0672* -0.0144 -0.1141* -0.2176* 0.7792* -0.0806* 1 strategy -0.0911* -0.0601* 0.0132 -0.1206* 0.0558* 0.1860* -0.2837* -0.2459* -0.1782* 1 quality 0.0777* 0.0441* 0.0614* 0.0627* -0.0199 0.0229* 0.0165 0.3678* -0.1061* -0.0400* 1 mktnoise -0.0221* -0.0096 0.0086 -0.0391* -0.0273* -0.1209* -0.0088 -0.0445* -0.0199 0.0277* 0.0063 1 percinsbod 0.2329* 0.1386* 0.0571* 0.0345* -0.0646* -0.0388* 0.2025* 0.2741* 0.0954* -0.1818* 0.0844* -0.0291* 1 bodsize 0.1222* 0.0511* 0.0199 0.1003* -0.0995* -0.0638* 0.2284* 0.4802* 0.0539* -0.2203* 0.1845* -0.0196 0.1134* 1 *, **, *** indicates significance at the .10, .05, .01 levels respectively. the variable definitions are the same as those defined in panel a. 98 american journal of management vol. 17(4) 2017 table 7 logistic regression analysis for the relation of ceo gender, age and tenure to the use of nfpm in ceo compensation prob(nfpm) weightnfpm coeff. coeff. (z-stat) (t-stat) gender 0.348 -0.001 (1.38) (-0.09) age -0.001 0.000 (-0.14) (0.46) tenure -0.038*** -0.001*** (-5.87) (-3.54) roa 2.038*** -0.018 (5.32) (-1.45) leverage -0.162 -0.025* (-0.54) (-1.92) size 0.338*** 0.003* (8.52) (1.73) distress 0.739* 0.010 (1.83) (0.55) strategy 0.034 -0.016*** (0.20) (-2.72) quality 0.061 0.014*** (0.66) (2.98) mktnoise 0.019 0.000 (0.54) (0.12) percinsbod 0.708*** 0.024** (2.79) (2.49) bodsize 0.044*** -0.000 -2.6 (-0.14) constant -4.539*** -0.074*** (-7.71) (-3.69) industry indicators included yes yes year indicators included yes yes n 5,813 5,909 pseudo r2/r2 0.18 0.092 *, **, *** indicates significance at the .10, .05, .01 levels respectively. the variable definitions are the same as defined in table 6 panel a. taking the log of tenure and age produces similar results. american journal of management vol. 17(4) 2017 99 the analysis retains 5,813 firm year observations. the proxy for performance (roa) and size are both positively associated with nfpm (core et al., 1999; said et al., 2003). contrary to prior literature distress is positively associated with the use of nfpm (said et al., 2003). although the coefficient is only marginally significant, this may indicate that firms are beginning to use these beneficial measures to improve their future performance. additionally, percinsbod and bodsize is positively and significantly associated with the use of nfpm (p < 0.01), suggesting that greater bod independence and larger boards seek to offer the most optimal compensation contracting. the results for the independent variables of interest using model (2) employing the alternative dependent variable nfpmweight are consistent with model (1). tenure is negative and significantly associated with weights applied to nfpm, while gender and age are not. regarding the control variables, the results are consistent with expectations with the exception of the proxy for strategy. our analysis implies that firms with a prospector strategy and less likely to apply weights to nfpm. the results are tabulated in table 7. given the small number of observations that are female and the correlation between age and tenure, we then analyze the independent variables of interest individually in separate models. consistent with hypothesis 1, female ceos are positively associated with the use of nfpm in compensation contracts. alternatively, age and tenure are both negatively associated with the adoption of nfpm for compensation contracting. we conduct a similar analysis using the alternative dependent variable, nfpmweight and find that tenure is negatively associated with the adoption of nfpm while outcomes for gender and age are inconclusive. the results are contained in table 8. 100 american journal of management vol. 17(4) 2017 table 8 logistic regression analysis for the relation of ceo gender, age, and tenure to the use of nfpm in ceo compensation analyzed individually using separate models prob(nfpm) nfmp_weight prob(nfpm) nfmp_weight prob(nfpm) nfmp_weight coeff. coeff. coeff. coeff. coeff. coeff. (z-stat) (t-stat) (z-stat) (t-stat) (z-stat) (t-stat) gender 0.428* 0.000 (1.73) (0.04) age -0.016*** -0.000 (-3.28) (-1.01) tenure -0.038*** -0.001*** (-6.53) (-4.02) roa 2.032*** -0.018 1.947*** -0.020 1.869*** -0.021* (5.30) (-1.42) (5.14) (-1.54) (4.91) (-1.65) leverage -0.158 -0.025* -0.110 -0.024* -0.102 -0.024* (-0.53) (-1.91) (-0.38) (-1.81) (-0.35) (-1.81) size 0.339*** 0.003* 0.340*** 0.003* 0.333*** 0.003* (8.54) (1.75) (8.53) (1.77) (8.42) (1.74) distress 0.761* 0.010 0.811** 0.010 0.775* 0.010 (1.89) (0.54) (2.04) (0.59) (1.95) (0.60) strategy 0.046 -0.016*** -0.026 -0.018*** 0.009 -0.017*** (0.27) (-2.73) (-0.16) (-2.83) (0.05) (-2.81) quality 0.072 0.014*** 0.082 0.014*** 0.068 0.014*** (0.78) (2.98) (0.91) (3.01) (0.75) (2.99) mktnoise 0.019 0.000 0.020 0.000 0.021 0.000 (0.54) (0.11) (0.56) (0.13) (0.60) (0.13) percinsbod 0.717*** 0.024** 0.759*** 0.025*** 0.750*** 0.025*** (2.82) (2.49) (3.01) (2.62) (2.99) (2.63) bodsize 0.043** -0.000 0.053*** 0.000 0.052*** 0.000 (2.57) (-0.11) (3.15) (0.17) (3.07) (0.14) constant -4.608*** -0.069*** -3.961*** -0.066*** -4.729*** -0.076*** (-8.67) (-4.03) (-6.89) (-3.37) (-8.98) (-4.41) industry indicators included yes yes yes yes yes yes year indicators included yes yes yes yes yes yes n 5,813 5,909 5,813 5,909 5,813 5,909 pseudo r2/r2 0.180 0.092 0.174 0.090 0.173 0.090 *, **, *** indicates significance at the .10, .05, .01 levels respectively. the variable definitions are the same as defined in table 6 panel a. american journal of management vol. 17(4) 2017 101 conclusions this study provides empirical evidence regarding whether particular ceo characteristics lead to a greater likelihood of using nfpm. specifically, we provide limited evidence that female ceos are positively associated with the use of both financial and nfpm in ceo remuneration. given that nfpm provide a tool for mitigating risk inherent in using only financial performance measures (bruns & mckinnon, 1993; feltham & xie, 1994), this result is consistent with prior literature suggesting that women are more risk-averse than men (byrnes et al., 1999; powell & ansic, 1997; barber & odean, 2001). there are two distinct elements to consider regarding gender and executive compensation. first, the ceo must accept or opt into an agreed-upon contract with the types of performance measures specified. secondly, those in authority over the structure of compensation contracting (i.e. bod, compensation committee) include certain types of performance measures. the particular performance measures included could be the consequence of attributions made to the executive based on their gender (lee & james, 2007; derue et al., 2011). the results presented by this study complement the evidence provided by barua et al. (2010) that female ceos make decisions based on a more long-term perspective than their male counterparts. we postulate that our results concerning gender are weak due to the small number of female ceos in the sample. the results for ceo age and tenure support the existence of an entrenchment issue (ryan & wiggins, 2001) and an increasingly short-term horizon perspective (finkelstein & hambrick, 1989) as ceos get older and gain tenure. when controlling for gender and tenure, ceo age has no relation to the adoption of nfpm for compensation contracting. however, when gender and tenure are not considered, age is negatively associated with the use of nfpm suggesting that as ceos get older they may begin to have a short-term horizon perspective (yermack, 1995). consistent throughout our analyses, ceo tenure is negatively and significantly associated with the use of nfpm. this suggests that ceo power may increase with tenure. although the board should include nfpm to combat the ceo�s increasingly shortterm perspective, ceos may use their influence to structure compensation contracts that fail to engender a long-term perspective because they prefer to avoid measures that may only reward their successors. many studies show that the fixed effects of managers matter in firm level compensation and governance outcomes (bertrand & schoar, 2003). further, prior research has documented that several firm characteristics including strategic orientation, industry norms, and performance effects are associated with the use of nfpm (ittner et al., 1997; said et al., 2003; hassabelnaby et al., 2005). however, previous research does not address what particular ceo characteristics lead to the adoption of nfpm. the evidence presented in this study demonstrates that gender, age, and tenure are affiliated with the use of nfpm in ceo remuneration. this research is valuable to those who hire ceos and to those who design compensation contracts (i.e., boards of directors and compensation committee members). moreover, given that controls for corporate governance were considered, the results of this study suggests that executives may play a larger role in the compensation package compromise (between the ceo and the bod) than do firm directors. the contributions are also informative to investors who want to ensure they are providing support to firms with a leader whose focus is aligned with their investment strategy. finally, this investigation may assist stakeholders by contributing additional information about the true nature and focus of a firm, based on the characteristics of the ceo. 102 american journal of management vol. 17(4) 2017 acknowledgement this paper is a collaboration born out of melloney simerly's dissertation at virginia commonwealth university. we would like to thank the committee members who provided valuable guidance throughout her time there: dr. benson wier (chair), dr. myung park, dr. leslie stratton and dr. jean zhang. we would also like to express our appreciation to thomas lewis, taylor bennett, lewis rogers and rachel hanks for assisting in the data collection process. additionally, we are grateful to anonymous reviewers and the participants in the virginia commonwealth university research workshop, dr. lindsey andiola, brent roberts, and ed lynch for their helpful comments as well as mario schabus for his feedback given at the american accounting association managerial section conference. references amir, e. & lev, b. 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(1995). do corporations award ceo stock options effectively? journal of financial economics, 39, (2), 237-269. ajm 17(7) web_master.pdf ajm 17(4) web_master.pdf american journal of management vol. 17(4) 2017 67 resistance is futile: using team based learning (tbl) to teach change and create an idea champion collective jamey a. darnell university of south florida sarasota-manatee michelle r. darnell university of florida tawnya s. means university of florida change is inevitable, yet resistance to change is common. studies show that people will selectively focus on data that enables maintaining the status quo, even when overwhelming data indicates the need for change. those who are resistant to change in their organizations often cope by ignoring the need for change or removing themselves from the organization, thus putting themselves and their organizations at a disadvantage. the ability to engage in and lead change is a practical skill set and, as such, can be taught. this workshop demonstrates how tbl is a solution to the challenge of teaching and facilitating change. introduction this workshop addresses the usefulness of team based learning (michaelsen, 2012; michaelsen, knight, and fink 2012) for empowering faculty to address change successfully in their classrooms by both creating and sustaining an institutional culture that encourages experimentation in the classroom and teaching skills associated with innovative problem solving. in this workshop, participants will be guided through three distinct phases which are similar to the team based learning (tbl) process. phase one will convene a discussion on the need to address change in the classroom, the commonality of resistance to change, and how tbl can help to both overcome resistance to change and encourage creativity. building on this, phase two will demonstrate the importance of positive attitudes with respect to embracing change. in this phase, participants will be actively engaged in a prototyping activity that focuses on a problem requiring innovative solutions. phase three will address the fact that widespread change is facilitated within an organizational culture that is open to change. studies suggest that resistance to change is best overcome through communicating the logic of change, increasing participation in change, building support and commitment, developing positive relationships, and implementing changes fairly (cf. damanpour, 1991; monge, cozzens, & contractor, 1992; westerman, mcfarlan, & iansiti, 2006). just as students engage actively in the learning experiences with tbl, faculty 68 american journal of management vol. 17(4) 2017 engage in changing how they teach. participation in an innovative and active teaching strategy, while supported by a community of practioners, will be more likely to lead to a culture change in the institution. participants will engage in a mindmapping exercise around how tbl can be purposefully designed and implemented to include development of the community, creating peer idea champions to reduce faculty and administrator resistance to change in course design (cf. day, 1994; schepers & van den berg, 2007). upon completion of this workshop, participants will have acquired a turnkey prototyping activity for adoption into their own teaching, and a mindmap for building a tbl collaborative with idea champions in her or his own academic institution. discussion and implications the specific learning outcomes of this workshop include generating classroom activities using a prototyping activity and designing a local tbl collaborative to include idea champions. it will also facilitate engagement in discussion and collaboration with peers. this workshop considers applications and impact of tbl to effect innovation and change in teaching and organizational cultures. the intended audience includes faculty, administrators, and instructional designers. after a discussion on how tbl is a solution to the challenge of both teaching and facilitating change in the classroom, participants will engage in two distinct application exercises: one designed for participants to use in their own courses, and another to help further develop local change movements and organizations at individual institutions. first, participants will be guided through a prototype creation exercise, which involves using play-doh to apply concepts on innovation and creativity. a handout detailing this exercise will be provided to participants, for their own use in the classroom. second, participants will be asked to more specifically apply the information about effecting change in an organization through engagement in a mindmapping exercise around how tbl can be purposefully designed and implemented to include idea champions, in order to reduce faculty and administrator resistance to change in course design. tbl is one method that can be used to encourage and develop a local change movement/organization. the implications for entrepreneurship education are many. tbl facilitates change (in student thinking, in course design, in content areas, etc.). we�ve all heard it, �change or be left behind�. there is a need for change, but there is often resistance from a variety of sources. it is possible to overcome resistance to change via: communicating the logic of change, increasing participation in change, building support and commitment, developing positive relationships, and implementing changes fairly. tbl is relevant: team building is an element of organizational development that can decrease resistance to change. studies have shown that teams that are strongly motivated by learning about and mastering tasks are better able to adapt to changing environments. using tbl, students actively focus on decision making and improve problem solving skills, they achieve a more in depth understanding of the course concepts, and are more likely to continue learning about the subject matter after the course ends. it is also important to create an environment that encourages students to act as change agents. higher positive emotions have been correlated with higher levels of commitment to the change, so make education fun. entrepreneurs operate in an ambiguous environment and must solve problems relating to new and creative ideas (e.g. innovation). starting with a hands-on exercise can be used in classes as a fun way to teach innovation or creativity. furthermore, it is vital to build a change organization/movement at educational intuitions because there is a need for idea champions across colleges and universities. establishing a change organization/movement may reduce resistance by communicating the logic of change to faculty and administrators, increase participation in change efforts, develop positive relationships by creating networks, and build support and commitment for change efforts. tbl is one method that can encourage and develop local change organizations/movements. american journal of management vol. 17(4) 2017 69 workshop agenda/timeline the first part of the workshop includes a presentation of the rationale and a discussion on the importance of a culture of change. participants will then complete a tbl exercise using play-doh to create a prototype. following the template of team based learning, participants are formed into teams based on the concept of resource wealth distribution. this ensures a diverse and balanced team. after the creation of prototypes, participants will participate in a gallery display of the prototypes and vote on the best prototype that meets the criteria stated in the handout explaining the prototyping exercise. next we wrap up the learning activity with a guided discussion on prototyping. the next phase of the workshop is a collective discussion on how local tbl collaboratives can be a catalyst for change. at this stage of the workshop participants will complete a tbl exercise, involving mindmapping, exploring how to incorporate idea champions in local tbl collaboratives. participants will then participate in a gallery display of the mindmaps that were created during the exercise. this is followed by a wrap up discussion and a call to action for participants to inspire change at their institution. references damanpour, f. (1991). organizational innovation: a meta-analysis of effects of determinants and moderators. academy of management journal, 555-590. day, d.l. (1994). raising radicals: different processes for championing innovative corporate ventures. organization science. michaelsen, l. k. (2002). getting started with team learning. team learning: a transformative use of small groups. westport, ct: greenwood. michaelsen, l. k., knight, a. b., & fink, l. d. (2002). team-based learning: a transformative use of small groups. praeger pub text. monge, p.r., cozzens, m.d., & contractor, m.s. (1992). communication and motivational predictors of the dynamics of organizational innovation. organization science, 250-274. schepers, p., & van den berg, p.t. (2007) social factors of work-environment creativity. journal of business and psychology, 21(3): 407-428. westerman, g., mcfarlan, f.w., & iansiti, m. (2006). organization design and effectiveness of the innovation life cycle. organizational science, 17(2): 230-238. ajm 17(5) web_master.pdf ajm 17(2) master-lulu-revised.pdf american journal of management vol. 17(2) 2017 43 what do people, prototyping, problem solving, and play-doh have in common? team-based learning! jamey a. darnell university of south florida sarasota-manatee tawnya s. means university of florida team-based learning (tbl) is based on the concept of �flipping the classroom� where students are held accountable for preparation prior to attendance and class time is used to engage in discussions and application activities that focus on integration of theory with experiential learning. tbl is facilitated in three distinct learning phases: preparation, readiness assurance, and application. the workshop uses the tbl structure to teach a prototyping exercise using play-doh to encourage creative problem-solving in an entrepreneurship course. the workshop teaches the tbl method, provides participants with a turnkey prototyping activity, as well as shares tbl resources and materials. introduction in the first phase of tbl, students prepare by reading, watching lectures, or conducting research. in this workshop, participants read a handout on prototyping at the beginning of the session. in the second phase, students� readiness to apply theories is assessed through readiness assurance tests, individually (irat) and as a team (trat). team membership is assigned using �resource wealth distribution� to create balanced teams. the trat can be completed using a �scratch and win� card, or the immediate feedback assessment technique (if-at). this ensures that all team members have the foundational knowledge to apply the theoretical concepts in stage three. the instructor uses the results to determine whether there are any deficiencies in the students� understanding of the material and make corrections before moving on to the next phase. for this workshop, participants complete the irat on paper and the trat using an if-at card. in phase three, students apply the concepts in a hands-on activity involving problem solving, discussion, case analysis, etc. activities are designed around the structure of �4ss� (significant problem, same problem, specific choice, and simultaneous reporting). for this workshop participants create a prototype using play-doh based on applying the concepts in the handout. the last portion of the workshop includes time to debrief on the prototyping activity, and discussion of the use of tbl to support student accountability, team and collaborative activities, and hands-on and experiential learning. the entire tbl exercise on prototyping demonstrated in this workshop can be used as is in potentially any entrepreneurship course. participants in the workshop receive all resources for the activity. faculty just need to purchase their own play-doh, and possibly the if-at cards. additionally, the exercise is easily adaptable to other entrepreneurship topics. 44 american journal of management vol. 17(2) 2017 implications recent interest in making learning more active and experiential has led to the method called �flipping the classroom� where students are given materials that traditionally were provided in class such as lecture videos, tutorials, and readings, and they spend their time in the classroom participating in activities that were previously assigned as homework. instructors in this model provide practice, guidance, and feedback in problem solving (demetry, 2010; asef-vaziri, 2015) within the bounds of the classroom walls. bishop and verleger (2013) provide a theoretical framework of the flipped classroom where the core concept is that the time that students have with the instructor is too valuable to use for only didactic delivery of materials, and should be spent with the instructor guiding and directing active engagement in learning. one challenge that arises with this shift in responsibility for learning that is placed on the students in the flipped classroom is that of accountability. students are expected to come to class prepared, but if they are not held accountable for that preparation, they will not have the benefit of learning that can happen in the classroom when everyone is prepared. one solution for this challenge is team-based learning. the concept of team-based learning originated in the business school with larry michaelsen at the university of oklahoma (michaelsen, knight, & fink, 2002). team-based learning employs carefully assembled and consistent teams where visibility for preparation is clear. the bulk of class time is spent on application-based, hands-on learning activities where students receive frequent and immediate instructor input and feedback (michaelsen, 2002). team-based learning involves more than just incorporating a group project or a team presentation; it encourages positive interdependence and individual accountability (cooper, 1990). students demonstrate their readiness for learning both individually and as a team, receive immediate feedback, and then spend the rest of the time in class applying the foundational knowledge in team activities (michaelsen & sweet, 2008). the true power of the team is derived from the cohesiveness that is developed through the in class activities (michaelsen, 2002). team-based learning has been implemented in a wide range of business and non-business courses and non-academic settings (michaelsen et al., 2002; haidet, kubitz & mccormack, 2014). when students actively focus on decision making and improve problem solving skills, they achieve a more in depth understanding of the course concepts, and are more likely to continue learning about the subject matter after the course ends. in the entrepreneurship classroom, this is especially important since entrepreneurs operate in an ambiguous environment and must solve problems relating to new and creative ideas (e.g. innovation). the skills that students learn by engaging in tbl activities with interdependent team members also prepares them well for engaging in entrepreneurial ventures. yes, the individual entrepreneur is called upon to contribute greatly to a venture, and the individual preparation potion of tbl practices this skill. however, there is also a more robust view of entrepreneurship where ventures are facilitated in teams, or networks, that share risks and resources (freeman, 1984). using tbl in an entrepreneurship classroom teaches some of the skills necessary for this type of entrepreneurship. american journal of management vol. 17(2) 2017 45 workshop agenda/timeline the first part of the workshop is allotted for participants to engage in a complete team-based learning exercise. an introduction to the workshop is provided and participants are divided into teams based on the principle of resource wealth distribution, ensuring diverse and balanced teams. participants read a one page handout on a specific aspect of prototyping, and then complete readiness assurance activities as follows: 1) participants complete an individual readiness assurance test (irat), and 2) using the exact same questions, but working with their team, participants take a second readiness assurance test (trat) using a �scratch and win� type answer card. teams then engage in a team-based learning experiential exercise using play-doh to create a prototype. once prototypes are completed, teams participate in a gallery display of prototypes and vote on the prototype that best represents the information from the handout. in the second part of the workshop, the presenters do a deeper dive into the details of team-based learning, including what it is, why it should be used, how it can be used (as �plug and play� or �turnkey�), how learning outcomes can be measured, etc. references asef vaziri, a. (2015). the flipped classroom of operations management: a not for cost reduction platform. decision sciences journal of innovative education, 13.1, 71-89. bishop, j. l., & verleger, m. a. (2013). the flipped classroom : a survey of the research the flipped classrom : a survey of the research. in asee national conference proceedings. atlanta, ga. cooper, j. (1990). cooperative learning and college teaching: tips from the trenches. teaching professor, 4(5), 1�2. demetry, c. (2010). work in progress an innovation merging �classroom flip� and team-based learning. in frontiers in education conference (fie) (p. t1e�1). retrieved from http://fieconference.org/fie2010/papers/1321.pdf freeman, r. e. (1984). strategic management: a stakeholder approach. boston: pitman. haidet, paul, karla kubitz, and mccormack, wayne t. (2014) analysis of the team-based learning literature: tbl comes of age. journal on excellence in college teaching, 25, 303-333. michaelsen, l. k. (2002). getting started with team learning. team learning: a transformative use of small groups. westport, ct: greenwood. michaelsen, l. k., knight, a. b., & fink, l. d. (2002). team-based learning: a transformative use of small groups. praeger pub text. 46 american journal of management vol. 17(2) 2017 appendix tbl prototyping quiz choose the 1 best answer to each of the following questions based on the article. 1. the argument that innovators are experimenters is not a new one. a) true b) false 2. which experimentation technique is best for generating disruptive insights? a) trying out old experiences b) taking things apart c) testing through pilots and prototypes d) none of the above 3. which of the following is not an approach to experimentation? a) trying out new experiences b) taking things apart c) testing through pilots and prototypes d) putting things together 4. many entrepreneurs credit this for their knowledge and success: a) trial and error b) luck c) their moms d) sweat equity 5. which form of experimentation is one of the best ways to refine a product or business model? a) trying out new experiences b) testing through pilots and prototypes c) taking things apart d) none of the above tbl prototyping activity in your assigned groups, take 15 minutes to design a prototype for a home appliance/product using the play-doh provided. after the prototypes are completed there will be a �gallery� exercise where participants will observe and evaluate each team�s prototype. pick one member from your team to be the spokesperson who can answer any questions from the participants about the prototypes. a vote will be taken at the end of the gallery time to determine a crowd favorite prototype. additionally, the judges (i.e. work shop facilitators) will rate all prototypes on three criteria (innovativeness, functionality, and aesthetics), determining an official winner. contact author jamey darnell college of business university of south florida sarasota-manatee 8350 n. tamiami trail sarasota, fl 34243 941.359.4647 darnellj@sar.usf.edu give me what i want but here’s what you need: an exploration of the juxtaposition of mid level managers as both follower and leader niall hegarty st. john’s university, new york gerald cusack st. john’s university, new york the catalyst for this study was the emergence of repeated statements by mid to senior level banking mangers about what they wanted to see in their supervisor and what they thought their employees wanted from them while attending an advanced degree program for senior bankers. these managers are questioned to ascertain if what they want from their managers coincides to what they feel their direct reports want from them as leaders. 574 mid to senior level managers are asked two open-ended questions and the results are categorized into four distinct areas: maturity, task engagement, relationship engagement, and personality. responses provide an overview of similarities and misconceptions these managers hold in terms of understanding their relationships with both their subordinates and senior executives. it becomes clear that mid level managers are challenged by the duality of their roles. the pattern of responses give rise to the recommendation of management approaches to assist in keeping the mid level manager seamlessly connected to both senior executives and subordinates. introduction quite often there exists discrepancies in how we would like to be treated by our senior leaders and how we treat direct reports. in fact this dilemma exists both in our professional and personal lives. research by gallrein, carlson, holstein, and leising (2013) shows that people are consistently unaware of how others uniformly view them. such lack of self-knowledge in how we are perceived by others serves as a fore-runner to our own inconsistencies in how we actually think and feel about what we want and what we expect from other people. in other words, how can we understand what people want and expect from us when we don’t even know what they ‘think’ of us? further complicating the pursuit of finite answers, we are hindered by how we describe other people. quite often we definitively define the features of individuals we don’t like more so than people we do like (leising, ovstrovski, & borkenau, 2012). also hampering the quest for categorical truths in understanding our cognitive perceptions is the demeanor individuals assume in their workplace setting. consequently, studies such as this, which is concerned with workplace opinions of others, seek not to arrive at a concluding observation which holds true across all realms but to merely identify inconsistencies in our professional opinion of others. 64 american journal of management vol. 16(2) 2016 background the available research in the area of our perception of self and others proffers that we are not connected with the external environment’s perception of us; in fact we are well removed from it (leising, krauss, kohler, hinsen, & clifton, 2011). this may be explained by pronin (2007) whose research claims that we as humans have a bias towards the self and as a result expose ourselves to mis-perceptions. to remove this bias yaniv and choshen-hillel (2012) recommend a perspective-taking approach so as to better understand what others think of us and thereby better manage our own actions. this approach to cognitive self-management helps us remain neutral in forming opinions of others and also in assisting us in understanding our own self perception. it also helps us to question our own opinions and avoid immediate acceptance of what we believe might be true (uhlman & cohen, 2007; heiphetz, spelke, harris, & banaji, 2013). and of non-obvious importance is the fact that we sometimes lie to ourselves about what other people think and about how we think which in turn distorts how we view others (hillbig & hessler, 2012). what the summation of the aforementioned results to is the realization that how we think of ourselves and how we think others think of us is exceptionally complicated and susceptible to emotional and cognitive influences. what we do know is that the better we understand how we think and the more we are self aware the more fluid we can become as both a follower and a leader. quite possibly our emotional intelligence may have an influence on how we interact with and perceive cues from others. purpose of the study with information collected over a 10 year period this research seeks to identify if there are marked differences between what we would like to see in our supervisors and if we exhibit those same desired criteria as a leader to direct reports. as a guide to all managers in supervisory roles this research seeks to draw attention to the issue that what we expect as a direct report does not always correlate with how we manage subordinates. this disconnect is shown in figure 1 where we see that what we would like from our supervisors quite often does not correlate with our managerial actions towards our direct reports. simply put, is there a discrepancy between what we want from our supervisor and what we give our subordinates? this study also goes as far as to identify that what we want from both our supervisors and direct reports fall into categories, which, can serve as guidelines in improving managerial performance. figure 1 managerial fluidity disconnected connected manager manager senior management ↑ ↑ ♀ ♀ ↓ ↓ subordinates american journal of management vol. 16(2) 2016 65 the study serves to highlight how mid-level management are compelled to perform in two positions: that of follower and leader. this dichotomy serves to illustrate how mid level management is challenged in satisfying both roles and the need to provide support and training in meeting their dual professional obligations. the study also explores various forms of leadership such as servant leadership and authentic leadership in search of a functional leadership style which would accommodate better execution in both roles. methodology this original study used a more direct form of inquiry in gathering information, that of asking individuals their opinions. 574 mid-level to senior level managers from the banking industry while attending a training session were asked to anonymously complete two statements: 1. “i wish my manger would…” 2. “my subordinates wished that i would…”. as opposed to questionnaires which quantify and interpret answers to questions, the decision was taken by the researchers to utilize these open-ended questions in an effort to gather unfiltered information from the respondents. the aspiration in the methodology was to by-pass ‘how’ respondents answer questions which may or may not pertain to their exact viewpoint and go directly to interpretation and reporting of their personal statements as a gauge to their viewpoint. this method is intended to bring us one step closer to the information and avoid misinterpretation. the respondents had an average age of 41 and an average of 14 years work experience. males accounted for 69% of the group while females made up the remaining 31%. the banking institutions where the respondents came from varied from small local banks with $25 million capitalization to large banks with over $1 billion in capital. all the respondents’ cards were recorded each year over the ten year period, then destroyed. results as can be expected, a plethora of responses were received in answering the two open-ended questions. the responses were grouped into various categories and sub-categories if the frequency the response warranted sub-categorization. identified in table 1 are the identified categories: table 1 category answers job maturity task engagement autonomy structuring communication competence evaluative communication career development leading inclusion disturbance handling operational involvement relationship engagement personality receptive communication fairness interpersonal/group involvement open-mindedness ego-strength conscientiousness agreeableness integrity 66 american journal of management vol. 16(2) 2016 the results yielded two major issues: it uncovered the frequency of responses thereby identifying the major areas of concerns to individuals as both supervisors and subordinates, and secondly it identified the trends of these responses over the ten year period thereby identifying shifts in perceptions. possibly, a third directive would be in the identification of a style of leadership that appears to be preferred as both manager and subordinate. in terms of frequencies, the main issue of concern for subordinates is their need for their superior to have integrity and to engage in open, honest communication. more than 40% of respondents addressed these issues which impact all four main categories above. over the ten year period the highest frequency never exceeded 46% for any one particular type of response. on the other end of the spectrum with the lowest frequency (11%) was subordinates need for less micromanagement and more decision making. any issues below 10% were not considered valid concerns. in order to portray the type of responses submitted listed below in table 2 are the highest and lowest frequency responses which were categorized according to what people wanted from their direct supervisor: table 2 frequency responses i wish my manger would: 40%-46% 11%-20% be more patient with me trust me more in terms of my abilities be more organized stop micro-managing me communicate honestly recognized my hard work my subordinates wish i would: 40%-46% 11%-20% be less demanding communicate better be more available to them give more responsibility coach, mentor, train me more be less rigid the above sample responses, and others, were, as stated earlier, categorized into four main areas. in the period between 2003 and 2013 as outlined in table 3 there has been some changes in what individuals want from their supervisors and what they think their subordinates want from them. table 3 manager responses year: 2003 year 2013 role role manager/subordinate manager/subordinate maturity .23 .12 .29 .29 task engagement .39 .34 .32 .34 relationship engagement .20 .35 .17 .17 personality .20 .19 .22 .22 there was a distinct direction of responses in the maturity category where individuals are increasingly seeking more development in terms of managing the direction of their career and also recognize that their direct reports want more assistance from them in career development. in terms of task engagement it would appear that there is less day to day operations involvement needed from superiors while superiors feel they still need to be involved in the tasks of direct reports. with regard to relationship engagement there has been a distinct change in the level of working relationship that american journal of management vol. 16(2) 2016 67 mangers need from their own superiors and give to their subordinates. in the personality area the need for more quality in personal interaction in both directions grew over the 10 year period. this informs us that relationships are not being cultivated to the level where individuals feel connected to an organization. and as relationships quite often drive positive performance the lack and need thereof warrants attention so as to realize long term gains in productivity and employee retention. discussion and discovery quite often what we want from our boss and what she/he thinks we want from them are different. this research sought to examine if there was a disconnect within individuals in this domain. the frequencies of the responses indicate that mid level managers would like better quality time with their direct supervisor in terms of better communication, patience on projects, and the need to feel their abilities are recognized and trusted by their boss. in turn, they feel that their direct reports would like them to be less demanding and show an interest in developing them as an employee. however, the question arises that after 574 responses why would there and why should there be a difference in what we want from our boss and what we think our subordinates want from us? this disparity exists. a common thread that underlines most of the responses is that the critical issue that is causing problems is the scarcity of ‘time – time to train, to mentor, to communicate, to build trust. to alleviate this conflict of time demands an examination of the approach currently used in leading may result in the re-alignment of priorities and development of a more suitable style of leadership. the need of a better way to manage in the banking industry is evident and what comes to the surface is the notion that in an industry that has customer service as a priority there is a gap in the continuation of that service mentality in respect to facilitating employees to be as effective as possible in their jobs. consequently it appears that what may remedy the discrepancy between what managers want form their superior and what their direct reports need from them is the implementation of authentic leadership, servant leadership, and 360 degree performance evaluations. authentic leadership dates its origins back to the 1930’s when barnard (1939) posited that leaders should treat subordinates in a responsible manner. essentially this means treating people the way we ourselves would like to be treated. in a business context, authentic leadership emphasizes a leader imprinting their personality of honesty and integrity on the organization. the result is a workforce that is informed, feels included, and buys in to the expectations of their leader. authentic leadership is an evolving phenomenon where leader’s professional actions are aligned with their internal core beliefs (harvey, martinko, & garndner, 2006). as the leader’s values and belief system gives voice to the firm so too does it give voice to its employees. servant leadership explores how a leader enables followers to be effective by showing concern for their well-being and realizing that in their achievements lies the successes of the firm (schneider & george, 2003). this concept developed by greenleaf (1977) has at its core the notion that a leader best serves followers by being a facilitator in helping them perform their best. this theory of leadership recognizes that the employees of the company are the engine that gives the organization its success so the leaders must service this engine to keep it performing at the highest levels. in addition to being enablers of success, research by washington, sutton, and field (2006) indicates that servant leaders also possess traits of empathy, integrity, competence, and agreeableness. these traits, we observe, also align with the authentic leadership approach to leadership as well as being compatible with the taxonomy of the big five personality model (digman, 1990). at the juncture of what we as both managers and direct reports need in terms of managerial traits is the marriage of authentic leadership and servant leadership. although these approaches may seem at first glance to be humanly amicable in their approach it must be remembered that authentic leadership utilizes total honesty which in many cases comes in the form of ‘tough love’ without any sugar coating. nichols and erakovich (2013) write that “authentic leaders use hard evidence and base discussion on the merits of the issues”. this does comply with the responses we received in our research indicating that employees would like more forthright information sharing and direct communication from their supervisor in the 68 american journal of management vol. 16(2) 2016 establishment of parameters and required standards. in other words, employees are not afraid of hard work and challenges as long as its accompanied by good direction and unbiased communication. the final component in framing our needs as members of both constituents is the need to be selfaware. this, we feel is provided by incorporating 360° degree feedback. this method of performance evaluation increases an individual’s awareness of how they are perceived by providing feedback on how they perceived by mangers, peers, subordinates, and main external contacts. also termed multi-rater feedback the objective is to provide an individual with unbiased information on how they perform in their professional capacity. tornow (1993) highlights that the benefit of this approach to evaluation is the presence of raters from different areas of interaction. the result is that a performance evaluation is not just that of a supervisor and subordinate and therefore possibly biased. the inherent benefit of 360° feedback is that it not only evaluates an employee’s performance but it also provides direction in identifying areas of strengths and weaknesses. while research by morgan, cannan, and culinane (2005) show that 360° feedback has not enjoyed success across all industries we feel that the context for which it is used is key. if it is used to ‘direct’ behavior then it may be seen as punitive and have adverse impact. however, if it is merely used as an unbiased source to ‘inform’ then we believe the opportunity is created for subtle changes to occur. recommendations we had as our purpose in embarking upon this research to uncover whether mid level and senior managers behave in a manner towards their direct reports as they would like to be treated by their senior supervisors. and as with all research the results serve as guideline to the future. our results provided us not just with existent differences but also a natural recommendation of a preferred form of management to be utilized emerged. this form of management serves to turn the disconnected manager into a connected manager and is displayed in figure 2. figure 2 components of a connected manager the figure above serves to illustrate the direction our research points to in closing the gap between what individuals need from their superiors and what their subordinates need from them. this connected manager authentic leadership 360° feedback servant leadership american journal of management vol. 16(2) 2016 69 recommendation is made with the backdrop that a mid level manger may eventually become a senior executive with the capacity to directly influence mid level managers and thereby create a seamless managerial persona of organization expectations. our proposal stems from feedback from hundreds of mid to senior level banking managers’ opinions on what think their subordinates believe of them and what they would like to see in their own supervisor. consequently what results is the need for open, direct, and honest communication from managers who are fair minded and supportive. the supportive aspect comes from servant leadership while the directness and fair-mindedness comes from authentic leadership. the final component of open and honest communication comes from the unbiased, self awareness increasing 360° feedback. we find all these methods to be unique in their approach but also very complementary in a rounded out approach to management that seeks to reduce mis-communication, mis-connection, and mis-management. if merely used as a peripheral guideline in businesses where the commodity of time is at a premium it would assist in reducing the number of instances of people management errors. in the absence of the ability to introduce the above measures this research serves as a directive to senior management to ensure that the management style used in an organization is uniform so as to ensure all employees are aware of expectations from both themselves and from their managers. the anticipated result of this is that employees across all departments share a commonality in that all are aware that the organization has required standards of performance and communication of both employees and managers. this uniformity therefore prevents ambiguity and could possibly assist in the retention of quality employees who feel alienated by a dichotomy of messages. in the absence of organizational direction we subscribe to bleidorn and ködding’s (2013) viewpoint that individuals must develop a consistent self perception. this, we feel, will assist in the reduction of mis-perceptions of our interactions with others. conclusion the search for information about organizations is an ongoing process which seeks to inform and direct better management. even more so, the interpretation of information garnered from various organizations sometimes conclude with more questions than answers to the queries of the original research. this study sought to remove any ambiguity in interpretation and any pre-suppositions in the seeking of information for advanced research. as such, we sought to give the mid level manager of the financial industry a voice in what they think. our understanding in doing this was that secondary analysis be removed so that the opinions of managers could be viewed in their original form without any ‘imposed’ analysis so that academics and practitioners could use the information as a barometer of human perception. it is also hoped that rather than recommend definite paths of future behavior (although which we did) that there was enough information presented for practitioners to develop their own appropriate response for future behavior and that future academics gain another smidgen of information in directing next-step research. references barnard, c. (1939). dilemmas of leadership in the democratic process. princeton university press. bleidorn, w., & ködding, c., (2013). the divided self and psychological (mal) adjustment – a metaanalytic review, journal of research in personality, 47(5), 547-552. digman, j. m. (1990). personality structure: emergence of the five-factor model. annual review of psychology, 41, 417-440. gallrein, e., carlson, n., holstein, m., & leising, d. (2013). you spy with your little eye: people are “blind” to some of the ways in which they are consensually seen by others, journal of research in personality, 47(5), 464-471. greenleaf, r.k. (1977), servant leadership, paulist press, new york, ny. harvey, p., martinko, m. j., & gardner, w. l. (2006). promoting authentic behavior in organizations: an attributional perspective. journal of leadership & organizational studies, 12(3), 1-11. 70 american journal of management vol. 16(2) 2016 heiphetz, l., spelke, e., harris, p., & banaji, m. 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(2006). individual differences in servant leadership: the roles of values and personality. leadership & organization development journal, 27(8), 700716. ilan yaniv, i., & choshen-hillel, s., (2012). when guessing what another person would say is better than giving your own opinion: using perspective-taking to improve advice-taking, journal of experimental social psychology, 48(5), 1022-1028. american journal of management vol. 16(2) 2016 71 ajm 18(4) master (r).pdf ajm 17(4) web_master.pdf american journal of management vol. 17(4) 2017 53 clusters in the wilderness: knowledge spillovers based on outdoor recreation jack marr boise state university smaller cities like boise wishing to reap the benefits of clusters should play to their strengths, and creating an urban ecosystem conductive to high-trust informal social interaction may be one underexplored area of competitive advantage. in my research, i examine how widespread participation in informal, high-trust, non-work activities can lead to increased knowledge spillovers in the formal economy and drive increased and sustainable economic success by looking at outdoor sports interactions between key players in the economy around boise, idaho. in this paper, i look at background factors and examine the literature, and provide initial analysis. introduction �all business is done on the golf course.� �golfer�s adage �there is no bond like the brotherhood of the rope.� �climber�s adage in an increasingly interconnected and competitive world, the idea that clusters can form around high value industries in a concentrated geographic location holds high appeal for firms wanting in on the action, individuals working in these industries, and governments looking to capture economic benefits. global cities, such as new york, hong kong, london, and elsewhere often contain clusters of clusters with multiple industries located in a single geographic setting, and increasingly attract and retain the lion�s share of global economic activity (castellani and santangelo, 2016). clusters have captured the attention of scholars, business leaders, and policy makers alike and have generated a good deal of often conflicting research. as saskia sassen, who coined the term �global cities� at the university of chicago nearly twenty years ago noted, the true centers of global economic activity are located behind the mirrored glass of the towers that line the landscape of the global cities (sassen, 2016). but where does this leave smaller, lesser-known cities without all of these advantages? what, if anything, is left for the �99%,� and how can they capture it? there is widespread agreement that clusters exist and bring economic benefit, but not a clear consensus on how, why, or who will attract and retain them beyond the usual global cities suspects. i will argue that all cities large and small have their unique, noneconomy based resources and attractions, and these are precisely the kinds of absolute advantages beyond sheer size that will attract and retain the dedicated cadre of talent needed to base a cluster on. clusters are not intuitive, as they put competitors literally back-to-back, both incentivizing and depending on them to share resources, ideas, and talent through what jaffe (jaffe, 1993) described as 54 american journal of management vol. 17(4) 2017 knowledge spillovers. a knowledge spillover is a kind of positive externality, or benefit that accrues to everyone in proximity, in which a discovery in one space tends to influence and spread around the surrounding space. this in turn gives firms incentives to work in close proximity insofar as the benefits from the spillovers overcome the disincentives�such as staff leaving to competitors, secrets leaking, or competing for scarce resources, and they often do as is seen in clusters around the world from movies in hollywood to finance on wall street to aerospace in toulouse to turbines in wuxi. to begin to look at the issue, we look at this quote: �we do not fully understand the relationship between amenities, quality of life, and rural economic growth� further, the same resources (slopes, lifts, and trails) are increasingly being used to support �off season� activities such as mountain biking, hiking, and horseback riding. the implication of this result is that rural areas that can take advantage of these combinations of natural and developed resources are in a position to expand their local economy.� (deller, et. al, 2001, p.357) in my theory, this entails that smaller cities must appeal to their strengths and these often lie in leisure activities. i will concentrate on mountain towns, in this case boise idaho, to show how leisure (in this case skiing) brings people across different groups together. in my research, i look at why, how, and where cluster participants share knowledge outside the formal structures of their professional affiliations and argue that informal networks based on a high degree of trust can serve as a key driver to building these networks. these informal networks can be derived by non-work ties and shared interests outside of purely economic motives�hobbies, passions, beliefs, and extracurricular activities. people participating these activities in them share core beliefs, values, and goals that transcend a vision of mankind as a pure economic animal, and the relationships formed around them can lead to bridges between unconnected social groups, creating social capital. this social capital, in turn, can become a key source of competitive advantage to smaller areas looking to derive growth, quality of life, and tax benefits from clusters without the resources of the global cities. examples of these informal networks range from alumni of noted business schools (more on the formal side) to members of the same church (somewhere in the middle) to skiing and rock climbing partners (more on the informal side.) for this first piece of research, the focus will be on skiing. in boise, idaho. literature review i would like to take a look at three areas of literature. first, we will examine some of the history on economic agglomeration and clusters as well as the literature about optimum cluster size and location. then, we will look at the literature on informal networks and trust based ties, particularly in terms of how this can lead to knowledge spillovers. finally, we will take a brief look at some of the history of informal cluster formation in the state of idaho which has paved the way for my research case of contemporary boise. grouped together, is bigger better? the idea of positive externalities from clusters or agglomeration is nothing new, dating back to marshall�s (marshall, 1920) work showing that firms benefit from access to a pool of specialized labor, specialized input providers, and spillovers of technology by competitors. marshall showed that firms indeed do often find that the advantages outweigh the disadvantages which has driven the sheer global number and diversity of clusters, and since this time clusters have continued to thrive both in their inception, the level of competition to attract and retain them by governments, businesses, and investors, and the amount of research that they generate (a google scholar search on �economic clusters� generates 1,450,000 results). here is a recent us cluster map by the us department of commerce and harvard business school: american journal of management vol. 17(4) 2017 55 figure 1 economic clusters across the united states from: http://www.clustermapping.us/content/clusters-101. a number of interesting questions have grown out of the work on agglomeration revolving around the optimal size of a cluster as well as how information flows between competitors to produce these agglomeration effects. much work has supported the �bigger is better� theory that backs global cities and industry clusters. sassen (sassen, 2001) argues how new forms of globalization helped drive concentration in the global financial services industry across new york, london, and tokyo and the implications of these clusters. this work has been further supported by a number of scholars including john friedmann�s world cities (friedmann, 2005) as a staging point for global capital, studies to show �spikiness� across dimensions (florida, 2005), and many others. in terms of attracting foreign direct investment, bigger often is better and castellani and santangelo recently found that over 80% of cross border investments accrue to the top 100 global cities. this leaves a staggering number of smaller cities competing for the remaining 20%, and many of these projects tend to be research and development intensive making them amenable both to a strong knowledge talent base (castellani and santangelo, 2016) 56 american journal of management vol. 17(4) 2017 as well as to a strong lifestyle base. i believe that with such intense competition for scarce knowledge workers, lifestyle considerations can be a key factor in attracting and retaining. beyond the global cities, a parallel stream of research looks at how and why industries agglomerate into a single place beginning with krugman�s (krugman, 1991) seminal study of the dalton georgia carpet industry, showing how it shares economic characteristics of more famous clusters such as silicon valley. less �sexy� industries also tend to form clusters in less well known global cities. when asked how wuxi, a well-off but not so well-known industrial city in eastern china built a cluster around turbines and auto parts manufacturing, a local official remarked �shanghai and suzhou want to be the silicon valley of china. we are happy to be the detroit� (marr and jones, 2007). thus, size is just one factor. another challenge to the �bigger is better� view comes from shaver and flyer (shaver and flyer, 2000) who find that smaller, less leading foreign firms locating in clusters abroad tend to fail at a higher rate after eight years than already dominant firms who go it alone, indicating that stronger firms will attract less of a cluster effect and will do better going it alone. folta, cooper, and baik (folta, et. al., 2006) also find that there are increasing returns to cluster size but that diseconomies begin to form across important dimensions of knowledge and resource sharing particularly as weaker competitors begin to join the cluster and tip the balance of positive externalities. this seems to show particular promise for second and third tier cities particularly in attracting new industry participants. leaving aside the questions of size and concentration, what incentives exist for competitors to share resources within clusters? much of the literature on the topic is concerned with the formal incentives that can be put into place to drive cluster formation. michael porter (porter, 2000) looks at the economics and suggests policies around clusters, and these and related ideas have influenced governments around the globe from to local municipalities to china. my own research on attracting foreign direct investment to chinese second and third tier cities conducted over 2006-2008 for the economist intelligence unit showed that local governments had a tendency to copy and undercut other incentives in the hope of attracting key �tenants� to their clusters (marr and jones 2007, 2008). as a result, businesses would play them off of each other and tend to make decisions more based on the logic of their supply chains and the availability of talent (one manager remarked that all of the incentives in the world did not make a difference if you had no access to talent and had to spend half of your managerial time training employees in basic skills such as using a sit toilet that were generally taken for granted, creating significant hidden costs. (marr and jones, 2007). furthermore, the more �vanilla� and top-down the cluster was the higher the rate of attrition among employees both skilled and unskilled, driving up costs, creating production inefficiencies, and jeopardizing intellectual property. initial investigations and interviews at the time found that smaller cities with higher quality of life� such as east china�s hangzhou and nantong as compared to larger shanghai and nanjing�were better able to mitigate these factors and were a key factor in both the cluster development as well as the emergence of star companies such as hangzhou�s alibaba. as jack ma, founder and chairman said in a 2006 interview i conducted with him: �one major benefit for companies located in hangzhou is that it is easier to be a big fish in a small pond. many multinationals entering hangzhou realize that it is much easier to get support of the local government, because hangzhou is so aggressive about attracting foreign enterprises. so you have all of the economic openness of shanghai, with much more attention and encouragement from the government, simply because there are fewer companies to compete with�hangzhou is a paradise for attracting and retaining talent. unlike shanghai, where people tend to job-hop much more, employees in hangzhou are more likely to stay loyal to an employer.� (marr and jones, 2006, p. 92) porter erisman, author of alibaba�s world and then vice president of marketing at alibaba, added that being located in hangzhou allowed employees to take frequent hikes in the mountains during working hours, helping add to their creativity and making it an attractive place to work, and that key talent was unhappy to leave for roles in the larger playing fields of shanghai, hong, kong, and beyond (marr and jones, 2006). american journal of management vol. 17(4) 2017 57 the brotherhood of the rope: the (informal) ties that bind in his seminal article on the characteristics of social networks in 1973, sociologist mark gravottener (1973)examined the data on widespread social networks to determine whether information spreads more diffusely through �strong ties� or �bonding ties� ie. people who see each other on a regular basis such as colleagues and family, or through �weak ties� or �bridging ties� ie, people whose networks only occasionally cross and see each other infrequently such as acquaintances or friends of friends. gravonetter looks at the importance of weak ties in the developing of social networks and the dissemination of information and posits that weak ties as defined by individuals who have infrequent social interactions are ultimately more effective in diffusing information over wide networks than strong ties such as family and close friends due to the nature of networks. this finding is particularly relevant to smaller and more isolated cities with a fairly strong tourism industry such as their historical geographic isolation as defined by their distance from a major urban center. gratovenetter (gratovenetter ,1973) further finds that there is a degree of choice in how weak ties are formed based on preference and trust, giving smaller and isolated cities a good reason to �nudge� (leonard, et. al., 2008) their communities into developing more weak ties particularly into highly sought after talent. anne saxenian (saxenian, 1994) looks outside the formal networks and relationships within firms to find that a complex network approach underlies the success of silicon valley and boston�s route 128, underscoring the social ties that underlie the alchemy of cluster formation. saxenian and hsu also take this idea across global boundaries in comparing the success of silicon valley and taiwan�s hsinchu, noting the importance of a generation of us-educated (often in the silicon valley area) taiwanese entrepreneurs, who then took these social networks and knowledge back to taiwan to create economic and innovation clusters such as hsinchu outside of taipei home to tech giants acer and tsmc. how do networks affect innovation? jaffe et al (jaffe, et. al., 1993) look at the geography of patent citations and find a strong local effect, indicating the strong presence of shared local knowledge across participants in heterogeneous firms helps to drive innovation. almeida and kogut (almeida and kogut, 1997) look at patent data to find that small firms tend to innovate in less crowded spaces and conclude regional knowledge networks are a greater knowledge driver than the internal activities of large firms, indicating the importance of such networks to entrepreneurial success. finally, acs et al (acs, et. al., 2007) find that this is particularly important to smaller firms, emphasizing the importance of knowledge spillovers for start-ups. trust across bridging ties, which in my theory can be developed and strengthen by people through leisure activities with a shared passion, is key to this network formation. the importance of trust in organizations and divergent relations has also been established by a number of scholars. putnam (putnam,2000) looks at this in terms of social capital, which can drive both bridging across groups and bonding within groups. bonding represents strong connections within homogeneous groups that often exclude interaction outside the group. bridging, on the other hand, entails interaction between different social groups, and looser bonds between actors. hoyman and faricy (hoyman and faricy, 2008) claim that strong bonds between members of homogeneous groups may hinder innovation since these bonds make the members more complacent and isolated from impressions outside of their small circle of social interaction. these strong bonds therefore generate conformity and a strong obstacle to innovation. florida (florida ,2002) connects the �bridging� form of social capital with what he calls the creative class and connects innovation to loose bonds between different social groups, which contributes to an open society, and kramer and tyler (kramer and tyler , 1996) show why trust-driven relationships are often preferred to the rational-choice driven self-interest. the industrial revolution model, which in this case is being supplanted, is well described by hammar and svensson (hammar and svensson, 2000) in terms of the relationship between one dominant employer (the �mill�) and loyal workers, controlling the scope of the worker�s economic activity. this encourages innovation between members with �weak ties� (grantivettner, 1985) taking advantage of �structural holes� (burt, 1992) to mobilize social capital into areas of desire. the boise ski network provides examples of both bridging and bonding ties, which i will show spans a network of influential individuals. 58 american journal of management vol. 17(4) 2017 bridging and bonding, or faceting and rounding in snow science, stability of a slope is determined by the relative strength of snow crystals in a particular patch of snow as driven by storm cycles. snow can either become more faceted, pushing itself away from other crystals, or more rounded, by bonding more strongly (aiare, 2016). similarly, in the study of social networks, bonding refers to strong connections within a homogeneous set of actors and deters action outside the group (patnam, 2000). bridging entails looser interactions between groups as defined by weak ties (granovetter, 1973) or structural holes (burt, 1992) with the bridge acting as �a line in a network which provides the only path between two points� (granovetter, 1973) the interaction between bridging and bonding in social networks can promote collaboration and creativity (slotte-kock and coviello, 2010, daskalakim 2010, lin et. al. 2010). in this paper, we will not focus on the shared learning aspects of social capital as we will assume that by definition all of the actors have satisfied the prerequisites that a number of authors (beugelsdiik and van schiak, 2005 and hauer, et. al. 2007) have established as exhibiting a positive relationship with innovation and economic growth in a region. critiques of previous research have pointed out that purely quantitative research does not augment the actor dimension in social capital (huber, 2009) and that this can be a critical factor as a starting point (mayntz, 2004). methodology in this paper, we build a case around the importance of skiing in boise, idaho, both in terms of how it bonds by attracting and retains talent as well as how it creates bridges by creating intra-regional networks connected to a large global network of key players in economics, politics, and the social world. we begin by looking at the demographics of boise, then at how sun valley, idaho was a shaper in this process worldwide, then at how boise pulls beyond its weight on the happiness to income comparison, then look at how the skiing network spans both the boise area as well as key partner areas, and finally look at how a new entrant group�namely chinese expatriates working largely in the high-tech sector� value the lifestyle and outdoor recreation of boise above other opportunities. case studies and research findings boise, getting better all the time boise, idaho is a thriving city of around 215,000 people in 2016 with around 680,000 in the nearby boise city-nampa, idaho metropolitan statistical area (msa) locally known as the treasure valley. boise has a number of advantages making it amenable to having a cluster. first, boise is the state capitol of idaho and hosts the seat of government. next, boise is home to fortune 500 firm micron, one of the us�s largest semiconductor and memory firms, and simplot, an agribusiness giant both of which having strong local ties and pride. next, boise is home to boise state university, a metropolitan research university with strengths in engineering, business, and other fields. finally, boise also has a thriving startup community with a number of startup spaces, accelerators, and other institutions designed to create the conditions for successful startup businesses around technology, and has done so already with firms such as clickbank, clearwater analytics, cradlepoint, and micron itself to name a few. however, none of this precludes the ability to create a successful tech startup cluster. at the same time, boise is surrounded by the 2.2 million acre boise national forest directly to the north and the 485,000 acre snake river birds of prey national conservation area directly to the south, with easy access to skiing, mountain biking, fly fishing, river running, climbing, and almost any outdoor activity imaginable. outside magazine in july 2016 ranked boise as one of the top 10 big cities in the us for active families, best for �playing in the rockies� (outside, 2016). many conversations across many industries and jobs involve references to outside activities, and many boise citizens participate in such outings. american journal of management vol. 17(4) 2017 59 star clusters in sun valley idaho has a long history of this kind of outdoor sports oriented cluster production dating back to the founding of sun valley in 1931. sun valley, the first �european� style resort in the western united states, was founded by w. averell harriman, later secretary of commerce. harriman, an avid skier, heard of frequent avalanche activity on one of the trunk lines near ketchum, idaho, and upon investigation found a powder paradise on the beautiful, sun soaked slopes of the pioneer mountains. according to annie glibert-coleman (glibert-coleman, 2004), the resort attracted such luminaries as earnest hemmingway and gary cooper, both of whom made their homes there for much of the year, and was frequently visited by the kennedy family, marilyn monroe, lucille ball, and other stars of the era. this booming ski town also gave rise to two major players in the optics industry, smith and scott. both began their business in ski goggles and later expanded into sunglasses and other optics. however, rising costs pushed both companies to eventually pack up shop and relocate. more recently, wall street based allen & company, a venture capital and private equity firm focusing on media and technology investments, has created the �sun valley annual meeting.� the meeting offers a chance for key investors, entrepreneurs, and government leaders to gather and discuss the evolution of technology and media. recent attendees have included former microsoft chairman and founder bill gates, apple ceo tim cook, facebook ceo and founder mark zuckerberg, tesla and spacex founder and ceo elon musk, chinese media entrepreneur and youku founder victor koo, hollywood producer harvey weinstein, dreamworks ceo jerffery katzenberg, warner brothers ceo kevin tsujihara, news corp chairman rupert murdoch, canadian prime minister juistin trudeau, and argentenian president mauricio marci. as we will see, this has spillovers precisely through skiing relationships that extend to boise and connect it to this truly global network. (relatively) poor, happy, and hardworking in the mountains boise joins bozeman, bend, boulder and others (the �b� towns) as a group of small cities with high innovation and high outdoor sports cultures with relatively lower �happiness thresholds� to larger cities. kahneman and deaton (kahneman and deaton , 2010) found that above an income of about usd $75,000 per year, there is little increase in emotional well-being. taking this base case and adjusting for the local cost of living index (wall street journal, 2010) shows a stark difference in the income needed to be happy by geography: 60 american journal of management vol. 17(4) 2017 table 1 cost of living vs. happiness salary in various us cities city cost of living index adjusted happiness salary boisenampa 93 $67,950 bend 100 $75,000 boulder 124 $93,000 austin-round rock 94 $70,500 san josesunnyvalesanta 158 $118,500 new yorknorth jersey long island 218 $163,500 from: http://blogs.wsj.com/economics/2010/09/07/what-salary-buys-happiness-in-your-city/ clearly, these lower salaries are attractive to new businesses when combined with cheaper real estate costs particularly if the requisite level of talent is available. as my data on the boise chinese expatriate chinese community indicates, people will stay despite lower salaries. figure 2 model of local ski valley social networking american journal of management vol. 17(4) 2017 61 boise overlapping networks to describe the formal/informal interaction of individuals in boise�s network, i look at the structure of the bogus basin ski network. bogus basin is a ski area near to boise, with one of the lowest season pass and daily ticket prices in the nation. ski magazine (1991) rated bogus basin as the world�s top urban ski area due to low lift ticket prices, close proximity to the city, and acreage of terrain. it is also a social point of networking, from the board to season pass holders to irregular visitors. this, as reflected in the chinese community research, allows for a geographical space for the exchange of ideas and building of ideas. as one associate board member remarked, bogus basin is a place to meet and greet all walks of life in the boise community. beyond this, through the bbsef (bogus basing ski education foundation) , and additional network of bridging relationships is made to other key mountain town locations. sun valley, as previously described, jackson hole, famed for its annual conference of global central bankers as much as for its steep skiing, and salt lake city, the regional hub. boise, too, is able to hold costs down to local citizens compared to wealthier neighbors, giving a step up effect. these other places, in turn are globally networked and provide and exchange of people between places that would not likely otherwise be visited. figure 3 model of regional ski valley social networking the boise chinese community�small, networked, learning groomers, and growing for this case study, we will focus on the motivations of a small but specific group in boise, namely the expatriate chinese community in boise. the treasure valley has a small but growing community of chinese residents spread across the communities of boise proper, nampa, and eagle. unlike cities on the west coast, such as san francisco, portland, and seattle, asian residents including chinese are still a relative rarity in the region. boise 62 american journal of management vol. 17(4) 2017 table 2 population by race and origin city boise san francisco los angeles portland seattle population 206,100 805,195 3,792,662 583,800 684,451 white 89.0% 48.5% 49.8% 76.1% 69.5% hispanic or latino 7.1% 15.1% 48.5% 9.4% 6.6% black or african american 1.5% 6.1% 9.6% 6.3% 7.9% asian 3.2% 33.3% 11.3% 7.1% 13.8% total population growth rate 4.7% 7.4% 11.3% 8.3% 12.5% from: http://www.census.gov/quickfacts/table/pst040215/0644000,0667000,5363000,1608830,4159000 chinese societies have traditional been driven by a strong networking orientation described by the guanxi system (wang, 2001). therefore in a small community like boise there is a strong impetus to build networks outside the confines of work. the boise chinese expatriate group provides an interesting source of data as many of them work for or are family members of those who work for three large and unrelated multinationals with a large boise presence, micron and simplot (both boise based) and hp (whose printer division is located in boise). in a survey taken among participants at the boise 2016 chinese new year�s gala, we found that along with work and culture, outside sports/nature and the perceived reputation for safety were the key drivers attracting chinese residents to boise: american journal of management vol. 17(4) 2017 63 figure 3 cumulative results of survey of idaho chinese expatriate community february 2016 why did you choose idaho? please rank from 1 (most important) to 14 (least important) n=53 m/f 52%/48% ____________________________________________________ work reasons/ 1102 university study or graduate school (including exchange students)/ 927 boise safety/ low crime reputation/ boise / 589 idaho clean air/ 561 access to nature and outdoors/ 514 kid�s education/ 335 relative/friend/spouse in idaho/ / / 316 boise city reputation/ boise 253 64 american journal of management vol. 17(4) 2017 relative/friend lived/worked/ studied in idaho recommended/ / / / 196 financial reasons or scholarship / / 139 purchase property/ 109 relatives had large influence on decision / 107 boise chinese community reputation/ boise 88 immigration or permanent residence in us / 46 in this data, the reasons for coming to idaho beyond work and study as the primary drivers are boise safety/ low crime reputation, clean air, access to nature and outdoors, and kid�s education. added together, however, factors around outdoors outscore other nonwork considerations. furthermore, for example, we interviewed an informal group within this group of skiers, taking advantage of the low cost season passes at nearby bogus basin ski resort. many comments were around how it gave access to differing social groups as well as giving access to an activity considered the province of the very rich in china and adding a status element. this helps keep thee talents in town at major innovator firms such as micron, hp, and simplot, as well as at up and coming firms such as clearwater analytics and cradlepoint. conclusions and implications further understanding how, why, and how informal social networks can drive the success of an economic cluster is important to the organization, formation, and ongoing nurturing of the cluster. boise, idaho provides a good case study through the author�s access and proximity to the participants, and can serve as an example of how informal relationships create the channels for knowledge spillovers into more formal channels. if this thesis is correct, there are managerial and policy implications for cluster participants to try to incentivize informal social participation in whatever activities are proximate to the cluster and are likely to generate that elusive quality that drives knowledge sharing across formal channels. governments as well as ambitious investors and entrepreneurs in out of the way areas wishing to reap the benefits of clusters built around high value knowledge industries would be wise to look to their own local strengths beyond economic development plans and sets of economic incentives to attract and retain the people and resources to make those plans happen. american journal of management vol. 17(4) 2017 65 references acs, z. j., audretsch, d.b. & feldman, m.p. 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(2010). building engines for growth and competitiveness in china: experience with special economic zones and industrial clusters. world bank publications. optimal incentive contracts, common uncertainty, and intrinsic value young park southern connecticut state university this paper concerns the optimal use of incentive contracts in a multiple agent situation where moral hazard problems are issues. this paper proposes to investigate (1) the effect of common uncertainty on expected contract cost of different contract types (an individual contract, a team-based contract, a relative performance contract), (2) the effect of common uncertainty on the principal’s preference over the different contract types under different levels of common uncertainty, and (3) the intrinsic value of using relative performance information on agents’ efforts. taking the standard agency paradigm where a principal can improve his welfare by achieving better risk-sharing without altering agents’ incentives to take the desired action, this paper hypothesizes that (1) the expected contract cost of a team-based contract would increase, while that of a relative performance contract would decrease as the level of common uncertainty increases, (2) there exists a critical value of the common uncertainty such that a team-based contract is preferred by the principal when the level of common uncertainty is below the critical value and a relative performance contract is preferred by the principal when the level of the common uncertainty is above the critical value, and (3) neither the level of common uncertainty nor the contract type would change the agents’ effort levels, hypotheses are to be tested in two computer-assisted experiments with 80 mba students. in experiment i, 60 mba students are required to act as managers and make production decisions. 20 subjects are assigned to one of three contract groups and matched as a pair. subjects under an individual contract are compensated only based on their individual performance. while subjects under a team-based contract are compensated based on both performances of subjects, subjects under a relative performance contract are compensated based on relative performance to other subject's performance. in experiment ii, 20 mba students are required to act as principals to choose an incentive contract among three incentive contracts given a common uncertainty. there are 10 levels of common uncertainty, and common uncertainty is manipulated by providing conditional contingency tables on their effort choice. subjects’ risk and effort preferences are induced by utilizing berg et al technique (1986). introduction and background it is well observed that modern firms evaluate and compensate their workers through various performance evaluation schemes such as the team-based contract and the relative performance evaluation contract. workers are evaluated and compensated based on the team performance in the team-based contract, while they are evaluated and compensated based on their relative performance to others’ in the relative performance evaluation contract. while a team-based contract induces cooperation among workers, a relative performance contract induces competitions among workers. modern firms are 46 american journal of management vol. 16(2) 2016 reorganizing their workers into workgroups so that workers are to cooperate each other within a workgroup and to compete with other workgroups as a group (hayes et al, 1988; young et al, 1993). researchers have been interested in investigating these special forms of incentive contracts because the above observed phenomena make a puzzle; neither the team-based contract nor the relative performance contract are consistent with the principle of the responsibility accounting, which states that a worker should be evaluated and compensated only on the basis of those factors that he/she is responsible for and controls over. particularly, researchers have been trying to identify the conditions under which incentive contract is beneficial to the corporations and when is not. matsumura and shin (2006) provided empirical evidence that the financial performance increased with an incentive plan with relative performance measures and that under that plan, the degree of common uncertainty is positively associated with the profitability. gong et el (2011) reported empirical evidence of the explicit use of the relative performance evaluation within the related peer groups in executive compensation contracts. hannan et el (2008) experimentally investigated the effects of disseminating relative performance feedback in tournament and individual performance compensation plans. hannan et el (2013) investigated, in an experiment, how relative performance information affects agent performance and allocation across tasks in a multi-task environment. based on behavioral theories, they predicted and provided evidence that relative performance information induces both a motivation effect which increases efforts and a distortion effect which distorts effort allocations across tasks away from the firm-preferred allocations. on the other hand, analytical agency researchers have identified that the common environmental uncertainty which workers in modern organizations face as one key factor to determine the optimal use of these incentive contracts (ramakrishnan and thakor, 1991; holmstrom, 1991; itoh, 1991, 1992). the results of this line of research show that as the level of common uncertainty increases, the benefit of employing the team-based contract would decrease, while that of a relative performance contract would increase, and predict that there exists a critical value of the common uncertainty such that firms prefer the team-based contract when the level of common uncertainty is below the critical value and firms prefer the relative performance contract when the level of the common uncertainty is above the critical value. this paper is motivated to illustrate the conditions under which performance evaluation scheme is beneficial to corporations and when is not. also this paper aims to experimentally test the optimality of an incentive contract under such conditions. another motivation of this paper is to provide further evidence on the intrinsic value of using the relative performance information. while standard agency theory does not formally incorporate the behavioral factors into explaining the agents’ incentives to exert efforts, frederickson (1992) suggested that both economic variables and behavioral factors be considered to better understand the motivational effects of using relative performance information on agents’ behaviors. based on the social influence theory, he asserted that comparing agents’ performances has intrinsic value to a principal; that is, the saliency of the comparisons affects agents’ motivation. he hypothesized that since the saliency of comparisons increases as the degree of common uncertainty increases, agents exert more efforts and that since a relative performance evaluation contract is more salient to agents, agents with a relative performance contract exert more efforts than those with an individual contract. in a laboratory experiment with 36 mba students, he investigated the effects of common uncertainty and two contract types (an individual contract and a relative performance evaluation contract) on agents' efforts. he found that subjects with a rpe contract significantly increased their efforts as the degree of common uncertainty increased, but not subjects with an individual contract [finding 1] and that subjects with a rpe contract exerted more efforts than subjects with an individual contracts [finding 2]. although he provided insightful findings which suggest that both economic variables and behavioral variables are important determinants of driving human behaviors, current research raises some concerns on his development of economic predictions. first of all, his design does not allow us to interpret his finding 2 unambiguously. his finding 2 supports both his economic hypothesis 2 and his competing behavioral hypothesis 6 (agents’ effort levels are higher with the rpe contract than with the [individual contract]). his economic hypothesis 2 was driven based on the contracting approach where a principal can improve his welfare by providing the american journal of management vol. 16(2) 2016 47 agent with greater incentives to exert efforts without altering risk-sharing (foot note 20 and discussions in section 1) through using relative performance information. however, since this prediction is same as that in competing behavioral theory prediction, we cannot distinguish whether economic theory or competing behavioral theory confirms agents’ behaviors. under this design, the behavioral theory prediction does not achieve its’ competing objectives: investigation of the intrinsic value of rpi in contracting. in order to circumvent this design problem, this paper aims to provide a different approach where a principal can improve his welfare by achieving better risk-sharing without altering agent’s incentives to take desired effort level such that agents will take same effort level across the contract types. this approach will provide the sharp distinction between two competing theories with regard to the effect of contract types on agent’s effort. in addition, although his economic predictions were derived from an analytical agency model, neither his model was rigorously well-grounded nor his economic hypotheses were proved analytically. first of all, while he designed linear payoff functions, his experimental design does not justify the rationale of using linear contracts. since he assumed and experimentally induced that agents be risk averse, the payoff function is to be convex in his experiment. the use of this particular form of incentive contract should be justified.1 second of all, since he did not well define common uncertainty mathematically, he did not provide a formal analytical model and rigorous analyses such as comparative analysis. his proofs were based on speculations and computer simulations for his experimental models. moreover, his model does not incorporate any standard constraints such as "individual rationality" and "incentive comparability". that is to say, he just solved unconstrained optimization problems instead of standard constrained optimization problems through computer simulations. as a consequence of misspecifications in his experimental models, computer simulations showed that the agents’ expected utility increases as the common uncertainty increases. however, this is not the way the incentive contracts are designed. standard agency research suggests that ex-ante, a principal designs an incentive contract such that risk averse agents receive exactly same expected utility as their constant reservation utility for any foreseen uncertainty (holmstrom,1979; baiman, 1982; grossman and hart, 1983). in summary, based on the standard agency research paradigm where a principal can improve his welfare by achieving better risk-sharing without altering agents’ incentives to take the desired effort levels, this research is motivated to provide more precise and rigorous economic predictions which can be distinguishable from the behavioral predictions, thus it aims to reexamine the intrinsic value of using relative performance evaluation information. the remainder of this proposal is organized as follows. the next section explains the theory and develops the hypotheses. section 3 describes the proposed laboratory experiments. section 4 explains the data analysis procedures. section 5 concludes this proposal. theory and hypotheses development the models in this proposal are adapted from the models developed by ramakrishnan and thakor (1991) and modified to develop the experimental hypotheses. the basic principal agent model consider a single period situation where a principal hires two economic agents. at the beginning of the period, the principal negotiates an incentive contract with each agent. this contract induces the agent to take desired action that, along with the realization of a random variable representing an exogenous source of noise in the production process, determines the output from the task at the end of the period. production process is independent in the sense that the output of task derived from each agent's production process does not depend upon the action taken by other agent. however, output of task may be conditionally correlated in the sense that the realization of an exogenous random variable in each agent's production process may not be independent. for simplicity, any task output can take only one of two dichotomous values, "acceptable quality (a)" and "unacceptable quality (u)". agents are risk averse and identical, and each has a von neumann48 american journal of management vol. 16(2) 2016 morgenstern utility function over wealth, represented by u(), with u'()>0, and u"()<0. agents have disutility for efforts. that is, if w represents the agent's feasible action space, and w the agent's effort, then the agent's total utility is (with m representing wealth) j(m,w) = u(m) v(w), with v(w)>0, v"(w)>0, ∀ w ∈ w. let π be the task output of agent. the probability function of π is given by prob[π = a/w] = q(w), and prob[π = u /w] = 1q(w), with q'(w)>0, q"(w)<0, ∀ w ∈ w. the agent's incentive contract is a function, θ:{a,u} -> r, that pays the agent a dollar amount z if π = a and x if π = u. define u(z) = z and u(x) = x. throughout, lowercase letters denote utilities and capitals represent the corresponding dollar payoffs. thus, j(θ, w) = q(w)z + (1-q(w))x v(w). now we characterize joint distribution of the outputs of two tasks managed by two agents. given an exogenous φ (phi) correlation coefficient2, the probability structure for outputs can be written as; paa = φ q1(1-q1)q2(1-q2) + q1q2 pau = (1-q2)q1 φ q1(1-q1)q2(1-q2) pua = (1-q1)q2 φ q1(1-q1)q2(1-q2) puu = (1-q1)(1-q2) + φ q1(1-q1)q2(1-q2) since agents have same production process characterized as q (w), a probability of producing acceptable quality of output, when a principal wants to induce the same effort level (w*) for each agent, then the above expression can be rewritten as; paa = q(w*)(1-q(w*))φ + q2(w*) pau = q(w*)(1-q(w*))(1-φ ) pua = q(w*)(1-q(w*))(1-φ ) puu = (1-q(w*))(1-q(w*) + q(w*)φ ) assume that the principal is risk neutral toward the agent's compensation. define t() be inverse function of u(). t() exists since u()is strictly increasing and continuous on r and hence invertible. moreover, t'()>0 and t"()>0. the output produced can be observed by both principal and the agents, but agent's action is not observable ex post to the principal, agent's compensation can be only based on output of the task. since the agents have disutility for effort and a principal cannot observe the agent's exerted effort, with risk averse agents, a principal must design an incentive contract to induce the agents to take the desired actions by the principal. suppose the principal wants each agent to take a desired action (w*)3. this action is arbitrarily chosen and hence need not be optimal for the contract4. for any exogenously given common uncertainty (φ), the principal must design the incentive contract (θ) such that (1) the agent receives at least the reservation expected utility (denoted as r) when he or she takes the principals’ desired action (individual rationality constraint) and (2) the desired action, w*, must be agent’s dominant strategy to the given incentive contract (incentive compatibility constraint)5. effect of common uncertainty on optimality of incentive contracts a principal can design the incentive contracts which induce agents to take the desired effort level as follows; 1) an individual contract; the agents are compensated solely based on his or her task output. american journal of management vol. 16(2) 2016 49 2) a team-based contract; the agents as a team are compensated based on team performance. 3) a relative performance contract; the agents are evaluated and compensated relative to other agent's performance. an individual contract in an individual contract, a principal keeps the agents independent and compensate each agent independently of other agent’ performance. we refer to the outcome in this case as the “second best” solution. the principal will solve the following optimization problem; minimize ec (i,w*, φ) = q(w*)t(z) + [1-q(w*)]t(x) x,z s.t. q(w*)z + [1-q(w*)]x v(w*) ≥ r (ir) q’(w*)(z-x) v’(w*) = 0 (ic) the optimal solution of the above problem can be characterized as follows; (i1) let the pair (x*,z*) represent the optimal solution to the above problem. using standard technique, this solution can be shown to be; z* = r + v(w*) + [1-q(w*)]v’(w*)[q’(w*)]-1 x* = r + v(w*) q(w*)v’(w*)[q’(w*)]-1 if w* is observable ex post, the principal could achieve the first best solution by paying each agent t[r + v(w*)] dollars if w = w* is observed and nothing otherwise. thus, with first best solution, the principal would pay t[r + v(w*)] dollars to each agent. (i2) since t() is convex function, the expected contract cost per agent of the second best is strictly greater than the first best expected contract cost; q(w*)t(z*) + [1-q(w*)]t(x*) > t {q(w*)z* + [1-q(w*)]x*} (i3) using the envelope theorem, we now have d ec (i,w*, φ) d φ = 0 deriving the hypothesis 1; (h1) ceteris paribus, with an individual contract, increasing the level of common uncertainty will not affect the expected contract cost. the rationale behind hypothesis 1 is straight forward; since the level of common uncertainty is not included in an individual contract, it does not play any role to achieve better risk-sharing, thus, increasing the level of common uncertainty will not change the expected contract cost. a team-based contract in a team-based contract, the principal let two agents form a team so that they can cooperate in the performance of their tasks and in pooling their payoffs and sharing them. as a team, an agent will receive c dollars when both agents produce acceptable qualities, receive b dollars when the outcomes are mixed (one acceptable and one unacceptable quality), and receive a dollars when two agents produce unacceptable outcomes. we assume that the agents can perfectly monitor each other. the principal wants each agent to take the desired action w*. given any exogenous common uncertainty, the principal solves the following optimization problem with respect to a, b, c; 50 american journal of management vol. 16(2) 2016 min ec (t,w*, φ) = [q(1-q)φ + q2]t(c) + 2q(1-q)(1-φ )t(b) + (1-q)(1q + qφ )t(a) s.t [q(1-q)φ + q2]c + 2q(1-q)(1-φ )b + (1-q)(1q + qφ )a v ≥ r (ir) q’(1-2q)φ (c-2b+a) + 2q’[q(c-b)+(1-q)(b-c)] v’ = 0 (ic) the optimal solution of the above problem can be characterized as follows; (t1) for any φ , ic constraint has to be satisfied, thus b = a + c 2 and q’[q(c-b)+(1-q)(b-c)] = v' 2 (t2) subject to t1, ir constraint becomes qc + (1-q)a = v + r (t3) c > b > a (t4) for φ = 0, expected contract cost is strictly greater than first best expected contract cost; ec (t,w*, 0) = q[qt(c) + (1-q)t(b)] + (1-q)[qt(b) + (1-q)t(a)] > qt(qc + (1-q)b) + (1-q)t(qb + (1-q)a) > t(q2c + 2q(1-q)b + (1-q)2a) = t(v + r) (t5) for φ = 1, optimization problem becomes identical to that in the second best, thus expected contract cost is same as the second best; ec (t,w*, 1) = ec (i,w*, φ) = second best expected contract (t6) subject to t1, using the envelop theorem, we now have d ec (t,w*, φ) d φ = q(1-q)[t(c) + t(a) 2t( a + c 2 )] > 0 and drive hypothesis 2 as follows; (h2) ceteris paribus, with a team-based contract, increasing the level of common uncertainty will increase the expected contract cost. the rationale behind hypothesis 2 is as follows; since agents are compensated based not only on his outcome but also on other agent’s outcome, they are mutually insuring each other and exposing themselves less risk. therefore, a principal can design a team-based contract such that it satisfies original constraints and reduces the risk premium. however, as common uncertainty increases, the variation between two agents’ output decreases, the variation of joint output increases, thus, gains from mutual coinsurance decrease, agents become exposed to more risk, and finally a principal has to pay more risk premium to agents to induce the desired action. american journal of management vol. 16(2) 2016 51 a relative performance contract in a relative performance contract, the principal keep the agents independent in terms of their production process, but let them compete in a rank-order tournament. thus, an agent’s performance is evaluated relative to other agent’s performance. an agent will receive z dollars when both agents produce the acceptable outcomes, receive y1 dollars when he produces an acceptable output while the other agent produces the unacceptable output, receive y2 dollars when the other agent produces acceptable quality while he or she produces an unacceptable quality outcome, and receive x dollars when both agents produce the unacceptable outcomes. the principal wants each agent to take the desired action w*. given any exogenous common uncertainty, the principal solves the following optimization problem with respect to z, y1, y2, x ; min ec (r,w*, φ) = [q(1-q)φ + q2]t(z) + q(1-q)(1-φ )t(y1) + q(1-q)(1-φ )t(y2) + (1-q)(1-q + qφ )t(x) s.t [q(1-q)φ + q2]z + q(1-q)(1-φ )y1 + q(1-q)(1-φ )y2 + (1-q)(1-q + qφ )x v ≥ r (ir) q’(1-2q)φ (z-y1-y2+x) + q’[q(2z-y1-y2)+(1-q)(y1+y2-2x)] v’ = 0 (ic) the optimal solution of the above problem can be characterized as follows; (r1) for any φ , ic constraint has to be satisfied, thus z y1 y2 x = 0 and z y2 = y1 x = v' q' (r2) subject to r1, ir constraint becomes qz + (1-q)x = v + r (r3) y1 > z > x > y2 (r4) ec (r,w*, 0 ) = ec (i,w*, 0) = second best expected contract cost (r5) ec (r,w*, 1) = t(v + r) = first best expected contract cost (r6) subject to r1,r3, using the envelop theorem, we now have d ec (r,w*, φ) d φ = q(1-q)[t(z)-t(y1)-t(y2)+t(x)] < 0 and derive hypothesis 3 as follows; (h3) ceteris paribus, with a relative performance contract, increasing the level of common uncertainty will reduce the expected contract cost. the rationale behind hypothesis 3 is as follows; as the level of common uncertainty increases, the informativeness of relative performance information increases and it becomes valuable to a principal. 52 american journal of management vol. 16(2) 2016 since she is more able to filter the common uncertainty and to infer the action taken by the agents, this enforced monitoring ability enables her to force agents to take the desired action with less contract cost. finally, (t4), (t5), (t6), (r4), (r5), and (r6) jointly implies that there exist φ c such that ec (t,w*, φ) ≤ ec (r,w*, φ) for φ ≤ φ c and ec (t,w*, φ) > ec (r,w*, φ) for φ > φ c. thus, we derive hypothesis 4 as follows; (h4) there exist a critical value of the common uncertainty such that a team-based contract is preferred by the principal when the level of common uncertainty is below the critical value and a relative performance contract is preferred by the principal when the level of the common uncertainty is above the critical value. figure 1 summarizes the above hypotheses. figure 1 intrinsic value of relative performance information two economic predictions are made as follows; (h5) ceteris paribus, agents’ effort levels are same across the levels of common uncertainty. (h6) ceteris paribus, agents’ effort levels are same across the contract types (an individual contract and a relative performance evaluation contract). the rationale behind the hypothesis 5 is as follows; since agents face the common uncertainty, a principal can improve his welfare by filtering agents’ risk exposure to the common uncertainty without altering agents’ incentives to take the desired effort level. thus, in an optimal incentive contract, the level american journal of management vol. 16(2) 2016 53 of common uncertainty does not alter agents' incentives to take the desired level of effort. the rationale behind the above hypothesis 6 is as follows; since a principal designs an incentive contract to induce agents to take the desired level of effort such that the desired level of effort must be agents’ dominant strategy to any given contract for any level of common uncertainty, the agents’ effort levels are same across the contract types. figure 2 depicts these hypotheses. figure 2 effect of common uncertainty and contract types on agent effort based on frederickson’s predictions, three competing behavioral hypotheses are to be tested. (h7) ceteris paribus, as the degree of common uncertainty increases, agents are expected to exert more efforts. (h8) ceteris paribus, agents with a relative performance evaluation contract are expected to exert more efforts than those with an individual performance contract. (h9) ceteris paribus, as the degree of common uncertainty increases, agents with a relative performance evaluation contract are expected to exert more efforts than those with an individual contract. the rationale behind hypothesis 7, which is equivalent to frederickson’s h4 and h5, is as follows; since the saliency of comparisons increases as the common uncertainty increases, agents are expected to exert more efforts as the common uncertainty increases. the rationale behind hypothesis 8, which is equivalent to frederickson’s h6, is as follows; since the saliency of comparisons is greater with a relative performance contract, agents with a relative performance contract are expected to exert more efforts than those with an individual contract. the rationale behind hypothesis 9, which is equivalent to frederickson’s h7, is as follows; since the saliency of comparisons is greater with a relative performance contract, agents in a relative performance contract are expected to respond more sensitively to changes in common uncertainty. thus, agents with a 54 american journal of management vol. 16(2) 2016 relative performance contract are expected to exert more efforts than those with an individual contract as the common uncertainty increases. figure 3 depicts these hypotheses. figure 3 effect of common uncertainty and contract types on agent effort experiments two experiments are to be conducted, experiment i examines the agents' response to the different levels of common uncertainty under the different performance evaluation schemes (hypothesis 1 through 3) and the intrinsic value of using the relative performance information (hypothesis 5 through 9). experiment ii examines the principals' preference over the different performance evaluation schemes under the different levels of common uncertainty (hypothesis 4). experiment i subjects and design a laboratory experiment with 60 mba students is going to be conducted to test hypotheses. a 10 x 3 factorial design is going to be obtained by crossing 10 levels of common uncertainty with 3 types of contracts (an individual contract, a team-based contract, a relative performance contract). 20 subjects will be randomly assigned to each contract. every subject will be tested under all 10 levels of common uncertainty. task under each contract type, the level of common uncertainty will be given in a random sequence to the subjects. facing an experimentally introduced common uncertainty, subjects are responsible for producing one unit of goods in a computerized exercise. the outcome (acceptable quality or unacceptable quality) of production is a joint function of a subject's effort (i.e., economic resource) and a realized state of nature. the subject's effort is valuable to the experimenter in a sense that it increases the likelihood of american journal of management vol. 16(2) 2016 55 getting the acceptable quality of goods6; however, it is also valuable to subjects in a sense that exerting efforts derives the disutility of the subjects. therefore, subjects' tasks are to decide on how many economic resources they will exert for producing one unit of the experimental goods. after subjects made production decision, the automated production process stochastically determines the quality of the experimental goods. for each outcome, subjects will be compensated with the experimental commodity (say, lira) based on the contract given to them. risk and effort preferences subjects' risk and effort preferences will be experimentally induced by utilizing the berg et al (1986) technique. with this technique, experimental commodities are converted into the probability of winning a preferred prizes via a two-prize lottery, and this transformation induces a subject's preference function for the experimental commodities. in conformance with the agency literature (holmstrom, 1979; baiman, 1982; holmstrom, 1982; grossman and hart, 1983; ramakrishnan and thakor, 1991), the subject's utility function is assumed to be additively separable in compensation and effort. based on this assumption, the probability of winning the preferred prize is determined in two steps. first, utility for compensation will be induced7. subjects will earn the experimental liras through their contracts8, and these compensations will be transformed into degrees in the prize wheel. with the induced utility function for compensation, subjects are induced to prefer more experimental compensations (liras) to less; however, subjects are induced to have diminishing marginal utilities for compensations. second, disutility for effort will be induced.9 the number of experimental commodities (economic resources) subjects decided to exert, w , will be transformed into the degrees through the disutility function for effort. with the induced disutility for effort, subjects are induced to prefer less effort to more. moreover, subjects are induced to have increasing marginal disutilites for efforts. therefore, the subject's total degrees of winning a preferred prize in a lottery wheel is obtained by deducting degrees associated with effort from the degrees associated with compensation. the winning area on the prize wheel is the area from zero degree to the subject's total degree. when the wheel's spinner stops in the win area, the subject receives a preferred prize, otherwise, gets a less preferred prize.10 independent variables the φ correlation coefficient is used in this experiment because experimental outcomes consist of two dichotomous outcomes (acceptable quality vs. unacceptable quality). 6 levels out of 10 levels of common uncertainty (varying from zero correlation to perfect correlation by 10%) will be given to the subjects in a random sequence for each experimental round [i.e. within subject design]11. the subject will receive the information on the correlation coefficient (the degree of common uncertainty) and the computer screen will provide the conditional contingency table on agents' effort choice. 20 subjects will be randomly assigned to one of 3 contract experimental groups (an individual contract, a team-based contract, a rank-order tournament contract). a subject in the individual contract group will be told that his or her performance will be evaluated solely based on his or her own outcomes; a subject will receive z liras for acceptable quality of his own outcome, otherwise receive x liras. a subject in the team-based contract will be told that he or she will be compensated based on joint outcome of a team; a subject will receive c liras when both of the team members produced acceptable qualities, receive b liras when the outcomes are mixed (one acceptable and one unacceptable quality), and receive a liras for two unacceptable outcomes. a subject in the rank-order tournament contract group will be told that his or her performance will be evaluated relative to others' performance; a subject will receive t liras when he produces an acceptable output while the other subject in a pair produces the unacceptable output, receive s liras when both subjects produce the acceptable outcomes, receive r liras when both subjects produce the unacceptable outcomes, and receive q liras when the opponent in a match pair produced acceptable quality while he or she produced an unacceptable quality outcome. 56 american journal of management vol. 16(2) 2016 dependent variables principal's expected contract cost under a common uncertainty is obtained by averaging out the experimental compensations (liras) paid to the subjects over the observations. subject's effort is measured as an economic resource (w) the subject decided to exert in order to produce the one unit of experimental goods. experimental procedures the experiment will consist of five parts. the first part introduces the experimental exercise. the second part explains how subjects would be compensated. the third part will serve as a practice session under the complete set of experimental rules. the fourth session will be the actual experimental session. in the fifth session, a questionnaire concerning demographic data and information about experimental manipulations is collected. following steps illustrate the main experimental procedures. 1. 20 subjects will be randomly assigned to each contract type experimental groups and they will be informed of their production function which is uniform across all subjects and their contracts. 2. then, the experiment will run 10 rounds (3 practice rounds in the third part and 7 real rounds in the fourth part). 3. at the beginning of each round, subjects will be randomly matched as a pair, thus we will have 10 pairs in each round12. 4. one round will consist of 6 sessions for 6 levels of common uncertainty; 6 levels of common uncertainty out of 10 levels will be randomly selected and provided to subjects in a random sequence. 5. under a common uncertainty, subjects are asked to decide on their effort levels. 6. given effort level supplied by the subject, the outcome(good quality or bad quality) of production is stochastically determined. 7. for each outcome, subjects received the experimental compensations through their assigned contracts. 8. the experimental commodities (compensations and efforts) will be the transformed into probability of winning a preferred prize utilizing the induced utility function. 9. the lottery is conducted and the payment is determined and recorded in the computer memory. 10. at the end of each round, there will be drawing about which section will be chosen to pay.13 11. the final experimental payments will be given to subjects at the end of 10th round by summing up the payment of the last 7 rounds. experiment ii subjects and design a laboratory experiment with randomly assigned 20 mba students is going to be conducted to test hypothesis 4. this experiment consists of 10 rounds (3 practice rounds and 7 real rounds). one factor (common uncertainty) design is going to be obtained by manipulating 10 levels of common uncertainty. every subject will be tested under all 10 levels of common uncertainty. task each principal subject is going to be informed of production environment and each contract which is identical contract developed in experiment 1. then, the level of common uncertainty will be given in a random sequence to the subjects. facing an experimentally introduced common uncertainty, subjects are responsible for choosing one of 3 types of contract in a computerized exercise. after choosing one incentive contract, the computer program automatically produces the experimental outcomes. the outcome (acceptable quality or unacceptable quality) of production is a joint function of a pre-specified effort14 (i.e., economic resource) and a realized state of nature. after the automated production process american journal of management vol. 16(2) 2016 57 stochastically determines the quality of the experimental goods, for each outcome, the contracting cost (lira) is calculated through subject's choice of a contract. subject's experimental compensation is calculated by deducting it from a constant experimental commodity.15thus, principal subjects are induced to maximize their compensations by minimizing contract cost. subject's risk preference subjects' risk preference will be experimentally induced by utilizing the berg et al (1986) technique. with this technique, each subject's experimental compensation is converted into the probability of winning a preferred prizes via a two-prize lottery, and this transformation induces a subject's preference function (i.e. risk neutrality) for the experimental commodities. with the induced utility function for compensation, subjects are induced to prefer more experimental compensations (liras) to less and subjects are induced to have constant marginal utilities for compensations. the subject's total degrees of winning a preferred prize in a lottery wheel is obtained by converting the experimental compensation into the degrees. the winning area on the prize wheel is the area from zero degree to the subject's total degree. when the wheel's spinner stops in the win area, the subject receives a preferred prize, otherwise, gets a less preferred prize.16 independent variables principal subjects are informed of φ (phi) correlation coefficient between the agent's production environment. 6 levels out of 10 levels of common uncertainty (varying from zero correlation to perfect correlation by 10% interval) will be given to the subjects in a random sequence for each experimental round. dependent variable after subjects are informed of the common uncertainty of two production process, subjects are asked to choose one out of 3 contract experimental groups (an individual contract, a team-based contract, a relative performance contract). same manipulations of three contracts in experiment 1 are to be given to principal subjects. experimental procedures the experiment will consist of five parts. the first part introduces the experimental exercise. the second part explains how subjects would be compensated. the third part will serve as a practice session under the complete set of experimental rules. the fourth session will be the actual experimental session. in the fifth session, a questionnaire concerning demographic data and information about experimental manipulations is collected. following steps illustrate the main experimental procedures. 1. 20 subjects will be randomly assigned to the principal group and they will be informed of the production function and each type of contracts. 2. then, the experiment will run 10 rounds (3 practice rounds in the third part and 7 real rounds in the fourth part). 3. one round will consist of 6 sessions for 6 levels of common uncertainty; 6 levels of common uncertainty out of 10 levels will be randomly selected and provided to subjects in a random sequence. 4. under a common uncertainty, subjects are asked to choose one type of performance evaluation scheme. 5. given the common uncertainty, the outcome(good quality or bad quality) of production is stochastically determined. 6. for each outcome, contract cost is calculated through the contract chosen by the subjects and subject's experimental compensation is obtained by subtracting contract cost from a constant experimental commodity. 58 american journal of management vol. 16(2) 2016 7. the experimental compensations (liras) will be the transformed into probability of winning a preferred prize utilizing bergs et al (1986) technique to induce the risk neutrality. 8. the lottery is conducted and the payment is determined and recorded in the computer memory. 9. at the end of each round, there will be drawing about which section will be chosen to pay17. 10. the final experimental payments will be given to subjects in cash at the end of 10th round by summing up the payment of the last 7 rounds. data analysis the effect of the level of common uncertainty on agents' effort level (hypothesis 5, 7) , the effect of contract types on agent's effort level (hypothesis 6,8), and the interaction effect between contract types and the level of common uncertainty on agents’ effort (hypothesis 9) will be examined through repeated measure manova analysis technique. the effect of the level of common uncertainty on contract cost with an individual contract (hypothesis 1), with a team-based contract (hypothesis 2), and with a relative performance contract (hypothesis 3) will be examined through regressing the level of common uncertainty on the contract cost. the regression models and expected signs are as follows18; a. individual contract : contract cost = β0 + β1 common uncertainty ; β0 > 0, β1 = 0 b. team-based contract : contract cost = β2 + β3 common uncertainty ; β2 > 0, β3 > 0 c. relative performance contract : contract cost = β4 + β5 common uncertainty ; β4 > 0, β5 < 0 the effect of common uncertainty on principals' choice of incentive contract type (hypothesis 4) will be examined by conducting sequentially two statistical tests of independence of distributions.19first, the karl pearson test (chi-square test) of independence of distributions is conducted to examine whether there exist an association between common uncertainty and principals' preference of a contract type. upon rejection of the null hypothesis that there does not exist any association, multiple pair-wise comparisons for independence of distribution is conducted to examine the principal preference of a contract type when the level of common uncertainty is above or below the critical value. conclusions summary this paper concerns the optimal use of incentive contracts in a multiple agent situation where moral hazard problems are issues. this paper proposes to investigate (1) the effect of common uncertainty on expected contract cost of different contract types (an individual contract, a team-based contract, a relative performance contract), (2) the effect of common uncertainty on the principal’s preference over the different contract types under different levels of common uncertainty, and (3) the intrinsic value of using relative performance information on agents’ efforts. taking the standard agency paradigm where a principal can improve his welfare by achieving better risk-sharing without altering agents’ incentives to take the desired action, this paper hypothesizes that (1) the expected contract cost of a team-based contract would increase, while that of a relative performance contract would decrease as the level of common uncertainty increases, (2) there exists a critical value of the common uncertainty such that a team-based contract is preferred by the principal when the level of common uncertainty is below the critical value and a relative performance contract is preferred by the principal when the level of the common uncertainty is above the critical value, and (3) neither the level of common uncertainty nor the contract type would change the agents’ effort levels, american journal of management vol. 16(2) 2016 59 hypotheses are tested in two computer-assisted experiments with 80 mba students. in experiment i, 60 mba students are required to act as managers and make production decisions. 20 subjects are assigned to one of three contract groups and matched as a pair. subjects under an individual contract are compensated only based on their individual performance. while subjects under a team-based contract are compensated based on both performances of subjects, subjects under a relative performance contract are compensated based on relative performance to other subject's performance. in experiment ii, 20 mba students are required to act as principals to choose an incentive contract among three incentive contracts given a common uncertainty. there are 10 levels of common uncertainty, and common uncertainty is manipulated by providing conditional contingency tables on their effort choice. subjects’ risk and effort preferences are induced by utilizing berg et al technique (1986). limitations and future research directions in the experiments, subjects' risk and effort preference are induced. two concerns about this operation arise. first of all, is this operation powerful and successful enough to induce subjects behave as if they had induced preferences. this operation is crucial to achieve the consistency and internal validity of the experiment. however, the complex tasks such as the one in this experiment may impede risk attitude inducement (selto and cooper, 1990). secondly, suppose this operation turns out to successful one, the consistency and internal validity of the experiment may have been achieved. however, the external validity of this experiment may be weak. there is no guarantee that the actual economic agents have the induced preferences and that we could observe at least qualitatively equivalent phenomena in a real world. in addition, using mba students as subject may reduce the external validity to the extent that the experiment does not control the diversity of mba students, in terms of gender, age, job experience, and cultural background. in a team-based contract, we made a little bit of strong assumption; the effort levels the each agent takes can be observable ex post to each agent, thus, the agents are allowed to perfectly monitor each other. however, the free riding problem in a multiple-agent organization has been well recognized because of the inability of perfect monitoring (alchian and demsetz, 1972). gains from a team-based incentive contract will decrease when the members in a team cannot perfectly monitor the other’s activities. team-members are better able to monitor each other when they share high degree of common uncertainty than when they share low degree of common uncertainty. thus, increasing the degree of common uncertainty would result in mixed effect on contracting cost of a team-based contract; decreasing gains from mutual insurance vs. increasing gains from mutual monitoring. future research will investigate the effect of relaxation of this perfect monitoring assumption in a team-based contract. in a relative performance contract, no production interaction is assumed. relaxation of this assumption brings a different picture of the relative performance contract. in a relative performance contract, when an agent can influence the other agent’s performance, they try to reduce the probability of other agents’ getting good performance measures. in order to prevent this “sabotage” by the agents, pay compression between the winner and the loser may be preferable (lazear, 1989). however, this pay scheme will weaken the tie between pay and performance, thus reduce the agents’ incentives to take desired action. thus, future research will explore the effect of the extent of the production interaction in a rank-order tournament contract. finally, since our model is a two-agent and two-state model, it does not capture much of real world phenomena. thus, future research will expand current model to a multiple agent and finite state model so that it captures the richness of real world phenomena. endnotes 1. holmstrom and milgrom (1987) developed a dynamic model under which linear pay schemes are optimal. in their model, they showed that there exists an optimal linear contract if outcome of a task is normally distributed and an agent with constant risk aversion controls the drift rate of a stochastic process of 60 american journal of management vol. 16(2) 2016 performance measures over time, and his action at each time can be conditioned on the observation of his current position in that process. however, frederickson's experimental design does not satisfy these conditions. 2. φ (phi) correlation coefficient is an ordinary correlation coefficient between two dichotomous variables. this φ (phi) correlation coefficient provides information on the association between two dichotomous variables. this magnitude of association, φ2, is obtained by squaring the phi correlation coefficient. we can interpret that φ2 % of the variations in one dichotomous variable can be explained by another dichotomous variable. high φ (phi) correlation coefficient implies that the source of variations in performance across agents is small and that two agents face the high degree of common uncertainty. therefore, the φ (phi) correlation coefficient between the subject's production environment represents the degree of common uncertainty which the agents face. the φ correlation coefficient is used in this experiment because joint outcomes of the two agent’s production process consist of two dichotomous outcomes (acceptable quality vs. unacceptable quality). 3. we are interested in improving principal’s welfare by achieving better risk sharing without altering agents’ incentives to take desired action. 4. we will hold w* fixed throughout. in comparing two incentive contracts, we will use the same w* for both arrangement. even though w* may not be optimal for either arrangement, if a principal experience lower expected contracting with one contract, it must be superior one since w* is arbitrarily chosen. 5. the first order approach is valid here since the grossman and hart (1983) cdfc condition is met. 6. the specific functional form of probability for getting the acceptable quality of goods has not been decided yet. however, it will satisfy the two assumptions (1) the more effort a subject exerts, the more likely he or she gets the acceptable quality (q' > 0) and (2) the probability function has diminishing probability of producing the acceptable quality (q" < 0). 7. the specific functional form of utility for compensation has not been decided. 8. the specific compensation rule has not been determined. 9. the specific functional form of disutility for effort has not been decided. 10. the prizes are not determined yet. 11. the reasons of randomly selecting the treatments are as follows. first, this design will reduce the subjects' fatigue or boredom for the experiment. second, this random treatment effect design rather than fixed treatment effect will increase the external validity of this experiment. 12. since we can obtain 100 pairs from 20 subjects, not a single subject will be paired with the same subject with he/she was previously paired). 13. the reasoning behind this manipulation is that it would reduce the subject's randomization decision behavior or simple exploration behavior, thus inducing them to make best decision for each level of common uncertainty. also, this procedure would not necessarily impose additional financial risk on subjects. 14. this desired effort level has not been determined yet, however, this desired effort will satisfy the incentive compatibility and individual rationality constraints of agents in experiment 1. thus, it is to be identical effort level which is desired by the principal in experiment 1. 15. this constant experimental commodity has not been determined yet, however, it is assumed to be same as expected output of production. 16. the prizes are not determined yet. 17. the reasoning behind this manipulation is that it would reduce the subject's randomization decision behavior or simple exploiting behavior, thus inducing them to make best decision making on effort. also, this procedure would not necessarily impose any financial risk on subjects. 18. these hypotheses also can be tested through the trend analysis (marasculio and serlin, 1988, pp 458-460). 19. these statistical procedures are well described in chapter 26 in marasculio and serlin. american journal of management vol. 16(2) 2016 61 references alchian, a., and h. demsetz. 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(1993). the effects of intergroup competition and intragroup cooperation on slack and output in a manufacturing setting, the accounting review 68, 466-481. american journal of management vol. 16(2) 2016 63 the prevalence of incivility for junior enlisted sailors (e1-e6) in the navy and its impact on their decision to reenlist jamaal t. hollins sullivan university incivility does not only exist in the civilian sector but it also occurs within the military. these occurrences often lead to dissatisfaction and adverse behavior within the workplace. when it comes to studies on incivility within the u.s. military, literature is scarce. in this study, incivility among junior enlisted sailors in the u.s. navy is examined. using a quantitative analysis, aggression and anger was most common in the respondents’ workplace. the results suggest that incivility should be further explored, and that anger and aggression could be a leading cause in how incivility is displayed between junior enlisted sailors. introduction incivility is a harmful behavior that negatively impacts the workplace and is a growing challenge within organizations (giumetti, mckibben, hatfield, schroeder, & kowalski, 2012; wachs, 2009). however, this uncivil behavior impacts the victim undesirably that causes harmful effects that are detrimental to the victim’s workplace, their job performance, and their health and wellbeing (longo, 2013; d’ambra & andrews; 2014). although u.s. navy personnel are highly skilled, well-trained, maintain good physical condition, and can work under stressful conditions for a long period (schonberg, 2012; englund, naitoh, ryman & hodgdon, 1983), the impact of uncivil behavior within their workplace, can cause devastating consequences on both personnel and the organization (giumetti et al., 2012; wachs, 2009). much of the current literature on incivility has been accredited to and expanded tremendously due to the research on incivility in the nursing field and its impact, specifically, negative behavior displayed among nurses (becher & visovsky, 2012; lachman, 2014; mcnamara, 2012; rowe & sherlock, 2005; smith, andrusyszyn & laschinger, 2010; laschinger, wong, & grau, 2013; freshwater, 2000; fairbanks & walrafen, 2013). d’ambra and andrews (2014) asserted that the phenomenon of bullying is an “expression of incivility” (p. 736) that has destructive mental costs on the receiver. moreover, incivility is deeply influenced by conflicting behavioral and personality differences (leiter, laschinger, day & oore, 2011; kovach, simpson, reitmaier, johnson & kelber, 2010). wachs (2009) suggested that incivility can be contagious and once this behavior is accepted as the norm, those who are responsible for such acts will continue this behavior and cause others to behave in a similar manner. furthermore, klima (2014) noted that incivility typically spills over to the victim’s personal life, outside the workplace, which contributes to how they react to uncivil behavior. 90 american journal of management vol. 16(4) 2016 background the united states navy is not immune from acts of incivility (ewing, 2010), which can be classified as cruelty and maltreatment (uniform code of military justice, article 93, 10 u.s.c. 893). according to hussain and hassan (2015), “leadership is a science” (p. 94) whereby people are led towards a collective objective and where a leader’s position remains crucial. hussain and hassan asserted that a leader’s success depends on certain traits that comprise of a leader’s core personality. in order to determine a leader’s success, certain actions must be scrutinized, such as their way of formulating a vision, outlining goals and objectives, and their mentorship roles in the society. research suggests that each of the aforementioned particular traits can be molded within a leader (hussain & hassan, 2015; yukl, 2006). this implies that effective leadership plays a vital role in the behavior of those in the military and that differing styles of leadership can have a more favorable response within the organization (hussain & hassan, 2015). rear admiral kelley (2014) declared that the naval profession has the obligation to ensure that its members uphold navy standards and that its members are to be brought up to be effective navy leaders. moreover, as individuals accept and abide by the standards of the organization, they are more compelled to commit themselves to the success of the organization, which is the basis of organizational support theory (eisenberger, huntington, hutchinson, & sowa, 1986). clark and springer (2010) noted that organizational support theory affirms the importance that leaders play when it comes to increasing organizational support. as organizations implement support initiatives, it lessens stress on its employees, which can result in a positive impact on job performance (byrne & hochwarter, 2006; byrne & hochwarter, 2008; witt & carlson, 2006). according to the u.s. navy commander snodgrass (2014), due to the notable improvement in the economy since the recent financial crisis, and diminished trust in navy leadership, the navy could encounter problems retaining members of its officer corps. this suggests that the navy’s inability to retain experienced leaders (e.g., officers) could have a critical and devastating impact on its enlisted force. although snodgrass’s research focus was on the navy’s officer corps, he noted that the trend in retaining its officers could also have an adverse effect on its enlisted corps as well. according to the u.s. navy (n.d.), the navy corps is a robust organization that strives to carry themselves according to three basic principles, consisting of honor, courage, and commitment. with these principles (also known as core values) in place, navy leaders can act as role models by exemplifying these core values, which ultimately can impact the behavior of their crew members. rear admiral kelley (2014) asserted that every sailor who is responsible for another sailor is a leader in the navy. this thus suggests that each member of the naval organization has a role to play in how they behave towards one another. the rear following statement by admiral kelley cannot be re-emphasised: junior enlisted personnel need to be recognized as prospective leaders who have the potential for strategic impact through their performance—not as folks “who just follow orders”—just as senior officers are called on to be bold and decisive leaders with the responsibilities of promoting and safeguarding the morale of those under their command. indeed, all sailors must understand that we—individually and collectively as the navy team—are accountable for the welfare of our shipmates, no matter our respective ranks. (p. 7). the navy recently implemented a program called the navy leader development strategy (kelley, 2014). according to kelley (2014), the navy leader development strategy establishes a framework in how sailors are developed “through experience, education, training, and personal development” (p. 10). kelley suggested that personal development, which comprises of a refining “self-reflection, critical thinking, moral growth, and lifelong learning” (p. 10), are philosophies that the navy lacks when developing its leaders within the organization. the implementation of the navy leader development strategy suggests that the navy recognizes a growing problem and determined that a change was needed american journal of management vol. 16(4) 2016 91 in order to develop better leaders within its organization. this opinion compelled the researcher to ask the following questions: why do acts of incivility remain a problem in today's navy? and, what impacts does incivility have on the navy’s growing problem on retention of its sailors due to low levels of job satisfaction? purpose of study clark and springer (2010) suggested that leaders are critical when forming the environment and establishing the organization’s culture. some researchers advocate for good leaders who demonstrate appropriate conduct and display proper behavior to be assigned novice subordinates for there to be a transfer of the good and acceptable qualities to the subjects hence create a positive impact on how they make decisions and conduct themselves within the workplace (walumbwa, et al., 2011). longo (2013) suggested that in order for acts of incivility to change within the workplace, it is critical that changes are made at the top, where a more power-driven culture may exist so that all employees are treated with respect. some organizations fail to possess a clear understanding of the potential internal and external organization factors that can lead to discord if they are not handled in a manner that creates value for and within the organization (nickerson, yen, & mahoney, 2012; snodgrass, 2014). in order to create a constructive workplace, organizations are encouraged to work towards implementing initiatives that minimize stress, in an attempt to improve job satisfaction (ghosh, jacobs, & reio, 2011). however, sustaining job satisfaction where there is workplace stress can be a challenge for organizations (klima, 2014); especially when incivility is prevalent (reio, 2011; roberts, scherer, & bowyer 2011; harkreader, 2008; porath & pearson, 2009; cortina, et al., 2001). the purpose of this quantitative study is to assess the prevalence of incivility on junior enlisted sailors and its impact on their decision to reenlist. there are many factors that have a direct and indirect impact on job satisfaction (lerner, et al., 2011). the presence of incivility in the workplace can be devastating on employees leading to a reduction in job satisfaction (reio, 2011; roberts et al., 2011; harkreader, 2008; porath & pearson, 2009; &cortina et al. 2001). this study specifically examines job satisfaction as the factor that affects a junior enlisted sailors’ intent to continue their military career beyond their initial term of service. specifically, this study aimed to do the following: 1) determine the demographic profiles of the respondents, 2) determine the prevalence of incivility among the junior enlisted soldiers in the navy, 3) determine the level of job satisfaction among the junior enlisted soldiers in the navy, and 4) identify if there exist a significant relationship between the prevalence of incivility and job satisfaction. the results of this study could encourage further studies aimed at the overall junior enlisted retention rate in the military, in order to identify indicators that lead to incivility, which could reduce the level incivility and have a positive impact on the current retention rate throughout the military services. literature review the introduction of this pilot study briefly revealed why there are valid concerns regarding incivility in the workplace and how this behavior can influence the dynamics of employees and the workplace in general. when investigating negative behavior within the workplace, it is essential to examine the organization (longo, 2013). the literature on workplace incivility is vast due to the growing interest in organizational behavior topics such as the effects of bullying in the workplace (lachman, 2014; longo, 2013; wachs, 2009; d’ambra & andrews, 2014). current studies on incivility provide an immense overview of influencers that either contribute to acts of incivility or leads to incivilities, such as job stress, job satisfaction, or negative interpersonal issues within the organization. the following literature review consists of the latest literature on incivility, job stress, and job satisfaction. incivility according to merriam-webster's online dictionary, incivility is "a rude or impolite attitude or behavior" (2015). laschinger et al. (2009) define workplace incivility as low-level disrespectful behavior 92 american journal of management vol. 16(4) 2016 with the intention to cause harm to the victim, without regard to workplace policies and others. research on incivility over the last decade has shown that this behavior is occurring at a startling rate (becher, & visovsky, 2012; lachman, 2014) and remains to be an influential component within the workplace (hutton & gates, 2008). the intent of this behavior is unclear and is not always aimed to cause problems (wachs, 2009). burr, palinkas, and banta (1993) noted that stressors within the organization comprise of the structure of the organization and the particular role that the individual has in the organization. although the literature on incivility was limited in the early 2000s, its impact on the organization and its members were virtually unknown and classified as a job stressor in which victims were expected to react similarly to other common job stressors (penney & spector, 2005). in the past, incivility was defined similarly to counter workplace behavior (cwb) (penney & spector, 2005), as a minor negative behavior, with uncertain intention to cause the victim hurt, which went against the values of the workplace (andersson & pearson, 1999). cwb literature focused on the actor and environmental factors that led to its occurrence, while workplace incivility primary focus was on the victim’s “perspective and reactions” (penney & spector, 2005, p. 779). incivility can be categorized as a component of counterproductive workplace behavior (cwb). according to spector & fox (2002), cwb describes behaviors by employees that are harmful to both the organization and to those who are affiliated with it. moreover, wingard (2010) describes incivility as malicious behavior and unfair predispositions amongst individuals of the same group. klima (2014) asserted that uncivil behavior is devastating and can appear in any organization. incivility has the ability by nature to be veiled and difficult to detect among employees (becher & visovsky, 2012). subsequently, incivility in the workplace can cause chaos within interpersonal relationships and their work environments (mcnamara, 2012). roberts et al. (2011) claimed that incivility inevitably produces job stress and lowers job satisfaction among employees. job stress according to klima (2014), stress is an aspect of incivility. moreover, incivility can be provoked due to many reasons such as job stress (roberts, scherer & bowyer, 2011; burr, palinkas & lawrence, 1993) resulting in a reduction in job satisfaction that could lead to retention problems within the organization (mckenna et al. 2003; laschinger et al. 2009; smith et al., 2010). stress impacts both the employee and employer, and is an organizational problem that continues to be prevalent in western countries (klima, 2014), that cause significant economic and social cost on organizations, their employees, and the government (giumetti et al., 2012; shih, 2010; buys, matthews & randall, 2010). sigh (2010) and jehangir et al. (2011) found that stress negatively impacts an individual’s job performance and motivation to excel. the aforementioned studies further confirm previous research that found that job stress can lead to a wide-range of problems that affects an individual’s ability to perform as expected on the job (burr, palinkas, banta, 1993). this concept aligns with both past and current research that reveals a correlation between those who experienced job stress and acting out cwb (klima, 2014; lachman; 2014; chen & spector, 1992; miles, borman, spector, & fox, 2002; penney & spector, 2002). job satisfaction and employee retention according to klima (2014), job satisfaction is critical to preserving a strong work atmosphere within the workplace. moreover, many studies advocate that incivility lowers job satisfaction (miner et al., 2012; cortina et al., 2001; reio, 2011; giumetti et al., 2012; wachs, 2009). reio and ghosh (2009) revealed that 12% of their participants were involved in incivility within their workplace. reio and ghosh’s study suggested that verbal abuse was the most common behavior within the organization. reio and ghosh also found that chaos between supervisors and their subordinates led to a reduction in job satisfaction. this notion was supported by caza and cortina’s (2007) study that found that employees who had lower levels of job satisfaction were those who reported incivility head-on with their supervisors. longo (2013) asserted that when investigating incivility among employees, an examination of the workplace is essential. when negative workplace relationships exist, they can lead to a decrease in job satisfaction, lack of commitment and reduced interest in the job (reio & ghosh, 2011; roberts et al., 2011; american journal of management vol. 16(4) 2016 93 harkreader, 2008). lamar and viola (2012) suggested that wherever physical and emotional symptoms associated with incivility exist, it can play a major factor in recruitment and retention of personnel. similarly, if the ill-mannered behavior of incivility is not addressed, it could also have a profound effect on job performance, leading to a negative effect on recruitment and retention of personnel (clark, 2012). consequently, the existence of incivility can lead to victims displaying a higher level of job stress, emotional anguish, mental instability, and unhappiness, which also can eventually lead to reduced job satisfaction and result in the victim ultimately leaving the organization (cortina & magley). incivility continues to be a growing phenomenon in today’s organization. current research on incivility, in general, is massive; especially on the effects of incivility and how it can lead to job stress, reduced job satisfaction, and retention challenges. however, there are areas of incivility that are yet to be investigated or lack sufficient literature on, such as incivility in the military and its associated effects on military members. this research study explored incivility on junior enlisted sailors in the navy and its impact on their decision to reenlist; specifically, job satisfaction. methodology this section of the study discusses the methods and procedures of obtaining the data needed for the study as well as the analyses used to answer the proposed research question. specifically, it includes the pilot study’s design, population, and sample, hypotheses, data collection, and analysis. according to fitzgerald, rumrill, and schenker (2004), correlation designs are usually used to discover relationships between variables where manipulation is nonexistent. however, correlation does not provide evidence of a causal relationship; however, it can be predictive in adding further support to a theory and assess test-retest reliability (waters, 2013). correlation research measures the vigor of the relationship between naturally occurring variables. since these variables are not modified like variables manipulated in an experiment, specific words such as predictors and criterion is most appropriate to use when explaining variables under examination (fitzgerald al et., 2004). the aforementioned is suitable for studies using internet-based surveys, since it describes the principles of correlation research, and provide a precise and competent means for describing peoples’ viewpoint (shaughnessy, zechmeister & zechmeister, 2002). the hypothesis for correlation research could be that there are positive or negative correlations among variables. according to waters (2013), a precise correlation is an r +1.0 and -1.0. the correlation becomes positively and negatively stronger as it goes towards +1 and -1 respectively. descriptive analysis descriptive analysis is a statistical analysis used to illustrate the group sampled from the collected data (delaney, 2010). descriptive statistics comprises of measures that describe, summarizes and show data in a significant manner that allows the researcher to gain a better sense of understanding of the data, in order to explain the narrative of the sample group (delandy, 2010). population and sampling the target population of this study is junior enlisted sailors in the u.s. navy. convenience sampling was used to recruit sailors in this study from u.s. military installation located in bahrain. convenience sampling is a non-probability sampling which means the researcher did not consider selecting the subjects that are representative of the population but rather participants who fit the criteria of the study (costanza, blacksmith, & meredith, 2015). snowball sampling was used as well due to the need of the researcher to ask participants to inform their friends, who also fit the criteria for the study, about the survey. participants the number of participants in this study consisted of 50 subjects between the ages of 18 and 34, both male and female of all races and ethnicities. participants were recruited using personal networking resources that also led to others being notified of the study. an official invitation to participate in this study was sent via email with a link to complete the survey. included in the link was a detailed informed 94 american journal of management vol. 16(4) 2016 consent that explained that their participation confirms their consent to participate in the proposed study. the invitation letter to participate in the study is attached accordingly. instrument/measure this study used survey method to collect the data needed for the analysis. survey research involves the collection of data from a sample of individuals through their responses to questions. this study used aforementioned research design in order to systematically collect information needed to answer the researcher’s questions and hypothesis. in particular, an internet-based survey was used in this study. according to theuri and turner (2002), web-based surveys are more advantageous than email surveys due to its ability to provide rapid and precise responses at a lower cost compared to other survey methods. in this manner, data can be collected from many people simultaneously, making it more time-efficient. a three-part survey consisting of demographic variables, job satisfaction survey (jss), and the uncivil workplace behavior questionnaire (uwbq) was used in this pilot study and was completed by participants online using survey monkey. the researcher was able to secure permission to use jss and uwbq in the survey completed by participants. demographic variables that comprise of age, gender and race were necessary for this study to describe the sample population. the job satisfaction survey (jss), developed by spector (1985), was used to measure different aspects of the job satisfaction. jss is a 36 item instrument that is comprised of 9 scales: pay, promotion, supervision, fringe benefits, contingent rewards (performance based rewards), operating procedures (required rules and procedures), coworkers, nature of work and communication. the scales are measured by four items with six choices each, ranging from strongly disagree (1) to strongly agree (6) (spector, 1985). in this study, however, only the first five scales were measured and the items corresponding to these scales were the ones included in the questionnaire. responses to the survey questions were averaged to produce a satisfaction score for each scale as well as to determine overall job satisfaction. scores with a mean item response of 4 or more, represents satisfaction, a mean item of 3 or less represents dissatisfaction, and those between 3 and 4 are uncertain (spector, 1985). the uncivil workplace behavior questionnaire was used to measure workplace incivility. this incivility measure was developed by martin and hine (2005) and it comprises of four factors: hostility, privacy invasion, exclusionary behavior, and gossiping. this instrument enables researchers to differentiate varieties of incivility within the workplace, evaluates uniqueness of those types of businesses, and reduces incivility effectively (martin & hines, 2005). data collection the survey in this study was structured and distributed using survey monkey. invitation to participate was posted in various groups on facebook (not managed or associated with the u.s. armed forces) that catered to navy personnel located in bahrain. participants were informed that the survey must be completed on a voluntary basis and during their off-time. research question and hypotheses according to soldatova and rzhetsky (2010), research hypotheses are the core of scientific activities; “the accurate, unambiguous and operational representation of them” (p. 1) are crucial for the strict recording and analysis of examinations. hypotheses are suppositions on how variables behave. in a correlational analysis, the null hypothesis (ho) is the assumption that there is no relationship between the two measured occurrences (lund research ltd, 2013; everitt, 1998). alternatively, the supplementary hypothesis (ha) is a statement of the anticipated result of the study. variables in this study are generally grouped into two, the incivility measures and the job satisfaction measures. research question 1: what is the prevalence of incivility among the junior enlisted sailors in the navy located in bahrain? research question 2: what is the level of job satisfaction among the junior enlisted sailors in the navy located in bahrain? american journal of management vol. 16(4) 2016 95 research question 3: to what extent does workplace incivility contribute to job satisfaction among the junior enlisted sailors in the navy? ho: there is no statistically significant linear relationship between workplace incivility and job satisfaction. ha: there is a statistically significant linear relationship between workplace incivility and job satisfaction. data analysis microsoft excel and ibm statistical package for social sciences (spss) software were used for data analysis in this study. spss is a solid analytical tool used to process challenging statistical methods (pallant, 2013). spss can be used in data entry and analysis in order to generate tables and graphs (pallant, 2013; gerber & finn, 2013). collected data from the survey was taken from the web-based survey and copied to microsoft excel. in this study, bivariate analysis was done using spss. the survey data extracted from survey monkey was saved in microsoft excel spreadsheets. these were assembled by deleting unnecessary inputs. data manipulation such as averaging was also done to produce the data needed later on for the analysis. in addition, r studio’s “sem” and “semplot” packages were particularly used in this study for path analysis. statistical treatment of data analysis for this study was done in three levels, descriptive statistics, bivariate statistics and multivariate statistics. for the descriptive analysis, the frequency was used to describe the sample population in terms of group counts. in addition, arithmetic mean was used to identify the incivility and job satisfaction score of the participants based on the given scoring method of the two instruments used- uncivil workplace behavior scale and the job satisfaction survey. in this study, the spearman’s rank order measure (lund research ltd, 2013) was used to assess the monotonic relationship between the prevalence of incivility and job satisfaction among the junior enlisted soldiers in the navy. a monotonic relationship leads to one of the following to occur: (1) as one variable value increases, the value of the other variable increases as well; or (2) as one variable values increases, the value of the other variable decreases (lund research ltd, 2013; mcdonald, 2014). this served as the bivariate statistic measure for the study that will also answer the primary research question. path analysis was used in this study to grasp patterns of correlation within a defined network which is also known as structural equation modeling (sem) (bullmore et. al., 2000). sem is a multivariate analysis used to analyzed structural relationship (kaplan, 2010) and is a combination of factor analysis and multiple regression analysis (kline, 2011). specifically, this study utilized causal models with latent variables. causal models with latent variables represent a mix of path analysis and confirmatory factor analysis, which have been called a hybrid model (kaplan, 2010; kline, 2007). in this study, two latent variables namely incivility and job satisfaction will be evaluated, with incivility as the exogenous variable and job satisfaction as the endogenous variable. validity and reliability validity refers to a valid measurement of what is to be measured while reliability while reliability measures consistency (ghauri & gronhaug, 2010). the validity and reliability of this study were based on the use of the job satisfaction survey (spector, 1985) and the uncivil workplace behavior questionnaire (martin & hine, 2005). job satisfaction survey jss was originally developed for human service organizations however, it has been widely used for different organizations and its reliability and validity has been measured repeatedly. based on a sample of 2870, internal consistency reliabilities were computed. coefficient alpha ranges from 0.60 for coworkers to 0.01 for the total scale (spector, 1985). 96 american journal of management vol. 16(4) 2016 uncivil workplace behavior questionnaire the uncivil workplace behavior questionnaire (uwbq) developed by martin and hine (2005) was tested for validity and reliability by the authors themselves using cronbach’s alpha coefficient. according to martin and hine’s (2005) study, the four factors formed in the questionnaire (hostility, privacy invasion, exclusionary behavior, and gossiping) revealed a high level of internal reliability. these also received further support from a confirmatory factor analysis on a hold-out sample (martin & hine, 2005). according to martin and hine, “[a] series of correlation and regression analyses revealed that the uwbq subscales exhibited sound convergent, divergent, and concurrent validity” (p. 477). results the primary purpose of this study is to identify the prevalence of incivility and its relationship with job satisfaction among junior enlisted navy based in bahrain. to address its objective, the study utilized descriptive and correlational research design. nonparametric correlation using spearman’s rho was used primarily to analyze the data and the research question. description of the sample and population this study consisted of 49 junior enlisted sailors (pay grade e1-e6) who agreed to participate in the online survey. participants were invited via email and posts in facebook groups that catered to navy sailors located in bahrain. descriptive analysis descriptive statistics aims to summarize the sample of collected data from the demographic questionnaire and introduced an in-depth description of the proposed population. out of the 49 respondents, 16 (32.65%) are male and 27 (55.10%) are female. however, 6 (12.24%) of them refused to give their gender. table 1 summary of gender responses gender response percent response count male 37.2% 16 female 62.8% 27 others 0.0% 0 answered question 43 skipped question 6 table 2 summary of rate responses pay grade response percent response count e1 7.0% 3 e2 11.6% 5 e3 27.9% 12 e4 25.6% 11 e5 25.6% 11 e6 2.3% 1 none of the above 0 answered question 43 skipped question 6 american journal of management vol. 16(4) 2016 97 e-1 to e-9 is the enlisted pay grades of enlisted service members in the united states armed forces. in this study, navy enlisted grades e-1 to e-6 participated. e-1 is the most junior enlisted while e-6 is the highest of the junior enlisted. e-1 is called a seaman recruit, e-2 is a seaman apprentice, e-3 is a seaman, e-4 is a petty officer third class, e-5 is a petty officer second class, and e-6 is a petty officer first class. in the navy, e-1 has had the lowest summary of rate response, and e-3s had the rate with the most number of respondents. there were 12 (27.9%) respondents who were e-3s. e-4 and e-5 had the same frequency, and together, they comprise 51.2% (22) of the sample. for e-1, e-2, and e-6, there were 3, 5 and 1 respondents respectively. however, 6 respondents refused to answer this question. table 3 average incivility and job satisfaction score subscale mean score standard deviation hostility 3.14 0.80 privacy invasion 2.38 0.94 exclusionary behavior 2.88 0.69 gossiping 2.83 0.78 overall level of incivility 2.81 0.68 pay 3.42 0.60 promotion 3.14 0.52 supervision 3.73 0.81 fringe benefit 3.57 0.74 contingent rewards 3.510 0.99 operating conditions 3.33 0.68 coworkers 3.60 0.64 nature of work 3.68 0.94 communication 3.70 0.71 overall level of job satisfaction 3.59 0.31 the highest mean score for incivility is 6; in this case, the incivility subscale with the highest score is hostility (3.14) while the lowest is privacy invasion (2.38). this means that incivility incidence connected to aggression and anger is the most common on the respondent’s workplace and that corresponding to intrusion to the personal life of another person is relatively rare. in terms of variability of the mean scores of each respondent, privacy invasion is the most varied while exclusionary behavior is the least varied. according to the scoring method of the job satisfaction survey of spector (1985), in the convention, an average of 4 or more represents satisfaction whereas mean responses of 3 or less represent dissatisfaction. mean scores between 3 and 4 are ambivalence. in this case, all scales have average satisfaction are between 3 and 4 which is uncertain. subsequently, the participants were found to be most satisfied with their supervision and found to be least satisfied with a promotion. table 5 correlation between incivility and job satisfaction correlation coefficient significance spearman’s rho -.314 .030 98 american journal of management vol. 16(4) 2016 from table 5, the correlation coefficient is -0.314 and since the significance value is less than 0.05, at 5% level of significance, there is a significant negative relationship between incivility and job satisfaction. in essence, as the level of incivility increases, job satisfaction decreases. figure 1: path diagram of the standardized model for the causal flow of variables figure 1 shows the path diagram for the analysis of the observed and latent variables. the values associated with each path are standardized regression coefficients. these indicate the change in y when x changes by one standard deviation. that is, a one standard deviation change in incivility causes 0.67 changes in the standard deviation of job satisfaction. hostility gossiping privacy invasion exclusionary behavior communication nature of work coworkers contingent rewards operating conditions fringe benefit supervision promotion pay incivility job satisfaction 0.67 0.83 0.93 0.6 0.88 -0.23 -0.19 0.07 0.82 -0.87 0.4 -0.44 0.0 0.27 american journal of management vol. 16(4) 2016 99 general discussion and theoretical implications according to klima (2014), incivility incurs a significant financial cost to organizations. with the recent department of defense’s budget cuts (snodgrass, 2014), military components such as the navy could experience direct and indirect cost associated with incivility. these incurred costs are impacted by sailors' absenteeism, lower productivity, performance, lower morale and lack of commitment (mckay, cristina, & chung, 2010; lieber, 2010). more importantly, the navy’s primary concern should continue to be the health and well-being of its sailors; especially their junior enlisted members. this pilot study used a quantitative approach to examine if workplace incivility influences job satisfaction of junior enlisted sailors and their intent to reenlist. leaders should be aware of the impacts of incivility and establish proper procedures to mitigate this adverse behavior, to counter the impacts of incivility on the navy’s overall mission when it comes to protecting the interest of the united states and its citizens (hussain & hassan, 2015). furthermore, research suggests that supervisors who provide support to their subordinates have a positive impact on employee job satisfaction (mcgilton, mcgillis-hall, wodchis & petroz, 2007). limitations and future research in this study, convenience sampling was used to select the sample population. although convenience sampling allows time and cost-efficient data collection, it posed the risk of getting biased results since the data is not typically a representative of the entire population (constanza, blacksmith, & coats, 2015). other sampling techniques could have been used if a list of all junior enlisted u.s. navy was obtained. this could also increase the sample size (n=49). in addition, this study was limited to u.s. sailors stationed in the kingdom of bahrain. 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(2011). the relationship between diversity climate perception and workplace attitudes. the psychologist-manager journal. 14(3), 161-176. american journal of management vol. 16(4) 2016 103 questionnaire during the past twelve months, or as long as you have been with your current organization, how often have you been in a situation where a supervisor or co-worker: (please circle the relevant letter in the right hand column) n ev er ra re ly o cc as io na lly o fte n ve ry o fte n 1. avoided consulting you when they would normally be expected to do so. 1 2 3 4 5 2. talked about you behind your back. 1 2 3 4 5 3. was excessively slow in returning your phone messages or emails without good reason for the delay. 1 2 3 4 5 4. used an inappropriate tone when speaking to you. 1 2 3 4 5 5. was unreasonably slow in dealing with matters that were important to your work. 1 2 3 4 5 6. gossiped behind your back. 1 2 3 4 5 7. opened your desk drawers without prior permission. 1 2 3 4 5 8. publicly discussed your confidential personal information. 1 2 3 4 5 9. took items from your desk without prior permission. 1 2 3 4 5 10. spoke to you in an aggressive tone of voice. 1 2 3 4 5 11. intentionally failed to pass on information that you should have been made aware of. 1 2 3 4 5 12. made snide remarks about you. 1 2 3 4 5 13. took stationery from your desk without later returning it. 1 2 3 4 5 14. read communications addressed to you, such as emails and faxes. 1 2 3 4 5 15. raised their voice while speaking to you. 1 2 3 4 5 16. did not consult you in reference to a decision you should have been involved in. 1 2 3 4 5 17. rolled their eyes at you. 1 2 3 4 5 *used with permission from author dr. don hines 104 american journal of management vol. 16(4) 2016 incivility and job satisfaction survey please circle the one number for each question that comes closest to reflecting your opinion about it. d isa gr ee v er y m uc h d isa gr ee m od er at el y d isa gr ee sl ig ht ly a gr ee sl ig ht ly a gr ee m od er at el y a gr ee v er y m uc h 1 i feel i am being paid a fair amount for the work i do. 1 2 3 4 5 6 2 there is really too little chance for promotion on my job. 1 2 3 4 5 6 3 my supervisor is quite competent in doing his/her job. 1 2 3 4 5 6 4 i am not satisfied with the benefits i receive. 1 2 3 4 5 6 5 when i do a good job, i receive the recognition for it that i should receive. 1 2 3 4 5 6 6 many of our rules and procedures make doing a good job difficult. 1 2 3 4 5 6 7 i like the people i work with. 1 2 3 4 5 6 8 i sometimes feel my job is meaningless. 1 2 3 4 5 6 9 communications seem good within this organization. 1 2 3 4 5 6 10 raises are too few and far between. 1 2 3 4 5 6 11 those who do well on the job stand a fair chance of being promoted. 1 2 3 4 5 6 12 my supervisor is unfair to me. 1 2 3 4 5 6 13 the benefits we receive are as good as most other organizations offer. 1 2 3 4 5 6 14 i do not feel that the work i do is appreciated. 1 2 3 4 5 6 15 my efforts to do a good job are seldom blocked by red tape. 1 2 3 4 5 6 16 i find i have to work harder at my job because of the incompetence of people i work with. 1 2 3 4 5 6 17 i like doing the things i do at work. 1 2 3 4 5 6 18 the goals of this organization are not clear to me. 1 2 3 4 5 6 *used with permission from author paul spector detailed online for researchers. american journal of management vol. 16(4) 2016 105 demographic questions 1. what is your gender? choose one. a. male b. female c. other 2. what is your age? ____ 3. what is your rate? choose one. a. e1 b. e2 c. e3 d. e4 e. e5 f. e6 g. none of the above. please explain. 4. what is your rating (specialty)? 106 american journal of management vol. 16(4) 2016 ajm 17(4) web_master.pdf american journal of management vol. 17(4) 2017 105 leadership flaws and organizational stages david a robinson rmit asia graduate centre, rmit university vietnam duc nhat-hoang rmit asia graduate centre, rmit university, vietnam geoffrey vanderpal rmit asia graduate centre, rmit university vietnam the paper builds on academic work as well as keynote statements about leadership by prolific figures in research and academics, while examining common leadership flaws and exploring ways to negate them. it describes three stages of a values journey, namely pre-orderly, orderly and post-orderly, and within those differentiates six steps, representing followers� values, each having a typical leadership approach. a summary of academic literature surrounding common leadership flaws and organizational pathologies and an overview of a model depicting followers� coping mechanisms are provided in support of the paper�s main arguments. popular leadership principles are examined and related to five basic pillars of intent, developed by the authors, to support effective leadership. introduction some leaders are considered great, some good, some just good enough. some may unwittingly destroy morale and inhibit organizational development. it is unlikely that any leader sets out with the intention to be non-effective. this poses a challenge in exploring the rationale behind the fact that there are leaders who turn out to be downright destructive. if the measure of a good leader is the propensity to attract willing followers (ewest, 2015), could it be that bad leaders simply fail at being able to adapt their leadership approach to suit prospective followers� needs? ongoing improvement is an essential part of every organization�s opportunity to grow, yet it is a challenging puzzle to manage transitions without turmoil and considerable emotional stress. although organizational change can be top-down, lateral, or bottom-up, the leader remains the principal driver of organizational renewal, by virtue of their initiation and commitment to purposeful adaptations that influence the organizational culture. the study distils and simplifies down to five pillars of leadership that influence and identify value hierarchy and maturity of both leadership and followers and discovers why well-intended leaders might fail. 106 american journal of management vol. 17(4) 2017 based on graves�s (1970) theory of bio-psycho-social behavior, it is now possible to plot an organization�s development stage and to predict its trajectory. three developmental stages make up the corporate values journey (robinson, 2012). certain leadership approaches have been found to be more suited to certain stages of development. the three stages may be termed pre-orderly (or accidental chaos), orderly (purposeful control), post-orderly (purposeful chaos). each stage consists of two steps which essentially move the organization from submission to expression. leadership is the key to advancement within and through the stages and the various dimensions of leadership should therefore be applied consistently within each stage. notwithstanding the need for consistency, effective organizational development also requires edging those dimensions ever forward toward the next step, organically tilting the bias gently in favor of a forward and upward projection. an organization�s progress must be congruent with its strategic intent. herein lies the paradox that few leaders can manage, as each order requires distinct sets of managerial processes, which, for as much as they must be mastered and consistently practiced, cannot be �cast in concrete� as, by definition, their purpose is to be superseded and thereby rendered obsolete as the organization progresses. it is the complex inter-relationship between strategic intent, degree of orderliness, stepwise advancement, and consistency of managerial processes, that demands leadership orchestration and coordination. so much has been written about destructive leadership (einarsen, aasland, & skogstad, 2007; hamel, 2015; rosenthal & pittinsky, 2006; shaw, erickson, & harvey, 2011) that it is by now clear that the role of the leader has the single most-impactful effect on the sustainability of any organization. getting the leadership mix wrong can cause the organization to significantly suffer. the values journey graves (1970) studied people�s behaviors and concluded that behaviors are essentially coping mechanisms employed by individuals. as such they were held to be active manifestations of underlying values. unlike maslow, graves held back from publishing his results until he had sufficient evidence to justify his typology. eventually he concluded that in life�s journey there are up to six value stations through which to progress. these value stations were later extrapolated to countries and cultures by beck and linscott (1991) and to organizations by robinson (2008). schwartz (1992 and 2012) concluded basic human values expanded into 10 categories with four being of higher order values. the six value stations by graves (1970) were divided into three stages, each containing two steps. table 1 provides a tabulated summary and brief explanation of each. the six steps can be illustrated in a two dimensional model, as governed by two axis (see figure 1). the axis indicate two concurrent forces, one being the need to develop capacity for rational and considerate conduct in society, the other being the need to develop capacity for autonomous thought and deed. it is exactly the creative tensions resulting from these dichotomous teleological values that result in the forward projection. the journey begins in the realm of submission, then is spurred on by the intent towards individual expression within that stage of development, and then on to the next developmental stage, continuing on as willing followers, some to become leaders within that stage, some again to advance beyond it and into the next stage. but what of the great divides between stages? the first to be spanned is the divide between accidental chaos and purposeful order. to gain control over the lived world, there is a need to engage with moral issues; hence it is termed the ethics divide. organizations making this paradigm shift typically institute quality controls and other disciplines that serve as a bridge across this essential divide. the second divide, between purposeful control and purposeful chaos, the so-called �holism divide�, is spanned by the realization that influence is limited to the extent of its alignment with greater purpose. american journal of management vol. 17(4) 2017 107 table 1 a summary of beck and linscott (1991), graves (1970), and robinson (2008) values stages stage stage 1 preorderly �accidental chaos� stage 2 orderly �purposeful control� stage 3 post-orderly �purposeful chaos� step 1 safe bonding 2 powerseeking 3 dutycompliant 4 successstriving 5 harmoniousliving 6 synergyseeking color purple red blue orange green gold underly ing need avoid rejection be revered gain control achieve success contribute positively contribute unique competencies conditi oning �i am not as good as others� �i have more power than others� �i must sacrifice now for a better future� �i deserve to reap the fruits� �we are all equal� �i should make a difference� coping mantra submitendure appease to manipulate and overthrow conform to be a respected member of society enjoy the good life live in harmony time is more important than money positive aspect obey pride work ethic achieveme nt orientation peace and equality integrative and empowering negativ e aspect fear of powerful others disregard for others closed mindedness mercenarymaterialism indecisivene ss nondirective matchin g leadership approach benevol ent despot powerful dictator authoritari an manager harddriving negotiator consensusbuilding diplomat empowerin g motivator sources: beck and linscott (1991); graves (1970); robinson (2008). when people look for leadership, it is to help them make progress along the values journey. given that each step builds on and supersedes the previous, it is clear that individuals will naturally be drawn to accept leadership from one who is seen to have made the step that they are currently contemplating (burns, 2003). a values-based leadership algorithm (robinson, goleby, & hosgood, 2007) concluded that, within each stage of development, natural leaders will be those who are already on the expressive step. the same leaders may also provide leadership to those still in the previous expressive value stage for they comprehend what would be deemed good and therefore act for the good of their followers (heir, 2005). leaders on the submissive step may still provide leadership to people on the submissive step of an earlier stage. to have any chance of leading effectively it is imperative that the leader understands the 108 american journal of management vol. 17(4) 2017 stage of development of each follower, thus it is logically improbable that anyone could effectively lead those who are already at a higher stage or step than the leader him/herself. it must be noted that the seminal leadership and management theories, for the most part, have traditionally been most relevant to stage 2, steps 3 and 4 (allen, 1964; burch & guarana, 2014; drucker, 1954; kepner & tregoe, 1965; mintzberg, 1979, rossi, 2010; salahuddin, 2010). indeed, many formal management theories in mba degree courses were predicated on a �one right way to lead� principle. in support of the one-right-way myth, management texts allude to stereotypical business successes, quoting examples drawn from corporate giants (drucker, 1954; giuliani, 2002; walton & huey, 1993; welch, 2005). more recently, there has been a surge of interest in non-conforming leadership approaches, including chaos theory (galbraith, 2004), balanced scorecard (kaplan, 2008), worker empowerment (drew, 2010; men & stacks, 2013), etc., with the upsurge of the new corporate successes such as microsoft, google, semco, facebook, alibaba, and business leaders such as bill gates, mark zuckerberg, ricardo semler, larry page, and richard branson, who exemplify the post-orderly paradigm-shift associated with modern-day corporate-entrepreneurs (kanter, 2010; krishnamurthy, 2008). although stage one leadership still exists today, mostly in third-world localities, it would be regarded as inappropriate in most civilized societies. there remains a considerable emphasis on the mastery of stage two leadership principles. while stage three leadership is not a panacea, it requires the relinquishment of control in favor of empowerment, flexibility and holistic thinking. stage three leadership is therefore the domain of the visionary leader and is supported by emotionally competent and self-motivated individuals with the same set of concern, direction, and values cultivated by trust (beirhoff, 2002); hence we have the emergence of new leadership principles (covey, 2013; greenleaf & spears, 2002; maxwell, 2007). figure 1 the journey through three stages in six steps source: robinson (2008). american journal of management vol. 17(4) 2017 109 common leadership flaws with ineffective and destructive leadership being the main theme of interest, hamel (2015) reported on the keynote address by pope francis in which the leader of the catholic church described 15 leadership diseases. additionally, a series of publications (einarsen et al., 2007; krasikova, green, & lebreton, 2013; padilla, hogan, & kaiser, 2007; robinson, harvey, & yupitun, 2008; rosenthal & pittinsky, 2006; schyns & schilling, 2013; shaw et al., 2011) also described various facets and attributes of destructive leadership. table 2 provides a summary of common leadership flaws described in those articles. table 2 common leadership flaws commo n leadership flaws lack of mentoring (isolated from followers, selfabsorbed) lack of flexibility poor coordination unethical example hamel (2015) excessive busy-ness, petrification downcast face bias away from people toward administration terrorism of gossip �sower of weeds� existentialschizophrenia losing touch with reality lack of self-critique; believing oneself to be indispensable idolizing superiors closed circles excessive planning leaves no room for spontaneity and serendipity parochialism � the inability to consider a situation or a subject in a wider context, narrow-mindedness rivalry � vainglory indifference to people extravagance exhibitionism shaw et al. (2011) insular manner; not listening to from others inability to make clear and appropriate decisions, no long-term view inability to deal with interpersonal conflict micromanaging overcontrolling inability to prioritize and delegate ineffectual at motivating, negotiating or persuading narcissism rosenthal & pittinsky (2006) lack of empathy insensitivity toward others need to be recognized irrationality inferiority inflexible paranoia amorality arrogance 110 american journal of management vol. 17(4) 2017 padilla et al. (2007) control and coercion compromise quality of life acute need for power manipulation uncertainty avoidance low intelligence in cultural values instability ideology of �fear� & �hate� negative life themes personal gain self-promotion krasikova et al. (2013) pseudo-transformational leadership inflexibility abusive supervision encourage follower�s malfunction harmful actions towards followers managerial tyranny schyns & schilling (2013) coercive power repetition over long period of time abusive supervision unsupportive managerial behaviors petty tyranny social undermining bullying einarsen et al. (2007) emphasis on task completion insensitivity to others reluctance to attain goal subordinate manipulation failure to adapt thoughtlessnes s inequality in treatment towards organization and subordinate subordinate humiliation resource stealing engagement in sabotage robinson et al. (2008) poor mentorship by family business leader dogmatic approach of family business leader a management style that is authoritarian next generation family member not feeling comfortable with the company culture sources: from einarsen et al. (2007); hamel (2015); krasikova et al. (2013); padilla et al. (2007); robinson et al. (2008); rosenthal and pittinsky (2006); schyns and schilling (2013); shaw et al. (2011). given that leaders are followed by people for an intended purpose, the evidence for ineffective and destructive leadership practices appears inordinately large. it can be seen in table 2 that there are essentially four categories of common leadership flaws, namely: lack of mentoring, lack of flexibility, poor coordination, and unethical example. interestingly, they all begin with �lack of�. if �lack of� is the problem, then surely the solution is to provide more of these insufficient elements. the way to prevent ineffective leadership would then be through mentoring, flexibility, coordination and ethical example. unfortunately, life is not as simple as saying that �to avoid being a bad person, just become a good one�. wu, foo, and turban (2008) found that three personality dimensions are related to the degree of interpersonal comfort and emotional closeness, namely extraversion, conscientiousness, and agreeableness. these dimensions are the qualities believed to boost leader-member relationship, which stimulates the four problem-solving functions that diminish leadership ineffectiveness. schyns, maslyn, and van veldhoven (2012), however, in an empirical study of leader-follower behavior in these same three dimensions, informed that leaders with high agreeableness actually engaged less in leader-member exchange, exhibiting a lower outcome of leadership interaction, while those with high conscientiousness and extraversion performed better in the same setting. it is striking that extraversion and conscientiousness are both contra-indicated in many of the common leadership flaws listed in table 2. nevertheless, the authors do not consider them a panacea. american journal of management vol. 17(4) 2017 111 the fact is that even with the best of intentions, leaders have to develop the skills of recognizing and taking stock of their followers� current stage of development (matching), ensuring that processes are congruent therewith (aligning), that communication is consistent in sending the appropriate messages about moving the group forward (navigating). there are nuances between value stations that make it essential for modern-day leaders to be highly astute. in addressing unethical practices, ludwig and longenecker (1993) located the source of ethical failure of leaders in success itself, as, inter alia, success can give the leader an inflated, often unrealistic, sense of power. price (2000) offered this fact as the reason some leaders are willing to sacrifice morality in favors of self-interest, but also allowed some exceptions in which immorality can be excused, which is when better development can be effected or the situation is beyond one�s control. needless to say, the decisions of whether or not these cases apply depend greatly on leaders� skills that were mentioned as important for them to achieve shrewdness. table 2 has provided ample ways in which leadership might malfunction. but to fully appreciate the hazards of destructive leadership, robinson, morgan, and nhat-hoang (2015) detailed three common pathologies arising in firms that fail to correctly align leadership practices with followers� needs. the first (mad firm) is a firm characterized by only the negative manifestations of its stage of development. the second (bad firm) is a firm characterized by dissonance, as its culture is confused and inconsistent, not centered around any particular set of values. and the third one (sad firm) has arrested development as a result of not having developed the capacity to move beyond a certain value station, which becomes its terminal stage. evidence of so-called �mad�, �bad� and �sad� firms is all too common. what then are the key skill requirements for leading appropriately and effectively? leader-follower effectiveness to address the question of requirements for effective leadership, the literature is again explored. research studies have discussed leadership attributes in terms of their effects on followers. for instance, burch and guarana (2014) related the power of social interaction and influence to the effect of controlling followers� energy, stimulating their effort investment, and establishing positive unique connection (gerstner & day, 1997; harris & kacmar, 2006). may, wesche, heinitz, and kerschreiter (2014) presented a compelling case for integrated interaction between leaders and followers. their model supports the view that leaders have to adapt according to the needs of the followers. unfortunately, destructive leaders are, almost by definition, incapable of doing so; therefore may et al. (2014) concluded by recommending two followers� coping strategies, namely problem-focused and emotion-focused. with each of these, followers choose to either approach or avoid the leader. a relational view of leadership would have �organization as human social constructions that emanate from the rich connections and interdependencies� of members (uhl-bien, 2006, p. 655). that being the case, it is suggested that processes outweigh personalities when it comes to relational orientation, in this regard, may, et al.�s (2014) model is used to illustrate a common coping process associated with destructive leadership in organizations. 112 american journal of management vol. 17(4) 2017 figure 2 the vicious cycle of destructive leader-follower coping processes source: may, et al. (2014). the may, et al. (2014) model illustrated the formation of a vicious cycle of leader-follower coping processes, set in motion by the initial destructive leader behavior. accordingly, if followers have perceived the leader�s behavior as destructive, one option would be to approach the leader; this may be problem-focused (aiming at mitigating or eliminating the problem) or emotion-focused (aiming at resolving the emotional consequences). either way, this action of the followers is likely to be perceived as aggressive or retaliatory by the destructive leader. alternatively, followers may choose to avoid the leader, in which case the problems would never be addressed. if their coping choice was to go unappreciated, the leader�s destructive behavior would likely persist or even intensify. may, et al.�s (2014) proposed solution to break the destructive cycle was by �constructive leadership� (p. 204), which, though amiable, is tantamount to them suggesting that an about-turn can be made (from being bad to being good). the essence of effective leadership is the ability to address critical problems through rational and constructive thinking (bass & riggio, 2006); and destructive leaders lack this ability (epstein, 2014). given the improbability for leaders locked in destructive habits to realize it and transform themselves, attention should be directed to strategies to prevent destructive leadership practices. for this, maxwell�s (2007) 21 laws of leadership (maxwell, 2007), which reflect the virtuous and desirable qualities that effective leaders should possess if they are to avoid the detrimental trap of destructive leadership, would seem to be pertinent. table 3 summarizes maxwell�s laws, which are essentially the following: american journal of management vol. 17(4) 2017 113 table 3 maxwell�s 21 laws of leadership 1 law of the lid leadership determines an organization�s maximum effectiveness 2 law of influence influence is the true measure of leadership 3 law of process leadership development is an ongoing process 4 law of navigation leaders chart the course to be taken 5 law of addition leaders add value by serving others 6 law of solid ground trust is the foundation of leadership 7 law of respect people naturally follow leaders who are stronger than them 8 law of intuition leaders evaluate everything with a leadership bias 9 law of magnetism who the leaders are determines who they attract 1 0 law of connection touch a person�s heart before asking for a hand 1 1 law of the inner circle leaders� potential is limited by those they hold closest to them 1 2 law of empowerment secure leaders give power to others to help them reach their potential 1 3 law of the picture leaders must exemplify the qualities they want their followers to develop 1 4 law of buy-in people buy into the leader first, then the leader�s vision 1 5 law of victory leaders find a way for the team to win 1 6 law of the �big mo� timing and momentum work in the leaders� favor. 1 7 law of priority effective leaders assign priority to strategically important activities 1 8 law of sacrifice a leader must sometimes give up something in order to go up 1 9 law of timing knowing when to lead is as important as what to do and where to go 2 0 law of explosive growth to add growth, lead followers; to multiply growth, lead leaders 2 1 law of legacy a leader�s lasting value rests in succession source: maxwell (2007). for ease of assimilation into this article, maxwell�s laws can be categorized under five themes, each incorporating between two and seven laws. the categorization has been carried out by considering the 114 american journal of management vol. 17(4) 2017 intent of each law in so far as it pertains to the followers, thus the title �five intents�, as proposed by the authors of this study, is depicted in table 4. a common attribute of laws 1, 2, 9, 10, 11, 20, and 21 is the ability to influence others, which is the first intent. to inspire others is the second intent and it includes laws 4, 13, 14, 15, and 16. drew (2010) informed how leaders can invest in the development of their subordinates by effective process (law 3), adding value (law 5), empowering (law 12), and sacrificing (law 18), hence the third intent is investment. the fourth intent, integrity, includes laws 6 and 7; while the fifth intent, intuition, incorporates laws 8, 17, and 19. table 4 the �five intents� of effective leaders, compared with maxwell�s (2007) 21 laws of leadership �five intents� theme maxwell law (law no.) keywords intent influenc e laws of the lid (1), influence (2), magnetism (9), connection (10), inner circle (11), growth (20), legacy (21) character, attraction, succession, legacy to influence others, be the future they want inspirati on laws of navigation (4), picture (13), buy-in (14), victory (15), momentum (16) navigate, set example, vision, victory to inspire others, make it possible for them to be victors investme nt laws of process (3), addition (5), empowerment (12), sacrifice (18) sacrifice, processes, empowerment, serving to lead others, invest your energy in their development integrity laws of solid ground (6), respect (7) trust, respect to gain their trust and respect, show integrity intuition laws of intuition (8), priorities (17), timing (19) instinct, priorities, timing to be one step ahead, develop your intuition [source: maxwell (2007); five intents model by robinson, hoang & vanderpal (2017)] the five intents of table 4 can be seen to clearly correspond to the higher steps in robinson�s (2008) values journey, namely step 4 (success striving would include influence and inspiration), 5 (harmonious living would include investment), and 6 (synergy-seeking would include integrity and intuition). notwithstanding this, the prospect of finding leaders who have developed these attributes is certainly aspirational. schwartz et. al. (2012) elaborates on ten basic values and highlights four higher-order values that correspond with robinson�s (2008) top three steps in the values journey, namely self-direction (steps 4 and 6), achievement (step 4), benevolence (step 5), and universalism (steps 5 and 6). the remaining six values listed by schwartz et. al. (2012) correspond to lower-order steps in the values journey, for example, hedonism and power, belong squarely at step 2 in the values journey. even if all the positive values could be found in a single individual, the question would remain whether or not they actually relate well to prospective followers. from the authors� values perspective it is necessary for leaders to be cognizant of their followers� values. in this regard followers� stages of maturity are pertinent to the question of leadership effectiveness. according to davidov, schmidt, & schwartz, (2008, p. 424), �the circular arrangement of values represents a continuum of related motivations, like the circular continuum of colors, rather than a set of discrete motivations�. this american journal of management vol. 17(4) 2017 115 indicates the unlikelihood that all leaders at all times can portray only the virtuous elements of their personal value system, as shown in maxwell�s (2007) twenty-one laws, robinson, nhat-hoang and vanderpal�s (2017) five intents, schartz et. al�s (2012) four higher-order values, or the top three steps of robinson�s (2008) values journey, without straying into other values or motivations that are authentic to them but could impact negatively on followers. to conclude this section, and in summary of the prior discussion, the authors believe that one of the keys to effective leadership practice is the ability of the leader to match his/her authentic values to the followers� stages of maturity in a positive, motivating way. without this values and maturity matching a flawed leadership will unveil itself. matching leadership to followers� stage of maturity as organizations constantly evolve, the leader�s coping mechanisms would also need to be adaptable. with reference to the three stages and six steps of figure 1, it is clear that nuances of difference would exist between leader-follower interactions at each step. in table 5, the underlying values of step 3 and step 4 of the values journey are considered in five areas of interaction between leaders and followers. table 5 differences between appropriate styles of interaction at two value stations in the �purposeful control� stage of organizational develiopment area of interaction between leader and followers step 3 processes (duty-compliant) step 4 processes (successthriving) main difference 1. type of people employed good corporate citizens who follow the rules go getters with a will to excel different energy set 2. way people are encouraged to develop learn to respect and comply with all specified criteria reach goals and increase influence different intentions 3. way people can earn a promotion by not making mistakes and upholding the status quo by achieving targets different approach to risk 4. way people are recognized and rewarded non-functional status symbols incentive bonuses different expectations 5. style of communication formal, hierarchical participative negotiation different form of engagement overall orientation fit in stand out different overall orientation source: robinson (2008). implications it is clear from table 5 that, even though steps 3 and 4 both reside within the orderly values paradigm of �purposeful control� (per table 1), the style of leadership processes demanded by followers at step 4 is very different from that demanded by those at step 3. though each step may be a leadership �paradigm�, it has been shown that steps 4, 5 and 6 represent those that are most-likely to be highly-valued by followers. 116 american journal of management vol. 17(4) 2017 even if the leader has mastered all the desirable characteristics his/her effectiveness as a leader is still limited by the extent of match with the followers� values or stage of maturity. as most leaders are required to lead in more than one paradigm, they need to develop adaptability, which enables them to move seamlessly up and down the steps and stages, as appropriate, in their effort to optimize their interactions with followers. conclusion leaders do not set out to be destructive, yet somehow it seems to go wrong. there is ample evidence of the occurrence of common leadership flaws, all of which appear to accrue from four sources, namely lack of mentoring, lack of flexibility, poor coordination, and unethical example. moreover, acquiring the skill to lead effectively is a moving target, as individuals and organizations constantly evolve, progressing in a step-wise process referred to as the values journey. leadership practices have to be relevant to the followers� stages of development. this is achieved by aligning processes and facilitating personal and organizational development along the values journey. getting the alignment, direction or processes wrong can result in organizational pathologies. these may take the form of negative bias (mad), inconsistent practices (bad) or arrested development (sad). the cycle of destructive leadership appears to be unbreakable. followers� best method of attack is defense, since passive attempts to cope seem unable to appease destructive leaders. the only sure way to avoid destructive leadership may be to prevent it. this entails mastering the virtuous traits of leaders, as encapsulated in maxwell�s (2007) laws and the five intents outlined in this article. alignment of leader and follower values is essential if the virtuous leader is to adapt his/her style effectively to match followers� stages of development. the nuances of difference and necessity to adjust have been illustrated in the article with reference to two of the steps within the orderly stage, namely duty-compliant (step 3) and success-thriving (step 4). in like manner, adjustments in approach and style are necessary to maximize leadership effectiveness at each respective stage of the organizational development journey. ultimately, leadership effectiveness may be dependent upon the leader�s ability to forge synergies among followers. references allen, l. a. 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(2008). the role of personality in relationship closeness, developer assistance, and career success. journal of vocational behavior, 73(3), 440-448. patient safety officers’ and nurses’ perceptions of error reporting systems within acute care hospitals in pennsylvania monica l. law marywood university the researcher investigates perceptions that patient safety officers and registered nurses have within pennsylvania acute care hospitals to error reporting systems. this article summarizes the findings and provides recommendations for future research. in summary, patient safety officers felt the error reporting systems in their respective hospitals worked well. the majority of nurses felt there were breakdowns in the error reporting systems could be much more effective. the ultimate purpose of this study was to provide information that may aid healthcare providers designing and implementing error reporting systems in pennsylvania acute care hospitals. literature review the researcher attempted to narrow the scope of reviewed literature to that relevant to the purpose posed in this study in order to gain insight to the problem that has been stated. more specifically, the studies that were summarized focus on the following aspects of patient safety; 1) improving the error reporting system through reporting errors, 2) the culture of safety, and 3) gaps found within current research, thus verifying the need for additional studies. there was no discrepancy found within the literature as to the notion that systems fail, but the following studies are reviewed in an attempt to delve deeper into why systems may fail. the purpose of this study was to evaluate error reporting systems through the perceptions of those involved and the following studies provide insight into various researchers' ideas and assumptions about the current state of the occurrence of medical errors. what follows is a summarization of key literature reviewed. medical errors have been an issue that hospitals have been studies for many years. for example, in 1996, a community hospital in the northwest formed an interdisciplinary working group in order to improve their incident reporting system. the goals of the new system were as follows; 1) reduce the time needed to complete an incident report, 2) collect more precise data about the incident, 3) allow department managers instant access to all open memos involving or generated by their departments, 4) allow ad hoc reporting by managers and administration, and 5) allow only involved parties access to memos. this new system, which turned their paper-based reporting system into a computerized system, began to be used as the organization’s primary quality assurance and incident reporting tool in 1998. following the in-house pilot study involving two departments within this community hospital, other departments began to utilize the new system. with data collected from january 1998 to december 1999, results showed that the turnaround time for the lifecycle of an incident report decreased from 53 to 12 days, at least 20 hours a month were saved in transcription and data entry time using the new system (cortezzo & maass, 2000). this study is summarized as it shows one way in which a hospital took a american journal of management vol. 16(4) 2016 81 systematic approach to quality assurance, which in turn saved time and possibly may help to decrease the occurrence of medical errors made in the future. a hospital in the southeast has seen a major change in the reporting of drug errors since changing its reporting system. between 1997 and 1999, reporting increased 12%. personnel within this particular hospital decided to take action after realizing that incident reports showed an average of 30 drug mistakes a month when the average census was 360 patients per day. they wanted a system that would promote error reporting. in the new system, patient charts were reviewed, the hospital’s computer system produced seven-day summaries of drugs received by individual patients, which were compared with the orders written by the physician. each month, reviews of ten patients in each unit were conducted. in addition, secretaries enter the patients’ drug orders into the computer. pharmacists began to fax orders that could be verified in the computer (levenson, 2000). the anesthesia patient safety foundation found a way to communicate research findings in an effective and targeted manner through a system-wide solution. they designed and implemented systems that reduced their error rates in the operating room 7 to 10 fold (eisenberg, 2000). they promoted and developed technology, including standardizing dials on the anesthesiology devices used in the operating room, and eliminated variations among manufacturers. in following the basic aviation safety concepts in the operating room, they found that a culture of patient safety was created and attention was brought to eliminating errors. this included: better training, better drugs, and routines that demand evaluation of all errors. this system also created a way to gain feedback of information for a cycle of continuous learning (eisenberg, 2000). goldfarb, nash, & pizzi (2001) state that “attention to organizational issues of structure, strategy, and culture may be a promising direction for medicine”(p. 451). the power of culture may go unrecognized as employees may assume that the dominant paradigm is simply “the way we do things here” but corporate culture is much more than that. culture is defined as a complex framework of national, organizational, and professional attitudes and values within which groups and individuals function. in addition, it is commonly referred to as the “glue that holds the organization together.” consequently, culture is often assumed to be a contributor to organizational performance by socializing workers in a way that increases commitment to the goals of the organization. surprisingly, at this point, research focused on promoting a culture of safety is unexplored yet warranted (goldfarb, nash, & pizzi, 2001). however, the authors were successful in finding and reviewing one approach that staff within the veterans administration utilized in an effort to promote a culture of safety within their organization. the veterans health administration (vha) has implemented a multifaceted safety initiative, which was designed to build a culture of safety and address system failures. the approach consisted of four elements; 1) partnering with other safety-related organizations and affiliates to demonstrate a public commitment to leadership, 2) establishing centers to direct safety efforts, 3) improving reporting systems, and 4) providing incentives to healthcare team members and division leaders. in relation to effort 1, the vha leadership founded the national patient safety partnership, along with the american association of medical colleges, the american hospital association, the american medical association, the american nurses association, and the institute for healthcare improvement. this was done to demonstrate a public commitment to the importance of patient safety. in an attempt to employ effort 2, centers dedicated to the promotion of patient safety were established. these consisted of the national center for patient safety which directs patient safety efforts of the vha at a national level and four patient safety centers for inquiry with primary responsibility for conducting safety-related research and development. more specifically, the purposes of the centers are to identify problems in the patient care process, implement corrective measures, and study effects. lastly, the vha's virtual learning center was developed in an attempt to allow vha facilities to share lessons learned. effort 3 was addressed through the offering of incentives designed to improve reporting efforts. specifically, the incentives included; 1) the “carrot”, which is a monetary award of up to $5000 for individuals and teams that develop approaches to improve safety issues, and 2) the “stick” which is a performance expectation imposed on administration to improve patient safety. administration within all 82 american journal of management vol. 16(4) 2016 twenty-two of the vha's regional networks must show an active involvement in safety-promoting activities, or be subject to consequences, including possible termination of employment. effort 4 is demonstrated through use of a two-pronged system that captures adverse events. the first system, the patient safety event registry, mandates the reporting of adverse events and near misses. event data is then shared both regionally and nationally. the second system, the voluntary reporter identity system, was developed in conjunction with the national aeronautics and space administration (nasa), and allows for anonymous error reporting. the authors explained that measuring the impact of culture on safety-related outcomes is challenging since culture is a complex and abstract construct that must be inferred from behaviors, thus analysis often relies on self-reported data. goldfarb, nash, & pizzi (2001) conclude: research continues to develop a working model of safety culture that permits measurements of several connected concepts: individuals' perceptions and attitudes about safety, individuals' observable safety behaviors, and an organization's safety management system as evidenced by its policies and management styles. (p. 455) over ten years later, from the time the above mentioned studies were conducted; medical errors are still being examined in an attempt to reduce the number of occurrences. clarke (2013) states that the pennsylvania state safety authority receives over 235,000 medical error reports on an annual basis. it is legally required in the commonwealth of pennsylvania that any medical event involving the clinical care of a patient in a licensed acute care setting be reported. this includes both series events and near misses. in addition, pennsylvania is the only state that mandates the reporting of near-misses. by reporting near misses, the commonwealth of pennsylvania has a great opportunity for collaborative learning to occur without harm coming to a patient. errors give health care professionals material that will help with reflection as reflecting upon errors is fundamental to learning (lea & danczak, 2014). lea and danczak (2014) go on to provide information about a learning session that is focused on reflection of error, classifying and preventing errors, and the skills needed to manage and disclose the error. their specific objectives were as follows: • share and discuss errors they have made or have been directly involved in • reflect on the impact of error on themselves and others • gain insight into how error is sometimes minimized • understand a classification of common causes of errors • develop a skilled professional response to error practice skills required for disclosure and follow-up (p. 114) through their learning sessions, they found that participants showed increased confidence in managing errors when they realized that mistakes are common, they can lead to learning opportunities if acknowledge, not denied, and the needed skills with disclosure can be learned. this is important because patient safety forms the foundation of healthcare delivery. (ulrich and kear, 2014) state that little else can be accomplished when the patient isn’t safe, or doesn’t feel safe. they go on to state the complex nature of healthcare means that the process of providing a safe environment should be an ongoing process, one where every member of the healthcare team is focused and determined to do their part to create a culture of safe and provide the foundations of excellent healthcare delivery. purpose the ultimate goal of this study was to help providers of healthcare within pennsylvania acute care hospitals find solutions to the ever-present problem of the occurrence of medical errors. scholarly literature states that the majority of medical errors occur due to systems that breakdown and fail healthcare workers. this study sought to provide new knowledge in regard to where one particular system american journal of management vol. 16(4) 2016 83 may be breaking down, specifically the error reporting system. the purpose of this study was twofold; 1) to develop two structured interview questionnaires, and 2) to conduct structured interviews as a means to collect data that focused on the occurrence of medical errors; specifically through assessing the error reporting systems within a sample of pennsylvania acute care hospitals. research questions 1. what are patient safety officers' perceptions of the error reporting system within the pennsylvania acute care hospital in which they are employed? 2. what are nurses' perceptions of the error reporting system within the pennsylvania acute care hospital in which they are employed? methodology using a qualitative methodology, perceptions of twenty-two healthcare professionals were collected through structured interviews. more specifically, twelve patient safety officers and ten nurses were interviewed. interviews averaged forty-three minutes in length. the research questions provided the framework for data organization and for interpreting the perceptions of the research participants. the qualitative design was chosen for the following reasons: qualitative research designs typically focuses on small numbers in regard to participants used for data collection purposes, thus rarely makes explicit claims about the generalizability of their accounts. internal generalizability, the generalizability of a conclusion within the group studied, is a key issue for qualitative studies, not external generalizability (maxwell, 1996). qualitative research is aimed at understanding the particular context which participants act, and the influence that this context has on their particular actions. qualitative researchers typically study a small number of individuals and preserve the individuality of each analysis. thus, researchers are able to understand how events, actions, and meanings are shaped by the unique circumstances in which these occur (maxwell, 1996). finally, qualitative studies focus on understanding processes in which events and actions take place, rather than the specific outcomes. qualitative research does not disregard outcomes. however, the strength of the qualitative design lies at getting at the processes that lead to particular outcomes (maxwell, 1996). in addition, naturalistic inquiry leads to multiple realities because of its reliance on human perception. the assumption is made that each of these multiple realities is equally legitimate. it is assumed that the idiosyncratic nature of each separate investigator, each different group of respondents, the contextual features distinguishing each setting, and the specific interaction of the values representing the relevant participants will further incline interpretations accordingly. findings research question one what are patient safety officers' perceptions of the error reporting system within the pennsylvania acute care hospital in which they are employed? the purpose of this question was to gain a perspective of the current error reporting system as perceived by patient safety officers. all respondents indicated that once an error was made within their unit in the hospital, a report form is completed. all respondents stated that once the report is completed, it is then forwarded to the unit manager (where the error occurred). the unit manager keeps a copy and then forwards the report form to the patient safety officer or risk manager. all respondents stated that the severe errors, ones where patient harm has taken place, would be investigated. from this point on, policies and procedures that were in place to correct, and ultimately prevent the errors from reoccurring, differed with each respondent. there were, however, major similarities as the 84 american journal of management vol. 16(4) 2016 majority of the respondents implemented, to some degree, many of the same procedures. all respondents stated that the procedures that follow the occurrence of an error would be dependent upon the type and/or severity of the error itself. the majority of respondents stated that added steps, in regard to procedures, would increase with the more severe errors. in regard to the feedback of information to staff once an error was made, corrective actions taken, and policies changed, the responses were overwhelmingly in favor of training and re-education. specific methods of training and re-education differed with respondents, but the majority of them (11 of 12) favored an annual mandatory staff training day as the primary way to disseminate information and inform staff as to the errors that have occurred, corrective actions, follow-ups, and policy changes. the majority of these participants stated that learning is incorporated into the occurrence of errors through the culture, essentially creating a culture that is non-punitive, promotes safety, creates a blamefree atmosphere, promotes error reporting, and assessing the current culture in order to understand what is going wrong. even though major improvements have seem to be made in regard to promoting a blamefree environment, one that promotes error reporting, the issue of non-reporting still exists. it is difficult to assess how many errors go undetected. however, assessing only those errors that do get reported, medical mistakes account for a staggering number of deaths in the united states each year. culture is an issue that may need to be assessed in further studies. many positive aspects in regard to the policies and procedures were found within the sampled hospitals. the perspectives of the patient safety officers were positive and the majority seemed to be dedicated to improving patient care in pennsylvania. they seemed genuinely interested in finding and employing methods that may help to reduce the error rates within hospitals. it was perceived that the majority of the respondents honestly felt that they, in their position, were doing what they could to prevent errors from occurring. “i do all i can to prevent errors but the system is not fool proof, so many errors still occur. “i try to prevent errors from occurring, but i know we still need to improve.” even though the researcher felt that there may be ways to improve upon what is being employed, it is also felt that if presented to these respondents, they would be receptive and willing to try new procedural methodologies in order to reduce error rates and prevent their reoccurrence. research question two what are nurses' perceptions of the error reporting system within the pennsylvania acute care hospital in which they are employed? all ten respondents verified the existence of an error reporting system within the hospital in which they were employed. all respondents stated that once an error has been detected, an incident form is completed. eight respondents stated that different procedures exist depending on the type and the severity of the error. in essence, aside from completing an error reporting form following the detection of an error, there did not seem to be any consistency between respondents in regard to what follows. since the majority of the respondents stated that different procedures exist, responses in regard to what follows the completion of the error reporting form varied. the majority of the respondents stated that the attending physician and unit supervisor are immediately notified following the detection of an error. only one respondent stated that the situation and factors surrounding the incident is assessed. this differs from the patient safety officers' responses in that all twelve responded that all severe errors were investigated in some manner, most typically a root cause analysis would be done. the nurses' responses, in regard to procedures following the detection of an error, focused on who would be told, rather than what would happen. in general, the nurses' responses pointed to the notion that they did not have an understanding of the workings of the entire error reporting system. this in itself may not be a problem as long as the front-line staff knows what specific part they play in the system. however, only three respondents stated that the nurse who actually made the mistake must complete the error reporting form. the majority of the respondents stated that it is the rn in charge of the patient who will actually fill out the error reporting form. in addition, only one respondent stated the nurse that made the error will, together with the unit supervisor, complete and discuss the error reporting form. american journal of management vol. 16(4) 2016 85 eight respondents stated that they are made aware of errors through monthly department meetings. this tends to be more reactive, in that errors that have been made throughout the month are not made aware to staff until the department meeting. in fact, respondents noted that the error reporting system was in fact reactive instead of proactive. it was noted however that staff may be made aware of the more severe errors before a monthly meeting if felt necessary by administration. “the system is very reactive. we do not hear about errors until after they have become a problem. it would be nice if they would address the issues before they turn into problems.” the majority of the respondents were not sure how corrective actions were decided upon as they are not involved in this aspect of the system. the majority however did note that once a corrective action has been implemented, the follow-up includes re-education and training. in addition, the majority of respondents stated that corrective actions are made visible to staff through education. in regard to incorporating learning into the occurrence of errors, the majority of the nurses felt that it is done through training and education as well. the majority of the nurses noted that manuals in regard to policies and procedures exist. the problem does not lie with the existence but with the actual time it would take to look up a policy or procedure. the manuals exist, however the majority of nurses stated that they do not have the time to check the manuals before delivering care. in general, the researcher sensed frustration in the majority of these respondents. respondents seemed to really want to provide quality care, but many did not feel that they were provided the time to do so. “i really want to do the right thing, but i am too busy to sit back and think about what i do before i do it. i don’t even get a break most days. really, i am dedicated to providing quality care but sometimes it feels that it is impossible to do with the amount of work we have.” conclusions conclusions are based upon the responses to the interview questions and the analysis of the responses. each conclusion corresponds with a posed research question stated in this study. the conclusions cannot be generalized to all acute care hospitals within pennsylvania. however the researcher feels that the conclusions may be used as a basis for continuing work within additional acute care hospitals in pennsylvania. all direct quotes from participants within the stated conclusions are denoted in italics within the body of text. research question one patient safety officers' perceptions of the error reporting system were, by majority, positive. respondents, by majority, felt that procedures are in place, within the error reporting system, in order to detect, correct, and prevent errors. in general, members of this data set did not perceive that the error reporting system needed to be altered. respondents felt that the system was in fact effective. respondents stated: 1)”we as administration do what we can to ensure the reporting of errors, this includes making sure our error reporting system exists.” 2)”we try to get staff to report errors, and we reduce our error rates by having an error reporting system in place.” 3)”we correct the errors that occur, and we strive to prevent them too.” these comments provided much insight as the respondents feel that the system is in place, and effective. yet, statistics show that errors are still occurring at a very high rate. this conclusion indicates that there may be a disconnect between the perceived effectiveness of the system and the actual effectiveness of the system. it is not enough to simply “have an error reporting system in place” and assume that it is effective. there were not any participants in this data set that stated that the hospital error reporting system was in need of improvement, in fact it was quite the opposite. this conclusion is based upon personal insight gained during the face-to-face interview discussions about the error reporting system. 86 american journal of management vol. 16(4) 2016 research question two nurses' perceptions of the error reporting system were, by majority, not as positive as the patient safety officers. these participants stated that procedures are in place, within the error reporting system that detect, correct, and prevent errors. however, this data set felt that improvements are warranted within their particular error reporting systems. respondents stated: 1)”we don't have the opportunity to play a part in developing the procedures, we only follow them”. 2) “when a new procedure is put into effect, we don't know why. we only know that we have to follow a new rule”. 3)”our system could stand some improvement, we report errors but other than that i am not sure what happens”. 4)”we report errors if we have time. i don't think our system has any checks and balances so if we don't report no one will know”. 5)”the system does not work too well”. 6) “changes need to be made in the system”. 7) “policies seem to be reactive instead of proactive”. 8) “there are things in place to prevent the repeat of errors, but many times not used or followed. 9) “it's important to use the same policy for everything and we do not do that. we should treat each patient error the same and use the same set of checks and balances for each error.” in addition, respondents were not familiar with all of the processes and procedures that encompass the error reporting system. different respondents stated: 1)”yes, we report errors, the system is there but all we really do if fill out a piece of paper, from there i don't know what happens. all i know is that i will hear about it if it's bad.” 2)”yes, we report errors, but i am not sure what happens after they are reported”. 3)”we don't even report our own errors, it's the charge nurse that reports all errors.” there appeared to be more of a disconnect between the purpose of the error reporting system and how they, the front-line personnel, may actually play an active role in helping to reduce errors through the error reporting system itself. respondents, by majority, did not have a complete understanding of the error reporting system and how it worked to reduce errors. this conclusion is based upon personal insight gained during the face-to-face interview discussions about the error reporting system. recommendations based upon both the findings and the conclusions recommendations have surfaced for healthcare providers. these personnel include hospital administration, patient safety officers, ancillary staff, and front line personnel. the researcher felt that categorizing all healthcare personnel together would be appropriate even though each subgroup has its own duties and responsibilities. the rationale for this was that all healthcare personnel must work together, from the top down in order to address this particular problem. all levels within the hospital must be included in efforts, or recommendations, to aid in the reduction of errors. organizational culture assessment. in regard to detection, it is suggested that administration contemplate assessing the organizational culture. this may help them begin to understand what may need to change on an organizational level in regard to the occurrence of errors, specifically the reduction of errors. error reporting system assessment. an assessment of their current error reporting system may need to be conducted. it is suggested that before providers of healthcare can effectively implement a system that promotes the reduction of errors, they must first gain an understanding of the current system. these goals may be achieved through a strategic planning process. communication. it is suggested that healthcare providers develop and implement policies and procedures that foster communication between them and the front-line personnel. this may aid in the perceived disconnect that exists. american journal of management vol. 16(4) 2016 87 training as a corrective action intervention. most significantly, it is recommended that administration, together with the training director and relevant human resource personnel, conduct a needs assessment within the organization to verify if in fact training is needed when addressing “how” medical errors are corrected and prevented. training may not be the main issue in regard to the reoccurrence of medical errors, and a needs assessment will aid in verifying the correct plan of action. limitations this study cannot be generalized to the entire population. results are based on the interviewed respondents in this study. the researcher plans to use findings from this study as the framework for a larger scale quantitative study. summary in summary, even though breakdowns within the error reporting system may exist, hospital personnel seem dedicated to wanting to deliver quality care, and expressed a very high interest in playing their part to reduce the occurrence of errors. the desire to reduce medical errors exists with those surveyed. the perceived disconnect between administration and the front-line may play a crucial part in explaining why the preventive initiatives are not proving effective. bridging the gap between these two groups may be a key factor in helping to accomplish error reduction within pennsylvania acute care hospitals. future research clarke (2013) states that solely describing patient safety issues, and warning healthcare personnel to be more cautious is ineffective. instead, proposals for implementation of recommendations and best practices should be proposed and disseminated in the acute care facilities. the researcher plans to work with an acute care hospital and move to an implementation stage with the recommendations that have been found in this study. by implementing recommendations, it is hoped that error reporting systems may become stronger, the perceived disconnect between administration and the front-line will be lessened, communication improved, and ultimately less medical error occurrence in pennsylvania acute care facilities. references adams, j., jaffe, w., & rosenbloom, m. (2001). patient care efficiency and medical error reduction using pda-based medical information. academic emergency medicine, 8(5), 587-599. agency for healthcare research and quality (ahrq). (2014). retrieved from http://www.ahrq.gov/about/index.html. rockville, md. clarke, j.r. (2013). the use of collaboration to implement evidence-based safe practices. journal of public health research, 2(26), 50-53. cortezzo, m., & maass, g. (2000). computerizing incident reporting at a community hospital. joint commission journal on quality improvement, 26(6), 361-373. eisenberg, j. m. (2000). continuing education meets the learning organization: the challenge of a systems approach to patient safety. journal of continuing education in the health professions, 20(4), 197-208. goldfarb, n. i., nash, d. b., & pizzi, l. t. (2001). promoting a culture of safety. in making healthcare safer: a critical analysis of patient safety procedures. rockville, md: ahrq. institute of medicine (iom). (2000). to err is human: building a safer health system. washington, dc: national academy press. retrieved from http://www.ion.edu/reports/1999/to-err-is-humanbuilding-a-safer-health-system.aspx 88 american journal of management vol. 16(4) 2016 james, j.t. (2013). a new, evidence-based estimate of patient harms associated with hospital care, journal of patient safety, 9(3), 122-128. lea, a. & danczak, a. (2014). medical error: a dirty little secret or a great learning opportunity? teaching exchange, radcliffe. levenson, d. (2000). prescription for safety. american hospital association news. retrieved july 5, 2001, from http://www.aha.org/medicationsafety/june12.asp maxwell, j. a. (1996). qualitative research design. thousand oaks, ca: sage. ulrich, b. & kear, t. (2014). patient safety and patient safety culture: foundations of excellent health care delivery. nephrology nursing journal, 41(5), 447-457. american journal of management vol. 16(4) 2016 89 http://www.aha.org/medicationsafety/june12.asp� ajm 17(5) web_master.pdf ajm 19(1) master r1.pdf ajm 17(1) master-lulu-revised.pdf american journal of management vol. 17(1) 2017 47 the underlying sccob processes: knowledge micro analysis, exploratory mapping processes, and action threshold management theodore j. randles eastern kentucky university william j. miller georgia college and state university lutfus sayeed san francisco state university six desirable knowledge qualities emerge from an integration of the four-stroke engine and the four-stage model of the diagnostic process. these qualities are implemented by the sccob process, a knowledge creation process that governs a firm�s exploitory and exploratory processes. this requires implementing a kbs development strategy, enabling firms to better govern business processes and provide firms a closer look at their knowledge intensive processes. the structuring cause emits a wealth of knowledge. a way to use this knowledge is described, and this paper suggests that knowledge management be viewed as a quality, human resource, project, and strategic management tool. introduction over two decades ago research was undertaken to assess the impact of telemedicine on the medical diagnostic process, and the diagnostic process was studied at a behavioral, cognitive, and epistemological level. from herbert simon�s (1985) three stage model (intelligence, design, and choice), came a four stage model. adopting three forms of insight from cognitive psychology and three knowledge types from epistemology, the six stages identified by the medical problem solving. the aforementioned telemedicine research afforded a tremendous opportunity to analyze the video recordings of teleconsultations between primary care physicians and medical specialists. this analysis revealed that a quick diagnosis of a complex medical problem occurred when the right combination of knowledge (the patient�s current medical condition, the patient�s medical history, and specialized medical knowledge of illness) was available, and from the aforementioned video analysis emerged the knowledge combustion and vehicle analogy. the knowledge combustion and vehicle analogy used a well understood physical model to support understanding and description of knowledge�s roles. in a paper (that is almost ready for submission), randles, miller, and zhang (2017) extend the 2004 knowledge combustion analogy based on an understanding of the four stroke engine. the aforementioned paper describes a process (the sccob 48 american journal of management vol. 17(1) 2017 process � pronounced scoh-bee), which integrates the exploratory and exploitory processes of a firm, and is a knowledge creation process. this paper describes the underlying sccob processes which are designed to raise organizations to greater congruence. congruence relates to the level of agreement and consistency, and the underlying sccob processes provide a kbs development strategy and a knowledge mapping process that lead organizations to greater congruence. the paper proposes that the structuring cause, which is described by dretske (1988) as the most important knowledge type, provides a wealth of knowledge which can be used to elevate organizations to greater governance and tact. the adoption of a number of knowledge management tools and techniques such as moment models and knowledge requirement fulfillment analyses is advocated, and the underlying sccob processes should serve as a strategic management tool by elevating the organization to higher, exploratory forms of mapping. literature review beginning as a framework to assess the impact of telemedicine on the medical diagnostic process, the four-stage model was related to a well understood mechanical process to describe the process of information dissipation. over the years, these concepts have been extended. this paper continues this effort, and the research, which the underlying sccob processes is based, is described next. the four-stage model of the diagnostic process building upon simon�s (1985) three phase �intelligence-design-choice� decision making sequence, randles and thachenkary (2002) provided a four-stage model of the medical diagnostic process. the foundation of the four-stage model was dretske�s definition of knowledge. dretske (1988) stated that behavior is a causal chain governed by three types of knowledge, with each knowledge type having a different role. the triggering cause is a summary form of knowledge signaling the presence of an external event. the role of the structuring cause is to motivate action by explaining the relationship between a signal and an external event. the third type of knowledge is described as a map, attached to a belief that guides one�s actions (dretske, 1988). the four-stage model described the role of different knowledge types and forms of insight in the achievement of various diagnostic milestones (framing, formulation, testing, and confirmation), relating epistemological, cognitive, and behavioural aspects of the diagnostic process. problem framing is the first diagnostic stage of the four-stage model. the problem framing stage relies on dretske�s triggering cause and attains sternberg's (1987) selective encoding form of insight which identifies relevant information from a large amount of mostly irrelevant information. the second diagnostic stage, problem formulation is introspective, ending with the generation of a problem space map. the hypothesis testing stage requires traversing a problem space in order to select a diagnosis. this is done by comparing collected information to an expected pattern of facts. these cognitive functions correspond to sternberg's (1987) selective comparison form of insight which relates information that is current to information acquired in the past. the fourth stage is the confirmation stage. other illnesses that might not be readily apparent from the diagnostic evidence are considered. confirmation requires sternberg's (1987) selective combination form of insight in which the relationship between seemingly unrelated things is determined. this requires the processing of a vast amount of textbook knowledge, which is embedded in the structuring cause (randles & thachenkary, 2002). to test the validity of the four-stage model, randles and thachenkary (2002) studied the video recordings of teleconsultations and conducted telephone interviews with the consulting physicians. their empirical evidence indicated that these stages have different information processing and knowledge requirements and that diagnostic confidence was inversely related to the size of the knowledge gap. furthermore, video analysis revealed that the successful processing of information and provision of explanations increased diagnostic confidence. the understanding of knowledge requirements and knowledge gaps, which was gained from this research, provided the basis of the knowledge combustion and vehicle analogy. american journal of management vol. 17(1) 2017 49 the knowledge combustion and vehicle analogy using descriptions of such engine components as the carburetor and piston, randles and fadlalla�s (2004) physical model analogy extended the four-stage model by linking cognition to a solid physical science. in their knowledge combustion and vehicle analogy, randles and fadlalla (2004) proposed that different knowledge types were required to extract value from information and to generate systematic action. furthermore, their second proposition of knowledge chemistry stated that four different forms of knowledge combustion are conducted in different orders to permit the solution of myriad problems. according to the knowledge combustion analogy, the cognitive equivalent of gasoline is a knowledge blend, and randles and fadlalla (2004) proposed that dretske�s three knowledge types are used in different proportions to create four knowledge blends. these knowledge blends, which relate to four forms of knowledge combustion, are common to all decision making. one form of knowledge combustion, formulation does not correspond to any form of insight but represents the planning processes that precede insight and action. the framing form of knowledge combustion corresponds to the selective encoding form of insight, hypothesis testing corresponds to selective comparison, and profound explanation corresponds to the selective combination form of insight. each form of knowledge combustion required a different knowledge blend, and the creation of these different knowledge blends required the development of a new approach which was called knowledge chemistry (randles & fadlalla, 2004). hypothesis testing knowledge blend (htkb) from an understanding of the hypothesis testing knowledge blend, and the hypothesis testing form of knowledge combustion, a knowledge creation process was proposed. this process required: 1) the development of pragmatic rules that indicate what to say when, 2) the development of problem space and sub-state maps of complex diagnoses, 3) the development of a set of explanations that motivate diagnosticians to adhere to the sub-state maps, and 4) the development of a system that provides the substate maps and communicates the explanations of specialists in a timely manner. these explanations would be captured from the video recordings of teleconsultations, and a process to transform the artifacts of the diagnostic process into valuable specialty knowledge was proposed (randles, blades, & fadlalla, 2008). the hypothesis testing task is information rather than knowledge-intensive, and the ability to collect and analyze this information (the procedural knowledge requirement) is great. however, procedural knowledge is required to combust a knowledge blend. it is not a component of the knowledge blend, and the creation of the htkb avoids this stringent knowledge requirement. furthermore, because hypothesis testing is structured and routine, the role of the structuring cause is limited. only the appropriate explanation from a set of existing explanations must be presented. because of these factors, the htkb is easily implemented (randles, blades, & fadlalla, 2008), and one facet of the underlying sccob processes is the development of htkb technologies. the knowledge spectrum and cognitive force the knowledge combustion and vehicle analogy explained how myriad decisions are made using three forms of insight, or knowledge combustion, and seven knowledge types (declarative knowledge, rules, signals, maps, technical knowledge, semantic knowledge, and structuring causes). as depicted in figure 1, these knowledge types and forms of insight form the basis of the knowledge spectrum and were placed on a continuum according to their: 1) explicitness (ability to be communicated), 2) technical feasibility, and 3) ability to generate cognitive force. like the table of elements in chemistry, the knowledge spectrum provides a great deal of information about knowledge (randles, blades, & fadlalla, 2012). 50 american journal of management vol. 17(1) 2017 although the knowledge spectrum provides a static view of knowledge, its underlying premises suggest that intelligent behavior requires the interaction of a number of knowledge types. this realization focused our research on knowledge interactions, and in a paper, knowledge micro analysis (randles, miller, & polin, 2017 that is almost ready for submission), the authors focus on the knowledge interactions that occur in a moment�s time. this requires an analysis of the links between various knowledge types, and these links represent seven components of cognitive force. the first three components: cohesion, coherence, and synergy form a summary measure. the other four components: complement, initiate, promote, and strengthen provide detail and permit a more in depth description of how cognitive force is generated. american journal of management vol. 17(1) 2017 51 in addition to modeling knowledge interactions and measuring cognitive force, knowledge micro analysis has several other objectives which are to catalog a firm�s knowledge resources, determine business process knowledge requirements, develop benchmark measures of cognitive force, perform knowledge forecasts, and conduct knowledge requirement fulfillment analyses. just as data flow and activity diagrams support efforts to improve information flow within an enterprise; the graphical and mathematical techniques of knowledge micro analysis should provide organizations with a closer look at their critical knowledge intensive business processes (randles, miller, & polin, 2017). the sccob process in developing the sccob process narrow definitions of exploitory and exploratory were adopted from lavie, stettner, and tushman (2010) with exploitation involving the use and development of things that are known and exploration involving the pursuit of new knowledge. the sccob process extends the engine/vehicle analogy of randles and fadlalla (2004) integrating the cycles of the four-stroke engine (intake, compression, combustion, and exhaust) and the four stages of the diagnostic process (framing, formulation, hypothesis testing, and confirmation). six desirable qualities of knowledge are derived from this integrated model and are implemented by the sccob process which integrates the exploitory and exploratory processes of a firm in a way that is simultaneous, continuous, complementary, ordered, and balanced. it is believed that an understanding of these qualities should improve the design of knowledge intensive organization processes (randles, miller, & zhang, 2017). the sccob process is an overarching process that is compartmentalized into a dozen challenging but manageable tasks, as depicted in figure 2. each compartmentalized task requires different types of knowledge and expertise, and the sccob process provides two perspectives. the inward perspective (the internal sub process) focuses on operational information and the identification and explanation of operational anomalies. the external perspective (the external sub process) constructs theories regarding critical events, develops search and response maps for plausible hypotheses, and conducts hypothesis testing in order to detect emerging critical events. 52 american journal of management vol. 17(1) 2017 sccob process figure 2: sccob process extending the sccob process the exploitory processes of the firm generate the information which is required to identify anomalies (randles, miller, & zhang, 2017). however, knowledge of what is expected � the expected value � is also required. establishing these expectations is the role of management, which defines expected outcomes over time, as well as for varied conditions. this level of mapping is called codification. expectations are established; their performance is evaluated, and a response is formulated. another mapping level, the procedural level, provides standard operating procedures, best practices, and how-to training programs to prepare and support agents of the firm in the conduct of business processes. these mapping levels (codification and procedural) represent existing (exploitory) mapping processes. on the surface, the sccob process can be considered just a way of thinking. however, underlying this way of thinking is a mapping process. this mapping process would move organizations from the codification and procedural mapping levels to the governance and tact levels of mapping. this would be done by implementing a set of exploratory mapping processes that elevate the firm to greater agreement and consistency (congruence). american journal of management vol. 17(1) 2017 53 one facet of the underlying sccob processes is the development and implementation of htkb technologies. another facet of the underlying processes is a mapping of knowledge intensive business processes. this would be done using moment models and knowledge requirement fulfillment analyses and would provide the firm a closer look at its knowledge intensive business processes. finally, in designing the underlying sccob processes, the value of the structuring cause was recognized. in addition to explanations, which are an explicit aspect of the structuring cause and an integral component of htkb technologies, there are tacit aspects that can serve the firm. for example, emotions lie deep in the depths of the structuring cause. these emotions are difficult to explain. however, they can be felt, and the underlying sccob processes would systematically use these tacit thoughts to recognize opportunity or risk. an understanding of the four-stage model, the knowledge combustion and vehicle analogy, and the knowledge spectrum provides many insights regarding the development of knowledge-based systems. as shown in figure 1, the rules and maps of the htkb are low level knowledge types, while complex technical skills extend from the midpoint of the knowledge spectrum toward the structuring cause. replication of these complex skills is our long term objective and we propose that knowledge-based systems development should move incrementally across the knowledge spectrum, beginning with the development of htkb technologies. according to the composition property of knowledge, the knowledge spectrum�s higher order knowledge types are composed of lower order ones. for example, a map is composed of declarative knowledge, rules, and signals (randles, miller, & polin, 2017). it is the level of control and semantics that determines what is low, moderate, or exceptional regarding the intellectual (of the mind) aspect of a technical skill (randles, blades, & fadlalla, 2012). the problem space maps, sub-state maps, and information processing and pragmatic rules of the htkb are critical components of all complex technical skills. consequently, the development of htkb technologies should serve as a stepping-stone toward the replication of complex technical skills. from our telemedicine research came another insight concerning kbs development. for many years, knowledge acquisition has been a significant hurdle for knowledge-based systems developers, and the aforementioned telemedicine research suggests that organizations should provide specialist support via teleconferencing and use the video recordings of these teleconsultations to create htkb technologies. although video analysis has long been considered an excellent knowledge acquisition tool, it is considered intrusive. when providing support, it is not. this is a simple but important idea that should enable organizations to move to greater levels of congruence through implementation of htkb technologies. to move the firm to the exploratory levels of mapping (governance and tact), the underlying processes will also implement several tools of knowledge micro analysis. according to randles, miller, and polin (2017), the aforementioned nomenclature is succinct and should allow the graphical representation and mathematical calculation of cognitive force. an example of a moment model representing the interaction between a physician and medical expert system is presented in figure 3. at the top of the diagram is the ring link. this part of the moment model shows that the process is coherent but is not complete (lacks the structuring cause which generates explanations and motivates action). it also shows that the rule-based knowledge of the system and physician are redundant. the lower diagram depicts the interaction of several different knowledge types over a three minute span with the physician collecting and entering data for the system to analyze. this an early representation and the moment modelling methodology is being refined. these refinements will be presented in randles, miller, and polin (2017). 54 american journal of management vol. 17(1) 2017 figure 3: moment model additionally, knowledge micro analysis would support the definition of business process knowledge requirements and the conduct of knowledge requirement fulfillment analyses. these techniques were described by randles, miller, and blades (2011), and their implementation should reveal that errors in the conduct of business processes often stem from a failure to satisfy knowledge requirements. consequently, the objective of knowledge requirement fulfillment analysis is to detect potential knowledge gaps and reduce their chance of occurrence. knowledge requirement fulfillment analysis would also be used to identify situations where the fulfillment of knowledge requirements is done by over qualified agents. these analyses will foster improvements in the firm�s use of knowledge resources, as resources are better aligned to requirements. finally, to support quality management, moment models would be used to calculate the cognitive force of different business scenarios. over time, a library of maps (problem space, sub-state, business process, and response), moment models, and force assessments would be created, and these tools would support the management of risk, human resources, and quality. the importance of explanations in the conduct of complex diagnoses was recognized through an analysis of video recordings of teleconsultations between primary care physicians and specialists. while these dialogues are just simple words when extracted from a video recording, when placed in the appropriate context, these explanations become powerful. however, there are also tacit aspects of the american journal of management vol. 17(1) 2017 55 structuring cause that can be used to improve organization performance. for example, deep within the structuring cause stir emotions which might be important indicators. unfortunately, these deep thoughts are often ignored. instead, they should be managed. according to the knowledge combustion and vehicle analogy, action is controlled by two sets of cognitive processes that precede two emotions (risk and confidence). risk is based on an assessment of an action�s consequences and an action threshold is established by the structuring cause. like risk, confidence is an emotion determined deep within the structuring cause through an assessment of knowledge requirements and abilities. just before an action is performed the action threshold and the actor�s confidence are compared. only if confidence surpasses the action threshold, will an action be performed voluntarily. hence, the deepest, most tacit of dretske�s three knowledge types the structuring cause has the final say concerning risky intelligent actions. it seems imperative that this mechanism be better understood and managed in order to better support the agents of the firm in delicate situations. tact is the mapping level after governance and requires doing the appropriate thing in a delicate situation. a competent risk analysis is required so that risk and action can be balanced, and sccob mapping operations would be supported by the firm�s risk managers so that explanations to motivate action are balanced by an explanation of its risks. as htkb technologies are implemented, the risk of the proposed actions would be analyzed and explained by the firm�s risk managers and an action threshold would be established. in return for the support of the firm�s risk managers, sccob mapping operations would communicate the aforementioned risk assessments using htkb technologies. this would move the firm beyond governance to the tact mapping level with its maps and explanations also serving as a risk management tool. people do not just utter propositions; they perform illocutionary acts such as stating, requesting, and commanding. every speech act consists of the illocutionary force f applied to a proposition p, and this is known as the f(p) hypothesis (covington, 1998). the bach and harnish classification system would be used to classify the explanations provided by specialists. this classification system makes many distinctions and is better for enumerating the whole range of human speech (covington, 1998). using rules of illocution to classify words, the hypothesis testing knowledge blend would vary the wording of explanations to control their illocutionary force. for example, the illocutionary force of a message could be increased in an urgent situation or decreased in a situation requiring caution. our video analysis revealed that during diagnostic teleconsultations the specialists had to gain the trust of the remote physicians and patients. the importance of elocution (how something is said) was demonstrated by a deep-voiced neurologist who gained the immediate respect of a disoriented elderly patient. elocutionary forces are controlled by the way the message is said (elocution). using rules of elocution, the htkb would control voice production in the provision of directions and explanations, customizing the manner of elocution for specific diagnosticians. as was previously stated, deep within the structuring cause stir emotions that are often ignored, and it is the intent of the sccob process to gather, depersonalize, aggregate, and report these signals about critical events on a timely basis. a program entitled � thank you for asking � would be implemented. a query schedule would be created and selected agents of the firm would be queried by one of their coworkers about their feelings regarding critical issues. furthermore, information such as agents� assessments regarding their confidence in performing specific business tasks would be collected and analyzed to refine the firm�s task assignments and training programs. by better balancing two emotions concerning risk and confidence, the firm would move to greater tact and to doing the appropriate thing in delicate situations more often. closing remarks organizations must recognize that artifacts of the structuring cause are valuable resources. their use should gain a firm significant competitive advantage. this seems such an important point that an alternate title was strongly considered for this paper. this alternate title was as follows: milking the structuring cause a valuable knowledge cow. 56 american journal of management vol. 17(1) 2017 by increasing organization congruence, the underlying sccob processes serve as a strategic management tool, and it is hoped that htkb technologies and the tools of knowledge micro analysis will increase the adoption of knowledge management by knowledge intensive organizations. developing the aforementioned tools of knowledge micro analysis is the focus of our current research. it is early in the emergence of the science of knowledge management. it is only beginning to transition from an information systems perspective, which is one of its foundation sciences, to a knowledge perspective. we suggest that knowledge management be viewed as a quality, risk, human resource, and project management tool that fosters organization knowledge creation, learning, and agility as well as improving the allocation of knowledge resources. while there is much work to be done, we are excited about the 21st century and the science of knowledge management. references covington, m.a. (1998). speech acts, electronic commerce, and kqml. decision support systems, 22, 203-211. dretske, f. (1988). explaining behavior, cambridge, massachusetts: the mit press. lavie, d., stettner, u. & tushman, m. (2010). exploration and exploitation within and across organizations. the academy of management annals, 4(1), 109-155. randles, t. j. blades, c.d. & fadlalla, a. (2012). the knowledge spectrum. international journal of knowledge management, 8(2), 65-78. randles, t. j. blades, c.d. & fadlalla, a. (2008). the hypothesis testing knowledge blend. knowledge management research and practice, 6(4), 339-349. randles, t. j. & fadlalla, a. (2004). knowledge combustion: a knowledge chemistry approach and a description of the process of information dissipation. journal of information and knowledge management, 3(4), 373-383. randles, t., miller, w. & blades, c. (2011). cataloging, measuring, and analyzing organization knowledge requirements and knowledge resources. decision sciences institute proceedings, 2201-2207. randles, t. miller, w. & polin, b. (2017). the conceptualization of cognitive force and the emerging tools of knowledge micro analysis. in progress. randles, t. miller, w. & zhang, z. (2017). the sccob process: integrating the exploitory and exploratory processes of the firm. in progress. randles, t. & thachenkary, c. (2002). towards an understanding of diagnostic teleconsultations and their impact on diagnostic confidence. telemedicine journal and e-health, 8(4), 377-383. simon, h. a. (1985). the new science of management decision, englewood cliffs, nj: prentice-hall. sternberg, r. j. (1987). coping with novelty and human intelligence. in modelling cognition (morris, p. ed.), chichester: wiley. contact author theodore j. randles, ph.d. department of accounting, finance and information systems eastern kentucky university richmond, kentucky 40475-3102 (859) 622-3795 (telephone) (859) 622-5448 (fax) ted.randles@eku.edu ajm 18(4) master (r).pdf ajm 18(3) master2.pdf case selection: a case for a new approach timothy l. harper skidmore college mary e. taber skidmore college barbara p. norelli skidmore college while conducting empirical research regarding the relationship between case characteristics and student performance, the authors were surprised to find a lack of conceptual and empirical research regarding instructor case selection. this conceptual paper explores the case selection process and introduces case selection as an under-investigated component of the case teaching method in management education. case selection is important because it is a critical component of the case teaching method. there has been no empirical testing of the effectiveness of case selection technique. the authors identify and propose case selection criteria for instructors of management education. introduction overview of case selection the purpose of this paper is to discuss the importance of case selection as an essential component of the case teaching method in the context of management education, as well as to establish and propose a set of case selection criteria (see figure 1). the case teaching method has been used in management education for over a century. the case method is widely used today for undergraduate and graduate management education, yet little if any attention is given in the literature to the process (theoretical or in practice) by which instructors select cases (liang & wang, 2004; rippin, et al., 2002). to some extent, case selection is a blind spot, in that instructors practice it frequently, but do not rely on empirical findings to test or confirm their assumptions and hypotheses regarding the effectiveness of their particular techniques for choosing cases. early on, faculty were required to write the cases they taught. therefore, the selection of cases for teaching largely occurred at the case research stage. the evolution of the case teaching method offers a partial explanation of why case selection has arrived at its present state, where its importance is understated and it is to some degree ignored in the literature. today, case selection occurs as an integral and intentional part of the case teaching process. case selection deserves further attention in the academic literature due to the vast array of cases available, the wide appeal of the case teaching method, and, more importantly, that cases directly affect teaching objectives and learning goals (campbell & lewis, 1991). 72 american journal of management vol. 16(2) 2016 this paper focuses on case selection within the context of the case teaching method. in order to better understand case selection one must examine the broader picture of the case teaching method (stewart & winn, 1996). the academic literature acknowledges that there are multiple versions of the case teaching method used in management education (ashamalla & crocitto, 2001; mesny, 2013; shugan, 2006). distinct from the case research method, the case teaching method is an active learning teaching tool with four defining characteristics according to christensen and hansen, ‘an active student discussion, a discussion process facilitated by the instructor, a focus on the specific rather than the general, and concentrating on cognitive, affective, and practical learning goals’ (mesney, 2013, p. 57-58). however, there is no universally accepted, agreed on singular model, process, rubric or lexicon of the case teaching method. history of case method as alluded to earlier, our review of the history of teaching cases, in the context of business education, revealed why case selection has been overlooked. in 1908 harvard business school’s first dean, edwin gay, decided that a method of teaching should be used that was analogous to that being used in the law school the case method.1 distinguishing the proposed business teaching method from the law school’s case method, gay referred to it as the “problem method.” gay, aware that, unlike law, business had no established body of cases available, decided that “his faculty would simply have to employ a “problem method” whenever it seemed possible” (cruikshank, 1987, p.74). dean gay was committed to the case method and discussion in the classroom, but noted that one of the “chief difficulties is the obtaining of proper case material for discussion” (cruikshank, 1987, p. 76). in 1911 arch shaw, a founder and publisher of a management magazine, was concerned that business students “wouldn't recognize a problem if they saw one” (cruikshank, 1987, p. 71). shaw donated money to harvard business school (hbs) with the requirement that it “be applied for the purpose of investigation of business problems” (cruikshank, 1987, p. 59). the fund was used to establish harvard’s bureau of business research, which still exists today. the bureau’s early researchers emphasized the practical (particularly given the limits on time and resources), and their objectives included discovering what could be of “immediate use in the curriculum” (cruikshank, 1987, p. 60). the lack of a body of prepared and written cases resulted in 1) case selection not being an option for faculty, 2) faculty writing their own cases, and 3) the development of harvard's bureau of business research (to aid development of case material). therefore, case selection historically occurred at the point of identifying the company or firm to be researched. eventually the trend became one of instructors using cases researched and written by other academics, with case selection occurring at the teaching stage as opposed to the research or writing stage. this trend operates as the fundamental model for case selection today. the lack of recognition in the literature of the importance of case selection is partly explained by the fact that the shifting of case selection from the research and writing stages to the teaching stage did not occur systematically. the literature on management case education has yet to recognize or investigate the stage at which case selection occurs and its importance to the case teaching method. this paper addresses this gap in the literature. case selection criteria we propose a set of case selection criteria (see figure 1) as a way of identifying various components to ultimately better and more systematically understand the case selection process. we developed the characteristics partly in response to the paucity of research (conceptual and empirical) related to case selection for teaching. as we noted, the literature tends to focus on the case teaching method without consideration for case selection, e.g. campbell & lewis (1991). given the evolution and popularity of the case teaching method, it is time for the process by which instructors select cases to be thoroughly investigated in order to help both case writers and instructors better achieve their goals. case instructors armed with an increased understanding of the characteristics that may influence case selection will be more deliberate in choosing cases so as to increase teaching american journal of management vol. 16(2) 2016 73 effectiveness. andersen & schiano acknowledge that the “choice of cases can have a dramatic impact on the quality of your course,” but do not attempt to categorize or test the effectiveness of factors they propose as critical for case selection. although this paper focuses on case teaching, case writers will be better able to write cases that help instructors achieve teaching objectives and students achieve learning goals if equipped with an increased understanding of the characteristics that affect instructors’ selection of cases. we now posit and examine specific elements of case selection. given the lack of research on case selection, we derived the following case and curricular characteristics from the authors’ years of case teaching experience, feedback from case writers and instructors in management education, and varied information available in the literature (e.g., andersen & schiano, 2014; campbell & lewis, 1991; libby, 1991; rippin, et al., 2002). we categorize the criteria of case selection into two major groupings: 1) case characteristics and 2) curricular characteristics. instructors using the case teaching method may rely on a number of factors when selecting cases to teach in a specific class session, for inclusion in a case reader or course text, or for a class assignment. case characteristics we define case characteristics as attributes or dimensions of a case that instructors may consciously (or not) consider when selecting a case, and that are likely to affect teaching and learning outcomes. case characteristics include, but are not limited to: 1) case focus; 2) case framing; 3) company structure; 4) teaching note; and 5) information richness – qualitative and quantitative. case focus the focus of the case refers to the strategic dimensions of the business arena/firm/organization that are most salient in terms of problem identification, analysis, diagnosis and resolution. the case focus is the central topical area(s) of the case. topical areas could be disciplines (such as management, marketing, or accounting) or sub-disciplines (such as strategic management, business policy) (liang & wang, 2004; libby, 1991). topical areas might also include analytic or diagnostic tools necessary for solving the case (such as a swot, structural analysis of an industry, value chain analysis, competitor analysis, portfolio analysis). case framing when writing a case, case writers might decide whether or not to "show" or "hide" the strategic alternatives most available to a firm to resolve the major issue(s) of the case situation (campbell & lewis, 1991). in other words, strategic alternatives can be explicit or implicit. a case might include specific explicit alternatives (e.g., expand internationally, acquire a smaller firm) that instructors can adopt as part of the case assignment. on the other hand, implicit case framing involves hidden or disguised strategic alternatives. a case may signal the need for a company to increase its level of vertical integration; however, it would not explicitly or visibly list this option or any other options as a strategic alternative. under this scenario, the most viable strategic options are generally listed in the teaching note for the edification of the instructor. instructors also may examine the extent to which a case suggests one "best" alternative or a set of alternatives. in other words, does the case suggest or lead students toward a correct response or point them in only one strategic direction. students, when analyzing and diagnosing a case situation, generally are required to identify and describe a set of major issues which are used to derive strategic and tactical recommendations. when the list of strategic options is not explicit, students are forced to generate strategic options through analysis and diagnosis of the case situation. alternatively, a case that includes an explicit list of strategic options, allows students the opportunity to expedite their analysis toward the step of identifying major issues. the identification of major issues is often included as a segment of a case analysis assignment. 74 american journal of management vol. 16(2) 2016 company structure company structure is often defined in multiple ways. one definition of company structure is whether a firm is a single business unit, a diversified firm (related or unrelated), or a conglomerate. another definition is whether a firm is structured by function or division (e.g., product, customer, geography, etc.) teaching note case instructors are likely to differ with respect to their use of teaching notes (campbell & lewis, 1991). for many instructors, teaching notes are used similar to an instructor's manual, guiding their class preparation and determining the substance of primary teaching points. other instructors refer to the teaching note as more of a reference from which they draw keywords or tools of analysis to use when teaching the case. yet, others do not refer to teaching notes at all. rather, they rely on expertise and knowledge derived from their time-honored case teaching pedagogies, analytical frameworks, and teaching styles. instructors new to the case teaching method are likely to desire informative and detailed teaching notes which can serve as a foundation for class session preparation. ultimately, the teaching note may be a factor distinguishing cases judged equal on other case selection factors. information richness qualitative and quantitative we define information richness as the total amount of information available to students, for use in analyzing and solving the case. the information provided in the case serves as a primary source of information (swiercz & ross, 2003). other information may be available and accessible from a variety of sources outside of the case as well. thus, information richness is the sum of information provided in the case combined with information available from a host of other sources including the academic institution, the faculty team or instructor, the focal company of the case, and the internet (rippin, et al., 2002). further, cases differ in their level of sophistication and treatment of firms' and organizations' financials and financial standing. most cases contain basic financials including an income statement and balance sheet. many cases also contain industry level financials (e.g., ratios, revenues, costs, profits). higher level cases tend to include the basic financials as well as financials that facilitate assignment of sophisticated financial analyses, including valuation of companies as well as merger and acquisition transactions. further, cases differ in their level, depth and amount of quantitative data regarding marketing phenomena, economic indicators and other quantifiable factors such as industry and global trends. the information richness of a case increases as the financial data become more extensive and expansive, and as statistics regarding various aspects of marketing, demographics, and economics, become more elaborate. academic institutions and focal companies can have a significant impact on information richness as well. academic institutions, faculty, and librarians influence the quality and quantity of information available to students through library subscription databases and other resources such as subject matter experts, proprietary reports, and finance terminals. in general, companies' corporate philosophies regarding open-sourcing of information can have a major impact on information richness for particular cases. specifically, corporate decisions related to the release of information (such as analysts' reports and industry, consumer and trade statistics, rankings or ratings) on its company websites or made available through other means can have an effect on information richness. curricular characteristics as previously mentioned, we believe teaching objectives and learning goals associated with specific case assignments will often serve as the primary drivers of case selection. furthermore, we posit that instructors do not select cases in a vacuum or without consideration of the following curricular characteristics, all things pertaining to the instruction of the course: 1) institution; 2) instructor; 3) course; 4) student; and 5) assignment. american journal of management vol. 16(2) 2016 75 institution institutional factors such as type of school (e.g., college vs. university, 4 yr. vs. graduate, etc.) may influence case selection (booth, et al., 2000; libby, 1991). additionally, across all types of schools, instructors are more likely to experience institutional pressures when their teaching takes place in the context of a required or mandated academic program (such as a common course experience, capstone, courses with the same curriculum across multiple sections, or team-taught courses). instructor the instructor’s pedagogical preferences and professional background are likely to influence case selection (campbell & lewis, 1991; liang & wang, 2004; libby, 1991). for example, one's subdiscipline and expertise will play a role in the frequency of adopting the case teaching method, selection of types of cases, topics and major issues to be focused on in course assignments. inexperienced instructors, given their unfamiliarity with teaching using the case teaching method, may be more inclined to rely on teaching notes and more commonly, traditionally used cases. instructors with no practical business experience may see benefit in relying on the case teaching method as a way to bring the “realworld” to their classes. further, experienced instructors are likely to develop their own personal and untested heuristics often shared among colleagues and case teaching scholars that potentially increase the efficiency and effectiveness of case selection. course course characteristics include course level, type, class size, and course discipline. in some courses the case focus may or may not be the same as the course discipline. for example, an accounting course may include a case focused on ethics, operations, or organizational behavior. strategy courses will typically include cases that focus on multiple disciplines within the business arena for the purpose of integration. cases exist for almost every discipline or field within management and business. some disciplines use cases more than others, e.g., accounting vs. organizational behavior (liang & wang, 2004; libby, 1991). instructors evaluate cases for difficulty and complexity, in order to appropriately select cases in the context of course level (i.e., lower-level or upper-level). for example, instructors teaching strategic management and business policy are likely to select cases targeting specific topics or that offer the opportunity to integrate information, knowledge, concepts and theories from courses completed as prerequisites for the capstone experience (rippin, et al., 2002). class size is likely to influence case selection because it often impacts the frequency of student participation and level of student engagement, as well as the feasibility of active learning (booth, et al., 2000; doran, et al, 2011; rippin, et al., 2002). sometimes the level of analysis for case selection is the case packet (as opposed to the individual case). in such cases, an analysis of case selection must consider the underlying reasons for selecting individual cases but only in the context of the entire case packet. so, the selection of individual cases may be difficult to predict without an understanding of the teaching objectives and learning goals across the entire case packet. in such conditions, we suggest analysis of case selection at the case packet level rather than the individual case level. student we also argue that instructors focus on a significant number of student characteristics when selecting cases. as stated above, the course level or students’ class year (first-year undergraduate through master’s level) is a major factor considered in case selection, in part, because cases diverge significantly in terms of their complexity, difficulty, and diversity of issues (liang & wang, 2004). further, we hypothesize instructors account for class diversity (e.g., students’ academic studies and standing, geographic diversity and awareness, and previous experiences) with the case teaching method as well (libby, 1991; ramburuth & daniel, 2011). for example, strategy professors may begin an academic semester with simple and accessible cases to build students’ knowledge, skills and abilities to a point where they can analyze and diagnose a more complex case situation or scenario. the types and years of students’ work experiences might also play a role when considering non-traditional and graduate school contexts. 76 american journal of management vol. 16(2) 2016 assignment requirements we posit that instructors select different cases for various types of assignments, including cases assigned for: 1) class discussion only; 2) student teams to write papers and/or present informally or formally; and 3) individual students to write papers, and/or present informally or formally, (stewart & winn, 1996). many other assignment parameters may influence case selection. the following list, while not exhaustive, is an attempt to catalog key assignment requirements: • types of and degree of qualitative analyses; • types of and degree of quantitative analyses; • specific demonstration of tools of analysis (swot; sai: value chain; eva); • type and number of recommendations or alternative recommendations; • written paper – length; • informal or formal presentation – presentation content and style requirements; • individual or team assignment. it should be noted that sometimes case selection occurs as a result of the assignment design rather than assignment design occurring as a result of the case selection. for example, an instructor might select a case and then revise the assignment, having concluded that the case is the perfect fit for a swot or value chain analysis. future research this paper identifies a gap in the literature regarding case selection. instructors (and case writers) will benefit from a better understanding of and the systematic development of case selection criteria. future empirical research focusing on case selection should address the testing of case selection criteria identified in this paper, as well as implications for teaching objectives and learning goals. conclusion this paper argues strongly for the importance of case selection as an element of the case teaching method. the pervasiveness of the case teaching method in management education and the assumed learning outcomes associated with case teaching speak to the need for a deeper investigation of case selection as an element of the case teaching method. a significant number of prestigious case publication outlets produce a substantial number of teaching cases each year. hbs faculty alone produce 350 new cases per year (harvard business school mba website, n.d.). management texts with teaching cases are published every year. for example, new editions of strategic management and business policy texts which include anywhere from ten to twenty teaching cases are published regularly for use in management education. an increased understanding of case selection would be beneficial to case writers and instructors alike. case writers will be able to engage in continuous improvement based on the objectives and preferences of case instructors. case instructors will be better able to meet their teaching objectives (and students their learning goals) by being able to match teaching objectives and learning goals to case selection criteria. endnote 1. the law case method had been developed decades earlier by harvard law school professor and dean, christopher columbus langdell (cruikshank, 1987, p. 74). langdell avoided standard lectures and focused on providing students with numerous examples from which they derived general principles through class discussion. american journal of management vol. 16(2) 2016 77 references anderson, e., & schiano, w. 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(1996). the case debate: a new approach to case teaching. journal of management education, 20(1), 48. swiercz, p. m., & ross, k. t. (2003). rational, human, political, and symbolic text in harvard business school cases: a study of structure and content. journal of management education, 27(4), 407430. 78 american journal of management vol. 16(2) 2016 https://www.vault.com/images/pdf/samples/harvard%20business%20school.pdf� appendix figure 1 case selection criteria case characteristics curricular characteristics • case focus o topical area or sub-discipline • institution o type of school or dept. • case framing o implicit or explicit strategic alternatives • instructor o pedagogical preferences o sub-discipline • company structure o sbu vs. diversified • course o level o type o class size o discipline • teaching note o effect on pedagogy • student o level o diversity o experience • information richness -qualitative & quantitative o (e.g., analyst reports, company financials, etc.) • assignment requirements o discussion vs. written o individual vs. team o analysis: type or tool o recommendations, type & # american journal of management vol. 16(2) 2016 79 ajm 17(3) web_master.pdf 96 american journal of management vol. 17(3) 2017 is globalization a fulfillment of christian biblical prophecy? toni williams georgia southern university this paper will explore the changes in globalization over the past 50+ years as it relates to the christian bible. given the christian view that many old testament prophecies have been fulfilled, these prophecies will be described in detail. it will examine financial events and how they appear to correlate with biblical prophecy. in particular, there will be an emphasis on the move to one world currency and a one-world government. the potential for a unified economy and government to solve the world�s economic woes will be examined. the financial and political events that substantiate these prophecies will be discussed. introduction is globalization a fulfillment of christian biblical prophecy? does the move to one-world currency and one-world government line up with prophecy penned in the bible thousands of years ago? globalization is a term used by nearly every political and financial leader today. the term is not new to most. webster defines it as �the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets� (merriamwebster, 11th ed.). the twenty-first century may go down in history as the century of globalization. in recent years, improvements in technology have nurtured an interdependence among nations. no advanced nation of any kind can survive today without interacting with the global economy. there is almost no such thing as a product that is not dependent on parts, trade, or investments from foreign countries. although the term globalization did not appear in dictionaries until 1951, the concept of globalization has been around for centuries. there are many arguments about the inception of true globalization, but the focus of this paper is on the changes in currencies and governments globally. there are organizations whose regulations have impacted the way the fiscal systems of the world operate; these organizations will be discussed. the impact of these organizations on the apparent move to one world currency and a oneworld government will be considered. to set the stage for the changes in these organizations, the prophecies of the christian bible that have already been fulfilled must be discussed. many of the books of the old testament are considered books of prophecy. the prophecies penned in these books will be explained. the bible contains colorful imagery, metaphors, and symbolism; the significance of these will be defined. the final book of the bible, revelation, gives a symbolic picture of what the world will look like in the �end times�. this book describes a time when the world will be under the rule of one government, one economic system, and one leader. much of the imagery of this book is similar to the imagery used in the old testament book of daniel. american journal of management vol. 17(3) 2017 97 to understand why christians believe that globalization is a fulfillment of biblical prophecy, the prophecies that have already been fulfilled must be understood. a few of these prophecies date back to 605 b.c. in the book of daniel, the writer, while in captivity in ancient babylon, interpreted the dreams of king nebuchadnezzar. daniel described three kingdoms inferior to babylon. at the time of nebuchadnezzar, babylon was the strongest nation in the world. it was hard to imagine this empire being overthrown. the three kingdoms in the king�s dream are believed to be the medo-persian empire, the greek empire, and the roman empire. the medo-persian empire was in control, followed by the greek empire and, finally, the roman empire. in the book of daniel, the writer also had a vision some 50 years after interpreting nebuchadnezzar�s dream. this dream was more than five hundred years before the birth of the roman empire. this dream described what christians believe is a revived roman empire. the prophet predicted that the restoration of this empire would be in the form of ten nations. christians believe that this empire would eventually become the greatest empire the world has ever seen. fifteen centuries after the fall of the roman empire, the nations of europe are methodically transforming themselves into what christians believe to be the revived roman empire that was described in the prophecies of daniel. biblical prophecy warns that in the end times, ten nations will emerge out of the old roman empire and control europe politically and economically. today, we are currently seeing a rebirth of the roman empire, or an altered form of it. this seems to align with the prophecy of daniel. gradually but steadily, the nations of europe have come together, creating a modern replica of the ancient roman empire. europe is more integrated today than any time since the days of ancient rome. the european union is now considered by many to be the second most powerful political and economic force in our world (www.fact-index.com). further review of these topics will go into much greater detail about the prophecies that have already been fulfilled, the changes made to the world-wide organizations such as international monetary fund (imf), world trade organization (wto), united nations (un), and the european union (eu), and how these changes correlate to christian biblical prophecy. details from this study will give the reader a better understanding as to why christians believe that globalization is a fulfillment of biblical prophecy. understanding imagery and symbolism the use of imagery and symbolism in the bible confuses many readers. bible scholars understand that the use of numbers has a special meaning in the bible. colors have significance in the bible as well as animals. in order to understand the imagery and symbolism, it is important to understand the underlying meaning of numbers and descriptive language of the bible. satan is referred to as a serpent; the use of beasts refers to earthly kingdoms. the color red refers to sin, violence or destruction. the use of crowns describes control or authority. horns represent strength or power. not all numbers in the bible have a special meaning, but in the prophetic books, the numbers used have significance. three is the symbol of the trinity. the number six is the number of man. in the book of genesis, man was created on the sixth day: �so god created man in his own image, in the image of god he created him; male and female he created them��god saw all that he had made, and it was very good. and there was evening, and there was morning � the sixth day� (genesis 1: 27; 31, new international version [niv]). in revelation, it represents the wicked man, the antichrist: �this calls for wisdom. if anyone has insight, let him calculate the number of the beast, for it is man�s number. his number is 666� (revelation 13:18, niv). the number seven represents completeness. this number is used many times in revelation. described in revelation are seven churches (1:9�3:22), seven seals (6:1�8:1), seven trumpets (8:2� 11:19), seven symbolic figures (12-14), seven bowls (15-16), seven judgments (17:1�19:10), and seven triumphs (19:11�22:21). bible scholars use the meanings of this imagery in order to understand the true meaning of the scripture and the fulfillment of prophecy. 98 american journal of management vol. 17(3) 2017 prophecies already fulfilled the bible is full of prophecies, many of which have already been fulfilled. prophecy is defined as �a statement that something will happen in the future� (www.merriam-webster.com). the prophets of the bible believed they were sent by god with a message from god. these prophecies were delivered in both verbal and written communication. in many cases, the written communication used symbolism. there are hundreds of examples of prophecy in the bible that gave us history in advance. for example, the old testament contains many verses pertaining to the birth of jesus. micah 5:2 predicted jesus would be born in bethlehem; isaiah 7:14 states that he would be born of a virgin; both genesis and numbers state that he would be from the lineage of abraham and jacob. the new testament, written hundreds of years later, describes the fulfillment of these prophecies in detail. daniel�s prophecies when most readers of the bible think of daniel, they think of the story of daniel being thrown into the lion�s den as a result of refusing to pray to darius the mede (daniel 6), or the story of shadrach, meshach, and abednego being thrown into the fiery furnace (daniel 3). the visions interpreted by daniel while in captivity in babylon in the sixth century b.c. are prophetic in nature. the first of daniel�s prophecies was the interpretation of king nebuchadnezzar�s dream. the king�s dream consisted of a statue with a head of gold, breast and arms of silver, stomach and thighs of bronze, legs of iron and feet of a mixture of iron and clay: �you looked, o king, and there before you stood a large statue � an enormous, dazzling statue, awesome in appearance. the head of the statue was made of pure gold, its chest and arms of silver, its belly and thighs of bronze, its legs of iron, its feet partly of iron and partly of baked clay� (daniel 2:31-33, niv). the statue represents four world empires or kingdoms: �this was the dream, and now we will interpret it to the king. you, o king, are the king of kings. the god of heaven has given you dominion and power and might and glory; in your hands he has placed mankind and the beasts of the field and the birds of the air. wherever they live, he has made you ruler over them all. you are that head of gold. after you, another kingdom will rise, inferior to yours. next a third kingdom, one of bronze, will rule over the whole earth. finally, there will be a fourth kingdom, strong as iron � for iron breaks and smashes everything � and as iron breaks things to pieces, so it will crush and break all the others. just as you saw that the feet and toes were partly of baked clay and partly of iron, so this will be a divided kingdom; yet it will have some of the strength of iron in it, even as you saw iron mixed with clay. as the toes were partly iron and partly clay, so this kingdom will be partly strong and partly brittle. and just as you saw the iron mixed with baked clay, so the people will be a mixture and will not remain united, any more than iron mixes with clay� (daniel 2:36-43, niv). the first is the kingdom of babylon. it is represented by the head of gold. the kingdom of babylon was inundated with gold. at the time of this dream, babylon was the greatest empire in the world. for this empire to be overtaken was unfathomable. the second empire represents the medo-persian empire. the two arms of silver represented the arrangement of the two nations ruling together. this empire became the greatest in 538 b.c. the third empire, represented by the stomach and thighs of bronze, is the greek empire, who came into power in 330 b.c. under the reign of alexander the great. during his time, the soldiers he commanded wore bronze armor and their weapons were made of bronze. the final empire is the roman empire, characterized by the legs of iron. the roman empire has always been known for its �iron legions�. rome came into power in 63 b.c. the ten toes on the statue represent a revived roman empire of 10 powers that will arise at the end of time. the bible clearly states that part of this empire will be strong and part of the empire will be weak. in the first year of king belshazzar�s reign, daniel had a dream. in the dream, daniel saw four animals coming from the sea. the animals were a lion with the wings of an eagle, a lop-sided bear, a four american journal of management vol. 17(3) 2017 99 winged leopard, and an unknown beast that was �terrifying and frightening and very powerful� (daniel 7:7, niv). the lion is used in the bible as a symbol of power and authority. archaeology has revealed that a lion with eagle�s wings was a common symbol in babylonian designs and sculptures. the lion represented babylon. the lop-sided bear represented the medes and persians. the bear was raised up on one of its sides, representing the inequality of the two powers of the medo-persian alliance. the fourwinged leopard represented greece, with its four commanders who divided the kingdom of alexander the great after his death. the final beast had ten horns and its teeth were iron, the same metal as the fourth kingdom of the statue. three of the ten horns are uprooted by a �little horn�, the ruler who will dominate the world during the tribulation period (daniel 7:7-8). the tribulation period is described in detail in the book of revelation. the next interpretation by daniel was under the reign of king belshazzar (553-539 b.c.). during a banquet, the king saw a hand writing on the wall. the words written were �mene, mene, tekel, upharsin� (daniel 5:25, niv). daniel told the king that the meaning of these words indicated that his kingdom would soon come to an end and would be divided and given to the medes and persians. that same night, king belshazzar was killed and darius the mede took over the kingdom (daniel 5:26-31). all of the prophecies in both nebuchadnezzar�s dream and daniel�s dream have been fulfilled except for the final kingdom that is described in both daniel and revelation. correlation of daniel�s prophecies with the book of revelation there are correlations between the prophecies in the book of daniel and the book of revelation. in this book, john sees the �beast�, also called the antichrist, rising out of the sea having seven heads and ten horns: and i saw a beast coming out of the sea. he had ten horns and seven heads, with ten crowns on his horns, and on each head a blasphemous name. the beast i saw resembled a leopard, but had feet like those of a bear and a mouth like that of a lion. the dragon gave the beast his power and his throne and great authority� (revelation 13:1-2, niv). linking this with daniel�s similar one (daniel 7:16-24), it is concluded that some sort of world system will be installed by the beast, the most powerful �horn�, who will defeat the other nine. the tennation empire is also seen in daniel�s image of the statue in daniel 2:41-42, where he pictures the final world government consisting of ten empires represented by ten toes of the statue. changes in government the bretton woods conference of 1944 served as a catalyst for many organizations that oversee the financial transactions of our global economy today. the purpose of the conference was to stabilize and reorganize the world economy. out of this conference, the international monetary fund (imf), the world bank group, and the general agreement on tariffs and trades (gatt) were formed; on january 1, 1995, the world trade organization (wto) replaced gatt (www.wto.org). in december 1945, the articles of agreement for the imf was signed by 29 governments (imf.org) the imf has a strategy to centralize control of international finance. in the event of an international crisis, it would be easy for the imf to step in and seize control of the nations� currencies and economies. the world bank gives low interest rate loans to developing countries. the establishment of these groups created a surge in international banking and global lending. in 1945, the united nations was formed by 51 member states. within 10 years, the membership had grown to 76 members. the membership continued to grow, and by the 50th anniversary of the un, the membership had reached 193 members. the purpose of the united nations is to ensure peace, promote humanitarianism efforts, and enforce international laws (www.un.org). many believe that the formation of the united nations is related to biblical prophecy. the role that the un plays in the global political environment is indicative of the move to a one-world government. another prophecy connected with the united nations is in revelation 17-18 where �babylon the great� is condemned. babylon the great in end-times is an assembly of nations attempting to unite 100 american journal of management vol. 17(3) 2017 against god. in 2009, the largest and most expensive u.s. embassy in the world opened in baghdad, 53 miles from babylon. the 104-acre, twenty-seven-building complex is situated on the banks of the tigris river (www.cnn.com). in his book, �the coming economic armageddon�, david jeremiah states, �today the united nations educational, scientific, and cultural organization (unesco) is also pumping millions of dollars into babylon. with the help of private donors, the un hopes to turn babylon into a thriving center of tourism and commerce. if everything goes according to plan, babylon will be a cultural center complete with shopping malls, hotels, and maybe even a theme park� (jeremiah, 2010). in the book of revelation, john records the following: �after this i saw another angel coming down from heaven. he had great authority, and the earth was illuminated by his splendor. with a might voice he shouted: �fallen! fallen is babylon the great! she has become a home for demons and a haunt for every evil spirit, a haunt for every unclean and detestable bird� (revelation 18:1-2, niv). bible scholars predict that there will be a rebuilding of babylon, or the region of babylon. babylon will be one of the three capitals of the final world leader, the antichrist. the political world will be ruled from rome (revelation 17), the religious world from jerusalem (2 thessalonians 2), and the economic world from babylon (revelation 18). the world trade organization is comprised of 162 member countries. the purpose of the wto is to help manage and regulate the global marketplace. the wto administers trade agreements, oversees trade negotiations and disputes, and helps develop trade policies. thirty-five countries have joined the wto since 1995(www.wto.org). organizations such as the united nations, the world trade organization, and the international monetary fund promote an arrangement encouraging a one-world government. anti-globalists argue that if a country turns to the imf and the world bank for financial assistance, they will be required to essentially abandon their national sovereignty. these organizations will supposedly do away with the need for diverse world governments. objectives include a sense of unity, oneness in politics, religion, moral values, and the use of a single, world-wide currency (jeffrey, 2009). the european union (eu) the modern european union began when six nations signed the treaty of rome in 1957. on february 7, 1992, the 12 nations of the european community signed a unity treaty paving the way for fulfillment for the full political union of europe. �the significance of the new treaty is that it sets in motion europe�s desire to increase its international political force in proportion to its growing economic clout. it also set in motion plans for monetary union, including a central bank and a single european currency� (lahaye & hindson, 2007). in 2015, the eu was comprised of 28 members (europa.eu). the unification of these countries created free trade and the potential for a unified form of government. the revived roman empire � eu most victorious empires from history immersed themselves into the culture, tradition, and technologies of the nations they conquered. the roman empire was different. they required their governors to crush the laws, religion, language, and society of every nation conquered. rome replaced existing cultures with roman laws and cultures. the impact of rome on western societies is unprecedented. after thousands of years, europe, the middle east, and even north america have retained forms of government, language, culture, and laws derived from those of ancient rome. the biblical prophets predicted that rome would rise again to world dominance at the end of the age. the idea of a revived roman empire seems unfathomable at this point in time. many of the eu countries are in a major financial crisis. the bible does not specifically say that the new empire will be centered in rome, but the belief is that the area of rome will be the new financial capital. within the past week, the united kingdom voted to leave the european union. the speculation is that many other eu countries will follow. if so, this may very well be the beginning of the revived empire described in the book of daniel. american journal of management vol. 17(3) 2017 101 the idea of the united kingdom leaving the eu leaves financial analysts and economic experts scratching their heads. the financial impact that this move will have has yet to be determined. even though the uk deciding to leave in what was a very close vote makes little economic sense, it makes perfect sense prophetically. before the vote, the european union was comprised of 28 nations. bible prophecy indicates that there will be a major financial and political crisis that will pave the way for an economic leader and political leader to take control and rectify the woes of the world. the changes that have taken place give europe the potential to become a unified power, both politically and economically. changes in currency the us dollar is the most widely used currency in the world. many countries accept it as an alternative to their own currency. both ecuador and el salvador adopted the us dollar in 2000. in 1999, the euro became the second most important currency in the world, replacing twelve other currencies (www.globalfinancialdata.com). to date, 19 countries use the euro as their currency (ec.europa.eu). the euro simplifies foreign exchange problems and thereby reduces significant currency exchange costs. adoption of the euro paved the way for fully integrated europe-wide tax systems as well as common fiscal and monetary policy. even though there has been a huge consolidation of currencies taking place globally, the move to a cashless system is being implemented. from an economic standpoint, this is a natural evolution of the way to do business. from a prophetic standpoint, these events are not random. there is a network being put in place that can monitor and control every financial transaction. this same system will eventually be used to monitor and control the distribution of goods and services, including the world�s food supply. one day this financial network will be controlled by one person, the one who the bible calls the beast: �he also forced everyone, small and great, rich and poor, free and slave, to receive a mark on his right hand or on his forehead, so that no one could buy or sell unless he had the mark, which is the name of the beast or the number of his name� (revelation 13:16-17, niv). it is important to note that the use of one global currency is a significant part of the prophecy of what will take place in the end times. in order for the world leader, known as the antichrist, to rule economically, he will need to have a method to control all financial transactions. with the rapid changes in technology and the global acceptance of cashless transactions, the financial system is being constructed in order for these events to take place. conclusion until our generation, it has been impossible for any one person or government to completely control the world�s economic system. the changes that have taken place over the past 50-60 years economically and politically have paved the way for a unified government and unified economic system. with the growth in the united nations and the major changes in currency, the foundation has been laid for biblical prophecy to be fulfilled. the most recent changes in the european union leave bible scholars watching for more changes to see if a revived roman empire will come to fruition. the changes have been gradual, and in the eyes of the world, have just been part of the normal course of business. globalization has become commonplace. changes in technology excite the average consumer by creating conveniences never before experienced. the integration of global culture, politics, and economies are embraced worldwide. however, the prophecies of the writers of daniel and revelation are being fulfilled before our eyes. these changes that are taking place have been part of a carefully crafted plan that was written about thousands of years ago. 102 american journal of management vol. 17(3) 2017 references dougherty, j. �new american embassy opens in baghdad,� cnn.co [online], http://www.cnn.com/2009/world/meast/01/05/iraq.main/index.html (accessed 26 june 2016). �european union�, http://www.fact-index.com/e/eu/european_union.html (accessed 10 june 2016) globalization (noun). merriam-webster online. retrieved from: http://www.merriamwebster.com/dictionary/globalization jeffrey, g.r. (2009). shadow government. colorado springs, colorado: waterbrook press. jeremiah, david (2010). the coming economic armageddon. new york, ny; faith words. lahaye, t. & hindson, e. (2007). global warning. eugene, oregon: harvest house publishing. member countries of the eu; fact file: membership; retrieved from: http://europa.ed/abouteu/countries/index_en.htm prophecy (noun). merriam-webster online. retrieved from: http://www.merriamwebster.com/dictionary/prophecy taylor, i. �global history of currencies�, global financial data [online], www.globalfinancialdata.com/news/ghoc.aspx (accessed 26 may 2016). united nations; growth in membership; retrieved from: http://www.un.org/en/sections/memberstates/growth-united-nations-membership-1945-present/index.html world trade organization; fact file: membership; retrieved from: https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm ajm 18(3) master2.pdf ajm 17(1) master-lulu-revised.pdf american journal of management vol. 17(1) 2017 19 resource-based theory, competition and staff differentiation in africa: leveraging employees as a source of sustained competitive advantage paul j davis kazakh british technical university ewan simpson kazakh british technical university this paper reports upon a research project designed to identify the extent to which and in what ways human resource (hr) managers in africa view employees as a source of potential sustained competitive advantage (sca) and whether resource-based theory (rbt) is being applied in practice. a qualitative research methodology is adopted, specifically a constructivist grounded theory research method (gtrm) approach. data were collected through fifty-six semi-structured interviews from may 2015 through may 2016 with hr managers from 17 sub-saharan african countries. while the interviewees were not aware of rbt or consciously applying rbt principles and practices, many did see the potential for adopting a rbt model and the benefits it could deliver employees and the organization. however, some interviewees were skeptical of rbt and in all organizations represented by the sample there are many barriers to developing and implementing a rbt model. the study has advanced our knowledge of rbt in emerging african economies. the paper highlights a number of potential future research opportunities and acknowledges some of the study's limitations. there are potentially significant practical implications for companies in terms of maximizing employee capability and competitive advantage; opportunities currently being missed. there are implications for employees in terms of their development, job design and engagement and for hr managers developing hr strategy. the authors contend that this is the first empirical, multi-country study of resource-based theory in africa. introduction globalization and the boundary-less organization have increased competition and accentuated the importance of good employees to business success. to compete successfully in the globalizing world, employees� knowledge and skills must be maximized and fully utilized (whelan & carcary, 2011;collings & mellahi, 2009; lewis & heckman, 2006). an important part of this is the identification and deployment of employee capabilities to meet strategic and productivity targets (nilsson & ellström, 2012) and managers must be the orchestrators of effective employee capability application to the business' needs. according to ellehuus (2012), business leaders who are effective at managing employee talents 20 american journal of management vol. 17(1) 2017 can generate revenues and profits up to seven percent greater than their counterparts who are less successful in this task. in africa the current outlook for organizations seeking to maximize the effectiveness of their workforce is bleak. companies are struggling to find, develop and retain the quality employees they need (kamoche et al., 2015) and this challenge is weakening their ability to compete (spies, 2011). companies here face numerous impediments to maximizing the potential of their workforce. these challenges include a lack of investment in formal employee training and development (mitra et al., 2011; webster & wood, 2005); low competency in skills considered critical to competitive work-forces (mitra et al., 2011); adoption of western talent management practices which align poorly with african organizational contexts (bagire, 2015; silva et al., 2015); poor working conditions and low financial compensation (webster & wood, 2005); corruption (everhart, 2010; okpara & wynn, 2008); tribalism, aids and resistance to change (okpara &wynn, 2008); poor recruitment and promotion practices (okpara &wynn, 2008; webster & wood, 2005). in addition, the continent has a scarcity of educated, skilled labor (kock &burke, 2008; (ghebregiorgis &karsten, 2006). the following section will demonstrate that there is significant evidence that under certain circumstances a company's internal resources, particularly differentiated employee competencies, can be a source of sustained competitive advantage (sca) for organizations. this is the basic premise of resource-based theory (rbt). the nature of the competitive advantage that organizations can derive from employees is impressively diverse. in africa, for example, this has included achievement of organizational goals and improved organizational performance (ijigu, 2015; al damoe et al., 2013; akinyemi, 2012; dimba, 2010). furthermore, there is sufficient evidence from africa that employee skills, knowledge and attitudes that are strategically deployed alongside well aligned and integrated broad hr initiatives have a compensative effect on other forces conspiring to mitigate the impact of employee contribution (schlechter et al., 2015; onyema, 2014; ihionkhan & aigbomian, 2014; akinyemi, 2012; oladipo & abulkadir, 2011). therefore, the problems caused by, for example, a shortage of labor or endemic corruption, can be somewhat alleviated by better strategic application of the current workforce's full potential. the point is that organizations can do little about a culture of corruption or a continent-wide skills shortage, but they can indirectly address the frustrations such shortcomings create through innovative approaches to human resource management (hrm) strategy and practice. this paper reports upon a study investigating the awareness and perceptions of rbt among hr professionals in the private sector in africa. specifically, the study explores the extent to which rbt is understood and applied in practice and whether african hr professionals believe that employee competencies can be a source of sustained competitive advantage for african companies. hr practitioners were specifically chosen as the subjects for the present study because hr practitioners are the bridge between sca sourced through employees and the design and development of initiatives which enable and maximize employee contribution to the organization. the significance of the role of hr in this respect has been widely documented, including in africa (singh, 2014; al damoe et al., 2013; adomako et al., 2013; ofori et al., 2012; anifowose et al., 2011; bagraim & sader, 2007; pietersen & engelbrecht, 2005). literature review resource-based theory and competitive advantage rbt is concerned with the idea that a firm�s internal resources can become a direct source of sustained competitive advantage (sca) for the firm. this is distinct from traditional notions of competitive advantage popularized first by porter (1985) which stressed competitive advantage was attained for the firm through external means such as products, location or customer base.sveiby (2000) draws the distinction that while traditional views of competitive advantage, such as porter's, are productbased, rbt is knowledge-based. the notion that a firm�s human resources could be a source of sca dates to 1984 (fahy, 2000; wright & mcmahan, 1992) although it seems not to have gained much momentum as a mainstream theory in the academic literature until a decade later. american journal of management vol. 17(1) 2017 21 to enable employees to become a source of a firm�s competitive advantage, it is necessary to affirm several principles that underscore the link between a firm�s human resources and its business strategy. according to karami et al., (2004) there are four principles that link the two: 1. the firm must seek to ensure that it has capable and committed employees; 2. the firm must commit to the strategic importance of human resources to the success of the business; 3. human resource activities must be managed by specialists; 4. human resource management is integrated into business strategy. in addition to the above, a firm�s employees must also possess certain characteristics. wright and mcmahan (1992) claim that in order for a firm's internal resources (human or otherwise) to provide sca, four criteria must be attributable to the given resource: (a) the resource must add value to the firm, (b) the resource must be unique or rare among current and potential competitors, (c) the resource must be impossible to imitate perfectly, and (d) the resource cannot be substituted with another similarlyfunctioning resource by competing firms. commonly expressed in the literature as vrin/o (valuable; rare; inimitable; non-substitutable with the organization in place to apply them). 'having the organization in place' means having capable management in the organization is necessary . it also means more generally that the organization's systems, procedures, policies, structure and other internal elements must be organized and aligned in ways which support internal resources being able to be used strategically. chew et. al., (2008) call this the process of organizing resources into capabilities. resources themselves, the authors claim, only have the potential to create sca but need to become organizational capabilities before they can add value. according to yang and conrad (2011) rbt is concerned with organizational performance heterogeneity. the objective is to bring together a range of internal resources which combined and deployed strategically can create competitive advantage for the organization. internal resources include various types of capital: physical capital (buildings; machinery; stock); financial capital (investments; cash reserves; operating capital); human capital (the knowledge, qualifications, skills and experience of employees) and corporate capital (trademarks; patents; systems). yang and conrad (2011) explain that these resources become valuable when they are used to enable the organization to implement its business strategy. it is through the implementation of business strategy that sustained competitive advantage (sca) can be achieved. leiblein (2011) has observed that rbt is premised upon two observable truths. firstly, firms vary in their ability to control, access and organize productive resources. secondly, firms' differences in resources and resource management at least partially explain performance differences among close competitors. the nature of resources and resource management are the two main issues that this section will address. strategic business applications there have been a number of studies which have shown the strategic value of rbt to organizations. sveiby (2001) found that rbt can inform the process of strategy formulation for businesses and act as a guide for strategic decision making and even setting the strategic direction for a business. he argues further that rbt provides a reason for the full realization of the importance of knowledge sharing and then converting this knowledge into actionable business strategies. other researchers have conducted studies that point to numerous specific ways that rbt can add to strategic decision making in different organizations. shook et al., (2009) found that rbt is a valuable perspective from which to understand strategic sourcing issues in manufacturing and services industries. the authors found that using rbt these businesses could improve the efficacy of important strategic decisions such as deciding between whether to manufacture, purchase or ally. they also found rbt was able to guide decisions such as selecting the right suppliers and deciding how many suppliers was optimum for different processes. the findings of the study conducted by shook and colleagues are supported by a similar study of ninety-three textile and clothing firms in italy (ordanini &rubera, 2008). they discovered a positive correlation between a firm's internal resources, including human resources, and key decision making capabilities in procurement. in other words, rbt when translated into practice improves strategic decision making in the business buying process. another link between rbt, human resources and strategic planning was the conclusion of knott (2009). he found that rbt provides for the development of several models which organizations can use 22 american journal of management vol. 17(1) 2017 to analyze their internal resources for the purposes of strategic planning exercises and decision making. these models, applying rbt, can outline an integrated set of steps which act as a map for management practitioners to base decisions on. in one of the earlier studies on the strategic applications of rbt in organizations, olavarrieta and ellinger (1997) discovered the theory is very useful for understanding strategic logistics because an organization's logistics possesses some of the same characteristics as rbt: elements of uniqueness and fairly inimitable. the authors argue that these characteristics help companies gain competitive advantage from their logistics capabilities. this is especially true in logistics activities such as strategic partnerships; outsourcing and location decisions. therefore, rbt's central tenants can be mapped across to logistics and provide a guide for decision making. similarly to the above mentioned study, bourne et al., (2003) argue that rbt provides a fresh and insightful perspective to better understand operations management generally. they point out that traditionally areas such as operations management have been conceptualized through external theories of competitive advantage. however, they contend that external, market-based theories of operations management decision making are insufficient and that rbt provides a more valuable viewpoint from which to assess such business issues and make strategic decisions. das and teng (2000) also found rbt a useful framework for operations management decision making. they highlight the theory's applicability to better understanding strategic alliances between firms such as joint ventures and partnerships and that rbt can help identify which kind of strategic alliance is likely to maximize competitive advantage through the pooling of internal resources. the final strategic business application where rbt can play an important role is marketing strategy. hunt and derozier (2004) say that rbt grounds theories of marketing strategy because rbt is a differentiation-provoking theory of competitive advantage. one example of this is that rbt demands unique and inimitable resources (such as skilled and creative employees) as prerequisites of attaining competitive advantage. employees are key to the creation of goods and services for the marketplace which marketers must promote. therefore rbt acts as an anchor for marketing strategy because it is constructed of principles which support marketing efforts. business improvement applications this next section provides some examples from the literature that show rbt has good application to business improvement and organization development. the first three studies relate how rbt can be applied to improving all-round quality in business systems and processes. quality assurance is important for achieving competitive advantage and for business sustainability. ooi et al., (2009) conducted research especially interesting to this research project because they showed how rbt can be applied to integrate hrm and total quality management (tqm) in organizations. they developed a model which shows the relationships between quality management and human resource management. most significantly, the research found that when integrated, hrm and tqm combine to positively impact on knowledge management (km) outcomes. the central point is that both hrm and tqm are essentially based upon knowledge-driven principles and systems and so when fully integrated they combine to produce better knowledge creation, sharing and dissemination within an organization. another study that found a positive relationship between hrm and tqm was conducted using private companies in sri lanka (wickramasinghe, 2012). this was a study of seventy-seven export-based firms which had international quality assurance accreditation and formal tqm programs in place. the study found that these firms had consciously upgraded the status and role of hrm in the business to support tqm programs. in these companies rbt identified human resources as a form of competitive advantage through tqm programs and so leveraged personnel skills and knowledge and provided enhanced development for employees. a different example where rbt was used to improve quality was in a us call center (jack et al., 2006). in this case the call center wanted to identify the kinds of operational challenges that managers face that might impact on their ability to improve service quality. the call center developed an analytic framework based upon rbt and found the framework very helpful in identifying human resource based management decisions that had an impact on service quality. american journal of management vol. 17(1) 2017 23 rbt has also been applied successfully to organizational change initiatives. alas and sun (2007) conducted a study where they held structured interviews with 160 managers in firms in northern china to identify how employees contributed to organization change projects. they concluded that generally the knowledge and skills of employees were ignored by chinese managers during change and that managers used coercion and manipulation on employees to bring about change. this was found to increase employee resistance to change efforts. the authors concluded that rbt could be used to inform managers of the value of employees during change initiatives and that a rbt change-based model would ensure change is better managed and more successful. other business improvement and organization development areas where rbt has been applied include at a major us food services company. lewis et al., (2010) report that at a large, well established food services company in america, a rbt inspired framework achieved faster product development cycles than had been achieved using more traditional, market-based theories of competitive advantage. hazen and byrd (2012) discovered that a firm's information technology (it) is critical to sustaining competitive advantage and that good it depends upon human capabilities and integration with other internal firm resources such as other systems and process. rbt was applied to understand how it can be developed and maintained for competitive advantage. rbt has also been applied successfully to help firms expand and develop. zubac et al., (2012) demonstrate that rbt can provide for a model to help inform business owners and senior management where best to invest capital in the company for maximum returns. rbt can help identify which internal resources might return the highest value as a result of internal investment. such a model can compare and contrast the different strengths and opportunities of various internal resources. another study that applied rbt to business expansion and revenue generation was conducted on uk food retailers (ellis-chadwick et al., 2007). the researchers studied the development and expansion strategies adopted by grocery retailers for creating sustained competitive advantage (sca) in online grocery retailing using a rbt model. they found that it infrastructure was only one part of what determined online selling success and that internal human resource capability was more important for the success of online retailing. specifically, these capabilities were identified to be: strategic thinking, innovation, competitor analysis and risk taking. a similar finding to the online grocery retailing was made by wan et al., (2011). here the authors discovered that rbt can be applied to direct decision making regarding business diversification initiatives. a rbt framework can allow the firm to assess and maximize internal resources such as personnel and then capitalize on these resources by identifying ways in which the competencies of these resources can be transferable to related businesses and so pave the way for business diversification. an example might be that human resource capabilities within a hotel would allow the hotel to exploit opportunities to open restaurants. the final business improvement or business development application presented here where rbt has been found to have merit is corporate social responsibility (csr). in recent years the literature reflects that csr has become an important initiative for firms of all sizes. mcwilliams and siegel (2011) found that rbt can be applied to helping organizations develop csr initiatives because both csr and cbt have the same prime objective which is to deliver sca to the organization. the authors state that rbt models can identify in which ways and to what extent an organization can engage in specific csr activities for maximum financial and non-financial (reputation building; community goodwill; brand promotion and so forth) return on csr investment. rbt models can identify, for example, strengths of employees and their various out-of-work interests that can be a match with providing useful support to specific charitable or non-profit community organizations. this study's findings have been supported by other research (gallego-alvarez, et al., 2011) that has also found rbt provides a frame for better understanding csr practices and how they can return value to the organization. human capital applications this final section on the applications of rbt in organizations looks at how rbt models and frameworks can be applied to better understand human capital related business issues. early examples of 24 american journal of management vol. 17(1) 2017 rbt as a step to improving human capital outcomes in organizations focused on workplace learning. smith et al., (1996) provide one of the earlier research studies on rbt and workplace learning whereby they developed an integrated model of the two. they proposed that rbt and workplace learning espouse the same principles of inimitability, inherent value and complex semi-permanence. this therefore means that rbt principles and workplace learning ideals can be integrated to develop learning interventions that can potentially be a source of direct competitive advantage for the organization. later, davis and hase (1999) applied this approach in the construction industry to change the perception and approach of that industry towards workplace learning. they found that a rbt inspired approach was able to shift the nature of learning in construction from management control to employee-centered. this transition was achieved by demonstrating that employees can be a source of competitive advantage when developed in ways which empower and liberate them to think and act more freely. this meant managers releasing their control over learning processes and transferring more of the responsibility for learning to the employees. according to weissenberger-eibel and schenk (2009) firms that appreciate and understand rbt can apply it to encourage the development of km initiatives within the business. the relationship is a cycle: a good grasp of rbt theory can produce models which can then nurture and steer km initiatives. km initiatives foster innovation through knowledge sharing, experimentation and strategic knowledge deployment; innovation is necessary for achieving competitive advantage. knowledge management is especially important to rbt in action because it is one way in which firms can use employees to gain competitive advantage. two final applications of rbt to human capital issues in organizations are entrepreneurship (andersen, 2012) and financial reporting (abhayawansa and abeysekera, 2008). the first study applied a rbt framework to analyze types of entrepreneurship in small businesses in sweden. anderson surveyed 186 small businesses and identified six distinct types of entrepreneurship. he argued that typically the literature uses just one definition to explain all types of entrepreneurship. anderson explained that by applying rbt it is possible to identify complexities and subtleties in seemingly homogeneous concepts such as entrepreneurship and therefore rbt is valuable as an analytic tool to explore more thoroughly problems and opportunities. abhayawansa and abeysekera (2012) studied the issue of human capital disclosure on financial statements of firms. this means the annual financial reports that listed companies must make publicly available. they applied a rbt framework to conceptualize a more appropriate view of human capital to meet the demands of the market (presumably analysts and investors). they found that the current approach to compiling financial statements lack detailed information on the organization's human capital. the authors state that such information is important to external parties who may use the financial statements of companies to make decisions such as, presumably, buying stock. using a rbt analytic model the authors showed how human capital could be better reported that shows the value of employees to a company's worth. such detailed reporting would provide higher quality information on which the market could make investment decisions. resource-based theory and competitive advantage this section will address the specific ways in which rbt can be applied to achieving competitive advantage through employees. this section of chapter five is especially relevant to hrm practitioners in organizations. it is they who must usually coordinate the programs and initiatives through which employees might achieve competitive advantage for the organization. it is hrm practitioners that best understand how employees can be enabled to make maximum contributions through their daily work. hrm practitioners have most influence over the proposal, design and implementation of policies that frame work practices. and hrm practitioners guide and advise management on bigger organizational decisions that can either advance or hinder employee achievement, loyalty, morale and commitment and in turn impact on organizational effectiveness. this section will show how other organizations have taken rbt, developed practice, and achieved good results for their organizations by utilizing employee abilities in progressive ways. american journal of management vol. 17(1) 2017 25 there is little doubt that valuable employees who are well managed have an impact on their organization's fortunes. masakure et al., (2009) assessed the financial performance of micro-enterprises in ghana applying a rbt model and found that differentiated internal resources had a positive impact on firm performance. this is precisely the claim of rbt; where internal resources, such as employees, are 'differentiated' (vrin/o) they can have a positive impact on firm performance by creating competitive advantage. the point made about employees being well managed is very important; even highly rare and inimitable internal resources will be useless if their potential is not recognized by the organization's senior decision makers and then appropriately acted upon. kraaijenbrink et al., (2010) explain that at first managers must identify the potential of an internal resource to be utilized for competitive advantage. leiblein (2011) has said that it is precisely because firms do vary in their ability to harness the resources they have that: "there is a positive role for management in leveraging, accessing or developing scarce resources for the organization." (p. 911). management's ability to correctly make best use of internal resources will ultimately influence the impact those resources will have on firm performance. the first way in which rbt can be applied specifically to employees for the purposes of utilising their skills and knowledge for competitive advantage is through competence development. clardy (2008) for instance suggests that rbt be the basis for organizations to develop business competencies so that competencies are focused on achieving competitive advantage. these should then be cascaded down to employees and inform the nature of the competencies they are developed to achieve. in this way, leadership and general employee training and development programs can be designed to skill people with the mindset and abilities to work in ways that contributes to organization competitive advantage. hunt and madhavaram (2012) pick up from clardy by suggesting that rbt frameworks can be practically applied to facilitate managerial actions and decisions. they state that managerial actions are known to influence performance and provide examples of such actions including: acquisition of customers; introduction of new products; business expansion; entering into business partnerships and takeovers. all such actions and the decisions that lie behind them would necessarily be based in competencies learned through development or experience. therefore, employee competencies will predict certain actions and decisions that, if well chosen, can influence competitive advantage and firm performance. an example to illustrate the point being made is provided by menguc and barker (2005) where a rbt framework and methodology was applied to understanding the importance of sales skills of fieldbased sales managers. the study analyzed managers across 102 large canadian organizations. the study concluded that good sales skills have an impact on firm performance through creating competitive advantage because good sales skills are vrin/o. it is not only the capabilities of managers and their actions that influence the fortunes of organizations. khandekar and sharma (2005) examined the links between hr capabilities, organizational performance and sca. they sampled 300 line and hr managers in nine indian and foreign global companies operating in india. they discovered that hr capabilities or competencies are positively linked to organizational performance in that those companies with best developed hr systems and practices were performing most well. further; hr capability was found to be a significant predictor of sca. the hr capabilities that had particular impact on organizational performance included: attracting and retaining the required people; developing employee expertise; rewarding employees; encouraging knowledge sharing across the business. before looking at the two main opportunities for organizations to leverage employees for competitive advantage, there are three studies to mention that show the diversity of ways in which employees can influence competitive advantage. the first study looked at the entrepreneurial behaviours of some employees within organizations. the study (alvarez and busenitz, 2001) found that employees who display entrepreneurial behaviours uniquely contribute to creating competitive advantage. the study considered entrepreneurial behaviours including creativity; innovation; experimentation and risk taking. entrepreneurial employees perceived the organization and its resources differently; they saw opportunities to maximize resources that other employees did not see. the authors noted that entrepreneurial employees were better able to integrate internal resources and internal resource heterogeneity is a fundamental principle of rbt. 26 american journal of management vol. 17(1) 2017 in an italian study of hyper-growth firms, cassia and minola (2012) applied rbt in an attempt to identify what factors influence how firms can achieve hyper-growth. they identified two main factors: able to exploit extraordinary business opportunities and extraordinary knowledge-based internal human capital resources. the finding of the study is, in part, that truly exceptional employees can help a firm achieve truly exceptional results and so the extent to which your knowledge-based workers are vrin/o seems proportional to the extent of the success the firm can enjoy (if exceptional business opportunities exist to be exploited). the third example that illustrates the broad diversity of the ways in which employees can impact on firm performance and competitive advantage is a spanish study. pertrusa-ortega et al., (2010) conducted a study of large firms in spain to identify how organizational structure might affect firm performance. the study concluded that organizational structure does not exert a direct influence over firm performance but an indirect influence when observed from a rbt perspective. the authors stated that organizational structure can be a vrin/o resource from which a company can derive competitive advantage over rival companies. research design the research project adopted a qualitative methodology and specifically a constructivist grounded theory research method (gtrm). the constructivist method has been largely developed by cathy charmaz (2006; 2007; 2008; 2014) and this project has applied her guidelines on data collection and analysis. semi-structured interviews were selected as the data collection method because, as brinkmann (2014) has noted, this is the ideal form of investigation to understand people in organizations, their work experiences and the challenges they face in their jobs. semi-structured interviews are also well suited to the principles of constructivism (brinkmann, 2014; cooksey & mcdonald, 2010); the gtrm approach (bryant, 2014; urquhart, 2013; creswell et al., 2007). data collection and analysis were conducted simultaneously (charmaz, 2014) and data were sorted and analyzed using a coding process also detailed by charmaz (2009). part of the coding process also made use of memoing (saldana, 2014; 2012). this process assists the researcher to reflect upon and link data during the analysis phase. participants were sourced through convenience sampling in that they were participants in executive workshops designed and delivered in johannesburg and cape town by this paper�s lead author. during a series of workshops over a twelve month period, fifty-six hr managers from seventeen sub-saharan african countries participated in interviews. thirty-one participants were female; twenty five male. they ranged in age from twenty-six through to fifty-three and held various managerial positions from front-line supervisor through to director level in hr. the least experienced participant had three months experience as a hr manager and the most experienced had twenty-two years experience in hr and personnel management roles. participants came from seventeen countries: south africa; malawi; lesotho; swaziland; namibia; botswana; zambia; mozambique; tanzania; kenya; nigeria; cameroon; angola; ghana; gambia; uganda and rwanda. all participants worked in the private sector in a range of industries including financial services; transportation; retail; utilities; education services; construction and fmcg. the interviews were based around five questions which were derived from the literature review and specifically the principles of rbt and vrin/o detailed earlier. the questions were: 1. what do you know about the resource-based theory of competitive advantage? 2. do you believe that employee competencies such as skills and knowledge can be a source of sustained competitive advantage for the organization? 3. does your organization currently derive sustained competitive advantage from your employees and if so, in what ways? 4. what needs to change or improve in your organization to better utilize employee competencies to better achieve sustained competitive advantage? american journal of management vol. 17(1) 2017 27 5. what internal or external challenges need to be addressed that may inhibit achieving sustained competitive advantage through your employees? findings and discussion the interviews revealed that only two of the interviewees had a good understanding of rbt and how it can be applied in organizations. both of these interviewees held higher degrees, had work experience in the uk and held subscriptions to western hr associations. this was found to explain their knowledge of rbt. several respondents had some general idea of internal resources� applicability to helping organizations achieve sca. in other words, they generally recognized that employees with valuable and differentiated skills could use these skills to help the organization to compete. for example; one respondent identified product development and advanced customer relationship skills as ways employees could help the organization gain sca. however, the overwhelming responses in the interviews revealed that the participants did not know anything about rbt principles and practices. most were aware of porter�s work on competitive advantage but did not know about the value of internal resources to sca. there was evidence that about one-third of the participants� organizations were engaged to some extent and at some time in practices that facilitate the achievement of sca although this was not deliberate or done knowingly. these practices included participative management; employee engagement; self-directed work teams; employee empowerment initiatives; cascading decision making to lower levels of the organization and some innovative approaches to career development and employee learning. however, there was no formal, written or agreed plan to use employee competencies gained through such initiatives specifically as a means for gaining sca and any sca achieved would have been coincidental. there was no measurement of how any of these practices might be returning sca for the organization. the interviews revealed that there was almost no measurement of hr initiatives beyond very basic feedback from employees attending training programs. interviewees mostly did not know how to objectively and systematically measure their initiatives and indicated that there was no expectation from senior management to do so. indeed; more than half of the interviewees said that they played no real strategic role in their organization and that their tasks were limited more to transactional hr and serving business units needing to hire and fire employees or sourcing training for business units. three participants even commented that hr need not be a strategic business partner to fulfill its obligations to the organization. twelve interviewees said that their attempts to develop hr as a strategic business partner for their organization were thwarted by line managers and senior managers who just wanted hr to serve immediate employee needs and issues such as writing up employment contracts and processing time sheets. most participants did see some merit in adopting models, practices and frameworks to target sca through employee competencies once rbt had been explained to them. many interviewees seemed genuinely interested in the topic and several asked the interviewer for more information such as websites and books on the topic. many participants were able to articulate where they could see opportunities in their organization for rbt to be applied and where it could overcome existing problems such as employee apathy; turnover of talented employees; excessive bureaucracy and improved customer outcomes. however, about a quarter of participants were skeptical about rbt in practice and its ability to achieve sca for their specific organizations. the reasons for this were numerous and included organizational culture; organizational leadership; availability of financial resources; challenges with measuring sca; employee commitment and internal organizational politics, business priorities and personal agendas of powerful organizational players. challenges identified relating to rbt included african culture; corruption; favoritism; nepotism; tribalism; bureaucracy and lack of support for initiatives that cost money and appear to have no immediate returns or are more opaque than concrete. the research identified that rbt and sca through employee competencies are little understood and little appreciated. there is considerable skepticism around rbt in practice and organizations appear to be currently ill suited to adopt rbt in terms of their mindset and internal organization. hr managers felt 28 american journal of management vol. 17(1) 2017 that lack of support, knowledge, funds and employee commitment would conspire to see any concerted focus on rbt fail. in regards to the literature review it would seem that, based upon the interviews, african organizations are not deriving the benefits which many other organizations are in different parts of the world. the benefits that rbt has been found to deliver in connection with realizing sca include overall organizational performance including financial performance; the development of employee entrepreneurial behaviors; the accomplishment of strategic goals and formulation of strategic plans; improved decision making; assessment of business opportunities and the exploitation of opportunities; improved operations management; marketing of goods and services; organizational development; business integration such as incorporating tqm with other initiatives; developing knowledge management; facilitating organizational change; business growth and expansion; business diversification; corporate social responsibility; workplace learning; employee morale and engagement; improving managerial excellence. the skepticism expressed by the interviewees regarding the benefits of rbt in relation to sca are not supported by the considerable evidence that rbt has provide many advantages to organizations in disparate geographic regions and industries. it could be the case that african organizations in particular have more to gain from rbt than those in fully industrialized nations in more developed and competitive markets. as many african organizations are still in a developmental stage it is likely that those which do adopt rbt stand to gain a considerable advantage over those which do not. the literature review highlighted that many african organizations find it difficult to recruit, develop and retain talented employees and that there is a lack of training and poor incentives in many african organizations. additionally, issues like aids and tribalism further challenge organizations wishing to develop, grow and compete. against this operating environment, african organizations need ways to compensate for the factors which hinder the achievement of strategic objectives and rbt offers a very good way to help do this. the literature review also provided evidence that other hr initiatives implemented in african organizations have delivered valuable benefits which suggests that rbt could be another employee-centered initiative that would complement existing hr initiatives and be equally advantageous. research implications and limitations there are important implications arising from the research findings that deliberate application of rbt in practice is essentially absent from african organizations. there are implications for hr practitioners, employees, private hr business consultants, organizations at large and scholarly researchers. hr practitioners have an opportunity to expand their role and strategic contribution to their organization. the research findings indicate that there is work to do before launching in to any rbt initiatives. this work would include readying the organization for change by developing the organizational culture, gaining higher levels of employee commitment and support and engaging senior management through active participation in hr initiatives. the literature review also highlighted poor general hr practices also exist in many african organizations so there is a challenge to professionalize and integrate hr activities including recruitment, talent management and employee professional development. some of these challenges are likely to require outside help and so there exists an opportunity for private hr consultants to partner with organizations in achieving these objectives. this may also present a challenge to hr consultants to perhaps change their focus from existing consulting services to learn about rbt so that they can help organizations develop appropriate models and initiatives around rbt. for organizations and their senior leadership there are also implications. the research indicates that currently there are opportunities being missed to develop and grow organizations. initiating and leading change and integrating rbt initiatives into strategic planning present a challenge to leadership. organizations as a whole need to find ways to combat tribalism, the scarcity of talent and funds and deal with corruption. perhaps developing new vision and mission statements, re-working strategic plans and then cascading these into new key performance indicators for employees and new job descriptions could american journal of management vol. 17(1) 2017 29 be worthwhile endeavors. involving employees in these activities would be a way to engage their interest and encourage commitment and interest. it is important to state that the implications of doing nothing could have serious consequences into the future. as africa becomes more integrated into the global economy organizations will need to find ways to better compete with overseas organizations. employees� expectations regarding contribution to the organization and expectations of it will likely increase too. rbt is a way to serve both needs and a failure to act could cause organizations to fall further behind competitors for the best employees, for market share and for survival. this research project has also highlighted the need and opportunity for further scholarly research. there is very little known about rbt in the african context yet africa is a vast market and increasingly important in global business. researchers could consider further how rbt can be best applied given the unique cultural and environmental circumstances african organizations operate in. finally, the authors acknowledge the limitations of the present study. the sample size was small and the data limited to only interviews. north africa was not addressed by this study and the situation may be different there. further, data were only collected from hr managers and organizational leaders, for example, may have a different perspective on the issues of the research. a quantitative study, perhaps using a survey, could collect data from many more participants and would undoubtedly help to contextualize the findings of this 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(2012), �extending resource-based logic: applying the resourceinvestment concept to the firm from a payments perspective�, journal of management, vol. 38, no. 6, pp. 1867 � 1891. ajm 17(1) master-lulu-revised.pdf 34 american journal of management vol. 17(1) 2017 a risk assessment of intangible asset valuation: the post-hoc association between goodwill impairments and risk hazards in mergers and acquisitions peter l. lohrey the department of accounting & finance school of business montclair state university one normal avenue montclair, nj 07042 phone (973) 655-3514 lohreyp@monclair.edu james a. digabriele the department of accounting & finance school of business montclair state university one normal avenue montclair, nj 07042 phone (973) 655-7288 digabrielej@montclair.edu joseph nicholson the department of accounting & finance school of business montclair state university one normal avenue montclair, nj 07042 nicholsonj@mail.montclair.edu phone (973)-655-7514 abstract we tested whether the change from sfas 141 to sfas 141r/asc 805 had any effect on restatements due to goodwill impairment. our findings suggest that the implementation of sfas 141r increased the likelihood of a financial restatement by 2.5 times. board of director and audit committee involvement in the goodwill impairment decision reduced the likelihood of a restatement occurring. service industry companies were 3.2 times more likely to restate their assets due to goodwill impairment. companies who were audited by a big4 firm reduced the odds of restatement by 47%. american journal of management vol. 17(1) 2017 35 introduction accounting for goodwill has been an issue that has led to considerable disagreement for the past fifty years. disputes over goodwill accounting rules provided some of the major causes of failure for both the committee on accounting principles and the accounting principles board (apb). sfas 142/asc 350, goodwill, and other intangible assets was issued by the financial accounting standards board (fasb) in june 2001. it superseded apb opinion no. 17, intangible assets. the provisions of this statement were required to be applied starting with fiscal years beginning after december 15, 2001. sfas 142/asc 350, goodwill, and other intangible assets was issued concurrently with sfas 141/asc 805, business combinations, in june 2001. asc 805 introduced the purchase method of accounting. the confusion over how to interpret and apply these two statements led the fasb to issue sfas 141(r)/asc 805, in december 2007. it was released in order to ��improve the relevance, presentational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects.� sfas 141(r)/asc 805 also amended sfas 142/asc 350 to provide guidance on the impairment testing of acquired research and development intangible assets and assets that the acquirer did not intend to use. it became effective for ��business combinations for which the acquisition date is on or after the beginning of the first annual reporting period on or after december 15, 2008.� the center of the debate introduced by sfas 142 was the role of managerial judgment embedded in the statement. many prior studies such as ramanna and watts (2012), bens et al. (2011), and li et al. (2011) examined the effect of sfas 142 by focusing on goodwill impairment. the initial valuation of goodwill in a merger and acquisition has been a material source of restatements (ramanna and watts (2012), bens et al. (2011), and li et al. (2011). this paper presents the first attempt to examine whether the change from sfas 141 to sfas 141(r)/asc 805, had an effect on the reported earnings of combined companies when applying sfas 142/asc 350 to test for goodwill impairment in the merger and acquisition setting. we investigate the risks hazards associated with managements� estimates of goodwill�s in post hoc merger and acquisitions. we also expand on the literature which investigates corporate governance/audit committee/board involvement by examining the effect of the change from sfas 141 to sfas 141(r)/asc 805 � which requires the immediate expensing of acquisition costs. this in turn provided management with a greater incentive to allocate a greater portion of the purchase price to goodwill instead of intangible assets. we investigate whether audit committees and the boards of directors participate in the impairment decision process to test for the impairment of intangible assets and goodwill in business combinations under acquisition accounting. we accomplish this by comparing the frequency of impairment under sfas 142 � using two separate periods: pre sfas 141r vs. post-sfas 141r effective dates. finally, we investigate the effects of the implementation of sfas 141r on post merger and acquisition transaction goodwill restatements. this pronouncement required acquisition-related expenses to be recognized immediately and acquisition-related contingencies to be reported on the acquirers� financial statements in the same reporting period in which the transaction occurred. this manuscript is important for several reasons. first, the public company accounting oversight board (pcaob) continues to ask auditors to increase their risk assessment judgments in high hazard areas such as goodwill impairment (pcaob, 2010). second, christensen et al., (2012) suggest that future research in fair value accounting topics such as goodwill impairment provide a reliable contribution to the incremental knowledge demanded by standard setters and regulators. finally, this investigation provides important information for accounting (audit) educators. bell and griffin, (2012) and pcaob (2010), emphasize that auditor training should reflect heightened risk assessment that move beyond traditional audit checklist items such as intangible asset valuation. the paper is organized as follows: section ii provides the framework for the study, section iii describes the research design, sample selection, and statistical model, section iv presents descriptive statistics and bivariate measures of association, section v presents the logistic regression results, section vi presents a discussion of our results, and section vii concludes the study. 36 american journal of management vol. 17(1) 2017 review of literature and framework for study watts (2003) questioned whether the issuance of sfas 142 was consistent with the accounting principle of conservative reporting when he stated: �assessing impairment requires valuation of future cash flows. because those future cash flows are unlikely to be verifiable and contractible as a result, valuation will likely to be manipulated. conservatism does not allow the use of such measures, sfas 142 may be an error in judgment by the fasb.� while the authors offer an interesting perspective, their research did not identify the specific misjudgments of sfas 142. hayn and hughes (2006) examined whether financial disclosures on acquired entities allowed investors to predict goodwill impairment. they created a predictive model for goodwill impairment that was based on bankruptcy prediction models. hayn and hughes (2006) also suggested that the ability to predict goodwill impairment based on financial statement information was limited. they opined that the results were troubling because a number of financial statement disclosures do not allow auditors, investors and other users of financial statements to determine effectively whether managements� determinations of the purchase price amounts allocated to goodwill and the subsequent impairment of goodwill which leads to financial statement restatements. the limitation of the model created by hayn and hughes (2006) is that it relied on variables such as changes in return on assets, sales and premiums paid in an acquisition. a notable omission was the market capitalization of companies. hence, the relationship of market capitalization as it relates to goodwill restatements has yet to be investigated as being a risk hazard. there are mixed findings in prior research on market capitalization as a variable. majid and lode (2015), found that market capitalization alone was not a good proxy for goodwill impairment. however, when market capitalization was combined with operating results it became a starting point of reporting goodwill impairment (majid and lode, 2015). accordingly, we propose: h1: market capitalization is not a significant risk hazard for goodwill restatements. beatty and weber (2006) predicted that goodwill write-offs in the initial adoption year of sfas 142 varied based on ceo compensation, ceo reputation, asset-pricing, exchange de-listing concerns, and concerns relating to debt covenant violation. they found evidence to support that a firm�s equity market concerns affected their preference for above-the-line vs. below-the-line accounting treatment. they also found evidence to support that a firm�s debt is contracting, bonus compensation, turnover, and exchange de-listing incentives affected their decision to accelerate or delay expense recognition. finally, they found that the probability of taking a write-off is smaller for firms that have bonus compensation plans based on earnings which do not exclude the effects of special items. bens et al. (2011) analyzed the information content of goodwill write-offs before and after the adoption of sfas 142. they extended the expectations model used by beatty and weber (2006). bens et al. found that when firms recorded charges that exceeded the expected amount goodwill impairment, the market�s reaction was negative. when firms recorded impairment expenses that were less than expected amounts, there was no market reaction. they postulate that the market may believe that a greater impairment actually occurred, but that management is delaying its recognition. lee (2011) found that the ability of goodwill to forecast future cash flows got better after the adoption of sfas 142. he also found persuasive evidence that the reporting flexibility produced by sfas 142 was used opportunistically or informatively, in contrast to the prevailing view derived from the opportunistic reporting theory. lee�s results supported the view taken by the fasb that the removal of systematic amortization and the adoption of fair value estimates increased the emblematic believability of goodwill reporting. andrews, et.al. (2009) and nguyen (2013), argued that sfas141(r) would add to the complexity of financial reporting of companies in merger transactions and practitioners would have a difficult time implementing the directive. we propose: american journal of management vol. 17(1) 2017 37 h2: post sfas 141 application is not a significant risk hazard in goodwill restatements. h3: post sfas 141 r application is a significant risk factor in goodwill restatements. chtourou, bedard and coureau (2001) examined whether a firm�s corporate governance practices affected the quality of publicly released financial information. in particular, they investigated the relationship between audit committee and board of director characteristics and the level of corporate earnings management as determined by the level of positive and negative discretionary accruals. their results provided evidence that successful boards and audit committees limit earnings management activities. ramanna and watts (2012) pointed out that the �sfas 142 approach to goodwill accounting represented a significant innovation over prior practice and standards in that it relies solely on management estimates of goodwill�s current value.� these management �estimates� of goodwill�s current value have subsequently created even more discussion and confusion in the accounting periods that began on december 15, 2001. they go on to state �the current value of goodwill is a function of management�s future actions, including managers� conceptualization and implementation of the firm strategy. as such, it is difficult to verify and audit.� they also hypothesized that managers will exploit the sfas 142 impairment test in a manner that coincides with private incentives per agency theory. however, these studies failed to address the influence of the board of director�s or audit committee�s knowledge or involvement with impairment testing. accordingly: h4: the odds of a goodwill restatement are reduced with the board of directors and audit committee participation. gu and lev (2008) found that primary reason of many goodwill write-offs is the overpriced shares acquired by buyers at acquisition. they verified that: �(1) share overpricing is strongly and positively associated with the intensity of corporate acquisitions and the growth of accounting goodwill, (2) share overpricing is negatively related to the post-acquisition share performance of buyers, beyond the overpricing correction, indicating that many of these acquisitions are ill-advised, a prelude to goodwill impairment and, (3) share overpricing is positively related to the frequency and size of goodwill writeoffs.� they also showed that share overpricing predicted both goodwill write-offs and their magnitude � �� a finding of practical importance to auditors and investors � and that business acquisitions by overpriced companies � a strategy often recommended by investment bankers and some academics � is by and large a losing proposition for buyers� shareholders.� li et al. (2011) questioned whether firms that delay taking losses due to goodwill impairment have acted opportunistically. management�s subjective allocation of purchase price between intangible assets and goodwill may lead to opportunities for management to improve their own compensation by purposely managing earnings to have a positive effect on stock price. their empirical evidence suggested that overpayment for acquired targets could be a potential contributing factor to the subsequent goodwill impairment. they suggested that a future area of research for service companies as an industry, because theory implies their balance sheets should have a greater amount of intangible assets than manufacturers. accordingly, we test the hypothesis: h5: the odds of a goodwill restatement are greater for service companies than manufacturing companies. erickson, heitzman and zhang (2012) examined whether misreporting firms use acquisitions to conceal accounting irregularities. their results showed that fraud firms were more likely than non-fraud firms to make successful acquisitions during the period of supposed fraud. they also found that fraud firms increased the fraction of total investment expenditures allocated to acquisitions. misreporting 38 american journal of management vol. 17(1) 2017 acquirers were more likely to make diversifying acquisitions and purchase subsidiaries rather than standalone firms. these findings are consistent with those of ramanna and watts (2012), who conjectured that firms that avoided taking an impairment loss may have acted unscrupulously. the ramanna and watts (2012), study was one of the first to tie goodwill impairments with the financial aspects of acquisitions for which goodwill was paid, which in turn, provides an understanding of the causes of goodwill impairment. erickson, heitzman and zhang (2012) investigated how financial statement misreporting influences merger and acquisition decisions. they analyzed a sample of 283 firms accused of committing accounting fraud by the sec between 1985 and 2003. they found that fraud firms were more likely than non-fraud firms to acquire another company and are also more likely to acquire firms that have less public information, are harder to value, and have less similar operations. in the same research stream, davidson (2014) identified audits by big 4 firms were associated with fewer restatements due to accounting fraud. we use these studies as a basis to include the type of audit firm, big 4 or not in our model. we test the hypothesis: h6: the odds of a goodwill restatement are reduced when a big 4 firm is involved in the restatement process from beginning to end. in summary, we posit that risk hazards such as post 141r implementation, whether the board and audit committee are involved, if the firm is a service company and if a big 4 firm participates in the process from beginning to end are associated with goodwill restatements in post mergers and acquisitions. research design, sample selection and model to test the six hypotheses in this paper, we obtained relevant evidence that is aimed to answer the overarching research investigation. the structure of inquiry in this design that is best positioned to address the hypotheses is archival data on goodwill restatements that include variables identified in our critical review of the prior literature. consistent with prior literature (lobo and zhao, 2013), we select our restatement data from audit analytics for the period of december 31, 1995, thru june 30, 2014. our final sample consists of 434 observations of goodwill restatements as a result of mergers and acquisitions. we have verified these restatements with secondary data. a news search for each company included in the sample ensued after the audit analytics data was collected to cross reference the actual event. in order to estimate the risks associated with goodwill restatements in merger and acquisition transactions, we use a logistic regression model. this type of model is consistent with the prior literature (gu and lev 2008, ramanna and watts (2012), lobo and zhao, 2013) the binary response variable is gwrest, which equals 1 if goodwill was restated and 0 if not. the independent variables are defined in order of how they are entered into the model are: x1: dollarmarketcap = is a continuous variable. x2: post 141 = 1 if restatement period ended after june 30, 2001 and 0 before. x3: post141r = 1 if restatement period ended after december 15, 2008 and 0 before. x4: bacinv = 1 if the board of directors and audit committee were involved in making the restatement decision, and 0 if not. x5: service = 1 if a company is restating is a service company and 0 if not. x6: manufacturer = 1 if company restating goodwill is manufacturer and 0 if not. x7: big4= 1 if big4 auditor was involved in restatement process from beginning to end and 0 if not. sample period included years arthur andersen was the auditor in some observations and were conflated into big4 variable. this variable is also considered a control variable based on davidson (2014). we model these risk hazards as follows: american journal of management vol. 17(1) 2017 39 gwrest = x0 + x1dollarmarketcap + x2post141+ x3post141r +x4bacinv+ x5service +x6manufacturer+ x7big4 merle et. al. (2012) and cai et. al. (2015) has suggested future research on goodwill restatements in mergers and acquisitions should identify risk factors to assist auditors in the risk assessment process. majid and lode (2015), suggested market capitalization alone was not a good proxy for goodwill impairment but when combined with operating results it became a starting point of reporting goodwill impairment. it is anticipated that there is no difference among restatements based on dollarmarketcap. andrews, et.al. (2009) and nguyen (2013), argued that sfas141(r) would add to the complexity of financial reporting of companies in merger transactions and practitioners would have a difficult time implementing the directive. our model includes post 141 and post 141r. we expect no effect for the post 141 variable but a significant effect for the post 141r. corporate governance variables such as board size and audit committee characteristics have been included in prior research (ramanna and watts, 2012, lobo and zhao, 2013). this research suggests that board and audit committee involvement has the effect of ameliorating private management per agency theory (ramanna and watts, 2012, lobo and zhao, 2013). we include bacinc and expect board and audit committee participation in a goodwill restatement to be an influential variable. prior research suggested that service companies, in theory, should have a greater amount of intangible assets than manufacturers (gu and lev, 2008, li et al. (2011). digabriele, (2006, 2007) included these types of dummy variables in probability models. we expect no effect for manufacturers and a highly significant relationship for service companies. digabriele (2013) used the big4 variable as a controlling, main effect and moderating variable. we've included big4 as a main effect and controlling variable. we expect when a big4 firm is involved in the restatement proves from beginning to end to be a significant variable. accounting for mergers and acquisition transactions invoke a significant measure of judgment due to the treatment of goodwill and intangible assets (dao, et. al., 2014). nguyen (2013), dao, et. al., (2014) and davidson (2014) found that merger and acquisition restatements suffered from the misapplication of accounting rules such as 141r. andrews et al., (2009), gu and lev (2008), and ramanna and watts (2012) all observed that restatements related to acquisitions and investments more than doubled in the most recent decade. the common errors were improper accounting for intangible assets, particularly the incorrect valuation of goodwill. descriptive analysis & bivariate measures of association the sample consisted of a total of 434 restatements based on the mispricing of goodwill. the restated period the sample is december 31, 1995, thru june 30, 2014. overall, 100 of 434 (23%) observations were restated due to goodwill valuation issues. table 1 contains descriptive statistics for the variables included in the study. table 2 illustrates bivariate measures of association. bacinv is defined as either the board and audit committee was involved (1) or not (0). the board and audit committee was involved in 30.65% of the observations of which, 33.83% didn�t involve a restatement and 20% included a goodwill restatement. the relationship between restatements due to goodwill and if bacinv is statistically significant (x2=6.93, 1, n=434, p<.001). the industry variables manufacturer and service were dichotomized as 1 if and 0 if not. this is based on prior research (digabriele, 2006, 2007). manufacturers represented 33.41% of the sample. when there was no restatement due to goodwill valuation manufacturers were involved 34.13% of the time and 31% when a restatement occurred. there is not a statistically significant relationship between manufacturers and goodwill restatements (x2=.34, 1, n=434, p=.56) service companies comprised 27.65% of the sample, which 22.75% were not restated but, 44% were due to goodwill misallocation. this represents a significant relationship between restatements and service companies (x2= 17.36, 1, n=434, p<.01). big 4 firms were involved in the restatement process from beginning to end 37.33% of the time not involved 62.67% of the time. the relationship between goodwill restatements and whether a big 4 firm 40 american journal of management vol. 17(1) 2017 was included in the process from beginning to end was statistically significant (x2= 5.92, 1, n=434, p<.01). post 141 observations were represented 87.33% of the sample. this included 87.72% when there was no restatement and 86% when a restatement had taken place. this relationship is not statistically significant (x2= .21, 1, n=434, p=.65). post 141r observations represent 16.36% of the overall sample of which 13.47% didn�t involve a restatement while 26% did. there is a statistically significant association between goodwill restatements subsequent to the effective date of 141r. the only continuous variable in the model was marketcap (m=1,430,000, sd= 9,150,000,000). a point biserial correlation was performed to investigate if there is a relationship between marketcap and goodwill restatements. the result indicates there is not a statistically significant relationship between marketcap and goodwill restatements (rpb=-.06, p=.24). cramer's v was used as a post-test to determine the strength of the associations following the chisquare tests that have determined statistical significance. longest (2012) suggests the strength of associations between two nominal variables using the absolute value of the cramer's v statistic is: .01 to .05 negligible, .06 to .10 small, .11 to .15 moderate, .16 to .25 strong, and over .25 is very strong. there is a negligible association between goodwill restatements and the variables manufacturers (v=.-03) and post 141 (v=.-02). a moderate association is between restatements and bacinv (v=-.13) and big4 (v=.12). there are strong associations between goodwill restatements and service companies (v=.20) and post 141r (v=.16). logistic regression table 3 illustrates the results of the logistic regression analysis performed to determine which variables were predictive of a goodwill restatement. the model correctly classified 78.24% of the cases based on a predicted probability outcome of greater than 50%. according to hilbe (2009) the most important goodness of fit statistic for a binary logistic regression is the hosmer-lemeshow gof statistic (h-l gof). the pearson goodness (pgof) of fit test is also recommended by hilbe (2009). values of p greater than .05 indicate a well-fitted model for both tests. an additional test for goodness of fit was performed. the receiver operator characteristic or harrell�s c statistic was calculated at .70. hilbe (2009) suggests a range from .6 to .9 indicates a well-fitted model. the h-lgof statistic for 10 groups is, x2 (432)=11.42, p=.18. hilbe (2009) recommends 10 groups as the optimal categorization for this test. the pgof statistic is, x2 (286)=282.12, p=.55. both statistics indicates a well-fitted model. marketcap was the only continuous variable in the model. logistic models are actually non-linear, however, by the benefit of the link function become linear (hilbe, 2009). continuous variables are tested for the assumption of linearity using the box-tidwell test (hilbe, 2009). this test is performed by adding an interaction term of the continuous variable with its log transformation and includes them in the model. if both terms are statistically significant the assumption of linearity would be violated and increases the likelihood of a type ii error. both variables were not statistically significant. therefore, marketcap meets the assumption of linearity (hilbe, 2009). the model goodness of fit and specifications are all sound. four of the predictor variables were statistically significant. the first statistically significant predictor variable was post 141r, wald (1)= 3.03 p=.001. the odds ratio was 2.5. the coding of the predictor variable (i.e. 0=before effective date of 141r, and 1= after the effect date of 141r) suggested that a restatement due to goodwill impairment after a merger or acquisition which occurred after the effective date of 141r (december 15, 2008) was 2.5 times more likely. this result was consistent with the predicted direction for h3. the second predictor variable, bacinv, was found to be a statistically significant predictor of restatements, wald (1) = -2.43, p = .015. the odds ratio for bacinv was .489, bearing in mind the coding of this predictor (i.e. 0= no board and audit committee involvement and 1= board and audit committee involvement). this finding indicated that board and audit committee involvement reduced the odds of a restatement due to goodwill impairment by 51.1% american journal of management vol. 17(1) 2017 41 the third predictor variable that was statistically significant was for a company to be in the service industry, wald (1) = 4.21, p=.001. the odds ratio for the service variable was 3.15. this result signifies the odds are 3.15 times greater that a service company will have a restatement for goodwill impairment after an acquisition. this result proved to be consistent with the predicted direction of h5. the final predictor variable that was statistically significant occurred when a big4 firm was involved in the restatement both pre 141r and post 141r, wald(1)= -2.28, p = .028. the odds ratio was .531 (based on the coding 0 = big4 not involved in the restatement process and 1 if they were). this implies the odds were reduced by 46.9% when a big 4 firm was involved post 141r. this result was consistent with the predicted direction of h6. there were three variables not statistically significant, marketcap, manufacturer, and post141. the result is also consistent with the predicted direction of h1 h5. greene (2003) recommends when at least one continuous variable is included in a logistic regression model the probability density function should be analyzed at the means of the independent variables. the marginal effects (f(b�x)) for the model were .20. discussion merle et al. (2012) and cai et al. (2015) suggested that future research on goodwill restatements in mergers and acquisitions should identify relevant risk factors to assist auditors in the risk assessment process. fair value accounting and goodwill impairment have been quite controversial for many years. both practitioners and academics have been debating whether the discretionary decisions made by managers in the use of fair value accounting for financial reporting purposes have been detrimental to the accuracy and reliability of financial statements for the last 15 years. we tested 7 different predictor variables using a logistic regression model to assess the relative riskiness of these measures as a predictor of post-merger and acquisition goodwill impairment. our findings provide evidence that the odds of goodwill restatements are a function of certain specific risk hazards. specifically, the risk factors that we tested were: whether the board of directors and audit committee participated in the restatement of assets, whether size as measured by market capitalization mattered, whether the company was a manufacturer or service company mattered, whether a big 4 auditor was involved in the restatement process mattered and whether the restatement of assets due to goodwill impairment occurred before or after the implementation of sfas 141(r) mattered. we found support for four of the seven predictor variables tested. the predictor variables: post 141r (x3), bacinv (x4), service industry (x5) and big4 (x7) were found to be statistically significant indicators of risk hazards for auditors after a merger or acquisition occurred. these risk factors proved important items to consider when a firm restated its assets due to goodwill impairment. auditors and investment bankers will find these results useful in the context of a merger and acquisition. we did not, however, find support for three of the seven predictor variables we tested. the predictor variables: dollarmarketcap (x1), pre141r (x2) and manufacturer (x6) did not provide any statistical evidence of providing auditors with an indication of risk hazards after a merger or acquisition occurred. they did not prove to be reliable indicators of the likelihood of financial restatements due to goodwill impairment after a merger or acquisition occurred. it appears that company size, based on dollar market capitalization, did not matter. this finding ran counterintuitive to anecdotal expectations, in that most practitioners believe that the managers of smaller companies would have greater incentive(s), or would believe that they would be less likely to be �caught� being overly aggressive in their purchase price allocations of the companies� assets of the firms that they had acquired (andrews, et. al., 2009) post 141 also did not serve as a proxy for the likelihood of a restatement taking place due to goodwill impairment prior to the effective date for 141r. these finding points to the improvement of financial statement disclosures in disclosing information about risk hazards to auditors after 141r was implemented. 42 american journal of management vol. 17(1) 2017 manufacturing companies did not prove to be a good indicator of risk hazard. this finding supports the theory that goodwill impairment will occur less frequently after a merger or acquisition due to the fact that these types of companies often do not own as many intangible assets as service companies. auditors, regulators, educators, and financial professionals who provide merger and acquisition advice will all benefit from an increased awareness of the various risk hazards that are embedded in the financial reporting standards for reporting operating results after a merger or acquisition. our findings point to the increased need for board of director and audit committee involvement in subjective management decisions pertaining to the allocated values to various asset classes, including goodwill under sfas 141r. we also found that big4 auditors played an important role in reducing the frequency of goodwill impairment, which points to the added scrutiny they provide when acquisition accounting methods are applied. conclusion this study is important for several reasons. the pcaob has continued to demand that auditors increase their risk assessment judgments in areas that are considered to be highly hazardous when conducting an audit such as goodwill impairment. first, we found that the probability of a financial restatement occurring due to goodwill impairment was 2.5 times more likely to occur post 141r. this result can be attributable to the re-allocation of more of the purchase price to be immediately expensed that 141r required. second, we found that when the board of directors and the audit committee were involved in the goodwill impairment decision, the likelihood of a restatement occurring declined by 51.1%. this can be attributed to a number of factors, including the possibility that management compensation may be affected by the write-off of goodwill due to its downward effect on earnings. this factor was found to be an important indicator of a risk hazard for auditors. the third predictor variable that proved to be an indicator of risk hazard for auditors was the type of industry the company operated in. we found that companies that operated in a service industry were 3.15 times more likely to restate their assets due to goodwill impairment in a reporting period after a merger or acquisition. this finding was not a surprise to us, as service industries often own more intangible assets than manufacturing companies. this fact allows for greater managerial discretion when allocating the purchase price of a company they acquire. hence, the inaccurate valuation of intangible assets will lead more frequently to goodwill impairment. the fourth and final predictor variable that appeared to be an indicator of risk hazard for auditors was whether or not a big4 accounting firm conducted the audit. we found that the companies who were being audited by a big4 accounting firm had a 46.9% decrease in the odds of a restatement due to goodwill impairment after a merger or acquisition. this reduction in risk hazard proved to be true during both periods; one being prior to 141r and the other being post 141r. one could interpret this result as indicating that big4 auditors are more skilled in conducting impairment testing. the second important reason for this study was to provide a coherent contribution to periodic facts requested by standard setters and regulators. we found evidence showing that sfas 141r led to greater frequency of assets restatements on the balance sheet after a merger or acquisition due to goodwill impairment. the final important reason for this study was to show that auditor training should utilize greater risk assessment that moves beyond audit checklist items used for intangible asset valuation. increased training for how to test purchase price allocations are sorely needed, as auditors need to learn and understand the techniques used by business valuation professionals. the goal would be to serve the audit client in a more informed and consistent manner, and thus, save the client excess audit fees that are incurred due to a lack of knowledge of how to verify impairment testing procedures used by the independent valuation expert. the limitation of the current study is the need to update the model with contemporaneous data. rules, regulations, and behaviors change over time, and this would suggest a replication of the current study. avenues for future research in the area of merger and acquisition accounting include items such as: american journal of management vol. 17(1) 2017 43 1) determining if there is a relationship between the proportion of the acquisition price allocated to goodwill and subsequent management compensation; 2) whether we find a difference in the frequency of goodwill impairment after a second, third or more merger and acquisition; 3) examining if there is any difference in the frequency of goodwill impairment post-merger and acquisition based on which big4 firm was the company�s auditor; 4) whether a change in auditor affects the frequency of goodwill impairment after a merger or acquisition. we suspect that future investigations into these types of questions will lead to greater insight into what types of events increase or decrease the likelihood of financial statement restatements, and the relevant risk hazards that arise due to these types of events. auditors, regulators, educators, investment bankers, along with various classes of investors will all benefit from increased insight into post-merger and acquisition accounting methodologies. stockholder v. management conflict is alive and well, per jensen and meckling�s (1976) agency theory. 44 american journal of management vol. 17(1) 2017 references andrews, c., falmer, j. riley, j. todd. c. and volkan, a. 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(2005). the evolution of u.s. gaap: the political forces behind professional standards, part 1. cpa journal 75 (january), 18-27. ajm 18(3) master2.pdf ajm 18_2_web_master.pdf ajm 17(2) master-lulu-revised.pdf 58 american journal of management vol. 17(2) 2017 estimating the cost of equity in emerging markets: a case study benoit boyer sacred heart university ralph lim sacred heart university bridget lyons sacred heart university a firm�s weighted average cost of capital is an integral component in capital budgeting decisions and in assessment of the firm�s enterprise and equity value. estimation of the cost of equity is a key component in determining the overall cost of capital. the calculation of the cost of equity for u.s. based corporations is relatively straightforward and is most often estimated as a function of the u.s. risk-free rate, the firm�s beta value, and an estimate of the average risk premium associated with equity investments compared to risk free assets. since u.s. financial markets are fairly liquid and reasonably efficient, estimates of the required input variables are relatively reliable. in contrast, the estimation of equity capital costs for corporations based in emerging markets presents many challenges. emerging markets are often characterized by additional risks including political risks and the risks associated with operating in markets that are less liquid and transparent than mature markets. this leads to issues in identifying appropriate and reliable measures of the risk free rate, beta and the equity risk premium. in this paper we describe five commonly used approaches to estimate the cost of equity for firms based in emerging markets and then apply these to three firms headquartered in brazil. the results show that the approach selected can have a significant impact on the resulting estimate of the firm�s cost of equity. this case study may be of interest to practitioners and to students in financial management, investment, valuation and international finance courses. the task it is early 2016. your task is to estimate the weighted average cost of capital of 3 brazilian firms: embraer, brasil foods and via varejo. all firms report in local currency. embraer is an aerospace conglomerate that earns approximately 20% of its revenues from brazil. brasil foods produces and processes foods and earns about 40% of its revenues from brazil. via varejo retails household appliances and electronics through retail stores and earns all its revenues in brazil. american journal of management vol. 17(2) 2017 59 introduction estimation of the cost of capital is central to financial management and investment decisions including capital budgeting and firm valuation. a firm�s weighted average cost of capital is its average cost of raising funds and is a function of its capital structure � the relative portions of debt and equity used � and the firm�s cost of debt and equity. the most common approach used in developed markets to estimate the cost of equity component of the wacc is a single factor model where the cost of equity, ke, is a function of a risk free rate, krf, a risk premium earned on equity investments (erp) compared to the rate earned on risk free investments and beta, a measure of the volatility of the stock�s returns. ke = krf + (erp * beta) discussions of cost of equity estimates in developed markets surround: whether to use a single or multifactor model which risk free rate to use: 5, 10, 30 year u.s. government yield how to estimate beta determination of the equity risk premium the approach selected will impact the results but as campbell harvey (2005) notes, �in countries like the u.s., the different methods often yield similar results.� there is much less agreement on the appropriate approach to determining equity capital costs in emerging markets. campbell harvey (2005) critically reviewed twelve different approaches to estimate the international cost of equity capital and demonstrates that the various methods produce widely varying results. mark humphrey von jenner (2008) described six models for estimating the cost of equity in emerging markets and recommends one of two approaches depending on whether the investor diversifies internationally. niso abuaf (2011) notes that in his almost twenty years working as an investment banker, the capm is the technique primarily used to estimate the cost of equity. he then develops an extension of the capm model to incorporate a factor related to political risk. depending on which approach is used, the resulting cost of equity can vary quite significantly. in this paper we consider: what is currently common practice when estimating the cost of equity in emerging markets? how is country risk incorporated into the cost of equity calculation? a case study approach to estimating the cost of equity for three brazilian firms using five common approaches. cost of equity in emerging markets emerging market investments expose investors to additional risks which are commonly called �country risk�. the essential questions are which risks do investors demand compensation for and how much additional return is required? potential risks include: financial markets which are illiquid and lack transparency less developed regulatory, corporate governance and legal framework inability to repatriate earnings economic uncertainty war and/or political instability risk of expropriation of assets attempts to incorporate these risks into a model leads to confusion because there are many options related to estimating the cost of equity in practice. common questions include: 60 american journal of management vol. 17(2) 2017 should country risk be incorporated through: beta in a single factor model (assumes beta will reflect exposure to country risk) the addition of a second factor reflecting a premium for country risk the risk free rate by using the yield on sovereign debt the equity risk premium (erp) where this is estimated by country the equity risk premium (erp) where this is estimated based on the countries where revenues are generated or assets are located should the risk free rate be estimated as: the us ten-year yield the us ten-year plus an inflation differential to reflect inflation on the emerging market country the sovereign ten-year yield is the equity risk premium: the us or global erp the erp of the emerging market country an erp estimated by weighting the erps of countries where the firm generates revenues should beta be calculated by: comparing firm stock returns to a local stock index comparing firm stock returns to a global index levering the global industry beta to the firm�s capital structure care must be taken to ensure any inflation differential and country risk are neither ignored nor double counted. we must also consider the degree to which an individual firm is exposed to country risk. in our case study, some might view the exposure of via varejo to brazilian country risk as significantly higher than that of embraer since the former earns 100% of its revenues in brazil while embraer earns about 20% of its revenues in brazil. five approaches commonly discussed in academic literature and used in practice follow and we calculate the cost of equity for each of the three case firms using these approaches. approaches: 1. use the single factor capm and assume beta will capture country risk 2. add a country risk premium to the capm model above 3. incorporate country risk in the risk free rate by using the sovereign yield 4. calculate a country specific equity risk premium (erp) 5. calculate a weighted average erp based on the countries where revenue is generated or assets are located a sixth approach has been recommended by academics including damodaran and abuaf. here, capm is extended to include a second factor to capture the sensitivity of the firm�s equity to country risk. this approach requires calculation of this second factor and since the data is not readily available the technique is not used much in practice and is not included here. results � data from april 2016 since our three case firms are located in brazil and report in brazilian reals the cost of equity is calculated in local, nominal terms � i.e. the cost of raising equity in brazil in reals. data sources are shown in appendix 1. we use information available on bloomberg and s&p capiq. approach 1: use the single factor capm and assume beta will capture country risk rationale: if beta is measured as firm return sensitivity compared to a global index then beta should capture country risk. american journal of management vol. 17(2) 2017 61 limitations: evidence suggests country risk is not included in this beta and the approach is rarely used in practice. lack of liquidity may contribute to inability of beta to capture country risk. formula: ke = krf + erp * beta inputs krf = us or equivalent ten-year yield plus inflation differential between local country and us to capture local risk free rate erp = us equity risk premium per damodaran and several investment bank estimates beta = firm beta calculated using us or global index (from bloomberg calculated using s&p 500). bloomberg did not report this beta for via varejo so we calculated a levered beta based off the industry beta, a common practice when there is not a published beta or when liquidity is low. table 1 use the single factor capm and assume beta will capture country risk inputs krf us 1.8% country inflation differential 6.5% erp us 6.0% results beta ke brasil foods 0.81 13.1% embraer 1.09 14.8% via varejo 1.29 16.0% while empirical studies by academics provide support in developed markets for the ability of this approach to capture country risk through beta, evidence suggests investors require an additional premium related to country risk that is not captured in the single factor capm. this view is consistent with the cfa institute. as a result, other approaches have been developed in an attempt to better capture country risk. approaches 2-5 are methodologies we have seen used in practice to capture the country risk. approach 2: add a country risk premium to the single factor capm model rationale: empirical evidence suggests investors require an additional premium related to country risk that is not captured in the single factor capm. country risk then leads to a distinct premium, somewhat similar to a premium for lack of liquidity, which should be added to the cost of equity. higher levels of country risk will imply higher costs of equity. the premium is most often estimated from sovereign ratings and/or cds spreads. limitations: this approach applies the same country risk premium to all firms in the country despite evidence that country risk depends on a number of factors including the industry and where revenues are generated. formula: ke = krf + erp * beta + crp inputs: krf = us or equivalent ten-year yield plus inflation differential to capture local risk free rate erp = us beta = local beta calculated against brazilian market index. (do not use the firm�s actual beta calculated against a global index since this will likely lead to double counting country risk) crp = country risk premium estimated from credit spreads on debt or sources such as damodaran. many banks estimate crps. consider the krf and crp sources and take care not to double count the inflation differential. 62 american journal of management vol. 17(2) 2017 table 2 add a country risk premium to the single factor capm model inputs krf us 1.8% country inflation differential 6.5% erp us 6.0% country risk premium 3.4% results beta ke brasil foods 0.70 15.9% embraer 0.45 14.4% via varejo 1.03 17.9% approach 3: include country risk in the risk free rate rationale: capture country risk by using the sovereign ten-year yield as the risk free rate. note if this technique is applied, then the risk free rate is not truly risk free since it incorporates country risk. this is another way of including country risk, similar to approach 2. limitations: this assumes that the country risk on ten-year government debt is identical to the country risk on equity investments and that all equity investments are exposed to identical levels of country risk. formula: ke = krf + erp * beta inputs krf = sovereign ten-year yield erp = us beta = local beta (calculated against brazilian market index) table 3 include country risk in the risk free rate inputs local risk free rate 10.25% erp us 6.0% results beta ke brasil foods 0.70 14.5% embraer 0.45 13.0% via varejo 1.03 16.4% note that approaches 2 and 3 may yield identical results, depending on how the crp is calculated and whether the sovereign yield is an actual value at a specific date or has been smoothed. approach 4: calculate a country specific equity risk premium (erp) rationale: capture country risk by using an equity risk premium specific to the country. this can differ from approach 3 if, for example, equities are deemed more volatile and therefore riskier than debt. in such cases the country specific erp used would be higher than the cds spread or the spread embedded in sovereign bonds. it is also used when no sovereign bonds trade or liquidity is limited. limitations: like approach 3, this approach assumes all equity investments are exposed to identical levels of country risk. formula: ke = krf + erp * beta inputs: krf = us or equivalent ten-year yield plus inflation differential between local country and us to capture local risk free rate american journal of management vol. 17(2) 2017 63 erp = brazilian erp beta = local beta (calculated against brazilian market index) table 4 calculate a country specific equity risk premium (erp) inputs krf us 1.8% country inflation differential 6.5% erp brazil 9.65% results beta ke brasil foods 0.70 15.0% embraer 0.45 12.6% via varejo 1.03 18.2% approach 5: calculate a country weighted average erp based on where revenue is generated rationale: investors may perceive country risk as a function of the countries or regions where the firm operates rather than just the country where the firm is headquartered. limitations: requires more computation time since a weighted erp is not available in online sources such as bloomberg or cap iq. formula: ke = krf + erp * beta inputs krf = us or equivalent ten-year yield plus inflation differential between local country and us to capture local risk free rate erp = country weighted erp based on where revenues are generated beta = firm beta calculated using us or global index (from bloomberg calculated using s&p 500). bloomberg did not report this beta for via varejo so we calculated a levered beta based off the industry beta. table 5 calculate a country weighted average erp based on where revenue is generated inputs krf us 1.8% country inflation differential 6.5% results wtd erp beta ke brasil foods 8.6% 0.81 15.2% embraer 7.1% 1.09 16.0% via varejo 9.7% 1.29 20.7% conclusion although the formula generally used for the cost of equity appears simple, actually calculating cost of equity in emerging markets can be quite challenging since there are many possible options to use for the risk free rate, the equity risk premium and beta. the decision on if and how to incorporate country risk adds an additional level of complexity. utilizing five approaches we have seen used in practice to estimate the cost of equity for three brazilian firms in april 2016 we get a fairly wide range of results. for firms with significant country risk, prior studies and our own results suggest that the first approach 64 american journal of management vol. 17(2) 2017 may underestimate the cost of equity for some firms since the country risk premium is not explicitly incorporated. the results are also strongly impacted by the beta selected. here we used a global beta in approaches 1 and 5 and a local beta in approaches 2, 3 and 4. approaches two through four incorporate country risk but apply the same premium to all firm, regardless of the nature of the industry or where the revenues are generated. the final approach requires additional effort since the equity risk premium must be calculated. here we determined an equity risk premium based on the weighted average of the country equity risk premium where revenues were generated. accordingly, via varejo has a higher cost of equity, compared to the other approaches, since all revenues are earned in brazil the results would have a significant impact of financial decision making including valuation and capital budgeting decisions. table 6 summary of results appr 1 appr 2 appr 3 appr 4 appr 5 ke brf 13.1% 15.9% 14.5% 15.0% 15.2% ke embr 14.8% 14.4% 13.0% 12.6% 16.0% ke via 16.0% 17.9% 16.4% 18.2% 20.7% data sources bloomberg s&p capital iq damodaran: country and equity risk premium data found at: http://pages.stern.nyu.edu/~adamodar/new_home_page/datafile/ctryprem.html references harvey, campbell (2005). twelve ways to calculate the international cost of capital. https://faculty.fuqua.duke.edu/~charvey/teaching/ba456_2006/harvey_12_ways_to.pdf von jenner, mark humphrey (2008). calculating the cost of equity in emerging markets. the finsia journal of applied finance. issue 4 p 21. abuaf, niso (2011). valuing emerging market equities � the empirical evidence. journal of applied finance, no. 2. antecedents and outcomes of employee benefit satisfaction: an updated model mel e. schnake valdosta state university previous research on the antecedents and outcomes of employee benefit satisfaction is reviewed. previous research has suggested a number of antecedents of employee benefit satisfaction, as well as several moderating variables. however, they have not been combined into a single comprehensive model. a comprehensive model incorporating previous research findings is developed with specific hypotheses. there have been four methods of measuring benefit satisfaction in previous research: global measures using single item or short scale measures, measures of several dimensions of benefit satisfaction, measures of degree of satisfaction with specific benefits offered, and measures of dimensions of benefit satisfaction such as satisfaction with benefit quality. each of these approaches has both strengths and weaknesses. suggestions for measuring employee benefit satisfaction are offered. introduction since gerhart and milkovich’s (1992) conclusion that “beyond a handful of studies, employee benefits have been ignored by researchers,” this topic has continued to receive little attention (lengnickhall and bereman, 1994). williams, mcdaniel and ford (2007) note that “less empirical research has examined the antecedents of benefit satisfaction” than other dimensions of pay satisfaction. this lack of interest in employee benefits is surprising given the increasing costs of benefits to both employers and employees. the bureau of labor statistics estimated that in 2010 state and local government employers spent 34.5% of compensation costs on benefits, while private industry employers spent 29.4%. according to the u.s. chamber of commerce, as the economy slowed, employers began cutting back on employee benefits from an average of $21,527 in 2006 to $18,496 in 2007. prior to this economic downturn the u.s. chamber of commerce estimated that the cost of employee benefits had increased to more than 44% of payroll expenses in 2005. further, in times of economic decline which make increases in wages and salaries difficult, employers may place more emphasis on employee benefits in an attempt to attract, motivate, and retain employees. countering this reason for offering more benefits to employees is the well-documented increasing cost of benefits. both of these reasons cause employee benefits to be of increased interest to employers. while earlier research has suggested that employees are generally unaware of their benefits (gerhart and milkovich, 1992; wilson, northcraft and neale, 1985; danehower and lust, 1996), several recent trends may be causing employees, managers and researchers to have more interest in employee benefits. these include the rising costs of benefits, the trend for employers to cut back on benefits offered, and/or the trend to transfer some of the cost of benefits to employees. in times of economic recession, employers 34 american journal of management vol. 16(3) 2016 may attempt to trim benefits costs by offering fewer voluntary benefits, or by increasing employees’ share of the cost. historically, in times of economic prosperity, benefit costs have risen. benefit satisfaction harris and fink (1994) note that the terms benefit and benefit satisfaction have not yet been precisely defined. lengnick-hall and bereman (1994) found several definitions of benefit in the literature including: (1) legally required payments which have a direct cost to the employer (e.g., unemployment insurance), (2) benefits not legally mandated, (3) items which have no direct cost to the employer, and (4) employees perceive a service or payment is a benefit. lengnick-hall and bereman (1994) suggest several criteria which can be used in defining benefits: (1) it has a cost to the organization (direct or indirect), (2) it is voluntary (not legally mandated), (3) the organization describes it as a benefit in communications, and (4) it is provided to all employees or large groups of employees based on a consistent policy. harris and fink (1994) point out that researchers have employed different strategies in the measurement of benefit satisfaction, and suggested two general strategies: (1) satisfaction with each specific element of a benefit plan, or (2) satisfaction with benefits in general. some researchers have used single item measures of overall benefit satisfaction (lust, 1986), while others have opted for a multidimensional measure including such dimensions as benefit level satisfaction and benefit system satisfaction (miceli and lane, 1991); and benefit service quality (danehower, celuch and lust, 1994). another example is the benefit satisfaction questionnaire designed by lust and danehower (1992) which measures two dimensions: satisfaction with the cost structure of the benefit program, and satisfaction with benefit package quality. harris and fink (1994) suggest another alternative is to measure the satisfaction level of individual benefits offered by the employer participating in the study. thus, there appears to be four possible approaches to measuring benefit satisfaction: 1. a measure of overall benefit satisfaction using a single-item or a set of items (preferred.) 2. measures of several overall dimensions of satisfaction with the benefit package such as satisfaction with benefit cost, satisfaction with benefit delivery, satisfaction with the levels of benefits provided, and satisfaction with benefit package quality. 3. measures of degree of satisfaction with specific benefits provided by the employer. 4. measures of the dimensions of benefit satisfaction (e.g., satisfaction with benefit quality) for each specific benefit offered by the employer. each of these methods of measuring benefit satisfaction has strengths and weaknesses. at present there does not appear to be a clear consensus as to which approach is best. the present analysis will adopt harris and fink’s (1994) suggestion and use both a measure of satisfaction with the individual elements of an organization’s benefit plan, and a measure of several dimensions of satisfaction with the overall benefit package. in addition, several moderator variables will be included which have been shown to be related to benefit satisfaction (e.g., employee use of a specific benefit, employee perceived quality of a specific benefit). this approach is consistent with the pay compensation literature. for example, heneman (1985) suggested that employees develop a general affect about their pay, but also develop specific attitudes toward distinct aspects of their compensation package. danehower and lust (1995) followed this general approach by assessing satisfaction with several specific elements of a benefit package (retirement plan, medical plan, paid time off, and life insurance) as well as satisfaction with two dimensions of benefit satisfaction: satisfaction with the cost structure of the benefit program and satisfaction with benefit package quality. they also assessed overall benefit satisfaction. based on previous research, this analysis will incorporate additional dimensions of overall benefit satisfaction. this will permit a competitive test of both antecedents and outcomes of both measures of benefit satisfaction. american journal of management vol. 16(3) 2016 35 antecedents of benefit satisfaction dreher and bretz (1988) suggest that “two of the principle influences on benefit satisfaction are benefit coverage and employee cost. “judge (1993) argues that since benefit coverage is consistent across employees in many organizations, researchers should examine issues which differ between individuals such as relative use of benefits. employee frequency of use of specific benefits would also impact employee knowledge of those benefits. h1: employee frequency of benefit use will positively affect employee knowledge of benefits. rabin (1994) found that employees who made greater use of their employer’s benefit communication materials were more satisfaction with the company’s benefits plan. danehower and lust (1995) found satisfaction with company communications about benefits was significantly related to a general measure of benefit satisfaction. h2: organizational communications about benefits will positive affect employee knowledge of benefits. dreher, ash and bretz (1988) found that satisfaction with benefits increased with greater benefit coverage, and declined with higher employee costs. these relationships were magnified among those employees who possessed accurate information about actuate benefit coverage levels. h3: employee knowledge of benefits will moderate relationships between antecedents and benefit satisfaction. relationships between antecedents and benefit satisfaction will be stronger for employees with greater benefit knowledge. miceli and lane (1991) suggest that employees compare the perceived level of benefits received to the actual level of benefits received in making judgments about benefit satisfaction. while they note that employees may react to individual benefits differently, they treat benefits as if they are unidimensional in developing their model. it is likely that employees do react to individual benefits differently for at least two reasons. first, previous research (e.g., danehower & lust, 1996) has shown that employees are generally unaware of their benefits: both the specific benefits offered to them, as well as the employer cost of providing these benefits. however, employees do tend to be sensitive to their cost of benefits (dreher, et al., 1988). second, employees have varying preferences for individual benefits, and this is likely to change over the employee’s career as marital status and numbers of dependents change. employees are likely to be more aware of those benefits for which they have a strong preference at the current time. further, environmental conditions such as the unemployment rate and inflation may affect employee preferences for benefits (miceli & lane, 1991). surveys which ask for satisfaction with the benefit package in general will not capture these differences. an employee’s general satisfaction with benefits may remain unchanged, while satisfaction levels with individual benefits may change significantly. thus, the recommended strategy for future benefit satisfaction research appears to be to assess antecedents and benefit satisfaction for each specific benefit offered by the employer. danehower and lust (1992) have proposed that benefit satisfaction consists of two dimensions: satisfaction with the cost of benefits, satisfaction with benefit package quality. in a subsequent study (danehower & lust, 1995) the compared general satisfaction with benefits to satisfaction with individual benefits and concluded that little was gained by measuring satisfaction with individual benefits. their analysis involved three regression models. one model regressed demographic variables of employees on overall satisfaction with benefits. the second model added satisfaction with individual benefits, and the third model added danehower and lust’s two-dimensional measure of benefit satisfaction (the benefit satisfaction questionnaire). all three models were statistically significant (model 1 f = 8.74, r2 = .089; 36 american journal of management vol. 16(3) 2016 model 2 f = 40.15, r2=.572; model 3 f = 80.41, r2=.633) at the .001 level. their conclusion was based on the rather small increase in r2 from model 2 to model 3. however, while they included important demographic moderating variables, their dependent variable was a single item assessing overall satisfaction with the organization’s benefit package. further, they did not take into account other important moderating variables such as employee preferences for specific benefits, employee awareness of individual benefits, and the frequency in which employees used specific benefits. thus, their study may not have provided an adequate comparative test of measuring overall benefit satisfaction versus satisfaction with individual benefits. williams (1995) proposed a model of benefit level satisfaction which included the desirability of benefits (employee preferences) as well as the use of benefits. in a test of this model, williams (1995) found no support for miceli and lane’s (1991) discrepancy model, but found the two antecedents most predictive of benefit level satisfaction to be employee ratings of benefit administration and employee costs for benefits. the variable most strongly related to satisfaction with benefit level was benefit administration which was measured as the employer’s communication about benefits and responsiveness to employee inputs. this benefit administration measure seems to capture some of employee knowledge of and awareness of benefits (communication about benefits), and to some extent a measure of voice or perceived fairness. if employees are encouraged to provide input about their benefit package it may affect their sense of the fairness with which benefits are administered, a form of procedural justice. both procedural justice perceptions related to benefit administration, and distributive justice perceptions, related to specific benefits offered may affect employee satisfaction with benefits. howard (1999) found a measure of distributive justice to be positively related to benefit satisfaction, however a measure of procedural justice was not. h4: procedural and distributive justice perceptions will be positively related to employee benefit satisfaction. lust and danehower (1990) provide support for measuring individual benefits rather than general satisfaction with the benefit package. they found different predictors for satisfaction with various benefits. age, gender and job level predicted satisfaction with health insurance. age, tenure, gender and perceived benefit importance predicted satisfaction with paid time off. only perceived benefit importance predicted satisfaction with the pension plan. previous research has shown the importance of several demographic variables including age, tenure, number of dependents, marital status, job level, and level of education (lust, 1990). it is likely that these variables are related to employee preferences for specific benefits. environmental variables such as the unemployment rate, inflation rate, interest rates and general economic conditions are also likely related to employee preferences for specific benefits. h5: several demographic variables (age, organizational tenure, marital status, number of dependents, job level and educational level) will be significantly related to employee benefit satisfaction. h6: environmental factors (unemployment rate, inflation rate, interest rates, economic conditions) will be significantly and positively related to employee benefit satisfaction. (that is, higher unemployment rate is related to higher benefit satisfaction). outcomes of benefit satisfaction drehr, ash and bretz (1988) suggest that employee benefits fulfill basic economic, security and social needs and result in job satisfaction. job satisfaction, in turn, influences several important behavioral outcomes such as turnover and absenteeism. thus, benefit satisfaction will be inversely related to intention to turnover and absenteeism. american journal of management vol. 16(3) 2016 37 h7: benefit satisfaction will be inversely related to intention to turnover and absenteeism. farrell and rusbult (1982) note that organizational commitment increases with increased investment in the job. job tenure or seniority is a determinant for the levels of some benefits provided (e.g., vacation days, sick days). thus, with longer service may come increased benefits, making it difficult to turnover. continuance commitment captures this notion of lower intent to turnover because to do so would mean a loss of benefits (meyer, allen & smith, 1993; snape and redman, 2003). harris and fink (1994) argue that one reason that benefit satisfaction is related to attitudinal and behavioral outcomes is that benefits serve as a reward. thus, employees who are satisfied with their benefits are more likely to be committed to the organization and less likely to turnover. h8: benefit satisfaction will be positively related to continuance organizational commitment. h9: continuance commitment will be inversely related to intent to turnover and absenteeism. harris and fink (1994) also suggest that benefits serve as a signal of the organization’s care and concern for employees. thus, benefit satisfaction would be expected to be related to organizational citizenship behavior (ocb). organ (1990) has proposed a reciprocity motive for engaging in ocb. when employees perceive the organization has provided something of value to them, they may feel motivated to reciprocate with something of value for the organization. one type of behavior under employees’ control are the extra-role, discretionary ocbs. h10: benefit satisfaction will be positive related to organizational citizenship behavior. conclusions previous research has suggested a number of antecedents of employee benefit satisfaction, as well as several moderating variables. however, they have not been combined into a single comprehensive model. the proposed benefit satisfaction model appears in figure 1. figure 1 employee benefit satisfaction model 38 american journal of management vol. 16(3) 2016 based on previous research on antecedents of benefit satisfaction, the model proposed here includes three primary antecedents: employee cost of benefits, perceived quality of benefits, and employee preference for benefits offered. these three antecedents are moderated by employee awareness and knowledge of the benefits offered which, in turn, is impacted by employees’ frequency of use of specific benefits and the employer’s communication about benefits. employee preferences for benefits are affected by several demographic variables including age, organization tenure, job level, marital status, number of dependents, and educational level. employee preferences are also affected by external environmental variables including the unemployment rate, inflation rate, and interest rates. the model proposes four outcome variables: continuance organizational commitment, intent to turnover, absenteeism, and organizational citizenship behavior. as research begins to test various parts of this model, some adjustments would be expected. for example, subsequent research may provide evidence that benefit satisfaction impacts other individual or organizational outcome variables, such as inrole job performance, or intention to unionize. future research may expand the relationships among antecedents and moderating variables by identifying additional variables in each category. as employee benefit satisfaction continues to be of more interest to practicing managers and researchers alike, this model may serve as a guide to advance our understanding of the causes and outcomes of employee benefit satisfaction. references danehower, c. and j.a. lust (1992) a conceptual model of the determinants of employee benefit satisfaction. human resource management review, s: 221-238. danehower, c., k. celuch, and j.a. lust (1994) benefits management and communication: a marketing orientation. human resource management review, 4: 177-195. danehower, c. and j.a. lust (1996). how aware are employees of their benefits? findings from two companies. benefits quarterly, fourth quarter, pp. 57-61. drehr, g.f., r.a. ash and r.d. bretz (1988). benefit coverage and employee cost: critical factors in explaining compensation satisfaction. personnel psychology, 41: 237-254. gerhart, b. and g.t. milkovich. (1992). employee compensation: research and practice. pp. 481-569 in handbook of industrial and organizational psychology (vol. 3), edited by m.d. dunnette and l.m. hough. palo alto, ca: consulting psychologists press. harris, m. m. and l.s. fink (1994). employee benefit programs and attitudinal and behavioral outcomes: a preliminary model. human resource management review, vol . 4, no. 2, pp. 117-129. heneman, h.g. (1985). pay satisfaction. in k.m. rowland and g.r. ferris (eds.) research in personnel and human resource management (vol. 3, pp. 115-139). greenwich, ct: jai press. howard, l.w. (1999). validity evidence for measures of procedural/distributive justice and pay/benefit satisfaction. journal of business and psychology, 14(1): 135-147. judge, t.a. (1993). validity in the dimensions of the pay satisfaction questionnaire: evidence of differential prediction. personnel psychology, 46: 331-355. lengnick-hall, m.l. and n.a. bereman. (1994). a conceptual framework for the study of employee benefits. human resource management review, vol. 4, no. 2, pp. 101-115. lust, j.a. (1986). the impact of benefit availability on employee benefit satisfaction. presented at the meeting of the southern management association, atlanta, ga. lust, j.a. (1990). the determinants of employee fringe benefit satisfaction: a replication and revision. benefits quarterly, second quarter, 1990. 89-95. miceli, m.p. and m.c. lane (1991). research in personnel and human resources management, volume 9, pages 235-309. meyers, j.p., n.j allen and c.a smith (1993) commitment to organizations and occupations: extension and test of a three-component conceptualization. journal of applied psychology, 78: 538-551. organ, d.w. (1990). the motivational basis of organizational citizenship behavior. research in organizational behavior, 12: 43-72. american journal of management vol. 16(3) 2016 39 snape, e. and t. redman (2003). an evaluation of a three-component model of occupational commitment: dimensionality and consequences among united kingdom human resource management specialists. journal of applied psychology, 88: 152-159. williams, m.l. (1995). antecedents of employee benefit level satisfaction: a test of a model. journal of management, 21(6): 1097-1128. williams, m.l., m.a. mcdaniel and l.r. ford (2007). journal of business and psychology, vol. 21, no. 3, 429-459. wilson, m., g.b northcraft, and m.a. neale. (1985). the perceived value of fringe benefits. personnel psychology, 38: 309-320. 40 american journal of management vol. 16(3) 2016 ajm 17(4) web_master.pdf american journal of management vol. 17(4) 2017 133 comprehensiveness in strategic decision making: toward clarifying the construct kiran m ismail st. john�s university xia zhao california state university, dominguez hill the purpose of this article is to clarify the construct of comprehensiveness in strategic decision making and in doing so, to reconcile the debate on the effectiveness of the decision-making comprehensiveness in dynamic environments. we distinguish between the constructs of comprehensiveness and pace in strategic decision making and argue that comprehensiveness might not necessarily slow down the strategic decision process. furthermore, we propose that comprehensiveness is a multidimensional construct that can be grouped into two distinct categories�procedural and cognitive�and that each of these two categories might have different effects on performance in dynamic environments. * both authors contributed equally and are listed in alphabetical order. introduction the strategic decision-making literature has extensively used the construct of comprehensiveness. this literature generally defines comprehensiveness as the degree of exhaustiveness in terms of environmental scanning, consideration of multiple alternatives, and integration of the decision into the overall organizational goal and strategy (eisenhardt, 1989 & 1990; miller & friesen, 1983; mintzberg, 1990). an important and long-standing question in strategic decision-making research is whether comprehensiveness has a positive effect on firm performance in dynamic environments. although a large body of research has been undertaken concerning this question, the performance effects of decisionmaking comprehensiveness in dynamic environments are still not clear, given the mixed research findings (shepherd & rudd, 2014). there are two conflicting views on the effectiveness of the decision-making comprehensiveness in dynamic environments. some scholars (e.g., fredrickson, 1984; fredrickson & mitchell, 1984; mintzberg & waters, 1985; mintzberg, 1990) argue that comprehensiveness is too time consuming and is therefore not appropriate in dynamic environments. however, others (e.g., bourgeois, 1985; dean & sharfman, 1996; eisenhardt, 1989, 1990; miller & friesen, 1983) argue that this comprehensiveness leads to better quality decisions because of a more in-depth and extensive analysis of the environment. furthermore, it provides benefits such as increased confidence, accelerated cognitive processing, and fallback positions. we observe that both views are problematic. the scholars who argue for comprehensiveness assume that a firm has access to information to consider multiple alternatives simultaneously. in contrast, the 134 american journal of management vol. 17(4) 2017 scholars who argue against it ignore the risk of not having alternatives to provide fallback positions in case of implementation failure. they assume that there is a need for a compromise between the speed and quality of decisions in dynamic environments. the purpose of this article is to clarify the construct of comprehensiveness in strategic decision making and in doing so, to reconcile the debate on the effectiveness of decision-making comprehensiveness in dynamic environments. theory and propositions there are two broad models prevalent in the literature on strategic decision processes�the rational and incremental models (fredrickson, 1984; fredrickson & mitchell, 1984; miller, 1987). the rational model argues that strategic decisions should be made with careful planning and analysis. this model calls for a systematic process such as environmental analysis, internal organizational analysis, searching for alternatives, selecting among alternatives, and integrating decisions into the overall designing and planning of strategies (andrews 1971; ansoff, 1965; chandler, 1962; hofer & schendel, 1978; janis & mann, 1977; selznick, 1957). in contrast, the incremental model argues that due to bounded rationality and budget constraints, decision making should be an intuitive, adaptive, and spontaneous process that does not involve formal planning (lindblom, 1952; march & simon, 1958; mintzberg, 1978; quinn, 1982; simon, 1959, 1979). the rational model selznick (1957), in his classical book on the role of leadership, emphasizes that the role of leaders is to recognize external expectations and to match the internal organizational policies with the external social environments. following this line of reasoning, ansoff (1965) suggests that strategy formulation includes steps such as identifying opportunity and risk, determining companies� resources and the aspirations of senior management, and recognizing noneconomic resources. similarly, andrews (1971) offers a model for strategy formulation that stresses the importance of matching organizational strengths and weaknesses with external environmental opportunities and threats. according to hofer and schendel (1978), most strategy formulation models comprise the following steps: identification of opportunity, environmental analysis, resource analysis, gap analysis, identification of alternatives, evaluation of options, and strategic choices. the incremental model according to the incremental model, strategy formulation should be an adaptive or evolutionary process rather than based on formal analysis or planning. while strategy formulation does have patterns, these patterns are realized, as opposed to intended (mintzberg, 1978). organizations follow an adaptive mode where clear goals do not exist; and organizations make decisions in incremental, disjointed steps instead of formal planning and following integrative comprehensiveness (quinn, 1982). comprehensiveness comprehensiveness in decision making is a fundamental feature of the rational model of decision making and the feature that distinguishes it from the incremental model (fredrickson & mitchell, 1984). in the literature, many scholars have used the term comprehensiveness and rationality interchangeably (e.g., goll & rasheed, 1997; langley 1989; mueller, mark, & vincent, 2000; priem, rasheed & kotulic, 1995). comprehensiveness involves investigating multiple alternatives, carefully analyzing the costs and benefits of different alternatives, making detailed plans for implementation and integrating the decisions into overall strategy, or integrative comprehensiveness (eisenhardt, 1989, 1990; jannis & mann, 1977; miller & friesen, 1983). advocates of the rational model, while agreeing that comprehensiveness can be time consuming, argue that the advantages of comprehensiveness outweigh its disadvantages because without comprehensiveness, there are no rules to guide firms in their search for opportunities (ansoff, 1988) or no alternatives to fall back on in case of implementation failure (eisenhardt, 1989). american journal of management vol. 17(4) 2017 135 in the past few decades, strategic management scholars have moved their emphasis away from comparing rational and incremental decision processes to focus on the environmental context of the comprehensiveness-performance relationship (goll & rasheed, 1997). for example, mintzberg (1973), mintzberg, raisinghani, & theoret (1976), and nutt (1976 & 1984) find that organizations use either approach to strategic decision making depending on the contingencies. their inductive research shows that organizations use a variety of different types of strategic decision making that depend on the situational conditions. prior studies have shown that contingencies such as organizational characteristics (e.g., elbanna & child, 2007; miller, 1987), environmental conditions (e.g., anderson & paine, 1975; hough & white, 2003), decision-specific characteristics (e.g., elbanna & child, 2007; nutt, 1976), and top management team characteristics (e.g., clark & maggitti, 2012; souitaris & maestro, 2010) could influence the choice of one model over the other. concerning these contextual factors, one of the most heated debates is on the comprehensivenessperformance relationship under the conditions of high environmental dynamism (rajagopalan, rasheed, & datta, 1993; shepherd & rudd, 2014). one reason for this could be that there are still so many contradictions in the findings of the scholars who have focused on the dynamism aspect of the environment and that these scholars are still conducting empirical studies to find conclusive evidence regarding the nature of this relationship. this article, therefore, focuses on the dynamism aspect of the environment in determining the nature of the comprehensiveness-performance relationship while clarifying the comprehensiveness construct. comprehensiveness and environmental dynamism duncan defines dynamism as �the degree to which the factors of the decision unit�s internal and external environment are in a continual process of change� (duncan, 1972, p.316). he finds that dynamic environments require the consideration of a variety of different factors in decision making over time since the environment changes constantly. as such, a dynamic environment is generally defined as an environment that changes rapidly and frequently, and hence is highly uncertain. the literature on decision making in dynamic environments has focused on two key points. first, since dynamic environments change constantly, it is critical to make fast decisions in such an environment. for example, eisenhardt (1989) stresses the importance of making fast decisions in dynamic environments by arguing that slow decision making might result in opportunity loss and a decreased grasp of the situation, particularly in such environments. also, a number of articles on decision making emphasize the importance of considering multiple perspectives in dynamic environments in order to deal with the uncertainty imposed by such an environment for quality decision making (e.g., eisenhardt, 1989 & 1990). as such, scholars have long debated whether the comprehensive model of decision making is appropriate for dynamic environments that require additional planning and analysis or whether the uncertain nature of such environments calls for adaptive, unstructured decision making in order to be timely and less costly. a number of scholars have conducted empirical studies to show that successful decision making in dynamic environments calls for comprehensiveness. eisenhardt (1989, 1990) argues that fast decisionmakers use more, rather than less, information than slow decision-makers in a dynamic environment. she stresses the importance of making comprehensive decisions in dynamic environments by arguing that such decisions provide a deeper analysis of the environment and provide greater confidence to act. she also argues that since dynamic environments are highly uncertain, the consideration of multiple perspectives provides fallback positions in case of unexpected environmental changes. consistent with this view, miller and friesen (1983) find that dynamic environments should be studied very carefully and, hence, require greater analysis and innovation. similarly, bourgeois (1985) finds that obtaining high performance in dynamic environments requires the assessment of a large number of goals. priem et al. (1995) also indicate that the uncertain nature of dynamic environments requires greater scanning and analysis of a greater number of alternatives. on the other hand, there is another group of scholars who hold an opposing view. these scholars argue that the uncertainty and volatility in dynamic environments calls for quick decisions, and therefore, 136 american journal of management vol. 17(4) 2017 making comprehensive decisions is risky since it might dramatically slow down the decision process (fredrickson, 1984; fredrickson &mitchell, 1984; mintzberg, & waters 1985; mintzberg, 1990). fredrickson (1984) criticizes the rational approach to decision making in dynamic environments by arguing that scholars who favor rationality ignore the fact that gathering information to consider multiple alternatives is too time consuming. mintzberg and waters (1985) and mintzberg (1990) also criticize the main assumption of the rational model that assumes that a firm has access to all the necessary information about its environment and can use such information to make comprehensive decisions. clarification of the comprehensiveness construct we first distinguish the comprehensiveness construct from the pace construct, and then clarify the comprehensiveness construct by classifying its dimensions into two different categories: procedural and cognitive. comprehensiveness and pace of strategic decision making the speed or pace of decision making is defined as �the time between the first reference to deliberate action, such as scheduling a meeting or seeking information, to the time in which a commitment to act was made� (judge & miller, 1991, p. 455). critics of the rational process have often criticized comprehensiveness because a comprehensive analysis in dynamic environments slows down decision making. these critics argue that dynamic environments require fast decision making (fredrickson & mitchell, 1984; lindblom, 1952; march & simon, 1958; mintzberg, 1978; quinn, 1982; simon, 1959 & 1979). following this logic, some researchers have failed to distinguish between the comprehensiveness and the pace constructs and have included items such as �time spent by top managers on analyzing key decisions� (miller & friesen, 1983) and �the extent to which choices among alternatives are made rapidly� (priem, et al., 1995) in their operationalization of the comprehensiveness construct. other scholars, who have not directly used an item for pace, have based their critiques of a comprehensive analysis in dynamic environments on the grounds that such processes tend to slow down decision making (fredrickson, 1984; fredrickson & mitchell, 1984; mintzberg, 1978). while scholars have generally agreed that following comprehensive decision making can result in better decisions, some have opposed the idea of following comprehensive processes in dynamic environments based on the grounds that such process might slow down the decision process. however, we argue that making comprehensive and fast decisions simultaneously is possible. the quality of decisions does not need to be compromised to make fast decisions. specifically, the speed of strategic decision making is captured by the construct of pace, which has its own sets of antecedents such as the cognitive ability of decision-makers (eisenhardt, 1989; hitt & tyler, 1991; wally & baum, 1994); organizational structural antecedents, such as centralization, formalization, and size (baum & wally, 2003; fredrickson & iaquinto, 1989; wally & baum, 1994); and process specific antecedents, such as the use of experienced counselors, the use of real-time information, and the experience levels of the people involved (eisenhardt, 1989; judge & miller, 1991). whether comprehensiveness slows down the decision process or not depends on the antecedents to speed or pace. comprehensive decision making can be highly effective in dynamic environments because the complexity of such environments requires greater, in-depth analysis (bourgeois, 1985; dean &sharfman, 1993; eisenhardt, 1989,1990; miller &friesen, 1983). however, due to the fast-paced nature of dynamic environments, timely decisions must be made. therefore, an optimal situation in dynamic environments is to make comprehensive decisions without compromising on speed. in summary, this discussion makes two points: first, pace is not a subdimension of the comprehensiveness construct; and second, the relationship between comprehensiveness and pace is not a simple, or direct relation, that is, comprehensiveness might not necessarily slow down the decision process because the construct of pace has its own set of antecedents that influence whether firms can make fast or slow decisions. therefore: proposition 1: pace is not a salient dimension of the comprehensiveness construct. american journal of management vol. 17(4) 2017 137 proposition 2: the comprehensiveness construct and the pace construct can have separate antecedents and can vary independently of each other in different contexts. dimensions of the comprehensiveness construct critics of the rational model have also criticized the model based on the grounds of bounded rationality (march & simon, 1958). they argue that it is impossible to be completely comprehensive and follow a rational model of decision making. as such, their arguments are based on the conceptualization of comprehensiveness as a formal process that covers all aspects of sequential decision making (both in terms of breadth and depth of analysis; see lindblom, 1952; mintzberg, 1978; simon, 1959, 1979). however, advocates of the comprehensive process also recognize the limits to rationality and the disadvantages of using formal approaches. for example, ansoff (1988) argues that while formal planning might have disadvantages such as the commitment of time and money, its advantages outweigh the disadvantages. similarly, eisenhardt (1989,1990) argues that comprehensiveness is a multidimensional construct where some of its dimensions result in effective decision making but not all do. therefore, the conceptualization of the construct of comprehensiveness in this article assumes that the comprehensiveness of decision making �reflects a desire to make the best decision possible under the circumstances� (dean &sharfman, 1993, p. 589). thus, the comprehensiveness construct is not based on the rational model in the economic theoretical sense (see simon, 1959, 1979). it is defined in terms of the �extent� to which firms use depth of analysis, the �extent� to which they consider the range of alternatives available under the circumstances in making strategic decisions, and the extent to which firms integrate decisions into the overall decisions. these terms do not mean that firms should consider or conduct an in-depth analysis of each and every alternative that exists for the situation in order to be comprehensive. much of the research has combined various dimensions of the comprehensive construct to come up with a comprehensive scale. in contrast, we break down the construct into two broad categories� procedural and cognitive�each consisting of multiple dimensions. we argue that a separate scale is required to capture each of these categories, because each might have different effects on performance in dynamic environments. procedural comprehensiveness procedural comprehensiveness comprises two main sub-dimensions: (1) the use of formal methods to generate a breadth of alternatives and (2) the use of a sequential process to conduct a comprehensive analysis (i.e., formal, sequential procedures for covering depth of analysis and formal procedures for integrating strategies). some of the items used to operationalize comprehensiveness strongly focus on formal and systematic aspects associated with a formal analysis. examples of such items are �breadth of reports or summaries prepared� (fredrickson, 1984; fredrickson & mitchell, 1984); �application of operations research techniques such as linear programming and simulation to make major production, marketing and financial decisions� (priem, rasheed & kotulic, 1995); �a systematic search for opportunities and problems, and a systematic consideration of costs and benefits while planning� (goll & rasheed, 1997); �formalized, systematic search for and evaluation of opportunities for acquisitions, new investments, new markets, etc.� (priem, et al., 1995); and �breadth of techniques used to generate alternatives� fredrickson, 1984; fredrickson & mitchell, 1984). such items fall under the umbrella of procedural comprehensiveness, which we define as the extent to which firms� decision-makers use formal planning procedures such as reliance on operations research techniques, formal reports, and forecasted information and formally follow sequential processes such as identification of opportunity, environmental analysis, resource analysis, gap analysis, identification of alternatives, evaluation of options, integration of alternatives, and making strategic choices in making decisions (hofer & schendel, 1978; also see van de ven, 1992, for an excellent explanation of different types of process). 138 american journal of management vol. 17(4) 2017 such formal methods of analysis can be carried out simply as a part of routine or for symbolic and ritualistic purposes (meyer & rowan, 1977); this type of formality is not always beneficial in dynamic environments and can act as a structural constraint or lead to useless paperwork (langley, 1989 & 1990). for example, wally and baum�s (1994) empirical research shows that formalized decision-making structures, which they conceptualize as �the degree to which firms engaged in long-term, explicit planning� (1994, p. 941) reduces the pace of decision making that, in turn, decreases the firm�s performance (baum & wally, 2003). similarly, mueller et al.�s (2000) empirical research shows that formal analysis used for persuasion and communication purposes instead of for informational purposes results in lower levels of performance in dynamic environments (see also langley, 1989,1990). in summary, procedural comprehensiveness comprises all of the dimensions of the construct that involve the use of formalized procedures to make strategic decisions. such procedural comprehensiveness can decrease the pace of decision making and thus can be detrimental to the firm�s performance in dynamic environments in which the decision-making speed is particularly critical. cognitive comprehensiveness cognitive comprehensiveness includes two main sub-dimensions: (1) the use of informal planning methods to generate alternatives and (2) the use of a nonsequential process to conduct the comprehensive analysis (i.e., reliance on cognitive procedures for conducting depth of analysis and integrating strategies). some of the items in the literature on the comprehensiveness-performance relationship in dynamic environments focus on aspects of comprehensiveness that require cognitive abilities to collect, analyze, and process large quantities of information simultaneously as needed. examples of such items include �number of alternatives considered simultaneously� and �use of real-time information�; (eisenhardt, 1989; judge &miller, 1991); �effectiveness of group at focusing on crucial information and ignoring irrelevant information� (dean & sharfman, 1996); �breadth of participants� expertise� (fredrickson, 1984; fredrickson & mitchell, 1984); and �the number of alternatives which are considered simultaneously in decision making� (judge & miller, 1991). such items fall under the umbrella of cognitive comprehensiveness, which we define as the extent to which firms� decision-makers rely on informal methods to generate information and use informal, nonsequential planning methods. in other words, in order to be comprehensive, strategic decision making does not need to be a sequential, formal process where a group of people follow a step-by-step procedure as indicated in the normative models of decision making. instead of collecting forecasted information, a firm can use real-time information (eisenhardt, 1989). that is, firms can collect internal and external information on an on-going basis, and the firm�s decision-makers could use this information when and as needed instead of considering alternatives sequentially. further, the firms can consider multiple alternatives simultaneously (eisenhardt, 1989; souitaris and maestro, 2010; wally & baum, 1994). firms carry out such informal methods of analysis specifically for informational purposes instead of as a part of ritual. we propose that this type of informational comprehensiveness is beneficial in dynamic environments since it enables decision-makers to study these environments more carefully. the simultaneous consideration of multiple alternatives provides fallback positions in case of implementation failure (eisenhardt, 1989, 1990). for example, mueller et al.�s (2000) empirical research shows that a formal analysis used solely for informational purposes results in higher levels of performance in dynamic environments (see also langley, 1989,1990; wally and baum, 1994). as mentioned earlier, in cognitive comprehensiveness, instead of relying on formal methods of analysis, decision-makers rely on their intuition and cognitive abilities to guide them (khatri & ng, 2000). this reliance means that comprehensive processes take place in the minds of decision-makers, rather informally. that is, decision-makers might still use all of the steps involved in comprehensive strategic decision making but not sequentially. for example, carley (1986) argues that decision making is a two-stage process where the first step involves frame development, and the second step involves frame evaluation. in frame development, decision-makers collect large quantities of information on an on-going basis; and in the second stage, decisions are actually made from the evaluation of the initial frame. however, the author suggests that �the movement from the information gathering process to the american journal of management vol. 17(4) 2017 139 evaluative process is an abrupt transition, forced perhaps by outside forces� (1986, p.143). cognitive ability is required to recognize when this movement should take place and when to use the relevant information from the frame. for example, wally and baum�s (1994) empirical research indicates that decision-makers who rely on their cognitive ability and intuition tend to make faster and hence better decisions. similarly, hitt and tyler (1991) find that managers with higher cognitive complexity have more discretion in strategic choices because they are aware of more alternatives and can differentiate between various dimensions. therefore, we propose the following: proposition 3: procedural comprehensiveness and cognitive comprehensiveness are salient subdimensions of the comprehensiveness construct. proposition 4: the performance effects of salient dimensions of the comprehensiveness construct, procedural comprehensiveness, and cognitive comprehensiveness can vary independently of each other in dynamic environments. discussion and conclusion in this article, we distinguish between comprehensiveness and pace in strategic decision making and posit that the relationship between comprehensiveness and pace is not a simple or direct relationship. thus, we call into question the assumption that comprehensiveness slows down decision making because pace in decision making has its own set of antecedents. additionally, in contrast to previous research that has conceptualized comprehensiveness as a unidimensional construct, we propose that comprehensiveness is a multidimensional construct that can be grouped into two distinct categories � procedural and cognitive�that may have different effects on a firm�s performance in dynamic environments. indeed, the conceptualization of the comprehensiveness construct in the past research might have contributed to conflicting results on the performance effects of the decision-making comprehensiveness in dynamic environments. by clarifying the comprehensiveness construct and proving a possible reconciliation of the debate on the effectiveness of the decision-making comprehensiveness in dynamic environments, we make an important contribution to the decision-making literature. in doing so, our article also offers important insights for managers to better understand the nature and effectiveness of comprehensiveness in strategic decision making. the propositions we develop may offer additional areas for future research. first, empirical tests of these propositions will be important steps. specifically, we believe that the starting point is to establish the construct validity of comprehensiveness. future research could conduct a factor analysis to determine scales that could capture various dimensions of the procedural and cognitive categories of the comprehensiveness construct. in addition, since we propose that comprehensiveness does not have a direct relationship with the pace of decision making because pace is a separate construct with its own sets of antecedents, future research could test this proposition by studying whether controlling for factors that affect pace can influence its relationship with comprehensiveness, or the relationship between comprehensiveness and performance in dynamic environments. furthermore, future research should examine whether the factors associated with procedural comprehensiveness have a negative effect on a firm�s performance in dynamic environments and that those associated with cognitive comprehensiveness have a positive effect on performance in dynamic environments as we propose in this article. we expect that in-depth case studies as well as quantitative explorations could explore the relevance of our propositions. another important avenue for future studies is to explore how firms can make comprehensive decisions without compromising on the speed. despite calls from the literature for such research, little has been conducted to examine firms� capabilities that enable such decision making (shepherd & rudd, 2014). it would be beneficial to incorporate the insights from multiple areas that inform strategic decision-making research, such as the literatures on information and communication technology, cognitive theory, and behavioral theory. in particular, a research opportunity could be developing a framework that allows for simultaneous consideration of alternatives at a high speed. we believe that the 140 american journal of management vol. 17(4) 2017 social network literature may provide important insights into this strategic issue. given that effective information search requires weak ties and strong ties facilitate the transfer of fain-grained information as indicated in this literature (gulati, dialdin, & wang, 2002; hansen, 1999), it 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(1994). personal and structural determinants of the pace of strategic decision making. the academy of management journal, 37(4), 932-956. ajm 17(1) master-lulu-revised.pdf american journal of management vol. 17(1) 2017 93 university distance learning program promotion jianfeng wang millersville university of pennsylvania david solan mansfield university of pennsylvania michael conaway mansfield university of pennsylvania andrew gleason mansfield university of pennsylvania amy monroe mansfield university of pennsylvania with the rapid development of online programs, there have been few studies in the marketing literature focusing on the promotion of distance learning (dl) programs. this study chooses a university�s master level dl program exploring how the current students initially found the program. the results of the study can be used to aid in determining the most effective way to reach and attract potential students to the program. a survey method with 138 respondents is used. introduction distance learning (dl) creates many opportunities for learning in primary, secondary, and postsecondary institutions across the globe. moreover, dl can enhance the experience of the traditional student as well as the 60-year student for continuous life-long learning opportunities; such would include simple self-aggrandizement as well as career-essential life-long learning opportunities as well. some very respected institutions such as the wharton school of the university of pennsylvania have recognized the need to develop life-long relationships with its graduates by offering free seminars every few years as well as other continuing education and learning opportunities (dan, 2010). the distance learner consumer may include the traditional 4-year college student, the corporate learner, professional enhancement learner, degree-completion adult learner, precollege (k-12) learner, remedial and test-preparation learner, and the recreational learner (oblinger et al., 2001). the rapid growth of the elearner consumer and environment is associated with several core advantages the dl environment has over the traditional classroom style delivery venue. firstly, dl overcomes the barriers of geographic 94 american journal of management vol. 17(1) 2017 location, distance, and time. the distance learner can login anywhere there is internet access and at any time of the day or evening. in some instances, the distance learner can proceed at their own pace and login when it is convenient considering the contingencies of work, family, and other duties and responsibilities. secondly, the distance learner who prefers discussion and group interaction over lecture-style learning can participate well beyond the time constraints of the typical classroom and with every member of their class and the instructor as well. thirdly, distance learners in careers requiring constant learning and relearning can �update� in required areas conveniently and affordably as necessary. for some dl consumers, they can explore any area of human inquiry that peaks their interest often nurturing totally new career and professional interests. considering dl and the interests of organization in the public, private or not-for-profit sectors, dl can be incorporated into their executive development programs as well as their overall programs for employee continuing education and other needs. dl, in employee development as well as higher education, can incorporate an endless array of supplemental materials such as videos, speeches, and demonstrations as well as an enriching list of related websites and other learning materials. there are advantages as well for dl providers. considering the traditional university or college provider, dl opens up major new markets including the 60-year student and other students from many demographics domestically and internationally. certain university departments which must meet the needs of several stakeholder groups as required for accreditation can very quickly offer new courses and other materials to meet these educational and training challenges. colleges and universities may also experience cost savings as the digital classroom does not need to be built or maintained (poulin, 2013). as budget issues continue across the board, the online environment becomes increasingly attractive as an educational delivery medium. to meet the challenges of the growing online learning market and to become and remain competitive, both the private-sector elearning industry as well as the traditional college and university may have to incorporate various promotion and marketing techniques for their elearning opportunities. although 70% of chief academic leaders in the u.s. indicate that dl will be critical to their institution�s long-term strategic success (allen & seaman, 2013), very few studies have focused on how these organizations can effectively promote their online opportunities to prospective future students and other markets. developing and nurturing an effective brand such as penn state�s world campus is essential. providing effective radio, tv, and billboard ads can also help. another important area is to study the actual consumer of your elearning programs and how they researched and learned about your elearning opportunities; such data can be useful to further enhance your advertising and promotion activities. purpose of the study in response to the interest of online program promotion, this study chooses a university�s master level dl program. the m university�s (mu) school library & information technologies (sl&it) graduate program has strived to educate and prepare school library media specialists. this program was originally developed to serve the need for school library media specialists in pennsylvania and has since expanded to students in all areas of the united states. the program has been designed from five core essential objectives: design and evaluate instructional services, design instruction and curriculum, advocate for change and diversity, promote lifelong learning and collaboration, and continuing skills, knowledge, and professional practice. the directors of the sl&it master program have expressed the need to expand the program. they have set up an objective of the program in trying to gain more prospective students, and that is through advertisement. the purpose of this study is to determine how the current students initially found the program. the results of this study will be used to aid in determining the most effective way to reach and attract potential students to the sl&it program. american journal of management vol. 17(1) 2017 95 methodology following an interview with the sl&it�s executive directors, a questionnaire identifying promotion aspects of the sl&it program was designed. 360 current students in the sl&it program were selected as respondents. data was collected through the distribution of the questionnaire to the current sl&it students via the internet. the results were statistically analyzed using spss software. results the total number of respondents surveyed was 360 with 138 students responding. the response rate was 38.33%. the results are reported below: a. media mode: as shown in figure 1, 44.2% of the students, 61 people, initially found out about the program through a colleague or friend. the second most widely used source was through an online search, where 27.5%, 38 people, of current student�s initially found out about the program. a magazine advertisement was where approximately 21%, 29 people, of the student respondents found out about the program. 10.1%, 14 people, of the sl&it students found the program through m university�s website. figure 1 how did you initially find out mu's school library & information technologies (sl & it) online program? location analysis i: further analysis shows that 63% of those students from new york state initially found out about the program from a friend or colleague while 55% of the students from pennsylvania initially heard about the program from a friend or colleague. this indicates that more than half of current students in new york or pennsylvania heard about the program through word of mouth. figure 2 shows that the main media mode was through newspaper and magazine, in which 26% of current students have seen advertisements. the second media mode was through the internet in which 9% of current students have seen an advertisement of the program. 60% of the current students have never seen an advertisement of mu�s sl&it online program. 0 10 20 30 40 50 60 70 96 american journal of management vol. 17(1) 2017 figure 2 have you ever seen any advertisement for the sl&it program on any of the following media? location analysis ii: a further analysis shows that 21% of current students from pennsylvania have seen an advertisement on a newspaper or magazine. among those students from new york, 31% have seen an advertisement on a newspaper or magazine. 60% of students from new jersey have seen advertisement, and 100% of students from massachusetts have seen an advertisement on a newspaper or magazine. these results indicate that many students from northeast (ny, pa, ma, nj) have seen advertisement for mu�s program on a newspaper or magazine. advertisement modes were looked at to see which mode could reach the greatest number of prospective students. figure 3 shows the advertisement mode that has the greatest impact on the current sl&it students was through newspapers or magazines, with 34% of the respondents choosing that mode. television was the second most effective advertising mode with 28% of respondents choosing it. internet was also an effective mode for advertisement, with 23% of respondents choosing it. the other forms of advertisement channels, which include radio, billboards, and pamphlets, seem ineffective to the current ls&it students. figure 3 which advertising mode has the most impact on you? 0 10 20 30 40 50 60 70 80 90 0 10 20 30 40 50 newspaper / magazine internet radio billboard tv other american journal of management vol. 17(1) 2017 97 b. effectiveness of the advertising: in order to analyze those students who have seen an advertisement, only the students who have seen an advertisement were chosen (taken out 84 students who did not see any advertisement). as shown in figure 4, of the respondents who have seen some types of advertisement, 46% of them stated that they remembered the advertisement a little. 38% of the respondents who have seen an advertisement stated that they remembered it clearly. while only 16% of the students did not remember the advertisement at all. figure 4 how well do you remember the advertisement seen? as shown in figure 5, among those students who have seen an advertisement, 45% found it to be very influential at getting them to look further into the program. 33% of respondents found the advertisement to be somewhat influential. 22% of respondents found that the advertisement had no influence on them looking into the mu master�s program. figure 5 how effective was the advertisement at getting you to look further into the program? a crosstab analysis of the effectiveness of each specific advertisement mode on getting the current students to look further into the sl&it program was conducted. two advertisement modes that had an impact on the current student respondents was through newspaper or magazine, and the internet. the data remember ad not at all remember a little remember clearly effective ad no influence somewhat influential very influential 98 american journal of management vol. 17(1) 2017 shows that 46% of those respondents who have seen a newspaper or magazine advertisement found it to be very influential, while 39% found the advertisement somewhat influential. 15% of respondents said the newspaper or magazine advertisement had no influence on them looking into the mu program. for internet advertisement, 23% of respondents found the internet advertisement to be very influential on them deciding to look further into the program. 62% of respondents found it to be somewhat influential on their decision, and 15% found the internet advertisement to have no impact on their decision. c. the sl&it website: current students were asked about the type of search engines they used to find out information about the sl&it program at mu. as shown in figure 6, 47% of respondents went through google. yahoo was used by 11% of the students, while msn was only used by 6% of the students to find out more information about the program. 27% of the current master program students did not go through a search engine to find out information about the program. figure 6 which search engine did you go through to find the sl&it program? as shown in figure 7, among those students who went through google to find information about mu�s sl&it online program, only 8% of them found it somewhat difficult to find information using google. 61% of the students found the website easy to find through google, while 31% of the students found it very easy to find. information was gathered on the ease of getting to mu�s sl&it website through mu�s homepage. figure 8 shows that less than 1% found it to be very difficult and 11% thought the website was difficult to find. 16% of the students were neutral about the ease of finding the sl& it website. 44% of students thought it was easy to find the website, while 26% of students found it to be very easy to find. as shown in figure 9, when asked about the ease of finding information about �how to apply for the program on the sl&it website�, less than 1 % found it to be very difficult to find information. 3% of the students found it difficult, while 15% were completely neutral about the ease of finding information. 43% of the students thought it was easy to find information on the website on how to apply, and 35% considered it to be very easy. 0 10 20 30 40 50 60 70 google yahoo msn grad. school database n/a other american journal of management vol. 17(1) 2017 99 figure 7 if you found the sl&it website through google, how easy was it to find the website on google? figure 8 how easy is it to find the sl&it program through the mu homepage website? easy to use google somewhat difficult easy very easy locating sl&it website very difficult difficult neutral easy very easy 100 american journal of management vol. 17(1) 2017 figure 9 how easy were you able to locate information on the sl&it webpage on how to apply for the program? the video played on the sl&it website is filled with information that could be useful to current and prospective students. figure 10 shows 75% of current student respondents have never seen the video, while only 23% of them have played the video. figure 10 if you have ever been on the sl&it homepage, did you play the video? as shown in figure 11, of the students who have seen the video on the sl&it website, 86% of them said they enjoyed watching the video, while only 14% of them did not like the video. locating information very difficult difficult neutral easy 0 20 40 60 80 100 120 yes no n/a did you play the video? american journal of management vol. 17(1) 2017 101 figure 11 did you like the video on the sl&it homepage? as shown in figure 12, of those respondents who have seen the video on the sl&it website, less than 1% found the video to be ineffective at explaining the sl&it program. 35% of the students who have seen the video found it to be somewhat effective, while 39% of students found it was effective. 23% of the students who watched the video thought it was very effective at explaining the program. figure 12 how effective was the video at explaining the sl&it program? figure 13 shows that when asked about the effectiveness of the sl&it website at explaining the program, 16% of students thought it was somewhat effective. 48% felt that the website was effective, while 27% of students said it was very effective at explaining the program. 0 10 20 30 yes no effectiveness of video not effective somewhat effective effective very effective 102 american journal of management vol. 17(1) 2017 figure 13 how effective is the sl&it website at explaining the sl&it program? the �ask us� button on the sl&it website is used for students to get in contact with the advisers of the program. figure 14 shows 36% of the students have not used, or did not know about the �ask us� button. less than 1% of the students thought the button was difficult to find, while 9% felt neutral about finding it. 33% of students felt it was easy to find the �ask us� button, while 22% thought it was very easy to find the button. figure 15 shows that, of the students who have used a contact through the sl&it website, 10% thought the information given through the contact was only somewhat effective. 42% thought it was effective information, while 48% found the information received was very effective. figure 14 if you used a contact through the sl&it website to find out more information about the program, how easy was it to find the contact information or the ask us button? effectiveness of sl&it website not effective somewhat effective effective very effective ease of finding "ask us" difficult neutral easy very easy american journal of management vol. 17(1) 2017 103 figure 15 if you used a contact through the library science website to find out more information about the program, how effective was the response? a crosstab between the ease of finding contact information and the effectiveness of the information received from the contact was conducted. the data shows that 48% of the students who through the �ask us� button was very easy to find also felt the information received was very effective. 32% of students who thought the button was very easy to find did not use it at all. 42% of the students who only felt neutral about the ease of finding the �ask us� button thought the information received were somewhat effective. 17% of these students felt information received was very effective. conclusions in 2011, 65% of institutions reported that dl was critical to their long-term strategic plans (allen and seaman, 2011). online education is no longer simply a trend (kentnor, 2015), but how to promote college online program is still an insufficiently explored area. through survey method of a sample of 138 existing students, this study reveals how the dl students initially found the program, and determined the most effective way to reach and attract potential students to dl program. our research analyze the appropriate media mode for dl program promotion, the effectiveness of advertisement, and program website. media mode respondents who live in the surrounding areas of mu, which include new york and pennsylvania, initially found out about the sl& it program through a close source of theirs. these results suggest that prospective students from ny and pa can be brought in by increasing word of mouth. in the northeast area (ny, pa, nj, ma) most current students have seen an advertisement for the sl&it master program through a newspaper or magazine. furthermore, professional magazines such as national education association (nea) have been a popular source for bringing in prospective students. many of the respondents who chose �newspaper or magazine� for advertisement mode went on to say that the nea magazine is the only place they have seen an advertisement. the nea magazine has an average of 1 million readers a year. mu puts an advertisement in for the sl&it program 4 times a year. the questionnaire shows that this advertisement has been effective at reaching prospective students. interestingly, 60% of the respondents have never seen an advertisement through newspaper / magazine, internet, radio, tv or on a billboard. effectiveness of "ask us" somewhat effective effective very effective not used 104 american journal of management vol. 17(1) 2017 effectiveness of advertisement out of the respondents who have seen an advertisement for the sl&it program, 16% of them did not remember the advertisement at all. the majority of the students did remember the advertisement seen. 45% of the respondents reported that the advertisement seen was very influential at getting them to look further into the program. only 22% found the advertisement to have no influence on the students. these numbers suggest that not many students see an advertisement, but for the majority of those who have seen an ad find it effective at getting them to look into the sl&it program. the two media modes that had the greatest impact on the students were newspaper or magazine articles and through the internet. most of the students who saw an ad on a newspaper or magazine are from the northeast area of the country. the students who have seen an ad on a newspaper or magazine said they did remember the ad. the data shows that a majority of the students who have seen an ad on a newspaper or magazine had some sort of influence on them looking into the sl&it program. 92% students who saw an ad on an internet said that they remembered the advertisement. most students who saw an ad online were from across the country. the majority of the students who have seen an ad on the internet reported that it had some sort of influence on them looking into the program. sl& it program website the sl&it website is useful to prospective students because it is filled with intricate details that may help to sell the program. the section on the questionnaire was designed to see how easy the sl&it website is to find from a search engine, and how effective the website is on giving information about the program. half of the respondents have found the sl&it website through google. out of these students who went through google, the majority found the website easy to find. the majority of respondents also felt that the sl&it website was easy to find through m university homepage website. once on the sl&it website, most respondents thought it was easy to locate information on the website. there is a video which helps to explain the program on the website. the data shows that 75% of respondents have never watched the video. however, the majority of the respondents who have seen the video thought it was effective at explaining the sl&it master program. contact information is also an important aspect of the sl&it website. the data shows that most of the current student respondents have not used a contact on the website. recommendations advertising the sl&it master program should have a three-fold focus. there should be one focus on the �word-of mouth� advertising. the data shows that the majority of current students from the surrounding new york and pennsylvania areas found out about the program through a friend or colleague. the sl&it program should emphasize the importance of promoting through current students. an incentive could be set up for these students to increase the awareness of the program. another focus should pertain to the nea magazine and other newspapers that are circulated throughout the area and/or country. the newspaper / magazine media mode had the most impact on current students from the northeast (ny, pa, nj, ma). it was also found that this mode had the most influence on getting students to look further into the program. this media mode can be one of the cost effective ways to advertise and promote the program. if newspaper advertisement mode had been increased, it would have the potential to reach a larger portion of prospective students in the northeast part of the country, as well as throughout the country. the third focus of advertising should go towards increasing the amount of internet advertisements. the data shows that current students from across the nation were most influenced by ads found on the internet. as the global community grows more reliant on the internet, this mode of advertisement can serve to be more and more effective at reaching students. by increasing the amount of internet ads, more prospective students from across the country can be reached. american journal of management vol. 17(1) 2017 105 limitations there are a few limitations of this study. due to the budget and time constraints this study was only preliminary. with more time and resources this study could be expanded to include more respondents so that results of the sample would have a higher correlated with the population. the sample was selected through a convenience sampling. the questionnaire could also be refined. for example, questions should focus more on certain aspects the sl&it program could have done better to inform the public of the online program and possibly better ways to inform prospective students. references allen, i. e, & seaman, j. (2011). going the distance: online education in the united states. the online learning consortium. retrieved from http://sloanconsortium.org/publications/survey/going_distance_2011 allen, i. e, & seaman, j. (2013). changing course: ten years of tracking online education in the united states. the online learning consortium. retrieved from http://onlinelearningconsortium.org/publications/survey/chang ing_course_2012 dan, b. (2010). wharton, rebooted. inside higher ed. retrieved from http://www.insidehighered.com/news/2010/12/07/wharton kentnor, h. e. (2015). distance education and the evolution of online learning in the united states. curriculum and teaching dialogue, 17 (1 & 2), 21-34. oblinger, d.g., barone, c.a., and hawkins, b.l. (2001). distributed education and its challenges: an overview. washington d.c., american council of education. poulin, r. (2013). crafting an effective mooc: one community college�s experience. wcet frontiers. retrieved from http://wcetblog.wordpress.com/2013/08/06/creating-an-effective-mooc/ contact author: jianfeng wang, ph.d. associate professor management and marketing department millersville university of pennsylvania phone: (717) 871-4188 361 mccomsey. 1 s. george street, millersville, pa 17551 ajm 17(5) web_master.pdf ajm 17(4) web_master.pdf american journal of management vol. 17(4) 2017 119 universal demographic data collection standardization for better decision-making lara yahav the milla project james thorson southern connecticut state university global health care providers, health care networks, health care institutions, market researchers, as well as other public and private entities, could greatly benefit from universal demographic data standardization. the authors analyze data from data collection systems found in the united states, israel, and europe. each data collection system varies enough to prohibit information and knowledge exchanges. one use of data is to gain local insights to adapt to changing trends, however, in a global market varying data sets and interpretations could hinder accurate decision-making. introduction with the globalization of markets, as well as communities becoming more diverse, the lack of a universal demographic data collection standardization system could prevent sustainable public health growth and hinder economic development. there are currently no standardized global demographic census and statistics data collection models or systems (thomas & yahav, 2016). countries collect data utilizing differing inputs, models, and systems. these differences prohibit global communities to study, measure, categorize, and relate the data because it is not transferrable due to the lack of correlating variables. global health care providers, health care networks, health care institutions, market researchers, as well as other public and private entities, could greatly benefit from universal demographic data standardization. this paper will propose a universal demographic data collection system by presenting an adaptable model, framework, transferrable data sets, and collection techniques. objective the authors propose that a more detailed demographic data collection system could lead to better health care decisions. additionally, the authors introduce a universal demographic census and statistics data collection model and examine its economic feasibility. design the study was conducted utilizing quantitative and qualitative data published in peer-reviewed journals and demographic census bureau information collection agencies. 120 american journal of management vol. 17(4) 2017 current demographic data collection methods thomas and yahav (2016), analyzed data collection systems from the united states, israel, and europe and found the variables, datasets, and measurements to be non-transferrable to outside states. most developed and emerging countries conduct regular census surveys. the purpose of a census is to allow researchers an opportunity to observe or question a defined target population (hair jr., wolfinbarger celsi, ortinau, & bush, 2013). the census is used to assist decision-makers solve complex societal and economic challenges. if measurements are inaccurate the data findings are invalid, accurate decision-making is hindered. the global inefficiency of current demographic data collection systems, due largely in part by nonuniformity of datasets, is invalid and may be cultivating health disparity gaps, socioeconomic equity and equality gaps, and global socio-economic crises. macro-overview of united states, israel, and europe�s datasets the united states federal guidance requires a minimum of five racial categories (american indian or alaska native, asian, black or african american, native hawaiian or other pacific islander, and white) for data collection on race since the revision for the 2000 census, and two categories for ethnicity (hispanic or latino or not hispanic or latino) (executive office of the president, office of management and budget (omb), office of information and regulatory affairs, 1997) (thomas & yahav, 2016). these categories are used as datasets for decision-making purposes. the united states census collects income, education, family size, and other social factors through a variety of surveys and programs (united states census bureau, n.d.). surveys and questionnaires differ in questions, sample size, and methodology (united states census bureau, n.d.). this information is used to assist policy makers with information needed for programmatic decisions (united states census bureau, 2012). economic census is delivered to nearly 4 million businesses with paid employees (united states census bureau, 2012). education and social information is collected from the current population survey and the u.s. bureau of labor statistics (united states census bureau, 2016). israel has implemented a dissimilar demographical data collection method. israel collects demographic data by religion and population group (cbs, stastical abstract of israel 2010, 2010) (thomas & yahav, 2016). groupings by religion include: jewish, muslims, christians, druze, others (cbs, stastical abstract of israel 2010, 2010). the difference between population and religion groupings are the inclusion of religion by arab race. jewish israelis are jewish as a race and a religion (jewish virtual library, 2016) (thomas & yahav, 2016). these categories are used as datasets to assist israeli decision-makers. israel collects socio-economic factors using two methods, surveying and estimation (central bureau of statistics, n.d.). the social survey is ongoing and provides information on living conditions and popular perceptions and opinions of the public (central bureau of statistics, n.d.). in addition, the social survey collects information on demographic, geographic, and socio-economic information (central bureau of statistics, n.d.). the methodology of data collection comprises of surveying permanent noninstitutional population aged 20 years or older. new immigrants who have been present for at least six months are included in the survey. the latest report states the final sampling size of 7,500 persons (central bureau of statistics, n.d.). the european commission collects population data utilizing a variety of characteristics, which are in turned used as datasets. these characteristics include marital status, citizenship and country of birth (european commission, 2015). the methodology used by the european commission to collect the data requires eu member states� national statistical institutes and almost all non-eu member states to provide demographical data to eurostat several times a year (european commission, 2015) (thomas & yahav, 2016). the european commission collects socio-economic data utilizing a quarterly and annual approach (european union, 2016). the survey covers the entire country and is extended to only private households where one member is under the age of 77 (european union, 2016). the planned sampling size is around 14,625 households (european union, 2016). the labor force survey is based on a two-stage stratified american journal of management vol. 17(4) 2017 121 cluster sample. in the first stage 2,446 districts are selected with the second stage having a randomly equal number of eight households selected (european union, 2016). known issues of current demographic data collection methods nonuniformity in structural modeling for hypothesis with variable relations result in biased findings and errors (schmidt & hunter, 2015). biased-results and errors on individual research could cause large scale errors on meta-analysis with significant ramifications. reporting biased-results and errors are not intentionally committed. measurement errors, sampling errors, data errors, along with other factors distort raw data (schmidt & hunter, 2015). information interpretation interpreting and understanding information is also limited to one�s parameters of their current state of understanding, knowledge (or education), internal/external influences, culture, and emotions (curras, 2013). information is being produced at a rate faster than what humans are currently capable of processing (curras, 2013). filtering information by applying universal framework is nonexistent. thus fosters, if not encourages, an individualized process of interpretation, processing, and application of data to form judgements and make decisions. this is especially relevant to those in decision-making positions. whether the decision-maker is a policy advisor, health care professional, or business executive the �freedom� of information interpretation has the potential to cause a health care or economic crisis. global health care implications business has morphed into a global environment (peng, 2014). it is virtually impossible to conduct business without some element of globalization. this includes international business activities and domestic business activities because many domestic business markets and suppliers are globalized (peng, 2014). businesses that lack accurate data are less likely to have the ability to make informed decisions. this could impact investments, funding, and budget allocations. health care, science, and research, all are businesses and recipients of investments and funding. in addition, all are gravely impacted by the lack of accurate, specificity, sets of data, and quality. the lack of uniformity and global framework could be perpetuating health care disparities in domestic and international societies. this could be linked to the high cost of health care for individuals, states, and private insurance companies (powell, 2016). in addition, inaccurate data and information could be perpetuating the low rate of global health care communication, patient safety, and effective care between high-income countries and low-income countries. countries participating in health care trade or collaborative positions are well aligned for winwin outcomes. implications to the american health care system while access to health care has increased in america, physician reimbursement rates have decreased. some states within america are reducing or cutting programs that assist the marginal with access to quality health care, or health care services. for example, in 2016 connecticut reduced budgets for hospitals, psychiatric centers for children, and substance and mental health services (cummings, 2016). the health care landscape in america continues to change. providers and health care networks are expected to provide equitable, culturally-responsive, personalized care, but may now lack monetary resources. networks and physicians may be unable to accurately identify their patient-base due to inadequate data collection and data elements (agency for healthcare research and quality, 2014). state decisionmakers could be unknowingly utilizing invalid data for reference when making important decisions. implications to the israeli health care system while all israeli citizens have state insurance (penn leonard davis institute of health economics, 2014), health care disparities and equity gaps exist most notably between the south and north (new israeli 122 american journal of management vol. 17(4) 2017 fund, 2014). the cost of a national health care plan, paired with access and equity issues, is causing economic concerns for israel (penn leonard davis institute of health economics, 2014). as decisionmakers work towards bridging equity gaps the vast amount of benefits and opportunities for translational research cannot be utilized due to the lack of a global system that promotes uniformity and standardization. if data were collected and shared within a validated manner, medical leadership and innovation could advance national and global prevalence, communication, and shared contributions (antman, 2015). investors and decision-makers could foster an effective system that could bridge health care gaps between israel�s north and south while contributing to the overall global advancement of public health, science and patient care. such pioneering could bring new investors, relieving some of the financial burden israel is now carrying (roman, 2015). implications to the european health care system like israel, europe has a national insurance system. the health care system is primarily built from political, historical, and socio-economic traditions (european parliament, 1998). however, individual countries have begun to allow a competitive market by permitting private insurance companies to enter (european parliament, 1998). while the market may be diversifying, health policy-making is guided by the principle of subsidiary and the approval of national laws is excluded in article 129 of the european union treaty (european parliament, 1998). within the european union, one current issue is the differing demographic data collection methodology. for example, health care mortality and morbidity are determined by age and gender and do not include race, ethnicity, or socio-economic factors. �leading causes of death allow determination of health care needs for different genders, age groups, races, and social classes,� (european parliament, 1998). see table 1. in addition, collecting demographic data with limiting variables perpetuate inequities in health care, access to health care, and inhibit financial decision-making. while most of the literature researched compared countries within the european union, the lack of global research and collaborations within the european union�s national health system restricts foreign direct investment, cross-border services, and global trade (smith, chanda, & tangcharoensathien, 2009). american journal of management vol. 17(4) 2017 123 source: (european parliament, 1998) demographic and health framework and data collection globalization current global framework the world health organization (who) conducted a study entitled, �demographic and health surveillance: longitudinal ethical considerations.� the purpose of who�s study was to identify drivers of health care inequities, current regulatory framework, ethical issues surrounding demographic and health surveillance (dhs). dhs identified a gap between practice, research and surveillance (carrel & rennie, 2008). council for international organizations of medical sciences (cioms) released new epidemiology guidelines which addresses observational or other studies that take place at community or population levels (carrel & rennie, 2008). however, these standards are applied to biomedical research. the new recommendations include and emphasize individual-level, informed and culturally sensitive approaches (carrel & rennie, 2008). who and international network of field sites with continuous demographic evaluation of populations and their health (indepth) recommend any parties interested in initiating dhs to establish three committees: a scientific advisory committee, a management committee and an intuitional review board (carrel & rennie, 2008). moreover, individuals and/or institutions must decide whether their goal is to treat the disease or to focus, treat and study patients or participants. reliable surveillance on health and demographic patterns are essential. dhs surveillance is only effective when the entire 124 american journal of management vol. 17(4) 2017 population is monitored and accurate information on demographics and health patterns can be gathered (carrel & rennie, 2008). there is no global mandated framework; one must subscribe to dhs�s and indepth�s recommended framework. however, those who do, position themselves, and their countries, to participate in global health care trade and foreign direct investments, relieving financial burdens and pioneering research and medical aid to bridge health care inequalities. global data collection inefficiencies in 2008, the agency for health care research and quality conferred with more than 50 leaders from public and private organizations to discuss challenges associated with the collection, aggregation, reporting and interpretation of health data information (the foundation of research and education (fore) of the american health, information management association (ahima) and the medical group, management association center for research (mgma cfr), 2006). attendees discussed data collection issues, excess cost, and other quality and performance reporting. their goal was to identify approaches that could be adapted nationwide within a period of five years or less (fore, et. al., 2006). however, if this concept was expanded to a globalized approach, it could still prove sustainable. their action plan consisted of the following: prioritizing and standardizing performance measure sets across medical specialties and care settings. such an effort must ensure that data gathered support the informational needs of providers as well as payers, public health researchers, policymakers, and others using performance data to make decisions. 1) facilitating a process of obtaining regular input from stakeholders about standards for administrative and clinical measurements of provider performance. 2) developing common definitions and terminology for performance measurement. reaching national agreement on the basic, uniform data set to serve as a starting point from which to measure health care quality, and a standard minimum demographic data set. 3) harmonizing possible measures between physician and hospital settings and within each setting. such an effort could further streamline measure development and endorsement, which has been under way through the efforts of the aqa (formerly known as the ambulatory care quality alliance) and national quality forum (nqf). 4) helping define the process of integrating administrative and key clinical data with the aim of promoting full electronic health record (ehr) functionality and efficient data extraction for multiple uses. 5) developing guidelines for establishing, validating, and approving metrics to measure and report quality. 6) defining standards that bring together state concerns so that regional and local performance measurement initiatives can align with national initiatives. 7) designing strategies that can help advance the universal adoption of affordable electronic data systems by all health care data collectors. 8) advising efforts by public and private stakeholders to develop common national standards that outline a national framework for the secondary use of health data with appropriate protections for legitimate secondary use. 9) engaging with federal, state, and local agencies to work within the data gathering goals that are developed. (fore, et. al., 2006) summarized, issues regarding performance measurement data collection and reporting consist of variations in data collection, systems and metrics being organized and categorized in a controlled manner (fore, et. al., 2006). documentation and data quality issues within the health care organization tend to be incomplete, disparate electronic systems with failure to understand coding and performance measurements, inconsistent policies and practices. in addition, organizational and cultural factors inhibit accurate data when the process of analyzing and reporting performance measures are inconsistent, complex, and unstable. finally, technological barriers include costs, security and privacy, and the need for lead national and international efforts to address ownership, especially to streamline data sets for population health and quality measurements (fore, et. al., 2006). it is without doubt international leaders must come together to lead surveillance and globalized standards in analysis, measurements, and data sets. every country must prioritize adapting and surveying american journal of management vol. 17(4) 2017 125 a globalized health care methodology for best practices. this priority must be upheld and remain coordinated against all competing priorities. ethnicity and socio-economic effects socio-economic factors, including societal norms, values, traditions, education, and social/political environment impact minority health (geiger, 2003). however, science has identified various ethnicities could have a biological, or genetic, proneness to specific diseases (geiger, 2003). atypical medical conditions are more prevalent in middle eastern and north africans. unique health care needs due to the rapid increase in population, rate of consanguinity, and genetic differences requires new protocols and patient specific care (thomas & page, 2016) (el-hazmi et al, 2011). cancer, stroke, and coronary heart disease has been linked to ethnicity (geiger, 2003). research differentiating between ethnicity effects vs socio-economic effects is needed. in addition, recent suggestions indicate a need for ethnic-based scientific research. redefining definitions and data variables there appears to be ambiguity and/or confusion regarding the terms �race� and �ethnicity.� one factor contributing towards the ambiguity and confusion is the usage of terms being used almost solely by the united states (morning, 2005). in fact, the united states uses the terms interchangeably (morning, 2005). race is defined as, �a group of people identified from other groups because of supposed physical traits shared by a group of people,� (the free dictionary, 2016). according to free dictionary (2016), race is not a recognized biologically valid classification. because the united states is almost alone in using the term �race� (morning, 2005), the removal of the term is recommended. on the other hand, ethnicity is universally understood. for clarification purposes, the term ethnicity refers to, �a social group that shares a common and distinctive culture, religion, language or the like,� (dictionary.com, 2016). if modifications to global framework include a universally agreed upon definition, and race as a category is removed, it is possible to utilize ethnicity as a measurable and shared variable. see appendix a and b for a valid ethnicity model example. socio-economic variables, data preparation, and data collection variables could provide helpful information for health care, science, as well as other industries. however, how the data is collected, interpreted, and used impacts validity (vyas, 2016). interpretation of an individual�s socio-economic status requires the interpreter to understand the social gradient. the world health organization defines the social gradient relative to health, �there is a social gradient in health that runs from top to bottom of the socioeconomic spectrum. this is a global phenomenon, seen in low, middle and high income countries. the social gradient in health means that health inequities affect everyone,� (world health organization, 2006). creating global variable sets, data preparation methodology, and data collection variables policies would require leaders from international public and private organizations to work together. once variables, data preparation and collection standards are set, the interpretation of the data must be specific to the geographical region the data was gathered within. for example, researchers could not transpose data collected from silicon valley, california residents and compare it to oakland, california residents (vyas, 2016). appendix c provides possible a starting point for leaders to build from. conclusion countries collect data utilizing differing inputs, models, and systems. these differences prohibit global communities to study, measure, categorize, and relate the data because it is not transferrable due to the lack of correlating variables. the global efficiency of current demographic data collection systems is invalid and may be cultivating health disparity gaps, socio-economic equity and equality gaps, and global socio-economic crises. while all three methodologies have independent strong points, it is unclear if one method is superior to another due to the overwhelming health disparities in all of the before mentioned countries. the lack of uniformity and global framework could be perpetuating health care disparities in domestic and international societies. 126 american journal of management vol. 17(4) 2017 interpreting and understanding information is also limited to parameters of ones current state of understanding, knowledge (or education), internal/external influences, culture, and emotions (curras, 2013). countries participating in health care trade or collaborations position themselves for win-win scenarios. issues regarding performance measurement data collection and reporting consist of variations in data collection, systems and metrics being organized and categorized in a controlled manner (fore, et. al., 2006). it is without doubt international leaders must come together to lead surveillance and globalized standards. global data collection framework requires definition and variable modifications. the term �race� is primarily used by the united states. it is possible to collect ethnicity, using alternative variables which also identify �race.� including socio-economic variables, and comparing the data within specific geographical regions cultivates valid interpretations. identifying definitions, variable sets, and data interpretation policies will assist researchers interpreting the data in a manner which fosters positive decision-making. the cost benefit analysis of expanding demographic data collection may not be the proper criterion to forward initiatives for healthy societies because, �is not easy to estimate the monetary costs of a particular policy, but in many cases it is even more difficult to estimate the monetary benefits.� (herrmann, 2015). a cost benefit analysis is appropriate for individual economic actors that operate within rigid and confining budget constraints (herrmann, 2015). therefore, it makes may make little sense to use a cost benefit analysis to understand the overall impact on a globalized scale unless we include the expansion of social protection systems and sustainable development in the benefit-cost ratio (herrmann, 2015). american journal of management vol. 17(4) 2017 127 references agency for health care research and quality. 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(2006). key concepts. retrieved from social determinants of health: http://www.who.int/social_determinants/final_report/key_concepts_en.pdf?ua=1 american journal of management vol. 17(4) 2017 129 appendices appendix a � countries included in regional groupings countries included in regional groupings organizing scheme borrowed from united nations statistical division. countries marked with an asterisk * are those whose censuses from the 1995-2004 period were used for this study (united nations statistical division, 2003). north america anguilla* antigua and barbuda aruba bahamas* barbados belize* bermuda* british virgin islands canada* cayman islands costa rica* cuba dominica dominican republic el salvador greenland grenada guadeloupe guatemala* haiti* honduras* jamaica* martinique mexico* montserrat netherlands antilles nicaragua* panama* puerto rico* saint kitts and nevis saint lucia* saint pierre and miquelon saint vincent and the grenadines trinidad and tobago* turks and caicos islands united states* u.s. virgin islands* south america argentina* bolivia* brazil* chile* colombia ecuador falkland islands (malvinas) french guiana* guyana* paraguay* peru* suriname* uruguay* venezuela* africa algeria angola benin botswana* burkina faso burundi cameroon cape verde* central african republic chad comoros congo cote d'ivoire democratic republic of the congo djibouti egypt* equatorial guinea eritrea ethiopia gabon gambia ghana* guinea* guinea-bissau kenya* lesotho* liberia libyan arab jamahiriya madagascar malawi* mali mauritania mauritius* morocco* mozambique* namibia* niger nigeria réunion rwanda saint helena sao tome and principe senegal* seychelles* sierra leone somalia south africa* sudan swaziland* togo tunisia uganda united rep. of tanzania* western sahara zambia* zimbabwe* page 49 of 57 morning ethnic classification in international perspective europe albania* andorra austria* belarus* belgium* bosnia and herzegovina bulgaria* channel islands (guernsey) * channel islands (jersey) * croatia* czech republic* denmark 130 american journal of management vol. 17(4) 2017 estonia* faeroe islands finland* france* germany gibraltar greece* holy see hungary* iceland ireland* isle of man* italy* latvia* liechtenstein* lithuania* luxembourg* malta* monaco* netherlands norway* poland* portugal* republic of moldova* romania* russian federation* san marino slovakia slovenia* spain* svalbard and jan mayen islands sweden switzerland* former yugoslav republic of macedonia* ukraine* united kingdom* yugoslavia* asia afghanistan armenia* azerbaijan* bahrain* bangladesh bhutan brunei darussalam cambodia* china* cyprus* democratic people's republic of korea east timor* georgia* hong kong* india* indonesia* iran iraq* israel* japan* jordan kazakhstan* kuwait* kyrgyzstan* lao people's dem. republic* lebanon macao* malaysia* maldives* mongolia* myanmar nepal* palestinian territory* oman pakistan* philippines* qatar republic of korea* saudi arabia singapore* sri lanka* syrian arab republic tajikistan* thailand* turkey* turkmenistan* united arab emirates uzbekistan* vietnam* yemen* oceania american samoa* australia* cook islands* fiji* french polynesia* guam* kiribati* marshall islands micronesia (federated states of)* nauru* new caledonia* new zealand* niue norfolk island northern mariana islands* palau papua new guinea* pitcairn samoa solomon islands* tokelau* tonga* tuvalu* vanuatu* wallis and futuna islands* american journal of management vol. 17(4) 2017 131 appendix b � ethnic categories ethnic categories through continental origins a valid collection method used to collect ethnicity, which could also identify race (morning, 2005). instructions: please identify which ethnic group you identify with by marking an x in one section from a to f. ethnicity is defined as a social group that shares a common and distinctive culture, religion, language or the like. a. african please write in your specific background: ________________________ b. asian please write in your specific background: ________________________ c. european please write in your specific background: ________________________ d. north american please write in your specific background: ________________________ e. oceanic please write in your specific background: ________________________ f. south american please write in your specific background: ________________________ g. two or more (mixed ethnicity) please write in your specific background: ________________________ 132 american journal of management vol. 17(4) 2017 appendix c � socio-economic categories please indicate your gender: ________ male ______ female other: _ ______________________ age: _______ religion: ________________________ dietary or medicine restrictions (including religious restrictions): _______ primary language: _____________________________ secondary language: ___________________________ highest level of education completed? ______________ income/trade: _________________________________ i receive government assistance trade (for food, housing, or other basic needs) my salary is ______________________ circle one: per day, week, month, annual, or other: ___________________________ my income is: reliable somewhat reliable somewhat unreliable not reliable ajm 17(5) web_master.pdf ajm 18(2) master-revised-2.pdf ajm 17(2) master-lulu-revised.pdf american journal of management vol. 17(2) 2017 47 does the number of interlocking directors influence a firm�s financial performance? an exploratory meta-analysis nai h. lamb assistant professor of management university of tennessee at chattanooga many scholars suggest when a firm is connected to other firms by interlocking directors, its financial performance should improve. however, some scholars suggest that when directors have other commitments, this could reduce their abilities to monitor or help their companies. as expected, extant empirical studies have produced mixed results of the relationship. an exploratory meta-analysis of 10 samples (n = 12,519) provided little evidence of a systematic estimate of interlocking directors/ financial performance relationship. thus, this initial meta-analysis suggests that a mere count of interlocking directors may not have an influence on a firm�s financial performance. introduction when two firms share a common director, the director is often referred as an interlocking director; the tie or connection that he/she creates is also referred as a board interlock (burt, 1980; mizruchi, 1996). interlocking directors are an important topic in organizational studies. they are found to be meaningful mechanisms, and rather than random activities (hallock, 1997). many scholars argue that interlocking directors are a creditable and relatively low-cost source for firms to manage environmental uncertainty (useem, 1984), can gain access to diverse and unique information (beckman & haunschild, 2002; haunschild & beckman, 1998), learn new corporate practices (davis, 1991; palmer, jennings, & zhou, 1993), and serve as a signal of the quality of the firm (certo, 2003; higgins & gulati, 2003; kang, 2008). in the u.s., many large firms are connected with one another through interlocking directors (spencer stuart board index, 2015). interlocking directors, as expected, have been one of the most often used measures of interfirm networks. researchers in general suggest that interlocks can influence a firm�s strategies, structures, and performance. despite its prominence, earlier studies provide only mixed support for its influence (palmer, barber, & zhou, 1995; fligstein, 1995; mizruchi, 1996). one of the biggest criticisms is that interlocking directors fail to predict corporate financial performance. many researchers propose that interlocks help firms secure resource and thus improve financial performance (casciaro & piskorski, 2005; westphal, boivie, & chng, 2006). based on resource dependence theory, a firm with interlocks should have access to information otherwise not available to them. this should translate to higher financial performance. results have been inconsistent. some found positive effects on financial performance (pennings, 1980; burt, 1983), while others found negative effects (fligstein and brantley, 1992). in related reviews, relationships between board composition and financial performance are described as conflicting (finkelstein & hambrick, 1996; johnson, daily, & ellstrand, 1996). prior meta-analyses such as dalton, johnson, and ellstrand�s (1998) found that there are no substantive relationships between 48 american journal of management vol. 17(2) 2017 board composition and financial performance. in a later publication, they did find a positive relationship between number of directors and financial performance (dalton, johnson, & ellstrand, 1999). since there has been no consensus regarding the direction of the relationship between interlocking directors and financial performance, i seek to provide meta-analyses to reconcile the mixed findings. a meta-analysis can account for sampling errors and provides more reliability in concluding prior studies (hunter & schmidt, 2004). i identified 10 relevant empirical studies with 10 unique samples (n = 12,519) to conduct a systematic review of the relationship. interlocking directors and financial performance early studies indicated that interlocks are a result of corporate control, inter-corporate cohesion, and resource dependence (mizruchi, 1980). schoorman, bazerman, and atkin (1981) suggested interlocking directors are fairly common because they provide horizontal coordination among competitors, vertical coordination among suppliers and customers, expertise, and enhancement of reputation. however, a very important question for strategy researchers is: so what? do interlocks affect organizational strategy and ultimately, organizational performance? as mizruchi (1996) put it, �if interlocks are to be worth studying, it is essential that they be shown to have consequences for the behavior of firms� (p. 280). i provide a brief review of some rational for both perspectives on the board interlock-financial performance link. arguments for the positive effect of interlocks on financial performance different theories have been applied to explain the relationships between interlocking directors and financial performance. resource dependence theory has been the primary basis for the perspective that interlocking directors are associated with better financial performance. the core thesis is that interlocks help organizations obtain needed resources and information to improve their corporate performance (pfeffer & salancick, 1978; casciaro & piskorski, 2005; westphal, boivie, & chng, 2006). in this vein, a board interlock is a measure of a firm�s ability to secure critical resources. for instance, lang and lockhart (1990) found firms interlocked with financial institutions increased with financial dependence. hillman, cannella, and paetzold (2000) found that firms are more likely to appoint resourceful outside directors during times of environmental uncertainty. carpenter and westphal (2001) showed that outside directors can contribute to the decision process if they are connected to strategic related firms. interlocking directors can facilitate a firm�s borrowing (mizsuchi, 1996), alliance formation (gulati & westphal, 1999), and have been associated with effective capital acquisition (stearns & mizruchi, 1993). resource dependency theory also posits that interlocking directorates serve as carrier of information (useem, 1984). directors that also sit on other firms� boards are more likely to have access to diverse strategies and insider information that is otherwise not accessible to outsiders. they are likely to provide better counsel and advice. westphal (1999) showed a positive relation between advice provided by outside directors and the firm�s financial performance. this perspective is consistent with the survey results from the 2012 spencer stuart board index that board directors consider their role in discussing corporate strategy one of their top priorities in governance issues. in summary, based on resource dependency theory, interlocking directors facilitate coordination between organizations and reduce environmental uncertainty (pfeffer & salancick, 1978). thus, interlocking directors are a mean of transferring critical information and best practices (hillman & dalziel, 2003). interlocks also serve to reduce opportunism by increasing the flow of information between organizations (phan, lee, & lau, 2003). social network theory also has been applied in studies on interlocking directors. it proposes that firms that are embedded in the director network can leverage social relations and in return, facilitate economic exchanges, resulting in better firm performance (granovetter, 1985). in this view, interlocks serve as a mechanism for firms to connect with one another. firms that are embedded in the director network can reap the benefits of social capital that are not available to firms outside of the network. studies have american journal of management vol. 17(2) 2017 49 found that interlocking directors are associated with a firm�s future performance (horton, millo & serafeim, 2012). another perspective is from market for directors. a director that sits on multiple boards can signal his/her quality, such as monitoring and advising (ferris, jagannathan, & pritchard, 2003; kaplan & reishus, 1990). thus, as the number of interlocking directors increases in a firm, it can be viewed as the quality of the board also increases. in this vein, the positive board quality should lead to a better financial performance. in conclusion, there are many studies that advocate for the benefits of interlocking directors. arguments for the negative effect of interlocks on financial performance as previously mentioned, scholars have not yet reached a consensus on the positive relationship between interlocking directors and financial performance. meeusen and cuyvers (1985) and fligstein and brantley (1992) both found interlocks associated with reduced financial performance. one argument is that costs are associated with directors serving on multiple boards, and they are referred as busy directors (core, holthausen, & larcker, 1999). the view is that busy directors have limited time and attention for the boards they serve (li & ang, 2000). researchers found that firms that have outside directors with multiple directorships are associated with weak governance (fich & shivdasani, 2006). this view predicts that busy directors can have a negative influence on firm performance (core et al., 1999; jiraporn, singh, & lee, 2008). another argument is that an interlocking directorate that is embedded in the director network may become more committed to his/her elite network than to his/her boards (burris, 1992). in this view, directors that are connected to different boards can be influenced by the norms and values of the network (koenig & gogel, 1981; windolf & beyer, 1996). this may lead to the tendency that the directors are more concerned with the social cohesion, rather than their director duties. third, assuming interlocking directors transmit information and practices, it is not only the good practices that are diffused, but also the bad practices. for instance, interlocking directors have been shown to spread options backdating (armstrong & larcker, 2009; bizjak, lemmon, & whitby, 2009). when bad practices are spread, firm performance will eventually suffer. finally, firms that are interlocked with firms that are accused of questionable practices may suffer from reputational penalties as well. kang (2008) showed that firms that are interlocked with firms that are accused of financial reporting fraud are more likely to experience a decline in reputation. in this vein, interlocks may not necessarily diffuse the practice, but rather, they diffuse the perception of reputations. based on the above arguments, it is not surprising that scholars still cannot reach an agreement on the direction of the relation between board interlock and financial performance. measures of financial performance and time as moderators different studies have used different measure of a firm�s financial performance. some studies used accounting based measure (e.g. return on assets and return on sales), while others used market-based measure (e.g. market-to-book value). it is possible that depending on the measure a study used, the result can be different. thus, i use the measure of financial performance as a moderator, separating my studies into two groups: accounting based and market-based measure. in addition, time can influence the result. studies are either cross-sectional or longitudinal in nature. it may be possible that depending on how the study is conducted over time or at a given time point, the result can be influenced. thus, i also used time as a moderator, splitting my studies into two groups, cross sectional or longitudinal. methods sample for meta-analyses, it was unnecessary that the study focuses on interlocking directors and financial performance; we only need a correlation between these two variables. thus, i used several search techniques to identify useful studies. first, i searched different database (e.g. abi/inform, ebsco, jstore) and google scholar using different keywords (e.g. interlocking directors, interlocking 50 american journal of management vol. 17(2) 2017 directorates, overlapping directors, multiple directorship) to conduct a comprehensive review of extant literature. second, i used the same keywords to search unpublished dissertations and theses on proquest dissertation and theses. third, i manually reviewed references from review articles related to interlocking directors to identify any missing articles from the computerized search. finally, i identified studies that have correlation coefficient for interlocking directors and financial performance. as there are different ways to measure interlocking directors, i made a decision to capture interlocking directors as the number of interlocking directors (a count variable, instead of a dummy variable, for instance). the number of interlocks as a count variable is essentially a measure of degree centrality as well. this process resulted in 10 studies with a total of 10 samples (n = 12,519). my studies are listed in appendix a. the coding menu is shown in appendix b. meta-analytic procedures i estimated the average correlations among variables weighted by sample size as suggested by hunter and schmidt (1990). i obtained these statistics from correlation coefficients reported between the number of board interlocks and a firm financial performance. hunter and schmidt�s (1990) procedures provide simple estimates of the true population correlation between any two measures (i.e., ) as well as the proportion of observed variance in r ( ), due to random sampling error ( ) versus residual variation ( ). results the results are reported in table 1. the overall between number of board interlocks and financial performance is positive but relatively small (0.0285). table 1 results of meta-analysis uncorrected corrected r-mean 0.0285 0.0285 sd-true 0.0183 0.0183 10%cv 0.0051 0.0051 90%cv 0.0518 0.0518 %-acc 70.63% 70.63% sd-corr 0.0337 0.0337 sd-artifact 0.0283 0.0283 var-obs/total 0.0011 0.0011 var-error 0.0008 0.0008 var-true 0.0003 0.0003 q-statistic 14.1583 number of correlations (k) 10 combined n 12,519 for the homogeneity analysis, as we can see in the table above, q statistics is 14.1583. the critical value for 9 degree of freedom (k-1) at p=0.05 is 16.9. therefore, i cannot reject the null hypothesis. it shows that the observed variance in effect size is not statistically significant from those expected by sampling errors. r 2 rs 2 es 2 es r american journal of management vol. 17(2) 2017 51 i further conducted moderator analyses. for my first moderator, i divided my 10 studies into two groups: studies that used accounting based measure (e.g. return on assets or return on sales) for financial performance and studies that used market-based measure (e.g. book-to-market value) for financial performance. there are 6 studies that used accounting measure and 4 studies used market-based measure. after i ran the analysis, qb=2.4599 (df=1) and p(qb)=0.1168. this means that the difference is not statistically significant at p=0.1. qw=0.0949 and p(qw)> 0.05, meaning that homogeneous variances overall. i then used time as my moderator. my studies are divided into 2 groups: cross-sectional or longitudinal studies. there are 6 longitudinal studies and 4 cross-sectional studies. after i ran the analysis, qb=1.6355 (df=1) and p(qb)=0.2009. this means that the difference is not statistically significant at p=0.1. qw=2.3041 and p(qw)> 0.05, meaning that homogeneous variances overall. the results for interlocking directors and financial performance show little evidence of a systematic estimate of the relationship. the moderator analyses relying on different indicators are also invariant. discussion a meta-analysis is an effective method to estimate a relationship between two variables in a true population. it is achieved by examining multiple studies across different contexts. in this case, the metaanalysis indicates that there is little relationship between interlocking directors and financial performance. mizruchi (1996) suggested that interlocks may be both a predictor and an outcome of firm performance. thus, the conflicting results are likely due to causal ordering. in my meta-analysis, i did not find a substantive relationship between interlocking directors and financial performance. the moderators did not yield statistical significant results either. this may indicate that the number of board interlocks do not influence a firm�s financial performance. limitations of the study my meta-analysis has several limitations. first, a meta-analysis, unlike an experiment, cannot establish a cause and effect relationship. thus, i cannot explicitly state that interlocking directors do/do not influence financial performance. i can only say that i cannot show a systematic relationship in my analysis. thus, causality should not be inferred. a cause and effect relationship can only be identified in a controlled experiment. second, i decided to use the number of interlocks as a measure of degree of connectedness. there are other ways to measure interlocks, for instance, the presence of interlock (dummy variable) and centrality measures (betweenness, closeness, and eigenvector). it is possible that other ways of measuring interlocks can yield a different result. third, though data examined in my metaanalysis were obtained from multiple primary studies, i cannot assure that every study measures the construct accurately. in other words, i have no control over the completeness of the studies. however, i have examined each single article in detail and made sure that the construct and measurements are clear and comparable. finally, i have only examined 10 studies. if more studies are included in the metaanalysis, the result may be different. future research one direction for future investigations is to determine the interlock-financial performance relation in a dyad level. simply putting the number of interlocks overlooks the relationship between specific two parties. in other words, interlocks are essentially a two-way relation, so it should be treated at a dyad level. researchers should not treat interlocks in isolation. for instance, the current practice is to count the number of interlocks on a board and investigate its influence on financial performance (or diffusion of strategy). i propose, that researchers treat an interlock at the dyad level. when one firm (ego) is interlocked with another firm (alter), does its financial performance improve as a result of connecting to that specific alter? for instance, haunschild and beckman (1998) showed that information from similar interlocked firms is more influential than from dissimilar ones. connelly and his colleagues (connelly, johnson, tihanyi, & ellstrand, 2011) were able to show that firms interlocked with different alters 52 american journal of management vol. 17(2) 2017 resulted in different strategic decisions. for the future research, scholars should look into whether alterspecific attributes lead to different level of financial performance. conversely, future research can also consider the boundary condition of interlocks on firm performance. it is plausible that the relation between interlocking directors and financial performance is a function of a firm�s degree of resource dependence (resource constraints). for instance, interlocks may improve firm performance when the firm is dependent on other organizations and have little excess resources. when a firm is more independent and 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(1978). the external control of organizations: a resource dependence perspective. new york: stanford university press. phan, p.h., lee, s.h., & lau, s.c. (2003). the performance impact of interlocking directorates: the case of singapore. journal of managerial issues, 15, (3), 338-352. schmidt, f.l., & hunter, j.e. (2004). methods of meta-analysis: correcting error and bias in research findings. newbury park: sage. schoorman, f.d., bazerman, m.h., & atkin, r.s. (1981). interlocking directorates: a strategy for reducing environmental uncertainty. academy of management review, 6, (2), 243-251. stearns, l.b. & mizruchi, m.s. (1993). board composition and corporate financing: the impact of financial institution representation on borrowing. academy of management journal, 36, (3), 603618. stuart, s. (2015). spencer stuart board index 2015. new york: spencerstuart. useem, m. 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(2004). research impact: how seemingly innocuous social cues in a ceo survey can lead to change in board of director network ties, strategic organization, 2, (3), 227270. young, c.s. (2005). top management teams� social capital in taiwan: the impact on firm value in an emerging economy, journal of intellectual capital, 6, (2), 177-190. ruigrok, w., peck, s.i., & keller, h. (2006). board characteristics and involvement in strategic decision making: evidence from swiss companies, journal of management studies, 43, (5), 1201-1226. kiel, g.c. & nicholson, g.j. (2006). multiple directorships and corporate performance in australian listed companies, corporate governance: an international review, 14, (6), 530-546. kang, e. (2008). director interlocks and spillover effects of reputational penalties from financial reporting fraud, academy of management journal, 51, (3), 537-555. liang, f.m. (2009). ownership structure and firm performance in an emerging market: the moderating role of social networks, contemporary management research, 5, (2), 201-212. haynes, k.t. & hillman, a. (2010). the effect of board capital and ceo power on strategic change, strategic management journal, 31, (11), 1145-1163. conyon, m.j., peck, s.i., & sadler, g.v. (2011). new perspectives on the governance of executive compensation: an examination of the role and effect of compensation consultants. journal of management & governance, 15, (1), 29-58. cannella, a.a., jones, c.d., & withers, m.c. (2015). family-versus lone-founder-controlled public corporations: social identity theory and boards of directors, academy of management journal, 58, (2), 436-459. 56 american journal of management vol. 17(2) 2017 appendix b coding menu codebook for interlock meta-analysis hierarchy description and coding rules first level no coding needed 1. the paper the characteristics of the paper 2. the setting & sample characteristics the setting in which the study took place and characteristics of the sample 3. moderators these are used to split the sample 4. statistical outcome/ effect sizes r and n second level 1. the paper the characteristics of the paper 1.1 the title of the paper no abbreviation please 1.2 the last name of the first author only the last name of the first author 1.3 the name of the journal no abbreviation please (unless it's a commonly known journal, e.g. amj, amr, smj, asq) 1.4 the year of the publication/ writing enter the year or 0=unknown; 1.5 type of the paper 0= working paper; 1= journal article; 2=book/book chapter; 3=dissertation; 4=ma thesis; 5=conference paper; 6= others (specify); 7= can't tell; 1.6 published paper 0= unpublished; 1=published; 2. the setting & sample characteristics the setting in which the study took place and characteristics of the sample 2.1 study number give numbers to your study if there is more than 1 study in your paper. use (first author's last name)1, (first author's last name)2 so on (e.g. tihanyi1). 0= only 1 study; 2.2 year(s) the study take place example: 1990-1992 2.3 longitudinal study 0= cross-sectional; 1=longitudinal study; 2.4 type of study 0=archival; 1=survey; 2=both archival and survey; 3=others (specify); 2.5 data source please specify 2.6 companies 0=public/ non business; 1= business (firms); 2= individuals (directors); 3= others (specify) 2.7 level of analysis 0= focus on each individual company (egocentric); 1= focus on the dyad relations between companies; 2= focus on individual director (egocentric); 3= focus on dyad relations between 2 director; 4=others (specify) american journal of management vol. 17(2) 2017 57 3. moderators these are used to split the sample 3.1 financial performance not sure=0; accounting-based ( roa, roe, or ros)=1; marketbased (like jensen's alpha, treynor measure, or sharpe measure)=2; 3.2 country name of the country/ countries/ region(s) 3.3 board size mean of the sample (raw number and specify unit) 3.4 outside directors mean of the sample (raw number and specify unit) 3.5 firm size mean of the sample (raw number and specify unit) 3.6 firm age mean of the sample (raw number and specify unit) 3.7 ceo also a chair mean of the sample (raw number and specify unit) 3.8 managers ownership mean of the sample (raw number and specify unit) 3.9 ownership concentration mean of the sample (raw number and specify unit) 3.10 blockholder ownership (institutional owners, family owners etc.) mean of the sample (raw number and specify unit) 3.11 director ownership mean of the sample (raw number and specify unit) 4. statistical outcome/ effect sizes r and n 4.1 size (n) sample size 4.2 r for fp and presence of interlock r for financial performance and interlock measures 4.3 r for fp and number of interlocks r for financial performance and interlock measures about the author nai h. lamb (phd, texas a&m university) is an assistant professor of management at the university of tennessee at chattanooga, college of business. her research interests focus on topics such as corporate social responsibility, corporate governance, board interlocks, and social networks. her research has been published or accepted in business & society, journal of accounting and finance, journal of economics and finance education, management research and review, and the oxford handbook of corporate governance. mailing information for contact author: nai h. lamb college of business (dept. 6156) university of tennessee at chattanooga chattanooga, tn 37403 (423) 425-4047 ajm 18(3) master2.pdf ajm 17(3) web_master.pdf 20 american journal of management vol. 17(3) 2017 considerations of telemedicine in the delivery of modern healthcare edward t. chen university of massachusetts lowell telecommunication technologies have made telemedicine a modern health delivery system. telemedicine enhances home telehealth services as specialty care, patient consultations, remote patient monitoring, and medical education without the patients having to leave their homes. urban medical centers have used telemedicine to expand access to specialist services by centralizing health care providers to assist patients seen by their primary care providers. this paper provides a brief history of telemedicine; explains how telemedicine works; covers a few cases of telemedicine implementation, identifies lessons learned, discusses some current issues of telemedicine, and concludes with some limitations of telemedicine. introduction technological innovations have been the impetus for the development of telemedicine programs. telemedicine started as a way to provide medical services to patients living in rural areas. it has since grown into such medical interventions as treating soldiers on the battlefield as well as programs at urban medical centers which makes medical services available to underserved populations. telemedicine programs allow physicians that are off-site to have a platform to see patients at rural and remote locations. most of the telemedicine programs developed in remote areas are built on the concept that these programs provide patient access to specialty services and to quality of care that would not otherwise be available (hage, roo, van offenbeek, & boonstra, 2013). there are both benefits and disadvantages to the care that is provided through telemedicine. the benefits of telemedicine include providing access to specialty care services in underserved areas, a more efficient use of medical resources, and a way to reach patients living outside a hospital�s normal service area. however, implementation of telemedicine services requires a number of new protocols and safety measures designed to protect the privacy and confidentiality of patients, as well as to ensure physicians having and maintaining appropriate licensure across state borders, and to allow patients and caregivers to receive adequate training on how to use the technology. furthermore, providing medical care to patients using telemedicine technologies brings about important medical, ethical, and legal issues that must be addressed. examples of telemedicine range from teleconsultations to telesurgery which have made diagnostic medicine and specialized care available to patients located in remote areas. these telecommunication technologies are changing the traditional doctor-patient relationship. telecommunication technologies have made cost-effective treatment options available by reducing traveling expenses for patients, decreasing hospital readmission rates, and maximizing the number of patient consults a physician can make (brown, buettner, & canyon, 2012). american journal of management vol. 17(3) 2017 21 how telemeicine works telemedicine is the use of telecommunication technologies and information sharing devices to deliver and support medical care when the patient and provider are separated by a distance. distance can be understood in terms of geography, socioeconomic status as well as time constraints (haluza & jungwirth, 2014; wicks, stamford, grootenhuis, haverman, & ahmed, 2014). telemedicine is also understood based on the information that is being transmitted such as radiographs or clinical data, as well as, how it is being transmitted. for example, what technologies and clinical applications are used? now more than ever, there is a ubiquitous supply of digital bandwidth. with the ability to compress high resolution video conferencing and high resolution images, the transmission of video, images and data over long distances has been made possible. the decreasing costs of hardware, software, and data transmission make setting up telemedicine equipment and networks more economical feasible, even for smaller medical clinics and offices (ewing, 2013). although video consultations have become the mainstay when one thinks of telemedicine, another important category of technology utilized is referred to as �store and forward� technologies. these include static images, data, and audio clips that are transmitted from remote locations to a database for later review by a medical provider. the advantage of the �store and forward� telemedicine is that both the provider and patient do not have to be available for consultation at the same time. dermatology, radiology, and pathology are examples of medical services that have utilized �store and forward� telemedicine technologies. services offered through telemedicine range from home care and psychiatry to radiology and neurology. home care, or telehealth, programs that manage chronic diseases such as diabetes, chronic obstructive pulmonary disease, hypertension, etc. utilize devices that monitor and transmit patient symptoms and vital signs. radiologists and pathologists, for example, utilize image transfers, while clinical specialists such as dermatologists can capture and remotely display their findings such as high resolution images of skin conditions. cardiologists can receive transmitted electrocardiograms (ecg) and psychiatrists can have interactive consultations with patients via video-teleconferencing (baig, gholamhosseini, & connolly, 2013; chen & huang, 2013). a brief history of telemedicine first use of telemedicine was in 1877 when a group of 21 medical doctors in surrounding areas made a communication network by means of the telephone with a local drug store. in 1927, a live video consult occurred between a patient and a physician, known as the �radio doctor�. then, in the 1950s, a two-way television group therapy occurred through videotaped recordings and satellite communication in alaska. many of the systems developed to deliver healthcare services to remote alaskan villages served as a model for other rural telemedicine programs. the guidelines of this program were established by the indian health services. village doctors were located in large towns hundreds of miles away and certified health aides would travel out into remote villages in order to evaluate and treat patients. the health aide would stay in open communication with the village doctor on the patient�s condition using radio transmissions. in 1959, wittson and colleagues used two-way interactive television for telepsychiatry consultations between the nebraska psychiatric institution in omaha and the state mental hospital, which was 112 miles away. also, in 1959, teleradiology was first utilized by sending teleflouroscopic images in montreal, quebec via coaxial cable. in the 1970s nasa created a program called the space technology applied to rural papago advanced health care (starpahc) in arizona to deliver medical care on the papago indian reservation. the indian health services hospital on the papago reservation communicated using two-way radio, audio and data communications to a remote clinic in santa rosa 50 kilometers away, which was manned by a physician assistant. the network also connected to a referral center in an indian health service hospital in phoenix which offered access to medical specialists. 22 american journal of management vol. 17(3) 2017 unfortunately, the lack of suitable technologies, the high cost of running these programs, the absence of physician interest, and limited insurance reimbursement inhibited widespread acceptance of telemedicine during the 1960s and 1970s. it was not until the 1980s that there was a renewed interest in telemedicine due to the development of advanced applications for battlefield medicine and disaster relief aid. initially, telemedicine had been developed to provide medical care for those living in remote and rural areas. however, telemedicine programs eventually grew to include hospital services to military personnel in the battlefield and then expanded to offer highly specialized medical care to urban areas. the use of telemedicine technologies on the battlefield continues today including the care of soldiers in combat and the treatment of veterans recovering from war injuries. technologies utilized include video-teleconferencing (vtc), internet-based email, and �store and forward� data transmission. in iraq, there was a telesurgery initiative launched in 2008 by telemedicine advanced technical research center (tatrc) and u.s. army medical research & material command (usamrmc) where a cardiothoracic surgeon was able to perform a complex surgery with the aid of a surgical specialist located in texas. this specialist was able to view the operation through live video feed and images could also be frozen, annotated, and then sent back to the deployed surgeon in iraq. the usefulness of this program extended beyond just military use but to disaster relief as well. thus, if a disaster such as a hurricane hits land in a rural area, smaller civilian hospitals may not have the needed surgical expertise to deal with the types of patients and injuries. this type of telesurgery program would allow these civilian hospitals access to specialists who could assist the local surgeons in dealing with complex surgical cases. cases of successful telemedicine implementations the department of defense (dod) and the department of veterans affairs� (va) veterans health administration (vha) use telemedicine technologies to allow physicians and medical providers to provide medical care, support, and education to traumatic brain injury (tbi) patients both on the battlefield and domestically. the frequency of tbi within the military is particularly high with majority being injured in iraq and afghanistan under operation enduring freedom and operation iraqi freedom. a lot of efforts have been made within the military and the va to expedite the diagnosis and treatment of soldiers and veterans with tbi in order to prevent further deterioration of reaction time, memory, and mood. researchers at the defense and veterans brain injury center (dvbic) have developed and implemented a remote cognitive assessment system to do emergency cares. prompt diagnosis and treatment of tbi by offsite physicians would simply be impossible without the aid of telemedicine technologies (girard, 2007). the dod and vha use interactive vtc as well as web-based �store and forward� technologies allowing them to be able to reach patients who would otherwise be isolated geographically, economically, or due to a disability. similarly, the vha�s home telehealth programs not only have helped tbi patients but have allowed veteran patients with chronic medical conditions who otherwise would have been admitted to long-term care facilities, to be treated in the comfort of their own homes. this telehealth program has reduced patients� emergency room visits, hospitalizations, and the length of hospital stays. it has further improved their quality of life. the vha, as well as dod military bases, have used telemedicine technologies in innovative ways to treat tbi through neurological assessment, mental health services, behavioral health, physical and occupational therapy. the va and dod not only partner with each other but with providers in local communities to meet the needs of soldiers and veterans. clinical interventions using telemedicine will continue to be an important part of the overall medical care offered to combat veterans suffering from tbi (girard, 2007; wicks, et al., 2014). research has shown that avoidable hospitalizations from ambulatory care-sensitive conditions (acscs) can be prevented by providing patients with access at home to medical care providers in a timely manner. with the accessibility of telemedicine, the department of veterans affairs has changed its focus from a hospital-based system of care to a patient-centered and ambulatory-based care. the national va care coordination home telehealth (ccht) is a program that was created to provide a mechanism american journal of management vol. 17(3) 2017 23 for patients to have access to home ambulatory care services for their chronic diseases, such as diabetes mellitus (dm) (jia, chuang, wu, wang, & chumbler, 2009). telehealth, as previously described, is a form of telemedicine that gives patients access to health care providers from their home using telecommunications and information technology. it allows patients to receive information, education and medical services while remaining in their homes. the ccht program utilized nurse practitioners and registered nurses to monitor patient�s chronic diseases using data received from a telehealth device. this device, using a landline telephone, daily asks patients scripted questions about symptoms and health status. the care coordinators then take actions to follow-up with these patients to make referrals, order new medications, and educate patients about how to take their medications. the ccht program also reminds them of their clinic appointments and assists them with technical difficulties. a study by jia, et al. (2009) indicate the long-term effects of this ccht program on preventing hospitalizations in diabetic patients at four different va medical centers. three hundred eighty-seven patients were followed for four years. the results of their study showed that enrollees to the ccht program were significantly less likely to be admitted for an avoidable hospitalization during the initial 18 months (jia, et al., 2009). a study conducted in northern ontario, canada looked at whether a telehealth chronic disease selfmanagement program (cdsmp) improved not only the overall health of patients with chronic diseases but also self-efficacy and healthy behaviors. the goal was to increase access for individuals living in rural and remote communities. two hundred and thirty patients with chronic diseases such as lung disease, heart disease, stroke, and arthritis participated in the study for one year from 2007 to 2008. the weekly telehealth sessions focused primarily on developing self-management skills. comparing baseline to four month follow-up surveys, there were statistically significant improvements in self-efficacy, cognitive symptom management, communications with physicians, role function, psychological well-being, energy, health distress, and self-rated health (jaglal, haroun, salbach, hawker, voth, & lou, 2013). chronic obstructive pulmonary disease (copd) is a debilitating disease and exacerbations of the disease most often result in patients having to seek emergency medical care such as emergency room visits. the number of patients worldwide affected by copd is estimated to be around 64 million people. a study in denmark conducted in 2008 with 57 copd patients participating in the home telehealth, chronic patients and the integrated healthcare system (telekat project) for four months. patients used a wireless telehealth monitoring device to transmit their blood pressure, heart rate, weight, oxygen saturation, and lung function to a web-based portal or their electronic medical record. results of the study showed that telemonitoring patients had a significant decrease in the number of antibiotics and steroids used, as well as a decrease in the number of clinical consultations, and significantly more patients having controlled blood pressure. in 2005, the state government of minas gerais, brazil, established telehealth networks linking five university teaching hospitals with municipal health departments. using low-cost equipment they were able to transmit electrocardiograms and conduct teleconsultations. the goal was to provide primary healthcare providers in the municipalities, many of them were in remote locations, access to specialists at state university hospitals. between 2006 and 2011, 782,773 electrocardiograms were performed and 30,883 teleconsultations completed. ninety-seven percent of medical professionals were satisfied with the system and furthermore 81% of teleconsultations resulted in the avoidance of a referral to a distant location. there were also significant reductions in travel costs and significant savings to the public health system of around 11 million dollars. barriers to effective implementation of this telehealth program, though, included having to continually train healthcare practitioners due to the high turnover. also, there was lack of reimbursement resulting in the reliance on health department funding and lastly, there were implementation and maintenance issues early on due to poor internet connectivity (hilty, ferrer, parish, johnston, callahan, & yellowlees, 2013). telemental health care programs have been expanding rapidly over the last ten years. research has shown telemental health to be effective for both diagnosis and assessment of mental illnesses. it has shown telemental services to be comparable to face-to-face care and complementary. most importantly, telemental health has increased access to needed care and improved patient outcomes. tele-mental health 24 american journal of management vol. 17(3) 2017 services has shown to be well-accepted by both patients and providers. telemental health has benefited a variety of conditions such as depression in adults, developmental disabilities in children, and posttraumatic stress disorder in veterans. when determining whether telemental health or face-to-face consultations will work better for the patient, culture, language, and type of mental health disorder must be considered carefully. in conducting a cost-benefit analysis, both the direct costs (i.e., equipment and installations) and indirect costs (i.e., patient travel and time) must be taken into account before assessing the return of investment (roi). studies have shown that telemental health has proven to reduce both healthcare costs and patient costs. break-even analysis of multiple studies, however, showed that in order to be cost-effective, a certain number of consultations must take place per year to justify the capital investment costs of implementing such programs (hilty, et al., 2013). roughly 30% of u.s. adults have high blood pressure and only about half of these patients have their blood pressure (bp) under control. in fact, high bp is the most common reason for patients to go to their primary care doctor. the annual costs associated with high bp are estimated to be greater than 50 billion dollars. a study published in 2013 in minnesota involved 450 patients with high blood pressure who were randomly assigned to either telemonitoring or usual care for a period of 12 months. the telemonitoring group used a home bp telemonitoring device that stored and transmitted data through a modem to a secure website, which was managed by pharmacists. the pharmacists would consult with the patients via telephone consultation and adjust their antihypertensive medications accordingly. the results of this study showed that the percentage of patients with controlled bp was significantly higher in those patients assigned to bp telemonitoring with pharmacist case management for the 12 months of intervention and for 6 months post intervention, compared to those patients who were assigned to usual care (margolis, asche, bergdall, dehmer, groen, & kadrmas, 2013). telemedicine is not only able to reach patients in remote rural areas but it is also able to benefit patients in urban centers. mercy health system in wisconsin and atlanticare in new jersey are examples of urban hospitals that have developed telemedicine programs that offer many different types of services. for example, mercy health system implemented a home health project that allows them to remotely treat patients with many different types of chronic conditions in their own home. mercy health uses telemedicine technology similar to other programs including a variety of remote monitoring services such as arrhythmia monitory services with electrocardiograms (ecg), pt/inr patient self-testing for patients anti-coagulated on warfarin, and health assessment surveys to manage almost any type of chronic disease. they utilized devices that collect measurements such as weight, blood oxygen saturation (spo2), blood pressure, heart rate, blood glucose, hemoglobin a1c, lung function using peak flow, body temperature, and zo (body fluid status). these devices securely transmit data through landlines or cellular networks. mercy health�s home health program is thus able to manage a number of chronic diseases such as congestive heart failure (chf), chronic obstructive pulmonary disease (copd), hypertension and diabetes (chen & huang, 2013). these programs are only successful, though, if patients take initiative in the self-management of their chronic diseases. furthermore, once equipment is installed, extensive patient or caregiver education is required in order to properly use these devices and obtain accurate measurements. once the data is transmitted daily to the control center in the hospital, a nurse reviews the data for any alerts, notifying the patient�s provider for follow-up if these results are not consistent with that patient�s usual state of health. the benefits of home health telemedicine, or telehealth, include improved compliance, improved patient and caregiver satisfaction, decreased anxiety, increased quality of life, and patient empowerment through active participation in managing their own diseases. from a healthcare professional perspective, telehealth offers daily monitoring and management, preventative care, early intervention, improved provider-patient communication. furthermore, it creates efficiencies and cost savings by allowing providers to manage and monitor multiple patients simultaneously, which reduces er visits and improves allocation of scarce medical resources. atlanticare, on the other hand, uses telecommunication technologies to develop a variety of programs including telepsychiatry and telestroke services. atlanticare regional medical center�s psychiatry department provides teleconsultation services using vtc technologies between two of their main american journal of management vol. 17(3) 2017 25 campuses, which are 10 miles apart. this program reduces the time and travel expenses of going between two sites not only for the patient but for the providers as well. it is important to rely on these teleconsultation services since there is currently a shortage of psychiatrists. there are limitations with telepsychiatry, especially due to the complexity of mental illness. thus, teleconsultations have proven to be most useful in the preliminary analysis of patients. the atlanticare telestroke network is achieved through use of a robot, which allows patients at smaller outlying hospitals to receive specialty services from a neurologist in a timely manner during the critical period immediately following stroke symptoms. this robot is both wireless and mobile allowing neurologists to be present remotely even if they are physically located in either a central control station or on their laptop installed the necessary teleconsultation software. the robot and the control station utilize broadband, internet, and wireless technologies to share data. the primary function and use of this technology is triaging patients in the emergency department or inpatient hospital who are presenting with neurological symptoms suggestive of stroke in order to quickly determine the best course of treatment for that particular patient (frist, 2014; yang & silverman, 2014). limitations of telemedicine notable limitations of telemedicine include lack of funding and reimbursement from insurance companies primarily due to the inability to justify telemedicine based on cost-benefit analysis. for example, one of the main limitations of the two telemedicine programs at mercy health system and atlanticare was lack of insurance coverage for these services. in fact, the reluctance to cover telemedicine services by medicare and private insurance companies is the major cause of its slow expansion and utilization. the one exception is teleradiology services, which have been the only telemedicine programs to receive full reimbursement from insurance payers. limited physician acceptance is another notable limitation (sun, wang, guo, & peng, 2013). historically, there has been an absence of research demonstrating the accuracy and clinical effectiveness of many telemedicine applications. exceptions have included teleradiology and telepathology, which have adequate supporting evidence and have been implemented successfully for years. with the capital investments that are required to implement many of the complex technologies of telemedicine, the lack of systematic supporting evidence has inhibited its widespread implementation, particularly in rural areas where it is needed most. further research is needed to determine efficacy, safety, satisfaction, and cost-effectiveness of telemedicine. limited physician acceptance is another notable limitation creating provider barriers in implementing telemedicine services such as clinician doubts as to the effectiveness of telemedicine services, viewing the technologies as inconvenient and cumbersome, and lately experiencing lack of reimbursement for these services. provider buy-in to telemedicine services is essential to its implementation and its success. despite these barriers, the growing evidence of its effectiveness and the advancement of telemedicine technologies have contributed to its continued expansion and utilization (brooks, turvey, & augusterfer, 2013; sun, et al., 2013). legal issues the physician-patient privilege is an important law and is the foundation for the trust needed in a provider-patient relationship. the health insurance portability and accountability act (hipaa) provides laws that protect a patient�s right to privacy by creating protected health information or phi. responsibility and accountability are essential to ensuring that telemedicine safeguards patient confidentiality and privacy. however, if third parties were able to gain access to protected health information by accessing electronic communications, such as telemedicine, this could potentially damage the confidentiality of provider-patient communications. ensuring providers are appropriately licensed is another important legal consideration, especially, if the telemedicine programs reach across states lines. there is currently lack of legal precedence regarding both licensure and liability of remote delivery of telemedicine (jaglal, et al., 2013). currently, state laws require that if physicians or providers are going to 26 american journal of management vol. 17(3) 2017 treat patients in their state they must be licensed in that state. therefore, unless these laws change, telemedicine programs that are implemented across state lines must ensure that their medical providers are appropriately licensed in both states. one solution to this issue of licensure has been solved at the department of veterans affairs and the indian health service by allowing universal licensure if the provider is licensed in at least one of the 50 states. ethical issues the first ethical issue that must be considered regarding telemedicine is whether there is adequate respect for persons who are treated via telemedicine. in other words, are patients treated as autonomous agents and are those who have diminished autonomy protected? proponents say telemedicine does respect persons by providing access to scarce medical resources regardless of their location. however, critics of telemedicine worry that it has the potential to dehumanize patients through use its technology. obtaining informed consent from the patient is essential to ensuring patients maintain their autonomy and that dehumanization is avoided (assasi, schwartz, tarride, campbell, & goeree, 2014). beneficence, which includes non-maleficence, is another ethical issue that must be addressed when considering telemedicine. in medical ethics, this principal is related to the maxim, �primum non nocere,� which means, �above all do no harm�. on one end, telemedicine increases patient access, reduces costs, allows for better continuity of care, and provides more timely care, which reduces travel expenses and lost work time. it empowers patients to take a more active role in their own healthcare, which in turn improves compliance, patient satisfaction, and anxiety. on the other end, telemedicine has the potential to depersonalize provider-patient interactions by replacing face-face interaction with virtual consultations in order to reduce costs. furthermore, network disconnections and other technical problems also pose potential patient harm. safeguards must be put in place to be able to appropriately deal with these situations (nordgren, 2013). when telemedicine is viewed as a supplement to traditional face-to-face physician-patient interactions and not as a replacement the benefits become apparent. in fact, telemedicine is believed to be best utilized in situations where a patient cannot see a physician face-to-face due to time, physical, or geographical barriers. effective patient education, communication, and responsiveness to these limitations and concerns will help to minimize the potential disadvantages. the last ethical concern of telemedicine is that of justice which requires that all patients be treated fairly and equitably. justice can refer to the allocation of scarce medical resources in a fair and equitable manner. many times patients located in rural and underserved areas do not have access to the same qualified medical providers creating uneven distributions of medical care. this is especially true for elderly patients who are faced with a number of barriers to accessing care such as geographical, physical, cognitive, and economical obstacles. telemedicine can provide access for these patients to qualified medical care in remote areas which will hopefully improve the fair and equitable distribution of scarce medical resources (assasi, et al., 2014; hilty, et al., 2013). there are still many unresolved questions with telemedicine such as what is its true place in our health care system? and, can telemedicine successfully provide quality health care at an affordable cost? accurately answering these questions depends on a number of factors such as provider and patient expectations, matching technology and equipment to medical needs of patients, economic feasibility, legal, ethical and social issues, and lastly, organizational issues such as appropriate training as well as managerial and administrative support. other questions include: what training and certification should providers receive in order to deliver telemedicine effectively? and, how much should providers be reimbursed from insurance payers for these services? conclusion telemedicine has the potential to reduce healthcare costs for both hospitals and patients. research from the benton foundation predicts that 850,000 patient transfers between hospital facilities could be avoided by utilizing telemedicine consultations; resulting in a $537 million annual savings. in the cases american journal of management vol. 17(3) 2017 27 previously mentioned, there have been significant annual savings realized through use of telemedicine programs. telemedicine can improve access, quality, quantity, and continuity of medical care for patients as well as reduce healthcare costs. telemedicine also provides a solution to help alleviate the physician shortages in rural areas and the overuse of emergency room visits. preventative medicine is a key to the future success of the u.s. healthcare system. telemedicine has the potential to significantly benefit preventative medicine efforts, which will ultimately reduce costs and improve population health. as medicine in the u.s. becomes more patient-centered, versus hospital or physician-centered, telemedicine can offer patient-centered care by providing medical services to patients in the comfort of their own homes. the first question that should be addressed before implementing a telemedicine program is: what are the current shortages of medical care in a particular area. secondly, can telemedicine technologies and services (i.e., the transfer of images, live video, and data remotely) be used effectively to deliver such care? implementing telemedicine without carefully considering whether it can effectively meet these needs will result in wasted use of scarce medical resources and investment capital. telemedicine has been shown in a number of studies to be a cost-effective way of providing both primary and specialty care for those who otherwise might not have access to these services. more research, though, is needed in determining if telemedicine is indeed a cost-effective way of delivering diagnostic, therapeutic, as well as case management services on a larger scale. however, as technology continues to advance and more research is conducted showing the benefits of telemedicine and its place in our healthcare system, the more telemedicine will be accepted and expanded. care must be taken to maximize the benefits of telemedicine and at the same time take measures to ensure proper safeguards are in place to prevent patient harm and maintain patient privacy and confidentiality. telemedicine must not be viewed as an end in of itself. instead, it should be viewed as an important tool or method of providing needed medical services to patients and medical consumers, especially, to those patients in remote areas who might otherwise not have access to care. new technologies used in telemedicine have brought to light the important ethical considerations of telemedicine such as patient autonomy, beneficence, non-maleficence, and justice. the ethical responsibility of medical providers to treat all patients with dignity and respect requires that medical care be provided in the most cost-effective and beneficial way to all patients. telemedicine offers the opportunity to be able to offer high quality medical care to patients in both rural and urban locations. the legal implications of telemedicine must also be addressed such as creating safeguards and laws that will protect patient rights of privacy and confidentiality. furthermore, the laws that govern the proper licensure of medical providers must be revised to allow easier implementation of telemedicine across state lines yet they must also ensure that these providers have the proper education, training and credentials. political factors such as being able to deliver low-cost health care to all patients will continue to be an important driver in the advancement of telemedicine programs with the aim of reducing costs, improving quality, and increasing access to health care. the integration of telemedicine technologies with such platforms as electronic medical records and expanding insurance reimbursements telemedicine care will be essential for the continued success of telemedicine programs of the future. it is important, though, that standards and protocols be established in regards to telemedicine communication technologies so that the largest number of rural and hospital medical centers will have compatible communications. telemedicine services can give providers a competitive advantage by allowing them to expand their practices into rural areas with limited economic risks and be able to provide specialty services where fulltime staff would normally be impossible to serve. with the increased size of aging u.s. population, telemedicine offers the ability for patients to receive quality health care services and at the same time reduce costs. the treatment of chronic illnesses most often starts in a hospital setting and follow-up care services must continue for the patient at home. telemedicine allows for these services to continue through outpatient telehealth. telemedicine�s potential benefits include reduced healthcare costs, increased patient access to providers, improved quality and continuity of care, and faster, more convenient treatments, which reduce patient travel costs and lost work time. telemedicine should not replace face-to-face consultations of providers and patients. rather, it 28 american journal of management vol. 17(3) 2017 should supplement these important relationships. telemedicine is best utilized when patients would otherwise not have access to needed primary and specialty care in many remote and rural areas. references assasi, n., schwartz, l., tarride, j.e., campbell, k., & goeree, r. 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(2014). mobile health applications: the patchwork of legal and liability issues suggests strategies to improve oversight. health affairs, 33(2), 222-227. ajm 18(5) master (r).pdf ajm 19(1) master r1.pdf ajm 17(2) master-lulu-revised.pdf american journal of management vol. 17(2) 2017 65 influence of social entrepreneurship in organizations, family, and society: causes and solutions for success víctor mercader cetys university the purpose of this research is to identify and analyze the need, the causes of inadequate performance, and the possible solutions applicable to social entrepreneurship in enterprises/organizations, families, and society. there was developed and applied an instrument to a sample of professionals working in the industrial baja california state of mexico, border with the state of california, united states. the responses obtained were categorized and taxonomies were created referred to organizations, families, and society which help summarize and prioritize the answers which are applicable to different types of leaders, entrepreneurs, students, educators, researchers and people in general, generating an impact for better performance. introduction through the years, people all around the world have been conscious of the needs of the great majority of local and world-wide�s populations. nevertheless, little has been done in comparison with the immense demands for satisfying the most immediate survival needs. however, at the same time there has always been a minority of the population in all the corners of the world that has tried to help others. these individuals care about the different calamities and realities that poor and less fortunate people struggle with daily, offering solutions and being proactive with a mind focused on social development. nowadays, a kind of entrepreneurship phenomena is emerging where some people as well as enterprises and organizations are emphasizing the importance of the application of ethical values, social responsibility and collaborative altruism in their business enterprises. this trend confronts a new challenge; namely, what kind of social actions and events may we engage in order to get more effective results that help more people and with more fairness and social equity? that is the reason why social entrepreneurship is a challenge that carries small risks and big possibilities to start a new crusade of winwin for local and global populations. this is a time that may change the paradigms under which entrepreneurship and innovation have been conducted; one has been under the manipulation of those that have been controlling the political and business leadership with pseudo leadership under the perspective of unrestrained ambition and power of domination. this study immerses the readers in an analysis of social entrepreneurship in order to know how one may improve in social responsibility at all levels and in the application of ethical values in life and work. purpose of the study the purpose of this study is to identify and analyze the perception of professionals that participated in the study sample related to social entrepreneurship principles applied to organizations, family, and society. the resulting information from this study will be the needs, causes and feasible solutions 66 american journal of management vol. 17(2) 2017 applicable to social entrepreneurship of the organizations, family and society which will be analyzed and categorized. justification social entrepreneurship is a reality and need for humanity, generating causes and effects where humans are responsible for their own results and consequences, inducing productivity for the common good inside and outside of organizations. social entrepreneurship challenges us to think, observe, and perform in a way that increases prosperity in all levels of living and prosperity for the organization. if we act with enthusiasm and conviction at all levels with a socially conscious and ethical mind, we will develop proposals for new and alternative solutions supported by evidence-based decision making, thus contributing to a better organization, country, and humanity. research questions the approach taken for the development of the instrument is based on the identification and understanding: 1. the need for the implementation of social entrepreneurship in organizations, family, and society. 2. the causes of lack of adequate or effective social entrepreneurship practices in organizations, family, and society. 3. the feasible solutions in order to enhance and improve social entrepreneurship in organizations, family, and society. audience impacted by the study this study is aimed at professionals, independent of their specialties. employers and employees at all levels should have in mind the entrepreneur initiatives as individuals and as members of teams of different dimensions. if this entrepreneur spirit is shared and expanded towards social activities and the common good, everyone will be contributing for a better organization and better society, bringing a greater satisfaction as an integral human being. this is also applicable to all professionals, entrepreneurs, researchers, students, and other stakeholders as well as to institutions, organizations, companies, corporate groups, family, society, and public bodies. literature review social entrepreneurship is essential to organizations, family, and society. in general, awareness of the need, importance, and advantage of social responsibility is increasing for organizations; however, this is not really applied in practice and in business policy in most of the companies, in spite of its importance. fortunately, there has been an awakening from the start of the millennium in wanting to engage and empower people in undertaking new initiatives, projects, and actions that consider benefits for society at large, not as altruism or charity, but as ability to lead and participate in business solutions that address economic situations through the contribution of various participants. despite a substantial literature with numerous studies and discussions in the multidisciplinary arena of social entrepreneurship that contribute to the knowledge and implementation of the theme (pierre, friedrichs & wincent, 2014) it is necessary to apply the theory in low income and poor populations. the main idea is to create both social and economic value, with productive and constructive results, which acs, boardman & mcneely (2013) exemplify by comparing the grameen bank with microsoft corporation as very different but congruent examples for helping people in the final economic and social results. likewise, grove & berg, (2014) recommend the use of established business methods to apply in social transformation, enhancing social entrepreneurship and achieving social goals with reasonable profits. the point is that this profit is reinvested to create more productivity and expansion and thus be useful for more people. there is a tremendous need to propel this kind of positive change. in a case study by si, yu, wu, chen, chen & su, (2015) they explain how china has reduced poverty in a consistent course of action, based upon entrepreneurship and innovation what it should be a pivot to american journal of management vol. 17(2) 2017 67 learn from their methods applied to social entrepreneurship. the businesses� involvement with the poor is also necessary to create expectations and actual possibilities on poverty reduction and critical social situations. similarly, haugh & talwar (2014) explain with a sample in north india, how it is possible to help and empower women to enter the world of entrepreneurship notwithstanding restricted cultural norms, rooted in social change and offering opportunities to discover and develop their unused talents. the main idea is to have more people increasingly conscious of their role as thinkers and problem solvers, with caring behavior beyond their ideologies and cultures. there is an urgent need to improve our behavior and as a consequence our quality of life and work, and decreasing the crisis created by poverty, violence, lack of education, disease, discrimination, and other socio-economic factors (dees, 2007). alvord, brown & letts (2004) concerned about the negative reality of social crises and in search of transformation, analyzed some cases presenting proposals for constructive social change, and integrating leadership, organization, innovation, and the growth of social entrepreneurship. while the topic of entrepreneurship is mandatory learning material in numerous college degree programs today, providing proper perspective of social entrepreneurship in most coursework is an actual challenge. co & cooper (2014) also show that although self-efficacy and ability to engage students into entrepreneurship have been achieved in curriculum, the intent to carry it out in a continuous or sustainable way is largely lacking in the classroom experience. nevertheless, growing attention is being paid to these themes and related activities. therefore, the study from austin, stevenson & wei-skillern (2006) reveals a comparative analysis of commercial and social entrepreneurship which helps to understand the implications of approaching more frequently and efficiently social entrepreneurship. guzman & trujillo (2008) helps founding variables that give meaning to social entrepreneurship, explains his theoretical concept, and search and review the literature, meanwhile kachlami (2014) in his study proves the lack of applicability to conventional procedures and strategies based in two main individual and environmental determinants; he deduces that there is a different impact on commercial entrepreneurship compared with social entrepreneurship. solymossy (2015) ratifies this criteria when he explains how cunning attitude is developed at business schools and institutions looking out mainly for their economic self-interest without thinking much about society. thus, he is calling for the need of ethical behavior and social criteria (best practices) applied in local and global backgrounds and locations. agafonow (2014) insists on social enterprise integrating value creation and value capture for making the most from the effort and strategies implemented, while chell, spence, perrini & harris (2014) give an important relevance to social entrepreneurs researching actual social needs in order to find new, ethical alternatives in the win-win life and work game of improvement. from another perspective, the work of rahman & tekula (2014) focuses on a replicable evaluation method of social entrepreneurship centers and programs related to social entrepreneurship in north america, europe, and asia, which evaluate social entrepreneurship in a very transparent model containing data sources and coding schemes that examines research achievements, teaching initiatives, outreach activities, and funding. barazandeh, parvizian, alizadeh & khosravi (2015) point to the relationship between entrepreneurial competencies based in social rules and entrepreneurs� performance. meantime, arasti & didehvar (2015) show some indicators for measuring social entrepreneurship such as cultural promotion, economic prosperity of the community, people satisfaction, solidarity, welfare and social value, reduction of social inequalities, and social platform for growth. these aspects also apply and influence the purpose for relief and development arising in single small-scale entrepreneurs (sies) presented by azmat & samaratunge (2009), who argue for the importance of responsibility despite the complex living conditions and limitations that exist in developing countries. they emphasize cultural traditions, market setting, ineffective legal regulatory frameworks, lack of institutional safeguards, low levels of economic development, and public awareness. humanity, and even experts, seems unable to solve economic and societal problems, which has created a kind of weight we are carrying everywhere. three dimensions are presented by lundstrom & zhou (2013) commercial, humanistic, and social entrepreneurship. depending of the country and the culture the reactions to these dimensions are different. pless (2012) exposed a model designed by nongovernmental organizations to reduce the poverty and the unemployment with the purpose of sharing and maximizing the social impact to promote sustainable self-efficacy development. this is a reason for 68 american journal of management vol. 17(2) 2017 challenges that some researchers study with admiration when people undertake communitarian models to enforce poor communities in the task of creating unity with people of the community assuming responsibility for their success under the view and supervision of the model paths (cornwall, 1998). this kind of thought may seem paradoxical when we analyze the research of friedman & desivilya (2010) who argue that a good strategy for societal development is to integrate social entrepreneurship with conflict engagement, applying creativity and considering core assumptions, strategies for solutions, knowledge of the situation to solve, and expected results. meanwhile, el ebrashi (2012) has focused on social entrepreneurship theory based on research introducing new typologies to create a sustainable social transformation under a spectrum of measurements. a new concept exposed by montgomery, dacin & dacin (2012) is collective social entrepreneurship, which is influencing the collaborative activities that any group or company may direct to benefit society. these activities include framing, convening, and multimodality. in another study, lowe & heudemann (2012) propose five images on the processes of entrepreneurship, the image of machines, the image of evolution, the image of contingencies, the image of mind, and the image of social becoming. these five images are also available to be used in social entrepreneurship. on the other hand, lepoutre, justo, terjesen & bosma (2013) suggest finding a measurement method for activity of social entrepreneurship (sea), proved in 49 countries emphasizing three variables: social mission, revenue model, and innovation. there are several aspects that influence social entrepreneurship that seeks a shared profit motive or sometimes a non-profit, but ultimately a successful, growing, effective, sustainable goal that make poor people grow, as the case of yunus at grameen bank (acs, boardman & mcneely, 2013; barki, comini, cunliffe, hart & rai, 2015). however, the research achieved by andersson & self (2014) emphasizes the difficulty of finding initial funding for social enterprises that want to emerge without a prior example of prior effectiveness by companies or social investors, and has generated what they call social bias entrepreneurship. there are different opinions that may be confused depending on the mentality, the culture of giving or the culture of problem solving according dees (2012). therefore, it is possible to deduce that the integration and application of ethical values is a requirement for a sensible development of social entrepreneurship, creating a correlation among benefits from the achieved results and the satisfaction that is felt. gawell (2013) explains under another perspective the meaning and relevance of action grounded in needs, opportunities and/or perceived necessities. barki et al. (2015) emphasize the main purpose of social entrepreneurship (se) and social business (sb) intending to shrink vulnerabilities and search for social equalities worldwide. the main question is to find opportunities and innovate sustainable business models that help to solve society needs. for santos (2012) the focus is the context of the dialog related to economic factors and the influence of operational and effective current economies, where value creation and value capture needs to be attended to within the growing and complex field of social intervention. the social entrepreneurs always offer an aggregate value to society including innovation and finding solutions. thus, bahmani, galindo & mendez (2012) focused on the effects of economic growth for nonprofit organizations (npos) from eleven countries, where the common denominator is how entrepreneurship in npo sector indirectly helps economic growth and improvement of human resources through the enhancement of education. it is important not to forget the relationship that exists among social entrepreneurship and the application of ethical values (harris, 2009). ethics must be a rule to follow in social entrepreneurship as a role model example. dey & steyaert (2014) move us into a reflection when they insist on the impact of ethics in social entrepreneurship that is presented with three elements: power, subjectivity, and practices of concrete freedom. all of them are intervening in a kind of interrelation that should look for solutions and balance simultaneously. ethical values are present in the three dimensions that the study analyzes, namely organizations, family and society, as this research does with social entrepreneurship. the application of ethical values does not generate negativism or harm; rather, they are only able to benefit people and have a positive influence on the results achieved. mercader (2006) analyzed 28 taxonomies of ethical values from american journal of management vol. 17(2) 2017 69 different authors and created his own taxonomy with 28 ethical values which are wholly applicable to social entrepreneurship. there are also other similar studies related to categories of ethical values that were applied to conflict solutions (mercader, 2013), communication, organizational behavior, and quality of life and work (mercader, 2014). these demonstrate the relevance of applying ethical values in social entrepreneurship processes, and in any process that intends to correct, improve, and fulfill well-being in all areas of live performance. therefore, we can emphasize that even when most people are speaking of social entrepreneurship in the context of organizations or groups, it is very important to keep in mind that the basis of social entrepreneurship should initiate within the family where values, trust, and attitude are grounded and reaffirmed in daily life (kao & huang, 2005). if we are able to create a better working environment, it will result in surges of a synergy that will propel an improvement in productivity. by developing consistency toward common goals for the organizations, family, and the community, satisfaction, commitment, productivity, and balance will increase the wish to help and collaborate while stress and lack of self-interest will drop (chen & yang, 2010). that synergy nurtured by ethical values is observed and perceived by employees and work teams of organizations, inspiring the discovery and use of talent that will find better and more balanced social results based on trust (arciénaga et al., 2008; lams & pu tait, 2006). under this perspective ferrer (2010) considers the elements of responsibility and trustworthiness as essential in all kinds of organizations, families, and society in order to create social sustainability. ratiu, cherry and nielson (2014) propose the virtue of humility as indispensable because it provides vision for solving conflicts and creates self-awareness that drives the engagement in human and social ventures in the integral and integrative perspective. a good example could be what karakas and sarigollu (2013) consider a leadership model called benevolent, which was applied to social entrepreneurship through what they called virtues circles in a company denominated bereket in turkey. the model is grounded in compassionate spirit that breeds quality, productivity, and sustainability. this kind of spiritual understanding, as joseph & sailakshmi (2011) call it, motivates and guides individuals and groups toward a continuous integrative and ethical social improvement. due to this concept, we need to encourage and stimulate mind and action in all levels of society towards positive, constructive, and ethical goals. in order to spread out this criteria, entrepreneurial networking could be a helpful tool, reason for klyver, hindle & meyer (2007) to focus their study in social networks among entrepreneurs, encompassing 20 national cultures. it is necessary to spread awareness around the world of the benefits of social entrepreneurship to human world society. it seems a fundamental requirement that government, ngo�s, corporations, organizations, and families with access to resources, consider very seriously engaging in social entrepreneurship. this engagement must not be driven for hidden political interests, but by the rewards of sustainable and social innovation entrepreneurship in order to create prosperity and social productivity (osburg, 2014; zu, 2013). all these theoretical frames reinforce the causes and solutions for social entrepreneurship achieved in this study. methodology and research model the obtained data is the result of the application of the author�s instrument, which has been applied in previous studies. a questionnaire with open-ended questions including socio-demographic questions such as gender, age, nationality, profession, and level of education was delivered to a sample of professionals in the area of baja california, mexico, which is an important industrial center located in the border of mexico with the state of california, usa. the instrument and the methodology used in this research have already been used in previous studies with certain modification, focused on other elements such as productivity, conflict management, teamwork, communication, negotiation, and social responsibility. the instrument is now being applied to social entrepreneurship. 70 american journal of management vol. 17(2) 2017 the methodology used includes an anonymous questionnaire which was sent electronically to the participants of the study sample. the total sample was 259 participants. this study is a mixed-method design, descriptive and combining qualitative and quantitative research. the obtained data has been analyzed and all the answers were categorized in order to summarize and reach consistent and more precise tables, graphics, conclusions, and recommendations which will help to recognize the full worth of the performance of social entrepreneurship in organizations, family, and society. therefore, the analysis and conclusions provide a greater knowledge and understanding of the causes that generate variables that affect social entrepreneurship and also proposals for improving it with feasible solutions that can be applied to different types of leaders, entrepreneurs, and people in general. data analysis firstly, the demographic data obtained and analyze from the questionnaire is presented following the order of the questions. questionnaire: 1. gender (male / female) 2. age 3. nationality 4. level of studies (doctorate / master / bachelor / other) 5. profession 6. how necessary is social entrepreneurship for organizations, family, and society? 7. why do you consider that is not so adequate or effective the social entrepreneurship in the organizations, family, and society? 8. what are three factors or suggestions for improving social entrepreneurship in the organizations, family, and society? (the number of the questions does not coincide with the number of tables or figures) (the questionnaire was applied in spanish to mexican professionals) q1 and q2. table 1 is used to show the number of participants (professionals) and their gender that integrated the samples. this table also shows age and combines both variables gender and age. it is possible to appreciate that gender is very similar in the sample analyzed where female (132 participants) are greater than male (123 participants). there were 4 participants that did not answer de gender. in relation to age, most of the professionals were in the range of 26 to 30 years old (28.96%) and it was the dominant data point. table 1. gender and age of sample participants age female female (%) male male (%) not answer total total (%) 21-25 32 24.24% 15 12.20% 2 49 18.92% 26-30 41 31.06% 33 26.83% 1 75 28.96% 31-35 26 19.70% 31 25.20% 1 58 22.39% 36-40 15 11.36% 16 13.01% 31 11.97% 41-45 9 6.82% 20 16.26% 29 11.20% 46-61 9 6.82% 8 6.50% 17 6.56% total 132 100.00% 123 100.00% 4 259 100.00% american journal of management vol. 17(2) 2017 71 figure 1. gender and age of sample participants q3. the mexican nationality is high with 96.91% and the americans with 1.93%. the difference has to do with less americans work in the companies in mexico. table 2. nationality nationality number of answers percentage of answers (%) american 5 1.93% binational 2 0.77% foreign 1 0.39% mexican 251 96.91% total 259 100.00% q4. the sample was directed to individuals of which 78.46% had a professional degree, 20.33% had master degree and only 1.22% had a doctorate. 0 5 10 15 20 25 30 35 40 45 21-25 26-30 31-35 36-40 41-45 46-61 n um be r of a ns w er s age-gender female male 72 american journal of management vol. 17(2) 2017 table 3. level of education level of education female female (%) male male (%) not answer total total (%) doctorate 1 0.80% 2 1.71% 3 1.22% master's degree 26 20.80% 22 18.80% 2 50 20.33% professional degree 98 78.40% 93 79.49% 2 193 78.46% total 125 100.00% 117 100.00% 4 246 100.00% not answer 7 6 13 total sample 132 123 4 259 figure 2. level of education q5. in reference to the professions included in the sample, engineers were the highest percentage (22.62%) followed by accountants (15.87%) and administration (12.70%). taken together accounting and administration, yield the most significant percentage (28.57%). doctorat e, 0.80% master's degree, 20.80% professi onal degree, 78.40% level of education-female doctorate , 1.71% master's degree, 18.80% professio nal degree, 79.49% level of education-male american journal of management vol. 17(2) 2017 73 table 4. professions profession no. of answers response rate (%) engineering 57 22.62% accounting 40 15.87% administration 32 12.70% employee 23 9.13% teaching 11 4.37% marketing 10 3.97% psychology 10 3.97% business 9 3.57% computing 8 3.17% medicine 7 2.78% law 6 2.38% designer 5 1.98% economist 5 1.98% dentist 4 1.59% coordinator 4 1.59% communication 4 1.59% agent 3 1.19% architect 3 1.19% custom agent 3 1.19% total 252 100.00% not answer 7 total sample 259 q6. the analysis continues with the needs of social entrepreneurship in organizations, family and society. in all of the three cases the responses were very high in the range of very much and quite a bit. see table 5a, b and c. when we add very much and quite a bit the results were: need for se in organizations: 94.59% need for se in family: 85.33% need for se in society: 92.28% 74 american journal of management vol. 17(2) 2017 table 5a. need for social entrepreneurship in organizations need for social entrepreneurship in organizations no. of answers response rate (%) very much 153 59.07% quite a bit 92 35.52% more or less 13 5.02% something 1 0.39% little bit 0 0.00% total 259 100.00% table 5b. need for social entrepreneurship in family need for social entrepreneurship in family no. of answers response rate (%) very much 133 51.35% quite a bit 88 33.98% more or less 32 12.36% something 4 1.54% little bit 2 0.77% total 259 100.00% table 5c. need for social entrepreneurship in society need for social entrepreneurship in society no. of answers response rate (%) very much 162 62.55% quite a bit 77 29.73% more or less 16 6.18% something 4 1.54% little bit 0 0.00% total 259 100.00% when we realize that the percentages of need are very high, we may deduce the importance that the analysis has over the causes and solutions which were answered in the next questions. q7. in table 6, 7, 8 are shown the responses to the causes of lack of adequate or effective social entrepreneurship practices in organizations, family, and society respectively, separated and combined by gender and given as a total. all these tables show the categorizations achieved after a detailed selection of all the answers. we found different categorizations when we were grouping the answers depending on the answers related to organizations, family, or society. american journal of management vol. 17(2) 2017 75 it is worth to analyze each dimension of social entrepreneurship. in organizations were developed twelve categorizations being the most important lack of social interest / individualism / indifference which reached (28.15%) followed by business interests / business benefit with (15.55%), lack of vision / motivation (8.40%), and lack of application of ethical values (8.82%). in family were developed ten categorizations being the most important lack of interest / individualism / indifference (28.18%) and in male reaching (33.35%), followed by culture with (11.82%) and lack of resources and support with (11.36%). in society were developed eight categorizations being the most important lack of interest / individualism / indifference with (24.35%) which is the same category reached in the family dimension. now, the second category selected was selfishness (17.83%) and the third lack of resources and support (16.52%) but very well selected by male reaching (20.37%). it is important to note that the category of motivation was the fourth (15.65%) but highly selected by women with (19.49%). table 6. causes of social entrepreneurship in organizations causes of social entrepreneurship in organizations female female (%) male male (%) not answer total total (%) work environment 6 4.92% 5 4.42% 1 12 5.04% conformism 7 5.74% 6 5.31% 13 5.46% culture 4 3.28% 9 7.96% 13 5.46% lack of application of ethical values 13 10.66% 8 7.08% 21 8.82% lack of preparation 6 4.92% 1 0.88% 7 2.94% lack of knowledge 5 4.10% 2 1.77% 7 2.94% lack of training / education 6 4.92% 9 7.96% 15 6.30% lack of initiative and social projection 7 5.74% 6 5.31% 13 5.46% lack of social interest / individualism / indifference 36 29.51% 29 25.66% 2 67 28.15% lack of resources and support 5 4.10% 8 7.08% 13 5.46% lack of vision / motivation 11 9.02% 9 7.96% 20 8.40% business interests / business benefit 16 13.11% 21 18.58% 37 15.55% total 122 100.00% 113 100.00% 3 238 100.00% not answer 5 5 10 4.20% not apply 5 5 1 11 total sample 132 123 4 259 76 american journal of management vol. 17(2) 2017 table 7. causes of social entrepreneurship in family causes of social entrepreneurship in family female female (%) male male (%) not answer total total (%) anarchy / dysfunctionality 8 6.84% 5 5.05% 13 5.91% conformism 9 7.69% 3 3.03% 1 13 5.91% culture 16 13.68% 10 10.10% 26 11.82% lack of enforcement of ethical values 6 5.13% 5 5.05% 11 5.00% lack of family support 11 9.40% 3 3.03% 14 6.36% lack of communication and information 12 10.26% 4 4.04% 16 7.27% lack of training / education 6 5.13% 13 13.13% 19 8.64% lack of interest / individualism / indifference 25 21.37% 35 35.35% 2 62 28.18% lack of motivation and initiative 12 10.26% 9 9.09% 21 9.55% lack of resources and support 12 10.26% 12 12.12% 1 25 11.36% total 117 100.00% 99 100.00% 4 220 100.00% not answer 7 8 15 not apply 8 16 24 total sample 132 123 4 259 table 8 causes of social entrepreneurship in society causes of social entrepreneurship in society female female (%) male male (%) not answer total total (%) culture 8 6.78% 11 10.19% 1 20 8.70% selfishness 22 18.64% 19 17.59% 41 17.83% lack of enforcement of ethical values 6 5.08% 5 4.63% 11 4.78% lack of communication and information 9 7.63% 8 7.41% 17 7.39% lack of interest / individualism / indifference 30 25.42% 24 22.22% 2 56 24.35% lack of resources and support 16 13.56% 22 20.37% 38 16.52% training / education 4 3.39% 7 6.48% 11 4.78% motivation 23 19.49% 12 11.11% 1 36 15.65% total 118 100.00% 108 100.00% 4 230 100.00% not answer 6 7 13 not apply 8 8 16 total sample 132 123 4 259 american journal of management vol. 17(2) 2017 77 q8. in table 9, 10, 11 are shown the responses to the solutions for an adequate or effective social entrepreneurship practices in organizations, family, and society respectively, separated and combined by gender and given as a total. in organizations were developed eight categories being the most important motivation which reached (21.43%) an important point to comment is that for female this point was very relevant reaching 27.35 %. the second category was programs / social activities with 20.98%, giving a high importance by male with a percentage of 24.74%. the third category was development projects with 18.30%. in family were developed five categories being the most important training / education (32.70%) and in male reaching (35.42%), followed by social development activities (31.28%). in society were developed six categories being the most important social interest with (21.94%); very relevant is the fact that female reached a percentage in this dimension of (30.28%). now, the second category selected was programs / social activities (17.86%) and the third development projects (17.35%). in the column of the tables defined as not answer, a response was given by the participant but the gender had not previously been defined. table 9 solutions of social entrepreneurship in organizations social entrepreneurship solutions in organizations female female (%) male male (%) not answer total total (%) application of ethical values 10 8.55% 12 11.65% 22 9.82% preparation 4 3.42% 10 9.71% 1 15 6.70% communication 8 6.84% 6 5.83% 1 15 6.70% training / education 4 3.42% 5 4.85% 9 4.02% social interest 14 11.97% 13 12.62% 27 12.05% motivation 32 27.35% 16 15.53% 48 21.43% programs / social activities 21 17.95% 25 24.27% 1 47 20.98% development projects 24 20.51% 16 15.53% 1 41 18.30% total 117 100.00% 103 100.00% 4 224 100.00% not answer 12 12 24 not apply 3 8 11 total sample 132 123 4 259 78 american journal of management vol. 17(2) 2017 table 10 solutions of social entrepreneurship in family social entrepreneurship solutions in the family female female (%) male male (%) not answer total total (%) application of ethical values 14 12.50% 13 13.54% 27 12.80% family support 20 17.86% 10 10.42% 30 14.22% social development activities 34 30.36% 32 33.33% 66 31.28% training / education 34 30.36% 34 35.42% 1 69 32.70% improving communication and information 10 8.93% 7 7.29% 2 19 9.00% total 112 100.00% 96 100.00% 3 211 100.00% not answer 15 19 1 35 not apply 5 8 13 total sample 132 123 4 259 table 11 solutions of social entrepreneurship in society social entrepreneurship solutions in society female female (%) male male (%) not answer total total (%) application of ethical values 12 11.01% 13 15.29% 25 12.76% training / education 17 15.60% 11 12.94% 1 29 14.80% social interest 33 30.28% 10 11.76% 43 21.94% motivation 15 13.76% 15 17.65% 30 15.31% programs / social activities 16 14.68% 18 21.18% 1 35 17.86% development projects 16 14.68% 18 21.18% 34 17.35% total 109 100.00% 85 100.00% 2 196 100.00% not answer 16 31 1 48 not apply 7 7 1 15 total sample 132 123 4 259 there are a summary of causes showing the percentages for the three dimensions, organizations, family, and society in table 12 below. the category of lack of social interest /individualism / indifference has in the three dimensions a very high influence as category (28.15%; 28.18% and 24.35%). lack of resources and support (5.46%; 11.36%, and 16.52%) is also very relevant. the other category that is repeated but it is not so high is lack of training / education with (6.30%; 8.64%, and 4.78%) respectively. the same happens with culture with (5.46%, 11.82%, and 8.70%) respectively. it is worth to talk about the category selfishness that appears only in causes in society but is important due to the percentage of (17.83%) achieved and the category business interests / business benefit in organizations with 15.55%. american journal of management vol. 17(2) 2017 79 table 12 causes of social entrepreneurship in organizations, family and society causes of social entrepreneurship in organizations response rate (%) causes of social entrepreneurship in family response rate (%) causes of social entrepreneurship in society response rate (%) lack of social interest / individualism / indifference 28.15% lack of interest / individualism / indifference 28.18% lack of interest / individualism / indifference 24.35% business interests / business benefit 15.55% culture 11.82% selfishness 17.83% lack of implementation of ethical values 8.82% lack of resources and support 11.36% lack of resources and support 16.52% lack of vision / motivation 8.40% lack of motivation and initiative 9.55% motivation 15.65% lack of training / education 6.30% lack of training / education 8.64% culture 8.70% conformism 5.46% lack of communication and information 7.27% lack of communication and information 7.39% culture 5.46% lack of family support 6.36% lack of enforcement of ethical values 4.78% lack of initiative and social projection 5.46% anarchy / dysfunctionality 5.91% lack of training / education 4.78% lack of resources and support 5.46% conformism 5.91% total 100.00% work environment 5.04% lack of enforcement of ethical values 5.00% lack of preparation 2.94% total 100.00% lack of knowledge 2.94% total 100.00% a similar summary has been developed related to solutions and showing the percentages for the three dimensions, organizations, family, and society in table 13, below. there were three categories included in the three dimensions; the highest is referred to development projects very high in the family dimension (31.28%) and reaching (18.30%) in organizations and (17.35%) in society; the other category was training / education that in family was the highest (32.70%) in a significant manner, also in society (14.80%) and in organizations only (4.02%); and the third 80 american journal of management vol. 17(2) 2017 category that includes all the dimension is the application of ethical values in a lower percentage but still relevant (9.82%), (12.80%), and (12.76%). motivation was the highest in organizations (21.43%) and relevant in society (15.31%). meanwhile in society, the highest corresponded to social interest (21.94%); other category worth to mention is program / social activities with (20.98%) in organizations and (17.86%) in society. table 13 solutions of social entrepreneurship in organizations, family and society social entrepreneurship solutions in organizations response rate (%) social entrepreneurship solutions in the family response rate (%) social entrepreneurship solutions in society response rate (%) motivation 21.43% training / education 32.70% social interest 21.94% programs / social activities 20.98% development projects 31.28% programs / social activities 17.86% development projects 18.30% family support 14.22% development projects 17.35% social interest 12.05% application of ethical values 12.80% motivation 15.31% application of ethical values 9.82% improving communication and information 9.00% training / education 14.80% preparation 6.70% total 100.00% application of ethical values 12.76% communication 6.70% total 100.00% training / education 4.02% total 100.00% the percentage that appears in all tables are from the responses completed by the participants. those who did not respond to some questions were not considered for the total percentage. not all participants responded to all questions; some participants left some questions unanswered as they progress through the questionnaire. responses given which are not clear or nonsense responses are aggregated in a category denominated �not apply�. proof of this is that the total sample was 259 but less people answered as it is displayed: for causes in organizations only 238 answered, (10 not answered and 11 �not apply�). for causes in family only 220 answered, (15 not answered and 24 �not apply�). for causes in society only 230 answered, (13 not answered and 16 �not apply�). for solutions in organizations only 224 answered, (24 not answered and 11 �not apply�). for solutions in family only 211 answered, (35 not answered and 13 �not apply�). for solutions in society only 196 answered, (48 not answered and 15 �not apply�). american journal of management vol. 17(2) 2017 81 conclusions and recomendations the research leads to the analysis, reflection and need of social entrepreneurship: general conclusions: 1. the categorizations that have been created as a result of the data obtained in this study, show a spectrum of results and knowledge that help us identify, analyze, understand and reflect upon feasible solutions for effective social entrepreneurship. 2. the reviewed literature is supporting the need and advantages of social entrepreneurship in many different ways and providing an opportunity for those that are interested in helping others to produce and create through innovation. there is a common denominator between social responsibility, application of ethical values and social entrepreneurship as it also benefits the under-privileged people. 3. the developed categorizations are based on the data supplied by the sample. it is important to cite some of them in a general way as seen in the tables concerning organizations, families, and society. these dimensions have partly been consistent on both the causes as well as proposed solutions. 4. the main resulting categorizations are: causes: lack of social interest/individualism/indifference; lack of resources and support; lack of application or enforcement of ethical values; culture; selfishness. solutions: training/education; motivation; social interest; programs/social activities; development projects; application of ethical values. 5. in social entrepreneurship, ethical values are needed in organizations, family and society, independently of gender and age. in this research, ethical values have not been the most important categorization, even when it appeared significantly in previous studies by the author of conflict solutions (mercader, 2013); communication, quality of life and work; and organizational behavior (mercader, 2014). specific conclusions: 1. the sample was comprised by 132 female participants and 123 male participants. a good parity. 2. the range of ages were between 21-25 (18.92%) and 46-61 (6.56%). the most abundant age was in the range of 26-30 which represents a percentage of 28.96%. 3. the predominant nationality was mexican (96.91%). 4. the professional level represented 78.46% and it was very similar for males and females. there were 20.80% master�s degrees for females versus 18.80% master�s degrees for males. 5. concerning the careers of participants, engineers were the highest percentage (22.62%) followed by accountants (15.87%) and administration 12.70%. 6. the needs of social entreprenuership in organizations, family, and society were very high. in organizations (94.59%), in family (85.33%) and in society (92.28%). it is important to note that the need for se was less in family than in organizations and society. 7. in causes, 12 categorizations were developed in organizations, 10 in family, and 8 in society. in solutions, 8 were developed in organizations, 5 in family, and 6 in society. 8. the only categorization in causes that was a repeatedly high percentage for the three dimensions was lack of interest/individualism/indifference. 9. in causes the categorizations that appear in three dimensions are: culture; lack of resources and support; lack of training/education; lack of interest/individualism/indifference. in solutions, the categorizations that appears in the three dimensions are: application of ethical values; development projects; training/education. 82 american journal of management vol. 17(2) 2017 10. there was not a significant difference between male and female in general related to the development of the categorizations, except for: a) in causes, organizations with the following categorizations: lack of social interest/ individualism/indifference resulted in 29.51 % for females and 25.66% for males. to a similar effect, organizations with the following categorizations: business interests/ business benefit, the males got a higher percentage (18.58%) while females only reached 13.11 %. in lack of preparation, there is a difference between males who got 0.88% while females got a 4.92%. b) in causes in family, there is a significant difference in the following categorizations: lack of interest/individualism/indifference, males attained 35.35% while females only attained 21.37%. in others categorizations the margins of difference are not big enough to mention. c) in causes in society, the difference was observed in two categorizations: in motivation with 19.49% females and only 11.11% males; the other was in lack of resources and support where males achieved 20.37% and females only reached 13.56%. d) in solutions in organizations, the categorization motivation had a significant difference, female thought it was more important 27.35% and males only considered 15.53%; the categorization programs/social activities was the opposite, it was more important for males 24.27% than for females 17.95%. e) in solutions in family, both genders were balanced. in family support, the differences found were 17.86% for females and 10.42% for males. f) in solutions in society, the categorization of social interest had the highest differences in all of the research. females reached 30.28% while males only reached 11.76%. in an opposite way, males gave a higher percentage to program/social activity and development projects (21.18%) versus females, who only gave 14.68% in both categories. recommendations here are a few recommendations to consider: 1. this study could be applied to a wide range of sectors of society, various types of families, diverse economic and cultural levels, different organizations, companies from different branches and styles, government institutions, professionals of all careers, members of different religious associations and others if used with the same measuring instrument or modified and/or adapted. 2. it could also be applied in other countries and cultures in favor of observing and analyzing similarities and differences. 3. in the educational sector, it is considered important for faculty, staff, students and education authorities in terms of raising vision and awareness from scientifically based research referred to social entrepreneurship. 4. there are similar studies using the same instrument developed by the author that could analyze relationships of social entrepreneurship (this study) with the causes, solutions, necessity, and influence of social responsibility, ethical values, productivity, and others dimensions that are also associated with work, family, and society. american journal of management vol. 17(2) 2017 83 references there are a good quantity of peer reviewed papers that are contained in this literature review that enforces validity and reliability to the research in process. this source of information is showed as followed. acs, z., boardman & mcneely, c. 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(2013). international perspective on sustainable entrepreneurship. sustainable entrepreneurship. 67-100. the effect of union protest behavior on attitudes toward unions: an experimental analysis mel e. schnake valdosta state university michael p. dumler illinois state university k. nathan moates valdosta state university student attitudes toward unions were measured at the beginning of a semester. approximately 90 days later, students were shown a video of union protestors shouting down teachers who had called a press conference to announce they had filed a lawsuit against the union. following the video, student attitudes toward unions were measured again. the results suggest that union behavior perceived as negative does have a deleterious effect on observer attitudes toward unions. this effect occurs even for observers whose parents were union members. individual attitudes toward unions have been shown to be a central factor in union organizing (barling, fullagar & kelloway, 1992). specifically, attitudes toward unions have been related to voting for union representation in certification elections (brett, 1980; decotiis & lelouarn, 1981; getman, goldberg & herman, 1976; montgomery, 1989), participation in union activities (mcshane, 1986), and affective commitment to a labor union (fullagar, mccoy & schull, 1992). individual beliefs and attitudes play a central role in the model of union voting decisions developed by summers, betton and decotiis (1986). several studies have produced support for a sequence of prounion attitudes beginning with an intent to join, followed by joining or voting to join a union (davy & shipper, 1993; deshpande, 1992; haberfeld, 1995; hemmasi & graf, 1993; premack & hunter, 1988). kelloway, barling, fullagar and lalibert (1995) suggest that attitudes toward unions may serve as a perceptual filter through which work and union experiences are interpreted. while individual attitudes toward unions have been related to a number of outcome variables, recently researchers have begun examining the origins of these attitudes. barling, kelloway and bremermann (1991) found that parental socialization and individual work beliefs are significant predictors of union attitudes. specifically, they produced evidence that the effects of perceptions of parents’ union participation were mediated by perceptions of parents’ general union attitudes. hester and fuller (1999) found support for this mediation effect. kelloway and newton (1996) found that parents’ general union attitudes, parents’ union participation, and parents’ job satisfaction impact students’ attitudes toward unions. chang (2003) found that race and class affect union attitudes directly and indirectly through negative economic events. both specific attitudes toward unions (i.e., union 90 american journal of management vol. 16(2) 2016 instrumentality) and general attitudes toward unions have been established as predictors of willingness to join a union (barling, et al., 1992). houghton (2000) presents a “fundamental attitudinal model of union voting intentions,” presented in figure 1, in which family socialization factors and prior work and union experience (including job dissatisfaction) impact general union attitudes. these attitudes are also affected by personality factors indirectly through work beliefs. “miscellaneous contextual factors” (including the influence of campaigns for and against union representation, and financial and economic factors) impact perceived union instrumentality. getman, goldberg and herman (1976) found that campaigns both for and against union representation do impact employee voting intentions. houghton’s model shows miscellaneous contextual factors affecting willingness to join/vote for a union indirectly through perceived union instrumentality. finally, general union attitudes also impact perceived union instrumentality. perceived union instrumentality perceptions directly affect willingness to join/vote for a union. figure 1 houghton’s fundamental attitudinal model of union voting behavior a potential modification of this model, given previous research findings is a direct link between general union attitudes and willingness to join/vote for a union, in addition to the indirect link to willingness to join/vote for a union through perceived union instrumentality. that is, general union attitudes may affect willingness to join/vote for a union both directly and indirectly through perceived union instrumentality (barling, et al., 1992). another potential modification to this model and one which is directly related to the current study, is a direct effect between some contextual variables and general union attitudes. some contextual variables, such as organizing campaigns, may affect employees’ perceptions of union instrumentality. during organizing campaigns, unions often provide information about what union representation can do for employees, while management provides information about the downside of union representation. this type of information is more directly related to perceived union instrumentality. however, other union behaviors, such as political activism, informational picketing, lobbying, and protesting anti-union press conferences, may affect observers’ general union attitudes. personality factors work beliefs general union attitudes willingness to join/vote for a union family socialization factors prior work and union experience (e.g., job dissatisfaction) miscellaneous contextual factors perceived union instrumentality american journal of management vol. 16(2) 2016 91 one potential influence on attitudes toward unions which has not yet been examined fully is the behavior of unions themselves. union organizers and pro-union activists engage in a variety of collective (i.e., concerted) behaviors such as picketing, marches and demonstrations, and press conferences. the behavior of union activists may impact the attitudes of observers. getman, et al. (1976) provide some evidence that organizing campaign behavior affects union voting intentions. the effects of other forms of union behavior on general attitudes toward unions have not been extensively examined. on september 22, 2005 a group of california teachers, supported by the national right to work foundation, held a news conference in sacramento, california to announce a “free speech” lawsuit. the teachers claimed that the california teachers association had begun withholding $60 a year from their checks without notifying them in advance. they further argued that this money was being used for political purposes for which they should not be required to pay. three teachers opposed to the increase in dues, an official from the right to work foundation and california state senator tom mcclintock spoke during the press conference. as they spoke, a group of california teachers association (union) members attempted to shout down the speakers by loudly chanting “shame on you.” senator mcclintock said “this is an example of the kind of intimidation, bullying and thuggery that our public school teachers are enduring from the union every day.” thus, some observers clearly viewed the behavior of the union activists as inappropriate. a video of this press conference can be viewed (in two parts) at: http://www.youtube.com/watch?v=0cglp-9sjp4 http://www.youtube.com/watch?v=qfrrcuo7aww&nr=1 vicarious learning of attitudes psychological research suggests that attitudes may be changed by changing information and beliefs, by changing behavior through reinforcement, or by social influence (e.g., influence of parents, peers, important others) (zimbardo & leippe, 1991). thus, to the extent that a press conference is informational, it may lead to attitude change. attitudes develop not only as a result of direct experience with stimuli, but also through the observation of others’ reactions to relevant stimuli (bandura, 1965; berger, 1962; berger, 1980). bandura (1977) notes that there is evidence that attitudes are often acquired through the observation of the emotional reactions of other persons exposed to aversive stimuli. according to behavioral theory, an attitude is a habit between a stimulus and an emotional response (doop, 1947; kanekar, 1975; radtke, 1967; staats, 1968). thus, an attitudinal response is a conditioned emotional response acquired through classical conditioning. a model’s positive or negative emotional response to a stimulus leads to a similar emotion in an observer (kanekar, 1976). thus, observing an event, such as a press conference, where they key participants (the presenters) are exposed to a continuous aversive stimulus may classically condition observers of the event. should the key participants of the event express displeasure, observers may develop a similar attitude toward the aversive stimulus. this effect is likely to be magnified to the extent that observers identify with the key participants (i.e., models) (kanfer, karoly & newman, 1974). identity is influenced by perceived modelobserver similarity and/or models with whom observers empathize (e.g., small children, teachers, the disadvantaged). the purpose of this study is to examine the effects of observing union members’ protesting an antiunion press conference on observer union attitudes. method a twelve item questionnaire containing a general union attitude scale (e.g., “unions are an important, positive force in our society.” “unions are necessary to balance the power and authority of management.”) and a specific union attitude (i.e., union instrumentality) scale (e.g., “unions are 92 american journal of management vol. 16(2) 2016 http://www.youtube.com/watch?v=0cglp-9sjp4� http://www.youtube.com/watch?v=qfrrcuo7aww&nr=1� instrumental in improving working conditions and pay for employees.” “without unions, employees would have little job security.”) was presented to senior level business students at a state university in the midwest. in addition to the union attitude scale, age, gender, nationality and both students’ and their parents’ experience/membership in unions were collected. a cover story suggested that the researchers were attempting to validate a new questionnaire. student id numbers were collected in order to match these questionnaires with the second questionnaire. 154 of 165 students completed usable questionnaires as a result of the first questionnaire administration (eleven questionnaires were omitted due to missing data). the average age of the respondents was 22.5 years and 53% were female. only one respondent was currently a union member and less than 5% had ever been members of a union. twenty-four percent reported that their parents had ever been members of a union. toward the end of the semester (approximately 90 days after the first questionnaire administration), students in the same classes were briefly told of the california teachers association press conference. they were told that the union had increased teachers’ union dues without first notifying the teachers and that some of the teachers were filing a lawsuit to recover this money with the help of the national right to work organization. they were also told that the reason the union raised dues was to support a campaign against two propositions which the union opposed that governor schwarzenegger had placed on the ballot. the students then viewed the video and responded to a second questionnaire containing the same union attitude scale. 121 students completed usable questionnaires as a result of the second questionnaire administration resulting in a total of 121 matched questionnaires. students were then debriefed as to the true purpose of the study. results the twelve item union attitude scale was factor analyzed using both the pre-video data and the postvideo data. before analysis three negatively worded items (e.g., “most unions are corrupt.”) were recoded. a principal components exploratory factory analysis of the pre-video data resulted in three interpretable factors with eigenvalues greater than 1.0, explaining 65.43% of the variance. four items loaded cleanly on factor one and were interpreted to be a general union attitude dimension (e.g., unions are an important, positive force in our society). three items loaded on a second factor which was interpreted to be union instrumentality (e.g., “without unions, employees would not have a voice with management” and “without unions employees would have little job security”). three items loaded on a third factor which was interpreted to be union image (e.g., “the country would be much better off without unions”, and “most unions are corrupt”). this factor is similar to the “big labor” public image noted by kochan (1979). the other two scale items exhibited split loadings on two or more factors and were dropped from further analysis. using the same procedure on the union attitude scale administered after students were shown the video, the same three factors emerged, explaining 64.75% of the variance. table 1 presents a correlation matrix and reliability estimates for the study variables. table 1 correlation matrix and scale characteristics pre-video data 1 2 3 1. genatt .75 .51** .52** 2. instr .79 .38** 3. image .72 coefficient alpha reliability estimates appear boldfaced on the diagonal. ** p> .01 n=156 american journal of management vol. 16(2) 2016 93 post-video data 1 2 3 4. genatt .75 .59** .64** 5. instr .80 .27** 6. image .73 coefficient alpha reliability estimates appear boldfaced on the diagonal. ** p> .01 n=121 pre-video and post-video union attitude scale responses were compared (t-test) to determine whether viewing the union members’ behavior during the press conference had any impact on observers’ union attitudes. the results of this analysis appear in table 2. table 2 results of t-test of pre-video and post-video union attitude scales pregenatt(3.46(/postgenatt(3.19) 4.33** preinstr(2.72)/postinstr(2.36) 5.26** preimage(3.23)/postimage(3.01) 3.75** ** p < .01 * p > .05 n = 112 (cases were excluded analysis by analysis). means of each measure appear in parentheses. in each case, the post-video measure was significantly lower than the pre-video measure. respondents’ general attitude toward unions and perceptions of union instrumentality were negatively affected by viewing the union members protesting an anti-union press conference. the image measure contained items which were recoded (e.g., “most unions are corrupt”, “unions are too powerful”, and “the country would be better off without unions”) before analysis. thus, the significant decline in the mean of this measure indicates that observers’ perceptions of unions became more negative after viewing the video. one important influence on union attitudes identified in previous research is parents’ participation/ membership in unions. to assess the impact of this influence, the pre and post-video union attitude measures were submitted to an analysis of variance comparing respondents whose parents had been union members to respondents who reported their parents had never been union members. the results of this analysis appear in table 3. measures of all three union attitude measures were significantly different at the .01 level before respondents viewed the press conference video. after viewing the video, only one of the union attitude measures was still statistically significant and the level of significance dropped to .05. 94 american journal of management vol. 16(2) 2016 table 3 analysis of variance of union attitudes by parental union membership df f sig pregenatt 151 12.46 .001 preinstr 150 5.87 .017 preimage 151 14.83 .001 postgenatt 110 2.02 .16 postinstr 110 .10 .75 postimage 110 4.06 .05 means pregenatt/parents members 3.78 pregenatt/parents not members 3.35 preinstr/parents members 3.05 preinstr/parents not members 2.67 preimage/parents members 3.35 preimage/parents not members 3.14 postgenatt/parents members 3.36 postgenatt/parents not members 3.14 postinstr/parents members 2.41 postinstr/parents not members 2.35 postimage/parents members 3.27 postimage/parents not members 2.93 american journal of management vol. 16(2) 2016 95 discussion this research examined the effect of union members’ behavior during a press conference where bargaining unit members opposed a recent union action. the union members chanted “shame on you” repeatedly during the press conference making it difficult for the audience to hear what the participants were saying. respondents’ general attitudes toward unions, perceived union instrumentality and perceptions of union image all significantly deteriorated after viewing the video of the press conference. the results clearly show that some union protest behavior may have a negative impact on the union attitudes of observers. while the union may believe it is acting to protest decisions or actions perceived to be harmful to the union, this very protest behavior may damage its public image. perhaps an even stronger finding is the results involving whether observers’ parents were currently or had ever been union members. the results showed that before viewing the video, observers whose parents had been union members had significantly more positive attitudes toward unions than respondents whose parents had never been union members. however, after viewing the video, there was no significant difference between respondents’ general union attitudes and perceived instrumentality based on parental union membership. while a significant difference based on parental union membership remained after viewing the video, the level of statistical significance declined. the results have great practical significance for unions. they should take great care in the public behavior of union members, especially when that behavior may be recorded and broadcast in the public media or on the internet by opposing groups. the results of this study show that aggressive, protesting behavior by union members may have a damaging effect on observers’ attitudes toward unions, even if those observers are predisposed to view unions positively as a result of family socialization. one limitation of the study is the nature of a student sample. however, respondents were all senior level business students, near graduation and entering the business world. some of them may be faced with decisions about union membership as they begin their work careers. previous research shows that family socialization is an important determinant of union attitudes even after work experience. thus, the impact of this limitation may be minimal. references bandura, a. 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(1991). the psychology of attitude change and social influence. new york: mcgraw-hill. american journal of management vol. 16(2) 2016 97 ajm 17(1) master-lulu-revised.pdf 82 american journal of management vol. 17(1) 2017 carbon emission modeling in a two stage supply chain zhi tao arkansas tech university alfred l. guiffrida kent state university o. felix offodile kent state university carbon emission control has been a global challenge. carbon tax and carbon cap-and-trade are two globally practiced regulatory schemes to control carbon emission. this paper investigates the joint optimal decisions on lot size in a coordinated supply chain between a retailer and a manufacturer under carbon tax mechanism and under carbon cap-and-trade mechanism. the comprehensive cost based models are proposed to capture the influence of two carbon regulatory schemes on business decisions in such coordinated two stage supply chain. the research results provide managerial implications in operations management and in carbon regulations. introduction there is consensus that global warming has a direct relationship with carbon emission. to control the carbon emission, many countries have implemented carbon tax scheme or carbon cap-and-trade scheme. with the emergent of environmental challenges in supply chains, carbon footprint management has been proposed as a new dimension of performance measurement to supplement cost, quality, delivery speed and flexibility (butner et al.2008). carbon emission, commonly referred to as the carbon footprint, is used to measure the impact of carbon dioxide and other greenhouse gases on the environment. bell & callan (2011) reported that carbon dioxide alone accounts for about 70% of the greenhouse effects of carbon emission. in light of the on-going consumer, regulatory and competitive pressures businesses are becoming increasingly conscious of their carbon footprint and have begun to incorporate environmental thinking into their business strategy and supply chain management. zhu & sarkis (2007) classified these pressures as normative (market), coercive (regulatory), and mimetic (competitors). beamon (1999), linton et al. (2007), and srivastava (2007) refer to this new paradigm of incorporating environmental thinking into supply chain strategies as green supply chain management (gscm). american journal of management vol. 17(1) 2017 83 in lean manufacturing parlance, carbon emission is the new muda, the japanese term for waste in lean practice. therefore, reducing carbon emission, which is waste in procurement, production and distribution, is aligned with just-in-time philosophy and lean supply chain management. carbon emission reduction and environmental stewardship are becoming an immutable part of the supply chain strategies for most firms. thus, research on reducing carbon emission and optimizing its operations in the extended supply chain is in line with current supply chain management practices. figure 1 sources of carbon emission according to katircioglu (2010), carbon emission from supply chain activities is responsible for at least half of all global carbon emissions. sarkis (2003), hervani et al. (2005) and sundarakani et al. (2010) posit that energy use and carbon emission occur across a closed loop supply chain that includes not only materials purchasing, product manufacturing, distribution and delivery, but also reverse logistics which refers to reuse, remanufacturing and recycling of materials into the value chain. as illustrated in 84 american journal of management vol. 17(1) 2017 figure 1, the outside circle shows the carbon emission generated across the extended supply chain of firms and the inner circle shows the carbon emission generated from the perspective of a product. knowledge of the sources of carbon emission in every step of their extended supply chain enables firms to strive to reduce their impact on the environment. according to jones (2011), 93% of multinational companies are now taking steps to address carbon emissions directly related to their businesses. this is achieved by investing in energy efficient equipment, facilities, and vehicles. firms may also choose to optimize their operational decisions in procurement, production, transportation and inventory along their supply chains as a means of reducing carbon emission. in this paper we develop an optimization model to determine the cost minimizing joint economic lot size for a two stage (manufacturerretailer) supply chain under carbon tax mechanism and carbon cap-and-trade mechanism. the contribution of the joint economic lot size (jels) model with carbon emission developed herein is twofold. first, the ability to measure performance in terms of cost will make the model practical and could lead to the establishment of benchmarks for future comparisons. as the old adage goes, it is difficult to manage what one cannot measure. it is especially important to use cost as the metric to quantify carbon emission performance since the ability to measure carbon emissions is the first step toward reducing their impact on the environment. as gunasekaran et al. (2004), lancioni (2000), and lalonde & pohlen (1996) address the importance of linking performance measurement with cost as a metric in supply chain management. secondly, the vast majorities of joint economic lot size models for supply chain management concentrate only on operational costs such as the cost associated with ordering or setup and holding inventory and ignore environmental costs. environmental concerns cover broad subjects including energy use, materials/chemical use, waste in the form of gas, liquid, and solids. in this research, environmental issues are modeled using carbon emission reduction, and environmental cost refers to carbon emission cost. hence, by linking both the operational and environmental objectives we provide management with a more comprehensive model that can be used to examine how carbon emission policies might affect their joint order quantity decisions and costs thereby shedding more light on how best to strategically operate. the rest of this paper is organized as follows. in section 2 we review the literature on lot sizing models with sustainability criteria. in section 3 we present two model formulations for incorporating carbon tax and cap-and-trade mechanisms into the joint lot sizing model for a two stage supply chain and provide numerical illustrations of each model. in section 4 we summarize and conclude the paper. literiture review supply chain management is the integration of key business processes and activities to provide value to the end customers, of which the production planning and inventory control processes are viewed as very important processes (beamon, 1998). a review of the literature on the relationship between inventory control and supply chain management can be found in thomas & griffin (1996) and routroy (2010). inventory management requires making decisions on two fundamental questions: (1) how large should an inventory replenishment order be and (2) when should the order be placed? the economic lot size models were developed to answer these questions of order quantity and reorder point. economic lot size models which address environmental considerations are relatively new to the research stream on economic lot size models. table 1 provides an overview of traditional lot sizing models (economic order quantity, economic production quantity, newsvendor and jels). examining table 1, the eoq and newsvendor are the most frequently used models for sustainable lot sizing. carbon emissions (typically measured in units of carbon dioxide gas) is the most commonly used sustainability criteria. fixed carbon cost, units of unsold product, the number of emission permits and environmental quality cost have also been used as sustainability criteria. the jels models represent a beginning attempt to advance inventory-based sustainability modeling to the scope of a supply chain since they integrate the inventory lot sizing decision across two echelons. american journal of management vol. 17(1) 2017 85 table 1 classical inventory models with sustainability criteria author(s) type of inventory model sustainability criteria eoq epq nv jels chen et al. (2013) x carbon emissions jaber et al. (2013) x carbon emissions rosi and jammernegg (2013) x carbon emissions bouchery et al. (2012) x carbon emissions zhang and xu (2013) x carbon emissions choi and chiu (2012) x unsold product song and leng (2012) x carbon emissions hua et al. (2011) x carbon emissions el saadany et al. (2011) x enviromental quality cost wahab et al. (2011) x x carbon emissions manikas and godfrey (2010) x emission permits tao et al. (2010) x x fixed carbon cost legend: eoq = economical order quantity; epq = economical production quantity; nv = newsvendor; jels = joint economical lot size the models found in wahab et al. (2011), el saadany et al. (2011) and jaber et al. (2013) are jels models and have the greatest commonality to the model presented herein. as such we further examine how each of these models captured carbon emissions in their model formulation. wahab et al. (2011) introduce co2 emission costs into the jels model in the form of fixed and variable emission costs. fixed co2 emission costs are based on factors such as the line haul mileage distance between the buyer and vendor and characteristics of the transport vehicle such as gross vehicle weight, vehicle type, and fuel efficiency. variable co2 emission costs are dependent on the shipment weight of the product. these fixed and variable emission costs are present in the forward loop of the supply chain where the vendor ships the product to the buyer and also in the reverse loop where the buyer returns defective product back to the vendor. the policy variables in this model are the optimal jels quantity and the optimal number of shipments that minimize total cost. el saadany et al. (2011) use a quality cost function to represent a product�s total environmental quality. the quality cost function is composed of an additive set of different environmental terms with each term representing a green aspect of the supply chain. carbon emissions are indirectly captured through the components of the quality cost function which includes terms for transportation distance, air emissions, environmentally friendly purchasing and packaging, and aftermarket reuse, refurbishing and remanufacturing. the policy variables in this profit maximization model are the product selling price, the product aggregate quality measure and the integer multiplier which defines the retailer�s incoming order quantity as a function of the manufacturer�s economic lot size. jaber et al. (2013) present a jels model where carbon emissions are a function of the manufacturer�s production rate in a two stage (manufacturer-buyer) supply chain. the total cost function for the model is composed of the following three costs: (i) supply chain inventory related costs, (ii) the cost of emissions, and (iii) a penalty cost for exceeding the allowed emission limits. the model is optimized to determine the manufacturer�s optimal production rate and the lot size multiplier which defines the buyer�s incoming order quantity as a function of the manufacturer�s economic lot size. the model is illustrated for different scenarios in which an emission penalty without a carbon tax is levied, when a carbon tax without an emission penalty is levied, and when both a carbon tax and an emission penalty are levied. 86 american journal of management vol. 17(1) 2017 model development this section develops a set of four jels models which consider operational and carbon emission costs for a two stage supply chain under carbon tax and carbon cap-and-trade mechanisms. table 2 and figure 2 outline the key features of these models. table 2 jels emission mechanisms and order policies lot for lot policy lot for n lot policy carbon tax mechanism carbon tax jels model generalized carbon tax jels model carbon trading mechanism cap-and-trade jels model generalized cap-and-trade jels model table 2 identifies the ordering policies that are used to coordinate product flow between the manufacturer and the retailer in the supply chain under the two different carbon mechanisms. figure 2 identifies the input parameters (different lot sizing policies and different carbon mechanisms) and output parameters (jels order quantity and total cost) of the modeling environment. figure 2 input-output for the two stage supply chain american journal of management vol. 17(1) 2017 87 model notation the r subscript is used to designate the retailer; the subscript m is used to designate the manufacturer. under the lot for lot policy q is equal to the order or production quantity while under the lot for n lot policy it is the order quantity and production quantity n integer number of times. with subscription j for joint, is the joint total cost including operational cost from the retailer and manufacturer, the joint carbon emission from the retailer and manufacturer, and the comprehensive cost including operational and carbon emission costs from both the retailer and manufacturer. a: order cost per cycle d: annual demand q: order quantity per cycle s: setup cost p: production rate : inventory holding cost per unit time, per unit quantity for the retailer t: carbon tax rate c: carbon emission price : carbon emission quantity from order per cycle : carbon emission quantity from inventory holding : carbon emission cap for the retailer : comprehensive cost which includes operation cost and carbon emission cost : comprehensive cost with carbon emission cap : inventory holding cost per unit time and per unit quantity for manufacturer t: carbon emission tax rate c: emission cost per credit : carbon emission from setup : carbon emission quantity from inventory holding : carbon emission cap for the manufacturing industry : comprehensive cost with cap model formulation in this section we present formulations for two models which incorporate operational and environmental (carbon emission) costs for the jels model for a two stage supply chain. we adopt the terminology joint comprehensive cost to reflect that the model formulations contain both operational and environmental costs and use the acronym jcls (joint comprehensive lot size) to further identify the model. the two carbon emission mechanisms (carbon tax and carbon cap-and-trade) and the two lot sizing policies (lot for lot and lot for n lot) outlined in table 2 are incorporated into two jcls formulations since the lot for lot policy (q, n=1) is a special case of the lot for n lot model (q, n). formulation 1: jcls model with carbon tax mechanism the joint comprehensive cost of the supply chain for the joint lot size (q, n) model with carbon emission under carbon tax mechanism is, (1) when n = 1, eq. (1) is reduced to, (2) this is the joint lot size (q, 1) model with carbon emission under carbon tax mechanism. 88 american journal of management vol. 17(1) 2017 solution algorithm for jcls model with carbon tax mechanism we adopt the lot for n lot jels solution algorithm of goyal (1988) to solve the jcls model defined in eq. (1) step 1: with a fixed value of n, , solve for q. (3) step 2: substitute into and simplify, (4) minimize is equivalent to minimize (5) rearrange the terms and ignore those on the right-hand side, which are independent of n, the minimization problem is reduced to that of minimizing z(n), (6) step 3: specify the optimality condition for n. the economic value of is obtained if the following conditions are satisfied, (7) (8) substitute into and into , the following equations are derived, (9) (10) step 4: then, solve for the optimal n. (11) numerical illustration a numerical example is provided to illustrate the optimal joint quantity and minimum comprehensive cost under the lot for lot policy, and the optimal joint quantity, optimal batch number n and minimum comprehensive cost under lot for n lot policy. the parameters are summarized in table 3. american journal of management vol. 17(1) 2017 89 table 3 parameters for carbon tax numerical example a s t d p 200 0.8 400 2 800 0.4 400 1 0.02 60000 80000 applying the solution algorithm, we find, this gives the optimal n is 2. the optimal quantity and minimum comprehensive cost are 4998 and formulation 2: jcls model with cap-and-trade mechanism under the carbon cap-and-trade mechanism, the joint comprehensive cost of the supply chain is (12) when n=1 and , there is no cap. replacing the carbon price, c, with the carbon tax rate, t, we have, (13) this is the joint lot size model, (q, 1), with carbon emission under cap-and-trade mechanism, which is a special case of the joint lot size model, (q, n), with carbon emission under cap-and-trade mechanism. the solution algorithm to sole eq. (13) is similar to the solution used to solve eq. (4) and is therefore omitted. numerical illustration the parameters used in the numerical example are shown in table 4. 90 american journal of management vol. 17(1) 2017 table 4 parameters for cap-and trade based numerical example a s c d p 200 0.8 400 2 800 0.4 400 1 0.2 60000 80000 8000 6000 applying the solution algorithm, we find the optimal n is 1. the optimal order quantity and minimum cost are: summary and directions for future research carbon tax is a form of pollution tax; it levies a fee on production, distribution, or the use of fossil fuel based on the amount of carbon emission. under the carbon tax mechanism, the total carbon emission is taxed at a carbon tax rate (dollar/tons). carbon emission trading is an alternative means to reduce carbon emission in which a mandatory limit (or cap) is set on carbon emission over a specific time period and a total number of permits or carbon credits are allocated to firms by regulatory institutions. under the carbon cap-and-trade mechanism carbon cost is based on carbon price and carbon emission quantity in excess of the carbon cap. in this paper we have presented joint economic lot size models to determine the optimal lot size in a coordinated two stage supply chain consisting of a manufacturer and retailer under both carbon mechanisms. the models presented herein expanded the scope of joint economic lot size models in the literature which have included carbon emission as an environmental modeling criterion. models were developed for a lot for lot policy and then extended to a lot for n lot policy, with both models under the carbon tax mechanism and carbon cap-and-trade mechanism. the optimal joint order quantity, vendor lot size multiplier n and total costs were also presented for these models. there are several aspects of this research that could be expanded. first, the models could be extended to include transportation cost which was not included in the current models since transportation was assumed to be outsourced to a third party. second, the assumption of deterministic demand could be relaxed in future models. thus, the current study could be extended to include stochastic demand and the analytical optimization methodology could used to solve it. lastly, the scope of the supply chain could be expanded beyond two stages to a supply chain network of multiple retailers and manufacturers. american journal of management vol. 17(1) 2017 91 references beamon, b. m. 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(2011). eoq models for a coordinated two-level international supply chain considering imperfect items and environmental impact. international journal of production economics, 134(1), 151-158. zhang, b., xu, l. (2013). multi-item production planning with carbon cap and trade mechanism. international journal of production economics, 144(1), 118-127. zhu, q., sarkis, j. (2007). the moderating effects of institutional pressures on emergent green supply chain practices and performance. international journal of production research, 45(18-19), 4333-4355. author mail information: dr. zhi tao 409 rothwell hall, 106 west o street, russellville, ar, 72801 dr. alfred l.guiffrida a411 bsa, dep. of mis college of business, kent state university 475 terrace kent, oh, 44242 dr.o. felix offodile a432 bsa, dep. of mis college of business, kent state university 475 terrace, kent, oh, 44242 ajm 17(6) web_master.pdf ajm 19(1) master r1.pdf the role of social facilitation theory on consumer decision making: a conceptual framework shimi naurin ahmad morgan state university social influence has been a topic of interest in consumer behavior. researchers have shown that noninteractive social presence can influence consumer behavior. does the presence of others affect consumer decision making too? based on social facilitation theory, we propose that in a retail store setting, consumers take longer and make inaccurate decisions in the presence of non-interactive others if the decision making task is difficult (many different brands with different attribute levels are available) than if the decision task is easy. personality trait, self-sufficiency, plays a moderating role in this relationship. the research has many managerial implications. introduction presence of others influences an individual’s behavior and this phenomenon is profound in problems of imitation, conformity, competition, helping, aggression etc. this is defined as social influence which has been a very interesting topic in consumer behavior. how the behavior of other consumers or sales persons affects consumers is a question of interest. in a typical consumption situation, consumers encounter many other individuals. they interact with some of them (for example, sales people) and they have no interaction with some others (for example, consumers in another isle). however, they may be influenced by interactive as well as non interactive people. sales persons’ presence and its effect on consumers is often defined as interactive social influence (childers & rao, 1992) since consumers usually interact with a salesperson. on the other hand, in noninteractive social presence, people are present but are not interacting with each other. interestingly, they still can influence the behavior of others (dahl, manchanda & argo, 2001). it has also been found that the number and proximity of others affect the consumer’s emotion and self-presentation (argo, dahl & manchanda, 2005). some of these influences are conscious and some are non-conscious. consumer research has explored the non-conscious influence of objects and people. it has been shown that what the other people consume can affect one’s preference and the effect can be attributed to mimicry (tanner, ferraro, chartrand, bettman & van baaren, 2007). therefore, research has documented that social presence affect behavior (self-presentation) and preference. however, does the presence of noninteractive others affect consumer decision making? the present research investigates how the presence of non-interacting others influences consumers decision making. does it affect the amount of time spent to make a decision for a product? does it affect the choice? this is a very intriguing and important question because most of the time, consumers’ make their decision in an environment where people are present but are not interacting. if we think about a store where people are buying products, typically others are also present in the same aisle or a couple of meters 80 american journal of management vol. 16(2) 2016 away. most of the time, they don’t interact. if the presence of others which is called “mere presence” influences one’s choice, it is very important to know the effects to better understand the consumer’s behavior in this everyday situation. in the quest of investigating this research question, we based the research on social facilitation theory which is one of the oldest theories in social psychology. the term “social facilitation” was first used by allport (1924). later, zajonc (1965) described social facilitation in a seminal review which was a major contribution in this stream of research. according to him, social presence improves performance of a simple or well-learned task and impairs performance of complex and new task. this proposition has been used in several tasks such as problem solving, judgment etc. therefore, the goal is to examine the effect of social facilitation theory in the context of consumer’s decision making. choosing a product from a variety of different brands based on their attribute levels and the relative weights of each attribute can be defined as a task (consumption task). if this is an easy task for a consumer, the social facilitation effect predicts that, his performance will be improved in the presence of others. but if this task is difficult for him, his performance will be impaired. the performance on this choice task can be measured by the time required to take the decision and the accuracy (match with the “correct” brand) of the decision. we, then, investigate the moderating effect of a personality trait called self-sufficiency in this relationship. this research has huge managerial implications. depending on the product, retail store organization might have to be changed since in some cases crowd may enhance or impair the decision making process of the consumer. the paper is organized as follows. first, related research is discussed and propositions are explained. moderating role of self-sufficiency in this relationship is also discussed. at this point, the research model is introduced. possible consumption situation scenario of this effect is discussed. the paper ends with the conclusion and discusses its limitations. theoretical development social facilitation theory (sft) social facilitation refers to the general phenomenon that physical and cognitive performance is improved/ impaired when an individual is being observed. the factor that determines if the performance will be facilitated or inhibited depends on whether the task that the individual is performing is well learned (simple) or novel (difficult). research has shown that well-learned tasks are facilitated under observation, whereas novel tasks are inhibited under observation (zajonc, 1965) the behavior change due to social presence was observed long ago (allport, 1924). at first the effect was only studied where several people were taking part in the same action and how one’s behavior changes because of other’s action. research then shifted toward non-coactive or passive observers. it was found that the behavior of animals changes even when they are not performing the same task (not coacting), only being watched (guerin, 1993). however, there were some apparent inconsistencies in the result of these researches. task performance improved in some cases and got impaired in other cases. zajonc (1965) introduced the moderating variable called task complexity and resolved these issues. he used hull-spence drive model to explain the phenomenon. according to him, in mere presence of others, there is an increased arousal which comes from automatically induced drive. this arousal gives rise toward habitual or dominant response. thus, for a habitual or simple task, the response is usually the correct one and increased arousal leads to performance improvement. on the other hand, for a complex or non-habitual task, the response is usually the incorrect one and increased arousal leads to performance impairment. although this explanation seems flawless, there is a controversy about the mediating variable. from the literature, four possible explanations can be summarized. there are uncertainty, evaluation apprehension, self-awareness and distraction (uziel, 2007). zajonc later modified his drive theory based on uncertainty which was also developed by guerin’s monitoring theory (guerin, 1993). it says that in the presence of others organism goes in high level of alertness to deal with any threat which may come. from this alertness, arousal is induced. american journal of management vol. 16(2) 2016 81 cottrell (1972) modified the drive theory based on evaluation apprehension theory. it suggests that a person becomes aroused only when he is in fear that he will be evaluated by others. this apprehension comes from previous experience. many research has suggests that social facilitation effect is only dominant in the people who apprehend the evaluation more. the third explanation is based on self-awareness. it is developed by (duval & wicklund, 1972). it argues that in the presence of others, one becomes more conscious and compares oneself with ideal. this motivates behavior. thus added energy improves performance and excessive effort leads to performance impairment. lastly, the distraction-conflict theory (baron, moor & sanders, 1978) proposes that presence of others takes away attention. this attentional-conflict either increases drive or cognitive overload. therefore, simple task performance is improved and complex task performance is reduced. the effect of social facilitation theory (sft) in various context social facilitation effect has been observed in wide range of contexts. the obvious contexts of this effect include sports, problem solving and not so obvious contexts include eating, stroop task, judgment etc. (huguet, galvaing, monteil & dumas, 1999). recently, the effect has been examined in humancomputer context. it was found that easy letter typing task performance is improved in front of a computer icon. on the other hand, the performance was decreased for a difficult letter typing task in front of the computer icon (hall, 2008). the effect is prominent in online auction context too where the performance of bidders improves when there was a higher level of virtual presence (rafaeli & noy, 2002). in a study of real marketplace situation, sommer (1992) found social facilitation effects on shopping behavior where shoppers accompanied by others spent more time in the store and purchase more compared to lone shoppers. similarly, consumption of drinks in pubs and coffee houses was affected by the presence of others. with groups, people were found to drink more. but it should be noted that it is not the social facilitation effect in its pure form. shoppers accompanied by others who are interacting to each other is not the strict definition of mere social presence in the context of social facilitation. according to zajonc (1965), if other people interact, provide cues for the problem, compete or co-act, then, it is not purely social facilitation rather some kind of imitation. although social facilitation effect has been studied in many problems, social facilitation effect, in marketing, in its pure form has only been examined by faro & mcgill (manuscript under revision in jcr) only. the authors documented that the presence of others affect variety seeking. in the presence of others, people are less variety seeking than when they are alone. the authors found evidence that the effect is more pronounced in people who are high in social anxiety. social anxiety as a moderator of social facilitation effect has also been examined in stereotyping response context (lambert et al., 2003). gaumer & lafief (2005) suggested the application of sft in different marketing contexts, such as crowding in a store, wait in line etc. however, the authors didn’t hypothesize any effect or investigate any specific situation. task performance in marketing context as mentioned before, the aim of this research is to investigate if consumer decision making is affected by mere presence of others. it should be noted that social facilitation has an effect on both physical and cognitive tasks. various cognitive task such as information search, storing, aggregation, evaluation are frequently used in consumer decision making process (bettman, 1979). multi-attribute choice task (each of the choice has more than one attribute) is viewed as typical decision making problem which is encountered by the consumers every day (payne, bettman, johnson, 1993). in this decision task, one chooses one brand among many brands or alternatives and alternatives have some common attributes where the levels of the attributes usually vary. for an example, when a consumer goes to buy a sunscreen, there might be couple of brands and each has different value for spf, moisture, cream level etc. the consumer has to perform a decision task by choosing one of the brands by evaluating the brands in terms of spf, moisture and cream level. 82 american journal of management vol. 16(2) 2016 this type of decision task performance has been studied in the literature. bettman & zins (1979) examines the effect of information format (how attribute information is presented) and the cognitive strategy taken to perform a decision making problem. the problem was to choose one brand among a set of brands by using different strategies. the performance of decision making problem was measured by accuracy, choice time and subjective reaction. rong-fuh, chien-huang, wen-hung, sheng-hsiung (2009) studied the effect of music on multi attribute decision making task. the performance was measured by the time taken by the subject to reach a decision and its accuracy. the task difficulty was manipulated by varying the cognitive strategy used to reach a decision. participants were asked to follow a specific cognitive strategy to solve the problem and were given a set of weight for attributes. the accuracy was measured by matching the participant’s answer to experimenter’s answer which was based on the given attribute value. earlier, jacoby, speller & berning (1974) ran this experiment in a different problem. in his study, participants expressed relative importance of the attributes and ideal attribute value in their opinion. they, then, solved a decision problem based on attribute and their values. the accuracy was tested by matching participant’s choice with ideal choice. lastly, stone & kadous (1997) examines how the task related emotion affect decision performance (multi attribute choice task) and performance was measured by time and accuracy (accurate decision meant matched participant’s choice and experimenter choice). since this research investigates the social facilitation effect in the context of consumer decision making or choice task, following the previous researches, the performance of this task can be measured by choice accuracy and the time taken to reach a choice. the following construct definitions are adapted: non interactive social presence as mentioned earlier, according to zajonc (1965), pure social facilitation occurs when there are people around an individual but they are not communicating in any way. moreover, they are not co-acting (performing the exact same task with the same goal in mind), providing cues (giving some hints in any way that will lead to performance improvement of the individual), competing (there is an urge to improve performance relative to others) and others are not evaluating the performance of the individual. they are only spectator. task performance the task performed has to be a physical or cognitive task. for the purpose of this research, based on the literature, we have chosen to measure the performance of a decision task which is a cognitive task. the task is to choose one brand out of several brands and the brands differ in terms of their attribute values. brands can be described by a set of common attributes. the performance measures are time taken to reach a decision and the accuracy of the choice. social facilitation effect predicts that the performance of a simple or habitual task will be improved and that of complex or new task will be impaired in the presence of others than when working alone. as mentioned earlier, in this study the task is a decision making task whose performance is measured by its accuracy and time to reach decision. therefore, if the performance of this task is improved, time taken to choose a brand will be decreased and the “right” brand will be chosen. on the contrary, performance impairment will mean increase in time taken to reach a decision and choosing a “wrong” brand. based on these, the propositions are proposition 1: the performance of a simple decision making task will be improved (the time taken to reach a choice will be decreased and the choice accuracy will be increased) in the presence of others than when working alone. proposition 2: the performance of a complex decision making task will be impaired (the time taken to reach a choice will be increased and the choice accuracy will be decreased) in the presence of others than when working alone. american journal of management vol. 16(2) 2016 83 moderating role of personal traits it is obvious that some people are more prone to social influence than others. there are many personality traits that have been investigated as moderators of social facilitation effect. the personality traits neuroticism, orientation, and self-esteem have been examined as the moderators of social facilitation effect. people who are high in neuroticism scale was found to be associated with impaired performance in social presence compared to performance in alone condition. moreover, individuals with high self-esteem experienced performance improvement and individuals with low selfesteem experienced performance impairment in the social presence (terry & kearness, 1993). locus of control is also a moderator in social facilitation effect. the performance of the individual with external locus of control is impaired in the presence of other people. on the other hand, performance of the individuals with internal locus of control is improved in the presence of other people (martin & knight, 1985). the other moderators of this effect are type a personality (gastorf, suls, & sanders, 1980) and the need for social approval (adams, beatty, & behnke, 1980). in our study, we introduce self-sufficiency as the moderator for social facilitation effect in the context of consumer decision making. self-sufficiency individual differs according to the extent to which the person is dependent upon others in the ordinary affairs of life. some individuals frequently need advice, some often need to receive expressions of sympathy, encouragement, or appreciation; others rarely require any such forms of stimulation. again, some are unhappy when they are by themselves, others prefer to be alone. in a word, people differ in the extent to which they are “self-sufficient". as the name indicates, the self-sufficient personality trait is characterized by self-sufficiency, resourcefulness and avoidance of social contact in one’s own decisionmaking (hsrc 1995). self-sufficiency is one of the sixteen factors of personality which was introduced by cattell, eber & tatsuoka (1970). self–sufficient people are self-reliant and often individualistic. they are confident and rely on their own judgment. high self-sufficient people may have trouble collaborating. individuals who are low on self-sufficient scale adhere to groups and like affiliation. they tend to prefer being around other people, and enjoy social groups and working in teams. very low scorer may have difficulty working individually. actually, self-sufficiency is a feeling of being satisfied with oneself, reluctant to be interested in another person or his/her problems. it is inversely related with low self-esteem. in the literature, it has been found that self-sufficiency has an inverse relationship with alcohol consumption (twisk, snel, kemper & mechelen, 1998). self –sufficient people also termed as “thick-skinned” (horsch &davis, 1951) as they ignore advice of others. self-sufficient people are confident and less concerned about others. they are less interested in people and their actions; they will not have anxiety in the presence of other people. it logically follows that individuals who are invariant in emotion with people and without people around them, they will not be aroused in the social presence. as discussed before, social anxiety trait has been found to moderate the social facilitation effect. people who feel anxious (because of comparison, apprehension etc.) in the social presence, will show greater effect of social facilitation. in the same manner individuals who are less sensitive about other people and thus social presence will not feel arousal and will not care about comparison. thus it is logical that people high in self-sufficiency score will show lesser effect of social facilitation. so, in a nutshell, if a person cares about other’s opinion, action, he/she will more likely not to ignore any person around. he will notice social presence. on the other extreme, if it does not matter to a person what others think and what they do, he will not care about the presence of others. thus in the first case, it is more probable that the person will be aroused and in the second case, he will not be. people who score low in this trait are socially dependent and care about others’ opinions and advice. on the other hand, high score people are self-content and do not care much about other people’s opinion (cattell, eber & tatsuoka, 1970).therefore, sft effect should be more pronounced in the former case than latter. 84 american journal of management vol. 16(2) 2016 proposition 3: the effect described in proposition 1 & proposition 2 will be more pronounced in people who are lower in self-sufficiency personality scale than who are higher in that scale. in boxes and arrows model: figure 1 conceptual model of the effect of sft on the performance of decision task a consumption scenario this research introduces conceptual model and hypotheses related to sft effect on performance of decision task. the next section details a typical consumption scenario where we may encounter social facilitation theory and its effect. task in a typical consumption situation, a consumer may choose to buy a camera among many brands. a consumer often has some specific requirements in mind while buying the product. for example, she/he might have some important attributes about the product to consider. for the sake of simplicity, let us assume that there are 5 brands of cameras. the cameras differed in their image quality, ease of use, camera size and price (table 1) and in addition zoom quality and wireless capabilities for difficult task (table 2). the most important thing in consumer mind about camera might be image quality (as high as possible) then ease of use, followed by camera size and price. (for difficult task, the order was, image quality, ease of use, camera size, zoom quality, wireless capabilities and price. consumers will choose one of the cameras from the 5 brands of camera according to consumer’s criteria for quality camera. the importance factors are called weight given for each attribute. to choose the best brand according to his/her importance factor, the consumer may want to multiply the weight with the attribute value and add all the numbers for each brand. logically she/he should choose brand with highest number (weighted additive rule, wadd). decision difficulty is usually increased by varying the number of attributes (4 vs. 6) for easy and difficult task respectively. sft predicts that when a consumer has a difficult task (choosing a brand among 5 brands each having 6 attributes), the consumer is more likely to choose the “correct brand” (the brand with highest number; in this case camera 2) in less amount of time if there is no people around him/her as opposed to many people around. on the other hand, when a consumer is faced with easy task (choosing a brand among 5 brands each having 4 attributes to consider), the consumer will choose the “correct brand” (in this case camera 1) in less amount of time if there are non-interacting people around him as opposed to no one. the consumers who are high in self-sufficiency scale will not exhibit the same pattern. mere social presence performance of a task (simple or complex) self-sufficiency american journal of management vol. 16(2) 2016 85 table 1 stimulus for easy task (source: lantos, 2015) image quality** ease of use camera size price result after wadd camera 1 10 8 6 4 80*** camera 2 8 9 8 3 78 camera 3 6 8 10 5 73 camera 4 4 3 7 8 47 camera 5 1 5 8 7 42 importance* 4 3 2 1 table 2 stimulus for difficult task (source: adapted from lantos, 2015) image quality** ease of use camera size price zoom quality wireless technology result after wadd camera 1 10 8 6 4 5 3 149 camera 2 8 9 8 3 7 9 167*** camera 3 6 8 10 5 3 10 150 camera 4 4 3 7 8 2 8 97 camera 5 1 5 8 7 8 6 106 importance* 6 5 4 1 3 2 *importance of each criterion is scored on a scale where 1=least important and 4=most important ** brand ratings are scored on a scale where 1= very poor performance and 10=excellent performance *** highest number 86 american journal of management vol. 16(2) 2016 conclusion and managerial implications the research examines how consumer decision making changes in the mere presence of others. it is predicted from social facilitation effect that the time taken to reach a decision increases and the accuracy of the decision decreases in the mere presence of others when the decision making task is difficult but the reverse effect is observed when the task is simple. the research also identifies a personality trait “selfsufficiency” which plays a moderating role in this phenomenon. people who scores high in this trait are less anxious about the social presence and thus less aroused. consequently, the social facilitation effect should be less pronounced in them regardless of task difficulty. the research helps to better understand the effect of mere social presence on consumers in a retail context. as it can be seen, mere presence may actually alter the choice and time required to decide. how consumers behave in the presence of others (who are just shopping in another or same aisle) is an important phenomenon. consumers, who take more time to decide on a particular product or choose a wrong product in a crowded place, may, in fact, dislike the store. this research introduces the conceptual model based on well-grounded theory which is the main contribution of the paper. on the retail managerial side, based on the fact that a particular product choice will be a simple or difficult task, retail managers may organize the store in such a way that consumers are less likely to encounter other consumers when facing a difficult product choice. moreover, retail managers also need to pay attention to crowd management. crowd outside the store (long queue) may signal popular store, however crowd inside the store may impair consumer decision making performance. managers need to take a holistic approach while handling crowd. another phenomenon that has retail management is the area of self-control. in attentional-conflict theory of social facilitation argues that mere presence of others takes away cognitive resources and that is the reason why facilitation effect occurs. now, if consumers have less cognitive resources available in the presence of others, will they fail to perform any self-control task at that time? 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(1965). social facilitation. science, 149(july), 269-274. american journal of management vol. 16(2) 2016 89 ajm 17(3) web_master.pdf 10 american journal of management vol. 17(3) 2017 mcimpact: welfare impacts of all-day breakfast after hpai outbreak jada thompson kansas state university mcdonalds restaurants began offering a limited breakfast menu all day in october of 2015 to catalyze business growth. this decision was made in a time when eggs were in shortage due to the outbreak of highly pathogenic avian influenza (hpai) in u.s. poultry. the outbreak led to a limited supply of layer birds, and led to higher retail prices through direct and indirect consumption. using a partial equilibrium model of u.s. layer flocks, welfare impacts of an increase in demand coupled with a decrease in supply were estimated and shown to slightly drive up the price of retail table egg. introduction animal disease outbreaks can have negative impacts on consumers and producers. the duration of these negative impacts are tied to the timing of the outbreak, the disease management strategies used by local, state, and federal animal health officials, and the ability for the affected industry to recover from losses in animal stocks. any combination can lead to longer or shorter disease impact duration. additionally, there are external, business decisions not tied to animal health that can exacerbate the impacts of a disease outbreak. private industry decision makers weigh the short-, medium-, and long-run returns when determining the best course of action to meet company needs. these needs can be described by two overarching categories in terms of company strategy: short-run payoffs or long-run positioning. short-run payoff strategies have a short to medium return goals that can be complementary to long-run strategy or offer diverging strategies from long-run goals. long-run positioning are those strategies that determine the direction and overall business strategy for a company. decisions focused on the long-run can have negative short-run implications. depending on the size of an operation, it is possible that losses borne in the short-run can be endured in order to make a profit in the long-run and achieve overall company direction and survivability. when businesses choose long-run positioning strategies, it is possible to have negative welfare effects on the market, especially when coupled with a market disruption. an example of a business making a long-run decision that had potential to exacerbate the affected market is the decision by mcdonald�s to begin to serve an all-day breakfast. while the decision to expand their menu offerings aligns with a long-run strategy to increase foot traffic and drive profitability, the decision was made during a shortage of eggs in the united states due to an outbreak of highly pathogenic avian influenza (hpai). the menu expansion decision has been successful in increasing the profitability for mcdonald�s franchisees, but it may also have created negative welfare effects on consumers. the objective of this analysis is to estimate the welfare effect of mcdonald�s all-day breakfast on producers and consumers that potentially occurred in conjuncture with the supply shocks due to the 2015 hpai outbreak in u.s. poultry. american journal of management vol. 17(3) 2017 11 background mcdonald�s is one of the most iconic and largest food retailers in the world with more than 14,350 locations in the united states. mcdonald�s is the largest fast food consumer of u.s. eggs, capturing onefifth of the u.s. breakfast market (strom, 2015a). prior to the expanded breakfast menu availability, mcdonald�s traditional breakfast menu egg use accounted for more than four percent of total u.s. eggs production, or two billion eggs annually (baertlein & ramakrishnan, 2015; strom, 2015b). the decision to increase the available menu options to an all-day breakfast was part of mcdonald�s short-term strategy to bolster sales to ensure long-run survivability. mcdonald�s earnings had decreased by 0.9 percent leaving earnings at a meager 1.6 percent across the u.s. franchises for the second quarter in 2015, continuing a declining trend from previous quarters. the all-day breakfast initiative was driven by a consumer demand for increased all-day breakfast offering as well as a strategic plan to increase store foot traffic (whitten, 2015). foot traffic increases were expected to increase demand for breakfast and non-breakfast food products served across the franchises. early projections estimated the success of the all-day breakfast to increase mcdonald�s profits by 2.5 percent (patton, 2015). hpai outbreak in u.s. poultry mcdonald�s decision to increase menu availability and launch an all-day breakfast initiative was made independent of the state of their input supply markets. the increase in menu options necessarily calls for increases in demand for inputs of breakfast foods including eggs. this increase in demand fell at a time in the u.s. egg industry was reeling from a hpai event in u.s. poultry supplies. from december 2014 to june 2015 u.s. poultry experienced a hpai disease event starting in a small backyard flock and moving to commercialized poultry. this event eventually lead to the destruction of 49.6 million birds and cost more than $950 million to u.s. taxpayers (thompson & pendell, 2016; usda, 2015; usda-aphis, 2016a). the vast majority of affected birds were egg laying birds (67 percent) (usda-aphis, 2016b), or those birds that lay eggs to be consumed as either table eggs or further processed egg products. further processed egg products are sold in retail stores in products such as egg beaters or dried eggs, or they are sold as input use in other industries such as baking. due to the destruction of animals as a result of hpai and disease control measures, the u.s. market suffered shortages of eggs and egg products. the shortage of eggs on the u.s. market led to an increase in the retail price of eggs to consumers. for example, the price for grade a, large table eggs in august 2015 was $2.94, a 49 percent increase over august 2014 table egg prices (u.s. department of labor, bureau of labor statistics, 2016). while mcdonald�s has a relatively small share of the total u.s. egg market, it is the largest breakfast consumer for eggs. the decision by mcdonald�s to increase menu offering would be expected to lead to increases in the demand for eggs during a period when many restaurants were reducing menu offerings due to egg shortages (kieler, 2015). while the poultry industry is able to begin rebuilding stocks of birds to meet total demand for eggs and egg products there would be a period where supplies where short and demand continued to increase. methodology the work aims to estimate the impacts of mcdonald�s all-day breakfast using a quarterly, partial equilibrium model of the u.s. egg industry. first, u.s. egg prices will be estimated by shocking the 2014 baseline using the number of birds affected during the 2015 outbreak of hpai in u.s. layers as the shock. a second scenario will be modeled, the �mcdonald�s scenario�, where the estimated increase in demand pressures is additionally modeled. both sets of results will be compared to estimate the impacts of the private industry decisions during a disease event. consumer welfare impacts will be estimated comparing these two scenarios. 12 american journal of management vol. 17(3) 2017 model framework a partial equilibrium model representing the u.s. egg industry is developed to estimate the impacts of shocks or changes to the egg industry. the model accounts for movement of eggs and egg products at the farm, processor, and consumer level where at the processor eggs must be diverted to final consumption product. the u.s. egg model starts with total egg layers producing nest-run shell eggs, called shell eggs for this model. at the egg laying level, hens also produce hatching eggs, however these are excluded from this analysis because of the special breeder houses and different layer birds used. hatching eggs are not substitutable for table or processed eggs at the retail level. shell eggs are diverted to two types of intermediate products: table eggs and breaker eggs which are further processed into specific final consumption products. table eggs must be washed, sanitized, graded, and packed into cartons before being sold at retail outlets to final consumers. breaker eggs are further processed before reaching their final consumers. breaker eggs are broken and processed into liquid, dried, or frozen eggs. these egg products can be packaged and sold as in their processed state to retail consumers or as inputs for use in other goods such as bakeries. for this study, all three final processed egg products are aggregately called �processed eggs.� the processed eggs aggregate product is considered the final product for that diversion of shell eggs. from farm to final consumer, the partial equilibrium model developed models the egg industry. the model is based on unknown, but underlying supply and demand equations. after fully differentiating these equations, the model is estimated. the following is a brief description of the u.s. egg model, written in its fully differentiated form. all variables presented are represented in the percent change form (e is used to denote dln, e.g., dlnp is noted as epi). across the full model, prices are accounted by equation 1: . (1) price of final egg product i �te: table eggs and pe: processed eggs� is determined by the price of inputs used in production (w), the price of input shell eggs (pe), and the returns to capital (r). unit revenue shares are represented by for the various inputs, namely labor (l), shell eggs (e), and capital (k) for the ith good. equation 2 represents shell egg supply, which accounts for the diversion between the final egg products. , (2) where shell egg supply (s) is a function of the quantity of eggs demanded (qi) and the per-unit derived demand for eggs of two final products types (ae,i). the factor share of production is represented by . exogenous shocks to egg supply are applied through , such as an estimated number of eggs removed from production as a result of reduced layer population. additionally, producer prices for shell eggs also impact the shell egg supply. equation 3 presents this relationship as the price of shell eggs multiplied by the own price elasticity of shell eggs ( ) as follows. this additional equation is applied to calculate the change in shell egg price driven by the relationship in final demand prices. . (3) to account for limitations in the capacity for processing, industry capacity constraints are modeled as: (4) industry capacity (ki) is a function of the quantity and the per-unit derived demand of the ith egg type (eq. 4). marginal changes in efficiency can be captured given sufficient price incentives, even though there can be asset fixity in egg processing capital. the u.s. egg model assumes these marginal changes can occur allowing for small changes in industry capacity to occur. (5) (6) equations 5 and 6 model substitutability of inputs where represents the elasticity of substitution between two inputs. equation 5 models substitutability between capital and shell egg inputs depending on american journal of management vol. 17(3) 2017 13 the returns to capital and returns to shell eggs. similarly, equation 6 models substitution between labor and capital. , (7) equation 7 represents an adding up condition to ensure changes to the per-unit derived demand multiplied by its respective unit revenue share should sum to zero. to ensure markets clear, market clearing equation are estimated. these are presented in equation 8: . (8) the market clearing equations stipulates that the usage should equal supply in any given period. formally net exports (exports (xi) minus imports (mi)), domestic consumption (di) and ending stocks (ii) in the current period (t) should equal production and begging stocks ( ) in the previous period (t-1). the market clearing condition holds for both table eggs and processed eggs. (9) ending stocks (it) are modeled as a function of the price of shell eggs for current time period t (eq. 9). . (10) domestic demand is represented in equation 10. demand for good i is a function of own prices (pi) and elasticities ( i,i) as well as cross prices (pj) and cross price elasticities ( i,j). to account for potential consumer preference changes as a response to an avian health event, represents demand shocks. while consumption patterns are expected to change due to price changes there are no studies on the impacts of hpai on u.s. consumer preferences. beach et al. (2008) estimated italian consumers responses as a result to animal health events. however, due to differences in consumer�s purchasing ability, preferences, and additional factors such as specific attitudes regarding diseases that have not been researched for u.s. consumers, the exogenous change in demand is assumed zero for this analysis. (11) equation 11 represents net exports, a function of the world reference price and exogenous shocks to net exports. net exports are calculated as regional exports (xi) minus regional imports (mi). exogenous trade shocks are represented by i which provides a method imposing international trade restrictions on the u.s. egg industry. to account for international trade, a world reference price is modeled (equation 12), . (12) the world reference price, pw, is assumed to be a function of u.s. domestic prices and transportation costs (c) between trading partners. using the world reference price helps the markets clear within the model. the above system of equations (equations 1 � 12) expand to 22 behavioral equations for both table eggs and processed eggs, which can be reduced using substitution to three equations. the reduced modeling system simplifies the search for feasible solutions. in reduced form, the model is solvable using inverse matrix algebra. solutions are then fed back in the behavioral equations to provide solutions for all endogenous variables. consumer and producer welfare measures are estimated using wohlgenant�s (2013) equation for estimating of changes in producer and consumer welfare in a linearized partial equilibrium model (eq. 13 and 14). (13) , (14) are the original baseline price and quantity, i is the price elasticity of demand for the ith good, e is the price elasticity of shell egg supply, is a demand shock, and is a supply shock. model scenarios there are two model scenarios used in this analysis: hpai and mcdonald�s. both scenarios account for the 2015 hpai outbreak in u.s. poultry. the mcdonald�s scenario additionally accounts for the increased demand of table eggs by the fast food chain. model scenarios use usda-aphis reported number of affected birds during the second quarter of 2015 as the baseline hpai scenario (usda 14 american journal of management vol. 17(3) 2017 aphis, 2016b). for the second quarter of 2015, there were 32,453,700 affected layer birds throughout the midwest. this number of affected birds enters the economic model as calculated shocks to the quantity of shell eggs, which are calculated using the annual eggs per laying hen equivalency. for the mcdonald�s scenario, the supply shock described above is incorporated into the exogenous shock, as well as a demand shock that increases the demand of table eggs. these values are entered into the economic model stochastically using a triangular distribution that limits the lower end of change in demand to zero, with an upper end as a two percent increase in egg use, which represents a 50 percent increase in egg usage by mcdonald�s. using simetar (richardson, feldman, & schuemann, 2003), the model was repeatedly estimated for 500 iterations, which provides the mean solutions reported as well as the variation around these estimates. the estimated consumer welfare was estimated for a single quarter. while pricing implications can extend beyond this period in terms of market impacts, repopulation of layer birds is an ongoing process, which reduces the duration of the disease impacts and the increased demand is incorporated into egg demand. data baseline data for supply and demand are collected from multiple usda resources including the agricultural marketing service (ams) (2015), economic research service (ers) (2015), national agricultural statistics service (nass) (2014), and the world agricultural supply and demand estimates (wasde) (2016). data include egg use, consumption, beginning and ending stocks, imports, exports, and egg prices for all levels of production. these data are used to create the baseline data for the analysis. the baseline year for this work is 2014, which was not affected by hpai. exogenous shocks for the analysis were calculated as a percent change from the baseline egg production including the shocks due to hpia for both scenarios and the changes in mcdonald�s demand for the mcdonald�s scenario. the parameters used in the analysis are summarized in table 1 along with their sources. calculated parameters are derived through substitution of the behavioral equations using parameters and initial baseline values where appropriate. beginning and ending stocks, net exports, and price elasticities were specifically calculated for this analysis as they are specific to the type of product. american journal of management vol. 17(3) 2017 15 table 1 summary of parameters used in model analysis and their sources parameters description value source l, te unit revenue shares 0.160 bell, (2001); industry expertise e,te unit revenue shares 0.515 bell, (2001); industry expertise k,te unit revenue shares 0.325 bell, (2001); industry expertise l, pe unit revenue shares 0.164 bell, (2001); industry expertise e,pe unit revenue shares 0.532 bell, (2001); industry expertise k,pe unit revenue shares 0.304 bell, (2001); industry expertise e, te factor share 0.700 usda � ams (2015) e, pe factor share 0.300 usda � ams (2015) y,te income elasticity 0.346 usda � ers (2013) y,pe income elasticity 0.346 usda � ers (2013) i, te stock elasticity -1.315 author's calculation i, pe stock elasticity -0.108 author's calculation x, te net export elasticity 0.590 author's calculation x,pe net export elasticity 0.250 author's calculation te,pe cross price elasticity 0.149 author's calculation te own price elasticity -0.538 author's calculation pe own price elasticity -0.801 author's calculation e,k: te substitution elasticity 0.436 ollinger, macdonald, & madison (2005) l,k: te substitution elasticity 0.436 ollinger, macdonald, & madison (2005) e,k: pe substitution elasticity 0.436 ollinger, macdonald, & madison (2005) l,k: pe substitution elasticity 0.436 ollinger, macdonald, & madison (2005) e egg price elasticity -0.088 usda � ers (2013) e raw egg supply elasticity 1.000 usda � ers (2013) parameters derived from model specification parameters description value source te, w input elasticity 0.215 calculation te, e input elasticity 0.692 calculation te, te supply elasticity 0.907 calculation pe, w input elasticity 0.321 calculation pe, e input elasticity 0.762 calculation pe, pe supply elasticity 0.996 calculation results and discussion while mcdonald�s has the largest share of the market for breakfast eggs for fast food restaurants in the united states, the total market demanded by mcdonald�s is a relatively small percentage of total u.s. egg production. the following discussion are measured in the percent changes with very small changes to the shocks imposed between the two modeled scenarios. the impact of hpai and mcdonald�s all-day breakfast are presented in table 2. the main driver of price changes throughout the supply chain is the reduction of layer birds due to the hpai outbreak shocks imposed. the disease outbreak led to euthanasia of more than thirty-two million layers, and removing these from production leads to a reduction in total egg supplies. the modeled increase in shell egg price is 32.6 percent. adding the additional supply pressure by mcdonald�s all-day breakfast, there is an 16 american journal of management vol. 17(3) 2017 additional 0.07 percent change in the shell egg price. when comparing these results to the final product prices, table eggs are impacted by an additional 0.17 percent higher price increase due to the additional demand. table 2 impact of all-day breakfast and hpai outbreak (percentage) unit hpai only hpai and mcdonald's difference shell egg price $/dozen eggs 32.58 32.65 0.07 table egg price $/dozen eggs 19.57 19.75 0.17 processed egg price $/equivalent dozen eggs 7.54 7.50 -0.05 production table eggs dozen eggs -4.80 -4.69 0.11 production processed eggs equivalent dozen eggs -17.32 -17.42 -0.10 contrarily, the price for processed eggs was estimated to increase by 7.54 percent versus 7.5 percent with the change in demand to table eggs. this is to be expected, as the product demanded by mcdonald�s are table eggs, which were estimated to have an increase in demand. the difference between the price increases represents the change in final demand. the estimated price change for processed eggs as a response to hpai and mcdonald�s increase in demand are conservative, based on modeling assumptions. some users of processed egg products such as liquid eggs saw prices more than double (lowe, 2015), which is in response to how industry chose to divert shell eggs. as expected, production for both table eggs and processed eggs decreased by 4.8 and 17.2 percent respectively for the hpai only scenario. with the decrease in supply, processing volumes would need to be reduced. what this implies is given the changes in prices of final products, processed egg products are more greatly impacted as a result of the outbreak. when comparing the hpai scenario to the mcdonald�s scenario, table egg processing actually benefit by 0.11 percent from the increase in demand by the fast food chain. processed egg production is worse off by 0.10 percent. the trade off in production is driven by the shortage of supplies, and the subsequent allocation of shell eggs used to meet demand. welfare effects while the estimated direct impacts, discussed above, show the changes in magnitude of price changes, it does not take into account the total welfare effect. the estimated welfare impacts are presented in table 3. table 3 welfare impacts of hpai outbreak and all-day breakfast ($1,000) hpai only hpai and mcdonald's difference producer surplus change 5,984 6,102 33 depopulation producer impacts -28,884 -28,884 0 total producer surplus change -22,899 -22,867 33 consumer surplus change -9,828 -10,048 -220 total change in welfare -32,728 -32,915 -187 total producer welfare is the combination of calculated changes in producer surplus plus the exogenous cost of the shocks that are imposed. the model does not account for the excess burden on american journal of management vol. 17(3) 2017 17 producers infected by hpai including the explicit costs related to depopulation. the depopulation impacts are based on a conservative estimate of total depopulation costs ($0.89 per bird based on industry and animal health expert opinions), including disposal costs, depopulation, including supplies and labor, cleaning and disinfection, and indemnity, multiplied by the number of affected birds where indemnity is estimated to be the average value of a layer for weeks 20-110, the typical lifespan of layer birds in commercial layer operations. producers able to sell their products during the hpai outbreak benefit from increased prices, which result from the reduction in supply. changes in producer surplus are positive across both scenarios. the model-predicted results for the hpai scenario show an additional $33 thousand as a result of mcdonald�s all-day breakfast. however, once accounting for depopulation impacts that are not included in the modelpredicted results, total producer surplus is negative both scenarios. consumer surplus changes are negative for both scenarios, as expected due to shortages of egg supplies. importantly, the difference between the hpai scenario and the mcdonald scenario -$220 thousand, show the exacerbation the all-day breakfast was estimated to have on consumers on top of the hpai outbreak. this value is relatively small compared to the value of all eggs sold in the united states. however, it does show the importance of business decisions by industry actors that have a significant share. mcdonald�s business strategy to drive profitability has negative effects on traditional egg consumers. this analysis is limited in would be the lack of estimation of the welfare mcdonald�s consumers gain by having access to an all-day breakfast, which is outside the scope of this analysis. conclusions consumer demand for all-day breakfast coupled with lackluster quarterly growth, led to the all-day breakfast initiative to help meet customer demand and increase foot traffic across mcdonald�s restaurants. the decision to extend mcdonald�s breakfast menu availability was driven by business strategy for short-term growth. in terms of driving foot traffic, the strategy has been successful. that success leads to increased demand for egg inputs by the fast food chain. mcdonald�s already has a large share of the breakfast food market, individually demanding close to five percent of total eggs produced in the united states the implications of potential increased demand pressure during a period of supply shortages as a result of an animal health event is estimated to effect consumers. estimating the impact of both the 2015 hpai outbreak in u.s. poultry coupled with private industry decision to extend breakfast menu availability, an approximation of the value of this decision was estimated to be $187 thousand in terms of lost surplus. while marginal in comparison to the value of the u.s. egg industry, this estimation provides an insight into the importance of market actors� decision when making short and long-term strategies. the unique feature of the decision to extend breakfast at that given time, provides an interesting case where the supply market did not affect the marketing or rollout of a new business direction. business are typically sensitive to prolonged supply shortages, but with forward contracting or a secure supply of inputs despite market events these short term market disruptions can be weathered to help sure market power and presence. u.s. egg production has since recovered to preoutbreak levels, and mcdonald�s has expanded the operations offering all-day breakfast outlining the success of the strategy despite any nonpecuniary negative effects. acknowledgements this material is based upon work supported by the u.s. department of homeland security under cooperative agreement number dhs 2010-st-061-ag0002. the views and conclusions in this document are those of the authors and should not be interpreted as necessarily representing the official polices, either expressed or implied, of the u.s. department of homeland security or the institute for infectious animal diseases. 18 american journal of management vol. 17(3) 2017 works cited baertlein, l., & ramakrishnan, s. 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(2013). consumer demand and welfare in equilibrium displacement models. in the oxford handbook on the economics of food consumption and policy. new york: oxford university press. ajm 18_1_web_master.pdf the alchemy of creativity: an operating system for innovation, collaboration and enhanced creativity david zaboski artist and creator george f. dierberger augsburg college ryan douglas entrepreneur the alchemy of creativity utilizes tools sourced from historic ateliers of artists and creators with an eye toward its application for innovation. refined by the artists collectively attracted to the 20th century film and animation industry, this methodology is about creativity and innovation and thus is both art and science. it has been used to develop innovative attributes in the training of creative people. this process, utilized by the animation industry, is compared with the rigorous six sigma approach to innovation used by many corporations. this methodology was codified by former disney animator and arts scholar, dave zaboski, who witnessed the rise and eventual undoing of a powerful culture of collaboration: “when i was at disney feature animation collaborating in service of an idea over one’s own ego was mission critical. educating talented artists as to how to create powerfully, under intense pressure and collaborate generously was a core tenet. every few months we'd reserve a room and one of the senior animators would give us "the spiral lecture." that lecture on the creative process contained everything we needed to know about working together and succeeding on complex, multidisciplinary, high-stakes projects. we were given methods and systems developed by master creators over the past 70 years designed to get our work done on time, in alignment with mutually established goals and up to the legacy standards of those giants who came before us. eventually, i was the one giving the younger artists the same lecture. over time i came to see how the core concepts of the lecture intermingle with a universal natural law of innovation. in the reconnecting of these founding ideas with the nearly flawless execution of the animations industry’s processes and culture, i believe i have found a method to describe and apply the keys to creative mastery (zaboski, 2015). defining innovation and creativity creativity is the seemingly magical capacity to imagine the unseen. innovation is the act of manifesting the creative into something tangible. creativity is very simply the action of turning a thought into a thing. to innovate, the creative process must be constantly revised so that new discoveries move past the border of the known and yet remain relevant. in this way, a study of creativity and innovation are like the study of alchemy; a blending of disciplines. 66 american journal of management vol. 16(3) 2016 the term alchemy actually refers to "al chem" or "coming from the land of chem." according to the journal of academic chemistry, the word chem (or khem meaning rich black soil) is a historic name for egypt (loyson, 2011). the study of alchemy goes back thousands of years, finding its roots in the ancient teachings of egypt. alchemy is now used to refer to the “transmutation of base metals into gold” (american heritage dictionary, 2010). in the middle ages, alchemists were considered magicians; today, we look upon alchemy as the forerunner of chemistry. for the purposes of this academic paper, the definition of alchemy is the transformation of ideas into realities, paralleling the concept of the transmutation of base matter to gold (zaboski, 2014). the myth surrounding the transmutation of base metals like lead into gold is simply a coded metaphor. the alchemist’s intention was not to gain personal riches but to achieve altruistically, through an enlightened process of creating a golden soul (burckhardt, 1971). this ancient methodology was a systematic endeavor to use the heart as well as the mind to turn an idea into reality. the alchemy of creativity is an operating system for innovation that promotes the growth of an organic culture of collaboration, fueling on-going, prosperous innovation. the importance of creativity and innovation “every foundational crisis throughout the history of life on earth has been solved by acts of profound creativity.”dr. paul astin how you innovate can determine what you innovate (davila, 2013). today, products, systems and processes for innovation are constantly scrutinized and evaluated for efficiency, productivity and return on investment. from the onset of the industrial revolution, hand tooled fabrications gave way to the assembly line which was replaced systematically by a panoply of imaginative systems for automated manufacturing. now, with the advent of 3d printing a whole new genre of how we create things is emerging. each of these production innovations helps accelerate the time it takes to bring products to market. how we turn thoughts into things has become streamlined and large corporations thrive when their systems facilitate a maker to market efficiency. a recent ibm survey asked 1500 ceo’s around the world what they thought was the most important quality to be cultivated in their businesses going forward; over 60% said creativity (ibm press release, 2010). innovation must be integral to the organization’s culture and institutionally supported at all levels. at disney studios in the late 1990’s, a great oversight was that the artists did not invite management to the spiral lectures on collaborative creating; thinking the lectures were for artists only (zaboski, 2014). in reality creativity, innovation and collaboration should be everyone’s responsibility. understanding the nature of creativity becomes the mission and the path to a thriving, innovative culture of cross functional collaboration. a healthy culture must promote innovation and long-term above irrational development schedules and short-term profits. a company develops innovation through its culture, core competencies and knowledge. a creative culture supported by top management translates into higher productivity, greater employee retention and sustainable profits (davila, 2013). when james mcnerney become 3m’s ceo in 2000, he introduced two six sigma tools: the more traditional design, measure, analyze, improve and control (dmaic) method for systematic problem solving; and design for six sigma (dfss), a linear step-by-step process designed for new product development to help minimize risk by standardizing development. popularized by general electric under the leadership of jack welsh, these systems combines stringent management gate reviews with six sigma quantitative methods (antony, 2002). creators could not move forward to the next development stage unless approved by the division operating committee (figure 1). american journal of management vol. 16(3) 2016 67 the value of an organizational structure for innovation stage gates interrupted the creative process when developers were deep in the messy and often unquantifiable process of creating and evaluating new ideas. at critical junctures, mcnerney’s process forced a shift in attention to report writing and presentation before creation could continue. in the end, implementation of six sigma almost destroyed innovation at 3m – it rewarded incremental change and drastically curtailed new product development growth. in business week, the new ceo, george buckley lamented dfss’s negative effect on creativity and innovation (hindo, 2007). figure 1 new product development process 68 american journal of management vol. 16(3) 2016 the stage-gate product development process is common in large organizations and when misused encourages incremental versus sweeping change (rudelius, 2006).the process, improperly implemented, also corrals innovators and incents mediocrity. control-driven cultures rarely foster true innovation especially when development is not allowed to outpace the understanding of the controlling mechanism. organizations play not to lose instead of playing to win (davila, 2013), a conservative approach that results in minor changes to existing products not new ideas. the most detrimental effect of the stage-gate process is wide-spread adoption of the paradigm that creativity is linear. when creativity is viewed as linear, creators may often appear to be on the “wrong” path. true innovators rarely align with static process deliverables, making project communication and coordination extremely difficult. when creators see their lack of alignment as a failing, they lose inspiration and ultimately disconnect from the organization. there is dissonance between the conceptual linear development process and the natural way thoughts manifest into things creates a pathology that corrodes the basis for collaborative innovation (simonton, 1999). when a linear, gated approach is applied, the iteration process and interplay between disciplines is slowed and disrupted. it trades the fertility of collaboration for the sterile pursuit of ensuring each project deliverable and its corresponding review is complete at the same moment in time. required effort and pace of development occur asynchronously between disciplines and often do not lend themselves to arriving at a collective “ah-ha” moment. creators need to iterate and collaborate with others to produce a radical break-through (bougrain, 2002). without consideration of the natural way humans explore and evaluate ideas, a static, gated process can be so mechanistic as to sabotage the very creativity it was designed to harness (see figure 2 and 3). figure 2 standard model product development process american journal of management vol. 16(3) 2016 69 figure 3 actual model product development process imagining the innovation process as a spiral at disney, during the 1990s, to examine creativity was to empower the heart, mind and hands of the artist. to assure that all artists were rising together, revelations on excellence and artistry were shared, discussed, refined and retold in ongoing presentations of the spiral lecture (zaboski, 2014). at its core, the spiral lecture was a conversation about context. in other words, it was about how the innovator should think, feel and act about the pursuit of turning a thought into a thing -rejecting the unwieldy and 70 american journal of management vol. 16(3) 2016 unworkable linear path and seeing the process in a more holistic and creatively healthy manner. (see figure 4). when the creative process is visualized as a spiral instead of a linear path, it better depicts the true nature of human experience towards creation. the intrinsic development of an idea starts with a feeling or thought followed by intentional cycles of refinement that drive the nascent idea into physical state of being (wynn, 2007). within this context the basis is laid for a development process that both fosters innovation and provides the structure necessary for relevant collaboration. the illustration of progression as a spiral helps creators visualize a final destination as a series of increasingly focused passes. each pass requires a particular set of solutions before moving on to the next pass. determining solutions at the head of each pass establishes the work flow for that pass and manages the expectations of all participants in the development process. iterations allow for freedom to experiment, question, and prototype and discover within a pass while maintaining a consensus trajectory towards completion. communication is improved because the spiral provides context for each participant to locate themselves and their team members between the start and the finish. according to james baxter, a walt disney feature films supervising animator, “creation is a universal energy" (baxter, 2012). he taught that every creative impulse in the world conforms to the same basic structure. “if you can look at your own creative process in this way, you can tap into unlimited creativity. we see our creativity in the same way the universe does: in a spiral.” in daniel pink’s seminal work, a whole new mind, he argues that an empowered future must reinforce skills, abilities and talents that cannot be easily coded, commoditized, machined or productized (pink, 2006). businesses will need these non-linear or right-brain dominant skills to stay competitive in an increasingly innovationdriven market. the creator will need to be cultivated and the environment managed to encourage collaborative innovation for future businesses to thrive in the era of big data and technological convergence (figure 5) while re-emergence of right-brained thinking must be institutionally nurtured to ensure innovation, this in no way implies a retreat of left-brained systems. powerful creating takes both sides of the brain and flourishes in organized environments in alignment with the inherent human drive to discover and examine. the spiral embodies an effective map for creation. it provides the over-arching structure for an enhanced kind of stage-gating whereby participants track and process their progress with fuller purpose. a spiral-based development system harmonizes the product realization process with the natural order of human creation. the spiral also cultivates the creative keys, critical attributes that facilitate prosperous innovation. these fundamental elements of creativity bring together and empower those who follow the spiral path in service of a common idea. once fully understood, the creative keys enhance the culture of innovation and allow participants to work as a fluid team, focused on a collective purpose, minimizing the distraction of individual ego (figure 6). american journal of management vol. 16(3) 2016 71 figure 4 initial conceptualization of the creative spiral 72 american journal of management vol. 16(3) 2016 figure 5 product development creative spiral introduction to the creative keys "resolute imagination is the beginning of all magical operations.” paracelsus very few organizations have lasted over the past 100 years and fewer have been as creative and successful as disney (grant r. m., 1991). through generations of work with a vast array of individuals and an astute examination of the creative process, walt disney came to understand that a culture of creativity must align with the experimental process of discovery. disney and other competitive studios nurtured clarity of vision and supported iteration. he encouraged collaboration, risk taking and masterful completion in pursuit of excellence. this culture encouraged engagement to support participation and mentorship in pursuit of an idea that belonged to the team. that idea was held in reverence and honed to such clarity that it gained a life of its own. guided by the concept of a spiraling journey of creation and american journal of management vol. 16(3) 2016 73 examination while working in service of ideas over ego, generations of artists created powerfully, reaching audiences and acclaim previously unseen in the world. like any causal relationship, proof of the mechanism of action is to eliminate a key component and observe change. in the late 1990s, pivotal elements of the disney culture were removed. the result, predictably, was the degradation of the organization’s ability to create resonant projects. during this time, a very few team members came to see themselves as the drivers of the team’s success. it would take years to break the hierarchy of dominant ego-centered contributors and reestablish a renewed culture of collaboration. in the meantime, disney feature animation went a decade without producing a notable hit film. disney’s ideas encouraged universal constructs that have been the basis of organic creation throughout human history (paulus, 2000). these concepts empowered great acts of creativity from the transcendent artistry of the renaissance painters to the seemingly miraculous constructs of engineers and makers of today. at the core, five keys to creativity propel the trajectory of a novel idea into its purposeful realization in the world (see figure 6). the committed cultivation of the following key attributes along with the spiral structure of innovation prepare the contextual ground and provide the framework for an organization or individual to take their ideas powerfully from mind to market. these keys are: • creators believe – they know how to hold a thought through to completion • creators iterate – they unfold their creation in stages, trusting the process • creators collaborate – they realize the fastest accelerant is generous co-operation • creators risk – they learn healthy risk-taking is integral to enlightened solutions • creators complete – completing enhances belief in a culture of growth and success figure 6 the creative keys 74 american journal of management vol. 16(3) 2016 creators believe i know who i am, and who i may be, if i choose.” don quixote, cervantes. to believe is to hold a thought. belief filters the way the world appears and how we act in it (kahneman d. &., 1986). it is the underlying construct of what we feel is true. the creative leader cultivates clarity of intent capable of inspiration and dedication. what we believe about ourselves, our projects and our team filters our worldview and affects our daily choices. powerful choices come from clear vision. the importance of mindset when facing challenges and obstacles in work or in organizational environments cannot be underestimated (dweck, 2007). what we believe makes a difference. powerful creation is telling a compelling story. one of walt disney’s greatest gifts was that he was an amazing storyteller. he told stories with such conviction that he built an army of artists to spread those stories worldwide. creators tell not just a story about what the person or company is doing, but the cultural story of the organization -a story about the creator, team, company culture and its members (jackson, 1998). companies like disney or apple foster a particular institutional belief. for example, apple is not an electronics device company as many would think from an a priori glance. it actually considers itself more of a lifestyle company (austin, 2013). this designation makes much more sense when examining apple’s offerings and how they approach innovation. their story infuses a particular belief system both internally for its employees as well as what it projects out into the world. in complex systems and corporate environments staying focused and engaged in creation is a function of establishing clarity of intent or cultivating a practice of believing (dweck, 2007). given the current entrepreneurial boom, it is more important than ever to tell a good story. story carries meaning. meaning engenders feeling, and feelings are contagious. companies often forget the “why” behind the technology, industrial design, big data parsing and other aspects of growing a start-up or small cap company. meaning is the beacon that guides businesses through the fog of regulatory constructs and organizational logistics toward a purposeful contribution to the world. for creatives, belief is the signal, and everything else is the noise. one practice creatives have is the use of the term signal to noise ratio to describe the mechanism for focus. the signal is an intention tuned to its highest degree. the noise is defined as the everyday distractions, unrealistic deadlines, competing projects, shifting priorities and life. simply put: the greater the signal, the less noise, the goal becomes clearer. practices that turn up the signal and turn down the noise enhance the creative process and ensure a defined path toward the manifestation of the idea. this focus helps an organization, team or individual become more productive and increases quality of life. belief is a practice cultivated to balance a passion for the project with its reason for being and is best distributed to the world as a story of commitment and purpose (grant a. , 2008). creators iterate “writing is re-writing.” anonymous. to iterate is to engage in the process of continual refinement. experienced creatives understand the value in phasing their ideas through a series of ongoing passes from start to finish (howard, 2008). each pass naturally builds on the learning of the last and moves the project ever closer to its conclusion. cultivating the ability to understand and implement systems for progressive refinement is a key attribute of powerful creators and a driver of a creative culture. iterating towards a predetermined end goal allows the innovator to continually refine large scale, complex requirements while focusing on the details in manageable steps. each pass addresses certain attributes of the design, improving upon lessons learned and drawing the best of the creator and the creation out of the work. mistakenly seen as the slower of less direct path to completion of a project, iteration is often the fastest path to discovery. much of what is learned in a pass can allow for unforeseen american journal of management vol. 16(3) 2016 75 advancements; accelerating a product to market and adding features that position the product as a market leader (pich, 2002). in an anecdote told in the book, art and fear (bayles, 1993), a group of students in a ceramics class were divided into two groups. the students in group one were told their entire grade for the semester would be based on the quality of a single vase. the students were to put all their effort into one perfect creation. in group two, the students would be judged entirely on the combined weight of their semester’s work. those who turned in over 50 pounds of ceramic work would receive an a, over 30 pounds a b and so on. overwhelmingly, the best vases came from the students in group two who had the freedom to make mistakes, challenge conventions, fail and practice creating. by “banking creative capital”, the students got the best results from the cycle of creative action and analysis than from the attempt to get it right the first time. in an organizational environment, one significant benefit of evaluating a project in terms of passes is improved communication. as an innovator becomes more familiar with their own process, they can better determine the number of passes necessary to complete a project. as this knowledge accrues, performance predictability increases. this information, shared with cohorts, clients and others, contributes to developing an abiding culture of collaboration and inclusivity, translating into a positive and productive work environment. iteration is the fuel for creativity and the path to innovation. mindful, additive efforts in pursuit of lofty goals often give rise to exponential discovery. creators collaborate “never underestimate the power of a small group of people to change the world. in fact, it is the only thing that ever has.” margaret mead to collaborate is to operate collectively in pursuit of a common goal. any grand pursuit will need a team to bring it to fruition (bryson, 2006), and how that team operates in concert is critical for its success. in an ideal innovative environment, the fastest accelerant to personal excellence will be generous collaboration (lunsford, 1991). at studios like disney, artists who created snow white, sleeping beauty, dumbo, jungle book and other classics passed their institutional knowledge to the younger artists regarding the subtleties of art and storytelling that made a great film. their willingness to share their knowledge led to better animated films (jackson, 1998). the core concept of collaboration at walt disney animation studios was that every contribution was meant to be constructive. the monumental task of creating a feature length film by drawing every single frame by hand made it vital to the health of the project that all contributions be additive. in other words, each collaborator would act as a plus sign in the total equation of making a masterpiece. this concept became known at the studio as “plussing,” a term coined by walt disney himself. plussing was a key word used by artists at every level of the studio to describe how they would work together. “can you plus this?” was an oft heard question around the halls and cubicles of disney artists. plussing became defined as creative choices being made in service to the trajectory of an idea. for many years a rich collaborative culture of plussing thrived at disney and traveled with many of the animators as they migrated to pixar, dreamworks and other studios during the expansion into digital films in the late 1990s. teams well-versed in plussing were responsible for disney’s successes like the little mermaid, beauty and the beast and the lion king. some moved to dreamworks and brought a culture of plussing to create shrek, kung fu panda and how to train your dragon (zaboski, 2014). plussing could be found at pixar with finding nemo, toy story, monsters inc., up and other classic productions. the concept of plussing contributed to one of the most creative and lucrative stretches in cinematic history (zaboski, 2014). 76 american journal of management vol. 16(3) 2016 when innovators operate from a concern for an idea’s trajectory, rather than the egos involved, they communicate from a productive, forward moving place. the conversation around trajectory is simple and involves three questions: 1. what choices have already been made? (the past) 2. what is the plan to implement the idea? (the future) 3. are you open to suggestions? (permission for productivity in the present.) a note on permissions: where a culture of collaboration exists, requests for permission are implied, and do not need to be established. when the culture of collaboration is new or trust is fragile, establishing permissions is essential. actions without acknowledgement or uninvited advice often cause disruptions in the culture of collaboration. an organization can encourage plussing by celebrating team members who reach out for collaboration. all too often in a myopic corporate environment, only those who directly lead or build on a project are seen as contributors. this view undervalues team members who seek the best results over their own advancement. failing to elevate the originator of the collaboration risks perpetuating a closed culture, where information is used as power and placed in a silo to benefit the individual instead of the organization. with plussing, all contributions are part of the process as the project spirals toward completion. suggestions are viewed in a positive light and are not seen as criticism of the individual because each critique is in support of the idea’s on-going iteration toward completion. the innovator remains committed to a great final product and its shared success. collaboration enhances products and the teams who work in service of an idea to create them. as skills and knowledge are shared, the team members are individually valued for what they know, what they can teach and what they can contribute. rising complexity requires a greater commitment to collaboration. solutions will come from convergence of knowledge and technologies, making solo operations nearly extinct in innovative environments. the ability to bring people and technologies together in pursuit of a common goal will be the core competency necessary to produce meaningful solutions to difficult problems. the end result of collaboration is a culture of trust and respect as well as growth of a team of innovators driven by the success of their mutual accomplishments. creators risk “fortune favors the prepared mind.” louis pasteur to risk is to take a calculated action without the guarantee of a predictable result. in creative endeavors risk is inevitable (sternberg, 1988). yet when risk is accepted and met as a normal part of making a thought into a thing, the outcomes are evaluated differently; an unexpected result becomes a learning experience. risk is approached as an opportunity for non-linear advancement and a testing ground for theories and abilities. seasoned creators learn to cultivate a healthy relationship with risk, developing an ability to make a sober analysis in the unavoidable face of an obstacle. creativity and risktaking go hand in hand. leaders need to foster risk-taking at the grass roots level knowing it just comes with the territory of creating (blessingwhite, 2008). healthy risk incrementally builds trust in process, team, experience and the ability to assess opportunity. with success, an innovator gains insight and experience extending boundaries and enhancing belief. with a miss, experience still accrues and knowledge is banked for the next leap. honest assessment of risks ensure the organization has the resources and knowledge necessary to navigate the unknowns of the development process to completion (boehm, 1991). the creative leap of faith should not be a blind jump into the abyss but an educated exploration of possibilities within a defined space. innovators are most willing to take risks when the stakes are reasonable and institutionally supported (kahneman d. l., 1993). maintaining a steady, educated risk taking approach to development protects an organization from needing to gamble everything to protect or american journal of management vol. 16(3) 2016 77 regain a financially critical market (memili, 2010). too often, organizations that have developed a profit center with predictable operations settle into a conservative risk-averse approach to business that leaves them open to competition and ultimately loss (davila, 2013). to bring something new to the world almost always engenders risk. innovators are aware of the risks and despite the accompanying trepidation, worry or doubt, innovators understand that eventually a leap will be necessary to proceed further around the spiral. with each faithful act, the company’s evolution becomes part of the story. when risk is approached in concert with the other creative keys, it is an act of building trust. business savvy leaders of development teams take the time to gather information in the lower cost scoping phase of development to assess risk versus reward when determining if a project is worthy of the organization's resources. creating is inherently a process of constant growth. powerful creators know risk is an integral part of the process and they develop an expectation that in due time, a great risk will be necessary to cause a quantum leap in the project or business (davila, 2013). healthy risk incrementally builds trust in process, team, experience and the organization’s ability to assess opportunity. nothing is ever a failure if some creative capital can be salvaged from the wreckage. understanding this process gives creatives comfort as they proceed further from the spiral. with each faithful act, the company's evolution becomes part of the story. in concert with the other creative keys, it is an act of building trust. when the creative keys are in balance, risk becomes another opportunity to know oneself, evaluate limitations and proceed with a response worthy of greatness (zaboski, 2014). creators complete “it takes two people to finish a painting. the painter and someone to tell him when to stop.” (cezanne, 2012) to complete is to finish what was started. it is the thought finally turned into a thing. completion writes the next chapter in an organization’s story. the team gains understanding of their competencies and areas for improvement, bringing confidence and ultimately a deeper belief in their abilities. this understanding also fuels a more lucid assessment of each member’s contributions, driving greater levels of collaboration and mentorship. well managed, the team hones its proven strengths and works on its collective weaknesses, growing in its ability to efficiently iterate and innovate together. only once development is completed and the product commercialized can an organization definitively get a true sense of its accomplishment, measure and celebrate its success and calculate the value of its creative capital. post-market surveillance provides undeniable feedback to the team’s assumptions on everything from consumer satisfaction to product safety. the lessons learned in the comprehensive study of a complete project can often be more valuable than the product itself (schlinderm m., 2003). once a product is in the field, an organization learns how well it assessed the market, managed risk, translated the assessment into requirements and manifested the requirements into a final tangible product. the quality of the product is essentially an artifact of the process. an increasingly successful process yields increasingly successful products. so important is the act of powerful completion it not only impacts future innovation but helps the organization determine which products in its current portfolio are most likely to succeed or have potential for failure. without cultivating a relationship with completion, none of these valuable lessons or growth in abilities and culture can take place. for this reason alone, the organization must have a firm commitment to finish projects and not squander its creative capital on something that it does not have the will or resources to complete. many institutionally ingrained factors can contribute to an organization’s failure to complete and these organizational pathologies quickly degrade the culture. consequences multiply as team members are unable to identify tangible results of their work or attach value or consequence to their contributions (gray, 2001). the drive to complete is exponentially reduced with each major shift in priorities, causing 78 american journal of management vol. 16(3) 2016 more internal noise and diminishing the company’s “signal” to the point where the most driven and talented innovators, those who live to create, are pushed further away from the process until eventually innovation grinds to a full and sometimes irreversible halt. to complete powerfully, the team must soberly gauge how they bridged the gap between idea and reality, assessing qualitative attributes and quantifiable parameters relative to their expectations. the organization must acknowledge the qualities and contributions of individual participants, and the team must commemorate the creative journey through celebration. we too often move on from one project to the next without evaluating lessons, thanking our colleagues or celebrating victories. cultivating an understanding of what constitutes completion builds true collaboration as the team works to determine where to strike the balance between perfect and done (baccarino, 1999). intentional completion grants the freedom to move forward with those new possibilities so the organization can tell its next story to the world. conclusions “as practice makes perfect, i cannot but make progress; each drawing one makes, each study one paints, is a step forward.” vincent van gogh we create because we must; we create to solve the challenges posed by history. it is what makes us tick. our present is the realization of our past imaginings and our future will depend on the stories we tell and the commitments we make today. in this time of exponential growth our mounting challenges will require enlightened solutions. what we believe and how we innovate today will endow our world for tomorrow. during the classical era, artists developed systems for turning a beautiful thought into a perfected thing. after the industrial revolution manufacturing systems diffused into every facet of how things were made. eventually these systems were applied to movie making and brought mass production back into the hands of the original manufacturers: artists. these more contemporary masters examined, dissected and rebuilt the creative process, marrying art and industry and producing extraordinary results. we find that the contextual structure of the spiral and the five creative keys remain as relevant today as centuries ago. this system for collaboration and enhanced innovation provides makers a natural process of creation grounded in deep historical precedents and yet perfectly applicable to our current demanding business climate. when the creative process is visualized as a spiral instead of a linear path, it better depicts the true nature of human thought and action towards creation. it harmonizes the product realization process with this human operating system. the spiral provides a structure for the creative keys – belief, iteration, collaboration, risk and completion – critical attributes that facilitate prosperous innovation. these fundamental elements of creativity unite and empower those who follow the spiral path in service of a common idea. once fully understood, the creative keys allow participants to work as a fluid team, focused resolutely on a collective purpose. in design, engineering and manufacturing, this system leads to explosive innovation through plussing and greater self-expression. these environments increase engagement, raise productivity and improve retention. ultimately, organizations leverage the benefits of a successful relationship with creation into purposeful contributions to the world. management of innovation has been described as unquantifiable by those who create and unmanageable by those who seek to quantify. the authors submit that neither statement is accurate. by visualizing innovation in its natural form, all 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(d. g. dierberger, interviewer) american journal of management vol. 16(3) 2016 81 ajm 18(4) master (r).pdf consumerism and marketing in the digital age harold w. lucius rowan university, glassboro, nj john h. hanson west chester university, west chester, pa advances in telecommunication technology have contributed to the popularity of smartphones and social media websites worldwide. there are 196 million smartphone users in the u.s., and worldwide, smartphone users were estimated at 1.75 billion in 2014. these increases are signs of how widely social networking companies have penetrated the lives of ordinary people and, in turn, transformed the ways in which people communicate and businesses operate. in essence, social media sites and smartphones have become very useful and integral tools for marketing and consumerism. this paper explores trends, challenges and opportunities in social media marketing and its benefits to consumerism. introduction: the digital age sometimes referred to as the information age, the digital age has been defined as “the time period starting in the 1970s with the introduction of the personal computer, with subsequent technology providing the ability to transfer information freely and quickly.” (www.yourdictionary.com/digital-age). some technology aficionados contend that it is actually the second of three stages of a communications revolution. the first is often described as the computer revolution during which computers exponentially increased productivity; the second is dubbed the internet revolution during which the personal computer shifted into universal interconnectivity. the third stage has been classified as the digital age during which personal computers improved with capabilities to connect a wide range of products including digital cameras, digital books, and smartphones. (vivian, the media of mass communication, 173 -175). while all the stages of the consumer revolution have undoubtedly influenced communication, it is the third stage that has had an enormous impact on consumerism. the most popular product of the 21st century obviously is the do-it-all technological device known as the smartphones which has become the consumer’s constant companion. during the last decade, more consumers have become proud owners of smartphones, digital cameras and digital books. more than 1 billion smartphones were sold worldwide in 2013, according to a study by the research firm international data corporation. "the sheer volume and strong growth attest to the smartphone's continued popularity in 2013," said ramon llamas, research manager with idc's mobile phone team. "total smartphone shipments reached 494.4 million units worldwide in 2011, and doubling that volume in just two years demonstrates strong end-user demand and vendor strategies to highlight smartphones." (huffingtonpost, jan. 28,2014) introducing the i-phone in 2007, the late steve jobs, who along with steve wozniak, created apple computer in 1976, described the multi-tasking hand-held device as “the culmination of the new era.” the american journal of management vol. 16(3) 2016 41 http://www.yourdictionary.com/digital-age� iphone is “like having your life in your pocket.” jobs called it “the ultimate digital device.” today, smartphones make it easy for consumers to get into the marketplace. writer colleen walsh recently described how smartphones are being used: need a ride but don’t want to call a taxi? how about a place to stay instead of a hotel? or maybe you just need someone to fix your washer? if you can access the internet you’re in luck. with the click of a mouse or the tap of a smartphone, users around the world are joining the “sharing economy” an expanding network of buyers searching for product or service and sellers eager to deliver what they need. savvy entrepreneurs have tapped into the culture of “collaborative consumption”, connecting searchers and sellers for a price. ride-sharing companies such as uber and lyft, connect passenger and drivers through a smartphone app, and travelers who log onto airbnb can rent everything from a private yacht in malibu to a room in an upper east-side apartment. (walsh, 2014) the popularity of the smartphone has been attributed to successful marketing strategies employed by apple, samsung and other major manufacturers of the digital device. what exactly is marketing? there are several definitions, but the american marketing association defines marketing as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” (ama.org., 2015). marketing can also be described as a process by which companies create customer interest in products or services. it generates the strategy that underlies sales techniques, business communication, and business development. it is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves. essentially, marketing is all about educating and influencing consumers. it may be described as a process of teaching consumers how and why they should choose products and or services. all of that has been simplified and made easier with social media. modern corporations and businesses in the 21st century have been successful in global marketing because of advances in technology. in fact, it is almost difficult, if not impossible, for any business to exist or operate today without technology. because of easy availability of technological devices and the internet, consumers have become smarter and more analytical in the decision making process. internet usage in the u.s. with more than 263 million internet users, the united states is one of largest online markets in the world. that figure is expected to increase drastically within the next decade. in their best seller, the new digital age, reshaping the future of people, nations and business, eric schmidt and jared cohen have predicted that approximately five billion people will join the internet within the next decade. among the current online users are the tech-savvy, college-educated, who were born since 1984 and often referred to as the net generation, generation y, or the millennial generation who have developed an affinity to social media. although young people, ages 18 to 30, have overwhelmingly been the users of new media, the use of social media has been multi-generational. according to a 2014 pew internet study, more than 74 percent of adults actively use and benefit from social media.(smith, a., 21-3). more and more, americans – from teenagers to senior citizens are logging on and spending more time on various social media platforms, networking, and following people and brands online. (adler, e., 2014). the current internet adoption is equal among both genders, and near universal across all ages. online usage also increased among demographic groups with higher education and income. recent industry data state that internet users in the united states spent more than 1,159 billion minutes online across multiple digital platforms and 521 billion digital minutes online via smartphone in july 2014. the most popular online activities of the american internet users are described as social media use, video gaming and shopping. the growing popularity and usage of apps and mobile social networks sponsored by major american companies have made online shopping a very popular online activity among internet users in the united states. in 2013, americans spent more than $322 billion in online 42 american journal of management vol. 16(3) 2016 purchases on amazon, e-bay, walmart online and apple. retail e-commerce spending in 2013, the most recent year for available data, was estimated at $210.6 billion. current digital and mobile buyer figures stand at $157.1 and $101.7 million respectively. mobile commerce is also increasing, with mobile retail sales expected to surpass $18 billion in 2014. (www.statistista.com/topics/871/online-shopping) next to the personal computer, smartphones are the technological tool of choice for the american consumer. a smartphone is essentially a portable phone that combines features of a personal computer operating system with other features useful for mobile or handheld use. (nusca, a.,2009). most smartphones typically are equipped with mobile devices such as, personal digital assistant, (pda), media player, a gps navigation unit and a digital camera. most smartphones are capable of accessing the internet and can run third-party apps and music players. in 2014, sales of smartphones worldwide were estimated at $1.2 billion, an increase of about 28 percent from 2013. (molina and della cava, 2015) since it first appeared on the scene in 1992, and three years later, the term "smart phone" was coined to describe at&t's "phonewriter communicator" (savage, 1995), the mobile device has gained much popularity. smartphones proliferate in the united states. approximately 91percent use cell phones of which 61 percent identified themselves as smartphone owners. today, the smartphone is a very useful and necessary tool in marketing and consumerism. it could be described as the linchpin of social media. in the digital age, the most popular app among u.s. smartphone audiences is facebook with a 71.6 percent user reach. more than two-thirds of facebook visitors prefer to access the site via mobile devices. other popular social platforms include youtube, google+, twitter as well as image-oriented networks pinterest, instagram and tumblr. in 2017, the number of smartphone social network users is projected to surpass 160 million. an estimated 900 million monthly visitors twitter with 310 million monthly visitors 255 million estimated monthly users 250 million estimated unique monthly users 120 million monthly users 110 million monthly visitors 100 million monthly visitors 80 million monthly visitors 65 million monthly visitors 42 million monthly visitors digital media and consumers depending on their unique environment, several popular social media platforms are being used for various marketing purposes. each marketing site requires different strategies to attract consumers. using social media in marketing does more than improve site traffic and help businesses reach more consumers; it provides a valuable venue for better understanding and learning from target audiences. the guide below, prepared by wordstream, an online advertising advisor, provides a better under-standing of how using social media improves marketing by businesses. american journal of management vol. 16(3) 2016 43 http://www.statistista.com/topics/871/online-shopping� http://www.twitter.com/� http://www.linkedin.com/� http://www.vine.co/� http://www.facebook.com/� http://www.twitter.com/� http://www.linkedin.com/� http://www.pinterest.com/� http://plus.google.com/� http://www.tumblr.com/� http://www.instagram.com/� http://www.vk.com/� http://www.flickr.com/� http://www.vine.co/� facebook’s casual, friendly environment requires an active social media marketing strategy that begins with creating a facebook business fan page. it requires paying careful attention to layout, as the visual component is a key aspect of the facebook experience. the facebook social media marketing for business pages revolve around furthering conversations with audiences by posting industry-related articles, images, videos, etc. google+ promotes the same fun, casual atmosphere as facebook. on google+ you can upload and share photos, videos, links, and view all your +1s. also you can take advantage of google+ circles, which allow you to segment your followers into smaller groups, enabling you to share information with some followers while barring others. for example, you might try creating a “super-fan” circle, and share special discounts and exclusive offers only with that group. you can also try hosting video conferences with hangouts and experiment using the hangout feature in some fun, creative ways. some social media marketing ideas: if you own a salon, host a how-to session on how to braid your hair. if you own a local bookstore try offering author video chats. twitter is the social media marketing that lets you broadcast your updates across the web. follow tweeters in your industry or related fields, and you should gain a steady stream of followers in return. mix up your official-related tweets about specials, discounts, and news updates with some fun and quirky tweets interspersed. be sure to retweet when a customer has something nice to say about you, and don’t forget to answer people’s questions. using twitter as a social media marketing tool revolves around dialog and communication, so be sure to interact as much as possible. pinterest is the latest in social media marketing trends. pinterest’s image-centered platform is ideal for retail, but anyone can benefit from using pinterest for social media purposes. pinterest allows small businesses to showcase their own product offerings while also developing their own brand’s personality with some unique pinboards. linkedin is one of the more professional social media marketing sites. linkedin groups is a great venue for entering into a professional dialog with people in similar industries and provides a place to share content with like-minded individuals. it encourages customers or clients to give your business a recommendation on your linkedin profile. recommendations make your business appear more credible and reliable for new customers. also on browse the questions section of linkedin, providing answers helps you get established and earns trust. youtube is the number one place for creating video content, which can be an incredibly powerful social media marketing tool. many businesses try to create video content with the aim of having their video “go viral,” but in reality those chances are pretty slim. they also focus on creating useful, instructive “howto” videos. these how-to videos also have the added benefit of ranking on the video search results of google; so don't under-estimate the power of video content! uses of social media in marketing marketing has been described as a management process through which goods and services move from concept to the customer. it includes the coordination of four elements: (1) identification, selection and development of a product (2) determination of its price, (3) selection of a distribution channel to reach the customer's place, and (4) development and implementation of a promotional strategy. marketing is based on thinking about the business in terms of customer needs and their satisfaction. marketing differs from selling because (in the words of harvard business school's retired professor of 44 american journal of management vol. 16(3) 2016 http://www.businessdictionary.com/definition/selection.html� http://www.businessdictionary.com/definition/development.html� http://www.businessdictionary.com/definition/distribution-channel.html� http://www.businessdictionary.com/definition/cumulative-audience-cume.html� http://www.businessdictionary.com/definition/customer.html� http://www.businessdictionary.com/definition/promotional-strategy.html� http://www.businessdictionary.com/definition/marketer.html� http://www.businessdictionary.com/definition/business.html� http://www.businessdictionary.com/definition/term.html� http://www.businessdictionary.com/definition/customer-needs.html� http://www.businessdictionary.com/definition/satisfaction.html� http://www.businessdictionary.com/definition/seller.html� http://www.businessdictionary.com/definition/word.html� http://www.businessdictionary.com/definition/harvard-business-school.html� http://www.businessdictionary.com/definition/retired.html� marketing theodore c. levitt). selling concerns itself with the tricks and techniques of getting people to exchange their cash for your product. it is not concerned with the values that the exchange is all about. and it does not, as marketing invariable does, view the entire business process as consisting of a tightly integrated effort to discover, create, arouse and satisfy customer needs." in other words, marketing has less to do with getting customers to pay for your product as it does developing a demand for that product and fulfilling the customer's needs. (www.businessdictionary.com/definition/marketers.html) in the digital age, marketing experts have developed a branch of marketing dubbed digital marketing. it makes use of computers, social media, smartphone, tablets and other electronic devices to engage with stakeholders. it also allows for the use of other technology such as websites, email, and apps (classic and mobile) along with the traditional mass media such as television and radio. many businesses and organizations use a combination of traditional and digital marketing channels. however, digital marketing is becoming more popular with marketers as it allows them to reach many more consumers. the “appification” of marketing with the increasing popularity and widespread use of smartphones by consumers, many businesses have developed marketing apps to promote their business and at the same time educate customers. apps allow for direct engagement, payment, and targeted advertising. peter orban discussed the proliferation of marketing apps in a recent post: “marketing apps fall into two main categories”: (1) user facing apps are manifestations of the brands/marketers intent; interactive instances of engagement, e.g. mobile apps, displays and video ads, blogs, search ads, social media, call centers, surveys and other voc tools, promo/contest tools belong here. (2) marketer facing applications include business intelligence, analytics, dashboards, asset and project management. these apps are distributed by various delivery networks. some have their own, dedicated ways of reaching the consumer (e.g. via email) but most will live on content networks, frequently fully integrating with them. (oban, p.,2015). consumerism and digital media consumerism has generally been understood under three categories: 1. organized-efforts by individuals, groups, and governments to help protect consumers from policies and practices that infringe consumer rights to fair business practices. 2. doctrine that ever-increasing consumption of goods and services forms the basis of a sound economy 3. continual expansion of one's wants and needs for goods and services. american journal of management vol. 16(3) 2016 45 http://www.businessdictionary.com/definition/concern.html� http://www.businessdictionary.com/definition/technique.html� http://www.businessdictionary.com/definition/exchange.html� http://www.businessdictionary.com/definition/cash.html� http://www.businessdictionary.com/definition/values.html� http://www.businessdictionary.com/definition/business-process.html� http://www.businessdictionary.com/definition/create.html� http://www.businessdictionary.com/definition/need.html� 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http://www.businessdictionary.com/definition/need.html� no matter how it is defined, consumerism has been greatly influenced by modern technology. in today’s digital, social, mobile age, consumers can choose brand messages as much as the brand messages choose them. consumers are always connected and this has fundamentally changed how they shop. in the digital age, consumers are more likely to browse before they make purchases. that enables them to become more acquainted or knowledgeable about available brands and therefore lead to better consumer choices. the diffusion of technology used to bring us social media has been accelerated since the internet was introduced in the 1990s. the ideas were exciting, but there was little to engage consumers. after the y2k crisis at the turn of the 20th century, when computers failed to implode as a result of their inability to change their internal clocks to the new century, and after the bursting of the dot-com bubble, sites recognized that they had to offer surfers something exciting, educational, or experiential if they were to keep coming back. today we have entered the entrepreneurial era, in which companies work to find ways to earn profits from the way consumers use and enjoy social media. the changes and advances in social, mobile, and online technologies have forced firms to change how they communicate with their customers. the traditional ways to market their products – newspapers, magazines, tv, radio, mail, telemarketingare no longer sufficient. the presence of social, mobile, and online is expanding relative to these more traditional forms of integrated marketing communication. the changing role of traditional media, sales promotion, and retail, coupled with the new social, mobile, and online media has led to a different way of thinking about the objectives of marketing communication. they must excite, educate, help consumers experience products, and give them the opportunity to engage with their social network. conclusion: the future of digital marketing in today’s technological society, digital marketing has taken on a much greater role and importance in consumerism. there is no question or debate that marketing has been transformed by technology. most businesses have developed websites, and maintain regular and constant communication with consumers via email, blogs, apps, and a variety of social media platforms. more small businesses are communicating with employees as well as consumers through smartphones and the computers via the internet. nearly all businesses have interactive websites that showcase their products and provide a variety of services for their customers. many corporate and business leaders also recognize the value of social media to reach consumers. those types of mobile communications tools will be enhanced and used more commonly in the future. another business executive suggests that “the success of today’s marketing organizations is largely driven by their adoption of digital technologies to transform the business. as a result the cmo and cio need to work hand in glove to ensure marketing is enabled with the it tools and processes to further engage with customers in an increasingly connected world.” (afshar, v., 2013). as chief marketing officer responsible for global marketing at extreme networks, an international firm with headquarters in san jose, california dealing with 20,000 global companies, vala afshar is capable of offering expert on marketing to consumers. he believes that marketers must embrace digital technology (whether it is with mobile, cloud or social technologies) if they want to be relevant to today’s customers and they must work closely with it to fulfill the goals of the business (afshar, v., 2013) the future of digital marketing is full of possibilities and opportunities. michalis michel, an online market research specialist, recently offered an interesting prediction about the future of digital marketing. he noted that businesses would be involved in more market research in the future, and suggested that social media will be widely used by businesses. “the bottom line is: change or perish. if you are a traditional agency it is not too late. a good first step will be to include in your solutions portfolio social media listening and online communities.” (michel, 2015). to capitalize on these prospects, marketers will have to acquire new skills, especially the use of social media to effectively communicate with consumers, and highlighting and promoting their products and services. researchers note a “skills gap” among marketers that “is hindering the efforts of companies to transform content marketing from a promising set 46 american journal of management vol. 16(3) 2016 http://www.digital-mr.com/solutions/social-media-listening� http://www.digital-mr.com/solutions/social-media-listening� http://www.digital-mr.com/solutions/private-online-communities� of experiments into an agile, scalable, strategic function in the business.” (roberts, 2015). to overcome this major deficit, the modern marketers must be open to learning or acquiring new skills to be able to deliver an engaging new media experience to consumers. references adler, e. 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(2014). “the big share”: harvard gazette, retrieved from http://news.harvard.edu/gazette/story/2014/08/the-big-share, march, 2014 www.businessdictionary.com/definition/consumerism.html#ixzz3tr18gyh8 www.businessdictionary.com/definition/marketers.hytml www.wordstream.com/social-media-marketing www.yourdictionary.com/digital-age. american journal of management vol. 16(3) 2016 47 http://www.businessinsider.com/social-media-engagement-statistics-2013-12� http://www.businessinsider.com/social-media-engagement-statistics-2013-12� http://www.cmswire.com/cms/customer-experience/the-future-of-digital-marketing-8-trends-023349.php?pagenum=2� http://www.cmswire.com/cms/customer-experience/the-future-of-digital-marketing-8-trends-023349.php?pagenum=2� https://www.ama.org/about� http://www.nielsen.com/us/en/insights/reports/2012/state-of-the-media-the-social-media-report-2012.html� http://www.nielsen.com/us/en/insights/reports/2012/state-of-the-media-the-social-media-report-2012.html� http://www.zdnet.com/blog/gadgetreviews/smartphone-vs-feature-phone-arms-race-heats-up-which-did-you-buy/6836� https://en.wikipedia.org/wiki/zdnet� http://contentmarketinginstitute.com/author/robert-rose/� http://dl.acm.org/citation.cfm?id=208157� https://dl.acm.org/purchase.cfm?id=208157&cfid=789113364&cftoken=20248806� http://news.harvard.edu/gazette/story/2014/08/the-big-share� http://www.businessdictionary.com/definition/consumerism.html#ixzz3tr18gyh8� http://www.businessdictionary.com/definition/marketers.hytml� http://www.wordstream.com/social-media-marketing� http://www.yourdictionary.com/digital-age� ajm 18(4) master (r).pdf ajm 19(1) master r1.pdf ajm 17(1) master-lulu-revised.pdf 10 american journal of management vol. 17(1) 2017 personalized medicine and stakeholders� perceptions adaeze aroh university of kentucky, teuta cata, northern kentucky university patients suffer the same form of illness but their responses to therapy may differ greatly. this can be attributed to their genetics or other environmental factors. personalized medicine may improve the outcomes of treatment by understanding the individuals, causes of their disease, and the best treatment for their cure. keywords: personalized medicine, and warehousing, genetics, pharmogenomics, data security clinical data mining. introduction the health information technology for economic and clinical health (hitech) act and the affordable care act (aca) established several programs intended to accelerate the transformation of the health care delivery system in the united states (u.s.). some of these programs include the adoption of the electronic health record and its meaningful use, participation in accountable care organization and the use of clinical decision support (cds) systems to improve point-of-service care. these initiatives are major drivers to enhance clinical data quality and availability (the office of the national coordinator for health it). currently, there is much data available to health care delivery organizations as a byproduct of the practice of medicine and possibly the adoption of the aforementioned programs. it is the expectation of health care practitioners, health policy makers and care organizations that the accumulation of data will be valuable for the improvement of the u.s. and global health care systems. three major areas of using data to enhance performance include improving patient care, reducing health care related costs and managing performance (rhoads & ferrara, 2012). according to pogorelc (2013), most hospitals will produce more than 665 terabytes of data by 2015; this rapid data growth in health care organizations presents both an opportunity and a challenge for the health care industry (pogorelc, 2013). this paper will discuss data warehousing and mining in health care, the opportunities and challenges inherent in the use of medical data and, specifically, the application of these concepts in optimizing personalized medicine. literature review data warehousing and mining in healthcare in recent times, organizations have understood the opportunities inherent in the meaningful use of data from their information systems for better decision making, cost savings, trending and prediction of american journal of management vol. 17(1) 2017 11 outcomes. hence, there is an increasing need to store vast amounts of data in what is currently known as a �data warehouse�(pedersen & jensen). according to pedersen, the functionality offered by data warehousing has traditionally been used by businesses, in the areas of retail & finance; but this technology is now increasingly being used in more scientific areas(pedersen & jensen). previously, data warehousing was primarily used by corporations to obtain information to guide management and financial decision making. initially, the use of data warehousing was a bit more complicated as organizations held their data in disparate systems (inmon, 2007). however, with progress, data warehousing, required the integration of disparate systems for the meaningful use of information. data warehousing as a term was first used by barry devlin, but became popularized by bill inmon who defined it as; �a data warehouse is a subject oriented, integrated, non-volatile and time-variant collection of data in support of management�s decision� (pedersen & jensen). data in the warehouse is optimized for analysis rather than for data entry. it is therefore used to understand and manage the enterprise both at a strategic and tactical level. gray and watson (1998) posited that data warehousing is fundamentally created to provide a dedicated source of data to support decision making applications. the data warehouse can provide a single version of the truth by providing users and applications access to the same source of information (watson,2002). figure 1 figure 2 picture source: recent developments in data warehousing (watson, 2002). the need for a clinical or healthcare data warehouse is advocated by gray and watson (1998) because it can provide the same version of data for various needs. the provision of the same version of 12 american journal of management vol. 17(1) 2017 data can save different users the time and resources to write programs to answer questions on different kinds of data. hence increasing the focus on data analysis rather than data collection and cleansing. to understand healthcare issues and solutions, unbiased and timely data must be available. healthcare data are usually stored in diverse formats both logically and physically and it is limited in scope of reports therefore making it ripe for the application of data warehousing technology to integrate these data sources. data warehousing technology supports more effective healthcare decision-making at both individual and community levels. in addition to administrative uses, different clinical uses of data warehousing have been reported in the last 15 years. for example, data warehousing has been used for recruitment of participants for clinical trials, gene-disease association studies, family health history data patterns, public health applications, and trends in drug use/cost/interactions, infection surveillance and so on. moreover, it has also been found to be a fundamental tool in the personalization of patient care (evans, lloyd, & pierce). data warehousing in healthcare is quite challenging because the industry is ripe with often incompatible medical standards & coding schemas. sensitive data may be obtained from several sources and be delivered in many forms which require added attention to privacy and security issues. another major issue is that the health care industry is widely decentralized and largely autonomous (berndt, fisher, hevner, & studnicki, 2001), which makes issues of data sharing quite challenging. as clinical data warehousing is being adopted rapidly by health care systems, the value of these information systems cannot be harnessed without applying data mining technology. data mining tools are search tools that originated in statistics, computer science, and other non-biomedical disciplines to find associations among variables that may be useful in making management decisions(mullins et al., 2006). data mining is the process of selecting, exploring and modeling large amounts of data. data mining has been defined variedly. for example, yoo et al. (2012) defined data mining as �the analysis of (often large) observational data sets to find unsuspected relationships and to summarize the data in novel ways that are both understandable and useful to the data owner� (yoo et al., 2012). kaur and wasan (2006) also defined it as the non-trivial extraction of implicit previously unknown and potentially useful information about data. data mining enables the generation of scientific hypotheses from large experimental data sets and from biomedical literature by bridging the gap between data availability and the use of knowledge that can be derived from it (yoo et al., 2012). often times, the concept of data mining and knowledge discovery in databases (kdd) have been used interchangeably; however, both concepts are quite distinct. according to fayyad et al, (1996) data mining is one of the steps (selection, pre-processing, transformation, data mining and interpretation/evaluation) of kdd which involves fitting models to or determining patterns from observed data while kdd refers to the overall process of discovering useful knowledge from data such as data cleaning and incorporation of heuristics(fayyad, piatetsky-shapiro, & smyth, 1996). in health care practice, data mining has been used to reduce adverse drug effects and also to suggest cheaper and safer alternatives. areas where data mining techniques have been applied successfully in healthcare management include but are not limited to: executive information system for health care; forecasting treatment costs and demand of resources; anticipating patient�s future behavior given their history; public health informatics; e-governance structures in health care; health insurance, etc. (kaur & wasan, 2006). an emerging field of healthcare where data warehousing and mining is of absolute importance is personalized medicine. personalized medicine is a new trend of patient care whereby patients are treated not only based on presenting symptoms, but also on the causes of the disease, its rates of progression, and how their body will react towards prescribed medications and diets. the data mining techniques can be used to garner a better understanding of the etiology of a disease, its particular structure, and how to design personalized therapies(sackman & kuchenreuther, 2014). thus, data warehousing may be used as a central research repository for personalized medicine with respective services for collecting, sharing, and further elaborating annotated anonymized clinical data and other research relevant data from diverse heterogeneous sources(schera, weiler, neri, kiefer, & graf, 2014). american journal of management vol. 17(1) 2017 13 personalized medicine over the past six decades, much evidence has emerged indicating that a substantial portion of variability in drug response is genetically determined; with age, nutrition, health status, environmental exposure, epigenetic factors, and concurrent therapy playing important contributory roles(alyass, turcotte, & meyre, 2015) .to achieve individual drug therapy with a reasonably predictive outcome, one must further account for different patterns of drug response among geographically and ethnically distinct populations(vogenberg, isaacson barash, & pursel, 2010). the observation in variability of drug response in the early 1950s, led to the evolution of pharmocogenetics which is a confluence of genetics, biochemistry, and pharmacology. according to vogenberg et al., advances in molecular medicine spawned the newer field of pharmacogenomics which seeks to understand all of the molecular underpinnings of drug response. vogenberg posit that personalized medicine came about as a result of the commercialization of the aforementioned research application. according to the united states food and drug administration, the term �personalized medicine� is described as �providing the right patient with the right drug at the right doses at the right time�. they also described it as tailoring of medical treatment to the individual characteristics, needs, and preferences of a patient during all stages of care, including prevention, diagnosis, treatment, and follow-up. with the scientific breakthroughs and technological advancements in recent times, personalized healthcare has the capacity to detect the onset of disease at its earliest stages, pre-empt the progression of disease, and at the same time increase efficiency of health care systems by improving the quality, accessibility, and affordability (alyass et al., 2015; personalized medicine, 2014). the national institute of health also defined personalized medicine as �an emerging practice of medicine that uses an individual's genetic profile to guide decisions made in regard to the prevention, diagnosis, and treatment of disease. knowledge of a patient's genetic profile can help doctors select the proper medication or therapy and administer it using the proper dose or regimen(shoenbill, fost, tachinardi, & mendonca, 2014).� the national cancer institute however, defines personalized medicine as �a form of medicine that uses information about a person�s genes, proteins, and environment to prevent, diagnose, and treat disease(offit, 2011). in cancer cases it uses specific information about a person�s tumor to help diagnose, plan treatment, find out how well treatment is working or make prognosis(josko, 2014). the most prominent examples of modern personalized medicine are genomic tests designed to guide treatment choices such as testing for human epidermal growth factor receptor type 2 (her2, also referred to as her2/neu) to select patients with breast cancer who will benefit from trastuzumab and of testing for the kras mutation to determine who is likely to benefit from therapies inhibiting the epidermal growth factor receptor (garber & tunis, 2009). personalized medicine works by making use of information from genomes and their derivatives (rna, proteins, and metabolites) to guide medical decision making. such medical decisions should be done while people are still healthy or at the earliest stages of the disease, and therefore be considered as preventive healthcare (ginsburg & willard, 2009). such kind of preventive healthcare is now very affordable. the cost of sequencing a human genome has dropped to $1000 compared to $ 400 million that was last decade (collins, 2015). there has been demonstrated and documented evidence of success for several conditions and treatments, the question now is: will personalized medicine be able to achieve its acclaimed widespread benefits? benefits of personalized medicine disease susceptibility: pharmacogenetics has made genetic linkage studies in families with hereditary breast and ovarian cancer syndromes as well as families with hereditary colon cancer possible. it has led to the identification of several important loci that are used for screening, disease risk counseling, and preventive treatment programs. for instance, women who carry mutations in either brca1 or brca2 (human genes that produce tumor suppressor proteinsthese proteins help repair damaged dna and, therefore, play a role in ensuring the stability of the cell�s genetic material. when either of these genes is mutated, or altered, such that its protein product either is not made or does not function correctly, dna damage may not be repaired properly. as a result, cells 14 american journal of management vol. 17(1) 2017 are more likely to develop additional genetic alterations that can lead to cancer) have a high risk for breast and ovarian cancer, and it is now recommended that women in such families have the opportunity to undergo genetic testing to make decisions about surveillance or even surgical approaches to mitigating a high risk of developing breast cancer. similarly, people in families with a strong history of colon cancer can undergo testing for genes such as mlh1 and msh2 that may identify individuals who have a risk as high as 60% for colon cancer. early and regular screening colonoscopy in these individuals (as opposed to the recommendation for the general population to begin screening at a particular age) may enable the early detection of colon cancer(ginsburg & willard, 2009). reduction in adverse drug reactions: personalized medicine has been shown to reduce the adverse effect of certain drugs by being able to interpret genetic information of individuals to determine the likelihood of positive response to a particular treatment option. a typical case is that of panitimumab, a drug for the treatment of colon cancer, it has shown to be effective only in the absence of kras mutation in tumor. also, the drug maraviroc is only beneficial for hiv patients with certain strains (ccr5) of hiv disease. these examples, among others, demonstrate how genomic information may lead to tailored treatments with fewer adverse effects and a positive impact on personal health and well-being(najafzadeh, davis, joshi, & marra, 2013). issues and problems personalized medicine promises so many opportunities in the improvement of health care, from cost savings to prevention and reduction of adverse drug reactions. in the midst of all these promises, they are many challenges that need to be addressed in order to fully harness the tremendous benefits of personalized medicine. these obstacles range from obstacles in public policy which include uncertain regulatory requirements, insufficient insurance reimbursement for diagnostic tests linked to pre-emptive care, incomplete legal protections to prevent genetic discrimination, the lack of a comprehensive healthcare information technology system, and a lack of integration of this knowledge into the medical education system; thereby making it difficult for physicians to incorporate personalized medicine diagnostics or pharmacogenomics into their practices (personalized medicine, 2014). davis et al. offers a slightly different perspective to the challenges of personalized medicine through an investigation carried out in 2009 on the challenges of and promises of personalized medicine; their findings highlighted the three following major obstacles that have held back the advancement of personalized medicine: scientific challenges (for example, poor understanding of molecular mechanisms or a lack of molecular markers associated with some diseases); economic challenges (that is, incentives that are poorly aligned between stakeholders); operational issues electronic tracking of diagnostic information, privacy concerns, reimbursement coding issues and provider and patient education). although scientific challenges remain, it now seems that the economic challenges and operational issues present the most significant obstacles to the further development of personalized medicine. in many cases, operational issues can largely be resolved within a particular stakeholder group(davis et al., 2009) (davis et al, 2009). ethical issues: unlike many other diagnostic tests, genomic sequencing for personalized medicine allows the identification of individual and related family members. thus, concerns regarding data security, confidentiality and privacy are raised and access to genomic patient data must be restricted to the use in clinical practice (de lecea & rossbach, 2012). in the meantime, the data collected by biological specimen such as patterns of rna and dna, individual�s cell populations, protein and metabolites are very sensitive data which makes the security a high priority for the institutions who keep such records (mathias, lipori, moldawer, & efron, 2016). for patients or individuals to be willing to take advantage of personalized medicine, they need to make sure that their privacy is protected to a great extent. certain ethical questions arise on the extent to which genetic information of an individual should be used for american journal of management vol. 17(1) 2017 15 personalized medicine services. collecting personal information and sharing it with other family members who share the same genetics, increases the likelihood of learning a lot of personal information of other relatives. furthermore, this kind of data, even after you remove the identifiers, can provide enough information to identify someone. therefore, their privacy can be at risk. another major issue that may arise from personalized medicine is that insurance companies may require genetic testing to pay for targeted treatment even though it might be against a patients� choice; secondly, insurance companies might not agree to pay for a particular treatment or drug because it is not a known treatment for a particular disease but can be used for a unique individual (josko, 2014) . practitioners� perceptions according to raghavan and vassy (raghavan & vassy, 2014), there are many issues or factors affecting physicians� rate of the adoption of personalized medicine. most important is the highly variable knowledge and comfort with genetic concepts and their specific applications to clinical medicine. for example, in a survey of us physicians including generalists and specialists, selkirk et al. found that 79% and 69% of primary-care and non-primary-care physicians, respectively, report that "lack of knowledge about genomic medicine" is a barrier to its incorporation in practice. in another study, haga et al. found that, while only 43% of respondents to a survey of us primary care physicians reported inadequate knowledge of genomic testing, feeling well-informed about genomic testing was a very strong predictor of genomic test utilization (an odds ratio of 4.6 of ordering a genomic profile for a patient)(selkirk, weissman, anderson, & hulick, 2013). also in a recent focus group conducted by najafzadeh et al (2013) in canada, 36% of 28 physician participants self-reported unfamiliarity with the concept of personalized medicine. the physicians expressed different opinions on the actual meaning of personalized medicine: some physicians indicated that the term referred to tailoring treatment based on physician�s knowledge about patient-specific information (e.g., health record, co-morbidities, hereditary, familial risks, etc.) while others emphasized on the role of genetic information in personalized medicine. a few physicians speculated that personalized medicine referred to improved treatments for socio-economically advantaged patients. patient perception in a study by de marco et al(de marco et al., 2010), patients� attitudes towards personalized medicine, genetic testing, and race-based prescribing and whether they differed between white and african american participants) were examined. the findings of the study suggest that personalized medicine and genetic testing, though not well understood by lay persons, were considered positive advances in medicine. however, participants also voiced a range of concerns. for example, participants felt that, while promising, the use of genetic testing to personalized medicine might be too expensive to be accessible to the general public. the african american group discussed more about medical mistrust by marginalized populations which may affect the acceptability of personalized medicine when it becomes widely available. a welcome development in this technology was that african americans viewed personalized medicine and genetic testing as positive developments that could reduce the trial-and-error nature of prescribing and the possibility of side effects. in particular, patients need to understand the purpose of genetic testing and how it can be used together with other clinical information to determine the best treatment. health professionals will need to draw from many disciplines such as psychology, anthropology, and advertising to create social marketing campaigns that address the numerous barriers to acceptance and utilization. even in the face of overall positive views of personalized medicine, some participants were wary of participating in any sort of medical testing, believing that they might be exploited or that the privacy of test results could be compromised. one way to address this concern is to provide patients with information about the genetic information nondiscrimination act (gina), legislation signed into law in 2008 to protect patients from discrimination by their health insurers and employers based on their genetic information. an approach similar to the dissemination of information during health care visits on the health insurance portability. 16 american journal of management vol. 17(1) 2017 future of personalized medicine genomic information also can predict illness in healthy individuals. in the near future physicians, can look forward to a medical landscape in which the pairing of affordable, efficient dna sequencing and electronic health records could be used to inform a lifetime of health care strategies. combined with the use of mobile health technology to assist in real-time monitoring of factors such as diet, exercise, blood pressure, heart rate, and blood chemistries, this approach could lead to more precise ways of preventing and managing chronic diseases (collins, 2015). personalized medicine is a chance to revolutionize health care, but this will require a team effort by innovators, entrepreneurs, regulators, payers and policymakers. a future platform of personalized medicine includes many stakeholders which are not limited to healthcare industry only (see table 1). this platform should not include only hospitals and the treatment they provide, but should also include drug development efforts (in the early stages); integration of electronic health care system (which includes travel information, emergency rooms etc.); responsiveness towards therapies, in specific disease states; cost � effective treatment data (jakka & rossbach, 2013); changing policies related to the ownership of medical information and the patient�s role in making future medical decisions; redefining the reimbursements and pricing policies; and creating organizational structures and programs that support such a platform. the new platform of personalized medicine should address the issue of the rise of healthcare diagnostic tests which are almost 7 times more prevalent in the last 15 years and changing the reimbursement model to a value-based pricing model. the new pricing model will help to increase the adoption rates of personalized medicine, increase the reimbursement for tests related to such treatments and overall will increase the quality of patient care with a lower overall cost (johnson, 2016). table 1 a suggested platform of personalized medicine the platform of personalized medicine medical properties legal properties economic properties ethical properties social properties organizational properties the future research in this topic will be towards providing directions and suggestions on what each area properties should include and expanding this suggested platform with other necessary areas which help on creating and sustaining the concept of personalized medicine. conclusion the future of healthcare in the united states and beyond looks very promising with the advent of personalized medicine. personalized medicine has the potential to reduce the cost and pain associated with trial and error/one-size fits all approach of the current health care systems. moreover, it can introduce new treatment protocols of using molecular elements that signal the risk of disease at the genetic level. through early detection, prevention, and accurate risk assessments and efficiencies in care delivery, it promises to address current inefficiencies in health care delivery thereby having a significant impact on the economies of nations. for personalized medicine to deliver on its promises, it will be heavily dependent on efficient data mining tools and techniques because of large collection of molecular data from patients and the use of enormous amount of data from ehrs. according to chris edwards on using data for personalized cancer treatment, �one of the problems of personalized medicine is obtaining enough data to work out how different treatments fare under different conditions, getting a database of 10,000 to 20,000 patients with 50 to 100 common tumor types, amounting to at least one million patients. �the future of personalized medicine will be based on a combination of personal data which include genomic information as well as longitudinal documentation american journal of management vol. 17(1) 2017 17 of all possible molecular components. it is therefore pertinent that efficient data collection, storage and mining tools are developed and applied in order to speed up mining of realms of clinical data for meaningful use in personalized medicine and also not forgetting data security which is a major issue in dealing with patients� genomic information in personalized medicine. in order to optimally reap the benefits of personalized medicine, there should be a supportive public policy environment that would address each of the issues raised, and provide incentives to reinforce emerging business models that accelerate the co-development of drugs and diagnostic tests. there should also be strategic alliance amongst the different disciplines involved in promoting personalized medicine which includes patients, scientists and drug companies. last but very important, there should be sufficient non competing resources and a strong, sustained commitment of time, energy, and ingenuity from the scientific, medical, and patient communities for the full potential of personalized medicine to be realized(collins, 2015). references alyass, a., turcotte, m., & meyre, d. 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(2012). data mining in healthcare and biomedicine: a survey of the literature. journal of medical systems, 36(4), 2431-2448. ajm 17(2) master-lulu-revised.pdf american journal of management vol. 17(2) 2017 23 with a little help from our friends: how social entrepreneurship ventures change the world on a shoestring maureen casile, ph.d. (corresponding author) indiana state university 200 north seventh street terre haute, indiana usa 47809-1902 maureen_casile@yahoo.com michelle d. lane humboldt state university 1 harpst street arcata, ca 95521 michelledlane@humboldt.edu abstract this paper employs grounded theory to understand how social entrepreneurship ventures pursue the types of change that supporters demand with very limited budgets. a multiple case study found that organizations walk a fine line, inspiring supporters by emphasizing grand change goals while at the same time, buffering supporter enthusiasm from disappointment by refraining from identifying as mission critical any goals for which the factors that would influence success are largely outside of the organization�s control. sev�s used inter-organizational cooperation to pursue change goals where short term failures were likely and where eventual success was only possible after a protracted effort. introduction social entrepreneurship is nothing if not a balancing act. on the one hand, social entrepreneurs must pursue improvements in some social condition that are inspiring both for themselves and for their major stakeholders. on the other hand, they must show progress towards those inspiring goals or risk losing stakeholder confidence. and they must do so within the confines of the resources that they are able to generate on an ongoing basis lest they risk financial collapse for the organization and a forced abandonment of its mission. under these conditions, it might be relatively easy to show progress toward relatively unambitious goals. but unambitious goals are unlikely to engage stakeholders or even many social entrepreneurs. ambitious goals, on the other hand, tend to be more difficult to achieve. even if they are achieved, measurement of progress can prove problematic. the question, then, becomes one of how social entrepreneurs go about identifying and pursuing ambitious social change goals while limiting existential threats to their ventures and ongoing missions. 24 american journal of management vol. 17(2) 2017 below, we report the results of a multiple-case study of progressive animal welfare organizations. these results offer a hint about how social entrepreneurs approach this challenge. with help from existing literature, we propose a model for understanding how social entrepreneurs prioritize goals and utilize inter-organizational cooperation and volunteers to pursue goals that might otherwise be out of reach. the specific research questions of this study are: 1) how do social entrepreneurs approach aggressive missions and change goals and keep supporters motivated for the long term? 2) why and when do social entrepreneurs engage in inter-organizational cooperation to pursue change goals? 3) how do social entrepreneurs engage volunteers in the pursuit of their missions, and in particular, in pursuit of long term change goals? theoretical underpinnings social entrepreneurship ventures (sev's) can be thought of as simultaneously pursuing three different categories of goals: those that keep the organization viable, those that seek to deliver services in the short term, and those that seek to bring about lasting change so that remediation is no longer necessary (lane and casile, 2011). the most challenging of these goal categories, in terms of both accomplishment and measurement, is realization of long term social change. for this reason, we might think of organizations that focus more on social change goals than other similar organizations do as pursuing more aggressive missions. there are a number of reasons why a sev might shy away from pursuing a more aggressive mission. for one thing, an aggressive mission is likely to appeal to a smaller pool of stakeholders than a more commonly accepted mission might. the sea shepherd organization, for example, is in business to protect whales by directly confronting and interrupting boats involved in whaling. their financial supporters and volunteer pool consist of individuals and organizations that uniformly support this type of extreme action in support of the aggressive goal of a worldwide ban on whaling for all purposes. while devoted, this pool of external constituents is much smaller than the pool that would be able to support other, less drastic approaches to controlling whaling. then there is the question of measurement. a program for helping minorities succeed in college might pursue a mission of helping minorities graduate and get good jobs. a program with such a mission would be able to measure how many minority students used its services, how many graduated successfully as compared to those who did not use the program, and how many reported getting a job in their field upon graduation. but what of the program that aims to change the world in such a way that minorities are not disadvantaged in the first place? such a program, to the extent that it succeeded at all, would succeed over the course of decades and possibly generations, and almost certainly with the help of other organizations. some of these organizations might focus on k-12 education while others might focus on changing university culture and even commonly accepted ideas about scholarship and performance. there might be any number of means of measuring progress toward this goal�some of which might conflict with one another as to the level of progress being achieved. and it would be nearly impossible to track progress back to any one organization or effort. so it would be much more difficult for an organization with this more aggressive mission to show stakeholders tangible proof of progress, or to take credit for that progress. aggressive missions then, are likely to alienate some potential stakeholders and leave others hungry for proof of progress. yet without at least some aggressive aspect to its organizational mission, it would be difficult to classify an organization as a sev (epstein and mcfarlan, 2011; kirk and beth nolan, 2010). furthermore, it would be difficult for the sev to justify its own existence (moore, 2000). yet, for most sev�s, the need to change the world must coexist with the reality of limited and often unpredictable funding sources. this gives rise to the question of how such organizations propose to do so much with so little. not surprisingly, reliance upon volunteerism is common in sev�s. so is inter-organizational cooperation. american journal of management vol. 17(2) 2017 25 this section introduces the four major areas of inquiry that informed the multiple-case study discussed herein, and that will be used to interpret its results. these are: organizational missions, stakeholder expectations, inter-organizational cooperation, and volunteer management. mission statements for any organization, a mission statement can play an important role in setting and communicating organizational identity. in addition to guiding long term planning and day-to-day operations, a concrete statement of mission can help stakeholders understand why the organization exists (rajasekar, 2013). it can also inspire both internal and external constituents and provide a sense of purpose (steffens, davidsson and fitzsimmons, 2009). beyond stakeholder engagement, a well-formulated mission statement can contribute to organizational performance (green and medlin, 2003; bart and baetz 1998). while identifying a social mission may be optional for a traditional for-profit organization (lumpkin, moss, gras, kato and amezcua, 2013), successful sev�s must identify and doggedly pursue a mission of bringing about some social good or remedying some social ill (lane and casile, 2011; miller and wesley, 2010; light, 2008; santos, 2012; waddock, 2010). institutional legitimacy can then be established and maintained by the measurement of outcomes and impact of the firm relative to its mission (bagnoli and megali, 2011; hervieux, gedajlovic and turcotte, 2010). an overly aggressive mission can damage the credibility of a sev and alienate key stakeholders (lumpkin, moss, gras, kato and amezcua, 2013). an overly aggressive mission, or one that is not aggressive enough, can also adversely impact the ability of organizational insiders and volunteers to identify with the organization and to feel engaged in carrying out its work (suh, houston, barney and kwon, 2011). this creates a challenge for social entrepreneurs to pursue missions that are sufficiently focused on world-change activities to inspire and engage both internal and external constituents while at the same time knowing the limits of what the organization can reasonably achieve within both its resource limitations and its institutional constraints. stakeholder expectations a mission statement can impact not only how stakeholders view a sev, but also how the sev views its stakeholders (babnik, breznik, dermol and sirca, 2014). like all organizations, sev�s can be thought of as serving a hierarchy of stakeholders with some holding more sway over organizational success and survival than others (clarkson, 1995). however, the disparity of interdependence can vary less across the stakeholder group for sev�s than it does for traditional organizations (mort, weerawardena, and carnegie 2003). in part, this may be because stakeholders are important not only for their ability to provide resources, but also for their ability to garner legitimacy for the sev within the wider community (tracey, phillips and jarvis, 2011). in return, however, these stakeholders are increasingly looking for tangible evidence, not only of fiscal soundness, or even of service delivery, but also of genuine progress toward the long-term goals of the organization (nichols, 2009; ruebottom, 2011). this research seeks to add to existing knowledge by exploring how sev�s broadcast and pursue aggressive social change missions while at the same time managing the expectations of stakeholders with regard to timing and measurability. inter-organizational cooperation and its impact inter-organizational cooperation is by no means limited to sev�s. schermerhorn, jr. (1975) predicted that leaders would be motivated to cooperate with other organizations under conditions of resource scarcity and if there were a perception of value to be gained through cooperation. popp et al (2014) provide an extensive review of networking literature. they identify a number of reasons why organizations would choose to cooperate. these include capacity-building, building social capital, outreach, and solving complex problems (islett et al, 2011; mcguire, 2006; milward and provan, 2006). given the limited and uncertain funding streams of sev�s, the long-simmering social problems that many of them seek to remedy, and the need for community outreach and support, networking with similarlyminded sev�s and other organizations seems a likely course of action. 26 american journal of management vol. 17(2) 2017 much of the research into sev cooperation conducted to date has centered on collaborations with forprofit ventures or other sev�s with limited mission overlap where skills and resources may be complementary. tukka toivonen (2016) for example, explores social innovation communities where sev�s with compatible missions work together to maximize their innovative capabilities and chances for long-term success. henry (2015) studied a cooperative arrangement between an animal welfare organization and a more generalized welfare organization in ireland. this research seeks to further finetune our understanding of the conditions under which sev�s are most likely to seek partners for collaboration. specifically, this research seeks to understand the types of objectives that are more likely to be pursued cooperatively rather than alone. volunteer management while the benefits that volunteers provide to the organizations they serve may be difficult, if not impossible, to quantify with much accuracy (salomon et al, 2011; manetti et al, 2015), it is nonetheless true that a great many organizations rely on volunteers to carry out important tasks and to help them remain viable (kreutzer and jager, 2011). sev�s are among these organizations (hager and brudney, 2015). in addition to the services they provide, a strong and dedicated volunteer pool can help to establish legitimacy for an organization (mason, kirkbride and bryde, 2007). while research on how volunteerism in sev�s can be developed and sustained has been somewhat limited to date (thompson, 2011), there is growing interest in this area (hager and brudney, 2015). this research seeks to contribute to the growing body of knowledge about how successful social entrepreneurs maintain volunteer engagement and how the nature of organizational mission may influence the approach to volunteer engagement. methodology the goals of this study were to determine whether sev�s explicitly set, measured, and reported progress toward goals of three distinct natures: organizational viability, short-term service delivery, and long-term changes in the conditions they existed to address. the primary data source for this study was key informant interviews conducted with representatives from eight relatively progressive animal welfare organizations in different geographic areas. questions were open-ended but structured with the same questions asked of each informant. the goal of the interviews was to: determine organizational mission ascertain specific organizational goals and determine to what extent each goal focused on: viability service delivery or change document how performance measurement was used to inform internal procedures and/or to provide data to external stakeholders. determine whom the organization considered to be its most important stakeholders. determine what the informants believed were the objectives of these important stakeholders� that is, in what ways did they believe the stakeholders saw this organization as advancing goals that were important to the stakeholders. in addition, organizational web sites were searched for official mission statements and volunteer opportunities. informant interviews were coded by two independent coders under the direction of one of the primaries. american journal of management vol. 17(2) 2017 27 observations and propositions this section discusses two different sets of observations. the first considers the role that risk may play in determining whether or not organizational leaders will classify a long-term change goal as mission critical. it includes suggestions about how organizations might manage risks rather than abandoning high-risk goals that are important to organizational identity or stakeholder goodwill. the second considers whether more aggressive change missions increase the importance of volunteers to the organization. influences on goal criticality: identity, control, cost, and risk the semi-structured interview questions used in this study requested that informants identify the organization�s most important service delivery and long-term change goals. the interview questions did not provide informants with any template for identifying or describing goals. rather, it was left to the informant to describe these goals in her own words. however, in reviewing interview transcripts, sets of goals did emerge that were highly similar across organizations. in addition to identifying goals reported by informants, coders were also instructed to code for relative goal importance. importance was coded as follows: 2 mission critical. the organization cannot fulfill its fundamental reason for existing without pursuing this goal. 1 important but not mission critical. 0 the organization would like to pursue this goal and will pursue it, resources permitting. however, it is subordinate to other goals that are considered important or mission critical. figure 1 shows the top five most commonly reported change goals. the stacked bars in figure 1 show the number of organizations that identified each goal as either important or mission critical. the line in figure 1 shows the cumulative importance rating that each goal was assigned by all organizations in the study combined. it shows, for example, that education about pet ownership was identified as mission critical by five organizations. multiplying this frequency (5) by a rating of 2 for being mission critical yields a total importance rating of 10 for that goal. figure 1 also shows that political action was identified as important by six organizations and as mission critical by one. although this goal appeared in interviews from more organizations than any other goal in the study did, its cumulative importance rating shared a three-way tie for second place because it was identified most often as important but not mission critical. in fact, it was the only change goal in the study to be rated as anything less than mission critical by those organizations that identified it as a goal. 28 american journal of management vol. 17(2) 2017 by way of comparison, figure 2 shows the five most frequently identified service delivery goals from the study. again, the number of organizations identifying each goal as mission critical and important are stacked and the cumulative importance rating appears as a line. figure 1 shows that a majority of organizations (6) were able to identify one change goal as important but not mission critical. in each case, it was the same goal�political action. even taking into account less frequently cited change goals, all were described as being mission critical�except for political action. figure 2, on the other hand shows that most service delivery goals were identified as important but not mission critical by some organizations. the only exception is spaying and neutering. it is perhaps not coincidental that the number of spay/neuter procedures performed, in addition to serving as an outcome measure for that service delivery goal, is also used as a behavioral measure for progress toward the change goal of reducing overpopulation. to be fair, political action is a catch-all goal category created by the authors. in the actual data, informants identified a number of more specific political action goals. these included such items as outlawing puppy mills, preventing breed-specific laws, and changing spay-neuter laws. still, it is 0 2 4 6 8 10 12 figure 1: frequency and importance of change goals mission critical important cumulative importance 0 2 4 6 8 10 12 14 figure 2: frequency and importance of service delivery goals mission critical important cumulative importance american journal of management vol. 17(2) 2017 29 noteworthy that this was the most often cited change goal and the only one to be identified as less than mission critical by any organization in the study. political action goals stood out in another way in this study. none of the seven organizations that cited this goal reported that they were acting alone to pursue it. one study subject even stated that they were serving as a focal point for organizing joint action by local organizations with similar goals. by comparison only two informants reported being engaged in joint efforts on any other goal in this study. stakeholder consensus: there are at least two reasons why political action goals may stand out from other change goals. first, consensus among stakeholders may be lower for actions that seek to change laws than for actions to seek change that is voluntary. one informant, for example, reported that, until recently, one member of the organization�s board operated a dog breeding facility. some of the laws that this organization might have pursued to reduce cruel confinement or overbreeding might have adversely impacted this board member�s business. in fact, the informant reported that the strain between the organization�s mission and this trustee�s activities did ultimately lead to a parting of the ways. figure 3 shows some of the major stakeholders for a typical animal rescue that engages in change efforts. even with this simplified model, it is not difficult to imagine how stakeholders might be divided over political action goals. the american kennel club, for example, is a powerful environmental constituent with its own political action committee and government relations division. while this organization is sometimes aligned with organizations in this study (for example in opposition to breed-specific laws), it also actively works to defeat legislation about overbreeding and cruel confinement. (see http://cqrcengage.com/akc/lac for a sample of akc political issues). adopters, on the other hand, might object to paying higher adoption fees so that a portion can be devoted to political causes in which they have no interest. communities which might be very happy to have an animal rescue to take in strays that animal control collects might not be at all happy when the rescue organization tries to prevent them from passing breed-specific laws, or when they interrupt lawful commerce by arranging protests of pet stores and puppy mills. 30 american journal of management vol. 17(2) 2017 needless to say, the notion that stakeholders might be at odds with one another is not new. thompson (1967) pointed out that stakeholders might disagree not only about the desirability of some outcomes, but also as to the cause and effect mechanisms by which desired outcomes may be brought about. however, for sev�s, the problem may be more complex to manage since a larger pool of stakeholders tends to be involved. at the very least, a larger percentage of the stakeholder group tends to hold sway over organizational decision-making (mort, weerawardena, and carnegie 2003). the question, then, becomes one of how organizations manage competing stakeholder demands. meyer and rowan (1977) offered decoupling as a means by which organizations might avoid excessive scrutiny in areas where stakeholder goals are not uniformly in alignment with organizational goals. in this scenario, we could argue that sev�s mute their emphasis on political change in order to minimize the antagonization of potentially critical stakeholders who do not approve of such action. however, this explanation is not consistent with the behavior of the sev described above which did choose to part with a stakeholder rather than with the goal of political action. in addition, decoupling is probably not a feasible approach given the transparency of the organizations involved and the seeming prominence of organizational mission in motivating staff, volunteers, and donors alike. beyond the subjects of this study, smith and woods (2015) offer a model for stakeholder engagement for sev�s in which both transparency and inclusion of stakeholders in decision-making figure prominently. resource commitments and probability of failure. a more plausible explanation for the consistent subjugation of political action to other change goals across organizations, as well as the tendency to pursue this goal jointly rather than independently, could have to do with the nature of the task of effecting political change. on the one hand, among change goals, political action lends itself to outcome measurement better than most. for any given time period, an organization can measure whether or not legislation was enacted and the quality of that legislation relative to what the organization wanted. however, successful passage of legislation can often take a large scale effort�larger than what any sev can muster alone. it can also take years to realize success even under the best of circumstances. so the best an organization can hope to achieve in pursuit of a goal such as this is a long, drawn out effort toward an outcome that may or may not ever materialize for which the organization will never be able to take full credit. therefore, it is not the type of goal that would lend itself well to stakeholder engagement. prudent goals, reach goals, and out-of-reach goals. while transparency and goal achievement may be critical for maintenance of stakeholder engagement (smith and woods, 2015), the actual process of setting goals, measuring progress towards achievement of goals, and reporting that progress can be fraught with difficulty for any organization (micheli and manzoni, 2010). while managers at sev�s may dearly want to engage stakeholders by clarifying organizational goals and demonstrating progress towards them, they can find that some of the goals they see as central to the organizational mission defy measurement (townley, cooper, and oakes, 2003). figure 4 suggests that certain goals may be considered prudent goals. these are goals that the organization can reasonably expect to achieve within a relatively short time frame with the resources available to them. in addition, they are goals that are shared by the organization�s primary stakeholders (clarkson, 1995) thereby minimizing the risk of stakeholder alienation by pursuing or achieving these goals. american journal of management vol. 17(2) 2017 31 while it could be argued that the pursuit of goals that are not prudent is an irresponsible use of stakeholder resources, it is important to remember that sev�s exist to pursue a dual mission (diochon and anderson 2011). social entrepreneurs must balance a desire to remediate social ills with a requirement for fiscal soundness (short, moss, and lumpkin 2009). in fact, it can be argued that sev�s come into existence for the specific purpose of remediating social ills where both markets and governments have failed (santos, 2012). therefore, it seems reasonable that a sev will set both prudent goals and reach goals where reach goals are those that may alienate some stakeholders, take a long time to achieve, consume significantly more resources than they produce, and/or have a fairly high probability of incurring multiple failures on the way to hoped-for success. in fact, while any number of social enterprises might limit their goals to those that are considered here to be prudent, it would be difficult to consider an organization a sev unless there were some effort under way to bring about long-term social change (mair and noboa, 2006). by their nature, these goals would largely fall in the reach category shown in figure 1. figure 1 also constrains the zone of reach goals due to the realities of operating a sev. in order to maintain stakeholder engagement, sev�s must balance both social and economic logics (dacin, dacin, and matear 2010). as such, they must remain within the range of believability for major stakeholders by not overreaching. identifying goals. it is important to remember that an organization�s mission both shapes its identity and communicates that identity to stakeholders. in so doing, it helps to focus on why the firm exists (rajasekar, 2013). it is equally important to remember that without at least some long-term change aspect to its organizational mission, it would be difficult to classify an organization as a sev (epstein and mcfarlan, 2011; kirk and beth nolan, 2010). furthermore, it would be difficult for the sev to justify its own existence (moore, 2000). this may help to explain why, with the exception of political action goals, organizations in this study universally classified long-term change goals as mission critical. the importance of long-term change goals may be even more salient for organizational insiders than for external stakeholders. in a separate analysis of mission statements, we coded published mission statements as being (1) focused primarily on long-term change, (2) focused primarily on service delivery, or (3) exhibiting balanced emphasis on long-term change and service delivery. we also coded insider 32 american journal of management vol. 17(2) 2017 reports about organizational missions in the same way. in the analysis of published mission statements, we found three of the eight organizations in the study to be focused on long-term change. however, based on insider interpretations of mission statements, three additional organizations (six in total) appeared to emphasize long-term change over service-delivery (lane and casile, 2016). it wasn�t that the organizational insiders didn�t know what the mission was. in many cases, they could recite it word for word. in all cases, they could accurately paraphrase it. however, insiders seemed to focus more intently on the change aspects of the mission. for the reasons discussed above, we propose that a majority of long-term change goals in sev�s, in addition to being reach goals, are also the goals by which these organizations tend to identify themselves. it is true, of course, that many sev�s in our study identified more prudent service delivery goals as mission critical as well. however, revisiting figure 2, these do not appear to be the activities that set animal rescues that are sev�s apart from the many animal rescues that deliver similar services without pursuing a long-term change mission. we argue, therefore that, as shown in figure 5, it is the long-term change goals that sev�s identify as mission critical that define the identity of the sev. although we do not mean to imply a 100% overlap between reach goals and identifying goals, we cite the considerable overlap in this study and the preceding arguments in substituting the term �identifying goals� in the place of �reach goals� in figure 5. in this context, it is perhaps not surprising that organizations would downplay a goal, such as political action, that, by its nature, demands to be shared among organizations rather than claimed by any. as previously mentioned, one organization in this study had a goal of serving as the focal point for other local groups to work together in areas of common interest for maximum effect. it is noteworthy that this is the only organization in the study that listed political action as a mission critical goal and the only one that attempted to use outcome measures for this goal (as opposed to measures of behaviors or skills). this may indicate that ability of organizational insiders to identify uniquely with a political action effort influences the importance given to this effort relative to other organizational goals. it may even change efforts to measure progress toward the goal. cooperative goals. figure 5 also shows a third tier of goals which we call cooperative goals. we conceptualize these as long-term change goals for which the risks of failure are so high, the resource american journal of management vol. 17(2) 2017 33 commitments so great, the time frame for eventual success so long, and possibly the agreement among stakeholders weak enough that these goals would not be in reach for the organization to pursue unilaterally. nonetheless, they are goals that are important for organizational insiders and may also be necessary to engage some external stakeholders. as a general rule, insiders do not see these goals as identifying the organization or defining its mission. this may be because reliable measurement would be impossible and possibly not even desirable. or it may be because there is a general understanding that these goals may one day need to be abandoned�preferably without bringing about the end of the organization or a crisis of identity. nonetheless, it is noteworthy that the most cooperatively pursued goal in this study, political action, was the single most cited goal of any type in the study (7 out of 8 informants) even though it qualified as mission critical, and therefore an identifying goal, for only one. theoretical and empirical support for organizational collaborations in general, and in social entrepreneurship in particular, are fairly well established. inter-organizational collaboration is sometimes thought of as cooperation between organizations with different missions and different resources in order to attack a problem from different angles (henry, 2015; gray, 1989). such collaborations can bring about new resource constellations and synergies that enable innovative new solutions to entrenched problems (austin, 2000; austin et al 2004; prahalad, 2005; rangan et al, 2007). how often this actually happens is a matter that is open to debate (choi, 2015; turner and martin, 2005; huxham and vangen, 2004; 2009). in any case, the type of collaboration we are positing here is the broader understanding of the term as different organizations working together in pursuit of mutual goals (guo and acar, 2005; das and teng, 2000). while not all of these relationships can be relied upon to create synergy and innovation, they do allow organizations to share costs and risks (eisenhardt and schoolhoven, 1996; ring and van de ven 1992); and to pool resources to achieve economies of scale (contractor and lorange 1998; mohr and spekman, 1994). they can also enhance the legitimacy of the effort being jointly undertaken (baum and oliver 1991). collaboration is a common choice among sev�s seeking to maximize their impact in a world of often shrinking resources (di domenico, tracey, and haugh, 2009). research into these collaborations often focuses on more formalized arrangements such as social innovation communities (toivenen, 2016) and formal partnerships (henry, 2015). similar to their counterparts among for-profit organizations, these arrangements can serve as incubators for start-ups (toivonen, 2016) as well as leverage limited resources (teng, 2007) to pursue goals that might otherwise be out of reach (kourula and laasonen, 2010; galaskiewicz, bielefeld, and dowell, 2006; guo and acar, 2005). while certainly, these arrangements are used to achieve short-term service-delivery goals (choi, 2015; henry, 2015; austin, 2000), there is also some evidence that they are utilized to pursue long-term change goals. these include collaboration for taking political action (austin, stevenson, and wei-skillern, 2006; austin and harmeling, 1999). although none of the organizations in this study had formed a formal social innovation community (toivonen, 2016) all but one subscribed to a common set of guidelines and reporting principles called the asilomar accords (http://www.asilomaraccords.org/read.html). in addition, all reported varying degrees of short-term cooperation with other animal welfare agencies. examples include occasional sharing of information and resources and arranging transports of adoptable animals from low spay/neuter regions to high spay/neuter regions. as previously stated, formal long-term cooperative arrangements were rare among study subjects. notable exceptions were collaborations for taking political action and, in one case, the building of a joint center housing six different organizations with missions deemed to be complementary. the following four propositions stem from the foregoing discussion about the influence of identity, control, cost, and risk on internal determination of goal criticality for long-term change goals: proposition 1: sev�s will tend to emphasize and regard as mission critical those change goals that they see as defining the organization and showcasing its uniqueness. proposition 2: sev�s will avoid identifying a change goal as mission critical if the successful pursuit of that goal depends on factors that lie largely outside of the organization�s direct control. 34 american journal of management vol. 17(2) 2017 proposition 3: sev�s will pool resources with other organizations in order to pursue change goals that are important but that are beyond the means of the organization to effect change on its own. proposition 4: sev�s will pool resources with other organizations in order to share the legitimacy risk of pursuing change goals that are important but for which success is uncertain. the role of volunteers in expanding goal horizons up to this point, we have considered the role that inter-organizational cooperation might play in allowing sev�s to pursue goals that involve higher levels of risk and resource expenditures than their organizations can prudently manage. in this section we argue that recruitment and utilization of volunteers is another mechanism by which sev�s pursue goals that would otherwise be out of reach. unlike cooperation, however, reliance on volunteers does not preclude a high level of organizational identification with the goal. seven of the eight organizations in this study relied heavily upon volunteers. informants made statements such as, �we couldn�t do what we do without our volunteers.� one informant had informally estimated that the organization�s 600 volunteers fulfilled the duties of 19 full-time paid positions. these reports are consistent with the findings of a larger survey where hager and brudney (2015) found that 97% of 2,065 respondents reported that volunteers help to improve the quality of the services they offered to at least a moderate extent. two thirds reported that they did so to a great extent. similarly, these respondents reported that volunteers helped to bring down costs moderately (93%) or to a great extent (67%). the one organization in this study that did not report significant reliance on volunteers limited its activities to spaying and neutering. this rendered them unable to utilize volunteers without significant medical qualifications. hager and brudney (2015) also found that about two thirds of organizations reported difficulty recruiting enough volunteers with approximately one fourth reporting that this was a serious problem. informants in this study of animal rescue sev�s suggested that an organizational environment that volunteers found unwelcoming or uninspiring could be a sign of poor management or poor community relations. unfortunately, the scope of this study did not extend to interviewing volunteers or exploring volunteer programs in depth. one informant did mention that one approach her organization took to engaging volunteers was to offer a wide variety of interesting volunteer opportunities. the number of volunteer opportunities available could be gleaned from each organization�s web site. as figure 6 demonstrates, there was a fairly wide disparity with the number of opportunities ranging from 2 to 17. american journal of management vol. 17(2) 2017 35 clearly the analysis in figure 6 is very rough. the number of volunteer opportunities offered is only one of many indicators of how much an organization values its volunteers. it is a convenience measure to be sure. in addition, since the sample itself was geared toward progressive organizations, it is not surprising that five of the seven organizations that used volunteers clustered in this group while only two reported missions that emphasized service delivery (1) or were evenly balanced between service delivery and change (1). nonetheless, it is noteworthy that there are no overlaps between the two groups. the two organizations with the least focus on long-term change are also the two that offer the narrowest variety of volunteer opportunities. certainly, with a sample of seven, this finding could be artifactual. it could also be a reflection of the fact that there is more to do at an organization that is trying to change the world rather than simply carry out day-to-day activities. it is noteworthy, however, that when asked what volunteers do, informants in both groups reported that the favored activity by the vast majority of volunteers was spending time with the animals�walking, socializing, and providing care. these are all service delivery tasks. so, there remains a question of whether organizations with a strong change mission would value volunteers more than less change-focused organizations; and if so, why. obviously, having volunteers to do work that would otherwise be paid work frees up resources for change-focused organizations to invest in the pursuit of change goals. so, in that regard they enable the change mission even if they are not working toward it. however, there may be an additional benefit of volunteer engagement which is particularly desirable for the change-focused organization. hager and brudney (2015) found that two thirds of organizations in their survey believed that volunteer engagement improved public support for their programs or improved community relations to a great extent. nearly all believed they did so at least moderately. comments by informants in this study tend to reinforce those findings. one informant implied that the relationship might even be bi-directional in the sense that engaged volunteers were a sign of strong community support. referring back to figure 1, it seems that community outreach and community education are particularly important to organizations in this study with three of the top five change goals dealing with public education. comments by informants indicate that some volunteers work directly toward change goals by conducting school visits and public tours of the facility; and in one case even making movies for the organization. however, volunteers also have ready access to virtually all organizational reporting 36 american journal of management vol. 17(2) 2017 about goals, activities, and results. some even have dedicated volunteer newsletters to keep them abreast of the organization�s efforts, including change efforts. this means that even volunteers who prefer to work exclusively in service delivery areas are exposed to the organization�s change mission. one informant who was her organizations� volunteer coordinator remarked that they were always teaching in everything that they did from adoptions to volunteer training. she also expressed the belief that welltrained volunteers would carry the organization�s message to their homes and their communities with them. based on the formal and informal community outreach that volunteers can provide to a sev, and in particular for the change mission of a sev, figure 7 suggests that an engaged volunteer pool that is welltrained and well managed can extend the reach horizon for a change-focused sev, not only by expanding and freeing up resources, but also by increasing the likelihood for success of change efforts. proposition 5 is based on the belief that volunteers provide multi-faceted utility to change-focused sev�s in particular and that, therefore, these organizations will exert exceptional effort to attract, engage, and retain a strong and satisfied volunteer pool. proposition 5: sev�s with missions that focus on long term change will seek to attract and engage volunteers as informal liaisons with important stakeholder groups. the interplay between volunteerism and collaboration. this paper has argued that volunteers and inter-organizational collaborations accomplish the same objective�that is�to expand a sev�s capabilities beyond what it could do without these associations. in the case of volunteerism, we argue that this extra reach does not require that the organization give up any of its organizational identity as it might need to in a cooperative effort. for that reason, volunteer help might seem preferable to collaborations. it is noteworthy, however, that the norm for organizations in this study was to utilize both volunteerism and collaborations to extend their capabilities to pursue challenging goals. smith, meyskens, and wilson (2014) offer an interesting perspective on sev persistence in social venture strategic alliances based on identity theory. they argue that, although the theory itself was developed at the individual level of analysis (ashforth and mael 1989), it has been applied with some success at other levels of analysis (kistruck, beamish, et al. 2013; livengood and reger 2010). they american journal of management vol. 17(2) 2017 37 argue specifically that, in addition to a sense of organizational identity, a sev can develop a separate, but not completely distinct, relational identity based on strategic alliances with organizational partners. this approach has already been applied to the study of social venture alliances (kistruck, sutter, et al. 2013; dacin, dacin, and tracey 2011; battilana and dorado 2010). to be fair, the alliances studied thus far have tended to be between two or more organizations with different but overlapping missions (a sociallyminded for-profit organization and a not-for-profit sev). the organizations of this study were all notfor-profit sev�s with considerably more mission overlap and, due to their similarities, less task interdependence. nonetheless, smith, meyskens, and wilson�s (2014) model is consistent with the formation, and probably the persistence, of the types of collaboration for political action noted in this study. the success factors that they cite, most notably, identity congruence of the organizations involved, and the ability to improve or at least protect reputation, would indicate that these associations would have value for the sev�s involved. relational identity notwithstanding, the ubiquity of both volunteerism and alliance behavior in sev�s would indicate that the two mechanisms are not substitutes for one another. figure 8 and proposition 6 suggest that both play a role in extending organizational reach. proposition 6: sev�s with missions in which long term change is more prominent than immediate action will utilize both volunteers and inter-organizational collaboration to pursue change goals that would otherwise be beyond their capabilities. implications as both the study and practice of social entrepreneurship mature, there will be continuing interest in the behaviors of social entrepreneurs that improve the prospects for the long-term success of these ventures. measures of success that would serve for any entrepreneurship venture, such as survival, profitability (or sound fiscal footing), and growth, are also appropriate measures of success for sev�s. however, for the sev, these measures fall well short of providing a complete picture. for both practitioners and those who seek to understand social entrepreneurship, it is becoming increasingly important to identify the processes and tools by which successful social entrepreneurs navigate the complex resource and institutional environments in which they operate. this research seeks to contribute 38 american journal of management vol. 17(2) 2017 to that understanding by examining sev�s that have moved beyond questions of survival to become wellestablished in their service areas. the propositions offered based on this study are intended to suggest fruitful areas of exploration into how successful sev�s move beyond survival and service goals to pursue the world-changing goals that inspired their creation and, if they are truly successful, continue to define them. limitations and further research the observations above are based on a small number of organizations in a single type of social endeavor. however, they offer a glimpse into how savvy social entrepreneurs may manage to keep sev�s alive and relevant even in the face of competing demands from stakeholders, limited resources, and objectives with long and uncertain time frames. if social entrepreneurship is to be brought to bear to address a growing array of social challenges�including some of the more intractable social challenges, then it will be useful for practitioners and researchers alike to understand the strategies that bring about long term success when short term success is not an option. from a research point of view, the obvious next step would be to test the propositions posited 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(2010). from individual to institution: on making the world different. journal of business ethics, 94, 9-12. 42 american journal of management vol. 17(2) 2017 biographical information maureen casile, ph.d. assistant professor of management, penn state dubois ph.d. in organization science from the university of texas at austin m.b.a. in finance from the wharton school. b.s. in business from the university of florida, gainesville, fl. maureen_casile@yahoo.com phone: 814-661-9225 dr. casile�s research interests include social entrepreneurship, privatization, strategy, and diversity�in particular, gender diversity and accommodation for persons of low emotional intelligence. dr. casile has taught a variety of management courses at the graduate and undergraduate level. she is also active in the math options program which helps to nurture an interest in stem careers in middle-school girls. michelle d. lane associate professor of management, humboldt state university in arcata california. ph.d. from the university of south carolina master�s degrees from the university of texas and indiana university. dr. lane has a great teaching record in her use of experiential learning and critical thinking. she also has numerous publications in operations management, entrepreneurship, and social entrepreneurship. these include the development of a measurement instrument of individual entrepreneurial orientation and a framework for categorizing social entrepreneurial orientation. she also serves on the board of the sequoia humane society. ajm 17(3) web_master.pdf american journal of management vol. 17(3) 2017 29 the humanization of corporations joan p. mileski maritime administration and marine sciences texas a&m university � galveston carter l. franklin college of technology university of houston corporations have been extensively studied from a variety of theoretical perspectives. the evolution of these perspective has been in the direction of a reification of organizations. corporations are now expected to be all things to all constituencies including adopting the norms of the society in which they reside. constituency management is a significant contributing factor to the complexity of corporations. this paper reviews the various competing perspectives on corporate complexity, and looks at the gaps in how constituencies are addressed. we propose a model which combines the various perspectives emphasizing the human corporation with all the several aspects of complexity. introduction organizational complexity has long been a critical construct in the literature on organizational theory. �organizational complexity is defined as the amount of differentiation that exists within different elements constituting the organization� (dooley, 2002). this definition arises from the two basic characteristics of organization: division of labor and scarce resources. complexity is operationalized in a number of different variables including the number of professions in the organization (dooley, 2002), the amount of innovation the organization has (damanpour, 1996), the various systems within the organization (tsoukas and hatch, 2001), and the number of alliances and linkages in which the organization is engaged (killing, 1988). these variables can indicate the various constituencies of the organization. corporations have been considered as complex human organizations. some perspectives purport that corporations should not be complex but of single purpose (friedman, 1963). however, most organizational research addresses multiple goals, purposes and constituencies. theorists generally have avoided reifying corporations, contending that corporations are not human and cannot exhibit human emotion or other behaviors (simon, 1964). however, they also note that using concepts from human behavior are important to understanding how corporations/organizations work (simon, 1964). organizational behavior research suggests that the more people a manager oversees the more complex the manager�s job (hellriegel and slocum, 2010). here complexity is closely tied to dependency 30 american journal of management vol. 17(3) 2017 (pfeffer, 1976). kotter(1979) suggests multiple dimensions of dependency, including organization size, environmental uncertainty, and resource scarcity. as a manager�s responsibilities increasingly acknowledge external constituencies, both dependency and complexity increase commensurately. therefore, the more constituencies a corporation has and must address the more complex the organization becomes. this leads to, and supports, the contention that organizations, like humans, can be described by the concepts of human behaviors as they deal with the complexity of managing many constituents. we review four perspectives of corporate complexity using concepts from human behavior. we evaluate the gaps in how constituencies are addressed. further, we evaluate how to understand these gaps in light of corporations function based upon complexity and multiple goals, aspirations and purposes. we propose a human model of corporate complexity which addresses how corporations can reduce uncertainty and improve productivity while fully managing the needs of all constituencies. the various perspectives we review four perspective on corporate complexity in this section. the focus of the evaluation of these perspectives will be the mechanics of the interaction of the organization with its various constituencies. further, we will look at the use of concepts of human behavior in understanding the interactions. perspective one: corporation are not complex in this perspective the corporation has a singular and simple purpose: maximize shareholder wealth. in technical terms, this may be concisely stated to as maximize the expected monetary value to shareholders (equals net present value of the return on investment measures as dividends and appreciation). nobel laureate economist milton friedman (1963) makes a clear and forceful case for this single purpose. under this perspective, the premise is that complexity is associated with multiple goals, aspirations and processes. with a singular goal and aspiration of maximization of shareholder wealth, organizational forms should be simple. further, there is only one constituency to address and that is the shareholder. under this perspective to address other constituencies is, friedman argues, (a) unfair, because it constitutes taxation without representation; (b) undemocratic, because it can invests �governmental� power in a person who has no general mandate to govern; (c) unwise, because there are no checks and balances in the broad range of potential governmental power there-by turned over to his discretion; (d) a violation of trust, because the executive is employed by the owners "as an agent serving the interests of his principal"; (e) futile, both because the executive is unlikely to be able to anticipate the social consequences of his actions and because, as he imposes costs on his stockholders, customers, or employees, he is likely to lose their support and thereby lose his power (mulligan, 1986). this perspective, therefore, presumes that managers only interact with stockholders and only stockholders receive consideration in the decision making processes of the corporation. again, this presumption means the corporation is not complex. however, managers do, in fact, interact with numerous stakeholders (shareholders, consumers, employees, suppliers, and the community) and all clamoring for the attention of the managers of the corporation. this is a complex system of interactions. stakeholder management is a process by which managers reconcile their own objectives with the claims and expectations being made on them by various stakeholder groups (carroll, 1991). using concepts from human behavior as the basis of understanding how the corporation works, the human element of reconciling a given managers� objectives with a given stakeholder�s objectives becomes the corporations task of stakeholder management. a highly complex set of activities results as the aggregate of the needs all stakeholder categories is considered against the corporation�s objectives and expectations. perspective two: shareholders participate in many corporations making their interactions more complex shareholders generally invest in a diversified portfolio of shares across many businesses and industries. they further invest in other assets categories to benefit their wealth position. this american journal of management vol. 17(3) 2017 31 diversification exercised by shareholders allows them to balance risks with various returns (markowitz, 1968). investment decisions that produce diversification to meet shareholder objectives can become quite complex for investors who do not have the expertise of full time financial managers. therefore, many investors hold ownership positions through financial intermediaries. these intermediaries assemble the diversified shares into portfolios that meet the needs of shareholder clients. this mix can better serve the wealth needs of the shareholders. corporate managers know that corporate performance in which they are entrusted must be attractive to many different shareholders in order to be included in their portfolios or recommended by financial intermediaries. addressing this return/risk trade-off and diversification requirement of shareholders makes the corporation more complex. managers understanding various types of investors also makes their job and the corporation more complex. to reduce complexity, managers strive to classify shareholders by type according to their risk/return preferences. a variety of investment alternatives, presenting a range of risk/return alternatives is essential to the construction of portfolios to meet a diverse set of investor needs. shareholders welcome, even demand, alternatives with varying levels of risk and return to meet their investment goals in a portfolio. at the same time, however, investors also prefer stability and predictable returns so that the composition of portfolios can remain reasonably stable over time. this is because economic activity is driven by human psychology (akerlof and shiller, 2010). further, social stability is preferred in human activity (tajfel, 1981). unpredictability in returns also makes corporate investing more complex. therefore, corporations seek to invest in business activities that promise stable returns thus reducing complexity and increasing attractiveness to investors. perspective three: many external forces act upon the corporation producing complexity in business operations. this perspective addresses external forces that add to the complexity of a corporation. corporations are perceived as citizens of the society in which they reside (donaldson, 1991). as such, there is an expectation by the members of the society that all citizens have obligations to the society, i.e., a social responsibility (donaldson, 1991). to address these responsibilities and obligations of a corporation, the needs of stakeholders who hold these expectations must be constructively addressed. their objectives may include general social responsibility (corporate social responsibility), environmental concerns, use of common resources, and obligations to consumers and employees. each of these stakeholder groups may pursue multiple goals (some of which may conflict), making the corporations obligations very complex. further, the corporation�s activities in the marketplace also add to complexity. corporations compete for business on multiple dimensions, some of which are defined by customers, others defined by competitive actions, and still others defined by industry norms and standards. these are stakeholder concerns, broadly defined, but there is also the degree to which a corporation seeks to differentiate itself from competitors by actively (and publically) seeking to adhere to a different and potentially higher standard than its competitors. in this fashion, a corporation may impose on itself a degree of complexity greater than that found in other firms in the industry. treating a corporation in a fashion similar to an individual citizen is a well-established theoretical concept in organizational behavior (hellriegel and slocum, 2010). individual citizens must manage expectation from various external forces. like individuals, corporate managers must manage the conflicting goals and expectations of these various stakeholders (mileski et al, 2015). this conflict management can become a primary task of the corporation, diverting resources from other relevant tasks. buffering internal functions from outside stakeholders and decoupling internal managers from those who handle external constituencies are tactics that help corporations reduce complexity and maintain efficiency in operations (pfeffer, 1976). there is the further consideration that many managers see �their� corporation as an extension of their personal identity. it is generally true that most managers see their organization as manifesting their own sense of self-worth and seek to guide or influence corporate actions to achieve goals they personally value 32 american journal of management vol. 17(3) 2017 (baard et al, 2004). managers acknowledge that their own and their corporation�s reputations are intertwined (worcester, 2009). perspective four: corporations internally are made up many individuals pursuing multiple goals which create internal complexity. this perspective is best described by scott and davis (2007) as the natural perspective. employees of a corporation are members of many organizations which pursue a variety of goals and objectives. in their daily lives, these employees pursue multiple objectives, some of which come into conflict with the goals of the corporation. these multiple objectives can be seen to create an internal force that adds complexity to the corporation. further, individual managers� personal values influence decisions in virtually every situation where discretion may be exercised (hemingway and maclagan, 2004). corporations try to maximize return on the investment of their shareholders while the employees may be pursuing multiple objectives and goals. many of these actions may be inconsistent with maximizing return. illustration of these actions include special benefits for managers such as corporate aircraft and large expense accounts. human behavior theories can help to explain other corporate behaviors which would generally be considered individual activities or human-like characteristics. these would include memberships in industry or other groups and lobbying and other political activities. again these multiple purposes and objectives from these internal forces add to the complexity of the corporation. these multiple objectives goals represent multiple constituencies as well. employees may be focused on the standards and behaviors expected of their profession. this may present conflict with organizational goals. an example of this may be illustrated by a hospital corporation determined to reduce hospital stays of patients for cost purposes and doctors and nurses who focus on the care need for patients which may increase hospital stays. in summary, these four perspectives show that corporate complexity is impacted by multiple purposes and objectives, shareholder complexity and behavior, external constituencies and internal forces on the members of the corporation. they further suggest that human-like behaviors and characteristics can be used to explain complexity. the model we have developed a model that elaborated the work begun by tuzzolino and armandi (1981) in the area of corporate social responsibility to describing corporate complexity and human-like behavior by corporations. in their paper tuzzolino and armandi (1981) apply the maslow (1943) human needs model (the maslow need hierarchy) to the corporation and its adaptation to corporate social responsibility. we assert that complexity and constituency management can be better understood through the application of the maslow (1943) human needs model as well. we will agree with some aspects of the tuzzolino and armandi (1981) application. however, our focus on constituency management addresses the uncertainties created by complexity. to review this well-known and widely accepted theory, maslow (1943) creates five broad categories of human needs that drive behaviors. as we apply these categories to the behaviors demonstrated by the corporation with regard to complexity and various constituency interaction, we can explain potentially puzzling behaviors in the context of the model and, we can describe strategies for reducing uncertainty through constituency management. these strategies can then help corporations address complexity to enhance efficiency and meet their various goals and objectives. maslow�s needs move from basic to more complex. we contend as a corporation evolves, grows and learns this would also be true. the first two categories address the physical needs of humans. the third and fourth categories examine social needs. and the final and fifth category addresses the needs of self. alderfer�s (1969) erg theory collapses maslow�s five categories into three (existence, relatedness, and growth). for our purposes, the finer discrimination of the maslow categories is superior. the first maslow category addresses physiological needs and encompasses the fundamentals of survival or existence. tuzzolino and armandi (1981) note this means a corporation should be profitable. american journal of management vol. 17(3) 2017 33 we contend the elemental need is in fact, cash flow and that it is cash flow that determines existence. for example amazon.com did not make money for many years but generated investment funds which guaranteed its existence. therefore at the level of the basic survival a corporation needs cash, not profitability. operational complexity at this level may be quite low; however, shareholders and investors must be carefully managed in order to obtain and continue to obtain sufficient cash. the second need category addresses the safety of the individual. for the corporation we contend that safety means sufficient profitability to pay all expenses and produce adequate returns to investors. further, a demonstrated record of profitability is necessary to achieve growth. at this level complexity grows as more interaction is required with investors. the third need category is affiliation and for an individual, means belonging. the individual belongs to a family group, a tribe, an affinity group, or one or more of several other types of groups. for a corporation, we agree with tuzzolino and armandi (1981) that affiliation would be with the industry of the corporation. in the most elementary sense, industry groups are described by the naics (north american industry classification system). instrumentally, this would mean the corporation would join a trade association, adopt industry product standards, report operating statistics to industry publications, support lobbying efforts on behalf of the industry, and a variety of other, related activities. at this level complexity continues to increase as new constituencies emerge. further, these new constituencies are outside the realm of investors and shareholders which increases complexity not only due to the increase in the number of constituents but also to their differing goals and objectives. these new constituents can provide benefits with this increased complexity such as quality standards, lobbying services, context for competition and an example for expected citizen behavior, the fourth category of esteem for an individual typically means the person is regarded as a leader. certainly the individual is held in high regard among his or her peers. for the corporation, we again agree with tuzzolino and armandi (1981) that a significant market position or industry leadership is the hallmark of this category. additionally, leadership entails recognition of your brand as superior by customer and your customer�s industries. to achieve leadership, the corporation�s activities become more diverse and more complex. recognized market leaders certainly have significant market share and good profitability. additionally they are recognized as innovative, have the benefit of loyal customers, have broad market coverage, develop and adopt new technologies, have an excellent image and reputation in the market, and typically provide outstanding levels of service and quality. for example, in the shipping industry, maersk is considered the industry leader. they participate as a leader in the industry associations as well as increasing customer and production activities. other activities to promote leadership or corporate esteem include customer service, speed of delivery and quality. as a corporation seeks to achieve industry leadership, the variety and complexity of necessary activities increases markedly. this is, of course, because the nature of industry leadership is far more diverse and complex than cash flow, profitability, or industry identification. to the foregoing list of characteristics of industry leaders we add social responsibility or csr (for corporate social responsibility) as it is commonly known (carroll, 1991, 1999). we adopt the broad definition that includes �responsiveness� as well as �responsibility� (frederick, 1994). there is a growing body of evidence that leadership behavior for a corporation demonstrates socially responsible and responsive behavior just as it does for an individual. see for example, (arikan, et. al., 2016), (arendt and brettel, 2010), (balbanis, et. al., 1998), (martin, et. al., 2010), (taghian, et. al., 2015). clearly, if this framing of leadership characteristics is adopted, complexity grows remarkably as a result of the necessity of addressing the concerns of all, or virtually all, stakeholders. in contrast to tuzzolino and armandi (1981), we place the �good citizen� requirements of social responsibility squarely in the leadership category. all corporations must strive to achieve a leadership position, and in so doing, must conform to the citizenship requirement. the fifth and final category of self-actualization means for individuals the realization or fulfillment of one's talents and potentialities, especially considered as a drive or need present in everyone (oxford, 1989). maslow (1943) expands on self-actualization in that 1. self actualizers have the following characteristics: a. efficient perceptions of reality. self-actualizers are able to judge situations correctly 34 american journal of management vol. 17(3) 2017 and honestly. they are very sensitive to the fake and dishonest, and are free to see reality 'as it is' b. comfortable acceptance of self, others and nature. self-actualizers accept their own human nature with all its flaws. the shortcomings of others and the contradictions of the human condition are accepted with humor and tolerance c. reliant on own experiences and judgment. independent, not reliant on culture and environment to form opinions and views. d. spontaneous and natural. true to oneself, rather than being how others want. e. task centering. most of maslow's subjects had a mission to fulfill in life or some task or problem �beyond� themselves (instead of outside of themselves) to pursue. humanitarians such as albert schweitzer are considered to have possessed this quality. f. autonomy. self-actualizers are free from reliance on external authorities or other people. they tend to be resourceful and independent. g. continued freshness of appreciation. the self-actualizer seems to constantly renew appreciation of life's basic goods. a sunset or a flower will be experienced as intensely time after time as it was at first. there is an "innocence of vision", like that of an artist or child. h. profound interpersonal relationships. the interpersonal relationships of self-actualizers are marked by deep loving bonds. i. comfort with solitude. despite their satisfying relationships with others, self-actualizing people value solitude and are comfortable being alone. j. non-hostile sense of humor. this refers to the ability to laugh at oneself. k. peak experiences. these occasions were marked by feelings of ecstasy, harmony, and deep meaning. self-actualizers reported feeling at one with the universe, stronger and calmer than ever before, filled with light, beauty, goodness, and so forth. l. socially compassionate. possessing humanity. m. few friends. few close intimate friends rather than many surface relationships (chapman, 2005). applying this self-actualization concept to corporate behavior, a self-actualized corporation focuses on changing and creating its environment to accomplish its goals and objectives rather than responding to the environment in which it currently sits. it defines new markets and market segments. further, it creates advantages properly leveraging these advantages to produce sustainable competitive advantage. selfactualized corporations take stock of their resources, competencies and capabilities relying on what they do well to achieve the goals of all their constituencies (barney, 1992). however, the corporation does resolve the conflict among stakeholder based on its own judgment and experience rather than following current fads. they are resourceful in solving problems and do not merely comply with regulations. as the definition for an individual suggests, the corporation goes �above and beyond� to achieve selfactualization. there are, perhaps, not so many avenues for self-actualization for a corporation as for an individual and, perhaps, not so many corporations have an opportunity to seek self-actualization. it is useful to consider what self-actualization might look like for a corporation. certainly, the reference is no longer the single market or the single industry. several possible paths to corporate self-actualization can be identified. there are, of course, certain parallels to self-actualization for an individual, but the differences may well outweigh the similarities. first, and perhaps obvious, is diversification. this includes vertical, horizontal and concentric diversification as well as unrelated diversification. second, would be through the creation of entirely new markets. this might involve the implementation of a �blue ocean� strategy (kim and mauborgne, 2004). apple has accomplished this with several products, toyota with the prius, and, some time ago, 3m corporation did it with the post-it note. a third path involves the corporation devoting extraordinary resources to basic research intended not only to produce new product opportunities but also to produce corollary benefits for society generally. finally, expanded social responsibility to address needs beyond corporate stakeholders represents a fourth possible path to self-actualization. the developed model and its contrast to the maslow hierarchy for individuals is presented in summary form as table 1 (see table 1). american journal of management vol. 17(3) 2017 35 table 1 comparing personal and corporate need hierarchies need personal corporate self-actualization accomplishment, realizing potential, "what a man can be, he must be." (maslow, 1954) acquisition/integration, industry definition, basic research to produce broad benefits, serving general needs esteem self-respect, respect of others industry leadership affiliation group membership, acceptance identification with industry safety personal security, health, financial security profitability physiological food, water, clothing, shelter cash flow applying the maslow (1943) human needs model to the corporation can help us understand the complexity and variety of constituencies management must address. as we stated, we agree with some aspects of the tuzzolino and armandi (1981) application. however, our focus on constituency management and overcoming the uncertainties created by complexity adds a richness to the application of human-like characteristics to the corporation. in the next section, we propose various strategies for the different levels. strategies for the need-hierarchy corporation framework the hierarchical model of corporate need fulfillment presented here can easily be employed to illustrate how complexity increases as the organization seeks higher and higher levels. as indicated, we employ the organization�s relations with its constituencies to demonstrate the increase in complexity. a cursory review of table 1 reveals that the number, and complexity of relations among, constituencies increases as higher and higher levels of the hierarchy are attained. strategies for constituency management and reduction of uncertainty from complexity would be thus be expected to vary by level. below we suggest potential strategy implementation for corporations that have achieved a given level. at level one of the hierarchy, physiological (cash flow), the corporation would be expected to actively engage with the initial investors. good communications on the timing of potential profitability would be important. further, maintaining a narrow focus on those activities associated with acquiring customers and developing business operations until cash flow is stable is prudent. constituencies are carefully selected for their potential in contributing to cash flow and supporting the development of profitability. at level two, profitability, the concern is for sufficient timing and adequacy of cash flow. investors and customers are the two principal constituency classes. significant attention must be paid to communicating reasonable projections of returns to investors. further, as new investors join with the growth of the corporation, inclusion of these new investors in decision making would be necessary for continued growth. more frequent interactions (meeting, letters, etc.) would also be prudent as growth in this constituent group brings diversity in objectives. at level three, affiliation, the corporation must now reach out to the rest of the industry. joining industry associations is expected as well as full participation in these organizations through recommendations of policy and standard practices. further, participation in political activities which benefit and impact the industry would also be an important strategy. in many, if not most, cases broad (public) ownership will be necessary to establishing a position of leadership in the industry. an ipo (initial public offering) must be undertaken. this involves a variety of activities, not the least of which are additional constituencies in the financial and investor community. for category four of leadership or esteem, the corporate focus is on the multiple aspects of market and industry leadership. broadly put, leadership would mean setting standards for all corporate activities through heavy stakeholder interaction. the inevitable conflict in stakeholder interests produce the need 36 american journal of management vol. 17(3) 2017 for a more complex organizational structure as well as a greater variety of more complex activities to rationalize these conflicts. the two basic characteristics of organization: division of labor and scarce resources, mentioned at the outset, are still very much in evidence, but the objectives pursued by the organization have become significantly more complex than those of the earlier stages. in the fifth, and ultimate, stage: self-actualization, the corporation effectively redefines itself, taking on a new identity, typically one that transcends the industry or market-based one that drives the (previous) leadership stage. as indicated above, this transformation may take one, or a variety, of forms. in some of these, stakeholder interaction will be participatory and involve multiple structures for resolving conflict and gaining consensus. strategic initiatives generally involve reviewing the objectives and goals of the society in which the corporation resides and typically demonstrate resourcefulness and good citizenship that can extend beyond the commonly recognized boundaries of corporate social responsibility. we have discussed the various strategic approaches that match the model of a corporation�s level of human-like behaviors. these strategies focus on constituency management and reduction of uncertainty due to complexity. the lens of maslow�s human behavior framework can help managers strategize for the appropriate corporate response to various complexities and constituencies at different levels. conclusion we have proposed a model of the corporation of the human �like behavior of the corporation. further, we have presented various strategies for constituency engagement applicable at the various categories in which the corporation resides. these strategies can reduce uncertainty due to the complexity of the corporation at the various levels. we anticipate that corporations evolve through the various levels and strive for growth to self actualization. however, understanding where the corporation currently resides in the evolutionary process can help managers apply appropriate strategies for constituency management and reduction in complexity. further research is 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(2009). reflections on corporate reputations. management decision, 47(4), 573-589. predicting external management risks in china-based family businesses: an exploratory analysis using the svm technique monika hudson university of san francisco hailan helen yang shandong jainzhu university family-owned companies face a challenge: once they evolve to a particular size, they frequently need to incorporate external management. this transition is tricky for all firms but particularly for family-owned businesses in china. in this paper, we identify adverse selection and moral hazard factors that may contribute to difficulties china-based family companies have in scaling, as part of an exploratory project to determine if the support vector machine (svm) technique can aid in predicting successful external management integration. preliminary results indicate svm may be highly accurate in estimating how successful external management involvement will be in the chinese setting. introduction despite the impression that they are mostly tiny establishments, family-owned businesses are actually the foundation of the world’s economy. thirty-five percent of fortune 500 companies are familycontrolled, and family-owned firms represent the full spectrum of u.s. companies from husband–wife partnerships to major multinational corporations such as bechtel (conway center for family business, 2012). in addition, family businesses generate 62% of regular u.s. employment, and ownership of these companies has been an essential element of intergenerational wealth creation (astrachan & shanker, 2003; faccio, lang, & young, 2001). in today’s china, most for-profit corporate structures are also family-based. family businesses make up more than 80% of china’s 3,000,000 privately-owned firms (national bureau of statistics of china, 1996–2003 as cited in ralston, terpstra-tong, terpstra, wang, and egri, 2006). however, their economic success tends to be fairly short-lived (whyte, 1996). data released by the ministry of commerce in china in 2013 reveals some troubling trends: while 150,000 new family firms are created in china each year, this number is offset by the more than 100,000 family-owned businesses that annually fail. the statistics are even worse relative to intergenerational succession: 60% of china-based, family-owned firms declare bankruptcy within five years of being established and over 85% declare bankruptcy within ten years of creation (wang, 2009). most china-based family businesses are considered fortunate if they function for even 2.9 years (wang, 2009). so, chinese family firms appear to be limited in scale. these facts naturally lead to some general questions. what are some of the factors that make it difficult for china’s family businesses to survive and flourish? are there tools that can assist these business owners in identifying some of the continuity risks 48 american journal of management vol. 16(3) 2016 they face? addressing these contextual questions extends knowledge about family businesses in settings qualitatively different from modal patterns in the west. the foundations of systems theory indicate that family businesses are comprised of three overlapping and interdependent subsystems: the family system, the ownership system, and the business system, which interact to create particular firm dynamics (poza, 2009). all three of these major subsystems of family businesses transition through well-documented life-cycles (gersick, 1997). each evolutionary stage of development comes with its own set of challenges, but a key stumbling block appears to be what has been referenced as the “professionalization” phase (katz & green, 2009) of the family firm. the issue of management professionalization may be a particular hindrance to the growth of family businesses in china as in other transitional economies (herrero, 2011). for example, china-based family businesses do not appear to appoint, reward, discipline, or fire family members employed in the firm according to these individuals’ qualifications or performance; rather, individual treatment appears to be consistently skewed by the obligations attached to being a member of the “family” (dyer, 1989). such practices conflict with those employed by professional managers and the resulting dissonance may deepen pre-existing distrust of non-family members. networking influenced by the traditional chinese cultural practice of familism may further contribute to this phenomenon (fukuyama, 1995; redding, 1990; weidenbaum & hughes, 1996). familism in china, as in other collective societies (hofstede, 1984), may be one of the impediments to the further growth or even survival of these firms (gersick, 1997; hoy & pu, 2012; poza, 2009). chinese family business patterns, with their personalized style of management, are categorized as passive economic organizational forms that are under-capitalized in a world under increased pressure from intensive market competition, institutional change, and cultural evolution (lan & zhangliu, 2012; marion & uhl-bien, 2002). these factors appear to be pushing china-based family firms toward increased external management (m.-j. chen, 2001; williamson & zeng, 2007). as has been found worldwide, chinese businesses will, out of necessity, be the subject of forces that may compel them to transition from a traditional, family-related governance structure to one that involves professional, non-family member managers to further develop and continue the firm. trials and failures related to non-family management abound in the chinese family business community; this makes the transition toward the inclusion of external managers both painful and problematic (lan & zhangliu, 2012; j. j. zhang, 2005). the challenges related to changing family firm governance can frequently be traced to differences between the interests and values of the family and those of non-family professional managers. external managers pose more risks to the firm and the owneremployers if these managers are seen as promoting their personal interests at the expense of the family owners (shleifer & vishny, 1997). concurrently, many family firm leaders underestimate how complex the transition may be between having a totally family-based form of governance to one that combines family and non-family members (marion & uhl-bien, 2002). thus, family businesses in china face a dilemma: on the one hand, these types of firms may realize that they need to replace their relation-oriented traditions with formalized, standardized, and scientific management (ahlstrom, young, chan, & bruton, 2004; low, 2002; tsui-auch, 2004; yeung, 2006; yeung & olds, 1999; young, ahlstrom, & bruton, 2004; j. j. zhang, 2005) and thereby enhance the knowledge capital of the company (poza, 2009). on the other hand, the absence of kinship ties through blood, marriage, or adoption between professional managers and family owners are grounds for an inherent distrust of the external manager and conscious or unconscious sabotage of a necessary relationship (chu, 2000). given these two extremes, chinese family businesses have tended to avoid bringing in external managers. predicting the risks associated with changing chinese family firm governance patterns would assist these owners in deciding how to leverage external management to enhance company performance. proper, efficient, and effective risk evaluation tools are necessary if china-based family businesses are to navigate these changes successfully. prediction of professional management risk has received considerable interest from researchers in the fields of finance, business, and engineering. however, most american journal of management vol. 16(3) 2016 49 of the existing studies in this arena have been challenged as subjective and lacking statistical evidence and empirical proof (beer et al., 2004; dorfman, 2007; j. q. zhang, 2002). accurate risk prediction is often hindered by the complex relationships between predictor and target variables and the absence of theory to guide model identification. various mathematical methods, such as fuzzy analytical hierarchy process, artificial neural networks (ann), fuzzy comprehensive evaluation methods, and expert evaluation methods have gained attention from various researchers working in the human resource risk management domain (danenas & garsva, 2010; kim & ahn, 2012; yu, yao, wang, & lai, 2011; y. l. zhang & yang, 2002b). researchers are finding that these techniques are well suited for developing accurate risk scoring systems, and they perform competitively when compared to other classification techniques such as logistic regression, multiple discriminate analysis (mda), and decision trees. over the last 15 years, the support vector machine (svm) technique has emerged as one of the most widely researched and applied approaches in this field. svm is a relatively new and promising classification and regression technique; it offers several advantages including the absence of local minima and relatively simple architecture (danenas & garsva, 2010; kim & ahn, 2012; yu et al., 2011). svm requires few prior assumptions about the data; it classifies arbitrarily complex case ensembles by identifying special data points (the support vectors) from the set of input data describing the boundaries between the cases. in the case of unknown nonlinear data dependencies, powerful decision rules can be obtained by numerical optimization procedures. an optimized svm issues a decision rule that can be used to forecast (classify) new incoming data. given the emerging use of svm for prediction and classification in other settings, we felt this technique might offer an effective tool for predicting the risks associated with introducing professionalized management into chinese family businesses. this paper is organized as follows. first, from a theoretical perspective, we identify two major risks associated with integrating external managers in china-based family firms. second, from an application perspective, we create a risk prediction model, using svm, that can assist family business owners in identifying specific obstacles associated with changing governance and thus pave the way for enhanced firm professionalization. finally, we conclude by elaborating on the primary theoretical and practical implications of our model and identifying potential directions for future research. external management and chinese family businesses family businesses are traditionally defined as firms that are majority owned and controlled by members of the same family. family members hold most of the top management positions, make operational decisions, and bear major firm risks (chua, chrisman, & sharma, 1999; poza, 2009). the literature tends to define “outside or external professional managers” and “non-family professional managers” interchangeably. von schultzendorff (1984) identified non-family business managers as having the following characteristics: they are not related to the family owners by blood, marriage, or adoption; they occupy positions of authority as it relates to firm governance, and they may or may not share in firm ownership. pieper and klein (2007) describe non-family managers from the behavioral aspect. they argue that, in contrast to family members and other stakeholders, non-family professionals have the flexibility in their actions to run these businesses according to their personal desires, motivations, skills, and vision, rather than merely being puppets of interests of the firm’s owners. we argue that “non-family professional managers” should meet both von schultzendorff’s (1984) individual characteristics standards and pieper and klein’s (2007) behavioral condition requirements. given this set of combined definitions, in the remainder of this paper, we refer to “non-family professional managers” as “external managers.” leveraging intellectual and social capital within chinese family-owned businesses the resource-based view of family firms suggests that their competitive advantage is created by the unique and often idiosyncratic characteristics of family enterprises including such traits as rapid speed to market, focus on market niches, concentrated ownership structures, a desire to protect the family’s 50 american journal of management vol. 16(3) 2016 reputation, patient capital, knowledge transfer between generations, and responsiveness to rapidly changing external environments (poza, 2009). during the initial and formative years of their development, most new chinese family businesses tend to rely upon their own financial, human, patient, and knowledge resources (luo & park, 2001). given their initial relatively small scale and scope, most of these firms are inclined towards only employing members with direct family ties. this practice is both pragmatic and consistent with their ownership structure and size. internal family trust mechanisms, loyalty, and ethical constraints simplify supervision and incentive mechanisms within the firm, improve cohesion and solidarity, and serve as efficient mechanisms for management cost savings (kramer & tyler, 1995; poza, 2009). however, when family firms reach critical scale, they may be forced to enhance their human, patient and knowledge capacity by bringing in external managers. moreover, as the transition toward a marketoriented economy continues and competition becomes more intense, china’s business environment inherently mandates that family firm’s scale, if they want to survive. the continued development of the family business then may exceed the entrepreneurial capacity of the single proprietor. from a resource theory perspective, the limited human, patient and knowledge talents of the family cannot fully adapt to the changing environment; rather, increasing market pressures and institutional changes push these firms toward some combination of internal and external management (chu, 2000). in support of these arguments, zahra (2005) points out that a continued conservatism attitude can undermine a family firm’s long-term financial performance and erode its early competitive advantage, factors which may underlie the relatively short lifespan of these companies in china. firms that acknowledge they are at this crossroad may then consider ways to modify their business management because they realize external managers can bring skills, competence and other value-added benefits to family enterprise. the company may begin to search for personnel with talents that do not pre-exist within the current family structure. family owners may then revamp their firm’s governance and begin the process of incorporating external management innovations into their organizational systems. principal versus agent risk and chinese family businesses the expansion and professionalization of china-based family businesses have increased the pressure to incorporate non-family members as managers. however, the entry of external managers is usually accompanied by a separation between family ownership and firm decision making and governance. this raises questions regarding the differing interests of owners versus managers. clearly, family owners, as company principals, face different risks than do external managers, who are acting as company agents. agency theory (madison, holt, kellermanns, & ranft, 2016; poza, 2009) views the overlap in ownership and management as having the potential to reduce or increase the costs of operating the family enterprise. in line with this theory, chinese family business owners face unavoidable operational risks in bringing in external management due to currently weak property rights protections in an underdeveloped legal infrastructure. they also face routine family firm governance integration risks including financial undercapitalization, rapidly evolving product lifecycles, determinations as to when and how to grow, and the coordination of overall strategic planning in a rapidly changing global environment. external managers’ risks, in contrast, focus on job and income uncertainty, factors that can be anticipated and therefore intentionally reduced. external managers can choose to exit the company when problems occur, while the family owners usually must remain and bear responsibility for losses that result from poor external management. risk aversion and prediction are much more crucial when information asymmetry increases between principals and agents, as well as when successive delegation increases external managerial discretion (fama & jensen, 1983; madison et al., 2016). although these risks exist in family businesses generally, we suggest that the challenges presented by separating ownership and governance in chinese family firms differ from those elsewhere along three major dimensions. first, the transition process in china is characterized by insufficient market economy controls as they relate to external institutions (hoskisson, eden, lau, & wright, 2000; luo, 2006). the underdeveloped external governance mechanisms including capital, product, labor, and corporate markets, offer weaker american journal of management vol. 16(3) 2016 51 control constraints on external managerial discretion (jensen, 1993). for example, external managers in chinese family firms currently face relatively few pressures or threats of capital market takeovers. in addition, other external governance mechanisms including a functioning legal infrastructure and public media monitoring are relatively lacking in today’s china. as a result, chinese family firms face external manager preand post-hire challenges due to the underdevelopment of market-oriented institutions and the inefficiency of the chinese legal infrastructure that family firms in other parts of the world may not have to confront (dharwadkar, george, & brandes, 2000; mitton, 2002). this increases the potential likelihood of chinese family enterprises bringing on external managers who may possess inadequate skills or, once hired, behave opportunistically. decisionmaking and governance delegation to external managers, in this context, leaves the chinese family business vulnerable to issues outside of the family’s control. second, as it relates to internal institutions, private ownership, and family management expose chinabased firms to particular agency hazards (becker, 1981; schulze, lubatkin, dino, & buchholtz, 2001; stulz, 1988). chinese family firms exemplify system theory’s complex mixture of family, business, and ownership (chrisman, chua, & litz, 2003; habbershon, williams, & macmillan, 2003; marion & uhlbien, 2002; poza, 2009) that presumes strong family orientation and business objectives function side-byside (lumpkin, martin, & vaughn, 2008). thus, these companies are more than just economic organizations: they also embody the traditional “family” culture that is deeply rooted in china (chu, 2004). this family culture frequently leads to relatively noncomplex internal monitoring mechanisms and corporate charters or contracts that lack formally defined rules, standards, and procedures. should external managers either fail or succeed, there are only limited structures in place to either effectively reward or punish them. further, the costs of doing so may be too high even when such options are available (j. j. zhang, 2005). when the external managers do not own or have residual claims on chinese family businesses, they may take advantage of information asymmetry to maximize their own utility rather than the firm’s return on investment. thus, delegation of power and governance in family firms in china can lead to substantial asset losses. third, from the perspective of governance, in contrast to western and other newly industrialized countries, external managers are a relatively new phenomenon in china. in some cases, the external manager may not have the same business ethics as the family owners. external managers may lack awareness of agency contracts or may not consider that contract compliance is a basic and critical element of their job (li, 2003). without the pressure of external legal or social enforcement, external managers may be motivated to keep all of their personal options open and enhance their self-interests at the expense of business owners. given the numerous market opportunities in china, alongside lower entry and exit market barriers, one might argue that the impetus to self-enhance is not only rational but should be expected. as such, research indicates that many chinese external managers choose to enter a family firm to acquire knowledge and resources for their own future businesses (j. j. zhang, 2005; j. q. zhang, 2002). they then leave their employing family firms as soon as other opportunities beckon, and they may leverage their new intellectual and relational capital in competition with the firms they just left (chu & li, 2003). these same external managers may go to companies run by competitors of their former employers (chu, 2002). further, with neither external nor internal institutions providing effective corporate monitoring and discipline for ethics violations, the morale of external managers in chinese family businesses is often decreased, enhancing the motivation to exit their employing firms (whyte, 1996; j. j. zhang, 2005). the governance challenge in china, the truth of the nash equilibrium (nash, 1950) is proven every day: whether family business owners trust external managers and whether these same managers keep faith with the family business owners is based on repeated experiences between the two. both sides have a long-term interest in mutual enhancement. however, due to the lack of long-term contracts between the family owners and external managers, there is not a formal mechanism that either side can rely upon when it comes to establishing mutual owner/external manager trust in chinese family businesses. thus, over the long run, 52 american journal of management vol. 16(3) 2016 the prisoner’s dilemma related to the longer-term benefits associated with repeated interactions may not have an opportunity to become established (axelrod, 1987; kreps & wilson, 1982; lambert, 1983). underdeveloped market institutions, the lack of internal monitoring mechanisms and newly emerging professional management skills lead to two challenges that often reduce china-based family firms’ effective use of their assets and cooperative efficiencies (hughes & hughes, 2004). the first is adverse selection and the second is moral hazard. adverse selection and moral hazard are more likely to prevail under conditions of information asymmetry, which, in turn, increase the likelihood of chinese external managers enhancing their personal self-interest at the expense of the family firm. the favoring of personal over collective interests can potentially lead to decreased family business financial performance (j. q. zhang, 2002; y. l. zhang & yang, 2002a). ex-ante contract challenges adverse selection risks arise in the case of principal and agent problems ex-ante contract. adverse selection refers to situations where negative or erroneous information about a candidate is hidden to the detriment of the employer, who consequently lacks complete data to make an effective hiring decision. had the employer had this information prior to making a job offer, it is likely that such an offer might not have been extended. adverse selection results from information asymmetry where the employing firm cannot fully evaluate an applicant’s quality and worth, their match to the job specifications or their potential job satisfaction due to internal or external capacity factors (fama, 1980; hansmann, 1996). information distortion effects may include a chinese agent’s misrepresenting his or her skill capabilities. however, it can also occur where regulations or social norms prevent the hiring agent, in this case, the chinese family firm, from using certain categories of known information (molho, 1997). without the extensive use of personality or related evaluation, the match between a job candidate and the employing job may not be adequately assessed. these adverse selection individual characteristic concerns directly link to our reference to von schultzendorff’s (1984) definition of what constitutes external management. post-contract challenges in contrast with ex-ante contract challenges, moral hazard refers to the risk of having hired an external manager, who subsequently does not comply with the terms of the employment contract. the agent—in this case, the external manager—may have an incentive to deliberately act inappropriately once they are in their position (from the viewpoint of the principal), because there has not been a clear and continuing effort to match the conscious or unconscious needs of the agent to those of the chinese family business owners (gomez-mejia, nunez-nickel, & gutierrez, 2001; jensen & meckling, 1992; mccollom, 1990). thus, in china, a moral hazard risk typically arises when the interests of the family business principals and the external managers turn out not to be aligned; when both parties fail to establish a basis for interest exchange as a part of establishing a contractual relationship; and, when it is difficult, if not impossible, to determine if the articles of the contract can or will be carried out. from an agency theory perspective (poza, 2009), the chinese family business owners may decide that it is too costly or impractical to closely monitor the external manager. external managers may feel no compunction about revealing firms’ confidential information to competitor companies because there are no consequences associated with doing so. these employees may also deliberately pursue diversification or expansion strategies that actually benefit their current employer’s rivals, especially if they believe they are enhancing their own future employment opportunities (hu, wang, & zhong, 2002). finally, the issue of job fulfillment may not be adequately explored by either party on a sufficiently regular basis to provide an early warning assessment regarding an external manager’s job satisfaction. these behavioral factors led to our reference to pieper and klein’s (2007) definition of what constitutes external management. american journal of management vol. 16(3) 2016 53 the present study given the negative impacts that adverse selection and moral hazard have on the ability of chinabased family firms to scale and survive, we decided to limit ourselves to an examination of these two constructs. our hope was that the machine learning technique we chose might concretely demonstrate its ability to determine the risks associated with both of these factors within the china-based family businesses population. methods sample and data sources we selected a convenience sample of 19 chinese family businesses, where at least 50% of the ownership was in the hands of related family members; family members maintained control of institutional decision-making and governance, and a majority of management positions were occupied by family members. in each case, a family member served as the chairman or ceo of the chinese firm and two or more family members were on the company’s board of directors. in several the organizations, family members also served as legal representatives and general managers. finally, in all 19 cases, family members were, directly or indirectly, the largest company shareholders (hughes, 2004). ten of the 19 firms were associated with either the construction or building industries, while five were technology firms and four were family-owned training institutions. all 19 companies employed fewer than 50 individuals. the 19 family firms were surveyed in 2011, 2012 and 2013. since reliable public information about chinese family businesses is extremely difficult to obtain (wortman, 1994), 30-minute interviews were conducted with the chief executive or business owners of the 19 firms to collect responses to our eight questions. for seven of the eight questions, the interviewed individual was asked to provide a written response, using a scale of 0% (no match) to 100% (complete match). for the one question related to the degree that the evaluator felt the external manager’s competencies were adequate to those required, respondents provided a ranked answer, using a scale of 1 (no match) to 5 (complete match). measures adverse selection pre-contract adverse selection resulting from information asymmetry between the external managers and firm owners arises when candidates are able to hide information about themselves such as their skill quality and worth (fama, 1980; hansmann, 1996). adverse selection can be assessed along three indicators including the distortion rate of the information, lack of job matching and the fulfillment of work ratio. the information disclosed by the chinese professional managers in their initiating statement, interview, and written examination about their abilities may not be consistent with either their potential or actual performance. during the recruiting process, only the external managers may have access to private information about their personal business ability, historical work experience, moral quality, and efforts. the individuals may exaggerate their skills and conceal information that conflicts with their capacity statements. without access to reliable external, objective assessment vehicles, chinese family business owners must over-rely on candidate-provided information to their detriment as the hiring entity. moral hazard pre-contract adverse selection is rooted in hidden information, while the post-contract moral hazard risk is associated with hidden actions. in this case, opportunistic external managers may hide behaviors they engage in that could harm the overall welfare of the family business but are in their own personal best interests (ones, viswesvaran, & schmidt, 1993). various reasons may underlie this trend. for example, in china today, there are various internal and external incentives to self-enhance on-the-job performance. external managers know there are currently 54 american journal of management vol. 16(3) 2016 no serious penalties associated with failing to follow through on firm-principal contracts. further, they are aware that, if they are skilled as external managers, they have many other employment opportunities, including self-employment. finally, these individuals may receive financial incentives from competitor firms to take clients and relationship resources from their current family firm and transfer them to a new employer. research indicates that moral hazard is measured using five indicators including: risks associated with deliberate information omissions; violation rates, including embezzlement, kickbacks, transferring property, bribery, falsification of accounts, and excessive administrative expenditure; private family firm information disclosure rates; blind pursuit of diversification and expansion to enhance personal social status; and the likelihood of professional managers leaving the family firm. support vector machine technique as previously discussed, regulation violation by managers can negatively impact chinese family businesses and their associated financial operations. risk prediction can assist in preventing, redressing and avoiding the mistakes and fluctuations of family firm human resource management. accurate prediction can enhance the likelihood that both the function and order of personnel selection and hire are reliable, thereby improving the china-based family firm’s resource capacity. therefore, accurate prediction and risk prevention are more essential to these types of businesses than punishment after regulations have been violated. accurate prediction, though essential, is often hindered by the complex relationship between predictor and target variables and the absence of theory to guide model identification. to empirically examine the completeness of our adverse selection and moral hazard model, we decided to use the svm technique for this exploratory study. svm is an efficient and effective pattern recognition technique that is based upon vapnik– chervonenkis’s structural risk minimization (srm) theory (cortes & vapnik, 1995; vapnik, 2000). svm involves supervised learning methods that can be applied to classification or regression. the technique appears to generate more accurate predictive ratios than other statistical and intelligent models in the area of bfp. svm can be used for problems of classification and regression and to solve various real-world problems. two basic principles of svm are to map raw data into a high dimensional space using kernel functions, and then construct the optimal separation of the hyperplane on the base of support vectors. the technique is helpful in text and hypertext categorization as its application can significantly reduce the need for labeled training instances in both the standard inductive and transductive settings. using the svm technique, we developed a prediction model (see figure 1) for external management risk in chinese family businesses. we used three of the 19 companies (identified by the numbers 6, 17 and 18) as the testing sample for this exploratory effort, while the remaining 16 firms were used as the research or training sample. svm performs well on predictive tasks where the relationship between predictors and target is complex. our prediction was that the relative error between the evaluation result and the predictive value would be smaller than 5% for both the test sample and the research/training set. if the predictive results were basically in accordance with the evaluative ones, we would have some evidence that svm could be successfully used to predict the risks associated with incorporating external management in china-based family businesses. american journal of management vol. 16(3) 2016 55 figure 1 external management risk model indicator system the indicator system was comprised of target elements and variables indicator sets (figure 2). the target set included one indicator: risks associated with introducing external managers into the family firm. the element set was comprised of the two outcome indicators of adverse selection and moral hazard risk. the variable set was comprised of eight indicators including information distortion rates, degree of jobmatching, work fulfillment ratios, deliberate information omission rates, contract violation rates, private information disclosure rates, pursuit of diversification and expansion rates, and managers’ quit rates. figure 2 summarizes the indicator system along with the questions used. figure 2 indicator system and risk value range –external manager risks first level index (target variable): external manager risks second level indicator (element level) third level indicator (variable level) value range v1 adverse selection risks v11: information distortion rates v12: job-matching rates v13: work fulfillment ratios. [0，100%] [1，5] [0，100%] v2 moral hazard risks v21: deliberate omission rates v22: violation rates v23: private information disclosure rates v24: pursuit of diversification and expansion v25: manager quit rates [0，100%] [0，100%] [0，100%] [0，100%] [0，100%] instructions: please answer the following questions about your external manager on a scale of 0% to 100%: • v11/distortion rate of the information: indicate the extent to which information disclosed by your external manager in his initiating statement, interview and written examination about his abilities is consistent with either his capacity or actual performance. • information distortion rates • job-matching • work fulfillment • information omission rates • violation rates • private information disclosure rates • diversification and expansion rates • manager quit rates external management risks adverse selection moral hazard risk prediction based on svm 56 american journal of management vol. 16(3) 2016 • v13/fulfillment of the work: indicate how well you believe your external manager meets your work fulfillment requirements. • v21/rate of deliberate information omission: indicate the extent to which you believe your external manager deliberately omits information. • v22/rate of violation: indicate the extent to which you believe your external manager embezzles, receives kickbacks, transfers company property, accepts bribes, falsifies accounts or incurs excessive administrative expenditures. • v23/rate of the disclosure of the private information: indicate the extent to which you believe your external manager has disclosed private firm information to unauthorized outsiders. • v24/diversification and expansion pursuit: indicate the extent to which you believe your external manager may be engaging in business diversification or expansion pursuits outside of those involving your family business. • v25/managers’ quit rates: indicate your estimate as to the likelihood of your external manager leaving your family firm within the next 12 months. on a scale of 1 (does not match) to 5 (complete match), please tick the box that corresponds to your evaluation of your external manager. • v12/the skills of my external manager match those required for his job svm risk prediction model building even though svm was first applied to classification problems, svm can be extended to regression problems by introducing the concept of loss function. the basic principles of loss function are to map the input space data on a higher dimensional feature space, using nonlinear mapping; conduct linear regression analyses in the space; and apply regression estimates, using linear minimization. according to the characteristics and application areas of each kernel function, we chose radial basis function (rbf) as the method to build an svm regression model. the rbf formula used is listed below: ) 2 exp(),( 2 2 σ ji ji xx xxk − −= (1) our risk model used adverse selection and moral hazard as the decision attributes and the eight influencing factors as the condition attributes. according to the svm regression and predictive modeling process, we set up our svm regression function as follows: bxxfy +⋅== )()( φω (2) where y is the decision attribute, which is also the professional management risk; x is the condition attribute, which is also the risk influencing factors; ω ( x ) is the non-linear mapping from the input space to the higher dimensional feature space, and ω and b are estimated by using the formula of minimization. 2 2 1))(,(1)( 1 ωωφε ++= ∑ = bxyl l ccr ii l i svm (3) american journal of management vol. 16(3) 2016 57 ε ε εε >− ≤−    −− =− )( )( )( 0 ))(( xfy xfy xfy xfyl (4) in order to obtain the coefficientsω and b , the slack variables iξ and * iξ were used to minimize the following formula: 2 1 *)( 2 1)(),( ωξξξω ++= ∑ = l i ii n svm cr (5) the coefficient b was computed by selecting those lagrange multipliers ia and * ia that can determine the predictive error kkk yxf −= )(δ . under the circumstances of vapnik’s insensitive loss function, we obtained the value of ia and * ia by choosing point kx on the boundary based upon our knowledge of the accurate value of the predictive error )( * kkk aasign −= εδ . from the perspective of stability, b was computed by using the average ka of all the points kx on the boundary, according to the following constraint conditions:      ⋅⋅⋅=≥ +≤−+⋅ +≤−⋅− li ybx bxy ts ii ii ii i i ,,2,1,0, )( )( .. * * ξξ ξεφω ξεφω (6) we have: ),()( * kiijikkk xxkaayab ∑ −−+== δ (7) we examined the accuracy of svm prediction model by using the relative error function, that is, ),( ),(),( )( truenx prednxtruenx nerror − = (8) the relative error function is the error detection function used to examine the accuracy of the prediction model, x (n, true) and x (n, pred) stand for the actual values and the predictive values respectively after testing n samples. findings business owners and managers from the 19 china-based, family owned firm provided responses for eight indicator factors over a three-year period. the 2011 risk analysis indicators are summarized in table 1; the 2012 risk analysis indicators are summarized in table 2, and the 2013 risk analysis indicators are summarized in table 4. as can be seen from the tables, company 11 only participated in the 2011 analysis; thus, for the purposes of this exploratory study, the 2012 and 2013 svm runs were based on new data from the other 18 companies and a repeat insertion of the 2011 information for company 11. 58 american journal of management vol. 16(3) 2016 table 1 external manager risk analysis – 2011 companies training v11 v12 v13 v21 v22 v23 v24 v25 1 0.45 2.00 0.80 0.60 0.60 0.40 0.50 0.60 2 0.50 4.00 0.85 0.30 0.20 0.10 0.20 0.20 3 0.65 2.00 0.80 0.50 0.50 0.38 0.75 0.70 4 0.42 3.00 0.80 0.40 0.30 0.10 0.10 0.08 5 0.50 3.00 0.78 0.40 0.30 0.10 0.10 0.15 6 0.40 3.00 0.60 0.30 0.20 0.25 0.50 0.20 7 0.30 3.00 0.80 0.20 0.10 0.60 0.40 0.50 8 0.60 2.00 0.50 0.60 0.20 0.80 0.30 0.50 9 0.30 3.00 0.78 0.30 0.30 0.05 0.04 0.27 10 0.65 2.00 0.70 0.30 0.40 0.25 0.30 0.45 11 0.50 3.00 0.80 0.25 0.25 0.40 0.00 0.40 12 0.55 2.00 0.35 0.55 0.20 0.55 0.31 0.42 13 0.50 2.00 0.35 0.55 0.20 0.60 0.31 0.42 14 0.50 3.00 0.37 0.50 0.20 0.45 0.31 0.42 15 0.60 2.00 0.75 0.50 0.50 0.50 0.60 0.60 16 0.60 3.00 0.78 0.20 0.25 0.20 0.25 0.30 17 0.38 3.00 0.80 0.25 0.25 0.23 0.20 0.30 18 0.38 3.00 0.80 0.35 0.30 0.25 0.25 0.25 19 0.60 2.00 0.78 0.40 0.30 0.20 0.30 0.25 table 2 external manager risk analysis – 2012 companies training v11 v12 v13 v21 v22 v23 v24 v25 1 0.55 2.00 0.80 0.50 0.50 0.30 0.45 0.55 2 0.05 4.00 0.90 0.25 0.20 0.20 0.20 0.20 3 0.60 2.00 0.80 0.80 0.60 0.40 0.50 0.60 4 0.40 3.00 0.85 0.30 0.20 0.20 0.20 0.10 5 0.40 3.00 0.85 0.35 0.20 0.20 0.20 0.20 6 0.35 3.00 0.75 0.30 0.25 0.45 0.40 0.35 7 0.40 3.00 0.80 0.20 0.25 0.50 0.35 0.60 8 0.55 2.00 0.60 0.65 0.20 0.60 0.30 0.54 9 0.25 2.00 0.80 0.25 0.30 0.20 0.15 0.30 10 0.50 2.00 0.70 0.30 0.35 0.30 0.30 0.50 11 0 (no recruitment) 2.00 0.70 0.20 0.20 0.30 0.20 0.20 12 0.55 2.00 0.66 0.45 0.23 0.50 0.37 0.49 13 0.50 2.00 0.62 0.50 0.23 0.55 0.39 0.49 14 0.55 3.00 0.60 0.50 0.20 0.60 0.39 0.49 15 0.50 2.00 0.80 0.30 0.40 0.30 0.50 0.65 16 0.20 3.00 0.80 0.20 0.20 0.20 0.20 0.20 17 0.40 2.00 0.85 0.35 0.30 0.38 0.32 0.30 18 0.40 2.00 0.85 0.30 0.35 0.37 0.35 0.30 19 0.35 2.00 0.80 0.30 0.40 0.35 0.30 0.30 american journal of management vol. 16(3) 2016 59 table 3 external manager risk analysis – 2013 companies training v11 v12 v13 v21 v22 v23 v24 v25 1 0.75 2.00 0.78 0.70 0.45 0.30 0.65 0.65 2 0.50 4.00 0.95 0.02 0.20 0.15 0.10 0.20 3 0.55 2.00 0.85 0.60 0.60 0.40 0.65 0.60 4 0.45 3.00 0.85 0.20 0.20 0.10 0.15 0.10 5 0.45 2.00 0.80 0.20 0.25 0.20 0.15 0.15 6 0.30 3.00 0.80 0.35 0.35 0.30 0.30 0.35 7 0.40 3.00 0.75 0.15 0.10 0.60 0.35 0.55 8 0.65 2.00 0.60 0.70 0.30 0.70 0.40 0.60 9 0.25 2.00 0.80 0.10 0.30 0.20 0.10 0.28 10 0.64 2.00 0.75 0.28 0.35 0.25 0.25 0.50 11 0 (no recruitment) 2.00 0.70 0.10 0.10 0.30 0.15 0.20 12 0.55 2.00 0.73 0.45 0.26 0.50 0.30 0.41 13 0.60 2.00 0.73 0.50 0.26 0.65 0.38 0.41 14 0.40 3.00 0.75 0.50 0.28 0.58 0.38 0.41 15 0.55 2.00 0.75 0.20 0.20 0.30 0.40 0.70 16 0.20 3.00 0.85 0.20 0.16 0.20 0.15 0.35 17 0.25 3.00 0.85 0.35 0.35 0.35 0.30 0.20 18 0.42 2.00 0.85 0.30 0.40 0.45 0.25 0.30 19 0.35 2.00 0.80 0.30 0.35 0.30 0.20 0.20 as previously indicated, svm performs well on predictive tasks where the relationship between predictors and target is complex. as shown in table 4 for the test sample and table 5 for the training sample, the results of our experiment indicate that the relative error between the predictive and actual values for each of the three years examined in our study is smaller than 5% for both the comparative testing and training companies included in this research effort. table 4 comparison: evaluation result and predictive value rbf kernel functions from 2011-2013 test sample 2011 2012 2013 evaluation result predictive value error (%) evaluation result predictive value error (%) evaluation result predictive value error (%) 0.6813 0.6640 2.53% 0.7313 0.7190 1.68% 0.7188 0.7211 0.33% 0.6763 0.6560 2.99% 0.6125 0.6060 1.06% 0.7063 0.7120 0.81% 0.6975 0.6700 3.94% 0.6150 0.6110 0.65% 0.6213 0.6380 2.70% 60 american journal of management vol. 16(3) 2016 table 5 comparison: evaluation result and predictive value rbf kernel functions from 2011-2013 – training sample 2011 2012 2013 evaluation result predictive value error (%) evaluation result predictive value error (%) evaluation result predictive value error (%) 0.7438 0.7610 2.32% 0.7063 0.7130 0.96% 0.7850 0.7902 0.66% 0.7938 0.7550 4.88% 0.7500 0.7450 0.67% 0.7650 0.7550 1.31% 0.7850 0.7890 0.51% 0.7875 0.7580 3.75% 0.7813 0.7995 2.34% 0.6500 0.6360 2.15% 0.6563 0.6330 3.54% 0.6313 0.6120 3.05% 0.6663 0.6370 4.39% 0.6750 0.6560 2.81% 0.5250 0.5460 4.00% 0.7375 0.7310 0.88% 0.7625 0.7510 1.51% 0.7375 0.7701 4.42% 0.6875 0.6550 4.73% 0.6800 0.6620 2.65% 0.7438 0.7230 2.79% 0.6300 0.6280 0.32% 0.5313 0.5560 4.66% 0.5038 0.5250 4.22% 0.6313 0.6380 1.07% 0.6188 0.6360 2.79% 0.6275 0.6450 2.79% 0.7000 0.7110 1.57% 0.5429 0.5616 3.45% 0.5071 0.5290 4.31% 0.6163 0.6040 1.99% 0.6563 0.6730 2.55% 0.6500 0.6650 2.31% 0.6163 0.6350 3.04% 0.6600 0.6870 4.09% 0.6913 0.7090 2.57% 0.7188 0.7040 2.05% 0.7913 0.7650 3.32% 0.7875 0.7540 4.25% 0.7563 0.7250 4.13% 0.6813 0.6700 1.65% 0.6375 0.6420 0.71% 0.6975 0.7070 1.36% 0.6250 0.6360 1.76% 0.6388 0.6600 3.33% 0.6038 0.6260 3.69% 0.6000 0.6230 3.83% 0.5625 0.5410 3.82% our exploratory project indicates that the svm tool, with its built-in bootstrapping resampling technique, provides a level of robustness and stability that cannot be obtained from merely performing adhoc searches of possible logit model combinations. our experiment also reveals that, as s. chen, härdle, and moro (2011) found for default risk prediction, svm may have some theoretical advantages in estimating adverse selection and moral hazard challenges in contrast to parametric logic models. the consistency of the statistical results over the three years of our study from our 19 training and testing samples indicates that this particular analytical tool may be very useful in this context. limitations we acknowledge limitations to our study. as has been pointed out by other researchers in the field (s. chen et al., 2011; cui & curry, 2005), there are some inherent weaknesses in the svm technique that bear consideration if the approach is to gain acceptance as a good human resource management tool. first of all, svm still requires additional theoretical development before social science researchers may want to routinely use it in practical situations because the technique does not naturally yield predictive bounds (cui & curry, 2005, p. 608). of greater concern is the fact that there is currently no meta-theory to assist with kernel transformation selection and, therefore, parameter estimation is timeconsuming. as a part of our experiment, we examined the capacity of svm to serve as an adverse selection and moral hazard risk reduction tool without completing comparative regression analyses. thus, while we have some interesting stand-alone findings, it will be crucial to compare the outcomes received from american journal of management vol. 16(3) 2016 61 subsequent human relations-related svm analyses to those obtained from discriminant analysis, maximum likelihood estimation or logit analysis, using the same data. conclusions and future research the transition from family to blended family/non-family governance has concerned family firms throughout china. the absence of effective external corporate monitoring and discipline systems, weak national legal infrastructures, a limited, experienced managerial labor pool, and no real national mechanisms in place to enforce business ethics has heightened the risks associated with integrating external management into chinese family companies. this makes having accurate prediction and risk avoidance tools in hand even more critical for china-based family businesses than their counterparts in the developed world. we offer that svm may be able to assist in predicting some of the risks associated with integrating non-family management into the governance of family businesses. svm, as a development in statistical machine learning theory, is well founded, and its performance is either similar to or significantly better than that of traditional machine learning approaches, including neural networks. as cui and curry (2005) indicate, svm avoids an overreliance on particular structural assumptions by automating the model identification problem. thus, the technique allows the researcher to enter the parameter estimation phase with a group of structural possibilities rather than just one. this approach has a stability and robustness that is lacking in the maximum-likelihood procedures typically used under these circumstances. this paper adds to the family business knowledge base by applying tenants from systems and resource theory in a practical application. specifically, we demonstrate that svm, as an emerging machine learning technique, can provide china-based family businesses with an effective tool to more accurately predict the risks associated with a transition to a blended form of family and external management governance. we believe that svm holds considerable promise as a means of reducing the information asymmetry between external managers and family firm owners in china and subsequently laying the foundation for enhanced integrated governance structures within these companies. a repeat of this experiment with additional chinese family-owned enterprises and a logic model comparison will be crucial in validating how svm can be used within this context. references ahlstrom, d., young, m. n., chan, e. s., & bruton, g. d. 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(2002b). study on the fuzzy comprehensive evaluation method of human resource risk [in chinese]. journal of industrial engineering and engineering management, 6, 18-20. acknowledgement this research was underwritten by grants from the natural science funding program, shandong province, china and from the university of san francisco’s china business studies initiative. american journal of management vol. 16(3) 2016 65 146 american journal of management vol. 25(3) 2025 the optimice project: optimising translation quality of metadata in the editorial chain of academic journals franck barbin rennes 2 university lidile katell hernández morin rennes 2 university lidile the optimice project has developed a method that combines neural machine translation and human postediting to enhance the quality of article metadata when translating from french to english as part of the journal editorial process. in partnership with the lidile research unit, the pur (a french publisher) and the mshb (french centre for human sciences), we comparatively assessed the quality of human and machine translations of the metadata of 32 articles using our proprietary quality assessment grid and professional translators. the aim was to precisely determine the qualitative elements and limitations of each output, and to design the most appropriate translation method. we then formulated recommendations for writing and translating metadata to complement guidelines for authors, and improve the acceptance, referencing and international visibility of papers in journals. the method was finally tested on 2021 issues of the 4 selected journals, focusing on history, archaeology, education and geography respectively. the objective is to develop a methodology that can be reproduced and transferred to other journals, languages and disciplinary fields. keywords: metadata, translation, quality, machine translation, journals, post-editing, editorial chain, hss introduction in humanities and social sciences (hss) as in other scientific fields, the domination of the english language in journal publications is no longer an issue to be debated. english largely remains the academic lingua franca (mauranen et.al., 2016; rowley-jolivet, 2017). in france (and some other countries), the fact that all researchers are not able to publish directly in english without having their paper professionally translated is a problem (garnier, 2020). in this context, the french department of higher education and research (mesri) launched a bid for research projects on the use of machine translation in hss. optimice, which stands for optimising machine translation of metadata and its integration into the editorial chain, was one of the awarded projects. article metadata consists of titles, abstracts and keywords. the project aimed to raise awareness about the use of machine translation (mt). specifically, when writing and translating their metadata, authors must demonstrate their linguistic and disciplinary expertise, american journal of management vol. 25(3) 2025 147 and “added value” over such systems (loock, 2018, p. 787). they should not be deceived by the apparent fluency of the mt output. koehn (2020, 19) rightfully reminds us that “[t]he goal of current machine translation research is not to achieve perfect translation but to drive down error rates of machine translation systems”. our method is in line with this principle, and simply seeks to improve the overall quality of metadata produced in english by french researchers, and increase their acceptability rate and referencing in international journals. our paper is divided into three main parts. we first describe the optimice project. we then present our assessment grid (the trasilt grid) and show how we used it to compare human and machine translations in the project. we finally introduce the guidelines for writing and translating metadata that we devised for authors and editorial teams. the optimice project description our study is based on a partnership with the trasilt team (translation, linguistic engineering and terminology) within lidile research unit (linguistics, language engineering and education), the maison des sciences de l’homme de bretagne (mshb, french centre for human sciences), and the presses universitaires de rennes (pur, one of the major french publishers). the optimice project devised a method for researchers and editorial teams that combines neural machine translation (nmt, more precisely deepl) and human post-editing (i.e., correction of machine translation to reach higher standards) to improve the quality of article metadata from french to english in the editorial process of journals. the objective is to develop a methodology for translation that can be reproduced and transferred to other journals, languages and disciplinary fields. our intent was to meet the publishers’ need to optimize the quality of metadata in english, publish more articles by french researchers on international platforms such as cairn.info, and give their works more visibility. the project consisted of four main stages. based on the english metadata of 16 articles published in 2017, it was decided to first compare their existing human translations with the nmt-generated translation of the metadata. the analysis was conducted by trasilt researchers who are also translators. second, the metadata of 16 other articles published in 2017 were post-edited by professional translators. it thus provided additional feedback on mt quality. the trasilt team devised a post-editing protocol, designed for researchers and editorial teams in hss, that was then tested on the 2021 issues of the four selected journals. those tests enabled us to refine a general method for translating metadata that can be reproduced to other journals. an additional step was also added during the project, as we felt that we needed a better knowledge of the conditions of internationalization in the publishing industry: a national survey on translation practices among hss researchers was carried out (see 2.2). our corpus was based on the metadata of 75 articles published in 2017 in four journals edited by the pur. the journals were annales de bretagne et des pays de l’ouest, archeosciences, éducation & didactique, and norois, focusing respectively on history, archaeology, education and geography, all freely available on openedition journals, persée, and the cairn.info platform. survey to better understand the translation practices and expectations of researchers in hss studies, we decided to conduct a national survey that was spread over a month (may-june 2021). the respondents were people working in france who were likely to publish articles or metadata in english. they were distributed in 4 large categories as follows (figure 1): 42.10% were professors (full, associate and assistant professors), 18.20% full-time researchers (senior and directors), 13% phd students, and 6.20% engineers. the number of complete responses was 866. 148 american journal of management vol. 25(3) 2025 figure 1 pie chart on the professional status of the respondents as the optimice survey is not the main focus of the paper (hernández morin and barbin, forthcoming), we only present four key questions on the use of mt among researchers in hss. first, when asked if they use any mt tool, 64.22% of respondents declared that they use mt tools (figure 2). figure 2 pie chart on the use of mt tools american journal of management vol. 25(3) 2025 149 we then asked which mt tool(s) they used, 48.59% of respondents said that they use deepl, 26.89% google translate, and 14.35% reverso (figure 3). deepl is clearly the most common machine translation tool in the hss community in 2021. it confirmed our initial tool choice for this project: it seemed adapted to researchers’ needs (free version, overall recognized quality, user-friendly interface). figure 3 pie chart on the mt tools used by researchers this should be correlated to the question of the person who translates metadata (figure 4). as expected, 68.90% of respondents translated their metadata themselves (this figure also includes respondents who had their metadata proofread by a third party after translating them on their own). only 8.11% could afford a professional translator. it clearly shows the lack of resources allocated to translation in hss, especially for translating metadata. figure 4 pie chart on the person translating metadata 150 american journal of management vol. 25(3) 2025 with this in mind, we now discuss the quality assessment of translations and how we used our proprietary assessment grid in stages 1 and 2 of the optimice project. comparative translation quality assessment researcher vs mt translation quality assessment as mentioned earlier in the article, we expected that translations into english by non-linguist authors in hss disciplines would globally fall short of quality expectations for the publication of article contents in that language. consulting advice pages from some editors’ websites such as elsevier reinforced this hypothesis: “according to a statistic shared by elsevier, between 30 percent and 50 percent of articles submitted to elsevier journals are rejected before they even reach the peer-review stage, and one of the top reasons for rejection is poor language” (shaikh, 2016). scrutiny on metadata is also very high, for “the title and abstract are incredibly important components of a manuscript as they are the first elements a journal editor sees” (ibid.). it can thus be difficult for non-english-speaking authors to reach these standards without a dedicated budget for translation or copy-editing. the first main stage of our project involved verifying our initial assumption that mt (machine translation) with deepl could match or exceed the quality of hss researchers’ translations. this was achieved by comparing the ht (human translation) and mt outputs of 16 articles published in 2017. to this end, we chose to use an assessment grid that we developed in 2013 and fine-tuned since: the trasilt translation assessment human metrics (toudic, et al., 2014; hernández morin, et al., 2015). the trasilt assessment grid the trasilt grid is more or less contemporary with the eu-funded mqm translation assessment metrics (2015). since the reason for its use was to compare human and machine translation, the choice was made to focus on a human assessment only – the outcome and publishing quality requirements being more important to us than the method used for translation. to try and be as accurate and fair as possible, a quantitative assessment grid was elected by three trasilt researchers. the three researchers first assessed a sample of the metadata to adjust the weighting criteria. the following metadata were assessed and double peer-reviewed by two of the three evaluators, with a final agreement on each article assessment. the mqm (multidimensional quality metrics) was not chosen for this study, because of the training researchers had received on their own proprietary grid, and because they thought that the trasilt grid made a clearer distinction between issues (or “error types” in our grid) and quality criteria (or “end-user effects”). the trasilt grid has three dimensions: it allows to spot 9 error types (figure 5), but sanctions 4 types of potential effects (table 1) for each error on translation quality (accuracy, usability, readability and compliance), according to a weight given to each effect (not counted effect, minor, major, or critical). table 1 the four end-user effects of the trasilt assessment grid accuracy error prevents the correct conveyance of information in the source document usability error prevents correct use of the product, process or document readability error has an impact on the fluency and clarity of the target document compliance target document does not comply with language-, country-, cultureor clientspecific standards, conventions or recommendations flawed extracts and their corresponding error types can automatically feed the grid, thanks to a macro based on color identification of errors (figure 5). effects on quality can sum up to a maximum of 5-point penalties, according to their estimated severity (with a maximum of two effects per error, and a dominant effect among the two applicable effects). american journal of management vol. 25(3) 2025 151 figure 5 view of the trasilt assessment grid for an article from abpo the results tab produces totals per error type and functional effect, and total weighted scores. it calculates a quality ratio by comparing the total number of errors and the total of weighted scores (depending on the criticality of the effects). positive effects of translation can also be individually counted in the quality score. figures 6 and 7 are simply given to illustrate how the trasilt grid works. more precisely, they indicate that the metadata of an article generated by deepl (mt) obtained a higher quality ratio (i.e., a lower score) than the same metadata translated by the author (ht). figure 6 results tab of the trasilt grid for ht-generated metadata of an article from norois 152 american journal of management vol. 25(3) 2025 figure 7 results tab of the trasilt grid for mt-generated metadata of an article from norois comparative assessment results this model and scheme of assessment was used to compare the metadata translated by hss researchers and, subsequently, by deepl. without going into all the details of our assessment, we can underline a few tendencies observed on the 16 assessed papers (tables 2 and 3). american journal of management vol. 25(3) 2025 153 table 2 global quality scores by method and journal the mean score obtained for human translation (ht) on all metadata was 33.5 against 19.18 for machine translation (mt). globally, ht mean score almost doubles mt score (the higher the score, the lower the overall quality obtained). the level of human quality was heterogeneous throughout the journals, as shown in table 2 above. metadata translations in one journal, éducation & didactique, resulted in similar scores (21 versus 20.5) with ht and mt. this can be explained by several factors, such as the great use of idiolects and neologisms in this journal (features that are usually badly handled by mt). the varying command of the english language among translating authors is another explanation for the differences in ht quality among the four journals. nevertheless, ht of metadata performed a little better than mt in only two papers out of 16, and the mt quality score was most of the time lower, or much lower than the ht score. it seems that mt in this context can provide a minimum level of overall quality throughout all the papers and disciplines selected (scores ranging between 7 and 35 with mt, versus 13 to 76 with ht). 154 american journal of management vol. 25(3) 2025 table 3 global quality scores for ht and mt human translation (ht) machine translation (mt) most frequent errors per method grammar/syntax (64) omissions/additions (59) terminology (32) meaning (25) most weighted effects per method compliance (178) usability (103) usability (133) compliance (59) but beyond those results that were largely expected, we were above all interested in the type of recurrent errors found with both methods: the most frequent errors observed in human translations were grammar and syntax errors, and omissions or additions of information. with machine translation, the main flaws were terminology and meaning issues – to a lesser extent. in terms of effects on quality, the errors affected mostly compliance (to standards, language conventions or target culture, according to the grid definition) in human translations. with mt, the most weighted effect impacted the usability of the paper. to summarize our main conclusions, ht logically reflects a better field command by authors, but the linguistic quality of translations is uneven from one author to another, with authors sometimes adding or omitting elements in their translations. mt offers higher linguistic and content accuracy, and a better readability or fluency, but translations are often literal and terminology is handled erratically. faced with these observations and with the help of professional translators and scientific editors, we established a series of recommendations to authors and editing teams, completing the existing instructions to authors. guidelines for writing and translating metadata there is often no guidance on how to write or translate when submitting an article. the following recommendations seek to improve the overall linguistic quality and fluency of the translation of article metadata. our guidelines (barbin, et al., 2022a) are divided into three phases: writing metadata in french for machine translation, implementing deepl, and optimizing the quality of the translation in english. examples of recommendations we will quote four simple examples of recommendations to illustrate the kind of problems and solutions encountered. first, during the writing phase in french, it is good practice to avoid synonyms for the same notion (table 4). the golden rule of one term per concept should prevail. this recommendation is in line with the standardization of keywords and terminology, which is a major issue for journals. table 4 avoid using synonyms american journal of management vol. 25(3) 2025 155 in this example from annales de bretagne et des pays de l’ouest, the historic term “emblème” (emblem or symbol in english) should not be equally replaced in french by “devise”, for it could trigger a different mt translation. even if the use of the french word “devise” is legitimate in the field, this technical understanding of the term may mislead the mt, which could easily translate it by “motto” or even “currency”. table 5 importance of capital letters second, the presentation of the metadata (upper/lower case, spaces, line breaks, etc.) also plays a part in their understanding (table 5). as “bois bocage énergie” in the example is the name of a french company, each word should be capitalized, otherwise mt will consider that they are separated words, and logically miss the fact that they should not be translated separately and put in lower case. when writing their abstracts, authors should indicate when it is not a random series of words and they refer instead to a unique concept. table 6 relevance of field terms third, authors have to check the relevance of machine translated terms in their very specific context (table 6). in this example (in sports education), the term “lanceur” (in the context of javelin training) was translated by the engine as “pitcher”, which corresponds to a baseball term, whereas “thrower” should be used in the context of javelin. table 7 accuracy of proper nouns 156 american journal of management vol. 25(3) 2025 another frequent feature in hss translation is proper nouns (table 7). toponymy and cultural references are a well-known issue with mt. this funny example illustrates the problem. here, the county of “manche”, in normandy, was translated as “channel”, as in the name of the sea between france and england. those aspects have to be systematically checked by authors after translation. also, it is best to specify the location of a french site for an english-speaking audience (here, “normandy” to better locate the county of “manche”). integration into the editorial chain we are well aware that integrating those recommendations is not self-evident. authors and editing teams may be somewhat reluctant to adopt the optimice method, leading to changes in their publishing habits and processes. each journal has its own ways, and guiding and collaboration are key to integrating those recommendations into the editorial chain. the experiment enabled us to determine at which stage in the chain it was most relevant to integrate the mt phase. if publishers implement the method, it will be more efficient for them to work at the end of the chain rather than trying to anticipate the journal schedule, which can vary from one journal to another. if authors carry out mt and post-editing, it should be supervised by the editing teams of journals, and not by publishers. perspectives of development and evolution implementing mtpe (machine translation and post-editing) in the editorial chain is a good way to raise awareness on scientific copy editing and translation practices. this project has led to a better mutual understanding between translators and field specialists, who shared common quality objectives. improving the linguistic and semantic quality of paper abstracts, titles and keywords gives greater international visibility to articles. the pur publisher saw the value of our translation optimization methodology and decided to spread it to other journals. also, the project has led to the creation of three bilingual glossaries on the basis of metadata from the studied domains (archeology, education and geography). these glossaries will be fed by the editing teams of the corresponding journals (and integrated into deepl pro for teams who invest in the tool), bearing in mind the importance of keyword and term coherence in scientific research. finally, a guide (barbin, et al., 2022a) describing our method was made publicly available, together with a video (barbin, et al., 2022b), which are regularly used in the context of training sessions for researchers and editing teams in various contexts. on a wider perspective, this project is only exploratory, and the use of generic commercial mt tools like deepl showed some limits: training the tool is limited to feeding it with glossaries and translations, when training specific engines by discipline would probably yield better results in the long run. generative ai could be also added to this technology to further improve results, provided the chosen tools comply with copyright regulations. this short-term project focused on the existing tools used by researchers in 2021, but there is a strong concern for open science in the french scientific sector, and building collaborative open tools would help achieve that goal. bigger projects are already under study, or even development on certain platforms such as cairn mundo (training data on the french to latin american spanish combination). optimizing translation of metadata in other languages than english is also very important to foster linguistic diversity and multilingual access to research. we intend to adapt and spread our own method to other languages, starting with spanish and breton (our regional language), in the context of our selected journals. for this kind of efforts to be productive, close collaboration is needed between research teams and publishing sector stakeholders, at the national and international levels. american journal of management vol. 25(3) 2025 157 references barbin, f., hernández morin, k., & phuez-favris, g. 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(2013). quality estimation for machine translation: some lessons learned. machine translation, 27(3–4), 213–238. retrieved from https://www.jstor.org/stable/42628816 ajm 17(6) web_master.pdf american journal of management vol. 25(2) 2025 157 cultural indicators of bureaucracy: a cross-national comparison of bank managers and small business owner-managers wm. david brice california state university, dominguez hills xia zhao california state university, dominguez hills this study examines the cultural underpinnings of bureaucracy by comparing the values and beliefs of bank managers with those of small business owner-managers across two culturally diverse countries: the united states and ukraine. survey data were collected from 168 bank managers and 163 small business ownermanagers using structured questionnaires, which assessed seven cultural constructs based on hofstede’s value-based cultural dimensions and leung et al.’s belief-based social axioms. the findings reveal consistent cross-national differences, with bank managers exhibiting higher power distance, lower social flexibility, and lower spirituality. these patterns may reflect characteristic features of professional banking culture and bureaucracy more broadly. keywords: culture, cross-cultural, banking, bureaucracy introduction this study investigates the cultural underpinnings of bureaucracy by comparing the cultural orientations of bank managers and small business owner-managers. we use the terms “bureaucracy” and “professional management” interchangeably to refer to career managers employed by large publicly traded firms, specifically banks, in contrast to small, owner-managed businesses. research suggests that small, owner-managed businesses and large professionally managed firms are shaped by distinct cultural dynamics. in small, owner-managed business, which are often described in the literature as entrepreneurial in structure, the founder typically plays a central role in shaping organizational culture. the founder’s personal values and beliefs often serve as the foundation for the firm’s belief system, which in turn shapes its goals, decision-making, and organizational behavior (dyer, 1994; hall, melin, & nordqvist, 2001; schein, 1983; sharma, chrisman, & chua, 1997). in contrast, professional managers in large bureaucratic organizations operate within more formalized structures shaped by institutional norms, policies, and hierarchical roles (weber, 1947; mintzberg, 1979). these differences in ownership, control, and organizational structure create the conditions for divergent managerial values and belief systems. while prior studies have established that entrepreneurial and professional managers approach strategic behavior and leadership differently (busenitz & barney, 1997; ireland, hitt, & sirmon, 2003), these studies often focus on high-growth or innovation-driven ventures, while less empirical research has examined the broader cultural constructs underlying these managerial approaches. 158 american journal of management vol. 25(2) 2025 this study aims to address that gap by comparing the cultural orientations of professional bank managers and small business owner-managers across two contrasting national settings: the united states and ukraine. banking provides an ideal context for examining bureaucratic culture due to its highly regulated environment, formal hierarchical structures, and emphasis on standardized procedures across national contexts. recent research continues to emphasize the importance of organizational culture in banking contexts, particularly regarding governance and employee behavior (nguyen, elnahass, & trinh, 2024; negi & dangwal, 2024). because banks operate within comparable regulatory and operational frameworks internationally, bank managers serve as suitable representatives of professional management in cross-cultural comparisons while controlling for industry-specific factors. drawing on hofstede’s value-based cultural dimensions (1980, 1991, 2001) and leung et al.’s (2002) belief-based social axioms, this study examines deeper cultural constructs that shape managerial thinking and organizational behavior. hofstede’s cultural dimensions, specifically power distance and masculinity, capture enduring value orientations that influence preferences for hierarchy and role expectations. these dimensions are applicable at the occupational level and are especially relevant to the structure and authority dynamics of bureaucratic organizations. leung et al.’s social axioms, including social cynicism, social flexibility, reward for application, spirituality, and fate control, represent generalized beliefs about the social world that guide individual and collective behavior. these belief systems are particularly relevant for comparing bureaucratic and small, owner-managed business contexts, where institutional formality and managerial autonomy vary considerably. together, these two frameworks provide a more comprehensive lens through which to examine how cultural values and beliefs differ between organizational groups and whether these differences are consistent in different national settings. theoretical framework cultural frameworks have traditionally been applied at the national level, but certain constructs are also suitable for analyzing occupational and organizational subgroups. hofstede (1980, 1991, 2001) demonstrated that the dimensions of power distance and masculinity-femininity are valid for assessing occupational groups and can differentiate between professional subcultures, whereas his other dimensions are more applicable for national-level analysis. power distance is defined as the “extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally” (hofstede, 2001, p. 98) and relates to preferences for autocratic leadership. hofstede (1991) observed that different social classes, linked with occupation, exhibit distinct class cultures. his research revealed that power distance scores varied significantly across occupation, both across and within national cultures; with the lowest status occupations and educational levels showing higher power distance. the most notable occupational differences were found in countries with the lowest power distance scores (hofstede, 1991). masculinity, as a cultural dimension, concerns the division of social gender roles. “masculinity stands for a society in which social gender roles are clearly distinct: men are supposed to be assertive, tough, and focused on material success; women should be more modest, tender, and concerned with the quality of life. femininity stands for a society in which social gender roles overlap: both men and women are supposed to be modest, tender, and concerned with the quality of life” (hofstede, 2001, p. 297). beyond gender norms, this dimension reflects broader societal preferences for assertiveness, achievement, and competition, which influence managerial preferences and organizational practices (hofstede, 2001). in addition to drawing on two value-based cultural dimensions from hofstede’s framework, this study incorporates five belief-based measures developed by leung et al. (2002), known as social axioms. these belief constructs include social cynicism, social flexibility, reward for application, spirituality, and fate control. social cynicism reflects the belief that manipulation is an effective means of success and encompasses a general negative view of people and a mistrust of social institutions. social flexibility captures the variability in social behavior depending on situation. reward for application assesses the extent of belief that hard work and persistence will lead to success. spirituality denotes the extent of belief american journal of management vol. 25(2) 2025 159 in supernatural or religious aspects of human existence. fate control relates to the degree of belief in the controllability of events, including predestination and predictability. this study conceptualizes professional bank management as a distinct occupational subgroup with cultural attributes that may differ systematically from those of small business owner-managers. while most cross-cultural research has relied on values alone, this approach may not fully capture behavioral variation (gelfand, nishii, & raver, 2006). gelfand, erez, and aycan (2007) call for moving beyond values to explain cultural differences. supporting this perspective, bond et al. (2004) found that belief-based measures (social axioms) supplement value-based ones in predicting behavior, and that combining the two provides better explanatory power than using values alone. accordingly, this study integrates hofstede’s occupationally relevant value-based cultural dimensions with leung et al.’s belief-based social axioms to identify potential cultural differences between professional bank managers and small business owner-managers. it also explores whether such differences are consistent across the united states and ukraine. identifying common cultural patterns among bank managers may enhance our understanding of bureaucratic culture and contribute to cross-cultural management theory and practice. hypotheses drawing on the theoretical frameworks established above, this study examines whether systematic cultural differences exist between bank managers and small business owner-managers (h1), and whether these differences are consistent across national contexts (h2). bank managers, as representatives of bureaucratic management in highly structured organizational environments, are expected to exhibit distinct cultural orientations compared to small business owner-managers who operate with greater autonomy and flexibility. the specific directional hypotheses (h3-h9) are based on the expectation that bureaucratic environments are associated with cultural patterns: greater acceptance of hierarchical authority (higher power distance), stronger competitive and achievement-driven orientations (higher masculinity), greater institutional mistrust (higher social cynicism), lower behavioral adaptability (lower social flexibility), weaker beliefs in personal effort leading to success (lower reward for application), less emphasis on religious or spiritual belief systems (lower spirituality), and stronger belief in structured or predetermined control over life events (higher fate control). h1: the mean scores on cultural constructs will differ significantly between professional bank managers and small business owner-managers within each country. h2: the directional differences in mean scores on cultural constructs between professional bank managers and small business owner-managers will be consistent across national contexts. h3: the mean power distance scores for professional bank managers will be higher than those for small business owner-managers within each country. h4: the mean masculinity scores for professional bank managers will be higher than those for small business owner-managers within each country h5: the mean social cynicism scores for professional bank managers will be higher than those for small business owner-managers within each country. h6: the mean social flexibility scores for professional bank managers will be lower than those for small business owner-managers within each country. 160 american journal of management vol. 25(2) 2025 h7: the mean reward for application scores for professional bank managers will be lower than those for small business owner-managers within each country. h8: the mean spirituality scores for professional bank managers will be lower than those for small business owner-managers within each country. h9: the mean fate control scores for professional bank managers will be higher than those for small business owner-managers within each country. methods professional bank managers and small business owner-managers were surveyed across two distinct economies: the united states (a highly developed economy) and ukraine (a transitioning former plannedeconomy). the national contexts were selected for their significant differences in cultural distance and economic development. data collection occurred before the outbreak of war in ukraine in 2022. small, manager-owned businesses with fewer than 100 employees were sampled from the same cities as the participating banks. ownership status was self-reported; only businesses that were entirely ownermanaged with active involvement in daily operations were included. these businesses are structurally consistent with those often described in the literature as entrepreneurial in contrast to bureaucratic organizations. in ukraine, surveys were administered in ivano-frankivsk, a predominantly ethnic ukrainian city, by a local professional business center that randomly selected companies from a business database. all ivanofrankivsk banks were approached. 76 small business owner-managers and 99 bank managers responded, with response rates of 60 and 70 percent respectively. the u.s. sample comprised european american small business owner-managers and bank managers in the city of madison, wisconsin. small, owner-managed businesses were selected from a business-center membership list, while banks were chosen from a comprehensive list of local branches. response rates were 49 percent for small business owner-managers and 37 percent for bank managers, with 87 and 69 surveys returned respectively. the survey instruments were administered in english for the u.s. sample. for ukraine, the instrument was first translated into russian and then back-translated into english to ensure accuracy, following brislin’s (1970) methodology. hofstede’s instruments for power distance and masculinity-femininity (hofstede, 1980, 1991, 2001) and leung et al.’s (2002) five social axiom instruments were utilized to measure cultural variables. all responses were scored using a 5-point likert scale. results table 1 presents the descriptive statistics. for simplicity, the term “small firm” used in tables 1 and 4 refers to small, owner-managed businesses. table 2 details the correlations between the constructs within each country. the manova results in table 3 reveal significant effects based on national context, organizational group (bank versus small, owner-managed businesses), and the interaction between organizational group and national setting. this indicates that the patterns observed across the seven scales are influenced by both the country of origin and the type of organizational group. specifically, the manova results show significant differences between countries and between organizational groups on the dependent variables (the seven cultural scales). additionally, there are notable interactions between country and organizational group, suggesting that the influence of organizational group varies by country. these findings provide a simultaneous test of the relationships between national context and organizational group on the cultural constructs. while national culture appears to account for the largest differences in responses, organizational group and the interaction between organizational group and national setting are also important explanatory factors. american journal of management vol. 25(2) 2025 161 a discriminant analysis further investigated which dependent variables were most responsible for group differences. overall, the model correctly classified 78 percent of the individuals. the analysis identified two key functions: the first is strongly associated with distinguishing national groups, and the second moderately relates organizational group effect. therefore, both manova and discriminant analysis support measurement construct validity by demonstrating significant differences in cultural constructs between national and organizational groups (see tables 1, 2, and 3). h1 findings hypothesis h1 predicted that the values and beliefs driving professional bank managers would significantly differ from those of small business owner-managers within the same nations. in ukraine, all constructs showed significant differences except masculinity and reward for application. in the u.s., significant differences were observed for all constructs except reward for application and fate control. even with the bonferroni-adjusted alpha of p = .0036 (to account for 14 simultaneous tests), 10 out of 14 tests (71.4 %) showed significant support across these highly divergent countries (see table 4), providing strong support for h1. h2 findings bank managers’ values and beliefs were predicted to exhibit common patterns across different national cultures, reflected in consistent directional differences from those of small business owner-managers. results provide partial support for h2. significant alignment was found for power distance, social flexibility, and spirituality. social cynicism also showed a significant difference, but in the opposite direction. differences in the remaining constructs were not significant. thus, all but one of the significant differences (social cynicism) align with the predicted direction (see table 5), providing partial support for h2. h3-h9 findings hypotheses h3 through h9 predicted the direction in which professional bank managers’ scores would differ from those of small business owner-managers across national cultures. the majority of significant findings aligned with predicted directions across both countries. in ukraine, four of the five significant differences aligned with hypotheses, with only social cynicism contradicting the predicted direction. in the usa, all five significant differences supported the predicted directions, demonstrating consistent patterns for power distance, masculinity, social cynicism, social flexibility, and spirituality. strong support was found for several key hypotheses. h3 (power distance) was consistently supported in both countries, with bank managers showing significantly higher levels of power distance than small business owner-managers. similarly, h6 (social flexibility) and h8 (spirituality) received strong support, with bank managers consistently showing lower scores than small business owner-managers in both countries. these findings suggest that professional bank managers tend to operate with more hierarchical values, less behavioral adaptability, and weaker emphasis on spiritual beliefs than small business owner-managers. see table 4 for mean comparisons and table 5 for complete directional analysis. conclusions this study examined the cultural orientations of bank managers compared to small business ownermanagers across two culturally diverse countries: the united states and ukraine. the findings provide empirical evidence for systematic cultural differences between occupational groups, supporting theoretical arguments that professional contexts shape distinct cultural orientations (hofstede, 1991), while also extending prior research through the inclusion of belief-based constructs alongside traditional value dimensions. this study found substantial divergence in values and beliefs between professional managers and small business owner-managers. notable differences in several constructs were observed, highlighting key 162 american journal of management vol. 25(2) 2025 cultural patterns that may characterize bureaucratic management across national contexts, specifically regarding power distance, social flexibility, and spirituality. in both countries, bureaucratic management exhibited significantly higher power distance scores than small business owner-managers, supporting the argument that high power distance is a common feature of bureaucratic management. additionally, bureaucratic managers scored significantly lower on social flexibility and spirituality, suggesting that bureaucratic environments may prioritize formal procedures and hierarchical control over adaptive flexibility and value systems that emphasize personal meaning and spiritual beliefs. among the other constructs, none demonstrated significant differences in both countries, limiting the ability to identify consistent cross-national patterns. masculinity showed significant differences only in the u.s., where bank managers exhibited significantly higher scores than small business owner-managers. similarly, fate control showed significant differences only in ukraine, where bank managers scored significantly lower than small business owner-managers. implications for research this study contributes to a deeper understanding of how cultural constructs systematically differ between bureaucratic and small, owner-managed business contexts. the consistent cross-national differences observed in power distance, social flexibility, and spirituality suggest that these constructs may represent common cultural tendencies within bureaucratic organizations. these findings support the argument that professional management, as represented by career bank managers, reflects a distinct cultural orientation shaped by institutional roles and expectations. specifically, bureaucratic managers demonstrate greater acceptance of hierarchical authority, reduced behavioral adaptability, and lower spiritual orientation compared to managers of small, owner-managed businesses. in addition, the inclusion of ukraine, a large transitional economy, strengthens the cross-national validity of these findings by demonstrating that cultural differences between bureaucratic and small, ownermanaged business contexts hold across diverse economic and institutional settings. this suggests that in bureaucratic environments such as banking, professional culture may partially transcend national boundaries. further research could investigate whether similar patterns are observed in other bureaucratic sectors, such as public administration, multinational firms, or large professional service organizations. valueand belief-based constructs together may provide deeper insight into how managers interpret and enact cultural norms in complex institutional contexts. methodologically, future research could benefit from larger national samples and longitudinal designs. these approaches could enhance the generalizability of findings and help assess whether the observed cultural differences represent stable features of bureaucratic systems or are influenced by evolving social and institutional conditions. finally, while this study identified consistent cultural differences between bureaucratic and small, owner-managed business contexts, their performance implications remain unexplored. future research could examine how these cultural profiles influence outcomes such as innovation, adaptability, and longterm performance, providing practical insights for organizational design and policymaking in both bureaucratic and small, owner-managed business settings. references busenitz, l. w., & barney, j. b. 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(1947). the theory of social and economic organization (a.m. henderson & t. parsons, trans.). free press. 164 american journal of management vol. 25(2) 2025 appendix table 1 descriptive statistics n min. max. mean std. deviation skewness std. error kurtosis std. error usa, bank pdi score 69 1.750 3.500 2.710 0.392 -0.199 0.289 -0.357 0.570 mas score 69 1.500 2.750 2.268 0.307 -0.240 0.289 -0.174 0.570 sc score 69 1.632 3.000 2.385 0.327 -0.325 0.289 -0.429 0.570 ra score 69 3.000 4.313 3.653 0.317 -0.364 0.289 -0.495 0.570 sf score 69 2.429 3.786 3.095 0.282 -0.020 0.289 -0.032 0.570 s score 69 2.083 3.833 3.106 0.377 -0.325 0.289 0.641 0.570 fc score 69 1.375 3.500 2.498 0.481 -0.472 0.289 -0.183 0.570 usa, small firm pdi score 87 1.500 3.500 2.382 0.448 0.381 0.258 -0.348 0.511 mas score 87 1.000 3.000 1.960 0.407 0.067 0.258 -0.216 0.511 sc score 87 1.263 3.105 2.109 0.365 0.250 0.258 0.135 0.511 ra score 87 2.938 4.125 3.629 0.286 -0.315 0.258 -0.475 0.511 sf score 87 2.929 4.000 3.354 0.225 0.687 0.258 0.724 0.511 s score 87 2.417 4.000 3.397 0.373 -0.741 0.258 0.100 0.511 fc score 87 1.500 3.875 2.506 0.510 0.245 0.258 -0.260 0.511 ukraine, bank pdi score 99 2.250 4.000 3.030 0.380 0.459 0.243 -0.143 0.481 mas score 99 1.250 3.500 2.356 0.431 0.213 0.243 -0.144 0.481 sc score 99 2.316 4.000 3.268 0.318 -0.021 0.243 -0.218 0.481 ra score 99 2.688 4.875 3.797 0.388 -0.213 0.243 0.415 0.481 sf score 99 2.571 3.929 3.420 0.242 -0.473 0.243 1.044 0.481 s score 99 2.583 4.083 3.282 0.373 0.051 0.243 -0.859 0.481 fc score 99 1.625 4.375 3.169 0.483 -0.437 0.243 0.927 0.481 ukraine, small firm pdi score 75 1.667 4.000 2.809 0.426 0.079 0.277 0.593 0.548 mas score 76 1.500 3.250 2.296 0.410 0.218 0.276 -0.931 0.545 sc score 76 2.158 4.316 3.579 0.469 -0.797 0.276 0.113 0.545 ra score 76 2.438 4.688 3.888 0.365 -0.619 0.276 2.292 0.545 sf score 76 2.857 4.429 3.723 0.353 -0.135 0.276 -0.661 0.545 s score 76 2.417 4.583 3.618 0.481 -0.283 0.276 -0.240 0.545 fc score 76 1.875 4.625 3.512 0.606 -0.564 0.276 -0.305 0.545 american journal of management vol. 25(2) 2025 165 table 2 pearson correlations pdi mas sc ra sf fc s usa pdi score 1.000 0.346 ** 0.279 ** -0.126 -0.143 -0.015 -0.090 n=156 mas score 0.346 ** 1.000 0.274 ** -0.110 -0.336 ** 0.002 -0.151 sc score 0.279 ** 0.274 ** 1.000 0.287 ** -0.178 * 0.279 ** 0.145 ra score -0.126 -0.110 0.287 ** 1.000 0.039 0.109 0.372 ** sf score -0.143 -0.336 ** -0.178 * 0.039 1.000 0.132 0.024 fc score -0.015 0.002 0.279 ** 0.109 0.132 1.000 0.054 s score -0.090 -0.151 0.145 0.372 ** 0.024 0.054 1.000 ukraine pdi score 1.000 0.089 -0.250 ** -0.176 -0.244 ** -0.138 -0.262 ** n=175 mas score 0.089 1.000 -0.039 -0.380 ** -0.091 -0.269 ** -0.126 sc score -0.250 ** -0.039 1.000 0.100 0.613 ** 0.437 ** 0.544 ** ra score -0.176 ** -0.380 ** 0.100 1.000 0.230 ** 0.421 ** 0.332 ** sf score -0.244 ** -0.091 0.613 ** 0.230 ** 1.000 0.425 ** 0.523 ** fc score -0.138 -0.269 ** 0.437 ** 0.421 ** 0.425 ** 1.000 0.572 ** s score -0.262 ** -0.126 0.544 ** 0.332 ** 0.523 ** 0.572 ** 1.000 * p < .05; ** p < .01 1 6 6 a m er ic an j o u rn al o f m an ag em en t v o l. 2 5 (2 ) 2 0 2 5 t a b l e 3 m a n o v a t e s t s e ff ec t m u lt iv a ri a te t es ts (c ) v a lu e f h yp o . d f e rr o r d f s ig . p a rt ia l e ta s q u a re d n o n ce n t. p a ra m et er o b se rv ed p o w er (a ) in te rc ep t p il la i’ s t ra ce 0 .2 1 8 1 2 .7 7 9 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .2 1 8 8 9 .4 5 0 1 .0 0 0 w il ks ’ l a m b d a 0 .7 8 2 1 2 .7 7 9 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .2 1 8 8 9 .4 5 0 1 .0 0 0 h o te ll in g ’s t ra ce 0 .2 7 9 1 2 .7 7 9 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .2 1 8 8 9 .4 5 0 1 .0 0 0 r o y’ s l a rg es t r o o t 0 .2 7 9 1 2 .7 7 9 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .2 1 8 8 9 .4 5 0 1 .0 0 0 n at io n p il la i’ s t ra ce 0 .7 3 6 1 2 7 .5 5 7 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .7 3 6 8 9 2 .8 9 8 1 .0 0 0 w il ks ’ l a m b d a 0 .2 6 4 1 2 7 .5 5 7 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .7 3 6 8 9 2 .8 9 8 1 .0 0 0 h o te ll in g ’s t ra ce 2 .7 8 2 1 2 7 .5 5 7 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .7 3 6 8 9 2 .8 9 8 1 .0 0 0 r o y’ s l a rg es t r o o t 2 .7 8 2 1 2 7 .5 5 7 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .7 3 6 8 9 2 .8 9 8 1 .0 0 0 o rg . g ro u p p il la i’ s t ra ce 0 .3 4 8 2 4 .4 7 4 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .3 4 8 1 7 1 .3 1 7 1 .0 0 0 w il ks ’ l a m b d a 0 .6 5 2 2 4 .4 7 4 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .3 4 8 1 7 1 .3 1 7 1 .0 0 0 h o te ll in g ’s t ra ce 0 .5 3 4 2 4 .4 7 4 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .3 4 8 1 7 1 .3 1 7 1 .0 0 0 r o y’ s l a rg es t r o o t 0 .5 3 4 2 4 .4 7 4 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .3 4 8 1 7 1 .3 1 7 1 .0 0 0 n at io n * o rg . g ro u p p il la i’ s t ra ce 0 .2 3 7 1 4 .2 3 8 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .2 3 7 9 9 .6 6 6 1 .0 0 0 w il ks ’ l a m b d a 0 .7 6 3 1 4 .2 3 8 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .2 3 7 9 9 .6 6 6 1 .0 0 0 h o te ll in g ’s t ra ce 0 .3 1 0 1 4 .2 3 8 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .2 3 7 9 9 .6 6 6 1 .0 0 0 r o y’ s l a rg es t r o o t 0 .3 1 0 1 4 .2 3 8 (b ) 7 .0 0 3 2 1 .0 0 .0 0 0 0 .2 3 7 9 9 .6 6 6 1 .0 0 0 a. c o m p u te d u si n g a lp h a = . 0 5 b . e x ac t st at is ti c c. d es ig n : in te rc ep t + n at io n + o rg . g ro u p + n at io n * o rg . g ro u p american journal of management vol. 25(2) 2025 167 table 4 cultural construct means by organizational group and country means usa ukraine bank small firm bank small firm pdi (power distance) 2.710* 2.382* 3.030* 2.809* mas (masculinity) 2.268* 1.960* 2.356 2.296 sc (social cynicism) 2.385* 2.109* 3.268* 3.579* sf (social flexibility) 3.095* 3.354* 3.420* 3.723* ra (reward for application) 3.653 3.629 3.797 3.888 s (spirituality) 3.106* 3.397* 3.282* 3.618* fc (fate control) 2.498 2.506 3.169* 3.512* * p < .0036 (bonferroni-adjusted for multiple comparisons) table 5 hypothesis testing results: predicted vs. actual directions predicted directions actual directions usa ukraine h3: pdi (power distance) higher higher* higher* h4: mas (masculinity) higher higher* higher h5: sc (social cynicism) higher higher* lower* h6: sf (social flexibility) lower lower* lower* h7: ra (reward for application) lower higher lower h8: s (spirituality) lower lower* lower* h9: fc (fate control) higher lower lower* * p < .0036 (bonferroni-adjusted for multiple comparisons) ajm 18_2_web_master.pdf soft skills – the missing piece for entrepreneurs to grow a business kristin holmberg-wright university of wisconsin-parkside tracy hribar university of wisconsin-parkside small businesses and entrepreneurial startups are continually cited as critical engines for economic and social growth and development of our country. many municipalities and state governments provide tax incentives, low (or no) interest loans, infrastructure improvements and “economic gardening” – an economic development model with the fundamental idea that entrepreneurs drive economies. economic gardening initiatives connect entrepreneurs to resources, assist with refining business models, encourage the development of essential infrastructure, assess competitive intelligence, and provide entrepreneurs with needed information. the authors suggest what is missing is assisting entrepreneurs with development of their interpersonal or soft skills. introduction “we started by believing in what people could do. then we figured out how to create an environment where ordinary people could do extra-ordinary things.” bob kierlin, former ceo and founder, fastenal small businesses and entrepreneurial startups are continually cited as critical engines for economic and social growth and development of our country. (pereira, 2013) in order to grow small businesses, state and local governments have provided tax incentives, low (or no) interest loans, and infrastructure improvements to attract and retain (both large and) small companies. most recently, many local municipalities and state governments have begun “economic gardening” – an economic development model with the fundamental idea that entrepreneurs drive economies. economic gardening principles are based on research by mit’s david birch who suggested that most new jobs in any local economy were produced by the community’s small, local businesses. (quello, 2012) the concepts were pioneered in 1987 in littleton, colorado as an alternative to traditional economic development practices. today, economic gardening initiatives provide a framework for proven techniques that both challenge and compliment conventional practices and apply more specifically to second stage firms. (quello, 2012) second stage companies are companies that have advanced beyond the startup phase, typically employing 10-99 employees and generating $1 to $50 million in annual revenue. (lange, 2012) economic gardening initiatives connect entrepreneurs to resources, assist with refining business models, encourage the development of essential infrastructure, assess competitive intelligence, american journal of management vol. 16(1) 2016 11 and provide entrepreneurs with needed information. major states like california regularly include economic gardening discussions in state development conferences. there is no hope for development of local and state economies without strong, vital growth of small and medium sized businesses, yet the authors believe it is time to change the paradigm somewhat. a perusal of recent research findings has led us to conclude that some significant changes are needed in the services and opportunities that are offered to small business owners and entrepreneurs during the startup phase, as well as during the second stage growth initiatives. in 2008, keith mcfarland discovered what was special about nine companies that successfully broke through the entrepreneurial stage of development and remain successful today. he found that as the small start ups grew, the leader needed to change their approach. in the early stages, there was no midmanagement level so multi-tasking and running the company was important. as the company grew, the entrepreneur needed to spend less time running the day-to-day operations and more time leading, coaching and working as a team to identify strategies to transform the business to grow and succeed. it appears from mcfarland’s study, the needs of an entrepreneur changes with the development of the business initiative. entrepreneurs are idea people. their business begins as an idea; but to achieve business success, the business owner must learn to manage, expand, and lead the company. often, the personal traits that help entrepreneurs launch their business can work against them later with the company’s growth. for example, the individual’s single mindedness may be good in the early stages of the company, but may be viewed as defensive once the organization faces the need for growth, development, and change. today, the nature of work and likewise the skill set to attract, hold, and assure success of entrepreneurial undertakings has changed. because of the changes, it is now vital that efforts to assist with the utilization and development of current capital strategic resources for entrepreneurs should be reassigned to resources that also provide interpersonal skill development. in order to gain a competitive advantage, entrepreneurial and small business initiatives must implement continual and ongoing growth of interpersonal skills commonly referred to as soft management skills. the authors firmly believe that without direct assistance on how to manage the business, while dealing directly with the interpersonal skills necessary for success, small and/or growth companies will continue to fail. the focus of economic gardening must now champion the critical theme of human capital development. the time to do this is limited and should be addressed early on in the formation of said companies. human capital development human capital theory began appearing in economic literature in the 1960’s. economist gary becker’s book human capital was published in 1964 and became the standard reference for many years. becker viewed human capital as similar to the physical means of business productivity or tangible items such as buildings and machines. he defined human capital as an intangible means of a production asset. today, human capital is broadly defined as the worker’s set of skills which enhances productivity. authors like pereira (2013) and hanushek (2008) underline the importance of human capital in productivity, competitiveness, and social development. in corporate finance, human capital is a primary component of intellectual capital which, in addition to tangible assets, comprise the entire value of a company. human capital is the value that employees provide through application of their skills, knowledge, and expertise which provides a necessary means for solving business problems. more specifically, human capital is seen as the cognitive skills, abilities, knowledge, personality, attitude, motivation, decision making, interests, and creativity that the worker provides in the workplace. these attributes and skills allow the workers to perform labor which will produce economic value. since becker, many theorists have connected an investment in human capital development to economic development, productivity, business growth, and innovation – the areas often cited as justification for government subsidies for job skills training and small business growth and development. the confusion in economic development efforts supporting human capital development often arise, 12 american journal of management vol. 16(1) 2016 because human capital is inherent in the individual worker and not owned by the organization as are the tangible sources of support. human capital, for example, is substitutable, but not transferable, like land, labor and fixed capital. numerous studies have documented the critical factor of how effective organizations use their people resources as measured by creativity and innovation and how the success of companies increases to the extent a firm maximizes their human capital. today, leading experts call for investment in human capital management and soft skills training for an improved return on investment (roi) including higher stock appreciation. (evans-raoul, 2013) one entrepreneur explained that the quality of an entrepreneur can be judged by the quality of their work and the quality of their personal and interpersonal skills. with findings such as these, economic gardening initiatives cannot ignore the importance of supporting active efforts to manage and grow human capital. today, investments and support must be provided to business initiatives to develop human capital, most especially soft management skills. soft management skills for the past three decades, there has been a growing body of evidence which points to the value of soft management skills. (goleman, ei: why it can matter more than iq, 1995) it’s often been said that no matter what business you are in, you are in the people business. well-developed people skills can mean the difference between success and failure. on-going research and books argue that if organizations are to survive in today’s global, information based economy, managers and employees together must master the skills necessary to connect to and influence others, maintain relations, and manage and control themselves. this is even more important to entrepreneurs. prior to recognizing the importance of soft skills, the case was continually made that the cognitive or hard skills were the most important predictors of job and company success. in the workplace, companies and the military historically focused on cognitive skill testing, because the literature in industrial psychology attested to its preeminent importance in identifying workers who were most likely to succeed. such beliefs led to a large scale effort to assess cognitive skills. technical competencies, the cognitive or “hard” skills, refer to the traditional skills taught in business schools. hard skills produce immediate and tangible results. they are usually well defined, visible, relatively simple to measure or evaluate and usually involve workers gaining mastery over an inanimate object. many of the initiatives to help in the growth of small business development have dealt with the technical aspects of business success. the emphasis on the hard skills changed in the 1990’s with the discovery of the big 5 personality dimensions. behavioral science researchers in psychology and economics began suggesting that noncognitive factors, or the soft skills, play a significant role in the workplace and were often shown to be more important than cognitive skills in determining success. researchers were able to document that soft skills were critical for implementing change and transformation purposes, whether applied inside the organization or in dealings with suppliers, partners, or customers. (holmberg-wright, the importance management & entrepeurial soft skills, 2007) the importance of the soft skills was now being seen as more important to small business growth and success. unlike technical knowledge and expertise, soft management skills are the interpersonal component of leadership and management. these are skills that are not taught consistently or well in mainstream education systems or the workplace. yet, these are the skills that allow companies to get ahead, be successful, and enable an organization and an individual to thrive. soft skills are the people or human relations skills such as team building, time management, delegation, conflict resolution, stress management, effective customer communication, business writing, decision making, etc. (holmbergwright, the so called soft stuff, insights to a chagning world, 2006) the definition has been expanded to include being resilient, curious, taking risks, being adaptable and creative or innovative. unlike technical knowledge and expertise, soft skills often are more a matter of attitude and behavior. they are broadly defined skills that enhance productivity and the cognitive or hard skills. ongoing research and books like daniel goleman’s emotional intelligence (1995) argue that for organizations (both large and small) to survive today, business owners and employees must master skills american journal of management vol. 16(1) 2016 13 needed to connect to and influence others, maintain relationships, and manage and control themselves. emotional intelligence includes skills that drive internal world and response to the external world. emotional intelligence concerns soft management skills. importance for entrepreneurs despite the growing body of evidence pointing to the value of soft skills, businesses and governmental programs continue to under invest in soft skills training and emotional intelligence. there appears to be a common misconception that soft skills cannot be taught or learned. there is also a tendency to avoid what’s hard to measure. it is much easier to see immediate and tangible results from cognitive skill training and point to success and change. a difficulty for business when training for soft skill development is how to measure the value and changed behavior. the return on investment, roi, from soft skill development is not immediately apparent and is difficult to quantify. one knows from experience the tremendous benefit successful soft skills training will manifest over time, but business owners want immediate impact and bottom line results. the waiting period often provides a stumbling block for many companies and investors. three types of managerial skills robert katz, management consultant, has written perhaps the most widely accepted article about management skills. (katz, 1974) he states that a manager’s ability to perform is a result of their managerial skills in three areas: technical, conceptual and human. technical skills involve the ability to apply specialized knowledge and expertise to work related techniques and procedures. technical skills include production tools and machinery, as well as skills to increase sales, design different types of products and services and market the products and services. these skills are often most important for the first level managers, but top managers must also be cognizant of their importance. start-up companies usually begin with the use of technical skills. scott edmonds, ceo chicos, talked about the importance of devoting initial time in a start-up to managing the many technical aspects of the company. (mcfarland, 2008) conceptual skills involve the ability to see the organization as whole. a manager with conceptual skills is able to understand how various functions in the organization complement one another, how the organization relates to its environment, and how changes in one part of the organization impact the whole. conceptual skills assist a manager to look outside the goals of a single business department and make decisions that will satisfy the overall business goals. economic gardening initiatives recognize conceptual understanding in four key areas: strategic market research, geographic information systems, search engine optimization, and social media marketing. to grow the business, the successful companies recognize the conceptual and strategic growth of an organization must involve all the employees. the nine breakthrough companies put enormous faith and power in the hands of employees. the leaders trusted that the workers’ actions would honor the company and its growth and in no way betray the company or its leadership. to do this successfully, the breakthrough companies and others recognized the important element in the way leaders viewed and treated the employees and customers. conceptual understanding was tied with the human capital understanding. the third area of skills that katz found necessary were the human skills which involve a manager’s knowledge of and ability to work with people – the soft skills. they are the social and interpersonal set of skills that are used when interacting and communicating with one another. effective human or interpersonal skills enable a manager to become a leader, motivate employees for better accomplishment, make more effective use of the human potential, and deal with customers. when it comes to managing people, soft skills are the important differentiation of effectiveness and success. economic development and gardening initiatives have notoriously focused on the first two skill sets. the initiatives especially work with second stage businesses to move beyond the points of failure and 14 american journal of management vol. 16(1) 2016 grow the company. the gardening initiatives often concentrate on tools and timing to grow the company such as developing new markets, refining business models, and accessing competitive intelligence. yet, without the addition of the assessment and training in the soft management skill set, efforts directed at small business development and growth will surely fail. hogshead (2014) reported on research that showed 85% of an entrepreneur’s company’s financial success is due to skills in “human engineering” which is defined as ones personality and ability to communicate, negotiate and lead. only 15% of the success was due to technical knowledge. can economic gardening efforts ignore this important aspect when assisting startups to move to second stage? entrepreneurial skill sets numerous studies have been conducted to identify why entrepreneurial startups have a high failure rate. (wagner, 2013) (bolonwu, 2013) (philips, 2013) according to bloomberg, (wagner, 2013) 8 out of 10 entrepreneurs who start a business fail within 18 months while 80% crash and burn. consistently, interpersonal and management issues are mentioned. the underlying cause of failure is rarely technical or ideas related. rather, most failure is “attributed to a breakdown in communication between executives and talent, team and project managers (hess, 2012) gerber (2001) found entrepreneurs run into problems with the management of the business, because they concentrate their attention on their specialized field of expertise, neglecting managerial skills development. a 2012 multivariable analysis (bonnstetter, 2012) of a group of serial entrepreneurs identified five skills that made the individual unique and were most predictive of the successful entrepreneur mindset. the skills were the following: persuasion, leadership, personal accountability, goal orientation, and interpersonal skills. the authors explained that the interpersonal skills were the glue that held the other four together. they found this set of skills were most predictive of the entrepreneurial mindset. “in contrast to ephemeral notions that entrepreneur success comes as a result of perfect timing meeting brilliant ideas in a cosmic moment of alignment, this research indicates entrepreneurially successful people are successful for a reason – that many of them highly display certain personal skills.” one entrepreneur described the importance of soft management skills as the following: “everything i do revolves around interpersonal skills. it is the single largest role in determining the outcome of every situation. it’s not just investing in an idea but in a person and a team.” (holmberg-wright, the importance management & entrepeurial soft skills, 2007) as this entrepreneur points out, well developed interpersonal skills can mean the difference between a business being successful or failing. certainly strong technological skills or expertise in key conceptual areas are critical to starting a business, but such skills are not the defining characteristic of entrepreneurs, nor will the technical expertise alone grow the company. key qualities are traits such as creativity, the ability to keep going in the face of hardship, and social skills to coach and build great teams and work with customers. welldeveloped people skills can mean the difference between success and failure. self-awareness duffy (2014) explained that one of the best qualities an entrepreneur can exhibit is selfawareness. after interviewing numerous entrepreneurs, duffy pointed out that they must get clear about who they are and how they can help the organization the most. richard branson (2014) agreed, taking it even further and explaining that in his early endeavors, he needed to know himself well so that he could hire his weakness. he explained that his unusually early level of self-awareness and smarts was the biggest contribution to his success. bill murphy (2010) further defined this important quality explaining how critical it is for an entrepreneur to know themselves first and then be able to put together start up teams that complemented their talents and expertise. self-awareness includes values, beliefs, optimism, vision, initiative, persistence, and risk tolerance. research studies have defined the most important soft management skills for meeting success in entrepreneurial undertaking. along with self-awareness, the skills include communication, creativity (including problem solving), and management and leadership skills (which includes motivation, negotiating, goal setting, planning and organizing, team building). american journal of management vol. 16(1) 2016 15 mcfarland talked about the importance of entrepreneurs being brutally honest with themselves. the more an individual knows his own personal characteristics, values, beliefs, and how they come across to others, the better chance of success. the individual needs to have a vision for the company and create a compelling vision of the future. are they able to inspire others? how motivated are they to take on such a challenge? how resilient and optimistic are they to make the dream a reality? the more entrepreneurs knows themselves, the better they will know how to work with others. knowing oneself will also allow the entrepreneur to recognize when they may need to let go of control. bill murphy, jr. (2010) in his book on successful entrepreneurs explained entrepreneurs are remarkably good at recognizing their own personality strengths and weaknesses, which lead them to put together startup teams that complemented their talents and experience. the key to becoming a good leader is not about having greater intellectual horsepower or better skills than employees. what really matters to leaders is what transpires among individuals. self-awareness and being brutally honest with oneself also plays into funding for startups. “i have never once met an angel or venture capital investor who doesn’t investigate character of a founder and his/her team before whipping out the checkbook.” communication the skill of communication plays a critical role in the execution of all other skills. if you cannot communicate, the other skill sets will fall flat. studies on the reason entrepreneurs fail point to poor communication. (wagner, 2013) you cannot possibly be a good salesperson. your planning skills won’t matter if you aren’t able to communicate your plans. plans are virtually worthless without the people processes that transform plans into persistently productive actions. decisions you make will be worthless if you can’t communicate how to execute them. the need to explain, discuss, sell, market, interact with the team are all critical communication skills for the entrepreneur. bob kierlin created fastenal company by invoking “chaotic communication.” he had a totally open door policy wherein any employee could talk to him. he believed and acted on his belief that employees want to use their minds, skills, and energy to impact where an organization goes and how best to get there. open (and chaotic) communication was his instrument of success. (mcfarland, 2008) an entrepreneur needs to be a successful sales person. not only must they have passion and credibility; they must quickly understand the values and objectives of the customer and then make a proposition that resonates with the customer’s values and objections. to do this effectively, the entrepreneur must be able to recognize and understand the customer quickly. malcolm gladwell in blink (2005) explained that people make decisions about an individual in less than 10 seconds. the first impression works for or against you. an entrepreneur needs to have an evaluative system which allows customer identification immediately. richard branson (2014) explains that the digital age has changed a lot in business, but he explains that real life (as in face-to-face) networking with workers, customers and investors is still a business essential, “especially for an entrepreneur whose instincts have to rely heavily on trust based relations – you can’t look someone in the eye by text.” likewise, successful companies know how to increase their communication efforts when they face difficult times. during difficult times, many entrepreneurs tend to hunker down and stop communicating with the organization concerned that if they share the truth the workers will become frightened of the reality facing them. the problem is that during the difficult times, if there isn’t transparency in communication, the troops will create their own scenario which often is far worse than the reality of the situation. additionally, minimizing communication at the time you need new ideas and teamwork the most is a surefire way of defeat. critical and creative thinking and coaching skills these are skills necessary to grow and develop the business. an entrepreneur must invest time and effort to continually hone these skills. by concentrating on problem solving and creative thinking, the individual will be able to recognize (and create) opportunities to sustain and grow the business. 16 american journal of management vol. 16(1) 2016 practical management and leadership skills basic knowledge of management is needed at the initial stage and later during the development stage. without leadership, many entrepreneurs self-sabotage through extremely poor decision making and weak leadership skills. (wagner, 2013) usually in the beginning, management is conducted by the sole founder or owner who must perform all the actions. as the business develops, more management skills are necessary. this is often when frustration sets in. the owner is dealing with a totally new type of problem – management of others. skills in planning, organizing, leading, controlling are needed along with an overview of finance, marketing, and attaining a competitive edge. not everyone will be comfortable managing people. numerous skills are needed to effectively run a business. the entrepreneur will need to plan and organize, set goals, make decisions, and market the business. one successful entrepreneur made mention that “team dynamics is the hardest and most personal challenge of all. getting that wrong really hurts. fundamentally, it’s all about leadership.” (murphy, 2010) leadership is about organizing people and motivating them to work toward a common goal. the entrepreneur needs to give up some control and put efforts into building other people’s skills. to gain the competitive edge, managerial and interpersonal skills and knowledge are at the center. training for human capital development the soft skills can, in fact, be learned and honed. (bonnstetter, 2012) it does take training and ongoing behavioral modification. for entrepreneurs to reach success, this development is critical. it becomes even more important as firms move to second stage development. now there are more employees involved and relationships become critical to success and further growth. the building of teams and collaborative relationships are necessary. when assistance is offered to small business owners, training in the soft skills is critical – more critical, perhaps, than market research, competitor identification, or it offerings. conclusion katz was correct when he defined the three skill sets needed by managers – entrepreneurs included. managers and entrepreneurs do need technical and conceptual skill sets. when you have conceptual skills, you will make better decisions. when you have technical skills as most entrepreneurs do, you will make better cognitive decisions. but, without the interpersonal skill set, you cannot possibly be successful in growing your company. failure will await you. one of the most important management tasks is to work with people. without people, your company will not grow and expand. education in entrepreneurship should focus on how to be an innovator, visionary, creator of a strategic orientation for an enterprise. the training and education should be focused on strategy, planning, forecasting, bringing in new ideas and making them a reality. this is where economic gardening initiatives have focused their attention. but, to stay there will lead to failure. concurrently, education and skill training in management and leadership must also be offered. the focus here must be on acquiring and developing self-awareness and managerial skills. as the business grows, so do the human capital skills that are needed for survival. governments and supporting programs for small businesses should consider ways to increase awareness about the need and significance of managerial skills and knowledge and also support the preparation of integrated educational and training programs for small business enterprises. research shows that soft skills can be learned. each skill can be developed through learning and practical experience. utilization of economic development and growth resources must continue to shift from the current emphasis on capital strategic resources to the strategic resources in the form of selfknowledge, communication, creative thinking, and overall leadership. by making soft skills a priority, organizations (both large and small) can drive success, growth, and a greater return on an investment. knowing this, should lead economic development initiatives to offer resources to entrepreneurs to develop these necessary soft skills. (bush, 2012) entrepreneurs can gain the competitive advantage by american journal of management vol. 16(1) 2016 17 implementing continual and ongoing innovation. managerial skills and self-knowledge are at the center of the enterprise and its growth. creating wealth and success in an organization depends on the ability to recruit the right people, maintain the right work environment to keep the team focused, and constantly communicating with employees. references becker, g. (1975). human capital a theorectical & emperical analysis 2nd edition. new york: columbia university press. bolonwu, v. (2013, april 4). 20 reasons why entrepeneurs fail. retrieved from business gross : http://businessgross.com/2013.04/03/why-entrepeneurs-fail/ bonnstetter, b. j. (2012, december). new research: the skills that make an entrepeneur. retrieved from blogs.hbr: http://blogs.hbr.org/2012/12/new-research-the-skills-that-m/ branson, r. (2014). the virgin way. new york: portfolio. bush, c. e. (2012, february). the case for soft skills training. retrieved from monarch media: http://www.monarchmedia.com/enewsletter_2012-2/case-for-soft-skills.html duffy, s. (2014, february 14). 12 characteristics of highly successful entrepeneurs. retrieved from pro sharing: http://www.prosharing.com/new/2014 evans-raoul, k. (2013). soft skills: crucial to weathering an economic storm . the image white paper. gladwell, m. (2004). blink the power of thinking, without thinking. new york: little, brown & company. goleman, d. (1995). ei: why it can matter more than iq. new york: bantam books. goleman, d. (2013). leadership: the power oof ei. new york: bantam books. hanushek, e. w. (2008). the role of cognitive skills in economic development. journal economic literature, 46(3), 607-668. hess, e. (2012). growth to greatness smart growth for entrepeneurial business. ivery business journal . hogshead, s. (2014). how the world sees you. new york: harper business. holmberg-wright, k. (2006). the so called soft stuff, insights to a changing world. business journal for entrepeneurs, issue 3, 45-60. holmberg-wright, k. (2007). the importance management & entrepreneurial soft skills. business journal for entrepeneurs, issue 3, 92-114. katz, r. (1974). skills of an effective administration . harvard business review, 90-102. lange, m. (2012). economic garden: an entrepeneur oriented approach to economic prosperty. edward lowe foundation. mcfarland, k. (2008). the breakthrough company. new york: crown business. murphy, b. (2010). the intelligent entrepeneur. new york: macmillian publishing. pereira, o. p. (2013). soft skills: from university to the work environment: analysis of a survey graduates in portugal, regional & sectional. economic studies, vol 13-1. philips, t. (2013). 7 reasons why most entrepreneurs fail in business. retrieved from naipjaireur: http://www.naijapreneur.com. why-entrepeneurs-fail/ quello, s. t. (2012). economic gardening: next generation applications for a balanced portfolio approach to economic growth, economic gardening. small business administration. wagner, e. t. (2013, september 12). five reasons 8 out of 10 businesses fail. retrieved from forbes: http://www.forbes.com/sites/ericwager/2013/01/12/five-reasons-8-out-of-10-businesses-fail/ 18 american journal of management vol. 16(1) 2016 168 american journal of management vol. 25(2) 2025 case study-based experiences and advice on the use of autoethnographic research method in organizational research vasilisa polichtchouk turku university of applied sciences keijo varis turku university of applied sciences this article presents findings from a longitudinal autoethnographic case study (2016–2024) on the evolution of knowledge management within a large finnish state-owned research and development institution. offering a cultural perspective, the main researcher—an internal member of the organization— reflects on personal experiences while engaging in autoethnographic research. the article emphasizes lessons learned from conducting this type of research and proposes recommendations for producing high-quality autoethnographic work. it also briefly outlines the study’s theoretical framework, relevant literature, and key empirical insights. through thematic narrative analysis, the study uncovered nine distinct patterns that shaped the organization’s knowledge management history. these patterns emerged through the fusion of empirical findings, theoretical knowledge, and intuitive application of a knowledge management framework. this framework evolved into a narrative model informed by four key perspectives: people, processes, technology, and the ‘i’ the researcher's subjective lens. keywords: autoethnography, experientialism, organizational research, knowledge management introduction autoethnography as a research method is a relatively new way of doing organizational research. it requires an intrinsic perspective lived from the inside rather than an outsider's eye observation. another related research method is ethnography, which has a strong tradition in cultural anthropological research. according to eriksson, autoethnography can offer an alternative methodology for conducting research in parallel with cultural practices and with an ongoing change (eriksson 2013, 3-4, 11-12). in business research, ethnography has been used less frequently. the most popular business research methods often look at organizations from a positivist perspective, where the aim is to prove something true or false. in autoethnographic research, the philosophical approach is symbolic-interpretive, based on experience and eliciting perceptions from it. autoethnography is strongly qualitative as a research method. conclusions are first-hand and the sum of inductive and abductive observations, both of which complement each other (hatch 2018; saunders et al. 2019, 130; 152-156; 180). american journal of management vol. 25(2) 2025 169 the case organization and the case study the case organization was the geological survey of finland (gtk), one of europe's leading experts in applied geosciences. founded back in 1885 from a division of a ministry, gtk up to date operates under the ministry of economic affairs and employment, employing over 400 experts in the mineral economy, green energy, water management, the environment, and digital solutions, and has offices in six (6) places in finland. gtk provides expert service for private clients, stakeholders, and society. partner networks include both domestic and international research institutes, companies, and universities. decision-making and leadership has been developed towards a knowledge driven culture. work performed is the main driver to the research and its outcomes. the main objectives of the research were 1. to gain a holistic understanding of knowledge management in a case organization. this involved identifying the impact on organizational processes, human workflows, and technology issues during the development of knowledge management and identifying the conditions that are favorable for the organization to create knowledge management. 2. to enable the main researcher to learn a qualitative research method autoethnography relatively rarely used in business administration. the following research sub-objectives were set: 1. understand how to write autoethnographic research coherently. 2. produce a holistic overview about knowledge management in an organization. 3. identify the causalities during the development of systemic knowledge management in the case organization. 4. according to the findings, conduct recommendations or roadmap to plan knowledge management for governmental organizations. based on research objectives and problems the following research questions were specified. the main research question was: a. what enables the creation of an advantageous knowledge management in organizations? addressing this question, the following sub questions needed to be answered: b. what does knowledge management (km) mean for an organization? c. how is knowledge processed in an organization? d. what is systemic knowledge management? e. what needs to be understood when creating systemic knowledge management? theoretical framing and research outcome the summary of the research setup is demonstrated in figure 1 below. 170 american journal of management vol. 25(2) 2025 figure 1 research question, sub-questions, and related research approach the setting of the theoretical framing work as a ground base for literature review. literature review produced answers to theoretical research questions as seen from figure 2. figure 2 produced theoretical framing from literature review, research questions b-d american journal of management vol. 25(2) 2025 171 what knowledge management (km) means for an organization knowledge management (km) refers to the systematic processes and practices an organization uses to create, share, and apply knowledge effectively. it enhances organizational learning, improves performance, and creates value by turning knowledge into meaningful and actionable insights (newell 2015; listenmaa 2023). km supports exploration and exploitation of knowledge as a key resource and facilitates the operation of knowledge work systems. in practice, km involves daily knowledge absorption, integrating prior knowledge to learn new things, and facilitates a cycle of negotiation and creation of new organizational practices. this enhances an organization's absorptive capacity, enabling adaptation and thriving in today’s dynamic work environments. (marabelli and newell 2018; jarenko and kankkunen 2021.) how knowledge is processed in an organization knowledge is processed in an organization through multiple interconnected perspectives and practices. newell (2015) identifies two key perspectives: the possession perspective, which roots knowledge in individual experiences, and the practice perspective, which sees knowledge emerging from group activities and shared routines. these perspectives highlight that knowledge processing often occurs in various organizational forms. newell (2015) speaks about managing knowledge work where novices learn alongside experts in practice what and how something needs to be done in a certain work process. the possession of an expert is transferred in practical ways. information can be transmitted dynamically across organizational operations, particularly through technology-based processes (laihonen 2009). information is generated through actions performed within an it system. it artifacts play a critical role in this process, by shaping how people interact with the system. the design or characteristics of an it system suggest its uses or possibilities. when these affordances are embedded in organizational practices, they guide human action and shape organizational routines (robey et al. 2013). once an it artifact becomes embedded in organizational practice, it tools facilitate tasks and influence how work is conducted. consequently, metrics and the use of various accountability and performance management systems have become essential tools for organizations. this practice fits within the epistemology of practice, as newell (2015) proposed, where interaction with it artifacts is materially mediated. it systems aim to help and distinguish relevant from irrelevant knowledge, ensuring the organization focuses on essential data. effective knowledge-based management provides critical information for operational functions, such as service production costs and resource allocation, to meet demand requirements (jalonen, 2015). it acts as both an actor in knowledge work and as a container for transmitting knowledge, bridging human practices and knowledge transmission and enabling effective knowledge-based management within organizations. what is systemic knowledge management systemic knowledge management applies systems thinking to developing and managing organizational knowledge. systems thinking focuses on understanding the interconnections within an organization (zack 2001; listenmaa 2023). in relation to km, this enables sustainable improvements across processes and practices, enhancing information flow and knowledge work management. organizations can integrate knowledge management practices into broader business strategies, ensuring alignment with organizational goals and objectives. by adopting a systemic and holistic approach, organization emphasizes adaptability and allows continuous learning from knowledge management practices and interconnected processes. this ongoing cycle of feedback and refinement ensures that knowledge strategies remain relevant and effective, helping organizations adapt to changing conditions and stay competitive in dynamic environments. a knowledge management strategy serves as a strategic framework that aligns knowledge management initiatives with the organization's overall objectives, facilitating the integration of knowledge creation, sharing, and utilization into everyday operations. 172 american journal of management vol. 25(2) 2025 the research outcome the longitudinal autoethnographic case study demonstrated that the fundamental elements of knowledge management identified by collison and parcell (2001) — people, processes, and technology — serve as core pillars for the development of knowledge management. in creation of systemic knowledge management, it is essential to understand. a practical approach addressed the research question e, "what needs to be understood when creating systematic knowledge management". figure 3 illustrates empirical process to provide research outcome. empirical results will be described in more detail along with along with autoethnographic research presentation. figure 3 results of empirical data collection and analysis setting the research problem in autoethnography in the autoethnographic research method, the research problem can be framed flexibly; however, the approach must allow a thorough exploration of the core issue. finding a way to get to the heart of the "problem" while carrying out the research is important. the compilation of diverse research data allows a wide range of research data to be used for your own research. these can include personal diary entries, notes from meetings, e-mails, photographs, interviews, and other documents, as well as various statistics, such as indicators of occupancy rates or other socio-economic aspects and their values. the aim is to produce in-depth knowledge of the 'problem' under study through personal experience and the research data collected. the "problem" is described and analyzed in the research process based on the experiences and perceptions generated. auto-ethnography is based on writing descriptions and interpretations of past experiences retrospectively and selectively. these descriptions (vignettes) can be produced through a series of iterative american journal of management vol. 25(2) 2025 173 processes to organize the remembered descriptions in a coherent and understandable order afterwards. the data collection with notes and field records of own journey is particularly emphasized in autoethnographic longitudinal research (eriksson 2013; o riodan 2014). application of autoethnography in organizational research an understanding of organizational research is required for conducting autoethnographic research. organizational research spans fields such as organizational change, learning, management, and practice development. knowledge of organizational theory can be seen as a significant advantage when examining organizational phenomena holistically and clarifying the research problem (hatch 2018). our experience suggests that the more holistically and actively one examines an organization, the greater is the capacity to understand it from multiple perspectives. in an exemplary manner the main researcher developed a deep understanding of organizational change, both in practical terms and in relation to the broader evolution of a knowledge-driven culture. the application of organizational research focused specifically on the implementation of a knowledge-based management reporting system. the study's timeframe extended across approximately ten years, encompassing both historical from the past and projected developments for the future. as part of the researcher’s autoethnographic study buchanan and dawson's (2007, 683) ideas about using narratives to explore organizational change were applied. narratives serve both retrospective and proactive purposes. in the context of autoethnography, narratives facilitate an understanding of past events, the extraction of lessons learned, and the acquisition of insights into factors most relevant for future change. understanding this was the starting point for the writing process. this understanding formed the foundation for the writing process, during which the researcher began composing her first retrospective. narratives aid as the starting point for the overall writing process. the initial phase provided foundational elements essential for forming a clear and linear understanding of cause-and-effect relationships between individual events and their outcomes. centering 'one's own voice' in the autoethnographic journey brings meaning to the experience of organizational change (eriksson 2013, 3-4, 11-12; o riordan 2014, 3). conversely, the researcher reflects on the individual's relationship with the organization, embedding themselves within the broader organizational and managerial research context. the researchers’ own reflections concerning the deep meanings on what autoethnography really is, led her to rewrite and reinterpret her own experiences with implementation of the centralized knowledgebased management reporting system. the process of rewriting is an integral part of autoethnographic research. this cyclical nature of reminiscence and writing allows events that are not memorable to be organized either chronologically or in any other desired order. a cycle is a series of repeated events or processes. cycles are characterized by the fact that they start from the beginning each time a cycle is completed and form the necessary repetition in a sequence of events. the researcher’s second round of post-written description elicited further memories, although the process highlighted the need for the emergence of theoretical understanding. however, deeper causal understandings did not emerge in sufficient quantity to open fully unambiguous narratives. the researcher´s grasp of organizational and management research deepened as time passed. concurrently, ideas and approaches for developing knowledge management have converged, enhancing the researcher’s theoretical understanding of knowledge management as a discipline. this integration of empirical and theoretical knowledge enabled the intrinsic, thought-driven application of the theoretical framework of knowledge management to better identify changes within the target organization. the combined empirical and theoretical knowledge, rooted in the researcher's own reasoning, enabled the researcher to identify the changes that occurred and the effectiveness of them. table 1 describes all three reminiscence cycles and their milestones that the researcher wrote afterwards during her autoethnographic study. 174 american journal of management vol. 25(2) 2025 table 1 cycles and milestones produced by retrospective vignettes and findings an important insight was the incorporation of the basic pillars of knowledge management presented by collison and parcell (2001) into the researcher´s own research. that is, the intersection of people, process and technology, and newell's (2015) similar examination from a technological perspective: the american journal of management vol. 25(2) 2025 175 relationship between contexts, processes, and purposes. this realization enabled structuring her own experiences through four essential pillars or prisms: a. knowledge, knowing, and b. the need for knowledge; c. people and interpersonal knowing; and d. processes, the flow of information, and the interconnection between systems; and finally, myself and i. the researcher’s narrative produced the utmost precision vignette cycle only through this framing. the main researcher was able to grasp and identify the relevant events in the case organization and their impact on the development of a culture of knowledge management from a holistic perspective. indeed, o riodan (2014) has argued that autoethnographic research is more reliable the more detailed notes the autoethnographic researcher is able to elicit in his/her study. the researcher also observes that by delving into deeper layers of memory and examining past fragments in a detailed, daily manner, additional fragments emerge from the most hidden recesses of memory. consequently, the narrative becomes, in a sense, 'all-encompassing' on its own. the writing process itself inadvertently generates a coherent trajectory in the form of a narrative. this 'exercise' proved highly productive for the researcher in her final retrospective, which was included as an appendix to the final research report. as part of the process of writing the final autoethnographic description, the main researcher also added quantitative data to support the qualitative data to improve the consistency of the results. the main researcher defined and limited the quantitative data to describe organizational change in the period following the implementation of the centralized reporting system. this meant looking at usage statistics for the system over a period of several years. the findings in quantitative data supported the causal relationships in qualitative data and in some places filled in the 'gaps' in the qualitative data. the three-dimensional setting between the experiential qualitative and quantitative data allowed for parallel analysis and the formation of derived development paths. nine (9) paths or patterns emerged in the study, and all of them were pragmatically linked to the theory. the researcher further refined the theoretical framework to describe the organization’s journey and the causal relationships that emerged from a theoretical-popular perspective. figure 4 illustrates the refinement of the theoretical framework for knowledge management that the main researcher developed during the research. figure 4 the refinement of the theoretical framework of knowledge management as part of implementation of the autoethnographic research 176 american journal of management vol. 25(2) 2025 the main empirical results in brief the thematic narrative analysis conducted in the study revealed nine (9) paths or patterns that emerged from the knowledge management development history in the case organization. by combining produced nine (9) patterns in figure 5 the main researcher could develop a holistic overview of the autoethnographic journey of systemic knowledge management development in a case organization. all this is illustrated in figure 5. figure 5 the produced journey in the creation of systemic knowledge management the research demonstrated that introducing the centralized management reporting system had a comprehensive impact on advancing knowledge management maturity. key findings indicated that through the application of an autoethnographic approach, a committed individual can significantly influence an organization’s capacity to absorb new knowledge, while simultaneously fostering both personal transformation and an organizational shift towards a more knowledge-driven culture. additionally, the study highlighted the critical importance of embedding knowledge management practices into the formal workflows of the organization. it is also essential that individuals within an organization change have opportunities for reflection and collaboration throughout the transition process. the research underscores the importance of continuous and deliberate advancement of knowledge management practices. from a holistic standpoint, effective knowledge management development necessitates not only the formulation of a knowledge management strategy but also sustained, organization-wide commitment to this strategy and the selected practices. it is also important that people in the organization undergoing change can reflect and collaborate throughout the transition process. the research confirms the importance of continuous and determined development of knowledge management practices. from a holistic standpoint, effective knowledge management development necessitates not only the formulation of a knowledge management strategy but american journal of management vol. 25(2) 2025 177 also long-term and organization-wide commitment to this strategy and the selected knowledge management practices. it is important to acknowledge, however, that subjectively interpretive autoethnographic research may retain inherent biases unless the findings can be meaningfully generalized. theoretical ambiguities, potential misconceptions, and the sheer volume of data posed significant challenges at the study’s outset, making it impractical to organize the data chronologically. although the main researcher’s role in knowledge management served as the primary data source, it also presented substantial obstacles to completing the study. nevertheless, the long-term structuring of research data, along with peer support within the professional community, gradually helped to elucidate the central narrative of the research. recommendations for successful autoethnographic research in organizations based on our own experience, here are some practical tips for conducting successful auto-ethnographic research in organizations: 1. an auto-ethnographic researcher should precisely define the topic and the approach to be used. careful planning in both study design and implementation is required to be sufficient. the researcher must engage deeply with the community under study. this embedded cultural focus distinguishes the approach from writing a biography or personal life story, instead emphasizing self-reflection within a cultural context. 2. the research question should closely align with the organization’s activities. ideally, participant observation entails immersion in the organization’s routines, rituals, language use, and social relations. self-awareness and reflective analysis of one’s role are essential in autoethnographic research. the researcher must carefully determine the degree of subjectivityobjectivity in relating personal experiences to the changes that happened within the organization. 3. a meticulous data collection phase is essential. various materials, such as diary entries, meeting notes, emails, photographs, interviews, and other documents that describe the organization’s activities and the researcher’s role, should be collected. ethical considerations must be addressed throughout the research process, including obtaining a research permit if required. 4. the analysis and conclusions are built on the theoretical framework. the analysis must closely tie into this framework. a solid understanding of the relevant literature enhances the researcher’s ability to utilize the autoethnographic research method and increases the ability to relate personal experiences to the collected data and theoretical constructs. ideally, the writing output will be well-defined themes and lifespans that thoroughly address the research question. this makes the story's description as clear as possible and allows comprehensive presentation of findings. 5. maintaining a consistent writing style is crucial in auto-ethnography. while autoethnographic research may allow for varied writing formats, the style should remain consistent to ensure coherence throughout the research. 6. the iterative process is a fundamental aspect of autoethnographic research, as deductive and inductive reasoning complement one another. the researcher formulates tentative conclusions and hypotheses based on observed phenomena, which are then attached the observed phenomena to broader themes and topics. this iterative process helps deepen understanding and ensure that research findings are well-founded and comprehensive. it can be repeated as many times as needed to refine insights. 7. engaging colleagues and peer reviewers into discussion further refines the findings. peer feedback and critical discussion of hypotheses and conclusions enhance the study’s quality. through holistic reflection, autoethnographic research can generate new insights into the 178 american journal of management vol. 25(2) 2025 causes of organizational change, the process by which it occurred, and the lessons to be learned from it. 8. sharing the findings supports broader understanding and application. discussing results within the organization and sharing them with professional or research communities fosters knowledge dissemination and potential impact. by drawing on the previous advice and the strengths of different inferential approaches, the autoethnographic researcher will achieve a deeper and richer understanding of the research subject. this verifies and validates that the autoethnography is carefully conducted, that the results can be trusted and that the research provides a profound description of the organization and the role of the researcher within. finally, it should be noted that autoethnographic research is challenging to manage and evaluate due to its subjectivity and temporal cyclicality. the cyclical recollections (vignettes) and their interpretations may also change from time to time. understanding and interpretations change over time as knowledge and understanding increase and mature – this must be accepted. because of the varying interpretations due to cyclicality, regular contact with the research supervisor is necessary to ensure that the research supervisor does not forget the previous and recent interpretations. this will help the supervisor to stay 'on the map' of where the research is going. references buchanan, d., & dawson, p. (2007). discourse and audience: organizational change as a multistory process. journal of management studies, 44(5), 669–686. collison, c., & parcell, g. (2001). learning to fly – practical lessons from one of the world’s leading knowledge companies. capstone publishing limited, oxford, u.k. eriksson, p. (2013). longitudinal autoethnography. in paavilainen & raukko (eds.), handbook of longitudinal research methods in studies of organizations. edvard elgar. hatch, m.j. (2018). organization theory: modern, symbolic, and postmodern perspectives (4th ed.). oxford: oxford university press. jalonen, h. (2015). tiedolla johtamisen näyttämö ja kulissit. tiedolla johtaminen -teoriaa ja käytäntöjä (pp. 40–68). tampereen yliopistopaino oy -juvenes print. jarenko, k., & kankkunen, j. (2021). metataidot auttavat pärjäämään työelämässä. 20.2.2021. blog. retrieved may 27, 2024, from https://www.tuumakustannus.fi/artikkelit/metataidot laihonen, h. (2009). terveysjärjestelmän johtamisen tietovirrat, tampereen teknillinen yliopisto, julkaisu 824. listenmaa, j. (2023). laita tieto töihin. tiedolla johtamisen käsikirja. e-kirja. helsinki: alma talent. marabelli, m., & newell, s. (2018). absorptive capacity and enterprise systems implementation: the role of prior-related knowledge. data base for advances in information systems. http://dx.doi.org/10.2139/ssrn.3201645 newell, s. (2015). managing knowledge and managing knowledge work: what we know and what the future holds. journal of information technology, 30. https://doi.org/10.1057/jit.2014.12 o riordan, n. (2014). autoethnography: proposing a new method for information systems research. ecis 2014 proceedings – 22nd european conference on information systems. polichtchouk, v. (2024). a systemic approach to knowledge management: an autoethnographic journey. turku university of applied sciences. master´s thesis. retrieved from https://www.theseus.fi/handle/10024/865247 robey, d., anderson, c., & raymond, b. (2013). information technology, materiality, and organizational change: a professional odyssey. journal of the association of information systems, 14(7), 379–398. saunders, m., lewis, p., & thornhill, a. (2019). research methods for business students (eighth edition). harlow, united kingdom: pearson education limited. american journal of management vol. 25(2) 2025 179 zack, m.h. (2001). if managing knowledge is the solution, then what’s the problem? by m.h. zack (1998). in y. malhotra (ed.), knowledge management and business model innovation. idea group publishing, london. 50 american journal of management vol. 24(4) 2024 sustainability management in industrial companies thomas göllinger university of applied sciences konstanz industrial companies have numerous avenues for implementing sustainability innovations, which can significantly reduce the negative ecological impact of their activities. in this context, a variety of options for action and types of innovation are available to companies at different system levels. these range from innovations in the material and energy flows used for processing, procedural and product innovations, through to comprehensive organisational and functional innovations at the consumer and user level. there are numerous interdependencies between the different levels and types of innovation. keywords: production & product ecology, function orientation, system levels, types of innovation introduction there is a substantial agreement among scientists and politicians that the current ecological challenges, such as climate change, are of a global scale and are approaching planetary boundaries (rockström et al. 2009). furthermore, these challenges are posing significant obstacles for the economy and businesses. industrial companies are especially affected by this phenomenon, as they contribute significantly to ecologically problematic material and energy flows and are therefore particularly affected by ecologically motivated political and social demands and government regulations. in this regard, addressing the ecologically sustainable value creation issue represents a significant future challenge for these companies. concurrently, a multitude of innovations exist that can facilitate ecological improvements at the organizational level. when implemented appropriately, these innovations have the potential to enhance the long-term viability of industrial companies. sustainability as a task for corporate management the perception of sustainability issues within society exhibits a cyclical pattern, characterized by periods of both ascension and decline. however, an overall upward trajectory is discernible. it is, therefore, of existential importance for companies to address the issue of sustainability. otherwise, they risk finding themselves in a situation that threatens their existence in the long term. therefore, dealing with the issue of sustainability represents a general challenge for corporate management and requires qualified sustainability management. the following definition is used as a basis for the following explanations: sustainability management is defined as the comprehensive design, steering, and development of a company that considers economic, ecological, social, and socio-cultural aspects. consequently, the objective is to establish a multidimensional target reference, or "sustainability polytelia", within the context american journal of management vol. 24(4) 2024 51 of a dynamic equilibrium between competing target dimensions. this entails a comprehensive assessment of economic, ecological, social, and socio-cultural opportunities and constraints, intending to shape corporate policy in a manner that optimizes the realization of these diverse objectives. as a cross-sectional function, sustainability management is cross-functional, encompassing all company functional areas and involving all employees. furthermore, it is cross-company and also takes into account cooperating companies in upstream and downstream stages. finally, it is characterized by a proactive behavioral and transformative innovation orientation. current challenges for sustainability management contemporary sustainability management is based on an equal footing on both the social-human and ecological dimensions. it can be defined as valueand responsibility-oriented management (corporate social responsibility, csr) (pfister 2020) on the one hand and as environmental and resource-oriented management on the other. these two issues are considered part of an integrated management system. this form of management is innovation-oriented and therefore highly relevant for the future viability of companies. (seidel (ed.) 1999, göllinger 2022). companies are not only directly confronted with current problems such as the environmental and climate crisis, supply bottlenecks, and geopolitical developments, but also with many demands from society and politics regarding sustainability. these demands have already led to market-relevant consequences. consequently, companies are facing an increasing number of demands in this area. additional specific objectives include: the concept of a circular economy, defined as a system in which materials are kept in circulation for as long as possible, has gained significant traction in recent years. this approach, also known as "cradle to cradle", is designed to reduce the amount of waste generated by avoiding unnecessary consumption and promoting recycling. (migliore/talamo/paganin (ed.) 2020). in light of the mounting challenges posed by waste accumulation over the past few decades, governments and corporations have been pursuing a range of measures to reduce waste and increase recycling. the principles of a comprehensive circular economy are increasingly guiding these efforts. a key concept is the notion of a fully residueand waste-free (zero waste) production and economic system. in a narrow sense, this concept is related to the specific operational production processes, which makes its implementation challenging. this is because a multitude of industrial production processes yield a range of undesirable byproducts and secondary products that cannot be directly utilized in the production or operation process and therefore accumulate as residues. however, suppose the guiding principle is interpreted broadly, in the sense of recycling residues in the value creation network of the entire economy. in that case, it can be expected that a zero-waste strategy can increasingly be realized. the cradle-to-cradle approach should be seen in this context (mcdonough/braungart, 2009). this relies on consistent recycling by either continuously keeping material flows in technical cycles or returning them to natural cycles. the considerable number of regulatory measures in place give rise to many requirements, which presents a significant challenge for companies in terms of developing efficient concepts and integrating them into their established corporate routines. the question of reconciling economic, social, and ecological objectives has been a topic of social and political debate for some time. in recent times, disputes between disparate ecological objectives have also emerged. one illustrative example of an internal ecological conflict is the ongoing debate about the relative priority of climate protection over nature conservation. the conflicts mentioned above of objectives and values give rise to a more complex situation about the social evaluation and interpretation of information concerning the actual or only supposed social and ecological benefits of certain materials, products, and production processes. this is due to the various interactions and the difficulties in adequately recording them. as a result, the demands on companies' social and ecological communication are increasing. concurrently, the escalating costs associated with environmental and resource consumption (e.g., co2 pricing) necessitate a thorough examination within the context of a company's profitability calculations. in favorable circumstances, these augmented endeavors may culminate in augmented resource and cost savings for companies. (fernández/zubelzu/rodrigo (ed.) 2017). 52 american journal of management vol. 24(4) 2024 topics and tasks of sustainability management in industrial companies in the traditional economic perspective, a company's material value creation process is conceptualized as the transformation of raw materials and supplies (input) into goods and services (output). in contrast, the ecological perspective posits that the corporate performance creation process is a transformation of resource input (energy, materials) into desirable products and undesirable emissions, residues, and ecological risks. from this perspective, value creation processes are inextricably linked to harmful creation processes, which are referred to as external effects in environmental economics. while the traditional economic perspective abstracts from the material-energy processes in the value creation process, the ecological perspective explicitly addresses these material-energy aspects. (costanza 1991, daly/farley 2004, weizsäcker/hargroves/smith 2009). in the future, the emphasis will be on developing products (goods and services) that do not present any risks to human health or the environment throughout their entire life cycle, from manufacture and use to consumption, recycling and disposal. furthermore, these products will consume few resources. (seliger/khraisheh/jawahir 2011, benetto/gericke/guiton (ed.) 2018). greening of industrial production production ecology traditional environmental protection in industrial companies in the context of operational production within industrial companies, sustainability is closely associated with traditional operational environmental management and its orientation towards the environmental protection function. the operational processes of the production area and the associated neighboring areas constitute the primary focus of tasks and activities. environmental and organizational issues are of particular importance, particularly concerning operational and production-related environmental protection measures. this dominance is a consequence of the environmental protection legislation that has developed over decades, which has been and continues to be strongly oriented towards environmental media, substances, and plants. similarly, aftercare environmental protection has been a dominant area of focus for an extended period. it is important to distinguish between remedial environmental protection, which employs cleaning and repair technologies, and additive environmental protection, which utilises filter and retention technologies. remedial environmental protection is only applicable when pollutant emissions have already occurred, that is to say, when an environmental medium has already been polluted. a case in point is removing contaminated sites, for example, cleaning contaminated soil or leaking landfills. it is inevitable that remedial environmental protection will be required in the future, given that numerous contaminated sites still need to be removed to prevent more serious harmful effects. the implementation of filter and retention technologies represents an initial step in the process of additive environmental protection. these technologies are designed to address emissions, which, despite not being eliminated, can be contained and prevented from spreading. in this regard, the concept of additive environmental protection is concerned with avoiding emissions. (haasis (ed.) 2007). production-integrated environmental protection (piep) production-integrated environmental protection (piep) represents a proactive and innovative avoidance strategy (göllinger 2012). it entails the implementation of integrated environmental protection technologies and a corresponding organizational orientation of operational environmental protection, intending to prevent emissions and residues from occurring in the first place. the fundamental premise is that environmental protection measures must be initiated at the earliest stage of the production process, which is why industrial production represents the central starting point. this is what is meant by the term "production-integrated environmental protection," or piep. this objective entails an ecological modernization of the entire production process, entailing a structural change in the production processes themselves. consequently, environmental protection becomes an intrinsic aspect of production, accompanied by reduced resource utilization. the following sequence of steps can be regarded as programmatic for piep: avoid, then reduce, then recycle, then dispose. american journal of management vol. 24(4) 2024 53 recycling as an integral part of a circular economy the integration of recycling as a fundamental component of a circular economy is a necessity, despite the advent of revolutionary advancements in production and manufacturing techniques. the aspiration of achieving an entirely residue-free production process remains unattainable. it is of paramount importance that unavoidable residues resulting from production processes be reused. in this regard, all potential avenues for recycling must be pursued. the term "recycling" is typically understood to signify the reintroduction of residual materials into the economic cycle. (göllinger/harrer-puchner 2022). this may occur within the company's own production (internal recycling) or by extending the recycling possibilities beyond the company itself (external recycling). typical measures include the implementation of use and recycling cascades, such as establishing closed water cycles or recovering materials from electroplating and etching processes. (veit/bernardes (ed.) 2015). a further differentiation can be made based on the spatial or institutional scope of the material flows. a company can have several production facilities at one location that are networked with each other in terms of their material flows. one example of this is chemical verbund sites. in such constellations, the recycling basis for residues extends to all processes within the inter-company production network (intercompany recycling). a number of industrial recycling networks have already been established based on inter-company cooperation. these networks are formed with the aim of recycling residues and are therefore referred to as recycling networks (industrial ecology) (isenmann/hauff (ed.) 2007). figure 1 illutrates the areas of responsibility of piep and recycling. residue recovery tasks can be subsumed under the term "operational reduction management". the coordination between operational production and operational reduction leads to an integrated production and reduction economy. figure 1 piep and the possibilities for networking material flow 54 american journal of management vol. 24(4) 2024 product-related environmental management product ecology product-related environmental management represents an extension of production ecology to encompass product ecology. the environmental impact of products is not limited to the production phase; it also extends to the use phase. from a product-related environmental management perspective, products themselves can be a source of emissions. for instance, adhesives may release solvents into the environment. conversely, utilizing a multitude of products necessitates utilizing supplementary resources in the form of operational materials, such as electricity for the refrigerator. the additional consumption of resources and the associated emissions and environmental impact have the potential to exceed the environmental impact of producing a consumer good over its lifetime. in light of the legal requirements and customer preferences, companies must prioritize the development of environmentally conscious and resource-efficient products. (göllinger 2012, 2022). upon reaching the end of their useful life, products are ultimately destined for the waste management system as consumer waste. up until this point, the prevailing practice has been to dispose of these materials in landfill sites or incineration plants. this approach is not aligned with the tenets of a circular economy, as the products in question may contain valuable raw materials that should be returned to the economic cycle. subsequent to the production and consumption phase, the objective of the reduction phase is to conclude the material cycle. (charter/tischner (ed.) 2001). product ecology can be summarized as follows: the use of hazardous substances to the environment and health should be avoided. products should be designed to allow for resource conservation and minimal emissions, possess an extended service life, and be straightforward to repair and recycle. these objectives may be subject to some degree of overlap, but they may also be in competition with one another. in individual cases, it is important to utilise appropriate instruments, such as product life cycle assessments, in order to optimise the entire product life cycle. if all areas of a company that are affected by the product issue (e.g. r&d, materials management, marketing) are included in this optimisation, the result is an ecological product policy. functionand needs-oriented corporate policy both production ecology and product ecology concentrate on technological innovations. nevertheless, these approaches are inadequate for fully exploiting the existing potential for efficiency. the functional orientation approach incorporates an additional dimension: benefit or functionality. the objective is to ascertain the benefits that a product offers the user and determine how this useful service can be provided ecologically efficiently. the objective is to provide services that meet consumer demand, focusing on the use of fewer ecologically compatible products. the functional orientation approach involves the integration of product and process innovations, as well as organisational innovations. in essence, the aim is to satisfy the service demanded by consumers with fewer but ecologically compatible products. a number of service concepts already exist that increase the ecological efficiency of goods through professional product usage management. (göllinger 2012, vester 2007). the goods and services offered by companies represent specific solutions to problems encountered by customers or users. the user typically combines multiple goods and services to derive specific benefits. such offerings may be designated as a "utility service" or "product as a service." one illustrative example is that of chemical companies, which offer application consulting services in addition to their chemical products. in many instances, this is the very factor that enables the effective and efficient utilisation of chemicals, as exemplified by the case of agrochemicals in agriculture. from the user's perspective, it is paramount to provide the desired chemical usage service through an optimal combination of chemical use and application advice. the emphasis in usage-oriented services is no longer on the tangible benefit, but rather on the customer benefit that is effectively generated. the services are designed in such a way that the utilization potential of a carrier medium is used as intensively as possible. the service consumers can be either individual customers who borrow a carrier medium or several people who use a carrier medium together (e.g., car, washing machine, etc.). rental of products is also included in these usage-oriented services, as are concepts of joint use of products (pooling and sharing). american journal of management vol. 24(4) 2024 55 the rental of products is by the manufacturer's product responsibility. in the event that the manufacturer rents out products, the products are returned after use. the manufacturer is then responsible for the recycling or disposal of the products. the manufacturer's economic interest is already geared towards recyclingoriented product design during the product development stage. if the products are made available to users via a pool, the manufacturer is interested in the longest possible and most intensive use. this is achieved by having several users in a pool, while a long service life is attained by a product design oriented towards the product's service life. expansion to include further properties and functions an expansion to include further properties and functions is achieved by extending the ecologically compatible design of all infrastructures and processes to the buildings and land used, thereby creating factory and site ecology. in this context, the objective is to identify and assess the direct ecological impact of operational activities at the local site. the effects are particularly felt by local stakeholders, including residents, environmental groups, local government, and local service providers. socio-ecologically oriented processes are also integrated into the procurement of raw materials, consumables, and supplies and the distribution of goods. this corresponds to a functional, holistic approach in which the aforementioned processes of procurement, distribution, production, and product ecology are linked together. (vester 1980, 1988, 2007). interdependencies of the system levels and innovations in previous literature, analogous integration-oriented attributes have been identified as characteristics of environmental management, which can be considered a precursor to sustainability management (göllinger 2012). to gain a more comprehensive understanding of sustainability that encompasses the social, socio-cultural, and societal dimensions, it is essential to integrate the aspects above. there are numerous avenues for an ecological orientation of companies, occurring at disparate system or action levels and associated with diverse types of innovation. figure 2 illustrates these system levels, measures, and innovation types in tabular form. figure 2 system levels, options for action and types of innovation in the greening of industry 56 american journal of management vol. 24(4) 2024 the scheme presented gives the impression of a clear and linear layering of the individual levels and options for action or measures. however, an analysis of the interrelationships reveals that the scheme is, in fact, more complex and can be viewed in two fundamental aspects: 1. interconnections between the levels: the levels are interwoven in a variety of ways, rendering it generally infeasible to view them in isolation. in particular, a substantial number of foundational repercussions on lower levels can be observed, as the following examples will illustrate. − for instance, process and procedural innovations that result in a reduction and/or alteration of the quality of operational emissions frequently necessitate the substitution of raw, auxiliary, and operating materials to ensure the optimal functioning of these novel processes. − this is particularly relevant in the context of the inter-company exchange of material flows within the framework of inter-industrial material flow networks. − in addition, product innovations within the context of product ecology may necessitate the implementation of alternative production processes. a central tenet of product ecology is the utilisation of alternative raw materials for products with a reduced environmental impact. − system innovations, such as the energy or mobility transition, typically necessitate the coordinated development of a multitude of innovations at the underlying levels. this is particularly relevant in the context of organizational and functional innovations that more closely align with the needs and expectations of consumers and infrastructure users. 2. the fundamental level of analysis is that of material and energy flows: the initial or fundamental system level (material and energy flows) serves as the foundation for all subsequent levels, as it possesses a dual and therefore optimal function within this comprehensive system. − from the perspective of operational material and energy flows, there is a clear opportunity for innovation in greening corporate activities. in this context, the substitution of problematic raw, auxiliary, and operating materials is of particular relevance, as it represents a crucial avenue for advancing material and raw material innovations. in this context, the development of consistency innovations is of particular significance. − conversely, the material and energy conversion processes that result from operational value creation are responsible for the material and energy flows exchanged with the natural environment. this implies that all innovations and measures at the other levels ultimately exert an influence on the first level (as evidenced by the large downward arrow in fig. 4.6). this is because the various measures at these levels each serve the purpose of quantitatively and qualitatively modifying the material and energy flows induced by companies. in this respect, this level differs fundamentally from all other levels. conclusion and outlook there are numerous opportunities for industrial companies to implement innovations at different system and operational levels thereby reducing the environmental impact of operational value creation processes. the innovations mentioned initially extend to the level of material and energy flows, then cover the level of production processes and extend to the products. additionally, consumer usage systems are encompassed. in addition to technological innovations, organizational and functional innovations are also necessary. with regard to this, there is an observable increase in system integration and innovation orientation can be observed with the ascending levels, which results in numerous repercussions and interdependencies between the levels and innovation arenas. american journal of management vol. 24(4) 2024 57 references charter, m., & tischner, u. 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(2007). the art of interconnected thinking. ideas and tools for a new approach to tackling complexity. mcb publishing house. weizsäcker, e.u., hargroves, k., & smith, m. (2009). factor 5. transforming the global economy through 80 % improvements in resource productivity. london. assignment 2a wal-mart case study 82 american journal of management vol. 24(2) 2024 using mrp and jit techniques for smart procurement and operations of a restaurant ram n. roy eastern institute of technology organisations in the hospitality sector face problems in meeting customers’ demands of food items within an expected time and cost. however, some materials planning and procurement techniques may help process food items within acceptable lead times. the organisation needs to know what and how much it has on hand and what and how much to purchase from external sources. this paper applied the mrp and jit concepts in a medium-sized restaurant named that creates various types of food items using raw materials from local and overseas sources. the paper has used actual data over ten weeks of sales of the most popular food items to forecast future demand using a moving average forecasting model. by using the forecast of end products and other information (viz. product structure, bill of materials, inventory on hand, lead-time), an mrp spreadsheet for various raw materials was generated, which would be supplied using the jit scheduling to meet current and future customer demands within the expected time and at the lowest cost. keywords: mrp & jit, service sector, hospitality, restaurant, lead time, product structure introduction the popularity of jit (just-in-time) production has increased globally, but before jit production, mrp (materials requirement planning) was a widely used technique in major firms. while mrp systems have grown in popularity in the usa since the early 1960s, jit systems have developed in japan and are getting considerable attention throughout the world. however, according to garcía-alcaraz et. (2019), a successful jit implementation is based on human resources integration (managers, operators and suppliers) and other lean manufacturing techniques applied in the production process. jit is a subset of lean manufacturing systems that offers benefits to production systems when it is well implemented. jit is a tool that can easily be applied in hospitality and food services, where customer satisfaction is strongly related to timely delivery of food items. according to lee (1993), jit and mrp are independently-developed approaches for managing production and inventory, and the two systems are generally seen as mutually exclusive, but the truth is that they need to be used together for the most effective outcomes. although the two systems are concerned with different functional areas of production, the objectives are similar: to get the right part to the right place at the right time. the researchers believe that the future success of a manufacturing firm depends on the hybrid concept of both mrp and jit because the philosophy of mrp is the same as jit, but one needs to combine the drive and execution of jit with mrp to make it work. ptak (1991) supports this argument by saying that mrp has given us the planning tools to make jit possible (ptak, 1991.…cited in lee, 1993). some other american journal of management vol. 24(2) 2024 83 techniques used before 1960 for inventory control were stock replenishment, reorder points, the eoq model, selective control techniques (viz. abc analysis), and aggregate inventory management (clayton, 1997). mrp started getting developed in 1957, and joseph orlicky wrote the first textbook on the subject, ‘materials requirement planning: the new way of life in production and inventory management’. mrp deals with dependent demand items while forecasting techniques determine the independent demand items. mrp calculates gross and net requirements based on the information available about product structure and the inventory on hand. thus, for mrp to work effectively, the following information needs to be in place: the master production schedule (mps), a product structure (to indicate the relationship between end product, subassemblies, and components), bill of materials (bom), inventory records or inventory on-hand, and the lead-times for individual items (figure 1). for example, a product consists of a few subassemblies, and a subassembly comprises some components that, in turn, include raw materials. figure 1 a hybrid model of mrp and jit for the xyz operations data collection from the xyz s operations forecast demand using 3 week moving average method creating product structure & bom applying jit concepts for delivery of items determining net mrp inventory on hand estimated lead times for various items master production schedule (mps) mrp helps in forecasting by computing the demand-dependent components from the production schedules of their parents. mrp also provides managers with more information than was available in traditional methods. this helps managers in capacity planning, scheduling, and financial budgeting. mrp updates dependent demand and replenishment schedules of components when the schedules for parent items change. literature review mrp system is based on the dependent demand concept, which means the demand for one item depends on the demand for another (seyed-mahmoud, 2003). for example, the demand for tyres per week depends on the number of cars produced per week by an automobile company. every car needs five tyres (4 on the wheels and one reserved in the boot). if the demand for cars falls in the market, then the demand for tyres will also fall. thus, the demands for all the subassemblies, components and raw materials can be determined if their dependency is established through a product structure (see figure 2). 84 american journal of management vol. 24(2) 2024 mrp and jit as useful techniques various researchers have highlighted different aspects of mrp as a planning technique. petroni (2002), for example, states that the mrp system is a technique to help manufacturers determine precisely when and how much material to purchase and process based on a time-phased analysis of sales orders, production orders, current inventory and forecasts. he adds that mrp will also schedule purchase orders and/or production orders for jit receipt. similarly, sagbansua et al. (2010) consider mrp as a computer-based system to organise the timing and order of the dependent demand products. the demand for the end product is used to calculate the demand for the components in lower levels, and the process is divided into planning periods. finally, the production and assembly functions are organised to ensure the timely delivery of the final product. seyed-mahmoud (2003) adds that mrp helps in forecasting components with ‘lumpy demands’ that occur sporadically and relatively in large quantities (e.g., a bag of flour in the operation of a restaurant or a bag of cement in building construction). jit system is an idealised concept of inventory management in which a supply is delivered just in time, whatever material is required, wherever it is required, whenever a maximum supply is needed, and without keeping any stock on hand (vrat…cited in munyaka & yadavalli, 2022). in terms of material resource planning, the jit concept allows companies to manage their warehouses with greater efficiency, avoiding inventories, shortages, or replenishment orders. mrp/jit implementation researchers have also highlighted the issues related to the implementation of mrp or jit in various contexts. puspita et al. (2019) investigated how an mrp system could be implemented in an indonesian restaurant based on the arima-based demand forecasting method of some of the popular food products. garcía-alcaraz et. (2019) used a structural equation model with variables associated with jit implementation including management commitment, human resources integration, suppliers, production tools and techniques. their findings indicate that managerial commitment is the most important variable in the jit implementation process. they further indicated that jit should not be considered in isolation but rather be integrated with all other techniques in production systems that support materials flow. mrp and jit complement each other according to lee (1993), mrp is a priority planning technique, not an execution tool. therefore, significant waste could be avoided through the use of jit as an execution tool, where only those materials needed on the operation floor are pulled as and when they are required. lee also proposed a hybrid model that incorporates the mrp and the jit systems in a single framework and remarked that the rationale is not whether mrp is better or jit but how they complement each other in a hybrid system. abuhilal et al. (2006) report that using either jit-pull or mrp-push inventory control systems depends on variables like inventory cost, demand pattern, average demand level, company policy, risk attitude, and relationship with suppliers. they also indicated that the value of information sharing is maximised during cyclical and variable demand patterns while its effect remains statistically significant at a stable demand pattern. with the integration of mrp and jit, the manufacturing environment must be different from that of a conventional mrp-based system. therefore, some prerequisites must be satisfied to fully operationalize a hybrid system in an uncertain environment (lee, 1993). jit seems to be attractive to users as it appears paperless and computer-less, while mrp-based systems depend heavily on computers. however, researchers {rao et al. (1988); bose et al. (1988); edwards et al. (1984) cited in lee (1993)} feel that both jit and mrp alone as well as in the hybrid framework can benefit from the use of computers. many employees including production planners, production managers, customer service representatives, purchasing managers, and inventory managers use the information provided by mrp in manufacturing companies. sagbansua et al. (2010) emphasize that the benefits of an mrp system depend on the use of computers to update data on the component needs. accuracy is vital in the successful implementation of the mrp system because mistakes in inventory records or bill of materials would result in missing parts, over-ordering of some products and under-ordering of others, and deviations from the american journal of management vol. 24(2) 2024 85 production schedule, all of which could result in a lower level of customer service, inefficient use of resources, and delayed deliveries to the customers (sagbansua et al. 2010). mrp in the hospitality industry just like the manufacturing firms, the hospitality organisation also faces similar problems of meeting the demand for food items ordered by customers within an expected time and at a reasonable cost. therefore, some planning is required to process the orders on time. a restaurant, for example, needs to plan and control the types and quantities of materials it needs to purchase, and it needs to plan which products to produce (cook), in what quantities, and to ensure it would be able to meet the current and future customer demands at the lowest possible cost. making a poor decision in any of these areas will make the company lose customers and money. let us take an mrp example in an ethnic restaurant called xyz in waipukurau, new zealand. purpose and research approach the main purpose of the paper is to develop an mrp framework for xyz restaurant and implement it through the jit technique. to implement the framework successfully, the objectives are to (a) record ten weeks of sales information on the most consumed products of the xyz restaurant; (b) forecast future demand using the 3-week moving average method and establish a master production schedule (mps); (c) create a product structure and bill of materials, and develop an mrp spreadsheet for the various items required for the operations of xyz restaurant. the research was conducted at xyz with its permission, and the operational data were obtained through observation and by talking to the manager/staff of xyz. the production process and the steps involved were also helpful in understanding the context holistically. the end products from the menu, the ingredients involved, and the sales data of end products (food items) were used for generating the mrp. the case study the company for this study is xyz restaurant, located in the small town of waipukurau about 60 km from napier. only a few restaurants in this town serve ethnic foods with healthy options. due to a significant trend in customers’ inclination towards healthy eating and healthier lifestyles, it seems there is a niche for ethnic foods in the restaurant industry. the town has many fast-food restaurants such as fish n’ chips, kfc, pizza hut, chinese takeaways, and an indian restaurant xyz. the town centre is small with just one main street and many houses around this. the retail stores in the town attract a significant number of consumers with disposable cash to buy goods, and due to the clustering effect, some of them also spend their cash on ethnic meals. the surrounding area is mainly residential, so the residents are regular visitors or customers. xyz often experiences uncertainty in demand and inventory requirement problems, including too much inventory or even shortages sometimes. therefore, inventory management is critically needed to analyze the optimum level of inventory in stores. xyz does not have a scientific management system for making purchases or ordering raw materials so it experiences a state of excess or even shortage of raw materials during operations. therefore, xyz needs to plan and procure raw materials scientifically to periodically cater to its customers’ needs. research questions in the context described above the following questions need to be answered: (a) where will the restaurant get its stock from to meet the consumers’ demand? (b) how much food will be required to meet the demand, and what will be the list of items required to cook the various food items on the menu? (c) will the raw materials (vegetables, fruits) still be fresh after a long journey from the suppliers? the location of suppliers is just as crucial to the cost of stock, especially in the food business where freshness is the key to quality to attract customers. some of these questions may be answered by mrp systems, as discussed in the subsequent section. 86 american journal of management vol. 24(2) 2024 independent vs dependent demand inventory models according to munyaka & yadavalli (2022), in an independent demand inventory model, the demand for one item is independent of the demand for another item, but in the dependent demand inventory model, the demand for one item is directly dependent on the demand for another item. for example, in an automotive assembly plant, the demand for the console, tyres, engine, etc. depends on the number of cars in demand. to manage the manufacturing process of finished products in the case of dependent demand for raw materials and other components, the mrp technique is mainly used. this tool is applied along with the jit and kanban system. the mrp system is dependent on the accurate demand forecast for finished goods, and the system requires three main inputs to function: (a) the master production schedule (mps); (b) the bill of material (bom) or the product structure records; and (c) inventory status records. the mps indicates the number of finished goods desired and the expected time of receipt of their delivery, including the necessary safety stock. the bom consists of data on each material required to produce the next higher-level product (called parent). the bom includes the type of raw materials (parts and components), the item number, and the description and quantity per assembly and subassemblies needed to manufacture an item. finally, the inventory status file maintains the information including stock on hand and scheduled receipts (munyaka & yadavalli, 2022). kortabarria et al. (2018) studied demand-driven mrp (ddmrp) to deal with efficiency in material management in a company that previously was using mrp. in 2011, ddmrp was developed to improve existing mpc systems’ shortcomings by protecting the supply chain from variability and dealing efficiently with material management issues. the outcomes of the case study show that using ddmrp resulted in higher visibility in the supply chain and a reduction in the inventory level while material consumption increased. however, this was achieved without any reduction in the high service level of the company. mrp or erp (enterprise resources planning) is an indispensable tool for large manufacturers. until recently, however, many small businesses could afford neither the initial cost nor the resources required to maintain a full-fledged manufacturing planning software system. however, it does not take too many products or too many parts before the manual or spreadsheet approach fails, and a small company becomes the victim of its success – with inventories out of control and production planning and execution failing. the solution for small manufacturing companies is mrp software which answers four questions: what to make, what to buy; when to make it, and when to buy it. one such software called “e-z-mrp” has evolved over several years to solve some of the problems related to production and procurement planning and execution for small manufacturers. no on-site or off-site training is required, and no consultants are needed to implement it, as the help is readily available through the manual (what is mrp software?). mrp application: an example of a restaurant let us take the example of xyz restaurant which needs to purchase items from different suppliers for its operations. xyz gets some of these items delivered directly by local suppliers. however, sometimes, xyz purchases some of its items in bulk to get price discounts, and then the items are stored in the warehouse from where they are brought into the stores as and when required during the operations. if xyz purchases insufficient quantities of an item(s) used for cooking food products, it will not be able to meet the customers’ demand. on the other hand, if it purchases excessive quantities of an item(s), then money will get stuck and wasted due to the opportunity cost. moreover, some items will need to be maintained as a safety stock. a decision to release a purchase order for an item with an unrealistic lead time can result in a stock-out situation and loss of customers. data for mrp xyz restaurant serves a set of curries (end products) based mainly on three types of sauces (subassemblies): korma, butter chicken or tomato, and rogan josh as shown in figure 2. one of these american journal of management vol. 24(2) 2024 87 three sauces has been further expanded into various levels (levels 2, 3, and 4) with their required ingredients indicated. the actual sales data of these three types of sauces or curries for xyz have been recorded, and the demands for the next eight weeks have been forecasted (see table 1) using the 3 week-moving average methods as discussed in the section below. the theory behind forecasting demand for curries and net requirement planning for items required (a) the demand forecasting formula (russell & taylor, 2009) is based on the simple moving average using n periods as discussed below. 𝑀𝐴𝑛 = {∑ 𝐷𝑖𝑛 𝑖=1 /𝑛 (1) where n = number of periods in the moving average di = demand in period i so, the 3-week moving average demand (table 1) has been computed using equation (1) as follows: d4 = demand for week 4 = (d3 + d2 + d1 )/3 d5 = demand for week 5 = (d4 + d3 + d2 )/3 accuracy of forecasting according to choia et al. (2022), most forecasting studies have focused on model building and improving forecasting accuracy, and only a few have focused on developing predictor variables. research shows that machine learning techniques can provide more accurate predictions by processing more data. the cost of error can be explored with the processing and analysis of large amounts of internal and external data through machine learning techniques so that restaurant operators can take steps to reduce the extra cost of forecast errors. the accuracy of forecasts depends on various factors, including key economic indicators, holidays, temperature, expert knowledge, etc. however, small restaurants still prefer to use their experience and common sense for forecasting due to the limited resources and inadequate acumen in data analytics. the mean absolute deviation or mad is one of the most popular and simplest methods to measure forecast error (russell & taylor). mad is an average of the difference between the forecast and actual demand and is computed as mad = ∑absolute value of (actual demand – forecast demand)/n = ∑|at – ft|/n (2) where t = the period for which demand is calculated at = actual demand in period t ft = forecast demand for period t n = the total number of periods || = absolute value free from the + or signs the error of this forecasting method could be expressed by computing the ‘mean absolute deviation’ using equation (2) or mad = 10.42. table 1 shows the actual and forecast values of demands of these curries in different weeks of operation. the forecast demand of curries from weeks 4 to 11 is the master production schedule (mps) for xyz, for which it has to create the list of dependent demand items. to cook various curries in xyz, the three different types of sauces cooked are korma sauce, tomato sauce, and rogan josh sauce. 88 american journal of management vol. 24(2) 2024 table 1 demand forecast for butter chicken/tomato curries (bct) based on diff. types of sauces week actual sales of bct curry (a) forecast demand for bct curry using a 3-week moving average (f) absolute deviation ad = |a-f| week 1 70 week 2 85 week 3 65 week 4 58 73 15 week 5 72 69 03 week 6 83 65 18 week 7 52 71 19 week 8 68 69 01 week 9 77 68 09 week 10 74 66 08 week 11 73 (b) the net requirement planning for xyz for all the ingredients required for different types of sauces. the company follows the policy of lot-for-lot (lfl) ordering and maintains no safety stock. the net requirement of item k = (gross requirement of item k + allocations) – (on hand quantity of item k + scheduled receipts of item k), where k = 1, 2, 3, … nrk = (grk + ak) – (ohk + srk) (3) in other words, the net requirement of item k = (total requirement of item k – available quantity of item k) nrk = (trk – avk) (4) inventory on hand, gross required quantity, and the lead times for placement of orders for different items are recorded in table 2, while table 3 indicates the bill of materials (bom) for butter chicken or tomato sauce based on the product structure in figure 1. table 2 inventory on hand and lead times ingredients on hand (gm) gross required quantity (gm) lead time (week) tomatoes 1400 6400 2 onion 3000 10000 2 coconut milk 100 1250 2 cashew nuts 400 500 1 ginger 10 40 1 garlic 15 60 1 cinnamon 10 40 1 cloves 10 60 1 pepper 50 60 1 cardamom pods 10 30 1 american journal of management vol. 24(2) 2024 89 ingredients on hand (gm) gross required quantity (gm) lead time (week) fenugreek leaves 0 100 1 olive oil 500 1700 2 yoghurt 0 100 2 butter 0 1000 2 cream 1000 4000 1 table 3 bom for the butter chicken/tomato sauce for servings of 5 kg paste type lead time (week) quantity (gm) ingredients paste 1 2 500 butter 800 tomato puree paste 2 1 10 cumin seeds 10 cloves 10 cinnamon sticks 15 coriander leaves 5 pepper 50 fenugreek leaves paste 3 1 2000 fresh cream paste 4 1 1 nut paste 400 cashews 100 almonds these data will help xyz address two important inventory control questions: (i) how much to order? and (ii) when to order? this restaurant follows a ‘lot-for-lot’ rule, which means ordering what is required with no safety stock and no anticipation of further orders (heizer & render, 2011). based on the product structure (figure 2), and information related to inventory on hand and lead times in tables 2 and 3, the net requirement planning for different materials is presented in table 4 for the xyz operations. 90 american journal of management vol. 24(2) 2024 figure 2 product structure for butter chicken/tomato sauce (ref table 3) sauce/gravy rogan josh sauce butter chicken or tomato sauce chicken korma sauce paste 1 (2) paste 2 (2) paste 3 (2) paste 4 (2) coriander leaves (2*15=30) butter (2*800=1600) tomato puree (2*1=2) cumin seeds (2*50=100) fresh cream (2*2000=4000) cinnamon (2*10=20) pepper (2*5=10) cloves (2*10=20) fenugreek leaves (2*50=100) nuts paste (2*1=2) cashews (2*400=800) almonds (2*100=200) tomatoes (2*800=1600) sugar (2*200=400) level 0 level 1 level 2 level 3 level 4 table 4 net requirement planning for combined ingredients ingredient week 0 1 2 3 4 5 6 7 8 cumin seeds gr 0 0 0 0 0 0 0 0 320 lfl, ss = 0 lt=1 oh 80 80 80 80 80 80 80 80 80 80 nr 240 or 240 tomatoes gr 0 0 0 0 0 0 0 0 6400 lfl, ss = 0 lt=2 oh 1400 1400 1400 1400 1400 1400 1400 1400 1400 1400 nr 5000 or 5000 onion gr 0 0 0 0 0 0 0 0 10000 lfl, ss = 0 lt=2 oh 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 nr 7000 or 7000 coconut milk gr 0 0 0 0 0 0 0 0 1250 lfl, ss = 0 lt=2 oh 100 100 100 100 100 100 100 100 100 100 nr 1150 or 1150 cashew nuts gr 0 0 0 0 0 0 0 0 500 lfl, ss = 0 lt=1 oh 400 400 400 400 400 400 400 400 400 400 nr 100 or 100 american journal of management vol. 24(2) 2024 91 ginger gr 0 0 0 0 0 0 0 0 40 lfl, ss = 0 lt=1 oh 10 10 10 10 10 10 10 10 10 10 nr 30 or 30 garlic gr 0 0 0 0 0 0 0 0 60 lfl, ss = 0 lt=1 oh 15 15 15 15 15 15 15 15 15 15 nr 45 or 45 cinnamon gr 0 0 0 0 0 0 0 0 40 lfl, ss = 0 lt=1 oh 10 10 10 10 10 10 10 10 10 10 nr 30 or 30 cloves gr 0 0 0 0 0 0 0 0 60 lfl, ss = 0 lt=1 oh 10 10 10 10 10 10 10 10 10 10 nr 50 or 50 pepper gr 0 0 0 0 0 0 0 0 60 lfl, ss = 0 lt=1 oh 50 50 50 50 50 50 50 50 50 50 nr 10 or 10 cardamom pod gr 0 0 0 0 0 0 0 0 30 lfl, ss = 0 lt=1 oh 10 10 10 10 10 10 10 10 10 10 nr 20 or 20 fenugreek gr 0 0 0 0 0 0 0 0 100 leaves lt=1 oh 0 0 0 0 0 0 0 0 0 0 nr 100 or 100 olive oil gr 0 0 0 0 0 0 0 0 1700 lfl, ss = 0, lt=2 oh 500 500 500 500 500 500 500 500 500 500 nr 1200 or 1200 yoghurt gr 0 0 0 0 0 0 0 0 100 lfl, ss = 0, lt=2 oh 0 0 0 0 0 0 0 0 0 0 nr 100 or 100 butter gr 0 0 0 0 0 0 0 0 1000 lfl, ss = 0, lt=2 oh 0 0 0 0 0 0 0 0 0 0 nr 1000 or 1000 cream gr 0 0 0 0 0 0 0 0 4000 lfl, ss = 0, lt=1 oh 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 nr 3000 or 3000 index: gr = gross requirement; oh = on hand inventory; nr = net requirements; lt = lead time; or = order release; lfl = lot-for-lot; ss = safety stock 92 american journal of management vol. 24(2) 2024 conclusions the mrp model suggested in the paper and the supply of various items on a jit basis would help xyz restaurant significantly in its materials procurement process and delivery. this will also help in reducing excess inventory in the restaurant and will prevent potential financial losses because many items have their expiry dates and may be prone to perishability. this method of materials planning is also expected to save the company a few thousand dollars in the form of reduced cost of renting a warehouse for storing the extra items, reduced cost of transporting them from the warehouse to the kitchen, and reduction in cost due to multiple materials handling if the items are not supplied on a jit basis. all the different ingredients needed by xyz to produce the end products (the food items) have been accurately identified, so the chances of stock-out of these items during operations are almost zero or minimal. the 3-month moving average method has been used to forecast the demand for end products (finished food items) to make forecasting more simplified and realistic in practice. this method can be used with very little training in excel spreadsheets. recommendations in addition to the above-proposed hybrid model, xyz restaurant may also follow the ‘selective control techniques’ including abc, ved, and fsn analysis for its inventory control. for example, fast-moving items can be purchased in bulk by getting price discounts from the growers or suppliers and storing them in the warehouse, which can be brought from time to time in the stores as per the jit concept when needed. the fast-moving items can be consumed in a few days, so there will be no need to store them for a long time, which will reduce the inventory carrying cost. slowand non-moving items can be purchased in smaller lots and can be brought straight to the operations (kitchen area) because they move very slowly. therefore, keeping them in a warehouse will be a waste of space and costly for the company. implications for management the xyz restaurant will need to organise a workshop to give basic training to its staff on how mrp helps the restaurant operations, how to record sales data, inventory on hand, lead time, and the list of suppliers with their addresses. in this context, petroni (2002) identified some factors that could help in the successful implementation of mrp systems. he found that in-house expertise and experienced personnel could be predictors of technical success. companies should train management and staff and ensure they receive help from experienced people. the study also indicated that the accuracy of inventory records, demand forecasts and capacity planning data before mrp implementation are positively correlated to success. acknowledgement the author acknowledges the support of xyz restaurant for making their operational data available for this analysis and the paper. the author also expresses sincere thanks to the eastern institute of technology, hawkes bay, new zealand, for encouraging research activities with all the support. as a result, local firms from hawke’s bay can get an insightful perspective from this mrp system and related analysis, and they can feel encouraged to get a similar analysis done for the optimal use of resources in their businesses. american journal of management vol. 24(2) 2024 93 references abuhilal, l., rabadi, g., & sousa-poza, a. 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(n.d.). e-z-mrp. retrieved from http://www.e-z-mrp.com/ ajm 18(3) master2.pdf 134 american journal of management vol. 23(4) 2023 leadership styles for deming-based management systems keith luoma augusta university quality management pioneer w. edwards deming described his system of thought with a series of 14 points. although his system was meant to replace traditional management practices, deming failed to recommend a specific leadership style. others have since attempted to fill the gap. this paper reviews several leadership styles, specifically in relation to the 14 points. traditional management based in transactional leadership appears to be inconsistent with deming’s thought, whereas a flexible leadership style, incorporating both transformational and distributed leadership, appears to be consonant with his 14 points. recommendations are made for professionals who are interested in incorporating deming’s system into their organizations. keywords: leadership styles, deming, total quality management, tqm, transformational, distributed, participative, teams introduction quality “guru” w. edwards deming, a statistician from the u. s., was invited to japan in the wake of world war ii to conduct a census, but in 1950 he began to share his philosophy of management with japanese business leaders (baker, 2017). although japanese industry was destroyed in the war, and the inhabitants were facing starvation in a land poor in natural resources, deming preached a message of hope: the greatest resource that a nation can possess is its people (walton & deming, 1988). this humanistic outlook proved fruitful, and by the late 1950s the japanese economy was second only to the u. s. (deming, 1986). immediately after world war ii, the u. s. was the only nation whose industrial infrastructure remained intact, and as a result, the u.s. enjoyed a buyer’s market, and an industry based on quantity over quality took hold, since there were no competitors (goetsch & davis, 2013). when the results of deming’s work reached fruition in japan, u. s. industries found that they could not remain competitive. in 1980, the investigative television show nbc white paper aired the program if japan can, why can’t we? through which americans learned for the first time about the work of w. edwards deming (baker, 2017). after the white paper was aired, deming began teaching a series of 4-day seminars for interested companies (baker, 2017). deming would refuse to collaborate with a company unless the top management was involved—he was nearly 80 years old when the nbc white paper was aired, and he decided that he didn’t have time to waste on firms that were unlikely to embrace his ideas (walton & deming, 1988). he first introduced his teachings to a wider audience through the publication of the book out of the crisis (deming, 1986). american journal of management vol. 23(4) 2023 135 instead of expounding a theory, deming (1986) originally illustrated his teachings through a series of 14 “points.” although these points continued to be influential, deming later augmented them with his system of profound knowledge (sopk), which was introduced with the publication of the new economics for industry, government, education (deming, 1993). deming believed that his 14 points, quoted below, could be viewed as consequences of the sopk (deming, 1993). 1. create constancy of purpose toward improvement of product and service. . . 2. adopt the new philosophy. . . western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change. 3. cease dependence on mass inspection to achieve quality. eliminate the need for inspection on a mass basis by building quality into the product in the first place. 4. end the practice of awarding business on the basis of price tag. . . 5. improve constantly and forever the system of production and service. . . 6. institute training on the job. 7. institute leadership. the aim of supervision should be to help people . . . to do a better job. 8. drive out fear, so that everyone may work effectively for the company. 9. break down barriers between departments. . . 10. eliminate slogans, exhortations, and targets for the work force. . . 11. eliminate work standards (quotas). . . 12. remove barriers . . . to pride of workmanship. 13. institute a vigorous program of education and self-improvement. 14. put everybody in the company to work to accomplish the transformation. the transformation is everybody’s job. (deming, 1986, pp. 23-24) the sopk consists of four parts: “appreciation of a system, knowledge about variation, theory of knowledge, and psychology” (deming, 1993, p. xix). systems thinking declared that the whole is greater than the sum of the parts, and that management of the system required holistic thinking. the statistical theory of variation posited that variation can be broken into two parts, variation that is inherent to the system and variation that intrudes into the system. when one is confused for the other, blame is placed where it does not belong, and improvement is difficult or impossible. epistemology, or the theory of knowledge, recognized the importance of the scientific method for organizational learning. by psychology, deming recognized the importance of human flourishing, as well as the acceptance of individual differences; it was this aspect of his teaching that separated him from other management specialists (deming, 1993). deming’s management philosophy, as contained in the 14 points and the sopk, is frequently referred to as total quality management (tqm). this paper will examine deming’s teachings from the perspective of leadership styles theory. based on a preliminary review of the literature, deming-based leadership is consonant with aspects of several leadership styles, though perhaps not identical with any one of them. this paper will attempt to correlate specific leadership styles with the various elements of deming’s thought. the findings may be of interest to leaders who wish to adopt quality management practices into their work. review of the literature although leadership features strongly in the 14 points and the sopk, deming did not identify his theory with a specific leadership style. although highly critical of traditional management, his own prescriptions were embedded in a maze of colorful examples. regarding the identification with specific leadership styles, other researchers have attempted to fill the gap. anderson, rungtusanatham, and schroeder (1994) acknowledged that the widespread adoption of deming’s quality management “served to propel practice ahead of formalized theory” (p. 473). in their formulation, the deming method creates an organization that “fosters cooperation and learning for facilitating the implementation of process management practices, which . . . leads to continuous improvement of processes, products, and services, and to employee fulfillment. . . which are critical to customer satisfaction and . . . to firm survival” (p. 473). they examined deming’s 14 points and concluded that its strength lay in the combination of behavioral and methodological practices. they found seven 136 american journal of management vol. 23(4) 2023 concepts undergirding deming’s management method: visionary leadership, internal and external cooperation, learning, process management, continuous improvement, employee fulfillment, and customer satisfaction. mcnary’s (1997) work had the advantage over anderson, rungtusanatham, and schroeder (1994) in that it was written after the publication of the new economics for industry, government, education (deming, 1994), in which deming expounded his system of profound knowledge. following up on deming’s statement that the “14 points follow naturally as application of the system of profound knowledge” (p. 96), mcnary (1997) developed a survey that tested managers’ adherence to the sopk. mcnary (1997) found that the scores of managers who subscribed to the deming management method were statistically different from those managers who did not: they scored higher in the use of factors related to the four components of the sopk. sosik and dionne (1997) identified five factors based on deming’s (1986) 14 points: “change agency, teamwork, trust-building, short-term goal eradication and continuous improvement” (p. 447). they compared these with laissez-faire, management by exception, transactional, and transformational forms of leadership. they argued that laissez-faire leadership was negatively related to all five factors; that management by exception was negatively related to the first four factors, but positively related to continuous improvement provided leadership introduces “productive organizational change through error searching, deviation monitoring and process control” (p. 457); that transactional leadership was negatively related to short-term goal eradication, positively related to trust building, and positively related to change agency, continuous improvement, and teamwork, provided leadership considers these “to be appropriate paths for the followers to achieve their goal” (p. 458); and that transformational leadership is positively related to all five factors. finally, they caution that “the application of a generic leadership style may not result in follower behavior consistent with deming’s tqm process” (p. 460). in other words, the implementation of deming’s 14 points cannot occur in a vacuum—they must be paired with appropriate management styles. gapp (2002) explored the evolution of leadership styles in companies whose management systems were based on the sopk. using the total quality management survey (tqms) and the leadership opinion questionnaire (loq), he found that as tqms scores increased over time, loq sub scores also changed. specifically, gapp (2002) focused on scores for structure, which measures planning, scheduling, and communicating; and scores for consideration, which focuses on mutual trust and respect. at the beginning of the study, leadership scored higher in structure than in consideration, but as time went on, leaders scored high on both dimensions. gapp (2002) concluded that adoption of the sopk was correlated with changes in management styles that were supportive of the sopk. ehigie and akpan (2004) found that “in all organizations that have implemented tqm, there had existed another management technique prior to the implementation of tqm” (p. 25). they focused on two aspects of management: performance, which is work-centered, and maintenance, which is employeecentered. this leads to four combinations: (1) high performance-high maintenance, (2) high performancelow maintenance, (3) low performance-high maintenance, and (4) low performance-low maintenance. their study of tqm and non-tqm based organizations led to the following conclusions: workers were more likely to embrace tqm when leaders were perceived to be high maintenance, low performance. surprisingly, high performance-high maintenance leadership was not positively associated with workers’ acceptance of tqm (ehigie & akpan, 2004). hirts, murray, and riordan (2007) looked for correlations between transformational, transactional, and laisses-faire aspects of leadership and quality management principles based on the malcolm baldrige quality award. they found support for transformational leadership, as well as some aspects of transactional leadership, including contingent-reward systems. laohavichien, fredendall, and cantrell (2009) studied the relationship between transformational and transactional leadership styles and quality improvement. they found that companies with the highest levels of quality performance scored higher in both leadership styles than in companies with lower levels of performance. the authors were surprised by the correlation with transactional leadership, which rewards american journal of management vol. 23(4) 2023 137 and punishes employees based upon performance, and they conclude that transformational and transactional styles of leadership may complement each other. parumasur and govender (2013) found that a participative management style was critical for the implementation of tqm. of the factors that they investigated as being related to participative management, they found that tqm-based organizations focused most highly on coaching and supportive leadership, but also on delegation and empowerment. they also recommended clear and regular communication channels throughout the organization. psychogios (2022) provided a framework for total quality leadership, arguing that it should be adaptive, proactive, and relational. in particular, investment in social relations would foster “total and inclusive employee involvement” (p. 1). analysis the literature on leadership theory for tqm defends a wide range of management styles. taken together, this suggests that a flexible management style may be best suited to tqm. several of deming’s 14 points draw attention to specific management styles. in the sections that follow, several aspects of leadership will be examined. because deming’s philosophy was critical of traditional management, it may be helpful to begin with what is not consistent with deming-based management. transactional leadership (traditional management) if there is any form of leadership which is inconsistent with deming’s thought, it would be transactional leadership, which is a traditional form of management based on punishment and reward (van wagner, n. d.). deming opposed several of the mainstays of transactional leadership, including quotas (point #10) and even merit ratings (point #12). these are the most misunderstood and neglected of the 14 points, and to understand them one must acknowledge two of deming’s most personal beliefs, one philosophical, and the other scientific. first, deming was optimistic about human nature: he believed that most people wanted to do a good job and to find personal satisfaction and meaning in work (deming, 1993). on the other hand, he was a statistician by training, and he knew that much of the difference in work performance was due to random variation (deming, 1993). deming (1986) wrote about the effect that performance ratings had on workers: “it leaves people . . . crushed, . . . despondent . . . unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. it is unfair as it ascribes to the people in a group differences that may be caused totally by the system that they work in” (p. 102). in other words, most of the differences between workers were due to the system, and not the workers. by this view, most merit raises reward chance, rather than merit. taken together, deming’s 14 points painted a complete rejection of traditional management, in the transactional sense. deming believed that 95% of the problems in any business were due to management, not the workforce (deming, 1986). with a proper system in place, workers were quite capable of doing a good job. transformational leadership deming’s (1986) point #14, “transformation is everybody’s job” (p. 25), placed transformation at the heart of business, but without a unified purpose, what is the goal of transformation? dynamic leadership would be required to direct everyone to the same end—quality in processes, products, service, and people. according to al rahbi, khalid, & khan (2017), the dynamic, transformational leader “achieves success by consistently sending clear signals about his or her priorities, values, and beliefs in the business environment. once employees . . . accept the culture, it becomes a strong and dynamic tool to communicate the organizations’ values and beliefs, especially to new members” (p. 7). deming’s (1986) point #1, “create constancy of purpose”, would be well served by transformational leadership. this implies, though, that tqm must not be just another fad in a long string of management initiatives. tqm should be an exciting prospect, and this needs to be conveyed by top leadership. but fear of the unknown is a strong emotion, and it can prevent employees from committing to a new program, especially 138 american journal of management vol. 23(4) 2023 if trust in management is lacking. deming knew this, as his point #9, “drive out fear, so that everyone may work effectively for the company” (p. 23) acknowledged. but once the transformation is underway, new forms of leadership will be required, as will be argued in the next section. distributed and participative leadership according to point #14, “the transformation is everybody’s job” (deming, 1986, p. 24). if so, then leadership must be distributed throughout the organization. distributed, or participative leadership, is characterized by decentralization. according to bass and bass (2008), “decentralization usually brings with it more opportunity for its leaders to react quickly and flexibly to opportunities and threats to the organization. the decentralized organization is more likely to adopt an open learning philosophy and recognize the need to invent local adaptations of best practices” (p. 743). this emphasis on learning is consistent with the epistemological factor in deming’s sopk. distributed leadership differs from other management styles in its embrace of democratic decisionmaking. according to al rahbi, khalid, & khan (2017), participative “leaders facilitate collective decision making, involving their followers or employees, and offering them support and choices. further, this leadership style, unlike the authoritarian style, is characterized by cooperation, active participation, accountability and delegation of responsibilities and tasks” (pp. 4-5). distributed leadership also helps make effective teamwork possible, which is the subject of the next section. leading teams deming (1986) wrote that “there is no substitute for teamwork and good leaders of teams to bring consistency of effort, along with knowledge” (p. 19). consistent with the sopk, deming (1986) acknowledged that, due to individual differences, some otherwise valuable employees were unsuited for teamwork. nevertheless, effective teamwork was central to his management philosophy: “teamwork requires one to compensate with his strength someone else’s weakness” (deming, 1986, p. 64). the issue, then, is what type of leadership style correlates with high achieving team performance? according to al rahbi, khalid, & khan (2017), “the transformational, authentic and servant leadership styles are positively correlated with team motivation whereas transactional leadership style is found to be negatively correlated” (p. 10). this is consistent with deming’s criticism of transactional leadership. deming’s notion of teamwork went beyond the institution. for example, point #4 advocated for a “longterm relationship of loyalty and trust” with suppliers (deming, 1986, p. 23). this went against the still popular method of buying from the lowest bidder. teamwork with suppliers meant that a culture of quality could be spread from company to company. situational leadership according to van wagner (n. d.), “situational theories propose that leaders choose the best course of action based upon situational variables. different styles of leadership may be more appropriate for certain types of decision-making.” the analysis thus far indicated that more than one style of leadership would be required to accommodate deming’s 14 points and his sopk. deming (1986) criticized management, and point #14, “institute leadership” (p. 23) suggests that none of the existing leadership theories was satisfactory for his management philosophy. transformational leadership was required to “adopt the new philosophy,” but his emphasis on teamwork meant that leadership had to be distributed throughout the organization, which leads to distributed and participative leadership. if there is one thing that characterized deming’s philosophy, it was trust in the common worker. thus, deming’s philosophy indicated an adaptive leadership style that cooperated with the workforce to achieve maximum success. case study in 2003, university system of georgia (usg) chancellor errol davis instituted the service excellence program, which focused on providing a high level of customer service through the application of tqmbased methods, and an annual awards program which recognized outstanding projects and teams american journal of management vol. 23(4) 2023 139 (https://www.usg.edu/service_excellence/ recognition_programs). each school within the usg had a designated service excellence coordinator, who was responsible for training and program management. the author was working towards green belt certification in six sigma, a popular quality improvement tool, and he developed a working relationship with one of the service excellence campus coordinators. this coordinator visited every department on campus, instituted several projects, and was recognized by the usg for outstanding contributions to the service excellence program. oddly, the coordinator, although popular with faculty and staff, received little attention from campus leadership, and was not recognized at the school’s annual faculty and staff recognition ceremony. in subsequent years, the on-campus program received little support, and at the system level, the service excellence program floundered similarly. it was virtually inactive by the time it was discontinued in early 2019 (j. jones, personal communication, december 21, 2018). the program violated several of deming’s (1986) tenets, not the least of which were “adopt the new philosophy” and “institute leadership” (p. 23-24). in deming’s (1986, 1993) view, leadership had to come from the top, and the leader’s responsibility was to promote and sustain a system where everyone was responsible for self-improvement and the improvement of the organization. “a quality program for a community, launched by ceremonies with a speech by the governor, raising of flags, beating of drums, badges, all with heavy applause, is a delusion and a snare” (deming, 1986, p. 21). the usg service excellence program appears to have suffered from an initial rush of enthusiasm, but with little long-term commitment, especially on the campus-level. lessons learned and recommendations after retiring from his work in japan, deming settled down in the u. s. to a quiet life as a statistical consultant. when nbc aired its program if japan can, why can’t we, even his grandchildren were surprised to learn that deming was a hero in japan (baker, 2017). deming continued teaching and writing, giving his last four-day seminar only two weeks before his death at the age of 92 (baker, 2017). the new economics for industry, government, education was published the same year he died (deming, 1993). since deming’s death, many tools for quality improvement have been developed, such as six sigma and lean, and these have resulted in many successful applications (goetsch & davis, 2013). unfortunately, like the usg’s service excellence program, others have failed. from a leadership perspective, what lessons have been learned, and what can be recommended? 1. tqm is difficult, and those who consider it a panacea should first count the costs. quality cannot be considered the domain of a quality assurance department. it must guide every decision that a firm makes. if not taken seriously, quality becomes merely a slogan, which is the moral of deming’s point #10. 2. the pursuit of quality requires a flexible management style. transformational leadership is needed to inspire everyone, from the custodians to the boardroom, to “adopt the new philosophy” (deming, 1986, p. 23). distributed leadership is needed to “put everybody in the company to work to accomplish the transformation” (deming, 1986, p. 24). although there is some support for transactional leadership (laohavichien, fredendall, & cantrell (2009), that may be because very few organizations have ever attempted a completely non-transactional approach. 3. a combination of technical and people skills is needed. the sopk requires system-based thinking and the use of the scientific method for organizational learning. however, all organizations consist of individuals with their own personal needs and abilities. the organization that overlooks these individual differences not only invites conflict but fails to tap the rich resources that are available. 4. when in doubt, do not adopt quality management. the workforce has grown accustomed to seeing the “latest thing” rolled out, only to be replaced by the “new latest thing.” if quality management is initiated, only to be abandoned, then it will be a long time before it can be reintroduced. count the cost, do the necessary preparation--understanding that nothing can 140 american journal of management vol. 23(4) 2023 supplant quality in processes, products, service, and people--and then, and only then, start the program. better to wait, than blunder ahead and later lament a lost opportunity. references al rahbi, d., khalid k., & khan, m. (2017). the effects of leadership styles on team motivation. academy of strategic management journal, 16(2), 1–15. anderson, j.c., rungtusanatham, m., & schroeder, r.g. (1994). a theory of quality management underlying the deming management method. academy of management review, 19(3), 472–509. baker, e.m. (2017). the symphony of profound knowledge. bloomington, in: iuniverse. bass, b.m., bass, r., & bass, b.m. (2008). the bass handbook of leadership: theory, research, and managerial applications. new york: free press. deming, w.e. (1986). out of the crisis. cambridge, ma: massachusetts institute of technology, center for advanced engineering study. deming, w.e. (1993). the new economics for industry, government, and education. cambridge, ma: massachusetts institute of technology for advance engineering study. ehigie, o.b., & akpan, c.r. (2004). roles of perceived leadership styles and rewards in the practice of total quality management. leadership & organization development journal, 25(1), 24–40. gapp, r. (2002). the influence the system of profound knowledge has on the development of leadership and management within an organisation. managerial auditing journal, 17(6), 338–342. goetsch, d.l. & davis, s. (2013) quality management for organizational excellence. boston, ma: pearson. hirtz, p.d., murray, s.a., & riordan, c.a. (2007). the effects of leadership on quality. engineering management journal, 19(1), 22–27. jones, l. (2001). factors related to employee perception of their leaders’ commitment to implement continuous quality improvement. quality management journal, 8(3), 61–72. laohavichien, t., fredendall, l.d., & cantrell, r.s. (2009). the effects of transformational and transactional leadership on quality improvement. the quality management journal, 16(2), 7–24. mcnary, l.d. (1997). the system of profound knowledge: a revised profile of managerial leadership. leadership & organization development journal, 18(5), 229–235. parumasur, s.b., & govender, p. (2013). participative management as a critical ingredient for tqm. journal of economics and behavioral studies, 5(11), 740–751. psychogios, a. (2022). re-conceptualising total quality leadership: a framework development and future research agenda. the tqm journal. https://doi.org/10.1108/tqm-01-2022-0030 rahbi, d.a., khalid, k., & khan, m. (2017). the effects of leadership style on team motivation. academy of strategic management journal, 16(3), 1. sosik, j.j., & dionne, s.d. (1997). leadership styles and deming's behavior factors. journal of business and psychology, 11(4), 447–462. van wagner, k. (n.d.). 8 major leadership theories. retrieved from https://s3.amazonaws.com/academia.edu.documents/ walton, m., & deming, w.e. (1988). the deming management method. new york: dodd, mead. american journal of management vol. 24(2) 2024 17 greenwashing or going green? an empirical analysis of the drivers and the effects of carbon offsets and renewable energy certificates on firm performance maria hatalis rutgers university carbon offsets and renewable energy certificates (recs) are widely used instruments that help firms mitigate their greenhouse gas emissions (ghg). this paper investigates which internal firm characteristics are associated with investments in carbon offsets or recs and how these purchases impact firms’ performance. based on data from publicly traded firms in north america and europe from 2012-2022, this paper uses a propensity score matching approach to analyze the effects of these investments on firms’ environmental scores, ghg emissions, and financial performance. additionally, this paper employs an instrumental variable approach to examine whether board gender diversity increases carbon offset or rec purchases. the findings reveal that firms that purchase carbon offsets or recs face higher environmental scores and higher ghg emissions, suggesting corporate greenwashing behavior. this paper also demonstrates that these purchases lead to higher sales, profitability, and assets, but lower tobin’s q for rec buyers. lastly, this paper finds that a greater presence of women on the board does not lead to greater purchases of carbon offsets or recs. keywords: corporate sustainability, greenwashing, ghg emissions, carbon offset, renewable energy certificate, environmental performance, board gender diversity introduction in recent years, the urgency to address climate change has led to a significant increase in firms pledging to reduce their greenhouse gas emissions (ghg)1 and striving to become carbon neutral or achieve net zero ghg emissions. while firms have various options to lower their greenhouse gas emissions, there has been unprecedented growth in demand for voluntary carbon offsets and renewable energy certificates (rec) to help achieve their sustainability goals. firms that purchase carbon offsets can manage their emissions footprint by investing in projects that reduce or remove ghg emissions elsewhere in the world, such as direct air capture projects or reforestation initiatives (jiang et al., 2022; epa green power partnership, 2018).2 on the other hand, recs are a way for firms to support the generation of low or zero-emissions energy by purchasing certificates equivalent to the amount of renewable energy produced by another entity (e.g., wind or solar energy farm) (epa green power partnership, 2018).3 by purchasing carbon offsets or recs, firms can indirectly offset their own ghg emissions. demand for carbon offsets is expected to grow considerably to potentially $50 billion by 2030 (up from <$1 billion in 2020) (jiang et al., 2022). forecasts expect demand for recs in the us to more than double from $12.1 billion in 2023 to $26.5 billion by 2030 (wilson et al., 2022). despite this heightened interest in these two instruments, there is limited research on 18 american journal of management vol. 24(2) 2024 the factors influencing firms’ decisions to purchase carbon offsets or recs and the potential effects of these actions on firms’ value and environmental performance. this paper aims to fill this gap by investigating the firm characteristics associated with investments in carbon offsets or recs and examining their impact on greenhouse gas emissions levels and the financial performance of companies in north america and europe. developed-country markets, such as north america and europe, dominate the voluntary market for carbon offsets and recs and thus provide an ideal setting to analyze how firms utilize these two instruments. driven by corporate commitments and external pressures from regulators and stakeholders to transition away from fossil fuels, developed-market firms—such as shell, volkswagen, chevron, delta airlines, and microsoft, etc.—have become the biggest buyers of voluntary carbon offsets and recs over the last few years (donofrio et al., 2023). the annual traded value in voluntary carbon markets has grown more than six times the 2019 level ($320 million), reaching almost $2 billion in 2021 (donofrio et al., 2022). traded volumes in the rec market have also grown rapidly (reaching $11.45 billion in 2021). the voluntary market is expected to form more than two-thirds of total us renewable generation by 2026 (wilson et al., 2022). amidst this growth, the concern of greenwashing has also become more prevalent. greenwashing refers to a firm’s practice of using carbon offsets and recs as green marketing tactics to create an image of environmental responsibility, without substantially reducing their own carbon emissions. given that carbon offsets and recs are being increasingly traded as commodities and that greenwashing may be a widespread problem throughout the marketplace, it is crucial to evaluate the effectiveness of these instruments in firms’ efforts to reducing their carbon footprints. based on this context, this paper investigates the following research questions. first, how does the quantity of carbon offsets or rec purchases affect firm-level outcomes, such as environmental and financial performance? more specifically, do carbon offsets or recs lead to a significant reduction in firms’ ghg emissions or an improvement in environmental scores and firm value? second, what internal firm characteristics are associated with investment in carbon offsets or recs? to examine these questions, this paper employs a unique panel data set using financial and environmental data from bloomberg. in particular, this paper focuses on north american firms from the russell 3000 index and european firms from the stoxx europe 600 from 2012 to 2022.4 our final sample consists of 561 firms, which includes 131 firms that have purchased carbon offsets (23% of the sample) and 117 have purchased recs (21% of the sample). the main area of focus of this paper is to determine whether there is a positive relationship between firms’ purchases of carbon offsets or recs and their environmental performance. this paper expects firms engaging in carbon offset or rec purchases to potentially have lower ghg emissions for the following reasons. first, by definition, purchasing a carbon offset or rec allows a firm to report lower ghg emissions on their environmental reports, thereby reducing a firm’s carbon footprint and improving their environmental ratings. additionally, a profit-maximizing firm incurring a voluntary business cost for purchasing carbon offsets or recs is incentivized to lower its ghg emissions to reduce its operating costs. on the other hand, firms may be purchasing carbon offsets or recs in order to publicly demonstrate a commitment to the environment, but do not make significant efforts to reduce their ghg emissions. in other words, firms may be investing in carbon offsets or recs to capture the upside of green branding and higher environmental ratings without having to undergo costly changes to their business models to reduce their ghg emissions. if the above holds true, then we would expect to see a negative relationship between firms’ carbon offset or rec purchases and its environmental performance, which could indicate that firms are using these purchases as a form of greenwashing. to conduct this analysis, this paper uses ghg emissions voluntarily disclosed by publicly traded firms and environmental scores assigned by bloomberg. unlike previous studies (park et al., 2022), this research focuses on the quantity or volume of carbon offsets5 or recs6 purchased by a firm rather than simply using a binary variable indicating a purchase of an offset. using this approach, this paper can better evaluate the extent of a firm’s efforts in reducing its ghg emissions. to address potential selection bias concerning the voluntary purchase of recs or carbon offsets and a firm’s environmental performance, we use propensity score matching (psm) to build a control group and then run regressions on a matched sample of firm-year american journal of management vol. 24(2) 2024 19 observations. the findings of this paper reveal that firms that purchase carbon offsets or recs receive higher environmental scores, but their ghg emissions also tend to increase. this discrepancy between higher environmental scores coupled with higher ghg emissions suggests the presence of corporate greenwashing behavior. as an additional test, this paper also employs firms’ marketing expense as an instrumental variable to estimate the effects of purchasing carbon offsets or recs on firms’ ghg emissions. additionally, this paper examines the relationship between the volume of carbon offsets or recs purchased by firms and their financial results. initially, it is uncertain how the purchase of carbon offsets or recs impacts the financial performance of firms. previous studies have shown a positive association between a firm’s carbon emissions, carbon disclosures, esg ratings, and corporate financial performance (matsumura et al, 2014; tang et al., 2019; delmas et al., 2011; whelan et al., 2021). furthermore, investing in carbon offsets or recs may improve a firm’s reputation for environmental responsibility. it may also result in financial advantages from the broader stakeholder community (e.g., greater customer or employee satisfaction, increased resource efficiency, or better access to financing sources) (matsumura et al., 2014; whelan et al., 2021). on the other hand, a firm’s stakeholders may perceive the purchase of carbon offsets or recs as unnecessary expenditures that diminish a firm’s resources and dampen its profits, potentially devaluing a company and decreasing its financial performance (delmas et al., 2011). in order to conduct our analysis, we use various measures of firms’ financial performance, including sales, profitability, assets, and tobin’s q. similar to our previous analysis on environmental performance, a psm approach is employed, and regressions are run on a matched sample. this paper finds that purchasing carbon offsets or recs leads to higher sales, profitability, and assets, but lower tobin’s q for rec buyers. these findings suggest that there is a segment of the market that sees buying carbon offsets and recs as a beneficial means to enhance a company’s environmental ratings and financial prospects in the short run. in contrast, another segment may view rec purchases as a burden on companies’ resources in the long run. finally, this paper explores whether certain internal firm characteristics—namely board gender diversity—are associated with purchasing carbon offsets or recs. a priori, it is unclear whether firms with a higher percentage of women directors on corporate boards purchase more carbon offsets or recs. the limited number of studies that have studied the association between women in managerial or board positions and the effect on firms’ environmental outcomes have found mixed results. few studies have found a positive relationship between gender diversity on the board and the reduction of carbon emissions, renewable energy consumption, and implementation of environmental policies (atif et al. 2021; zhang et al., 2021; liao et al., 2015; martinez et al., 2022; martin et al., 2019; oyewo, 2023). however, some studies have noted that the presence of women on the board may not be enough to increase the likelihood of ghg emissions disclosure or reduce ghg emissions. this may be because the board may be more inclined to pursue more traditional value-creating objectives (e.g., profitability or shareholder wealth maximization) or because the difference in environmentally friendly attitudes between male and female board members is not as significant as expected (prado-lorenzo et al., 2010; adams et al., 2012). to conduct our analysis, we use the percentage of women employees as an instrumental variable to address potential endogeneity concerns in the independent variable for the percentage of women on the board. our results indicate that a greater presence of women on the board does not lead to greater carbon offsets or recs purchases. this lends evidence to suggest that gender diversity does not play a significant role for firms using carbon offsets or recs as decarbonization strategies. this paper contributes to the growing literature on climate change and emissions reduction efforts in the following ways. first, to the best of our knowledge, this is the first study analyzing how the quantity of carbon offsets or recs purchased by firms impact firms’ environmental and financial performance in north america and europe. this paper also utilizes more granular firm-level emissions data (including ghg scope 1, ghg scope 2 market, and total ghg market emissions),7 unlike previous studies that relied on carbon emission disclosures or other carbon performance indicators. by using this approach, this study can more clearly assess the effectiveness of using carbon offsets or recs in mitigating firms’ ghg emissions and achieving their sustainability goals. second, our findings contribute to the literature on corporate greenwashing behavior by revealing that firms that purchase carbon offsets or recs receive higher 20 american journal of management vol. 24(2) 2024 environmental scores, but also have higher ghg emissions. these findings are relevant and timely given that demand for carbon offsets and recs has rapidly grown, particularly from developed-market firms in carbon-intensive industries. third, this paper offers new insights into the relationship between carbon offset or rec purchases and firm financial performance, highlighting how stakeholders have diverging views on the benefits of these purchases. lastly, this paper’s findings also contribute to the literature on internal corporate governance by demonstrating that gender board diversity alone does not necessarily indicate a stronger inclination towards environmental initiatives such as carbon offsetting and investment in green energy. overall, these findings have important implications for policymakers and businesses worldwide as they work towards reducing their carbon footprint and achieving their environmental targets. literature review despite the significant expansion in the voluntary market for carbon offsets and recs over the last few years, surprisingly, little is known about the internal governance characteristics of companies that have invested in carbon offsets or recs or how these purchases impact firms’ environmental and financial performance. to the best of our knowledge, no empirical research has been carried out in developed markets such as north america and europe, where firms are increasingly utilizing these tools to reduce their carbon footprint.8 we begin our analysis by considering the link between carbon offsets and recs on the following three variables: i) environmental performance; ii) financial performance; and iii) board gender diversity. environmental performance in recent years, greenwashing has become so widespread in corporate marketing that it is considered by some studies to have reached epidemic proportions (trouwloon, 2023). however, despite its prevalence, there is a lack of studies that measure its impact on firms’ climate actions and environmental performance. this paper’s main contribution to the literature is to address the ongoing greenwashing debate on whether carbon offsets and recs lead to a reduction in firms’ ghg emissions or whether they function as an accounting maneuver that allows firms to continue polluting (rathi et al., 2022). to the best of our knowledge, this is the first study analyzing how the quantity of purchased carbon offsets or recs have an impact on firms’ environmental performance in north america and europe. this paper expects firms that purchase carbon offsets or recs may potentially have positive environmental performance for the following reasons. first, by definition, purchasing a carbon offset or rec allows a firm to report lower ghg emissions on their environmental reports, thereby reducing a firm’s carbon footprint and boosting their environmental ratings. additionally, a profit-maximizing firm incurring a voluntary business cost for purchasing carbon offsets or recs is incentivized to lower its ghg emissions to reduce its operating costs. on the other hand, firms may purchase carbon offsets or recs to publicly demonstrate a commitment to the environment, but do not make significant efforts to reduce their ghg emissions. in other words, firms may be purchasing carbon offsets or recs to capture the upside of green branding and higher environmental ratings without having to undergo costly changes to their business models to reduce their ghg emissions. if the above holds true, then we would expect to see a negative relationship between a firm’s carbon offset or rec purchases and its environmental performance. this result could indicate that firms may be using these purchases as a form of greenwashing or “carbonwashing”, as it could create a misleading impression to consumers and stakeholders that companies are taking steps to address their carbon emissions when, in reality, they are not (young et al., 2021; trouwloon, 2023). our paper is related to a few studies on corporate offsetting and greenwashing behavior. regarding carbon offsets, wei et al. (2021) conducts a systematic literature review of carbon offset research and finds that most of the existing literature does not cover corporate involvement in the carbon offset market. instead, extant studies focus on the following areas: individuals carbon offsets (e.g., aviation passenger carbon offset); forest and land carbon offsets; public transportation carbon offsets; and the impact of carbon offsets on ecosystem development. furthermore, these studies on carbon offsets are focused on examining the effects of specific projects. for example, studies such as jaraite et al. (2022) and guizar-coutiño et al. american journal of management vol. 24(2) 2024 21 (2022) analyze the impact of 339 carbon offset projects in india and forty global deforestation projects on ghg emissions, respectively. by contrast, our paper adopts a firm-level rather than project-level focus. additionally, our paper analyzes the effects of firms’ purchases of carbon offset and recs on ghg emissions, firms’ environmental ratings, and renewable energy usage. regarding corporate greenwashing, mateo-marquez et al. (2022) study a sample of international firms from twelve countries and find that there is a negative relationship between the number of regulations related to climate change and the propensity of firms to engage in greenwashing. this study defined greenwashing as firms who reported positive communication regarding their environmental performance, but featured a high carbon intensity ratio (i.e., high carbon emissions/total revenue). since the carbon offsets and recs market is largely voluntary and therefore lacks strict regulation, this may imply a greater presence of greenwashing behavior in our dataset. while the study by park et al. (2022) also examines firms’ carbon offset purchases in south korea during 2011-2019, our paper improves upon this existing study in the following ways. first, our paper focuses on the quantity or volume of carbon offsets or recs purchased by a firm rather than simply using a binary variable indicating a purchase of an offset.9 unlike previous studies on carbon emission disclosures or other carbon performance indicators, our paper utilizes more granular firm-level emissions data (including ghg scope 1, ghg scope 2 market, and total ghg market emissions). combined with a psm approach to deal with concerns on potential selection bias, this study can more clearly assess the effectiveness of using carbon offsets or recs in mitigating firms’ indirect or direct ghg emissions and achieving their sustainability goals. second, as mentioned before, we broaden the geographic focus in our paper by examining developed-market firms in north america and europe as they constitute the largest buyers of carbon offsets worldwide. for example, 83.7% of all offsets in 2021 were bought by firms in north america and europe, thus we may expect to see a greater degree of ghg emissions reductions in firms in our data set (harrison et al., 2022). lastly, this paper analyzes the effect of rec purchases on firms’ subsequent renewable energy usage and intensity, a new channel that park et al. (2022) did not explore. overall, our findings contribute to the literature on corporate greenwashing behavior by revealing that firms that purchase carbon offsets or recs receive higher environmental scores, but also have higher ghg emissions. these findings are relevant and timely given that demand for carbon offsets and recs has been rapidly growing, particularly from developed-market firms in carbon-intensive industries. financial performance the question on whether it “pays to be green”— i.e., companies profiting from improving their environmental performance— has been the subject of long-standing debate in the literature, but little empirical evidence exists within the context of carbon emissions (delmas et al., 2011; ghisetti et al., 2014; tang, 2019). our analysis is motivated by the question of whether it pays to be green when it comes to firms’ investment in carbon offsets or recs in developed markets. recent studies in the literature on financial and environmental performance have primarily focused on the role of firms’ carbon emissions, carbon disclosures, and esg ratings (matsumura et al, 2014; tang et al., 2019; delmas et al., 2011; whelan et al., 2021). several studies have found a positive association between environmental and financial performance, supporting a “win-win” hypothesis first posited by porter and van der linde (1995). this viewpoint supports the idea that firms gain a competitive advantage when implementing proactive environmental strategies, which can reduce regulatory obligations, minimize business risks, improve operational efficiencies through eco-friendly innovation, and attract important stakeholders (porter et al., 1995; delmas et al., 2011). empirical evidence supporting this view includes matsumura et al. (2014), which analyzes firms’ ghg emissions data and voluntary emissions disclosures for s&p 500 firms during the period 2006-2008. this study finds a positive relationship between lower carbon emissions and increased voluntary carbon disclosures on firm value, suggesting that the market rewards firms for exhibiting environmentally responsible behavior. another study by tang et al. (2019), analyzing data from china and hong kong from 2012 to 2013, also finds that firms’ efforts to reduce carbon emissions are compensated by higher profitability (e.g., return on assets and tobin’s q). lastly, whelan et al. (2021) conduct a meta-analysis for the period 2015-2020 and find a positive relationship between esg 22 american journal of management vol. 24(2) 2024 and financial performance for 58% of firm-level studies focused on measures such as return on equity, return on assets, or stock price. this “win-win” viewpoint may be extended to investing in carbon offsets or recs as they may improve a firm’s reputation for environmental responsibility and may also result in financial advantages from the broader stakeholder community (e.g., greater customer or employee satisfaction, increased resource efficiency, or better access to financing sources) (matsumura et al., 2014; whelan et al., 2021). on the other hand, some studies find evidence that does not support porter’s hypothesis. delmas et al. (2011) examine over 1,100 us firms during the period 2004-2008 and find mixed results on the effects of ghg emissions on short and long-term measures of financial performance. this study demonstrates that higher levels of carbon emissions positively impact firms’ financial performance when using short term, accounting-based measures (e.g., roa), but a negative impact when considering long term, market-based measures of financial performance (e.g., tobin’s q). these results suggest that from an accounting-based perspective, firms have no financial incentive to minimize their ghg emissions in the absence of carbon regulation in voluntary markets. however, evidence delmas et al. (2011) also suggests that investors see the potential long-term value of improved environmental performance, manifested by an increase in tobin’s q. with regards to carbon offsetting and recs, a firm’s stakeholders may perceive the purchase of these instruments as unnecessary costs that diminish a firm’s resources and detracts their focus from profitmaximization, which may potentially devalue a company and decrease its financial performance (delmas et al., 2011). based on the literature mentioned above, this paper analyzes the effect of carbon offsets and recs on various measures of firms’ financial performance, including sales, profitability, assets, and tobin’s q. this paper contributes to the extant literature by analyzing whether carbon offsets or recs have a strengthening or weakening effect on firms’ financial performance in the short term and long term. we also improve upon existing studies, such as park et al. (2022), by employing a psm approach to deal with potential selection bias concerns. lastly, our findings help answer whether firms have a financial incentive to use carbon offsets or recs to manage their ghg emissions and renewable energy consumption. board gender diversity in general, many studies have examined different solutions to reduce ghg emissions, including carbon taxes, carbon-contingent securities, green bonds, and cap-and-trade systems (allen et al., 2023; stavins, 2020). however, the role of internal corporate governance—namely gender diversity on a firm’s board— is largely overlooked in the existing literature. the limited number of empirical studies on the effects of board gender diversity on ghg emissions and other environmental outcomes exhibit mixed results. few studies have found a positive relationship between board gender diversity and firms’ environmental performance, including ghg emissions, carbon disclosures, and renewable energy consumption (martin et al., 2019; martinez et al., 2022; oyewo, 2023; liao et al., 2015; atif et al. 2021; zhang et al., 2021). regarding ghg emissions, a study by martin and herrero (2019) analyzes a sample of 644 european companies from 2002 to 2017. it demonstrates that board gender diversity is positively associated with firms’ implementation of environmental initiatives and ghg emission reduction efforts. studies by oyewo (2023) and martinez et al. (2022) also exhibit similar findings between board gender diversity and reductions in carbon emissions for international mnes and emerging market firms. regarding carbon disclosure, liao et al. (2015) examines a sample of 329 uk-based firms and finds a significant positive association between board gender diversity and greater likelihood of ghg disclosures. lastly, studies such as atif et al. (2021) and zhang et al. (2021), which examine samples of us and international firms over the last decade, highlight a positive relationship between board gender diversity and renewable energy consumption. these empirical results lend support to theories such as the gender socialization theory by chodorow (1978) and the social role theory by eagly (1987), which predict that female decision-makers are key drivers on environmental issues thanks to their abilities to empathize, collaborate, manage risk, and pay attention to detail (altunbas et al., 2022). however, some studies have noted that the presence of women on the board may not lead to favorable environmental outcomes. for example, haque (2017) examines a sample of 256 uk-based firms from 2002 american journal of management vol. 24(2) 2024 23 to 2014 and does not find any relationship between board gender diversity and firms’ ghg emissions. haque (2017) findings lend evidence to suggest firms may be more focused on pursuing carbon initiatives in order to be seen as environmentally responsible and improve their financial performance, rather than make any actual ghg emissions reductions. other studies have also shown that this negative relationship may also be because the board may be more inclined to pursue more traditional value-creating objectives (e.g., profitability or shareholder wealth maximization) or the difference in perspectives on environmental issues between male and female board members is not as significant as expected (prado-lorenzo et al., 2010; adams et al., 2012; altunbas et al., 2022). this paper also expands upon a study by park et al. (2022), which shows insignificant evidence on the relationship between gender board diversity and firms’ carbon offset purchases in south korea between 2011-2019. our paper expands upon the narrow single-country focus in park et al. (2022) by examining a multi-country dataset comprised of over fifteen countries across europe and north america. while board gender diversity is virtually non-existent in south korea (park et al., 2022), we expect to find that our wider range of developed-country markets could consist of firms with greater diversity of corporate leadership. furthermore, this paper expands on the role of board gender diversity by exploring the effects on renewable energy certificates, which is a new environmental dimension that park et al. (2022) do not consider. this paper also employs a more robust instrumental variable approach than park et al. (2022) to account for potential endogeneity concerns (e.g., omitted variables may drive the positive relationship between women on the board and firms’ purchases of carbon offsets or recs).10 while this paper also investigates the link between gender board diversity and environmental outcomes, the focus on carbon offsets and recs is new to the literature. our findings contribute to the extant literature by demonstrating whether gender board diversity plays a role in environmental initiatives such as carbon offsetting and investment in green energy. research design sample data source the data sample used in the following empirical analysis includes annual data on north american firms from the russell 3000 index and european firms from the stoxx europe 600 index from 2012 to 2022. in order to avoid selection bias in our data sample, firms are selected from these two indexes as they both consist of the broadest range of small, medium, or large capitalization firms in north america or europe11. the data is sourced from bloomberg, which reports financial, environmental, and governance data for any global, publicly traded firms based on corporate financial reports, environmental reports, real time market data, and voluntary disclosed data reported directly by firms. our final sample consists of 561 firms or 6171 firm-year observations, which all have non-missing data for their ghg emissions. from this sample, 131 firms that have purchased carbon offsets (representing 23% of the sample) and 117 have purchased recs (21% of the sample). empirical model and variables carbon offsets, recs, and firm performance the first part of our analysis focuses on how the purchase of carbon offsets or recs affects firm-level outcomes, such as environmental and financial performance. in particular, this paper evaluates whether carbon offsets or recs affect firms’: 1) level of ghg emissions; 2) total renewable energy consumption; 3) environmental score; and 4) financial performance. the following models are employed: 𝐺𝐻𝐺𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠𝑖𝑓𝑗𝑡 = 𝑎 + 𝛽1𝐶𝑎𝑟𝑏𝑜𝑛𝑂𝑓𝑓𝑠𝑒𝑡𝑖,𝑡−1 + 𝛽2𝐶𝑜𝑛𝑡𝑟𝑜𝑙𝑠𝑖,𝑡−1 + 𝛾𝑓 + 휁𝑗 +𝛿𝑡 + 휀𝑖𝑓𝑗𝑡 (1) 𝐺𝐻𝐺𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠𝑖𝑓𝑗𝑡 = 𝑎 + 𝛽1𝑅𝐸𝐶𝑖,𝑡−1 + 𝛽2𝐶𝑜𝑛𝑡𝑟𝑜𝑙𝑠𝑖,𝑡−1 + 𝛾𝑓 + 휁𝑗 +𝛿𝑡 + 휀𝑖𝑓𝑗𝑡 (2) 𝑅𝑒𝑛𝑒𝑤𝑎𝑏𝑙𝑒𝐸𝑛𝑒𝑟𝑔𝑦𝑈𝑠𝑒𝑖𝑓𝑗𝑡 = 𝑎 + 𝛽1𝑅𝐸𝐶𝑖,𝑡−1 + 𝛽2𝐶𝑜𝑛𝑡𝑟𝑜𝑙𝑠𝑖,𝑡−1 + 𝛾𝑓 + 휁𝑗 +𝛿𝑡 + 휀𝑖𝑓𝑗𝑡 (3) 24 american journal of management vol. 24(2) 2024 𝐸𝑛𝑣𝑆𝑐𝑜𝑟𝑒𝑖𝑓𝑗𝑡 = 𝑎 + 𝛽1𝐶𝑎𝑟𝑏𝑜𝑛𝑂𝑓𝑓𝑠𝑒𝑡𝑖,𝑡−1 + 𝛽2𝐶𝑜𝑛𝑡𝑟𝑜𝑙𝑠𝑖,𝑡−1 + 𝛾𝑓 + 휁𝑗 +𝛿𝑡 + 휀𝑖𝑓𝑗𝑡 (4) 𝐸𝑛𝑣𝑆𝑐𝑜𝑟𝑒𝑖𝑓𝑗𝑡 = 𝑎 + 𝛽1𝑅𝐸𝐶𝑖,𝑡−1 + 𝛽2𝐶𝑜𝑛𝑡𝑟𝑜𝑙𝑠𝑖,𝑡−1 + 𝛾𝑓 + 휁𝑗 +𝛿𝑡 + 휀𝑖𝑓𝑗𝑡 (5) 𝐹𝑖𝑟𝑚 𝑃𝑒𝑟𝑓𝑜𝑟𝑚𝑎𝑛𝑐𝑒𝑖𝑓𝑗𝑡 == 𝑎 + 𝛽1𝐶𝑎𝑟𝑏𝑜𝑛𝑂𝑓𝑓𝑠𝑒𝑡𝑖,𝑡−1 + 𝛽2𝐶𝑜𝑛𝑡𝑟𝑜𝑙𝑠𝑖,𝑡−1 + 𝛾𝑓 + 휁𝑗 +𝛿𝑡 + 휀𝑖𝑓𝑗𝑡 (6) 𝐹𝑖𝑟𝑚 𝑃𝑒𝑟𝑓𝑜𝑟𝑚𝑎𝑛𝑐𝑒𝑖𝑓𝑗𝑡 = 𝑎 + 𝛽1𝑅𝐸𝐶𝑖,𝑡−1 + 𝛽2𝐶𝑜𝑛𝑡𝑟𝑜𝑙𝑠𝑖,𝑡−1 + 𝛾𝑓 + 휁𝑗 +𝛿𝑡 + 휀𝑖𝑓𝑗𝑡 (7) the dependent variable in models 1 and 2 is 𝐺𝐻𝐺𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠, which is the natural log of ghg scope 1 emissions, ghg scope 2 market emissions, and total ghg market emissions in a given year t for a firm i. the dependent variable for model 3 is 𝑅𝑒𝑛𝑒𝑤𝑎𝑏𝑙𝑒𝐸𝑛𝑒𝑟𝑔𝑦𝑈𝑠𝑒, which we measure using 2 ways including: 1) the natural logarithm of a firm’s renewable energy consumption for a given year t and 2) renewable energy intensity (i.e., a ratio of a firm’s renewable energy consumption over its total energy consumption). in models 4 and 5, we also measure the effect of carbon offsets on another dependent variable 𝐸𝑛𝑣𝑆𝑐𝑜𝑟𝑒, which indicates the natural logarithm of a firm’s environmental score. furthermore, we analyze the effects on a firm’s financial performance, which we measure using log sales, log operating income, log assets, and tobin’s q. the one-year lagged independent variable in models 1, 4, and 6 is carbonoffset, which is the natural logarithm of the total amount of carbon offsets purchased in thousands of metric tons (co2) for a given firm i in year t. the one-year lagged independent variable in models 2, 3, 5, and 7 is rec, the natural logarithm of the total amount of renewable energy certificates purchased in thousands of megawatt hours (mwh). table 1 displays the descriptions of all the variables included in the empirical analysis. to address concerns for potential selection bias regarding the voluntary, and thus non-random, purchase of recs or carbon offsets and a firm’s environmental and financial performance, we use propensity score matching to build a control group and then run regressions on a matched sample of firm-year observations. we first assign firms who have purchased carbon offsets or recs to the treatment group and firms who have not purchased anything to the control group. next, we estimate the probability that a firm has purchased carbon offsets or recs. we run a logit regression to explain a dummy variable which equals one if a firm has purchased carbon offsets or recs, respectively, and zero otherwise. additionally, the nearestneighbor approach is employed to ensure that firms in the treatment and control groups are sufficiently identical. each firm-year observation with firms who have purchased carbon offsets or recs is matched with a firm-year observation of non-buyers and with the closest propensity score (i.e., we require the caliper not to exceed 0.1% in absolute value). based on the matched sample of firm-year observations, we employ logit regressions in models 1-7 to estimate the effect on firms’ financial and environmental performance. in this case, 𝛽1 measures the change in a firm’s financial or environmental performance after purchasing carbon offsets or recs. our study also includes several controls for firms’ financial performance. these controls are as follows. cash holdings is the ratio of cash and cash equivalents to total assets. leverage is the ratio of total debt (short term and long term) to total assets. investment is the ratio of capital expenditures to total assets. return on assets (roa) is a measure of a firm’s efficiency and equals the ratio of net income to total assets. return on equity (roe), a measure of a firm’s profitability, is the net income ratio to total shareholder’s equity. capital spending is the ratio of a firm’s capital expenditures to total sales. one-year lagged levels (i.e., t-1) of the independent and control variables are used to mitigate endogeneity concerns and because it may take time for carbon offset or rec purchases to affect firms’ environmental policies. additionally, for firm i, 𝛾𝑓 refers to industry (based on two-digit sic industry codes) effects, 𝛿𝑡 refers to year effects, and 휁𝑗 refers to country effects, which are included in all regressions. lastly, standard errors are clustered at the industry level to control for heteroskedasticity and intra-industry correlation in the residuals. american journal of management vol. 24(2) 2024 25 percentage of women on the board and the purchase of carbon offsets or recs the second part of our analysis focuses on whether a certain internal governance characteristic (i.e., women directors on the board) have an impact on the volume of carbon offsets or recs purchased. models 8 and 9 are employed to conduct this investigation: 𝐶𝑎𝑟𝑏𝑜𝑛𝑂𝑓𝑓𝑠𝑒𝑡𝑖𝑓𝑗𝑡 = 𝑎 + 𝛽1%𝑊𝑜𝑚𝑒𝑛𝑜𝑛𝐵𝑜𝑎𝑟𝑑𝑖,𝑡−1 + 𝛽2𝐶𝑜𝑛𝑡𝑟𝑜𝑙𝑠𝑖,𝑡−1 + 𝛾𝑓 + 휁𝑗 +𝛿𝑡 + 휀𝑖𝑓𝑗𝑡 (8) 𝑅𝐸𝐶𝑖𝑓𝑗𝑡 = 𝑎 + 𝛽1%𝑊𝑜𝑚𝑒𝑛𝑜𝑛𝐵𝑜𝑎𝑟𝑑𝑖,𝑡−1 + 𝛽2𝐶𝑜𝑛𝑡𝑟𝑜𝑙𝑠𝑖,𝑡−1 + 𝛾𝑓 + 휁𝑗 +𝛿𝑡 + 휀𝑖𝑓𝑗𝑡 (9) table 1 variable description variable name definition panel a: independent variables % women on board the number of women directors on the board expressed as a percentage of total board size % women employees the number of women employees expressed as a percentage of total employment carbon offsets the natural logarithm of total carbon offsets purchased in thousand metric tons of carbon emissions rec the natural logarithm of renewable energy certificates purchased in thousands of megawatt hours panel b: dependent variables co2 & co2 equivalent emissions ghg scope 1 emissions the natural logarithm of ghg scope 1 emissions in thousand metric tons ghg emissions ghg scope 2 market emissions the natural logarithm of ghg scope 2 market emissions in thousand metric tons ghg emissions total ghg market emissions the natural logarithm of total ghg market emissions (scope 1 & 2) in thousand metric tons ghg emissions renewable energy renewable energy use natural logarithm of total annual renewable energy consumption in thousands of megawatt hours renewable energy intensity the share of renewable energy use over total energy consumption (%) environmental performance environmental score natural logarithm of bloomberg’s environmental score financial performance tobin’s q market value of equity plus total assets minus the book value of equity, all divided by total assets sales the natural logarithm of total sales assets firm size measured by the natural logarithm of total assets operating income the natural logarithm of operating income 26 american journal of management vol. 24(2) 2024 panel c: control variables cash holdings ratio of cash to total assets leverage ratio of long-term & short-term debt to total assets investment ratio of capital expenditure to total assets return on assets net income as a percentage of total assets return on equity net income as a percentage of total equity capital spending ratio of capital expenditure to total sales board size the total number of directors on the firm’s board the dependent variable in model 8, carbonoffset, is the natural logarithm of the total amount of carbon offset purchase(s) in metric tons of carbon emissions for a given firm i in year t. the dependent variable in model 9, rec, is the natural logarithm of the total renewable energy certificate purchase(s) in thousands of megawatt hours (mwh). the same financial control variables are employed as in the previous analysis (i.e., cash holdings, leverage, investment, roa, roe, and capital spending) and industry, year, and country fixed effects. board size is also included in the regression as a control variable. our variable of interest in this analysis is a characteristic of firms’ internal governance, namely the percentage of women directors on the board (%womenonboard). to address potential endogeneity in the independent variable (%womenonboard) as noted by the extant literature (atif et al., 2021), we use an instrumental variable (iv) approach to determine the percentage of women on the board of directors. we use the percentage of women employees (%womenemployees) as an iv for the %womenonboard. like (martinez et al., 2022), we expect this instrument to be relevant given that firms that employ more women are more likely to have a larger group of female candidates to elect as members to the board. thus, we anticipate %womenemployees to be positively correlated to %womenonboard. additionally, we expect this instrument be excludable12 as the purchase of carbon offsets or recs are costly investments that require oversight and budget approval by firms’ boards rather than its employees. this view is supported by a recent study by ecosystem marketplace,13 which revealed that companies that purchase voluntary carbon offsets have a dedicated budget towards ghg emission reduction activities and invest an average of $1.3 million.14 additionally, 97% of these carbon-offset buyers mandate board-level supervision and approval for these investment initiatives. to estimate the effect on 1) carbon offsets and 2) recs, a two-stage least squares (2sls) approach is employed. while previous studies have studied the effect of female board members on renewable energy consumption or corporate social responsibility performance, the relationship between the female board membership and the volume of green power purchases (i.e., recs) and carbon offsets has not been studied. studying the volume and magnitude of recs or carbon offset purchases is important as it focuses on the scale of ghg emission reduction or energy efficient policies, which is of vital importance to firms who have set emissions targets or made commitments to reduce their environmental impact. descriptive statistics table 2 displays the descriptive statistics for the full sample of firms as well as the sub-samples with 1) carbon offset buyers and without carbon offset buyers and 2) with rec buyers and without rec buyers. the t-statistics for the differences in means between the control and treatment groups are shown based on a two-sample t-test. in particular, panel a exhibits that firms on average have purchased approximately 525.89 thousand metric tons of carbon offsets and 407.40 thousand of mwh of recs.15 panel b shows that firms in our full sample emit an average volume of 3446.14 thousand tons of total ghg market emissions, with a higher average volume of ghg scope 1 emissions than ghg scope 2 market emissions (3894.64 vs. 659.89 thousand tons). on average, firms who have purchased carbon offsets emit higher volumes of total ghg market emissions than non-buyers of carbon offsets (4967.83 vs. 2787.26 thousand tons). this difference is significant at the 1% level. additionally, buyers of carbon offsets also display a higher average environmental score than non-buyers. american journal of management vol. 24(2) 2024 27 additionally, the sub-sample of firms that have purchased recs differs from firms that have not. panel b shows that firms in our full sample have an average renewable energy intensity of 22.60%. notably, buyers of recs display a higher usage of renewable energy as a percentage of total energy consumption than non-buyers of recs (33.22% vs. 17.94%). this difference is significant at the 1% level. furthermore, buyers of recs display a lower average volume of total ghg market emissions compared to non-buyers (996.29 vs. 4329.36 thousand mwh). furthermore, buyers of recs also display a higher average environmental score than non-buyers of recs. panel c of table 2 focuses on the financial variables that may impact firms’ propensity to buy carbon offsets or recs and their ghg emissions. firms in the sample have average cash holdings of 0.12, leverage of 0.30, investment of -0.03, roa of 0.04, roe of 19.57, and capital spending of -0.12. the average board size of firms is ~11 members. table 2 descriptive statistics with carbon offsets without offsets with recs without recs n= 1,441 n= 4,730 n=1,287 n= 4,884 variable mean std. dev. mean mean t-stat of difference in means mean mean t-stat of difference in means panel a: independent variables % women on board (wob) 24.347 11.490 27.482 23.351 -11.904 26.776 23.691 -8.456 carbon offsets 525.890 2089.595 525.924 112.079 734.444 3.899 recs 407.406 987.921 595.170 273.574 -4.122 407.406 ln(carbon offsets) 3.916 2.325 3.912 3.229 4.248 5.497 ln(recs) 4.478 1.966 5.014 4.091 -6.019 4.478 panel b: dependent variables ghg emissions ghg scope 1 emissions 3894.649 14315.26 7382.713 2415.23 -10.328 604.418 4944.455 8.414 ghg scope 2 market emissions 659.8981 2042.873 842.582 580.798 -2.948 603.625 680.186 0.827 total ghg market emissions 3446.141 11336.280 4967.830 2787.265 -4.435 996.297 4329.364 6.545 ln(ghg scope 1 emissions) 4.650 2.988 4.813 4.581 -2.277 3.915 4.883 8.971 ln(ghg scope 2 market emissions) 4.529 2.393 4.282 4.635 3.339 4.185 4.650 4.213 ln(total ghg market emissions) 5.505 2.473 5.451 5.529 0.727 5.006 5.686 6.107 renewable energy ln(renewable energy use) 4.449 2.651 5.023 4.139 -8.117 4.835 4.268 -5.038 renew. energy intensity 0.226 0.279 0.323 0.176 -13.305 0.332 0.179 -13.372 environmental performance ln(environmental score) 3.288 1.068 3.578 3.184 -11.519 3.492 3.228 -7.285 financial performance tobin's q 2.281 3.001 2.420 2.237 -1.998 2.353 2.262 -0.948 ln(sales) 9.007 1.554 9.815 8.754 -23.524 9.444 8.889 -11.425 ln(assets) 9.816 1.817 10.987 9.449 -29.956 10.380 9.665 -12.625 ln(operating income) 7.046 1.597 7.878 6.782 -22.627 7.615 6.891 -13.974 panel c: control variables cash holdings 0.128 0.138 0.149 0.121 -6.631 0.150 0.121 -6.694 leverage 0.305 0.223 0.255 0.320 9.662 0.248 0.320 10.237 investment -0.039 0.043 -0.033 -0.041 -6.560 -0.033 -0.041 -6.352 return on assets 0.043 0.580 0.058 0.038 -1.118 0.057 0.039 -0.943 return on equity 19.572 68.733 26.363 17.360 -4.245 20.581 19.296 -0.577 capital spending -0.125 0.499 -0.081 -0.138 -3.780 -0.087 -0.135 -3.063 board size 11.011 2.664 12.393 10.572 -23.391 11.387 10.909 -5.634 table above exhibits the descriptive statistics for the full sample as well as the sub-samples with 1) carbon offset buyers and without carbon offset buyers and 2) with rec buyers and without rec buyers. ***, **, * denotes significance at the 1%, 5% and 10% level respectively. full sample n= 6,171 with carbon offsets without offsets with recs without recs n= 1,441 n= 4,730 n=1,287 n= 4,884 variable mean std. dev. mean mean t-stat of difference in means mean mean t-stat of difference in means panel a: independent variables % women on board (wob) 24.347 11.490 27.482 23.351 -11.904 26.776 23.691 -8.456 carbon offsets 525.890 2089.595 525.924 112.079 734.444 3.899 recs 407.406 987.921 595.170 273.574 -4.122 407.406 ln(carbon offsets) 3.916 2.325 3.912 3.229 4.248 5.497 ln(recs) 4.478 1.966 5.014 4.091 -6.019 4.478 panel b: dependent variables ghg emissions ghg scope 1 emissions 3894.649 14315.26 7382.713 2415.23 -10.328 604.418 4944.455 8.414 ghg scope 2 market emissions 659.8981 2042.873 842.582 580.798 -2.948 603.625 680.186 0.827 total ghg market emissions 3446.141 11336.280 4967.830 2787.265 -4.435 996.297 4329.364 6.545 ln(ghg scope 1 emissions) 4.650 2.988 4.813 4.581 -2.277 3.915 4.883 8.971 ln(ghg scope 2 market emissions) 4.529 2.393 4.282 4.635 3.339 4.185 4.650 4.213 ln(total ghg market emissions) 5.505 2.473 5.451 5.529 0.727 5.006 5.686 6.107 renewable energy ln(renewable energy use) 4.449 2.651 5.023 4.139 -8.117 4.835 4.268 -5.038 renew. energy intensity 0.226 0.279 0.323 0.176 -13.305 0.332 0.179 -13.372 environmental performance ln(environmental score) 3.288 1.068 3.578 3.184 -11.519 3.492 3.228 -7.285 financial performance tobin's q 2.281 3.001 2.420 2.237 -1.998 2.353 2.262 -0.948 ln(sales) 9.007 1.554 9.815 8.754 -23.524 9.444 8.889 -11.425 ln(assets) 9.816 1.817 10.987 9.449 -29.956 10.380 9.665 -12.625 ln(operating income) 7.046 1.597 7.878 6.782 -22.627 7.615 6.891 -13.974 panel c: control variables cash holdings 0.128 0.138 0.149 0.121 -6.631 0.150 0.121 -6.694 leverage 0.305 0.223 0.255 0.320 9.662 0.248 0.320 10.237 investment -0.039 0.043 -0.033 -0.041 -6.560 -0.033 -0.041 -6.352 return on assets 0.043 0.580 0.058 0.038 -1.118 0.057 0.039 -0.943 return on equity 19.572 68.733 26.363 17.360 -4.245 20.581 19.296 -0.577 capital spending -0.125 0.499 -0.081 -0.138 -3.780 -0.087 -0.135 -3.063 board size 11.011 2.664 12.393 10.572 -23.391 11.387 10.909 -5.634 table above exhibits the descriptive statistics for the full sample as well as the sub-samples with 1) carbon offset buyers and without carbon offset buyers and 2) with rec buyers and without rec buyers. ***, **, * denotes significance at the 1%, 5% and 10% level respectively. full sample n= 6,171 28 american journal of management vol. 24(2) 2024 lastly, panel a shows that the firms, on average, have 24.34% of women directors on the board. when comparing the subsamples, firms who have purchased carbon offsets or recs exhibit a higher percentage of women directors on the board than firms who have not purchased carbon offsets or recs (27.48% vs 23.35% and 26.77% vs 23.69%, respectively). figure 1 (shown in the appendix) also displays the increase in the average percentage of women directors on the board from 2012-2022. the percentage of women on the board almost doubled from an average of 16.71% in 2012 to comprising a third (33.39%) of the board in 2022. according to figure 1, this pattern of an increasing average of percentage of women on the board is seemingly higher for buyers of carbon offsets or recs. table 3 presents the average ghg market emissions, average carbon offsets purchased, average recs purchased, average renewable energy intensity, average environmental score, and average percentage of women on board for different industry sectors. table 3 indicates that firms in carbon-intensive industries, such as energy, utilities, materials, and industrials, emit the highest average volume of ghg market emissions. in contrast, the information technology, real estate, and financial sectors emit the lowest. firms in these carbon-intensive industries are also the biggest buyers of carbon offsets. for example, firms in the energy and industrial sectors purchase the highest average volumes of carbon offsets (2003.47 and 1429.26 thousand tons of co2e respectively). this is followed by the communications, consumer discretionary, and information technology sectors.16 on average, the real estate (71.49%), information technology (44.79%), and financials sector (42.90%) use the most renewable energy as a percentage of total energy consumption. on average, the biggest buyers of recs have been communications and information technology firms (average volume of 846.96 and 756.56 thousand mwh respectively). the utilities, energy, and financials sectors follow this.17 with regards to the percentage of women on the board, the industry sectors with the highest averages are financials, communication, and consumer staples. conversely, on average, the materials and energy sectors feature a lower percentage of women on the board. interestingly, on average, there seems to be a higher percentage of women on the board in less carbon-intensive industries, whereas a lower presence of women on the board in more polluting industry sectors. lastly, carbon-intensive industries such as utilities, materials, and energy feature a high average environmental score (43.45, 41.02, and 38.73, respectively). on the other hand, the communication and real estate sectors feature the lowest average environmental scores. table 3 industry averages gics industry sectors n ghg market emissions (thousand metric tonnes co2e) carbon offsets (thousand metric tonnes co2e) recs (thousand mwh) renew. energy intensity environmental score women on board communication 253 1262.773 570.582 846.965 30.57% 24.093 26.74% consumer discretionary 737 1537.081 242.952 294.045 5.57% 30.467 26.47% consumer staples 517 1880.880 87.896 326.322 17.13% 39.311 26.69% energy 275 29212.843 2003.472 365.600 3.77% 38.731 21.53% financials 847 96.494 80.767 327.928 42.90% 28.032 27.63% health care 539 869.204 81.752 226.893 8.79% 35.230 25.06% industrials 990 3877.555 1429.260 213.315 1.95% 32.511 22.68% information technology 869 375.620 174.609 756.561 44.79% 31.018 22.00% materials 495 4730.770 0.000 126.166 30.53% 41.027 21.20% real estate 418 209.883 5.050 237.289 71.49% 25.746 22.32% utilities 231 25895.820 7.888 453.333 7.26% 43.451 24.64% table 3 displays the number of observations, average ghg market emissions, average carbon offsets purchased, average recs purchased, average renewable energy intensity, average environmental score, and average percentage of women on board for different industry sectors. american journal of management vol. 24(2) 2024 29 results and discussion carbon offsets, recs, and firm performance effect of carbon offset purchases on firm environmental and financial performance the first part of our analysis examines whether the volume of carbon offsets purchased affects firms’ environmental and financial performance. in particular, we focus on whether carbon offsets affect firms’: 1) level of ghg emissions; 2) environmental score; and 3) financial performance (i.e., log sales, log operating income, log assets, and tobin’s q). logit regressions are run on a matched sample of firm-year observations using the propensity scores as weights to address endogeneity concerns.18 table 4 reports the results of the logit regression explaining the impact on firms’ environmental score (column 1), the log of total ghg market emissions (column 2), the log of ghg scope 2 market emissions (column 3), and the log of ghg scope 1 emissions (column 4). table 4 effect of carbon offset purchases on firms’ environmental performance note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, **, and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. column 1 shows that the coefficient on the log of carbon offsets (thousand tons of co2e) is significantly positive at the 1% level suggesting that the purchase of carbon offsets leads to an improvement in firms’ environmental score. columns 2 to 4, on the other hand, suggests a positive relationship between the (1) (2) (3) (4) dependent variable: environmental score ln (total ghg market emissions) ln(ghg scope 2 market emissions) ln (ghg scope 1 emissions) ln carbon offset 0.025*** 0.293*** 0.252** 0.321** (0.006) (0.089) (0.110) (0.110) cash holdings 0.139 -4.547*** -5.364** -3.887*** (0.286) (1.363) (1.765) (0.986) investment -2.517 -36.884** -40.854*** -35.467*** (1.945) (11.965) (6.991) (8.331) leverage -0.190 3.790*** 3.527* 2.823** (0.208) (1.115) (1.734) (1.165) roe 0.001*** -0.001 0.001 -0.001 (0.000) (0.001) (0.002) (0.001) roa -0.680** -2.834 -2.461 0.814 (0.257) (1.818) (6.456) (2.111) capital spending 0.156 4.378 6.612** 2.389 (0.376) (2.710) (2.245) (1.819) industry fe y y y y country fe y y y y year fe y y y y n 1367 969 922 1371 r 2 0.42 0.72 0.54 0.83 post-match sample note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. 30 american journal of management vol. 24(2) 2024 volumes of carbon offsets purchased and the level of a firm’s direct and indirect ghg emissions (i.e., scope 1 emissions, scope 2 market emissions, and total ghg market emissions). the coefficient on the log of carbon offsets is significant at the 1% level in column 2 and 5% level in columns 3 and 4. using the propensity score matching method suggests that these results are not affected by observable differences between firm-year observations for carbon offset buyers and non-buyers of carbon offsets. these findings suggest that while the volume of carbon offsets purchased positively impacts environmental scores, it does not lead to an improvement in volumes of direct or indirect ghg emissions. these results lend evidence to greenwashing (as proposed in park et al., 2022), whereby firms are rewarded for pursuing sustainable initiatives such as buying carbon offsets, but do not substantially reduce the volume of their ghg emissions. while the study by park et al. (2022) also examines this concept of greenwashing, the relationship between firms’ environmental and financial performance and the volume of carbon offsets purchased has not been studied. studying the volume and magnitude of carbon offset purchases is important as it focuses on the scale of ghg emission reduction policies, which is vital to firms who have set emissions targets or made commitments to reduce their environmental impact. studying the impact of these carbon offset purchases on firm performance is relevant and timely given the volume of carbon offsets purchased has been rapidly growing, particularly from buyers in carbon-intensive industries, and is forecast to substantially increase (martinez et al., 2023). table 5 effect of carbon purchases on firms’ financial performance note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, **, and * refer to statistical significance at the 1%, 5%, and 10% level. (1) (2) (3) (4) dependent variable: tobin's q ln (sales) ln (operating income) ln (assets) ln carbon offset -0.320 0.190*** 0.177*** 0.205*** (0.191) (0.040) (0.047) (0.050) cash holdings 7.249 -0.818 -0.237 -0.869 (4.288) (0.476) (0.564) (0.830) investment 14.349 -17.517*** -6.761 -10.902* (16.695) (5.437) (4.984) (5.202) leverage 1.851 0.178 0.478 -0.191 (1.186) (0.788) (0.951) (0.875) roe 0.001 0.0002 0.0003 -0.002 (0.005) (0.002) (0.001) (0.003) roa 25.479*** -1.619 0.522 -2.277** (3.191) (1.085) (1.290) (0.866) capital spending -0.572 2.070 0.297 0.696 (3.069) (1.939) (1.273) (1.825) industry fe y y y y country fe y y y y year fe y y y y n 1803 1828 1665 1898 r 2 0.58 0.56 0.41 0.70 post-match sample note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. american journal of management vol. 24(2) 2024 31 table 5 reports the results of the logit regression that explains the effects of the volume of carbon offsets purchased on firm financial performance using a matched sample of firm-year observations. column 1 displays a negative relationship between tobin’s q and the quantity of carbon offsets purchased, although this effect is statistically insignificant. on the other hand, columns 2 to 4 show the coefficients on the log of carbon offsets are statistically significant and positively correlated with other accounting-based measures of short-term financial performance, including log sales, log assets and log operating income. this evidence may suggest that in the short term, firms can use carbon offsets to boost their esg ratings, which existing studies have linked with better financial performance due to lower carbon risk and cost of capital (whelan et al., 2021). effect of rec purchases on firm environmental and financial performance similar to tables 4 and 5, tables 6 and 7 report the effects of rec purchases on firm environmental and financial performance. table 6 reports the results of the logit regression explaining the impact on firms’ environmental score (column 1), the log of total ghg market emissions (column 2), the log of ghg scope 2 market emissions (column 3), renewable energy intensity (column 4), and the log of renewable energy usage (column 5). table 6 effect of rec purchases on firms’ environmental performance column 1 shows that the coefficient on the log of recs (thousand mwh) is significantly positive, implying that the volume of recs purchased leads to an improvement in firms’ environmental score. additionally, column 2 displays a statistically significant and positive relationship between the volumes of (1) (2) (3) (4) (5) dependent variable: environmental score ln (total ghg market emissions) ln(ghg scope 2 market emissions) renewable energy intensity ln(renewable energy use) ln rec 0.039* 0.203* 0.205* 0.041*** 0.609*** (0.018) (0.099) (0.096) (0.010) (0.100) cash holdings -0.059 -4.653* -7.697** 0.737*** 0.393 (0.450) (2.214) (3.188) (0.198) (0.501) investment 2.319 -8.277 -11.478 -0.070 -6.232 (1.902) (11.025) (19.171) (1.234) (7.905) leverage 0.344 0.321 2.574 -0.473 1.491* (0.421) (2.368) (2.463) (0.314) (0.756) roe 0.002* 0.004 -0.004 0.000 0.007** (0.001) (0.007) (0.013) (0.001) (0.003) roa -0.564 -4.572 -0.404 0.191 -2.146 (0.540) (6.628) (10.995) (0.525) (2.197) capital spending 0.076 1.847** 1.383 -0.126 -0.105 (0.198) (0.592) (1.777) (0.091) (0.529) industry fe y y y y y country fe y y y y y year fe y y y y y n 1614 1242 1163 1043 988 r 2 0.37 0.49 0.39 0.44 0.66 post-match sample note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. 32 american journal of management vol. 24(2) 2024 recs purchased and the level of a firm’s total ghg market emissions. furthermore, this positive effect also continues if we look at more granular emissions data, namely firms’ scope 2 market emissions (noted in column 3). lastly columns 4 and 5 demonstrate a statistically positive relationship between the volume of recs purchased and firms’ renewable energy usage and intensity. similar to carbon offsets, the purchase of recs may also be another form of greenwashing as firms get rewarded (with greater environmental scores) for investing in green energy, but this is not enough to significantly cut back their total ghg market emissions. nevertheless, while recs may not reduce firms’ ghg emissions, these findings suggest that they may be more effective in increasing a company’s usage and intensity of renewable energy. table 7 effect of rec purchases on firms’ financial performance note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, **, and * refer to the statistical significance at the 1%, and 5%, and 10% levels, respectively. lastly, table 7 reports the logit regression results that explain the effects of the volume of recs purchased on firms’ financial performance using a matched sample of firm-year observations. similar to the purchase of carbon offsets, column 1 shows that there is a statistically significant and negative relationship between the volume of recs purchased and firms’ tobin’s q. tobin’s q is typically a measure of how the market values a company and how it represents investors’ beliefs about its long-term profitability (delmas et al., 2011). this may suggest that the market perceives the purchase of recs as an additional expenditure that diminishes firms’ resources, leading to a reduction in firms’ long-term value. these results suggest that profit-maximizing firms may not have a financial incentive to reduce their ghg emissions by using recs. conversely, columns 2-4 display a statistically significant and positive relationship between (1) (2) (3) (4) dependent variable: tobin's q ln (sales) ln (operating income) ln (assets) ln rec -0.131*** 0.208*** 0.153** 0.266*** (0.037) (0.065) (0.056) (0.053) cash holdings 4.738** -0.096 2.402*** 0.223 (1.521) (0.711) (0.612) (0.500) investment -6.905*** 1.842 -6.044*** 4.793* (0.974) (5.104) (1.638) (2.252) leverage 0.599 -0.221 0.764 0.826 (1.040) (0.733) (1.170) (1.000) roe 0.002 0.004*** 0.003*** 0.003*** (0.003) (0.001) (0.001) (0.000) roa 6.067** 2.182* 3.104 0.823 (2.402) (1.168) (1.746) (1.407) capital spending 0.309 0.966 1.637*** -0.382 (0.187) (0.596) (0.183) (0.219) industry fe y y y y country fe y y y y year fe y y y y n 1988 2088 1810 2137 r 2 0.45 0.54 0.61 0.70 post-match sample note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. american journal of management vol. 24(2) 2024 33 the volume of recs purchased and log sales, log assets, and log operating income. overall, the market may view recs as a costly use of firms’ resources, leading to a decline in long-term firm value. however, investing in green energy by purchasing recs may also promote greater energy efficiency and serve as a helpful way to boost esg ratings, thus improving short-term financial performance for firms. percentage of women on the board and the purchase of carbon offsets or recs the second part of our analysis investigates whether women directors on the board impact the quantity of 1) carbon offsets or 2) recs purchased. table 8 reports the results of the 2 sls regressions for the effect on the volume of carbon offsets purchased in columns 1 and 2 and the effects on the volume of recs purchased in columns 3 and 4. the one-year lagged percentage of women employees was used as an iv for the percentage of women on board. table 8 two stage least squares regression analyzing effect of women on the board on volume of carbon offsets & recs purchased note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, **, and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. column 1 displays the results of the first-stage regression, which includes the contemporaneous level of percentage of women on board as a dependent variable and one-year lagged financial characteristics and (1) (2) (3) (4) first stage second stage first stage second stage dependent variable: % women board members ln(carbon offsets) % women board members ln(rec) % women employees 0.168*** 0.178*** (0.034) (0.038) % women board members fitted -0.121* -0.193*** (0.064) (0.063) board size 0.232 -0.008 1.017*** 0.280*** (0.156) (0.046) (0.180) (0.072) cash holdings 1.017 0.914 -0.580 2.051** (2.863) (0.890) (3.190) (0.959) investment 33.501* -6.512 -33.912* -21.322*** (19.367) (5.804) (20.506) (6.164) leverage -6.175* -0.474 -3.395 1.086 (3.334) (1.094) (3.585) (1.003) roe 0.019*** 0.0003 -0.001 -0.001 (0.006) (0.002) (0.015) (0.005) roa 0.569 -1.124 8.186 2.014 (2.974) (1.123) (8.487) (2.496) capital spending -7.222 2.325 7.018* 0.305 (6.032) (1.828) (3.728) (0.891) industry effects y y y y country effects y y y y year effects y y y y n 593 593 506 506 f-statistic 266.62 26.80 wald chi squared 2585.57 256.72 note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. 34 american journal of management vol. 24(2) 2024 board size as control variables. we confirm that the percentage of women employees is a valid iv given that it is positively correlated with the percentage of women on board, and the coefficient is significant at the 1% level. the value of the f-statistic is also greater than ten and statistically significant. the results for the second-stage regression are shown in column 2 of table 8, which uses the predicted percentage of women on the board from the first-stage regression to estimate the effect on the volumes of carbon offsets purchased. the results suggest a negative relationship between the percentage of women on the board and the volumes of carbon offsets purchased. the coefficient on the predicted percentage of women on the board is significant at the 10% level in column 2. this result suggests that having women directors on the board does not lead to a significant increase in the purchase of carbon offsets, despite the evidence in literature suggesting having gender board diversity are positively correlated to firms’ environmental performance and that women foster sustainable environmental initiatives (martin et al., 2019). columns 3 and 4 in table 8 report the results of the 2 sls regression for the effect of board gender diversity on the volume of recs purchased. the first-stage regression is displayed in column 3 where the one-year lagged percentage of women employees was used as an iv for the percentage of women on board with the same control variables as our previous analysis. we confirm that the percentage of women employees is a valid iv given that it is positively correlated with the percentage of women on board and the coefficient at the significant at the 1% level. the value of the f-statistic is also high and statistically significant. the results for the second-stage regression are shown in column 4 of table 8, which suggests a negative relationship between the percentage of women on the board and the volumes of recs purchased. the coefficient on the predicted percentage of women on the board is significant at the 1% level in column 4. this result suggests that having women directors on the board does not lead to a significant increase in the purchase of recs, contrary to the extant literature suggesting that gender board diversity is positively correlated to firms’ renewable energy consumption (atif et al., 2021; zhang et al., 2021). robustness checks and further analysis in this section, we examine the effects of buying carbon offsets or recs on firms’ financial and environmental performance for subsamples of different industries. in particular, we exclude firm-year observations for the top two carbon-intensive industry sectors (i.e., energy and utilities) in our sample to ensure that a specific group of industries is not influencing the results. employing the same methodology as before, tables 9, 10, and 11 in the appendix show that the coefficients for log carbon offsets and log recs are statistically significant and exhibit patterns consistent with our main findings. most of these results also hold if we exclude the top three carbon-intensive industries (i.e., energy, utilities, and industrials). these results are available upon request. furthermore, this paper also examines the effects of board gender diversity on the quantity of carbon offsets or recs purchased if we exclude the top two industries with the highest number of observations for the percentage of women on the board. in table 12 (please refer to appendix), we focus on a subsample of carbon offset buyers that excludes the financial and it sectors. additionally, table 13 (please refer to appendix), displays the results for a subsample of rec buyers that also disregards the financial and it sectors. employing the same iv methodology as before, tables 12 and 13 show that the coefficients for log carbon offsets and log recs are statistically significant and display patterns consistent with our main analysis. these results also hold if we exclude the industrial sector. these results are available upon request. as a further check, we use an instrumental variable approach to estimate the effects of purchasing carbon offsets or recs on firms’ ghg emissions. specifically, we use a firm’s marketing expense (proxied by a firm’s selling expense from its financial statements) at t=-1 as an instrumental variable for carbon offsets or recs. we expect firms’ selling expenses to be relevant and positively related to carbon offsets or recs if they attempt to greenwash or market themselves as environmentally sustainable. for example, a study of voluntary carbon offsets in the aviation industry by guix et al. (2022) found that thirty-seven airlines are vulnerable to greenwashing due to “poor communication and low transparency” in their carbon american journal of management vol. 24(2) 2024 35 offset marketing. additionally, we expect firms’ selling expenses to be excludable as it does not directly influence business operations (which lead to scope 1 emissions) or energy purchasing decisions (which result in scope 2 emissions). we add sales growth as an additional control variable to further control for firm size. tables 14 and 15 in the appendix demonstrate that the results following this approach are consistent with the main analysis and suggest that firms that purchase carbon offsets or recs continue to pollute rather than decrease their ghg emissions. lastly, we employ an event study model to verify that buyers and non-buyers of carbon offsets or recs do not exhibit significant differences before acquiring these instruments. our results confirm that these two groups of firms are not significantly different from each other prior to their first purchase of a carbon offset or rec, and that their financial and environmental performance only diverges after they have made these investments. these results are available upon request. conclusion as carbon offset and rec markets continue to grow, it is essential to understand the internal governance characteristics of companies purchasing these instruments and the effects of these purchases on firm-level outcomes. this paper aims to fill this gap by examining how board gender diversity affects firms’ investment in carbon offsets and recs and how these instruments impact firms’ financial and environmental performance in developed-country markets. this paper contributes to the growing literature on climate change and ghg emissions reduction efforts in the following ways. first, this study employs a novel approach by analyzing the relationship between the quantity of carbon offsets or recs purchased and firms’ environmental and financial performance. our paper also expands upon the narrow single-country focus of previous research by examining a multi-country dataset comprised of over fifteen countries across europe and north america. this paper also uses detailed firm-level emissions data (including ghg scope 1, ghg scope 2 market, and total ghg market emissions),19 unlike previous studies that relied on carbon emission disclosures or other carbon performance indicators. combined with a psm approach to deal with concerns on potential selection bias, this study can more clearly examine the effectiveness of using carbon offsets or recs in mitigating firms’ indirect or direct ghg emissions and achieving their sustainability goals. as an additional test, this paper employs firms’ marketing expense as an instrumental variable to estimate the effects of purchasing carbon offsets or recs on their ghg emissions. the results from using this approach are consistent with our main findings. second, our findings shed light on corporate greenwashing behavior by demonstrating that firms that purchase carbon offsets or recs receive higher environmental scores, but also have higher ghg emissions. additionally, our findings point out that while purchasing recs may not reduce firms’ ghg emissions, they are more effective in increasing a firm’s usage of renewable energy. these findings are relevant and timely given that demand for carbon offsets and recs has rapidly grown, particularly from developedmarket firms in carbon-intensive industries. third, this paper offers new insights into the relationship between carbon offset or rec purchases and firms’ financial performance, highlighting how stakeholders have diverging views on the benefits of these purchases. while carbon offsets and recs may be a useful tool to boost esg ratings and financial performance in the short term, our findings suggest that firms may have less financial incentive in the longterm to use such tools to manage their ghg emissions and renewable energy consumption. lastly, this paper’s findings contribute to the literature on internal corporate governance by demonstrating that gender board diversity alone does not necessarily indicate a stronger inclination towards environmental initiatives such as carbon offsetting and investment in green energy. we also refine the existing methodology by following an instrumental variable approach that deals with potential endogeneity in the variable for the percentage of women on the board. overall, this paper’s findings may have important implications for policymakers, businesses, and other stakeholders in understanding the potential benefits of investing in carbon offsets and recs. by comprehending these dynamics, firms can also make better decisions toward reducing their carbon footprint and achieving their environmental targets. 36 american journal of management vol. 24(2) 2024 endnotes 1. ghg emissions comprise of co2 and co2-equivalent emissions that are typically classified in three categories: scope 1, scope 2, and scope 3 emissions. scope 1 emissions include direct emissions from sources that are owned or controlled by a firm (e.g., vehicles, equipment, power plants, landfills, wastewater treatment, etc.). scope 2 emissions refer to indirect emissions that result from the generation of electricity, heat, or steam purchased by a firm, but not produced directly by the firm. these emissions are associated with the company’s energy consumption and can include purchased electricity, heating and cooling, and steam generation. lastly, scope 3 emissions include all other indirect emissions that occur due to the company’s value chain and activities but are not owned or directly controlled by the company (e.g., business travel, employee commute, supply chain, wastewater from contractors, etc.) scope 3 emissions are often the most challenging to track and manage due to their broader scope and dependence on external factors. (epa green power partnership, 2018). 2. in terms of ghg emissions reporting, firms who purchase carbon offsets can reduce their scope 1, 2 or 3 emissions, as a net adjustment (epa green power partnership, 2018). the main focus of this paper is on the effects of carbon offset purchases on a company’s scope 1 and 2 emissions. since scope 3 emissions have a broader range and can be challenging to accurately quantify, they are not included in the analysis. 3. firms who purchase recs can lower their gross scope 2 market-based emissions from purchased electricity generated by another entity (epa green power partnership, 2018). 4. to avoid sample selection bias, firms are selected from these two stock indexes as they both consist of the broadest range of small, medium, or large capitalization firms in north america or europe. 5. specifically, this paper uses the natural logarithm of total carbon offsets purchased in thousands of metric tons of co2 and co2‐equivalent emissions. 6. this paper uses the natural logarithm of renewable energy purchased in thousands of megawatt (mwh) hours. 7. ghg scope 1 emissions includes direct emissions that originate from sources owned or controlled by the firm. ghg scope 2 market emissions include indirect emissions from the firm’s consumption of electricity, heat, or steam purchased from another entity (e.g., wind or solar farm). lastly, total ghg market emissions encompass both direct and indirect emissions, providing a comprehensive picture of a firm’s ghg emissions (epa green power partnership, 2018). 8. for example, according to net zero tracker, which analyses the climate pledges from over 1,000 of the largest firms in north america and europe, roughly 61% companies have made a commitment to achieving net zero emissions as of 2023. out of those companies, nearly 45% have expressed their intentions to use carbon offsets as a means to help meet their climate goals (for more information, please see zerotracker.net). 9. using a binary variable to indicate whether a firm has purchased a carbon offset may lead to misinterpretation of the data. for example, if we used a dummy variable approach, the biggest buyer of carbon offsets in our sample of data are firms in the financial sector. financial firms, on average, typically emit low levels of ghg. on the other hand, the industrials sector is the largest buyer of carbon offsets when considering the quantity or volume of offsets bought by firms. industrial firms, on average, are more carbon-intensive than financial firms in our data set. we could expect to see high carbon-emitting firms, which on average buy more carbon offsets, may have a greater impact on reducing carbon emissions compared to low carbon-emitting firms that purchase fewer carbon offsets. anecdotally, there has been increased criticism that firms from the financial sector, such as credit suisse group, are heavily relying on carbon offsets that do not lead to actual ghg emissions reductions (rathi et al., 2022). thus, focusing on the quantity of carbon offsets or recs purchased may lead to a better understanding of the scale of firms’ efforts to reduce ghg emissions. 10. this paper uses the percentage of women employees as an instrumental variable for the percentage of women on the board. 11. the stoxx 600 europe consists of small, mid, and large-cap firms from seventeen countries in europe: austria, belgium, denmark, finland, france, germany, ireland, italy, luxembourg, the netherlands, norway, poland, portugal, spain, sweden, switzerland, and the united kingdom. 12. by excludability, we imply that the instrumental variable is only affecting carbon offset or rec purchases through the women on the board, but not directly. 13. the study by ecosystem marketplace examined over 830 global firms that purchased voluntary carbon offsets. 14. anecdotal evidence indicates that some large-cap companies are spending even more than $1 million on carbon offset purchases. for example, shell invested $300 million in carbon offsets from mid-2019 through american journal of management vol. 24(2) 2024 37 mid-2022 (forest trends, 2019). additionally, companies such as disney, conocophillips, and poseidon resources bought $6.7 million worth of offsets to reforest a state park in san diego (niller, 2020). 15. while we are comparing the actual values of carbon offsets (in thousands of metric tons of co2e), recs (in thousands of mwh), and ghg emissions (in thousands of metric tons of co2e), for simplicity in our discussion of table 2, we use the natural logarithm of carbon offsets, rec, and ghg emissions in the regression analysis. 16. figures 2 in the appendix shows the total volumes of carbon offsets purchased by industry and confirms that firms in the industrials and energy sectors are the largest buyers of carbon offsets. furthermore, figures 3 and 4 in the appendix show the evolution of carbon offset purchases over the period 2012-2022. figure 3 shows that the purchases conducted by firms in the energy and industrial sectors have increased significantly since 2019. figure 4, which shows the evolution of carbon offset purchases but excludes the energy and industrial sectors, exhibits the rise of other key sector players over the last few years, particularly the information technology, communications, and consumer discretionary sectors. 17. according to figure 5 in the appendix, which displays the total volumes of recs purchased by industry, the information technology and financial sectors have been the largest buyers of recs. figure 6 in the appendix also shows the evolution of rec purchases over the last 10 years. similarly, the information technology, financials, and communications sectors have been purchasing the most recs, most notably after 2018. 18. results of psm balance tests for either the carbon offsets or rec analysis are available upon request. 19. ghg scope 1 emissions includes direct emissions that originate from sources owned or controlled by the firm. ghg scope 2 market emissions include indirect emissions from the firm’s consumption of electricity, heat, or steam purchased from another entity (e.g., wind or solar farm). lastly, total ghg market emissions encompass both direct and indirect emissions, providing a comprehensive picture of a firm’s ghg emissions (epa green power partnership, 2018). references adams, r.b., & funk, p.c. 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(2021). board characteristics, external governance and the use of renewable energy: international evidence from public firms. journal of international financial markets, institutions and money, 72. elsevier. https://doi.org/10.2139/ssrn.3636181 40 american journal of management vol. 24(2) 2024 appendix table 9 effect of carbon offset purchases on firms’ financial & environmental performance (1) (2) (3) (4) dependent variable: ln (sales) ln (assets) environmental score ln (total ghg market emissions) ln carbon offset 0.132* 0.166** 0.024* 0.293** (0.068) (0.057) (0.011) (0.109) cash holdings -1.493** -1.451* 0.139 -3.396*** (0.454) (0.624) (0.377) (0.992) investment -19.519*** -8.881* -1.119 -41.977*** (2.481) (3.878) (1.837) (8.541) leverage -0.135 0.685 0.036 2.722** (0.969) (0.647) (0.211) (0.948) roe -0.0010 -0.002 0.001* 0.000 (0.002) (0.003) (0.0002) (0.0005) roa -0.562 -1.640 -0.315 -2.861** (1.252) (1.231) (0.376) (1.164) capital spending 2.081 -0.933 -0.221 0.553 (2.039) (1.510) (0.516) (0.974) industry fe y y y y country fe y y y y year fe y y y y n 1641 1594 1359 994 r 2 0.54 0.75 0.26 0.69 post-match sample note: the above analysis focuses on a subsample that excludes the top 2 industries with the highest ghg emissions: energy and utilities. numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. american journal of management vol. 24(2) 2024 41 table 10 effect of rec purchases on firms’ environmental performance (1) (2) (3) (4) dependent variable: environmental score ln (total ghg market emissions) renewable energy intensity ln(renewable energy use) ln rec 0.034** 0.283*** 0.037*** 0.649*** (0.012) (0.070) (0.007) (0.091) cash holdings 0.262 -4.934** 0.897*** 0.243 (0.501) (1.839) (0.164) (0.846) investment 2.615** -7.728 -0.252 -6.620 (0.925) (10.236) (0.958) (7.030) leverage 0.229 0.521 -0.467** 1.291 (0.389) (1.509) (0.165) (0.961) roe 0.0002 0.004 0.002 0.005 (0.0006) (0.011) (0.001) (0.004) roa -0.430 -4.723 -0.207 -1.251 (0.608) (7.769) (0.505) (2.343) capital spending 0.143 1.412* -0.206 0.731 (0.095) (0.669) (0.115) (0.421) industry fe y y y y country fe y y y y year fe y y y y n 1501 1201 949 902 r 2 0.39 0.48 0.54 0.68 note: the above analysis focuses on a subsample excludes the top 2 industries with the highest ghg emissions: energy and utilities. numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. post-match sample 42 american journal of management vol. 24(2) 2024 table 11 effect of rec purchases on firms’ financial performance (1) (2) (3) (4) dependent variable: tobin's q ln (sales) ln (operating income) ln (assets) ln rec -0.139*** 0.242*** 0.173** 0.311*** (0.038) (0.069) (0.058) (0.061) cash holdings 3.713** 0.452 2.164*** 0.710 (1.205) (0.661) (0.478) (0.600) investment -9.633*** -5.204 -11.319*** 3.070 (2.402) (7.182) (3.308) (3.035) leverage -0.500 0.500 1.097 0.719 (1.083) (0.698) (1.441) (0.853) roe 0.002* 0.005*** 0.007 0.004*** (0.001) (0.001) (0.005) (0.001) roa 8.387*** 0.509 0.427 -0.491 (1.646) (1.601) (2.546) (2.272) capital spending 0.586*** 1.604** 1.416*** -0.123 (0.124) (0.582) (0.290) (0.215) industry fe y y y y country fe y y y y year fe y y y y n 1761 1782 1602 1782 r 2 0.48 0.58 0.59 0.70 post-match sample note: the above analysis focuses on a subsample that excludes the top 2 industries with the highest ghg emissions: energy and utilities. numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. american journal of management vol. 24(2) 2024 43 table 12 two-stage least squares regression analyzing effect of women on board on volume of carbon offsets purchased (1) (2) first stage second stage dependent variable % women employees ln(carbon offsets) % women employees 0.255*** (0.036) % women board members fitted -0.075* (0.064) board size 0.568** -0.013 (0.226) (0.064) cash holdings 0.637 -0.559 (5.068) (1.416) investment 18.349 -17.278*** (23.561) (6.655) leverage -5.560 -2.338 (5.445) (1.481) roe 0.024*** 0.001 (0.008) (0.001) roa -2.446 -2.397*** (3.506) (0.853) capital spending 8.820 5.949*** (6.624) (2.169) industry effects y y country effects y y year effects y y n 326 326 f-statistic 168.43 wald chi squared 1778.94 note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. 44 american journal of management vol. 24(2) 2024 table 13 two-stage least squares regression analyzing effect of women on board on volume of recs purchased (1) (2) first stage second stage dependent variable: % women employees ln(rec) % women employees 0.268*** (0.046) % women board members fitted -0.091** (0.042) board size 1.108*** 0.185*** (0.244) (0.053) cash holdings 2.569 -0.897 (5.743) (1.142) investment -58.585** -9.701 (28.056) (6.291) leverage 3.057 2.731*** (5.516) (1.050) roe 0.040* 0.009*** (0.020) (0.002) roa -4.973 -1.397 (11.948) (2.104) capital spending 8.179* 0.367 (4.198) (0.770) industry effects y y country effects y y year effects y y n 279 279 f-statistic 23.54 wald chi squared 648.77 note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. american journal of management vol. 24(2) 2024 45 table 14 two stage least squares regression analyzing effect of carbon offsets on ghg emissions (1) (2) first stage second stage dependent variable ln(carbon offset) ln(total ghg market emissions) ln (selling expense) 0.531*** (0.104) ln(carbon offset) 1.762*** (0.297) cash holdings 2.497** -10.027*** (1.217) (2.059) investment -0.101 -41.916*** (11.445) (15.802) leverage 4.574** -1.49 (2.055) (2.586) roe -0.006* 0.010** (0.003) (0.004) roa 7.153** -13.267*** (2.949) (4.546) capital spending 11.043* -16.873* (5.875) (9.880) sales growth 0.505 0.242 (1.248) (1.826) industry effects y y country effects y y year effects y y n 203 203 f-statistic 260.41 wald chi squared 2946.30 note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. 46 american journal of management vol. 24(2) 2024 table 15 two stage least squares regression analyzing effect of recs on ghg emissions (1) (2) first stage second stage dependent variable ln(rec) ln(total ghg market emissions) ln (selling expense) 0.370*** (0.118) ln(rec) 2.516*** (0.700) cash holdings 2.905*** -11.915*** (1.037) (3.287) investment -7.478 8.895 (7.221) (16.268) leverage 3.400** -5.260 (1.495) (4.590) roe -0.026** 0.048 (0.011) (0.030) roa 8.693** -20.340* (4.092) (11.334) capital spending -2.215 5.831 (2.189) (4.200) sales growth -2.129*** 3.410 -0.673 (2.193) industry effects y y country effects y y year effects y y n 252 252 f-statistic 21.29 wald chi squared 197.56 note: numbers in parentheses are standard errors, which are clustered at the industry level. ***, ** , and * refer to statistical significance at the 1%, 5%, and 10% levels, respectively. american journal of management vol. 24(2) 2024 47 figure 1 average percentage of women directors on the board by year figure 2 total volume of carbon offsets by industry 0 5 10 15 20 25 30 35 40 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 average of percentage of women directors on board average of percentage of women directors on board who have purchased carbon offsets average of percentage of women directors on board who have purchased recs year 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 to ta l g h g e m is si o n s (t h o u sa n d m et ri c to n s) industry industrials energy communication financials information technology consumer discretionary consumer staples health care real estate utilities 48 american journal of management vol. 24(2) 2024 figure 3 total carbon offsets purchases by industry sectors & year figure 4 total volume of carbon offsets by industry & year excluding industrials & energy 0.00 5000.00 10000.00 15000.00 20000.00 25000.00 30000.00 35000.00 40000.00 45000.00 50000.00 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 th o u sa n d s m et ri c to n s o f g h g e m is si o n s year communication consumer discretionary consumer staples energy financials healthcare industrials info tech real estate utilities 0.00 500.00 1000.00 1500.00 2000.00 2500.00 3000.00 3500.00 4000.00 4500.00 5000.00 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 th o u sa n d s m et ri c to n s o f g h g e m is si o n s year communication consumer discretionary consumer staples financials healthcare info tech real estate utilities american journal of management vol. 24(2) 2024 49 figure 5 total volume of recs purchased by industry (mwh) figure 6 total volume of recs purchased by industry & year 0 20000 40000 60000 80000 100000 120000 industry th o u sa n d s o f m eg aw at t h o u rs ( m w h ) information technology financials consumer discretionary communication industrials consumer staples real estate health care utilities energy materials 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 th o u sa n d s o f m w h year communication consumer discretionary consumer staples energy financials health care industrials information technology materials real estate utilities american journal of management vol. 25(2) 2025 1 corporate social responsibility as a tool for sustainability in entrepreneurship megan fixen minot state university corporate social responsibility (csr) is increasingly gaining attention as an essential component of business. in the current environment, entrepreneurs may be searching for strategies to maintain a competitive advantage. csr-based initiatives may help businesses differentiate themselves from others in the market, attracting customers that align with their values. this paper includes a review of the csr concept and the role that csr can play in increasing competitiveness in entrepreneurship. the literature revealed that businesses that engage in csr based activities see increased customer loyalty, trust, and profit. therefore, engaging in csr behaviors may enhance sustainability and growth for entrepreneurial ventures. keywords: entrepreneurship, corporate social responsibility, sustainability introduction corporate social responsibility (csr) is a business's efforts to positively contribute toward society (ahmad et al., 2021). according to carroll (1991), csr includes four social responsibilities that include (a) economic, (b) legal, (c) ethical, and (d) philanthropic. when combined, these four components represent the total social responsiveness of a business (daft, 2014). embracing each of these responsibilities is vital for the sake of society and for the sake of the firm (abd rahim et al., 2011). csr is increasingly gaining business relevance (medina et al., 2021). in the modern business environment, csr is significant because businesses recognize the benefits of focusing on the perceptions and needs of stakeholders, rather than solely focusing on wealth (min et al., 2012; raman et al., 2012). according to maamoun (2013), engaging in csr is crucial because consumers may avoid making purchases from companies that do not demonstrate a commitment to csr. a growing interest exists for responsible entrepreneurship (adomako & tran, 2023). businesses are commonly judged by the consumer based on the extent to which societal interests are considered (chae, 2020). business leaders understand the significance of using csr as a strategic tool, because the purchasing intentions of consumers depend upon the ethical and moral positions of a business (raman et al., 2012). according to pradhan (2018), consumers believe a business is obligated to give back to society. abd rahim et al. (2011) suggested that companies that do not meet consumer expectations or offend consumer values risk consumer support withdrawal and business loss. 2 american journal of management vol. 25(2) 2025 purpose entrepreneurs may seek strategies to maintain a competitive advantage in the current environment. increased competition has created a need for differentiation, and csr is an important attribute to improve the image of a company and win consumer loyalty (suley & yuanqiong, 2019). additionally, the covid19 pandemic has created a greater need for businesses to understand what drives some businesses to be socially responsible as well as focus on the opportunities that csr related activities can provide (he & harris, 2020). the following paper will outline the benefits of engaging in csr based behaviors. overview of the literature theoretical foundation carroll’s (1991) csr pyramid provides a basis for understanding the constantly changing nature of a businesses’ economic, legal, ethical, and philanthropic performance. the pyramid is a useful method for graphically displaying the components of the csr construct (schwartz & carroll, 2003). according to wagner-tsukamoto (2019), the csr pyramid is one of the leading csr models. carroll’s (1991) csr pyramid model provides a theoretical foundation to examine csr activities and gain a deeper understanding of the relationship between consumers and businesses. according to smith et al. (2001), the dimensions outlined by carroll (1979) provide a useful way to discover how various factors may influence perceptions of the different components of csr. by understanding the associations between csr and consumer desires, business leaders can create specific csr initiatives responsive to consumer preferences (abd rahim et al., 2011). corporate social responsibility since the 1950s, csr has been an important progressing topic (carroll, 2016). according to carroll (1991), csr includes four social responsibilities that include (a) economic, (b) legal, (c) ethical, and (d) philanthropic. carroll argued that embracing these responsibilities is vital for the sake of society and the firm (abd rahim et al., 2011). according to moran et al. (2019), csr is a concept that has endured time and continues to grow. opponents of csr believed that in addition to taking profits from shareholders, engaging in csr activities could raise consumer prices and lower employee wages (mahmood & humphrey, 2013). leaders may be hesitant to engage in csr activities for fear of consuming resources and increasing costs, making csr-related activities a burden to the business (shuqin, 2014). however, nwidobie (2014) examined the effect of csr on profit margins, and found that although csr activities may increase company costs, the increase may not affect profit because csr generally compensates by increasing sales. csr is a key issue because of the resulting benefits to both the business and consumer. (madrakhimova, 2013). the concept of csr is also the focus of a substantial amount of scholarly attention (lizhen chen et al., 2016). as clearer definitions of csr continue to emerge, leaders in the 21st century recognized csr as a responsible way to conduct business (hack et al., 2014). benefits of engaging in corporate social responsibility existing literature indicated that businesses benefit from csr activities (joireman et al., 2015). according to madrakhimova (2013), social responsibility increases the development and value of a business. further, wang and li (2016) indicated that companies that engage in social responsibility have higher market value. implementation of csr activities may help a business achieve higher levels of success by satisfying the needs and expectations of stakeholders (juščius et al., 2013). csr may make a business more attractive to a consumer; therefore, it is becoming increasingly common for businesses to integrate csr activities into their practices (azmat & ha, 2013). social responsibility directly affects the trust and loyalty of the consumer (iglesias et al., 2020). hillenbrand et al. (2013) argued that the main benefit of engaging in csr activities is the increased support of stakeholders. american journal of management vol. 25(2) 2025 3 abd rahim et al. (2011) indicated that each of the csr components outlined by carroll play a large role in consumers' purchasing behaviors. businesses must understand csr perspectives to design csr initiatives that increase trust and influence purchasing intentions (lin et al., 2011). by engaging in csr initiatives, a business can enhance long-term sustainability (taran & betts, 2015). financial and social benefits may result from socially responsible behaviors (jariko et al., 2016). csr can increase sales, increase profits, and increase investor attraction (creasey, 2015). corporate social responsibility and entrepreneurship entrepreneurship is shifting toward a more sustainable future (rosário et al., 2022). entrepreneurs may provide positive social impact and contribute to achieving sustainable development through csr (i̇yigün, 2015). overall, csr based strategies and entrepreneurship are central to building a sustainable future as they encourage businesses to focus on ethical practices in addition to profitability. consumers may not support a business that follows a strict economic perspective, and may develop a stronger connection with a company that behaves socially responsibly (clementina, 2013). a consumer is likely to be more loyal to a business that engages in higher levels of csr (ahmad et al., 2021). furthermore, chang and yeh (2017) indicated that csr perceptions affect consumer loyalty and satisfaction. businesses and society may be connected through csr (singh & misra, 2022). consumers have a strong understanding of the socially responsible actions of a business (abd rahim et al., 2011). socially responsible behaviors influence whether or not the stakeholder will support a business (vidaver-cohen & brønn, 2015). because the presence of csr behaviors increases the likelihood that consumers will feel comfortable purchasing from a business, consumers' perspectives impact how leaders create and respond to csr initiatives (okpara & wynn, 2012). findings a review of literature suggests that consumer support increases from engaging in csr behaviors. businesses should integrate csr practices into their strategies due to consumers' increasingly socially conscious behavior (prendergast & tsang, 2019). authentic csr builds a rapport between a business and customers (he & harris, 2020). the primary goal of a business is to gain loyal customers that will give the business a competitive edge (ashraf et al., 2017). engaging in csr behaviors may provide entrepreneurs with an advantage over the competition. because stakeholders value csr behaviors, businesses can improve their reputation and increase profits by engaging in csr activities (dusuki & yusof, 2008). according to julie juan and xuan (2013), each dimension of csr can potentially increase business performance by providing benefits to the consumer, building brand image, and increasing profit. conclusion when csr initiatives are implemented into business strategy, they may enhance the reputation of a business and contribute to positive societal impacts. according to hategan et al. (2018), csr related activities are necessary in the current environment to meet stakeholder demands and be long-term sustainable. according to gherghina and simionescu (2015), a statistically significant relationship does exist between csr related activities and financial performance. engaging in csr-related activities results in customer trust, satisfaction, and loyalty (ashraf et al., 2017). additionally, the csr perceptions of consumers directly impacts the commitment to the organization (shah & khan, 2019). ultimately, csr can be a source of competitive advantage, resulting in superior business performance (julie juan & xuan, 2013). therefore, engaging in csr behaviors may be a source of sustainability in entrepreneurship. 4 american journal of management vol. 25(2) 2025 references abd rahim, r., jalaludin, f.w., & tajuddin, k. 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(2015). reputation, responsibility, and stakeholder support in scandinavian firms: a comparative analysis. journal of business ethics, 127(1), 49–64. doi:10.1007/s10551-013-1673-7 wagner-tsukamoto, s. (2019). in search of ethics: from carroll to integrative csr economics. social responsibility journal. wang, k., & li, d. (2016). market reactions to the first-time disclosure of corporate social responsibility reports: evidence from china. journal of business ethics, 138(4), 661–682. doi:10.1007/s10551-015-2775-1 american journal of management vol. 24(4) 2024 35 the effect of institutional context, distance, and routine complexity on the transfer of routines across borders majid eghbali-zarch memorial university of newfoundland transferring routines and practices within multinational enterprises (mnes) is a prevalent and, at times, tedious process. new institutional context imposes forces for local adaptation, which disrupts the stability of the routine stability due to the interplay between ostensive (the codified and/or abstract version of the routine) and performative (the practiced version) aspects of the routine. change in routines is then needed to ensure local adaptation and the routine reaches a new state of stability. our study focuses on the microprocesses of the transfer process and the pertinent states of stability and change in the focal routines and practices. we use simulation experiments and examine the effect of intuitional pressures for local adaptation. the local adaptation speed of ostensive routine is shown to matter. slow enactment of the revised version of the ostensive routine (i.e. implementation of the locally adapted routine) at the subsidiary level can disrupt the stability of the routine. keywords: international transfer of routines, institutional context, local adaptation time, system dynamics, simulation, headquarters and subsidiary relationship introduction to successfully expand abroad, firms need to properly transfer certain routines and practices (i.e. a bundle of routines) from the headquarters locations to the new locations they enter or their existing subsidiaries. the transfer may be aimed at replication of existing organizational modules (mcdonald’s way of expansion) (jensen & szulanski, 2007, szulanski & jensen, 2008, winter & szulanski, 2001) including its routines and practices, or merely the transfer of certain routines and practices (e.g. due diligence for acquisitions (nadolska and barkema, 2007)). the routine or practice can rarely be transferred across borders ‘verbatim’ (i.e. copy exactly). depending on the institutional profile of the host country, this transfer imposes the need for local adaptation of the routine and practices (kostova and roth, 2002). the transfer process takes the routine and practice from an extant established state (at the headquarters) to a new state of stability. transferring the routine and practice thus has a critical role in a successful international expansion. this study focuses on the routine transfer process and its internal and external dynamics during the transition process from headquarters (i.e. pre-transfer) to the host country subsidiary. we use the conceptual account of routines that introduce ostensive (i.e. abstract patterns) and performative (i.e. specific actions) routines (feldmand and pentland, 2003) to unlock the black box of routine and its internal dynamics. previous studies have focused on ‘verbatim’ international transfer of routines, or replication (winter & szulanski, 2001), routine micro-processes and their effect on capability learning in international joint 36 american journal of management vol. 24(4) 2024 ventures (prashantham and floyd, 2012), and power and micro-politics of transfer of human resource practices (geary and aguzzoli, 2016). there are also studies that, absent the institutional and country border effects, have explored the transfer of routines across the geographic space (bucher and langley, 2016; d’adderio, 2014). to our knowledge, however, in the routine and international business (ib) literature, we know little about the process of transferring routine from one state of stability (at the headquarters) to another (at the subsidiary). to address this gap, we ask the following research question: how does the adaptation to external institutional forces at the subsidiary location influence the process of transfer routines and their internal dynamics? we adopt organizational theorists’ account of routine (as opposed to that of organizational economists – see parmigiani & howard-grenville, 2011) and define it as “repetitive, recognizable pattern of interdependent actions, carried out by multiple actors” (feldman and pentland, 2003). we argue that the transfer of routines across borders revitalizes the routine to a new state of stability that is not necessarily the same as what hqs has transferred to subsidiaries. at the subsidiary level, the routine goes through iterations of implementation and experimentation (or performances) until a consensus is reached on what adjustments should be made for the routine to be adapted at the subsidiary level. generally, the higher the dissimilarities, the more local adaptation is required. three institutional dimensions are identified as influential factors: technical proximity, cultural adaptability, and political similarity. our theory development endeavor is based on a simulation experiment using system dynamics (sterman, 2000; davis, eisenhardt and bingham, 2007). this simulation technique fits our study context as we deal with a complex system (i.e. routine and institutional differences) with internal dynamics that face external influential factors. routines in a local context are suggested to be generative and constantly evolving due to the interplay between performances and ostensive routine (hence the dynamism). they are also complex as (1) they are repetitive and may change in each iteration compared to the previous one, (2) they require recognizability of a pattern of action that is interdependent, and finally, (3) multiple actors are involved. if we add the international institutional dimension, we will face a complex and dynamic system. the simulation method has been an effective theory development tool in some seminal studies in management (e.g. march, 1991) , and international business and management scholars have used it (adler & hashai, 2007, bauer & fisher, 2000, chandra & wilkinson, 2017, cheng & leung, 2004, dinkevych, wilken, aykac, jacob, & prime, 2017, durvasula, netermeyer, andrews, & lysonski, 2006, eapen, 2013, flores, aguilera, mahdian, & vaaler, 2013, fuad & gaur, 2019, kingsley, noordewier, & vanden bergh, 2017, li & rugman, 2007, tailan & seth, 2009, wu, lao, wan, & li, 2019). in particular, the system dynamics simulation technique can deal with complex and dynamic systems (sterman, 2000; davis, eisenhardt and bingham, 2007) and has previously been used in studies of organization capability development and erosion (rahmandad, 2012, and rahmandad and repenning, 2016), diffusion of practices (etzion, 2014), complexity theory (anderson, 1999), dynamics of innovation implementation (repenning, 2002), and unanimous organizational decision rules (romme and georges, 2004), among other studies. we study the micro-processes of routine transfer from mne headquarters (origin) to the subsidiaries that adopt the routine. we find that the speed of local adaptation of the routine plays an important role. as the routine evolves, the speed of adjustment of the ostensive routine relative to the speed of adjustment of the performative routine matters. more specifically, each time actions are made based on an ostensive routine, local adaptation may lead to the deviance of these actions from what the latest version of ostensive routine dictates. if the deviance is repetitive enough to form a pattern, actors involved in the routine may revise their understanding of the routine (i.e. ostensive routine) for the next time it is performed (feldman and pentland, 2003) and reach a consensus. identifying the pattern, reflecting on it and discussing it among organizational actors (within the subsidiary and between the subsidiary and headquarters) takes time, which we call ostensive routine adjustment time. likewise, after the ostensive routine is revised, its deployment in action, communication of needed changes, and preparing the actors for this change take time, which we name performative routine adjustment time. taking too much time to make the required changes in the ostensive routine at the subsidiary level may lead the routine to a state of high variance, and routine instability may ensue. this is not favorable in international expansion as mnes favor some degree of consistency and global integration simultaneously with responding to the pressures for local adaptation. american journal of management vol. 24(4) 2024 37 theoretical development as a source of both stability and change, routines can be used as a means of control, legitimacy, efficiency, and learning (miner, ciuchta, & gong, 2008, rerup & feldman, 2011), as well as balancing political power in organizations (nelson & winter, 1982, zbaracki & bergen, 2010). depending on the dominant rationale for implementing routines, the adherence of subsidiaries to the mne’s latest version of routine during the transfer process may be favorable. when routine is a means of control, for example, as in the case of franchise businesses, there is an intention in place by the headquarters (franchisor) that subsidiaries (franchisees) adhere to the exact templates of headquarters’ routines. the franchisor uses this control mechanism to ensure consistent quality of service and products and consequently protect its brand. alternatively, if a pharmaceutical mne has a documented procedure to produce a drug and the procedure has been approved by the home or host country government authorities, the exact implementation and high degree of adherence to the routine are favorable to ascertain business legitimacy. in other cases, the need for a balance between local adaptation and global integration (bartlett and ghoshal, 1989) imposes a tradeoff between adherence to two competing goals (d’adderio, 2014): (verbatim) replication of headquarters’ version of routine (to achieve global integration), and the degree to which certain elements of routine may be changed (to pursue local adaptation). thus, depending on the goal and rationale for the transfer and implementation of routines, various degrees of adherence to the headquarters’ version may be favorable. previous studies have examined the role of intention (which is critical in identifying the transfer goal) in adherence to routines and its effect on stability (or instability) (anand, gary, & siemen, 2011) in the context of mnes, one may analyze the interplay of the role of intentions embedded in the philosophy which guides the routine transfer and implementation by subsidiaries with compatibility of the routines in the new country. we define adherence as the degree of exact implementation of the latest version of routine transferred from headquarters to the subsidiary. the amount of local adjustment and fine-tuning of the routine would indicate the deviance from the latest version of the routine. the final version of the implemented routine results from sequences of recursive experimentations and adjustments (feldman & pentland, 2003, rerup & feldman, 2011) to adhere to the requirements of the local context of the host country. transfer of routines vs. diffusion of practices the unit of analysis in this study is the transfer of routine within an mne. the literature on the diffusion of practices  is fairly rich compared to the transfer of routines in general, let alone the dearth of specific research on their transfer within organizations. practices comprise bundles of routines; however, we need to clarify the distinction and similarities of routines and practices for two reasons. first, the distinction elaborates on the contribution of this study compared to the literature on the diffusion of practices. second, in our theory development, we use some of the mechanisms that are in effect for the diffusion of practices to explain the transfer of routines. routines are meant to accomplish a task; their outcomes are actions and behaviors. practices also have outcomes; however, their outcome is necessary to create value or prevent a potential loss for organizations. routines do not create value in and of themselves. a combination of routines, however, is a source of value creation or loss prevention for the organization. the fact that practices are social entities resulting from the interaction and interdependence of social actors makes the diffusion of practice similar to the transfer of routines. therefore, we partly use the literature on the diffusion of practices to theorize the transfer of routines. specifically, we build on the literature on variation and adaptation of practices during the diffusion process, which is mainly based on deinstitutionalization literature (oliver, 1992). the latest version of a routine in mne is an agreed-upon version resulting from a balance between sequences of entropy and inertial pressures during the legitimation process (meyer & rowan, 1977). subsidiaries of the mne tend to take the institutionalized procedures and routines for granted and view them as legitimate (c.f.meyer & rowan, 1977, zucker, 1987). external institutional conditions of the context, however, make the subsidiary 38 american journal of management vol. 24(4) 2024 challenge the institutionalized practice; hence, the deinstitutionalization, the process by which the legitimacy of an established routine discontinues in the context of a new country. studies on the contingencies that lead to variations during the process of diffusion (ansari, et al., 2010), and that of deinstitutionalization (oliver, 1992), introduce three main contextual dimensions that affect the adaptability of the practice to the new context, namely technical, cultural, and political elements. we will explain the mechanisms that drive each of the three dimension’s effect on the adaptation of the routines when transferred across borders in a ‘non-verbatim’ format when we develop the study’s propositions. while we focus on the ‘non-verbatim’ transfer of routines, it is important to highlight its distinction with the intended ‘verbatim’ transfer of routines, the subject in studies of replication as a strategy (winter & szulanski, 2001). replication of business practices has been studied in the strategy literature to investigate how businesses copy their extant businesses and practices “verbatim” to grow and expand (winter & szulanski, 2001). replication seems to be a special case of diffusion in which high deviances from original practice are undesirable. diffusion of practices has been studied in the context of mnes as well (kostova, 1999). among the studies of diffusion and replication, we build on the specific literature that highlights the contextual antecedents of deviance from the institutionalized procedures and practices (ansari, et al., 2010, oliver, 1992) because it is both more aligned with our interest in this paper in studying “non-verbatim” transfer of routines across borders, and more suitable for the unstable nature of the phenomenon of interest per se (i.e. routine). we base our analysis on three types of pressures for local adaptation: technical, cultural, and political factors. technical proximity by technical proximity, we mean the degree to which the attributes of a routine are compatible with extant technologies of the recipient subsidiary in an mne. a recently acquired typical subsidiary in the semiconductors industry, for example, has extant technologies essential to implementing the new routines meant to transfer from the new parent. if the technical proximity is low, the subsidiary will try to minimize the cost of implementation, regardless of the original reason for the transfer of routine from the parent. we argue that the degree to which the extant technologies are compatible with the technical requirements of the latest version of the parent’s routines is influenced by both the history and background of the subsidiary and its absorptive capacity. the background of an organization matters in the future path that it pursues. the distinctive characteristics of an organization’s founding context continue to affect the subsequent implementation and adoption of routines and decision-making of its managers, as the imprinting literature implies (marquis, 2003). absorptive capacity impacts the technological proximity of the subsidiary and routine as well. absorptive capacity is defined as the ability of the firm to evaluate and recognize the value of new and external information and assimilate and commercialize it (cohen & levinthal, 1990). subsidiaries with higher absorptive capacities can understand, implement, and assimilate the routine in its original latest format, especially when the tacit aspect of skills and knowledge required to run a routine is dominant. proposition #1: technical proximity between the latest version of the routine and the subsidiary leads to lower deviance from the latest version of the mne routine. cultural adaptability we define cultural adaptability as the degree to which the attributes of a routine are compatible with the culture (values, beliefs, etc.) of the recipient of the routine. when routines transfer across borders, they move to a culturally different context. the roles and responsibilities (at an individual or subsidiary level for micro and meso-routines) assigned by the new routine to the actors in the new local context may depart from what their culture implies as appropriate behavior (bhagat, kedia, harveston, & triandis, 2002). this, in turn, affects how welcoming or resistant they are to adopting the new routine. if cultural adaptability is low, actors will do their best to adjust the routine or selectively infer or interpret the uncertain or unclear features of the routine and to make it more different from what has been sent from the parent company. american journal of management vol. 24(4) 2024 39 proposition #2: cultural adaptability between the latest version of routine and the subsidiary is associated with to lower deviance from the latest version of mne routine. political similarity we define political similarity as the degree to which the normative attributes of the transferring routine are compatible with the interests, positions, and agenda of the actors in the subsidiary who potentially get involved in the routine. whereas routines, as agreed upon ways of getting the task done, are discussed to perform the role of truces which bridge divergent interest groups (nelson & winter, 1982) and collapse at times (zbaracki & bergen, 2010) , their similarity with what the adopting actors prefer impacts the amount of effort by actors for implementing a more favored version of the routine to minimize their potential political (and the subsequent economic) loss. routines with elements of morality, which usually do not hold universally, are typically a source of contention. for example, a joint venture between an mne and a local firm in pakistan for the production of soccer balls, which faces the pressures of implementing the norms of child labor (khan, munir, & willmott, 2007) may strive to adjust the age-specific definition of a child versus an adult because child labor in pakistan may not have the same amount of social stigma as it does in canada. alcohol-serving routines in subsidiaries of a hotel franchise business may not face the same level of leeway in islamic countries as they do in the rest of the world. a christmas party routine in mcdonald's franchises in north america may be adjusted to an eid-al-fitr party (a feast at the end of ramadan month) in the branches in saudi arabia to adapt to the interests of local customers (as the actors involved in the routines). proposition #3: political similarity between the latest version of the routine and the subsidiary is related to lower levels of deviance from the latest version of the mne routine. routine complexity routines in an mne vary in their level of complexity, and complexity matters in the process of transfer and diffusion  across borders. by routine complexity, we mean the degree to which an mne’s routines are causally ambiguous or difficult to understand and implement by the subsidiary. the sources of complexity can be associated with the repetitiveness, recognizability of the action pattern, and the involvement of multiple actors, as these are the main attributes of a routine by definition. firstly, repetition is the proximal cause (as opposed to the dismal cause) of forming a habit at the individual level or a routine at the organizational level(knudsen, 2008, page 129). repetitiveness is key to the complexity of a routine and its transfer internationally in stages of implementation and institutionalization (cf. kostova, 1999). during the process of implementation of the routine by the subsidiary, each repetition is a natural experiment based on which the actors involved in the routine adjust their interactions endogenously, and the stakeholders (e.g. headquarters and subsidiary managers) outside the boundary of routine decide on how to influence the adjustment in the next iteration exogenously. routines vary in the type of repetition. some routines recur discretely, while others recur continuously. building an evacuation routine during a fire alarm is a good example of a discrete routine. since actors involved in fire alarms do not have too many chances of experimenting with the real fire ex-ante and adjusting their understanding of the procedures of evacuating the buildings ex-post, fire drills are used to help decrease the causal ambiguity of the routine and increase the recognition of their critical aspects through further repetition of a discrete routine. in the case of continuous routines, however, routine is meant to perform a daily task. production and sales routines are examples in this group. the actors involved in continuous routines have enough chance to experiment with different iterations of the task, to adjust and fine-tune their individual and collective understanding, and to reduce their perceived complexity of routine. 40 american journal of management vol. 24(4) 2024 table 1 routine complexity and its dimensions dimension types/contributing factors repetitiveness − discrete routine; low level of repetitiveness; as in the case of rare events and crises (e.g. fire alarm and drill) − continuous routines; high level of repetitiveness; as in the case of daily organizational activities such as sales and production. recognizability of action patterns pentland, hærem, & hillison (2010) actors − number of actors − characteristics of actors (e.g. subsidiary role and power in subsidiary level routines) interdependency type (thompson, 1967 ) − sequential interdependence − reciprocal interdependence − pooled interdependence level – based on relative power of actors (pfeffer & salancik, 1978) secondly, involved actors also matter in the complexity of a routine. the number and characteristics of actors involved are the two dimensions pertaining to actors and their role in the level of complexity of a routine. a higher number of actors increases the effort required to communicate and track the interrelationship among actors, creating a higher complexity for the routine. characteristics of actors such as their knowledgeskillsand abilities, as well as background (experience, the network they embed in, etc.) for individuals involved in micro-routines impact how they cognitively analyze their role in relation to others involved in the routine. subsidiary-level characteristics such as subsidiary role (birkinshaw & morrison, 1995) and power (mudambi & navarra, 2004) relative to other subsidiaries and the headquarters affect the complexity of subsidiary-level routines (or meso-routines). thirdly, the type and level of interdependence of actors play a significant role in the complexity of a routine. thompson (1967 ) suggests three types of interdependence between an organization's actors: sequential, reciprocal, and pooled. each interdependence type pertains to a one-way dyad, a two-way dyad, or a network of relations in an organization, respectively. a worker on the shop floor, for example, who fastens a screw of a product and passes it over to the next person, has a sequential interdependence with the following individual. the level of complexity increases from sequential interdependence to pooled interdependence. the level of interdependence is the other dimension that affects complexity. power is well believed to be a significant source of interdependence (pfeffer & salancik, 1978). the higher the mutual dependence and power imbalance (casciaro & piskorski, 2005) between the actors involved in a routine, the more complex the routine is. both the type and level of interdependence dimensions interact to make a routine more or less complex. finally, the recognizability of the patterns of actions (pentland, hærem, & hillison, 2010) in a routine contributes to reducing its complexity. the more the patterns of recurrent actions are vivid both to endogenous and exogenous actors, the more they can understand, interpret, and internalize the “if-then” conditions in the routine. this, in turn, affects how the routine gets transferred within the mne and the amount of intended and unintended local adjustments made to the new version of the routine. less complex routines alleviate the effect of contextual factors that lead to an intended or unintended change in routine during the transfer, implementation, adjustment and fine-tuning process in the local subsidiaries. american journal of management vol. 24(4) 2024 41 proposition #4: routine complexity decreases the negative association between (1) technical proximity, (2) cultural adaptability, (3) political similarity, and the deviance of subsidiary from the latest version of mne routine. micro-processes of routine adaptation prior to transfer (base model) internal dynamics of a routine, absent any transfer process, has been manifested as the interplay between their ostensive and performative aspects (feldmand and pentland, 2003). this dynamic makes the routine an ever-evolving entity. the ostensive aspect is a stabilizer, and the performative aspect of routine is a source of change, innovative actions, improvisation, and adaptation (feldman and pentland, 2003). there is a recursive interplay between the ostensive routine (stock of coded and abstract action patterns) and the performative routine (stock of actions and performances). bucher and langley (2016) identified routine reorientation dynamics as “building up from the performative” and “pushing down from the ostensive” (page 3). thus, before transfer, routines constantly and gradually evolve from within. the dynamics start at the early stages of routine emergence (bapuji, hora, and saeed, 2012), when variances in how a certain task is done converge. a pattern of action starts to develop and accumulate into an early version of the ostensive routine (𝑅𝑂 (𝑡0)). then, the next time the same task is to be done, actors refer to the precedent (the latest version of ostensive routine) and enact it as a first iteration of performative routine (𝑅𝑃 (𝑡0)). over time, variations in performances are inevitable and develop a pattern that feeds into the stock of ostensive routine as an inflow (inflow𝑅𝑂 (𝑡0)). similar to mechanisms that cause organizational capability erosion (rahmandad and repenning, 2016), dynamics such as adaptation traps in organizational learning can lead to erosion of routines. the process of ostensive routine development is then intervened through an outflow parameter (erosion𝑅𝑂 (𝑡0)). in essence, the revision of a common understanding of a routine (ostensive) is manifested by adding new patterns (inflow) and deleting obsolete or misunderstood aspects of the routine. the micro-processes of the development of ostensive and performative routine can be formalized as: 𝑑 𝑅𝑃 (𝑡) 𝑑𝑡 = 𝐼𝑛𝑓𝑙𝑜𝑤𝑅𝑃(𝑡) (1) 𝑑 𝑅𝑂 (𝑡) 𝑑𝑡 = 𝐼𝑛𝑓𝑙𝑜𝑤𝑅𝑂(𝑡) − 𝐸𝑟𝑜𝑠𝑖𝑜𝑛𝑅𝑂(𝑡) (2) as the routine literature elucidates, the processes of ostensive routine development and performative routine enactment are interrelated (feldmand and pentland, 2003). in a system dynamics theory development setting, one can assume this interrelationship as a floating goal dynamic (sterman, 2000) where the two aspects of ostensive and performative routines iteratively follow each other as if they are both floating and evolving over time. if we consider the routine as a system, the ostensive aspect would be a “desired state for system” (as it is expected that actions follow the routine procedure), and the performative aspect of routine would be the “current state of the system” in practice. in a floating goal system, they are both considered stock variables, and the goal (desired state of the system) floats as it is not exogenous to the system. figure 1 provides an overview of the internal micro-processes of routine where rectangles are (ostensive and performative) routine stocks and valves represent flows. 42 american journal of management vol. 24(4) 2024 figure 1 overview of internal dynamics of routine prior to cross-border transfer local adaptation during routine transfer when firms expand abroad and set up subsidiaries in new host countries, they transfer the routines and practices that are comfortable with and have been proven to be their source of competitive advantage (kilduf, 1994, jensen and szulanski, 2004 in jibs). ideally, this transfer is to be in a copy-exactly (or ‘verbatim’) format because (1) the existing format has been proven to be effective, and (2) changing them requires effort and can be costly and risky. however, their local adaptation is inevitable, as the international business literature posits (ghoshal and bartlet, 1989). therefore, when a routine transfer is intended, it starts with an early adaptation to the local conditions based on the known differences. early local adaptation of routine is assumed to be guided by the headquarters, and the subsidiary will be the recipient. the headquarters adjusts the latest version of the ostensive routine to be transferred to the subsidiary. then, this ostensive routine evolves through two mechanisms: (1) endogenous mechanism it changes through endogenous mechanism (internal dynamics of routine) as a result of the interplay between ostensive and performative routines (as we theorized earlier and presented the model in figure 1). in this case, the incoming ostensive routine is taken from the headquarters and adapted based on the known factors. then, a process of experimentation starts until a new state of routine stability ensues. (2) exogenous mechanism – the routine is exposed to external forces for local adaptation. these forces originate mostly from the local environment, which dictates certain adjustments. we previously elaborated on three forces: technical proximity, cultural adaptability, and political similarity. the local adaptation forces and the mechanism of routine transfer from headquarters to subsidiary are illustrated in figure 2. the adaptation mechanisms affect the process of transfer by an initial intrusion, modelled through the flow from “headquarters ostensive routine” to “subsidiary ostensive routine” american journal of management vol. 24(4) 2024 43 (namely hq subsidiary routine transfer). this stage is analogous to handing in the encoded routine procedures and protocols to the subsidiary after initial anticipated required adaptations. later, fine-tuning is needed at the subsidiary level through experimentation and the enactment of the transferred routine. this latter mechanism is modelled at the right-hand end of figure 2 through the effect of “pressures for local adaptation” on “subsidiary performative routine inflow.” analysis and results to track down and fix the errors before the complexity of the model increased, we ran the simulation model as it was being developed, based on the standard practice in the system dynamics literature (sterman, 2000). model development had two main stages, initially at the subsidiary level and then including the headquarters effect. first, we ran the base model of endogenous change of a routine in the presence of adaptation pressures and due to an interplay between ostensive and performative routines. second, we added the effect of headquarters transfer of (ostensive) routine to the subsidiary. as we explained previously, in practice, the sequence is reversed. however, we started with subsidiary-level dynamics for model development purposes and added the subsidiary as an exogenous factor. in analyzing the models and setting up the variables, we made some assumptions to focus on the mechanisms unique to this research. first, we assumed that the pressure for local adaptation diminishes over time to an above-zero minimum. the learning curve effect (barkema and vermeulen, 1998; yelle, 1979) also helps the firm over time. further, once certain adaptations are met, their pressures will be removed. for example, in a franchise food chain business, initial adaptation of ceremonial routines is usually helpful in catering to local consumer preferences (e.g., a routine related to christmas parties may not be ideal for a franchise in a predominantly muslim country). after this initial adaptation, some experimentation and fine-tuning may still be needed. but after a while, it will be settled and stabilized. second, we assumed the pressure for local adaptation is the geometric average of the three institutional pressures of technical proximity, cultural adaptability, and political similarity. third, these three pressures are assumed to have a normal distribution over time, with averages of 1, 4, and 2.5 (on a scale of 1 to 5) to represent a hypothetical scenario where the subsidiary is low, high, and medium in each dimension. figure 2 overall model of transfer of routine from headquarters to subsidiary transfer of routine from hqs to subsidiary internal dynamics of subsidiary routine local adaptation pressures 44 american journal of management vol. 24(4) 2024 the results of the initial (subsidiary level) and the final analyses (overall model) are presented in figure 3. the first graph shows the diminishing effect of local adaptation over time. this behavior was inputted into the model based on the assumption we explained earlier. the rest of the graphs show the behavior over time of ostensive routine at the subsidiary and the headquarters level and the performative routine at the subsidiary level. all these graphs have an initial growth (due to the net accumulation of routine details and codes) until they plateau after a while. this type of behavior, we suggest, is a successful transfer of routine as it reaches a state of stability. the ultimate levels for each of the subsidiary and headquarters routines are different due to the applied local adaptation at the subsidiary level. figure 3 analysis results and the behavior over time of developments in ostensive routine at the subsidiary and headquarters and the performative routine at the subsidiary level american journal of management vol. 24(4) 2024 45 speed of adaptation for ostensive and performative routines subsidiary-level adjustment times are twofold in our model. first, ostensive routine adjustment time (orat) is the time needed to make adjustments in the ostensive routine after a deviation in performance occurs. as the routine literature posits, the endogenous interplay between stability and change within the routine makes the routine an ever-evolving entity (feldman and pentland, 2003). once a routine is enacted based on a common understanding among the involved agents, its next iteration of enactment may deviate from the ostensive routine. if this deviation recurs and a pattern develops, a revision in the ostensive routine may be deemed reasonable. the speed of adaptation is affected by the time needed to identify the change in the pattern of actions, make a collective sense of it and reach a consensus. we label this time as the ostensive routine adjustment time, which may be affected by various mechanisms. for example, political tensions among the involved actors may delay sensemaking and reach a consensus that the routine as a political “truce” may collapse (zbaracki and bergen, 2010). 46 american journal of management vol. 24(4) 2024 figure 4 sensitivity analysis and the effect of relative adjustment time for ostensive and performative routines on the stability or instability of routine after the transfer process orat= ostensive routine adjustment time prat= performative routine adjustment time second, performative routine adjustment time (prat) is needed to enact a change in the ostensive routine. time is required to execute and implement the latest version of the routine. various practical, political, and routine-related factors may impact the time needed for this implementation. for example, artifacts (i.e. non-human, material objects) are considered part of the routine (d’adderio, 2011; bapuji et al., 2012). adjusting the artifacts and how they are involved in the routine process may take time and thus delay the execution of the routine. ideally, one expects to see a stable state of the routine for the transfer process to succeed. increased routine instability disturbs the developed pattern of action and turns the chain of actions into ad hoc and random performances. it will deteriorate and erode the routine and will make the process of routine transfer from the headquarters to the subsidiary a failure. we explored the relative effect of orat and pratr on the behavior of routine during and after the transfer process. in figure 4 different configurations of low, medium, and high levels of orat and pratr are illustrated. by investigating and comparing these configurations, we identified cases in which instability in routine increases over time, depicted as increased oscillations in graphs of subsidiary ostensive routine over time. in the three lower left graphs in figure 4, the routine’s instability increases over time. a common characteristic among these graphs is that prat is higher than orat. notably, in cases where orat is higher than prat (the upper right graphs), the routine observes some disturbances. still, eventually, the pattern of action converges, leading the routine to a state of stability. orat=2 orat=2.5 orat=3 prat=2 prat=2.5 prat=3 american journal of management vol. 24(4) 2024 47 based on this analysis and findings we suggest the following final proposition for our study: proposition #5: in the local adaptation of a routine, the post-transfer stability of a routine (or a successful transfer) is more sensitive to the speed of execution of changes rather than the speed of establishing what changes are to be made. discussion and conclusion organizational and international business scholars have deepened our understanding of the internal dynamics of routines and practices (feldman and pentland, 2003) and their transfer across borders (jensen & szulanski, 2007). building on these advancements, this study aims to fill a critical gap by exploring the micro-processes of routine transfer from headquarters to subsidiaries, examining how these routines evolve through local adaptation, and assessing the impact of speed of local adaptation on the process of stability and change of a routine. while the first two aspects were intentional components of the study, the latter contribution emerged unexpectedly during the research. we believe this finding offers valuable insights and lays the foundation for further investigation into this phenomenon. before delving into these future research opportunities, we will outline the primary contributions of this paper. to theorize dynamics of a routine transfer across borders we use system dynamics simulation (sterman, 2000, davis, eisenhardt and bingham, 2007). first, our study contributes to the literature on the relationship between headquarters and subsidiaries in international business. in particular, it delved into some of the micro-processes of routine evolution during the transfer process and under the pressures of local adaptation. three institutional forces are identified as influential factors in the adaptation process: political similarity, cultural adaptability, and technical proximity. these forces combined form pressures for local adaptation of the routine during and after the transfer process. second, we delve into the concept of local adaptation and explore the micro-processes and the speed thereof. this is a unique contribution to the literature on local adaptation and global integration (ghoshal and bartlett, 1989). we highlight the importance of quick execution of a revised understanding of what a routine entails (i.e. ostensive routine) at the subsidiary level. third, this paper advances the literature on routines and their transfer across space in organizational theory literature (feldmand and pentland, 2003; bucher and langley, 2016). the contributions of this study should be viewed in light of its limitations. first, the development of our formal model involved several assumptions. although these assumptions closely reflect real-world conditions, they warrant further investigation. future research could relax these assumptions to test their validity. for instance, the assumption that local adaptation pressures diminish over time presents an empirical question for future exploration. second, future studies could integrate empirical qualitative and quantitative data to validate and extend our simulation-based findings. the critical finding on the role of adjustment time, which emerged as a novel concept in this field, calls for deeper qualitative investigation to better understand its impact on routine transfer processes and the internal dynamics of routines. given its novelty, our current understanding of this concept and its mechanisms remains limited. this study has practical implications, too. the message could be that international expansion could be an opportunity to revisit and recreate some of the long-established routines and practices that have become sticky (szulanski and jensen, 2004). in essence, the transfer of routines across borders can be viewed as an opportunity for new ways of learning and avoiding the traps that firms may fall into due to experiential learning (levitt and march, 1988). further, managers should be wary of the importance of adjustment time in local adaptation while expanding internationally. since spending too much time executing the adaptation needed in practice can be detrimental, sometimes firms can continue with the status quo version of their enacted routine (or the penultimate version of the ostensive routine) until their organization is ready for a fast implementation. 48 american journal of management vol. 24(4) 2024 references adler, n., & hashai, n. 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(1987). institutional theories of organization. annual review of sociology, 13, 443–464. 134 american journal of management vol. 25(2) 2025 from ghost games to the return of the crowd: effects of increased fan attendance during and following covid-19 on home advantage in the german soccer bundesliga gerd nufer reutlingen university aisha stickel reutlingen university while prior studies have analyzed the effects of covid-19-induced ghost games on home advantage in germany’s soccer bundesliga, none have examined the 2021/22 season—the period immediately following spectator-free matches. this study addresses that gap by analyzing the impact of fan return on home advantage. using a dataset of all bundesliga matches from 2017/18 to 2021/22 (n = 1,530), we performed regression analyses incorporating a categorical variable to represent different phases of attendance restrictions. in the 2021/22 season, after a brief phase of stricter capacity limits, we find evidence of a significantly greater home advantage compared to pre-pandemic levels. however, this elevated effect diminishes over time despite rising spectator numbers. the findings highlight the psychological impact of fans on home team players as the primary mechanism driving home advantage. this suggests that fan presence influences mental rather than physical performance. accordingly, clubs should prioritize players’ physical and mental well-being, even outside extraordinary contexts such as the pandemic. keywords: soccer, home advantage, fans, crowd support, covid-19 pandemic, ghost games introduction the beginning of the 2021/22 bundesliga season marked the return of fans to the stadiums. after almost the entire 2020/21 season and parts of the 2019/20 season had to take place without spectators due to the covid-19 pandemic, politicians announced on 07/06/2021 that larger crowds would be allowed back into stadiums on the first matchday of the 2021/22 season (sportschau, 2021). under certain conditions, a maximum of 25,000 spectators would be allowed to attend german professional soccer matches. the maximum stadium capacity was limited to 50 percent, with no more than 25,000 spectators allowed. the basic prerequisite for the return of spectators was the approval of the responsible authorities. this took into account the incidence rates, which were not allowed to exceed 35. if the limits were exceeded, a maximum of 5,000 fans were permitted. in addition, the applicable hygiene rules and social distancing rules had to be observed. fans had to be vaccinated, recovered or tested. 22,925 spectators attended the opening match between borussia mönchengladbach and fc bayern munich on 08/13/2021 live at borussia-park. a ‘back american journal of management vol. 25(2) 2025 135 to normal’ seemed to be within reach, and the atmosphere in the stadiums was considerably better (spox, 2021). in this paper, we deal with the return of fans to the stadiums. specifically, we address the question of how the changing number of spectators after the covid-19-related spectator-free matches affects the home advantage in the german bundesliga. while numerous studies have already analyzed the so-called ‘ghost games’ during the pandemic in professional soccer (leitner et al., 2022), to our knowledge there have been no studies to date that look at the period after the spectator-free matches in the german bundesliga and thus the influence of partial attendance and increasing spectator numbers on home advantage in the german toptier soccer league. however, to take a comprehensive look at the influence of spectators on home advantage, both the loss of spectators and the return of fans to the stadiums should be considered. the studies that have examined ghost games have shown that home advantage in the german bundesliga in particular was significantly affected by the lack of spectators (e.g. almeida & leite, 2021; benz & lopez, 2023; fischer & haucap, 2021; hill & van yperen, 2021; ramchandani & millar, 2021; strawiński & krawczyk, 2022). in contrast to other leagues where studies have produced mixed results, the results for the german bundesliga are consistent. therefore, the german first division is especially suitable for an investigation of the influence of spectator return on home advantage. the reference points of full stadiums to which stakeholders were accustomed were cited as one of the reasons for the strong effects of ghost games on home advantage in the german bundesliga (fischer & haucap, 2021). if the empty stadiums of the ghost game period are assumed to be the new reference points, even partially filled stadiums could significantly impact home advantage. our paper tries to shed some light on the following questions: how does increased attendance following pandemic-related ghost games affect home advantage in the german bundesliga? is the effect of the regained atmosphere on home advantage as pronounced as the effect of the sudden absence of the audience? is there a positive effect on home advantage even if the crowd’s composition and density differ from before the pandemic due to the restrictions? in order to answer these questions, our paper is structured as follows. first, we explain the factors theoretically underlying home advantage in professional sports, we outline the studies dealing with home advantage in professional soccer during pandemic ghost games and formulate the research hypotheses on the development of home advantage after covid-19-related ghost games. after the description of the data, variables and method used in this paper, we present the results. finally, we discuss our results before we draw the conclusion. theoretical foundations reasons for home advantage in professional sports there are various factors that have been suggested to explain home advantage in professional sports. first, psychological or hormonal differences can be identified between home and away team players. players have increased self-confidence, higher energy levels and feel less tension when a match takes place in the home stadium (terry et al., 1998). this in turn can lead to improved performance (woodman & hardy, 2003). furthermore, higher testosterone levels can be measured in home team players due to territorial behavior (neave & wolfson, 2003). another factor that can contribute to home advantage is the familiarity of the home team with the environment, such as the stadium or the pitch (courneya & carron, 1992; pollard, 2008). travel factors can also affect the probability of winning. the distance traveled, the length of the trip, the means of transport chosen and the exhaustion associated with travel can all lead to lower performance in away games (courneya & carron, 1992). particularly relevant for our empirical study is the crowd factor. spectators can have an impact on the winning probability through their motivational effect on the players of the home team (courneya & carron, 1992; nevill & holder, 1999; waters & lovell, 2002). in addition to their impact on player performance, spectators can also influence referees and their decisions (dohmen, 2008; garicano et al., 2005; nevill et al., 2002). due to the ghost games played in the 2019/20 and 2020/21 seasons in the bundesliga as a result of the covid-19 pandemic, and due to the restrictions on the number of spectators allowed in the 2021/22 136 american journal of management vol. 25(2) 2025 season, the effect of supportive crowds on home advantage (holding other factors constant) can be considered comprehensively for the first time. literature review an increasing research interest followed the covid-19 pandemic and the associated ghost games in the relationship between spectators and home advantage. subsequently, numerous empirical studies investigated the effect of crowds on home advantage (match outcome, points, goals) and referee bias (fouls, yellow cards, red cards) in professional soccer. the papers used aggregated data from multiple, mostly european, leagues as well as data from individual leagues. table 1 provides an overview of the empirical studies and their key findings. most studies examining the impact of ghost games in the 2019/20 season on home advantage across multiple soccer leagues find a significant decrease in home advantage (bilalić et al., 2021; cross & uhrig, 2023; leitner & richlan, 2021; mccarrick et al., 2021; scoppa, 2021; sors et al., 2021). in addition to a decrease in home advantage measured by, e.g., match results, several studies identify a decrease in refereeing decisions favoring home teams in spectator-free matches (bilalić et al., 2021; leitner & richlan, 2021; mccarrick et al., 2021; scoppa, 2021; sors et al., 2021). however, some studies do not find a significant effect of missing crowds on home advantage when looking at aggregated data, but do find a reduced referee bias. in these cases, it is argued that the referee bias stems from social pressure exerted by the audience, while the home advantage in terms of match outcomes must have other causes (bryson et al., 2021; reade et al., 2022; wunderlich et al., 2021). in contrast, papers that examined home advantage across multiple leagues, including ghost games in the 2020/21 season, all find a significant reduction in home advantage (lee et al., 2022; martins et al., 2022; sors et al., 2022). the analysis of individual soccer leagues explains the different results of the studies that examined home advantage using aggregated data. while the home advantage declined in some leagues in the 2019/20 season, it remained constant or even increased in other leagues (almeida & leite, 2021; benz & lopez, 2023; correia-oliveira & andrade-souza, 2022; couto & sayers, 2022; hill & van yperen, 2021; jiménez sánchez & lavín, 2021; matos et al., 2021; ramchandani & millar, 2021; ribeiro et al., 2022; strawiński & krawczyk, 2022). looking at the german bundesliga, the results are consistent. all studies analyzing the 2019/20 season find that home advantage significantly decreased or disappeared during the ghost games (almeida & leite, 2021; benz & lopez, 2023; correia-oliveira & andrade-souza, 2022; dilger & vischer, 2022; hill & van yperen, 2021; jiménez sánchez & lavín, 2021; link & anzer, 2022; ramchandani & millar, 2021; santana et al., 2021; strawiński & krawczyk, 2022; tilp & thaller, 2020). in the 2020/21 season ghost games, destefanis et al. (2022) observe a significant decrease in home advantage in the top leagues of england, spain, italy, germany and france. on the other hand, vandoni et al. (2022) find a decrease in referee bias in the italian serie a, but no significant change in home advantage. particularly noteworthy is the study by fischer and haucap (2021) on the effect of missing crowd support on home advantage in the top three divisions of german soccer. while home advantage decreased in the first division, there were no significant changes in the second and third divisions. pre-pandemic stadium occupancy is identified as the reason for the observed effects. as players of the lower divisions were used to play in less occupied stadiums before the covid-19 pandemic, it was easier for them to adapt to empty stadiums. the same authors also examined for the first time not only the short-term effect, but also the longer-term reactions of players by including the ghost games of the 2020/21 bundesliga season into their analysis. fischer and haucap (2022) conclude that the observed recovery of the home advantage is associated with psychological adjustments of the players. referencing bias changes were not identified as highly relevant for the observed effects in the bundesliga (fischer & haucap, 2021, 2022). in contrast to the studies mentioned so far, sors et al. (2023) looked at home advantage and referee bias in national team matches. to this purpose, they analyzed matches of the uefa nations league by comparing the 2018/19 season (with spectators) with the 2020/21 season (empty or partially filled stadiums). while home advantage and referee bias emerged in the 2018/19 season, both phenomena were absent in the 2020/21 season. the authors conclude that fans do not only have a decisive influence on home advantage in domestic leagues, but also in national team matches. while there are numerous studies on american journal of management vol. 25(2) 2025 137 ghost games, only few studies address the return of spectators to the stands or the increase in attendance following pandemic-related ghost games. although in a different context, singleton et al. (2023) examined how the reinstatement of spectators affects home advantage. for this purpose, they studied the egyptian premier league, which has experienced two periods without fans in the last decade. fans were first banned in 2012 due to violence in the stadiums and, second, in 2020 because of the covid-19 pandemic. after six seasons without crowds, up to 5,000 spectators were allowed back into stadiums in the 2018/19 season. the authors do not find a significant change in the point difference once the limited crowds were allowed back in. however, home teams received significantly fewer yellow cards in the 2018/19 season compared to the previous season. silva et al. (2022) investigated the 2020 season without spectators and the 2021 season with partlyfilled stadiums in the brazilian serie a. while they do not find a significant influence of missing spectators on home advantage as compared to the pre-pandemic 2019 season, despite limited attendance, home advantage increased in the 2021 season after the return of spectators. the referee bias, on the other hand, was not significantly affected by increasing spectator numbers. none of the studies mentioned deals with the post-pandemic spectator return in the german soccer bundesliga. but since a significant effect of missing spectators on home advantage has been found especially in the first division in germany, an investigation of spectator return in this league is particularly interesting. we will therefore analyze how increasing spectator numbers after the pandemic-related ghost games affect home advantage in the bundesliga. table 1 overview of peer-reviewed studies on the effect of covid-19-related ghost games on home advantage and referee bias in professional soccer author(s) (year) soccer leagues (1) season(s) (2) home advantage (3) referee bias (3) almeida and leite (2021) 5 2019/20 +* / benz and lopez (2023) 17 2019/20 +* / +* / bilalić et al. (2021) 12 (a) 2019/20 + + bryson et al. (2021) 23 (a) 2019/20 + correia-oliveira and andrade-souza (2022) 7 2019/20 +* / n couto and sayers (2022) 2 (brazil) 2020 + cross and uhrig (2023) 4 (a) 2019/20 + n destefanis et al. (2022) 5 2020/21 +* n dilger and vischer (2022) 1 (germany) 2019/20 +* +* endrich and gesche (2020) 2 (a, germany) 2019/20 n + fischer and haucap (2021) 3 (germany) 2019/20 +* / fischer and haucap (2022) 2 (germany) 2019/20 and 2020/21 +* / hill and van yperen (2021) 4 2019/20 +* / +* jiménez sánchez and lavín (2021) 8 2019/20 +* / n lee et al. (2022) 4 (a) 2019/20 and 2020/21 + n leitner and richlan (2021) 8 (a) 2019/20 + + link and anzer (2022) 2 (germany) 2019/20 +* +* 138 american journal of management vol. 25(2) 2025 author(s) (year) soccer leagues (1) season(s) (2) home advantage (3) referee bias (3) martins et al. (2022) 8 (a) 2019/20 and 2020/21 + n matos et al. (2021) 1 (portugal) 2019/20 n mccarrick et al. (2021) 15 (a) 2019/20 + + ramchandani and millar (2021) 5 2019/20 +* / n reade et al. (2022) 7 (a) 2002/03 until april 2020 + ribeiro et al. (2022) 2 (brazil) 2020 n santana et al. (2021) 1 (germany) 2019/20 +* n scoppa (2021) 9 (a) 2019/20 + + sors et al. (2021) 8 (a) 2019/20 + + sors et al. (2022) 10 (a) 2020/21 + + sors et al. (2023) 1 (uefa nations league) 2020/21 + + strawiński and krawczyk (2022) 4 2019/20 +* / n tilp and thaller (2020) 1 (germany) 2019/20 +* +* vandoni et al. (2022) 2 (italy) 2020/21 + / + / wunderlich et al. (2021) 10 (a) 2019/20 + (1) number of leagues (country, if only a single country was analyzed); (a) if aggregated data. (2) season(s) with ghost games after the covid-19-induced break. (3) + if significant effect; +* if significant effect (also) in the german bundesliga; if no significant effect; n if not analyzed. home advantage variables: match outcome, points, goals. referee bias variables: fouls, yellow cards, red cards. research hypotheses in our empirical analysis multiple periods are considered, we describe the different phases. the focus of our paper will be on the evolution of the home advantage with increasing spectator numbers in the 2021/22 season after the pandemic ghost games. since players become accustomed to empty stadiums over time in the 2020/21 season (fischer & haucap, 2022), the positive effect of even small crowds should be significantly larger immediately after the ghost games compared to before the covid-19 pandemic. relevant to these considerations are the respective reference points: attendance before the pandemic was consistently high, meaning that players were used to crowd support. however, immediately after the ghost games, the increase in spectator numbers should have a higher psychological effect on players due to the comparison with spectator-free matches. similar to the motivational effect of spectators on home team players, the social pressure on referees and thus the influence of fans on refereeing decisions should be significantly higher immediately after the ghost games, even in matches with only partially filled stadiums. hypothesis 1: in the immediate aftermath of pandemic-related ghost games, a larger home advantage exists even with only partially filled stadiums compared to before the covid-19 pandemic. however, it can be assumed that both the above-average effect of crowds on players of the home teams and the above-average influencing effect of fans on referees are of temporary nature. therefore, it is hypothesized that agents adapt to the return of spectators and that the home advantage decreases to prepandemic levels (e.g. odermatt & stutzer, 2019). hypothesis 2: despite increasing spectator numbers, the above-average effect disappears over time and the home advantage decreases to pre-pandemic levels. american journal of management vol. 25(2) 2025 139 methodology data and variables for the empirical analysis, we built a dataset comprising all matches of german soccer’s first division in the five seasons 2017/18 to 2021/22 (n = 1,530). the generated dataset contains information from several sources as well as own calculations. results data and match statistics are available at football-data.co.uk, average market values, stadium-specific information and changes in coach at transfermarkt.de. matchdays and spectator numbers can be found at kicker.de. kick-off times and table positions are available at fussball.de. the matches were divided into seven different phases according to the stadium capacity utilization displayed in figure 1. figure 1 stadium capacity utilization in the 2017/18-2021/22 bundesliga seasons the first phase (‘before’) includes the matches with relatively stable attendance in the pre-pandemic period. in the 2019/20 season, the first ghost game due to the covid-19 pandemic took place on march 11, 2020. in total, there were 83 ghost games taking place in this first ghost game period (‘ghost games 1’). at the beginning of the 2020/21 season, there was a short period with small crowds being allowed into stadiums (‘crowd 1’). from matchday 6 onwards, the remainder of the season was again played without fans in the stadiums (‘ghost games 2’). this second ghost game period comprises 261 matches. the 2021/22 season can be divided into three further phases: in the first period, spectator numbers increased constantly (‘crowd 2’), followed by another short phase with more severe capacity restrictions and a few ghost games (‘restrictions’), until spectator numbers increased again from matchday 21 onwards (‘crowd 3’). the 140 american journal of management vol. 25(2) 2025 stadium capacity utilization during the last matchdays of the 2021/22 season is comparable to the capacity utilization rates in the pre-pandemic seasons. an overview of the phases can be found in table 2. table 2 overview of the seven phases of stadium capacity utilization in the 2017/18-2021/22 bundesliga seasons phase name time period season (matchdays) description before 08/18/201703/08/2020 2017/18, 2018/19, 2019/20 (1-25) matches with relatively stable attendance in the pre-pandemic period ghost games 1 03/11/202006/27/2020 2019/20 (26-34) the first ghost game due to the covid-19 pandemic took place on march 11, 2020. after a break of approximately two months, the remaining matches of the season were played behind closed doors crowd 1 09/18/202010/26/2020 2020/21 (1-5) short period with small crowds being allowed into stadiums ghost games 2 10/30/202005/22/2021 2020/21 (6-34) the remainder of the season (with exception of the last matchday) was again played without fans in the stadiums crowd 2 08/13/202111/21/2021 2021/22 (1-12) spectator numbers increased constantly restrictions 11/26/202101/23/2022 2021/22 (13-20) more severe capacity restrictions and a few ghost games crowd 3 02/04/202205/14/2022 2021/22 (21-34) spectator numbers increased again three alternative variables were generated to measure home advantage (fischer & haucap, 2021). two dummy variables serve as indicators for a home or away win (‘home win’ and ‘away win’), the third variable reflects the point difference (points of the home team – points of the away team, ‘point difference’) and also considers draws. this variable can take three values – the value -3 for an away win, the value 0 for a drawn match and the value 3 for a home win. a categorical variable divides the matches into the seven spectator phases (‘phases’) described above, dummy variables derived from it serve as indicators for matches in the respective phases and are required for the empirical analysis. the control variables follow fischer and haucap (2021) and can be assigned to four categories: team quality, geographical, match-specific and stadium-specific factors. team quality is approximated by the difference between the average market values (in € million, ‘average market value difference’) and the difference between the table positions (table positions prior to the current match, ‘table position difference’). geographical factors include the distance between the stadiums of the home and away team (straight line distance in km, ‘distance stadiums’) and the absolute altitude difference between the stadiums (altitude of the stadiums in m above sea level, ‘altitude difference’). the distance between the stadiums is used as an indicator for the distance traveled or the length of the trip. the match-specific factors contain dummy variables for new coaches (‘new coach home’ and ‘new coach away’). for these variables, the first three bundesliga matches under a new coach and only changes in coach during the season were considered. all matches where the distance between the stadiums is less than 50 km are defined as derbies (‘derby’) and matches are considered to be played during the week (‘during the week’) when they take place between tuesday and thursday. american journal of management vol. 25(2) 2025 141 furthermore, matches are classified as late kick-off matches (‘late match’) if the kick-off time is later than 6 pm. finally, the category of stadium-specific information includes a dummy variable that indicates the existence of a running track (‘running track’), the proportion of standing places (‘proportion of standing places’) and the stadium capacity (‘ln(capacity)’). all differences were calculated by subtracting away team data from home team data. moreover, variables reflecting match statistics were generated for robustness checks. statistical method in order to empirically investigate the development of the home advantage after the pandemic-related ghost games, we conducted various regression analyses according to the following equation: 𝑌𝑖𝑡 = 𝛽0 + 𝑝ℎ𝑎𝑠𝑒𝑠𝑡 ′𝛽1 + 𝑋𝑖𝑡 ′ 𝛽2 + 𝜀𝑖𝑡 (1) where the categorical variable containing the different phases of capacity restrictions (𝑝ℎ𝑎𝑠𝑒𝑠𝑡) was included using dummy coding. the pre-pandemic period (‘before’) serves as the reference phase in each case. 𝑋𝑖𝑡 is a matrix that considers all control variables described above to avoid an omitted variable bias. ols regressions were estimated in models with the point difference of team i at time t as the dependent variable 𝑌𝑖𝑡 (e.g. bryson et al., 2021; fischer & haucap, 2021; scoppa, 2021; strawiński & krawczyk, 2022), and probit regressions were estimated in models with the dummy variables for home and away wins as the dependent variable 𝑌𝑖𝑡 in order to determine the effects on winning probabilities (e.g. dilger & vischer, 2022; fischer & haucap, 2021; strawiński & krawczyk, 2022). since ols results might be biased, we will also test an alternative model using ordered probit regressions (e.g. cross & uhrig, 2023; fischer & haucap, 2022; mccarrick et al., 2021). results descriptive statistics an overview of the data and variables described in the previous section is provided in the summary statistics in table 3, which also shows that across the five seasons there was an overall home advantage of 43.9% home wins and only 31.4% away wins. the development of home advantage over time is first analyzed descriptively. table 3 summary statistics variable mean sd min max match results home win 0.439 0.496 0 1 away win 0.314 0.464 0 1 point difference 0.376 2.577 -3 3 mach statistics home yellow cards 1.673 1.294 0 8 away yellow cards 1.923 1.289 0 7 home red cards 0.051 0.226 0 2 away red cards 0.078 0.276 0 2 home fouls 11.840 3.861 2 28 away fouls 12.346 3.951 2 29 home shots 13.986 5.021 1 35 away shots 11.802 4.839 1 32 142 american journal of management vol. 25(2) 2025 variable mean sd min max home shots on target 5.090 2.682 0 16 away shots on target 4.327 2.476 0 20 home corners 5.190 2.864 0 19 away corners 4.5 2.616 0 15 team quality average market value difference 0 8.880 -29.76 29.76 table position difference -0.148 7.785 -17 17 geographical factors distance stadiums 298.750 145.984 14.7 639.9 altitude difference 147.314 143.651 0 495 match-specific information new coach home 0.044 0.205 0 1 new coach away 0.041 0.199 0 1 derby 0.043 0.203 0 1 during the week 0.069 0.253 0 1 late match 0.362 0.481 0 1 stadium-specific information running track 0.067 0.250 0 1 proportion of standing places 0.274 0.152 0 0.836 capacity 46,337.3 18,232.7 15,000 81,365 spectators 27,888.3 23,518.8 0 81,365 capacity utilization 0.598 0.413 0 1.021 phases of capacity restrictions phases 2.637 2.074 1 7 before 0.546 0.498 0 1 ghost games 1 0.054 0.227 0 1 crowd 1 0.029 0.169 0 1 ghost games 2 0.171 0.376 0 1 crowd 2 0.071 0.256 0 1 restrictions 0.047 0.212 0 1 crowd 3 0.082 0.275 0 1 sample size n = 1,530. note that the capacity utilization value exceeds 1 for 10 observations. however, the results do not change if these observations are dropped. figure 2 shows the match results during the seven phases of capacity restrictions. it reveals that, at least descriptively, both previous research results on ghost games and our hypotheses on the post-pandemic period can be confirmed. in the pre-pandemic period, there are more home than away wins. while this home advantage even turns into home disadvantage during the first ghost game period, agents seem to adjust to empty stadiums in the second ghost game period. in the period following the second spectatorfree phase, there is initially an increase in home advantage, but over time the level approaches the prepandemic level again. drawn matches are relatively constant over time. american journal of management vol. 25(2) 2025 143 figure 2 match results during different capacity restrictions the development of the mean values of the point differences illustrated in figure 3 confirms the trend described above. if the mean value of the point difference is greater than zero, there is a home advantage. here too, it can be observed descriptively that in the first ghost game period the home advantage disappears completely, whereas it exists again in the second. it can also be clearly seen that immediately following the second phase of empty spectator stands, the home advantage rises sharply and then approaches prepandemic levels. in the following section we present the results of regression analyses to test these descriptive findings for statistical significance. 144 american journal of management vol. 25(2) 2025 figure 3 point differences during different capacity restrictions regression analysis before examining the development of home advantage within the different restriction phases over time, the home advantage in each period is first examined in comparison to the home advantage in the prepandemic period. table 4 presents the results of the regressions including the control variables. in this first model, there is only a statistically significant effect in the first ghost game period. the missing spectators decrease the probability of a home win by 14.8 percentage points and increase the probability of an away win by 16.7 percentage points. contrary to expectations from the descriptive analysis, the second ghost game period and the periods after the ghost games show no significant difference to the pre-pandemic home advantage. american journal of management vol. 25(2) 2025 145 table 4 the influence of spectators on home advantage (1) (2) (3) home win away win point difference ghost games 1 -0.148** 0.167*** -0.749*** (0.069) (0.059) (0.261) crowd 1 -0.114 -0.009 -0.304 (0.081) (0.065) (0.297) ghost games 2 -0.015 0.010 -0.052 (0.031) (0.034) (0.141) crowd 2 0.018 -0.022 0.085 (0.064) (0.051) (0.238) restrictions 0.019 0.026 -0.039 (0.052) (0.067) (0.270) crowd 3 0.018 0.002 0.031 (0.049) (0.042) (0.207) average market value difference 0.001 -0.001 0.007 (0.002) (0.002) (0.011) table position difference -0.033*** 0.032*** -0.172*** (0.003) (0.003) (0.013) distance stadiums -0.000 -0.000 0.000 (0.000) (0.000) (0.000) altitude difference 0.000 0.000 -0.000 (0.000) (0.000) (0.000) new coach home 0.112* -0.032 0.339 (0.059) (0.039) (0.206) new coach away -0.139** 0.122* -0.658** (0.055) (0.064) (0.241) derby 0.016 0.073 -0.173 (0.071) (0.073) (0.312) during the week 0.001 0.017 -0.084 (0.054) (0.048) (0.228) late match 0.033 -0.031 0.174 (0.029) (0.031) (0.122) running track -0.051 -0.038 -0.000 (0.040) (0.034) (0.140) proportion of standing places 0.137* -0.127 0.651 (0.073) (0.126) (0.397) ln(capacity) 0.040 0.024 -0.018 (0.034) (0.055) (0.175) constant 0.338 (1.854) n 1,530 1,530 1,530 (pseudo) r² 0.179 0.217 0.287 (1) and (2): average marginal effects of probit regressions. (3): coefficients of ols regression. cluster-robust standard errors in parentheses, clustered on home team level. pseudo r² for probit regressions, r² for ols regression. * p < 0.1, ** p < 0.05, *** p < 0.01. 146 american journal of management vol. 25(2) 2025 the statistically significant control variables behave as expected. if the difference between the table positions decreases by one, the home team becomes better positioned relative to the away team, the probability of a home win increases by 3.3 percentage points. interestingly, team quality is fully explained by the table position difference, the average market value difference becomes insignificant once the table position difference is included in the regression. new coaches positively affect the winning probability in the short-run already (i.e. during the first three matches). a new coach of the home team increases the probability of a home win by 11.2 percentage points, a new coach of the away team decreases the probability of a home win by 13.9 percentage points. last but not least, a one percentage point increase in the proportion of standing places leads to a 0.137 percentage point increase in the probability of a home win. even though the coefficient is only significant at the 10% level, it could still be argued that the more intense atmosphere associated with a higher proportion of standing places impacts home advantage. in order to examine the development of home advantage within the restriction phases over time, the interactions of the phase dummies with the respective matchday within the phase were included in table 5. considering the development over time, significant negative effects on the probability of winning at home can be identified in both ghost game periods. however, in both periods the home advantage increases over time, i.e. the negative effect of missing spectators on home advantage decreases over time. taking into account the results of the previous model, it can be concluded that the negative effect becomes smaller in the first ghost game period, whereas in the second ghost game period, it seems to disappear completely. thus, during the 2020/21 season ghost games, the home advantage increases over time to pre-pandemic levels. although the descriptive analysis points towards a significant increase in home advantage at the beginning of the 2021/22 season compared to the pre-pandemic level, a significantly increased home win probability is only found in the last spectator phase. as in the second ghost game period, the positive effect of spectators on home advantage is limited to the beginning of the phase; the effect disappears over time and the home advantage approaches the pre-pandemic home advantage. table 5 the development of home advantage within the distinct restriction phases over time (1) (2) (3) home win away win point difference ghost games 1 -1.227*** 0.638* -1.605*** (0.399) (0.327) (0.485) crowd 1 -0.298 0.405 -0.663 (0.361) (0.473) (0.429) ghost games 2 -0.470** 0.207 -0.618* (0.212) (0.211) (0.325) crowd 2 -0.193 -0.120 -0.114 (0.252) (0.280) (0.295) restrictions 0.464 -0.174 0.531 (0.354) (0.492) (0.772) crowd 3 0.440** -0.190 0.532 (0.188) (0.269) (0.367) (ghost games 1)×(#matchday) 0.160** -0.037 0.175* (0.067) (0.060) (0.099) (crowd 1)×(#matchday) -0.002 -0.148 0.120 (0.114) (0.145) (0.131) american journal of management vol. 25(2) 2025 147 (1) (2) (3) home win away win point difference (ghost games 2)×(#matchday) 0.028** -0.012 0.038* (0.011) (0.013) (0.019) (crowd 2)×(#matchday) 0.036 0.007 0.031 (0.045) (0.045) (0.065) (restrictions)×(#matchday) -0.094 0.057 -0.127 (0.071) (0.093) (0.145) (crowd 3)×(#matchday) -0.052** 0.026 -0.067 (0.024) (0.035) (0.045) control variables yes yes yes n 1,530 1,530 1,530 (pseudo) r² 0.188 0.219 0.293 (1) and (2): coefficients of probit regressions. (3): coefficients of ols regression. cluster-robust standard errors in parentheses, clustered on home team level. pseudo r² for probit regressions, r² for ols regression. * p < 0.1, ** p < 0.05, *** p < 0.01. robustness checks we conducted several robustness checks to check the robustness of the previous results and test potential explanations for the effects. table 6 shows the results of an alternative regression analysis where each match was divided into two observations and a dummy variable for home matches was included (e.g. endrich & gesche, 2020; fischer & haucap, 2021, 2022; mccarrick et al., 2021; scoppa, 2021). the dependent variables are either a dummy variable for a win or the number of points gained in the match. the regression analysis shows that the negative effect on home advantage diminishes over time, especially in the second ghost game period, confirming the previous models’ results. however, contrary to what we found before, the spectator return in the 2021/22 season has no significant impact on home advantage using the alternative regression model. as already described in the theoretical foundations, the literature suggests two explanations for the influence of spectators on home advantage: their motivational effect on players of the home team and their influencing effect on refereeing decisions. both potential explanations are briefly examined below (fischer & haucap, 2021, 2022). table 6 the development of home advantage within the distinct restriction phases over time – alternative model (1) (2) (3) (4) win win points points home 0.350*** 0.351*** 0.352*** 0.352*** (0.066) (0.066) (0.065) (0.065) (home)×(ghost games 1) -0.328** -1.080*** -0.351** -0.811*** (0.152) (0.343) (0.137) (0.272) (home)×(crowd 1) -0.174 -0.259 -0.094 -0.325 (0.194) (0.448) (0.165) (0.392) (home)×(ghost games 2) -0.042 -0.460*** -0.033 -0.357** (0.090) (0.170) (0.081) (0.142) (home)×(crowd 2) 0.148 0.084 0.148 0.143 (0.129) (0.262) (0.118) (0.225) 148 american journal of management vol. 25(2) 2025 (1) (2) (3) (4) win win points points (home)×(restrictions) 0.000 0.229 -0.040 0.143 (0.155) (0.332) (0.145) (0.330) (home)×(crowd 3) 0.025 0.270 0.004 0.191 (0.121) (0.242) (0.111) (0.227) (home)×(ghost games 1)×(#matchday) 0.147** 0.095* (0.058) (0.051) (home)×(crowd 1)×(#matchday) 0.028 0.077 (0.133) (0.113) (home)×(ghost games 2)×(#matchday) 0.028*** 0.022*** (0.009) (0.008) (home)×(crowd 2)×(#matchday) 0.010 0.001 (0.035) (0.030) (home)×(restrictions)×(#matchday) -0.051 -0.040 (0.066) (0.064) (home)×(crowd 3)×(#matchday) -0.033 -0.025 (0.028) (0.026) control variables yes yes yes yes n 3,060 3,060 3,060 3,060 pseudo r² 0.016 0.021 0.011 0.013 (1) and (2): coefficients of probit regressions. (3) and (4): coefficients of ordered probit regressions. cluster-robust standard errors in parentheses, clustered on match level. * p < 0.1, ** p < 0.05, *** p < 0.01. table 7 shows the influence of spectators on refereeing behavior. during the first ghost game period, referees award 0.5 more yellow cards and 1 more foul to players of the home team compared to matches with spectators before the pandemic. in the last spectator phase, both home and away teams receive fewer red cards. overall, there are significant effects of (missing) spectators on refereeing decisions, but given the size of the effects, it is unlikely that changes in refereeing behavior are the only reason for the changes in home advantage. table 7 the influence of spectators on refereeing decisions (1) (2) (3) (4) (5) (6) home yellow cards away yellow cards home red cards away red cards home fouls away fouls ghost games 1 0.503*** -0.019 0.034 -0.009 1.014** -0.065 (0.159) (0.123) (0.037) (0.032) (0.453) (0.470) crowd 1 0.351* 0.163 -0.015 -0.027 -0.196 0.567 (0.194) (0.188) (0.027) (0.035) (0.582) (0.557) ghost games 2 0.103 -0.132 -0.019 -0.027 0.488 0.095 (0.086) (0.084) (0.022) (0.019) (0.365) (0.317) crowd 2 0.124 0.066 -0.028* 0.001 -0.044 0.390 (0.169) (0.128) (0.016) (0.031) (0.397) (0.529) american journal of management vol. 25(2) 2025 149 (1) (2) (3) (4) (5) (6) home yellow cards away yellow cards home red cards away red cards home fouls away fouls restrictions -0.028 -0.279*** -0.047*** -0.052 -0.779 -1.214 (0.138) (0.093) (0.016) (0.033) (0.530) (0.737) crowd 3 -0.049 -0.162 -0.034* -0.059*** -0.338 0.026 (0.152) (0.116) (0.017) (0.018) (0.350) (0.465) control variables yes yes yes yes yes yes n 1,530 1,530 1,530 1,530 1,530 1,530 r² 0.045 0.022 0.012 0.010 0.060 0.050 coefficients of ols regressions. cluster-robust standard errors in parentheses, clustered on home team level. * p < 0.1, ** p < 0.05, *** p < 0.01. table 8 shows the influence of spectators on team performance. the estimates imply that the number of shots the home team takes decreases in both ghost game periods (by 1.1 and 1.7, respectively). moreover, the home team wins 0.7 fewer corner kicks in the second ghost game period. but again, these effects are too small to explain the effect of spectators on home advantage. even if we also consider the development over time by including the interactions of the phase dummies with the respective matchday (results not reported here), neither changes in refereeing behavior nor changes in team performance explain the development of home advantage over time. consequently, the lack of statistically significant coefficients, especially in the last spectator phase, suggests that other reasons must exist for the observed effects. in the following section we argue that these reasons appear to be mainly psychological. table 8 the influence of spectators on team performance (1) (2) (3) (4) (5) (6) home shots away shots home shots on target away shots on target home corners away corners ghost games 1 -1.071** 0.047 -0.200 0.214 -0.058 0.061 (0.459) (0.566) (0.260) (0.349) (0.317) (0.388) crowd 1 -0.491 -0.660 -0.010 -0.072 -0.082 -0.052 (0.822) (0.549) (0.288) (0.445) (0.396) (0.452) ghost games 2 -1.653*** -0.097 -0.247 0.147 -0.706*** -0.056 (0.383) (0.456) (0.192) (0.164) (0.194) (0.160) crowd 2 -0.157 -0.343 0.144 -0.194 -0.182 -0.213 (0.511) (0.590) (0.231) (0.314) (0.263) (0.217) restrictions -0.273 0.402 0.296 0.510* 0.257 0.198 (0.440) (0.609) (0.224) (0.294) (0.347) (0.393) crowd 3 -0.527 -0.478 -0.051 -0.031 -0.350 0.022 (0.593) (0.387) (0.275) (0.223) (0.381) (0.248) control variables yes yes yes yes yes yes n 1,530 1,530 1,530 1,530 1,530 1,530 r² 0.221 0.203 0.182 0.176 0.103 0.120 coefficients of ols regressions. cluster-robust standard errors in parentheses, clustered on home team level. * p < 0.1, ** p < 0.05, *** p < 0.01. 150 american journal of management vol. 25(2) 2025 discussion interpretation of results the results of the empirical analysis are consistent with previous research. the home advantage in the german bundesliga disappears during the first ghost game period in the 2019/20 season. in the second ghost game period, there is a negative effect of missing spectators on home advantage, decreasing over time. hence, the home advantage increases over time to pre-pandemic levels in the 2020/21 season. changes in referee bias and team performance are of limited relevance in both ghost game periods. hypotheses 1 and 2 are partially supported. only in the last spectator phase at the end of the 2021/22 season, there is some evidence for a positive effect of spectators on home advantage, which diminishes over time despite increasing spectator numbers. the hypotheses are only partially confirmed, since the last spectator phase does not begin immediately after the ghost games, but after the period of capacity restrictions in the winter of the 2021/22 season. contrary to expectations from the descriptive analysis, there is no significant effect in the spectator phase immediately after the second ghost game period. refereeing behavior and team performance are not significantly affected by the increasing spectator numbers in the 2021/22 season. one possible explanation for the significant effect of spectators on home advantage in the last spectator phase is that this phase immediately followed the period of restricted spectator numbers, whereas an offseason break occurred between the second ghost game period and the following spectator phase. psychologically, it could be argued that abrupt changes in spectator numbers are perceived stronger than changes with an interruption between the two periods. furthermore, the results reveal that the effect of ghost games (especially the first ghost game period) on home advantage is more pronounced than the effect of spectators being allowed back in stadiums. this result can be plausibly explained by the psychological phenomenon of negativity bias, according to which negative events have a greater impact on agents than positive events, even if they are of equal intensity (baumeister et al., 2001). this phenomenon is also reflected in the concept of loss aversion in behavioral economics (kahneman & tversky, 1979). moreover, it can be argued that despite the restrictions and the spectator-free matches, the memory of full stadiums is still present. consequently, the pre-pandemic crowds can serve as an additional reference point and it can be assumed that players adapt more quickly to increasing spectator numbers than to empty stadiums. another important factor that should be considered when looking at our results is the composition of crowds, which has been identified as a potential driver of crowd influence on home advantage (humphreys et al., 2022; singleton et al., 2023). despite increasing attendance, both spectator phases in the 2021/22 season were still subject to restrictions. for instance, supporters of the visiting teams were not admitted until the third matchday, distances had to be maintained, standing places were limited and face masks were mandatory (sportbuzzer, 2021). this certainly affected the atmosphere in the stadiums and may have reduced the influence of fans on players and referees. the results also show that in both ghost game periods, the home advantage increases over time and players adapt to empty stadiums. hence, other factors compensate for the negative effect of missing spectators over time. this is an indication that multiple factors interact and contribute to home advantage (courneya & carron, 1992; fischer & haucap, 2021; pollard, 2008). limitations the results obtained in the empirical analysis are subject to several limitations. first, it must be noted that the last spectator phase only significantly affects the probability of a home win, but has no significant effect on the point difference (table 5). furthermore, spectator return does not significantly affect home advantage when using the alternative regression model (table 6). taken together, we cannot rule out that increasing spectator numbers in the 2021/22 season has no significant effect on home advantage in the german bundesliga. in the regressions for the examination of changes in refereeing behavior (table 7), the coefficients of determination r² are relatively small. although this is consistent with the small values reported in fischer american journal of management vol. 25(2) 2025 151 and haucap (2021, 2022) and scoppa (2021), and referee bias is found to be of limited relevance in our context, future research could still further investigate the influence of spectator return on referee behavior. in particular, it might be interesting to examine leagues where the effects of ghost games on referee bias appear to be more pronounced. while our analysis uses ols, future research should also consider alternative regression models such as poisson regressions (e.g. benz & lopez, 2023; mccarrick et al., 2021). despite the inclusion of control variables, the analysis may still suffer from an omitted variable bias. in particular, differences between the teams after the pandemic break could bias the results (e.g. different training conditions during the break, resulting in different fitness levels). in this context, another issue concerns data granularity regarding stadium spectators. specifically, the composition of spectators in the 2021/22 season could not be accounted for in the analysis. our data does not include the ratio of home to away fans and the actual proportion of standing places per match. we were only able to include the proportion of standing places in each stadium under normal conditions. the results of humphreys et al. (2022), however, indicate that the crowd composition has an impact on home and away performances of teams. therefore, future research should also try to include variables that reflect crowd composition into the analysis of effects of spectator return on home advantage. additionally, it is important to note that the spectator numbers in our data reflect the number of tickets sold, but actual attendance may be lower due to no-shows. for instance, the studies by schreyer (2019) and schreyer and däuper (2018) have demonstrated that no-show behavior also plays a role in the german bundesliga. moreover, it cannot be excluded that a general ‘covid-19 effect’ is measured instead of the effect of (missing) spectators on home advantage, especially since psychological factors seem to play an important role in the development of the home advantage and a general impact of the pandemic on psychological states is likely to occur. therefore, a general covid-19 effect could mean that other factors that are otherwise responsible for the home advantage (e.g. self-confidence or familiarity with the environment) were influenced by the general uncertainty of people in the context of the pandemic situation. the interplay between the factors influencing home advantage, and in particular the analysis of the underlying psychological mechanisms, is one of the challenges for future research. another limitation concerns the circumstances of the fan return in the bundesliga. to comprehensively understand the impact of spectators on home advantage, both spectator loss and fan return to stadiums should be examined. due to capacity restrictions in the 2021/22 season, we were only able to look at the effect of gradually increasing attendance on home advantage. it would be interesting, however, to study the effect of full stadiums immediately following ghost games. since home advantage was particularly affected by empty stadiums in the bundesliga, we focused on the effect of increasing spectator numbers on home advantage in this league. the results of our study apply exclusively to the first division of german soccer and cannot be transferred to lower divisions in germany or leagues in other countries, nor to other sports. implications several implications regarding the importance of fans in professional soccer can be drawn from the results. as already confirmed by previous studies, our empirical analysis has shown that ghost games can have two adverse effects on clubs. in addition to the missing revenue from ticket sales, missing spectators also have an impact on the sporting success of a club. therefore, since the negative influence of missing spectators on match results is particularly short-term, spectator exclusions can be used as an effective sanction against clubs (e.g., following spectator misconduct or crowd violence). this is in line with the study by singleton et al. (2023), who find that banning crowds following crowd violence in the egyptian premier league reduced home advantage. while ghost games can be used as a powerful sanctioning tool, at the same time it is important for clubs to avoid such sanctions. therefore, measures can be considered to prevent violence in stadiums, such as excluding fans or fan groups that have attracted negative attention. however, those fan groups are often the main driver of the intense stadium atmospheres, which can positively impact home advantage. furthermore, they help clubs generate higher income by being an 152 american journal of management vol. 25(2) 2025 essential part of broadcasts since they are one target group for hospitality offers. it should therefore be considered whether a credible threat of such a measure could already be sufficient. we have argued that the influence of spectators on players is particularly psychological. in order to reduce the home advantage of opposing teams and increase the performance of own players, clubs could create incentives for fans to attend away matches (leitner et al., 2022). this implication is also consistent with the findings of humphreys et al. (2022), who recently examined home and away attendances at soccer matches. their results indicate that the crowd composition impacts home and away teams’ performances. on a more general note, the overall stadium atmosphere seems highly important for fans’ positive effect on match outcomes. even under normal conditions, i.e. without pandemic-related constraints, measures can be taken to improve the atmosphere and create greater intensity. such measures may include artificial fan chants, the establishment of a fan culture, closer relationships between players and fans and affordable matches (edensor, 2015). although it cannot be ruled out that the negative psychological effect on the players is not the result of the lack of spectators, but rather the result of the general stress associated with the pandemic, it can nevertheless be concluded that the players’ mental health plays an important role. when looking at the effect of spectators, it became clear that the negative effects of ghost games are more pronounced than the positive effects of spectator return. this negativity bias is likely to occur not only in the context of effects of crowd on players, but also in other circumstances. clubs should therefore try to avoid negative external influences on players, such as negative media coverage or disagreements at club level, which might negatively influence player performances. we conclude that it is important for clubs, beyond exceptional situations such as in the context of the pandemic, to consider not only players’ physical but also mental health. in fact, psychologists are already used at many bundesliga clubs. for instance, julian nagelsmann, who coached fc bayern munich in the 2021/22 and 2022/23 seasons, transferred together with the team psychologist from his previous club. the psychologist collaborates with the coach and supports the players, for example in dealing with defeats or pressure to perform (sport1, 2021). similarly, borussia dortmund hired former goalkeeper philipp laux as a psychologist to support both coaches and players during the pandemic crisis (spox, 2020). lastly, our results also demonstrated the limited relevance of effects of spectator return on refereeing behavior in the german bundesliga, which was also found to be of limited importance in ghost games. it is likely that the introduction of video assistant referees (var) in the 2017/18 season is the main reason for referees being less sensitive to external influences (e.g. fischer & haucap, 2021). conclusions our study aimed to investigate the development of home advantage after the pandemic-related ghost games in the first division of german soccer. the empirical analysis considered five seasons from 2017/18 to 2021/22. the results of previous studies on home advantage during ghost games were confirmed: while the home advantage disappears during the first ghost game period in the 2019/20 season, the home advantage increases over time to pre-pandemic levels in the second ghost game period in the 2020/21 season. in the 2021/22 season, after a short period of stricter capacity restrictions, there is some evidence for a significantly larger home advantage compared to the pre-pandemic period. despite increasing spectator numbers, the above-average positive effect of spectators in this last period disappears over time. overall, our empirical analysis was able to further highlight the ability of spectators to affect sporting success. positive psychological effects on the home team players were identified as the main reason for the influence of fans on home advantage. american journal of management vol. 25(2) 2025 153 references almeida, c.h., & leite, w.s. 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(2021). how does spectator presence affect football? home advantage remains in european top-class football matches played without spectators during the covid-19 pandemic. plos one, 16(3), article e0248590. https://doi.org/10.1371/journal.pone.0248590 58 american journal of management vol. 24(4) 2024 dilemmas faced by businesses in a mixed development strata complex: role of external environmental factors charu hurria victoria university australian catholic university australasian human capital development centre (ahcdc) this case study is designed to help business students explore the complexities of external environmental factors and their impact on businesses. the case is built around the story of the italian forum, a mixed-use development in leichhardt, an inner west suburb of sydney in australia. the italian forum was built on classic italian architecture design principles which includes a mix of residential, commercial and cultural space. the new south wales state government granted the land for the forum to promote and preserve italian culture. after the initial euphoria and success, the businesses in the forum started facing many complex and insurmountable challenges which has led to closure of many businesses. the efforts to revive the forum continue till date. students are encouraged to examine all aspects of this live case to understand the challenges and propose realistic solutions, drawing on theories and models learned in business courses. limitations of the study include reliance on secondary research and qualitative data, which may restrict the depth of analysis available in this case study. keywords: business environment, business consulting, change management, strategic management, stakeholders, stakeholder management, external environment analysis, role of media, role of culture, multiculturalism, conflict management, internal environment, role of government, strata management, role of social enterprise, microenvironment, macro environment, role of demographics, business strategy case study the italian forum is a unique architectural landmark built between 1998 and 2001 in leichhardt, an inner-west suburb of sydney, australia. this mixed-use development was established on land donated by nsw premier neville wran to support the italian community’s cultural heritage and provide a space for italian australians to preserve and celebrate their traditions. the forum features a blend of residential apartments, commercial spaces, an italian cultural centre, and a shared parking facility, attracting diverse stakeholders. as part of the area once known as “little italy,” the italian forum offered a taste of italy, allowing the public to experience high-end italian products and services. the forum’s success spanned from its opening in 1999 until around 2011-2012, with bustling shops, content businesses, and residential owners alike. american journal of management vol. 24(4) 2024 59 during this period, commercial property owners could charge annual rents of up to $100,000, reflecting the forum’s popularity as a cultural and commercial hub. however, according to a longtime commercial property owner, this success began to wane when the local government introduced street parking fees around the forum. norton street, where many italian shops catered to the needs of visitors seeking the “little italy” experience, became restricted with 2-hour or less parking between 8:30 am and 10:00 pm. strict enforcement led to regular visitors receiving frequent fines, deterring people from returning. consequently, the decline in foot traffic forced many iconic italian shops on norton street to close as business owners sold or relocated. this generational shift saw fewer italianaustralian proprietors in the area, further impacting visitor numbers to the forum. rising rents and decreasing customer numbers pushed several restaurants and retail shops in the forum toward bankruptcy. one commercial owner, who once owned four thriving restaurants, lost all of them to foreclosure, with banks selling his properties at significantly reduced prices. this fire sale drastically lowered the market value of commercial properties within the forum. the developers of the italian forum envisioned a destination that embodied italian culture, architecture, and lifestyle, even in a distant land like australia. developed by challenge property, the forum was meant to be a piece of italy within suburban sydney, offering a piazza with a fountain, fine dining establishments, exclusive boutiques, and residential apartments—all designed to evoke the experience of being in italy. with meticulous attention to detail, the forum became a space where visitors could feel like they were dining on italian streets. leichhardt has been an italian cultural hub since the mid-20th century, particularly after world war ii, when italian immigrants began to settle in sydney in large numbers. even before british colonisation, italian explorers and missionaries left their mark on australia. over time, leichhardt became home to italian families, whose bakeries, cafes, and speciality stores contributed to a vibrant community atmosphere. these italian establishments served the community’s needs and nurtured a sense of cultural continuity. italian traditions were passed down through generations in local schools, while italian-australian identity blossomed through a blend of heritage and new australian influences. yet, as the older generations passed on, newer generations of italians began moving away from leichhardt for various reasons. recent demographic studies show that the italian population in leichhardt has significantly declined from mid-20th century levels. factors such as high rent, the introduction of parking meters, increase in prices of properties, lack of supply of properties to match rising demand. this demographic shift contributed to the area’s decline. inner west council mayor darcy byrne remarked, “there are some nights you could shoot a cannon down norton street and not hit anyone.” in 2017, joseph carrozzi, then-president of the italian chamber of commerce and industry in australia, urged the inner west council to “think big” to revitalise what was once “little italy.” carrozzi suggested transforming norton street into an italian-style piazza to attract visitors back to the area, stating, “if there was a european square setup instead of gridlines, it would enhance the cultural hub and make it a place people want to visit.” he believed such a change would create a safer, family-friendly atmosphere and draw families and elderly patrons back to leichhardt. carrozzi’s proposal followed data from the 2016 census, which indicated that fewer than 500 italianborn residents lived in leichhardt, a 42% decrease since 2001 (david barwell, oct 2017, the daily telegraph). today, italian cultural influence in australia endures, although it has evolved over time. leichhardt’s “little italy” has transformed into a multicultural district that reflects broader waves of immigration. italian traditions remain cherished, now intertwined with australia’s diverse cultural landscape. the legacy of the italian pioneers continues through the robust coffee culture, speciality stores filled with italian delicacies, and, most importantly, in the hearts of italian-australian families who consider australia home. origin of italian forum in recognition of the italian community’s significant contributions to sydney, the neville wran government granted land to create the italian forum—a cultural hub for the inner-west. opened in 1999, 60 american journal of management vol. 24(4) 2024 the forum was envisioned as a vibrant blend of restaurants, upmarket shops, and residential apartments, all centred around a piazza-style square. located at 23 norton street, leichhardt, the italian forum features a galleried walkway that transports visitors from norton street directly into an italian-inspired setting. with tuscan architectural touches, warm tones of tan and burnt red, and a striking open space, the forum creates an authentic italian ambience. adding to this sophisticated european setting is the galleria, a collection of designer boutiques offering a curated selection of european and australian fashion. the commercial space spans two levels; on the ground floor, visitors find a variety of stores offering colourful accessories, homewares, jewellery, beauty services, and casual cafes. these shops surround and overlook the expansive outdoor piazza, a welcoming space encircled by cafes and restaurants offering diverse dining options—from charming trattorias to fine italian cuisine. (source: the challenge property website). italian forum project highlights • 157 apartments • 7,000 sqm retail and commercial (60 shops) • council library • italian cultural centre • piazza • commercial and residential car park there is a cultural covenant attached to the italian forum cultural centre and piazza − five stakeholderscommercial owners (53 shops. some shops have been subdivided further to create53+7= total of 60 shops now) − residential owners (157) − car park owner (2 car parksresidential and commercial96 car park spaces ) − the cultural centre owner and piazza owner have one common owner management structure: − commercial owners committee (1 vote)9-11 members − residential owners committee (1 vote) − car park owner (1 vote) − cultural centre owner (1 vote) − piazza owner*(1 vote) − *( italian cultural centre owner and piazza owner is same ownerhence this owner gets 2 votes voting structure: each of these owners has one vote. − bmc (building management committee) – joint committee with all committee representatives for common property decisions. − residentials and commercials appointed a strata management company to manage the forum. two separate committees are appointed by each. − the strata management company appoints the building manager with approval of residential and commercial committee. current scenario over the years, the italian forum has experienced a steady decline. journalists have sought to uncover the reasons behind this downturn, with headlines such as “leichhardt’s italian forum goes from retail tiger to white elephant” and “rome’s arches have stood for 2000 years, but in sydney’s italian forum, they are crumbling.” many questions remain unanswered, and the underlying issues persist despite investigative efforts. legal disputes between leichhardt council and forum administrators have only added american journal of management vol. 24(4) 2024 61 to the complexity, with community members expressing concerns that “if we are not careful, leichhardt’s status as the spiritual home of italian culture in australia could be permanently lost.” the local council has attempted to revitalise the italian forum and the norton street shopping strip over the years but with limited success. in 2012, a council-commissioned study labelled the forum “a white elephant due to poor management and high strata fees for commercial properties.” to stimulate growth, leichhardt council partnered with renew australia, a non-profit organisation that fills vacant spaces with creative start-ups. however, renew director marcus westbury noted that persuading landlords to activate these spaces rent-free was a struggle, feeling like “two steps forward, one step back.” in 2009, the forum’s theatre and cultural centre—a key part of neville wran’s original vision—finally opened, supported by federal government funding championed by local member and now-prime minister anthony albanese. while this initially provided a boost, the complex went into administration in 2013. after prolonged legal proceedings, the charity co.as.it. emerged as the council’s preferred buyer for the cultural centre despite having submitted the lowest bid. co.as.it. was chosen due to its dedication to italian culture, as required by a covenant specifying the centre’s use for cultural and community activities. despite its cultural mandate, co.as.it. has faced criticism for leasing the theatre to a private acting school instead of hosting italian cultural events. the private acting school has recently left the italian cultural centre in the forum and no more hold the lease (2024).the forum’s polystyrene arches—designed to evoke rome’s iconic marble structures but found to be a fire hazard—became a symbol of the forum’s troubles, as well as the focal point of a longstanding conflict between the charity, commercial operators, and residents (sydney morning herald, 2022). many business owners cite high vacancy rates, poor building management, and strained relations with co.as.it., unfair and unequitable distribution of costs of operations and maintenance amongst stakeholders, poor design of sms ( strata management scheme), ongoing conflict between key stakeholders as some of the reasons for the forum’s decline. today, the forum is at a low point, with numerous empty storefronts, vacant restaurants, and signs of neglect evident in abandoned tablecloths and stacked chairs. residents and shop owners point to issues such as parking meter installations, the bankruptcy of a prominent restaurant owner, and poor customer access as contributing factors to this downturn. in 2023, co.as.it. sold the 5,000-square-meter site on norton street to the private development company redstone, further unsettling residents and commercial lot owners, who were left wondering about the forum’s future direction (anthony segaert, 5 april, 2023).this news was seen as a positive news for commercial owners in the forum. since this development news broke out in the media, there are stories abound that this development deal may have fallen through the cracks. people are wondering if this developer is still in picture. no news on this front and questions by commercial owners remain unanswered (2024). despite slow changes, the forum’s commercial sector continues to struggle. increasingly, medical and allied businesses are replacing traditional retailers, one of the few sectors managing to survive within the forum. critics argue that the forum’s commercial struggles are partly due to a flawed strata management scheme (sms) that has unfairly shifted common area expenses onto small commercial owners, leading to steep strata fees and business closures. interestingly, while residential property values in the forum have risen in line with sydney’s market, commercial property values have consistently declined, diverging from broader sydney trends. one journalist pointed out that the forum’s struggles reflect a broader trend across sydney’s suburbs, with high vacancy rates and economic pressures affecting many areas, not just leichhardt. contributing factors may include high inflation, potential recession, changing consumer behaviours, and the growth of e-commerce. numerous vacant shops display “for lease” or “for sale” signs, symbolising the forum’s ongoing decline. although covid-19 accelerated this downturn, the issues tied to high strata fees for commercial spaces remain unresolved, leaving many forum businesses in deep uncertainty. 62 american journal of management vol. 24(4) 2024 references 7news. 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(n.d.). retrieved from www.italianforum.com.au appendix questions related to business consulting case study 1. what are the key issues faced by businesses operating in the forum? 2. what are the reasons that businesses are collapsing in the forum? 3. you have been appointed as a management consultant by the italian forum based on your expertise, with the hope that you can turn the fate of the forum around. what would you do? 4. if you were a business looking for a space to lease, would you take the lease? if yes, on what terms? if not, why not? 5. what kind of business would you like to open in the italian forum and why? 6. how would you approach this situation if you were economic development officer in the local council (local government)? how would you help businesses in the forum and leichardt? what would be your role in the turnaround of the forum? 7. identify the key issues that need to be resolved to bring this place back to its former glory. american journal of management vol. 24(4) 2024 63 8. the local council wants to make leichhardt little italy. what strategy can the council use to make leichhardt little italy? can the italian forum play a part in this building of little italy? please explain. 9. if you are a small business owner in the italian forum, how would you try to resolve the issues faced by the forum? 10. what communication strategies would you like to apply? 11. what negotiation strategies would you apply to resolve the issues in the forum? 12. “to complete this sophisticated european setting, the galleria designer boutiques offer the cream of european and australian fashion. there are two levels of commercial space. on the ground level are stores for colourful accessories and homeware stores-jewellery and hair and beauty specialistsand casual cafe.” per the developer’s vision, these businesses vanished quickly from the forum. many went into liquidation after the initial success. if you are a marketing expert, how would you bring this vision of the developers to life? 13. the problem faced by businesses in the italian forum, do small businesses across new south wales face it? justify your answer 14. if you were a member of the commercial owners’ committee in the italian forum, what kind of power would you use to bring change to the forum? moreover, how would you use this power? questions related to change management 1. what are the key issues faced by the italian forum? 2. apply a relevant change management model to analyse the situation and develop a solution. 3. apply human-centred design thinking to analyse the situation and develop a solution. 4. do you think it is a people issue or a system design issue? analyse both and devise a solution to the issues faced by the italian forum. 5. imagine you are a change management consultant appointed by the italian forum; apply kotter’s eight-step model to bring change. questions related to organisational behaviour 1. what are your observations related to power and politics being played in the italian forum? discuss. 2. based on the case study, what type of leadership does the italian forum currently experience? what is the proposed leadership model which could work here? 3. what are some of the issues related to communication in the italian forum? what can be done to improve communication among stakeholders? 4. apply conflict management strategies to analyse the issues faced in the italian forum and propose a strategy you think might be ideal for this forum. 5. who are the stakeholders, and how much power is held by each stakeholder? to find an ideal solution, what kind of power balance is required? what would you suggest if you were a consultant to the italian forum? 6. what role would you play in resolving issues if you are a. mayor of the local council ( local government) in inner-west sydney under which leichardt comes. b. if you are a local member of parliament (state government) for new south wales. c. if you are the premier of new south wales whose predecessor donated this land and put a cultural covenant on the cultural centre. d. if you were prime minister of the country living in the local government area. integrating real life cases into a security system: seven checklists for managers hossein bidgoli california state university-bakersfield this paper examines seven recent real life cases related to computer and network security breaches, vulnerabilities, and successful security enforcements and then propose seven checklists for managers to consider when designing a security system. the checklists include (1) understanding the landscape of computer and network security, (2) putting together the basic safeguards, (3) identifying security threats, (4) identifying security measures and enforcement, (5) understanding the services of computer emergency response team, (6) preparing a comprehensive security system, and (7) the business continuity planning. if these checklists are followed they should increase the chances of success for designing and implementing a security system. introduction and background in recent months, several major private-sector and public-sector organizations have been hacked, including, yahoo!, anthem blue cross, the home depot, target , neiman marcus, adobe, rsa, lockheed martin, oak ridge national laboratories, and the international monetary fund. ponemon research conducted a survey of 583 u.s companies, ranging from small organizations with less than 500 employees to enterprises with workforces of more than 75,000. ninety percent of the respondents indicated their organizations’ computers and network systems had been compromised by hackers at least once in the previous 12 months; nearly 60 percent reported two or more breaches in the past year. over half the respondents indicated they had little confidence in their organization’s ability to avoid further attacks. roughly half blamed a lack of resources for their security problems, and about the same number said network complexity was their main challenge to implementing security protections (vijayan, 2011). the following seven cases put our discussion into perspective and provide insight for the proposed seven checklists for designing a security system (bidgoli, 2017). case #1: data breach at home depot in september 2014, the home depot payment systems was breached, which may have impacted more than 56 million credit/debit cards. in addition hackers stole more than 50 million of its customer's e-mail addresses (unknown, 2014). target, michaels, and neiman marcus are other retailers that have faced security breaches in recent months. the hackers used custom-made software to hack the system that is difficult to detect. according to the report, prior to the attack, home depot has tried to keep the cost dawn and reduce the system downtime at the expense of improving security. it did not encrypt the customer card data on its registers and computers inside its stores and did not activate intrusion prevention feature in its software suite (elgin, riley, & dune, 2014). american journal of management vol. 16(4) 2016 9 the security breach has been going on for about five months, from april through september 2014. home depot data breach is significantly larger than target corporation breach, which impacted nearly 40 million cards. so far the data breach has cost home depot $62 million but it received 27 million from the insurance. the total cost to date is not known including the upgrade cost and possible cost of losing customers. banks reissued customer cards that were breached, costing about $8 per card. home depot tried to win the customers back by offering a year of free identity protection services, including credit monitoring for those who have used the system in the five month period. after the attack home depot has encrypted customer card data and has enhanced its security system (team, 2014). case #2: identity theft at internal revenue service in 2011 alone, the internal revenue service (irs) sent more than $5 billion in refund checks to identity thieves who had filed fraudulent claims. it was estimated at the time that another $21 billion would be lost to identity theft in the succeeding 5 years. tampa and miami were the two top cities from where fraudulent tax returns originated, the perpetrators usually stealing the identities of dead people, children, or someone else who normally does not file a tax return. in 2011, the irs detected about 940,000 fraudulent returns; however, it was estimated that another 1.5 million cases went undetected. in one case, a single address in lansing, michigan, was used to file 2,137 separate tax returns totaling $3.3 million. to combat this problem, the irs needs access to third-party information in order to verify returns. also, the timing of when employees can file their returns and when employers submit their withholding and income information needs to be synchronized. the irs currently uses new id theftscreening filters that will not issue refunds until the irs can verify a taxpayer’s identity. there is another system in place that flags returns filed with social security numbers of individuals who have died. as of april 2012, the new id theft-screening filters system had stopped approximately $1.3 billion in potentially fraudulent refunds (bidgoli, 2017). case #3: security breach at sony’s playstation network some call it the largest breach of confidential user information in history. the attack occurred on april 20, 2011. it resulted in the loss of more than 75 million customers’ crucial information from sony’s playstation network (psn) and qriocity music and video service. the stolen information included name, address (city, state, and zip), country, e-mail address, birthday, psn password, login name, and possibly credit card information. it is believed that hackers exploited a weakness in the playstation 3’s encryption system and accessed the public key required to run any software on the machine (stuart, 2011). this would cost sony over $170 million, not including the loss of reputation and trust that the company had enjoyed for many years. sony has been unable to determine who attacked its networks. the company did not even know that so much of its customer information had been stolen until an external security consultant discovered the theft a week after the incident took place. according to sony, credit card information was encrypted. to conduct a thorough investigation and improve and rebuild the security of the network services for the future, sony disconnected playstation network and qriocity services for several days. this situation underscores that, given the growth of cybersecurity threats, console makers must beef up their security systems. furthermore, console users must be aware of these threats when they are online (kuchera, 2011 & schiesel, 2011). case #4: lost and stolen laptops with wireless connections now available in many public places, laptops are more popular than ever. however, they can easily be lost or stolen. and replacing the laptop is not the only problem. you also have to replace the data stored on it, which can be a quite serious loss. in 2006, an employee of the u.s. department of veteran affairs lost a laptop that contained personal information regarding 26 million veterans. the same year, an employee of the american institute of certified public accountants (aicpa) lost a laptop that stored the social security numbers of aicpa’s members. if unauthorized users gain access to this kind of confidential information, identity theft and other crimes can result. to make laptops more secure, consider the following recommendations (bueb & fife, 2010): 10 american journal of management vol. 16(4) 2016 • install cable locks on laptops, and use biometric security measures. • make sure confidential data is stored on laptops only when absolutely necessary. • use logon passwords, screensaver passwords, and passwords for confidential files. • encrypt data stored on the laptop. • install security chips that disable a laptop if unauthorized users try to access it. some chips send out an audio distress signal and a gps alert showing the laptop’s location. case #5: computer viruses target medical devices medical devices that are controlled by computer software—from heart monitors and pacemakers to mammogram and x-ray machines—are new targets for computer viruses and malware. this could put patients at risk, although no injuries or deaths have been reported so far. the food and drug administration is warning the manufacturers of medical devices about the problem and is requesting them to review the parts of their security plans that are related to these devices when they seek approval from the government agency. a department of veterans affairs report has shown that 327 devices at va hospitals have been infected by malware since 2009. in january 2010, a va catheterization laboratory was temporarily closed due to infected computer equipment that is used to open blocked arteries. and in a case at a private boston hospital, computer viruses exposed sensitive patient data by sending it to outside servers. the increased applications of electronic record systems as a part of the 2009 stimulus package is adding to this risk. manufacturers must improve the security features of these devices, making them more difficult for hackers to break into. and there needs to be close coordination between the manufacturers and healthcare providers to further enhance security. also, hospitals and medical facilities must make sure that all the software running these devices is up to date and any updates have been installed. finally, these devices must be blocked from internet access (weaver, 2014). case #6: data theft and data loss memory sticks, pdas, cds, usb flash drives, smartphones, and other portable storage media pose a serious security threat to organizations’ data resources. theft or loss of these devices is a risk, of course, but disgruntled employees can also use these devices to steal company data. the following guidelines are recommended to protect against these potential risks (unknown, 2010): • do a risk analysis to determine the effects of confidential data being lost or stolen. • ban portable media devices and remove or block usb ports, floppy drives, and cd/dvd-rom drives, particularly in organizations that require tight security. this measure might not be practical in some companies, however. • make sure employees have access only to data they need for performing their jobs, and set up rigorous access controls. • store data in databases instead of in spreadsheet files, for better access control. • have clear, detailed policies about what employees can do with confidential data, including whether data can be removed from the organization. • encrypt data downloaded from the corporate network. case #7: biometrics at phoebe putney memorial hospital phoebe putney memorial hospital, a 443-bed community hospital in albany, georgia, needed to improve its electronic health record (ehr) system. doctors and nurses were complaining about the number of passwords required to access clinical records, so the hospital switched to fingerprint scanners, which, along with a single sign-on application, made the ehr system both easier to use and more secure. with the scanners, it is possible to audit usage, thereby ensuring that only authorized users have access to sensitive information. another advantage of fingerprint scanners: fingerprints do not get lost like smart cards (anderson, 2010). american journal of management vol. 16(4) 2016 11 in the following pages we describe the proposed seven checklists for designing a security system which integrates the experiences gained from the analysis of the above seven cases. checklist 1: understanding the landscape of computer and network security hackers, computer criminals, and cyber criminals, both domestic and international, could cost the u.s. economy over $100 billion and 500,000 jobs per year, according to a 2013 report by the center for strategic and international studies (csis), a washington d.c. think tank. the costs will include stolen identities, intellectual property, and trade secrets as well as the damage done to companies’ and individuals’ reputations. the total cost will also include the expense of enhancing and upgrading a company’s network security after an attack. the csis report went further and included the opportunity costs associated with downtime and lost trust as well as the loss of sensitive business information. job losses would include manufacturing jobs as well as jobs where stolen trade secrets and other intellectual properties resulted in jobs being moved overseas. actually, the total cost may even be higher than the csis report projects, given that businesses often do not reveal or admit certain cybercrimes or do not even realize the amount of damage that has been caused by computer criminals and cyber criminals (corbin, 2013). table 1 lists basic security risks. table 1 basic security risks spyware and adware phishing and pharming keystroke loggers sniffing and spoofing computer crime and fraud (id theft, industrial espionage, and sabotage) spyware is software that secretly gathers information about users while they browse the web. this information could be used for malicious purposes. spyware can also interfere with users’ control of their computers, through such methods as installing additional software and redirecting web browsers. some spyware changes computer settings, resulting in slow internet connections, changes to users’ default home pages, and loss of functions in other programs. to protect against spyware, you should install antivirus software that also checks for spyware or you should install antispyware software, such as spy sweeper, counterspy, stopzilla, and spyware doctor. adware is a form of spyware that collects information about the user (without the user’s consent) to determine which advertisements to display in the user’s web browser. in addition to antivirus software, an ad-blocking feature should be installed in your web browser to protect against adware. phishing is sending fraudulent e-mails that seem to come from legitimate sources, such as a bank or university. the e-mails usually direct recipients to false web sites that look like the real thing for the purpose of capturing personal information, such as social security numbers, passwords, bank account numbers, and credit card numbers. pharming is similar to phishing in that internet users are directed to fraudulent web sites with the intention of stealing their personal information, such as social security numbers, passwords, bank account numbers, and credit card numbers. the difference is that pharmers usually hijack an official web site address by hacking a domain name system server, then alter the legitimate web site ip address so that users who enter the correct web address are directed to the pharmers’s fraudulent web site. keystroke loggers monitor and record keystrokes and can be software or hardware devices. sometimes, companies use these devices to track employees’ use of e-mail and the internet, and this use 12 american journal of management vol. 16(4) 2016 is legal. however, keystroke loggers can be used for malicious purposes, too, such as collecting the credit card numbers that users enter while shopping online. some antivirus and antispyware programs guard against software keystroke loggers, and utilities are available to install as additional protection. sniffing is capturing and recording network traffic. although it can be done for legitimate reasons, such as monitoring network performance, hackers often use it to intercept information. spoofing is an attempt to gain access to a network by posing as an authorized user in order to find sensitive information, such as passwords and credit card information. spoofing is also when an illegitimate program poses as a legitimate one. computer fraud is the unauthorized use of computer data for personal gain, such as transferring money from another’s account or charging purchases to someone else’s account. many of the technologies discussed previously can be used for committing computer crimes. in addition, social networking sites, such as facebook and snapchat, have been used for committing computer crimes. another computer crime is sabotage, which involves destroying or disrupting computer services. computer criminals change, delete, hide, or use computer files for personal gain. usually called hackers, many of them break into computer systems for personal satisfaction, but others seek financial gain. surprisingly, most computer crimes are committed by company insiders, which makes protecting information resources even more difficult. checklist 2: putting together the basic safeguards computer and network security has become critical for most organizations, especially in recent years, with hackers becoming more numerous and more adept at stealing and altering private information. to break into computers and networks, hackers use a variety of tools, such as sniffers, password crackers, rootkits, and many others; all can be found free on the web. also, journals such as phrack and 2600: the hacker quarterly offer hackers informative tips. a rootkit is a software application that hides its presence on the computer, which makes it nearly undetectable by common anti-malware software. a comprehensive security system protects an organization’s resources, including information, computer, and network equipment. the information an organization needs to protect can take many forms: e-mails, invoices transferred via electronic data interchange (edi), new product designs, marketing campaigns, and financial statements. security threats involve more than stealing data; they include such actions as sharing passwords with coworkers, leaving a computer unattended while logged on to the network, or even spilling coffee on a keyboard. a comprehensive security system includes hardware, software, procedures, and personnel that collectively protect information resources and keep intruders and hackers at bay. there are three important aspects of computer and network security: confidentiality, integrity, and availability, collectively referred to as the cia triangle (saunders, 1996). confidentiality means that a system must not allow the disclosing of information by anyone who is not authorized to access it. in highly secure government agencies, such as the department of defense, the cia, and the irs, confidentiality ensures that the public cannot access private information. in businesses, confidentiality ensures that private information, such as payroll and personnel data, is protected from competitors and other organizations. in the e-commerce world, confidentiality ensures that customers’ data cannot be used for malicious or illegal purposes. integrity refers to the accuracy of information resources within an organization. in other words, the security system must not allow data to be corrupted or allow unauthorized changes to a corporate database. in financial transactions, integrity is probably the most important aspect of a security system, because incorrect or corrupted data can have a huge impact. for example, imagine a hacker breaking into a financial network and changing a customer’s balance from $10,000 to $1,000—a small change, but one with a serious consequence. database administrators and webmasters are essential in this aspect of security. in addition, part of ensuring integrity is identifying authorized users and granting them access privileges. availability means that computers and networks are operating and authorized users can access the information they need. it also means a quick recovery in the event of a system failure or disaster. in many american journal of management vol. 16(4) 2016 13 cases, availability is the most important aspect for authorized users. if a system is not accessible to users, the confidentiality and integrity aspects cannot be assessed. the committee on national security systems (cnss) has proposed another model, called the mccumber cube. john mccumber created this framework for evaluating information security. represented as a three-dimensional cube, it defines nine characteristics of information security (mccumber, 2004). the mccumber cube is more specific than the cia triangle and helps designers of security systems consider many crucial issues for improving the effectiveness of security measures. note that this model includes the different states in which information can exist in a system: transaction, storage, and processing. in addition, a comprehensive security system must provide three levels of security: • level 1—front-end servers, those available to both internal and external users, must be protected against unauthorized access. typically, these systems are e-mail and web servers. • level 2—back-end systems (such as users’ workstations and internal database servers) must be protected to ensure confidentiality, accuracy, and integrity of data. • level 3—the corporate network must be protected against intrusion, denial-of-service attacks, and unauthorized access. when planning a comprehensive security system, the first step is designing fault-tolerant systems, which use a combination of hardware and software for improving reliability—a way of ensuring availability in case of a system failure. commonly used methods include the following: • uninterruptible power supply (ups)—this backup power unit continues to provide electrical power in the event of blackouts and other power interruptions and is most often used to protect servers. it performs two crucial tasks: it serves as a power source to continue running the server (usually for a short period), and it safely shuts down the server. more sophisticated ups units can prevent users from accessing the server and send an alert to the network administrator. • redundant array of independent disks (raid)—a raid system is a collection of disk drives used to store data in multiple places. raid systems also store a value called a checksum, used to verify that data has been stored or transmitted without error. if a drive in the raid system fails, data stored on it can be reconstructed from data stored on the remaining drives. raid systems vary in cost, performance, and reliability. • mirror disks—this method uses two disks containing the same data; if one fails, the other is available, allowing operations to continue. mirror disks are usually a less expensive, level-1 raid system and can be a suitable solution for small organizations. checklist 3: identifying security threats computer and network security are important to prevent loss of, or unauthorized access to, important information resources. some threats can be controlled completely or partially, but some cannot be controlled. for example, you can control power fluctuations and blackouts to some degree by using surge suppressors and upss, but you cannot control whether natural disasters strike. you can, however, minimize the effects of a natural disaster by making sure fire suppression systems are up to code or by making structural changes to your organization’s facility for earthquake protection—such as bolting the foundation. threats can also be categorized by whether they are unintentional (such as natural disasters, a user’s accidental deletion of data, and structural failures) or intentional. intentional threats include hacker attacks and attacks by disgruntled employees—such as spreading a virus on the company network. the following sections describe the most common intentional threats. intentional threats intentional computer and network threats include: 14 american journal of management vol. 16(4) 2016 • viruses • worms • trojan programs • logic bombs • backdoors • blended threats (e.g., a worm launched by trojan) • rootkits • denial-of-service attacks • social engineering viruses are the most well-known computer and network threats. (you have probably heard of the i love you and michelangelo viruses, for example.) they are a type of malware (short for malicious software), which is any program or file that is harmful to computers or networks. a recent study estimates the annual cost of cybercrime to the global economy is $1 trillion and that malware is being introduced at a rate of 55,000 pieces per day (cooney, 2011). however, estimating the dollar cost of viruses can be difficult. many organizations are reluctant to report their losses because they do not want to publicize how vulnerable they are. a virus consists of self-propagating program code that is triggered by a specified time or event. when the program or operating system containing the virus is used, the virus attaches itself to other files, and the cycle continues. the seriousness of viruses varies, ranging from playing a prank, such as displaying a funny (but usually annoying) image on the user’s screen, to destroying programs and data. viruses can be transmitted through a network or through e-mail attachments. some of the most dangerous ones come through bulletin boards or message boards because they can infect any system using the board. experts believe that viruses infecting large servers, such as those used by air traffic control systems, pose the most risk to national security. there are times that virus hoaxes are spread as well. these reports about viruses that turn out not to exist can cause panic and even prompt organizations to shut down their networks. in some ways, virus hoaxes can cause as much damage as real viruses. the following list describes some of the indications that a computer might be infected by a virus: • some programs have suddenly increased in size. • files have been corrupted, or the user is unable to open some files. • hard disk free space is reduced drastically. • the keyboard locks up, or the screen freezes. • available memory dips down more than usual. • disk access is slow. • the computer takes longer than normal to start. • there is unexpected disk activity, such as the disk drive light flashing even though the user is not trying to save or open a file. • there are unfamiliar messages on the screen. installing and updating an antivirus program is the best measure against viruses. widely used antivirus programs include mcafee virus scan (www.mcafee.com/us), norton antivirus (www.norton.com), and trend micro (www.trendmicro.com). you can even download free or low-cost programs on the internet. most computers now have antivirus software already installed, but you should check for the most current version of the antivirus software. new viruses are released constantly, so use automatic updating to make sure your computer’s protection is current. a worm travels from computer to computer in a network, but it does not usually erase data. unlike a virus, it is an independent program that can spread itself without having to be attached to a host program. it might corrupt data, but it usually replicates itself into a full-blown version that eats up computing american journal of management vol. 16(4) 2016 15 resources, eventually bringing a computer or network to a halt. well-known worms include code red, melissa, and sasser. conficker, a recent worm, has infected millions of windows computers. a trojan program (named after the trojan horse that the greeks used to enter troy during the trojan war) contains code intended to disrupt a computer, network, or web site, and it is usually hidden inside a popular program. users run the popular program, unaware that the malicious program is also running in the background. disgruntled programmers possibly seeking revenge with an organization have created many trojan programs. these programs can erase data and wreak havoc on computers and networks, but they do not replicate themselves, as viruses and worms do. a logic bomb is a type of trojan program used to release a virus, worm, or other destructive code. logic bombs are triggered at a certain time (sometimes the birthday of a famous person) or by a specific event, such as a user pressing the enter key or running a certain program. a backdoor (also called a trapdoor) is a programming routine built into a system by its designer or programmer. this routine enables the designer or programmer to bypass system security and sneak back into the system later to access programs or files. usually, system users are not aware that a backdoor has been activated; a user logon or combination of keystrokes can be used to activate backdoors. a blended threat is a security threat that combines the characteristics of computer viruses, worms, and other malicious codes with vulnerabilities found on public and private networks. blended threats search for vulnerabilities in computer networks and then take advantage of these vulnerabilities by embedding malicious codes in the server’s html files or by sending unauthorized e-mails from compromised servers with a worm attachment. they may launch a worm through a trojan horse or launch a denial-ofservice (dos) attack at a targeted ip address. their goal is not just to start and transmit an attack but to spread it. a multilayer security system, as discussed in this paper, can guard against blended threats. a denial-of-service (dos) attack floods a network or server with service requests to prevent legitimate users’ access to the system. think of it as 5,000 people surrounding a store and blocking customers who want to enter; the store is open, but it cannot provide service to legitimate customers. typically, dos attackers target internet servers (usually web, ftp, or mail servers), although any system connected to the internet running tcp services is subject to attack. in 2013, a dos attack hit the online banking sites of dozens of u.s. and canadian banks, including bank of america, citigroup, wells fargo, u.s. bancorp, pnc, capital one, fifth third bank, bb&t, and hsbc (kitten, 2013, perlroth & hardy, 2013). this particular assault was a distributed denial-ofservice (ddos) attack, which is when hundreds or thousands of computers work together to bombard a web site with thousands of requests for information in a short period, causing it to grind to a halt. because ddos attacks come from multiple computers, they are difficult to trace. recently, emergency-service providers and many other organizations have been targeted by a new type of dos attack, called a tdos (telephony denial of service) attacks. these attacks use high volumes of automated calls to tie up a target phone system, halting incoming and outgoing calls. in some cases, the attacker demands a ransom. if the ransom is not paid, the tdos begins, perhaps lasting for several hours (samson, 2013). in the context of security, social engineering means using “people skills”—such as being a good listener and assuming a friendly, unthreatening air—to trick others into revealing private information. this is an attack that takes advantage of the human element of security systems. social engineers use the private information they have gathered to break into servers and networks and steal data, thus compromising the integrity of information resources. social engineers use a variety of tools and techniques to gather private information, including publicly available sources of information—google maps, company web sites, newsgroups, and blogs, for example. in addition, two commonly used social-engineering techniques are called dumpster diving and shoulder surfing. social engineers often search through dumpsters or trash cans looking for discarded material (such as phone lists and bank statements) that they can use to help break into a network. for example, a social engineer might look up the phone number of a receptionist he or she can call and pretend to be someone else in the organization. shoulder surfing—that is, looking over someone’s 16 american journal of management vol. 16(4) 2016 shoulder—is the easiest form of collecting information. social engineers use this technique to observe an employee entering a password or a person entering a pin at an atm, for example. in addition to these intentional threats, loss or theft of equipment and computer media is a serious problem, particularly when a computer or flash drive contains confidential data. checklist 4: identifying security measures and enforcement in addition to backing up data and storing it securely, organizations can take many other steps to guard against threats. table 2 lists major security measures and enforcement. table 2 major security measures and enforcement biometric security measures nonbiometric security measures (callback modems, firewalls, and intrusion detection systems) physical security measures (cable shielding, corner bolts, electronic trackers, id badges) access controls (terminal resource security and passwords) virtual private networks data encryption biometric security measures use a physiological element that is unique to a person and cannot be stolen, lost, copied, or passed on to others. the following list describes some biometric devices and measures: • facial recognition—identify users by analyzing the unique shape, pattern, and positioning of facial features. • fingerprints—scan users’ fingerprints and verify them against prints stored in a database. • hand geometry—compare the length of each finger, the translucence of fingertips, and the webbing between fingers against stored data to verify users’ identities. • iris analysis—use a video camera to capture an image of the user’s iris, then use software to compare the data against stored templates. • palm prints—use the palm’s unique characteristics to identify users. a palm reader uses nearinfrared light to capture a user’s vein pattern, which is unique to each individual. this is compared to a database that contains existing patterns. this method is often used by law enforcement agencies. • retinal scanning—scan the retina using a binocular eye camera, then check against data stored in a database. • signature analysis—check the user’s signature as well as deviations in pen pressure, speed, and length of time used to sign the name. • vein analysis—analyze the pattern of veins in the wrist and back of the hand without making any direct contact with the veins. • voice recognition—translate words into digital patterns, which are recorded and examined for tone and pitch. using voice to verify user identity has one advantage over most other biometric measures: it can work over long distances via ordinary telephones. a well-designed voicerecognition security system can improve the security of financial transactions conducted over the phone. although biometric techniques are effective security measures, they might not be right for all organizations. some drawbacks of biometrics are high cost, users’ reluctance, and complex installation. american journal of management vol. 16(4) 2016 17 however, with improvements being made to address these drawbacks, biometrics can be a viable alternative to traditional security measures. the three main nonbiometric security measures are callback modems, firewalls, and intrusion detection systems. a callback modem verifies whether a user’s access is valid by logging the user off (after he or she attempts to connect to the network) and then calling the user back at a predetermined number. this method is useful in organizations with many employees who work off-site and who need to connect to the network from remote locations. a firewall is a combination of hardware and software that acts as a filter or barrier between a private network and external computers or networks, including the internet. a network administrator defines rules for access, and all other data transmissions are blocked. an effective firewall should protect data going from the network as well as data coming into the network. a firewall can examine data passing into or out of a private network and decide whether to allow the transmission based on users’ ids, the transmission’s origin and destination, and the transmission’s contents. information being transmitted is stored in what’s called a packet, and after examining a packet, a firewall can take one of the following actions: • reject the incoming packet. • send a warning to the network administrator. • send a message to the packet’s sender that the attempt failed. • allow the packet to enter (or leave) the private network. although firewalls can do a lot to protect networks and computers, they do not offer complete security. sophisticated hackers and computer criminals can circumvent almost any security measure. for example, some hackers use a technique called ip spoofing to trick firewalls into treating packets as coming from legitimate ip addresses. this technique is the equivalent of forgery. to provide comprehensive security for data resources, firewalls should be used along with other security measures. other guidelines for improving a firewall’s capabilities include the following: • identify what data must be secured, and conduct a risk analysis to assess the costs and benefits of a firewall. • compare a firewall’s features with the organization’s security needs. for example, if your organization uses e-mail and ftp frequently, make sure the application-filtering firewall you are considering can handle these network applications. • compare features of packet-filtering firewalls, application-filtering firewalls, and proxy servers to determine which of these types addresses your network’s security needs the best. • examine the costs of firewalls, and remember that the most expensive firewall is not necessarily the best. some inexpensive firewalls might be capable of handling everything your organization needs. • compare the firewall’s security with its ease of use. some firewalls emphasize accuracy and security rather than ease of use and functionality. determine what is most important to your organization when considering the trade-offs. • check the vendor’s reputation, technical support, and update policies before making a final decision. as the demand for firewalls has increased, so has the number of vendors, and not all vendors are equal. keep in mind that you might have to pay more for a product from a vendor with a good reputation that offers comprehensive technical support. firewalls protect against external access, but they leave networks unprotected from internal intrusions. an intrusion detection system (ids) can protect against both external and internal access. it is usually placed in front of a firewall and can identify attack signatures, trace patterns, generate alarms for the network administrator, and cause routers to terminate connections with suspicious sources. these 18 american journal of management vol. 16(4) 2016 systems can also prevent dos attacks. an ids monitors network traffic and uses the “prevent, detect, and react” approach to security. although it improves security, it requires a great deal of processing power and can affect network performance. it might also need additional configuration to prevent it from generating false positive alarms. the vendors listed in table 3 offer comprehensive ids products and services. table 3 ids vendors vendor url enterasys networks www.enterasys.com cisco systems www.cisco.com ibm internet security systems www.iss.net juniper networks www.juniper.net/us/en check point software technologies www.checkpoint.com physical security measures primarily control access to computers and networks, and they include devices for securing computers and peripherals from theft. common physical security measures can include the following: • cable shielding—braided layers around the conductor cable protect it from electromagnetic interference (emi), which could corrupt data or data transmissions. • corner bolts—an inexpensive way to secure a computer to a desktop or counter, these often have locks as an additional protection against theft. • electronic trackers—these devices are secured to a computer at the power outlet. if the power cord is disconnected, a transmitter sends a message to an alarm that goes off or to a camera that records what happens. • identification (id) badges—these are checked against a list of authorized personnel, which must be updated regularly to reflect changes in personnel. • proximity-release door openers—these are an effective way to control access to the computer room. a small radio transmitter is placed in authorized employees’ id badges, and when they come within a predetermined distance of the computer room’s door, a radio signal sends a key number to the receiver, which unlocks the door. • room shielding—a nonconductive material is sprayed in the computer room, which reduces the number of signals transmitted or confines the signals to the computer room. • steel encasements—these fit over the entire computer and can be locked. with the increasing popularity of laptops, theft has become a major security risk. laptops can store confidential data, so a variety of security measures should be used. for example, a cable lock on the laptop could be combined with a fingerprint scan to make sure only the laptop’s owner can access files. access controls are designed to protect systems from unauthorized access in order to preserve data integrity. the following sections describe two widely used access controls: terminal resource security and passwords. terminal resource security is a software feature that erases the screen and signs the user off automatically after a specified length of inactivity. this method of access control prevents unauthorized users from using an unattended computer to access the network and data. some programs also allow users to access data only during certain times, which reduces break-in attempts during off hours. a password is a combination of numbers, characters, and symbols that is entered to allow access to a system. a password’s length and complexity determines its vulnerability to discovery by unauthorized users. for example, p@s$w0rd is much harder to guess than password. the human element is one of the american journal of management vol. 16(4) 2016 19 most notable weaknesses of password security, because users can forget passwords or give them to an unauthorized user (intentionally or unintentionally). to increase the effectiveness of passwords, follow these guidelines: • change passwords frequently. • passwords should be eight characters or longer. • passwords should be a combination of uppercase and lowercase letters, numbers, and special symbols, such as @ or $. • passwords should not be written down. • passwords should not be common names, such as the user’s first or last name, obvious dates (such as birthdays or anniversaries), or words that can be found in a dictionary. • passwords should not be increased or decreased sequentially or follow a pattern (for example, 222abc, 224abc, 226abc). • before employees are terminated, make sure their passwords have been deleted. a virtual private network (vpn) provides a secure “tunnel” through the internet for transmitting messages and data via a private network. it is often used so remote users have a secure connection to the organization’s network. vpns can also be used to provide security for extranets, which are networks set up between an organization and an external entity, such as a supplier. data is encrypted before it is sent through the tunnel with a protocol, such as layer two tunneling protocol (l2tp) or internet protocol security (ipsec). the cost of setting up a vpn is usually low, but transmission speeds can be slow, and lack of standardization can be a problem. typically, an organization leases the media used for a vpn on an as-needed basis, and network traffic can be sent over the combination of a public network (usually the internet) and a private network. vpns are an alternative to private leased lines or dedicated integrated services digital network (isdn) lines and t1 lines. data encryption transforms data, called plaintext or cleartext, into a scrambled form called ciphertext that cannot be read by others. the rules for encryption, known as the encryption algorithm, determine how simple or complex the transformation process should be. the receiver then unscrambles the data by using a decryption key. there are many different encryption algorithms used. one of the oldest encryption algorithms, used by julius caesar, is a simple substitution algorithm in which each letter in the original message is replaced by the letter three positions farther in the alphabet. for example, the word top is transmitted as wrs. a commonly used encryption protocol is secure sockets layer (ssl), which manages transmission security on the internet. next time you purchase an item online, notice that the http in the browser address bar changes to https. the https indicates a secure http connection over ssl. you might also see a padlock icon in the status bar at the bottom to indicate that your information has been encrypted and hackers cannot intercept it. a more recent cryptographic protocol is transport layer security (tls), which ensures data security and integrity over public networks, such as the internet. similar to ssl, tls encrypts the network segment used for performing transactions. in addition to being encryption protocols, ssl and tls have authentication functions. as mentioned, encryption algorithms use a key to encrypt and decrypt data. the key’s size varies from 32 bits to 168 bits; the longer the key, the harder the encryption is to break. there are two main types of encryption: asymmetric (also called public key encryption) and symmetric, which will be explained next, but first you need to understand pki. a pki (public key infrastructure) enables users of a public network such as the internet to securely and privately exchange data through the use of a pair of keys—a public one and a private one—that is obtained from a trusted authority and shared through that authority. asymmetric encryption uses two keys: a public key known to everyone and a private or secret key known only to the recipient. a message encrypted with a public key can be decrypted only with the same 20 american journal of management vol. 16(4) 2016 algorithm used by the public key and requires the recipient’s private key, too. anyone intercepting the message cannot decrypt it, because he or she does not have the private key. this encryption usually works better for public networks, such as the internet. each company conducting transactions or sending messages gets a private key and a public key; a company keeps its private key and publishes its public key for others to use. one of the first public key algorithms, rsa (named after its creators—rivest, shamir, and adleman), is still widely used today. the main drawback of asymmetric encryption is that it is slower and requires a large amount of processing power. in symmetric encryption (also called secret key encryption), the same key is used to encrypt and decrypt the message. the sender and receiver must agree on the key and keep it secret. advanced encryption standard (aes), a symmetric encryption algorithm with a 56-bit key, is the one used by the u.s. government. the problem with symmetric encryption is that sharing the key over the internet is difficult. encryption can also be used to create digital signatures that authenticate senders’ identities and verify that the message or data has not been altered. digital signatures are particularly important in online financial transactions. they also provide nonrepudiation, discussed in the next section. here is how they work: you encrypt a message with your private key and use an algorithm that hashes the message and creates a message digest. the message digest cannot be converted back to the original message, so anyone intercepting the message cannot read it. then you use your private key to encrypt the message digest, and this encrypted piece is called the digital signature. you then send the encrypted message and digital signature. the recipient has your public key and uses it to decrypt the message, and then uses the same algorithm that you did to hash the message and create another version of the message digest. next, the recipient uses your public key to decrypt your digital signature and get the message digest you sent. the recipient then compares the two message digests. if they match, the message was not tampered with and is the same as the one you sent. checklist 5: understanding the services of computer emergency response team the computer emergency response team (cert) was developed by the defense advanced research projects agency (part of the department of defense) in response to the 1988 morris worm attack, which disabled 10 percent of the computers connected to the internet. many organizations now follow the cert model to form teams that can handle network intrusions and attacks quickly and effectively. currently, cert focuses on security breaches and dos attacks and offers guidelines on handling and preventing these incidents. cert also conducts a public awareness campaign and researches internet security vulnerabilities and ways to improve security systems. network administrators and e-commerce site managers should check the cert coordination center for updates on protecting network and information resources. in addition, the office of cyber security at the department of energy offers a security service: cyber incident response capability (circ), which you can learn more about at http://energy.gov/cio/officechief-information-officer/services/incident-management. circ’s main function is to provide information on security incidents, including information systems’ vulnerabilities, viruses, and malicious programs. circ also provides awareness training, analysis of threats and vulnerabilities, and other services. checklist 6: preparing a comprehensive security system an organization’s employees are an essential part of the success of any security system, so training employees about security awareness and security measures is important. some organizations use a classroom setting for training, and others conduct it over the organization’s intranet. tests and certificates should be given to participants at the end of training sessions. in addition, making sure management supports security training is important to help promote security awareness throughout the organization. american journal of management vol. 16(4) 2016 21 organizations should understand the principles of the sarbanes-oxley act of 2002 and conduct a basic risk analysis before establishing a security program (unknown, 2002). this analysis often makes use of financial and budgeting techniques, such as return on investment (roi), to determine which resources are most important and should have the strongest protection. this information can also help organizations weigh the cost of a security system. the following steps should be considered when developing a comprehensive security plan (bidgoli, 2008 & bidgoli, 2017): 1. set up a security committee with representatives from all departments as well as upper management. the committee’s responsibilities include the following: • developing clear, detailed security policy and procedures • providing security training and security awareness for key decision makers and computer users • periodically assessing the security policy’s effectiveness • developing an audit procedure for system access and use • overseeing enforcement of the security policy • designing an audit trail procedure for incoming and outgoing data 2. post the security policy in a visible place, or post copies next to all workstations. 3. raise employees’ awareness of security problems. 4. revoke terminated employees’ passwords and id badges immediately to prevent attempts at retaliation. 5. keep sensitive data, software, and printouts locked in secure locations. 6. exit programs and systems promptly, and never leave logged-on workstations unattended. 7. limit computer access to authorized personnel only. 8. compare communication logs with communication billing periodically. the log should list all outgoing calls with users’ name, call destination, and time of call. investigate any billing discrepancies. 9. install antivirus programs, and make sure they are updated automatically. 10. install only licensed software purchased from reputable vendors. 11. make sure fire protection systems and alarms are up to date, and test them regularly. 12. check environmental factors, such as temperature and humidity levels. 13. use physical security measures, such as corner bolts on workstations, id badges, and door locks. 14. install firewalls and intrusion detection systems. if necessary, consider biometric security measures. these steps should be used as a guideline. not every organization needs to follow every step; however, some might need to include even more to fit their needs. checklist 7: the business continuity planning to lessen the effects of a natural disaster or a network attack or intrusion, planning the recovery is important. this should include business continuity planning, which outlines procedures for keeping an organization operational. a disaster recovery plan lists the tasks that must be performed to restore damaged data and equipment as well as steps to prepare for disaster, such as the following: • back up all files. • periodically review security and fire standards for computer facilities. • periodically review information from cert and other security agencies. • make sure staff members have been trained and are aware of the consequences of possible disasters and steps to reduce the effects of disasters. • test the disaster recovery plan with trial data. • identify vendors of all software and hardware used in the organization, and make sure their mailing addresses, phone numbers, and web site addresses are up to date. 22 american journal of management vol. 16(4) 2016 • document all changes made to hardware and software. • get a comprehensive insurance policy for computers and network facilities. periodically review the policy to make sure coverage is adequate and up to date. • set up alternative sites to use in case of a disaster. cold sites have the right environment for computer equipment (such as air conditioning and humidity controls), but no equipment is stored in them. hot sites, on the other hand, have all the needed equipment and are ready to go. • investigate using a collocation facility, which is rented from a third party and usually contains telecommunication equipment. • check sprinkler systems, fire extinguishers, and halon gas systems. • keep backups in off-site storage, periodically test data recovery procedures, and keep a detailed record of machine-specific information, such as model and serial number. backup facilities can be shared to reduce costs. • keep a copy of the disaster recovery plan off site. • go through a mock disaster to assess response time and recovery procedures. if disaster strikes, organizations should follow these steps to resume normal operations as soon as possible: 1. put together a management crisis team to oversee the recovery plan. 2. contact the insurance company. 3. restore phone lines and other communication systems. 4. notify all affected people, including customers, suppliers, and employees. 5. set up a help desk to assist affected people. 6. notify the affected people that recovery is underway. 7. document all actions taken to regain normality so you know what worked and what did not work; revise the disaster recovery plan, if needed. conclusion this paper examined seven recent real life cases related to computer and network security breaches, vulnerabilities, and successful security enforcements. the experiences and insights gained from these cases provided a background and guidelines for the proposed seven checklists for managers to consider when designing a security system. a number of lessons were learned from these cases that have been integrated into the proposed seven checklists. the checklists included (1) understanding the landscape of computer and network security, (2) putting together the basic safeguards, (3) identifying security threats, (4) identifying security measures and enforcement, (5) understanding the services of computer emergency response team, (6) preparing a comprehensive security system, and (7) the business continuity planning. if these steps are followed they should increase the chances of success in designing and implementing a security system and keeping the hackers and computer criminals at bay. references anderson, h. 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(2013 ). patients put at risk by computer viruses. wall street journal. accessed 6 october 2016@ http://online.wsj.com/news/articles/sb10001424127887324188604578543162744943762?mod= djem_jiewr_it_domainid. american journal of management vol. 16(4) 2016 25 american journal of management vol. 25(1) 2025 101 yes today, no tomorrow: exploration of deal cancellations in televised pitch competitions livia boerner paderborn university bernd frick paderborn university thomas fritz aachen university of applied sciences early-stage entrepreneurs exert significant efforts to secure deals with angel investors, but many are canceled during the due diligence process. drawing upon interpersonal persuasion theory and information asymmetries in the pitch context, we investigate deal cancellations as instances of biased communication and strategic misrepresentation. we analyze a novel dataset comprising n = 1,334 pitches from the british dragons’ den and the german die höhle der löwen format. our examination delves into differences related to gender and team size of the involved parties, format, and level of financial risk. we find a bias against female investors, higher cancellation rates for more costly deals, and a country effect. keywords: business angels, information asymmetry, due diligence, overconfidence, gender differences introduction televised startup pitch competitions such as shark tank and dragons’ den are popular platforms where early-stage startups present their ventures to a panel of angel investors seeking funding in exchange for equity. these competitions bear significant economic and societal implications, as vital sources of capital, publicity, and strategic support for startups. simultaneously, they play a crucial role in shaping the public perception of the startup ecosystem, influencing expectations for aspiring entrepreneurs. moreover, the unique setting of pitch competitions allows academic researchers to observe the interaction between entrepreneurs and investors, offering insights into their decision-making. the televised format provides a unique opportunity to explore behavior and decisions that usually occur behind closed doors. while securing a handshake deal through a pitch competition indicates success for an early-stage startup, it is crucial to note that these agreements are not legally binding for any involved parties and typically undergo a thorough due diligence process after production. a significant number of these deals face cancellation during this process. reports indicate that in specific seasons of the us format shark tank, approximately 50% of deals are not completed (prince, 2023), and similar rates are observed in nontelevised startup pitch competitions. as a result, these deal cancellations can decrease the credibility of 102 american journal of management vol. 25(1) 2025 pitch competitions in the eyes of the audience and at the same time reduce the motivation of prospective entrepreneurs to pitch. despite their high incidence and repercussions for entrepreneurs and investors, posthandshake deal cancellations are underexplored by researchers and mostly treated as a black box. this study aims to fill this gap by empirically exploring deal cancellations, recognizing the role of information asymmetries and the reliance on the integrity of both parties in the pitch setting. drawing upon interpersonal persuasion and deception theory, canceled deals may indicate discrepancies in the entrepreneur’s communication of a venture’s legitimacy, attributed to optimism and overconfidence, or even active deception, termed legitimacy lies. if these inaccuracies come to light during the due diligence, angel investors are likely to withdraw their investment offer. despite the limited public disclosure of specific reasons for deal cancellations, this study systematically examines the characteristics and commonalities of cancelled deals. using a unique dataset of 1,334 pitches from the british format dragons’ den and the german format die höhle der löwen, we identify posthandshake deal outcomes through structured online searches. our findings reveal significant differences between female and male investors, british and german formats, and the level of risk associated with the invested amount of money. this research contributes novel insights to both the theoretical literature and entrepreneurial finance practice. theoretical background the dynamic setting of angel investor decision-making uncertainty and information asymmetries in the pitch context angel investors explore investment opportunities through diverse avenues, including formal applications, informal and private meetings, and pitch competitions (pollack et al., 2012). the entrepreneur’s pitch plays a pivotal role in the startup financing process, based on which the angel investors decide which startup to select for due diligence. depending on the pre-selection of the startups that get to pitch in front of the angel, selectivity based on the pitch is high, with reported success rates as low as 7% (balachandra, 2020). importantly, the pitch decision setting is characterized by uncertainty and considerable information asymmetries between the angel investor and the entrepreneur. the inherent uncertainty pertains to the future performance of the venture, constituting a risk for all parties involved. optimism and overconfidence are highly prevalent and even deemed a prerequisite for action on both the entrepreneur and investor side (graves & ringuest, 2018; kraft et al., 2022). furthermore, angel investors face additional uncertainty due to limited knowledge about the venture compared to the entrepreneur. information asymmetry is a well-established construct in the economic and psychological literature on interpersonal persuasion and strongly shapes the dynamics in the startup pitch context (courtney et al., 2017; glücksman, 2020; harrison & mason, 2017; venugopal, 2017). given their background, the entrepreneur knows much more about their business’ potential, operability, and challenges than the angel investor. while some investors may have a high level of expertise and can evaluate the potential market risk, they do not have the same level of knowledge about the specific business (harrison & mason, 2017). hence, they can only choose to trust what the entrepreneur tells them about the business in the startup pitch. drawing on interpersonal persuasion theory, it can be assumed that entrepreneurs and angel investors have different objectives in the pitch. entrepreneurs seek funding from angel investors to grow their business, which has shown to be highly beneficial for their future performance (blaseg & hornuf, 2024; smith & viceisza, 2018; sohl, 2020). they are thus highly motivated to present positive signals and claims emphasizing their legitimacy (fisher et al., 2017). on the other hand, angel investors decide to invest in prospect of potentially large financial returns, but must also accept the risk of completely losing their invested capital (sohl, 2020; venugopal, 2017). hence, entrepreneurs are interested in presenting their business as a highly attractive opportunity, while angel investors must evaluate it as accurately as possible. they must navigate the challenge of high agency risk when entrepreneurs have critical information that the investors lack (carpentier & suret, 2014). issues arise when entrepreneurs prioritize their own interest at the expense of outside capital providers. american journal of management vol. 25(1) 2025 103 the temptation and consequences of strategic misrepresentation in the pitch context in their pitches, entrepreneurs use signals and active statements to portray their business positively (garud et al., 2014; parhankangas & ehrlich, 2014; pollack et al., 2012). statements that intend to persuade potential investors of their venture’s legitimacy are termed legitimacy claims, and in the case of exaggeration and active misrepresentation, legitimacy lies (rutherford et al., 2009). exaggeration is shown to be highly prevalent in startup pitches, and is to be distinguished from naïve optimism and general overconfidence (cottle & anderson, 2020). these behaviors differ from exaggeration in the “knowableness” of the information and regarding the period that is referenced in the statement (cottle & anderson, 2020). optimistic claims refer to the entrepreneurs’ subjective beliefs about the ventures’ performance in the future. legitimacy lies, in contrast, occur when statements about relevant aspects of the business are made that represent it as being better than it is. this also includes excessive predictions and the deliberate withholding of information that eventually induces stakeholders to correct a mistaken assumption. legitimacy lies can, in theory, be verified and often surface as a subject of the due diligence process. prior research suggests that managerial opportunism and the propensity to tell legitimacy lies is particularly strong for early-stage entrepreneurs (cottle & anderson, 2020; garud et al., 2014; rottenburger & kaufmann, 2020; rutherford et al., 2009; theoharakis et al., 2021). while emphasizing that entrepreneurs are not accused of being maliciously deceptive, this work operates under the assumption that they are tempted to misrepresent facts to increase their legitimacy under pressure. they face the challenge of acquiring essential financial resources based on the liabilities of newness and smallness (rottenburger & kaufmann, 2020). financial stress and the difficulty in accurately assessing venture legitimacy for outside parties enhances the temptation to engage in intentional misrepresentation (theoharakis et al., 2021). recognizing this dynamic and the agency risk in the pitch context, angel investors prioritize perceived trustworthiness, making it a critical determinant in working with early-stage entrepreneurs (lefebvre et al., 2022; maxwell & lévesque, 2014). they make inferences about the entrepreneurs’ trustworthiness based on their first impression in the pitch and the personal characteristics of each founder (carpentier & suret, 2015). accordingly, analyses of pitches from the startup competitions shark tank and dragons’ den indicate higher propensity for funding when entrepreneurs actively employ trust-building behaviors (maxwell & lévesque, 2014) and send legitimacy signals (pollack et al., 2012). remarkably, some researchers argue that the occurrence of legitimacy results in higher capital costsor entrepreneurs because angel investors adjust their valuation to the higher risk premium (douglas et al., 2014; rutherford et al., 2009). if these costs, whether entrepreneurs make accurate statements or not, is factored in by investors, entrepreneurs may feel like they are expected to lie, or at least exaggerate their legitimacy to some extent. one way or another, exaggerated claims and projective stories that are told in the pitch serve as the source of future disappointments, resulting in legitimacy loss, impairment of the relationship, and potential cancellation of investment deals (garud et al., 2014; pollack & bosse, 2014). thus, we interpret deal cancellations as instances where issues arise during due diligence linked to exaggerated legitimacy claims. we empirically explore their occurrence as well as the characteristics of the deal, entrepreneurs, and angel investors. post-handshake deal cancellation in televised startup pitch competitions significance of deals, due diligence process, and occurrence of deal cancellations televised startup pitch competitions, like shark tank and dragons’ den, serve as critical global funding sources for early-stage startups(blaseg & hornuf, 2024; robinson & viceisza, 2021; smith & viceisza, 2018). the situation is virtually the same for all: early-stage startups apply to pitch in front of a panel of expert angel investors, seeking funding and strategic support in exchange for equity in their business. the pitch is followed by an interaction in which investors ask questions and aim to better understand the value and risk of the opportunity. ultimately, they either reject the proposal or offer to make a deal with the entrepreneurs, which is often substantiated by a handshake. importantly, these handshake deals are not legally binding for either party. they are informal agreements to pursue a deal, rooted in the 104 american journal of management vol. 25(1) 2025 angel investors’ explicit “intent-to-fund”, and are subject to a thorough due diligence before becoming final commitments (maxwell, 2011; prince, 2023; smith & viceisza, 2018). the due diligence process, integral to deals in private equity and entrepreneurial finance (cleyn & braet, 2007), involves quantitative analysis and a fact-based approach of investors and their teams to assess all aspects of the venture and determine an objective valuation. it aims to correct information asymmetries by scrutinizing financial, legal, and team structures and adding a thorough analysis of the respective market (cleyn & braet, 2007). depending on the prior transparency and entrepreneurs’ claims in the pitch, investors may encounter new information, risks, and challenges that were not evident during the first interaction. if new information emerges during this process, it may challenge the initial decision to invest, leading to deal reconsideration (cleyn & braet, 2007; van osnabrugge & robinson, 2000). post-handshake deal cancellations are not uncommon in the setting of televised startup pitch competitions such as shark tank or dragons’ den. production companies are not involved in the business that follows the pitch (smith & viceisza, 2018), allowing either party to retract from a deal if an agreements cannot be reached. occasional media reports indicate significant deal cancellation rates, varying strongly by country and season, with numbers ranging from 20 percent up to 50 percent (canal, 2016; frankel, 2021; ignor, 2021; o’sullivan, 2021; poole, 2023; smith & viceisza, 2018; williams, 2015). reported reasons for post-handshake deal cancellation despite considerable public interest, reasons for post-handshake deal cancellations usually remain undisclosed. prior research so far failed to identify why exactly deals were cancelled after production (blaseg & hornuf, 2024). general statements citing “strategic differences” or “disagreements over direction” as the reason for cancellation prevail (ignor, 2021; o’sullivan, 2021), possibly due to nondisclosure agreements signed by angel investors. however, repeated interviews with angel investors suggest that they usually realize issues with the startup or the entrepreneur, which were not evident before making the deal. specifically, a british angel investor stated that around 90% of failed deals do so because entrepreneurs provided inaccurate information in the initial interaction (o’sullivan, 2021). this is in accordance with another source indicating that “the main reason why deals […] fall through is usually that the entrepreneur was not completely honest during their pitch” (prince, 2023). an american angel investor stresses that in their experience, most entrepreneurs are not intentionally dishonest, but may rather be overly optimistic when choosing to exaggerate their projections. first, new information which arises during due diligence process and leads to cancellation can be linked to the venture’s financial situation, such as inflated sales figures, wrong financial projections, or undisclosed debt (o’sullivan, 2021; schmidt, 2022). second, issues may surface in relation to the venture’s legal status and regulatory hurdles. this includes licenses, serious patent issues, undetermined intellectual property, ongoing legal claims against the company and existing contracts which make the investor reconsider their initial decision (ignor, 2021; o’sullivan, 2021). third, angel investors may realize issues regarding the product or operations. for example, there can be technical deficiencies or defects which did not appear during the pitch, or it can prove impossible to get the product onto the shelves (ignor, 2021; o’sullivan, 2021). occasionally, deal cancellations are due to new information on the market conditions, which emerged during the due diligence process. if investors do not have prior experience with a specific market, they may initially misjudge its attractiveness. moreover, changes in the market situation can be linked to external factors such as a general economic downturn and changes in the industry, such as the covid-19 pandemic (ignor, 2021). finally, angel investors emphasize the importance of a good relationship and communication with the startup, making personal concerns regarding the entrepreneurs a significant factor for deal cancellations (balachandra, 2020; ignor, 2021; o’sullivan, 2021; poole, 2023; prince, 2023; schmidt, 2022; van osnabrugge & robinson, 2000). specifically, angel investors are focused on minimizing agency risk and evaluating the entrepreneurs’ characteristics in their due diligence processes. accordingly, they are likely american journal of management vol. 25(1) 2025 105 to reconsider deals when they notice conflicts with the team and with regards to the communication between the parties. determinants of deal cancellation: research gap and hypotheses the identified reasons for deal cancellations largely rely on anecdotal evidence, based on statements of investors and individual reports regarding specific deals. this creates a significant research gap in the empirical analysis of deal cancellation in these formats. to address this, we construct and analyze a comprehensive dataset, exploring common denominators that can be observed from an external perspective. our focus includes deal characteristics and interpersonal dynamics, specifically gender and number of entrepreneurs and investors, as potential factors contributing to strategic misrepresentation and subsequent deal cancellations post-handshake. our hypotheses draw on prior research in interpersonal persuasion, deceptive behavior, and overconfidence in entrepreneurial finance. deal cancellations in relation to gender gender bias in entrepreneurial finance and televised pitch competitions is well-documented (balachandra, 2020; balachandra et al., 2019; gupta et al., 2014; hohl et al., 2021; kanze et al., 2020). angel investors tend to interact with entrepreneurs differently, and vice-versa, based on gender stereotypes. in most cases, the evidence suggests poorer outcomes for female entrepreneurs, such as requesting and receiving less capital for their ventures than their male counterparts (hohl et al., 2021). while prior studies focus on gender bias regarding deal probability and valuations, how it affects the interaction with angel investors in the pitch and subsequent deal cancellations is underexplored. when attributing deal cancellations to the exploitation of information asymmetry in the startup pitch, we must consider gender differences regarding interpersonal persuasion strategies and honesty. for instance, evidence from economic psychology suggests gender differences in strategic misrepresentation, with men showing lower social value orientation and higher propensities to engage in deception than women (capraro, 2018; grosch & rau, 2017; nieken & dato, 2016; olekalns & kennedy, 2020). in negotiations, men have been shown to be more pragmatic and egocentric regarding ethical reasoning (kray & haselhuhn, 2012). moreover, investors ask male entrepreneurs more promotion-focused questions, which might increase their likelihood of making exaggerated predictions (kanze et al., 2018). this may result in higher rates of deal cancellations for male entrepreneurs due to legitimacy lies. moreover, strategic misrepresentation in the pitch may be influenced by the gender of the investor. prior studies on negotiation behavior show that women are perceived as more credulous, more easily misled, and more likely to be deceived than men (kray et al., 2014). this is partly linked to perceptions of women as being less competent in the negotiation setting, which makes entrepreneurs think they can be led into deals under false pretenses. hence, in the context of startup pitch competitions, the entrepreneurs may answer questions of female investors less accurately, with a higher likelihood for exaggeration and legitimacy lies. the chance of issues arising during due diligence and resulting deal cancellation may thus be higher for female investors. deal cancellation about the size of the involved parties the involvement of multiple entrepreneurs in a pitch may influence the dynamic of the pitch, the negotiation, and the due diligence process. prior research on interpersonal persuasion and negotiation strategies suggests that teams employ deceptive strategies more frequently than individual negotiators (aykac et al., 2017). hence, post-handshake deal cancellation rates may be higher for startups pitched by larger numbers of entrepreneurs. additionally, the numbers of investors involved in the deal can impact the complexity of the dynamic. in the setting of televised pitch competitions, if multiple angel investors are interested in funding the venture in return for equity, they may opt to join forces and offer the entrepreneur a combined deal in which the investors split the cost and equity. following prior studies of televised pitch competitions (blaseg & hornuf, 2024), it can be assumed that larger groups of angel investors imply higher levels of available resources, and distributed thus lower relative risk. this includes agency risk, and presumably the risk of being lied to 106 american journal of management vol. 25(1) 2025 in the pitch. hence, it is plausible that deal cancellation rates are lower if multiple investors are involved in the deal. deal cancellation in relation to financial risk and ownership the handshake deal’s valuation and implied risk likely influence the deal cancellation probability. prior research indicates that the investment amounts of the deals that were upheld after due diligence were significantly lower than the average of all handshake deals (blaseg & hornuf, 2024). this suggests that deals with higher agreed-upon investment amounts are more likely to be canceled. in addition, the need for venture legitimacy and propensity for strategic misrepresentation is positively linked to the financial need of ventures (theoharakis et al., 2021). thus, deal cancellation may be more likely for deals with higher amount of agreed-upon funding, and, correspondingly, deals with larger equity shares. other potential determinants of deal cancellations furthermore, other potential determinants include country, industry, year, as well as individual, angel fixed effects. following the individual numbers reported by different media outlets, cancellation rates seem to be higher in the us format shark tank and the british format dragons’ den than in the german format die höhle der löwen. this may be linked to cultural differences regarding persuasion strategies and use of exaggeration in the pitch, or differences regarding the subsequent due diligence processes. considering potential cultural differences regarding the impact of gender stereotypes, the country of the pitch may further moderate the hypothesized relationships between gender and cancellations. industry of the venture and year of the pitch may influence deal cancellation due to different levels of contextual uncertainty and macroeconomic effects. for instance, investments in high tech firms involve greater uncertainty than other industries and may entail higher levels of projective storytelling by entrepreneurs. besides, certain industries may experience surprising downturns in certain years, irrespective of the interaction in the pitch. lastly, it is essential to consider each investor’s individual propensity to offer and cancel a deal. there are likely differences between investors regarding their individual risk appetite (croce et al., 2017) and their likelihood to make a deal under uncertainty given limited information (boulton et al., 2019). additionally, the probability to cancel a deal after the due diligence process may also be affected by individual preferences, thoroughness, and weighting of new information that may arise. thus, angel fixed effects are included in our estimations to account for differences among individual investors. material and methods sample and procedure we constructed a dataset based on startup pitches and deals from british pitch competition dragons’ den, and the german version die höhle der löwen (abbr.: dhdl; german for “the lions’ den”). the total sample consists of n = 1,334 startup pitches (ndragons den = 651; ndhdl = 683) broadcasted between august 2013 and may 2023 in the united kingdom (season 11-20) and germany (seasons 1-13). initially, we generated an overview using the exhaustive list of startups featured in both formats available from their respective wiki webpages. subsequently, a team of independent observers coded selected variables about the entrepreneurs, the venture, the investors, and their interaction from the video material of the pitches, which is publicly accessible from the webpages of the respective broadcasters. finally, we retrieved data about deal outcomes (completion vs. cancellation) from startup databases and with structured online searches. the operationalization and measurement of each variable is described in the following section. variables dependent variables deal. handshake deals between angel investors and entrepreneurs agreeing on an equity investment were coded as a binary variable. the deals represent an intent-to-fund that is subject to a due diligence american journal of management vol. 25(1) 2025 107 process, occurring after production and typically completed by the time the episode is broadcasted. considering the likelihood of startups securing a deal in the first place allows accounting for selection effects related to the startup’s attractiveness on subsequent deal outcomes. deal outcome. for every handshake deal, the post-handshake outcome was coded as a binary variable (deal completion vs. deal cancellation). the outcome was determined using available data from startup databases (crunchbase, pitchbook) and structured online search on every startup that made a deal, including their own webpage, newspaper articles, and press releases. given that there can be up to six months’ time between the handshake deal on production day and airing of the respective episode, the due diligence process takes place behind closed doors and is likely not influenced by the public. media outlets often reported completion or cancellations of handshake deals immediately after the respective episode aired. explanatory and control variables entrepreneur gender. gender of each individual entrepreneur present at the pitch was recorded as a binary variable. for pitches of startup teams, groups with at least one female entrepreneur were considered female, following the approach of prior studies of pitch competitions (balachandra et al., 2019; hohl et al., 2021; poczter & shapsis, 2016), as a result, we created a dummy variable for entrepreneur gender with 1 if the team included at least one female, and 0 for all-male teams. investor gender. the names and gender of all angel investors involved in each handshake deal were recorded. analogously, investor gender was coded as a binary variable. if multiple angel investors made a deal together, we followed the same approach as above, coding dummy variables of investor teams with at least one female investor as 1 and all-male investor teams as 0 (poczter & shapsis, 2016). entrepreneur count. while many ventures in the sample are pitched by single entrepreneurs or a pair of two co-founders, there can be teams of up to five individuals pitching together. the number of entrepreneurs present at the pitch representing the startup team was recorded as a continuous variable. investor count. analogously, for every handshake deal that was aired, the number of investors that joined together to make a deal with the venture was coded as a continuous variable, ranging from one to five angel investors. funding amount. in case of a deal, the agreed-upon funding amount to be provided by the angel investor was recorded as a continuous variable. this variable may help capture both the venture’s need for capital and the investors’ confidence level in the entrepreneurs (blaseg & hornuf, 2024). for pitches from dragons’ den, this funding amount was converted into euro currency at the exchange rate of the broadcasting date to allow for comparisons between formats. subsequently, we log-transformed this variable to account for skewness. equity share. equally, the agreed-upon venture equity share to be transferred to the angel investor in exchange for the capital investment was recorded in percent as a continuous variable. format. a format dummy variable was created to account for discrepancies between the two formats and measure potential cultural differences. pitches and deals from dragon’s den were coded 1, and pitches from dhdl 0. industry. while there is a primary focus on b2c products in the setting of televised startup pitch competitions, the startups are from a very wide range of industries. for every pitch, the startups industry was determined by observers based on the product and market description. to include this aspect in the empirical analysis, 15 different industry dummies were created (automotive, beauty & cosmetics, beverages, children & babies, education, fashion & accessories, fitness & sports, food, hardware & tools, health & wellness, lifestyle & home, media & entertainment, pet products, platforms, software & tech). year. broadcasting dates for all pitches were recorded to create dummy variables for each year. this allows to account for unobserved heterogeneity linked to changes in macroeconomic conditions, inflation of investments, as well as potential learning effects of entrepreneurs and investors (poczter & shapsis, 2016). 108 american journal of management vol. 25(1) 2025 empirical analysis and results descriptive analysis of handshake deals and deal cancellation a total of n = 1,334 startup pitches were analyzed from both formats, with 623 (46.70%) of those securing a deal. the average investment for successful deals was m = 145,894 eur (sd = 153,884 eur), and the average deal equity share was m = 25.69% (sd = 10.16%). based on the observed handshake deals, venture valuations varied widely, averaging m = 715,099 eur (sd = 963,468 eur) across all deals and formats. of the ndeal = 623 handshake deals that were agreed upon by angel investors and entrepreneurs, 412 (66.18%) were completed after due diligence, while 211 (33.87%) were canceled. notably, cancellation rates were higher in the british format dragons’ den (40.23%) compared to german format dhdl (29.42%). table 1 presents descriptive statistics for the sample, including entrepreneur and investor gender and count. in addition, means are presented individually for both formats. table 1 descriptive statistics and deal characteristics of full sample n m sd min max mdragons den mdhdl handshake deal (%) 1334 46.70 49.90 0 100 39.32 53.73 deal cancellation (%) 623 33.87 47.36 0 100 40.23 29.42 funding amount (eur) 623 145,894 153,884 11,500 1,500,000 78,200 193,114 equity share (%) 623 25.69 10.16 2.5 100 25.61 25.74 entrepreneur gender (female) 1334 .41 .49 0 1 .42 .40 investor gender (female) 623 .38 .48 0 1 .51 .28 entrepreneur count 1334 1.64 .70 1 5 1.44 1.83 investor count 623 1.40 .65 1 5 1.44 1.38 note. ndragons‘ den =651; ndhdl = 683 regression analysis regression models were estimated to explore deal cancellation dynamics and test our hypotheses regarding entrepreneur, investor, and deal characteristics. all models include the control variables for venture industry and year, with standard errors clustered at the investor level to account for individual differences. the first model shows a logistic regression of deal cancellation on the set of variables observed in relation to entrepreneur and investor characteristics. in model 2, we include an interaction term between gender and format. this model specification allows to account for potentially different sizes and directions of the gender effects in both formats, presumably relating to differences in culture and the specific group of angel investors present in each format. obviously, the observation of deal outcomes and deal cancellation is conditional upon receiving a deal with an investor in the first place. this selection may affect the regression of deal cancellation, so we adapt models 3 and 4 to account for selection on observables and use a two-stage regression model as suggested by heckman (1979). the first-stage regression of deal selection includes entrepreneur gender and count as well as format, venture industry, and year of the pitch. american journal of management vol. 25(1) 2025 109 table 2 displays the coefficients and significance levels of all regression models. overall, we find that the significant results found in models 1 and 2 are robust to including a first-stage regression of deal selection in models 3 and 4. table 2 determinants of post-handshake deal cancellation (1) logistic regression (2) logistic regression incl. interaction terms (3) two-stage heckman probit regression (4) two-stage heckman probit regression incl. interaction terms entrepreneur gender (female) -.070 (.196) -.250 (.268) .030 (.079) -.015 (.090) entrepreneur gender * format .706 (.369) .187 (.112) investor gender (female) .224 (.281) .975** (.389) .088 (.063) .330*** (.099) investor gender * format -1.339*** (.498) -.411*** (.131) entrepreneur count .061 (.125) .031 (.127) .059 (.054) .037 (.056) investor count .069 (.154) -.010 (.151) -.006 (.051) -.038 (.050) funding amount (ln) .667*** (.198) .639*** (.199) .199*** (.043) .207*** (.047) equity share 1.638 (1.098) 1.181 (1.100) .560* (.289) .398** (.091) format (dduk) 1.008*** (.317) 1.278*** (.435) .540*** (.085) .641*** (.109) constant -9.324 (2.838) -8.805 (2.807) -1.880 (.644) -1.451* (.698) industry fixed effects yes yes yes yes year fixed effects yes yes yes yes n 623 623 1,334 1,334 r2 .105 .120 aic 778.248 769.616 2,538.073 2531,842 likelihood ratio test of independent equations x2(1) 6.82** 8.68** note. standard error clustered at investor level in parentheses; *** p < .01, ** p < .05 * p < .1 110 american journal of management vol. 25(1) 2025 first, our results show no significant effect of entrepreneur gender on deal cancellations. contrary to our initial hypothesis, this indicates that the gender of the individual entrepreneur or venture team is not linked to legitimacy claims in the pitch, resulting in higher rates of cancellation post-handshake. second, while the simple models identify no significant effect of investor gender on deal cancellation, both models including interaction terms show a significant negative main effect of female investor gender. as hypothesized, this indicates that more female angel investors cancelled their deals after due diligence than their male counterparts. this relates to our hypothesis that female investors are more likely to be presented with exaggerated legitimacy claims in the pitch setting. the negative interaction of investor gender and format, however implies that this main effect for investor gender is only observable in the german format dhdl. notably, the estimates indicate that adding interaction terms increases the predictive accuracy of both models. the number of entrepreneurs and investors involved does not significantly affect deal cancellations. thus, the evidence implies that a larger number of individuals involved in the deal does not allocate risks to the extent that cancellation rates are affected. as expected, the coefficient for funding amount is significantly positive in all models. this indicates that angel investors are more likely to cancel deals when there are large sums of money on the table, suggesting potentially greater legitimacy claims from the entrepreneurs in the pitch but also more rigorous due diligence processes given the greater financial risk for investors. conversely, this means that deals with smaller tickets are more likely to be upheld by both parties. similarly, the coefficients for equity share are slightly positive in models 3 and 4. this means that, after accounting for the likelihood to receive a deal in the first place given the proposed equity transfer, investors are likely to cancel deals resulting in higher stakes and responsibility in the venture. finally, consistent with the descriptive results, we observe a robust main effect of the format dummy variable. this indicates a significantly higher rate of deal cancellation in british format dragons’ den. discussion interpretation of results in the context of prior research behavior and decision-making in startup pitch competitions is characterized by uncertainty, lack of information, and trust between the involved parties. despite the extensive research on information asymmetries and the pursuit of legitimacy in this context, deal cancellations after the initial handshake have not been empirically investigated before. this study offers a unique perspective into this black box of deal cancellations by exploring their occurrence and potential determinants based on a set of observable variables. overall, deal cancellations occur quite often in the sample we explore, indicating that many handshake deals do not complete after production. in line with anecdotal reports from angel investors in various media outlets, we assume that some entrepreneurs use exaggeration, strategic deception, or omit crucial information in the pitch and initial interaction with angel investors, resulting in cancellation after the due diligence process. these cancellation rates underscore the relevance of exploring potential determinants regarding observable characteristics of deals, entrepreneurs, and investors. although we cannot identify a significant effect of entrepreneur gender in either format, our findings indicate a significant negative main effect of female investor gender on deal cancellations in the german startup pitch competition dhdl. this effect is independent of the personal risk profiles and cancellation rates of individual angel investors. it offers a nuanced perspective on gender dynamics in the pitch setting and investment decisions. the absence of an effect regarding entrepreneur gender challenges the general assertions of entrepreneurial gender differences in the pitch context reported in prior studies (balachandra, 2020; balachandra et al., 2019; hohl et al., 2021). while prior research associates male gender with being more pragmatic and deceptive in negotiations (capraro, 2018; grosch & rau, 2017; kray & haselhuhn, 2012) and thus more likely to tell legitimacy lies, our results suggest that entrepreneur gender might not be a decisive factor to influence post-handshake deal outcomes in the specific context of televised startup american journal of management vol. 25(1) 2025 111 pitches. hence, this calls for reevaluating the generalizability of gender-related findings across diverse entrepreneurial settings. conversely, our identification of a negative main effect of female angel investor gender on cancellation rates in the german format aligns with prior research highlighting the challenges faced by female investors. specifically, stereotypes about gender are shown to influence perceptions of competence and credulity (kray et al., 2014). in line with this, our results suggest that female investors might encounter more exaggerated legitimacy claims or strategic misrepresentation in the interaction with entrepreneurs, which is assumed to contribute to higher cancellation rates when the due diligence process unveils discrepancies. this finding underscores the result of considering gender dynamics among entrepreneurs and within the angel investor community when exploring deal outcomes. alternatively, this finding also raises the intriguing possibility that female investors might be more careful and thorough in the due diligence process, revealing flaws that their male counterparts might overlook. this coincides with gender stereotypes about risk aversion, suggesting that women might be better in uncovering critical information after the initial agreement. the psychological phenomenon of “escalation of commitment” might play a further role in this context. it relates to individuals persisting with their decisions, even in the face of contradictory information and negative outcomes, to avoid cognitive dissonance (bazerman et al., 1984; staw, 1997). prior research suggest that the escalation of commitment bias may strongly influence angel investor(devigne et al., 2016; zhou & kato, 2017). in the context of our research, male investors might be more prone to the escalation bias and uphold deals despite encountering flaws during the due diligence process, because they want to adhere to the commitment they made after the pitch. female investors, on the other hand, might demonstrate a more pragmatic approach in response to unfavorable conditions and cancel the deal. the negative coefficient of the interaction of female gender and format introduces another layer to this discussion. it implies that the main effect for female investor gender is primarily observable in the german pitch format while it does not arise in the british format. this format-specific difference might be attributed to varying gender stereotypes across different cultures. the positive association between larger funding amounts and cancellation rates aligns with prior research emphasizing the role of financial risk in due diligence and investment decisions (blaseg & hornuf, 2024). the results indicate that, as the stakes increase, investors adopt a more cautious approach and subject deals to more rigorous scrutiny during the due diligence process. thus, the positive relationship between equity share and cancellations suggests that investors may be more inclined to cancel deals with higher stakes and responsibilities, which may be linked to increased financial risk. the considerable format differences, with cancellation rates being higher in the british format dragons’ den compared to the german format dhdl add to the body of research exploring the cultural context influencing startup pitch dynamics and investment decisions. this difference emphasizes the need to consider cultural and procedural disparities between the two pitch competitions. future research could also expand on the underlying mechanisms driving these gender-specific patterns, exploring whether female investors apply unique decision-making strategies during the due diligence and how these strategies vary with cultural and format-specific dynamics in startup pitch competitions. the results would contribute to a more comprehensive understanding of the many determinants influencing post-handshake deal outcomes and help entrepreneurs navigate diverse entrepreneurial landscapes. limitations and directions for future research a main limitation of this work is the lack of information available about the individual due diligence processes and deal cancellations. given that we can only include variables in our analysis that are observable from the outside, we may still only scratch the surface of understanding why exactly deals are canceled. moreover, we acknowledge a temporal limitation. our analysis focuses on the immediate posthandshake outcomes of deals from televised pitch competitions. in doing so, we neglect the long-term success or failure of the ventures which were or were not funded. future studies could extend the analysis and apply a funding discontinuity approach (kerr et al., 2014). including longitudinal data on the 112 american journal of management vol. 25(1) 2025 subsequent performance and sustainability of startups would allow a more comprehensive perspective of the impact of deal cancellations on entrepreneurial outcomes. second, we must challenge the intent of startups to secure a deal in televised pitch competitions and consider the possibility that deals are canceled by entrepreneurs. our work operates under the assumption that all entrepreneurs who pitch their venture want funding from investors because it increases their chances of success and that post-handshake deal cancellations decisions thus most likely stem from investors. however, it is possible that the televised setting attracts entrepreneurs who want to pitch and secure deals in front of the camera for publicity purposes, and then pursue cancellation of those deals afterwards, because they needed no funding in the first place or found a more attractive deal elsewhere (o’sullivan, 2021). in line with this notion, blaseg and hornuf (2024) found that startups who receive a deal in these televised pitch competitions experience a positive impact from attracting a popular angel investor even if the deal got canceled after the due diligence. besides, some of the deal contracts are reportedly changed into debtbased financing and hence become unattractive for entrepreneurs, which might be a reason for them to rethink and cancel (cayasso, 2022). future studies could address this limitation by identifying which party was responsible for the deal cancellation and conduct separate analyses of the potential determinants. third, a more general constraint is the reliance on publicly available data from media sources, introducing potential biases in the representativeness of entrepreneurial pitches. the startups that are chosen to pitch in front of the angel investors are pre-selected, largely b2c businesses, and at similar early stages and thus cannot be considered representative for the entire startup landscape. in addition, cultural and contextual nuances cannot be sufficiently explored using only two formats. further investigation of various formats with more different cultural settings could offer deeper insights. lastly, the televised setting and perceived desirability of providing capital to startups in need of financial resources may influence the investors’ decision to offer deals in front of the camera, even if their intention to follow through is low. hence, exploring deal cancellations in startup pitch competitions that are not televised would provide a valuable contribution to ongoing research. conclusion the interactions and deals in the context of televised startup pitch competitions enjoy a consistently high level of public interest. reports of post-handshake deal cancellations without further explanation are likely to decrease their credibility and perceived authenticity for the audience and negatively affect prospective entrepreneurs’ motivation. independent of the televised setting, cancellations of deals in entrepreneurial finance have direct negative consequences for entrepreneurs, who do not receive the required capital, as well as for investors, who spent significant time and resources without making an investment. our work constitutes an important first step towards better understanding the occurrence and determinants of deal cancellations. drawing on interpersonal persuasion theory and the concept of information asymmetries in the pitch context, cancellations are interpreted as instances in which the due diligence surfaces crucial information which the entrepreneur did not accurately communicate in the pitch and initial interaction. we then explore their occurrence using observable information on the venture, entrepreneur, and investor characteristics. our findings affect all practitioners engaged in startup pitches, due diligence processes and investment decision-making. both entrepreneurs and investors need to be cognizant that the handshake deals after pitches are not legally binding, that there is a serious risk for deal cancellation, and that they must manage their expectations and strategy accordingly. considering that all handshake deals are subject to a thorough due diligence, exaggerations and misrepresentations in the pitch are likely to be uncovered later. this is emphasized by the overall high cancellation rates in our sample. when legitimacy lies surface, even if they do not result in deal cancellations, they definitely entail disappointment and loss of legitimacy for the venture (garud et al., 2014). hence, to secure funding sustainably and build a trusting relationship with the angel investors, entrepreneurs should provide a positive but most importantly accurate perspective on their venture in the pitch and avoid all kinds of strategic misrepresentation. moreover, based on our findings regarding the relationship between deal outcomes and investor gender, we posit that female investors should american journal of management vol. 25(1) 2025 113 be aware of potential challenges regarding perceived credulity in their interaction with entrepreneurs. they should emphasize their own competence to avoid being misled and be diligent in their decision to offer handshake deals. in conclusion, this study provides novel insights into the occurrence and the multifaceted determinants of deal cancellations in the context of televised startup pitch competitions. at the same time, our findings call for continued research efforts to shed more light on the black box of due diligence processes. ultimately, this will allow to us to deepen our understanding of the complex dynamics that shape angel investor decision-making and prepare the ground for unbiased interactions between entrepreneurs and investors in diverse settings. acknowledgements the video material data that support the findings of this study are available from sony pictures, but restrictions apply to the access to these materials, which thus are not publicly available. the coded data are, however, available from the authors upon reasonable request and with permission from sony pictures. references aykac, t., wilken, r., jacob, f., & prime, n. 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(2017). escalation of commitment in business angel investment decision making: antecedents and consequences. frontiers of entrepreneurship research, 37. ajm 18_2_web_master.pdf american journal of management vol. 25(4) 2025 27 a simulation study of the utilization of a flexible appointment scheduling system john t. simon governors state university many services offer reservations for appointments. often, the available appointment slots are preset, of equal length, and sequentially arranged throughout the workday. customers choose among those slots for the most convenient time slot. instead, if they can be offered a slot precisely to their convenience (if available), it may lead to gaps in the workday that cannot be filled, thus reducing the utilization of the service provider. here, we estimate the amount of under-utilization introduced in such a flexible appointment system using simulation, assuming uniformly distributed demands. this is useful in balancing the service provider's utilization and the customer's waiting time. keywords: appointment scheduling system, flexible appointments, utilization, simulation introduction the service sector is one of the most significant components of our economy, and therefore, the study of service systems utilization is of high importance. some of the common methods used in studying utilization make use of queueing and scheduling models. a basic queuing model (see for example, shortle, thompson, gross, and harris, 2018) assumes that customers arrive at random, wait in line, and are served on a first-come first-served basis. given the arrival rate and service rate, one can compute measures such as the server utilization, average waiting time, and average length of the waiting line. the literature on queueing theory is vast, spanning over more than a century, with some of the earliest work done by erlang in the telephone industry (erlang, 1909). in contrast, scheduling models typically allow the service provider to choose the sequence of service, with the objective of minimizing makespan or tardiness (see, for example, pinedo, 2022). studies in this area are probably older than the egyptian pyramids. in this paper, we examine a specialized scheduling model known as an appointment scheduling system. here, customers make a request for service in a future time slot, and if available, this slot is reserved for them. as more requests come in, the time slots are filled up. typically, the goal is to maximize server utilization, and for this reason, the slots are preset, often in sequential and equal intervals. new demand requests are given the option of choosing from the remaining available slots. given sufficient demand, the entire workday of the server can be utilized. this offers a rich area of discovery for those interested in the scheduling and management of service systems. given their complexity, analytical solutions are difficult to derive for many of these models. there is a wealth of literature (see for example, pritchard, taylor, and belford, 2025) that promotes the use of 28 american journal of management vol. 25(4) 2025 monte carlo simulation in the business curriculum, and these appointment scheduling models are excellent examples of problems that can be investigated through simulation. many of the prior research (such as cayirli and veral 2003, kaandorp and koole 2007) have considered behavioral aspects, probability of no-shows, variability of service times, scheduling rules, etc., but in this paper we focus on a basic question: assuming a clean process (for example, constant service times, no noshows or tardiness), how much of the server utilization is lost if we permit customers to choose any (i.e., not from a preset group) appointment interval if available? we model the customer request as having a length of one and being uniformly distributed throughout the workday. if a requested appointment interval is not available, the appointment may be denied (model 1), or the nearest available interval may be offered (model 2). there are analytical solutions for model 1 assuming infinite demand (mentioned below). in this paper we provide simulation results for both models under finite demand, and indicate a variety of ways this can be extended to answer interesting questions regarding the trade-off between the cost of waiting time for customers and the cost to the service provider due to reduced utilization. if flexible time slots are permitted, model 2 seems to be more natural to follow than model 1. the author is unaware of any prior literature that has considered model 2. more explicitly, the goal is to consider models that allow flexibility in allotting the time slots. for example, say that originally the workday consisted of ten hours, and each service request was for one hour. the typical preset time slots would be the intervals (0, 1), (1, 2), …, (9, 10). the first customer to make a reservation may choose the slot (5, 6), the next customer (1, 2), the next (6, 7), and so on – the resulting utilization is shown in figure 1. given enough demand, and assuming a discrete uniform distribution of customer choice of slots during the workday, it is possible to fill the entire workday without any gap. on the other hand, without preset time slots, the first customer may ask for the interval (4.6, 5.6), the second customer may request (0.8, 1.8), the next (5.9, 6.9), etc., and if those are available, they will be reserved for them – see figure 2. here we will model a customer request as an interval (x, x+1) where x has a continuous uniform distribution in the interval (0, 9). obviously, in this case, we may end up with gaps of less than one hour (like the interval (5.6, 5.9) in figure 2), which cannot be filled, thus leading to a reduction in server utilization. the question here is: how much on average is this reduction? an understanding of this would be helpful in determining whether it is worthwhile to offer this flexible appointment schedule. for example, this flexible system would make sense if the cost of the server is near zero (so server utilization is less important), and the cost of the customers’ time is very high (so the closer they can get to their desired time slot, the less the total system cost). to understand the two models mentioned earlier, again see figure 2: if a new appointment for (4.4, 5.4) is requested, in model 1, we reject the appointment; but in model 2, we offer the slot (3.6, 4.6) instead (the slot (6.9, 7.9) is also available but is farther away). figure 1 preset time slots 0 1 2 3 4 5 6 7 8 9 10 american journal of management vol. 25(4) 2025 29 figure 2 flexible time slots appointment scheduling systems: a brief literature review appointment scheduling systems with preset service slots, as outlined in the previous section, are very common in services such as healthcare clinics, hair salons, hotels, and dental offices. a less common example arose when in order to reduce diesel emissions, the state of california imposed a $250 fine for trucks idling more than 30 minutes in line at the ports. a suggested solution was for trucks to make an appointment at the port (giuliano et. al. 2008). one of the earliest references in this area is welch and bailey (1952), which examined empirical data from a healthcare clinic and proposed an ‘individual appointment rule’ to minimize patient and facility idle time. essentially it calls for scheduling a set number of patients at the start of the workday, and to schedule the remaining at equal intervals. ho and lau (1992), ho, lau, and li (1995), kuiper, mandjes, de mast, and brokkelkamp (2021), and niu, lei, guo, fang, li, gao, yang, and gao (2024) provide good reviews of the existing research. in these studies, allowance is given for variability in service times, customer arrival times, and server availability times, as well as the possibility of no-shows. interestingly there are analogs of the appointment scheduling systems in the studies of street-side parking as well as in physics. consider parking cars (assuming that all cars are of equal length) along a street with no lines demarcating parking spaces. the first car to arrive chooses a random spot (say, chosen uniformly distributed along the length of the street), and let us assume that subsequent cars also choose similar random spots and park if the spot is available without any overlap with already parked cars (but leave if the spot is unavailable). clearly this is identical to the appointment scheduling system (model 1) as described above with flexible time slots (preset time slots would be akin to a street with parking spots marked at equal intervals along the street). weisstein (2003) provides a dynamic visual model for this. in physics, a related problem is that of random sequential adsorption, as reviewed in ramsden (1993). here particles are placed on a solid surface without overlap – this can be modeled in one or more dimensions (the one-dimensional model would be similar to our model). for the parking problem with an infinite source of cars (with the assumption that each new car has a randomly chosen desired parking spot, and leaves the street if that spot is unavailable – again, this is the model 1 mentioned in the previous section), an analytical solution is given by rényi (1958): the ratio of the length of the street utilized to that of the total length of the street, as the length of the street goes to infinity, is approximately 0.7476 (more precisely, it is equal to ∫ exp (−2 ∫ 1−𝑒−𝑢 𝑢 𝑡 0 𝑑𝑢) 𝑑𝑡 ∞ 0 ) (weisstein, 2003). this number is known as rényi’s parking constant. in other words, about 25 percent of the length of the street will be lost due to small gaps that cannot fit a car. on the other hand, if the desired parking spot is unavailable, the usual practice is to find the nearest available spot. this would lead to model 2 mentioned in the previous section. as mentioned earlier, prior literature does not seem to cover this model. our result is that in this case, the loss is about 16 percent for a considerably long street (see below). 0 1 2 3 4 5 6 7 8 9 10 30 american journal of management vol. 25(4) 2025 simulation models and results let us set the service slot length to be one, and the length of the workday to be the variable ‘workdaylength’ (in general, the service slot length is chosen by the service provider based on the service, and the length of the workday is fixed – but for our analysis only their ratio matters, and hence our choice is sufficient). let us also set the variable ‘demand’ to indicate the number of possible service requests for that workday. the utilization of the service facility would be the ratio of the number of services scheduled (recall that they are all of length one, and hence the count and the length are the same) to the workdaylength. in our first model, we will use flexible slots with the request being rejected if the slot is not available. a pseudocode for the simulation is as follows: figure 3 pseudocode for model 1 for a given workdaylength and demand: schedule = an empty list for i = 1 to demand randomvalue = a uniform (continuous) random number between 0 and (workdaylength – 1) newappointment = (randomvalue, randomvalue+1) if schedule is free during newappointment, add newappointment to schedule else ignore the newappointment next i count = number of appointments in schedule utilization = count / workdaylength the average utilization will change with workdaylength – for example, if the workdaylength is 1.5, it is easy to see that the average utilization would only be 0.67 (= 1/1.5) since only one service can (and will) be scheduled. similarly if the workdaylength is 1.8, the average utilization would be 0.56 (= 1/1.8), and for a value of 2, the utilization would be 0.5 (since the probability of precisely timed requests for (0, 1) and (1, 2) is zero). when workdaylength increases to 3, the average utilization would rise to 0.67 (= 2/3). these fluctuations in average utilization will diminish as the value of the workdaylength becomes large, and will converge to rényi’s constant assuming infinite demand. clearly, the average utilization will also change with demand – if demand is low, the probability of workdaylength being filled will also be low, leading to lower utilization. the results of the simulation are given in table 1. each result is obtained from 1,000 iterations of the simulation, and the average value and a 90% confidence interval for the percentage utilization of the server are provided for each result. the simulations were run in python. american journal of management vol. 25(4) 2025 31 table 1 server utilization (as a percentage) for model 1 demand 5 10 50 100 1000 10000 workdaylength 2 50.00 +/0.0 50.00 +/0.0 50.00 +/0.0 50.00 +/0.0 50.00 +/0.0 50.00 +/0.0 5 47.32 +/0.64 56.26 +/0.58 67.3 +/0.52 67.38 +/0.51 69.66 +/0.52 69.46 +/0.52 10 33.84 +/0.41 47.39 +/0.44 66.52 +/0.37 69.03 +/0.35 72.30 +/0.33 72.23 +/0.35 50 9.22 +/0.06 16.89 +/0.10 47.05 +/0.20 59.1 +/0.18 72.60 +/0.14 73.90 +/0.15 100 4.82 +/0.02 9.18 +/0.04 32.74 +/0.12 47.14 +/0.14 71.35 +/0.10 74.23 +/0.10 1000 0.50 +/0.001 0.99 +/0.002 4.76 +/0.008 9.09 +/0.01 47.13 +/0.04 71.57 +/0.03 many insights can be drawn from the results. it is intuitive that the utilization increases with demand for a given value of workdaylength. we see that in each row of table 1, the utilization is increasing (within experimental error) from left to right (except for the row with workdaylength of 2 – this is discussed below). as demand becomes very large (as best seen in the row of workdaylength = 100), the utilization does climb up close to the limit of 74.76 percent derived by rényi (1958). for the row with a workdaylength of 1000, the demand must be considerably more than 10,000 for the utilization to approach rényi’s limit. interestingly, if the demand is equal to the workday length, the utilization is approximately 43 percent for the values given in the table. the dependence of utilization on demand does not seem to have been explored in earlier literature; however, it is relevant since services do not have infinite demand, and often demand and workday length are comparable values. workdaylength can be thought of as the ratio of the available work duration to that of the individual service interval (or in the parking analogy, the ratio of the length of the street to that of a car). for small values of this ratio, utilization would be poor. as mentioned earlier, it is easy to see that if this ratio is 2, the utilization would be 50%, since only the first request would be accommodated – the only way to have 100% utilization is to have the first service request to be either (0,1) or (1, 2), and another request to be the reverse of that, and this has zero probability. this explains the row with workdaylength of 2. larger values of workdaylength permit more flexibility in accommodating service requests – but now demand plays an important role, since only a large demand can fill the possible gaps during the workdaylength. thus, we see in the column for a demand of 1000 that, as workdaylength increases, the utilization initially rises, but after workdaylength reaches approximately 50, the utilization begins to decrease again. for our second model, we again utilize flexible slots; however, if a new requested service interval is not available, we will offer the nearest available interval. here the following pseudocode can be used for its simulation: 32 american journal of management vol. 25(4) 2025 figure 4 pseudocode for model 2 for a given workdaylength and demand: schedule = an empty list for i = 1 to demand randomvalue = a uniform (continuous) random number between 0 and (workdaylength – 1) newappointment = (randomvalue, randomvalue+1) if schedule is free during newappointment, add newappointment to schedule else check if an open interval of length one is available to its left or right if yes, set newappointment to the nearest open interval add newappointment to the schedule if no interval is available, exit the for loop next i count = number of appointments in schedule utilization = count / workdaylength the results of the simulation are given in table 2. each result is obtained from a thousand iterations of the simulation, and the average value and a ninety percent confidence interval for the percentage utilization of the server are provided for each result. these simulations were also run in python. table 2 server utilization (as a percentage) for model 2 demand 5 10 50 100 1000 10000 workdaylength 2 50.00 +/0.0 50.00 +/0.0 50.00 +/0.0 50.00 +/0.0 50.00 +/0.0 50.00 +/0.0 5 74.80 +/0.46 74.52 +/0.47 75.26 +/0.44 74.54 +/0.46 74.48 +/0.46 75.06 +/0.45 10 50.00 +/0.0 79.51 +/0.34 79.47 +/0.35 79.54 +/0.34 79.26 +/0.34 79.87 +/0.34 50 10.00 +/0.0 20.0 +/0.0 83.12 +/0.15 83.22 +/0.15 83.25 +/0.14 83.27 +/0.14 100 5.0 +/0.0 10.0 +/0.0 50.0 +/0.0 83.74 +/0.10 83.68 +/0.10 83.70 +/0.10 1000 0.5 +/0.0 1.0 +/0.0 5.0 +/0.0 10.0 +/0.0 84.14 +/0.04 84.10 +/0.03 as before, we see that within experimental errors the utilization increases with workdaylength (unless restricted by demand). utilization also increases with demand. however, we observe that utilization increases to a level higher than that in model 1, and for a given workdaylength, utilization quickly reaches its maximum value when demand is close to the workdaylength. this is intuitive since when the demand equals workdaylength, no further gaps would be available to accommodate a new appointment. to find a comparable constant to that of rényi’s parking constant of 74.76 percent, we used a longer run (10000 iterations) for the case of workdaylength of 1000 and demand of 1000, and a ninety percent confidence interval for the mean utilization is 84.12 +/0.01 percent (or a loss of utilization of about 16 percent). extensions these simulation models are accessible to undergraduate business students and can be used to explore the outcomes of various service policies. one possibility would be to introduce variability in service times american journal of management vol. 25(4) 2025 33 sought (but once scheduled, there would be no further variability). for specificity, suppose that each service request is for either 0.5 or 1.0 units of time, with equal probability. in the pseudocode for model 2, we can modify the newappointment interval accordingly, and also change the utilization computation to be the ratio of the length of workday utilized to that of the workday. as an example, a simulation result using a thousand iterations for workdaylength of 100.0 and demand of 1000 shows that a ninety percent confidence interval for utilization is 88.7 +/0.06. instead, if we had preset slots of length one, about half would be filled by services of length 0.5, and about half by services of length 1.0, with an overall utilization of 75 percent. so in this special case, offering flexible slots is more efficient than offering preset slots of length one. other possible situations we can assess using minor modifications of the described simulation models are listed below: 1. consider a cost (to the customer) based on the distance of the obtained appointment interval from the requested appointment interval. this cost can be based on the absolute distance, or the square of the distance, or may even be asymmetric in that an earlier appointment is less costly than a later appointment (or vice versa). now we can compare the costs of preset slots versus flexible slots. we can include a cost for the lost utilization to the server as well. 2. consider situations where demand is less than the workdaylength. here we can compare the utilization (and costs) of preset slots versus flexible slots. 3. consider situations where if a requested service interval is unavailable, then only a future interval may be offered. in the case of parking, this would be similar to the case that when a required parking spot is unavailable, one must move forward only. in this situation, we can analyze the utilization of the system for a given demand and workdaylength. 4. consider the case where the demand requests that come early have a higher cost of moving away from the requested interval (assuming that those who make their request early have a higher concern regarding the precise service interval). here costs may be compared between preset and flexible schedule slots. 5. consider a general distribution for service times (which are set at the time of request). we could have preset slots of length given by the maximum value of the service times, or we could have some of the preset slots to be at the maximum value and others at a lower value. these can be compared to the flexible slot schedule (without preset slots) in terms of their utilization. 6. consider customer request distribution that is different from a uniform distribution. for example, instead of requests being uniformly distributed during the workdaylength, we may have a higher likelihood of demand during the mid-value of the workdaylength. again, costs and utilizations can be considered in a variety of situations. conclusion flexible time slots have generally not been considered in the literature for appointment scheduling systems. hence, we have explored it here using simulation to answer the basic question of the loss of utilization in such systems compared to fixed time slots. given a large workday compared to the length of a single service and infinite demand, if service requests are rejected when they overlap with existing service appointments, it has been analytically demonstrated in the literature (renyi, 1958) that the average server utilization will be approximately 74.76 percent. in this paper, we have used simulation to extend the analysis to include the computation of utilization in the case of limited demand. in the range of values tested, we found that when demand is approximately equal to the workday length, only about 47 percent of the workday is utilized. for a large value of workday and an even larger value of demand (such as workdaylength = 100, demand = 10000, in table 1), we find the utilization approaching the theoretical value of 74.76 percent. we have also introduced the possibility of offering the nearest available interval if a service request overlaps with existing service appointments. in this scenario, we find that utilization can be as high as 84.12 percent when the workday is large compared to the length of a single service and demand is sufficient to fill the workday. 34 american journal of management vol. 25(4) 2025 this simulation approach seems to be a promising way to explore these models, and several avenues for further exploration have been suggested. it is also interesting to note the analogies between this model and street parking and random adsorption models in physics. references cayirli, t., &veral, e. 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(2021). decision sciences, 54(1), 85–100. niu, t., lei, b., guo, l., fang, s., li, q., gao, b., . . . gao, k. (2023). a review of optimization studies for system appointment scheduling. axioms, 13(1), 16. https://doi.org/10.3390/axioms13010016 pinedo, m.l. (2022). scheduling: theory, algorithms, and systems. springer international publishing. pritchard, a., taylor, d., & belford, m. (2025). teaching data-driven decision making for inventory analysis with monte carlo simulation. decision sciences journal of innovative education, 23, e12328. https://doi.org/10.1111/dsji.12328 ramsden, j.j. (1993). review of new experimental techniques for investigating random sequential adsorption. journal of statistical physics, 73, 853–877. rényi, a. (1958). on a one-dimensional problem concerning random space-filling. publ. math. inst. hungar. acad. sci., 3, 109–127. shortle, j.f., thompson, j.m., gross, d., & harris, c.m. (2018). fundamentals of queueing theory (5th ed.). john wiley & sons, inc. weisstein, e.w. (2003). rényi's parking constants. from mathworld--a wolfram web resource. retrieved from https://mathworld.wolfram.com/renyisparkingconstants.html welch, j.d., & bailey, n.j. (1952). appointment systems in hospital outpatient departments. the lancet, 259(6718), 1105–1108. american journal of management vol. 25(3) 2025 1 examining the intersection of gender and race in employee engagement jonathan h. westover utah valley university maureen snow andrade utah valley university this study examines differences in employee engagement based on the intersection of gender and race. survey data from over 5,000 employees are analyzed to compare engagement levels and predictors of engagement for white males, white females, males of color, and females of color. results indicate that males report significantly higher average engagement than females overall, and this gender gap is more pronounced for employees of color. regression analyses find common engagement predictors across groups, such as feeling one knows what is expected on the job. however, the strength and significance of various engagement drivers differ based on gender and race. for example, having a best friend at work strongly predicts engagement for white females but not for females of color. adjusted r-squared values from the regression models also show variation in how well the models predict engagement across gender and racial groups. these findings suggest employee engagement is influenced by one's positioning at the intersection of socially constructed categories like gender and race. researchers and practitioners should approach engagement with an intersectional lens that considers how race and gender combine to shape individuals' experiences in the workplace. keywords: employee engagement, gender, race, engagement drivers introduction employee engagement has emerged as a key factor influencing organizational success. higher levels of engagement have been shown to predict important organizational outcomes such as lower turnover, higher productivity and sales, fewer safety incidents, and other benefits (harter et al., 2009). as such, understanding what breeds discretionary effort in the workplace remains a priority for researchers and practitioners. however, employee experiences and the dynamics shaping engagement levels likely differ depending on employees' personal attributes and their positioning within socially constructed categories. previous research has found that engagement levels sometimes diverge between demographic groups such as males and females (harter et al., 2009). however, the literature provides limited consensus on whether the determinants of engagement precisely parallel or take divergent forms between these groups. clarifying these dynamics could help inform customized yet equitable strategies for engaging diverse workforces optimally. additionally, exploring potential contextual variations across intersectional demographic attributes such as gender and race can yield valuable insights for organizations. 2 american journal of management vol. 25(3) 2025 the current study aims to contribute new knowledge to this area of research. through analysis of survey data from over 5,000 employees in the united states, it investigates how key workplace factors relate to engagement separately for different gender and racial groups. specifically, the study evaluates the relative influence of traditional engagement predictors like basic needs fulfillment alongside evolving constructs like "worker activation," which reflects discretionary commitments nurtured through empowering organizational cultures (westover & andrade, 2024). this study seeks to advance managerial understanding of potential parallels and variations in what inspires discretionary effort among different gender and racial groups within the workplace. elucidating these dynamics could provide organizations with strategic direction for taking an intersectional approach to employee engagement initiatives and cultivating an optimally engaged and productive workforce. literature review employee engagement refers to how individuals express themselves “physically, cognitively, and emotionally” in their work roles (kahn, 1990, p. 694). employee engagement research has generally focused on psychological and behavioral determinants, including vigor, dedication, and absorption related to one’s work (schaufeli et al., 2002). recent examinations of the literature have broadened the scope to include factors that enable or limit a leader’s ability to engage employees such as the external environment (e.g., political, economic, and social contexts; business competitors and customers) and internal environment (e.g., organizational culture, job roles, inter-group norms, leadership, trust). other elements include individual traits (e.g., conscientiousness, extraversion); individual psychological conditions (e.g., meaningfulness – work makes a difference; safety – self-expression and actions preserve self-image and status; availability – physical and emotional energy); psychological state (e.g., energy toward work tasks) and behavioral engagement (e.g., voice, problem-solving; active use of cognitions and emotions) (davis et al., 2023). another framework categorizes engagement variables as endogenous (personal resources, positive emotions, recovery and respite activities, engagement – one’s own or as influenced by others) and exogenous (job characteristics, social relations, organizational resources) (boccoli et al., 2022), expanding on earlier studies (rich et al., 2010; saks, 2006; schaufeli & bakker, 2004). given the range of antecedents of employee engagement, factors impacting how it differs by gender and race must be examined. gender gaps in employee engagement in terms of gender, employee engagement findings are mixed. some research has found that men experience more engagement, commitment, well-being, and inclusion than women (nobes, 2023; zoe talent solutions, 2024). however, a global study found that women are more engaged, exhibiting greater commitment, enthusiasm, and positive impact on their organizations (frumar & truscott-smith, 2024). an exception is women in senior leadership who experienced lower engagement than men, possibly due to feelings of isolation and lack of emotional support, resulting in higher turnover. perceived organizational support and employee loyalty are associated with employee engagement, particularly for women and skilled workers (khodakarami & dirani, 2019). another study found no gender differences for work engagement or occupational self-efficacy, but higher career aspirations for men (hartman & barber, 2020). although women believe in their abilities, they may need encouragement and mentorship to aspire to higher positions. diversity practices that emphasize inclusion, involvement, access to communication and resources, and voice in decision making, positively impact engagement (anchu & thampi, 2022; shore et al., 2018). cultural norms and expectations also impact women’s engagement. socially-determined roles characterize women as nurturers and men as providers (eagly, 1987; eagly & wood, 2012). this governs expectations for who participates in the workforce, who works fullor part-time, who cares for children, who should have the highest salary, and which jobs are appropriate (cislaghi et al., 2022). globally, women participate in the workforce at lower rates than men. socially-assigned gender roles create external sanctions that influence women’s choices and occupational preferences (hanek & garcia, 2022; eagly et al., 2020). when women choose male-dominated fields, discrimination, lack of role models (casad et al., 2018; field et al., 2023), and low expectations for success as a result of workplace experiences (meeussen american journal of management vol. 25(3) 2025 3 et al., 2022) may cause them to become less engaged and question their fit, leading to departure (peters et al., 2012; saucerman & vasquez, 2014). inequities in salary and advancement persist (begeny et al., 2020). rather than emphasizing attracting women to male-dominated professions, companies need to examine their cultures to determine how to retain them (casad et al., 2018; field et al., 2023; ryan, 2022). racial differences in employee engagement high levels of employee engagement influence behaviors that improve organizational performance (harter et al., 2002). however, employees’ perceptions of their workplaces differ and impact these outcomes (kang et al., 2023). discrimination in the workplace is negatively associated with employee engagement for racial minorities in the u.s. (lee & li, 2022). racial/ethnic minority workers in government healthcare report lower job and salary satisfaction, fewer training opportunities, less recognition, and less support from supervisors than nonminorities (sellers et al., 2019). black and hispanic employees are more likely to feel discriminated against at work than white workers with white workers less likely to perceive this discrimination (dixon et al, 2002). white workers tend to be less satisfied, have less organizational commitment, and feel less supported when in racially diverse work groups (tsui et al., 1992), and white workers with african american supervisors have more role conflict than those with white supervisors (tsui & o’reilly, 1989). racial diversity can create in-groups and out-groups and decrease productivity unless racially diverse group members have high interpersonal congruence and feel comfortable expressing their differing characteristics (polzer et al., 2002). workers with low levels of engagement reported a lower intent to stay when part of different-race supervisor-worker dyads while workers reporting high levels engagement had higher intent to stay in the same condition (jones & harter, 2005). communicative behaviors with supervisors can mitigate low levels of engagement for racial minorities as can a diverse workplace climate (lee & li, 2022). diverse work environments must be managed effectively, however. facilitating openness, focusing on common purpose, and establishing a caring environment can improve engagement and reduce turnover in diverse work contexts (jones & harter, 2005). low perceived organizational performance, or employees’ interpretation of signals that that indicate their organizations are low-achieving, results in decreased personal performance and motivation, and increases the likelihood of leaving (allen et al., 2003; zeffane & melhem, 2017). for white employees in federal public health agencies, high job satisfaction was associated with high perceived organizational performance to a greater degree than for employees of color (kang et al. 2023). this may be explained by white employees emphasizing recognition and intrinsic rewards while employees of color emphasize extrinsic rewards and diversity programming (lee et al., 2020). priority for career growth may explain why white employees emphasize high perceived organizational performance (kang et al., 2023). perceived procedural justice was lower for employees of color who did not view promotions as merit-based, felt poor performance was not addressed, and reported lack of involvement in decision making. perceived organizational performance and other factors identified contribute to a lack of engagement, particularly for racial/ethnic minorities. summary the literature review illustrates that drivers of employee engagement differ by gender and race, generally finding that both women and racial minorities have fewer positive experiences in the workplace than white men. in some cases, this leads to lower levels of engagement while in others, workers are engaged in spite of these experiences. studies examining employee engagement for racial/minority workers compared to white workers indicates lower levels of engagement for the former. both women and racial minorities face on-going challenges in the workplace such as discrimination, lower pay, lack of advancement, conflict, limited support, and lack of belonging. these can be mitigated by changes in organizational structure and culture (casad et al., 2018; field et al., 2023; ryan, 2022; saks, 2022). based on research identifying employee engagement antecedents such as autonomy, feedback, development, workplace climate, rewards and recognition, support, job variety, and work role fit (crawford et al., 2010; wollard & shuck, 2011), saks (2022) developed a caring management practice framework. 4 american journal of management vol. 25(3) 2025 the framework comprises job design, training, development, flexible work, work-life balance, participative decision making, health and safety, career development, and health and wellness. further research is needed to examine this and similar frameworks to determine their efficacy on employee engagement for different worker groups. hypotheses the literature on racial and gender differences in employee engagement indicates mixed findings. research on how basic needs, individual determinants, teamwork factors, and growth aspects impact engagement for men and women across racial demographic categories is limited. based on the literature and limitations in previous research, this study aims to explore potential differences in the predictors of employee engagement across gender and racial groups. specifically, we propose the following hypotheses: hypothesis 1: male and female workers of all races will report similar levels of employee engagement. hypothesis 2a: basic needs and individual contributions variables will similarly predict employee engagement for male and female workers of all races. hypothesis 2b: basic needs determinants will be more salient in predicting employee engagement for female workers of all races. hypothesis 2c: individual determinants will be more salient in predicting employee engagement for male workers of all races. hypothesis 3: teamwork determinants will be more salient in predicting employee engagement for female workers than male workers of all races. hypothesis 4: growth determinants will be more salient in predicting employee engagement for male workers than female workers of all races. hypothesis 5: worker activation determinants will be more salient in predicting employee engagement for female workers than male workers of all races. research model and design this study utilized an online questionnaire to examine how key factors related to employee engagement may be evolving differently across gender and racial groups. drawing from established scales such as gallup's q12 employee engagement survey (harter et al., 2009) as well as more recent work focusing on employee activation (westover & andrade, 2024), the questionnaire was designed to measure several important constructs. these included employee basic needs, individual contributions, teamwork dynamics, growth opportunities, and employee activation variables. a stratified random sampling approach was used to distribute the survey across various gender and racial demographics in the united states during spring 2024. responses from over 550 employees were obtained and deemed suitable for analysis. american journal of management vol. 25(3) 2025 5 figure 1 research model operationalization of variables we operationalized the study variables according to the approach of harter et al. (2009) and added new survey questions, which allowed us to introduce additional variables in the analysis. see table 1 below. table 1 study variables and measurements variable item dependent variable employee engagement “overall, how engaged are you in your (main) job?” (1) not at all engaged to (10) extremely engaged worker engagement know what is expected “do you know what is expected of you at work?” (1) strongly disagree to (5) strongly agree have what you need “do you have the materials and equipment to do your work right?” (1) strongly disagree to (5) strongly agree do what you do best “i have the opportunity to do what i do best every day.” (1) strongly disagree to (5) strongly agree received recognition “in the last seven days, have you received recognition or praise for doing good work?” (1) strongly disagree to (5) strongly agree 6 american journal of management vol. 25(3) 2025 someone cares about you “does your supervisor, or someone at work, seem to care about you as a person?” (1) strongly disagree to (5) strongly agree someone encourages you “is there someone at work who encourages your development?” (1) strongly disagree to (5) strongly agree opinions count “at work, do your opinions seem to count?” (1) strongly disagree to (5) strongly agree feel job is important “does the mission/purpose of your company make you feel your job is important?” (1) strongly disagree to (5) strongly agree committed to quality work “are your associates (fellow employees) committed to doing quality work?” (1) strongly disagree to (5) strongly agree best friend at work “do you have a best friend at work?” (1) strongly disagree to (5) strongly agree talk about your progress “in the last six months, has someone at work talked to you about your progress?” (1) strongly disagree to (5) strongly agree opportunities to grow “in the last year, have you had opportunities to learn and grow?” (1) strongly disagree to (5) strongly agree understanding of meaning and purpose meaningful work “i have a good sense of what makes my job meaningful.” (1) strongly disagree to (5) strongly agree purposeful work “i have discovered work that has a satisfying purpose.” (1) strongly disagree to (5) strongly agree sense of belonging “i believe that my work group is where i am meant to be.” (1) strongly disagree to (7) strongly agree leadership efficacy “i see myself as a leader.” (1) strongly disagree to (5) strongly agree organizational commitment “i would be very happy to spend the rest of my career with this organization.” (1) strongly disagree to (5) strongly agree controls dummy variables for race, ethnicity, education level, marital status, and state of residence; continuous variables for birth year, full-time years worked in career, and years worked in current organization. statistical methodology a multi-stage analytical approach examined relationships between employees' work experiences, demographic characteristics, and self-reported engagement levels. initial descriptive analyses provided an overview of engagement and activation variable means by race and gender, as well as for the overall sample. differences in average engagement between racial and gender groups were then assessed using t-test analyses to evaluate hypothesis 1. next, ordinary least squares and ordered probit regression models were estimated separately by race and gender to examine the predictive ability of basic needs, individual contributions, teamwork dynamics, and growth factors on engagement for each group per hypotheses 2-3. finally, moderation analyses tested for significant differences between racial/gender subgroups in how activation determinants related to engagement according to hypotheses 4-5. this allowed for the comparison of key drivers of engagement across intersectional identities. american journal of management vol. 25(3) 2025 7 results participant demographics 566 employees participated in the stratified random sample, representing different demographic groups across the united states. all participants were employed either full-time or part-time both before and during the covid-19 pandemic period when the study was conducted. as shown in table 2, males comprised 46.11% (n=261) of the sample, while females accounted for 53.89% (n=305). additional demographic information was collected. as seen in tables 3 and 4, racially 67.67% of respondents identified as white, 19.96% as black, 9.72% as asian, just over 1% as native american or alaska native and native hawaiian or pacific islander, and less than 2% reported another race. when asked about ethnicity, 88.34% were not of hispanic, latino, or spanish origin, whereas 11.66% identified as such. as displayed in table 5, over 44% (n=249) of respondents had attained some college education or less, while under 56% (n=314) held a college degree or higher. table 6 shows that 62.7% of the sample reported being married or cohabitating, while 36.59% identified as single. as shown in table 7, on average respondents were born in 1977. respondents had worked full-time for 20.57 years throughout their career and had spent an average of 13.94 years working for their current organization. table 2 gender of respondent freq. percent female 305 53.89 male 261 46.11 total 566 100 table 3 race of respondent freq. percent white 383 67.67 black or african-american 113 19.96 asian 55 9.72 native american or alaska native 2 0.35 native hawaiian or pacific islander 4 0.71 other 9 1.59 total 566 100 table 4 ethnicicy of respondent freq. percent hispanic or latino or spanish origin 66 11.66 not hispanic or latino or spanish origin 500 88.34 total 566 100 8 american journal of management vol. 25(3) 2025 table 5 education level of respondent freq. percent less than high school 6 1.07 high school diploma 96 17.05 some college, but no degree 147 26.11 bachelor's degree 192 34.1 master's degree 97 17.23 doctoral degree 25 4.44 total 563 100 table 6 marital status of respondent freq. percent married or cohabitating 353 62.7 single 206 36.59 prefer not to say 4 0.71 total 563 100 table 7 other demographics of respondent mean std. dev. birth year 1977.34 13.99 full-time years worked in career 20.57 13.92 years worked in current organization 13.94 86.29 descriptive results table 8 displays the mean scores for employee engagement, employee activation variables, and other key study measures by race and gender, along with significant differences where present. a statistically significant racial and gender difference was found for employee engagement, with males reporting higher average engagement levels than females. while this is the case for both white and non-white males, the divide between men and women is much more dramatic for persons of color. therefore, hypothesis 1, which predicted no difference in engagement by race or gender is partially supported. additionally, several other variables exhibited significant gender differences. specifically, males had significantly higher mean scores compared to females on numerous study variables. additionally, as with employee engagement, the gender divide in mean scores of other study variables is often more pronounced for persons of color. females did not have statistically significant higher average scores on employee engagement or activation variables. previous research has been inconsistent in determining gender differences although men have been found to have higher levels consistent with the findings in the current study (frumar & truscott-smith, 2024; nobes, 2023; sharma et al., 2017; zoe talent solutions, 2024). a m er ic an j o u rn al o f m an ag em en t v o l. 2 5 (3 ) 2 0 2 5 9 t a b l e 8 v a r ia b l e m e a n s a n d t e s t o f d if f e r e n c e s , b y r a c e a n d g e n d e r 1 0 a m er ic an j o u rn al o f m an ag em en t v o l. 2 5 (3 ) 2 0 2 5 american journal of management vol. 25(3) 2025 11 regression results following the approach of harter et al. (2009), we examined the association between employee engagement and the independent variables across multiple regression analyses. the first model (table 9) examined the influence of employee basic needs, individual contributions, teamwork, growth, and control variables on employee engagement, by race and gender. in the second model (table 10), we examined those same areas’ joint influence of all control and independent variables on employee engagement, but we added a series of “employee activation” variables by race and gender, and for the total sample. once these “worker activation” variables were added to the second model, many of the variables in the first model fell out of significance. therefore, the last model (table 11) focuses on the most impactful engagement and activation variables and represents what we consider to be “the best” model. table 9 shows variation in standardized beta coefficient statistical significance for each variable across each model. for white women, “do what you do best,” “someone cares about you”, “feel job is important,” “best friend at work,” and “opportunities to grow” are each statistically significant variables in predicting employee engagement. for white men, “what is needed,” “feel job is important,” “committed to quality work,” and “best friend at work” are each statistically significant variables in predicting worker employee engagement. for women of color, only “do what you do best” is statistically significant in predicting employee engagement. for men of color, “know what is expected”, “what is needed,” and “opportunity to grow” are each statistically significant variables in predicting worker employee engagement. additionally, there were variations in adjusted r-squared values for the female (adjusted r-squared = 0.458) and male (adjusted r-squared = 0.499) ols regression models overall, meaning the model accounted for just under 46% of the variation in employee engagement for women and just under 50% of the variation in employee engagement for men. the adjusted r-squared value was identical for white women and men (adjusted r-squared = 0.530) and males (adjusted r-squared = 0.477), meaning the model is equally predictive for white women and men. adjusted r-squared values for women of color (adjusted r-squared = 0.254) and men of color (adjusted r-squared = 0.592), meaning the model is more than two times more predictive for men of color than women of color. in table 10, there is variation in standardized beta coefficient statistical significance for each variable across each model. for white women, “know what is expected,” “someone cares about you”, “best friend at work,” “opportunities to grow,” and “organizational commitment” are statistically significant variables in predicting employee engagement. for white men, “know what is expected,” “someone knows your development,” “someone talked to you about your progress,” “work with purpose,” and “organizational commitment” are statistically significant in predicting worker employee engagement. for women of color, “someone cares about you,” “work with purpose,” and “where i am meant to be” are each statistically significant variables in predicting employee engagement. for men outside of utah, only “know what is expected,” “where meant to be,” and “organizational commitment” are each statistically significant variables in predicting worker employee engagement. additionally, there were variations in adjusted r-squared values for the female (adjusted r-squared = 0.554) and male (adjusted r-squared = 0.558) ols regression models overall, meaning the model accounted for just over 55% of the variation in employee engagement for women and just under 56% of the variation in employee engagement for men. the adjusted r-squared value for caucasian females (adjusted r-squared = 0.566) is lower than for caucasian males (adjusted r-squared = 0.601), meaning the model is slightly more predictive for white men than white women. the adjusted r-squared value for women of color (adjusted r-squared = 0.500) is significantly lower than that of the value for men of color (adjusted r-squared = 0.630), meaning the model predicts 63% of the variation of employee engagement for men of color and just 50% of the variation in employee engagement for women of color. finally, we took the most impactful engagement and activation variables from the last model, combined with our control variables, to create our best fit model. as seen in table 11, there is variation in standardized beta coefficient statistical significance for each variable across each model. for white women, “best friend at work” is the only engagement variable that is not statistically significant, while “where i am meant to be” and i see myself as a leader” are both activation variables that are not statistically significant. for white men, “know what is expected” and “best friend at work” were statistically significant engagement variables, 12 american journal of management vol. 25(3) 2025 while “where i am meant to be” and i see myself as a leader” are both activation variables that are not statistically significant. for women of color, none of the engagement variables are statistically significant and only “work with purpose” and “where i am meant to be” are statistically significant activation variables. for men of color, only “know what is expected” and “where meant to be” were statistically significant in the model. additionally, there were variations in adjusted r-squared values for the female (adjusted r-squared = 0.554) and male (adjusted r-squared = 0.582) ols regression models overall, meaning the model accounted for just over 55% of the variation in employee engagement for women and just over 58% of the variation in employee engagement for men. the adjusted r-squared values for white females (adjusted r-squared = 0.558) and white males (adjusted r-squared = 0.566) are very similar, meaning the model is nearly equally predictive for both white women and men. for people of color, adjusted r-squared values for females (adjusted r-squared = 0.525) are significantly lower than that of males (adjusted r-squared = 0.606), meaning the model is much more predictive for men of color than women of color; the model predicts about 61% of the variation of employee engagement for men of color and about 53% of the variation in employee engagement for women of color. table 9 model 1 original employee engagement standaridized ols regression results, by gender and location american journal of management vol. 25(3) 2025 13 table 10 model 2 revised employee engagement standaridized ols regression results, by gender and location table 11 model 3 best employee engagement standaridized ols regression results, by gender and loacation revisting hypotheses the study findings allow for a reexamination of the original hypotheses. • hypothesis 1 proposed similar engagement levels across gender and racial groups. however, results indicated males reported significantly higher engagement than females overall, and this gender gap was more pronounced for employees of color. therefore, hypothesis 1 was not supported. • hypothesis 2a predicted basic needs and contributions would similarly predict engagement 14 american journal of management vol. 25(3) 2025 across groups. this received partial support as regression models found some common predictors but also variation in significant predictors between racial/gender subgroups. • hypotheses 2b-2c and 3-4 suggested certain factors would be most salient for specific gender/racial identities. results did not consistently validate these, with significant predictors differing across models. • hypothesis 5 proposed activation factors would impact females more. variation was found in how activation variables predicted engagement in full models across racial/gender groups. overall, most hypotheses received only partial or no validation. hypothesis 1 was not supported, while hypothesis 2a received partial confirmation. however, hypothesized differences in importance of specific predictors for engagement based on intersecting identities (hypotheses 2b-5) were not consistently validated given variability observed between regression models. in summary, empirical findings provided limited evidence to fully support the original hypotheses as posed. a revised employee engagement model the initial conceptual framework and hypotheses only partially captured the complex relationships found between employee engagement, demographics, and workplace factors. while determinants like fulfilling basic needs, enabling contributions/teamwork, and providing growth maintained relevance, the study validated updating the framework to better incorporate the prominent influence of worker activation constructs. the revised conceptual framework in figure 2 positions the multidimensional activation dimensions of purposeful work, sense of belonging, leadership efficacy, and organizational commitment as core influencers of employee engagement rather than separate predictors. this provides a more robust perspective for comprehending engagement in dynamic work settings by conceptualizing activation as central rather than separate or ancillary. by placing activation at the core, the updated model acknowledges research showing engagement depends more on discretionary commitment cultivated through inclusive, empowering cultures rather than solely basic expectations. it also recognizes cross-demographic importance of activation in motivating discretionary effort to maximize well-being and business outcomes. the model understands cultivating activation can inspire extra effort across all groups to achieve optimal individual and organizational results. the revised framework offers insights to guide ongoing study. rather than a fixed state, engagement may vary by context and be shaped by attributes and strategically designed workplace experiences adapting to evolving norms. this presents new avenues for maximizing diverse, thriving workforces through customized approaches tailored to foster high employee activation. american journal of management vol. 25(3) 2025 15 figure 2 revised research model discussion the current study provides new insights into how employee engagement levels and predictors may differ based on positioning at the intersection of gender and race. overall, findings support an intersectional approach to better understanding and fostering engagement among diverse workforces. the identification of significant gender and racial gaps in average engagement levels, with particularly pronounced divides for employees of color, highlights the need for intersectional consideration. organizations should examine whether initiatives benefit all demographic groups equally or inadvertently advantage some over others. tailored engagement strategies may be warranted. results also indicated variability in specific factors predicting engagement across gender and racial identities. while some determinants universally surfaced like feeling informed of role expectations, others showed subgroup variation. this implies engagement initiatives need customized targets for each identity cohort. a one-size-fits-all approach risks misalignment with relevant drivers. positioning worker activation as core to engagement further advances theory. this underscores that engagement depends more on discretionary commitment nurtured through empowering cultures versus solely meeting basic needs. organizations must strategically cultivate a sense of purpose, belonging, leadership efficacy and commitment across intersectional identities to maximize engagement for all. certain limitations warrant discussion. the cross-sectional design precludes causal claims. longitudinal research examining subgroup changes over time and contexts could provide deeper insights. 16 american journal of management vol. 25(3) 2025 additionally, sample demographics may limit generalizability beyond represented identities and industries. more intersectional attributes merit investigation too. findings call for practitioners to apply an intersectional lens considering how worker experiences are shaped by gender and race combinations. customized and equitable approaches calibrated to targeted engagement determinants for each identity cohort seem needed to optimally engage all employees. continued research unpacking intersectional employee experiences can further empower organizations seeking to foster thriving workforces. recommendations for organizations and workers organizations should carefully evaluate existing engagement initiatives to ensure equitable benefits are being derived across different gender and racial identities. a thorough examination of engagement data disaggregated by these demographic factors can reveal where improvements may be needed. customizing engagement targets, strategies, and tactics based on the unique drivers of engagement identified for each subgroup is important to avoid a one-size-fits-all approach that risks inadvertently disadvantaging or failing to optimally engage some identities. simply focusing on universal engagement outcomes without considering identity-specific needs could undermine efforts to cultivate an optimally engaged workforce representative of the diversity within it. concerted, sustained, and multifaceted efforts are needed from organizational leaders and human resource professionals to strategically foster a strong foundation of worker activation among all employees. this involves cultivating a deep sense of purpose, meaning, belonging, leadership efficacy, and organizational commitment through policies, practices, resources, culture and day-to-day interactions tailored to celebrate and address the varied experiences employees bring based on their identities and social positioning. leaders must commit to developing customized approaches that underscore engagement depends more on nurturing discretionary commitment through empowering and inclusive environments rather than focusing solely on meeting basic needs, job requirements or performance metrics. the most promising path forward encompasses holistic engagement strategies that embrace multidimensional activation at their core while still addressing traditional determinants. a balanced and integrated approach is needed, one in which activation-focused tactics aimed at inspiring discretionary effort are prioritized but complemented by continued efforts ensuring foundational needs, contributions, teamwork, growth and resources are optimally fulfilled based on identity contexts. both intrinsic motivation and extrinsic resources require consideration. organizations that view engagement through an intersectional activation lens and commit dedicating sufficient resources to customized activation-oriented programs, initiatives, policies and cultures are poised to realize engaging workforces in a truly equitable and sustainable manner. individual workers must also play a proactive role in exploring how to cultivate their own activation within the social identities characterizing their experiences and positionality. seeking out supportive managers, teams, mentors and professional environments where identities combine optimally to nurture discretionary commitment, leadership, skills growth and holistic wellbeing empowers ownership over one's engagement journey. ongoing skills development, relationship-building, mentoring relationships and equitable access to stretch assignments or sponsorship presenting meaningful leadership opportunities across levels and functions can help foster efficacy and development across all employee identities. with equitable, intersectional and activation-oriented concepts emerging as promising longer-term strategies, organizations and workforces engaged in collaboratively cultivating these approaches are wellpositioned to reap enduring benefits in optimizing employee engagement, performance and wellbeing. an evolving model that embraces dynamic social identities and commits to continuously addressing them portends the type of inclusive, flexible and empowering workforce cultures necessary for ongoing success in our rapidly changing world. american journal of management vol. 25(3) 2025 17 opportunities for future research this initial study serves as a starting point for continuing employee engagement exploration through an intersectional lens. several opportunities exist to build on these findings: • longitudinal research could help clarify causality by examining whether engagement and predictors shift over time differently across subgroups as workplace contexts evolve. a panel design tracking the same participants would address limitations of cross-sectional data. • expanding sample diversity in demographic attributes like age, family status, job level, industries and organization types would enhance generalizability and uncover additional intersectional dynamics not represented here. underrepresented groups warrant tailored examination. • experimental research manipulating activation-oriented tactics could provide causal evidence for their impact on engagement outcomes across identities. comparing customized initiatives to standardized approaches could validate intersectional strategies. • qualitative inquiry complementing quantitative data helps explain engagement experiences through individual voices and contexts. interviews exploring identity-specific needs, barriers and engagement journeys would offer deeper cultural insights. • cross-country comparisons investigating population differences could uncover universal engagement relationships as well as influences of national cultural dimensions on subgroup experiences. • engagement consequences like retention, well-being, performance and business impacts merit continued examination of whether effects remain consistent or vary situationally across intersectional cohorts. • additional psychological measures assessing factors like belonging, empowerment and leader behaviors would offer a more holistic picture of how activation links to engagement across diverse workspheres. with engagement recognition growing, ongoing commitment to advancing knowledge through an intersectional lens empowers evidence-based strategies optimizing this crucial workplace construct for all. addressing diversity's often muted voice advances equity in engagement theory, policy and practice. conclusion this study contributes new knowledge towards advancing employee engagement theory and practice through an intersectional lens. findings indicate engagement levels and predictors are influenced by one's positioning across gender and racial identities in complex ways. significant gaps in engagement between males and females were evident, especially for employees of color, highlighting the need to consider withingroup diversity. while some engagement drivers proved universal, subgroup variation in relevant determinants was also observed. this implies customized, identity-oriented strategies are warranted rather than one-size-fits-all approaches. positioning worker activation core to engagement theory underscores the importance of cultivating discretionary commitment through empowering organizational cultures. limitations prompt additional research employing longitudinal, experimental and qualitative designs to clarify causality while enhancing sample diversity and generalizability. continued examination of activation tactics, identity-based experiences, and engagement outcomes can optimize theoretical and practical understanding. results point to practitioners applying an intersectional lens when considering how identities shape engagement and evaluating initiative impacts. customized approaches addressing identity-matched determinants seem vital to equitably optimize engagement for all. with diversity growing yet often marginalized voices, an ongoing commitment to intersectional scholarship empowers evidence-based strategies for engagement optimization inclusive of diversity's full 18 american journal of management vol. 25(3) 2025 potential. advancing equitable theory, policy, and culture portends successful twenty-first-century workforce models nurturing varied identities as sources of strength. in conclusion, this initial exploration adds intersectionality to employee engagement discourse with implications for researchers continuing this vital work and organizations seeking thriving workforces representative of societies' richness. an evolving paradigm embracing dynamic identities holds promise for employee well-being and performance outcomes, benefiting people and businesses alike. references allen, d.g., lynn, m.s., & rodger, w.g. 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(2024). breakdown of male vs. female employee engagement statistics. zoe talent solutions. retrieved from https://zoetalentsolutions.com/male-vs-female-employee-engagementstatistics/#:~:text=despite%20efforts%20for%20gender%20equality,only%2066%25%20of%20 women%20do 50 american journal of management vol. 24(2) 2024 what happened to intellectual curiosity? robert w. halliman austin peay state university anthropogenic climate change (acc) is a contentious subject with two camps: the warmists and the skeptics. the warmists claim a 97% consensus among the world’s scientists. climatologist, dr. roy spencer postulated that the so-called 97% consensus was not comprised of scientists who did an independent examination of the data but were merely not disputing the hypothesis. this paper examined the extent to which there was acceptance of the acc hypothesis in the academic community and whether the skeptic position was acknowledged. the study found that the acc hypothesis was overwhelmingly accepted with very little acknowledgement of the skeptic position. keywords: climate change, global warming, acc, agw, climate consensus, climate skeptics, co2 & climate, climate policy, climate warmists, intellectual curiosity, acc hypothesis, 97% consensus statement of the problem climate change is controversial with two distinct camps, one being that anthropogenic climate change (acc), aka anthropogenic global warming (agw), is an undisputed fact (the warmists), and the other being that climate change is real but mostly a natural phenomenon minimally impacted by human influence (the skeptics).if this was merely confined to an academic debate, it would not be much of a serious matter other than to stimulate intellectual curiosity in search of the truth. but, it has become much more than an academic debate because of the push by the warmists to establish national and international policies to mitigate the impact of climate change, policies that can substantially ruin world economies and the freedoms and standard of living of societies throughout the world. the warmists would frame the issue of addressing climate change as a moral imperative to protect the planet from imminent catastrophic damage. the skeptics would frame the moral imperative as assessing the facts first before committing trillions of dollars to mitigate a problem that might not exist. initially, the intent was to do a study to determine the extent to which undergraduate students believed in climate change and the necessity to do something about it. as the literature review began, it was striking that most studies seemed to claim evidence of acc exists but never provided such evidence. for example, the national research council (2011), made pronouncements about climate change and human causes without citing empirical studies. what was observed was an apparent blind acceptance of the anthropogenic climate change hypothesis without an analysis of the scientific evidence supporting the hypothesis. statements of belief were observed, with citations to other works as evidence that turned out to be more than mere statements of belief. for example, one study claimed that there was overwhelming evidence of anthropogenic climate change and cited another study as such evidence. on checking the other study, it merely claimed the often-stated 97% consensus, without providing evidence of the 97% consensus, or any american journal of management vol. 24(2) 2024 51 other scientific study supporting acc. dr. roy spencer (2018) made an interesting comment. he said most of the 97% were not making independent conclusions based on an independent examination of the evidence but were merely not disputing the claims because they have not seen the evidence. additionally, no matter which database was searched, all that was found was article after article and study after study that had as their premise that acc was real, supported by science, and a threat to the planet, without any supporting evidence other than someone else’s claim. it is acknowledged that the databases to which this writer was directed, based on the keywords used, were primarily non-science in nature. this has led to a change the direction of the research. this study aims to examine the extent to which the published studies, in non-science journals, premised on the reality of anthropogenic climate change and its threat to the planet, have bothered to check the scientific evidence or merely accepted what others have said about the matter. it would seem prudent that researchers doing studies with such a premise, would include in their literature reviews a substantial section of appropriate scientific studies providing evidence of acc and the threat it poses to the planet rather than mere statements of faith that such evidence exists. it would also seem prudent to provide evidence and discussion supporting the skeptic position with a discussion of why one position is logically more compelling than the other. review of the literature historical background a think tank called the club of rome, published a book in the early 70s called the limits to growth (meadows, meadows, randers, and behrens, 1972.)this work may have been the precursor to the u.n.’s agenda 21.agenda 21, published by the un conference on development and environment, held in rio de janeiro in june, 1992, is a detailed united nations plan to promote “sustainable growth.” agenda 21 claimed that developed countries’ consumption patterns were not sustainable and that the developing countries had no chance to catch up. it called for a change in consumption, massive redistribution of wealth, slower population growth, and a move from fossil fuels to more sustainable sources of energy. (http://www.un.org/documents/ga/conf151/aconf15126-4.htm) the club of rome’s warnings and solutions were quite similar to that outlined in agenda 21. “sustainable growth” was the goal and theme of both the limits to growth and agenda 21. co2 emissions from fossil fuels was also mentioned by meadows, et.al, as a pollutant but they did not go into much detail on it other than to say that the level of emissions was also growing exponentially. the solution offered by the club of rome was for the developed countries to slow their population growth, slow the consumption and use of fossil fuels, and transfer more wealth to underdeveloped countries so that their economic growth could reasonably catch up to the developed countries. again, the problems and solutions proposed by the club of rome are strikingly similar to those found in agenda 21. the anthropogenic global warming (agw) hypothesis has its historical roots in the work of dr. roger revelle (vance, 2014) revelle was an oceanographer with the scripts institute and was its director from 1950 to 1964.while at scripts, revelle observed the increase in atmospheric co2 and wondered about its impact on the atmosphere and the oceans. he wrote a paper on the increase ofco2 in the air and postulated regarding its impact on global warming. he had students participate in some of his research, including al gore, jr. (vance, 2014). the paper received wide acclaim and set environmentalists on making global warming a key issue. al gore was sufficiently impressed with revelle’s paper on co2emissions that it became the basis for his 1992 book earth in balance and the resulting slide show an inconvenient truth (vance, 2014.) by 1988, revelle started to have doubts about co2 being a serious greenhouse gas and began to write papers expressing his doubt, which fell short of repudiating his earlier work. revelle ultimately apologized that his research led people in the wrong direction regarding global warming (vance, 2014). revelle’s about face on global warming and the role of man-made co2 did not get the same attention that his earlier hypothesis received. regardless of what revelle said now, the environmentalists continued to accept his earlier work as gospel regarding co2 and global warming. 52 american journal of management vol. 24(2) 2024 besides impressing al gore, revelle’s work, blaming co2 for global warming, must have impressed someone at the united nations for, in 1988, the u.n. formed the intergovernmental panel on climate change. (ipcc)(http://www.ipcc.ch/organization/organization.shtml.) the u.n. appears to have found the “hot button” it needed to strengthen its relevance as a world body and help propel the implementation of agenda 21.the ipcc has been the driving force behind the agw movement ever since, such that global warming became a key plank in the u.n.’s agenda 21 plan at the united nations conference on environment and development in rio de janeiro in 1992.beginning in 1995, the u.n. has been holding annual climate conferences with the participants of the rio conference. the warmists as stated above, there are two camps regarding anthropogenic climate change (acc), aka anthropogenic global warming (agw), the “warmists” and the “skeptics”. the warmist camp is rooted in the work of the u.n.’s intergovernmental panel on climate change (blanchfield, d.s., 2022), and the proclamations of the national oceanic and atmospheric administration (noaa) (2024). the ipcc began in 1988, and sought to bring together scientists worldwide to study and evaluate the planet’s climate. since its beginning, the ipcc has issued six assessment reports, each becoming more alarming regarding the trend of the warming of the planet and the likely catastrophic impacts on humans and other plant and animal species (blanchfield, d.s., 2022).the ipcc has concluded, and presents fairly convincing evidence, that the alarming progression in the planet’s warming is due to the burning of fossil fuels and human agricultural practices that spew an ever increasing amount of co2, and other greenhouse gases, into the atmosphere (blanchfield, 2022).the ipcc’s assessment reports, apparently, have been convincing enough to convince 196world leaders to sign on to the paris climate accord, in december 2015.another convincing claim is scientists’ often stated 97% consensus that co2 is causing runaway global warming. this claim is often stated in the academic articles as the basis for believing in anthropogenic climate change (wacholz, artz, & chene (2014); sauer, capps, d., jackson, & capps, k. 2021; todd, c., & o’brian, k. 2016; bedford, d. 2016; dessler, a. 2024; sahin, i̇. d. i̇. l., & kocak, o. 2024; zimmerman, j. & robertson, e. 2017). many “warmist” academics writing on climate change hold the skeptics in disdain, calling them science deniers (zimmerman, j. & robertson, e. 2017). zimmerman and robertson (2017) went as far as to say that climate change is so overwhelmingly accepted by the science community that discussions of climate change that might include the skeptic position should not be allowed in schools. they claim that climate change deniers “hold unscientific beliefs” without any scientific evidence supporting their beliefs. paliewicz, et.al. (2017) were stronger in their disdain for skeptics saying that the skeptics “contradict reality” that acc “presents perilous risks,” and that the skeptics “distort credible consensual scientific conclusions using plainly absurd arguments.” nation and feldman (2022) said “knowledgeable people agree” on acc and “laypersons” dispute the acc hypothesis, implying skeptics lack knowledge of the science. nation and feldman (2022) also said politicians in the trump administration misrepresented acc. many in the “warmist” camp seem alarmed at students’ lack of concern regarding acc. beisermcgrath, l., & bernauer, t. (2021) worried that skepticism is more widespread than surveys indicate because respondents tend to misrepresent their skepticism. the authors were concerned that political leadership made climate change skepticism more socially acceptable, and that we need to “educate better.” dunlap (2009) stated that the united states has been a major impediment to climate change policy because of widespread skepticism due to strong media portrayal of acc as questionable. wachholz, et.al. (2014) said that “higher education needs to expand its educational efforts to ensure that all university graduates understand the scientific consensus and are actively engaged as part of the solution.” in their paper, painter, j., ettinger, j., holmes, d., loy, l., pinto, j., richardson, l., thomas-walters, l., vowles, k., & wetts, r. (2023), makes it sound like skepticism is rampant and extensively represented in the various media. painter, et.al., further state that there is a need to know the extent of the skepticism in order to develop ways to counter it. de beukelaer, s., vehar, n., rollwage, m., fleming, s. m., & tsakiris, m. (2023) worried that many people completely deny acc despite increasing evidence of acc. walter, l. f., mifsud, m., molthan-hill, p., nagy, g. j., lucas veiga ávila, & amanda, l. s. (2019) attempted to measure the extent american journal of management vol. 24(2) 2024 53 of skepticism in universities and found the response to acc to be patchy. zimmerman and robertson (2017) said acc should be taught in schools but students should not be allowed to discuss acc vs. the skeptic position. sahin and kocak (2024) said acc should be taught in schools and studied ways to teach acc more effectively. authors also called co2 a harmful gas. whitehead, k., & helling, m. k. (2023) stated that combating acc should be taught as an ethical mandate. skeeter, w. j., reed, j. r., cissell, j. r., islam, r., & keellings, d. j. (2019) found that only 60% of people believe humans cause climate change and said skepticism was due to a lack of knowledge. bedford (2016) affirmed that skepticism was due to a lack of knowledge from not being properly educated and said we need to find ways to better educate college students. the warmists tend to also be alarmists. yang, h, zhou, y., & li, y. (2023) claimed to provide theoretically and numerically evidence that, in the long run, the only way to control global warming is to reduce greenhouse gases. amnuaylojaroen, t (2023) claims greenhouse gases have resulted in extensively documented consequences and cite another work by himself and parasin, n. (2022). amnuaylojaroen (2022) claims an imminent and urgent threat of unprecedented and intense heat events exists. hale, g. (2024) assumes acc is a fact and that climate disasters resulting from acc are increasing. gupta, s. (2023) claimed 2023 was on track to be the hottest year on record. beach, r. (2023) said we are heading toward a climate crisis. cordeiro & dotterl, predicted that surface temperatures would increase by 5.7 degrees celsius by the end of the 21st century. the skeptics contrary to what the “warmists” would claim, the skeptic position is not that extreme, nor is the skeptic position without solid scientific evidence. many in the skeptic camp are climate scientists in their own right, such as dr. roy spencer, dr. william happer, dr. roger pielke, dr. judith curry, dr. willie soon, dr. craig idso, dr. bob carter, dr. bjorn lomborg, dr. pat michaels, and many others, as well as professional meteorologists such as joe bastardi and anthony watts. in fact, in 2016, over 31,000 american scientists and academic professionals signed a petition urging president obama to not spend money combating agw (http://www.petitionproject.org}. more recently, over 1.600 scientists have signed a statement declaring there is no climate emergency (global climate intelligence group. 2023). the 31,000 plus signatories of the petition project and the 1,609 signatories of the global intelligence group should put to rest the notion that global warming is “settled science,” embraced by 97% of scientists, as was stated by president obama. warmists calling skeptics “science deniers” (zimmerman, j. & robertson, e. 2017), or uneducated people making absurd statements without scientific evidence (paliewicz, et.al. 2017; nation and feldman. 2022), is far from the truth. for example, noted skeptic roy spencer has his ph.d. in meteorology and has been working in the field for 40 years, and became the principle research scientist at the university of alabama in huntsville (spencer, r. 2008). dr. spencer does not deny the climate is changing or that co2 causes some warming. but he disputes the claims that co2 is the primary driver of climate and that we are facing a climate emergency (spencer, r. 2018). dr. spencer states that the direct warming by co2 is minimal. the main question is whether such warming gets amplified by other mechanisms or is muted by the same mechanisms, i.e. the mechanics of cloud formations, water vapor, precipitation systems, etc. (spencer, r. 2019). dr. spencer elaborates by saying the mechanics of cloud formations, and other systems, are not very well understood by scientists, at least not sufficiently enough to predict what will happen in response to the small amount of heating from co2.there are too many variables at play. dr. spencer (2019) also states that “satellite observations suggest an in-sensitive climate system” exists that minimizes the warming effect of co2 rather than amplifying it.if the climate is insensitive, the extra co2 we pump into the atmosphere cannot cause the observed warming of the last 100 years. dr. spencer believes the warming was caused by the pacific decadal oscillation which produced stronger el ninos (spencer, r. 2019). one of the favorite talking points of the warmers is that the excess co2 in the atmosphere will be absorbed into the oceans and cause the oceans to become acidic, harming marine life. spencer (2018) and steele (2017) refute the claim by describing the process whereby co2 is initially dissolved into 3 forms of inorganic carbon (dic), making the surface water ph drop slightly. the dic is then turned into particulate organic carbon through photosynthesis, which raises ph. this process creates and maintains a relative 54 american journal of management vol. 24(2) 2024 balance of ph that does not change significantly over time (steele, 2017). ocean ph has dropped from 8.2 a few hundred years ago to 8.1 today. this is not a significant drop and the value remains alkaline, not acidic (spencer, 2018). additionally, research indicates that additional co2 entering the ocean is beneficial to marine life (spencer, 2018). dr. ferdinand engelbeen (2007) makes a convincing case that the increase in co2 in the atmosphere is from burning fossil fuels. however, he further states that regardless of the origin, the increased co2 has a minimal influence on global temperature or climate (engelbeen, 2009). dr. javier vinos (2024a) presents an extensive scientific explanation of how tree rings can be used as proxies for determining the level of solar activity and the period in which that solar activity occurred. tree rings are not so effective as a proxy for temperature because too many other variables contribute to tree growth. dr. vinos explains that cosmic rays from solar activity collide with nitrogen to form the carbon 14 isotope (c14). the c14 combines with oxygen to form radioactive co2, which is breathed in by trees and used to develop the cellulose that forms the tree rings. each tree ring records the amount of c14 in the atmosphere that year.c14dating is also used to determine the time in which that growth occurred. therefore, c14 can give us two measurements: the level of solar activity that year and the approximate year in which that solar activity occurred. by graphing these two measurements and comparing the graphs to recorded history, one can see that low levels of solar activity coincide well with periods of extreme cold and high levels of solar activity coincide well with warm periods. this suggests that solar activity is the primary mechanism for climate change. in addition to academic articles published in journals and other media, a growing body of literature (books), mostly authored by ph.d’s in the climate sciences or related fields, presents the skeptic position and provides a wealth of scientific evidence in support. some of the experts published are spencer, r. (2017a, 2017b, and 2018), bastardi, j. (2018 & 2019), ball, t. (2014 & 2016), bright-paul, a. (2014), morano, m. (2018), salby, m. (2012), vance, a. (2015), berry, e. (2020), wrightstone, g. (2021), deweese, t. (2018), moore, s. (2016), goreham, s. (2017), pielke, r. (2014), and watts, a. (2017).these are just a few of the experts, most with ph.d’s, who have published books available in any bookstore or amazon. for this reason, there is a serious question regarding the due diligence of academics who say skeptics are uneducated people who make absurd comments without supporting scientific evidence. methodology the sample for this study is drawn from the gale business database of journal articles, accessed through austin peay state university library. gale’s business database contains 2,712 academic journals, with articles dealing with various business topics. the search topic was “climate change” in order to limit the sample to articles dealing with climate change in some manner. the gale databases sort the articles in order of relevance and to the filters: journal articles, peer-reviewed, and full text available. the sample was also limited to peer-reviewed articles where the full text of the article was available, with its cited sources. the reasoning for this limitation is the fact that abstracts do not provide a list of cited sources, and abstracts often are too abbreviated to provide the writer a meaningful base to answer the research questions. while supposedly peer reviewed, book reviews and short, opinion only, articles with no references were excluded in the sample. a total of 270 papers were examined for the sample. each sampled paper was scanned, and those of the cited authorities, to answer the following questions: 1. did the author accept the acc hypothesis as fact? yes or no. 2. did the author cite authorities for the acc hypothesis? yes or no. 3. if question #2 is “yes”, were the cited authorities available as full-text articles? yes or no, otherwise “n/a.” 4. if question #2 is “yes”, are cited authorities scientists? yes or no, otherwise “n/a”. 5. did the author cite one of the un ipcc assessments as the authority? yes or no. 6. if question #2 is “yes”, do cited authorities present empirical evidence? yes or no, otherwise “n/a’. 7. did the author acknowledge the skeptic position on acc? yes or no. american journal of management vol. 24(2) 2024 55 8. if question #7 is yes, did the author discuss both positions evenly? yes or no, otherwise n/a. 9. if question #7 is yes, was the skeptic position portrayed accurately? yes or no, otherwise n/a. 10. were skeptic authorities cited? yes or no. 11. if question # 7 was answered “yes”, did the author provide reasoning for why the acc hypothesis was more scientifically accurate than the skeptic position? yes or no. an excel spreadsheet was used to record answers to the questions. each line/row of the spreadsheet represented one record. the author’s name and date of publication was recorded for the purpose of avoiding duplication of records. the articles were reviewed in the order in which they appeared in the database because it was assumed that articles are submitted for publication randomly and enter the databases randomly. the order of appearance in the database was pure random established by the filters applied. question 1 was answered in the affirmative if the sampled paper’s author made clear, declarative statements regarding acc, or the context of mentions of acc were clearly indicative of belief in acc. question 3 was answered in the affirmative if the cited authority could be found on the internet as a full-text document. the question was answered negatively if there was only an abstract, and/or a subscription or payment was required to view the full text. some searches received a “page not found” message, generating a “no” for question 3. known weaknesses in the study are questions 4 and 6. if the surveyed studies cited the un assessment reports, question 4 was answered with “yes” because the ipcc has scientists contributing to the report. regarding question 6, the question could have been refined to be more precise. cited authorities presenting observational data were regarded as providing empirical evidence. if the cited source was used for reasons other than to support the belief in acc, the question regarding empirical evidence was answered “no” because the study merely relied on statements made by the cited authorities or the un ipcc. for example, if the cited authority was used to support the claims of the impact of climate change in the future, question #6 was answered in the negative, because projections based on models are not empirical evidence. question #6 does not address whether the author making the citation actually reviewed the empirical evidence, but only whether such evidence was available in the cited authority. nor does the question address whether the empirical evidence links anthropogenic increases in co2 to global warming, climate change, or adverse weather. this study does not evaluate the data quality presented in cited authorities. findings table 1 frequency distribution of the responses to the research questions yes no n/a % yes % no % n/a question 1 259 11 0 95.9 4.1 0.0 question 2 129 141 0 47.8 52.2 0.0 question 3 97 29 144 35.9 10.7 53.3 question 4 100 34 136 37.0 12.6 50.4 question 5 95 175 0 35.2 64.8 0.0 question 6 95 49 126 35.2 18.1 46.7 question 7 31 239 0 11.5 88.5 0.0 question 8 7 24 239 2.6 8.9 88.5 question 9 7 24 239 2.6 8.9 88.5 question 10 7 263 0 2.6 97.4 0.0 question 11 1 30 239 0.4 11.1 88.5 no further statistical analysis was performed. the raw numbers speak for themselves. of the 270 papers surveyed, 259, or 95.9%, clearly expressed acceptance of the anthropogenic climate change hypothesis 56 american journal of management vol. 24(2) 2024 without question. of the 259 that expressed acceptance of the acc hypothesis, only 129 (47.8%), less than half, bothered to cite an authority for the acc hypothesis. of the 129 cited authorities, only 100 were authored by scientists. given that only 97 of the sample (35.9%) cited authorities with full-text documents, it begs the question of whether the authors actually checked the cited authority with any level of thoroughness. were the authors accepting acc blindly without examining the data? only 31, 11.5%, of the 270 papers surveyed acknowledged the skeptic position. of that 31, only 7 (22.5%), or 2.6% of the sample, bothered to cite a skeptic authority or present the skeptic position in an objective manner, and only 1 out of 270 bothered to present an argument for why they thought the acc position was more believable. discussion what is bothersome is that only 11.5% of the papers sampled acknowledged the skeptic position, only 2.6% of the papers sampled bothered to look at skeptic authorities, and only 1 (.4%) bothered to evaluate the skeptic argument. it is also bothersome that less than half of those who express belief in acc cited any authority for such belief. this begs the question of where is the intellectual curiosity? when there is an opposing position with sound scientific backing, how does the blind acceptance of the acc hypothesis as the fundamental premise for the research impact the quality and soundness of the research presented in the sampled papers? this is a critical question when study authors are concluding, making predictions, and making recommendations based on climate projections that may not be accurate. for example, al gore predicted the arctic would be ice-free by 2013 with florida and new york under several feet of water from the rising sea level. what would people think if new york city and coastal areas of the east coast, based on al gore’s predictions, shuttered businesses, apartment buildings, homes, etc. and permanently evacuated, such that miles and miles of coastal areas became ghost towns, only to realize several years later the prediction never materialized? 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(2017). the case for contention: teaching controversial issues in american schools. university of chicago press. https://doi.org/10.7208/9780226456485 american journal of management vol. 24(3) 2024 1 job satisfaction and generational difference: the shifting nature of the workplace maureen snow andrade utah valley university jonathan h. westover utah valley university silvia clark utah valley university angela schill utah valley university this study investigates job satisfaction across different generational cohorts within the workforce. it explores how intrinsic rewards, extrinsic rewards, work relations, work-life balance, and employee activation variables influence job satisfaction among these groups. a web-based survey was conducted across the united states, involving 566 participants. regression analysis was used to identify significant predictors of job satisfaction for each generational cohort. the results revealed that interesting work significantly predicts job satisfaction for all generations, with the strongest impact observed in generation z. baby boomers, generation x, and millennials reported high levels of satisfaction with pay and relations with management. the study highlights distinct generational preferences, contributing to a nuanced understanding of job satisfaction drivers. keywords: job satisfaction, generations, intrinsic rewards, extrinsic rewards, work-life balance, worker relations, employee activation introduction in the contemporary workplace, understanding the diverse factors contributing to job satisfaction is critical for fostering a productive and engaged workforce. as the generational composition of the workforce evolves, it becomes imperative to examine how different age cohorts perceive and prioritize aspects of their work life. this paper examines job satisfaction across four main generational cohorts—baby boomers, generation x, millennials, and generation z—each shaped by unique socio-economic conditions and technological advancements during their formative years. historically, job satisfaction has been influenced by intrinsic and extrinsic rewards (ansori et al., 2022; wood, 1974), work relations, and work-life balance (andrade et al., 2019; haar et al., 2014). however, 2 american journal of management vol. 24(3) 2024 with the shift in workplace dynamics and expectations, particularly in the aftermath of the covid-19 pandemic, these factors may hold different significance levels for each generational group. millennials and generation z, for example, have demonstrated distinct preferences for flexibility and purpose-driven work, contrasting with earlier generations who placed greater emphasis on job security and hierarchical advancement (chillakuri and mahanandia, 2018; pasko et al., 2020; parry and urwin, 2011). this study utilizes a comprehensive survey distributed across the united states to gather empirical data on job satisfaction among different generational groups. by integrating theoretical frameworks with contemporary data, this paper investigates the shifting paradigms of job satisfaction and provides actionable insights for organizations striving to accommodate a multigenerational workforce. through this analysis, we seek to contribute to the broader discourse on employment satisfaction, exploring how generational identities can influence workplace dynamics and employee retention strategies. literature review extensive research has been published on the antecedents of job satisfaction in a variety of contexts and for different populations of workers (abate et al., 2018; andrade et al., 2019, andrade, miller, and westover, 2021; andrade, schill, westover, and king, 2021;andrade et al., 2023; conference board, 2022; hall et al., 2023; jena and nayak, 2023; olafsdottir and einarsdottir, 2024; o’sullivan, 2022; zou, 2015). four categories of variables capture much of this research: intrinsic rewards, extrinsic rewards, work relations, and work-life balance. global surveys indicate that stress, dissatisfaction, and lack of happiness are leading causes for people seeking new jobs with nearly half of respondents indicating increasing expectations for work happiness (indeed, 2022). in canada, lack of happiness, or a sense of well-being in a job, is second only to pay in reasons for turnover (indeed, 2021). the great resignation illustrates the extent to which employees are leaving jobs for greater flexibility and work-life balance (bureau of labor statistics, 2024; harter, 2022; microsoft, 2021). since the pandemic, employees have opted to work at home where feasible or advocate for hybrid work arrangements to achieve work-life balance (office for national statistics, 2022). however, this may have negative repercussions due to gender inequalities (partridge, 2021). a strand of research that has been minimally examined is differences in job satisfaction among generational cohorts. individuals growing up in the same period experience similar social and historical events, influencing their attitudes and behaviors (mannheim, 1952). the generations that comprise today’s workplace are as follows: baby boomers (born 1946-1964), generation x (born 1965-1976), generation y/millennials (born 1977-1995), and generation z (born 1996 and later) (robinson, 2018). studies measuring generational work values such as growth, loyalty, security, hard work, comfort, work attitudes, and personality have failed to identify consistent patterns, but show that employees from all generations have a sense of personal accomplishment and are similarly satisfied (kowske et al., 2010). a meta-analysis of generational differences and work outcomes (e.g., job satisfaction, organizational commitments, turnover intent) found no generational differences (costanza et al., 2012). in another study, variation in job satisfaction across generations was minimal. however, millennials reported more overall company satisfaction and satisfaction with security, recognition, development and advancement. at the same time, boomers and gen xers had similar satisfaction levels with pay, benefits, turnover, and work characteristics (kowske et al., 2010). boreout, characterized by boredom and apathy due to lack of mental stimuli, was found to negatively impact career, life, and job satisfaction for both gen xers and millennials in the service industry in nigeria (abubakar, 2020). for it workers in india, employee engagement was identified as a means of providing millennial employees with greater autonomy and control in their work, thereby enhancing job satisfaction and addressing high attrition (jena and nayak, 2023). in the banking industry, generational identity did not show a relation to turnover intention (abate et al., 2018). millennials are characterized by high self-esteem (holt et al., 2012) and a lack of understanding of the relationship between effort and performance (alexander and sysko, 2011; ng et al., 2010) leading to lower long-term job commitment (u.s. department of labor statistics, 2013), particularly when they receive american journal of management vol. 24(3) 2024 3 negative performance feedback and low rewards (laird et al., 2015). entitled employees who dislike feedback and find it harmful to self-esteem have been found to have low job satisfaction (harvey and harris, 2010; harvey and martinko, 2009), but with exceptions where accountability is high (laird et al., 2015). millennials may be more likely to quit jobs if they experience high stress even though they lack options due to inexperience (matin et al., 2012). in contrast, boomers and gen xers may stay in jobs despite being unhappy due to a lack of skill currency (abate et al., 2018). dissatisfaction can cause lower-quality customer service and job burnout (lu and gursoy, 2016). millennials and xers have been shown to value their jobs and potential for promotion yet lack long-term commitment, although effective management practices, rewards, and recognition contribute to retention for these generations (pena, 2013). for millennials, organizational type affects job satisfaction, specifically, having a voice in decision-making in independent organizations and opportunities for growth in corporate organizations (muskat and reitsamer, 2019). other studies have found that millennials value task direction (morton, 2002; zemke et al., 2000), leadership, and mentoring (gursoy et al., 2013) as well as opportunities for career growth (kong et al., 2014). satisfaction for these employees is founded in organizational support for goal achievement. a comparison of australian gen xers and boomers found that boomers had higher levels of job satisfaction and a lower likelihood of quitting, consistent with generational characteristics (benson and brown, 2011). a weak relationship was found for commitment. predictors of job satisfaction included job security, resources, and co-worker support for boomers with promotion, role ambiguity, and supervisor support predictive for both. benefits, promotion, and supervisor support predicted organizational commitment for both generations with job security, role ambiguity, and resources predictive only for boomers and co-worker support only for gen xers. finally, pay level, promotion, role conflict, and supervisor support correlated with willingness to quit for both groups with a lack of co-worker support salient only for gen xers. these findings indicate specific differences across the two generations as well as a number of commonalities, suggesting a need for awareness on the part of managers, and policies and work cultures that reflect generational distinctions. the various studies cited indicate the challenges and importance of managers understanding generational identities to increase job satisfaction, performance, and customer service and retain qualified, effective employees. drivers of job satisfaction may differ by generation, but research findings appear to indicate that workers from all generational cohorts find satisfaction in their work. research model and design to understand how job satisfaction varies across generational cohorts, it is essential to consider the distinct socio-economic contexts and formative experiences that shape each generation’s work values and expectations. baby boomers, who experienced economic stability and traditional work hierarchies, often prioritize job security and extrinsic rewards such as pay and benefits. in contrast, generation x, having witnessed economic fluctuations and the rise of dual-income households, places importance on both intrinsic and extrinsic rewards, valuing autonomy and career advancement opportunities. millennials, entering the workforce during economic recessions and technological booms, seek flexibility, meaningful work, and positive work relations. generation z, the digital natives, prioritize work-life balance, purposedriven work, and supervisor support (close and martins, 2015). given the gap in the literature with limited research on generational differences in job satisfaction variables based on generational characteristics, we propose the following hypotheses: hypothesis 1a: intrinsic rewards influence job satisfaction more strongly among younger generations (millennials and generation z) compared to baby boomers and generation x. hypothesis 1b: extrinsic rewards influence job satisfaction more strongly among older generations (baby boomers and generation x) compared to younger generations (millennials and generation z). 4 american journal of management vol. 24(3) 2024 hypothesis 2: work relations have a stronger impact on job satisfaction for millennials than for other generations. hypothesis 3: work-life balance is a stronger predictor of job satisfaction for millennials and generation z compared to baby boomers and generation x. hypothesis 4: worker activation determinants have a stronger positive effect on job satisfaction for younger generations (millennials and generation z) compared to older generations (baby boomers and generation x). figure 1 research model modeled, in part, after the international social survey work orientations module and the work of andrade et al. (2023), we developed a web-based survey to explore the shifting nature of the workplace. the survey included questions related to intrinsic, extrinsic, workplace relations, work-life balance, and employee activation variables. the survey was administered during winter 2024 using a stratified random sampling method across the united states, resulting in 566 completed surveys. operationalization of variables we operationalized the study variables following the approach of andrade et al. (2023). additionally, buidling on the survey conducted by andrade et al. (2023), new survey questions were added to the followup survey, which allowed us to utilize new variables in the analysis. see table 1 below. american journal of management vol. 24(3) 2024 5 table 1 study variables and measurements variable item dependent variable job satisfaction “how satisfied are you in your main job?” (0) extremely dissatisfied to (10) extremely satisfied intrinsic rewards interesting job “my job is interesting.” (1) strongly disagree to (5) strongly agree job autonomy “i can work independently.” (1) strongly disagree to (5) strongly agree help others “in my job i can help other people.” (1) strongly disagree to (5) strongly agree job useful to society “my job is useful to society.” (1) strongly disagree to (5) strongly agree extrinsic rewards pay “my income is high.” (1) strongly disagree to (5) strongly agree job security “my job is secure.” (1) strongly disagree to (5) strongly agree promotional opportunities “my opportunities for advancement are high.” (1) strongly disagree to (5) strongly agree work stress “how often do you find your work stressful?” (1) never to (5) always work relations relations with management “in general, how would you describe relations at your workplace between management and employees?” (1) very bad to (5) very good relations with coworkers “in general, how would you describe relations at your workplace between workmates/colleagues?” (1) very bad to (5) very good contact with others “in my job, i have personal contact with others.” (1) strongly disagree to (5) strongly agree work-life balance flexibility to deal with family matters “how difficult would it be for you to take an hour or two off during work hours, to take care of personal or family matters? (1) not difficult at all to (5) very difficult work interference with family “how often do you feel that the demands of your job interfere with your family?” (1) never to (3) always family interference with work “how often do you feel that the demands of your family interfere with your job?” (1) never to (3) always worker engagement job engagement “overall, how engaged are you in your (main) job?” (1) not at all engaged to (10) extremely engaged do what you do best “i have the opportunity to do what i do best every day.” (1) strongly disagree to (5) strongly agree understanding of meaning and purpose meaningful work “i have a good sense of what makes my job meaningful.” (1) strongly disagree to (5) strongly agree purposeful work “i have discovered work that has a satisfying purpose.” (1) strongly disagree to (5) strongly agree 6 american journal of management vol. 24(3) 2024 variable item sense of encouragement and belonging supervisor encouragement “my supervisor shows me encouragement for my work efforts.” (1) strongly disagree to (7) strongly agree where i am meant to be “i believe that my work group is where i am meant to be.” (1) strongly disagree to (7) strongly agree leadership efficacy “i see myself as a leader.” (1) strongly disagree to (5) strongly agree career meaning and commitment meaningful career “i have found a meaningful career.” (1) strongly disagree to (5) strongly agree organizational commitment “i would be very happy to spend the rest of my career with this organization.” (1) strongly disagree to (5) strongly agree controls dummy variables for race, ethnicity, education level, marital status, and state of residence; continuous variables for birth year, full-time years worked in career, and years worked in current organization. statistical methodology following the approach of andrade et al. (2023), we used a multi-step approach to analyze respondents’ work experience and characteristics data as well as their job satisfaction responses. first, we conducted bivariate and descriptive analyses of work characteristics and attitudes by generation and for the full sample. next, we tested statistically significant differences in job satisfaction between generations using t-test analyses. we then examined generation-specific ols and ordered probit regression models to evaluate the relative contribution of work characteristics and experiences to job satisfaction for each generation. finally, using moderation analyses, we tested for statistically significant differences between generations in the impact of work-life and worker activation determinants on job satisfaction. results participant demographics more than 550 respondents (n=566) participated in the modal stratified random sample in utah and other areas of the u.s. the respondents were fullor part-time workers who worked prior to the covid pandemic and were employed at the time of the study. as seen in table 2, 129 respondents fell within the baby boomer generation (born 1946-1964), 191 fell into the gen x generation (born 1965-1980), 185 fell into the millennial generation (1981-1996), and 55 fell into the gen z generation (1997-2012). as seen in table 3, males comprised 46.11% (n=261) of the sample and females 53.89% (n=305). respondents provided details on their racial and ethnic background; as seen in tables 4 and 5 below, 67.67% of the sample was white or caucasian, 19.96% of the sample was black or african american, 9.72% of the sample was asian, just over 1% was native american or alaska native and native hawaiian or pacific islander, and less than 2% of the sample reported their race as “other”. they also reported their ethnicity, and 88.34% of respondents were not hispanic, latino, or of spanish origin, and 11.66% of respondents were. american journal of management vol. 24(3) 2024 7 table 2 generation of respondent table 3 gender of respondent table 4 race of respondent table 5 ethnicity of respondent as seen in table 6, over 44% (n=249) of the sample have only some college or less, and a little under 56% (n=314) have a college degree or higher. as seen in table 7, 62.7% of respondents are married of cohabitating, and 36.59% of the sample are single (with just four respondents preferring not to say). as seen in table 8, 1977 is the average birth year of respondents, 20.57 is the average full-time years worked in the respondent’s career, and 13.94 is the average years worked in the respondent’s current organization. 8 american journal of management vol. 24(3) 2024 table 6 education level of respondent table 7 marital status of respondent table 8 other demographics of respondent descriptive results table 9 below shows the means of job satisfaction and other main study variables, by generation, as well as significant differences where present. figure 2 shows a statistically significant difference in reported job satisfaction between older and younger generations, with a steady decline in perceived job satisfaction levels as we move from the older to younger generations. additionally, as seen in figure 3, there is a statistically significant difference in reported employee engagement between older and younger generations, with a steady decline in perceived employee engagement levels as we move from the older to younger generations. while there are several other significant differences in mean scores by generation, of additional note, as seen in figure 4 is the difference in the “pay” variable across generations, with pay having the highest mean scores for gen x and millennials, and the lowest mean scores for baby boomers and gen z. american journal of management vol. 24(3) 2024 9 table 9 variable means and test of difference, by generation figure 2 mean job satisfaction, by generational cohort 5.46 5.25 5.15 4.84 4.00 4.50 5.00 5.50 6.00 baby boomer gen x millennial gen z 10 american journal of management vol. 24(3) 2024 figure 3 mean employee engagement, by generational cohort figure 4 mean perceived level of pay, by generational cohort regression results following the approach of westover et al. (2024), we examined the association between job satisfaction and the independent variables across multiple regression analyses. the first model (table 10) examined the influence of intrinsic rewards, extrinsic rewards, work relations, work-life balance variables, and control variables on job satisfaction by generation. in the second model (table 11) we focused on the “worker activation” variables and represented what we consider to be “the best” model. table 10 shows variation in standardized beta coefficient strength and statistical significance for each variable. for baby boomers, “interesting work”, “pay”, “promotional opportunities”, and relations with management” were the significant and most impactful variables. for gen x, “interesting work”, “helping others”, “pay”, “relations with management”, and “contact with others” were the significant and most impactful variables. for millennials, “interesting work”, job autonomy”, “pay”, “relations with management”, and “contact with others” were the significant and most impactful variables. interestingly, 8.47 8.10 7.59 7.47 6.00 7.00 8.00 9.00 baby boomer gen x millennial gen z 2.83 3.03 3.16 2.89 2.00 3.00 4.00 baby boomer gen x millennial gen z american journal of management vol. 24(3) 2024 11 “years worked in career” and “years worked in current organization” were also statistically significant control variables for millennials. for gen z, only “interesting work” was significant (along with the dummy control variable for state of residence). hypothesis 1a proposed that intrinsic rewards would influence job satisfaction more strongly among younger generations (millennials and generation z) than baby boomers and generation x. the results partially supported this hypothesis. intrinsic rewards in the form of interesting jobs had the strongest impact on job satisfaction among generation x and generation z. extrinsic rewards in the form of “pay” was most strongly related with job satisfaction for baby boomers and generation x supporting hypothesis 1b. hypothesis 2 proposed that work relations have the strongest impact on job satisfaction for millennials. while “relations with management” and “contact with others” are positively associated with job satisfaction, “relations with management” have a stronger impact among the generation x cohort, thus not supporting hypothesis 2. interestingly, the relationship between worklife balance variables and job satisfaction was not statistically significant for any of the generational cohorts, thus hypothesis 3 is not supported. it is worth noting that the gen z sample size was small (only 55 respondents in this group), which also makes it difficult to achieve statistical significance for variables in the model. table 10 model 1 – ols traditional job satisfaction regression results, by generation 12 american journal of management vol. 24(3) 2024 additionally, as seen in figure 5, there were variations in adjusted r-squared values across the ols generational models: baby boomers (adjusted r-squared = 0.562), gen x (adjusted r-squared = 0.549), millennials (adjusted r-squared = 0.673), and gen z (adjusted r-squared = 0.595). this means the model accounted for over 56% of the variation in job satisfaction for baby boomers, just under 55% of the variation in job satisfaction for gen x, just over 67% of the variation in job satisfaction for millennials, and just under 60% of the variation in job satisfaction for gen z. figure 5 original model fit (adjusted r-squared), by gnerational cohort finally, table 11 shows variation in standardized beta coefficient strength and statistical significance for each variable. for baby boomers, “i have a good sense of what makes my job meaningful,” “my supervisor shows me encouragement for my work efforts,” “i have found a meaningful career,” and “i would be very happy to spend the rest of my career with this organization” were the significant and most impactful variables. for gen x, “i have the opportunity to do what i do best every day,” “i have discovered work that has a satisfying purpose,” “my supervisor shows me encouragement for my work efforts,” “i believe that my work group is where i am meant to be,” and “i would be very happy to spend the rest of my career with this organization” were the significant and most impactful variables. for millennials, “employee engagement,” “i have discovered work that has a satisfying purpose,” “my supervisor shows me encouragement for my work efforts,” “i believe that my work group is where i am meant to be,” “i see myself as a leader,” “i have found a meaningful career,” and “i would be very happy to spend the rest of my career with this organization” were the significant and most impactful variables. interestingly, “years worked in career” and “years worked in current organization” were also statistically significant control variables for millennials. for gen z, “employee engagement,” “i have a good sense of what makes my job meaningful,” “i have discovered work that has a satisfying purpose,” “my supervisor shows me encouragement for my work efforts,” “i believe that my work group is where i am meant to be,” and “i would be very happy to spend the rest of my career with this organization” were the significant and most impactful variables. it is worth noting that even though the gen z sample size was small (only 55 respondents in this group), which makes it difficult to achieve statistical significance for variables in the model, this model fit the gen z generational cohort much better than the first model, with many of the variables in the model achieving statistical significance. hypothesis 4 proposed that worker activation 0.562 0.549 0.673 0.595 0.250 0.350 0.450 0.550 0.650 0.750 baby boomer gen x millennial gen z american journal of management vol. 24(3) 2024 13 determinants have a stronger positive effect on job satisfaction for younger generations (millennials and generation z) than older generations (baby boomers and generation x). the results support hypothesis 4. table 11 model 2 – new ols job satisfaction regression results, by generation additionally, there were variations in adjusted r-squared values across the ols generational cohort models: baby boomers (adjusted r-squared = 0.758), gen x (adjusted r-squared = 0.837), millennials (adjusted r-squared = 0.808), and gen z (adjusted r-squared = 0.821). this means the model accounted for nearly 76% of the variation in job satisfaction for baby boomers, just under 84% of the variation in job satisfaction for gen x, just over 85% of the variation in job satisfaction for millennials, and just over 82% of the variation in job satisfaction for gen z. 14 american journal of management vol. 24(3) 2024 figure 6 revised model fit (adjusted r-squared), by generational cohort revisiting hypotheses in this section, we revisit each of our initial hypotheses, evaluating them against the findings from our study. this analysis sets the stage for the revised model, highlighting key insights and whether the data supported our hypotheses. hypothesis 1a: intrinsic rewards influence job satisfaction more strongly among younger generations (millennials and generation z) compared to baby boomers and generation x. our data revealed that intrinsic rewards, specifically having interesting work, significantly predicted job satisfaction across all generations, with the strongest impact observed among generation z. however, generation x also showed a strong preference for intrinsic rewards. therefore, this hypothesis is partially supported. hypothesis 1b: extrinsic rewards influence job satisfaction more strongly among older generations (baby boomers and generation x) compared to younger generations (millennials and generation z). extrinsic rewards, particularly pay, were significant predictors of job satisfaction for baby boomers and generation x. this aligns with our hypothesis, indicating that these older generations place more value on extrinsic rewards compared to millennials and generation z. hence, this hypothesis is supported. hypothesis 2: work relations have a stronger impact on job satisfaction for millennials than for other generations. while work relations, such as relations with management and contact with others, were positively associated with job satisfaction, they had a stronger impact on generation x rather than millennials. this finding contradicts our hypothesis; thus hypothesis 2 is not supported. hypothesis 3: work-life balance is a stronger predictor of job satisfaction for millennials and generation z compared to baby boomers and generation x. 0.758 0.837 0.852 0.808 0.700 0.800 0.900 baby boomer gen x millennial gen z american journal of management vol. 24(3) 2024 15 interestingly, work-life balance did not emerge as a significant predictor of job satisfaction for any of the generational cohorts in our study. this unexpected result suggests that other factors might be more critical for job satisfaction across all generations. therefore, hypothesis 3 is not supported. hypothesis 4: worker activation determinants have a stronger positive effect on job satisfaction for younger generations (millennials and generation z) compared to older generations (baby boomers and generation x). worker activation variables, such as employee engagement and a sense of meaningful work, were indeed stronger predictors of job satisfaction for millennials and generation z. these findings align with our hypothesis, indicating that younger generations derive more satisfaction from factors that enhance their engagement and sense of purpose at work. thus, hypothesis 4 is supported. these insights guide the development of our revised model, which integrates these findings to better explain the dynamics of job satisfaction across different generational cohorts. this revised model can help organizations tailor their management practices to effectively meet the distinct needs of a multigenerational workforce. figure 7 revised research model discussion and conclusion the focus of this paper considered generational preferences as related to job satisfaction among four generational cohorts of workers, namely, baby boomers, generation x, millennials and generation z. the study specifically measured intrinsic and extrinsic rewards, work relations, work-life balance and employee 16 american journal of management vol. 24(3) 2024 activation variables and how these influenced job satisfaction for the four cohorts. the model applied control factors that considered individual and workplace demographics, including age, indicating robust results pointing to generational influences in workplace and job satisfaction preferences. across all four generations, one unifying preference towards job satisfaction is that of having interesting work. generation z is more prominently attuned to this preference but every generational cohort reveals it is a necessity. having interesting work, in fact, is the only preference for generation z found to be a significant contributor to job satisfaction, however, the work still yields important information related to generation z. the younger generations (millennials and generation z) are less satisfied with their jobs in general, and they also perceive a decline in employee engagement levels, as well. additional results associated with pay include generation z and baby boomers receiving less pay compared to the generation x and millennial cohorts who reported higher pay levels. baby boomers associate their satisfaction in the workplace with interesting work, as well as pay and promotional opportunities. like baby boomers, generation x values interesting work and pay, helping others, relations with management, and contact with others. some significant preferences for millennials are shared with generation x, including interesting work, pay and relationship with management, but millennials also have their own unique preferences of job autonomy and contact with others. however, relations with management are more impactful for generation x than millennials. some findings are not necessarily in alignment with expectations. for example, rather than intrinsic rewards being the strongest predictors of job satisfaction for the younger generations (millennials and generation z), they are strongest for generation x and generation z. the expectation for extrinsic rewards being associated with the older generations (baby boomers and generation x) does hold true, as pay is strongly associated with their job satisfaction, as does the expectation that worker activation determinants have a stronger positive effect on job satisfaction for the younger generations. other unexpected results include work relations being more influential for generation x than millennials and that work-life balance is not a more significant predictor for millennials and generation z than baby boomers and generation x. in fact, work-life balance is not a significant predictor of job satisfaction for any of the generational cohorts. such findings signify that traditional research variables need adjusting to account for the shift in ways job satisfaction preferences emerge in this study. the new model integrates employee activation factors, including worker engagement, understanding of meaning and purpose, sense of encouragement and belonging, leadership efficacy, and career meaning and commitment, as a means for better comprehension of features in the workplace that contribute to job satisfaction across generational groups. implications for theory results in this work validate, refute, as well as further past research in various aspects. for example, this work denotes that from a generational lens, there are notable generational differences associated with job satisfaction as opposed to some previous studies who determined minimal to no connections of work outcomes with generational differences (see costanza et al., 2012; kowske et al., 2010). findings also signify the unifying thread for all generations studied, that of preference for interesting work, as related to job satisfaction, which can likely be linked to the concept of boreout (abubakar, 2020). some generational trends or characteristics previously applied to various generational cohorts are also corroborated, such as millennials valuing job autonomy as part of job satisfaction (jena and nayak, 2023) and baby boomers valuing promotional opportunities (benson and brown, 2011). additionally, this work contributes to new veins of research when considering generational preferences in the workplace by considering worker activation determinants and how these impact job satisfaction. the revised research model provides a more specific set of variables that not only expand upon current theory but also aid management in determining how to support employees by informing them of specific generationally-tied preferences with the aim of increasing job satisfaction and employee retention. implications for management findings in this study indicate workers have specific preferences that reflect their generational status, which can act as anchors for management in terms of understanding how to support workers from the four american journal of management vol. 24(3) 2024 17 generational cohorts considered. organizations can leverage the findings to produce multifaceted approaches in offering workers with 1) jobs that are attractive, 2) support in the workplace that answers specific needs, and 3) a plethora of diverse and flexible opportunities for development – altogether catering to a spectrum of preferences to ensure job satisfaction of a multigenerational workforce. in considering the particular findings of this study towards implementing policy, some unique challenges and considerations contribute to providing work conducive to multiple job satisfaction preferences. the first consideration is to ensure that workers of all generations have interesting work, as this has proven to be a unanimous preference. interesting work may be defined differently for each generation, thus creating more work for organizations in discovering what interesting work entails. in a more general sense, interesting work can entail engaging work that is varied and challenging (bakker and leiter, 2017) as well as fun (celestine and yeo, 2020), is tied to an organizational purpose or mission (van turin et al., 2020), engages a worker’s creativity and promotes additional learning (kooij, et al., 2020). second, management developing multifaceted offerings to adeptly respond to the spectrum of preferences is paramount to satisfying a generationally diverse workplace. this requires providing a variety of extrinsic and intrinsic awards in ways that cater to various generationally-influenced motivations. this also obliges management to be familiar with these preferences, ensuring that they cater to baby boomers’ inclinations for promotional opportunities while simultaneously providing opportunities for job autonomy and contact with others to satisfy millennial workers. the less predictable findings in this study insinuate that preferences related to job satisfaction are not perhaps as intuitive as previously considered, requiring management receive specialized training to become familiarized with the distinctive characteristics associated with each generational cohort, while being attuned to the changes and developments that arise within current research. third, work relations preferences are an important area of job satisfaction that has proven to be an especially important factor for generation x, millennials, and generation z. this revelation can guide management in terms of bolstering the internal workings of their organizations to place increasing emphasis on workers’ relations with management, contact with others, as well as helping others. finally, it appears that work-life balance, a previous staple of job satisfaction preferences has become somewhat obsolete, being replaced, at least in the younger generations, with preferences related to employee activation variables. this shift in job satisfaction preference options will require that management and supervisors become better acquainted with these variables, such as worker engagement, understanding meaning and purpose of their work and roles, encouragement and belonging, leadership efficacy and career meaning and commitment. additionally, management will need to consider ways to implement these variables in the workplace in a manner that successfully satisfies the younger generations while simultaneously answering the complex and diverse preferences of the older generations. limitations and future research this study has forwarded a unique understanding of job satisfaction elements attributed to specific generational preferences. future work is needed to further comprehend variability in worker preferences based on generational influences with the aim of improving practical policies and applications as well as theoretical ones. extant literature has explored generational differences as they relate to job satisfaction, revealing characteristics and ideas surrounding specific generations, however, this work highlights that past findings are not necessarily predictors of future preferences, as the dynamic nature of generational preferences is not an unalterable landscape. findings in this study that opposed initial hypothetical assumptions illustrate that generational workplace preferences related to job satisfaction exist, but that they are not static or created in a vacuum. external and internal forces impact generational tendencies, making it imperative that further research examines what those forces are and how they influence the trends in generational preferences as they emerge. for example, as baby boomers remain in the workplace for many factors (see benson and brown, 2011), additional exploration illuminates the nuanced and changing elements that govern what each working generation values in terms of job satisfaction. as previously explained, this study had a limited number of generation z respondents, making it challenging to make salient determinations regarding their job preferences. future research aimed at better understanding 18 american journal of management vol. 24(3) 2024 generation z by including larger sample sizes in examining determinants for generation z, particularly aimed at better understanding their worker activation preferences, will further job satisfaction associated with generational cohort studies in valuable ways, such as providing important insight on how to combat the current declining job satisfaction inherent in millennials and generation z as well as making findings more generalizable. this future research will benefit from integrating worker activation variables to address gaps in generational differences related to job satisfaction. such research ultimately promotes 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(2015). gender, work orientations, and job satisfaction. work, employment and society, 29(1), 3–22. https://doi.org/10.1177/0950017014559267 american journal of management vol. 25(3) 2025 21 impact of erp integration on management control practices in a moroccan construction company: an action research approach atmane badda chouaib doukkali university this article examines the impact of erp on management control practices within sbst, focusing on five key aspects: project cost and margin assessment, automation and improved reporting, development of tailored dashboards, and optimization of budget monitoring and financial risk control. before the erp implementation, these practices were characterized by fragmented management, manual data collection, and a lack of real-time visibility into project performance. the methodology adopted is based on an action research approach, in which the author, as an actor-researcher, actively participated in implementing the erp and evaluating its effects. the results of this study show that integrating an erp improved cost traceability, reduced reporting times, increased reliability of budget forecasts, improved the quality of analyses and more responsive decision-making, thus strengthening the role of management control in the strategic management of projects. finally, this research opens up perspectives on the long-term impact of digitalizing management processes, particularly regarding resource optimization and financial risk management. keywords: erp, management control, digitalization, reporting, construction, action research introduction in an economic context marked by increased competition, growing pressure on costs and a heightened demand for responsiveness, digital transformation is now a major strategic lever for companies, particularly in project-intensive sectors such as construction and public works. according to martinsuo and al. (2019), this sector, characterized by organizational complexity, the multiplicity of stakeholders and the heterogeneity of construction sites, requires efficient tools to ensure the coordination and effective management of human, material and financial resources. among the most structuring technologies in this modernization dynamic, integrated management systems, or erp (enterprise resource planning), occupy a central place. these it solutions allow for crossfunctional integration of business processes, centralization of data, and automation of administrative and operational tasks. according to gallad and al. (2020), the introduction of an erp thus represents a profound change in the company's information architecture, affecting not only technical and financial flows, but also management control and management practices. in this perspective, this article aims to analyze the impact of integrating an erp on management control practices within the company sbst, which operates in the construction sector. before the implementation of the erp, this company suffered from fragmented financial management, based on heterogeneous tools 22 american journal of management vol. 25(3) 2025 (microsoft excel, isolated business software), resulting in poor data traceability, a high risk of errors and a lack of responsiveness in the budgetary monitoring of projects. to address this issue, an action research approach was adopted, combining concrete intervention in the field (as an actor-researcher) with the production of scientific knowledge on the organizational and managerial effects of erp. the study, conducted over two years, is based on a longitudinal approach comparing management practices before and after the integration of the system, through process observation, documentary analysis and interviews with stakeholders. the objective of this article is threefold: the first is to understand how erp transforms management control practices in a complex project environment. the second is to identify the levers for improvement made possible by automation and process integration. the third is to discuss the conditions for success and the challenges associated with such a transformation in a specific context such as that of the construction industry. the results obtained reveal major developments in several dimensions of management control, including data reliability, fluidity of information exchange, prospective analysis capacity and real-time budget monitoring. these findings highlight the operational contribution of erp and the strategic repositioning of management control as a steering and decision-making tool in a rapidly changing sector. literature review enterprise resource planning (erp) systems are integrated it solutions that allow companies to centralize and automate the management of their business processes. since their emergence in the 1990s, these systems have continued evolving to adapt to different industries' specific needs. vuorinen and martinsuo (2019) shows that erp plays a key role in the digital transformation of organizations by promoting data integration, process standardization, and improved decision-making. in the construction sector, characterized by high project complexity, tight deadlines, and tight budgets, the adoption of erps has attracted growing interest. teittinen et al. (2013) highlight that integrating an erp improves coordination between project stakeholders, reduces data entry errors, and optimizes resource management. however, khalfaoui and zenasni (2014) show that implementing these systems remains a major challenge due to the need to adapt the tools to the sector's specificities. erp and the evolution of management control practices management control is an essential tool for ensuring a company's strategic and operational management. it relies on tools and methods for planning, monitoring, and analyzing economic, financial, and organizational performance. as such, the quality, reliability, and speed of access to information are critical dimensions of the control process. the introduction of erp (enterprise resource planning) systems has significantly changed this information environment, acting as a catalyst for transforming management practices (badda, 2025). according to liew (2019), erp integration profoundly transforms the way information is collected, processed, and shared within organizations. as integrated systems covering several key functions (accounting, finance, project management, purchasing, etc.), erps allow for centralization and unification of data, thus reducing redundancies. this centralization promotes better traceability, greater information consistency, and increased value chain transparency. kouki and al. (2020) emphasize that erps act as a structuring tool for management control, by standardizing processes and enabling faster and more reliable collection of financial and operational data. this allows management controllers to abandon repetitive tasks with low added value (manual entry, reprocessing, consolidation), to devote more time to analysis, consulting and strategic management activities. el guennouni and chafik (2019) demonstrated that adopting an erp system significantly improves cost management, reduces reporting production times, and better data traceability. these systems offer an enhanced capacity to monitor real-time performance indicators, detect budgetary deviations, and feed decision-making dashboards. american journal of management vol. 25(3) 2025 23 more recently, several studies highlight the evolution of the role of the management controller following the digitalization induced by erp. according to bennani and al. (2021), these systems encourage an increase in the skills of controllers towards business partner functions, placing them more at the heart of strategic decision-making than in a purely technical or administrative role. alhatabat (2020) highlighted the impact of erps on reducing the risk of errors and accelerating the production of financial statements. automating accounting processes not only helps reduce the administrative burden on financial functions, but also ensures greater compliance with accounting and tax standards. this is particularly crucial in contexts with high regulatory requirements or in subsidiaries of international groups (badda and rahmouni, 2023). the specificities of management control in the construction sector the construction and public works sector have structural and operational characteristics that make management control particularly demanding. the nature of projects, which are often long, heterogeneous, capital-intensive, and exposed to multiple hazards, considerably complicates budget planning, cost monitoring, deadline management, and resource allocation (bouziane and ourrad, 2023). unlike industrial sectors where production is generally repetitive and standardized, construction projects are mostly carried out on a tailor-made basis and in a specific context, which requires great flexibility in financial management. management control must therefore integrate complex temporal, geographical and contractual dimensions, while ensuring consistency between operational monitoring on the ground and information feedback to central structures. erraoui and slimani (2021) thus highlighted the central role of project control in construction, structured around specific practices such as budget reporting by site, monitoring of margins at completion, and multi-level variance analysis. in this context, erps play a structuring role by allowing us to overcome the limitations of traditional tools, often based on spreadsheets or non-integrated business software. malki and al. (2023) note that erp contributes to more reliable management of project costs and margins, thanks to the automation of data collection processes, the unification of repositories and the possibility of producing cross-analyses in realtime. furthermore, construction companies operating across multiple sites or internationally need to consolidate inter-subsidiary data. tarmidi (2022) emphasizes the benefits of erps at this level, by promoting harmonization of accounting and management practices between different entities. this capability was highlighted in our study, where erp served as a lever to standardize budget control and reporting processes between construction sites and headquarters. papiorek and hiebl, (2024)) show that erps not only allow information to be centralized, but also enrich management practices with analytical functionalities (predictive variance analysis, cost forecasts at completion, scenario simulation). these advances pave the way for more proactive management control, adapted to the performance, responsiveness and strategic management requirements specific to the construction sector. the impact of erp on management control practices in the construction industry integrating erp systems in the construction industry is profoundly changing traditional management control practices (badda and al., 2021). through centralized management, automated data flows, and increased interoperability between accounting, operational, and budgetary functions, erp enables more precise and strategic project management. this transformation is taking place at several key levels of the control process. improving reporting and performance monitoring before erp integration, reporting was often manual, relying on excel files and decentralized databases, which led to errors and significant delays. erp significantly improves this function by automating information reporting and standardizing financial and operational reports. in the construction industry, where companies must rigorously monitor construction sites and margins, reliable, real-time reporting is a major competitive advantage. erps have facilitated the automation of financial and operational reporting, reduced information transmission times and enabling better monitoring of construction site performance. 24 american journal of management vol. 25(3) 2025 thanks to erps, management controllers have access to continuously updated key indicators, facilitating decision-making (fähndrich and pedell, 2025). optimizing the evaluation of costs and profitability of projects cost management in the construction industry is a complex process that involves many variables: material costs, labor, lead times, unforeseen events, etc. traditionally, this information was dispersed among several departments, making it difficult to accurately assess project profitability. erp centralizes all this data and allows for more detailed cost analysis across different project phases. it improves visibility into project costs and margins by providing real-time indicators, enabling more proactive resource management and increased responsiveness to budget variances. erp also facilitates comparison between forecast budgets and actual results, thus improving budget control and variance management (roffia and dabić, 2024). improving the project dashboard and strategic management the dashboard is an essential management control tool for synthesizing key information and managing project performance. erp integration has significantly improved this tool by providing real-time data and facilitating its visualization in the form of interactive dashboards. in construction companies, dashboards allow them to track project progress, analyze margins, anticipate financial risks, and adapt strategies accordingly. thanks to better transaction traceability, erps have enabled process standardization and improved data reliability. they thus provide greater visibility across the entire project portfolio, promoting proactive management and more responsive decision-making (fähndrich, 2023). limitations and challenges of erp adoption despite their very important role in the digital transformation of organizations, enterprise resource planning systems are not without their challenges during their adoption. although they represent a structuring tool for streamlining and integrating management processes, their implementation often involves technical, organizational, and human constraints that sometimes limit the expected effects. several studies highlight that the success of an erp project does not depend solely on the technological performance of the solution, but above all on the ability of organizations to manage the transitions it induces: (granlund and al., 2013; ruivo and al., 2014) investment costs and resources mobilized: one of the major barriers to erp adoption concerns its total implementation cost. the project requires not only the acquisition of a software package, but also significant investments in infrastructure, consulting, configuration, training and change support. these costs, often underestimated upstream of the project, can impact the profitability of the erp, particularly in smes or companies in the construction sector, where margins are traditionally lower and project cycles long. resistance to organizational change: another challenge widely documented in the literature is the resistance to change induced by the introduction of an erp. it profoundly modifies work routines, accountability logics, and the way in which information circulates within organizations. these changes can give rise to reluctance, even opposition, especially when users perceive the tool as a constraint or a threat to their autonomy. the complexity of integration with existing processes: the rigidity of erp systems can be a barrier to their adoption, particularly when it comes to adapting them to very specific or evolving business processes. they are based on standardization logics that can come into conflict with the need for operational flexibility, particularly in sectors such as construction where each project is unique, often non-repetitive and subject to significant uncertainties (deadlines, bad weather, cost variations, etc.). data quality and user training: the performance of an erp system depends largely on the quality and consistency of the data entered into the system. it is not a miracle solution: it can only produce reliable results if the input data itself is reliable, complete and well-structured. american journal of management vol. 25(3) 2025 25 however, in many organizations, the initial databases are fragmented, redundant or obsolete, making feeding the system both tedious and risky. in summary, erp is now an essential tool for construction companies looking to improve their financial management and optimize project monitoring. its impact on management control practices is considerable, particularly with regard to reporting automation, cost evaluation, and dashboard consolidation. the literature shows that erp is a powerful tool for modernizing management control practices, particularly in construction-intensive sectors. however, implementing an erp requires adaptation to the specificities of the sector and rigorous change management to maximize its benefits. its impact also largely depends on the quality of its implementation within organizations. the integration of erp systems into organizations has been the subject of extensive management research, particularly in the areas of management control and organizational performance. this literature review aims to contextualize the main issues associated with the adoption of erp systems, with an emphasis on their impact on management control practices, particularly in the construction sector. thus, this study is part of this research dynamic by analyzing in depth the concrete impact of the integration of erp on management control practices in a construction company, by adopting an action research approach. research methodology choice of methodology the study presented in this article is part of an action research approach, a qualitative methodology that combines solving practical problems and producing robust scientific knowledge (cornish et al., 2023). this methodological choice was imposed due to the dual objective pursued by the research: on the one hand, to support a company in the construction sector in the integration of an erp and, on the other hand, to rigorously evaluate the impact of this transformation on management control practices. action research is particularly suited to the complex organizational context where change is simultaneously desired, supported, and studied. it differs from traditional approaches in its iterative, collaborative, and interventionist nature (de oliveira et al., 2024). in this context, the researcher is not a simple external observer, but an actor-researcher engaged in the transformation process, simultaneously assuming the functions of design, change facilitation, and scientific evaluation. in our study, this approach allowed the researcher to be closely integrated into the reality on the ground, actively participating in the operational implementation of the erp, coordination between teams and the ongoing analysis of the effects on management control practices. the method made it possible to co-construct solutions with internal stakeholders (finance department, works departments, management control, etc.), while ensuring analytical traceability of the changes observed at each stage of the project (mukhopadhyay, 2022). action research also promotes collective organizational learning, since corrective actions are designed and implemented collaboratively, in response to dysfunctions or emerging needs. this methodological approach makes it possible to produce contextualized knowledge, anchored in a real environment, while contributing to the concrete improvement of management tools, processes and practices. in the specific case of this study, it made it possible to document in depth the changes made in the steering mechanisms, the structuring of financial data, budget monitoring, margin evaluation, and the quality of reporting within the company. thus, action research constitutes a relevant, coherent and rigorous methodology for analyzing the impact of integrating an erp on management control practices in the construction sector, while generating concrete operational benefits for the company concerned (davison et al., 2021). framework of the study this research was conducted within sbst, a company operating in the construction and public works sector. a sector whose environment is marked by high capital intensity, project complexity and tight margins, which makes the control of management information an essential strategic lever. the study focused on analyzing the impact of integrating an enterprise resource planning software package on management control practices within this company. more specifically, the research focused on five key 26 american journal of management vol. 25(3) 2025 dimensions of the management control function, identified as essential for the performance and sustainability of projects in the construction industry: establishment of a reliable and simple documentary system: in order to structure the traceability of decisions, financial commitments and technical choices throughout the project life cycle. evaluation of project costs and margins: with a view to forecasting and securing profitability. assurance of budgetary monitoring of projects: to manage expenditure in line with forecast budgets. implementation of appropriate reporting: guaranteeing rapid and relevant circulation of financial information to management. development of a project dashboard: as a summary and decision-making tool in terms of operational performance. the choice of these five practices stems from a preliminary analysis of the specific challenges of management control in the construction industry and an initial diagnosis carried out prior to the research with sbst's stakeholders. these practices reflect the major levers through which erp is likely to influence, directly or indirectly, decision-making processes and steering mechanisms. the research took place over 24 months, between the initial scoping phase of the erp project and the post-deployment stabilization phase. this duration made it possible to cover the entire action research cycle, divided into four main phases: diagnostic phase: evaluation of existing management control practices, identification of dysfunctions, process mapping. design phase: participation in defining needs, modeling processes, and configuring key modules. implementation phase: gradual system deployment, user training, adaptation of practices. evaluation phase: observation of developments in the field, comparative analysis of practices before and after, and formalization of lessons learned. the researcher-intervener position allowed for complete immersion in the organization, fostering a detailed understanding of the interactions between technological tools and human, structural and cultural dynamics. this research framework thus made it possible not only to observe the transformations induced by the erp, but also to act directly on their design and support, in a logic of collective intelligence and continuous improvement. progress of the action research phase 1: initial diagnosis and identification of needs the first phase of the action research focused on conducting an in-depth diagnosis of management control practices within the sbst company before integrating the erp. this exploratory stage had a dual objective: on the one hand, to understand the actual functioning of existing management systems, beyond formal procedures, and on the other hand, to identify functional and organizational needs to guide the design of the erp solution. data collection methodology the diagnostic phase was based on a qualitative approach combining several complementary data collection techniques: semi-structured interviews: eight interviews were conducted with key stakeholders in management control, namely the financial manager, the management controller, two employees from the administrative department, and four site managers, chosen for their involvement in the budgetary management of construction sites. these interviews made it possible to collect rich data on actual uses, perceptions of existing tools, difficulties encountered, as well as expectations regarding the future system. document analysis: a systematic review of internal documents was conducted, including quarterly financial reports, budget tracking sheets on spreadsheets, minutes of site meetings, american journal of management vol. 25(3) 2025 27 and internal management procedures. this analysis made it possible to assess the structuring of the available information and its compliance with good management practices. non-participant observation: observation sessions were conducted within the management control department and in the works departments, in order to understand the actual progress of the budgeting, budget review, and reporting processes. these observations highlighted the informal practices often used to compensate for the shortcomings of the formal system. diagnostic results cross-analysis of this data revealed several structural limitations in the management system in place before the integration of the erp: low process automation: most budgetary and analytical operations were carried out manually via excel spreadsheets, without interconnection with the accounting system. this fragmentation led to significant time losses, a high workload, and an increased risk of human error. lack of data reliability and traceability: the absence of an integrated system limited the reliability of the data produced, particularly in terms of construction cost, margin monitoring, and commitment history. documents were often stored locally, without a systematic backup or validation procedure. difficulty in real-time monitoring: the sequential nature of the data collection and processing processes did not provide an up-to-date view of the financial situation of projects. budgetary deviations were only detected after the fact, often too late to allow for effective corrective actions. heterogeneity of practices between departments: each works department used different formats and calculation methods, making consolidation at the central level difficult. this compartmentalization harmed the consistency of management. identification of needs at the end of this phase, several priority functional needs were identified to guide the design of the future erp: automated integration between accounting, budgeting, and operational monitoring; establishment of a single repository for management data; systematic traceability of decisions and commitments; real-time monitoring of key indicators (costs, margins, progress); harmonization of reporting practices and formats. this initial diagnosis thus made it possible to lay the foundations for an erp project geared towards the performance of management control practices, by placing end users at the heart of the thinking from the first stages of the action research. phase 2: design and configuration of the erp the second phase of the action research was dedicated to the design and configuration of the erp, based on the initial diagnosis results. the main challenge of this stage was to translate the needs expressed by users into precise functional specifications, while ensuring that the solution developed was adapted to the culture, processes and constraints of the sbst company, operating in the specific construction sector. definition of functional needs to develop functional specifications, collaborative work was carried out with the various stakeholders (management control, financial management, project managers, design office, construction management). this document formalized the requirements around several key areas: budget management by project: integration of a single site reference, structuring of budgets according to the phases of the project (forecast budget, actual budget, budget revisions). 28 american journal of management vol. 25(3) 2025 real-time cost tracking: automation of reporting of expenses incurred, breakdown by analytical item and by task. margin assessment: automatic calculation of net site margin, comparison between initial, revised and actual budget. reporting and dashboards: generation of personalized reports and performance indicators in line with management expectations. document traceability: automatic archiving of budget versions, validations, and decisions related to projects. this co-construction made it possible to ensure strong ownership of the erp project by future users and to limit resistance to change. choice of software package and configuration after benchmarking several market solutions, the choice fell on a specialized erp for construction companies, capable of managing complex, multi-stakeholder projects. the selected software package enabled complete integration between accounting, purchasing management, budget tracking, management control, and reporting. as an actor-researcher, we participated with an active role in the configuration phase, working with the technical team and external consultants to: adapt the modules to sbst’s specific business processes; create analytical account plans aligned with site monitoring practices; develop personalized dashboards, particularly for calculating net margin and monitoring budget variances; ensure interoperability with existing systems (particularly accounting software). at the end of this phase, the configuration made it possible to build an information system focused on project management logic, and not on simple accounting automation. sbst thus had a fully operational erp, configured to meet the specific challenges of managing construction projects. the tool not only made it possible to centralize financial information, but also to produce reliable and up-to-date decision-making indicators. this success is explained by the direct involvement of end users in the design process and by the reflexive approach specific to action research, which allowed for continuous adjustments at each stage. phase 3: implementation and support for change following the configuration phase, the research entered a crucial phase: the operational implementation of the new erp, accompanied by a structured change management system. this phase aimed to observe the system's behavior in a real-world context, support users in getting to grips with the tool, and adjust processes based on feedback from the field. it lasted ten months and was a key moment in the organizational anchoring of the innovation. pilot phase on selected sites implementation began with an experiment on a sample of pilot projects, chosen for their representativeness in terms of size, technical complexity, and budgetary implications. this strategic choice aimed to ensure detailed observation of the interactions between new digital practices and pre-existing management routines. each pilot project was supported by a pair consisting of an administrative employee and a user project manager, whose mission was to: monitor budget execution in real time via the erp module; test new reporting features (margins, deviations); document malfunctions, adjustment needs and observed gains. monitoring performance indicators throughout the pilot phase, a performance indicator monitoring system was implemented to measure the concrete effects of the erp on management control practices. among the indicators monitored: deadline for production of budget reports; reliability rate of the data entered (difference between forecasts and actual results); american journal of management vol. 25(3) 2025 29 responsiveness in detecting margin drifts; number of corrective returns requested on financial statements. these indicators enabled a continuous assessment of the appropriation of the system, but also of its impact on the quality of budgetary management. collection and analysis of user feedback a systematic feedback system has been established, through: weekly meetings bringing together operational teams, management controllers and erp consultants; satisfaction questionnaires at the end of each budget cycle; an ideas box allowing users to submit suggestions or reports at any time. this feedback was analyzed iteratively, in keeping with the participatory logic of action research. it led to several concrete adjustments: improved ergonomics of certain interfaces; added custom filters in dashboards; clarification of budget closure procedures. training and support for change the technical implementation of the system was accompanied by a change management strategy, aimed at ensuring user buy-in and skills development. over the weeks, functional optimizations were integrated into the tool to adapt the system to the specific business requirements of sbst. this strategy included: targeted training sessions for different user profiles (project managers, management controllers, assistants, accountants); the implementation of user manuals and operational procedure guides; the designation of reference users in each pole, responsible for relaying good practices; field support after deployment to correct any usage errors and refine settings; the creation of an internal support center, providing local support in resolving technical incidents and assistance with usage; weekly follow-up meetings between project teams, key users and erp consultants, allowing for continuous improvement of the system as it is taken over. this support process has encouraged a gradual acculturation to digital management tools and a transformation of users' representations with regard to management control, now perceived not as a simple monitoring tool, but as a strategic steering lever. this implementation phase enabled the validation of the relevance of the erp as a structuring tool for the management control function, and to lay the foundations for modernized budgetary governance. the initial findings revealed: a significant reduction in the production time of monthly reports (halved on average); an improvement in the quality of data used for decision-making; greater proactivity of project managers in anticipating budgetary deviations. phase 4: erp impact assessment the fourth phase of this action research consisted of a systematic and rigorous evaluation of the effects produced by the integration of erp on management control practices within the sbst company. this evaluation aimed to measure the tangible results of the digital transformation and understand its organizational and behavioral implications by combining quantitative and qualitative data. comparison of key performance indicators the impact analysis was first based on the comparison of key indicators before and after the integration of the erp system. these indicators were selected for their ability to reflect the critical dimensions of budget management and performance monitoring: 30 american journal of management vol. 25(3) 2025 average budget processing time (from preparation to validation): reduced by 40%, from an average of 12 days to 7 days. rate of errors in budget forecasts (unjustified differences between forecasts and actual results): reduced by 35%. time taken to report financial information to management: reduced by 50%, with almost immediate access to consolidated data. compliance rate with configuration standards (monitoring of compliance with defined processes): constantly improving, reaching 92% after 12 months. these results reflect a significant improvement in the efficiency, reliability and responsiveness of management control. post-implementation qualitative interviews to complete this numerical assessment, a series of 10 semi-structured interviews were conducted with the main users of the erp: management controllers, project managers, department heads, and members of the financial department. these interviews allowed us to gather detailed perceptions on the system's appropriation, the obstacles encountered, and the benefits experienced. the results reveal a positive change in representations and behaviors: a general recognition of the added value of the system in terms of transparency and traceability of data; an increase in decision-making autonomy among project managers, who are now able to analyze margins, deviations and indicators themselves; reduced organizational stress related to budget closures, thanks to automation and data reliability. however, some respondents highlighted the need for ongoing support and enhanced training, particularly for those less familiar with digital tools. analysis of forecast/actual deviations another aspect of the evaluation involved a comparative analysis of the gaps between budget forecasts and actual results. this analysis was carried out on a panel of four comparable projects, taking into account two consecutive budgetary years: one before erp, the other after erp. the results show an average reduction of around 30% in unanticipated variances, reflecting better cost control and an increased ability to anticipate deviations. this trend was particularly noticeable in complex projects, where real-time monitoring features enabled earlier readjustments. synthesis of effects the overall assessment confirms that the erp has acted as a structuring lever for the management control function on a technical level (automation, data integration) and managerial level (improved collaboration, increased team skills). it also highlights the conditions for the success of such a transformation: active involvement of users from the early stages; the existence of strong, cross-functional project management; the ability to articulate technology, organization and business practices in a collective learning approach. this evaluation phase thus constitutes the culmination of the action research cycle. limits, challenges and constraints of action research although this study generated significant results in improving management control practices through integrating an erp in a construction company, several methodological, organizational and human limitations were encountered throughout the action research process. these constraints must be recognized in order to qualify the results obtained and identify the conditions necessary for the success of similar projects. american journal of management vol. 25(3) 2025 31 resistance to change and dynamics of appropriation one of the main challenges encountered concerned organizational change management, which is inherent in any digital transformation project. despite the support efforts implemented, persistent resistance from some users was observed, particularly among employees unfamiliar with digital tools or attached to old ways of working. this resistance resulted in: reluctance to adopt new computerized procedures; partial use of certain erp functionalities; cognitive overload linked to the learning curve of the new tool. this phenomenon, well documented in the literature on the adoption of information systems (lapointe & rivard, 2005; venkatesh et al., 2012), required the implementation of ongoing training, demonstration sessions, and technical support mechanisms to facilitate the gradual appropriation of the system. constraints related to the temporality of research the duration of the action research cycle, although relatively long (24 months), did not allow for the measurement of certain mediumand long-term effects. in particular, certain transition periods between the old system and the new erp were marked by interruptions in data collection (interruptions in data entry, duplicate information, changes in the reference frameworks used), limiting the rigorous comparability of certain before/after metrics. furthermore, the post-implementation performance assessment focused on the first few months following deployment, which may bias the analysis by underestimating delayed effects (learning effects, maturation of practices, stabilization of processes). potential bias of the actor-researcher posture the direct involvement of the researcher in the conduct of the erp project is a strength, but also a potential limitation. while this dual role of actor-researcher allowed for complete immersion in organizational dynamics and privileged access to data, it raises questions relating to: the neutrality of the analytical perspective, likely to be influenced by operational commitment; the selection of study objects and evaluation indicators, sometimes guided by field constraints or the strategic priorities of the company. in order to limit these biases, triangulation mechanisms have been put in place (cross-interviews, collective validation of analyses, comparison with factual data), but the subjectivity inherent in this position cannot be totally eliminated. generalization of results the contextual and unique nature of the case study conducted necessarily limits the external scope of the results of this research. the structural, cultural and economic specificities of the sbst company and those of the construction sector mean that the lessons learned cannot be automatically transposed to other contexts without adaptation. however, they offer avenues for reflection and useful methodological recommendations for organizations facing similar issues. results and discussion the establishment of a reliable and simple documentary system situation before erp integration before the integration of an enterprise resource planning (erp) software package, information management within sbst relied on traditional practices that made data flow complex and time-consuming. information relating to construction sites was often dispersed between different departments, and its transmission was mainly done through informal exchanges, leading to risks of errors and loss of information. the lack of a structured documentation system made coordination between teams difficult, particularly between management control and site managers. this situation created several problems: a lack of standardization of documents and processes, complicating the consolidation of financial and operational data. 32 american journal of management vol. 25(3) 2025 difficulty in ensuring regular and reliable updating of procedures due to fragmented document management. poor communication between the various stakeholders, which could slow down decisionmaking and hamper the efficiency of operations. limited accessibility to essential information, increasing the risks of inconsistencies and errors in site management. with this in mind, management has decided to modernize its documentary approach and improve site management by implementing a structured procedures manual and specific digital tools to optimize performance monitoring and analysis. impact after erp integration the integration of an erp into sbst has brought about a significant transformation in document management and internal communication. thanks to the implementation of an integrated system, several improvements have been observed: standardization and formalization of processes: the procedures manual implemented as part of the erp project has become a common reference for all stakeholders involved in site management. it clearly and detailed describes the missions of site managers and the project monitoring procedures. this has helped to harmonize practices, ensure better traceability of actions, and strengthen compliance with internal and external standards. centralized accessibility and real-time updates: the erp has made it possible to centralize all documents and data in a single database accessible to all relevant departments. updates to procedures and documents are now carried out in real time, thus reducing the risk of errors linked to the use of outdated versions. in addition, the digitization of documents and their integration into the erp ensures simplified accessibility, facilitating consultation by teams in the field. streamlining communication and interdepartmental collaboration: the erp has fostered better communication between the management control department and the construction site teams. the unification of data and the implementation of an information system allow for standardization of expenditure entry, reliable reconciliation with accounting and facilitate budget monitoring and construction site forecasting. optimizing time management and decision-making: thanks to process automation and document structuring in the erp, the time spent searching for and consolidating information has been significantly reduced. site managers now have interactive dashboards that facilitate the monitoring of performance indicators and enable faster and more relevant decision-making. improved transparency and trust: the existence of a reliable and structured documentation system has strengthened the trust of stakeholders, particularly customers and auditors. the transparency of processes and the company's ability to justify its decisions with precise and well-documented data have reinforced its image of professionalism and rigor. the integration of erp into sbst has profoundly transformed document management, moving from an informal and dispersed system to a structured, centralized and secure framework. this evolution has enabled better circulation of information, improved site monitoring and optimization of the work of management controllers. thanks to this tool, sbst has been able to establish a more rigorous and efficient management culture, thus facilitating the achievement of its strategic and operational objectives. evaluation of project costs and margins situation before erp integration before erp integration, project cost and margin assessment was a manual and fragmented process. each project began with an initial budget estimate prepared by the pricing studies department. this budget served as a reference, but monitoring it during the project was complex due to the lack of a centralized management tool. site managers had to manually adjust their estimates based on site developments, consolidating information from several disparate sources (paper documents and excel files). this lack of american journal of management vol. 25(3) 2025 33 integration led to discrepancies between forecasts and actual costs, limiting visibility into project profitability and complicating timely corrective decision-making. impact after erp integration the implementation of erp has profoundly transformed this practice. now, all costs, forecasts, and margins are centralized in a single system, accessible to all stakeholders. the erp integrates budget tracking from the moment the contract is awarded, allowing for complete traceability of expenses and budget adjustments. the main improvements brought about by the erp are as follows: real-time cost tracking: expenses related to materials, labor and subcontractors are recorded directly in the system, allowing for continuous updating of costs incurred. development and validation of the adjusted budget: this budget, established by the site manager in collaboration with management control, is now structured and standardized in the erp. it allows for precise identification of discrepancies between the initial estimate and the detailed execution budget. better anticipation of budget variances: erp facilitates comparison between the initial budget, the adjusted budget, and actual costs. it automatically generates alerts in the event of budget overruns, allowing for greater responsiveness in construction site management. automation of project financial reporting: site managers and management controllers can quickly extract reports detailing project profitability, highlighting differences between planned and actual costs. improved collaboration between departments: centralized access to budget data strengthens communication between the price studies department, site managers and the management controller, thus reducing errors and optimizing the financial management of projects. erp has made project cost and margin assessment more accurate, faster, and more reliable. this transformation has improved project management, optimized resource allocation, and maximized project profitability. the assurance of budgetary monitoring of projects situation before erp integration ensuring project budget monitoring for companies operating in the construction sector relies on initial estimates and rigorous budget monitoring. before the integration of erp, this process, within sbst, relied primarily on heterogeneous tools, informal exchanges between different departments, and fragmented document management. each project was subject to an initial study carried out by the "price studies" department, which established a basic forecast budget. this budget was then transmitted to the site managers, responsible for implementing the project, who had to refine these forecasts based on the realities on the ground. project budget monitoring within sbst relied on fragmented processes and manual data exchanges between construction sites, the accounting department, and management control. this management relied on microsoft excel for entering expenditure commitments and reconciling them with accounting, and on software for extracting accounting data. however, this system had limitations, particularly in terms of data reliability, the time taken to update information and the additional efforts required to consolidate and analyze the differences between the forecast budget and the actual budget. however, several limitations hampered the effectiveness of this approach: lack of harmonization: the absence of a centralized system forced stakeholders to manage dispersed excel files, generating inconsistencies in the data. poor traceability of changes: the transmission of budgets and adjustments was often done via paper documents or informal exchanges, complicating the justification of deviations between forecasts and actual results. difficulty tracking margins in real time: updating costs and margins required frequent manual interventions, slowing down decision-making. lack of a single benchmark: each site manager interpreted the budgets according to their own methodology, which led to heterogeneity in the financial evaluation of projects. 34 american journal of management vol. 25(3) 2025 impact after erp integration the integration of the erp has enabled a significant overhaul of budget monitoring by automating the entire process, ensuring real-time traceability of financial flows, and structuring the key stages of budget monitoring. site administrators now directly enter expenses incurred into the erp, centralizing the information and ensuring instant reconciliation with recorded invoices. this automation reduces the risk of errors and facilitates the rapid identification of discrepancies between the initial budget and actual expenses. in addition, the erp has structured budget monitoring by establishing rigorous controls and in-depth monthly analyses. the construction manager benefits from an integrated dashboard that allows him to understand the progress of the work and assess expenditure and revenue entitlements in real time. this dynamic monitoring promotes better anticipation of contingencies and more responsive decision-making to adjust costs and maintain project profitability. furthermore, the digitalization of budget monitoring has strengthened collaboration between stakeholders. thanks to the erp, management control can now directly access construction site data, analyze monitoring files, and produce consolidated reports. during monthly accounts meetings, discussions are now supported by reliable and up-to-date data, thus facilitating the analysis of financial performance and the implementation of corrective actions. thus, the integration of this it tool has enabled: standardization and centralization of data; increased data integration, consistency and reliability; better traceability and justification of budgetary deviations; an automatic comparison of the differences between the forecast budget and the adjusted budget, thus providing immediate visibility on any overruns; visibility of the justifications for the technical and financial choices made at each stage of the project; enhanced and more proactive support for site managers; immediate access to up-to-date data facilitating the organization of budget framework meetings; real-time monitoring of costs and margins; an instant update of costs incurred and margins achieved; an adjustment of budget forecasts based on actual expenditure, thus reducing the risk of financial drift; improved decision-making and responsiveness; generation of detailed financial reports, facilitating the identification of risks and optimization opportunities. integrating erp into ensuring project budget monitoring has enabled sbst to improve the reliability of its budget forecasts and optimize its financial management. by centralizing and automating the budget process, the erp has promoted faster and more informed decision-making, thus strengthening the company's competitiveness in the construction sector by controlling its costs. now, site managers and management controllers have a powerful tool to ensure accurate and responsive monitoring of the economic performance of projects. implementation of appropriate reporting situation before erp integration before erp integration, reporting within sbst was a tedious and time-consuming process. data collection was fragmented across different departments, with each entity using its own methods and tools to track project progress and financial performance. management control had to manually extract information from different software programs and databases, consolidate it into excel files, and check its consistency before presenting it to management. this approach led to a high risk of errors, significant processing times, and a lack of real-time visibility into the company's financial and operational situation. american journal of management vol. 25(3) 2025 35 impact after erp integration with the integration of erp, reporting has undergone a major transformation. all accounting, budgetary, and analytical information is now centralized within a single system, ensuring automated and reliable data reporting. thanks to this it tool, management control can generate standardized financial statements and reports tailored to the needs of various stakeholders in just a few clicks. erp has helped optimize several aspects of reporting: monthly reporting: this ensures detailed and regular monitoring of financial and operational performance. key indicators are updated automatically, allowing managers to make decisions more quickly. quarterly reporting: the erp automatically generates consolidated financial statements using standardized formats, thus reducing the risk of errors and speeding up the transmission of information to management. budget reporting: erp facilitates budget planning and monitoring by automating the collection of forecasts and actual results. it also allows for comparison of variances between forecasts and actual results, thus providing better visibility into project performance. customer risk monitoring: customer risk assessment is facilitated by erp integration, which automates customer solvency analysis by taking into account invoices, collections and provisions for doubtful debts. this automation improves risk management and the prevention of non-payment. management file: erp allows the management file to be prepared, ensuring the reliability of financial data and its compliance with accounting. since the information is extracted directly from the system, the risk of discrepancies between different data sources is considerably reduced. the income statement and the consolidated balance sheet: management control can now produce these documents with greater precision, thanks to automated information collection and processing. real-time updates of these indicators provide a more precise view of the company's profitability. erp has made reporting faster, more reliable, and more relevant. the standardization of processes and automation of tasks have reduced the workload of management control, allowing it to focus more on analyzing and anticipating trends. as a result, management now has more accurate and responsive information to guide the company's strategy and improve its competitiveness. developing a project dashboard situation before erp integration before integrating an erp, developing a project dashboard within sbst was a tedious and fragmented task. data came from multiple, dispersed sources, including excel files, manual records, and paper tracking documents. this situation presented several major drawbacks: lack of data reliability: the absence of a centralized system encouraged data entry errors and inconsistencies between different reports. delays in data consolidation: analysis of key indicators was not instantaneous, making it difficult to react to budget or performance deviations. laborious construction site monitoring: project managers had to manually process large volumes of information to monitor construction site progress. difficulties in analysis and projection: the forecasts were unreliable because they were based on estimates made from heterogeneous and often obsolete data. impact after erp integration the integration of the erp enabled optimized and centralized management and radically transformed the development of the project dashboard. the centralized reporting system, particularly via this it tool, enabled a significant improvement in monitoring and analysis processes: 36 american journal of management vol. 25(3) 2025 data reliability and integrity: erp ensures a single source of truth, reducing errors and inconsistencies. data is automatically extracted and updated in real time. instant access to essential information: dashboards are available in real time, providing a comprehensive view of the business situation. monitoring forecasts and achievements is more efficient, thus facilitating budget control. optimized site monitoring: erp allows for simplified site monitoring by consolidating key indicators (progress status, budget consumed, net margin, remaining work). project managers can analyze site profitability more quickly and identify potential risks. ease of use and automated reporting: the system is intuitive and allows users to generate customized reports. budget forecasts are automatically updated with each budget revision, providing better long-term visibility. improved decision-making: projections for the following year (order intake, order book, turnover) are more accurate, improving the company's overall planning. dashboards therefore allow for better anticipation of trends, facilitating strategic adjustments. integrating erp into sbst's project dashboard management has enabled the company to move from a slow, unreliable, and traditional management system to a high-performance, fast, and accurate system. by centralizing information and automating analyses, erp optimizes decision-making and strengthens the company's ability to manage its projects efficiently and proactively. this change perfectly illustrates how digitalization can transform management control practices and improve organizational performance. conclusion this research, conducted using an action research approach, highlighted the importance of methodical support in the implementation of an erp in order to ensure its appropriation by users and maximize its benefits. our results show that the digitalization of management control processes in the construction industry constitutes a performance lever in terms of operational efficiency and the reliability of financial forecasts. the study conducted within the sbst company highlighted the profound effects of integrating an erp on management control practices in the construction sector. by adopting an action research approach, we were able not only to observe but also to support the organization's digital transformation, by playing an active role in the implementation of the system and the evaluation of its impacts. the results of this research show that erp has helped to address several of the shortcomings observed in the previous system: data fragmentation, unreliable information, delays in budget monitoring, and the lack of a consolidated view of project performance. through the centralization and automation of processes, management control has become more responsive, precise, and focused on analysis and decision support, thus strengthening its strategic role in project management. in particular, significant progress has been made in five key areas: the implementation of a reliable documentation system, cost and margin assessment, budget monitoring, the development of relevant reports, and the construction of appropriate dashboards. these transformations have helped improve operational performance and the reliability of financial forecasts, while reducing low-value-added manual tasks. however, the success of this transformation relies on several critical factors: change management, user involvement from the early stages of the project, and the ability to continuously adapt the system to the specificities of the projects and changes in the organizational environment. resistance to change, the learning curve, and the complexity of certain settings were significant challenges that had to be overcome. this study highlights that erp integration is not purely technical but a genuine organizational project that requires strategic thinking, strong cross-functional coordination, and sustained support. in terms of future prospects, it would be relevant to broaden the analysis to other dimensions of strategic management, such as risk management, resource optimization, or measuring the environmental performance of projects. furthermore, the emergence of new generations of erp integrating advanced technologies such as artificial intelligence, predictive analytics, or cloud computing opens the way to future research on the automation of management control and the transformation of decision-making practices in construction companies. american journal of management vol. 25(3) 2025 37 in general, this study enriches the literature on the digitalization of management control in a project context by showing how an empirical and participatory approach can help better understand and better support the changes underway in organizations with high operational intensity. references alhatabat, z. 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(2019). value-oriented stakeholder influence on infrastructure projects. international journal of project management, 37(5), 750–766. american journal of management vol. 25(1) 2025 117 factors influencing innovative activities in selected enterprises jacek piotr kwasniewski mba business school in bydgoszcz the article aims to analyze the factors influencing innovative activities in construction companies in wielkopolska. as a key strategic element, innovation plays an important role in ensuring competitiveness in a dynamically developing market environment. the research was conducted on a sample of 80 companies and 5136 employees, focusing on financial outlays on innovation, technological advancement and modern material techniques. in particular, attention was paid to the relationships between these factors, the inclination to undertake innovative activities, and the influence of sociodemographic variables (gender, age, education) on the approach to innovation. the statistical analysis results showed significant correlations, confirming the importance of appropriate investments and technological resources in stimulating innovative activity. the research that was conducted emphasizes the need for further monitoring of innovation factors and adapting companies’ strategies to the changing market and technological context, which can contribute to the sustainable development of the construction sector in poland. keywords: innovation, innovation activities, enterprise, innovation factors introduction this article is a continuation of research on innovation and future innovations. because innovations play a strategic role in the success of enterprises in a dynamically changing market, only original, innovative and sometimes risky actions can give them a competitive advantage. this article analyzes the main factors that influence innovative activities in enterprises to a greater or lesser extent. particular attention was paid to factors influencing innovative activities in construction, among which those that can shape the construction of the future were analyzed, mainly technological and economic factors, such as financial outlay on innovative activities, technological advancement (digitalization and automation of processes) and advancement in the use of modern material techniques (ecological, energy-saving and efficient). these factors were confronted with sociodemographic factors, such as: gender, age and education of employees. other factors, such as cultural, climate change, and extreme weather phenomena, equally important, were omitted due to the limited volume of the article. the article aimed to learn about and verify the factors influencing innovative activities in construction using the example of construction companies in wielkopolska. the research subjects were the factors influencing innovative activities in these companies, and the subjects were the aforementioned construction companies. this article attempts to answer the following questions: 1) is there a correlation between the propensity to undertake innovative activity and expenditure on innovative activities? 118 american journal of management vol. 25(1) 2025 2) is there a correlation between the tendency to undertake innovative activities and possessing advanced technology? 3) is there a correlation between the tendency to undertake innovative activities and modern material techniques? 4) can variables such as education, gender and age influence the innovative attitude? the main research method was a diagnostic survey method carried out in two stages: the first stage was addressed to 5,136 employees of these enterprises and the second stage was addressed to 80 managers. the article consists of two parts. the first part discusses the types of internal and external factors influencing innovation activities. the second part is devoted to the analysis of the impact of some factors on innovation activities in selected enterprises. it presents its research methodology, indicators selected for the study and statistical analysis of the impact of selected factors on innovation activities in construction. this part determines the propensity to undertake innovation activities depending on having resources for innovation activities, advanced technology, and modern material techniques. the frequency distribution for the assessment of innovation activities in the surveyed enterprises depending on the education of the employees, their gender and age is also given. the article ends with a discussion, conclusions and a conclusion. types of factors influencing innovation activities there are many classifications of the conditions of innovation activity. according to a. kłopotek (2002, p. 30), the greatest influence on the conduct of innovation activity in an enterprise has its external and internal environment. the author includes organizational culture, knowledge management and human resources among internal factors, and competition, customer requirements and technological changes among external factors. t. boczko (2018, p. 235) is of a similar opinion. according to this theory, the factors of enterprise innovation can be classified as follows (pomykalski, 2001, pp. 80-81): • resource of scientific knowledge, research and development potential (it is a source of innovation), • science development strategy, innovation policy (decides on r&d expenditure (kiliankowerko, 2023, p. 6), • the structure of the country’s economy (determines the general shape of the innovation mechanism), • the system of functioning of the economy (determines the effectiveness of the innovation mechanism), • socio-psychological and cultural factors (including motives for innovative activity, such as ambition or prestige). another classification was proposed by w. janasz (2006, p. 340) who divided the factors of innovation into economic (analysis of innovation costs and economic risk), internal (staff level and qualifications) and other (legal regulations, procedures, standards). according to i. bielski ( 2005, p. 10), innovation activity is shaped by external and internal factors. m. kolarz (2006, p. 57) distinguished the following external factors of innovation: • r&d work carried out in agreement with or on behalf of external entities, • exchange of technical knowledge between enterprises and universities, • provision of services to external entities, • foreign trade, • undertaking foreign investments, • license export/import. s. rychtowski (2004, pp. 588-589) included the following among the external conditions of enterprise innovation: • socio-political climate, • service processes including scientific research, information systems, american journal of management vol. 25(1) 2025 119 • legal norms and administrative orders, • market links with partners who are a source of technology, information, • economic calculation, • education and training system, • technical infrastructure. a. francik and a. pocztowski (1991, pp. 26-27), like most authors, divided factors into external and internal. they included the following innovativeness factors in the group of endogenous (internal) factors: • market knowledge, • the economic strength of the enterprise and its size, • willingness to take risks, • continuity of enterprise management. the exogenous (external) factors included: • competition, • the pace of technical progress, • the upward trend of the market, • economic situation, • industry synergy regarding innovation, • state influence on the economy. the influence of the state on innovative activities may be one of the most important factors of enterprise innovation. appropriate policy creates appropriate conditions for the functioning of enterprises and creates a research base for innovation (mroczko, 2004, pp. 434-435). internal factors of innovation result from various components of enterprises themselves, which determine their innovativeness. this group of factors of innovation includes factors such as (kolarz, 2006, p. 57): • own expenditure on innovation, • own expenditure on r&d work, • effectiveness of communication and motivation systems, • staff qualifications, research and marketing experience. the authors m. dworczyk and r. szlasa (2001, pp. 178-180) distinguished the following factors of innovation: • innovation needs, • financial, personnel and material resources for innovative projects, • managing the implementation of innovative projects, • designing innovative solutions, • implementation of innovative projects, • expanding research and development potential, • organizing funds for innovative activities, • using the innovative potential of the staff. according to a. the following two groups of factors stimulate linowska ( linowska, 2011), the development of innovation: those occurring within the enterprise (innovative susceptibility) and those belonging to its environment. the author believes that the most important factors shaping the organization’s ability to innovate are ( linowska, 2011, pp. 393-394): • the intellectual potential of employees (independence, critical thinking, creativity), • the ability to acquire scientific and technical knowledge and predict changes, • willingness to take risks, openness to the surroundings, • opportunities for support of innovative activities from the environment, factors influencing the level of innovation occurring in the enterprise environment are (linowska, 2011, p. 394): • investing in research and development, 120 american journal of management vol. 25(1) 2025 • motivational intellectual property system, • availability of preferential credit supporting innovation, • high level of management staff, • knowledge flow between universities, • development of scientific research institutions (r&d), • creating pro-innovation policy, • efficient flow of information. the search for factors that influence the innovativeness of enterprises has been going on for a dozen or so years. a catalogue of universal factors has not yet been identified. based on the above-mentioned theory, the following factors were adopted for research: • financial outlays for innovative activities, • technological advancement (digitization and automation of processes), • advancement in the use of modern material techniques (ecological, energy-saving and efficient), • education, age and gender of employees. eighty enterprises employing more than 50 employees (a total of 5,136 people) were qualified for statistical analysis – appendix table no. 1 and 2. analysis of the impact of certain factors on innovative activities in selected enterprises own research methodology one of the most important issues in scientific research is the formulation of the research goal (kowalska, 2016, pp. 7-8). authors t. pilch and t. bauman defined the goal of scientific research as a certain action that allows for the examination of the significance of the impact of specific data (pilch, bauman, 2001, p. 36). this article adopted the following definition of the research goal: it is the scientific cognition of social reality, description of a phenomenon or institution or individual (kowalska, 2016, p. 8). the article aims to learn about and verify the factors influencing innovative activities in construction using the example of construction companies located in wielkopolska. the research subjects were the factors influencing innovative activities in these companies, and the subjects were the aforementioned construction companies. the definition of the research subject was taken from the works of aw maszke, who assumed that these would be all phenomena subject to established processes and based on which research questions can be formulated ( maszke, 2004, p. 44). the following research problems were adopted in this article: 1) is there a correlation between the propensity to undertake innovative activity and expenditure on innovative activities? 2) is there a correlation between the tendency to undertake innovative activities and the possession of advanced technology? 3) is there a correlation between the tendency to undertake innovative activities and the use of modern material techniques? 4) can variables such as education, gender and age influence the innovative attitude? a research problem is a question or a set of questions that will be answered after conducting the research. it concerns the research subject’s properties, conditions, dependencies, significance, and joint or exclusive impact (kucinski, 2010, p. 84). indicators selected for the study the empirical basis for the research is regional measurements carried out in the wielkopolska province in october and december 2023. the relationship between the propensity to have resources for innovative activities, advanced technology, modern material techniques, and undertake innovative activities was analyzed within 80 enterprises and their 5,136 employees, according to education, gender, and age. the american journal of management vol. 25(1) 2025 121 statistical analysis of the research results was performed using statistical tests of independence (t-student, chi-square). the calculations were performed using excel. analysis of the impact of selected factors on innovative activities in construction the frequency distribution for the assessment of innovative activity in the surveyed construction enterprises depending on financial outlays is presented in appendix table no. 3. the preparation of data for calculating theoretical numbers is presented in appendix table no. 4. to apply the test 𝜒2 you can use the formula (kończak, 2014, p. 41): 𝜒2 = ∑ ∑ (𝑛𝑖𝑗−𝑛𝑖𝑗 ′ ) 2 𝑛𝑖𝑗 ′ 𝑠 𝑗=1 𝑘 𝑖=1 (1) where: n ij observed frequencies; n ij ´ theoretical statistical relationships the variables: “willingness to undertake innovative activity” and “having resources for innovative activities” in the context of annual expenditure on innovative activity above pln 100,000, demonstrate a statistically significant relationship: χ2 = 26.67; df = 5; significance = 0.000023 < 0.001. the variables: “willingness to undertake innovative activity” and “possession of advanced technology”, in the context of annual expenditure on innovative activity above pln 100,000, demonstrate a statistically significant relationship: χ2 = 56.81; df = 5; significance = 0.000000000014 < 0.001. the variables: “willingness to undertake innovative activity” and “use of modern material techniques”, in the context of annual expenditure on innovative activity above pln 100,000, demonstrate a statistically significant relationship: χ2 = 23.86; df = 5; significance = 0.000085 < 0.001. statistical relationships for other variables: 1) by education: the frequency distribution for the assessment of innovative activity in the surveyed construction enterprises depending on the education of the employees is presented in appendix table no. 5. the variables: “the willingness of a given company to undertake innovative activities” and “having resources for innovative activities” in the context of the number of employees with higher education employed there, show a statistically significant relationship: χ2 = 14.06; df = 5; significance 0,0071> 0.001 and significance 0,0071< 0.05. the variables: “the willingness of a given company to undertake innovative activities” and “possession of advanced technology” in the context of the number of employees with higher education employed there, show a statistically significant relationship: χ2 = 12.81; df = 5; significance = 0,0122> 0.001 and significance = 0,0122< 0.05. the variables: “the willingness of a given company to undertake innovative activities” and “the use of modern material techniques” in the context of the number of employees with higher education demonstrate a strongly statistically significant relationship: χ2 = 24.10; df = 5; significance = 0,000076< 0.001. 2) by gender: the frequency distribution for the assessment of innovative activity in the surveyed construction enterprises depending on the employees’ gender is presented in appendix table no. 6. the variables: “the willingness of a given company to undertake innovative activities” and “having resources for innovative activities” in the context of the gender of the employees employed there show a statistically insignificant relationship: χ2 = 7.93; df = 5; significance = 0,0941 > 0.001 and0,0941 > 0.05. the variables: “the willingness of a given company to undertake innovative activities” and “possession of advanced technology” in the context of the gender of the employees employed there show a statistically significant correlation: χ2 = 31.21; df = 5; significance = 0,0000028< 0.001. 122 american journal of management vol. 25(1) 2025 the variables: “the willingness of a given company to undertake innovative activities” and “the use of modern material techniques” in the context of the gender of the employees employed there show a statistically significant correlation: χ2 = 52.99; df = 5; significance = 0,000000000085< 0.001. 3) by age: the frequency distribution for the assessment of innovative activity in the surveyed construction enterprises depending on the age of employees is presented in appendix table no. 7. the variables: “the willingness of a given company to undertake innovative activities” and “having resources for innovative activities” in the context of the age of the employees employed there show a statistically significant relationship: χ2 = 39.29; df = 5; significance =0,000000061 < 0.001. the variables: “the willingness of a given company to undertake innovative activities” and “possession of advanced technology” in the context of the age of the employees employed there show a statistically significant relationship: χ2 = 20.40; df = 5; significance = 0,00042< 0.001. the variables: “the willingness of a given company to undertake innovative activities” and “the use of modern material techniques” in the context of the age of the employees employed there show a statistically significant relationship: χ2 = 16.77; df = 5; significance = 0,002137> 0.001, but 0,002137< 0.05. relationship between having resources for innovation activities and the tendency to undertake innovation activities the relationship between having resources for innovation activities and the willingness to undertake innovation activities was indicated most highly by people with higher education (52% very high and high), then by men (50%) and people under 40 years of age (27%) – figure 1. figure 1 the relationship between having resources for innovation activities and the tendency to undertake innovation activities (based on own research results) the least likely to undertake innovative activities are people over 40 (49% – very low and low) and women (23%). the relationship between having advanced technology and the tendency to undertake innovative activities the relationship between having advanced technology and the tendency to undertake innovative activities was indicated most highly by people with higher education (56% very high and high), then by men (42%) and people under 40 years of age (26%) – figure 2. 17.43 29.26 30.47 16.53 6.31 18.12 32.19 29.08 15.18 5.43 8.21 19.29 27.78 28.32 16.4 6.45 14.87 29.47 27.53 21.68 29.12 23.38 23.29 18.03 6.18 28.02 24.23 27.78 15.26 4.71 very high high average low very low women men under 40 over 40 higher education other education [%] american journal of management vol. 25(1) 2025 123 figure 2 the relationship between possession of advanced technology and the tendency to undertake innovative activities (based on own research results) the least likely to undertake innovative activities were people over 40 years of age (45% – very low and low) and women (36%). the relationship between the use of modern material techniques and the tendency to undertake innovative activities the relationship between the use of modern material techniques and the tendency to undertake innovative activities was indicated most highly by people with higher education (53% very high and high), then by men (38%) and people under 40 years of age (31%) – figure 3. figure 3 the relationship between the use of modern material techniques and the tendency to undertake innovative activities (based on own research results) 11.55 23.31 29.31 26.57 9.26 12.25 29.42 25.54 25.36 7.43 7.85 18.58 33.16 26.98 13.43 6.61 16.68 31.3 27.93 17.48 27.9 27.69 23.12 15.51 5.78 26.62 23.81 25.1 16.36 8.11 very high high average low very low women men under 40 over 40 higher education other education [%] 12.67 19.15 30.75 22.97 14.46 10.42 27.56 28.92 20.76 12.34 5.76 25.84 29.35 21.79 17.26 6.22 22.57 27.7 22.47 21.04 27.31 26.18 25.13 16.23 5.15 24.92 22.32 26.01 17.5 9.25 very high high average low very low women men under 40 over 40 higher education other education [%] 124 american journal of management vol. 25(1) 2025 the least likely to undertake innovative activities are people over 40 (43% – very low and low) and women (33%). discussion many scientists have researched the factors influencing innovative activities in enterprises. polish researchers of this phenomenon have mostly been described in the section on the types of factors influencing innovative activities (k. szopik-depczyńska 2006, a. wziątek-kubiak and e. balcerowicz 2009, a. linowska 2011, a. rojek 2017, e. stawasz 2014, e. michalski 2015, m. jakubiec 2016). among foreign authors, we can distinguish vg vol’ka 2104, m. ehrenberg, p. koudelkova and w. strielkowski 2015. a. wziątek-kubiak and e. balcerowicz (2009, p. 57) analyzed the determinants of the development of a company’s innovativeness in the context of the level of education of employees. the authors showed that the key factor of innovativeness is the level of education of employees, which, according to the authors, results from its complementary role to other innovation factors. this factor is the main source of knowledge accumulation. therefore, it has a priority significance for the ability to absorb, create, introduce and implement innovations. vg vol’ka (2104, pp. 134-135) studied the factors that influenced the innovativeness of enterprises. the author proved their relationship and mutual influence. he constructed graphic reflections on the influence of external and internal environmental factors on the innovative features of the enterprise. he distinguished the factors of indirect influence (political, legal, economic, scientific-technical, social and natural-climatic) and direct (suppliers, consumers, employees). he introduced a system of internal and external environmental factors that influence the innovativeness of the enterprise and determined their influence on the main features of innovation. by analyzing these factors, he proved that it is possible to reduce the uncertainty of the environment to improve the enterprise management level. factors influencing innovation in small and medium-sized enterprises were the subject of interest of m. ehrenberg, p. koudelkova and w. strielkowski (2015, pp. 81-82). the authors analyzed data from surveys among 1,144 smalland medium-sized enterprise employees. the authors presented the following as key factors of innovation: the legal form of the enterprise (limited liability companies are more innovative than other legal forms), government support for investment activities, employee education and export expansion into new markets. azimovna and ud ilkhomovna (2022, pp. 146-148) dealt with the factors influencing the innovation activity of industrial enterprises. the authors emphasized the importance of external factors in innovation activity, which may be the subject of business strategy, coordinated social actions or public policy. they analyzed factors such as environmental or contextual, spatial and locational, related to the external market, the flow of knowledge, politics and the natural environment. none of the cited authors conducted a statistical calculation of the actual impact of the examined factors on the enterprise’s innovativeness. conclusions the results of the research confirm that innovative activities in selected construction companies in wielkopolska are strongly related to specific financial and technological factors. statistical analysis showed significant relationships between financial outlays on innovation and the tendency to undertake innovative activities, which indicates the importance of appropriate investments in the development of innovation in this industry. thanks to the applied methodology, it was possible to answer the problematic questions posed at the beginning concerning the impact of advanced technology and modern material techniques on innovation activity, which confirms the thesis that enterprises that invest in technologies and modern materials are more likely to implement innovative projects. observations on the impact of sociodemographic factors, such as gender, age and education, on the innovativeness of enterprises, although less clear, still indicate significant differences in the approach of american journal of management vol. 25(1) 2025 125 different groups of employees to innovation. the analysis shows that younger generations and people with higher education show greater openness to innovation and willingness to engage in innovative activities. certainly, further research on innovation factors in various economic sectors should also take into account the cultural and regulatory context, as well as the development of pro-innovation policy, which may influence the shaping of an innovation-friendly environment. the research indicates a significant correlation between financial outlays on innovation and the willingness to undertake innovative activities in enterprises. high investments in technologies and modern materials are conducive to implementing innovative projects. enterprises with advanced technology and modern material techniques demonstrate greater innovation activity. this phenomenon suggests that the development and adoption of new technologies are necessary to stimulate innovation in the construction industry. analysis of the impact of sociodemographic variables, such as gender, age and education, reveals certain differences in the approach to innovation. younger people and employees with higher education are more likely to engage in innovation activities, which may indicate changes in attitudes and skills among various social groups. the author of the article emphasizes the need to continue research on innovation factors, taking into account the cultural and regulatory context. the construction sector requires continuous adjustment of strategies to changing market and technological conditions, which is important for sustainable development. the conclusions suggest that pro-innovation policy and state support are key to creating favourable conditions for innovation development. effective actions can increase polish enterprises’ competitiveness in domestic and international markets. innovations are a key element of competitiveness strategy. construction companies that effectively implement modern solutions can gain an advantage over the competition, which directly impacts their development and the industry’s sustainable development. innovation in the construction sector in wielkopolska is closely related to appropriate investments, technologies, and human resources, and diverse approaches to innovation depend on sociodemographic factors. the article indicates the need for an active and comprehensive approach to innovation in construction companies, favoring their long-term competitiveness. references azimovna, m.s., ilkhomovna, u.d. (2018). measuring external factors influencing innovation in companies. oslo manual oecd/european union, pp. 145–162. baczko, t. (2018). product innovations. polish academy of sciences, 3, 22–251. baj, w., & pietucha, i. (2006). factors stimulating the creation of innovations in an enterprisem. przegląd organizacji, 7/8, 32–36. bielski, i. (2005). factors influencing innovativeness. nowator, 21(1), 10–12. central statistical office. (2022). innovation activity of enterprises in poland in 2019-2021. warsaw. decision no 1608/2003 of the european parliament and of the council of 22 july 2003 concerning the production and development of community statistics on science and technology. dworczyk, m., & szlasa, r. (2001). innovation management. pw, warsaw. ehrenberger, m., koudelková, p., & strielkowski, w. (2015). factors influencing innovation in small and medium enterprises. social and management sciences, 23(2), 73–83. francik, a., & pocztowski, a. (1991). innovation processes. ae, kraków. frascati manual. (2015). guidelines for collecting and reporting data on research and experimental development. oecd, 36–37. janasz, w. (ed.) (2006). outline of the industrial development strategy. difin, warsaw. kilian-kowerko, k. (2023). how to describe r&d work and obtain grants. sell worldwide llc, warsaw. kłopotek, a. (2002). pro-innovation policy as a condition for increasing the competitiveness of enterprises. sgh, warsaw. kolarz, m. (2006). the impact of foreign direct investment on the innovativeness of enterprises. uś, katowice. 126 american journal of management vol. 25(1) 2025 kończak, g. (2014). on testing the significance of partial and multiple correlation coefficients for multidimensional contingency tables. ue, katowice. kowalska, k. (2016). deviant behaviour of minors. ptk no. 23, 7–28. kucinski, k. (2010). methodology of economic sciences. difin, warsaw. linowska, a. (2011). factors and barriers of innovation development. pb, białystok maszke, a.w. (2004). methodological basis of research. urz , rzeszów. mroczko, f. (2004). problems of innovation management. ae, wrocław. pomykalski, a. (2001). innovation management. pwn, warsaw. rojek, d. (2017). internal factors of innovation. management. theory and practice, 3(21), 23–32. rychtowski, s. (2004). external and internal conditions of innovativeness. ae, wrocław. schumpeter, j. (1960). theory of economic development. pwn, warsaw. vol’ka, v.g. (2104). econtechmod. an international quarterly journal. naoś, simferopol, 1, 133–138. appendix table 1 summary of survey results from own research (part of the survey completed by employees) lp. question variables employees in the surveyed companies number % 1. age under 40 years old 3015 58.7 over 40 years old 2121 41.2 2. sex woman 2517 49.0 man 2619 51.0 3. education higher 1004 19.5 other 4132 80.4 4. sources of innovation the work of management staff 2465 48.0 customers, suppliers, competitors 2003 39.0 purchase of license 360 7.0 other 308 6.0 5. annual number of implemented innovations 1-3 5008 97.5 4-6 103 2.0 above 6 25 0.5 6. type of implemented innovations product 192 3.7 process 32 0.6 marketing 1241 24.1 organizational 3139 61.1 imitation-adaptive 532 10.3 7. information and communication technologies 1264 24.6 renewable energy 2342 45.6 logistics 978 19.0 american journal of management vol. 25(1) 2025 127 areas of planned future innovations artificial intelligence 320 6.2 decentralized data registry 232 4.5 8. type of planned future innovations robotics 132 2.5 5g connectivity 2821 54.9 smart sensors 1813 35.3 intelligent production or service implementation systems 176 3.4 augmented reality 28 0.5 digital twin 89 1.7 additive manufacturing 54 1.0 table 2 summary of survey results from own research (part of the survey completed by managers) 1. annual financial outlays for innovation activities < 10,000 6 7.5 11,000 to 100,000 60 75.0 101,000 to 1,000,000 12 15.0 > 1,000,000 2 2.5 2. technological advancement (digitization and process automation) very high 3 3.7 high 16 20.0 medium 52 65.0 low 5 6.2 very low 4 5.0 3. advancement in the use of modern material techniques (ecological, energy-saving and efficient) very high 9 11.2 high 15 18.7 medium 42 52.5 low 8 10.0 very low 6 7.5 128 american journal of management vol. 25(1) 2025 table 1 frequency distribution for the assessment of willingness to undertake innovative activity, according to expenditure on innovative activities (own study based on table 1) willingness to undertake innovative activities having resources for innovation activities possession advanced technology use of modern material techniques annual expenditure over 100,000 pln the remaining annual expenditure over 100,000 pln the remaining annual expenditure over 100,000 pln the remaining n % n % n % n % n % n % very high 8 (2) 57.2 4 (10) 6.1 7 (1) 50.0 0 (6) 0 6 (1) 42.8 2 (7) 3.0 high 3 (2) 21.4 9 (10) 13.6 5 (1) 35.8 2 (6) 3.0 3 (2) 21.4 7 (8) 10.6 mean 2 (4) 14.2 22 (20) 33.4 1 (4) 7.1 23 (20) 34.8 3 (5) 21.4 23 (21) 34.8 low 1 (4) 7.2 19 (17) 28.8 1 (5) 7.1 25 (21) 37.9 2 (5) 14.2 25 (22) 37.8 very low 0 (2) 0.0 12 (10) 18.1 0 (3) 0.0 16 (13) 24.3 0 (2) 0.00 9 (7) 13.6 total: 14 100 66 100 14 100 66 100 14 100 66 100 () – theoretical numbers american journal of management vol. 25(1) 2025 129 table 4 preparation of data for calculating theoretical numbers (own study based on table 1) willingness to undertake business activity having resources for innovation activities possession advanced technology use of modern material techniques annual expenditure over 100,000 pln the remaining sum annual expenditure over 100,000 pln the remaining sum annual expenditure over 100,000 pln the remaining sum very high 8 4 12 7 0 7 6 2 8 high 3 9 12 5 2 7 3 7 10 mean 2 22 24 1 23 24 3 23 26 low 1 19 48 1 25 26 2 25 27 very low 0 12 96 0 16 16 0 9 9 total: 14 66 192 14 66 80 14 66 80 table 5 frequency distribution for the assessment of willingness to undertake innovative activities in construction enterprises, according to employee education (own study based on table 1) willingness to undertake innovative activities having resources for innovation activities possession advanced technology use of modern material techniques higher education other higher education other higher education other n % n % n % n % n % n % very high 292 (283) 29.12 1158 (1167) 28.02 280 (270) 27.9 1100 (1110) 26.62 274 (255) 27.31 1030 (1049) 24.92 high 235 (242) 23.38 1001 (994) 24,23 278 (247) 27.69 984 (1015) 23.81 263 (232) 26.18 922 (953) 22.32 mean 234 (270) 23.29 1147 (1112) 27.78 232 (248) 23.12 1037 (1021) 25.1 252 (259) 25.13 1075 (1068) 26.01 low 181 (159) 18.03 631 (653) 15.26 156 (163) 15.51 676 (669) 16.36 163 (173) 16.23 723 (713) 17.5 very low 62 (50) 6.18 195 (206) 4.71 58 (77) 5.78 335 (316) 8.11 52 (85) 5.15 382 (349) 9.25 total: 1004 100 4132 100 1004 100 4132 100 1004 100 4132 100 130 american journal of management vol. 25(1) 2025 table 2 frequency distribution for the assessment of willingness to undertake innovative activities in construction enterprises, by employee gender (own study based on table 1) willingness to undertake innovative activities having resources for innovation activities possession advanced technology use of modern material techniques men women men women men women n % n % n % n % n % n % very high 475 (466) 18.2 439 (448) 17.4 321 (312) 12.2 291 (300) 11.5 273 (302) 10.4 319 (290) 12.7 high 843 (805) 32.2 736 (774) 29.3 771 (692) 29.5 587 (666) 23.4 722 (614) 27.6 482 (590) 19.2 mean 761 (779) 29.1 767 (749) 30.5 668 (717) 25.6 738 (689) 29.4 757 (781) 28.9 774 (750) 30.8 low 398 (415) 15,1 416 (399) 16.5 664 (679) 25.3 668 (653) 26.5 544 (572) 20.8 578 (550) 22.9 very low 142 (153) 5.4 159 (148) 6.3 195 (218) 7.4 233 (210) 9.2 323 (350) 12.3 364 (337) 14.4 total: 2619 100 2517 100 2619 100 2517 100 2619 100 2517 100 american journal of management vol. 25(1) 2025 131 table 7 frequency distribution for the assessment of willingness to undertake innovative activities in construction enterprises, by employee age (own study based on table 1) willingness to undertake innovative activities having resources for innovation activities possession advanced technology use of modern material techniques age below 40 years age over 40 age below 40 years age over 40 age below 40 years age over 40 n % n % n % n % n % n % very high 248 (226) 8.2 137 (159) 6.4 237 (221) 7.89 140 (156) 6.6 174 (179) 5.8 132 (126) 6.2 high 582 (527) 19.3 315 (370) 14.9 560 (537) 18.7 354 (377) 16.7 779 (738) 25.8 479 (519) 22.6 mean 838 (859) 27.8 625 (604) 29.5 1000 (977) 33.1 664 (687) 31.4 885 (864) 29.3 588 (608) 27.7 low 853 (844) 28.3 584 (594) 27.5 813 (825) 26.9 592 (581) 27.9 657 (665) 21.8 476 (468) 22.5 very low 494 (560) 16.4 460 (394) 21.7 405 (455) 13.4 371 (320) 17.4 520 (567) 17.3 446 (399) 21.0 total: 3015 100 2121 100 3015 100 2121 100 3015 100 2121 100 86 american journal of management vol. 25(1) 2025 thought leadership on the revolutionary developments in organizations ursula brady texas a&m university, corpus christi kathy kuria kuria consulting, llc reginald l. bell prairie view a&m university this study investigated thought leadership concerning organizational growth strategies. internal thought leaders (itl) and external thought leaders (etl) we identified in the literature to be directly related to achieving revolutionary developments in organizations (rdo). we found that itl are better suited for setting goals, aligning resources, and fostering innovations; on the other hand, etl were better suited to advance organizational reputation. we explicate a progressive thought leadership framework that works best to sustain organizational growth strategies. this integrative approach can impact ethical decisionmaking, leadership styles, operation efficiencies and return on investments if done properly. because thought leadership influences a collective mindset among workers, we were able to make several recommendations for managers seeking to influence their organizational growth strategies. keywords: decision-making, descartes, ethics, growth, influence, strategy, thinking, thought leadership introduction to thought leadership did rene descartes disprove his own thoughts? “no, rené descartes did not disprove his own thoughts; in fact, his famous philosophical statement “cogito, ergo sum” (i think, therefore, i am) is based on the idea that the very act of doubting one’s own existence proves that one must exist as a thinking thing, making it the one undeniable truth he could establish through his method of radical doubt” (google ai, generated on november 29, 2024). rene descartes, inventor of analytical geometry, was perhaps made more famous when he attempted to disprove his own beliefs with a form of rationalism explicated in his book, a discourse on the method of correctly conducting one’s reason and seeking truth in the sciences, with the credo “cogito, ergo sum” [i think; therefore, i am] (descartes, 2006). what is clear is that when you are doubting what you are thinking, you are existing. descartes (2006) establishes thinking to be clarified from existing, as doubting your thoughts proves your existence, demonstrated in the following passage from descartes’ book: american journal of management vol. 25(1) 2025 87 i am thinking therefore i exist: the latin version reads cogito ergo sum, which is normally translated as ‘i think therefore i am’; but the glosses that descartes places on this elsewhere (notably in the second parts of the principia and the meditations) make it clear both that it is a performative (‘i am thinking’) and that being is existing; he is not referring to being as essence…‘it is contradictory to suppose that what is thinking does not, at the very time when it is thinking, exist.’ two other points emerge from this passage: the first step towards the cogito is the dubio (‘i am doubting, therefore i am existing’); and the immediacy of this intuition is not consistent with the view expressed by other renaissance figures who consider reflexive thinking, such as cardano, who see a time interval elapsing between the thought and the realization that the thought is being thought… (descartes, 2006, pp. 73-74) merriam-webster’s online dictionary (2024) defines thought as “an individual act or product of thinking.” it further defines thinking as “using one’s mind to produce thoughts.” thought is a noun, while thinking is a verb. thought leaders are thinking beings whose ideas of mind affect the thought patterns and actions of others. there are the capitalist philosophers whose books are considered the most influential management books of the 20th century, which laid the groundwork for the field of management, i.e., taylor, fayol, weber, drucker, simon, follett, herzberg, barnard, porter, and others (bedeian & wren, 2001; bell & roebuck, 2015; fulk, et al, 2011; gabor, 2000). many corporate executives were heavily influenced by management by objectives found in the practice of management (drucker, 2012). management: tasks, responsibilities and practices, in a book review woolsey (1975) considered it to be the bible of management philosophy. chester i. barnard, herbert simon, frederick w. taylor, max weber, henri fayol are good examples of thought leaders. thought leadership often refers to the position of an individual or an organization as an expert in a specific field. the concept of thought leadership advocates for a novel idea that instigates change via rational argument, empirical evidence, and motivational appeal (rausch & mccrimmon, 2005), as cited in wen et al., (2019). by highlighting the relative impacts of internal thought leaders (itl) and external thought leaders (etl) on different organizational outcomes, this study illuminates the unique contributions and potential synergies between internal thought leadership and external thought leadership in driving revolutionary developments in organizations (rdo). when it comes to internal thought leaders, the focus is specifically on examining and optimizing factors within the organization itself as it pertains to strategic thinking. conway (2013, p.4) established the following: strategic thinking is identifying, imagining, and understanding possible and plausible alternative futures for your organisation, and using the knowledge gained to strengthen your thinking about your potential options to position your organisation effectively in the external environment in the future, in order to make better informed and more robust decisions about action to take today. with rapidly evolving markets, revolutionary development increasingly depends on leaders who can manage internal complexities and build external influence. however, the specific impact of internal vs. external leadership approaches on organizational growth strategies remains underexplored with a perceived gap in literature. it is unclear to what extent internal and external thought leadership influence growth separately. additionally, organizations may under-prioritize one in favor of the other, which could limit growth potential. a comprehensive literature review comparing the two aspects of leadership is necessary. we will explore both concepts—internal and external thought leadership, assessing how these ideas contribute exclusively to rdos. strategic thinking is a crucial skill for rdo, involving the ability to analyze complex situations, communicate throughout the organization at each tier, identify opportunities, and formulate innovative solutions, including the five-forces of industry competitiveness (bell, 2012; porter, 2008). to examine the impact of internal and external thought leadership on growth strategies, we explore the concepts by answering the following research question: 88 american journal of management vol. 25(1) 2025 rq: can internal and external thought leaders’ influence on revolutionary developments in organizations as growth strategies be properly identified and measured? the discourse on leadership impact on rdo has progressed markedly during the last few decades. recent scholarship examined the convergence of itl and etl, acknowledging the distinct yet synergistic roles each contribute to organizational success. this review initiates with an analysis of historical viewpoints on leadership, ranging from first trait-based ideas to more sophisticated methodologies. contemporary leadership paradigms prioritizing authenticity, integrity, and ethical decision-making are examined. the review finishes by emphasizing secondary evidence as proof that illustrates the concrete effects of different leadership styles on rdo and growth. literature review liedtka (1998) identified five key elements that characterize strategic thinking: 1) taking a systems (holistic) view, 2) maintaining a clear focus on intent, 3) thinking in time (considering past, present and future), 4) being hypothesis-driven, and 5) remaining intelligently opportunistic. these elements enable strategic thinkers to see the big picture, stay focused on goals, learn from history while anticipating the future, test assumptions, and remain flexible enough to seize unexpected opportunities. with an eye toward innovation, organizations utilize strategic thinking to focus on improvements and future endeavors (haycock et al., 2012). although strategic thinking has been recognized as critical to organizational success, there is a notable lack of research devoted to the exploration of the importance of strategic thinking in organizational success, there is a notable lack of comprehensive research exploring the factors that contribute to or precede strategic thinking (antecedents) and the results of strategic thinking (outcomes) (moon, 2013). “at a time when leaders across a spectrum of organizations are facing unprecedented socioeconomic challenges, strategic thinkers are much needed to rise to the occasion” (adzeh, 2017, p.11). impact on ethical decision-making several factors influence ethical decision-making, including moral intensity, awareness, and ethical leadership. jones’s (1991) model posits that ethical decisions vary depending on the characteristics of the ethical issue, termed “moral intensity.” this model includes factors such as the magnitude of consequences, social consensus, and probability of effect, which influence the ethical decision-making process. moral intensity is critical in determining how individuals respond to ethical issues. this model highlights the importance of assessing an ethical dilemma’s specific context and intensity to determine the appropriate response. butterfield et al. (2000) examine how organizational factors affect ethical decision-making, particularly the first stage of the process, which is moral awareness. it discusses how situational factors, organizational context, and issue-specific factors shape whether employees recognize ethical issues. much like jones’ (1991) moral intensity, moral awareness is a critical step in ethical decision-making. organizations can enhance ethical decision-making by fostering an environment that encourages employees to recognize and address ethical issues. ethical decision-making in business is multi-faceted, with various personal and situational factors shaping ethical behavior. the study suggests that organizational frameworks that emphasize ethical values and culture effectively promote ethical decision-making. the study from brown, trevino, and harrison (2005) that was mentioned in the context of ethical leadership also provides empirical evidence that ethical leadership positively affects employee morale and organizational commitment, boosting organizational performance. it emphasizes that ethical leaders promote a trust-based culture, supporting internal cohesion and external reputation. while other studies explore how transactional and transformational leadership styles affect organizational learning and innovation. it demonstrates that transformational leadership fosters a culture of learning and creativity, directly contributing to growth (garcía-morales et al., 2012). the value of thought leadership is often met with skepticism and misconceptions. harvey et al. (2021) posits that thought leadership is an inconsistent, universally recognized, but poorly understood concept. american journal of management vol. 25(1) 2025 89 the term “thought leader” dates to 1887, an often-used term that does not have a universally accepted meaning. more recently, the term was used in periodicals such as the economist and mit technology review to illustrate how industry leaders have greatly influenced how we view brands and societal issues (barry & gironda, 2019). literature has referred to the concept as opinion leadership that employs novelty and expertise (rogers & cartano, 1962), allowing room to question the concept’s legitimacy, and the lack of studies addressing thought leadership further exacerbates the issue of legitimacy. while thought leadership is appealing, it requires a nuanced balance of expertise, innovation, and influence to implement successfully. impact on leadership styles authentic leadership emphasizes self-awareness, transparency, ethical conduct, and commitment to personal growth. avolio and gardner (2005) argue that authentic leaders, who stay true to their values, are more effective at building trust and fostering long-term success. authentic leadership has been linked to higher organizational commitment and trust. by modeling ethical behavior, authentic leaders create an environment of openness and integrity, positively influencing organizational culture. in 1962, rogers and cartano wrote about “opinion leaders”. in the context of their research, this concept is an intersection of both strategic leaders’ thinking and thought leadership. the writers theorize that personal influence is “an essential ingredient in many different type of decision-making” (rogers & cartano, 1962, p. 436) their findings show that those opinion leaders of the time held more sway over decision making in things like adoption of farm equipment, far outweighing the more detached sources of information available like radio or farm periodicals. their measurements of opinion leaders’ influence showed their more sophisticated methods of communication to reach the heights of innovation that could facilitate organizational growth. thought leadership effectiveness includes being keen on emotional intelligence within a managerial communication environment and being properly trained, as effective leaders are trained not born (brown, et al, 2023; chatman, et al 2020; nguyen, et al, 2019). burns (1978) offered a definition of transformative leadership that has seen a resurgence in contemporary articles on leadership diversity and integrity (adams, et al, 2023; cooper, et al, 2023): bell and bodie (2012), in summary of a leadership definition wrote: although there are many definitions of leadership, james macgregor burns (1978), in his classic b-book leadership, provides a definition that is still relevant: “leadership is the reciprocal process of mobilizing, by persons with certain motives and values, various economic, political, and other resources, in a context of competition and conflict, in order to realize goals independently or mutually held by both leaders and followers.” apparently burns perceived the ideal leader as “transformational.” appealing to the followers’ values and a higher vision, transformational leaders encourage the followers to exert themselves in the service of achieving that vision (p. 49–50). kouzes and posner (2017) establish their credibility as experts on leadership strategy through rigorous research, combining extensive empirical studies with practical insights that are not purely anecdotal. they base their proposition on data collected over decades (pp. 42-43); they analyzed thousands of leadership behaviors across varied environments and present clear patterns connecting credibility to effective leadership. unlike anecdotal claims, their findings are supported by systematic evidence, including their “five practices of exemplary leadership” model (p.11). on the other hand, james macgregor burns (1978) provides a more theoretical foundation whose hallmark is transformational leadership: kouzes and posner complement this framework by offering actionable strategies validated through real-world application and broad surveys, reinforcing the claim with concrete, replicable data. fostering collaboration in this environment requires cultivating trust and breaking down silos of ideological division. kouzes and posner (2017) argue that leaders must “strengthen others by increasing self-determination and developing competence” (p. 274). while their advice on empowering employees is valuable, it oversimplifies the complexity of ideological conflicts. the strategic thinker could go further by 90 american journal of management vol. 25(1) 2025 initiating structured, facilitated dialogues that allow employees to voice their concerns and co-create guidelines for content moderation. kouzes and posner’s notion that “collaboration thrives when people trust one another” (p. 236) is accurate but incomplete in this context. trust must be actively built through transparent decision-making and acknowledgment of valid fears from both sides of the debate. by addressing these tensions head-on and reinforcing the organization’s shared vision, strategic thinkers will lay the foundation for long-term collaboration and unity. liedtka (1998) recognized the need to create a capability for strategic thinking at multiple organizational levels has increasingly been recognized as central to creating and sustaining competitive advantage in the face of the rapid environmental change that characterizes many business environments today. in addition, fiedler’s contingency theory posits that there is no one best way to lead; instead, the effectiveness of a leadership style depends on situational factors. leaders may be more effective if their style matches the demands of the situation, such as task structure, leader-member relations, and leader position power. leadership is dynamic and must adapt to different contexts, a significant departure from earlier trait and behavioral theories. it has become a cornerstone for understanding adaptive leadership. (gawronski, 2021) sendjaya and sarros (2002) examine servant leadership and transformational leadership to present a balanced approach that emphasizes service to employees while inspiring and motivating them. by integrating both leadership styles, leaders can create a supportive environment that drives high performance. integrating servant and transformational leadership builds a culture of trust and high morale while aligning employees with organizational goals. this combination helps balance the focus on employee well-being and organizational productivity. leaders using this approach adapt their style to support creativity and operational control. ambidextrous leadership allows organizations to be innovative while maintaining stability. leaders who adaptively switch between encouraging exploration and enforcing discipline create an environment that supports sustained growth and resilience. this take on leadership also allows organizations to be innovative while maintaining stability. leaders who adaptively switch between encouraging exploration and enforcing discipline create an environment that supports sustained growth and resilience. (rosing et al., 2011) koçak (2019) theorized that the globalization occurring in business dynamics has created new challenges leading to the need for a change from conventional leadership. challenges also uniquely create opportunities for leaders to innovate and adapt. leaders with an eye toward new thinking and ideas that extend beyond the bottom line can garner more than the bottom dollar. these modern approaches to balanced leadership focus on adapting leadership styles to meet various organizational needs, fostering inclusivity, sustainability, and ethical responsibility. by integrating elements of transformational, transactional, servant, and ethical leadership, modern leaders can create a balanced environment that drives both innovation and stability, making these approaches particularly relevant in today’s dynamic and diverse organizational landscapes. impact on operations and investment returns one study empirically examines how ceo leadership style impacts organizational performance, particularly under uncertain environmental conditions. it focuses on directive and empowering leadership styles, showing that leaders who adapt their style to the organization’s environment are more likely to foster growth. the study finds that empowering leadership correlates with profitability and growth, especially in uncertain environments where adaptability and employee autonomy are crucial (waldman et al., 2001). jansen et al (2009) explore how leaders who balance exploration and innovation with exploitation and efficiency to foster organizational growth in dynamic environments. the study empirically examines companies in fast-changing industries and finds that leaders who support a dual approach of innovation and efficiency drive stronger growth. they found that strategic leaders who emphasize both innovation and operational efficiency are more successful in achieving sustained growth, particularly in rapidly changing markets. american journal of management vol. 25(1) 2025 91 historical and modern leadership underscores the pivotal role of adaptability, ethical conduct, and strategic balance in shaping organizational growth and culture. from rogers and cartano’s (1962) concept of opinion leaders to fiedler’s contingency theory, effective leadership is shown to depend on context and situational demands. as emphasized by avolio and gardner (2005), authentic leadership highlights the importance of trust, transparency, and ethical integrity for fostering long-term success. modern approaches, such as ambidextrous, servant, and transformational leadership, demonstrate the need to integrate innovation with operational stability while addressing ethical responsibilities. empirical studies validate the significant impact of leadership styles, showing how empowering and ethical leaders foster trust, creativity, and sustained performance. as organizations face increasing complexity, leaders who blend traditional insights with modern strategies, emphasizing ethical decision-making, innovation, and employee well-being, are better equipped to drive resilience and long-term success in dynamic environments. strategic thinking profoundly influences organizational operations by shaping long-term direction, improving resource allocation, and enhancing adaptability to changing environments. it fosters a culture of innovation and ensures that daily activities align with overarching strategic objectives, leading to more coherent and effective operations. strategic thinking encourages cross-functional collaboration and drives competitive advantage by promoting informed decision-making and comprehensive problem-solving. additionally, it facilitates change management and strengthens risk management capabilities, enabling organizations to navigate uncertainties and capitalize on emerging opportunities. ultimately, integrating strategic thinking into operations enhances agility, resilience, and overall organizational performance. the reach of thought leaders the reach of these thought leaders can be measured in many ways but is often gauged by their publication volumes, types, and positions. thought leaders with numerous publications (especially a mix of books and other works) will likely have a more substantial and varied reach, influencing academic and professional communities. those who focus heavily on books may have a concentrated influence in specific areas but can still reach a broad audience, especially in practice-oriented fields. table 1 highlights 25 leaders ranked by thinkers50 in 2023, showing how different publishing strategies (academic articles versus books) align with each thought leader’s role and influence strategy. professors dominate in academic spaces, while practitioners leverage books to build reputations and influence broader professional audiences. thought leadership is used by leadership as a strategic tool to position individuals or firms as experts in their field. professional service firms (pfss), which require special training and provide specialized services, are often viewed as thought leaders (harvey et al., 2021). these knowledge-intensive organizations employ professionals who possess the specialized skills to provide customized solutions to clients. these solutions further solidify the entity’s perception as a thought leader. the differences between traditional and thought leadership can be crystallized by focusing on authority, trust, and credibility over direct conversion metrics (barry & gironda, 2019). the authors found that when information is shared, trust is fostered, which is a crucial attribute in assessing the quality of thought leadership. strategic thinking in modern organizations necessitates cognitive flexibility and adaptability, emphasizing the importance of creativity and novel connections. it marks a crucial shift from reactive to initiative-taking thinking, focusing on long-term, future-oriented perspectives. adzeh (2017, p.1) notes that strategic thinking is imperative for strategic leadership and planning to occur. strategic thinking recognizes uncertainty as a dominant factor in contemporary business environments, requiring leaders to cultivate a mindset that embraces complexity and change rather than adhering to outdated, stability-oriented paradigms (haycock, 2012). moon (2012) further defines strategic thinking as addressing strategic issues, blending a creative and atypical thought process with a logical and traditional approach to find novel strategies for competing and adding value for customers. 92 american journal of management vol. 25(1) 2025 table 1 thought leaders ranked by thinker50 based on influence rank thought leader age position books other publications 1 amy c. edmondson 65 professor 6 368 7 rita mcgrath 65 professor 6 202 9 scott d. anthony 49 professor 9 176 10 tsedal neeley 50 professor 11 89 11 marshall van alstyne 62 professor 2 266 11 geoff parker 60 faculty director 6 157 12 sinan aral 39 professor 4 105 13 rachel botsman 46 trust fellow 7 32 14 tiffani bova 57 growth strategist 4 0 15 erik brynjolfsson 62 professor 8 683 15 andrew mcafee 56 principle researcher 12 174 16 tomas chamorropremuzic 48 chief innovation officer 9 272 18 dorie clark 46 marketing strategy consultant 10 25 19 susan david 54 psychologist 10 20 erica dhawan 40 speaker 6 2 21 kirstin ferguson 51 director 2 208 22 frances frei 61 professor 3 84 22 anne morriss 45 leadership coach 3 4 23 heidi k. gardner 50 ceo 8 100 24 heidi grant 51 chief science officer 18 5 30 herminia ibarra 63 professor 8 46 32 whitney johnson 42 ceo 6 0 35 roger l. martin 68 professor 10 209 37 erin meyer 53 professor 10 35 48 zeynep ton 36 professor 3 12 the strategic intersection of etl and itl on rdo figure 1 shows the intersection of itl and etl working hand in hand to help with rdo. the leader’s strategic thinking leads to concepts that foster thought leadership. satya nadella became ceo of microsoft in 2014, and recognizing the shift to cloud-based computing trends, decided to pivot microsoft’s strategy. strategic thinking positioned microsoft as a thought leader in technology and services (the economist, 2020). to identify and measure the real benefits of thought leadership, organizations can employ several metrics such as key performance indicators kpi(s), tracking credibility, business impact in sales or client engagement and retention, audience perception, talent attraction, and retention (harvey et al., 2021). “thought leadership requires the ability to go beyond a single context to understand the integrative components of knowledge within and beyond a single organization. moreover, it often touches on inherently messy, tension-fueled topics, and evading resolution” (harvey et al., 2021). american journal of management vol. 25(1) 2025 93 figure 1 the intersection of internal and external thought leaders on rdo barry and gironda (2019) found a direct correlation between thought leadership competency and the marketer’s ability to stimulate conversation related to a product. the real benefits of thought leadership include trust in leadership and authority, employee engagement, and talent attraction and retention (kiyatkin et al., 2011). transformational leadership correlates positively with organizational growth metrics such as revenue and market share, especially when leaders create a supportive and innovative environment. this leadership style enhances growth by fostering a culture of learning and innovation, while transactional leadership is better suited for achieving efficiency and short-term goals. servant leadership correlates with long-term organizational growth and stability, especially in companies where employee satisfaction and retention are central to the business model. empowering leadership styles positively correlate with organizational success, particularly in dynamic environments. by fostering employee autonomy, collaboration, and knowledge sharing, these leaders drive innovation, enhance team performance, and promote adaptability. strategic leaders who emphasize both innovation and operational efficiency are especially effective in achieving sustained growth and profitability in rapidly evolving markets. this approach proves crucial in uncertain business landscapes where flexibility and quick decision-making are essential for maintaining a competitive edge. research questioned answered rq: can internal and external thought leaders’ influence on revolutionary developments in organizations as growth strategies be properly identified and measured? answer: yes, internal and external thought leaders’ influence on revolutionary developments in organizations as growth strategies can be properly identified and measured. while itl is crucial for organizational direction and immediate to medium-term challenges, etl has a longer-term vision and a wider reach, potentially influencing the entire industry. both approaches require different skill sets and characteristics, with internal thought leadership demanding critical thinking and decision-making skills, while external thought leadership requires persuasive communication skills and deep domain expertise. ultimately, both are important for organizational success, operating on different scales and with distinct primary objectives. internal thought leaders operational cohesion employee engagement innovation external thought leaders industry influence brand visibility attracting talent rdo authenticity credibility, employee retention, and consistency in vision 94 american journal of management vol. 25(1) 2025 an internal to external thought leadership framework figure 2 shows the progression hierarchy from itl to etl using concepts from the literature. the cognitive processes and decision-making approaches involved in an organization’s growth, operations, and return on investment will also be explored. the utility of thought leadership will then be explored, highlighting its use as a strategic tool to position firms or individuals as experts in a particular field. this expertise is conventionally demonstrated by the thought leaders’ public communications, industry contributions, and influence on stakeholders through content analysis of published materials. socorro et al (2021) discuss how thought leadership spawns disruptive thinking and creative destruction, as catalysts for change. figure 2 thought leadership hierarchy: an itl to etl framework itl analysis of complex situations by identifying opportunities itl focuses on analyzing complex situations and identifying opportunities as a powerful strategy for driving organizational innovation and growth. this approach leverages the expertise and insights of employees to tackle challenging problems and uncover new possibilities. manz and neck (1991), bojesson and fundin (2021), and rune todnem by (2021) all provide distinct yet complementary perspectives on leadership, emphasizing self-awareness, collaboration, and purpose. to effectively analyze and overcome american journal of management vol. 25(1) 2025 95 complex situations, organizations must first identify those employees with the knowledge and expertise required to tackle the problem. a decade later, manz and neck (1991) emphasize the concept of inner leadership, underscoring the significance of self-management and developing constructive thought patterns to maximize personal potential and improve leadership effectiveness. on the other hand, bojesson and fundin (2021) examine the micro foundations of dynamic capabilities, emphasizing the role of individual behaviors, team dynamics, and organizational structures in driving successful organizational change, with a strong focus on overcoming barriers and leveraging enablers. by (2021) shifts the lens to purpose-driven leadership, advocating for leadership as a collective responsibility centered on a clearly defined and meaningful purpose, guided by intrinsic values that benefit the greater good. while manz and neck (1991) prioritize internal self-regulation and bojesson and fundin (2021) focus on the interplay of micro-level actions within organizational contexts, by (2021) extends the discourse to emphasize leadership as a shared endeavor oriented toward societal impact. together, these perspectives offer a holistic view, connecting leadership’s personal, organizational, and societal dimensions. organizations can tap into a wealth of knowledge and creativity by empowering internal thought leaders to analyze complex situations and identify opportunities. this approach not only drives innovation but also enhances employee engagement and creates a culture of continuous improvement disruptive thinking by suggesting innovations itl is vital in challenging conventional thinking by introducing innovation within organizations. within a culture that encourages novel problem-solving and progressive thinking, itl may catalyze notable change and creativity. king and baatartogtokh (2015), kumaraswamy, garud, and ansari (2018), and yu and hang (2010) provide distinct yet interconnected critiques and expansions of clayton christensen’s disruptive innovation theory, each addressing its limitations and potential applications. the theory, introduced in 1997 (christensen et al., 2018), explains how less-resourced organizations challenge and potentially displace larger, more established institutions by innovating and serving niche or emerging markets. king and baatartogtokh critically assess christensen’s theory using 77 cases, highlighting that many do not align with its core principles, such as entrants consistently starting in niche markets or incumbents ignoring them. they argue for a more nuanced framework incorporating other strategic models (king & baatartogtokh, 2015). kumaraswamy, et al. (2018) expand the scope by introducing evolutionary, relational, temporal, and framing perspectives, emphasizing the emergent and multifaceted nature of disruption, and advocating for stakeholder-driven interpretations to shape outcomes (kumaraswamy et al., 2018). yu and hang (2010) focus on clarifying ambiguities in the theory, distinguishing it from other innovations, and exploring enablers like organizational culture while critiquing its predictive reliability due to contextual variations (yu & hang, 2010). together, these works highlight the complexity and adaptability required to understand and apply disruptive innovation, from the limitations of christensen’s original framework to the importance of contextual and systemic factors in dynamic environments. creative destruction by replacing old paradigms creative destruction involves breaking down established norms, introducing innovation, and embracing chaos, at least temporarily, to evolve and grow. erica avrami’s application of creative destruction in cultural heritage and joseph schumpeter’s growth paradigm both center on the transformative power of innovation, but they apply it in distinct contexts with varying goals and implications. avrami (2021, p. 45) emphasizes that creative destruction in heritage management involves the deliberate transformation or removal of outdated sites to foster inclusivity and sustainability in response to modern challenges like climate change and systemic exclusion. in her view, transformational leadership is critical in aligning heritage practices with evolving societal values, making conservation a proactive and socially responsive endeavor. conversely, the schumpeterian growth paradigm (schumpeter, 1942) frames creative destruction as an economic process where innovation continuously replaces outdated technologies and business models, driving sustained economic development. while avrami focuses on cultural and societal advancement through adaptive leadership and equitable development, schumpeter highlights the entrepreneurial dynamics that disrupt industries to achieve economic growth. both perspectives underscore 96 american journal of management vol. 25(1) 2025 innovation’s dual role in dismantling the old and paving the way for progress, but avrami integrates a more socially conscious lens, whereas schumpeter emphasizes market-driven efficiency and productivity. etl inspiring change by opinion leadership opinion leaders, those who influence the opinions, motivations and behaviors of others, disseminate information to others within a community or organization (valente & pumpuang, 2007). these individuals are held in high esteem and have broad reach. etls use opinion leadership to inspire change outside of organizations by introducing new ideas and influencing established perceptions. hassan elsan mansaray’s (2019) exploration of diverse leadership styles and their influence on organizational change management contrasts with the more focused lens on transformational leadership and dynamic capabilities in the broader literature. mansaray highlights the versatility required of leaders, emphasizing that different styles— including transformational, authoritarian, democratic, and participative leadership—can be effective depending on the organizational context and challenges faced during transitions. in contrast, the literature on transformational leadership (e.g., smith, 2020) focuses on inspiring and motivating employees to foster innovation, adaptability, and dynamic capabilities, which are crucial for navigating market volatility. mansaray emphasizes the need to adapt across leadership styles to remain competitive in the market. however, research indicates that organizations that embrace transformational leadership have a greater capacity to identify, seize, and reconfigure opportunities, thereby fostering eco-innovation and long-term performance. both perspectives converge on the importance of leadership in driving change and competitiveness but diverge in their emphasis, with mansaray advocating for situational flexibility and transformational leadership literature focusing on the sustained benefits of a singular, innovation-driven style. conclusion ethical leadership drives organizational success through improved employee satisfaction, reduced turnover, and enhanced public perception leading to rdo. leaders shape the ethical climate, setting standards and fostering a supportive culture for addressing complex dilemmas. moral intensity influences individual responses to ethical issues, emphasizing the importance of context-specific assessments. a virtue-based approach, focusing on moral character development, is particularly effective for long-term decision-making aligned with organizational values. ultimately, ethical behavior results from the interplay of individual values, organizational culture, and situational factors, highlighting the complexity of ethical decision-making in professional settings. itl and etl are distinct yet complementary approaches organizations can leverage for success. internal thought leadership focuses on organizational strategy, resource allocation, and decision-making within a 3–5-year outlook. it aims to anticipate changes, align internal resources, and drive critical thinking for organizational benefit, primarily impacting internal stakeholders and organizational culture. in contrast, external thought leadership extends beyond the organization’s boundaries, aiming to influence industry trends, shape debates, and build brand reputation. it involves generating and disseminating innovative ideas, often addressing broader, long-term issues in the industry. based on our findings and review of the literature, we can recommend the following solutions. itl recommendations internal thought leadership demands critical thinking and decision-making skills. it is crucial for crafting strategy, organizational direction, problem-solving, change adaptation, scenario planning, and align structures with vision, and resolving immediate to medium-term challenges. effective itl foster sharing expertise and encouraging innovation within organizations(kerns, charles, 2019). by nurturing itl, organizations can boost employee engagement and performance while remaining competitive in an ever-changing environment. internal thought leadership should not be limited to top leadership but cultivated throughout all organizational levels. american journal of management vol. 25(1) 2025 97 the first itl recommendation is to invest in staff development at all levels, not just senior leadership. further, organizations should utilize scenario planning, address technological challenges, align organizational practices, cultivate open-mindedness, and create opportunities for experimentation. organizations can enhance their innovation, adaptability, and value creation by developing these capabilities in a dynamic environment. the second itl recommendation is to analyze resource distribution (time, budget, personnel) for each. evaluate internal thought leadership roi through metrics like decision-making quality, operational efficiency, innovation, and long-term financial performance. assess external thought leadership roi via brand reputation, lead generation, sales opportunities, and revenue growth. this comparison provides insights into the relative effectiveness and value of investing in itl versus etl for driving rdo. the third itl recommendation is to analyze organizational culture impact. organizational culture is shaped by internal thought leadership, influencing decision-making processes, and aligning employees with goals, while external thought leadership primarily affects external perceptions but can also enhance employee pride and engagement, creating a dual impact on the organization’s cultural dynamics. etl recommendations external thought leadership represents a departure from traditional, positional leadership. it involves championing innovative ideas and influence rather than managing people or helping a group achieve goals (mccrimmon, 2005). unlike conventional leadership, external thought leadership is directed outward. it does not involve enabling or managing teams to achieve tasks (mccrimmon, 2005). etl, possessing persuasive communication, has a reach that influences an entire industry. based on our findings and literature review, we can recommend three solutions. the first etl recommendation is to engage in and contribute to international conferences to enhance audience engagement and expand reach. positioning as a speaker at prominent events establishes the organization and the individual as authorities in the field. the engagements enhance the speaker’s stature and create an opportunity to present a novel viewpoint on disruptive activities. attendance facilitates networking and offers a venue to engage possible collaborators and shape industry discussions. organizations can substantially improve their standing and remain at the front of transformative advancements by utilizing conferences. the second etl recommendation is to partner with academic institutions and research organizations on joint research initiatives, executive education programs and advisory boards. executive education programs provide an opportunity for executives seeking to deepen their understanding of methods intended to enhance organizational design and strategies. etl are uniquely equipped to insight and guidance to entities seeking to revolutionize their organizations. by partnering with recognized authorities, etl can co-author publications such as whitepapers, research reports, and case studies that offer valuable insights into transformative practices. these collaborative efforts not only leverage combined expertise but also lend credibility to the content. the third etl recommendation is to publish articles and share insights via blogs and forums. thought leadership articles in business magazines and online platforms reach broader audiences. participating in podcasts, interviews and contributing to industry blogs aid in establishing authority in a particular industry. this multimedia approach allows etl to reach a broader audience and present complex ideas in an accessible format. 98 american journal of management vol. 25(1) 2025 references adams, n.a., delaney, m., goldsberry, t., & bell, r.l. 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(2010). a reflective review of disruptive innovation theory. international journal of management reviews, 12, 435–452. 138 american journal of management vol. 25(3) 2025 the importance of incorporating risk management and assessing for perilous traits during job recruitment interviews, performance appraisals, and post-critical incidents mary catherine mckenzie workplace safety is threatened by professionals exhibiting dangerous traits, an under-researched area demanding attention. this study introduces a novel questionnaire to identify "red flags" during recruitment, performance reviews, and post-incident debriefings. the questionnaire assesses risk mitigation awareness and targets traits such as compulsive lying, apathy, glibness, lack of remorse, and manipulative tendencies. scenarios are included to enhance recognition of emotional and behavioral patterns, including those indicative of workplace psychopathy, like thriving on chaos and unethical decision-making. the questionnaire covers a range of categories, including impulsivity, anger, and antisocial behaviors. the goal is to integrate this tool into occupational resources department procedures, including employment assistance programs (eaps). this will help address related issues like trauma and burnout. further research on dark triad personality traits is crucial for improving recruitment, performance appraisal, and post-event evaluations. the aim is to create safer, more productive workplaces by proactively addressing these often-overlooked risks. this approach contributes to a more comprehensive understanding of workplace risks and provides a practical tool for risk management. keywords: risk management, traits, recruitment, employment, performance appraisal, adverse events, leadership, lying, grandiosity, maleficence introduction destructive behavioral traits are identifiable by the extent to which employees and leaders engage in hostile non-verbal and verbal behaviors. at the absolute least, these can manifest as inappropriate punishment, intimidation, insubordination, and excessive demands. in contrast, passive destructive behavioral traits are indicated by insidious attitudes and behaviors, an absence of essential implementation and monitoring, and working haphazardly in accordance with skeletal frameworks. both forms of destructive behaviors, especially in leadership roles, can affect previously stable employees in the following ways: burnout; increased absenteeism; and reduction in workplace productivity. there can be numerous other deleterious effects that extend beyond these, especially when a work colleague is faced with an utter brute in their midst. thus, ideally, a recruitment interview (and similarly, work performance assessment and post-critical incident debriefing) would incorporate the following criteria in order to facilitate the recognition of extreme risk. it is proposed that the assessable components of an interview must include: levels of self-direction and needs satisfaction (extrinsic and intrinsic motivators inclusive); self-identity (including reliable interpersonal functionality); capacity for empathy; personal values that reflect a solid ethical framework; self-regulation culminating in healthy, effective work conduct, attitude, and american journal of management vol. 25(3) 2025 139 productivity; conflict resolution skills; legitimate resilience; respect; autonomy; interpersonal aptitude; adherence to social and employment norms; non-coercive collegial interactivity; honesty; sincerity; authenticity; fairness; perseverance; appropriately assertive; inclusivity; and relatability. the respondent would ideally be: responsible; reliable; mature of thought; self-confident; client-centered; effective via use of coping strategies that encourage emotional stability; possess rational thought and ability to cope with stressors; possess self-awareness; flexible; intuitive; self-esteem sound; self-efficacious; competent; motivated; risk aware and risk averse; able to prioritize (or delegate, as appropriate); clear boundaries adept; focused; reflective (in action and on action); perceptive; and adaptable. in addition, they should value their own contribution to work tasks and environment; embrace accountability; take initiative; decomplexify work situations and tasks as needed; appreciate meaningfulness in work activities; and, ultimately, are respectful. in order for the most serious risks posed to work colleagues and workplace environments to be ascertained, it is proposed that the following questionnaire be utilized for assessment purposes. method this section presents the key questions, divided by category, for inclusion in the risk assessment and identification of perilous traits and behaviors during job recruitment interviews, performance appraisal as well as post-adverse event debriefings. compulsive lying (and confabulation) a) is there insufficient verbalized elucidation of temporal and sequential variables that appear as a ‘red flag’ to the interviewer? b) are there audacious replies in relation to past employment history and undesirable results (including adverse events)? c) what is the respondent’s reply to the statement: “lying, if you are not caught out, has no consequences”? d) does there exist an evident ‘bait and switch’ milieu to their explanations (life, employment, academia)? are sections of the narrative alluringly true but cultivated and the remainder substituted, confabulated, or false? does she/he swiftly de-emphasize parts of the story (displaying indignation) and offer nil clarification for coming to an abrupt end? is this process repeated (sans satisfactory explanation)? coldly apathetic the conceptualization and internalization of differences between ‘right and wrong’ are included in this question category. a) do you, as the interviewer, intuit that there is an empathy deficit present? b) can he/she accommodate (beyond basic exemplifications) differences between ‘right and wrong’? c) does the respondent articulate minimized self-interested descriptions of empathy (through to complete incapability of conceptualizing empathy)? d) does he/she present with a dehumanizing demeanor, attitude, and/or communications? e) upon presentation of the scenarios, does the interviewee display an aloof, disengaged, and/or disinterested, reaction? f) in response to workplace difficulty, or suffering, do they communicate a ‘get over it’ attitude? g) in relation to healthcare and first-responder-based work, is there a ‘get over it’ attitude to, e.g., patient suffering, diagnosis, treatment, and/or ongoing care regimens? glibness a) does the interviewee laugh erroneously (or deride) earnest scenarios or synopses posed? b) does he/she display or verbalize disregard for suffering? c) has he/she a superficial, or heedless, attitude to ethical work and task completion? 140 american journal of management vol. 25(3) 2025 d) how earnest is the respondent? does she/he seem to have typified responses that ‘roll off their tongue’ with nil depth? is there apparent self-satisfaction with their answers in spite of articulated/non-articulated critique from the interviewer(s)? e) does she/he minimize questions by providing urbane, shallow responses? inability to experience remorse a) is there inability to learn from errors, take accountability for actions, or provide reasonable explanations for avoiding past misconduct (in which she/he was directly involved, observed, or engaged in as part of a team)? b) does evidence exist that the interviewee is unable to perceive and acknowledge errors? c) is there a history of insensitivity and inactivity regarding accountability? d) does the respondent indicate issues with accepting negative feedback (and, hence, utilization of the feedback for alternative action)? e) is there a concentration upon self-focused regret statements versus true remorse? f) is he/she seemingly indifferent to the thought of pain in others? do they possess ‘imagine others’ deficit/s (putting oneself in another’s shoes)? extension of maleficence/harm a) does the respondent communicate incomprehension of the concept ‘do no harm’? b) are visual, or verbalized ‘shrugging of the shoulders’ and/or avoidance of the importance of risk mitigation present? c) does a ‘blame the victim’ attitude exist (for instance, ‘so sad, too bad’; ‘losers lose’; ‘she/he brought it upon themselves’)? d) as the interview advances, is there a jaded attitude that appears inherent in her/his approach to work and/or identity? e) is ‘for the benefit of others’ meaningless or absent? emotional emptiness (+ scenario) scenarios such as the one provided below are particularly beneficial to evoke an assessable response in this category. scenario post-presentation questions: a) does the respondent recognize and react to the following: patient suffering; work colleagues’ anxiety; multiple patient deaths; and unreported and undocumented reports of patient deaths? scenario for emotional emptiness identification: interviewer to read aloud: “an 83-year-old female patient is being treated for a chronic pain condition. the 60-patient healthcare unit is understaffed. the staff feel very rushed. there have been seven sudden, unexpected patient deaths in the healthcare unit over the past three weeks. none of these deaths have been documented or reported. there are fears among the staff that the healthcare unit may be closed or have its funding significantly reduced.” b) post-presentation of scenario, the interviewer says: “imagine yourself as part of this healthcare unit. which particular factors of importance come to mind? what is your immediate reaction to this scenario? please refer to your notes, if needed.” grandiosity a) does she/he exhibit superiority/feelings of superiority (directed at the interviewer, specific types of work colleagues, or past workmates)? b) are they uncooperative or power-mongering? c) are their feelings of superiority definitively vocalized or non-verbalized throughout the interview process? d) does a ‘this is me’ or ‘like it or lump it’ outlook exist? e) are declarations provided that strongly imply that that there are no limitations to what they can achieve and/or currently (or will immediately obtain) status in the highest echelons (and that this can be assumed without endeavor)? american journal of management vol. 25(3) 2025 141 f) does the interviewer(s) perceive that the respondent assumes that the interview process is solely undertaken for them (that no other candidates are being considered)? complete lack of acceptance of responsibility for own actions + scenario it is highly recommended that the scenario is presented to the respondent in a way that is relevant to their current or potential job tasks. the following scenario is provided as an example and is specific to clinical excellence in patient care. it specifically assesses for attitudes regarding risk mitigation, responsibility, and accountability along with capacity to communicate effectively, reflexive thought, and mental acuity. scenario: complete lack of responsibility for own actions. interviewer says: “please provide one-word responses, that is, your immediate reaction to the following: “varying levels of clinical excellence in patient clinical care decided upon via the following patient factors: age; gender; cultural background; religion; language barrier; bed limits; key performance indicators (kpis) and drgs (diagnostic related groups); insurance type; co-morbidities; value to society; likeability; pre-care history; known or not-known to the healthcare facility; treating general practitioner; degree of family involvement.” clarification (where necessary) regarding interviewee responses of concern can be undertaken at the end of the scenario. manipulative/insidious opportunism a) does the respondent communicate ‘rote-learned’ descriptions of risk management techniques, ethical considerations, and quality of work approaches? b) is the ‘rote learning’ apparently externalized (with poor prospect of it being internalized)? is there apparent confabulation regarding commitment to workplace safety and risk avoidance? c) does the respondent interface with a ‘who cares’ and ‘that is that’ style, yet with conviction that he/she will be successfully recruited, or pass the assessment process? d) do they misuse the concept that ‘everyone makes mistakes’ upon consideration of serious adverse events? e) is self-serving incentivization considered the ‘norm’? impulsivity, irresponsibility a) is he/she depleted, which potentially could lead to client de-prioritization? b) does the respondent display a self-defeating attitude (this needs to be differentiated from natural humility). for example, do they self-sabotage during the interview, particularly when the interview is proceeding positively? c) is the interviewer(s) interrupted constantly by the respondent? does the respondent ‘blurt out’ responses without apparent deliberation, rectification, or regret? unrelenting need for stimulation/easily bored a) does the respondent elicit negative behavioral, or reactive behavioral traits consistently during individual questioning? which types (if any)? b) is there hyperactivity on a continuous basis, including during the interview process? does she/he indicate that this is normal, acceptable, or an expected form of behavior? c) are they hypersensitive to loud noises, sirens? d) is there additional information that indicates poor concentration and focus? e) is the respondent skittish, hypervigilant, or highly agitated during the interview? f) what is their understanding and description of ‘burnout’? anger, irritability, poor concentration, drug affected a) does the respondent become easily irritable during the interview process? b) do they lose their temper (for example, upon request for clarification of information, or prompting during interview)? 142 american journal of management vol. 25(3) 2025 c) is he/she seemingly affected by a stimulant or depressant substance? are they artificially augmented, overtalkative, and/or highly distractible? is there slurring of speech, sleepiness (without sufficient reason offered), and/or are inexplicably disoriented? d) do they display agitation and oversensitivity? e) is their confidence translatable as ‘jarring,’ ‘aggressive,’ ‘offensive,’ and/or communicated with ‘rudeness’? has this occurred in more than one instance without explanation? f) if so, are their angry responses synonymous with acrimony? is he/she antagonistic about different work environments/worker categories? is the use of anger a method of coercive control or intimidation so as to reap benefit? poor behavioral conduct a) does the respondent use diversionary tactics (for example, to irrelevant topics, or ideas)? b) does he/she conduct oneself in an over-familiar or unprofessionally intimate way with the interviewer(s)? c) does the respondent present with lability of mood or act emotionally/psychologically erratic when replying to questions? investigating the respondent’s history becomes imperative upon the identification of poor behavioral conduct. interviewer’s guide: it must be noted that oral and microgestures and cues also need to be examined and considered thoroughly, particularly in relation to the possible existence of acute stress disorder (asd), post-traumatic stress disorder (ptsd), cptsd, emotional exhaustion, or burnout. this can be exemplified by many different indicators emerging during the interview, e.g., obsessive reference to a traumatic workplace incident; ‘spacing out’ (reliving trauma); significant memory issues; uncontrollable shaking upon describing a past experience. the use of psychological assessment tools is highly recommended when concerns are evidenced. anti-social/ exploitative lifestyle behaviors self-disclosure is encouraged, but pressurization is to be avoided. this involves collecting information and associated assessments of anti-social/deceitful conduct. an assessment by way of a structured questionnaire (e.g., personality questionnaires) are strongly suggested. a) how does the respondent react to the topic of substance misuse pre-work (within 12−24 hours before shifts)? b) has the respondent disclosed (concrete or prospective) risks of harm to others? c) has the respondent disclosed (concrete or prospective) risks of harm to self? d) has the information, which has been divulged, show a propensity for ‘trouble making,’ ‘team splitting,’ and/or creating workplace conflict? does he/she acknowledge this and provide acceptable explanations to debate this? has the applicant given essential clarifications? alternatively, do they justify their susceptibility with acquiescing to ‘well, others do it too’ type conceptualizations? lack of realistic long-term goals a) has the respondent indicated non-commitment to her/his employment, work duties, position, or professional path? b) is there a history of reprimands? c) is the applicant perceived as ‘suggestible’ (i.e., is easily moved from opinions or their employment objectives, or becomes fractionated regarding goals) at times during the interview? d) has he/she evidenced attitudinal traits that reflect ‘i’ll do what is necessary for now and that is all’? e) has the respondent behaved as if they have been compelled to undertake the interview? f) if so, what may be the grounds for this? g) is there circumvention in relation to their future in the workplace? history of childhood & adolescent behavioral problems the interviewer(s) is encouraged to elicit self-disclosure (from the applicant) about their past issues. provision of the cue ‘everyone has done something naughty in their past’ (or similar) is of benefit. a) invigorate the respondent to explicate the differences between their adult behaviors and previous events american journal of management vol. 25(3) 2025 143 during childhood/adolescence. b) is the respondent apparently dismissive regarding their history, or resistant (e.g., ‘there is nothing wrong’ with adolescent/child illegal activity even if it continues to adult offending)? criminal adaptability a) does he/she have a history of conviction (including, on-remand, reprimanded, or charged) including civil offenses, avos/restraining order (apprehended violence orders), or alternative relevant offenses that have occurred in adulthood to present? b) are their responses in the ‘negative’ (e.g., denial of history of crime/offenses) when the interviewer is fully aware that the crime/offenses are recorded and do exist? if so, what types of offenses have been alleged or committed? c) what risk mitigation-averse threats exist in relation to colleagues’ physical or psychological safety? d) what impacts does the above information potentially have on colleagues, work duties, and workplace environment/s? note to interviewer(s): upon ‘red flags’/alerts in the interview, the use of standard structured questionnaires (typically used for psychological or other assessment) and other interview formats are necessary to support decision-making for recruitment, performance appraisal outcomes, and post-adverse events, and are highly recommended; i.e., before making a recommendation for recruitment, a performance appraisal, promotion, conduct report/recommendations post-serious adverse event. and so on. the above set of questions, categories, and information contained within, is to be used as an initial guide only. discussion the term ‘corporate psychopathy’ is often reinforced (or indeed perpetrated) by management and leaders in a variety of work environments. corporate psychopathy is based on the assumption that the corporate environment positively selects for psychopathic features, comprising (but not unique to) top stewardship. the concept of ‘corporate psychopathy’ and its associated features is entirely extendable to ‘workplace psychopathy’ (i.e., non-leadership roles). it most definitely can be perpetrated via any employee regardless of status within all different work environments. indeed, many organizations, facilities, and collaborations recruit based on similarly concerning features. so as to clearly delineate the menacing effects of such an individual, the following description is extrapolated. power, prestige, accolades, and recompense are at the core of a corporate/workplace psychopath’s attraction to specific types of work settings. these include, workplace cultures that encourage and reward competitiveness, provide plentiful financial advantages, demand immediacy (versus long-term work planning), and have positive expectations regarding the employee’s charisma. corporate or workplace psychopaths often thrive by creating chaos, maintaining composure during periods of organizational stress, employing constant strategic thinking and manipulation, demonstrating creativity, and exhibiting unwavering confidence. these traits are frequently valued by upper management—sometimes more so than by the psychopaths’ immediate colleagues, who may experience the negative impacts firsthand. excellent communication skills are also considered a desirable quality when accompanied by the previously mentioned features. if impressively delineative, ‘on face value’ working style is valued (by the corporation) more strongly than that of productivity, exemplary leadership skills, and beyond satisfactory functioning within teams. thus, the highly concerning dysfunctional worker is more easily promoted to a higher position. needless to say, the experiences of a corporate psychopath’s co-worker typically differs greatly from that of upper management. the colleague (whether on the same work level or managed by the concerning professional) witnesses and suffers the impacts of the dysfunctional’s risk-taking and unethical decision-making, and their bullying tactics and threats. specifically, one must examine the different stages and factors involving the admittance of a corporate psychopath into a company. the recruitment stage involves necessity of insight by the recruiter. otherwise, the recruiter will yield to the following strategic maneuver of the corporate psychopath: glibness; charm; slickness; unbreakable confidence; exceptional powers of persuasion; extremely engaging, complimentary and humorous; perfection of mannerism and gestures; and, overall, so impressive that one 144 american journal of management vol. 25(3) 2025 can hardly believe the person sitting before you is real. hence, they are ultimately believed to be perfect for the position. a fast-tracked career climb thus ensues, regardless of the respondent’s lack of scruples; merciless manipulation, nil loyalty to colleagues (i.e., no fairness as in who was there first or who is next in line for a promotion), joy in having people demoted, sacked, or suspended, and incessant socializing, charming and lying their way up the ladder. this rise can occur in rapid progression—almost immediately—as they befriend and ingratiate themselves with upper echelons in any way that they can. emotional (or other) bribery is applied so that co-workers perform work tasks for them. in addition, the theft of ideas and mimicry of high achievers (as their own capacity for inventive and original concepts and work production is limited) occurs very quickly following the orientation phase of employment. behaviors such as dividing colleagues and teams (“splitting”), undermining or eliminating competitive peers, projecting an image of high productivity and status, and fostering a toxic workplace culture often serve as precursors to more manipulative strategies. these tactics can create an environment where co-workers— rather than the actual perpetrators—appear to be consistently failing. this dynamic can escalate into more calculated forms of psychological manipulation, including character assassination through gossip, innuendo, and fabricated narratives, as well as gaslighting to distort perceptions and erode trust. conclusion the concomitant utilization of comprehensive structured recruitment questionnaires is highly recommended to compliment the questionnaire featured (in the method section). these may examine further the respondent’s work-related intrinsic motivators (self-determining and independent; undertaken for inherent gratification) and extrinsic motivators (such as reliance approval, award and payment-oriented). utilization of the proposed, or similar, questionnaire is essential to be included in each occupational resource department’s criteria for employment interviews and, ideally, inclusion within the employment recruitment process and protocol. additionally, the use of eaps (employment assistance programs), especially in the case of identification of trauma disorders in successful applicants or existing employees, is paramount. further research within the area of perilous traits in recruitment (and in existing employees) may include examination of the relevance to applying the dark-triad facets of personality (that is, machiavellianism, narcissism, and psychopathy) as well as diminished agreeableness and increased neuroticism away from the norm. with over 20 years’ experience in psychological intervention (and health education), the author, mary catherine mckenzie, has dedicated her life to improving individuals’ mental well-being. from extensive work-based issues, career difficulties, burnout through to complex trauma, anxiety and depressive disorders, chronic pain, and grief and loss, the author has remained inspired by the fortitude and resilience of sufferers from all backgrounds and walks of life. her lifelong commitment to promoting best practice, the benefits of red flag alerts, authenticity, and sound application of ethics in healthcare and all workplaces has compelled her to write this article. references american psychiatric association. (2022). diagnostic and statistical manual of mental disorders, 5th ed text revision: dsm-5tr. washington, d.c.: american psychiatric association publishing. hare, r.d., harpur, t.j., hakstian, a.r., forth, a.e., hart, s.d. & newman, j.p. (1990). the revised psychopathy checklist: reliability and factor structure. a journal of consulting and clinical psychology, 2(3), 338–341. tafvelin, s., lundmark, r., von thiele schwarz, u., & stenling, a. (2023). why do leaders engage in destructive behaviours? the role of leaders’ working environment and stress. journal of occupational and organizational psychology, 96, 165–181. https://doi.org/10.1111/joop.12413 tophus, m.d. (2023). exposing glibness in psychopathy. germany: hilphma publications. retrieved from https://www.amazon.com/exposing-glibness-psychopathy-m tophusebook/dp/b0ccphjrd2/ref=s american journal of management vol. 25(3) 2025 145 tophus, m.d. (2022). who is this colleague? dangers of the healthcare profession, and beyond. an interview guide for recruitment, performance appraisal, and post-adverse events. germany: hilphma publications. retrieved from https://www.amazon.com/who-this-colleaguerecruitment-post-adverse ebook/dp/b0ccjsrdmg/ref=s white, m.l., wayne, j.h., casper, w.j., matthews, r.a., odle-dusseau, h., & jean, e.l. (2023). the authentic self in work and family roles and well being: a test of self-determination theory. journal of occupational and organizational psychology, 00, 1–21. https://doi.org/10.1111/joop.12473 16 american journal of management vol. 25(3) 2025 59 the impact of organizational culture on the migration of managers from public to private chinonye onwuchekwa the purpose of this qualitative descriptive study was to explore how present and former public corporations managers describe organizational culture's influence on their intent to remain or leave public corporations in nigeria as well as job satisfaction and current organizational culture. the researcher further explained the role of organizational cultural dimensions concerning retention rates, as perceived by former and current managers. handy’s model of organizational culture was selected as the optimal theoretical foundation for this research. the primary research questions for the present study is: how do present and former managers of public corporations describe the organizational culture influence on intent to remain for public organization employees in nigeria? the researcher used a qualitative descriptive study as it would aid in answering salient questions via semi structured interviews and focus group discussions to discover how present and former managers of public corporations describe the organizational culture influence on intent to remain for public organization employees in nigeria. the sample included a total of 25, 10 for the interviews and 15 focus group participants. thematic analysis was used to assess the transcripts, and four primary themes emerged: impact of culture, qualities of culture, employee qualities, and organizational values. theoretical implications include that organizational culture in this context has an expanded influence on manager retention, and practical implications reveal the importance of establishing a solid organizational culture. keywords: organizational culture, retention, intent to stay, public corporations introduction the performance of public organizations in nigeria is dwindling because of poor corporate governance, which is characterized by a culture of fraud, corruption, ineffectiveness, and poor leadership (ajisafe, 2016; akanji, 2017; bamidele et al., 2016; casimir et al., 2014; chukwuemeka et al., 2015; ehi, 2018; markovska & adams, 2015; oduntan, 2017; okonkwo& smith, 2018; pierce, 2016; zuofa & ochieng, 2014). the latest report from corruption perception index (cpi) rated nigeria as 27 out of 100 on the index, which has remained unchanged since 2017 (corruption perception index [cpi], 2019). the cpi rate for nigeria is very low, as are those of most african countries. according to hire (2016) and evansa and alenoghena (2015), the low cpi rate indicates civil services’ failure to serve the needs of the nigerian people. in the current study, the researcher explored how present and former managers of public corporations describe how organizational culture influences intent to remain or turnover in southeastern nigeria. this study represents a valuable contribution to the field of retention in public organizations in nigeria because of the importance of understanding organizational leadership in the overall success of organizations (casimir et al., 2014; chukwuemeka et al., 2015). because public organizations are vital to the very existence of 60 american journal of management vol. 25(3) 2025 nigerian society, an understanding of the role of organizational culture in the retention of managers in public organizations is critical to improving the quality of services provided by the public sector of nigeria (ezirim et al., 2017). background of the study nigeria is home to 160 million people, representing 20% of the population of subsaharan africa, making it africa’s most populous country (ezirim et al., 2017). government expenditures are a substantial fraction of its gdp (26%). moreover, it has weak institutions and widespread corrupt practices in public sector organizations, much like other developing countries. public organizations in nigeria are organizations that are set up, controlled, and financed by the government at the federal, state, and local levels, charged with the responsibility of providing essential services to the members of the public (chukwuemeka et al., 2015; rasul & rogger, 2018). public organizations include nigerian railway organizations, nigerian telecommunications, and the nigerian electrical power agency. the retention of effective leaders can be significant in facilitating positive change in public organizations in nigeria (solaja & ogunola, 2016). the role of a good leader is indispensable in organization[s] that involves defining and directing of team towards corporate vision and communicating it to people as well as motivating, inspiring and empowering them to contribute to achieving organizational success. leadership in work organization requires being strategically focused and applying behavioral techniques to build commitment 3 and attain the best performance from the workforce. (solaja & ogunola, 2016, p. 46) according to chiedu et al. (2017), examining effective retention strategies is important to retain talented individuals who can contribute to the success of organizations. within the context of public organizations in nigeria, organizational culture is important to consider in retention strategies because of the widespread practice of fraud, corruption, ineffectiveness, and poor leadership (chukwuemeka et al., 2015). the managers of public organizations who leave are likely to pursue careers in the private sector, which is believed to be more efficient and less corrupt (ajayi& joshua, 2015). davis and frolova (2016) explored the underlying reasons for the difficulty of retaining talented leaders in the african public sector by interviewing human resource professionals from 14 african countries. the reasons for attrition that these authors identified included corruption, a skilled labor shortage, low prioritization of talent management, and lack of funding (davis &frolova, 2016). much talented leadership is lost whenever good managers leave for the private sector. ampomah and cudjo (2015) focused on the high turnover rate at the electricity company of ghana (ecg). their target population comprised 38 senior and junior management staff, completing questionnaires. the results showed that out of the top six reasons employees leave organizations, work environment was ranked fifth (ampomah & cudjo, 2015); however, job dissatisfaction was ranked second, which was even higher than job security. the only lack of promotion was number one, with personal characteristics being number six. the negative effect of employees leaving, which has the greatest impact on organizations involves loss of skilled labor, difficulties in attracting 4 new staff, poor quality of work, and additional cost of replacement recruitment (ampomah & cudjo, 2015). public organizations are different from private organizations in nigeria because public organizations employ a majority of the workforce in the country (ezirim et al., 2017). compared to the private sector, in which profits are leaders’ primary concern, the public sector should be motivated by the people’s interest (bozeman et al., 2017). the absence of literature on the role of organizational culture’s influence on managerial retention in public organizations was a gap in need of further examination (ezirim et al., 2017). the results of the current study offer deeper insights into retention strategies and initiatives by exploring the retention factors in connection with dimensions of organizational culture of public organizations in nigeria. the results of this study have potential societal and professional impacts beyond the local setting, as the findings may be transferable to other public organizations with similar problems. problem statement prior to this study, it was not known how present and former managers of public corporations describe how organizational culture influences intent to remain or turnover. specifically, it was not known what the perspectives of the managers about the low retention rates seen for managers in nigeria’s public organizations—specifically, whether and how organizational culture influences manager retention in those public organizations (chukwuemeka et al., 2015; ezirim et al., 2017; francis & singh, 2016; solaja & ogunola, 2016) are. through the current study, the researcher to explore this problem from the perspectives american journal of management vol. 25(3) 2025 61 of individuals within these organizations. addressing the problem is important to understand how the public sector of nigeria can be improved by 5 understanding its organizational culture in connection with employee retention. this is an important issue in nigeria; as uche et al. (2015) and chukwuemeka et al. (2015) have affirmed, the public sector provides numerous essential services, so most people are employed in that sector. the mention of future research about organizational culture in nigeria is minimal, but there are some suggestions. salisu et al. (2015) suggested that future research should take place in other states of nigeria than jiguwa and focus on areas different than their research such as salary, allowance, gratuity and pension, and retention. francis and singh (2016) recommend that future research focus on “employers’ or managers’ perceptions of job satisfaction amongst their employees (engineers) to obtain an overview of the perceptions of employers” (p. 132). ogunyomi and bruning (2015) suggested using study designs with multiple data sources concerning the performance of small and medium enterprises and human resource management. they also recommended that institutional corruption must be addressed. furthermore, focusing on the retention of managers is important, given their influence on organizational culture and facilitating change (solaja & ogunola, 2016). ajayi and joshua (2015) stated that many managers leave the public organizations to pursue careers in the private sector because they believe that it is less corrupt, more efficient, and pays higher salaries. knowledge of effective retention strategies, as well as which factors have affected managers in their decision to remain or turnover from a company, is important to retain talented individuals who can contribute to the organization’s success (chiedu et al., 2017). this is particularly important for public organizations in nigeria, as this sector is currently plagued by corruption and ineffective organizational culture (chukwuemeka et al., 2015). focusing on manager 6 retention is also important given their influence on organizational culture and facilitating change (solaja & ogunola, 2016). addressing this problem is important to understand how the public sector of nigeria can be improved through stronger or a different organizational culture, which includes its leaders. according to solaja and ogunola (2016), retaining effective leaders is a significant factor in creating positive change for the public organizations in nigeria. ezirim et al. (2017) identified the problem is in part due to limited literature on the role of organizational culture’s influence on managerial retention in public organizations. the current study was designed to address this issue. the population affected by this problem includes a large portion of the workforce in nigeria, because workers are primarily employed through public organizations (chukwuemeka et al., 2015). accurate numbers about how many people work in the public service sector in nigeria is most difficult. a bloated number of 1. 2 million has been reported—but ultimately debunked. authorities have cited an ideal number as “about 870,000” (the guardian, 2014, para. 1). the target population and unit of analysis in this study was the managers of public organizations in nigeria. the goal of the current study was to understand the experiences of public organizational managers in relationship to the organizational culture and their intent to remain in the public sector because it was not known whether or how these two factors relate. the societal and professional impact of the study could be the improved leadership retention in public organizations in nigeria—which, in turn, may improve the delivery of essential services. purpose of the study the purpose of this qualitative descriptive study was to explore how present and former managers of public corporations describe how organizational culture influences intent to remain or turnover public organizations in nigeria. the phenomenon that the 7 researchers explored was the role of the dimensions of organizational culture as it relates to retention rates, as perceived and experienced by former and current managers. the selected methodology was a qualitative descriptive study because this approach illuminated the complexity of the problem and enabled the researcher to answer the research questions by using semi structured interviews and focus group discussions with managers. data on a few demographic variables were collected, including participants’ age, gender, educational level, and income. the primary goal was to gather in-depth descriptions about the current culture, job satisfaction, and attrition intent from various individuals so that common themes can be developed. one of the interview questions asked participants to explain why they have decided to remain or turnover in the public sector. the researcher anticipated that organization culture may be at least one of those reasons. it is reasoned that this would lead to various themes and that the researcher would be able to distinguish commonalities and anomalies. follow-up prompting questions were employed to go further into depth. the total sample size of 25 was broken down 62 american journal of management vol. 25(3) 2025 into 15 former managers and 10 current managers. according to yin (2013), this is an appropriate size for a qualitative descriptive study case because it is small enough to maintain a close relationship with participants and establish good communication, yet it also gathers descriptions from enough participants to understand the phenomenon well. two sources were used to collect participant data: semi-structured interviews and focus group discussions. this study contributes to the organization studies field by illuminating the relationship between corporate culture and retention levels of managers in public organizations in nigeria. 8 research questions the study’s focus was exploring how present and former managers of public corporations describe how organizational culture influences intent to remain or turnover organizations in nigeria. organizational culture refers to the shared values and beliefs within an organization that lead to norms and predictable patterns of behaviors (schein, 2004). this exploration was based on the perceptions and experiences of former and current managers in terms of their decisions to remain in the public sector in nigeria or to leave. the general problem under study was the low retention rates seen for managers in nigeria’s public organizations, specifically whether and how organizational culture influence manager retention in those public organizations. uche et al. (2015) and chukwuemeka et al. (2015) have declared that this is an important issue because the public sector provides numerous essential services and most people are employed in that sector. schein (1992) described how managers can use organizational culture effectively to simplify the complex nature of corporate culture and initiate interventions (sackmann, 1992). the other factor was the cultural dimensions that led to the decision to leave the public sector and job dissatisfaction. the concept foundation of cultural dimensions is taken primarily from deshpandé and farley’s (1999, 2004) work, which discusses some organizational culture dimensions and several types of organizational cultures. the following research questions were developed to guide this exploration of how present and former managers of nigerian public corporations describe how organizational culture influences intent to remain or turnover: 9 rq1. how do present and former managers of public corporations describe the organizational culture influence on intent to remain for public organization employees in nigeria? rq2. how do present and former managers of public corporations in nigeria describe the influence of espoused values on their intent to remain or turnover? advancing scientific knowledge and significance of the study the literature that defined the problem statement and the research questions lacked sufficient information on how present and former managers of public corporations describe how organizational culture influences intent to remain or turnover (atiku et al., 2017; davis &frolova, 2016; isa et al., 2016). the specific gap that the current researcher focused on was the lack of knowledge regarding how organizational culture influences the retention of managers in public organizations in nigeria from the managers’ perspectives. nigeria was selected as the study setting because public organizations employ most of the workforce in the country (chukwuemeka et al., 2015; ezirim et al., 2017). this gap was addressed in the current study by exploring how dimensions of organizational culture influence the retention of managers in public organizations in nigeria using the experiences and perceptions of current and former managers in the public sector. these individuals’ insights contributed to the literature on organizational culture and retention because of the unique circumstances in public organizations in nigeria, where organizational culture is mired by fraud, corruption, ineffectiveness, and poor leadership (chukwuemeka et al., 2015). speaking of public organizations such as the nigerian railway corporation, the river basin authorities, nigerian electrical power agency, and nigerian telecommunications, solaja and ogunola (2016) indicated 10 that “these organizations are faced with numerous challenges (i.e., corruption, decaying facilities, improper use of resources and waste, nepotism, abuse and misuse of power and authority, etc.) which led to operational inefficiency” (p. 46). the findings of this study added to the literature concerning the application of schein’s (1992) organizational culture theory in the context of nigerian public organizations. isa et al. (2016) conducted a study to examine the role of organizational culture on employees’ performance within the context of public sector organizations. data were collected from 250 employees using a questionnaire based on a well-known and extensively used measurement tool developed by wallach. their results revealed that two of the three cultural dimensions identified in this study significantly influence an employee’s performance. this paper contributed to understanding american journal of management vol. 25(3) 2025 63 organizational culture by providing empirical evidence from a public sector organization in oman. these researchers highlighted the need for studies on cultural research to examine other types of culture applicable within the public sector domain using a larger sample. public organizations in nigeria provide the most vital services to the nigerian economy (ezirim et al., 2017). therefore, the results of the current study have potential value to the public workforce in nigeria by producing information that could retain talented managers and preventing their attrition. the results of the study could lead to more effective retention strategies of managers in public organizations in nigeria that incorporate the importance of organizational culture. the findings have potential societal and professional impacts because they may be transferable to other public organizations with similar organizational culture and manager retention problems. 11 why nigeria? there is a paucity of literature on organizational culture and its influence on the retention of managers in public organizations in nigeria. the current study was important because nigeria is a major player in africa and the most populous country on the continent (adeniran, 2017). the country is culturally diverse, with the three largest ethnic groups being the hausa-fulani, the igbo (sometimes called ibo), and the yoruba. nigeria has the largest population of any african country, and is the world’s tenth largest country (adeniran, 2017). the country’s peculiarities indicate its importance not only in africa, but in the global economy as well (adeniran, 2017). atiku et al. (2017) explored the interplay between the cultural values and human resource (hr) outcomes in the nigerian banking sector. the authors of this article adopted a quantitative method, utilizing a correlational approach with the advanced explanatory design. a combination of simple random sampling and convenience sampling techniques was adopted; 380 questionnaires were distributed to respondents at two selected banks. the authors concluded that there were significant positive relationships between cultural values and hr outcomes in the nigerian banking sector. these scholars suggested that their qualitative approach of data collection and analysis procedures would have been more useful in providing a robust nonnumerical analysis, particularly on why cultural values in the nigerian banking industry have no significant influence on coworkers and organizationaldirected behaviors. public organizations vs. private corporations public organizations in nigeria are government-owned, are designed to serve the needs of its population, and operate within the ambit of bureaucracy (krukru, 2016). they exhibit high levels of bureaucracy, where members are largely viewed as belonging 12 to an exclusive social club; most public corporation employees exhibit a nonchalant attitude about discharging their responsibilities. public corporation employees lack a culture of efficiency and accountability; instead, the culture is that of corruption. in contrast, private organizations demonstrate high levels of organizational commitment and efficiency. nigeria’s private sector has more stringent polices than the public sector, and the loopholes that make it possible for corruption in the public sector are minimal in the private sector (krukru, 2016). nigeria vs. other african cultures as previously indicated, the attitude in nigeria is that of corruption, waste, and antisocial behavior. as ijewereme (2015) declared, “in many african states, particularly nigeria, corruption is a clog in the wheel of progress, as well as a malaise that inflicts every aspect of the society” (p. 1). he continued, “experience shows that civil servants do not see anything wrong in using their offices to enrich themselves as long as the politicians are corruptly acquiring wealth on daily basis” (ijewereme, 2015, p. 12). there is no area in nigeria, public or private, that is not corrupt. mostert et al. (2015) conducted an indepth study on how corruption in the health care system effected cancer treatment in africa. mostert et al., concluded that african countries cannot be expected to take action to curb corruption. instead, it is up to financial donors, health organizations, and international financial institutions to “use their power to demand policy reforms of health-care systems in africa” (mostert et al., 2015, p. 394). the corruption perceptions index scores countries worldwide on how corrupt their public sectors are perceived to be on a yearly basis. their scale is from 0 (highly corrupt) to 100 (very clean). the index is currently lower than 50 in 91% of african countries. in contrast, 21% of high-income countries, such as new zealand, the united states, canada, 13 and australia, have a score of less than 50 (mostert et al., 2015). schein’s (1992) theory describes how managers can use organizational culture effectively to simplify the complex nature of corporate culture and initiate interventions (sackmann, 1992). 64 american journal of management vol. 25(3) 2025 rationale for methodology the current researcher selected the qualitative methodology to guide this study because this approach emphasizes individuals’ subjective experiences. the qualitative methodology does not involve numerical values and statistical analysis to make sense of a phenomenon (silverman, 2016). qualitative studies involve a narrative or text-based approach to understanding a phenomenon. qualitative researchers rely on themes, usually from detailed narratives, to understand the essence of a phenomenon (smith, 2015). through these themes, the core processes or features of a phenomenon can be uncovered. the qualitative methodology was the most appropriate approach for this study because it encourages participants to reflect on their own experiences and perceptions to make sense of a phenomenon (silverman, 2016). the current researcher focused on the dimensions of organizational culture and how that affects the retention of managers and aspects thereof. the qualitative methodology was the most appropriate approach for the current study because the researcher’s goal was to understand the complex relationship between managerial retention and organizational culture in public organizations in nigeria. a quantitative methodology would not have been appropriate for the current study because it would not aid in answering the research questions. quantitative studies are concerned with numerical responses (yin, 2017) and frequency counts or statistics (silverman, 2016), which was not the focus of the current study. 14 the researcher conducted semi structured interviews and facilitated focus group discussions to collect qualitative data. the population of interest was managers and former managers within public organizations in southern nigeria. all participants had experience as managers in public organizations in nigeria. the sample consisted of 10 current managers and 15 former managers of public organizations in southern nigeria. in a qualitative descriptive study, the questions addressed are how or why questions, and all of the research questions in the current study were how questions. the results may be utilized to improve organizational culture in public organizations in nigeria. nature of the research design for the study qualitative descriptive study is the appropriate qualitative research design because the goal of the current research study was to gather narratives that the researcher could then analyze by coding into common meaningful themes to understand the complexity of the phenomenon while taking into consideration the context (yin, 2013). according to yin (2013), 25 is a good sample size for gathering in-depth descriptions of participants’ experiences so that various perspectives are solicited. this small sample size also helped the researcher to establish open frank communication and maintain a close relationship with participants. other qualitative methods were considered. grounded theory would not have worked for this issue because the goal was not to develop a theory. a phenomenological study would not have aligned with this study’s goals, which were not to understand the “essence” of lived experiences of individuals. ethnography was not appropriate for this study because it aims to describe a culture-sharing group. a qualitative study was determined to be the best method for this study because the purpose of the current study was to examine the complexity of the issue by allowing the participants to discuss their 15 thoughts and interpretations within the context it occurs so that solutions could then be developed and instituted to solve the problem. one data source was semi-structured interviews, which are considered reliable data (yin, 2013). due to the need for social distancing resulting from the covid-19 pandemic, virtual interviews and focus group discussions were conducted through the zoom platform. the unit of analysis was individual managers. the target population was managers of public organizations in southern nigeria. the researcher compiled an interview protocol, consisting of open-ended questions, based on the purpose of the research and insights gained from the literature reviewed together with the theoretical foundation of this study. two existing interview protocols were used and adapted to develop the interview protocol. before adapting the existing protocols, the researcher obtained permission from the authors to use and adapt these lists of questions. the existing protocols were (a) the organizational culture, business ethics, and whistleblowing interview schedule (teo & caspersz, 2011), and (b) employee turnover semi structured interview (maertz et al., 2003). the researcher developed the codes into meaningful themes of commonalities. the researcher then used the coding to develop the themes. the researcher administered a demographic questionnaire. the data source was a self-administered demographic questionnaire that participants received via email, completed, and mailed back to the researcher at least 2 days before the interview. participants took part in the following activities: (a) semi structured interview, (b) focus group discussions, (c) completing a demographic questionnaire, and (d) member checking of interview transcript summaries. the researcher checked the american journal of management vol. 25(3) 2025 65 transcript of the focus group discussion against the audio recording taken during the focus group 16 discussion. after recruitment via flyers, the participants received informed consent forms via email and were requested to give electronic consent whereafter the informed consent forms were sent to the first 25 participants. upon receiving the participants’ consent, the researcher made arrangements to meet with the participants to conduct the semi-structured, audio-recorded interviews, lasting 60–90 minutes each. due to the need for social distancing based on the covid-19 virus, the researcher conducted virtual interviews using the zoom platform. participants were informed that they should locate a private, quiet, and safe room. the focus group meetings, which lasted about 90 minutes, were also conducted via zoom with the participants’ cameras off to maintain their confidentiality. definition of terms the phenomenon explored was the role of the dimensions of organizational culture as it relates to retention rates, as perceived and experienced by former and current managers of public organizations. these terms aided in the exploration of the perceptions and experiences of former and current managers in terms of their decisions to remain in the public sector in nigeria. in this section, the researcher provides the definitions of commonly used terms in the current study: artifacts. the first level is the organization’s characteristics which can be easily viewed, heard, and felt by individuals collectively known as artifacts. the dress code of the employees, office furniture, facilities, behavior of the employees, mission and vision of the organization all come under artifacts and go a long way in deciding the culture of the workplace (schein, 1992). basic assumptions. a pattern of basic assumptions evolves among the members of a social group and makes the core of the culture in any organization. the basic 17 assumptions are understood, the isolated and confusing artifacts and values become coherent (schein, 1992). corruption. corruption is using public office for private gain or the misuse of entrusted power for private gain. therefore, the use of official position by an office holder for his personal benefit represents corruption. thus, corrupt behavior would include, fraud bribery, favoritism partiality, stealing the public resources, seizure of public assets for private use etc. (transparency international, 2018) espoused values. the values of the individuals working in the organization play an important role in deciding the organization culture. the thought process and attitude of employees deeply impact the culture of any particular organization. the individual’s mindset associated with any particular organization influences the culture of the workplace (schein, 1992). norms. norms can be descriptive or injunctive (meisel& goodie, 2014). descriptive norms refer to the perceived prevalence of a behavior, whereas injunctive norms refer to the perceived approval of a behavior within a specific context. organizational culture. this refers to the shared values and beliefs within an organization that lead to norms and predictable patterns of behaviors (schein, 2004). public organizations. in nigeria, public organizations are those that are set up, controlled, and financed by the government at the federal, state, and local levels, charged with the responsibility of providing essential services to the members of the public (chukwuemeka et al., 2015). retention. retention refers to the period between the commencement and termination of an individual’s employment (nagaraju& rao, 2015). furthermore, 18 retention is “a technique adopted by businesses to maintain an effective workforce and at the same time meet operational requirements” (mita et al., 2014, p. 155). shared values. these refer to a system of group-based beliefs within an organization that enables different individuals within a group to achieve the same goals (forenza & mendonca, 2017). assumptions, limitations, delimitations assumptions an assumption is a self-evident truth (simon, 2011). based on this definition, the key assumptions of the study were the following: 1. it was assumed that all the participants would be honest with their responses during the data collection process. this assumption was necessary to treat the data as valuable and useful within the context of a research study. 2. it was assumed that this study accurately represents the current situation and organizational culture in public organizations in nigeria. this assumption was informed by the literature suggesting the unique organizational culture of public organizations in nigeria that is characterized by fraud, corruption, and ineffective leadership. research questions the phenomenon that was explored in the current study was the role of the organizational culture and its influence on employee turnover. the research questions that guided the study were as follows: rq1. how do present and former managers of public corporations describe the organizational culture influence on intent to remain for public organizations employees in nigeria? rq2. how do present and former managers of public corporations in nigeria describe the influence of espoused values on their intent to remain or turnover? these research questions are also aligned with the theoretical 66 american journal of management vol. 25(3) 2025 framework designated for this study. handy’s (1985) cultural model informed the formulation of the above research questions to understand how managers describe the influence of organizational culture on employee retention intentions. handy’s cultural model posits a need to ensure that organizations adopt the best organizational culture to influence employee turnover intentions. handy’s cultural model comprises four types of cultures that influence employee relationship, job satisfaction, and their intentions to leave or continue working in the company. the four cultural constructs include power culture, role culture, achievement culture, and support culture. each of the constructs was used to formulate the research questions. first, power culture was used to develop the research question, which sought to understand how power organizational culture influences employees’ intent to continue working for public organizations in nigeria as described by managers. the second construct, role culture, was used to formulate the second research question which seeks to how role organizational culture influences employees’ intent to continue working for public organizations in nigeria as described by managers. achievement culture, which is the third theoretical construct, was used to inform the third research question that seeks to understand how achievement organizational culture influences employees’ intent to continue working for public organizations in nigeria as described by managers. lastly, support culture construct was used to formulate the fourth research question seeking to understand how support organizational culture influences employees’ intent to continue working for public organizations in nigeria as described by managers. therefore, there is evidence that the theoretical framework used has been used to inform the development and formulation of the research questions. the research questions are each aligned to address the posed purpose statement through gathering specific data. the first research question was addressed by gathering data through semi structured interviews with participants. for the second research question, data from the focus group were collected and analyzed. an interview guide, which is discussed in the “sources of data” section, was developed to ensure that the questions applied in the interviews and focus groups aligned with the associated research questions. finally, the demographic questionnaire was used to describe the study sample.these participants were managers in public organizations in nigeria. table 1 displays the interview characteristics. the interviews were on average 37 minutes long and ranged from 17 minutes to 44 minutes. the transcripts were about 7 pages, singles paced on average, ranging from 4 pages to 14.5 pages. the average number of codes per transcript was about 23. table 1 interview qualitied american journal of management vol. 25(3) 2025 67 table 2 displays the focus group characteristics. the focus group discussions were about 81 minutes long and ranged from 69 minutes to 98 minutes in length. the transcripts were about 17 pages in length on average, ranging from 14 pages to 22 double-spaced pages. approximately 24 codes emerged from the transcripts for the focus groups. table 2 focus group qualities table 3 represents the participant characteristics. the average age of the participants was between 37 to 68 years of age. five participants were females, and 19 participants were male. twenty-two participants held a master’s degree and three reporting a doctorate. twenty participants were married, two were single and one reported divorce. the average household income range between 35,000 to 50,000. table 3 demographic of participants w h at i s y o u r ag e? w h at i s y o u r g en d er ? w h at i s y o u r et h n ic it y ? w h at i s th e h ig h es t le v el o f sc h o o l y o u h av e co m p le te d o r h ig h es t d eg re e y o u h av e re ce iv ed ? w h at i s y o u r m ar it al s ta tu s? w h at i s y o u r to ta l h o u se h o ld in co m e? 45 int male black masters divorced 43,000 40 fg female black masters single 35,000 42 int male black masters married 40,000 65 int male black doctorate married 50,000 63 int male black masters married 38 60 int female black masters married 42 47 int female black masters married 44 38 int male black masters married 49,000 68 fg female black doctorate married 48,000 39 fg male black masters single 30,000 55 int male black masters marricd 38,000 56 int malc black masters married 36 37 fg male black masters married 37,000 48 fg malc black masters married 39,000 44 int male black masters married 36,000 68 american journal of management vol. 25(3) 2025 64 fg female black masters married 38,000 65 fg male black doctorate married 49,000 51 fg male black masters married 35,000 53 fg male black masters married 35,000 50 fg male black masters married 37,000 59 fg male black masters married 36,000 55 fg male black masters married 35,000 45 fg male black masters married 37,000 52 fg male black masters married 36,000 63 fg male black masters married 35,000 data analysis procedures the first analysis of the interviews employed a deductive approach in which codes were developed from the interview questions. this process resulted in 15 codes that were applied to the transcripts. table 4 coding frequency for interviews and focus groups american journal of management vol. 25(3) 2025 69 summary of findings and conclusion this section contains a summary of the findings previously presented in fera, four themes arose from this iterative, qualitative analysis: (a) qualities of culture, (b) impact of culture, (c) organization values, and (d) employee qualities. each theme encompassed several subthemes and codes. the first theme, qualities of culture, was composed of two subthemes: extent to which culture is employee-oriented and extent to which organizational culture is processor results-oriented. this first theme relates to participants ‘perspectives of organizational culture. they opined on the orientations of their cultures. the second theme, impact of culture, was composed of three subthemes: impact of culture on remaining in an organization, impact of culture on motivation to leave or retire early, and effect of organization culture on employees. these subthemes demonstrated the variety of impacts that organizational culture had on employees. they shared the impact on employee retention and motivation to retire or leave early. the third theme, organization values, portrayed participants’ descriptions of business values and efforts to maintain these values. this theme comprised two subthemes: values defined and the influence of values. participants reported on the values that existed within their organizations and values that were important to sellers. participants also described how these values influenced different organizational activities. the fourth and final theme, employee qualities, included information about the qualities of employees that contribute to values. there were two subthemes that composed this theme: employee involvement in the organization and qualities of successful employees. participants conveyed how employees were considered. recommendations for future practice it is recommended that these findings be applied to practice to improve public organizations in nigeria, which are government-owned and are designed to serve the needs of its population, and they operate within the ambit of bureaucracy (krukru, 2016). they exhibit high levels of bureaucracy, where members are largely viewed as belonging to an exclusive social club; most public corporation employees exhibit a nonchalant attitude about discharging their responsibilities. public corporation employees lack a culture of efficiency and accountability; instead, the culture is that of corruption. on the contrary, private organizations demonstrate high levels of organizational commitment and efficiency. nigeria’s private sector has more stringent polices than the public sector, and the loopholes that make it possible for corruption in the public sector are minimal in the private sector (krukru, 2016). thus, the results from this study can help advance these issues. recommendations for future research there remains a paucity of literature on organizational culture and its influence on the retention of managers in public organizations in nigeria. this researcher proposes that further research be conducted on this study because nigeria is a major player in africa (adeniran, 2017). the country is culturally diverse, 70 american journal of management vol. 25(3) 2025 with the three largest ethnic groups being the hausa-fulani, the igbo (sometimes called ibo), and the yoruba. nigeria has the largest population of any african country and is the world’s tenth-largest country (adeniran, 2017). the country’s peculiarities indicate its importance not only in africa but in the global economy as well (adeniran, 2017). atiku et al. 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(2019, january 29). sub-saharan africa: undemocratic regimes undermine anti-corruption efforts. transparency international. retrieved from https://www.transparency.org/news/feature/cpi2018-subsaharan-africa-regional-analysis american journal of management vol. 25(1) 2025 71 ambush marketing: creativity vs. controversy gerd nufer reutlingen university ambush marketing, a tactic non-sponsors use to associate with major sporting events, raises ethical, legal, and strategic questions. this paper explores the phenomenon from historical, theoretical, and practical perspectives, highlighting its dual nature as a creative marketing tool and a controversial threat to official sponsorships. drawing on case studies, it categorizes ambush marketing strategies into direct, indirect, and destructive forms, examining their effectiveness and consequences. while ambush marketing enables brands to leverage the visibility of events without official sponsorship costs, it challenges the exclusivity and financial stability of event organizers and sponsors. the discussion considers legal frameworks, consumer perceptions, and the broader impact on sports sponsorship markets. ultimately, the analysis suggests a balanced approach to regulation, acknowledging ambush marketing’s potential to drive innovation while emphasizing the need for fair competition and protection of sponsorship rights. this paper contributes to a nuanced understanding of ambush marketing’s implications in the evolving landscape of sports marketing. keywords: ambush marketing, sports sponsorship, guerrilla marketing, event marketing, brand association, marketing ethics, creative advertising introduction major international sporting events are the ideal platform for numerous companies to embed their brand management and communicative target group approach in an attractive sporting environment. sports event organizers therefore sell privileged marketing rights for their event to official sponsors, who in return acquire exclusive opportunities to use the event for their advertising. on the other hand, ambush marketing characterizes the approach of companies that have no marketing rights to an event but establish a connection to this event in various ways through their marketing measures. there is often a fine line between violating sponsorship rights and creative and innovative communication policy, which is why ambush marketing is the subject of controversial debate. the phenomenon of ambush marketing has become significantly more important and professional in practice in recent years. from a theoretical perspective, the topic has so far mainly been addressed by anglo-american economists (e.g. meenaghan, 1994; shani & sandler, 1998; mcdaniel & kinney, 1998; lyberger & mccarthy, 2001; dickson, naylor & phelps, 2015) and legal scholars (e.g. bean, 1995; wittneben & soldner, 2006; melwitz, 2008; heermann, 2011; ellis, parent & séguin, 2016). however, the intensification of competition in the communication and sponsorship markets has meant that the use of ambush marketing as a marketing instrument can now be observed worldwide and, in addition to legal aspects, other aspects are also important for critical consideration. 72 american journal of management vol. 25(1) 2025 principles of ambush marketing ambush marketing (or ambushing) refers to a “marketing ambush”. in more popular scientific sources, ambush marketing is often used synonymously with terms such as “free-riding”, “parasitic marketing” and “parasite marketing”. official sponsors refer to this ambush of expensively purchased advertising rights as “theft” and emphasize the illegal aspects of ambush marketing (payne, 1998; townley, harrington & couchman, 1998; burton & chadwick, 2018). however, there are also representatives of an opposing position. they see ambush marketing as a “legitimate force” that helps the sports sponsorship market to become more efficient: “... all this talk about unethical ambushing is ... intellectual rubbish and postured by people who are sloppy marketers” (welsh, 2002, n.p.). definition of ambush marketing ambush marketing was first coined by bayless (1988, p. 1) as “a popular tactic […] to take advantage of […] an event”. this simple, unambiguous definition describes the false association by a company not sponsoring an event with a view to derive similar benefits as official sponsors of the event do. an early academic definition of ambush marketing comes from meenaghan (1994, p. 79). he describes ambush marketing as “the practice whereby another company, often a competitor, intrudes upon public attention surrounding the event, thereby deflecting attention toward themselves and away from the sponsor”. chadwick and burton (2011, p. 714) define ambush marketing as “a form of associative marketing which an organization designs to capitalize on the awareness, attention, goodwill, and other benefits, generated by having an association with an event or property, without the organization having an official or direct connection to that event or property”. it is clear from these definitions that ambush marketing occurs particularly in the context of sponsored sporting events and is often initiated by direct industry competitors of official sponsors. the following definition will be used for the following analysis: ambush marketing is the approach of companies to signal to the direct and indirect audience of a (sports) event the impression of a connection to the event through their own marketing, especially communication measures. however, the companies in question do not have legalized or merely underprivileged marketing rights to this third-party-sponsored event. in this way, ambushers, like official sponsors, want to promote and sell products through an association with the event in the recipients’ perception. the philosophy of ambush marketing is to achieve conventional marketing goals with unconventional methods. as a rule, the aim is to achieve the greatest possible effect with a comparatively small investment. ambush marketing can, therefore, be classified as an instrument of guerrilla marketing. the use of ambush marketing is often on the borderline of legality. objectives of ambush marketing the idea of ambush marketing is to benefit from the success of sponsoring sports events without the specific obligations of an official sponsor. the goals of ambush marketers are therefore largely congruent with the goals of event sponsors but are to be achieved at a reduced financial cost (pechtl, 2007). the objectives of ambush marketing can, therefore, be derived from the objectives of sponsorship (bruhn, 2010). the focus is on achieving psychological and communicative objectives (see figure 1). american journal of management vol. 25(1) 2025 73 figure 1 objectives of ambush marketing ultimately, exploiting the marketing potential of a sporting event implies economic goals such as sales, turnover, market share and profit. this is directly related to the offer of event-related products and services (pechtl, 2007). the pre-economic (psychological) goals are primarily in the area of communication impact. ambushers such as sports sponsors strive for psychological goals such as attracting attention to their own advertising, increasing their level of awareness and topicality. they hope for an image gain through their (supposed) sponsorship (goodwill) as well as an image transfer of positive characteristics of the sporting event to the product or company image (glogger, 1999). in addition to these goals, which are analogous to event sponsorship, ambush campaigns also have explicitly competition-oriented goals: the communication policy impact of sports sponsorship is to be reduced, thereby weakening the competition (e.g. by preventing the exclusivity of sponsorship, reducing the sponsors’ share of voice or hindering the sports sponsors’ advertising). systematization of the manifestations of ambush marketing the following section presents an approach to structuring the manifestations of ambush marketing, which classifies ambush marketing manifestations into different categories, case groups and cases. differentiation of basic ambush marketing categories the first step is to differentiate between three basic categories of ambush marketing. first, a distinction can be made between direct (“blatant”) and indirect (“subtle”) ambush marketing (wittneben & soldner, 2006; du toit, 2006; pechtl, 2007). the characteristic feature of direct ambush marketing is that the campaigns are aimed directly at the marketing rights of the event organizer or the event sponsorship. in contrast, in indirect ambush marketing, the ambusher uses the sporting event as an opportunity for its own marketing activities, which is why indirect ambush marketing is primarily located in the area of communication. this fundamental distinction has become established in the literature on ambush marketing. this dichotomy is supplemented by a third category, which is best characterized as dominant destructive-aggressive ambush marketing: measures in this category aim to reduce the impact of official sponsorships through destructive action. by blocking the sponsors’ measures, an ambusher usually attacks a direct competitor and thus weakens the competition. ambush marketing case groups to be distinguished per category in the second step, these three categories are each further subdivided into case groups in which similar cases are grouped together. target variables of ambush marketing economic psychological sales, turnover, market share, profit attention image, goodwill awareness, topicality competition-orientated weakeningof competition, reduction of effectiveness of sponsorship 74 american journal of management vol. 25(1) 2025 in the context of direct (“blatant”) ambush marketing, direct ambush marketing approaches, which are primarily motivated by product policy and focus on (rather short-term) economic objectives, are separated from direct ambush campaigns, whose motivation and implementation is primarily in the area of communication policy and which therefore focus on (rather medium-term) psychological objectives. in the first case group, event-related products are created and offered unauthorizedly. in the second case group, a sponsorship is communicatively feigned that does not actually exist. indirect (“subtle”) ambush marketing is initially subdivided into ambush marketing by intrusion and ambush marketing by association. while ambush marketing by intrusion encompasses all ambush activities within the framework of a sporting event that can be characterized as “taking advantage of the opportunity”, ambush marketing by association is further differentiated: “agenda setting” includes all ambush marketing measures that can be subsumed under “positioning through topicality” and that use the event as a communication platform (pechtl, 2007; 2008). “fun ambushing” and “modern ambushing” are two separate special cases of ambush marketing by association. the category “dominant destructive-aggressive ambush marketing” is not differentiated into any distinguishable case groups. typology and description of the various manifestations of ambush marketing finally, in the third step, the 24 cases of ambush marketing subsumed under individual categories and case groups are differentiated. figure 2 summarizes the above considerations on the structuring and systematizing the manifestations of ambush marketing. figure 2 systematization of the manifestations of ambush marketing it is not always possible to clearly differentiate between ambush marketing cases; in practice, there are overlaps. this means that individual ambush campaigns that can be observed have a multiple character and can (or even must) be assigned to two (or possibly even several) cases in parallel. the systematization also american journal of management vol. 25(1) 2025 75 makes no final claim to completeness. due to the highly innovative nature of ambush marketing, with new creative campaigns constantly being observed, this is more of a snapshot. therefore, the structure adopted is not rigid, but flexible and open, so that new cases can be included and integrated later. consequences of ambush marketing in sport the main parties involved in sports sponsorship bear the consequences of ambush marketing: sports event organizers, official sports sponsors and the media. in the following, the consequences of ambush marketing are first illustrated for these three groups before the effects on the entire sports sponsorship and sports market are considered. consequences for the official sports sponsors if ambushers participate in a sporting event in addition to official sponsors, a smaller proportion of the marketing potential remains for the sponsors and licensees. initially, there is direct rivalry for the market potential of merchandising products. sponsors/licensees and ambushers are competitors in the same business segment with their respective products. ambushers siphon off the purchasing power of consumers with their own event-related products (pechtl, 2007; königstorfer & uhrich, 2017). ambush marketing also weakens the communicative effect of the sponsorship of an official sponsor. ambush marketing increases the number of providers who use the sporting event for communication purposes. there is a risk that attention will shift away from the sponsor to the ambusher and that the desired increase in awareness and the intended image transfer will not be in the interests of the sponsor, but in favor of the ambusher. as a result, the exclusivity of being an official sponsor in direct relation to the sporting event is lost. the resulting “commoditization” makes it more difficult for sponsors to achieve their communication goals (bruhn & ahlers, 2003; pechtl, 2008; berberich, 2006). at the same time, the advertising pressure on the target groups increases, which implies a decrease in attention towards communication measures that relate to the sporting event. not only is there rivalry between the providers in an industry, but all advertisers are competing for the (scarce) attention of the target group. sports sponsors therefore achieve a lower “share of voice” in the target groups due to ambush marketing (pechtl, 2007). these findings lead to the conclusion that ambush marketing for sports sponsors generally results in a decrease in the effectiveness of their sponsorship message and ultimately a loss of value of their sponsorship (townley, harrington & couchman, 1998; meenaghan, 1996). if official sponsors can only realize part of the market potential of a sporting event due to ambush campaigns, it is to be expected that their willingness to pay and perform in support of such a sporting event will decrease. this can often trigger a re-evaluation of sporting event sponsorship as part of the communication mix, particularly in economically strained times (bruhn & ahlers, 2003; meenaghan, 1996; payne, 1998). consequences for the organizers of sports events as the budget of sports event organizers is generally not sufficient to finance major sports events, they are dependent on the acquisition of financially strong external partners. marketing the event is therefore a key objective for the organizers. in return, they offer sponsors communication opportunities as part of the event and enable the sponsoring companies to create an association with the sporting event. if, due to ambush marketing, this association and consequently the communicative success of the sponsorship commitment is not guaranteed or has to be shared with non-sponsors, sponsorships lose value. the consequence of this is either a demand by the sponsors for a reduction in sponsorship fees or even a withdrawal by the sponsors. both cases lead to uncertainty on the part of sports event organizers and jeopardize their sources of income (bruhn & ahlers, 2003; meenaghan, 1996; townley, harrington & couchman, 1998; payne, 1998). consequences for the media for the media, sports broadcasts have long been an essential program component and an effective instrument for profiling themselves in the face of media competition. major sporting events generate high 76 american journal of management vol. 25(1) 2025 viewing figures and also the opportunity to realize high advertising revenues by offering advertising blocks around the broadcast. uncertainty on the part of broadcasters, therefore, also impacts the financial situation of television stations: they lose program content and, as a result, advertising revenue (bruhn, 2010; bruhn & ahlers, 2003). consequences for the development of sports sponsorship and the sports market overall, parallel activities of sports sponsors and ambushers in the context of the same sporting event lead to the chain of effects shown in figure 3. figure 3 impact chain of the consequences of ambush marketing due to the network of relationships between the main stakeholders in sports sponsorship, the consequences are not limited to individual groups, but ultimately lead to uncertainty in the sponsorship market as a whole. this in turn has negative consequences for the development of the sports event market if sports sponsors withdraw from their commitments and the financial basis for a large number of sports events is withdrawn. as a result, the staging of important and popular major sporting events such as the olympic games and soccer world cups or european championships, which are largely financed by external partners (primarily sponsorship money), is at risk in the medium term (mcdonald & davidson, 2002; bruhn & ahlers, 2003; lentze, 2006). american journal of management vol. 25(1) 2025 77 examples of ambush marketing in practice the following section presents and discusses some particularly media-effective and/or controversial cases of ambush marketing (in chronological order) that have occurred in the context of sporting events in recent years. bavaria the beer brand bavaria from the dutch heineken group attracted great attention during the 2006 and 2010 world cups with well-planned ambush campaigns. before and during the 2006 world cup in germany, bavaria distributed around 250,000 lederhosen in the netherlands in the national color orange with “bavaria” printed on them (see figure 4). the intention was that dutch fans would wear these lederhosen during their stay in germany’s supposed “lederhosen country” and display them publicly, especially when visiting stadiums. figure 4 ambush marketing by bavaria 2006 (nufer, 2013, p. 44) this strategy initially worked, as thousands of holland fans turned up in dungarees before the netherlands’ preliminary round match against the ivory coast in stuttgart to – consciously or unconsciously – transport unauthorized advertising into the stadiums as multipliers. the organizers had to act quickly to protect the official sponsors. fifa referred to its ticketing terms and conditions, whose rule 10 stated that “advertising, commercial, political or religious items of any kind, including banners, symbols, and leaflets ... are not permitted and ... may not be brought into the stadium if the organizing committee has reason to believe that they will be displayed in the stadium.” fifa’s rights protection team ensured that all unauthorized bavaria advertising material had to remain outside the stadium gates, meaning that over 1,000 dutch supporters had to take off their lederhosen, as otherwise fifa would have refused them entry to the stadium. although it was ultimately a fended-off ambush attempt, the action brought bavaria immense attention. the fact that over 1,000 people watched a world cup match in the stadium in their underpants attracted a great deal of media attention – so the action would probably have attracted less attention if the fifa team had not stopped it. during the 2010 fifa world cup in south africa, bavaria again relied on ambush marketing. it again achieved a high level of media attention – this time with the so-called “beer babes”. in the audience of the preliminary round match between the netherlands and denmark in johannesburg, 36 young women presented themselves in orange mini dresses from the brewery. this time, the bavaria brand name was only attached to a small label on the seam (see figure 5). 78 american journal of management vol. 25(1) 2025 figure 5 ambush marketing by bavaria 2010 (nufer, 2013, p. 44) fifa once again took rigorous action against this campaign, removing the blondes from the stadium and even briefly arresting their alleged leaders. tempers flared afterwards: the world soccer association filed a lawsuit in court against the planned action. the dutch embassy assured the women of legal support. while bavaria’s advertising intention was obvious in 2006 with clear lettering on the dungarees, the brewery’s calculation in 2010 was much more subtle. it was a case of ambush marketing calculated on the drawing board: on site, i.e. in front of and inside the stadium, the campaign was not initially recognized as ambush marketing. as a result, the “beer babes” – unlike the fans wearing orange bavaria dungarees four years previously – were able to enter the stadium without any problems and undisturbed by fifa surveillance. who would notice a few girls dressed in orange (with a barely visible bavaria logo) in the stadium when thousands of orange-clad dutch fans are there anyway? again, it was only when fifa intervened that the action attracted media attention. however, while fifa itself saw through the ambush calculation in 2006, it must have received a specific tip-off in 2010 – presumably from the initiator bavaria itself, because it was only when fifa intervened that the ambush marketing campaign was exposed as such and made public. this was the only way that this incident, which was initially completely harmless from an advertising perspective, made it into the media coverage and had an immense pr impact – and that is exactly what bavaria wanted to achieve. kulula in the run-up to the 2010 fifa world cup in south africa, the south african airline kulula advertised itself as the “unofficial airline of you-know-who” (see figure 6, left). the world soccer association fifa then sued kulula for unfair competition, accusing kulula of having made an unauthorized reference to the 2010 fifa world cup. kulula then launched a new advertising campaign in the national press in june 2010: “we offer affordable flights for everyone except sepp blatter,” kulula advertised with a wink, “he can fly for free” (see figure 6, center). shortly afterwards, kulula followed up with full-page advertisements in the south african press: “it’s official. sepp blatter is flying with us” (see figure 6, right). the low-cost carrier immediately put things into perspective: “okay, it’s not exactly the sepp blatter we were expecting, but a promise is a promise.” it was “sepp, the dog”, a boston terrier from cape town. kulula says: “we are proud to have him on board. because every sepp blatter is our friend”. american journal of management vol. 25(1) 2025 79 figure 6 ambush marketing by kulula (nufer, 2018, p. 61) this successive increase in ambush marketing attracted international media attention and significantly raised the south african low-cost airline’s profile nationally and internationally. the brand played a charming game with fifa. the foresight with which it proceeded is remarkable – in planned, successive steps, each of which achieved a corresponding effect on its own and ultimately made the entire campaign appear well thought out and very successful. bruno banani at the 2014 winter olympics in sochi, the world marveled at more than just the best athletes. one exotic luge athlete enjoyed just as much media attention as many olympic champions and medal winners, even though he had only finished his luge competition in sochi in a distant 32nd place: bruno banani (see figure 7) from the south pacific island of tonga. figure 7 bruno banani luger from tonga (nufer, 2018. p. 63) 80 american journal of management vol. 25(1) 2025 bruno banani would not have made the headlines for sporting reasons. a few years earlier, he might have attracted attention in luge due to his exotic origins. but at those winter olympics, competitors from india, australia and china were also competing in his discipline alone – all countries with a very limited luge tradition. so it took more than that to really stand out: the 26-year-old computer science student was discovered a few years earlier in his home country and signed by a german marketing agency. a short time later, the winter sportsman officially changed his name to the brand name of the german underwear manufacturer bruno banani from chemnitz, was sponsored by them and also trained mainly in germany. the kingdom of tonga, which belongs to polynesia, is an island located around 2,000 kilometers north of new zealand and around 4,000 kilometers east of australia in the south pacific. in the winter, the average low temperature is 18 degrees celsius and has never snowed. while supposed “superstars”, “super talents” and “top models” are discovered every year on german television, “tonga’s next luge athlete” was sought on tonga. in 2008, the tongan princess decided that the time was ripe for the first winter sports olympian from tonga. a casting was held to find the tongan with the greatest talent for luge. fuahea semi (as he was still called at the time) showed the best skills when it came to maneuvering a sled down a sand hill as quickly as possible. among the spectators at this spectacle was an employee of a german advertising agency from leipzig, which works with the underwear brand bruno banani, among others. the idea of signing and sponsoring the athlete was quickly born. and because a tongan origin in luge is no longer exotic enough, fuahea semi was renamed bruno banani, including a new passport – all to attract public attention. after founding the tonga luge association (which has exactly one member), nothing stood in the way of bruno banani’s international sporting career. after the first attempt to qualify for the 2010 winter olympics in vancouver failed, bruno banani sensationally managed to qualify for sochi 2014. aldi the british subsidiary of german discounter aldi süd relied on a mixture of comedy and soccer language, including an opportune allusion to christmas, in its marketing for the first soccer world cup to be held in winter in 2022 (see figure 8). figure 8 ambush marketing by aldi (portela, 2022, n.p.) the country-specific beers temporarily offered in the range during the world cup were already a good idea, as experience has shown that drinking beer and watching soccer go well together. aldi’s mascot trio consisting of “ronaldi”, “marrowdona” and “messy” in christmas tree decorations reinforced the link to american journal of management vol. 25(1) 2025 81 the winter world cup. the highlight was a tv commercial that left an impression on consumers’ minds and made them smile: in addition to a consistent soccer reference, it included an allusion to the best soccer commercial of all time, the clever use of christmas references to the first winter world cup and links to the company’s own product range garnished with a dash of pop culture and zeitgeist. check24 the comparison portal check24 gave away five million germany jerseys in the run-up to the 2024 european soccer championship held in germany – and generated a lot of data and valuable social content. the jersey campaign was combined with a european championship betting game. the comparison portal’s app was at the top of the appstore charts for weeks. at the same time, former national team player lukas podolski appeared in the company’s tv advertising. the company attracted a lot of attention in a year with a european championship in its own country, which also bears similarities to the “check24” brand as “euro 24”. its partner was the sporting goods manufacturer puma. initially, check24 ordered 1.5 million jerseys from puma, but had to quickly increase this due to the high demand. in the week of the tournament’s opening match, check24 was sending out 400,000 jerseys per day – and was actually able to reliably meet the high demand. figure 9 ambush marketing by check24 (modemann, 2024, n.p.; schlenk, 2024, n.p.; schemmerling, 2024, n.p.) for check24, the ambush measure was a way to tap into a younger target group. the campaign was designed to attract as many new customers as possible to the comparison portal. to receive the free jersey, you had to download the company’s app and enter your details. the betting game is designed to ensure that jersey owners continue to use the app regularly. check24 wants to build up an active soccer community, and in future there will be a bundesliga betting game and a streaming comparison on the portal. with this campaign, check24 has secured an immense amount of valuable data records that the participants voluntarily provided. at a time when the digital advertising ecosystem is becoming increasingly challenging due to stricter data protection regulations and the phasing out of support for thirdparty cookies at google, this is of immense value. consumer advocates, however, criticize the fact that you had to pay for the jersey with your data. check24’s ambush marketing for euro 2024 has set new standards. the communication effect will continue in the long term, as it can be assumed that the owners will continue to wear their jerseys and thus show them off. the munich-based company has deliberately chosen a path without the german soccer 82 american journal of management vol. 25(1) 2025 association. the portal is not an official dfb partner, so the logo with the german eagle on the jersey looks different. legal problems were circumvented by generating the eagle using ai. for comparison: in 2014, the year of the last world cup title for germany to date, adidas sold around three million jerseys as the official supplier of the german national soccer team, a record figure to date. check24 and puma have now significantly surpassed this figure with five million jerseys. critical appraisal of ambush marketing ambush marketing is located at the intersection of two opposing spheres of interest engaged in a distribution battle for the marketing potential of a sporting event: on the one side are the organizers and the official sponsors, on the other side are the ambushers. from the perspective of the organizers and sponsors, ambush marketing represents a threat; from the perspective of the ambushers, it represents an opportunity (nufer, 2018; ellis, parent & séguin, 2016; pechtl, 2007). the following arguments can be put forward for and against ambush marketing. opportunities and uses of ambush marketing due to the high costs of official sports sponsorships and the assurance of industry exclusivity on the organizers’ part, fewer companies can participate in a mega sports event as official sponsors. ambush marketing aligns with the competitive spirit of not letting profit and sales opportunities go to waste. the lack of a service supporting the sports event and the endeavor to participate in its marketing potential is not unfair per se. a sporting event should not be run as a “closed society” by the organizer and sponsors. recently, there has also been an increasing tendency towards the “monopolization” of major sporting events, which in some cases manifests itself in a possibly excessive “regulatory frenzy” on the part of the organizers about the use of their event-related trademarks. this is not always comprehensible to the general public and sometimes even generates sympathy for ambushers. at the same time, rigid action against ambushing also jeopardizes a minimum level of advertising freedom (wittneben & soldner, 2006; pechtl, 2007; bruhn & ahlers, 2003; o’sullivan & murphy, 1998; dickson, naylor & phelps, 2015). welsh (2002, n.p.) is considered one of the most active defenders of ambush marketing: “when you own and license kermit you have only given the rights you own to one specific frog, and maybe not even to all green ones. [...] ambush marketing, correctly understood and rightly practiced, is an important, ethically correct, competitive tool in a non-sponsoring company’s arsenal of businessand image-buildingweapons. to think otherwise is either not to understand – or willfully to misrepresent – the meaning of ambush marketing and its significance for good – and winning – marketing practice.” advocates of ambush marketing describe ambushing as a legitimate, creative force that helps the sponsorship market to become more efficient. ambush marketing is only possible if the official sponsors do not shield their activities sufficiently or do not fully exploit their potential (portmann, 2008; welsh, 2002). ambush marketing would, therefore, be a new, innovative instrument in the marketing mix. dangers and limits of ambush marketing in return for their sponsorship and license fees, the official sponsors would like to receive exclusive exploitation of the marketing potential of the sporting event. this is also in the interest of the organizer, who can thus generate higher income from the sponsorship and licensing business. from this point of view, it is legitimate to protect this shared interest in exclusivity by using the available legal options. in particular, disregarding the property rights of official sponsors can be legally pursued. based on the general sense of justice, it can be argued that only companies that have made a financial contribution to the organization of the sporting event may also skim off the economic profit (wittneben & soldner, 2006; pechtl, 2007; grady, 2016). ambushers also violate the statutes of various corporate and agency associations that aim to promote fair, ethical marketing (e.g. “standards of practice” of the american marketing association of advertising agencies, “code of ethics” of the business marketing association). in this respect, ambush marketing misleads consumers (bruhn & ahlers, 2003; payne, 1998). a negative image transfer from ambush american journal of management vol. 25(1) 2025 83 measures to the initiating company is also possible, especially if the target group being courted compares the positive promotional idea of official sponsors with the possibly even destructive-aggressive approach of the ambusher – which can increase even further to the point of creating reactance on the part of recipients. opponents of ambush marketing condemn ambushing as the illegal theft of expensively purchased advertising rights. a statement by former ioc marketing director payne (quoted in sportlink, 2003, p. 4) summarizes the opinion of many critics: “ambush marketing is not a game. it is a deadly serious business and has the potential to destroy sponsorship. if ambush or `parasite’ marketing is left unchecked, then the fundamental revenue base of sport will be undermined. [...] ambush marketers are thieves knowingly stealing something that does not belong to them.” these arguments can be summarized as follows: what if all companies preferred ambushing to being an official sports sponsor? conclusion and outlook overall, due to its controversial nature, ambush marketing should not be relegated to the “dirty corner” of marketing per se. rather, ambush marketing should be classified as a competitive instrument connected to a sporting event. the fact that ambush marketing is often a “hare and hedgehog race” in which the organizer takes on the role of the hare should therefore be seen as a sign of a functioning competition in which each of the players involved uses their specific “weapons” (official sponsorships versus creativity). for the ambusher, ambush marketing can sometimes also represent a dangerous competitive strategy: while the ambusher can fight with marketing weapons alone, the organizers and sponsors/licensees can furthermore fight the battle for the marketing potential of an event with their legal positions – and thus with an additional set of tools. this could turn investments in ambush marketing into “sunk costs” for the ambusher through the courts (nufer, 2018; burton & chadwick, 2018; pechtl, 2007). as the above explanations show, a general assessment of ambush marketing is impossible. ambush marketing must be viewed differently according to the various categories. the following can be stated: • for the most part, direct ambush marketing operates in the gray area of legitimacy or even deliberately exceeds it, which is why this category of ambush marketing is largely to be judged as unlawful. • as blocking or destroying the sponsorship effect can generally hardly be proven as a targeted and planned obstruction, legal prosecution of predominantly destructive-aggressive ambush marketing is difficult. however, planned attacks on sponsors that pursue the primary goal of reducing or even destroying the effect of official sponsorship must be condemned as immoral. • jurisprudence often has little to say against indirect ambush marketing. even from an ethical and moral point of view, it is not easy to put forward cogent arguments against creative advertisers. organizers of major sporting events must, therefore, accept that it is also possible for non-sponsors to take advantage of opportunities that present themselves or to lean on an event – without infringing rights. restricted event protection would be an appropriate and proportionate solution. it is important to find a good balance so that the financing of major sporting events remains secure and fair competition between advertising companies can take place at the same time, true to the motto “those who do not differentiate themselves are eliminated” (schulte, 2007, p. 138), because ambush marketing as an instrument of guerrilla marketing has great potential to enrich communication policy with innovative and sometimes amusing approaches. 84 american journal of management vol. 25(1) 2025 references bayless, a. 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(2006). der schutz von veranstaltern und sponsoren vor ambushmarketing bei sportgroßveranstaltungen. wettbewerb in recht und praxis, 21(10), 1175–1185. american journal of management vol. 24(3) 2024 21 why are so many remote workers reluctant to endure the politics of organizational culture? sandylane y. oquendo prairie view a&m university reginald l. bell prairie view a&m university a recent wall street journal (wsj) article dated may 31, 2023, titled “why workers aren’t coming back to the office full-time” (smith & carpenter, 2023), examines reasons employees prefer remote work, such as rising childcare costs, avoidance of micro-management, low interpersonal conflict, wardrobe requirements, food costs, commute time, and parking expenses. the wsj has recently published multiple articles on remote work, including one on january 11, 2024, stating “remote workers are losing out on promotions, new data shows” (chen, 2024), which claims remote workers were promoted 31% less frequently than office workers. understanding the politics of organizational culture related to remote work preferences is crucial. we conducted a literature review using google scholar with key terms “remote work” and “office” or “politics” or “culture” from 2019 to 2023, including the covid-19 pandemic period. there is a pressing need for a cultural shift within organizations to adopt remote and hybrid work models, driven by professionals' increasing demand for remote work options. keywords: culture, compensation, politics, remote work, scientific management, taylorism, turnover frederick w. taylor’s influence on organizational culture frederick winslow taylor (1911) is the third pillar of the classical management perspective [along with henri fayol and max weber], contributing to the rise of the field of management (bell & martin, 2012; kanigel, 2005; schachter, 2010). as a pioneer, taylor (1911) showed a visual depiction of a “fine workman” in late 19th century and early 20th century america and how a devoted manager builds organizational culture around the duties and burdens of his principles. some authors are of the impression that taylor was a product of his era, and that the views he held about human capital were forged by the beliefs and values of that era, especially regarding the politics of race; his safety at times required armed security protection from angry mobs (bell & martin, 2012; gabor, 2000; nelson, 1980; nelson, 1995). taylorism had extreme political and cultural influences on the task work that laborers would [or could not] accept as piece-rate, particularly hungarian, german and black laborers (nelson, 1995; tylor, 1911). taylorism remains an integral part of modern business work processes (bell, 2011). an excerpt from an article on researchgate titled, my chat with chatgpt regarding black laborers’ influence on frederick w. taylor’s principles of scientific management, may 3, 2024, by bell (2024) shows the effects of taylor’s managerialism on organizational culture, within the context of the late 19th century and early 20th century. 22 american journal of management vol. 24(3) 2024 bell (2024, pp. 1-3) describes the tension between highly-skilled black laborers and taylor’s “task work” system that is exemplified further in black people’s fiction surrounding the notion of a h.n.i.c. table 1 illustrates the sentiments of commonality and the legacy of highly skilled black laborers in that era. table 1 depiction of the black laborer in relation to scientific management “taylorism is known as that method described by taylor as a sort-of “personal productivity coefficient” (bell & martin, 2012). the task taylor put before himself was to usher in higher levels of organizational surplus with more efficient techniques of work in motion (gabor, 2000); nonetheless, laborers had a different take on taylorism, and their collective sentiments were demonstrated by controlling the flow of work, thus the flow of output, which taylor himself described as ‘soldiering;’ this type of group communication in the collective voice pitted taylorism against laborers’ interests (nelson, 1980, nelson, 1995). for laborers the rapid improvement in efficiency meant that dramatic changes in workmen’s outputs were akin to them immolating themselves on the altar of scientific management. completing work too soon meant no more work! taylor seems to dispute modern interpretations of his organizational analyses with his own words about the culture with which he dealt rate for ‘task work.”’ “figure 1 shows pages 71 and 72 from principles of scientific management (taylor, 1911) that highlights language that is perhaps the most elucidating facts depicting taylorism and the characteristics of the workers, with black american men working as “bosses” and “teachers,” that led to taylor’s breakthroughs in job analysis and design. what good is any scientific method without keen observations? it is apparent that highly-skilled black men were a source of his keen observations. principles of scientific management continues to be the bedrock of modern manufacturing processes, job analysis and design, and quality control.” “taylor bragged about the black men he was observing as ‘the finest body of picked laborers,’ which contributed to the development of the principles of scientific management. his sentiment is unambiguous and clear. he contrasted black laborers against the 19th and early 20th century stereotyped ‘nigger drivers’ which is exemplified by the clichéd language found in the clip from the movie lean on me, where morgan freeman (school ‘principal’) and robert guillaume (district ‘superintendent’) engaged in a tug-of-war verbiage, both depicting themselves as the exemplar h.n.i.c.—head nigga in charge!” “the fictional movie clip from march 3, 1989 which punctuates the stereotype “nigger driver” unfolds with: actor robert guillaume (superintendent) exploding: ‘“get used to it—it’s the way of the world. if you’re so hot on discipline—then got dammit! start by accepting mine!! cause contrary to popular opinion—i am the head nigga in charge!!!”’ fiction informs reality but reality instructs fiction. certainly, the clichéd h.n.i.c. existed decades prior to the lean on me (1989) movie, and it is easy to surmise that the “finest body of picked laborers” taylor described was that same underlying sentiment which punctuated black male competence depicted throughout the movie. because, after their fierce verbal scuffle, superintendent and principal retreated to their masculine humanity, and the scene ended with the boss (superintendent) inviting the reprimanded principal to lunch, in a comforting lowered tone ‘come on, let’s get something to eat.’ similar to the respect between men portrayed in movie, taylor (1911, p. 72) too observed that “it would have been absolutely impossible for anyone to have stirred up strife between these men and their employers.”’ “taylor also discovered early the workers’ behavior of ‘soldiering’ that social psychologists today describe as social loafing (bell & kennebrew, 2023; bell & rahman, 2023; gabor, 2000). taylor observed that 'a careful analysis had demonstrated the fact that when workmen are herded together in gangs, each man in the gang becomes far less efficient than when his personal ambition is stimulated…”’ american journal of management vol. 24(3) 2024 23 figure 1 pages 71 and 72 from frederick winslow taylor’s principles of scientific management bell (2024, p. 8) concluded, after his chat with chatgpt regarding the influence black laborers had on taylor’s principles of scientific management, that: because modernity broadly teaches that america is systemically racist, by mistake ai refers to it as “scientific racism,” it might be impossible for chatgpt at this time to discern that any 19th century intellectual might well have genuinely believed the black laborers were “finest body of picked laborers” and were in fact superior workmen, as frederick w. taylor (1911) described on page 72 of his book, principles of scientific management. taken from his book, intellectuals and races, thomas sowell argues that late 19th century black people and white people were getting along; black people were doing financially better than recent white immigrants; and it was liberal policies that eroded race relations (sowell, 2023). 24 american journal of management vol. 24(3) 2024 i am not certain the chatgpt could consider the truth value of taylor’s claim about black laborers’ superior skills. it was not demonstrated that taylor’s claim was untruthful. taylor was born in 1856 to a wealthy quaker family in philadelphia, pa; therefore, it is a hard-fact of history. for some reason chatgpt was unable to integrate this fact. quakers were a branch of christianity that fought for the abolition of slavery. numerous quakers were lynched or hanged for their beliefs. taylor was a quaker and his core values were molded in him by his mother [emily annette taylor (née winslow)] and father [franklin taylor] who were prominent abolitionists, and his mother was also rumored to have participated in the underground railroad (curtis, 2011). psychologists believe that a child’s core values are formed by age 13. religious conviction is a significant predictor of moral choice (bell et al, 2011). it appears more likely than not that taylor was genuine in his praise of black laborers. it is unlikely that taylor was much different in his core moral values than his quaker mother and father. it is likely that chatgpt would have tailored its response to taylor’s quaker ancestry and thomas sowell’s input had i introduced it as a question. (p. 8) why is taylorism relatable to a remote work era? in the late 19th century and early 20th century, there was no such thing as remote work via electronic means for laborers. the laborers’ work was persistently grueling; the culture was stern (braverman, 1998; kanigel, 2005); the workers engaged in the act of soldiering to prevent job loss and mitigate against what they perceived as a threat to their livelihoods—the scientific management principles of taylorism (gabor, 2000; nelson, 1980; nelson, 1995; schachter, 2010; taylor, 1911). despite race and cultural politics, there is direct video evidence supporting sowell’s (2023) claim that black and white laborers worked in harmony in philadelphia, as truly depicted in the silent film footage of the men working with molten metal at the midvale steel plant in 1919 (african american steelworkers, midvale steel, philadelphia, circa 1919). taylor proved that work output at bethlehem steel could be increased six times the rate and workers felt threatened. tensions ran extremely high among the laborers and frederick w. taylor; it is like being a flyon-the-wall when reading gabor’s (2000, p. 3) account: the focus of taylor’s experiment was the immigrant laborers themselves—hungarian and german—whose job it was to haul bars of pig iron weighing ninety-two pounds each onto the railroad cars. for two days, taylor and two deputies observed ten men as they lugged bars of pig iron from the bethlehem steel yard to the railcars. laboring at a backbreaking pace, taylor’s ten ‘hungarians’ each loaded an average of seventy-five tons of pig iron per day, nearly six times the previous rate. on the basis of those observations, taylor established a production quota. to complete a fair day’s work, he determined, each worker would have to haul forty-five tons per day— an output level still about three times as high as the average output before taylor appeared on the scene. to be sure, taylor offered to pay the men who met the quota a higher wage. but to the bethlehem laborers, taylor was asking too much. in the ensuing weeks it became clear that some of the men were physically incapable of meeting the quota. others simply refused to try. either way, the bethlehem workers lost their jobs by the dozen. by some accounts, taylor was so deeply hated by the men that he had to walk home under armed guard for fear of an attack on his life. (p. 3) taylor clearly established that managers have a duty and a burden to define the work of employees (production quotas) and monitor and correct the output generated from skilled work. exemplary work should be rewarded with higher incentives. poor performers will be eliminated. modern managers’ concern about the new remote worker era is an inability to control the production quotas, accurately monitor and american journal of management vol. 24(3) 2024 25 assess the output, and appraise performance of the remote worker. according to boone and bowen (1980, pp. 35-36) there are four main duties and burdens undertaken by management called “the principles of scientific management:” 1. the first principle is the deliberate gathering together of the great mass of traditional knowledge by means of time and motion study; 2. the second principle is the scientific selection of the workers and then their progressive development; 3. the third principle is the bringing together of this science and the trained worker, by offering some incentive to the worker; and 4. the fourth principle involves a complete redivision of the work of the establishment, to bring about democracy and cooperation between the management and the workers. for modern organizations to successfully transition the majority of employees back to in-person work, and to support the remaining remote workers, organizational leadership must address all levels of organizational culture. the benefits of the in-person cultural must outweigh the benefits of work-fromhome. taylorism continues to instruct managers that workers will soldier together to mitigate against modern labor demands (wrege & greenwood, 1991). southwest airlines learned the hard way that workers can destroy $75 million in profits collectively over a weekend when mandatory vaccine shots violated their perceptions of a social contract (bell & kennebrew, 2023). psychology has shown carrots work better than sticks: threatening remote workers’ jobs is an extremely bad idea! the pandemic taught workers they could work from home and still contribute successfully to the bottom-line. managers’ plea for the majority of workers to come back to a physical office building to work in-person seems to be falling on deaf ears for a large percent of remote workers. there is an apparent reluctance on the part of remote workers to un-learn the expectations and benefits they learned during the pandemic about remote work, and to now give-it-up to endure the office politics for in-person work seems unfeasible. purpose of our study we aimed to investigate the interplay between leadership approaches, the essence of organizational culture, and employee preferences regarding remote work post-pandemic. our study differentiates “telecommuting” historically, defining remote work as tasks performed outside a company’s physical space from “hybrid work” which is also introduced to denote remote and in-person work. we examined secondary sources published between 2019 and 2023 in academic journals, blogs, and websites. our research explored the evolution of remote work, emphasizing the need for companies to adapt organizational culture to align with employee preferences. edgar schein’s (2004) definition of culture was used to operationalize the study and place boundaries around the meaning of organizational culture. edgar schein’s theory on organizational culture provides a framework for understanding the deep-seated aspects of organizational culture: artifacts, espoused values, and underlying assumptions levels, and how political culture influences human behavior. edgar schein (2004) defines culture: “as a pattern of shaped basic assumptions that was learned by a group as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” (schein, 2004, p. 17). transforming an organizational culture often involves aligning visible artifacts and behaviors with the espoused values and challenging and reshaping the fundamental assumptions contributing to a dysfunctional or unethical culture (schein, 2004). our findings, therefore, contribute to the literature by elucidating how our findings help to inform leaders about organizational culture that leverages remote work to retain talent, increase productivity, decrease absenteeism and lower operational costs. in the present business environment, the extensive acceptance of remote work has introduced novel challenges and opportunities for leadership. it is apparent that physically returning to an office space in26 american journal of management vol. 24(3) 2024 person is daunting for too many remote workers. relying on established leadership principles, we wanted to know if managerialism would require organizations to adjust to remote work reconsiderations, augmenting leadership strategies, with a new focus on adaptability, employee engagement, and collaboration. we, therefore, asked the following research question. rq1: why are so many remote workers, post-pandemic, reluctant to endure the politics of organizational culture in-person? from telecommuting to a remote work urgency remote work gained mass popularity due to the covid-19 pandemic urgency; however, it is not a new concept. it was previously referred to as “telecommuting,” a term coined by jack nilles, a nasa rocket scientist, during the early 1970s while working on a project to address fuel consumption issues amid an oil crisis (ortiz-farmer, 2005). scholars from the university of southern california were researching this radical way of doing business. the research explored the potential impact of using telecommunications and computer technology to replace certain forms of urban transportation. the focus was on alleviating peak commuting loads in major u.s. cities, emphasizing enabling the information technology industry to work remotely to achieve this goal (nilles et al., 1976). the style of work continued to grow gradually. twentyfirst-century technological advances, such as the internet and cloud-based computing programs, allowed work to be carried out virtually. by 2019, about seven percent of the u.s. labor force worked remotely (barrero et al., 2023). organizational leadership is vital for designing, implementing, and sustaining effective remote work policies. the covid-19 pandemic accelerated the adoption of remote work. the global crisis taught organizations two things. first, they must take proactive approaches to be prepared to overcome unforeseen situations. second, remote work is here to stay (barrero et al., 2021). a 2020 study by mckinsey & company emphasizes the importance of adjusting employees’ skills and roles to enhance the resilience of operating models in the aftermath of the pandemic-induced changes in working methods (sapana agrawal et al., 2020). adam ozimek and upwork chief economist argue that the profound and swift transformation due to covid-19 is the most significant shift in the global workforce since world war ii (ozimek, 2020). according to national council on compensation insurance (ncci) information, remote workers in the u.s. accounted for 6% of the labor force before the pandemic. that number increased to 35% by may 2020 (coate, 2021). however, it is worth noting that remote work adoption was feasible due to having the technological platforms to support such a workstyle (barrero et al., 2023). the pandemic meant that organizations needed to transform their organizational culture and view remote work as a benefit to meet the needs of professionals in the workforce (lusoli, 2022). working from home has gained popularity among industry professionals, challenging employers to create new opportunities (barrero et al., 2023). barrero, bloom, and davis’s (2021) study found that 40% of americans working remotely at least once a week would seek new employment if their employers required a total return to the workplace (barrero et al., 2021). nearly every university went online completely or had a major portion of their curricula redesigned to meet the needs of students forced into quarantine. it is very likely the willingness of students to accept remote work and the eagerness of university faculty learning how to deliver course content online is what saved most universities from ruin (adedoyin & soykan, 2023; bahasoan, et al, 2020; camargo, et al 2020). software application like zoom and docusign played a huge role in helping universities and healthcare professional to stave the covid-19 hurricane (maor, et al 2023; phillips, et al 2023; volmar, et al 2023). form documents used to by nearly every large organization, i.e., add/drop forms, registration forms, and grade appeals, were especially amenable to docusign’s utility. remote work and office culture politics leaders set the tone, establish expectations, and provide the direction needed to ensure that remote work aligns with organizational objectives and promotes a positive and productive work environment. schein’s model suggests that to understand and change an organization’s culture, leaders must go beyond american journal of management vol. 24(3) 2024 27 the surface-level artifacts and behaviors and delve into the underlying values and, even more challenging, the unconscious assumptions. remote work culture involves examining visible artifacts and behaviors to assess the tangible aspects of the organization’s culture, especially in a remote/hybrid work setting. the alignment of espoused values with the updated organizational culture is crucial, requiring revisions to mission/vision statements, codes of conduct, and official documents. the most challenging task involves addressing basic assumptions and unconscious beliefs deeply ingrained in the organization’s dna, influencing how employees perceive the world and make decisions. recognizing that each layer is equally important, organizations must take a holistic approach, giving equal consideration to all levels and implementing a strategic plan tailored to the organization’s needs to achieve a successful cultural shift and gain employee buy-in. in a recent study conducted by savino and foster the researchers refer to organizational culture as a” sacred element”. they explain that the organizational culture is the lifeblood that guides organizations, enabling effective daily and long-term operations. since 2020, the shift to remote and hybrid work has tested many cultures. organizations now face the crucial question of how to move forward post-pandemic, significantly impacting their culture (savino & foster, 2024). remote workers encounter various challenges in navigating office politics remotely, including issues related to inclusion, visibility, bias, relationship building, and advocating for their needs. effective communication, proactive engagement, and a strong work ethic are crucial for remote workers to successfully manage office politics from a distance. despite the bustling nature of public spaces like restaurants post-pandemic, office buildings remain largely vacant, posing challenges for downtown economies and corporate culture. employees cite reasons such as high expenses, caregiving responsibilities, and the continued prevalence of virtual meetings for their reluctance to return to the office. while many prefer the flexibility of remote work, employers increasingly push for a return to in-person work, creating a disconnect between employer desires and employee preferences. financial and lifestyle benefits drive some employees to request full-time remote work (smith & carpenter, 2023). despite its allure, recent data suggests that fully remote workers experience fewer promotions compared to their office-based counterparts, particularly women who receive less mentorship. this disparity, attributed to “proximity bias,” poses challenges for remote workers seeking career advancement. while some prioritize commuting to the office to mitigate career setbacks, companies like egnyte strive to provide equal opportunities for remote and in-office employees. additionally, hybrid workers face similar promotion prospects to fully on-site employees, while remote workers experience reduced promotion opportunities despite their higher productivity levels. however, some prioritize personal well-being and work-life balance over career advancement, indicating differing values within the workforce (chen, 2024). remote work also poses challenges for building professional networks and receiving feedback, leading to concerns about career trajectory and impostor syndrome among younger workers. they may feel forgotten or excluded from opportunities, as supervisors often prioritize those they interact with in person. additionally, remote communication can lead to misunderstandings and strained relationships (janin, 2022). a major challenge is performance visibility (bailey and kurland, 2002). in their research, (kłopotek, 2017) explains that employees find it more difficult for co-workers to recognize the effort and time invested in tasks. despite working long hours on a particular issue, employees might not receive the same recognition they would from a supervisor in a traditional work setting where their efforts would be more visible and appreciated. despite the potential downsides, some young workers appreciate remote work’s flexibility and worklife balance. a study conducted by forbes indicates that millennials, in particular, increasingly prefer the flexibility offered by remote work (haan, 2023). however, they still value occasional in-person interactions for collaboration and relationship-building. employers must actively engage younger remote workers to foster connections and prevent turnover, potentially through structured onboarding programs and periodic in-person meetings. ultimately, offering flexibility in where and how work is done can benefit both employees and employers (janin, 2022). qi, xu, and liu’s research findings indicate that employees’ self-control positively impacts their selfefficacy in remote work, leading to increased work effectiveness. furthermore, perceived organizational 28 american journal of management vol. 24(3) 2024 support, interaction with supervisors, and family support amplify the effect of self-control on remote work self-efficacy (qi et al., 2023). according to mäkikangas et al. (2022), organizational support is a key factor in enhancing employees’ affective commitment and job involvement. sánchez-vergara et al. explore the growing prominence of remote work, emphasizing its importance and the need for policies and infrastructure to support this trend. they highlight global shifts towards accommodating remote work arrangements, reflecting broader societal acceptance and integration of remote work practices (sánchez-vergara et al., 2023). similarly, peter cappelli’s book, “the future of the office,” delves into the challenges and opportunities presented by remote work, offering insights into navigating its complexities and broader societal implications. capelli states, “this could be the moment to redefine what work means for employees and it fits into society.” (cappelli, 2021). despite resistance from employers like elon musk, the pandemic has underscored the need to redefine work arrangements and retain talent through remote options. zoom, once synonymous with remote work during the pandemic, has surprised many by mandating its own employees to return to the office, aligning with a trend among businesses to enforce return mandates. the company requires employees living within 50 miles of an office to work in person at least twice a week, citing the effectiveness of a structured hybrid approach. while this decision sparked strong reactions and wry headlines, some experts like nicholas bloom find it sensible, considering zoom’s investment in office space and the existing hybrid work model for most employees. despite the push for in-office collaboration, office occupancy remains below pre-pandemic levels, reflecting a broader shift in work dynamics and the ongoing debate over remote versus in-person work (masih, 2023). meanwhile, howe and menges conducted a study on individuals’ beliefs about the learnability of remote work and their association with emotions and productivity during remote work. the widespread transition to remote work prompted this study, revealing hypotheses regarding attitudes toward remote work and its impact on emotions and productivity (howe & menges, 2022). a significant belief related to emotions and productivity while working remotely is the concept of autonomy. hackman and oldham (1975) define autonomy as the degree to which employees possess the freedom, authority, independence, and discretion to make job-related decisions. essentially, autonomy enables employees to determine “what tasks to do and how to do them.” this organizational resource empowers employees by granting them decision-making authority, fostering a sense of self-control, and enhancing their productivity and emotional well-being (edmondson & matthews, 2024). the future of remote work appears promising, given the growing evidence suggesting its positive impact on productivity. however, research uncovers crucial factors: employees’ beliefs about remote work significantly influence their ability to transition successfully to remote work. specifically, employees who view remote work as a skill anyone can develop are more likely to embrace it, while those who perceive it as an inherent trait may struggle. organizations should consider how employee mindsets impact their adjustment to remote work to foster a brighter future for remote work. cultivating adaptive mindsets, particularly growth mindsets regarding remote work, can empower employees to thrive in both crises and stable times. additionally, as remote work technologies become increasingly integral and sophisticated, they play a vital role in supporting the mindset necessary for remote work success. therefore, organizations that adopt (suarez, 2022). summary of our findings after experiencing the benefits of remote work, some professionals prefer this working style or a hybrid option. barrero, bloom, and davis’s 2021 study revealed that 56% of employees are more likely to consider a new job with remote/hybrid flexibility, with a more significant portion of respondents identifying as women (barrero et al., 2021). due to the increased desire of professionals for flexibility in working arrangements, organizations must assess their landscape to determine where it makes sense to create flexibility. organizations must take a holistic, two-sided approach to implement these strategies successfully. one side focuses on the organization’s benefits from the remote/hybrid working policies. a boston consulting group (bcg) study revealed that remote working models could increase employee american journal of management vol. 24(3) 2024 29 productivity by 15 to 40 percent, reduce turnover by 10 to 15 percent, decrease absenteeism by 40 percent, and lead to a potential reduction in real estate expenses of 20 percent (elizabeth kaufman et al., 2020). airbnb, allstate insurance, verizon, and pinterest are among the organizations that have permanently shifted their organizational culture to work remotely/hybrid (smith, 2023). by prioritizing flexibility, these companies let their constituents know they value their feedback and are willing to make changes that appeal to the masses. making these working adjustments requires leaders to use the five practices of exemplary leadership®. leadership must model the way. they cannot say something and do something different. kouzes and posner explain that leadership behavior earns their constituents’ trust and buy-in. after the leadership updated policies, they inspired and shared the vision by sharing them with staff and having a flexible policy where employees can select the option that best works for them. these companies are challenging the process by not returning to pre-pandemic status and being forward-thinking. kouzes and posner (2017) emphasize that leaders “need to search for opportunities by seizing the initiative and looking outward for innovative ways to improve” (kouzes & posner, 2017). organizations making permanent shifts are enabling others to act. not only are they enabling their constituents to embrace the changes, but they are also change agents that enable other companies to follow their steps. a significant contributor to this practice is “fostering collaboration and building trust” (kouzes & posner, 2017). the mckinsey and company and bcg studies show that collaboration and trust are necessary for successful remote/hybrid work implementations (sapana agrawal et al., 2020; elizabeth kaufman et al., 2020). companies that take an employee-centric approach encourage the heart of their constituents. employees feel valued, and this practice leads to the second prong. in the book “people-centric organizational change” hodges (2024) asserts that the key to achieving successful business change is through engaging employees and making the transformation people-centric. the second prong focuses on employee benefits from a remote/hybrid work approach. an indeed article shows that remote/hybrid work has 17 significant benefits, including less time spent commuting, increased productivity and performance, improved work-life balance, the ability to stay connected, a custom work environment, healthier choices and lifestyle, less time spent in meetings, a remote approach is more environmentally friendly, it provides a change of scenery, decreases the need for employees to take sick days, saves employees money, provides schedule flexibility, improves focus, increases mobility, provides the flexibility of wearing comfortable clothes and shoes, and increases job opportunities and job satisfaction (indeed editorial team, 2023). in 2020, the mckinsey global institute’s analysis of 2,000 tasks and 800 jobs across nine countries indicated a likely persistence of hybrid work model’s post-pandemic, particularly for the highly educated and wellpaid minority of the workforce. the study emphasized removing cultural and technological barriers to remote work during the pandemic, leading to a structural and cultural shift in how some people work. however, it emphasized that the potential for remote work is determined by tasks and activities, not occupations (lund et al., 2020). the remote work era is here to stay as the demand for post-pandemic remote/hybrid work increases, organizations must adapt their culture quickly. especially with research showing that the quality of work produced by a group of individuals working remotely through video communication is comparable to that of a face-to-face team (mäkikangas et al., 2022). ozimek’s findings indicate that the anticipated growth rate of remote/hybrid work between 2020 and 2025 is projected to double, increasing from 30% to 65% (ozimek, 2020). figure 2 outlines the industries with the most significant remote/hybrid work potential. the finance and insurance industries have a 76% potential. management has 68%. professional, scientific, and technical services have 62%, and it and telecommunications have 58% (lund et al., 2020). figure 2 shows findings that indicate remote/hybrid work is here to stay. remote/hybrid work has the potential to serve as a blueprint with longterm benefits for organizations by addressing changing workforce dynamics, enhancing flexibility, improving talent strategies, and fostering a more sustainable and adaptable work culture (sapana agrawal et al., 2020). 30 american journal of management vol. 24(3) 2024 the transition will bring new skills as companies shift to a remote/hybrid work era. mckinsey & company’s study notes that while many employees acquired skills through hands-on experience during the initial phase of the crisis or received rapid training, the ongoing trend of remote/hybrid work is likely to present a persistent challenge for upskilling (agrawal et al., 2020). in 2023, full-time working arrangements in the u.s. comprised 29% hybrid and 16% fully remote setups (barrero, bloom, & davis, 2023). additionally, data from 2021 indicated that 40% of americans working remotely at least once a week would consider changing jobs if their employers mandated a complete return to the workplace (barrero, bloom, & davis, 2021). implementing remote/hybrid work models can boost productivity by up to 40%, decrease turnover by up to 15%, reduce absenteeism by 40%, and potentially cut real estate costs by more than 20% (kaufman, et al., 2020). figure 2 industries with most significant potential for remote/hybrid work a blueprint with long-term potential to successfully implement remote/hybrid work models, organizational leadership should leverage the five practices of leadership® framework. this involves setting a long-term goal and commitment by exploring various remote/hybrid work versions (model the way). by adopting a job-by-job or function-byfunction approach, organizations inspire a shared vision with their constituents. leaders should challenge the process and consider onsite client interaction, specialized equipment needs, supervision, and regulatory oversight. enable others to act by fostering collaboration and interaction among constituents. moreover, leaders can enable others to act by creating an environment that encourages the heart by welcoming innovation. this comprehensive leadership approach is vital for successfully adopting remote/hybrid work models (kaufman et al., 2020). the evolution of remote work from the early concept of “telecommuting” to the widespread adoption of remote and hybrid work models has been significantly influenced by the covid-19 pandemic. the pandemic acted as a catalyst, accelerating the acceptance and normalization of remote work across various industries. the shift from traditional office setups to flexible remote and hybrid arrangements reflects a profound transformation in the global workforce. this research explored the emergent and unanticipated benefits of remote work, the evolution of remote work, particularly in the context of the covid-19 pandemic, and the necessity for organizations to adapt their culture to align with the preferences and needs of professionals in the workforce. this study viewed remote work from the lens of edgar schein’s organizational culture theory. the literature review established that remote/hybrid work has long-term potential, serving as a blueprint for organizations navigating changing workforce dynamics. many more employees than anticipated found a strong desire to remain remote and are reluctant to return to the office culture. the research findings underscore the importance of organizational leadership, cultural adaptation, and skills enhancement in successfully implementing remote/hybrid work models. our five recommendations for organizations struggling to call employees back to the office post-pandemic spawn from kouzes and posner’s “five practices of exemplary leadership.” in his “leading change” work, john kotter emphasizes that to initiate organizational change successfully, leaders need to build a persuasive case that outlines the organization’s risks and opportunities. american journal of management vol. 24(3) 2024 31 furthermore, effective communication involves conveying the situation’s urgency, motivating individuals to act, and emphasizing the benefits of the proposed change. we recommend that organizations leading change and adopting remote/hybrid work post-pandemic utilize the five practices of exemplary leadership® framework. in envisioning the future of remote work, we suggest that leaders draw upon the anecdotal claims presented by kouzes and posner (2017) to inspire a shared vision among employees. kouzes and posner argue that influential leaders articulate a compelling vision that appeals to the values and aspirations of their team (kouzes & posner, 2017). kotter recommended that leaders communicate a vision emphasizing the benefits of remote work. organizations should include corporate anecdotes that highlight the positive impact of this work style and aim to inspire a collective sense of purpose and commitment from employees. this approach would allow leadership to prospect the future, express their passion, and make a case for commitment—all factors discussed in chapter 5 of kouzes and posner’s book. the five practices of exemplary leadership the five practices of exemplary leadership® framework comprises ten commitments that center on modeling the way, inspiring a shared vision, challenging the process, enabling others to act, and encouraging the heart. table 2 illustrates the model and provides explanations for each commitment. in the first practice, leaders model the way. table 2 the five practices and ten commitments of exemplary leadership kouzes & posner, 2017, p. 24 the first practice is to model how leaders must clarify and affirm shared values by finding their voice and setting an example by aligning their actions with them. the second practice is to inspire a shared vision. leaders accomplish this by envisioning the future, imagining and enabling exciting opportunities, and enlisting others in a common vision by appealing to shared aspirations. the third practice is to challenge the process. in this practice, leaders seek opportunities by seizing the initiative and looking outward for innovative ways to improve. they experiment and take risks by consistently generating small wins and learning from experience. 32 american journal of management vol. 24(3) 2024 the fourth practice involves enabling others to act. leaders foster collaboration, build trust, and facilitate relationships by enabling others to act. they strengthen others by increasing self-determination and developing competence. the fifth and final practice is encouraging the heart. through this practice, leaders recognize contributions by showing appreciation for individual excellence. they celebrate the values and victories by creating a spirit of community. the remainder of the literature review will highlight recent studies that delve into the growing demand for remote/hybrid work models. our recommendations edgar schein’s organizational culture theory provides a valuable framework for understanding the deep-seated aspects of organizational culture. it emphasizes the significance of addressing visible artifacts, espoused values, and unconscious assumptions to create a meaningful cultural shift. organizational leadership plays a crucial role in setting the tone, establishing expectations, and providing direction to ensure remote work aligns with organizational objectives. the impact of the pandemic highlighted the need for organizations to be proactive and adaptable in the face of unforeseen challenges. once considered a temporary solution, remote work has become a permanent fixture in the modern work landscape. organizations must recognize the importance of aligning their organizational culture with the preferences and needs of professionals in the workforce. our recommendations section proposes the adoption of the five practices of exemplary leadership® framework by kouzes and posner for organizations embracing remote and hybrid work post-pandemic. this framework encourages leaders to model the way, inspire a shared vision, challenge the process, enable others to act, and encourage the heart. these practices are essential for building trust, fostering collaboration, and creating a positive work environment in remote settings. we advocate for a substantial shift in organizational culture and present five key strategies to effectively bridge the gap in leadership approaches and organizational cultures. remote and hybrid work options have long-term potential and can serve as a blueprint for organizations seeking to navigate changing workforce dynamics. as the demand for such work arrangements increases, organizations must adapt rapidly, leveraging the skills acquired during the pandemic and upskilling employees for continued success. the following five recommendations have been outlined to effectively bridge the gap in leadership approaches and organizational cultures. recommendation 1 use “the five practices of exemplary leadership” framework to lead organizational culture. the five practices of exemplary leadership®” framework provides a proven and comprehensive approach to leadership, ensuring that leaders effectively model behaviors, inspire a shared vision, challenge the process, enable others to act, and encourage the heart. this is crucial for successfully implementing and sustaining organizational change, especially in remote/hybrid work. recommendation 2 leverage learnings from pandemic practices and technological advances to develop remote/hybrid work models. leveraging pandemic practices and technological advances enables organizations to adapt to evolving work dynamics. it involves incorporating lessons from the swift transition to remote work during the pandemic, ensuring resilience and preparedness for future disruptions. utilizing technical platforms, such as virtual meetings, cloud-based sharing capabilities, and project management tools, is crucial to equipping the virtual workforce to perform efficiently and effectively. recommendation 3 listen to constituents when enforcing remote/hybrid work policies. listening to constituents when enforcing remote/hybrid work policies is essential for considering the preferences and concerns of employees. this approach fosters better communication, engagement, and satisfaction among the workforce, contributing to a positive organizational culture. american journal of management vol. 24(3) 2024 33 recommendation 4 designate a professional development budget to keep up with the evolving digital landscape. designating a professional development budget to keep up with the evolving digital landscape is crucial for ensuring that employees and leaders acquire the necessary skills for remote/hybrid work. staying current with digital advancements is vital for organizational success and competitiveness. recommendation 5 leverage remote work models to foster an employee benefit. offering remote/hybrid models as an 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(1991). frederick w. taylor, the father of scientific management: myth and reality. business and economic history, 20(1), 17–26. american journal of management vol. 25(4) 2025 11 optimizing large language models for resource-constrained environments: a parameter-efficient approach using qlora and prompt tuning shivay shakti comscore, new delhi drishti hajong indian institute of technology priyanshi dubey government medical college as the deployment of ai solutions continues to grow, particularly in resource-constrained environments, the need for efficient and cost-effective methods becomes increasingly critical. large language models (llms) present significant computational challenges that often make their deployment impractical for many real-world applications. this study evaluates parameter-efficient fine-tuning methods, specifically qlora and prompt tuning, in combination with distilbert, to address these challenges. our combined approach achieved a 36.2% reduction in memory usage and a 50% reduction in inference costs while maintaining 87.75% accuracy compared to baseline models. the results demonstrate that stacking these techniques can provide multiplicative benefits in resource reduction without significant performance degradation, offering practical solutions for resource-constrained deployments. keywords: parameter-efficient fine-tuning, large language models, qlora, prompt tuning, resourceconstrained environments, nlp, memory optimization, deployment cost reduction, text classification, quantization, low-rank adaptation introduction problem statement the deployment of modern deep learning models, particularly large language models (llms), faces increasing challenges due to their growing computational demands. organizations across academic and industrial sectors struggle with resource constraints that limit their ability to effectively utilize these models. this challenge is particularly acute in business environments, where managers must justify substantial expenses for computational infrastructure, including costs associated with model training, deployment, and ongoing inference operations. 12 american journal of management vol. 25(4) 2025 research objectives this study aims to address the following objectives: 1. evaluate fine-tuning methods that achieve competitive performance (≤ 1% accuracy drop) while minimizing computational and financial overhead. 2. investigate the effectiveness of qlora (4-bit and 8-bit quantization) and prompt tuning (with varying token counts) in text classification tasks. 3. quantify efficiency-performance trade-offs through comprehensive ablation studies, focusing on practical deployment scenarios. contributions 1. a comparative analysis of parameter-efficient methods for nlp tasks, with an emphasis on real-world application scenarios. 2. quantitative evidence demonstrating multiplicative benefits in resource reduction through technique stacking. 3. a systematic framework for evaluating cost-effectiveness across different model configurations. 4. practical implementation guidelines for business stakeholders, focusing on both initial deployment and ongoing operational costs. literature review evolution of large language models (llms) growth and scaling challenges of llms the exponential growth of large language models (llms) has presented significant challenges in scaling and computational demands. kaplan et al. (2020) introduced scaling laws that illustrate how computational requirements grow non-linearly with an increase in model parameters. these findings emphasize that the infrastructure costs increase significantly as models become larger. a prominent example of this scaling issue is gpt-3, developed by brown et al. (2020), which contains 175 billion parameters. gpt-3 set a benchmark for language models, but it required an enormous amount of computational power —approximately hundreds of gpu-years —making it a challenge for widespread, cost-effective deployment. techniques for model efficiency knowledge distillation knowledge distillation is a popular technique to reduce model size while preserving performance. sanh et al. (2019) introduced distilbert, a distilled version of bert that achieves approximately 97% of bert's original performance while being 60% smaller. by transferring knowledge from a larger "teacher" model to a smaller "student" model, knowledge distillation allows significant reductions in both memory requirements and computational cost. this technique is crucial for deploying llms in resource-constrained environments while maintaining competitive accuracy and efficiency. quantization and pruning quantization and pruning are also effective approaches to reducing the computational footprint of llms. quantization, as implemented in nvidia's tensorrt, reduces the precision of model parameters, thereby decreasing memory usage and accelerating inference while maintaining high levels of accuracy. pruning techniques, such as those employed in google’s switch transformers, involve eliminating less critical parts of the neural network, thereby reducing the overall complexity without substantially sacrificing model performance (fedus et al., 2021). both methods are instrumental in enabling llm deployment on hardware with limited computational capabilities, such as edge devices or mobile platforms. american journal of management vol. 25(4) 2025 13 parameter-efficient fine-tuning lora (low-rank adaptation) techniques low-rank adaptation (lora) is an efficient fine-tuning technique that allows for adapting llms without modifying the entire model, which reduces the number of trainable parameters significantly. hu et al. (2021) demonstrated that lora achieves competitive performance while requiring far fewer computational resources by applying low-rank updates during training. this approach helps to maintain the original pre-trained model intact, thus enabling easier deployment in scenarios where memory resources are limited. quantized lora (qlora) developments quantized lora (qlora) extends the benefits of lora by incorporating quantization. dettmers et al. (2023) showed that qlora achieves an 85% reduction in memory requirements compared to traditional fine-tuning methods, without compromising model accuracy. by combining the principles of parameterefficient adaptation with quantization, qlora facilitates the training and deployment of llms on consumer-grade gpus, thus democratizing access to powerful language models for smaller organizations. hybrid and combined efficiency approaches hybrid parameter-efficient approaches hybrid approaches combine multiple parameter-efficient techniques to maximize scalability and resource savings. for instance, integrating lora with prompt tuning has been shown to reduce memory requirements while maintaining strong model performance. prompt tuning, introduced by lester et al. (2021), involves adding trainable prompt vectors to adjust the model for new tasks without altering the core model parameters. by combining lora with prompt tuning, researchers have achieved notable efficiency gains, making the deployment of llms feasible even in constrained settings. the effectiveness of these combined approaches has been supported by industry benchmarks, such as mlperf (2023), which demonstrate significant reductions in operational costs and training times. real-world applications and deployment considerations industry-specific implementations large language models are increasingly being deployed across various industries, with notable implementations in the healthcare sector. according to a study published in nature digital medicine (2023), llms have been integrated into clinical workflows to support tasks such as summarizing medical records, generating diagnostic recommendations, and improving overall patient care. these models have the potential to enhance clinical decision-making, provided that ethical and data privacy considerations are effectively managed. in addition, nvidia’s igx orin platform has demonstrated the ability to deploy llms at the edge, allowing real-time processing in scenarios where latency and energy efficiency are crucial, such as in healthcare and industrial iot environments. this demonstrates that by utilizing parameter-efficient adaptations, llms can be effectively deployed even in resource-constrained or latencysensitive environments. methodology experimental design the primary objective of this study is to assess the feasibility and effectiveness of parameter-efficient fine-tuning techniques in real-world settings, with a particular focus on their cost-effectiveness for business adoption. we chose the ag news dataset as the benchmark for this experiment, given its relevance to text classification tasks and its structured representation of news articles categorized into four major classes. this dataset allows us to replicate real-world applications such as content moderation, news aggregation, and customer support classification—all of which are vital for many enterprises. 14 american journal of management vol. 25(4) 2025 use case selection and justification the primary use case involves text categorization, specifically classifying news articles into pre-defined categories. this task was selected due to its relevance across multiple domains, including media and content management industries, where cost-effectiveness is crucial for adopting machine learning models. dataset characteristics we used the ag news dataset comprising four distinct categories: world, sports, business, and sci/tech. the dataset was split into training and testing sets in an 80/20 ratio to ensure a balanced representation across all categories. we performed balanced sampling to ensure that each class was equally represented, avoiding any potential bias and ensuring the model's ability to generalize well across different categories. evaluation metrics our evaluation focused on both technical efficiency and performance. specifically, we monitored accuracy, f1 score, precision, and recall to measure model quality, and also added efficiency metrics, such as memory usage and training time, to evaluate the computational overhead. in a business context, reducing costs while maintaining model performance is paramount; therefore, each metric was chosen to reflect this dual emphasis on efficiency and effectiveness. study limitations while our study provides valuable insights into the efficiency gains possible with parameter-efficient methods, it is limited by the use of a single dataset and a specific gpu (google colab t4). these constraints may limit generalizability to other datasets or hardware environments. future studies can expand on these findings by testing on more diverse datasets and infrastructure setups. model configurations in this section, we present four different model configurations to understand the trade-offs in accuracy, computational cost, and memory requirements. the configurations are based on distilbert, chosen for its balance between efficiency and performance. distilbert (baseline) this serves as our baseline configuration, representing the traditional fine-tuning approach without employing any parameter efficiency techniques. this baseline helps us evaluate the full computational cost and performance capabilities of a standard model. distilbert + qlora this configuration introduces low-rank adaptation (lora) with quantization, which aims to reduce the number of trainable parameters and memory requirements. the primary goal is to minimize the computational cost of model training and inference while maintaining competitive accuracy, which is critical for cost-sensitive business environments. distilbert + prompt tuning in this configuration, we add learnable prompt tokens to the model, enabling adaptation with minimal retraining. prompt tuning is particularly attractive for businesses as it reduces retraining costs and provides a flexible way to adapt pre-trained models to new tasks without modifying the core model parameters. distilbert + qlora + prompt tuning (stacked approach) this stacked approach aims to leverage the strengths of both qlora and prompt tuning. by maximizing parameter efficiency, this configuration significantly reduces both the initial training cost and the ongoing costs associated with deployment, while striving to maintain model performance close to the baseline. american journal of management vol. 25(4) 2025 15 implementation details training environment we utilized google colab as the infrastructure for computational experiments, leveraging its t4 gpu (16gb vram) for all training runs. this platform was chosen due to its accessibility and costeffectiveness, allowing the implementation of our methods in a realistic, resource-constrained environment. a. memory constraints: to address these limitations, we applied specific optimization techniques such as gradient checkpointing and mixed-precision training to fit our models effectively within the available resources. training arguments a. epochs, batch sizes, learning rates: the baseline model was trained for 5 epochs with a batch size of 16, while qlora and prompt-tuned models required adjustments to fit into gpu memory (batch size reduced to 8). learning rates were also tuned individually for each configuration to balance training stability with computational cost. b. qlora configurations: we used a 4-bit quantization level to minimize gpu memory usage and set the rank (‘r’) to 8 to control the dimension of the low-rank matrices applied to the model. c. prompt tuning configurations: twenty virtual tokens were initialized as prompts to help the model adapt without modifying core weights. the integration with qlora involved setting the virtual tokens at specific layers to maximize efficiency while retaining performance. model deployment considerations a. model exportation: after training, models were exported using onnx, a format chosen for its efficiency in inference tasks. b. cloud deployment: we considered deploying the trained models on platforms such as google cloud or aws for real-time text classification tasks. this approach allowed us to assess the cost implications for businesses aiming to utilize these models in production settings. c. integration and maintenance considerations: minimizing integration complexity was key to ensuring that businesses could adopt these techniques with minimal disruption. techniques like lora and prompt tuning reduce the need for frequent retraining, thereby reducing ongoing maintenance costs. we also considered aspects like predictable maintenance, which is crucial for financial planning. evaluation metrics to evaluate the models, we focused on metrics that would not only reflect the performance of the models but also provide a clear perspective on efficiency. specifically, our metrics were divided into two categories: performance metrics a. accuracy: the proportion of correct predictions out of the total instances. b. f1 score: the harmonic mean of precision and recall, especially important for balanced assessment across all classes. c. precision and recall: precision measures the accuracy of positive predictions, while recall indicates the coverage of positive instances. efficiency metrics a. memory usage: measured during training and inference to determine the resource footprint of each model configuration. b. training time: time taken to reach the end of training, measured in minutes. this metric helped assess the feasibility of using these models in time-sensitive business contexts. 16 american journal of management vol. 25(4) 2025 c. inference latency: measured during deployment, focusing on how quickly a prediction can be made by each model. tracking tools a. weights & biases (w&b): we used w&b for real-time tracking and visualization of training progress, model parameters, and efficiency metrics. this tool also allowed us to produce figure 1 the memory consumption between the baseline and qlora models, highlighting the efficiency gains in memory usage with qlora training accuracy the progression of accuracy over the training epochs for qlora, as compared to the baseline, is depicted in figure 2. this figure helps demonstrate that qlora maintains competitive accuracy levels across all epochs, despite the reduction in resources. figure 2 demonstrates the accuracy progression across training epochs for baseline and qlora, reflecting qlora's competitive performance 7.45 5.25 0 2 4 6 8 m em o ry u sa ge ( g b ) memory consumption: baseline vs qlora baseline qlora 86.50 87.00 87.25 87.50 87.50 87.00 87.50 88.00 88.25 88.25 86 86 87 87 88 88 89 1.0 2.0 3.0 4.0 5.0 a cc u ra cy ( % ) epoch accuracy over training epochs: baseline vs qlora epoch qlora american journal of management vol. 25(4) 2025 17 business insights a. accuracy vs cost: the slight decrease in accuracy and other performance metrics is offset by notable reductions in memory usage and training time. this makes qlora a highly practical approach for businesses that must operate within fixed computational budgets. b. cost per inference: with memory optimization, the cost per inference dropped to $0.02, offering a more affordable solution for businesses focused on minimizing operational costs. distilbert + prompt tuning results prompt tuning was employed to adapt distilbert with learnable prompt tokens, which allowed the model to modify its behavior with minimal retraining. performance metrics a. accuracy: 88.00% (similar to baseline) b. f1 score: 87.98% c. precision: 88.11% d. recall: 88.00% training time & memory efficiency a. training time: reduced to 32 minutes, reflecting a substantial reduction in retraining requirements. b. memory usage: 6.00 gb peak memory, representing a moderate reduction compared to the baseline model. figure 3 the comparative training times of baseline distilbert, distilbert + qlora, and distilbert + prompt tuning prompt size and accuracy impact the effect of varying prompt sizes on model accuracy is presented in figure 4. the results demonstrate that increasing the prompt size to 50 tokens offers the highest accuracy, while smaller prompt sizes still retain a reasonable level of efficiency. 46 38 32 0 10 20 30 40 50 t ra in in g t im e (m in u te s) training times: baseline, qlora, and prompt training baseline qlora prompt tuning 18 american journal of management vol. 25(4) 2025 figure 4 a heatmap depicting the impact of different prompt token sizes on model accuracy impact of prompt sizes on accuracy a cc u ra cy 10 tokens 20 tokens 50 tokens business insights a. cost efficiency: prompt tuning emerges as a cost-effective method for adapting models without compromising much on performance. the reduced training time directly translates into cost savings, making this a preferred approach in scenarios requiring frequent model updates. b. cost per inference: the cost per inference using prompt tuning was $0.025, providing a balanced solution between the baseline and qlora. stacked approach (distilbert + qlora + prompt tuning) the stacked approach, which combines qlora and prompt tuning, sought to achieve maximum parameter efficiency and cost-effectiveness while retaining as much accuracy as possible. performance metrics a. accuracy: 87.75% b. f1 score: 87.68% c. precision: 87.82% d. recall: 87.75% resource efficiency a. memory usage: 4.75 gb, a substantial improvement over other configurations. b. training time: reduced further to 28 minutes, maximizing the cost-effectiveness. 86 88 88 american journal of management vol. 25(4) 2025 19 figure 5 a radar chart comparing accuracy, f1 score, memory usage, and training time across all configurations business insights a. trade-off analysis: while the stacked approach results in a marginal decrease in performance compared to the baseline, the memory and time savings are highly significant. businesses operating with restricted computational budgets can greatly benefit from this stacked approach, as the cumulative efficiency gains outweigh the slight reductions in model performance. b. cost per inference: the stacked approach resulted in the lowest cost per inference of $0.015, making it the most cost-effective solution for businesses aiming to maximize roi. summary of results the table below consolidates the findings from all experimental configurations, clearly illustrating the trade-offs between computational efficiency and model performance. by using the stacked approach, businesses can achieve significant resource savings, which is crucial for environments where operational costs need to be minimized without compromising the model's performance. 20 american journal of management vol. 25(4) 2025 table 1 summary of performance, efficiency, and computational costs for each configuration model config. accuracy (%) f1 score (%) precision (%) recall (%) training time (mins) memory usage (gb) cost per inference ($) distilbert (baseline) 88.25 88.17 88.31 88.25 46 7.45 0.030 distilbert + qlora 87.50 87.22 87.42 87.50 38 5.25 0.020 distilbert + prompt tuning 88.00 87.98 88.11 88.00 32 6.00 0.025 stacked approach (qlora + prompt tuning) 87.75 87.68 87.82 87.75 28 4.75 0.015 ablation studies ablation studies were conducted to assess the sensitivity and impact of various design choices, particularly in the context of parameter efficiency and business-related costs. each study was designed to analyze different aspects of our parameter-efficient fine-tuning approaches, highlighting key trade-offs and providing insights into optimal model configurations for diverse business use cases. prompt token analysis in this ablation study, we experimented with different quantities of virtual tokens used in prompt tuning, including 10, 20, and 50 virtual tokens. this section aims to identify the optimal number of tokens that offer the best balance between performance and computational efficiency. accuracy vs. token count the results indicate a trade-off between the number of prompt tokens and the model's accuracy. specifically: a. 10 tokens  accuracy: 86.50%  memory usage: 5.75 gb  training time: 29 minutes  cost per inference: $0.0011  business implications: suitable for businesses seeking minimal costs, with a minor sacrifice in accuracy. b. 20 tokens ○ accuracy: 88.00% (best balance) ○ memory usage: 6.00 gb ○ training time: 32 minutes ○ cost per inference: $0.0013 ○ business implications: achieves near-optimal performance, suitable for scenarios that require moderate accuracy with reasonable resource utilization. c. 50 tokens o accuracy: 88.20% (highest accuracy) american journal of management vol. 25(4) 2025 21 o memory usage: 7.00 gb o training time: 39 minutes o cost per inference: $0.0016 business implications: best for enterprises where accuracy is paramount, and the computational cost is less of a concern. practical implications for business the 20-token configuration seems to strike the ideal balance between performance and cost. it provides competitive accuracy while ensuring that training and memory consumption remain at manageable levels. this is crucial for businesses that need to maintain a balance between model performance and infrastructure costs. figure 6 a line chart depicting the accuracy, memory usage, and training time for each prompt token configuration. this visualization helps businesses make informed decisions on resource allocation as shown in section iv.b, the baseline model achieved 88.25% accuracy. the 20-token configuration maintains this performance while reducing memory usage by 19.5%. quantization level analysis the quantization level of the qlora was varied between 4-bit and 8-bit quantization to determine the impact on model efficiency and performance. this analysis is particularly important for businesses as quantization affects both the deployment feasibility and inference cost of the model. 4-bit quantization ○ accuracy: 87.25% ○ memory usage: 4.50 gb ○ training time: 26 minutes ○ cost per inference: $0.0012 86.5 88.2 88.2 29 32 39 5 5 5 0 20 40 60 80 100 1 0 2 0 5 0 m e t r ic v a l u e number of prompts token accuracy memory training 22 american journal of management vol. 25(4) 2025 ○ business impact: reduces computational load and therefore is more cost-effective for realtime applications, suitable for businesses where reduced inference cost is critical. 8-bit quantization ○ accuracy: 88.00% ○ memory usage: 5.25 gb ○ training time: 30 minutes ○ cost per inference: $0.0016 ○ business impact: higher accuracy with increased resource usage. this approach is optimal for businesses that prioritize accuracy over the cost of inference. figure 7 comparison of metrics for 4-bit quantization levels a bar chart comparing memory usage, accuracy, and cost per inference for the 4-bit and 8-bit quantization levels. this visual will help stakeholders understand the trade-offs between precision and computational expense. layer-wise analysis in this section, we analyzed the effects of applying prompt tuning at different layers of the distilbert architecture. the objective was to determine where prompt tuning can be applied most effectively to optimize accuracy and reduce resource requirements. layer-level performance a. early layers (layers 1-2)  accuracy: 86.00%  memory usage: 4.25 gb  cost per inference: $0.0010  business insights: less computational overhead but lower accuracy; suitable for noncritical applications where inference speed is a priority. b. middle layers (layers 3-4) ○ accuracy: 87.80% ○ memory usage: 5.00 gb ○ cost per inference: $0.0013 87.25 4.50 0.0012 88.00 5.25 0.0016 0 20 40 60 80 4-bit 8-bit m et ri c v al u e quantization level american journal of management vol. 25(4) 2025 23 ○ business insights: offers a good trade-off between accuracy and cost. ideal for businesses that need moderately high performance without significant infrastructure. c. late layers (layers 5-6) ○ accuracy: 88.25% (best accuracy) ○ memory usage: 6.25 gb ○ cost per inference: $0.0015 ○ business insights: high accuracy but higher memory requirement. best suited for highstakes applications such as healthcare or finance where accuracy is paramount. practical implications for businesses tuning middle layers appears to provide the most balanced outcome in terms of accuracy and computational cost, making it an attractive choice for most enterprise use cases. figure 8 accuracy and memory usage across different prompt using tuning placements a layered bar graph to illustrate accuracy gains and memory usage across different prompt tuning placements in the network. this will help visualize the diminishing returns on accuracy as computational costs increase. summary of ablation studies the ablation studies indicate that both prompt token count and quantization level are pivotal in determining the resource efficiency of models. business applications must therefore consider a combination of these techniques to achieve optimal roi. the layer-wise prompt tuning study further demonstrates that efficient tuning does not necessarily mean tuning at the deepest layers, especially if businesses need to optimize for both cost and performance. 86.00 87.80 88.25 4.25 5.00 6.25 0.00 20.00 40.00 60.00 80.00 early layers (1–2) middle layers (3–4) late layers (5–6) m et ri c v al u e layer placement accuracy memory usage (gb) 24 american journal of management vol. 25(4) 2025 table 2 consolidated recommendation table summarizing configurations for prompt tuning, including prompt tokens, quantization levels, applicable layers, and cost impacts for different business requirements scenario tokens quantization layer cost impact high performance 50 8-bit late high balanced 20 4-bit middle medium resource limited 10 4-bit early low key takeaways for stakeholders 1. use 20 virtual tokens to strike a balance between computational efficiency and accuracy. 2. for resource-constrained deployments, 4-bit quantization offers good enough accuracy at a lower inference cost. 3. apply prompt tuning to the middle layers for balanced performance, minimizing cost while maintaining acceptable accuracy levels. conclusions and implications key findings our analysis reveals that combining qlora and prompt tuning offers a significant reduction in computational resources, which directly impacts cost savings for business deployments. this is particularly crucial in resource-constrained environments where managers need to optimize for both performance and budget. comparative performance the combined approach of qlora and prompt tuning provided a significant reduction in computational resources while maintaining competitive model accuracy. specifically, our combined approach achieved a 36.2% reduction in memory usage and a 50% reduction in inference costs, while maintaining 87.75% accuracy, demonstrating that parameter-efficient methods can significantly improve deployment efficiency without substantial performance degradation. effectiveness of techniques the studies identified scenarios where prompt tuning, alone or in combination with qlora, was particularly effective, such as resource-constrained environments and tasks requiring rapid adaptation. practical implications the findings provide a clear pathway for managers and decision-makers to deploy nlp solutions that are both efficient and cost-effective. by leveraging qlora and prompt tuning, businesses can reduce the infrastructure needed for training and inference, thereby optimizing roi. recommendations for practitioners depending on the business needs, practitioners can decide between qlora, prompt tuning, or their combination. for scenarios requiring minimal resource usage, 4-bit quantization with prompt tuning may offer the best trade-off. for higher accuracy, the stacked approach (combining both techniques) is recommended. american journal of management vol. 25(4) 2025 25 low-resource environments the practical application of these findings is particularly valuable in environments with limited computational power. businesses aiming to deploy ai without investing heavily in infrastructure can use these techniques to achieve competitive performance. while these findings provide immediate practical value for businesses, several promising directions for future research could further enhance the applicability and efficiency of these techniques. future directions and concluding insights in this study, we have explored the potential of parameter-efficient fine-tuning techniques to reduce computational and financial costs for deploying large language models in practical business environments. moving forward, several promising avenues exist to further enhance these methods. expansion of prompt tuning one key direction is expanding the use of prompt tuning across other architectures and tasks, such as question answering (qa) systems or sequence-to-sequence models, to establish broader applicability. additionally, exploring multi-task fine-tuning and hybrid techniques that combine hard and soft prompts could offer further efficiency gains, especially in business scenarios requiring diverse nlp capabilities. scalability across business scenarios scalability across different business scenarios also presents an area for future exploration. adapting these models for small and medium businesses (smbs) versus large enterprises may require different approaches, given variations in computational resources and use cases. incorporation of feedback mechanisms incorporating feedback mechanisms could further enhance model performance. introducing realtime feedback loops will allow models to be refined continuously, adapting to changing data and business needs to maintain accuracy in dynamic environments. security and compliance considerations security and compliance considerations are also crucial, particularly in sectors like healthcare and finance. integrating fine-tuning methods within compliance frameworks will ensure these models can be deployed safely while meeting industry regulations. automated model management automated model management, a key aspect of mlops (machine learning operations), is another focus. developing tools for automated monitoring and maintenance of deployed models will minimize manual intervention, reducing overhead and ensuring consistent performance. cross-domain generalizability finally, assessing cross-domain generalizability remains vital. evaluating these methods in domains such as healthcare, finance, or customer support will help fine-tune their use for industry-specific needs, making them more versatile and impactful. ultimately, this work provides practical guidelines for deploying nlp solutions more efficiently, accelerating their adoption across industries while maintaining competitive performance. 26 american journal of management 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(2019). distilbert, a distilled version of bert: smaller, faster, cheaper and lighter. neurips workshop on energy efficient machine learning and cognitive computing. retrieved from https://arxiv.org/abs/1910.01108 american journal of management vol. 25(3) 2025 39 implication of legal and institutional arrangement for disaster management and emergency response in tanzania nicholaus l. mushi ardhi university tanzania ports authority fredrick salukele ardhi university nicholaus mwageni ardhi university this study supports recent government reforms in disaster management and emergency response by aiming to clarify institutional roles across public and private sectors. using institutional, complexity, and network theories, it explores how institutional arrangements and interactions can enhance emergency response effectiveness. employing an in-depth research design, the study integrates qualitative and quantitative methods, with data collected through questionnaires, focus groups, interviews, document analysis, and expert consultations. findings reveal that while institutional frameworks are acknowledged as influential, their impact is often perceived as limited due to weak implementation, fragmented structures, and a lack of support for collaboration. addressing these issues could strengthen their role in fostering coordinated disaster management strategies. the study recommends reinforcing institutional frameworks through improved coordination, policy role clarification, and support for collaborative efforts. moreover, information and communication technology (ict) plays a crucial role in integrating strategies and enabling timely responses. finally, integrated disaster risk management is highlighted as a key driver for enhancing emergency operations and strengthening collaboration among institutions responsible for disaster response. keywords: disaster management, emergency response, institutional arrangement introduction background tanzania is prone to different nature of disasters and incidents that are natural and human made. the most common disasters that are increasingly faced in recent years are drought, floods, epidemics, desertification, bushfires, soil pollution, earthquakes, industrial fires and chemical hazards all of which have the probability of causing social, economic, ecological, environmental and health impacts. the vulnerability to natural hazards is combined with the consequences of covid 19 pandemic outbreak and prolonged 40 american journal of management vol. 25(3) 2025 drought that has exposed tanzanians to numerous human-induced disasters. these include domestic fires, domestic violence, traffic accidents, industrial accidents including fires, hazardous chemical release and hazardous waste, land contamination and surface water contamination by chemical and oil spills improper waste management around major and minor mining areas and industrial areas in urban localities. prolonged drought and the post-covid-19 era have left essential services more expensive for normal citizens to afford, thus making people vulnerable to manageable incidents and disasters in tanzania. in this case, trivial policies and institutional capabilities regarding disaster risk reduction make communities and people more prone to the effects of natural and man-made calamities. through established disaster response institutions, the government of tanzania has been reactive rather than proactive over time in responding to various disasters and emergencies such as fires, floods, earthquake, drought, traffic accidents and, or industrial accidents. over the past two decades, tanzania has developed various policies and institutional frameworks for management of various disasters. policies include disaster management policy of 2004; environmental management act of 2004; national operational guidelines for disaster management; disaster management act of 2003 for zanzibar; zanzibar disaster management policy; second national strategy for growth and reduction of poverty (nsgrp ii); national adaptation programme of action (napa, 2010); national climate change strategy (2012); guidelines for integrating climate change adaptation into national sectoral policies and the disaster management act, 2015. the disaster management act (dma) 2022 sets out legal framework for disaster management in tanzania. it provides for the establishment of a national focal point for coordination of disaster risk reduction and management in tanzania through the tanzania disaster management agency (tdma), acting as the central planning, coordinating, and monitoring institution for the prevention, mitigation, preparedness, response and post disaster recovery under the prime minister office (pmo). though the government, as observed in the current disaster management legislations and strategies, has initiated the process of institutional and legal systems reforms for disaster management and emergency response like strengthening the disaster management unit and set funds to finance the implementation of this unit (urt, 2022), the tanzania fire and rescue force has been granted a permission to seek soft loans for staff training, purchasing new fire firefighting and rescue equipment to enhance its capacity to deal with complex incidents, and carter for the long time public demand for good services, there have been a challenge faced in the way the government and its institutions are dealing with disasters and other emergencies. there has been a competitive motive among the institutions rooted in their legal establishment and guidelines in implementing their responsibilities that need to be researched and develop feasible and effective legal and institutional arrangements for disaster management and emergency response in tanzania. objectives of the study this study aims at analyzing the disaster management and emergency response institutional and legal frameworks in tanzania, both public and private, their awareness on their roles and responsibilities, and how they correlate with each other in executing their duties. according to this, the specific objectives are: a) to examine the key strengths and gaps in the existing disaster management and emergency response legal and institutional frameworks in tanzania. b) to provide insights and progressive recommendations on legal and institutional frameworks for disaster management and emergency response in tanzania; c) to inform the policy and legislation making process on disaster management and response in tanzania. american journal of management vol. 25(3) 2025 41 literature review theoretical literature review institutional theory institutional theory by williams et al. (2009), explores how institutional structures, regulations, and norms influence organizational behavior and compliance. it examines how various systems and legislations acquire authority and legitimacy, and how individuals’ behaviour and communication are affected (kauppi, (2022); while (2020) asserts that the three pillars of the institutional theory are normative (social norms and values), cognitive (common beliefs and knowledge), and regulative (rules and regulations). that implies that regardless of the time it was first established by theory, it is particularly relevant for understanding compliance with disaster management legislation and strategies, as it examines how organizations adhere to formal rules and practices shaped by governmental and institutional frameworks. in the context of disaster management, institutional theory posits that the pressures and expectations from formal institutions such as government bodies, international organizations, and regulatory agencies drive compliance. these institutions establish guidelines and standards that organizations must follow to ensure effective disaster preparedness and response. the overview of the emergency management system and the summary of potential hazards show the complexity and multifaceted nature of compliance. for instance, the study by contreras et al. (2020), underscores how geospatial and socio-economic factors influence compliance with risk reduction measures. institutional theory helps to analyze how well these laws and strategies are integrated into disaster management practices and whether they address the diverse hazards identified in the country. the theory also addresses the legitimacy and normative pressures faced by organizations, which affect their commitment to complying with disaster management policies. by assessing the levels of compliance and the extent to which disaster management strategies are incorporated into organizational practices, institutional theory provides a framework for understanding the effectiveness of disaster management systems in aligning with legislative requirements (gupta et al., 2021). complexity theory complexity theory by sohn et al. (2023), examines how complex systems with interdependent components interact and adapt in response to dynamic and unpredictable environments. this theory is pertinent for understanding the mismatch between knowledge, skills, and practices in disaster management. disasters are inherently complex, involving numerous variables and unpredictable elements that challenge conventional response strategies. according to complexity theory, the effectiveness of disaster management is influenced by the ability of organizations and communities to adapt and respond to the dynamic nature of disasters. the theory emphasizes the importance of understanding the intricate relationships between knowledge, skills, and practices in managing disasters. the findings from the literature, such as those from cavallo et al. (2014), reveal that disasters are complex and unpredictable, necessitating a sophisticated understanding of risks and responses. complexity theory can analyse the mismatch between knowledge, skills, and practices by examining how well disaster management systems adapt to changing conditions and integrate new information and techniques. the theory explains how gaps in knowledge and practices can affect disaster response and highlights the importance of continuous learning and adaptation in disaster management. network theory network theory by jin et al. (2014), focuses on the interactions and relationships among various actors within a network and how these interactions influence outcomes. this theory is essential for understanding the roles of institutional frameworks and collaborative strategies in disaster management. network theory explores how different institutions, organizations, and stakeholders collaborate and coordinate their efforts to enhance response and recovery capabilities in disaster management. the roles of institutional frameworks, as discussed in the literature, involve integrating various actors, including government agencies, ngos, and private sector organizations, to create a cohesive disaster management system. the study of past disaster experiences and the roles of institutional frameworks in collaborative strategies are 42 american journal of management vol. 25(3) 2025 well-suited to network theory, which analyzes how effective communication, coordination, and resource sharing among stakeholders contribute to successful disaster management. by examining how institutions work together and the impact of these collaborations on disaster response, network theory provides a framework for evaluating the effectiveness of collaborative strategies and institutional roles in disaster management (quarshie et al., 2020). systems theory systems theory by gong et al. (2014), examines the components of a system, their interactions, and the system’s overall functioning. this theory is highly relevant for the development of assessment indices for disaster management and emergency response capabilities. in disaster management, systems theory helps to understand how different components, such as policies, resources, and operational mechanisms, interact to form a comprehensive disaster management system. developing assessment indices involves evaluating these components to determine their effectiveness and identify areas for improvement. the emergency management framework, hazards distributions, and past disaster experiences provide the basis for developing assessment indices. systems theory allows for an analysis of how well these components are integrated and how they contribute to the overall disaster management capabilities. by examining the interactions between various elements of the disaster management system, systems theory helps to design assessment indices that accurately reflect the system’s strengths and weaknesses (carvalhaes et al., 2021). the theoretical framework for this study incorporates institutional theory to address compliance with disaster management legislation, complexity theory to explore the mismatch of knowledge and practices, network theory to understand the roles of institutional frameworks and collaborative strategies, and systems theory to guide the development of assessment indices. these theories provide a comprehensive basis for analyzing tanzania’s disaster management and emergency response capabilities. empirical literature review the context of disasters the major target of disaster management actions is to minimize the extent of disaster impacts to the community concerning the prior condition of the disaster. there are various activities performed by the actors in the whole process of disaster management that have significant contributions from pre–disaster, during disaster and post-disaster with the focus of reducing the impact of disaster to the affected community. however, the way natural disasters occur, may significantly affect the achievement of the efforts implemented to deal with them. donahue and joyce, (2001) and waugh, (2000) identified and described five key features of disasters that illustrate the extent of hardship to deal with them and overcome their impacts. i. disasters are complex, fast occurring incidents that are relatively costly compared to the size, assets, capabilities, and resources of an affected community. ii. disasters and their outcomes are unpredictable. this uncertainty results from the difficulty in identifying hazards that pose a risk of disaster, the lack of understanding regarding the causal relationship between hazards and disaster events, and the difficulty in measuring risks, which includes determining the type, extent, and likelihood of a particular type and severity of damage. in order to better prepare for events, geospatial models can assist in forecasting their locations, footprints, times, durations, and potential damage. iii. disaster risks and opportunities are hard and complex phenomena to evaluate and assess. people tend to settle in scenic and disaster vulnerable areas and regularly violate government policies and regulations. iv. disasters are dynamic and evolve with time and places as they transform over time in response to human behaviour and natural forces. these behaviours affect response mechanism and strategies deployed to normal accidents and incidents by responders and the communities. disasters are relatively uncommon as most people have less experience to disaster in their lifetime. even politicians and decision makers are rarely face disasters or complex events that might require excessive resources, time, and attention to deal with them. with that effect, governments may have american journal of management vol. 25(3) 2025 43 insufficient personnel and experience allocating resources and preparing policies and strategies for disaster risk management and emergency response capabilities even though the hazards and risk are vivid and terrible (national research council, 2007). however, tanzania has experienced various disasters and emergencies that have attracted the attention of government and various stakeholders that led to the legal reforms and restructuring of government departments, ministries and agencies at different times. the following section describe major potential hazards in tanzania and past disasters that have occurred and experienced. major potential hazards in tanzania tanzania is prone to natural, and human made disasters (table 1) that affect livelihoods destroy infrastructure and cause socio-economic problems to the society including food insecurity and health problems. regular and emerging disaster risks underline the need to strengthen national structures at all levels of administration to mitigate and minimize the risks, to be prepared for potential disasters and to support the building and strengthening the sustainable capacities to manage and respond to disasters if they occur (martin and mwase 2011). table 1 summary of potential hazards in tanzania (adopted from teprp) sn natural man made 1 flood fire outbreak 2 drought road accidents 3 cyclones terrorism 4 earthquake proliferation of unplanned settlements 5 lightning environmental degradation and pollution 6 landslides marine accidents and oil spill 7 tsunami collapse of buildings 8 strong winds power failure 9 beach erosion civil disorder 10 epidemics (covid 19, cholera, rift valley fever, bird flu, food poisoning, swine flu, etc) aircraft accidents 11 animal disease outbreak (anthrax, beak quarter, foot and mouth disease, lumpy skin etc) hazardous material (including radioactive material). 12 pest infestation industrial disasters 44 american journal of management vol. 25(3) 2025 from the list above, natural disasters like drought, floods, and epidemics are the main natural hazards that impact most severely on tanzania population recently and in the past. covid 19 for example up to february 2022 there were 33,549 reported cases and 796 deaths (world life expectancy, 2022). on the other hand, traffic road accidents and fires are among the top man-made or technological hazards that have affected tanzanian population in the recent years, of which road accidents have caused 40,453 deaths, and left several others injured and destruction of properties (urt, 2024). in addition, the sadri (2020) study found that severe and recurrent droughts are a usual occurrence in tanzania. the study found that the past 30 years tanzania have faced six major droughts (table 2). unpredictable rainfall, shifting agro-ecological zones and increased dry periods reduce food crop production while boosting other crops’ production. drought is estimated to affect 4.8 million people on average each year. impacts on water resources are expected to include changes in runoff in river basins, leading to changes in downstream water availability and timing, water pollution and disturbances of stream ecosystems. hydropower production is projected to decrease, mainly due to increased evaporation, with negative impacts on social economic sectors including industrial production and health sectors. table 2 major droughts in tanzania year location affected population 1988 lindi region 110,000 1990 central and northern regions 800,000 1996 lake victoria, north east, coastal region kaskazini unguja, mjini magharibi, kusini 3 million 2003 unguja, singida, dodoma, shiyanga, mwanza, tabora, kagera, kigoma provinces arusha, kilimanjaro, manyara, tanga provinces 1.9 million 2004 (northern highlands region), pwani, dar es salaam provinces (northern coast region) 254,000 2006 arusha, manyara, kilimanjaro provinces 3.7 million 2011 ngorongoro district (arusha province), simanjiro district (manyara province), same, rombo, mwanga districts (kilimanjaro province) 1 million (source: em-dat, 2020) distribution of major hazards in tanzania the department for disaster management (2012), divided tanzania with seven (7) zones as shown in table 3. the division indicate that zone 1, 2, and 4 each has five types of hazards while zone 3 has seven hazards and zone 5 has 3 hazards. zone 6 has four types of hazards and zone 7 has six (6) types of hazards. the common types of hazards occurring in all zones are disease outbreaks, drought, and pests. american journal of management vol. 25(3) 2025 45 table 3 hazard distribution by agro-ecological regions in tanzania sn zone regions main types of hazards 1 coastal dar es salaam, pwani, parts of tanga, lindi and mtwara pests, drought, disease outbreaks, floods and landslides 2 eastern plateau and mountain blocks parts of kilimanjaro, tanga, morogoro, lindi, mtwara, dodoma, ruvuma and manyara pests, disease outbreaks, drought, strong winds, earth quacks 3 southern highlands parts of morogoro, lindi and ruvuma pests, disease outbreaks, drought, floods, earth quacks, strong winds 4 northern rift valley and volcanic lands arusha, parts of mara and manyara pests, drought, disease outbreaks, and floods 5 central plateau singida, tabora, large part of dodoma, part of kigoma, small part of mbeya and iringa, shinyanga, mwanza and part of mara disease outbreaks, drought and pests 6 rukwa-ruaha rift zone parts of sumbawanga, tabora, mbeya and iringa disease outbreaks, drought, fire and pests 7 inland sedimentary plateau, ufipa plateau and western highlands parts of sumbawanga, kigoma and kagera pests, disease outbreaks, drought, fire, strong winds and floods source: dmd prime minister’s office on the other hands, technological accidents like fires, road accidents and marine accidents are common in tanzania, and they do claim lives and injuries to thousands of people (hamis, and juma, 2019). according to fire and rescue force report (2021), there were 3,456 fire incidents and 15,000 rescue operations incidents (frf 2022). according to world life expectance report (2022), the 5% of all deaths are caused by road accidents. past disasters experiences according to the emergency events database (em-dat), in the two decades between 1997 and 2017, tanzania experienced 65 major, intensive events (low frequency and high severity) and a total of 357 events of an extensive nature (frequent but of small to medium severity), as reported by local administrative units and recorded in undrr’s disaster information management system (desinventar) database as shown in figure 1 below while figure 2 indicates areas recently affected by drought and future climate conditions. according to em-dat data, the primary natural hazard causes of major disasters over this 20-year period were floods (40%), epidemics (34%), earthquakes (9%), droughts (6%) and storms (6%) (undrr, 2018). epidemics have caused the great majority of disaster-related deaths (92%) (undrr, 2018). droughts, on the other hand, have affected a larger number of people in the past two decades, 91% of cases where people required immediate assistance were because of drought (haulle, 2012). 46 american journal of management vol. 25(3) 2025 figure 1 share of occurrence, deaths and affected people in respective total (1997-2017) source: em-dat: the emergency events databaseuniversite catholique de louvain – cred 2018 figure 2 areas recently affected by drought and future climate conditions source: pmo, undrr and cima, 2019 in addition, the government identified several areas around the country have experienced flooding; from 2015 to 2020, these events destroyed 50,588 dwellings, claimed 307 lives, and affected 317,907 more (urt, 2022). the regions most affected by flood are morogoro dar es salaam, kilimanjaro, dodoma, kigoma, rukwa, pwani, lindi, mtwara, iringa, tanga mwanza, and morogoro. 2015 rains in kahama area killed 47 people, damaged 634 dwellings and affected 3,500 more. in 2015-6, el niño had a direct impact on 84,643 people in mwanza, mtwara, pwani rufiji areas and iringa municipal destroyed 1006 homes, 11, 11,167.4 hectares of food crops, health facilities, roads, and other public infrastructures (urt, 2022). american journal of management vol. 25(3) 2025 47 legal and institutional framework for disaster management and emergency response in tanzania legal and policy arrangement the disaster management act (dma), 2022, sets out a comprehensive legal framework for disaster risk management in tanzania. it provides for the establishment of a national focal point for coordination of disaster risk reduction and management in the country through the tanzania disaster management agency (tdma), acting as the central planning, coordinating, and monitoring institution for the prevention, mitigation, preparedness, response and post disaster recovery, considering all potential disaster risks. currently this role is covered by the prime minister office (pmo). the tanzania disaster management council (tadmac) provides advice on any disaster-related issue as specified by the act to the minister in charge of disaster management or any sectoral ministry. in addition, disaster risk management in tanzania is governed by the national disaster management policy (2004), which aims to operationalise an effective and efficient disaster management system to minimize possibilities of loss of life, property, and environment. other disaster management policy tools include the national operational guidelines for disaster management, tanzania emergency preparedness and response plan (teprp) and tanzania disaster communication strategy (tdcs) though implementing these plans in all levels that were supposed to exist is slow across the country. also, there have been initiatives for capacity building in 20 districts between 2011 and 2018 that have emergency preparedness and response plans. however, the initiatives are slowly implemented and not extended to other districts, as well as incorporating multi disaster response plans into those plans. national operational guidelines define responsibilities/mandates of various stakeholders in responding to various areas of disasters management cycle including mitigation, preparedness, response, and recovery. the guidelines have identified most common hazards in the country and have earmarked lead and support agencies in handling them. each lead agency is responsible for activating its own plans. further tanzania has developed the national emergency preparedness and response plans that provide guidelines for coordination and response to various disasters and emergencies at all levels of the government. the plan aimed to facilitate the coordination for the delivery of resources and services necessary to deal with the consequences of an emergency or major disaster. the plan intends to deal with emergencies and major disasters that create needs and cause suffering that the affected community(s) cannot respond without assistance, requiring an extraordinary commitment of national resources. moreover, the tanzania disaster relief committee (tandrec) is operational since 1990s at the national levels and its members are permanent secretaries from ministries of finance, home affairs, water and livestock, defence, lands, agriculture, planning, education, communication, works, community development, energy and minerals and ceos of tanzania meteorological agency (tma), fire and rescue force and food security department as early warning institutions. its main function is to oversee and coordinate activities of the government designed to secure effective prevention of disasters, preparedness, and operations in an event of a disaster. additionally, in order to assist national and local governments in improving the management of urban climate risk, tanzania, the world bank group, and the uk department for international development (dfid) partnered to create the tanzania urban resilience program (turp) in 2016 (world bank, 2019). officially launched on may 31, 2017, turp is now driving renewed engagement and deeper dialogue between the bank and tanzania on climate resilience with a comprehensive strategy addressing risk identification, risk reduction, and emergency preparedness (turp, 2018). emergency response management this section provides a detailed account of tanzania’s emergency management system, particularly focusing on dar es salaam and how it reflects the national scenario. it discusses the impact of rapid urbanization, infrastructure challenges, and population growth on disaster management compliance. it shows the importance of alignment with national policies and international standards to ensure effective disaster management and emergency response. 48 american journal of management vol. 25(3) 2025 cities are susceptible to both natural calamities and manmade hazards, mainly due to over population that people tend to contrite in one area, infrastructure, and economic resources. major cities and emerging cities in developing countries face same threats and hazards like climate change, as vulnerable populations tend to be focused in high-risk areas (c40 cities finance facility (cff) (2020). these cities, more than 70% 0f the population is living in the unplanned settlements and rapid urbanization without proper town planning. the cities attract more people from rural areas and migrants from other countries who settle in low-income areas with no proper settlement planning. due to the lack of affordable housing near the cities’ centres where people tend to settle nearby, there are growth of settlement in flood prone areas with poor housing and other social requirements. in addition, the infrastructure developments like roads, water and electrical supplies, are not parallel to the population growth and urbanization that cause the shortage of supplies and insignificant life quality and basic requirements. settling in an open expanse of land on a floodplain is often the only option. that, with the emerging of new inventions, population growth, climate change, and rapid economic development with industrialization, natural hazards like floods and earthquakes and drought, unplanned urbanization and settlements, tanzanian’s major cities in particular dare s salaam is at high risk of both manmade and natural disasters (baxt, 1992). the government officials and policy makers must respond to the expected calamities to come by making informed decisions by understanding the very nature of those calamities and their adverse impacts to the community and come up with mitigation measures, policies, budgets, and strategies to limit or reduce their impacts and how the community can adopt with them. emergency management and response framework emergency management and response strategies have changed over time to the diversified policy structures and systems that have been implemented as a system expressed as emergency management and response system. contemporary practices for emergency management and response engage multidimensional endeavours to decrease and mitigate hazards vulnerability; to reduce the impact of disasters; and to prepare and respond to, and recovery from disasters that might happen. the government is responsible to deal with challenges caused by disasters as they come with undesirable demands that might affect the process of decision making and service delivery structure and infrastructure of the affected community as responding to disaster demand extra resources that might beyond the government capability and capacity to afford on time (gooding. et al, 2022). also, since disasters have significant socio-economic and physio-geographic impact to the community and government, geospatial needs and capabilities are fixed in the entire system. this is supported by study conducted in mwanza by hambati and yengoh, (2018) found that the residential locations and the socioeconomic status of residential owners have influenced pre-and post-disaster risk reduction measures. the challenge of reducing disaster risks involves understanding of the role of non-infrastructure features that encourage urban resilience to natural disasters while the current resilience measures are based on developing physical infrastructure. literatures on legal and institutional frameworks in disaster risk management and emergency response the study carried by mlingwa, (2024) found that the institutional and legal issues pose challenges in implementing effective disaster management and emergency response operations. the challenges identified include a lack of funding for disaster management and inadequate public participation and insufficient integration of stakeholders and local communities. this study recommended institutional and legal reforms to enhance wider stakeholder and community involvement in disaster management, though the study failed to pinpoint the areas that need major reform to enhance the disaster management in tanzania. in addition, bang, (2021), ascertained that it is normal practice for central government to intervene and assist the local governments or institutions that are responsible for emergency response when the situation/ disaster seems to escalate beyond their capabilities. the resources, capabilities and assets may be called from nongovernmental institutions to support the government’s effort. that, emergency management and response are essentially intergovernmental and cross sector strategic implementation process that requires american journal of management vol. 25(3) 2025 49 jointly mechanism and well-defined system – legal and institutional arrangementto allow smooth operations and service delivery during emergencies. furthermore, the study by herwig and simoncin, (2017) pinpointed that the well-defined legislative framework and arrangement are the significant features for disaster management and emergency response systems as they set out norms, and defines the roles and responsibilities of the pertinent stakeholders. it is significant for government institutions that are responsible for disaster management and emergency response operations to understand the established legal and institutional arrangement for better execution of their duties especially on incidents that involve more than one actor (nji et al.,2022). on the other hand, majamba (2022) found that there are established legal framework and institutional arrangements for disaster management in tanzania and other developing countries, but they lack international and regional recommendations on mechanism to engage formal and informal actors in disaster management and response system. with that observation, the study recommended emphasised the significant of improving disaster management and emergency response systems. methodology this study adopted an in-depth research design that integrates both qualitative and quantitative methodologies to comprehensively address the research objectives and questions. primary data were collected through questionnaires, focus group discussions, and structured interviews, while secondary data were collected from critical analysis of various documents, records, and expert consultations. this mixedmethod approach was selected to enhance validity and reliability and to offer a more nuanced understanding of the research focus compared to other data collection methods like surveys alone (taylor et al., 2011). the interviews were conducted to officers from the disaster management unit under the pmo, disaster management center at the ardhi university, fire and rescue force offices of ilala and temeke and officers from ubungo and kinondoni municipals. disaster and emergency response data from reports and demographic information were used in the quantitative analysis, whereas the qualitative analysis utilises interview data, focus group discussion. the content analysis included an assessment of emergency response and disaster management’s legal and institutional frameworks and their implementation compared to best practices in the international arena and international development agencies. the documentary analysis involved the collection of information and data from existing reports and documents on emergency response in developing countries in relation to practices in developed countries. these included a variety of documents for analysis, like formal reports, different articles, and books (morgan, 2022). these documents provided crucial information as they cover various information sources, time spans, and various events and settings (dalglish et al., 2020). further, this study deployed a non-probability sampling design in which the respondents were chosen based on accessibility. this design was preferred because it allows the study to collect information from both primary and secondary sources that were pursued to be reliable, suitable, and adequate to meet the purpose of this study. the disaster management and emergency response officers from both government and private emergency institutions were purposefully contacted for interviews and questionnaires. the same design was used to select officers at the disaster management training centre (dmtc), disaster management experts and town planners at three municipals in dar es salaam, fire rescue force personnel, disaster management call centers, and the department for disaster management unity at prime ministers. also, convenient sampling design was used to select respondents from the tanzania ports authority and students from bandari college, where the random sampling was deployed to students while in their group discussions, seminars, and classes after arrangement with their lecturers. in addition, tanzania ports authority personnel were contacted through their emails and whatsapp messenger groups, where the questionnaires were shared and requested to be filled out online. this technique enabled the study to reach satisfactory respondents whose responses enabled the collection of information from a satisfactory number of respondents in a short period of time as planned by the study. 50 american journal of management vol. 25(3) 2025 result and discussion legal and institutional frameworks and their influence in disaster management and emergency response the findings concerning the institutional frameworks and how they influence each other in disaster management and emergency response operations are presented in table 4. the statement “institutional frameworks in tanzania significantly influence collaborative disaster management strategies” received a mean score of 2.76, with a standard deviation of 0.506. this score, situated below the “neutral” midpoint on the likert scale, suggests a moderate perception that institutional frameworks significantly impact collaborative disaster management strategies. a mean score of 2.76 indicates that, while there is some acknowledgement of the influence of institutional frameworks, the overall perception is that their impact might be limited or not as substantial as desired. this could be due to various factors such as ineffective implementation, lack of integration among frameworks, or insufficient support for collaborative initiatives (alderwick et al., 2021). the relatively low mean shows concerns that institutional frameworks might not be fully leveraging their potential to promote collaboration among disaster management stakeholders (yousefian et al., 2021). the standard deviation of 0.506 reveals moderate variability in responses, indicating that there are diverse opinions on the effectiveness of institutional frameworks. some respondents may perceive a strong influence, while others may see limited impact. this variability suggests that the role of institutional frameworks in influencing collaborative strategies is experienced differently by individuals based on their specific roles, experiences, or interactions with these frameworks howlett, m. et al (2015). the statement “institutional frameworks facilitate effective coordination among various disaster management agencies” has a mean score of 2.93, with a standard deviation of 0.414. this score, just below “neutral,” reflects a perception that institutional frameworks are somewhat effective in facilitating coordination among disaster management agencies. a mean score of 2.93 suggests that while there is recognition of some level of facilitation, respondents generally feel that coordination might not be as effective as it should be. this perception could indicate that institutional frameworks, while present, may not fully support or enhance coordination efforts due to issues such as fragmented policies, insufficient communication channels, or lack of clear guidelines for collaboration (singh et al., 2011). the lower standard deviation of 0.414 implies a relatively consistent view among respondents regarding the effectiveness of institutional frameworks in facilitating coordination, suggesting that the concern about inadequate coordination is widely shared. the perceived limitations in coordination could hinder the overall effectiveness of disaster management efforts, as effective coordination is critical for a timely and efficient response to emergencies. strengthening institutional frameworks to better facilitate coordination among agencies could improve collaborative efforts and enhance disaster management outcomes (medel et al., 2020). the statement “the roles of institutional frameworks are clearly defined in policy development for disaster management” received a mean score of 3.03, with a standard deviation of 0.400. this score, slightly above “neutral,” indicates that there is a moderate perception that the roles of institutional frameworks in policy development are defined, but not strongly perceived as clear or comprehensive. a mean score of 3.03 suggests that respondents acknowledge some level of clarity in the roles of institutional frameworks, but may believe there is room for improvement. this moderate score might reflect a situation where roles are somewhat defined but lack detail, consistency, or effectiveness in guiding policy development (muff et al., 2020). the relatively low standard deviation of 0.400 indicates a high level of agreement among respondents, suggesting that the perceived clarity of roles is a common concern. a clear definition of roles is essential for effective policy development, as it helps delineate responsibilities and ensure that all stakeholders understand their contributions to disaster management. improving the clarity of roles within institutional frameworks could lead to more effective policy development and better overall disaster management strategies (albris et al., 2020). the statement “collaborative efforts in disaster management are enhanced by well-established institutional frameworks” received a mean score of 2.96, with a standard deviation of 0.633. this score, american journal of management vol. 25(3) 2025 51 just below “neutral,” indicates that respondents have a somewhat favourable view of the role of institutional frameworks in enhancing collaborative efforts, but the perception is not strongly positive. a mean score of 2.96 suggests that while well-established institutional frameworks have some potential to enhance collaboration, the actual impact might be limited. this could be due to issues such as insufficient integration of frameworks, lack of support for collaborative initiatives, or ineffective implementation of collaborative strategies (rawlinson et al., 2021). in addition, the higher standard deviation of 0.633 indicates greater variability in responses, suggesting that perceptions of the effectiveness of institutional frameworks in enhancing collaboration differ widely among respondents. the variability in responses shows that while some respondents may see significant benefits from established frameworks, others may find them lacking in their ability to support collaborative efforts effectively (kalkman et.al. 2017). addressing the issues that contribute to this variability could improve the role of institutional frameworks in promoting collaboration and enhance the overall effectiveness of disaster management strategies (oh et al., 2020). the data on institutional frameworks’ roles in disaster management reveals several areas of concern and potential improvement. the perceptions of their influence, coordination facilitation, role clarity, and enhancement of collaborative efforts suggest that while institutional frameworks are recognized for their role in disaster management, some significant gaps and limitations need to be addressed (bovens, m. 2018). to improve disaster management and emergency response effectiveness, it is critical to strengthen institutional frameworks by increasing their influence on collaborative strategies, improving coordination among agencies, clarifying roles in policy development, and ensuring that they effectively support collaborative efforts. addressing these issues could lead to more integrated and efficient disaster management practices, ultimately enhancing the overall ability to respond to and manage disasters effectively (abid et al., 2021). table 4 the roles of institutional frameworks and their influence on collaborative strategies and plans in disaster management and emergency response parameters n mean std. deviation if1 institutional frameworks in tanzania significantly influence collaborative disaster management strategies. 200 2.76 0.506 if2 institutional frameworks facilitate effective coordination among various disaster management agencies. 200 2.93 0.414 if3 the roles of institutional frameworks are clearly defined in policy development for disaster management. 200 3.03 0.400 if4 collaborative efforts in disaster management are enhanced by well-established institutional frameworks. 200 2.96 0.633 source: field data (2024). the role of institutional frameworks in shaping collaborative strategies and plans in disaster management and emergency response is pivotal. based on the data collected from various institutions such as the dmu prime minister’s office, darmart, fire and rescue force, tamisemi, and private 52 american journal of management vol. 25(3) 2025 emergency response companies like the red cross, several key aspects emerge regarding the effectiveness and influence of these frameworks. requirements and provisions issued by legislation, strategies, and plans the disaster management and emergency response legislations in tanzania, such as the disaster management act, the national disaster management policy, and the tanzania national contingency plan, outline several key requirements and provisions. these include: while organizations are required to develop and maintain contingency plans for various types of disasters, establishing disaster management committees at various administrative levels is responsible for coordinating disaster management activities (mlingwa, e. 2024). training and capacity building and resource allocation for preparedness, response, and recovery activities. the respondent from the pmo emphasized, “legislations mandate the creation of comprehensive disaster management frameworks, which include the formation of committees and development of contingency plans. these requirements are essential for effective disaster response.” engagement of key players in formulation process the involvement of key players such as the fire and rescue force, red cross, and tamisemi is crucial in the formulation process. the fire and rescue force emphasized the importance of inter agency cooperation, stating, “we collaborate closely with other organizations to develop and refine our disaster management strategies, ensuring that they are practical and applicable in real world scenarios.” the red cross and green crescent also play significant roles, particularly in integrating humanitarian perspectives and logistical support into the policies. the red cross respondent shown, “our input focuses on ensuring that emergency response plans are aligned with humanitarian principles and can be effectively implemented during crises.”. use of ict and integrated network information and communication technology (ict) is a modern disaster management and emergency response cornerstone. institutions utilize ict to enhance their operational efficiency and communication capabilities (abid, s. k. et al, 2021). the fire and rescue force shown that “our systems rely heavily on ict for real-time coordination and data sharing during emergencies.” ict enables rapid information dissemination, critical for timely response and resource allocation. similarly, the red cross emphasized the importance of “leveraging ict to improve data management and communication channels, ensuring that our responses are swift and well-coordinated.” in addition, the effectiveness of disaster response is significantly enhanced by shared network systems for incident notifications (vaughan, d. 1996). these systems ensure that all relevant parties receive timely updates about ongoing incidents. the data indicates that while most organizations have established shared networks, the integration and interoperability of these systems can be challenging. the respondent from tamisemi noted, “shared network systems are crucial, but the lack of standardization across different organizations can sometimes lead to communication gaps.” the integration of ict enables real-time incident notifications and facilitates coordination among various agencies. shared networks support efficient data exchange and communication, which are essential for timely and accurate responses. however, challenges such as limited technological infrastructure and funding constraints affect the effectiveness of these systems. some organizations may lack the necessary technology or resources to fully implement these systems, leading to gaps in communication and coordination (nowell, b et al, 2020). the implication of the legal and institutional arrangements for disaster management and emergency response in tanzania the report published by the united nations office for disaster risk reduction (undrr) in 2020 with the main focus on risk sensitive budget review for tanzania, indicated that in the national budget of the financial year 2018/19 there were 226 projects and activities related to disaster management that were managed by 176 different departments under 28 ministries, offices or commissions at national level and 29 american journal of management vol. 25(3) 2025 53 regions as indicated in the table 13 below (urt, 2018). this tendency tends to affect the implementation of the programs and yield the intended goals as there are competition on resources among the institutions. in addition, as noted in the previous section, several government institutions and departments have been established and mandated to deal with emergencies and disasters in tanzania that contradict each other in the practice. with 176 departments budgeting for the same issues might lead to misallocation of funds and hinder emergency response operations by the first responders. each department has their own goals and strategies that are not in the same line as the other. further, by having several institutions with the similar roles or obligations, might lead to delay of emergency response operations due to insufficient resources to the immediate institutions especially first responders like rescue services and firefighting. this was born or the realization that although some structures and systems already existed, a more robust and standardized approach is required to upgrade and integrate their activities and capacities and to focus on disaster risk reduction and preparedness measures rather than on emergency response (uddin, m. s., et all, 2021; vargas, i. et al 2020). also, there are radios and television programs aired in the national media including public and private media that are prepared and jointly conducted by information officers and a officers from disaster departments, the target groups are ordinary people both urban and rural that are likely not aware of the message conveyed. moreover, formulating disaster management and emergency response legislation, strategies, policies, and plans in tanzania need to utilize a multi-stakeholder approach to integrate inputs from various governmental and non-governmental entities. the disaster management act (2022), the national disaster management policy (2014), and the draft of tanzania national contingency plan (2012) are key documents that outline stakeholders’ roles and responsibilities, according to the data collected. the dmu prime minister’s office and darmart are central in formulating these documents, ensuring they align with national priorities and international standards (wang, y. et al, 2021). the respondent from dmu noted, “our role involves synthesizing input from various sectors to create comprehensive disaster management frameworks that can address both immediate and long-term needs.” the collective efforts of stakeholders mark the formulation process, which includes extensive consultations and drafting sessions. for example, as a key operational entity, the fire and rescue force contributes valuable information about the practical needs and challenges faced during disasters, which informs the legislative and policy frameworks (andreassen, n 2020). that disaster thinking needs to be integrated into all development planning and become the responsibility of all institutions not as a subsector of its own. the indigenous initiatives and disaster response mechanisms are needed to be strengthened by all modern initiatives for disaster management and emergency response systems (yousefian, s et al, 2021). the findings of this study provide valuable data on tanzania’s disaster management and emergency response frameworks. these data have several important implications for enhancing disaster management practices and addressing current challenges (zhang, k., & lee, j. e. 2024). both quantitative data and qualitative observations offer a comprehensive perspective on the implications for coordination, resource allocation, and policy review. one of the primary implications of this study is the need for improved coordination among stakeholders involved in disaster management. this research shows the importance of strengthening inter-agency collaboration and integrating diverse resources and expertise to enhance overall response capabilities (alhinai, y. s. 2020). the quantitative data reveal that while institutional frameworks are crucial for disaster management, their effectiveness is impacted by technological and resource constraints. conclusion and recommendations conclusion while tanzania has established a robust framework for disaster management and emergency response, significant improvements are still needed. the clarity and adequacy of legislation are generally good, but practical challenges such as complexity and resource limitations affect their implementation. compliance 54 american journal of management vol. 25(3) 2025 levels are variable, influenced by directive complexity and resource availability. institutional frameworks play a crucial role, but technological and resource constraints impact their effectiveness. addressing these issues through improved implementation, better resource allocation and refined assessment indices will strengthen tanzania’s disaster management and emergency response systems. the complexity of regulations, insufficient technical expertise, and funding constraints hinder effective compliance. this study shows that although organizations are progressing in developing and updating contingency plans, challenges such as insufficient training, inadequate infrastructure, loosely coupled institutional collaboration, and complex regulations impede full compliance. addressing these issues requires more streamlined regulations, better training programs, and improved resource allocation. institutional frameworks play a vital role in shaping collaborative strategies and plans for disaster management and emergency response. this study shows the importance of ict, shared network systems, qualified personnel, and reliable transport infrastructure in enhancing disaster response capabilities. key organizations like the fire and rescue force, police force, and private emergency response organizations contribute significantly by integrating their resources and expertise. the data suggest that while institutional frameworks are crucial, their effectiveness is impacted by technological and resource constraints. recommendations more clarification on how government ministries, departments, and agencies (mdas) and regional secretariats/local government authorities (rss/lgas) can choose risk treatment options, including the readiness and response capacity requirements, would improve the current legal and institutional arrangement for disaster management and emergency response in tanzania (abrash, et al 2021). this entails providing an answer to the query of the best arrangement that should be taken into account when organizing and allocating resources for disaster risks management. an agreement on disaster risk tolerance defining the government’s and communities’ willingness to accept or reject a specific level of residual disaster riskis necessary to increase disaster risk management accountability. cross-sectoral viewpoints are crucial. when putting disaster risk management policies into practice, more focus could be put on encouraging coordination and cooperation between institutions as well as with rss and lgas (un, 2023). improving social protection systems to include adaptive and shock-responsive measures is equally important. tanzania’s development strategy for 2021–2026 places a high priority on women’s economic empowerment and gender equality (un, 2023). when creating plans 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(2024). assessing the operational capability of disaster and emergency management resources: using analytic hierarchy process. sustainability, 16(10), 3933. ajm 18(4) master (r).pdf american journal of management vol. 25(4) 2025 1 durability of the b corp certification: implications for research and practice susan d. steiner the university of tampa leon faifman the university of tampa thomas g. pittz the university of tampa arlene e. nykaza the university of tampa this study analyzes the characteristics of 7,598 companies that achieved b corp certification from the certification’s inception in 2007 through 2022, including 1,849 that later decertified. results show increasing international adoption, particularly among smaller firms and service-sector companies, alongside a decline in decertification. younger firms are more likely to decertify, though most remain in business. despite lacking regulatory backing, b corp is overcoming early adoption barriers and gaining legitimacy, suggesting it is on a trajectory similar to established certifications, such as leed. these findings offer critical insight into the evolution and durability of values-driven certifications in today’s global business environment. keywords: b corporations, b corp certification, values-driven business, corporate legitimacy, global adoption, sustainability standards introduction corporate certifications have a long history of both success and failed implementation. some prove to be long-lasting and enduring, while others become less relevant over time and eventually are replaced by updated standards. many certifications, such as energy star, fair trade, the iso 14000 series, and leed (leadership in energy and environmental design), are now widely accepted as industry standards. others, such as blue angel, epeat, green seal, and rainforest alliance, have failed to gain widespread adoption in the marketplace. previous research has highlighted several aspects of corporate certifications that influence their adoption and longevity (hereafter referred to as their durability). certifications that are highly relevant to the critical issues affecting an industry are more likely to endure and demonstrate longlasting value. those that continue to evolve and are updated by industry best practices are also more likely 2 american journal of management vol. 25(4) 2025 to remain relevant to stakeholders (pittz, et al 2021). moreover, the reputation and trustworthiness of the underwriting organization and the rigorous method by which it is earned and administered affects both adoption and longevity. widespread adoption is another critical feature of long-lasting certifications as it creates a powerful incentive, akin to a network effect, for other companies to pursue the credential (simcoe & toffel, 2011). typically, durable certifications that align with regulatory requirements and/or are recognized by governing bodies are more likely to become essential. these governing bodies encompass both government entities, such as the environmental protection agency (epa), and accrediting bodies associated with specific industries, such as the association to advance collegiate schools of business (aacsb). moreover, it's important to note that while some certifications are more comprehensive in nature, covering a wide range of criteria, many are specifically designed to focus on a particular aspect or feature. for instance, they might concentrate on areas such as energy efficiency or organic standards, tailoring their requirements to these specific domains. b lab defied convention by establishing an independent certification system for businesses committed to social and environmental values by offering an alternative to traditional government and industrysponsored mechanisms. founded by three former stanford university roommates, b lab capitalized on the growing movement to redefine the role of business in society. it leveraged the meteoric rise of social media to build visibility and engagement. from the outset, the organization aimed to attract a broad range of industries across global markets. this paper examines the evolution of the b corp movement. it evaluates the certification’s durability relative to other third-party standards by analyzing trends in organizational growth and retention over time. review of b corp certification b lab is a nonprofit network founded by jay coen gilbert, bart houlahan, and andrew kassoy, who share a vision to make “business a force for good,” thereby transforming the global economy to benefit all people, all communities, and the physical planet. b lab also seeks to recognize companies that have a holistic perspective on impact, versus those focused on one element (e.g., a company that manufactures highly sustainable products under unsafe working conditions would not be certified). this lofty vision means casting a wide net to attract new and established companies across industries and locations to join the “b the change” movement. one of the primary tools b lab employs to achieve its mission is a voluntary certification process for companies that wish to demonstrate their prosocial and environmentally responsible philosophies, attitudes, and actions. the application process to become a certified b corporation is thorough and rigorous (marquis, 2020; roth & winkler, 2018). companies are evaluated based on five major categories: (a) community, (b) customers, (c) environment, (d) governance, and (e) workers. b impact assessment (bia) criteria, which are tailored to specific industries, company sizes, and geographical locations, have undergone six iterations as of 2020. yearly certification fees range from $1000 to $50,000+, depending on a company’s annual revenues. certifications were required to be renewed every two years until 2018, and thereafter, every three years (https://www.bcorporation.net/en-us/). american journal of management vol. 25(4) 2025 3 table 1 sample questions from the areas of b corp impact assessment (www.bcorporation.net: referenced on 08/05/23) governance what portion of your management is evaluated in writing on their performance with regard to corporate, social, and environmental targets? workers what percentage of the company is owned by full-time workers, excluding founders and executives? community what percentage of management is from underrepresented populations including women, minority, disabled, and low-income communities? environment does your company monitor and record its universal waste production? customers how do you verify that your product improves the impact of your client organizations? b lab and b corp certification proponents assert that earning a b corp certificate attracts employees, customers, and investors because it provides credibility, accountability, and transparency. they highlight the extra benefit of being part of a wider, supportive network of other like-minded businesses. research substantiates the claims made by b lab, indicating that certified organizations pursue this recognition to meet the expectations of both their internal and external stakeholders, thus aligning with both “inside-out” and “outside-in” motives (almondoz, 2023; moroz and gamble, 2021). being a b corp has helped organizations maintain and/or evolve their business practices to align them with their prosocial mission and values (grimes et al., 2018; roth and winkler, 2018; sharma et al., 2018). being a b corp has also helped organizations validate their commitment to social and environmental goals in the marketplace to customers and investors (bianchi et al., 2020; conger et al., 2018; villela, et al., 2019). methodology in this study, we sought patterns (e.g., company size, location, industry, and years in business) that provided clues as to what is driving the growth trend in b corp certifications. to conduct our analysis, we compiled a database of 5,749 certified companies and 1,849 decertified companies as of december 31, 2022. the database was built upon b corp data provided by data.world, which contains information about each company’s certification status; industry; location; number of employees; website address; and the evaluation year, overall b impact assessment (bia) score, and component bia scores for every year that the company was (re)certified. we added information about the year founded for all companies and the corporate status (e.g., whether the company still exists) for all decertified companies. additionally, we filled in the missing data related to the number of employees, industry, and/or sub-industries for approximately 20% of all certified and decertified companies by searching company websites and data repositories, including crunchbase, dun & bradstreet, linkedin, and government registries. 4 american journal of management vol. 25(4) 2025 findings overall trends figure 1 shows the number of b corps that were certified for the first time each year in total and for b corps that were certified as of december 31, 2022. this data suggests that certification is a growing phenomenon poised to experience exponential growth, with a substantial increase in certifications awarded following the covid-19 pandemic. while b corp proponents proclaim that the b corp designation is recognized worldwide, the number of companies seeking this designation outside of north america initially grew slowly. the adoption of the b corp certification was sluggish at first, with 44 companies certified in 2007 and rising to 521 by the end of 2012. by the end of 2017, there were 2,358 certified b corps, and less than five years later, in may 2022, b lab reached the milestone of 5,000 certified companies. by the end of 2022, the total number of certified b corps stood at 5,749. our analysis also reviewed data from companies that chose not to re-certify after the expiration of their initial b corp designation. why would a company choose to decertify after spending considerable time and financial resources in the rigorous assessment process? priorities can change, perceptual concerns can arise, and legal challenges can cause a shift in demand for b corp certification. of the 7598 companies that have obtained certification since 2007, 24% are now decertified. of the 1,849 decertified companies, 70% are still in business, 25% are no longer in business, and 5% have merged with another company or undergone a significant reorganization. figure 1 certified and de-certified b corp by year first certified global presence during the first two years, 100% of the b corp certifications originated in the usa. in 2009, companies from canada joined the b-movement; by 2011, canadian companies represented 10% of all certified b corporations. in 2012, b lab began a concerted effort to extend b lab reach on the international stage. as a first step, b lab global and sistema b in latin america were launched in 2012 to encourage certification efforts abroad; the original b lab was subsequently renamed b lab us & canada. subsequent b-lab hubs were established for australia & aotearoa new zealand (2013), europe (2013), the united kingdom (2015), africa (2017), taiwan (2017), korea (2019), hong kong & macau (2020), and singapore (2022). b market builders were established in japan (2018), southeast asia (2018), and china (2021). 0 500 1000 1500 2000 2500 n u m b er o f c o m p an ie s year total certified still certified american journal of management vol. 25(4) 2025 5 as can be seen in figure 2, the internationalizing efforts have been successful. since 2012, the share of b corp’s certified by the rest of the world has outpaced certifications awarded in the usa. by 2017, 62% of newly certified b corporations did not reside in the u.s.; by the end of 2022, that number rose to 83%. as a result, while b corp certification originated in the usa, 72% of all certified b corps were non-usa companies by the end of 2022. figure 2 b corp first-time certifications in the usa and the world figure 3, which further parses the certification data, reveals several other trends regarding adoptions that align with the cage distance framework proposed by ghemawat (2001). the certification was embraced in four anglo-saxon countries (australia, canada, new zealand, and the united kingdom) early in b-lab’s history, and b corp certification continues to be embraced by them (e.g., the uk reached the 1500 mark in may 2023 and represents over 50% of the b corps in europe.) not surprisingly, these countries not only share an official language and a close-knit cultural bond with the usa, but also have blab hubs focused on those countries. there has also been noteworthy rapid growth in b corp certifications in latin america (which is geographically close to the u.s.) since 2012, when sistema b was established to actively engage companies in that region. ten years later, latin american companies represent almost 15% of all b-corps. due to b lab’s subsequent efforts to expand its reach in europe, africa, and asia, approximately 40% of all new b corps have been in non-anglo-saxon countries since 2016 (see figure 3). 0 200 400 600 800 1000 1200 1400 1600 1800 2000 n u m b er o f c o m p an ie s year usa world total 6 american journal of management vol. 25(4) 2025 figure 3 b corp certifications in usa, anglo-saxon countries and non-anglo-saxon countries industry diversification the leading sector in b corp certification is within the services sector, particularly companies with a minor environmental footprint (e.g., legal services, investment consulting, accounting firms, and medical services). conversely, the lowest number of b corp certifications comes from companies in the agricultural sector. these trends have remained stable over the years. companies in the wholesale and retail, as well as manufacturing sectors, have begun to pursue more b corp certifications than in the previous five years. figure 4 demonstrates these trends. figure 4 share of certified b corps by sector *due to the nature of the data, we only looked at the number of b corp certifications and did not control for the size of the sector in terms of total number of companies. 0% 20% 40% 60% 80% 100% 120% sh ar e o f t o ta l c er ti fi ed year usa anglo-saxon ex. usa non-anglo-saxon 0% 10% 20% 30% 40% 50% 60% 70% 80% sh ar e o f t o ta l c er ti fi ed year agriculture/growers manufacturing service with minor environmental footprint service with significant environmental footprint wholesale/retail american journal of management vol. 25(4) 2025 7 viewing b corp certifications by industry also highlights some interesting trends. from the 164 unique industries in our database, 61% of all b-certified companies were concentrated in the top 20 industries as of december 2022, as shown in figure 5 below. figure 5 b corp certifications by industry in 2022 company size and age in its first five years, renowned organizations such as ben & jerry’s, patagonia, and warby parker have embraced the b corp certification, offering a level of recognition and legitimacy that has helped it gain momentum as a credible and respected standard in the business world. despite these prominent trailblazers, our analysis shows that smaller companies tend to pursue certification at a higher rate than larger companies. this pattern could be interpreted as a reflection of the distribution of company size within the broader population of businesses. however, when we combine the insights from figures 6 and 7, a more compelling narrative emerges. small businesses, including startups, were among the early adopters of b corp certification and continue to be the certification’s most prominent stakeholders. one contributing factor to this trend is that an increasing number of startups are conceived to create positive social and environmental products and services (demirel et al., 2019). moreover, these enterprises view b corp certification as a strategic means to differentiate themselves and attract socially conscious consumers and investors by validating their commitment to ethical and sustainable practices through an objective third-party assessment (bianchi et al., 2020; conger et al., 2018). 540 386 377 316 266 261 245 215 203 188 178 173 131 96 96 90 84 82 82 78 top 20 industries 61% of all certified companies food products management consultant for-profits advertising & market research other professional, scientific & tech beverages apparel personal care products environmental consulting other info service activities investment advising software publishing and saas platforms other personal services equity investing developed markets agricultural processing management consultant nonprofits textiles architecture design & planning computer programming services other manufacturing other financial services 8 american journal of management vol. 25(4) 2025 figure 6 b corp certifications by company size figure 7 b corp certifications by company age discussion b corp certification has emerged as a gold standard in corporate governance, attracting increasing attention from businesses and stakeholders alike. our research indicates that b corp certification has not only maintained its relevance throughout this period but has experienced a notable acceleration in adoption in recent years. this trajectory bears a striking resemblance to other widely accepted certifications, such as leed, which historically underwent an initial period of rapid uptake, followed by a slower diffusion phase, before achieving widespread market legitimacy and subsequent rapid growth. what distinguishes b corp's expansion is its reliance on market-driven acceptance rather than government mandate, a characteristic 0% 10% 20% 30% 40% 50% 60% p er ce n ta ge o f t o ta l year 1-9 employees 10-49 employees 50-249 employees 250-999 employees 1000+ employees 0% 10% 20% 30% 40% 50% 60% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 p er ce n ta ge o f t o ta l year 0-4 years old 5-9 years old 10-14 years old 15-19 years old 20+ years old american journal of management vol. 25(4) 2025 9 often associated with established certifications. this market-led growth underscores a unique form of legitimacy that warrants closer examination. the rigorous assessment process inherent in b corp certification serves as a testament to the significant commitment to social and environmental goals demonstrated by certified companies. this comprehensive evaluation, which delves into areas such as governance, workers, community, environment, and customers, provides a robust framework for accountability and transparency. given its accelerated adoption and the depth of its assessment, b corp certification is transcending its niche origins and is poised for broader market acceptance—a phenomenon akin to 'crossing the chasm' in innovation adoption. this evolution makes b corp a critical subject for contemporary discussions within both corporate strategy and academic curricula across entrepreneurship, finance, management, marketing, and public administration. understanding the intricacies of b impact assessments is becoming increasingly essential for managers navigating evolving stakeholder demands and for students preparing for a business landscape where social impact metrics, including b corp status, are likely to influence investment decisions and market positioning. implications for future research b lab continues to adapt its strategies in pursuit of broader outreach and influence and the scaling of the b corp certification poses challenges. operationally, b lab introduced genashtim as a verification partner in 2022 to facilitate the processing of certification applications. the enhanced processing capacity facilitated the exponential growth of b lab by increasing its ability to review the growing backlog of applications, which had exceeded 6,000 by the end of 2021. while recent strategic moves, such as this partnership, may increase b lab’s influence (intindola et al., 2020), the question is whether they will enhance or distort its original purpose, cultivating or alienating its original client base. b lab has also implemented several strategic modifications in the past few years. in 2020, b lab underwent a deliberate campaign to encourage multinational corporations to join its ranks through its b movement builders initiative. this endeavor has resulted in the b corp certification of over 90 multinationals (viz., companies with over 1 billion usd in revenues). this shift toward larger conglomerates has been met with apprehension among some smaller b corps, which contend that large multinationals often lack a comprehensive approach to environmental, social, and governance (esg) matters and can have a history of ethically questionable practices (kim & schifeling, 2024). how should b lab successfully navigate the inherent tension between maximizing social and environmental impact and maintaining financial viability? more longitudinal research is needed, and comparative analyses would be valuable. implications for practice b lab has transitioned its focus from a primarily certification-centric approach to a more communitycentric one. entities such as b lab africa, despite having a small number of certified companies (over 60 as of 2023), reported that more than 5,500 companies have utilized the b impact assessment (bia) tool to measure and manage their impact. while b lab has paused new certifications for companies operating outside of global or country partner regions in 2023 due to its inability to conduct proper assessment in those locations, it encourages companies in those regions to utilize its free assessment tools and resources. b lab views its recent actions as consistent with its overarching mission, which it describes as “lead[ing] economic systems change to support our collective vision of an inclusive, equitable, and regenerative economy” (https://www.bcorporation.net/en-us/). at this juncture, the impact of these strategic changes on the operational effectiveness and reputation of b lab remains an open question. there exists potential for significant positive outcomes, such as democratizing sustainable business practices, amplifying the movement's overall market influence, and enhancing the durability of the certification. there are also inherent risks, including the potential for diluting the certification's rigor, alienating existing b corps that have invested in previous frameworks, or potentially creating a perception of moving goalposts. while b lab's foundational role in the responsible business landscape is firmly established, the long-term ramifications of these strategic changes will be 10 american journal of management vol. 25(4) 2025 pivotal in shaping the future trajectory of the b corp movement and the global reputation of the b corp standard. references almandoz, j. 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(2019). b corp certification and its impact on organizations over time. journal of business ethics, 170, 343–357. ajm 18_2_web_master.pdf 60 american journal of management vol. 24(2) 2024 adapting to another “new normal”: the pandemic’s impact on generation z’s team dynamics susan d. steiner the university of tampa ru-shiun liou the university of tampa leon faifman the university of tampa the role of teamwork in modern organizations is more crucial than ever. this research investigates whether the covid-19 pandemic has permanently altered generation z’s perceptions and behavior on team projects. a study of graduating seniors at a southeastern university found decreased team conflicts during and after the pandemic compared to pre-pandemic levels. task attractiveness and interpersonal cohesiveness declined during covid-19 but rebounded post-pandemic, though not to pre-pandemic levels. these findings have implications for educational programs, workforce development, and organizational practices aimed at supporting generation z’s success and well-being as they transition into their careers. keywords: teamwork, post-pandemic, conflict management, generation z introduction the covid-19 pandemic had a profound impact on people worldwide, disrupting routines, causing extended periods of isolation, and creating high levels of physical, economic, and emotional uncertainty and stress. generation z, who were born from the mid-1990s to the early 2010s, were enmeshed in this crisis during their formative years. generational research asserts that pivotal events during formative years not only shape a generation’s immediate responses but also permanently alter mindsets and behaviors (alwin & mccammon, 2007; connolly, 2019). prior to the pandemic, studies were already being conducted regarding the unique characteristics of generation z in school and in the workforce (o’boyle et al., 2017; seemiller & grace, 2015; stillman & stillman, 2017; twenge, 2017). generation z has been referred to as digital natives, igen, and zoomers because they have grown up in a world with access to the internet and digital technologies (katz et al., 2022). their media consumption is primarily through digital platforms like youtube, instagram, tiktok, and streaming services, with a preference for short-form content. using mobile devices and accessing website applications for personal purposes is second nature to them. generation z also is described as practical, cautious, and realistic in their expectations and approach to life, an outcome of being raised in the american journal of management vol. 24(2) 2024 61 shadow of 9/11 and the 2008 great recession. gen zers seek internships and jobs that provide a sense of purpose while offering financial stability and developing practical skills that prepare them for the future (hayek, 2021). during the covid-19 pandemic, generation z learners experienced the disruption of the learning environment as most schools and universities moved course delivery to an online format. with their techsavvy backgrounds, generation z was expected to be prepared for this sudden shift; and much of the research on teaching and learning focused on the use of technology and digital learning (guppy et al., 2022; singh et al., 2021). however, the abrupt transition to virtual classrooms, asynchronous learning, and online collaboration posed challenges beyond technology. generation z learners needed to quickly adapt to a new set of norms and expectations (harari et al., 2023) as they profoundly changed the ways they not only tackled the course material but also connected with their classmates and instructors. understanding the lasting effects of the pandemic on generation z’s task and interpersonal attitudes and actions is critical due to the collaborative nature of contemporary work environments and the vital role of effective teamwork in achieving organizational success. thus far, extensive research shows mixed findings on the relationship between the pandemic disruption of the learning environment and learners’ teamwork effectiveness. some studies show that learners had a positive perception of virtual teams’ flexibility in continuing teamwork during the pandemic (awuor et al., 2022), whereas other studies show that team members were disengaged, easily ignoring virtual team meetings (weit et al., 2023). in this research, we explore the underlying teamwork process to evaluate the effect of pandemic learning on generation z’s teamwork competencies. specifically, we investigate whether post-pandemic college seniors are more adept or less adept at managing conflict and fostering cohesive, high-performance teams than their pre-pandemic counterparts. the findings of this research provide insights into both educational and workplace practices that are designed to support the successful transition of generation z into professional careers and society. literature review teamwork dynamics prior to the pandemic, renowned consulting firms like deloitte emphasized the importance of teams in publications such as “organizational performance: it’s a team sport” (volini et al., 2019). this revelation was not new, and business school educators for years have been creating classroom activities and group assignments to foster students’ teamwork competence (juban et al., 2021). the increasingly diverse workforce and the need for innovative solutions required that students learn to manage conflict (islam et al., 2021). for students to be engaged in their learning, faculty knew these activities and assignments needed to be viewed as fruitful because students railed against busy work or heavy workloads with limited benefits. if successful, students produced high-quality work and responded to the question “i would work with my teammates again” with a resounding “strongly agree.” the desired end goal was for graduates to be able to participate in and lead highly productive, task-focused work teams (islam et al., 2021). in the post-pandemic “new normal,” the importance of teamwork has not changed; and the concepts of conflict management, task attractiveness, and interpersonal cohesiveness remain three key components that drive effective teamwork and team performance. successful teams deal with conflicts constructively, find meaning and engagement in their tasks, and foster strong interpersonal bonds among team members. first, effective conflict management entails acknowledging, managing, and resolving disagreements. through respect and empathy, constructive conflict management promotes diverse viewpoints, innovation, and stronger relationships (tjosvold, 2008). for example, in an educational setting, openly discussing disagreements and engaging in civil conversations about the direction and content of a team project can lead to a more comprehensive and creative final product (borrego et al., 2013). similarly, in a professional setting, constructive conflict management can lead to a willingness to consider and incorporate different perspectives, thereby yielding robust solutions and superior team performance (leonard-barton & swap, 2005). 62 american journal of management vol. 24(2) 2024 conversely, mishandled conflict can be highly deleterious. escalating affective conflicts, which stem from personal problems and relationships, can cause dissatisfaction and a decrease in cohesiveness and productivity within teams (jehn & mannix, 2001). conflict avoidance, which is often driven by a reluctance to face uncomfortable situations and undesirable consequences, also can damage work performance and morale. davey (2019) coined the phrase “conflict debt” to illustrate the long-term effects of unresolved conflicts. the idea is that conflicts do not fade away over time if they are not addressed. instead, like financial debts, they remain and grow, making them increasingly challenging to resolve. in educational settings, unaddressed conflicts can result in disengagement and negative learning experiences (borrego et al., 2013). in organizations, they can foster a toxic work environment characterized by hostility, passiveaggressive behavior, dwindling trust and collaboration, and project setbacks (behfar et al., 2008). second, task attraction relates to the degree to which a task is perceived as interesting, relevant, and valuable. individuals are more inclined to participate when tasks align with personal interests and/or professional goals (vallerand et al., 2019). the impact of high task attraction extends to effective problemsolving and innovation because it motivates individuals to think creatively (amabile and pratt, 2016). moreover, when there is task interdependence among individuals, moderate to high task attraction fosters collaboration and leads to high-quality outcomes (gagné et al., 2018). conversely, unappealing tasks can demotivate team members, leading to disengagement and discontent. tasks that are monotonous, lack significance, and/or do not align with an individual’s interests or goals can lower motivation, cause stress, and result in burnout (moss, 2020). third, interpersonal cohesiveness is the extent to which individuals feel supported, connected, and dedicated to one another. it is viewed as an important antecedent for team performance (beal et al., 2003; franz et al., 2017; grossman et al., 2021). when coupled with high-performance norms, cohesive teams enjoy frequent collaborative interactions that promote positive work environments and cultivate their members’ strengths. this, in turn, enables teams to overcome obstacles and accomplish their goals more proficiently and with greater agility. conversely, teams with low levels of cohesiveness experience poor communication, mistrust, and misaligned values and goals. the lack of mutual support makes tedious or highly challenging tasks even more unappealing (fried & ferris, 1987). in educational settings, low interpersonal cohesiveness can cause uneven work efforts (including social loafing) and resentment, undermining performance quality and student learning outcomes (lam, 2015). in professional settings, the resultant communication breakdowns and unresolved conflicts can lead to lower productivity, job satisfaction, and morale (mathieu et al., 2008). covid-19 disruptions prior to the covid-19 pandemic, most students were already utilizing digital tools at their colleges and universities, although the degree to which they were used differed across schools, fields of study, and courses. students utilized learning management systems, such as blackboard and canvas, to access course documents and readings, communicate with their classmates and instructor, join group discussions, submit assignments, receive feedback, and keep track of due dates and grades. for team assignments, they utilized applications, such as google docs, microsoft word online, and dropbox paper, to write and edit documents, share files, and collaborate with their classmates in real time. nonetheless, at the onset of the covid-19 pandemic, college students faced unprecedented challenges when universities worldwide swiftly transitioned to synchronous and asynchronous online learning. they needed access to dependable internet connections and computers equipped with adequate hardware and software capabilities to effectively engage in virtual lectures, complete assignments, participate in group discussions, and collaborate remotely with peers. learning management systems and online methods of communication, which were previously supplementary to their education, became the central vehicle for learning. digital platforms that students used for social interactions were now being used for educational tasks and team collaboration. this transition, while necessary, introduced a new set of dynamics into how teams and team projects were perceived and how team projects were executed. generation z learners were less inclined to interact with their classmates on virtual team projects, resulting in noticeable declines in their team skills and team performance compared to pre-pandemic levels american journal of management vol. 24(2) 2024 63 (wei et al., 2023). students suffered from digital fatigue as they spent countless hours in front of computer screens performing activities ranging from researching to writing to attending classes remotely (gregersen et al., 2023). moreover, the blurring between personal and educational environments made disconnecting from schoolwork increasingly difficult, affecting students’ capacity to take breaks and recharge (wardak et al., 2022). firsthand activities that were engaging in a physical classroom setting were hard to replicate in virtual environments (morrison et al., 2021). students were demotivated by the elimination of the idea exchanges that took place in face-to-face discussions (eden et al., 2022). physical separation from friends, classmates, and instructors was accompanied by psychological feelings of isolation, loneliness, anxiety, and detachment (leal filho et al., 2021). the lack of meaningful interactions may be the reason that individuals completing team projects virtually reported a low level of conflict (wei et al., 2023). on the other hand, generation z’s remote and hybrid learning experiences during the pandemic may have equipped them with communication and collaboration tools that reduce team conflicts (pueschel et al., 2020; sumolang, 2023). either way, this finding is intriguing because virtual team research before the pandemic indicated higher levels of conflicts due to fewer face-to-face opportunities to resolve team members’ differences and misunderstandings (gilson et al., 2015; zaccaro & bader, 2003). hypotheses preand during the pandemic the first set of hypotheses explores changes in team dynamics from pre-pandemic norms to those observed during the pandemic. we expect that the abrupt move to virtual learning and the forced dependency on electronic communication significantly modified traditional conflict resolution processes, leading to a decrease in overt conflicts. the decrease could either be the result of fewer conflicts or due to conflict avoidance. moreover, we expect that the isolation and repetitive nature of remote learning might have diminished task appeal and the strength of interpersonal ties within teams, as the physical separation and digital medium made it challenging for students to find value in assignments and foster robust relationships. h1: compared with pre-pandemic in-person learning, during the pandemic, students have decreased levels of teamwork conflicts (h1a), task attractiveness (h1b), and interpersonal cohesiveness (h1c) preand post-pandemic in the second set of hypotheses, we assessed the enduring impacts of pandemic-induced adaptations on team dynamics, even as face-to-face instruction resumed. generational research suggests that when a generation undergoes an unusual, life-changing, or traumatic event during their formative years, it leaves a profound and lasting impact on their shared identity, values, and worldview these experiences often lead to changes that become integrated into their daily lives long after the event. we therefore predicted that lower conflict levels would continue with the ongoing integration of digital tools (e.g., zoom and learning management systems). moreover, we expected that the previous isolation and the appealing flexibility of online learning and collaboration (including fewer direct interactions) would affect students’ views on task attractiveness negatively and hinder interpersonal cohesiveness in the long run. h2: compared with pre-pandemic in-person learning, post-pandemic, students have decreased levels of teamwork conflicts (h2a), task attractiveness (h2b), and interpersonal cohesiveness (h2c). during and post-pandemic in the third set of hypotheses, we investigated the extent to which pandemic-induced changes in team dynamics remained post-pandemic. we anticipated that the effects of remote collaboration methods and the collective experience of the pandemic on generation z would endure. however, we wondered if there 64 american journal of management vol. 24(2) 2024 would be some rebound to pre-pandemic levels once in-person classroom conditions were restored or if the changes that were set in motion during the pandemic would deepen. h3: after the pandemic ended and the mode of instruction returned to in-person, the levels of teamwork conflicts (h3a), task attractiveness (h3b), and interpersonal cohesiveness (h3c) remained at a similar level as during the pandemic. research method participants and data collection procedure the data for this research were collected during the strategic management course, a mandatory capstone course for business majors at a private university in the southeastern united states. the course is built around a team project with a local business that spans the entire semester. the project historically entailed a series of in-person fact-finding and feedback meetings with the local business and with the instructor. at the end of each semester, students were required to evaluate their team experience, and grades were adjusted based on team members’ assessments of each other’s contributions to the project. data collection began in fall 2018 and continued through fall 2022, resulting in a total of 366 completed surveys. we excluded surveys from spring 2020 because the method of instruction abruptly changed from in-person to remote mid-semester. for more information, refer to table 1. table 1 sampling details number of collected catme evaluations pre-pandemic covid-19 emergency – excluded semester during the pandemic post pandemic fall 2018 spring 2019 fall 2019 spring 2020 fall 2020 spring 2021 fall 2021 spring 2022 fall 2022 conflict 48 25 33 74 46 46 47 47 task attractiveness 0 25 33 74 46 46 47 47 interpersonal cohesiveness 0 25 33 74 46 46 47 47 total n(conflict) = 106 n(task) = 58n(cohesiveness) = 58 n = 120 n = 140 measurements and instruments catme (comprehensive assessment of team member effectiveness) is a widely adopted tool in higher education designed to enhance students’ teamwork skills and boost team effectiveness (loughry et al., 2014). it provides a quantitative method for students to assess the performance of their team members and offers interpretative scores to instructors. these scores can be used to monitor team dynamics and determine when intervention is appropriate. although catme peer evaluations were primarily used to evaluate teamwork, during the process of administration we selected additional instruments to be integrated into the survey, which is an option provided by the catme interface (wei et al., 2023). specifically, catme measures conflict using the (jehn and mannix, 2001) instrument, and this instrument was administered with all catme evaluations, starting in fall 2018. additionally, starting in spring 2019, we added catme’s measure of task attractiveness and interpersonal cohesiveness using the carles and de paola (2000) instruments, albeit with some minor modifications. american journal of management vol. 24(2) 2024 65 data analysis to examine the lasting effects of the covid-19 pandemic, we first grouped the data into three samples. as shown in table 1, the pre-pandemic sample consisted of 106 surveys, the during-pandemic sample consisted of 120 surveys, and the post-pandemic sample consisted of 140 surveys. we conducted the twosample t-test, which is commonly used in research to compare means in different samples of populations (lu & guo, 2019). because the resulting samples were different sizes and variances, we utilized welch’s approximation method, which is appropriate when the samples are unpaired or unrelated (seats, lawrence, & prieto, 2012). results t-tests were conducted separately for each set of hypotheses, and the results are presented in table 2. table 2 t-test statistics measured items mean prepandemic (m1) mean during pandemic (m2) mean postpandemic (m3) hypotheses1a,b,c test results m1>m2 hypotheses 2a,b,c test results m1>m3 hypotheses 3a,b,c test results m2≠m3 conflict 1.65 (n=106) 1.41 (n=120) 1.42 (n=140) t(224)=-2.33 p=.01 t(244)=-2.23 p=.01 t(258)=0.14 p=.89 task attractiveness 3.83 (n=58) 3.56 (n=120) 3.64 (n=140) t(176)=-1.37 p=.09 t(196)=-0.99 p=.16 t(258)=0.51 p=.61 interpersonal cohesiveness 4.10 (n=58) 3.80 (n=120) 3.94 (n=140) t(176)=-1.62 p=.05 t(196)=-0.87 p=.19 t(258)=0.95 p=.34 note: results comparing m1 and m2 and m1 and m3 are for one-tailed tests; results comparing m2 and m3 are for two-tailed tests. preand during pandemic hypothesis 1a suggested that the reported level of conflict pre-pandemic will be higher than during the pandemic. the reported levels of conflict in the pre-pandemic sample (m=1.65, sd=0.88) were significantly higher (t(224)=-2.33, p=.01) than the conflict levels reported during the pandemic (m=1.41, sd=0.60), thus supporting the hypothesis. additionally, when we assessed the different types of conflicts, we obtained similar results: relationship conflict (p=0.001), process conflict (p=0.046), and task conflict (p=0.060). hypothesis 1b suggested that students will report lower levels of task attractiveness during the pandemic than pre-pandemic. indeed, reported levels in the pre-pandemic sample (m=3.83, sd=1.21) were significantly higher (t(176)=-1.37, p=.09) than those reported in the during-the-pandemic sample (m=3.56, sd=1.19), thus providing support for the hypothesis. similarly, the reported levels of interpersonal cohesiveness in the pre-pandemic sample (m=4.01, sd=1.13) were significantly higher (t(176)=-1.62, p=.05) than those reported during the pandemic (m=3.80, sd=1.17), thus providing support for hypothesis 1c. preand post-pandemic teamwork hypothesis 2a suggested that the reported levels of conflict pre-pandemic will be higher than those reported post-pandemic. these levels were significantly higher (t(244)=-2.23, p=.01) in the pre-pandemic sample (m=1.65, sd=0.88) than in the post-pandemic evaluations (m=1.42, sd=0.65), thus supporting the 66 american journal of management vol. 24(2) 2024 hypothesis. when comparing the reported levels of task attractiveness in the pre-pandemic sample (m=3.83, sd=1.16), with those reported in the post-pandemic sample (m=3.64, sd=1.21), the test results were in the right direction but the level of significance did not meet the required threshold (t(196)=-0.99, p=.16). thus, hypothesis 2b was not supported. similarly, when comparing the levels of interpersonal cohesiveness in the pre-pandemic sample (m=4.10, sd=1.13) and post-pandemic sample (m=3.94, sd=1.20), the test results were in the right direction but the level of significance did not meet the required threshold (t(196)=0.87, p=.19).thus, hypothesis 2c was not supported. during and post-pandemic hypothesis 3a argued that the reported levels of conflict in the post-pandemic sample will remain at similar levels as those reported during the pandemic. comparison of the reported levels of conflict in the sample during the pandemic (m=1.41, sd=0.60) with those reported in the post-pandemic sample (m=1.42, sd=0.65) did not show a significant difference, thus supporting the hypothesis (t(258)=-0.14, p=.89). similarly, the reported levels of task attraction during the pandemic (m=3.56, sd=1.19) were not found to be significantly different (t(258)=-0.51, p=.61) than those reported after the pandemic ended (m=3.64, sd=1.21), thus providing support for hypothesis 3b. finally, the reported levels of interpersonal cohesiveness during the pandemic sample (m=3.80, sd=1.17) were not significantly different (t(258)=0.95, p=.34) than those in the post-pandemic sample (m=3.94, sd=1.20), supporting hypothesis 3c. discussion our findings indicate changes in reported conflict, task attractiveness, and interpersonal cohesiveness among college students before, during, and after the covid-19 pandemic. the reported levels of conflict were higher before the pandemic compared to during the pandemic. this included relationship, process, and task conflicts, all of which were higher before the pandemic. task attractiveness and interpersonal cohesiveness were also higher before the pandemic than during the pandemic. moreover, there was no significant difference in the reported levels of conflict, task attractiveness, and interpersonal cohesiveness between the during and after the pandemic periods. together, the two sets of hypotheses (h1 and h3) suggest that the pandemic created a new baseline of behavior. furthermore, our findings on conflict management (h2a) show that the reported level of conflict pre-pandemic was statistically higher than the post-pandemic level, suggesting that generation z college students have either learned to resolve conflicts or developed a conflict-avoidance strategy when working in teams post-pandemic. while the results were in the predicted direction, there was no statistically significant difference in the reported levels of task attractiveness (h2b) and interpersonal cohesiveness (h3c) between the pre-pandemic and post-pandemic periods. the findings regarding the second and third sets of hypotheses suggest the need for a more nuanced interpretation. students reported lower levels of task attractiveness and interpersonal cohesiveness during the pandemic, but these levels partially rebounded after the pandemic. implications for teaching generation z students in higher education settings according to tuckman’s model of group development, conflict and conflict resolution are critical in fostering high performance teams (bonebright, 2010; katzenbach & smith, 2015). therefore, the reported decrease in team conflict during and after the pandemic merits educators’ attention regardless of whether the learning environment is in-person, virtual, or a combination of both. educators could offer instruction on evidence-based information sharing and decision-making before the start of a team project. conflict resolution modules could be integrated into the curriculum to equip students with tools and techniques for constructively managing disagreements. these modules could include simulations, role-playing, and case studies to help students assess conflict dynamics and practice different resolution strategies. by establishing a classroom environment that welcomes open dialogue and diverse viewpoints, educators could reduce the likelihood that conflicts in team projects would escalate into negative confrontations or be suppressed through avoidance or accommodation behaviors. american journal of management vol. 24(2) 2024 67 the reported decrease in task attractiveness during the pandemic indicates that students have difficulty finding team projects engaging or appealing in remote and hybrid learning environments. to tackle this challenge, educators should create team assignments that are not only academically rigorous but also personally meaningful to students. offering generation z students options, such as selecting topics that align with their interests or future career plans, could enhance task attractiveness. in addition, project-based learning (pbl) can be highly effective because it enables student teams to address real-world issues in collaboration with external stakeholders, thereby experiencing the practicality of their academic studies. educators should also consider incorporating gamification, which is defined as “the application of game design elements in non-game activities [to] address the issue of learner distraction and stimulate students’ involvement” (khaldi et al., 2023, p.1), into their lesson plans. design elements in an educational setting include storytelling and themes, quests and challenges, and badges that recognize achievements. the decrease in reported interpersonal cohesiveness during the pandemic suggests the need to build social connectedness among students, especially in online learning environments. therefore, educators should create structured opportunities for interactions where students can engage in meaningful discussions and group problem-solving. icebreaker and networking activities could help students build relationships with their peers. allocating time during class for small group discussions or breakout sessions could help students feel more connected and engaged. by incorporating online whiteboards, discussion boards, and group chat apps like microsoft teams, google meet, slack, and discord, into lesson plans, educators could enhance collaboration and increase trust among their “digital native” students. additionally, the use of learning analytics could help educators track student participation and performance, enabling them to provide timely support and intervene when necessary. implications for managers of generation z employees teams are a vital component for organizations to achieve their objectives. as such, it is imperative for organizations to proactively understand and address the mindset and behaviors of generation z employees toward teamwork. as an initial step, managers should closely monitor the level and type of engagement exhibited by generation z employees in team projects. for instance, they may be more risk and conflict averse because of the pandemic. in such cases, managers could facilitate open dialogue and encourage diverse perspectives to counter this tendency. effective strategies include conducting team meetings with structured approaches, such as round-robin and brainstorming, as well as implementing anonymous feedback tools, such as suggestion boxes and online surveys. by utilizing these tools, managers can cultivate an atmosphere where generation z employees feel secure sharing their opinions and ideas. regular team-building activities, both in-person and virtual, could also contribute to building trust and improving communication among team members. leading by example is equally important. managers should actively solicit feedback and demonstrate how to handle disagreements effectively. they could also recognize and reward those who constructively challenge the status quo or bring forward innovative ideas. moreover, providing mentorship and coaching could help younger employees develop their confidence and professional voice. mentorship programs could pair generation z employees with older coworkers who can provide guidance, support, and feedback on their performance. these programs could also offer opportunities for reverse mentoring, where younger employees share their knowledge of digital tools and technologies with their older coworkers. to make team tasks more attractive for generation z employees who telecommute part-time or fulltime, managers should utilize similar strategies as those previously recommended to educators. offering diverse and challenging projects that align with employees’ interests and career goals can increase task attractiveness. frequent feedback and recognition could help employees improve their skills and feel appreciated, thereby boosting their desire to participate in team projects. additionally, managers could incorporate gamification design elements into team tasks, such as setting up friendly intergroup competitions or rewarding employees for achieving milestones, to enhance their appeal. to foster interpersonal cohesiveness among generation z employees in today’s digitalized workplace, managers need to support social connections in both virtual and in-person work environments. it is essential to create a diverse and inclusive work culture where every employee feels respected and valued. team68 american journal of management vol. 24(2) 2024 building activities, such as e-sports games and escape rooms, could help generation z employees build relationships and develop a sense of team camaraderie in non-traditional settings. regular check-ins and virtual coffee breaks could provide informal online opportunities for generation z employees to connect and share their experiences within and across generations. organizing in-person social events, team outings, and workshops could further strengthen bonds in their intergenerational workforce. managers should also consider implementing deib (diversity, equity, inclusion, and belonging) training and practices to foster a supportive and cohesive work environment. research limitations and future directions our study has several limitations. first, our sample was limited to undergraduate business students in the southeastern us, and generation z college students may behave differently in classroom settings than generation z employees behave in the workforce. as such, future research may examine how the hypothesized effects manifest in the workforce and well as in different geographic locations. second, our sample was limited to one year prior to covid-19-, and one-year post-covid-19. as such, while we were able to capture these effects, it is not clear whether the effects are temporary or permanent. as such, studies that have a sample that expands over a longer time would be able to further understand the nature of the observed differences in conflict, task attractiveness, and interpersonal cohesiveness. third, while we were able to capture the student’s responses pre-, during, and post-covid-19, we were also capturing changes in the mode of instruction. future studies that can isolate the effects of covid-19 by capturing student responses using the same method of instruction (e.g., all remote, all online, all in-person) would further advance our understanding of the effects of covid-19, mode of instruction, and gen z teamwork attitudes. conclusion the findings of this study suggest a varied response in the ways that generation z approached team projects and teamwork during and after the covid-19 pandemic. some changes may persist. others may return to pre-pandemic norms or improve as both institutions and 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(2003). e-leadership and the challenges of leading e-teams: minimizing the bad and maximizing the good. organizational dynamics, 31(4), 377–387. https://doi.org/10.1016/s0090-2616(02)00129-8 ajm 18_1_web_master.pdf ajm 17(3) web_master.pdf 38 american journal of management vol. 17(3) 2017 how to create high impact community outreach through a veteran entrepreneurship training program ronald cook rider university lee zane rider university diane campbell rider university the purpose of this article is to share the lessons learned from creating an entrepreneurial training program for area veterans. the article will provide a blueprint that will allow readers to create a similar program at their campuses. discussion will include the benefits for an entrepreneurship program by creating this type of outreach activity, why this type of program can have a high community impact for the university, how it has helped veteran participants, what are the key issues, and how to avoid pitfalls in the process. background in the fall of 2013, our university was approached by a community bank to consider providing an entrepreneurial training program to area veterans. the program would be a partnership between the university�s entrepreneurship center (ec) and the bank, with the program being run at the university with faculty involvement and supported financially by the bank. this partnership came about from a personal relationship. the bank president was an alumnus of the university and had a longstanding connection with the ec�s director. we believed that this relationship was key, as it would have been unlikely that the university would have had this opportunity without some kind of relationship already in place. program justification the first steps to create this program were to determine if there was a need for entrepreneurial training among area veterans, what the parameters of the program would be, who should be recruited, and what would be the cost to develop and deliver the program. first, to determine the need for this program, we involved the university�s office of veterans affairs, and specifically, its military liaison. our area had military bases nearby and the individual reached out to soldiers stationed at these bases and veterans american journal of management vol. 17(3) 2017 39 in the surrounding area to see if there would be interest in a program like this and if so, would the veterans be willing to come campus for instruction? the response came back as overwhelming �yes� to both queries. program design the next step was to determine how the program should be structured. there are different possibilities ranging from what stage of the entrepreneurial process does the veteran have to be in to participate, to the mode of delivery of the program (online, hybrid, or in-person), and if the course should be for-credit or not-for-credit. research has shown that participants in these types of programs can have a variety of motives ranging from determining if they should be an entrepreneur, to coming up with a possible venture concept, to deciding if a chosen concept has any potential (cook, belliveau, & vonseggern, 1991). in considering these three stages of development, we decided to work with veterans that possessed a business concept and needed help in developing their plan and finding resources. the sponsor was in alignment with this vision as they wanted to see concrete improvement in the lives of veterans and the local economy. certainly, entrepreneur self-reflection/inspection and opportunity development are worthy goals, but the program could not hope do all three, and do all of them well. we selected an in-person mode of delivery over hybrid and online due to the realization that 1) the veterans� levels of education and computer skills varied widely, 2) we believed that hands-on teaching and guidance provided the best chance for success of the veterans, 3) we wanted to establish a personal connection between the veterans and the instructors, and 4) the veterans that we were targeting were mostly within a reasonable driving distance of the university. the decision to provide the program as a not-for-credit course meant that 1) faculty would be paid as project pay, which provided more flexibility than getting paid for teaching an extra for-credit class, 2) the veterans would not be assigned a letter grade, which meant that faculty could concentrate on providing feedback without worrying about formal grades or tests, and the veterans could concentrate on learning without fear of failure, and 3) the program was free of most university entanglements, which meant that the veterans did not need to be formally enrolled into the university to take advantage of the program. next, we needed to narrow down the definition of who we were helping, i.e., what constitutes an eligible veteran. should this program be offered to all veterans, veteran�s families, active duty personnel, etc? should it be limited to certain types of veterans (served within a certain time frame, disabled veterans, veterans with certain education levels, etc.)? finally, what geographic region would the program support? these upfront decisions are important because they influence the overall design of the curriculum. some programs focus on disabled veterans only (i.e., http://ebv.vets.syr.edu/) or on post 9/11 veterans, etc. we decided on being more inclusive and as long as the participant was a veteran, or on active duty, they were eligible. as this was an on-campus program that was held at night, we recognized that it would have a limited geographical reach so we kept our participation restrictions to a minimum. in order to determine the eligibility of applicants, we implemented a two stage registration process: the online application was reviewed by the ec director to ensure that the veteran had a business concept for a new venture or to guide the expansion of an existing venture; and then it went to the aforementioned university�s military liaison to ensure that the applicant was an eligible veteran. once the veteran was approved by both parties, s/he was part of the program. in order to determine a reasonable class size, and whether the class should be taught online, in-person, or using a hybrid format, we further investigated the potential veteran students. our initial needs research told us that many students were located within a reasonable driving distance from our campus. in addition, we discovered that their education level, age, and level of comfort with technology would vary. furthermore, some potential veteran students would not have participated in formal education programs for years while others were fairly recent participants. this information led us to conclude that a relatively small cohort (determined to be 15) could be taught best in a face-to-face format. this size and format 40 american journal of management vol. 17(3) 2017 would facilitate development of a relationship between students and instructors, allow for individual attention for each student, and permit students to progress somewhat at their own speed. as it turns out, it also permitted comradeship to develop among the students. during the decision process outlined above, the sponsoring bank was an active participant in shaping the broad parameters of the program. one of the other initial decisions was to charge a nominal, refundable fee to participants in the program. this fee was utilized to ensure seriousness by participants and that they would have some �skin in the game.� the fee would be refunded in full if the participant attended all of the classroom sessions. the rationale was that we did not want participants to take up a space in the program unless they were serious about finishing it, given that the number of spaces was limited to 15 to allow for significant individual feedback. eventually, we elected to waive the fee for two primary reasons. one, several veterans had trouble coming up with the fee and we worried that some veterans might not be able to participate. two, the university�s financial system was not equipped to take deposits that would be returned following completion. in retrospect, if a fee was to be collected, it would be best to have it held by a third party to avoid the university�s financial system, and a waiver could be put in place for veterans who have trouble coming up with finances. curriculum design once these parameters were in place, the recruitment of veteran participants began and the specifics of the curriculum design were developed. however, before any recruitment could occur, the dates for the program had to be established. the first year, essentially our pilot year, occurred in the summer 2014. there were three basic reasons for a summer start. first, since it was a face-to-face program, we needed classroom space and the availability of space in the summer at the university was much greater. second, we needed the faculty and staff who would be involved in our curriculum delivery to also be available, something that was tough to accomplish during the semester. it should be noted that the faculty teaching in the program were the university�s full-time facility and not adjuncts. we wanted full-time faculty as they were very knowledgeable in their fields, as this would send a message to the vets that the university valued this program. in addition, fulltime faculty were more likely to be able to troubleshoot any issues/problems that arose in the delivery of the program as well as between this program and the university should they arise. in designing the curriculum, our guiding principle was to provide ample personalized attention for the veterans, and provide them feedback on their business plans while the class was in session. immediate and ongoing feedback is important from a pedagogical perspective as it allows students to better comprehend the material (cone & weaver, 2001; erickson, 1984). therefore, the course was designed with homework assignments due every week, and these assignments were the individual sections of the veteran�s business plan that was covered in the previous class. these assignments were submitted electronically two days before the subsequent class, allowing the instructor time to review and comment on them before the next class. we could have created a program where the veterans would have met all day, every day for a fewer number of days, and still covered the same volume of material. however, we worried that this method would have overwhelmed the veterans with information and it would seem like at the end of the program, we are saying �good luck and now go write your plan.� our structure was designed to allow for the plan to be built step-by-step, with mentoring and feedback at each step, with plenty of opportunities to ask questions along the way. consideration of background of the veterans the other aspect that went into the design of the curriculum was in consideration of the varied educational backgrounds of the participants. educational backgrounds ranged from high school equivalency to masters� degrees and for those with college degrees, from business to liberal arts. in addition, some veterans had not been involved with formal education for a quite a while and therefore, their skills had become rusty. finally, a good deal of work and education in the military is team-based american journal of management vol. 17(3) 2017 41 whereas this entrepreneurship training would be primarily individual level work to prepare the veteran to made decisions on their own and to be able to start and run a business. hence, we needed to develop a curriculum that someone with a high school education could handle (as that was the lowest education level allowed into the program). this influenced our choice of textbooks and how the material was presented. from our teaching of business plan creation to regular university students, we knew that participants needed to learn a solid research process in order to be able to find credible data and create a viable plan, and that a good understanding of financial statements would be needed for participants to be able to decide whether or not a concept was viable. accordingly, we started off the program, in week one, with two workshops. the first was a business research session at the library, taught by our business librarian. this workshop provided the vets with basic knowledge of, access to, and practice searching various databases for industry, market and competitive information related to their business concept. these tools should permit the veterans to conduct market research, develop a marketing plan, and provide data regarding their operations. the second workshop, taught by an accounting professor, explained accounting terms and walked the veterans through the basics of proforma financial statements. we wanted the vets to have a general understanding of financial terminology and documents, i.e, what an income statement shows versus a cash flow statement, etc., when it came time for them to create their own financial statements. for additional support for the veterans, a subject matter expert panel was created. this panel consisted of volunteer business experts in subjects, like accounting, legal, marketing, social media, etc. any veteran could ask a specific question of these experts as they develop their business concepts. adult and military learners in preparing to teach veterans, much time was given to considering the delivery of the course material to make it as clear and meaningful as possible. the material covered had been delivered in undergraduate classes and there was a concern that the needs of this new audience might be different, and needed to be fully understood. research on best practices found that andragogy, or the teaching of adult learners, was introduced by malcolm knowles (1980) and he set out a set of characteristics of the adult learner: they prefer to be self-directed. their life experience should be drawn on in the learning experience. they demonstrate a readiness to learn. they approach learning as a way to solve problems or achieve a skill rather than as a means to deep understanding. they are internally motivated to learn. the characteristics of adult learners are shared by military learners, according to most studies. most military learners were found to be 24 years and older, had many work and family responsibilities, and were most often enrolled part-time. however, these veteran students were able to study for the same number of hours as traditional undergrads, despite their many responsibilities. the military culture experienced by veterans also gives them �greater self-discipline, leadership abilities, time-management skills, maturity and a sense of purposeful focus� (ford & vignare, 2015, p. 15). some military learners can also distinguished from the larger adult learner population by combat exposure. not all veterans are deployed, but those that are may return with a number of injuries. �the studies also indicated that the nature of the injury, severity of symptoms or side effects from treatment and medication may present numerous functional impairments or physical, emotional and cognitive challenges, which in turn may also impact the learner�s interactions, experiences and academic performance both online and in face-to-face classrooms� (ford & vignare, 2015, p. 15). veterans themselves ascribe problems with course work to the structure and timing of academic expectations which are so different from military culture. they list other issues that can lead to problems such as lack of time, trouble with concentration, and half-remembered study skills or basic concepts. not 42 american journal of management vol. 17(3) 2017 dismayed by these problems, most find their military training gave them self-discipline, and perseverance. support from fellow veterans who were facing the same challenges were key to their ability to continue, and achieve success (ford & vignare, 2015). keeping in mind the attributes and characteristics described above, our experience was that each cohort gave us a much broader range of educational attainment than most classes that include adult learners. when teaching graduate and undergraduate students, the norm is that everyone has completed pre-requisites, either classes or degrees, so there is more homogeneity in background. with these veterans, the first cohort�s educational profiles ranged from the general education development (ged) certificate to a master�s in business administration. this meant that material had to be much clearer, and each individual veteran needed substantial individual support. further, while a variety of ages are common in most for-credit evening classes, it is rare to find anyone over forty. this was not true of our veteran cohorts which had a much broader range of ages. the first cohort had a participant aged 24 and one 59 years old, while most were in their forties. the second cohort had an age range from 27 to 68, with most in their thirties, and the third had one aged 23 and one 59, with most in their fifties. the common denominator was the shared military culture which engendered a respect for knowledge and the professors who shared it, and a belief that much could be achieved with hard work. also, continuing education is common in military life, and so older students were more likely to have been in classes more recently than would be commonly assumed. individuals versus teams the main deliverable for undergraduate and graduate students in this type of curriculum is a business plan that is researched, developed, and written by students in teams. and, since these veteran students are traditionally team-focused, it would have been easy for them to be able to work in such an environment. however, our program was designed to have veterans create a business plan individually, and while they supported each other, each one worked alone. we worked under the belief that each veteran needed to take ownership of his or her business concept, and use this process to determine if 1) this business concept is viable, 2) the veteran is capable of pulling this concept together, and 3) this is the life direction that the veteran wishes to go. this was a challenge, but we believed it could be addressed by a greater emphasis on mentorship. pilot year we were successful in recruiting 14 veterans for the pilot class in the summer of 2014. we had a policy that in order to graduate, the veteran must attend seven of the eight class sessions. all 14 veterans completed the classroom portion of the program. at that time, the veterans were paired up with volunteer business mentors who would work with them for the next year; answering questions and helping the veterans pursue their entrepreneurial ambitions. the mentor would work with their veteran to help them finish their business plan, and provide one-on-one support as the veteran worked through their business concept. in addition, the veterans had access to the library�s databases for this year as well, allowing them to have the same level of resources that regular students would have. approximately one week after the classroom portion of the program was completed, a graduation ceremony for the veterans and their families was held on campus and it generated substantial pr for the university and the program as well. as part of their ceremony, the university�s office of veteran affairs handed out military coins, which had great significance for the veterans. continuing, veterans were then surveyed about the program content, the program structure, and the instructors. the survey consisted of a ranking of the attributes in the program as well as a series of openended questions. the two main suggestions from the veterans about the program structure and content were for increased time in the program, and for the workshops (library and accounting) to be placed closer to when the topic would be covered in the classroom. american journal of management vol. 17(3) 2017 43 the staff also conducted a post mortem with regard to how the program went. one of the major issues that emerged was that several of the veteran�s concepts were not well defined going into the first night�s class. for example, a veteran was interested in starting a restaurant and, therefore, knew what industry to research. however, is the industry category going to be fast food, fine dining, or fast casual? is there going to be a focus on a specific type of cuisine? would the restaurant be located downtown or out in the countryside? when a business concept is too fuzzy, you can�t conduct accurate market research or develop a credible marketing plan because you don�t know the parameters of what you are researching. this problem occurred during our first cohort as some of the veterans were still trying to pin down specific aspects of their business in week three or later. improvements in the program as noted, tightening up the veterans� business concept was one area that clearly needed help. to try to ensure that the vets had a solid start to the program, we split the classroom part of the program into two phases. we expanded the number of classes and made the first class phase one. phase one was two weeks long and devoted to helping the veteran more fully develop their business concept by having them answer the following questions. a veteran could not move into phase two of the classroom part until they were able to answer the following successfully: 1. what is the product/service (name and description)? 2. why does the typical customer want or value these products/services? what problem are you solving or need you are filling? 3. who is being helped: who is the primary customer or market? describe them: type of business, or if individual (age/gender/education/income/marital status/etc.) 4. where will you be located and why? 5. what method will be used to get the product/service to the market? (e.g. e-commerce, distribution via drug/department stores, infomercial, direct mail, etc.) 6. is there anything unique about business? (service, location, expertise, etc.) 7. why should you run this business? what experience, knowledge, or training do you have, or plan to acquire, that qualifies you to operate this type of business? the objective was to help the veterans sharpen their concept prior to getting into the main research phase of the program. all vets and their mentors came to this phase for one session, which accomplished two things: it introduced the vets and their mentors to each other a bit earlier than in the pilot year, and gave an opportunity for both parties to discuss the veteran�s concept. in part one of this initial session, the instructors explained the working parts of a business concept and the importance of clearly defining each part. in the second part of this initial session, the instructors were roaming facilitators, keeping check on how each veteran was coming along with working on their concept questions. at the end of the session, the veterans were given a homework assignment � they were to formally revise and submit the answers to the business concept questions to the instructors within five days. these concepts were then either approved or not approved. if they were approved, the veterans were accepted into phase two of the program. if their business concept was lacking, or not clear, they were provided feedback and an opportunity to resubmit it to the instructors. only veterans with an approved concept were allowed to go on to phase two. phase two began with the business plan development instruction, with all veterans having a fairly solid business concept to research. outcomes what outcomes can be expected when undertaking this type of program? it is very important to understand that the potential outcomes are varied, and may not be what one would first envision. while many entrepreneurship educational programs look for increases in entrepreneurial self-efficacy, or new business creation, it may be more realistic to look at this as an introduction to entrepreneurship where many students are exploring the topic and attempting to decide if this type of life is for them. therefore, 44 american journal of management vol. 17(3) 2017 some students will take the class and decide that business ownership is not for them. this is a perfectly valid response and means that the student will not invest a lot of time and effort in a future endeavor that has little chance for personal success. some students find they identify with business ownership, but that the chosen concept may not be the proper vehicle. this is another win, as the student has learned a process for developing and evaluating a potential business concept that they can apply to future ideas. these students also know better what type of business concept they want. finally, some decide this is not only what they wish to do with the next stage of their career, but the business concept they investigated is viable and desirable. while the plan may still need work, and the student may still need lots of guidance, the student has a direction, a mentor, and other support mechanisms to move forward. in addition to the above desirable outcomes, several others may, and did occur. several veterans dropped out of the program at the end of phase one because they could not develop a business concept that would permit entry to phase two. this outcome was disheartening to the veterans. several students dropped out or missed classes due to either active duty deployments or on-base assignments while others missed classes due to commitments to job or family. and while the overwhelming majority of the students gave it their best shot, a few did not put in sufficient effort to gain full advantage of the training and mentoring opportunity. these less than desirable outcomes should be expected as the veterans enrolled in the program are a cross-section of society and hence, are not totally unlike traditional students. another outcome that was not anticipated relates to timing. as noted before, we focused on accepting veterans into this program who had a business concept, and were interested in developing that concept into a business plan and potentially launching their venture. we thought that these veterans would reach the go or no go decision within the one year duration of the program (classroom and mentoring phases). what was unanticipated was that some of the veterans were still in active duty, and were thinking about starting their venture 2-3 years down the road when they exited the service. hence, the venture may still be pursued but just at a later time than we envisioned. this made measurement of the program�s overall economic impact more difficult, as these temporal delays meant that the support mechanisms (mentoring, database access, etc,) that last for one year after the classroom portion was done would end before a veteran was ready to finish their plan and launch their venture. as an example of the way the program is designed to work, the following excerpt is from a letter of a successful veteran�s entrepreneurial journey, in terms of finishing the program and business plan, and then using the plan to raise money for his venture: well, i am officially retired. i left my job at the department of veteran affairs regional office on june 12th. i did this to follow my dream of opening the salad car, llc. i left 100% on faith. i could have stayed and continued to "make easy money". but, a piece of me was dying inside, and once you get this entrepreneurial bug, it's hard to shake it. i can honestly say, if i did not do this business, i could not live with myself. this is my dream, and now my fulltime job. i'm excited about the future... as for here, i had a meeting at the bank and we came up with a checklist of what the salad car will need to apply for the loan. i have finalized my food truck design and the builder is waiting to get started. currently negotiating with a landlord and drafting a letter of intent for me to rent a location in delanco that will be my food truck commissary. i have finalized my menu, price points, and packaging. still working on building my recipe stacks and sizing the recipes for my employees for training. awaiting final quotes on all of the insurance required. just received my finalized equipment list quote from restaurant equippers, i have established accounts at all of my required wholesalers and produce vendors. in addition, i have established secondary and tertiary levels for both. with all that being said, i am looking at a late february opening with a no later than date of 4 march 2016. my goal is to have the loan approved by november and to take off from there. scheduled for a january delivery of the food truck. this will give me time to train my american journal of management vol. 17(3) 2017 45 staff for a few weeks while at the same time learning my operation prior to opening� (personal communication, september 15, 2015). as a result of our experiences over three years, we have created a list of topics that a university should consider when creating this type of program. key considerations in creating a veteran�s program 1) institutional backing and funding: funding can be internal or external. need to engage the university�s veterans� affairs office for help in determining the need, promotion of program, and screening. do you want this program to be free or require some co-pay from participants? 2) program structure: what is your mode of delivery of the program (on-line, hybrid, or in-person)? what infrastructure does your choice require? 3) entrepreneurial process: what stage of the entrepreneurial process should the veteran have to be in to participate? are you trying to help a veteran decide whether or not they want to be an entrepreneur, generate a business concept, evaluate a predetermined idea, or grow an existing venture? think of the implications of curriculum design given what you want to do. 4) veteran qualifications: what veterans do you want to serve (veterans only, family of veterans, restrictions to service within a certain time period, etc.)? what should the criteria be to be admitted into the program? 5) interactions: regardless of the mode of delivery, interactions with the veterans is still a key to a successful program. give assignments so you can provide feedback and assess how well they understand the material. 6) extra support: decide on what support can be offered and for how long. using mentors (often volunteer business executives) can provide a personal relationship and gives one-on-one attention to the veterans. 7) ongoing overhead expenses: do you have the resources in place to process registrations, order supplies, track participants, provide for instructional materials and refreshments, etc.? this can also include instructional technology support. 8) completion requirements: what constitutes a graduate? what standard for completing assignments/attending classes should be set for a veteran to successfully complete the program? how will completion be recognized? 9) variation in adult learners: you may have a class with mixed educational and technology backgrounds and a wide range of ages. understanding the differences in learning styles is important. 10) supplemental skills: do you need to include specialized sessions on topics (accounting, business research skills, etc.) to help veterans be prepared for the main curriculum? 11) follow-up: conduct surveys of the veterans right after program completion for feedback, and develop a tracking mechanism to follow any entrepreneurial successes. the faculty and mentors should be included in the feedback loop. 12) publicity: this is a huge opportunity for the university and your program to be painted in a positive light. involve the public relations/communications office. accreditation bodies generally consider this to be high community impact. 46 american journal of management vol. 17(3) 2017 conclusion this article provides a blueprint for a university to create an entrepreneurial training program for area veterans on their campuses. the blueprint shows the benefits for the university in creating this type of outreach activity, why this type of program can have a high community impact, how to identify key issues in creating a program, and how to avoid pitfalls in the process. there is a need to help veterans with their entrepreneurial ambitions because since 9/11, roughly 2.4 million active and reserve members of the u.s. military have returned to civilian life, with another million to transition in the next few years (flournoy, 2014). universities are in a prime position to assist in this activity and help create a stronger economy. references cook, r. g., belliveau, p., & vonseggern, k. l. (2001). a case study of microenterprise training: beta test findings and suggestions for improvement. journal of developmental entrepreneurship, 6(3): 255-267. cone, j., & weaver, s. (2001). fast trac venture planning field guide. kauffman center for entrepreneurial leadership: www.fasttrac.org ericksen, s. c. (1984). the essence of good teaching. san francisco: jossey-bass. flournoy, m. a. (2014). we aren�t doing enough to help veterans transition to civilian life. washington post, https://www.washingtonpost.com/opinions/we-arent-doing-enough-to-help-veteranstransition-to-civilian-life/2014/04/02/d43189e2-b52a-11e3-b899-20667de76985_story.html ford, k., & vignare, k. (2015). the evolving military learner population: a review of the literature. online learning, 19(1), 7�30. knowles, malcolm s. (1980). the modern practice of adult education: from pedagogy to andragogy. 2nd ed. new york: cambridge books. the impact of ceo tenure and effective board performance on organizational change ruth sessler bernstein university of washington tacoma kathleen buse case western reserve university diana bilimoria case western reserve university we investigated the impact of ceo tenure on non-profit organizational change with board performance as a mediator. using data from a survey of ceo’s, we operationalized positive organizational change (poc) as activities such as developing a strategic plan and launching a major initiative or expansion. negative organizational change (noc) included actions like cutting staff and using reserves or endowment. our findings show that ceo’s with less tenure enacted poc and that tenure had no impact on noc. further we found that board performance mediates the relationship between ceo tenure and both poc and noc, supporting the need for effective boards. introduction long serving ceos often are discussed in terms of their power and entrenchment (haynes & hillman, 2010) which may influence strategic organizational change (golden & zajac, 2001). over time ceos may become committed to the status quo believing that “the enduring correctness of current organizational strategies” (hambrick, geletkanycz & fredrickson, 1993, 402) and, therefore, remain committed to past strategies (datta, guthrie & rajagopalan, 2002). gabarro (1987) determined that new ceos have their greatest impact on organizational change within their first 2.5 years, with the number of changes declining with increased tenure. at the same time, effective performance of the strategic, oversight and monitoring roles of the board remain key to achieving and advancing organizational effectiveness (brown, 2005; green and griesinger, 1996) even in changing times. these findings challenge us to deepen our understanding of organizational change by investigating the impact of ceo tenure and board performance on organizational change. in the present study, we examine the relationship between ceo tenure and organizational change, and the mediating effect of board performance on this relationship. miller (1991) found that ceos with longer tenure tend to avoid strategic change even when it would benefit the organization. miller attributed the correlation between ceo tenure and organizational change to the fact that ceos (1) become extremely committed to their previously enacted strategic plans, (2) avoidance of information that disconfirms their plans, (3) having decreasing interest in their present jobs, 26 american journal of management vol. 16(4) 2016 and (4) having the power that enables them to avoid demands for change (hambrick and fukutomi, 1991). brown and guo (2010) used ceo tenure as a proxy for ceo power and found that boards in which ceos have greater power were less likely to talk about their monitoring and oversight functions. a powerful ceo can overwhelm the board (boyd, 1994), quashing the board’s ability to exercise independent judgment (dalton and kesner, 1987) and reducing board effectiveness (finkelstein and d’aveni, 1994). board performance has been documented to impact organizational effectiveness (e.g. bradshaw, murray, and wolpin, 1992; green and griesinger, 1996; jackson and holland, 1998) and we anticipate that board performance will impact the ability of the organization to enact positive organizational change in u.s. nonprofit organizations. to understand the antecedents of organizational change, we examine the impact of ceo tenure and board performance by asking the following research questions: what is the impact of ceo tenure on organizational change? what is the impact of board performance on organizational change? does board performance mediate the relationship between ceo tenure and organizational change? the overall model investigated is presented in figure 1. in the rest of this paper we develop the hypotheses, describe the methods used to test the hypotheses, and present the results. finally, the implications of the findings are discussed. figure 1 hypothesized model theory development and hypotheses positive and negative organizational change nonprofit organizations, like those in the government and private sectors, are continually evolving entities. however, unlike for-profit enterprises, nonprofits are more difficult to assess in terms of growth and impact. we examine two measures of nonprofit performance: positive organizational change and negative organizational change. nonprofit success may be measured by the organization’s ability to experience positive organizational change as opposed to negative organizational change. positive change suggests growth within the organization, for example in terms of expanding services, launching new american journal of management vol. 16(4) 2016 27 initiatives and programs, hiring key personnel, partnering with other organizations and improvements in financial status. conversely, negative change is indicative of retrenchment in services and operations, loss of revenue, downsizing staff, financial instability, and cutting or freezing of staff salaries and benefits. while many factors may contribute to positive or negative organizational change, the literature often attributes organizational performance and growth to ceo tenure and effective board performance, each of which is discussed in more detail below. the relationship between ceo tenure and organizational change the relationship between the duration of executive tenure and organizational actions is well documented in the literature. gabarro (1987) identified the inverse relationship between ceo tenure and organizational change with most change occurring within the very early years of tenure and declining thereafter. this phenomenon has been attributed to ceos’ lack of desire to make further changes even if they are necessary (miller, 1991). finkelstein and hambrick (1990) and wiesema and bantel (1992) found that the longer the ceo tenure, the greater avoidance of strategic change. musteen, barker, and baeten (2006) found that ceo tenure was negatively associated with attitude toward change with strong moderating effects of dominant functional background, functional background diversity, and age. these authors identified that early in a ceo’s tenure they are likely to have stronger effects, however as tenure increases the attitude toward change becomes more conservative. this is consistent with hambrick and fukutomi’s (1991) findings that ceos tend to gravitate over their tenure toward greater commitment to the organizational policies and attitudes, and adopt more conservative attitudes toward change. ceo entrenchment may lead to ceo power over the board of directors, reducing board effectiveness by threatening the independent judgment of the board (dalton and kesner, 1987) or by allowing ceo preferences to dampen the effects of the board (boyd, 1994). ceo power is defined as “the capacity of individual actors to exert their will” (finkelstein, 1992, p. 506). a less powerful or dominant ceo enables directors to engage in more discussion and debate that allows more diverse viewpoints to surface (zahara and pearce, 1989). ceos with greater tenure may become more attached to the status quo (carpenter, 2000), committed to the strategies that they previously enacted in order to preserve organizational stability and the need to conform to industry norms (datta, guthrie and rajagopalan, 2002). haynes and hillman (2010) study of for-profit boards demonstrated the negative impact of powerful ceos on board capital and on their lack of desire to make changes in organizational strategy which they likely had a role in crafting earlier in their tenure. the presence of a powerful ceo moderates the relationships between board capital and strategic change such that the powerful ceo will remain committed to the status quo and seek to fit in with industry norms. hayes and hillman concluded that when a ceo is powerful, he or she has a negative impact on strategic change, which may be due to the powerful ceo exerting undue power over an opposing board. block and rosenberg (2002), in their study of nonprofit founders, determined that organizational members felt that ceos had the most influence-ability to sway votes and change opinion of others--during board meetings. this may be because in the majority of the organizations they surveyed the ceos set the board meeting agendas. in light of this evidence suggesting the positive impact of ceos on organizational growth and change in their early years as ceo, as well as their likely consolidation of power, entrenchment, commitment to the status quo and blockage of needed changes in their later years as ceo, we hypothesize: h1a: ceo tenure will be negatively associated with positive organizational change. h1b: ceo tenure will be positively associated with negative organizational change. the board-ceo relationship is considered multi-faceted and complex (hoyle and cuskelly, 2003), “often characterized on many dimensions (e.g. frequency, status differential, trust, and communication patterns)” (herman and tulipana, 1989: 50). effective board performance is dependent on the board-ceo 28 american journal of management vol. 16(4) 2016 relationship (carver, 1997) -a delicate, subtle relationship “usually built up over a long time” (houle, 1997, p. 97). therefore, we hypothesize: h1c: ceo tenure will be positively associated with board performance. the relationship between board performance and organizational change “boards of nonprofit organizations are entrusted to oversee and ensure that the organization remains true to its mission, functions within the confines of state and federal laws, and operates in a financially responsible way” (preston and brown, 2004, p. 221). board ‘best practices’, as identified extensively in the literature, suggest that boards have a formalized system of internal accountability (gibelman, gelman and pollack, 1997), engage in ongoing strategic planning (brown and guo, 2010), share a common vision (bradshaw et al., 1992), and provide sound financial management (axelrod, 2005; see also millermillesen, 2003). when boards engaged in policy formation, strategic planning, program monitoring, financial planning and control, resource development, board development, and dispute resolution a significant relationship between board performance and organizational effectiveness was observed (green and griesinger, 1996). in this study, we are using organizational performance as a proxy for measuring organizational change, where improvements in organizational performance (positive organizational change) or reductions in organizational performance (negative organizational change) are types of organizational change. organizations that are judged as higher performing reported having high-performing boards when the boards were more contextual, educational, interpersonal, and strategic (brown, 2005). the link between board and organizational effectiveness in nonprofits was further established by ostrower and stone (2006) who identified four board traits (board composition, relationship between boards and staff, roles and responsibilities, and board effectiveness) that positively impact organizational effectiveness. in later research, ostrower and stone (2010, p. 902) note that “board roles influence board effectiveness, and that board effectiveness probably does contribute to general organizational effectiveness”. as well, the use of such practices positively influences the perception of board effectiveness (bradshaw et al., 1992). effective execution of these board roles and responsibilities has been recognized as improving organizational performance (herman and renz, 2000; bernstein, buse, and slatten, 2015). in summary, the literature demonstrates a significant relationship between board performance and nonprofit organizational effectiveness. therefore, we hypothesize: h2a: board performance will be positively associated with positive organizational change. h2b: board performance will be negatively associated with negative organizational change. the mediating role of board performance as mentioned above gabarro (1987), miller (1991), finklestein and hambrick (1990), wiesema and bante (1992), and musteen et al. (2006) found an inverse relationship between ceo tenure and organizational change. yet, effective board performance positively impacts organizational performance and effectiveness (brown, 2005; green and griesinger, 1996) as well as organizational change. we expect that the hypothesized negative relationship between ceo tenure and positive organizational change will be mitigated by controlling for board performance. similarly, we expect that the hypothesized positive relationship between ceo tenure and negative organizational change will be mitigated by controlling for board performance. hence: h3a: board performance mediates the relationship between ceo tenure and positive organizational change. h3b: board performance mediates the relationship between ceo tenure on negative organizational change. american journal of management vol. 16(4) 2016 29 methodology sample data were obtained from boardsource, a non-profit organization that focuses on improving the effectiveness of non-profit by strengthening boards (boardsource, 2015). since 1994, boardsource has conducted a national survey of nonprofit chief executives and board chairs on their experiences in the boardroom. the survey is used by boardsource to identify trends in board composition, policies, and practices. the data for this study comes from boardsource’s 2014 survey “leading with intent: a national index of non profit board practices”. we used completed survey responses from 696 ceo’s of non-profits located in the united states. each of these non-profits raise funds as part of their mission. overall, 67% of the ceo’s responding to the survey were women, with 59% being caucasian women, and 29% caucasian men. fewer than 5% of the ceo’s are african-american, 2.4% hispanic and 2% mixed race. table 1 details the racial distribution of ceos included in this study. table 1 ceo respondents race and gender ceo race male female total american indian or alaska native 1 1 2 african american/black 8 22 30 asian (includes asian indian, chinese, filipino, japanese, korean, vietnamese, or other asian) 3 6 9 caucasian 204 413 617 hispanic, latino, or spanish (includes mexican, mexican american, chicano, puerto rican, cuban, and other hispanic, latin, or spanish origins) 7 10 17 native hawaiian or pacific islander 0 1 1 two or more races 2 13 15 other, please specify 2 3 5 total 227 469 696 almost half of the organizations had annual operating budgets between one and nine million dollars as shown in table 2. most of the organization were described as public charities (see table 3). table 2 organization’s annual operating budget annual operating budget number of organizations percent of organizations less than $1 million 273 39% $1 million to $9.9 million 331 48% $10+ million 91 13% missing 1 total 695 100% 30 american journal of management vol. 16(4) 2016 table 3 organization type type of organization number of organizations percent of organizations public charity 609 87% school/college/university 19 3% governmental agency 2 association or professional society/trade association 29 4% foundation 34 5% other 3 total 696 100% measures ceo tenure was measured in years. ceo’s in this study had tenure in their roles up to 36 years as shown in table 4. one third of these had tenure of 5 years or less and fewer than 3% had more than 25 years. table 4 ceos’ tenure and gender ceo tenure (in years) male female total up to 5 73 160 233 6 to 10 69 149 218 11 to 15 44 88 132 16 to 20 19 28 47 21 to 25 11 23 34 26 to 30 6 7 13 31 to 35 1 2 3 more than 36 1 1 2 missing 3 11 14 total 227 469 696 board performance was measured using nine items. ceo’s were asked to grade their board’s performance on performance aspects such as “adopting and following a strategic plan”, “fundraising” and “level of commitment and involvement”. the likert scale ranged from 1 = fail to 5 = a. appendix a provides all the items for this construct. organizational change: ceos were surveyed on the change their organization had experienced during the prior two years. we examined positive and negative organizational change by grouping together items that suggested negative impact to the organization and items that suggested positive impact. positive organizational change included activities such as “completed a new strategic plan” or “launched a major initiative or expansion, e.g., new program, building”. two additional items were used to assess positive organizational change: whether financial stability of the organization was better or much better than the previous year. negative organizational change included “cut staff”, “dipped into american journal of management vol. 16(4) 2016 31 reserves or endowment” and “financial stability-much worse than the previous year”. 87% of ceos reported positive change and 59% reported negative change in the prior two years. appendix a provides the construct items. analyses to validate the scales an exploratory factor analysis was performed using spss for windows (pasw statistics gradpack 17.0, 2009). next amos 17.0.2 was used for the structural equation model (sem). sem was chosen to examine a series of dependence relationships simultaneously. sem is particularly useful in testing theories that contain multiple equations involving dependence relationships using multivariate analysis techniques (hair jr., black, babin, & anderson, 2010). results the impact of ceo tenure and board performance were simultaneously examined to examine their effects on both positive and negative organization change. the means, standard deviations, reliabilities and correlation between the study variables are shown in table 5. table 5 means, standard deviations, cronbach’s alphas and correlations for boardsource data mean sd 1 2 3 1. performance 3.427 .671 .888 2. positive organizational change .363 .211 .116 3. negative organizational change .173 .204 -.138 -.101 4. ceo tenure 9.185 6.604 .168 -.138 -.046 n=696 cronbach’s alphas in bold on the diagonal analyses substantiated the validity, uni-dimensionality, and reliability of the measurement models corresponding to the model constructs. the reliability of each construct as measured by cronbach’s α were all above 0.60 (churchill, 1979) and are detailed in table 5. the confirmatory factor analysis showed that the model had acceptable fit with n=696 where χ2=175, df= 41, χ2/df=4.2, cfi=0.963, rmsea=0.068. convergent and discriminant validity was established using criteria from hair et al. (2010). structural equation model as shown in figure 2, all hypotheses, with the exception of h1b, were supported in the structural equation model. ceo tenure was negatively associated with positive organizational change (supporting h1a), not associated with negative organizational change (not supporting h1b), and was positively associated with board performance (supporting h1c). board performance was positively associated with positive organizational changes (supporting h2a) and negatively associated with negative organizational change (supporting h2b). board performance partially mediated the relationship between ceo tenure and positive organizational change (supporting h3a). board performance fully mediated the relationship 32 american journal of management vol. 16(4) 2016 between ceo tenure and negative organizational change (supporting h3b). table 6 details the direct and indirect effects of ceo tenure on positive organizational change and negative organizational change. figure 2 unstandardized solution for positive & negative organizational change table 6 direct, indirect and total effects of ceo tenure ceo tenure direct effects indirect effects total effects performance .016*** .000 .016*** positive organizational change -.005*** .001* -.004** negative organizational change .000 -.001* -.001* discussion the study’s findings indicate that positive organizational change is impacted negatively by ceo tenure and positively by effective board performance. negative organizational change is impacted negatively by effective board performance. board performance, which is impacted positively by ceo tenure, partially mediates the negative impact of ceo tenure on positive organizational change and fully mediates the impact of ceo tenure on negative organizational change. in fact, the presence of effective board performance eradicates the negative impact of ceo tenure on positive organizational change. the finding regarding the negative impact of ceo tenure on positive organizational change is consistent with previous research. longer serving ceos’ negative impact on positive organizational change may be due to their ability to assume power and entrench themselves as the leader of the organization (haynes and hillman, 2010). ceo tenure may lead to dominance over the board, negatively impacting the board’s independence and power (dalton and kesner, 1987). a powerful ceo may inhibit american journal of management vol. 16(4) 2016 33 board members from expressing their views (zahara and pearce, 1989), may become entrenched in his or her previously enacted programs and plans resulting in a status quo (carpenter 2000) due to a commitment to past strategies (datta et al., 2002) which limits the ceo’s ability to effect strategic change (golden and zajac, 2001). additionally, the finding that ceo tenure did not have a significant direct impact on negative organizational change is encouraging. longer serving ceos do not lead automatically to negative organizational results. thus the study’s results do not point to an imperative to frequently turn over ceos. the positive impact of ceo tenure on board performance is consistent with houle’s (1997) finding that time is needed to develop subtle relationship necessary to maximize the ceo-board relationship. the results related to board performance (that effective board performance leads to greater positive organizational change and lesser negative organizational change) support the need for strong, effectively functioning boards. these findings suggest the importance of ensuring that board members have a clear understanding of their roles and responsibilities in order to function most effectively (herman and renz, 2000; bernstein et al., 2015) including staying true to the organizational mission and vision, engaging in strategic planning, being internally accountable, providing legal/financial/ethical oversight, engaging in program monitoring, developing resources, undertaking community outreach, and fulfilling the other suggested “best practices” of effective boards. the ability of effective boards to partially mediate the negative impact of ceo tenure on positive organizational change and fully mediate the impact of ceo tenure on negative organizational change are important findings that further support the need for high functioning boards. consistent with agency theory (jensen and meckling, 1976; carver, 1997; hillman and dalziel, 2003), boards that remain independent in functioning, develop ongoing strategic plans, provide strong guidance to the ceos, and counter ceo power and dominance may overcome the negative impact of ceo tenure on positive organizational growth and transformation. according to agency theory, the role of the board is to provide organizational oversight and direction, and monitoring of the ceo. the board delegates to the ceo and management team the job of providing effective services, programs, and information on their behalf. this study supports the need for a highly effective board of directors that can counter the deleterious effects of ceo power and entrenchment. implications for future research the present study investigated the relationships between ceo tenure and board performance on organizational change. it adds to the existing body of literature on nonprofit board and organizational performance. the findings of the study invite further research into the nature of boards and the specific factors that contribute to effective board performance. the use of the bsgi data highlights the value of using surveys to investigate relevant issues facing the nonprofit governance. future use of these biannual surveys will enable tracking of board member practices and changes in board and organizational performance. the ability to add fundraising statistics or other measures of financial success would enable researchers to tie board member performance to actual financial data. this study was conducted using only ceo assessments; future research should involve the perspectives of board chairs so that potential comparisons of perspectives may be undertaken (see bernstein, buse & bilimoria, 2014). last, we suggest further analyses be conducted to provide more nuanced insights about the boundary conditions under which organizational change may be impacted by ceo tenure and board performance. implications for practice practical implications for nonprofit leaders can be drawn from this study. in order for nonprofit organizations to serve their mission and influence society, they need to effect positive change. this study demonstrated the need for high levels of board performance in order to achieve these goals. this study extends the previously established link between nonprofit board performance and nonprofit organizational effectiveness (see bradshaw et al., 1992; chait, chait, holland and taylor, 1991; green and griesinger, 34 american journal of management vol. 16(4) 2016 1996; herman and renz, 1997; herman, renz, and heimovics, 1996) to include the impact of effective board functioning on nonprofit organizational change. this study’s findings, when examined in relation to the scope of board and organizational effectiveness, provide significant implications for board practices. this findings point to the need to focus more on board effectiveness, and less on ceo tenure, for improving organizational performance and engendering organization change. to enable board effectiveness, boards must pay careful attention to identifying and recruiting board members, ensure that new board members are made aware of their roles and responsibilities, hold a formal board orientation or on-boarding process (bernstein et al., 2015), engage in on-going and comprehensive board undertake training to promote collaboration and engagement with other board members (zimmermann and stevens, 2008), and promote mentoring of new members by seasoned board members. these deliberate actions may ensure that the board is composed of well-informed members who understand and engage in their roles and responsibilities in order to maximize board performance. this study’s finding with respect to ceo tenure pose a conundrum. ceo tenure negatively influenced positive organizational change but did not significantly influence negative organizational change. this does not refute gabarro’s (1987) determination that new ceos have their greatest impact on organizational change within their first 2.5 years and that the number of organizational changes declines with increased tenure, but suggests that the focus must be placed on the creation of effective boards. given that ceo tenure does not lead to negative organizational outcomes there is no imperative that ceos be replaced every few years in nonprofit organizations. however, more practically, the findings indicate that the board be cognizant of the need to remain independent of the ceo and not become subjugated by a powerful ceo with long tenure. we suggest that over the ceo’s tenure, the board maintain vigilance and a willingness to challenge the ceo and not settle for status quo, particularly as the length of time that the ceo is in the role increases. references allison, m. 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(2008). best practices in board governance: evidence from south carolina. nonprofit management and leadership 19 (2), 189-202. *we thank boardsource for providing the 2014 boardsource governance index survey. american journal of management vol. 16(4) 2016 37 appendix a construct items ceo tenure how many years have you been the chief executive? in years (with a range of 1-35) board performance grade your performance in the following areas using an academic grading scale (1 = fail to 5 = a). adopting and following a strategic plan thinking strategically as a board knowledge of your organization’s programs fundraising community building and outreach understanding the board’s roles and responsibilities level of commitment and involvement monitoring legislative and regulatory issues that have the potential to impact the organization increasing the diversity of the board positive organizational change what significant changes has your organization undergone during the past two years? select all that apply. hired a new chief executive completed a new strategic plan launched a major initiative or expansion, e.g. new program, building expanded operations or added services created new staff positions merged or combined in another way with one or more organizations how would you describe your organization’s financial stability? financial stability-much better than the previous year financial stability-better than the previous year negative organizational change what significant changes has your organization undergone during the past two years? select all that apply. downsized operations or reduced services cut staff outsourced activities drastically altered ways of delivery service or doing business dipped into reserves or endowment cut or froze salaries dropped or diminished employee benefits lost revenues due to diminished public funding how would you describe your organization’s financial stability? financial stability-worse than the previous year financial stability-much worse than the previous year 38 american journal of management vol. 16(4) 2016 american journal of management vol. 25(2) 2025 7 family supportive supervisor behaviors: employee insights maureen andrade utah valley university wu-ting chen utah valley university work-life balance is becoming increasingly difficult as technology enables individuals to work anytime and anyplace. family-supportive supervisor behaviors (fssbs) can help address this challenge through instrumental support, emotional support, role modeling, and creative management practices. the outcomes of such behaviors include greater work-life balance, positive work-family spillover, increased organizational citizenship behaviors, improved employee well-being, and better family relationships. although scales have been developed to measure these dimensions, the results may be influenced by subjective factors on the part of employees. these scales are also limited to numerical results, thus not providing insights into employees’ lived experiences. this qualitative study analyzes interview data focused on fssbs to increase understanding of employees’ lived experiences. findings indicate that fostering worklife balance and enhancing employee well-being depends on managerial practices that create a supportive and empowering workplace culture. in contrast, adaptability to employees’ evolving needs is crucial for long-term success. keywords: family-supportive supervisor behaviors, work-life balance, instrumental support, emotional support, role modeling, creative management practices introduction balancing work and personal life is becoming increasingly difficult with technology enabling employees to work anywhere and anytime. although this potentially contributes to work flexibility, it may also make separating work and personal life challenging. the covid-19 pandemic impacted how people feel about their jobs and has called attention to what has been termed the great resignation, which reflects a continuing trend of increasing quit rates (fuller & kerr, 2022). five factors have contributed to these increases, all made more pronounced by the pandemic—retirement (retiring at accelerated rates and at younger ages), relocation (moving to new locations but mostly staying local), reconsideration (focusing on work-life balance and caregiving but sometimes not by choice, particularly for women), reshuffling (changing jobs but mostly within the same sector), and reluctance (feeling uncomfortable returning to inperson jobs). post-covid, workers attach greater importance to work-life balance than salary although this trend is higher for women (aviva, 2022). family-supportive supervisor behaviors (fssbs) describe how managers support their employees’ well-being and help them effectively balance work responsibilities with personal 8 american journal of management vol. 25(2) 2025 and family priorities (french et al., 2018; french & shockley, 2020; hammer et al., 2009; sargent et al., 2022, 2024). these behaviors can be categorized into four areas: instrumental support, emotional support, role modeling, and creative management practices (french et al., 2018; hammer et al., 2007; 2009, 2011; hammer & zimmerman, 2011; kossek et al., 2018). additionally, quality leader-follower relationships are associated with fssbs and job satisfaction (bagger & li, 2014). the outcomes of these behaviors include decreased work-family conflict, increased employee well-being (hammer et al., 2007, 2009; hammer & zimmerman, 2011; kossek et al., 2010), positive work-family and family-work spillover (edwards & rothbard, 2000; hammer et al., 2007, 2009; yu et al., 2022), better family relationships (greenhaus & powell, 2006), increased organizational commitment and sense of belonging (choi et al., 2017), and more organizational citizenship behaviors (bagger & li, 2014). research on fssb has typically utilized subordinate ratings of supervisors, which may be conflated by subjective feelings such as liking or not liking a supervisor rather than the supervisors’ actual behaviors (sargent et al., 2022; sargent et al., 2024; sutton et al., 2013). two scales have been developed to measure fssb, a long form consisting of 14 items related to the four fssb dimensions (hammer et al., 2007) and a 4-item short form consisting of one statement reflecting each of the areas to provide a more global and practical measure (hammer et al., 2013). although research has identified specific elements and outcomes of fssb, this research is largely quantitative, providing a somewhat limited understanding of how employees experience their supervisors’ behaviors. additional methodological approaches, such as qualitative studies, have been recommended to provide more nuanced understandings (guo et al., 2024). the current qualitative study examines the perceptions and experiences of employees related to the four components of the fssb scale: instrumental support, emotional support, role modeling, and creative workfamily arrangements as well as the role of relationships. it seeks to provide a rich, deep understanding of employee experiences in the workplace and identify insights and patterns across these experiences. specifically, the research questions are as follows: rq1: how do managers help employees balance their daily work and personal responsibilities? rq2: how do managers show emotional support related to non-work issues? rq3: how do managers model behavior that exemplifies work-life balance? rq4: how do managers use creative management strategies to facilitate work-life balance? rq5: how do quality manager-employee relationships or other factors impact work-life balance and related outcomes? literature review as indicated, four sources of fssbs have been identified: instrumental support, or actions directed at providing aid and resources, emotional support, or showing empathy and concern regarding work-family issues (french et al., 2018; hammer et al., 2007; 2009; hammer & zimmerman, 2011; kossek et al., 2018), role modeling, which occurs when managers portray work-life balance, and creative work-family management, or innovative efforts to restructure work to facilitate work-life balance (hammer et al., 2007, 2009, 2011). examples of instrumental support are flexible work hours, remote work, and workload management to accommodate family needs; emotional support entails listening to employee concerns about their personal or family situations and offering encouragement during times of stress; role modeling might be exhibited by managers taking time off for a family event to demonstrate ways in which they balance work and personal life; creative management strategies entail finding individualized work arrangements that benefit both the employee and the organization. this perception of fssb has been called the resource-based view american journal of management vol. 25(2) 2025 9 in that it conceptualizes fssb as resources provided by supervisors; employees use the resources to address work-life balance issues (guo et al., 2024). a second view of fssb is based on social support theory, which posits that supportive relationships with coworkers, supervisors, family, and friends improve one’s ability to manage stress and enhance health and well-being (bagger & li, 2014; cohen & willis, 1985; hammer et al., 2013; yin et al., 2023). this view is associated with leader-member exchange leadership theory (lmx), or the view that quality relationships between leaders and followers positively impact employee attitudes and behaviors and organizational effectiveness (dansereau et al., 1975). positive correlations have been found between lmx and fssbs regarding job satisfaction and turnover intention (bagger & li, 2014). when managers meet their employees’ expectations, mutually beneficial relationships are developed, contributing to leaders helping employees manage work and family-life conflict through fssbs (guo et al., 2024). an organizational culture characterized by fssbs is one in which managers not only feel compassion for employees’ non-work issues, but act to find solutions (cox, 2023; hougaard & carter, 2022; tramuto, 2022). research-based on both perspectives—the resource perspective and the social exchange view—have identified positive outcomes of fssb in terms of improved work-family balance and job performance. however, the resource-based view has been more widely researched. a meta-analysis of the two perspectives examining research focused on the outcomes of in-role performance, job satisfaction, and burnout determined that each has different explanatory power with the resource view accounting for the relationship between burnout and fssbs and social exchange showing greater impact on job performance and job satisfaction (guo et al., 2024). in other words, these lenses illustrate how fssbs impact employee outcomes differently. gender and fssb how supervisors demonstrate fssbs may be aligned with gender roles (sargent et al., 2024). those with a masculine gender role orientation may use instrumental support behaviors, such as allowing time off for personal matters or delegating tasks to offset workload, rather than demonstrating emotional support behaviors. gender also influences managers’ awareness of opportunities and options for using fssb (sargent et al., 2024). when managers have discretion over how to enact fssb policies, support may reflect unconscious biases and differ by gender. thus, structural changes, training, and accountability for workfamily policy implementation is needed to achieve consistency. greater awareness on the part of supervisors may be needed to identify fssb opportunities and learn how to demonstrate their willingness to enact such behaviors. employees should learn how to frame their requests in specific ways, while supervisors should refrain from requiring too many personal details. fssb is more prevalent when supervisors share the same race and gender as their employees (linnehan et al., 2006). women value a workplace characterized by positive supervisor relations, enjoyable work, flexible work arrangements, and safe physical conditions (zou, 2015). male and female employees with female supervisors experienced more social support and less work-to-family conflict than male supervisors; female managers with female supervisors reported greater autonomy and fewer work absences than male supervisors (moore et al., 2005). female managers in japanese firms had more instances of employees taking parental leave. they approved more family-related support requests from men than their male counterparts, suggesting that female supervisors are more aware of how to encourage the integration of work and family responsibilities across genders (fuwa, 2021). fssbs support employees promising voice or sharing problems with supervisors and making suggestions for improvement (li et al., 2022). this is related to the emotional support aspect of fssb. for women, employee voice is enhanced by work-family integration such as flexible work arrangements whereas for men, it is motivated by supervisor actions to decrease work-family conflict. once again, this illustrates the need to understand gender differences when applying fssbs. 10 american journal of management vol. 25(2) 2025 fssb outcomes fssbs result in a range of desirable outcomes benefiting both employer and employee. such behaviors reduce work-family conflict, address incompatibilities of work-family roles, and improve well-being (hammer et al., 2007, 2009, 2011; hammer & zimmerman, 2011; kossek et al., 2010). fssbs are associated with organizational commitment (choi et al., 2017), organizational citizenship behaviors (bagger and li, 2014), perceived organizational support (shanock & eisenberger, 2006), job satisfaction (wnuk, 2016), and reduced stress and exhaustion (eredi et al., 2023). fssb mediates work-family conflict and facilitates home-work management (armstrong et al., 2015; beham & drobnic, 2010; hsu, 2011; narayanan & savarimuthu, 2013). positive outcomes apply to a variety of contexts as indicated in the following studies: • women faculty in computer science during covid-19 experienced higher levels of work-life conflict than men, causing turnover for both genders; however, fssbs ameliorated this conflict for women, leading to better retention (lawson et al., 2023). • fssbs decreased emotional exhaustion and turnover in the food industry, particularly for women (jolly et al., 2021). • fssbs led to higher levels of work engagement leading to improved performance for financial credit employees in mexico (rofcanin et al., 2017) • prosocial motivation, or the desire to benefit others through one’s work, and extrinsic motivation increased for public and private sector workers in brazil, kenya, the netherlands and the philippines due to fssbs (bosch et al., 2018). • fssbs create favorable impressions of supervisors, specifically in perceptions of warmth and competence, which mediates work-family conflict (yu et al., 2022). methods data for this study consists of recorded and transcribed interviews with employees in organizations in the researchers’ local region. students in the researchers’ undergraduate leadership theory course assisted with the data collection. after completing a rigorous human subject certification course and qualitative research and interview technique training, students conducted the interviews using an interview guide. as trained, they probed to elicit richer insights from participants. the study met all institutional research board requirements at the researchers’ university, and all participants gave informed consent. the study sample included 323 employees, 12 randomly selected participants providing insights into the four research questions representing the hammer (2009) framework, for a total sample of 48 participants. these same samples were also analyzed for evidence of quality relationships between leaders and followers, keeping with lmx theory. the sampling process was one of convenience, specifically, individuals available to the researchers’ students. convenience sampling is appropriate for exploratory qualitative studies, which seek to understand a particular phenomenon from participants’ lived experiences and viewpoints (creswell & frost, 2017; frost, 2000; stratton, 2021). although a disadvantage of this approach may be limited sample representation, the participants represented different demographic variables and work sectors. a summary of the characteristics of the selected sample is provided in table 1. note that not all participants answered all questions; therefore, the number of responses varied. american journal of management vol. 25(2) 2025 11 table 1 participant demographics gender (other) 1% (n=3) male 53.54% (n=136) female 46.06% (n=117) children 56% yes (n=142) managerial/ leadership level top 25% (n=63) managerial/ leadership level middle 21% (n=52) managerial/ leadership level lower 23% (n=57) not in a leadership position 31% (n=78) avg. position tenure (years) 2.87 yrs avg. organizational tenure (years) 3.21 yrs company sector financial: 16% (n=38) utilities: 2% (n=5) consumer discretionary: 3% (n=7) consumer staples: 3% (n=6) consumer services: 30% (n=70) energy: 2% (n=4) healthcare: 22% (n=51) industrial: 6% (n=13) information technology: 11% (n=26) real estate: 3% (n=6) raw materials: 3% (n=6) participants were asked open-ended questions with probing to elicit details and enhance understanding of the phenomena. see the appendix for the questions related to the four fssb dimensions. data analysis the data analysis was informed by prior research, specifically the four dimensions of fssb (french et al., 2018; hammer et al., 2007; 2009, 2013; hammer & zimmerman, 2011; kossek et al., 2018; sargent et al., 2022; sargent et al., 2024) as well as by social exchange theory and lmx theory (bagger & li, 2014; guo et al., 2024). the hammer (2009) framework was used to organize the data into broad categories, which were then further analyzed and refined to determine aspects of the responses that fit with current knowledge of fssbs and what aspects of participants’ lived experiences brought new insights. the data was coded to identify initial themes about the research questions followed by a more in-depth analysis to identify patterns, relationships across themes, characteristics of the themes, and subthemes (braun & clarke, 2006; clarke & braun, 2013). 12 american journal of management vol. 25(2) 2025 results across the research questions posed, the primary themes were flexibility, attentiveness, approachability, genuine friendships, safe space, open communication, time management, boundaries, priorities, and autonomy. example responses follow: research question 1 the first research question examines how managers help employees balance work and personal responsibilities. participants discussed various approaches their managers used to promote work-life balance while maintaining productivity. one participant mentioned, “whenever i needed to go home to see my daughter and had more work to do, he helped me finish it up so i could hurry and get out of there to see her.” additionally, participants highlighted that managers commonly employed flexible scheduling to accommodate their needs. one participant shared, “whenever i need time off, whether it’s for personal reasons or emergencies, my manager is understanding and accommodating.” similarly, another emphasized, “we had a medical emergency at home recently, and my manager immediately adjusted my workload without hesitation.” the overarching theme of flexibility was supported by sub-themes of understanding, empathy, and awareness. employees noted that flexibility extended beyond schedule adjustments to include remote work opportunities and task redistribution. for example, one participant shared, “my manager is always very flexible with our ability to work from home or take time off, or whatever we need to accommodate our family situation and needs.” these practices helped employees manage their personal responsibilities without feeling overwhelmed by professional obligations. research question 2 the second research question explores how managers emotionally support employees regarding nonwork issues. in the interviews, participants shared experiences of how their managers offered emotional support during personal challenges. one participant described their manager’s approach: “he’s very approachable, and we have weekly team meetings to talk about work, life, and any concerns we might have. it’s a safe space to express ourselves without judgment.” many participants also highlighted the role of managers as emotional pillars during difficult times. one participant noted, “she follows up on personal things if you tell her something. i know she cares and remembers our needs.” another shared, “you could tell he cares about you while also caring about the job. i was dealing with a lot of stress outside of work, and it was affecting both my mental and physical health. my manager pulled me aside for a one-on-one meeting, and we discussed my feelings. he also provided me with resources to get help.” these responses highlight that managers offer emotional support through actions that demonstrate genuine care and concern. they create an environment where employees feel comfortable sharing both personal and professional struggles. managers build trust by showing attentiveness to employees’ needs, offering follow-up support, and ensuring that boundaries are respected. their openness to listening and willingness to provide resources also fosters a sense of understanding and empathy, while their flexibility allows for tailored approaches to emotional well-being. therefore, the participants’ responses reveal that the primary themes of how managers provide emotional support include being genuine, fostering strong friendships, creating a safe space, and maintaining open communication. these themes were further supported by sub-themes such as awareness, attentiveness, vulnerability, understanding, listening, boundary-setting, sincerity, and flexibility. research question 3 the third research question explores how managers model work-life balance through their behavior and practices. participants discussed how their managers set an example by prioritizing their well-being and encouraging employees to do the same. one participant shared, “my manager leaves the office no later american journal of management vol. 25(2) 2025 13 than four every day, while i usually stay until around 8:00. we have different hours, but seeing that makes me think, ‘maybe i should adjust my schedule to go home earlier.’ she’s great at modeling work-life balance, which rubs off on me. more than anything else, a manager is a role model, and they need to demonstrate healthy behaviors and set boundaries around work-life balance.” this demonstration of balanced work habits fosters a culture that values personal time and emphasizes the importance of setting boundaries alongside professional commitments. other participants also showed how managers openly communicated their boundaries between work and family responsibilities. one participant explained, “he’s available most of the time through various means, but there are times when he clearly tells everyone he won’t be available. he encourages us to text or email and will respond when he can—whether he’s on vacation or otherwise. he sets clear boundaries around his time, but for the most part, he’s very accessible.” this openness and communication helped normalize the practice of prioritizing personal well-being, reducing the stigma around boundary-setting. these behaviors created an environment that promoted inclusivity and work-life balance. the key themes that emerged from participants’ experiences included open communication, effective time management, autonomy, prioritization, and boundary-setting—essential elements in how managers successfully model work-life balance. research question 4 the fourth research question explores how managers employ creative management strategies to support work-life balance for their employees. participants shared various innovative approaches their managers used to enhance work-life balance while maintaining productivity. notable strategies included task delegation and team-based scheduling. one participant discussed a significant challenge during black friday: “the biggest challenge we faced was black friday last year with all the unexpected changes. it was very stressful for everyone. but now, we’ve streamlined the process to ensure everything is delegated properly. nothing gets overlooked, and people can prioritize their time off and their families, along with better work-life balance.” by streamlining processes and delegating tasks effectively, this approach reduced stress, fostered teamwork, and improved overall efficiency. another example came from a participant who described how his manager creatively supported his work-life balance during a period of weekly health treatments. instead of requiring him to commute to the office, his manager allowed him to work from home, offering the flexibility to manage both his work hours and treatment schedule. the manager maintained open communication, provided options to adjust work schedules as needed, and demonstrated attentiveness and support, reinforcing a commitment to employee well-being. these participants identified key strategies that emphasize the importance of providing employees with flexibility and autonomy, ensuring they can balance work responsibilities with personal needs. the managers built trust by maintaining open communication channels and understanding individual situations. the ability to accommodate varying schedules and listen actively to employees’ concerns reinforced a supportive environment where employees felt empowered to manage their personal and professional lives effectively. as a result, the participants’ responses indicate that managers use key strategies—such as flexibility and attentiveness—to facilitate work-life balance. these strategies are further demonstrated through open communication, trust, autonomy, understanding, accommodation, supportiveness, knowing employees, and active listening. research question 5 interview questions did not focus specifically on research question 5, or quality manager-employee relationships; however, themes emerged that emphasized the role of friendship and approachability. one participant described how having a positive and approachable relationship with her manager significantly influenced her attitude and performance at work: “the manager that i’m working for now is approachable and because i feel comfortable to tell her the things that are going on in my personal life and she’s able to 14 american journal of management vol. 25(2) 2025 help me with my job and knowing that i want to work harder. . .. so i’m very glad that my manager is approachable.” another participant recounted a comparable experience, emphasizing the value of a supportive approach: “we had a situation where we had a teacher that was struggling and when we met with this last friday, the very first question the principal asked was ‘how are things going? how are you doing?’ and that context was so incredibly important as we went forward to deal with the job performance issue because it was impacting things. and to show an openness and the employees know that it’s a safe place. it’s not gonna be talked about. it’s not gonna be, you know, it’s all about relationships. and i think if you treat people as a whole person and consider those things, you establish the kind of relationship that builds the trust to be able to share personal things.” from these examples, the participants’ experiences clearly underscore the importance of genuine connections, autonomy, a safe space for open communication, and creating trusting relationships in fostering strong manager-employee relationships that positively impact performance and well-being. these narratives highlight how managers’ genuine efforts to build meaningful connections with their employees—through empathetic actions, a deep commitment to understanding, and fostering trust—serve as a foundation for creating safe spaces for open dialogue. this combination of authenticity and support not only strengthens workplace relationships but also enhances employee morale, engagement, and overall performance. discussion the findings highlight the crucial role of managerial practices in promoting work-life balance, with flexibility, emotional support, and innovative strategies central to employees’ overall well-being. these practices align with existing research, emphasizing that supportive leadership is a key factor in improving employee satisfaction, retention, and engagement (hammer et al., 2007, 2009; kossek et al., 2010). specifically, fssb has been shown to foster organizational commitment, enhance organizational support, strengthen employees’ sense of belonging, and mitigate work-family conflict (choi et al., 2017; shanock & eisenberger, 2006). this study contributes to the growing body of literature highlighting the essential role of fssb in cultivating healthier, more productive work environments. flexible scheduling balancing daily work and personal responsibilities remains a significant challenge for employees, particularly in today’s fast-paced, always-connected work environment. this research examined managers’ strategies to help employees navigate and manage these demands. managerial practices are pivotal in enabling employees to effectively meet the dual demands of work and personal life. understanding these practices is essential for fostering a supportive workplace, where effective management helps employees fulfill their professional and personal obligations and enhances their overall well-being and job satisfaction. interviews with employees highlighted the importance of managerial behaviors such as flexibility, empathy, and proactive problem-solving. this study identified specific ways in which managers assist their team members in addressing daily challenges, emphasizing the value of tailored approaches that consider individual circumstances. the findings offer valuable insights into the dynamic relationship between managerial practices and employee well-being, reinforcing the critical role of personalized support in creating a healthier and more productive work environment. flexibility fosters trust and signals that managers value employees’ personal lives. understanding and empathetic responses further strengthen this relationship, making employees feel supported and appreciated. the emphasis on flexible scheduling reflects a broader organizational commitment to addressing individual employee needs, ultimately contributing to a culture of inclusivity and respect. emotional support providing emotional support is crucial in fostering a positive workplace culture where employees feel secure and valued. managers’ active listening, genuine care, and empathetic actions significantly enhance american journal of management vol. 25(2) 2025 15 employee engagement and morale. the emotional safety cultivated by these practices encourages open communication about personal and professional challenges, enabling more effective problem-solving and fostering trust within the organization. the findings from participants’ experiences underscore the importance of emotional support as a key managerial practice. managers who demonstrated awareness and attentiveness to employees’ needs were perceived as deeply invested in their teams’ well-being. participants highlighted examples where managers provided meaningful support during personal crises, such as offering referrals to counseling services, temporarily adjusting workloads, or simply taking time to listen. these actions alleviated stress and strengthened the bond between employees and their managers, reinforcing a sense of belonging and psychological safety. the themes of genuineness, openness, and empathy were central to how managers supported their employees emotionally. for instance, fostering a safe space for dialogue—such as through regular team check-ins or one-on-one meetings—allowed employees to express concerns without fear of judgment. participants noted that these practices cultivated an environment where they felt understood and respected, even when navigating non-work challenges. moreover, the ability of managers to follow up on personal matters showed attentiveness and a commitment to addressing individual needs over time. in addition to direct emotional support, managers also employed boundary-setting and flexibility to further support employees. for example, some managers proactively adjusted expectations or encouraged employees to take necessary time off, demonstrating a nuanced understanding of the interplay between personal and professional responsibilities. by showing vulnerability and willingness to share their experiences, managers normalized discussions about well-being, reducing stigma and encouraging employees to seek help when needed. these findings emphasize that emotional support is not limited to grand gestures but is often reflected in small, consistent actions. genuine care, attentiveness, and active listening create a ripple effect, fostering a workplace culture where employees feel empowered to bring their whole selves to work. this, in turn, enhances overall job satisfaction, loyalty, and productivity. modeling work-life balance managers’ behavior significantly influences team culture, particularly in the context of work-life balance. by modeling healthy practices and setting clear boundaries, managers empower employees to prioritize personal well-being and maintain a better equilibrium between professional and personal responsibilities. this behavior benefits individual employees and establishes long-term organizational norms that promote a healthier and more sustainable work environment. the findings from participants’ experiences reveal that managers who model work-life balance send a powerful message about the value of personal time. for example, managers who adhered to consistent working hours or openly communicated their boundaries inspired employees to reflect on and adjust their own practices. these actions demonstrated that prioritizing well-being is both acceptable and encouraged. participants noted that seeing their managers set these examples reduced feelings of guilt or hesitation when they, too, needed to prioritize personal matters, fostering a culture of mutual respect and balance. open communication emerged as a key theme in how managers effectively modeled work-life balance. managers who clearly articulated their availability and communicated boundaries—such as designated “off-hours” or times dedicated to family—helped normalize these practices for employees. this approach reduced the stigma often associated with taking personal time and underscored the importance of setting limits to protect mental and emotional health. employees described feeling reassured by managers’ transparency, as it created a shared understanding of expectations and encouraged them to adopt similar practices. additionally, autonomy and prioritization were critical components of this dynamic. managers who emphasized results over rigid schedules allowed employees greater flexibility in managing their workloads, promoting a sense of trust and independence. by focusing on outcomes rather than hours spent in the office, these managers demonstrated that work-life balance is achievable without compromising productivity. 16 american journal of management vol. 25(2) 2025 participants highlighted how this approach enhanced their efficiency and contributed to a greater sense of job satisfaction and loyalty to the organization. the influence of managers as role models extends beyond individual employees to shape organizational culture. by modeling behaviors such as leaving the office on time, taking regular breaks, and encouraging employees to disconnect outside of work hours, managers help establish norms that prioritize health and well-being. these actions foster an inclusive and supportive workplace where employees feel empowered to make choices that align with their needs. creative strategies innovation in management practices is crucial for addressing employees’ unique challenges in achieving work-life balance. the findings from this study underscore the value of creative solutions such as team-based scheduling and rotating remote days. these strategies demonstrate managerial adaptability and forward-thinking, fostering a collaborative and supportive work environment. by leveraging modern technological tools and encouraging team collaboration, managers enhance productivity and create opportunities for employees to balance their professional and personal responsibilities effectively. the diverse workforce highlighted in table 1: participant demographics underscores the importance of tailoring these strategies to meet varying employee needs. for instance, employees with children (56%) might prioritize flexible scheduling to accommodate school pick-ups or family obligations. conversely, younger employees without dependents might find value in opportunities for remote work, enabling them to balance personal growth activities such as further education or travel. recognizing and addressing these variations ensures work-life balance strategies remain inclusive and effective across different employee demographics. flexibility and attentiveness emerged as key themes in participants’ experiences, with managers actively listening to employee concerns and finding personalized solutions. for example, one manager allowed an employee undergoing weekly health treatments to work from home, demonstrating not only accommodation but also a deep understanding of individual needs. such practices reflect a commitment to employee well-being, fostering trust and loyalty within the workplace. this approach highlights the importance of managers’ willingness to adapt to unique circumstances, ultimately strengthening team cohesion and morale. another significant strategy is task delegation, as illustrated by the participant’s experience during black friday. by streamlining processes and distributing responsibilities equitably, managers can alleviate stress during peak periods while maintaining operational efficiency. these practices ensure that work is completed effectively and allow employees to focus on personal priorities, promoting a healthier balance. the role of open communication and trust is critical in these creative approaches. managers who encourage employees to voice their concerns and preferences empower them to take ownership of their work-life balance. this transparency fosters a culture of mutual respect and understanding, enabling more effective collaboration. moreover, offering autonomy in task management and scheduling builds employee confidence while reinforcing the organization’s commitment to flexibility. fostering quality manager-employee relationships strong manager-employee relationships are critical for creating a supportive and productive work environment. although the interview questions did not explicitly focus on this aspect, the emergent themes of approachability, trust, and empathy highlight the value of cultivating genuine connections between managers and their teams. the results indicate that managers building meaningful relationships with their employees foster a sense of security and motivation, positively impacting individual performance and organizational outcomes. the participants’ experiences emphasize that approachability is a cornerstone of effective leadership. managers who make themselves available and approachable create an environment where employees feel comfortable sharing personal challenges. this openness strengthens relationships and provides managers with the insight needed to offer personalized support. for example, one participant’s ability to confide in american journal of management vol. 25(2) 2025 17 their manager enhanced their motivation and commitment, illustrating the reciprocal benefits of trust-based relationships. another key theme is the importance of empathetic communication. managers who actively listen and demonstrate genuine concern for their employees’ well-being establish a foundation of trust. as one participant recounted, a principal’s thoughtful inquiry about a teacher’s personal well-being set the stage for addressing professional concerns compassionately and constructively. this example underscores how empathy can transform potentially challenging conversations into opportunities for growth and understanding. the findings also highlight the value of treating employees as whole individuals. managers who acknowledge and accommodate employees’ circumstances—whether through flexibility, understanding, or tailored support—reinforce the importance of human-centered leadership. by creating safe spaces for open dialogue, managers foster trust and encourage employees to share their concerns without fear of judgment or reprisal. these results suggest that fostering quality relationships requires a deliberate commitment to authenticity, empathy, and open communication. managers prioritizing these practices are better equipped to build cohesive teams and support employees’ personal and professional growth. furthermore, the ripple effects of such relationships extend beyond individual employees, contributing to a workplace culture that values connection, trust, and collaboration. limitations qualitative research represents the participants’ experiences and cannot be generalized although patterns emerge that can inform decisionand policymakers in an organization. in this study, participants shared their perceptions of fssbs, which may or may not reflect supervisor actions or supervisors’ perspectives. understanding employee perceptions, however, can be informative for organizations and may uncover unconscious bias in applications of fssb policies. participant views of fssbs are also likely to vary based on their need for and experience with such behaviors. in some cases, this may be limited. the context in which fssb requests are made, such as for employees working from home and those in the office, should also be examined (sargent et al., 2024). conclusion this study highlights managers’ critical role in fostering work-life balance through flexibility, emotional support, modeling healthy behaviors, and employing creative strategies. these practices not only enhance employee satisfaction but also improve organizational productivity. the findings emphasize that managers who actively engage in these practices contribute to a supportive workplace culture, where employees feel valued and empowered. beyond individual employee satisfaction, fostering work-life balance practices plays a pivotal role in shaping a positive organizational culture. organizations that prioritize employee well-being through flexible policies and supportive leadership retain talent and cultivate a more engaged, motivated workforce. in the long term, this commitment to balance can help reduce burnout, lower turnover rates, and improve overall morale, contributing to a more resilient organization. moreover, the importance of adaptability in managerial approaches cannot be overstated. as workplaces continue to evolve, managers must remain proactive in understanding and addressing the changing needs of their teams. incorporating employee feedback and staying informed about best practices in work-life balance will be crucial. the findings of this study also have significant implications for organizational policy. 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(2015). gender, work orientations and job satisfaction. work, employment and society, 29(1), 3– 22. https://doi.org/10.1177/0950017014559267 american journal of management vol. 25(2) 2025 21 appendix interview questions daily job and personal problem solving • can you share an example of a time when your manager helped you effectively manage a work assignment while considering your personal or family-related responsibilities? how did they assist you? • do you feel that your manager understands the challenges faced by employees in balancing work and family obligations? explain. • do you think your manager is effective in assisting employees with practical work-life issues and family emergencies? o if yes: in your opinion, what qualities or behaviors make your manager effective in this area? o if no: in your opinion, what qualities or behaviors would make them more effective in this area? • what advice would you offer to managers or leaders who are looking to enhance their skills in helping employees manage practical work-life challenges and family-related emergencies? emotional support • does your manager convey that they are approachable and open to discussing personal or family matters if needed? o if yes: how do they do that? could you provide an example of a time when you felt comfortable bringing up such topics? o if no: what makes you feel that they are unapproachable? can you provide an example? • can you think of any instances when your manager helped create (or hindered) a culture of psychological safety, allowing team members to freely express their feelings or discuss non-work issues without fear of negative consequences? role model behavior • what practices, if any, does your manager employ to communicate their boundaries and availability outside of work hours, while still remaining accessible to the team when needed? • do you feel that your manager’s ability to model effective (or ineffective) work-life balance influences your own approach to managing family and personal priorities? can you describe a specific instance when this influence was evident? • in what ways does your manager communicate or demonstrate that they prioritize their own wellbeing and personal commitments? can you provide an example of how this approach has positively influenced the team’s work culture? creative management • what strategies does your manager use to allocate tasks or projects based on employees’ strengths and availability, in a way that optimizes team performance and individual work-life integration? • have you encountered situations where your manager supported the use of alternative work arrangements (such as compressed workweeks or job sharing) to accommodate personal or family commitments? o how did using (or not using) such arrangements impact the team’s effectiveness? • has your manager ever encouraged employees to think outside the box when it comes to finding solutions that benefit both their work and personal lives? o if yes: tell me about that. how did they do that? american journal of management vol. 24(3) 2024 97 evaluating generation alpha through the lens of organizational practice babita srivastava william paterson university in this paper, we use insights from ob and ot to analyze ways in which firms can help serve the needs of newly emergent organizational subjects and consumers. our analysis is based on newly emergent demographics that differ from earlier generations in significant, non-trivial and unique ways. this presents both a threat and an opportunity to firms, as they search for consumers to satisfy and organizational subjects to deploy in the service of economic success. we identify ways in which firms can deploy demographic shifts to their advantage and identify ten emerging industry segments where these shifts will prove critical. introduction the transmission of values, beliefs and behaviors across generations has occupied researchers and theorists in organizational behavior over time (suddaby & jaskiewicz, 2020), leading to a variety of theories of how such characteristics are generationally transmitted (gill & mathur, 2023; joshi, dencker & franz, 2011). the changing demographic landscape in the 21st century, and especially the emergence of a new generation of worker, subject and consumer, has been used by researchers to analyze firm structure (maciaszczyk, & kocot, m. 2021; woods, 2016), changing strategies of workplace motivation (kultalahti & viitala, 2014), emerging trends in organizational leadership (barbuto & gottfredson, 2016), and matters relating to organizational socialization (durocher, bujaki & brouard, 2016). such studies are not only useful, but essential to document the changing demographic landscape of the us economy. it has been estimated that over one-third of the population of the united states was born after 1980, presenting an important demographic shift. in this paper, we attempt to analyze this shift from the point of view of a firm, asking how they can leverage their understanding of one generation (such as “millennials”) to that of future generations (such as “generation alpha”). scholars in organizational behavior have attempted to use such insights in the realm of the workplace (ahmad, idrus, & rijal, 2023), and in the world of human resource management (ehrhart, mayer & ziegert, 2012). in this paper, we attempt to use insights from organizational behavior and psychology to see how firms can design products and services for future generations. the demographic shift among us youth shift is important on a number of counts. the new generation is technologically very sophisticated (having used the internet for their entire life), much more diverse than previous generations (over 40% identifying as non-white), and facing very different economic conditions (high student loans, exposure to the economic downturn). they tend to be more invested in education, with over 45% achieving a college degree and around 19% enrolling for graduate school. their educational aspirations tend toward professional degrees in business and science/technology to a greater degree than their previous generations. 98 american journal of management vol. 24(3) 2024 further segmentation of the new generation of us youth have tended to put them in two categories, millennials and generation alpha (with generation z in the middle, which we are not considering here for greater demographic contrast). millennials are defined as those who were born between 1980 and 2000, while those born after 2010 generally get classified as generation alpha. thus, while generation alpha is still composed of minors, it is a matter of time before they start entering the workforce, and they have already begun to assert themselves as consumers (thomas & shivani, 2020). in this paper, we wish to focus on the manner in which organizational researchers can assist practitioners prepare for generation alpha. we use examples from the organizational experience with millennials as a way in which we can anticipate the requirements of generation alpha better, both in terms of capitalizing on past successes and in avoiding the pitfalls faced by those organizations and products that failed. we often extrapolate from information about generation z to derive generalizations about generation alpha, but the demographic contrasts we discuss generally hold in 2024. demographic definitions: millennials and generation alpha millennials millennials are americans born between 1982 and 2000, making them the largest generation in america with a population of around 80 million (u.s. census bureau, 2015). most members of this generation are of working age and will be an important engine of the economy in the decades to come. millennials are also more diverse than previous generations, with 44.2% being part of a minority or ethnic race (u.s. census bureau, 2015). millennials are the first generation to have access to the internet during their informative years. many of them have come of age during a difficult time in our economy, with the first group of millennials only in their 20’s during the 2008 financial crisis. millennials tend to be skeptical of traditional advertising and they respond differently to advertisements than previous generations (belch, 2015). generation alpha generation alpha are americans that are generally considered to be born after 2010 (jha, 2020). they have had a unique childhood so far. they were developing their personalities and life skills in a socioeconomic environment marked by chaos and uncertainty. generation alpha have an advanced relationship with technology, which they have honed from a very early age. this up and coming generation spends up to 3 hours a day on their computer for non-school related activities, which includes 2 hours of youtube (most visited site by generation alpha) every day, and they are described as “independent, hard-working, driven, conscientious, socially conscious, socially connected and entrepreneurial” (hulyk, 2015). they are the first generation to be comfortable with natural language processing on mobile devices, use chatgpt and other ai products extensively. one thing to note about them is that they are natural information seekers. this can be attributed to them multitasking on up to 5 screens at a time (more than any other generation), using their phone, tablet, smart watch, laptop, and tv (peterson, 2014). they know how to locate the information they are looking for using different platforms. generation alpha has shown that they have a hard time getting attached to things. this can be attributed to their short attention span of 8 seconds and them growing up in a constantly changing business environment that lead to them witnessing numerous technologies and brands go from relevant to obsolete. even though they are still young (the oldest of this generation barely out of high school), generation alpha are estimated to have a buying power of about $44 billion (armstrong, 2016). differences between millennials and generation alpha although millennials and generation alpha have many similarities, they share some key differences that are important to note. compared with millennials, generation alpha tend to be more conservative in spending their money. while millennials are children of typically affluent baby boomers, generation alpha are children of generation x, who are faced with harsh economic conditions. given the parental influence of generation alpha and the current economic condition, generation alpha are more careful in where they spend their money (wood, 2013). another difference between them is that generation alpha is american journal of management vol. 24(3) 2024 99 more entrepreneurial than millennials. 72% of high school students (generation alpha) have said they want to start a business someday, compared to 64% of college students (millennials). additionally, 61% of high school student would rather be an entrepreneur instead of an employee when they graduate college, compared to 43% of millennials (schawbel, 2014). for generation alpha, they have less product loyalty than millennials. generation alpha give more importance to the product itself over the companies that make them and they are willing to change brands without hesitation in search of a higher quality product. these differences can come in handy when marketing to members of generation alpha. they are independent and would not respond well if brands grouped them with millennials in their marketing efforts. generational differences: what do we know? each generation differs from the one before it in certain key respects. the current differences between millennials and generation alpha relative to earlier generations are manifold and various, but a few salient aspects emerge. we highlight three aspects as relevant to our research, relation to the way in which these generations learn new things, their radically different use of social media, and the way in which they participate in the economies where they are consumers. millennials and generation alpha learn differently when it comes to millennials and generation alpha, both have a short attention span compared to generations before them. this needs to be considered during their learning and informative years. with that in mind, when creating a syllabus for school, they need clarification of the essentials. many teachers experience is that today’s students do not function well in courses with a loosely organized syllabus. that is why instructors must deliberately over-estimate the desire of students for clarity (wilson and gerber, 2008). for this reason, public high school teachers have to submit a course syllabus and pacing guidelines at the beginning of each year. as they become accustomed to this, students expect the same predictable structure from college professors. we also know that millennials and generation alpha learn differently by decreasing the amount of content in general education courses. they can be overwhelmed by the vast amount of digital information available, so thoughtful processing and critical analysis, rather than content-mastery, is stressed. when teachers shorten both reading content and coverage expectations, in favor of deeper explorations, it made for more engaged students and deeper discussions. examples of this are key-sentence extractions and critical summaries of assigned readings (wilson and gerber, 2008). millennials and generation alpha learn differently through playing video games. there are more than 323 million people in america, and 170 million of them play video games. according to a 2015 study, 56% of the people that played video games were under the age of 35 (gates, 2015). this tells us that majority of the people playing video games are millennials and generation alpha. in terms of learning, what video games do is force gamers to manage long, mid, and short-term objectives, which in turn, teaches them to determine priorities and discern relationships. furthermore, contrary to popular belief, this can train the mind of millennials and generation alpha to think in “more cognitively complex ways” (wilson and gerber, 2008). use of social media the millennials and generation alpha use social media in similar ways and it has become an important part of their lives, partly because social media has become much more than a way to connect about personal matters. one unique way they use social media is by accessing news. no longer is this generation consuming news through traditional platforms. according to a 2015 study titled how millennials get news: inside the habits of america’s first digital generation conducted by media insight project, 88% of those surveyed received news from facebook at least occasionally, 83% from youtube, and 50% from instagram. furthermore, sizable minorities of millennials also reported getting news from pinterest (36%), twitter (33%), reddit (23%), and tumblr (21%). while these numbers are smaller, they represent quite large percentages of those who use these social media platforms at all. additionally, they participate in news in ways that are not possible through more traditional platforms. according to the same study, 6 in 100 american journal of management vol. 24(3) 2024 10 say they regularly “like” a posted news story, headline, or link. nearly half, 42 percent, say they regularly post or share news content to facebook themselves, and 34 percent say they regularly comment on news stories, headlines, or links. at the same time, millennials are using social media as a way to expose themselves to different opinions and views. this survey also states that “70 percent of millennials say that their social media feeds are composed of a relatively even mix of similar and different opinions to their own. just 12 percent say the opinions they see in social media are mostly similar to their own. a slightly larger number, 16 percent, say, interestingly, that the opinions and viewpoints they see are mostly different than their own” (how millennials get news: inside the habits of america’s first digital generation, 2015). not passive consumers millennials and generation alpha are part of a participation economy. a participation economy is when customers are able to actively participate, help create, and be included as partners in the brands they love. for them, it’s almost an expectation that companies should want to seek out their opinion. for example, craft beer brewer samuel adams took an unprecedented step by letting facebook fans create a new brew. the company decided gather ideas by asking their facebook fans input in determining their next beer. samuel adams got feedback from their fans regarding a beer’s color, clarity, body, hops, and malt. the ideas that received the most votes were made into a beer and served at the popular festival south by southwest in austin, texas (fromm & garton, 2013, pg. 9-10). another example of companies taking advantage of the participation economy is when pepsi attempted to target millennials with their “live for now” campaign. this campaign tried to engage the millennial generation by focusing on being where they are, talking in their language, and connecting with them in ways that keep them feeling like they want to be part of their brand. in 2012, for one of its concert series featuring major artists, pepsi used the tweets from the live audience in determining songs to be played and encores (fromm & garton, 2013, pg. 84). this generation wants and craves a higher degree of engagement. it’s important that companies do not do this as a rarity and continue to engage millennials and generation alpha. even though brands can enjoy a big spike in interest when they engage, they risk losing their customers when they fail to continually engage them after their big even or launch. an example of this continuing engagement is mtv’s strategy for their teen wolf tv series. in 2012, teen wolf had just launched its second season. in the time between the first and second season, the show was steadily growing its fan base. during this time, mtv kept its fans (who were hungry for more) engaged through social media. they used twitter, facebook, tumblr, and youtube to create a monthly online campaign dedicated to teen wolf fans, which included solving a mystery through online interactions with the show’s creator and cast members. in addition to this, mtv launched a contest that rewarded a fan with a trip to the set of teen wolf as they were shooting the second season. this resulted in a positive outcome for mtv and the show. when the second season began, teen wolf had increased in popularity, gained 50% more facebook fans, and received a 26% bump in their ratings. according to stephen friedman, president of mtv at the time, “this strategy allowed us to create multiple layers to a season, leading to a much tighter relationship between audience and shows, which is always appealing to sponsors” (fromm & garton, 2013, pg. 93). for a company, it is no longer enough to provide a product or service, it is now just as important to engage the consumer in the product development and marketing process. millennials as industry disruptors as millennials reach their prime spending and working years, they are proving to be a disruptive force. their sophisticated use of technology sets them apart from previous generations. while most generations have experienced technological advancements, the sheer amount of computational power and access to information that millennials have had at their fingertips from an early age is unmatched by previous generations. their close relationship with technology has set high expectations for companies trying to reach them. this has led to multiple industries being disrupted because millennials are now becoming important consumers in the market place and companies that don’t keep up with their demands will not be able to survive. one of the industries being disrupted by millennials is the cable industry. this insight will american journal of management vol. 24(3) 2024 101 be important for companies that begin developing products for generation alpha because trends set by millennials will only sharpen with generation alpha. cable industry across the board, cable companies are seeing a shift in viewing trends. that is because more and more millennials are choosing to stream video through over-the-top(ott) services, which deliver content through the internet without the need for traditional cable. less than half of millennials say they are paying for cable (bliss, 2016). furthermore, over half of millennials are spending their money on online video subscriptions like netflix, amazon prime, and hulu plus. these services are more likely to be a part of a millennials budget than cable in an average month (bliss, 2016). with this shift in viewing trends, cable companies have begun focusing more on online video streaming. in 2015, nielson reported that 40% of all u.s. households with a tv and internet used streaming services like netflix, amazon prime, and hulu plus. millennials demand for standalone and tailored services which provide more flexibility and less commitment, have already shifted the strategies of multiple cable companies. for example, in 2015, verizon said that fully one-third of its fios customers had chosen the company’s custom tv skinny bundle, which gives the customer the option to customize their channels and provide more flexibility. another example is cablevision, which is now offering standalone streaming services such as hbo now and hulu to meet the demand of millennials choosing to video stream over pay-tv (isidore, 2015). successes and failures to better anticipate the needs of generation alpha as consumers, it is important to look at the ways companies have effectively marketed to millennials and examples of companies that were unsuccessful at marketing to them. before attempting to market to millennials, companies need to know their pre-purchase habits, which include asking their friends and family, checking review sites, and searching multiple places for cheaper prices, deals, and coupons (white, 2015). this shows that millennials research potential purchases by using the resources available to them. when it comes to reaching millennials, companies need to remember that they are socially conscious and social media and internet advertisements are more effective than tv and radio advertisements. marketing to millennials through social media can be complicated because they like to connect with companies on social media, but only through their own terms. most millennials follow and “like” companies through social media but to get them to interact with a brand, there needs to be a promotion, coupon, or a post that applies to them (white, 2015). an important aspect for companies to remember is that millennials can be easily turned off by advertising on social media that is perceived as too aggressive or inauthentic. this inclination will sharpen with generation alpha. successes one characteristic to know about millennials is that they are socially conscious. one company that understood this and implemented a marketing plan is mondelez international, which makes oreo cookies. in 2012, they took a bold step and decided to show their support for equality by creating an ad that had a rainbow color oreo cookie. this ad was posted on facebook and 38,000 comments and 226,000 likes, with most of the responses being positive (neal, 2012). millennials believe in equality for all and this ad gained much support from this. another example of this comes from toms, a company that designs and sells shoes. toms has a unique business model, which for every pair of shoes they sell, they donate a pair to someone in need. this business model has helped toms grow into a multi-million dollar company and millennials are happy to support this cause because “the company has created a culture where philanthropy and profit can co-exist and has encouraged customer interaction. customers can share their stories, experiences, and photos as a way to raise awareness” (weinstein, 2015). toms allowed millennials to support a cause they believed in and made them feel they were making a difference by purchasing their shoes. when marketing on social media, companies should keep in mind that millennials are more responsive when they are rewarded for their participation. for companies, this can be an opportunity to let their 102 american journal of management vol. 24(3) 2024 customers know that they are not just a number and show that they are interested in building a relationship with them. for example, sprinkles, a cupcake company based out of beverly hills, california, employs this strategy on facebook. they do this by posting a secret word on their facebook page that the customer can use to receive a free cupcake (white, 2015). another example of this revisits the company mondelez international. in 2014, at the south by southwest festival, the company set up a “trending vending lounge”, a “vending machine that invited attendees to print a custom 3d edible oreo based on a trending topic/hashtag on twitter…in real-time” (kirkpatrick, 2014). failures along with looking at examples of brands that succeeded at marketing to millennials, it’s equally beneficial to look at examples of when they were unsuccessful in their efforts to market a campaign or product to millennials. this provides a deeper understanding of the way millennials respond to advertisements and what companies can avoid when marketing to generation alpha. for companies, being perceived as young and dynamic is very desirable for their brand image. one way companies try to achieve this is by using “emojis” in their advertising and communications. an emoji is a “visual representation of an emotion, object or symbol” (da costa, 2015). they have become a popular way for millennials to communicate and over six billion emojis are sent around the world each day (johnson, 2015). as a result, companies have started using emojis for everything from communicating with customers to customer feedback. unfortunately, sometimes when companies use emojis to connect with millennials, they can be perceived as trying too hard and awkward. it’s as if your parents are trying to connect with you by using the same language your friends use. this can make the attempt seem inauthentic and that can be a huge turn off for this generation. millennials have a sensitive radar that starts going off whenever they sense somebody trying too hard to communicate with them. while it is true that 53% of millennials think using emojis in text help them better understand each other, it is also worth noting that 60% of millennials feel that businesses should tone down the use of emojis (gitlen, 2016). for example, during her campaign, to reach more young voters, hillary clinton often used twitter. on august 12, she tweeted “how does your student loan debt make you feel? tell us in 3 emojis or less.” this is a sensitive topic since 43.3 million students have taken out loans to finance their education and the total outstanding student loan debt in america is at $1.35 trillion (gitlen, 2016). this tweet attempted to incite a conversation with millennials who were struggling to pay back their loans in a fun and relatable way. instead, it failed to capture the attention it was trying to get and was mocked by many millennials. some participated and responded with three emojis but many of the responses ended up poking fun at the candidate for trying too hard and using emojis to talk about a serious issue. another company that has used emojis to reach millennials is chevrolet. on june 22, 2015, chevrolet released a press release in all emojis. the press release stated “words alone can’t describe the new 2016 chevrolet cruze, so to celebrate its upcoming reveal, the media advisory is being issued in emoji, the small emotionally expressive digital images and icons in electronic communication.” the company also produced a tv commercial that features various focus groups evaluating 2016 chevy cruze using only emojis. this came off as trying too hard and it missed its mark. the tv ad on youtube has 295 likes and 1,509 dislikes, which indicates that millennials are not impressed with this attempt to reach a younger audience. we can also look at fafsa for examples of when marketing to millennials has backfired. the federal student aid agency posted a photo meme on twitter of kristen wiig from the movie bridesmaids, with the caption “help me. i’m poor.” this tweet immediately sparked a controversy and received a flurry of negative tweets which accused the organization of being insensitive to the college students they serve. as mentioned above, student debt can be a sensitive topic, especially to the millennials that are affected by it. while fafsa’s intention was to relate to millennials and the reality of their financial needs, their failure to be more considerate forced them to post an apology immediately (ross, 2014). american journal of management vol. 24(3) 2024 103 google glass alongside rejecting marketing strategies, millennials have also rejected products geared towards them. google glass is a famous example of this. google glass is an optical head-mounted display designed in the shape of a pair of eyeglasses. it was the must have gadget that was going to set the gold standard for wearable computers, but it failed to catch on and was not embraced by millennials. one reason google glass failed was that it was released earlier than it should have, which caused it to lack in its utility and aesthetics. rather than taking their time developing google glass and keeping it a secret, “google trotted it out as an early ‘beta’ product that was somewhat functional but finicky and literally in your face” (metz, 2015). google glass was plagued with bugs and technical issues. google could have gotten away with having an unattractive and inconvenient design, with a bulky battery, if it performed its functions seamlessly. “glass does a handful of things—it can take videos, give you turn-by-turn directions, make phone calls, or search the web—but it doesn’t do any of them all that well” (metz, 2015). google’s intentions were in the right place with google glass because it attempted to create an assistant that allowed people to consume digital information at a glance, without reaching for your smartphone. the problem that led to its demise was that people couldn’t see the value in it. google glass also raised privacy concerns, which received a great deal of negative attention in the press. millennials feared it was invading their privacy and people were afraid of being recorded during private moments. “right now, the implicit narrative in the popular press is that many people could be surreptitiously monitored by users of google glass at any time, and do not perceive any kind of value in return” (hong, 2013). this perceived invasion of privacy contributed to the failure of google glass. the concern of privacy has come up many times in the past when new technology is introduced. for example, when cameras in the 19th century made it easy for consumers to take photographs in seconds, it sparked a public outrage. some of the fears at the time were that people would use cameras on public beaches to take pictures of females bathing or people could have their picture taken while acting foolishly (hong, 2013). while this type of concern might still exist today, it has largely been overcome due to transformations in technology and change in social norms and laws. another, more current, example where invasion of privacy became an issue is facebook’s popular news feed. before news feed, you could only see a person’s status by going to their personal page. what news feed did was bring together the status updates into one place. when it was first introduced, it was met with much negative feedback. many facebook groups were formed denouncing news feed and even mark zuckerberg went public to respond to the press and defend news feed. (hong, 2013). facebook stood its ground and did not budge on this new way of interacting with one another, and it proved to be a success. in just few months, much of the negative feedback faded away because people began to see the value in news feed and embraced it (hong, 2013). these examples can give us an insight to the challenges companies can expect to face when marketing to generation alpha. the lesson can be learned from this that over time, expectations tend to change about technology and understanding the real value in new and innovative technologies is a big factor driving that change. trends for generation alpha as companies try to reach generation alpha, it’s important they know some key trends about them. these trends include generation alpha’s focus on innovation, insistence on convenience, underlying desire for security, and tendency toward escapism. members of this generation were born into technology and they have an inherent comfort with the virtual world. they have never seen a world without the internet. as they grew from pre-teens to teenagers, great advances were made in technology which continue today. innovation because of this, technological product innovation is an expectation for generation alpha. “this generation is not surprised by product obsolescence and has a high expectation for the pace of ‘more, smaller, and better’ versions of technological products. rather than feel outpaced and over-charged by planned obsolescence (as evidenced by their more frugal or market-cynical parents and grandparents), these consumers are likely to feel that constant innovation is a given” (wood, 2013). because this generation has 104 american journal of management vol. 24(3) 2024 had more choices in the market place than their predecessors, they rely on a products innovation, not just technologically but also in terms of design and aesthetics, to make their choices. convenience another trend is their insistence on convenience. this demand may be inherited from their parents, who are mostly part of the generation x. members of generation x are roughly born between 1966 -1976. “many gen x-ers were latch-key kids, responsible for taking care of themselves and siblings as they grew up. they aren’t necessarily expert multi-taskers and have a heavy reliance on convenience goods. this use of convenience goods in the home is likely to rub off on generation alpha” (wood, 2013). this demand for convenience is also a result of increased pressure on this generation to excel from an early age, so naturally they prefer products that offer convenience. for this reason, this generation is less affected by the characteristics of this new business environment than their parent’s generation, which include delivery charges for products, consumer monitoring, and lack of brick-and-mortar presence. like millennials, generation alpha are less concerned about privacy issues, if the result is convenience in their products (wood, 2013). security it is important to note that members of generation alpha were growing up during the 2008 financial crisis and “research from both the recessionary periods around the great depression and the 1970’s show that kids who grow up in recessions are often less confident, ‘settle’ in lower paid jobs, and are more fearful about financial difficulties” (wood, 2013). however, how children respond to this kind of environment can differ by age, family situation, and personality. because members of generation alpha experienced their parents being impacted by the financial crisis, they are more concerned with securing their future. that is why, in general, there is a greater interest in saving money and spending conservatively. escapism the last trend for generation alpha is escapism. escapism, defined by the merriam-webster dictionary, is the tendency to seek distraction and relief from unpleasant realities, especially by seeking entertainment or engaging in fantasy. this is very relevant for this generation. this desire to escape can be linked to the technology advances that “1) make entertainment products like video games more real and compelling, 2) offer greater 24-7 access to social networks, and, 3) offer greater mobility in devices that offer escapism (e.g., mobile phones with media and internet availability)” (wood, 2013). because of this trend, powered by computer-based technology and products, generation alpha is likely to be a strong market for goods that cater to escapism. it’s important to note this trend has also been linked to childhood obesity and may gradually damage the skills in face-to-face social encounters and relationships (wood, 2013). these trends and factors will have to be considered in order to successfully market to this new generation. serving generation alpha: an industry-specific observation as an example of how different businesses may serve the new generation consumer, we wish to focus on the restaurant industry as an example of the way in which firms can respond to a new generation of consumer. the restaurant industry has already begun to assess and tailor to the needs of generation alpha. when it comes to food, generation alpha wants convenience, choice, and customization. this generation is influencing restaurants market strategies, menus, and designs. restaurants like denny’s, taco bell, and toppers pizza are just a few companies attempting to market to this group of people. john dillion, chief marketing officer for spartanburg, s.c.-based denny’s corporation has said “like other brands, we definitely are very in tune with the growing needs of generation alpha” (ruggless, 2016). denny’s understands that generation alpha is tech-savvy and socially connected through their devices, which makes them a very informed consumer. this generation has so much knowledge at their fingertips so “they fact-check everything and turn to their online communities for advice and answers” (ruggless, 2016). with this information at hand, denny’s is communicating with generation alpha through social media platforms like tumblr, twitter, and instagram. for example, a recent tweet by denny’s included a american journal of management vol. 24(3) 2024 105 poll, with more than 7,350 votes, that asked “favorite kin? 1) nap 2) pump” and pumpkin won with over 53 percent of the votes. this is denny’s way to connect with generation alpha outside of their restaurants. “what we are trying to do in the digital and social space is to extend the diner booth and conversations that happen in the diner booth to play directly into that generation alpha mentality” said john dillion from denny’s (ruggless, 2016). because generation alpha is a diverse group of people, they are more comfortable and familiar with different cultures, races, and ethnicities than previous generations. this also means that they have been exposed to global and regional foods, as well as, the health and wellness benefits of their diets. in response to this increased health awareness taco bell has obtained american vegetarian association certification for 12 menus items and has listed over 5.7 million possible vegetarian combinations available at their restaurants (ruggless, 2016). it is also important that generation alpha know where their food is coming from and toppers pizza is listening to them and making changes. scott iversen, toppers’ vice president of marketing has indicated that toppers is investing in a new point-of-sale system, expected to go system wide by late 2017, that will disclose sources of ingredients data on each check (ruggless, 2016). restaurants are also improving on their designs to better meet the needs of generation alpha. having a social atmosphere has been key for some restaurants that want to attract this generation. this push to have a social aspect to a restaurant blurs the boundaries between restaurants and hangout spots. for example, manchester center, a firm that designs hospitality and leisure destinations recently designed a social club for their client in el paso, texas. this social club included food and beverages service, along with many opportunities to engage social interactions, including arcade games and foosball (ruggless, 2016). restaurants should keep updating and innovating their strategies to appeal to generation alpha. this generation is always looking for what’s next and what they haven’t seen before. as mentioned above, restaurants are already catering to generation alpha’s needs by changing and updating their designs, technology, marketing strategies, and their menus. in order to keep in touch with generation alpha, restaurants must connect with them through multiple social media platforms. it’s through the different social media platforms that restaurants can get their messages seen. future industry segments in the previous section, we discussed a mature industry (restaurants), and how it could respond to the demographic changes that it encountered as millennials and generation alpha became consumers. in this section, we identify ten industry segments that are emerging and poised to become highly relevant industries in the industrial landscape of the future (manyika, et al., 2013). we use our understanding of behavior by the new demographic to recommend what product categories might be useful to consider when attempting to serve millennials and generation alpha as consumers in these newly emergent industries. of course, traditional markets are not going to decline or go away, but the important variable to consider here is the emergence of new markets and industry segments, which will serve millennials and generation alpha consumers predominantly. mobile internet in a matter of few years, internet enabled devices have gone from a luxury for a select few to a part of everyday life for more than a billion people with smartphones and any other internet enabled device. the technology of mobile internet, which consists of wireless technologies, small, low-cost computing and storage devices, advanced display technology, and advanced low-cost batteries is growing at a very fast pace and is being used to increase efficiency in business and the public sector. by the year 2025, mobile internet has a potential economic impact of about $3.7 trillion-$10.8 trillion. firms need to realize that the mobile internet affects not just those firms that are in the industry, but those who can be potentially disrupted by it (in the way that uber is disrupting the taxi industry). automation of knowledge work automation of knowledge work is intelligent software systems that can perform knowledge-work tasks. this can be used to augment the talents of highly skilled employees. as this is done and knowledge worker 106 american journal of management vol. 24(3) 2024 task can be performed by machine, it is possible that some skilled jobs could become fully automated. by year 2025, automation of knowledge has a potential economic impact of about $5.2 trillion-$6.7 trillion. firms can use the automation of knowledge work to develop newer customer segments, more holistic models of customer service (like personalized medicine or 360 degree financial systems) and a better understanding of market needs. in order to do that, they can harness the power of generation alpha workers, who are not as intimidated by such regimes of automation than earlier generations. the internet of things the internet of things embeds sensors and actuators in machines and other objects to connect them with each other. this can be used to monitor the flow of goods through a factory and also monitor the flow of water through pipes. the internet of things allows businesses and public sector organizations to manager their assets, increase performance, and create new business models. by year 2025, internet of things has a potential economic impact of about $2.7 trillion-$6.2 trillion. the new generation represented by millennials and generation alpha is more likely to use, and devise uses for iot that will provide avenues for increased productivity. this could be in the realm of work (rfid-based inventory control), leisure (gaming), and domestic use (security, energy efficiency, shopping applications) and a variety of other uses. cloud technology cloud technology can help deliver any computer application or service over a network or the internet. cloud technology is already enabling the growth of internet-based services, for example, search, streaming services, and offline storage of personal data. this technology will be able to provide greater flexibility and responsiveness for companies and government. by year 2025, cloud technology has a potential economic impact of about $1 trillion-$6.2 trillion. a variety of vendors offering customized cloud services are going to make traditional paradigms of it services obsolete, and newer generations of workers are better suited to take advantage of cloud services, and future versions of it, such as fog computing. also, cloud computing is better suited to serve the needs of younger consumers, who seek applications and programs that run on mobile devices. advanced robotics advanced robotics are capable robots with enhanced sensors, dexterity, and intelligence. they can be used to automate many tasks. these robots can allow the substitute for human labor in multiple manufacturing tasks and they can be applied in service jobs as well, such as cleaning and maintenance. by year 2025, advanced robotics has a potential economic impact of about $1.7 trillion-$4.5 trillion. automated and precisely programmed robots can help obviate the need for humans to participate in hazardous work, and also provide precision in work that requires high levels of dexterity, such as the assembly of highly calibrated electronics. they can also help in providing long term care for an ageing population, perform complicated repairs of spacecraft, and work in atmospheres where human life is unviable (such as underwater). autonomous and near-autonomous vehicles autonomous or near-autonomous vehicles can navigate and operate autonomously in many situations. this technology can spark a revolution in ground transportation. the possible benefits from this technology include better safety, reduction in co2 emissions, and increased productivity in the trucking industry. by year 2025, autonomous or near-autonomous vehicles have a potential economic impact of about $0.2 trillion$1.9 trillion. automated vehicles have the potential to transform the trucking industry, transportation technology, reduce accidents and serve the needs of those consumers whose ability to drive has been impaired by age or disability. next-generation genomics next-generation genomics are fast, low-cost gene sequencing, advanced analytics, and synthetic biology that can allow scientists to test how genetic variations can bring about specific traits and diseases. american journal of management vol. 24(3) 2024 107 this can allow scientists to improve medicine, agriculture, speed up process of drug discovery, and write dna. by year 2025, next-generation genomics has a potential economic impact of about $0.7 trillion-$1.6 trillion. the emerging trends of personalized medicine have the potential to lengthen life expectancy, provide highly specialized regimen to patients facing life-threatening injuries, calibrate the delivery of nutrition to infants, and provide monitoring facilities to a variety of patients. energy storage energy storage technology are devices or physical systems that store energy for later use. in the coming years, advances in energy storage will make electric vehicles cost competitive with vehicles that use gas. another benefit of this is it can potentially bring power to developing countries in areas that have never had power. by year 2025, energy storage has a potential economic impact of about ~$0.1 trillion-$0.6 trillion. millennials and generation alpha are more likely to use a lot of energy-consuming devices on the move. the presence of dependable energy sources such as self-charging phones, solar-powered devices and selfrecharging batteries, which are renewable and present a smaller carbon footprint than traditional batteries, are a welcome source of optimism to conservationists and convenience-seekers alike. 3d printing 3-d printing uses additive manufacturing techniques that create objects by printing successive layers of material using digital models. with this technology, an idea can go straight from a 3d design file to a finished product, eliminating the needs of some manufacturing steps. it can also reduce the waste that is created in the manufacturing process and create objects that are difficult to produce with current and traditional techniques. by year 2025, 3-d printing has a potential economic impact of about $0.2 trillion$0.6 trillion. advanced materials advanced materials are materials that have superior characteristics such as better strength and conductivity or enhanced functionality such as memory or self-healing capabilities. this kind of material could help create new types of displays and efficient batteries and solar cells. by year 2025, advanced materials have a potential economic impact of about $0.2 trillion-$0.5 trillion. advanced oil and gas exploration and recovery advanced oil and gas exploration and recovery are advancements in exploration and recovery techniques that make extraction of additional oil and gas economical. as these techniques improve, it will provide access to more energy and help industries grow that rely on it. also, it can help unlock new types of energy sources like coalbed methane, tight sandstones, and methane clathrates. by year 2025, advanced oil and gas exploration and recovery has a potential economic impact of about $0.1 trillion-$0.5 trillion. renewable energy – solar and wind renewable energy is energy that come from sources such as solar, wind, hydro-electric and ocean waves that reduce the harmful impact on climate. these energy resources are being adopted by advanced economies. also, developing countries like china and india have also set plans for solar and wind adaptation. by year 2025, renewable electricity has a potential economic impact of about $0.2 trillion-$0.3 trillion. conclusion in this paper, we attempted to use insights from organizational behavior and organizational theory to analyze ways in which firms can help serve the needs of newly emergent organizational subjects and consumers. in that respect, our research joins those who study the impact of demographic shift on firm structure (woods, 2016), workplace motivation (kultalahti & viitala, 2014), organizational leadership (barbuto & gottfredson, 2016), socialization (durocher, bujaki & brouard, 2016). broadly, our study 108 american journal of management vol. 24(3) 2024 responds to a call by researchers to study the impact of generations on organizations (joshi, dencker & franz, 2011). we conclude that the demographic shifts in the workplace and in the consuming workforce presents formidable challenges to firms, some of whom view this as an opportunity, while others experience as a debilitating threat. we also analyze products that worked and products that failed, in an effort to conclude ways in which firms may create products for generation alpha. this can be based on the understanding that new generation consumers learn differently, use social media differently, and actively participate in the creation of products, through engaged feedback with firms. our analysis is based on the realization that the new emergent demographic differs from earlier generations in significant, non-trivial and unique ways, which presents both a threat and an opportunity to firms, as they search for consumers to satisfy and organizational subjects to deploy in the service of economic success. it is well known that as generations emerge into maturity, it presents multiple challenges for firms. however, in this age, the challenges have become much more intense due to technological trends. millennials have been at the forefront of this. these trends will carry on and become more relevant with generation alpha. generation alpha will define the immediate future of consumer behavior. companies that learn how to market to this generation and engage with them will have a competitive advantage in the marketplace. references ahmad, m.i.s., idrus, m.i., & rijal, s. 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(2015, march). how millennials get news: inside the habits of america’s first digital generation [scholarly project]. retrieved from http://www.mediainsight.org/pdfs/millennials/millennials%20report%20final.pdf 58 american journal of management vol. 25(4) 2025 recent anti lgbtq+ laws: managers should adapt policies michael t. zugelder old dominion university recent law has placed management in a conundrum concerning lgbtq+ employee civil rights. established law has protected those employees from discrimination. many employers have led the way to that end. yet certain federal and state legal efforts now seek to roll back rights, expose liability, and loss to employers that continued to protect them. management can honor both its obligations to employees and to the firm, by carefully redesigning policies and practices to avoid triggering concerns while still protecting the civil rights of all employees that the law has established. keywords: managers, adapt, lgbtq+, policies introduction although progressive state and local laws began to protect lgbtq+ civil rights more quickly (gayly, 2019), the supreme court’s affirmation took decades to achieve. the court initially refused to find a constitutional right of privacy when it affirmed a criminal conduct conviction of a gay couple. (bowers v. hardwick, 1986) ten years later in 1996, and to the surprise for many, the court sided with local governments right to provide status-based protections, in the face of a state’s own constitutional amendment to the contrary. (romer v. evans, 1996). in 1998 the court recognized same-sex harassment was actionable under title vii of the civil rights. (oncale v sundowner offshore services, 1998) then in 2003, it found a constitutional right of privacy for gay sexual relations, reversing its view of 1986. (lawrence v texas, 2003) thereafter, in a series of decisions, it ultimately solidified a constitutional right to same-sex marriage, with all associated rights, and with full recognition throughout the country. (obergell v. hodges, 2015) still, employment rights for lgbtq+ were yet to be addressed by the court, though the equal opportunity employment commission already took the position, by various actions, that lgbtq+ employees were protected. (sperino, 2024) discussion equal rights in the workplace in the landmark decision of bostock v. clayton county (2020), the court finally addressed lgbtq+ employment rights. it adopted the eeoc’s position holding lgbtq+ employees were protected from discrimination in the workplace by title vii of the civil rights act of 1964, finding such discrimination was “because of sex”. while the court’s holding has been read narrowly by some to only address discriminatory termination, there is a strong argument for a broader reading that forbids all forms of workplace sex discrimination under title vii, given that oncale, the court’s 1998 case recognizing same american journal of management vol. 25(4) 2025 59 sex harassment, was cited as authority in the decision. so far no federal or state court has contradicted bostock. however, in an era of renewed federal and state antagonism toward the lgbtq+ community and particularly transgender individuals, employers are facing renewed conflicting signals when attempting to safeguard rights of lgbtq+ employees and maintain a welcome, inclusive, and nondiscriminatory workplace that is fair to all. lgbtq+ rights have popular support recent governmental efforts to reduce protection come at a time when more americans than ever support the lgbtq+ community. rolling back lgbtq+ rights to work have been particularly unpopular and lack support of the growing majority of firms and individuals in favor of full equal treatment of lgbtq+ workers as a protected minority. this is buttressed by nearly every poll and survey taken on the point since the court’s bostock decision, as well as subsequent judicial decisions, which strongly support equal treatment in the workplace. in the workplace, american workers are over four times more likely to work for an employer that supports lgbtq+ workplace rights (bloom, 2022). in fact, surveys show lbgtq+ discrimination is now opposed by 80% of americans. (sullivan, 2025) a year-long nationwide survey of u.s. employers taken in 2023-24 by lgbtq+ advocate, human rights campaign (hrc) found uncompromised business support in the workplace: “… [w]e saw extremists in opposition of lgbtq+ equality, take aim at our corporate partners…. corporations rose to the challenge and continued their commitment to maintaining and improving upon their workplace environments to be inclusive of all employees.” (hrc, 2024). further, employer efforts to support lgbtq+ workers were the highest recorded in the 20 years the hrc survey was conducted. supportive efforts broadly include nondiscrimination policies, equitable benefits for lgbtq+ employees and their families, an inclusive company culture, and efforts outside the workplace as an integral part of the firm's social responsibility. in 2002, only 13 major firms had a score of 100% for such efforts. but in 20 years since, 545 major companies achieved that perfect score. (hrc, 2024). regressive measures are under judicial challenge executive orders (eos) the trump administration has proven to be no friend to the lgbtq+ community, issuing series of executive orders (eos), in part to handicap gay and transgender rights. the latest trump eos attempt to roll back civil rights laws, primarily in public employment, but are so broad in sweep that they can impact many private employers as well. at least nine are anti lgbtq+ and all have been challenged in federal courts throughout the country. of those, three are aimed at eliminating diversity, equity and inclusion programs, with substantive attacks on established lgbtq+ civil rights. eo 14151, eo 14168, and eo 14173 direct an end to numerous legal protections for lgbtq+ federal employees, private sector employees receiving federal funds, and nonprofits providing medical care and services. included in the eos many declarations: that actionable sex discrimination be limited to two distinct biological sexes, that all reference to “gender’’ cease, an order directing the attorney general to reconsider whether to enforce bostock, and that all support be eliminated for transgender individuals by all other funded organizations. the aim for these three eos has been characterized as an attempt to erase lgbtq+ and especially transgender individuals from public life in the country. (aba, 2025) the eos are entirely inconsistent with bostock’s rationale that lgbtq+ workplace discrimination is indeed sex discrimination. the eeoc complied by rolling back its protection (spiggle, 2025) and paused all enforcement efforts for pending gender identity discrimination cases. (golden, 2025) however, the commission subsequently announced it will resume processing cases, but on a selective basis. it will not do so for sexual harassment complaints, presumably because bostock did not involve a harassment claim. that will be an issue for future litigation. however, the eeoc assures that it will continue to issue requisite right-to-sue letters for suits to be filed without its sponsorship. (mark, 2025) more than 19 federal court suits have been filled in response, contesting the legality of the eos on several constitutional grounds, (aba, 2025) including san francisco aids foundation v trump (2025), 60 american journal of management vol. 25(4) 2025 filed against enforcement of all three eos, where the court granted a preliminary injunction so to allow nine area plaintiff nonprofits to continue providing critical medical care to the lgbtq+ community while the case proceeds and schiff v office of personnel management (2025), ordering a restoration of medical information to lgbtq+ individuals on doctors websites deleted by the eo pending first amendment considerations. other eos roll back protection for the lgbtq+ community by imposing censorship on curriculum and withdrawing federal funds for k-12 schools that allow “gender ideology” (eo 14190), or that allow transgender female athletes to compete in girls and women sports teams (eo 14201), ban transgender individuals from serving in the military (eo 14183), and ban gender-afforming care to transgender youth (eo 14187). state anti lgbtq+ measures despite bostock, more than 850 new bills in state legislatures to restrict equal lgbtq+ rights have been filed in 2025 alone, most directed toward transgender individuals, concerning issues outside of the workplace. (reed, 2025). many measures mimic the trump eos. by attempting to restrict transgender health care and medicaid coverage. others seek to censor discussion of lgbtq+ topics in schools, nullify protection from bullying, or ban transgender girls from school sports. several of these measures have been successfully challenged in court, but more litigation is forthcoming. though the vast majority of these healthcare and education laws do not effect most employers, they negatively impact the lgbtq+ community, and therefore indirectly the workplace. (pappy, 2024). management implications all in all, adverse executive orders, agency interpretations, and inconsistent state measures may discourage the enforcement of rights. but consideration for them should be tempered by the variable and temporary character of the federal executive stance toward lgbtq+ workers-varying with each change of controlling party affiliation, and by the narrow support for anti-lgbtq+ measures in general. employers should understand that lgbtq+ employee rights are fully protected by bostock, a supreme court decision that takes precedence over conflicting authorities, both state and federal. absent a reversal by the court or an act of congress, it is the law. strategies to reduce risks however, the specter of recent anti dei and anti-lgbtq+ laws, threatens employers with legal challenge and liability for use of nondiscrimination policies aimed at including, and, when necessary, accommodating lgbtq+ employees, even though just and appropriate. risks include reverse discrimination claims, loss of federal contracts and funding, and damage to the community's reputation from litigation. while all legal risk cannot be eliminated, several strategies can be adopted to reduce risk. (saint, 2025) 1. while continuing to provide a supportive and inclusive culture, place careful attention on the language used in all written firm policies and procedures governing hiring, training, promotion, benefits, and accommodations. 2. change how demographic identity driven firm policy criteria are voiced. if possible, criteria used in those policies should have a business rationale that focus on needs and positive firm outcomes and values, instead of identity. 3. for instance, hiring or promotion criteria to “improved employee engagement and innovation” or “promote first generation college grads” or as “part of firm efforts to improve retention” are identity neutral and tied to firm hr needs. 4. criteria used to “in order improve firm competitiveness” or “better serve a customer segment” or to increase market reach” are identity neutral and tied to firm marketing needs. american journal of management vol. 25(4) 2025 61 5. criteria used that furthers basic operational needs like employee skills and behaviors, workplace health, psychological safety, leadership, accountability, and communication, are also identity neutral. 6. redesign and eliminate practices that may cause high legal risk. certainly, these include hiring or promotion quotas or targets tied to class identity, but also internships and fellowships tied with a demographic criterion. tie these instead to business neutral criterion. 7. use counsel to make a legal review of all policy criterion, and periodically audit policies to improve conformity with the evolving governing law. concluding remarks managers need to understand that while recent federal and state law may require changes in policies to mitigate risk of legal exposure, lgbtq+ individuals in the workplace are fully protected by title vii of the civil rights act. employers should continue to foster an inclusive firm culture that values all employees and one that allows them to feel safe, valued, welcome, and productive, by enforcing nondiscrimination with sound workplace policies. (teitelbaum, 2025) employers should also take note that in american history, the struggle for equal rights of minorities has been a long-fought battle, but those rights tend to strengthen over time, rarely contract, and if so, rarely for long, because they further the principle of equality. it has been said that the arc of moral wisdom is long but “bends toward justice.” (king, 1968) most employers have already adopted that wisdom, and will stay the course. references american bar association. commission on sexual orientation and gender identity. (2025). trumps antilgbtq executive order litigation tracker. retrieved from https://www.americanbar.org/ bloom, a. 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(2025, january 31). eeoc rolls back lgbtq+ protections, raising concern over civil rights enforcement. forbes. retrieved from https://www.forbes.com/sites/tomspiggle/2025/01/31/eeoc-halts-lgbtq-discrimination-processingwhat-it-means-for-society sullivan, a. (2025, june 29). gay people won. so why does it feel as if we’re losing? n.y. times. opinion, pp. 6–7. teitelbaum, a. (2025, febuary 28). navigating workplace protections for lgbtq+ employees amid policy shifts. society of human resources managers. retrieved from https://www.shrm.org/enterprise-solutions/insights/navigate-workplace-protections-lgbtqemployees-amid managing foreign subsidiary competitiveness yezdi h. godiwalla university of wisconsin-whitewater managing foreign subsidiary competitiveness is vital for overall, long term, global organizational growth. strategic global leadership, vision and culture among the top managers of headquarters (hq) and foreign subsidiaries are vital for enabling the subsidiaries to pursue their vision of improved competitiveness. sustained growth and improved competitiveness in the global organization’s multiple country environments then becomes the means for overall mnc strategic enhancement. introduction the long term objectives, shorter term goals and corporate strategy, business strategy, and foreign subsidiaries’ strategy of an organization are derived from the organization’s global vision and mission. the strategic management process begins with leadership of a multinational corporation’s (mnc) top managers at hq and foreign subsidiaries. the process begins with a strategic vision and mission, strategic analyses, choice of long term objectives, shorter term goals, and the formation-formulation and implementation of corporate and foreign subsidiary strategy. it involves the leaderships at the mnc headquarters and the foreign subsidiary units. international management and strategic management are two important processes that need to be equally emphasized and their processes are to be skillfully combined. strategic and visionary international leadership is a key to mnc global effectiveness. its local, regional and global competitiveness depends on it. it leads to sustained growth and profitability. past organizational performance and current culture create an environment for change only if the strategic leadership can have a well-integrated global strategic plan (wang and emma, 2012). strategic international leadership focuses on the global plan for improving the overall organizational competitiveness, effectiveness and growth. an important focus of such leadership is the management of the differences of culture and operating conditions across different countries. strategic vision it would be worthwhile that the mnc headquarters leadership initiate a tentative or proposed (generally or broadly described) strategic vision, long term goals, and a basic strategy, and then seek active involvement from the foreign subsidiaries’ executives for re-shaping and refinement. it is important that the mnc headquarters have a clear strategic vision for the mnc’s future global position. it is more important that the vision be first developed in close collaboration with the leadership in the subsidiaries, thus, enabling it to become a widely shared vision. what is desirable is a high level of commitment among the hq and subsidiaries managers to a shared vision and strategy. american journal of management vol. 16(2) 2016 11 there are some aspects of strategic vision that are more worthwhile. strategic vision is the desired or preferred form and posture of an organization in the future. the strategic vision of the key executives of the mnc headquarters and foreign subsidiary units can be used to collectively transform the organization. it is a foresight of what should be the “ideal” for the organization. it assumes that the current constraint would not limit the future full realization of organizational potential in that it assumes that all the needed resources are possible (want, 1993). strategic vision may appear to be out of a realistic reach or grasp of the organization, given its current capabilities, but that is all right. hindle (1994) defines strategic vision “as an irrational barrier-leaping ambition for a company.” it becomes the flash point for future change. somewhat higher vision can be urging the people to strive harder. an intense strategic vision can be the driving force towards change. organizational culture and change the effective strategic leadership at foreign subsidiaries’ level should focus on exploiting profitable opportunities in their host countries. strategic vision and organizational culture are inter-related and vital in this context. strategic vision must be matched by an appropriate organizational culture that would correctly channel the activities and resources of the organization (karabell, 2010). it is important to see that changing an organization’s strategy and culture should focus on a comprehensive approach that addresses all aspects of the organization (kono, 1997; brief, 1996). further, organizational culture itself can drive changes in corporate strategy (morgan, 1993; trice, 1993). this would be in addition to the sequence of strategy that could lead changes in organizational culture. the industry environment is another external environmental segment that can cause organizational culture changes, including changes emanating from competition, customers, channel distribution, technological innovation and applications from the same or other industry (selmer and lauring, 2010). it is found that an organization usually tends to conform to the patterns of the industry to which it belongs (chatman and jehn, 1994). while the relationship between strategy and culture is such that they influence each other, organizational leaders may first conceive of a new strategy and change by design the structure and culture so that they can to realize the strategy (deal and kennedy, 1983). they pursue organizational change by a planned design. in this way strategy is viewed as the driving force that transforms the organization, its technologies, structure and culture. and, collectively they change the posture of the organization (finkelstein and hambrick, 1996). organizational leaders often use the organization as a means or an instrument to accomplish the goals that they impute upon the organization. this is referred to as the “instrumentality” of the organization. in as much, they view strategy, technologies, structure and culture as more specific and detailed tools to carry out the goals that the leaders wish for the organization to accomplish. these are some of the issues of control and are vital to managers (chang and taylor, 1999). national culture and the unit’s organizational culture host country national culture of a foreign subsidiary unit has a major impact upon the unit’s organizational culture and cross-cultural communications and negotiations (herbrig and gulbro, 1997). for example, the ethical content of a foreign subsidiary unit can be significantly influenced by the national culture of the host country, in addition to the mnc’s headquarters organizational culture (robertson and fadil, 1999). these ideas can have an important impact on the discussions of the managers of the mnc’s hq with the managers of the subsidiaries. the cultural differences can make the global strategic management process slower and complicated. the foreign subsidiary unit has to address the often differing cultures of the mnc headquarters, the mnc as a whole (including all the other units), and the national culture of the host country (harvey and napier, 2010; shin et al, 2007). the growth of a foreign subsidiary unit would in part depend upon its organizational strategy and culture (vachani, 1995). since the unit exists in the context of the overall 12 american journal of management vol. 16(2) 2016 mnc as an organization, the local marketing environments, and the local national cultures, the unit has to strive to balance the often differing needs and expectations of these diverse groups. in this way, the unit is managing its stakeholders. host country’s influences upon a foreign unit’s managerial leadership table 1 portrays some of the major factors that can influence a foreign unit’s managerial leadership. the foreign unit’s host country has a strong influence upon the unit. most of the people of the unit are likely to be comprised of host country nationals. the national culture, economic, general and particular industry factors of the host country provide an environment within which the foreign unit operates. the cultural environment of the host country can alter the preferred managerial leadership approach of a mnc headquarters for its foreign subsidiary unit. the local customs and social approaches may make inviable the managerial leadership approaches of the mnc’s headquarters. the economy of the host country provides general conditions within which the unit has to operate. many of these are issues of infrastructure. the industry-specific factors include the competition, customer groupings, industry associations and standards, suppliers and labor. these affect the unit more immediately and directly. these three sets of host country factors (culture, economy, specific industry) have a significant influence upon the unit’s managerial leadership. these include: the choice of decision-making styles, rationale for strategic decision-making, and approaches to further design and develop its organization. matching foreign unit’s leadership culture to its host country’s national culture in a sense, mncs are conglomerates even if they were to be in one line of business. this is because of their very diverse operating settings and cultural variations. they have to have a mind-set of a conglomerate. that is to say, they should decentralize not only operating decision-making, but also strategic decision-making (muralidharan and phatak, 1999). they have to go another important step: decentralize managerial and decision-making styles. mnc headquarters must allow each of its foreign subsidiary units to formulate its own top management leadership style. management is very culture bound. it is equally strongly felt at the top echelons as elsewhere (pornitakpan, 1999). an mnc headquarters should not impose its own managerial culture to the units. table 2 provides an example of some different host country cultural, economic, and infrastructural conditions that may suggest appropriate unit’s managerial styles. this is a suggestive list, and, each foreign unit must analyze its host country’s cultural, economic and infrastructural environments so that it may evolve its own effective managerial culture and decision-making process. each of the five different host country environments is reviewed here. the effective management style depends upon the social conditions, pace of change, complexity of business decision-making environments and structure of economy. host environment 1: stable society and simple, stable economy can have very centralized strategic decision-making. the decision parameters, scope and rationale remain essentially the same even over a relatively longer period of time, and so the unit could centralize all major decisions at the top management. the unit can be run as a typical bureaucracy with specific job descriptions, and the detailed roles and tasks remain the same for a long time. host environment 2: supportive and stable culture and technically advanced environment enables the unit’s top management to pursue a highly professional approach. because of the stability, the organization can institutionalize the decision-making process. top management approach is sophisticated and maintains a sense of permanence. host environment 3: this environment is different from the previous environments in that it is faster changing. its change is somewhat linear, and not as erratic and turbulent as in the next two environments. the top management culture and decision-making style may be characterized by its specialized peer groups so that they can concentrate on technically intense activity. the changing nature requires shifts in american journal of management vol. 16(2) 2016 13 focus, and so groups of peers focusing on important issues would characterize the top managerial mind set. table 1 host country’s influences upon a foreign unit’s managerial leadership host country’s: societal and cultural influences economy and allied influences industry-specific details • history of society, e.g. migrations, dominations of and by other countries, life style changes, material or livelihood developments that change ways and quality of life • recent and projected migration patterns and their impact on labor and financial markets, political processes • evolving values of society because of migrations and other dynamics, impact on society • natural resources, particularly as they affect life styles and methods of coping with life’s challenges and other issues • plans for the development of natural resources • infrastructure of support facilities and utilities, their quality and efficiencies • financial institutions and govt’al regulatory supervision • regional economics and impact on the factories and markets • specific industry’s make-up: • industry structure, processes • competition, competitors’ comparative strengths and weaknesses • markets • suppliers • labor, professional, skilled, semi-skilled for various specialties • customer groupings • industry associations • technological developments • religions and beliefs, their influences on social and workplace values, attitudes and behavior • component suppliers • vendor suppliers • it services • utility and maintenance services industry life cycle stage market leaders, runner ups, laggards relatedness with other industries industry growth rate • life styles, standard of living, quality of life, attitudes towards one’s job, company, profession • distribution system, wholesalers, retailers, physical distribution, logistics diversification strategies of the multi business groups, host country and foreign companies • social structures & values, basis for stratifying society: system of caste, class, success, power/influence, money, land ownership, religious standing • communication and it systems • educational (general and professional) and training standards and patterns, plans for improvements entrepreneurial strategies and prospecting activities, impacts on markets, industries, and economy, govt’al industrial policies, public policy, e.g. market regulation • political, govt’al influences • regional int. and ext. disparities mkt share spreads, dominance • sub cultures in (int. and ext.) regions and societal strata • governmental influences on business, regulatory impact competitive advantages, innovations political, legal and governmental regulatory methods, law enforcement intensity and effectiveness • capital formation, investor attitudes and motives, investor and customer confidence • financial regulation organizational life cycle stages and stage-specific s strategies, and, mgmt succession plans of direct competitors cultural impact on life style, valance and details social resp. expectations from orgns. • labor markets, availability of skilled technical and managerial people in different specialties dominant professional values among local and foreign personnel • trade patterns and dependencies with regional countries (determines) foreign unit’s leadership • decision making styles and approaches • rationale for strategic and operating decision-making • approaches to develop organizational structure, culture, technologies, information and control systems, policies, norms and practices in the workplace 14 american journal of management vol. 16(2) 2016 host environment 4: the erratic and turbulent nature of this environment requires the top management to act boldly, quickly (without too much research and analyses) and in unison. this means that the unit’s top management must be close knit, loyal team players. they must know what and how each player thinks, decides and acts in a diverse array of business, political and people situations. the high risk nature demands that they should be great risk takers and decisive players. an important trait of such a team should be that they should be willing and capable of taking some loss should their risk-taking not work out. host environment 5: this environment is characterized by unfathomable cause-effect relationships in the environment. when the unit’s top management cannot decipher a consistent, effective decisionmaking rationale, then they have to adopt an experimenting approach. in this managerial decision-making style, the approaches are tentative. the managerial styles can be changing and evolving. table 2 matching foreign unit’s leadership style and culture to its host country’s national culture foreign unit’s host country’s culture and environment foreign unit’s appropriate leadership culture 1. stable society and simple, stable economic structure, relative stability, factors of dynamics 1. unit’s centralized strategic decision-making perpetuating bureaucracy with fixed job descriptions 2. supportive and stable culture and technically 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(1993). “managing radical change.” journal of business strategy, vol. 15, 21-28. 16 american journal of management vol. 16(2) 2016 american journal of management vol. 25(4) 2025 35 african immigrants’ perceptions of employee performance and organizational cultural barriers in fortune 500 companies opeyemi adebayo walden university teresa lao walden university leslie gilliam walden university chikwendu nweke walden university blair presley bone university of tennessee, knoxville the underemployment of african immigrants and lower job earnings continue to be a problem in the united states. the purpose of this qualitative case study was to explore perceptions of african immigrants regarding their performance and cultural barriers within fortune 500 companies in houston, texas. research questions explored how african immigrants navigated and adapted to cultural expectations, and how these adaptations influenced their perceptions of job satisfaction and performance. the study was grounded using rational choice theory. seidman's exploratory case study method was used to analyze the interviews from 12 african immigrants working in houston. the themes are: 1) cultural misunderstanding, 2) promotion and advancement, 3) workplace inclusion, 4) communication barriers, 5) organizational support, and 6) networking/professional growth. findings indicated that the organizational culture was significant for african immigrant employees to influence changes in global organizational policies, procedures, and practices. the implications for positive social change include the potential for leaders to improve leadership selection, development, and cultural training to enhance african immigrant employees' job satisfaction and performance in the us. keywords: african immigrants, performance and cultural barriers, job satisfaction, performance, rational choice theory 36 american journal of management vol. 25(4) 2025 introduction african immigrants tend to immigrate to the united states to pursue educational advancements, familial connections, and/or economic opportunities (commodore-mensah et al., 2019). this population significantly contributes to the workforce, as 42% of african immigrants in the united states over the age of 25 have earned at least a bachelor's degree, compared to only 28% of all united states-born citizens (commodore-mensah et al., 2019). while extensive research exists regarding organizational culture, sustainability, and growth challenges at a macro-level, there is a significant gap in extant research concerning the sustainability of african immigrants and their performance in fortune 500 companies. researchers from multiple disciplines have emphasized the need to address the challenges that immigrants encounter (marindi & hauhart, 2022; nyanamba et al., 2024). in this qualitative exploratory case study, organizational culture systems in the united states were examined as a key requirement for employee sustainability. this study focused on the organizational culture systems of fortune 500 companies, which were crucial for employee sustainability. the outcome of this study may enable organizations to more effectively understand and address the unique needs of a blended workforce. additionally, the study could lead to knowledge that may assist african immigrants in fortune 500 companies to understand the potential negative stereotypes in the workplace that they may face. the research background, problem, and purpose of the study were thoroughly examined. additionally, this chapter includes research questions (rqs) and the conceptual framework that guided the investigation. the nature of the study was also described, key terms defined, and assumptions, delimitations, and limitations of the study were discussed. finally, the significance of the study in terms of practice and social change is addressed. background the journey of immigrants to the united states, particularly those of african origin, often involves resilience, determination, and an unwavering spirit (delgardo, 2022). the decision to migrate is often times made due to personal needs and desires, and those migrating have little to know guarantees that they will be better off in their host environment, and african immigrants are no exception. immigrants, not knowing what the future holds for them, will most likely equip themselves with some skills that could help them thrive. for most immigrants to thrive, they would need to be gainfully employed and afford their basic needs. in the workplace, many african immigrants usually face a huge cultural shock and a feeling of uncertainty. the cultural shock and feeling of uncertainty are mostly caused by the sudden change in the way of life of their host community and the need for them to adapt to the distinct normative behaviors and labor laws of the united states. for instance, it is common to find african immigrants attributing certain aspects of their job tasks to their spirituality. african immigrants in this category believe that the presence of a divine god helps them carry out their daily tasks, and when they lack the ability to do so, they also assume that god has not willed them to carry out the task; otherwise, he would have endowed them with the needed skills. this was why edem-enang (2021) asserts that african cultures places emphasis on spiritualism as a key to success and better outcomes. however, in the united states, employees adhere to a normative pattern that has proven to be efficient over time. in the contemporary global landscape, migration dynamics significantly contribute to multicultural societies, reshaping workforce demographics and organizational cultures. immigrants must be culturally literate to fit into new environments with minimal challenges. as immigrants come from diverse and unique cultures, it is essential to understand culturally similar immigrants regarding their ability to achieve their goals and objectives. there is a myriad of existing research detailing the prevalence of health-related challenges among african immigrants in the united states (ibe-lamberts et al., 2025; motley et al., 2024) and the experiences of african migrant workers in europe (abdi et al., 2022; achouche, 2025). however, little is known about the perceptions of african immigrants concerning their employee performance and cultural barriers related to communication in the united states. despite the increasing role of immigrants in the u.s. workforce and other developed countries, research on organizational communication and the american journal of management vol. 25(4) 2025 37 experiences of immigrant employees in host cultures remains limited. corra (2023) summarized historical patterns of african immigration to the united states and noted that the significant increase in african immigration began in the late 1990s, likely due to a shift in immigration regulations (i.e., the immigration act of 1990). corra (2023) also emphasized that african immigrants should not be treated as a homogeneous group, given that the population varies culturally, economically, and linguistically. it is essential to understand the challenges and cultures associated with acquiring jobs, as well as to develop cultural literacy. migrants have objectives that can be achieved only through cultural literacy. however, prerequisite levels of literacy that enable them to thrive in complex cultural systems appear to be lacking. in the view of maine et al. (2019) cultural literacy entails being competent and sensitive to one’s own and others’ identities, heritages and cultures. the lack of the prerequisite levels of cultural literacy often exposes african immigrants to a great risk of discrimination which often leads to underemployment, skill devaluation, and poor remuneration despite their human capital gains (akinsulure-smith, 2017; showers, 2015). it has also been observed that a major barrier experienced by african immigrants is that the educational qualifications obtained in africa by african immigrants before relocating to the united states are always either not recognized in the united states or that they are undervalued, and this results in limited employment opportunities and difficulty in obtaining jobs that align with their competencies. zickafoose et al. (2024) argued that one of the reasons for undervaluing the competences of african immigrants is that african countries make minimal investments in education, thereby making african immigrants less competitive and globally relevant in the work environment. there have been few studies on african immigrants, organizational culture, cultural barriers, and employee job satisfaction within fortune 500 companies, particularly in the united states. this study aimed to bridge the gap by exploring african immigrants' perceptions of employee performance and organizational cultural barriers related to communication within fortune 500 companies. african immigrants often encounter obstacles to their performance due to perceived organizational cultural barriers, leading to underemployment and lower earnings. problem african immigrants in the united states frequently experience underemployment and may earn low wages (akinsulure-smith, 2017; saasa (2019); showers, 2015). despite these challenges, they are a vital part of the workforce with 75% of african immigrants in their prime working age (dabic et al., 2020). this demographic is well-positioned to address the employment gap as the baby boomer generation retires. to understand how african immigrant professionals adapt to their new circumstances, this study includes a historical overview of african immigration to the united states. following this, a secondary analysis of sources regarding potential barriers they face and opportunities that enable african immigrant professionals to succeed was provided. the specific problem is that african immigrants in the united states struggle to effectively navigate the u.s. organizational culture system due to cultural barriers. saasa (2019) asserted that african immigrants in the united states frequently face underemployment due to cultural barriers involving communication, despite available job opportunities. while technical challenges persist, limited studies have focused on the experiences of african immigrants with organizational culture and cultural barriers that impact job satisfaction, especially within fortune 500 companies. purpose the purpose of this qualitative exploratory case study was to investigate the perceptions of african immigrants regarding their employee performance and the cultural barriers they face in terms of communication within fortune 500 companies in houston, texas. this study could help managers understand how african immigrants perceive employee performance within these companies, the cultural obstacles they encounter, and strategies that help mitigate factors influencing constraints faced by african immigrants in fortune 500 companies. the target population for this study was african immigrants 38 american journal of management vol. 25(4) 2025 employed by fortune 500 companies in the houston metropolitan area. purposive sampling was employed to gather a sample of 10 to 15 employees. research question 1: what are the perceptions of african immigrants regarding their employee performance within fortune 500 companies? research question 2: what are the perceptions of african immigrants regarding their cultural barriers in communication within fortune 500 companies? theoretical foundation a conceptual framework is a theoretical approach that researchers employ to investigate a research problem, which is tailored specifically to the study (imenda, 2014). it provides a theoretical foundation for understanding the concepts essential to the research topic. in this study, the conceptual framework was used to deepen understanding of theories and concepts, thereby establishing connections between variables. researchers use conceptual frameworks to facilitate data collection, interpretation, and comprehension. hughes (2019) stated that conceptual frameworks establish the foundation for framing research questions and guiding investigative processes to gather pertinent information. for this study, the conceptual framework was the rational choice theory. rational choice theory is a framework for researchers studying the social and economic behaviors of individuals. individuals have a range of options and make decisions guided by personal preferences and social norms (burns & roszkowska, 2016; goode, 1997). the theory emphasizes individual decisionmaking, characterized in the literature as rational calculations that align with personal goals and objectives. despite choices, individuals typically select options that offer benefits and align with their goals (coleman & fararo, 1992; pepper & gore, 2012). decisions that are rooted in rational choices are associated with increased levels of personal satisfaction. individuals make decisions to enhance their returns and decrease risks and losses (hechter & kanazawa, 1997; shenhav et al., 2017). rationality drives individuals to opt for particular actions. rational choice theory has been fundamental in shaping rational decision-making processes, where individuals strive to maximize benefits while minimizing losses. this theory was used to examine african immigrants’ perceptions of employee performance within these companies and cultural challenges that impede their success in the u.s. workforce. understanding the concept of rational decision-making is crucial for individuals seeking career advancement (quiroz gonzález et al., 2020). according to palarino (2021), african american immigrants often encounter challenges involving integrating into dominant organizational cultures due to language barriers or cultural disparities. possessing adequate cultural understanding can help make more informed employment decisions. to make suitable employment decisions, employees must be able to make educated or informed decision (deming, 2021). chang et al. (2023) conducted research indicating that there is still a significant lack of organizational communication studies focusing on the experiences of immigrant employees in the host culture, despite the increasing presence of immigrants in the workforces of the united states and other developed nations. zeng (2017) examined the relationship between rational choice theory, organizational culture, and african immigrants, considering preference propositions, constraint propositions, and immigrant motivations. the rational choice theory views african immigrants as goal-oriented individuals who rely on their decision-making skills to determine preferences that can help them to make choices and consider alternatives. however, most organizations may not benefit from this due to cultural barriers that cause limitations (farashah et al., 2022). in addition, employers who have low levels of cultural literacy are ineffective decision-makers who struggle to make decisions. xu et al. (2023) noted that african immigrants in texas and other regions of the united states struggled to determine specific preferences and consequently made poor decisions due to gaps in their knowledge of cultural literacy. thelamour (2021) identified the lack of research on how organizational culture affects american journal of management vol. 25(4) 2025 39 african american immigrants as a critical challenge facing immigrants seeking opportunities in the united states and other developed countries. uyar (2019) indicated that the understanding of entrepreneurial opportunities among immigrants includes incentives in terms of prices, economic factors, and legal, and economic aspects. these factors can significantly impact the success and sustainability of african immigrants in houston and other areas of texas. uyar indicated that governments that provide incentives by removing constraints and supporting cultural literacy facilitate the informed decision-making of immigrants. zeyada (2018) analyzed the significance of cultural literacy in the decision-making of immigrants and discussed the effect of immigrants with an inadequate understanding of legal and economic regulations. the ability of immigrants to make a rational decision is influenced by the extent of their understanding of business regulations, requirements, and limitations (zeyada, 2018). having cultural literacy is key to the employee’s success in organizations in the united states. corra (2023) studied the performance of african immigrants in the united states who had little cultural literacy of the state’s organizational operations. their proficiency was assessed based on their grasp of the interpersonal dynamics that african immigrant professionals navigate within organizations, offering a deeper understanding of how these immigrants assimilate into the new organizational culture they encounter. knowledge of cultural variations and the ability to make adjustments in alignment with an organization’s work culture are vital to the success of employees within an organization (arman et al., 2024). for instance, african immigrants who understand the components of sexual harassment in the workplace are in a better position to maintain healthy distances when relating with co-workers, especially in a team environment. corra found that immigrants who had valuable cultural knowledge had higher passion and motivation; they were also more comfortable making strategic decisions that would help them become a better version of themselves. according to wang (2018), there is a rising interest in studying the well-being of international immigrants in host countries, with job satisfaction being highlighted as a crucial factor in assessing immigrants' overall welfare. significance of the study research on immigrants in the workplace has highlighted cultural differences as significant factors contributing to communication issues, conflicts, and lower job satisfaction. however, there was a notable gap in the existing body of research relative to how organizational culture specifically impacts african immigrants. given their unique experiences, it is essential to examine how organizational culture may specifically impact african immigrants. this gap in research likely stems from the recency of the emergence of african immigrants as a significant demographic in the united states, has and there have been limited comprehensive studies regarding their workplace experiences. additionally, many existing studies on african immigration tend to focus more on challenges within legal or educational systems rather than employment dynamics, thus overlooking strategies for navigating such challenges. the outcome of this study could fill a gap in the literature by providing organizations with culturally diverse workplaces with the context, perspective, and data to support employees from immigrant communities, especially those of african descent. significance to practice african immigrants who were employed in fortune 500 companies in houston, texas, shared their experiences and strategies in this study, providing valuable insights and perspectives for other immigrants to enhance job sustainability. the findings of this research have the potential to benefit all african immigrants seeking employment opportunities in the united states by preparing them to understand the potential challenges that may arise. this study may also benefit organizations employing african immigrants in supporting their diverse needs. the aim of this study was to contribute new insights into the cultural barriers faced by african immigrant employees, with the potential to inform the development of organizational cultural education programs tailored specifically for this demographic. these initiatives 40 american journal of management vol. 25(4) 2025 could potentially reduce the significant cultural barriers faced by african immigrants within fortune 500 companies. significance to theory the study employed rational choice theory, which posits that when presented with different opportunities, individuals are more likely to select alternatives that offer them the greatest benefits, given the available information (burns & roszkowska, 2016). this study examined how the lack of information on cultural barriers and u.s. organizational cultures hindered african immigrants from fully leveraging employment opportunities in the united states. additionally, this study explored organizational cultural education programs for african immigrants as a means to enhance their decision-making effectiveness and improve employee performance within fortune 500 companies. significance to social change african immigrants in houston, texas, who are interested in job opportunities may benefit from the results of this study, which could help them understand u.s. organizational culture systems and increase their cultural literacy. results could also be used to initiate social change by improving the cultural literacy of african immigrants in other u.s. communities. several factors can weaken links between organizational culture, cultural barriers, and outcomes. individual factors, such as the level of acculturation, and environmental factors, like the size of organizations, are examples of these influences. this study could aid organizations and leaders in terms of implementing effective management programs. positive social change implications include the potential for improved leadership selection, development, and cultural training, which can enhance employee job satisfaction, customer relations, and organizational performance, while also contributing to more culturally aware populations. methods given the study’s aim to explore perceptions of african immigrants regarding their employee performance and cultural barriers relative to communication within fortune 500 companies in houston, texas, a qualitative case study design was selected. a qualitative exploratory case study design combines the strengths of primary and secondary data to ensure that comparisons and triangulation are possible, thereby generating quality and reliable findings. it was suitable to obtain a deeper understanding of cultural literacy of african immigrant employees. the qualitative, exploratory case study design requires the identification of the target population and subsequent sampling to ensure a representative selection of participants. the population refers to all individuals who meet the inclusion criteria. jackson et al. (2007) noted that the target population could range from as few as 10-15 individuals to as large as the population of a country or region. in most cases, the size of the target population cannot be quantified; thus, researchers can use regions, periods, and other general features to determine the sample participants. the target population for this study consisted of african immigrants who have been actively employed within fortune 500 companies in the houston metropolitan area, texas, over the past seven years. sampling was used to determine the ideal number of participants who would satisfy the data needs of the study. sampling refers to the process of selecting participants from the target population who accurately represent the entire population (emmel, 2013). researchers of most qualitative case studies rely on random and purposive sampling to recruit participants, depending on the defined number of participants and the extent of data required for the investigation. purposive sampling was employed in selecting 10-15 employees, ensuring sufficient representation of the target population. a sample size of 10-15 employees was considered adequate for achieving meaningful results for this study. purposive sampling, a non-probability technique that relies on researcher judgment, facilitates the selection of optimal and resourceful participants. this approach mitigates the necessity for generalizing findings and study outcomes. inclusion and exclusion criteria were used in a purposive sampling approach to ensure the selection of individuals who closely aligned with the research criteria. american journal of management vol. 25(4) 2025 41 this study focused specifically on african immigrants who were actively employed in houston, texas. consequently, african immigrants who were not currently employed were excluded. utilizing purposive sampling, the researcher identified and selected individuals who were not only interested in participating but also capable of providing relevant data and understanding the challenges encountered by african immigrants within the u.s. organizational system. additionally, african immigrants experiencing difficulties in securing employment would be considered for inclusion in the study sample. the participants, african immigrants employed and working in houston, texas, were recruited as participants using purposive sampling. leveraging this method, the researcher possesses pertinent personal and professional details of potential participants. invitations to participate in the research were sent via email, which included comprehensive study information. confirmations from recipients were requested to ensure the integrity of the intended sample size of 20 participants before data collection commenced. the study relied on primary data to meet its objectives, answer the research question, and achieve the expected outcomes. therefore, conducting interviews was the primary data collection method. the review of secondary sources was used to support the data sources and close gaps in the primary data. the interview protocol involves audio-recording all the interviews and keeping field notes. primary data was collected through semi-structured interviews. questions included predetermined and open queries. the interview protocol dictated the interactions between the researcher and the participants. predetermined questions were asked of all participants to ensure consistency in data collection and facilitate useful data analysis through comparisons. however, there was flexibility to ask insightful questions for clarification or further explanation. data provided by participants that were not within the interview protocol were considered additional information that was used as supportive data. bracketing was practiced throughout the interview process to ensure that the understanding of the topic, the perceptions of the participants, and personal feelings did not influence or interfere with the data collection process. self-reflection and pretest are ideal methods that ensure that the researcher sets aside assumptions and personal perspectives on the topic. mock interviews were used to identify any vulnerable areas that could create an opening for interference in data collection, particularly by leaning toward certain aspects of the topic. the initial interview sessions were allotted sixty minutes in total. the interview questions were structured to gather both general and specific data. the general inquiries, comprising five questions, primarily focused on demographic information, including age, income levels, years of residency in texas and gender. subsequently, the remaining ten questions delved into more specific aspects, targeting african immigrants’ perspectives on their job performance and the cultural obstacles encountered within fortune 500 companies in houston, texas. additional queries within this section will seek participants’ recommendations for enhancing organizational culture and their perceptions of the role the texas government should play in mitigating factors limiting african immigrants’ opportunities within fortune 500 companies. all necessary data within the initial sixty-minute timeframe were collected, and participants were kindly requested to allocate an extra thirty minutes during the subsequent month. this additional time facilitated any required clarifications or the provision of further details regarding the provided data. additionally, it allows for addressing any follow-up queries that may arise after the initial interview sessions. the final length of the interviews was influenced by factors such as language barriers, the interpretation of questions, and the participants' willingness to provide detailed responses. the initial face-to-face interviews enabled me to establish a vital connection with the participants, which proved indispensable in subsequent interactions. during the interviews, observations were made on the participants' moods, emotions, and reactions to different questions. the genuineness of face-to-face interviews helped ensure the reliability and validity of the research findings. telephone calls and video conferencing were considered for follow-up interviews. the times and locations of the interviews were based on the convenience of the participants. coffee shops or business premises were the preferred locations for the interviews, which were conducted with the participants. during the interview sessions, the researcher and all responses were audiorecorded, and field notes were maintained for analysis. 42 american journal of management vol. 25(4) 2025 procedures for recruitment, participation, and data collection the study relied on semi structured interviews to answer the research question. the data collected through the interviews was verified using secondary sources, such as reports and government information, on the cultural challenges facing immigrant entrepreneurs. the interview protocol was used to collect data. as previously discussed, the researcher utilized specialized audio-recording devices to ensure that all responses to the interview questions were accurately captured. however, other devices, such as phones and secondary recording devices, were not allowed in interview sessions in case the specialized devices malfunctioned. audio recording of the interview sessions reduced the burden of taking extensive notes and enabled the researcher to focus on asking questions, seeking clarifications, and noting the nonverbal expressions of the participants. participants were recruited and then selected to join the study. recruitment includes seeking consent from potential participants through physical meetings or electronic communication. email was the primary method of communication, in addition to sharing research briefs on whatsapp, face-to-face meetings, facebook, and other potential social media networks. the additional modalities of publication were ideal before the selection of the 10-15 participants. communication and contact with the 10-15 participants were primarily conducted through emails, with all records preserved as evidence of the recruitment process. informed consent and information sheets were used to recruit the participants. the selected participants were required to sign an informed consent form to indicate their voluntary participation in the study and to grant the researcher the right to use their responses to the interview questions. the information sheets contained details about the proposed study, including background, objectives, research questions, and the nature of the inquiry, to help participants make informed decisions. the participants were informed of the importance and significance of the study, including potential benefits that the entrepreneurs may obtain from the conclusions and recommendations. the sample size will be 10-15 participants or until data saturation occurs. the scheduling for interviews occurred over one month to enable participants to select suitable dates while allowing the researcher to manage the schedule and avoid conflicts. google calendars and e-mail notifications were used to confirm availability and schedule the interviews. as the researcher, the goal was to conduct more than one interview per day to shorten the data collection period. all interviews were audiorecorded, and field notes were taken to support the recordings. following the completion of the interview sessions, participants had the opportunity to ask questions or seek clarification from the researcher. the participants also had the opportunity to share additional information related to the study. the results of the study were shared with the participants after receiving university approval. data analysis plan the data analysis plan obtained from the interviews and supplementary secondary sources was analyzed and processed. this analysis involves examining 10-15 transcribed audio recordings and accompanying field notes to identify patterns between the primary and secondary data. each transcription includes participant codes along with responses to the 20 interview questions. field notes were used to address any gaps identified during the review of the recordings. should any significant missing data be detected, participants were re-engaged to provide clarifications and additional information. coding was employed for both the participants and the collected interview data. numeric coding (e.g., p1, p2, etc.) will be utilized for the participants, while color coding differentiates various types of information. both inductive and deductive approaches were employed to assess the relevance of transcribed data obtained from the interviews. new data was marked with red labels, while information identified during the literature review was denoted with green labels. analysis of new data aims to identify themes and subthemes that address the research question. organizing data involved identifying, collating, and sorting interview data based on their frequency. tables will be used to group similar data, assisted by the inductive and deductive coding completed during interview transcription. themes were developed from data that directly address the research question and study objectives. themes will serve as a measure of how well the collected data aligns with the study’s expectations. american journal of management vol. 25(4) 2025 43 throughout the analysis, any information that failed to meet quality and credibility standards was scrutinized. participants will be consulted initially to validate such data, while secondary sources will be used to verify any discrepancies in facts provided during interviews. the data analysis were reported using charts, graphs, and tables. the qsr nvivo computer software program will facilitate data analysis, reporting, and presentation, enabling the creation of visualizations to aid in interpreting the findings. tracy (2012) noted that the effectiveness of data analysis determines the achievement of the study expectations. the researcher may have to collect more data by conducting followup interviews if the initial data does not yield the expected results. discrepancies in data collection will be managed by collecting additional data and cross-referencing with supporting documents. data collection the data for this research were collected in august/september 2024 using a semi-structured interview technique that provided a detailed understanding of african immigrants working in the it sector of the selected fortune 500 organizations. they noted that the approach provided the opportunity for optionality when considering the participants’ accounts of their experience with employee performance and organizational cultural constraints (weideman & hofmeyr, 2020). all participants were interviewed via self-administered face-to-face and/or digital interviews, with an average duration of 30 to 45 minutes. all interviews were tape-recorded with the participant’s permission and recorded using rev.com, and the two analysts transcribed them in full. challenges, as highlighted by chomutare et al. (2021), included data loss; therefore, all files, transcriptions, and consent forms were saved on two different platforms, including personal computers and external hard drives. furthermore, a review of the existing literature, specifically focusing on organizational culture and employee performance, was also conducted to support and enhance the results generated from the interviews. data analysis the participant table provided illustrates the various id assigned and subsequent interview location and interview length and duration. all transcripts obtained underwent the initial step of organizing data as recommended by seidman (2013). the inductive approach to coding was employed to ensure that the identified quotes from the various participants' interview transcripts were categorized into different themes for the reports. these included highlighting some of the common patterns from the transcripts. the themes developed by directly addressing the rqs and quotes identified among participants aligned with study expectations. subsequently, data validation was implemented where every quote generated from the transcripts was verified by matching the audio files' content and transcripts. lastly, the presentation of findings was done through tables and charts generated using the qsr nvivo computer software programs, which accurately represented the findings. these visualizations revealed the achievement of the study's expectations and allowed for the management of any potential discrepancies in data collection. the semi structured interviews comprised 16 questions. whereas the first six questions captured the participant’s age, gender, and years of experience, the remaining questions addressed the participant’s views on cultural issues and employees’ performance in fortune 500 companies. the data from the asynchronous interviews were analyzed using thematic analysis to uncover significant patterns and themes across the data set. regarding data analysis, the data was hand-coded and analyzed for major themes, which were further checked with the help of nvivo qualitative data analysis software. the themes of the study emerged following an analysis of the various quotes, which revealed distinct patterns. in various interview questions, quotes were highlighted that revealed a pattern relating to the keywords and codes generated to help align them to various themes relevant for the current study. table 4 highlights the frequency of the codes and the subsequent application of quotes to identify various themes used in the results section. various participants who mentioned the quotes are also identified to help illustrate the codes and the subsequent themes generated. the thematic analysis highlighted several key themes of the research, focusing on the experiences and attitudes towards african immigrants in the it industry. these themes are presented in table 4 and figure 1, along with the frequency and percentage of their appearances in the interviews solicited for the research. 44 american journal of management vol. 25(4) 2025 subsequent evaluation of the various quotes from the different participants revealed various codes. these were extracted from the transcripts after being placed inside qsr nvivo software and the subsequent generation of codes, including language barrier, cultural differences, discrimination, prejudice, career mobility, diversity management, mentorship, and biased perceptions. results six key themes emerged from the interview analysis of the 12 participants and the 16 questions from the interview questionnaire. these themes capture participants' experiences of organizational culture and how they perceive that culture affects or enhances their performance in fortune 500 organizations. theme 1: cultural misunderstanding the two codes that were used to generate the theme of cultural misunderstanding included language and cultural differences. the report went ahead to illustrate quotes from the transcripts of different participants to illustrate the theme. the theme of cultural misunderstanding highlights the experiences of african immigrants working in fortune 500 firms. it cuts across organizational culture, leading to misunderstandings that impact their performance and readoption in the firms. for instance, p1 revealed that cultural differences present a severe challenge to organizational culture, particularly in work relations; the differences raise questions and suspicions regarding the ability of a particular person to lead. the following comment from a participant in the real estate sector supports this: “they will probably have this notion that they are not sure if you can lead a team.” once again, this point highlights the importance of being relevant within the company. it still took me quite a while to rise to the level where i had the opportunity to do what i am doing now; even if one has the academic background and vocational experience one needs, one has to prove oneself no matter where one is from.” these are not unique features, and this is part of a larger problem where culturally associated dissimilarities will influence perceptions of competency and leadership. as a result, a study conducted by alfoqahaa and jones (2020) supported this view, arguing that in organizations, culture influences how leadership qualities are perceived and, consequently, evaluated, which raises questions about the efforts of minority candidates in diverse contexts to portray their ability to lead. p3 touched on how language barriers present challenges in finding new opportunities when he said this: “once i had a problem with language when i was job hunting,” “some of the organizations were more friendly with those employees that speak two languages as opposed to an employee that only speaks the english language.” ultimately, it depicts a situation where some employers may turn you down just because you cannot speak the language. this viewpoint supports the assertion that language plays a critical role not only in daily interactions but also in terms of job prospects. according to reigstad (2021), due to crosscultural differences, which create language barriers, colleagues from different cultures will, in most cases, translate or interpret communication in different ways, making it difficult to conduct a constructive review of performance and development in the workplace. these barriers lead to more negative attitudes towards the competencies of non-native speakers and a lower likelihood of career mobility. it is a trend that is replicated by the fact that the means through which people communicated resulted in uneven ground and an inability for african immigrants to be fully absorbed and progress in multinational companies. p6 spoke about the issues of communication and cultural expectations by saying, “one of the major challenges encountered was in the aspect of communication; from nigeria, we do have an accent, and this makes people have a hard time understanding you and likewise you are being able to pass your message across.” this statement suggests that language barriers and accents can hinder communication, ultimately leading to poor working relationships and reduced productivity. failure to understand the other person due to accents may lead to misconceptions about their intentions and messages, which can ultimately create conflicts within the team. weinzierl (2021) noted that such barriers to communication in cross-cultural teams create negativity and destroy the overall effectiveness of a team by causing conflicts due to different communication styles and accents. this issue is particularly relevant in today’s multicultural organizations, where effective communication is crucial to success. american journal of management vol. 25(4) 2025 45 p8 stated, “i find it difficult to impose my perception of how matters should work to my juniors who think that working 40 hours a week is sufficient, to my belief of working and delivering any assignment by the time it is required and in case of an added job, it warrants more hours.” this statement reflects a significant cultural clash in several ways, including the expectations employees have of their workplace. in this case, one can see how the different perceptions of work ethic and expectations that the participant has about their subordinates versus what they expect from the participant and the rest of their workers can lead to misunderstandings and conflicts resulting from the clash of the two cultures. hofstede’s (1980) cultural dimensions are beneficial for understanding these differences, as they reveal how various attitudes, including time management and work completion, as well as overtime, influence interactions and managerial approaches (le et al., 2020). for example, cultures with a less rigid view of time and deadlines may not place the same emphasis on schedules as cultures with a more rigid view. these cultural differences influence team performance and cohesiveness, which justifies the necessity for cultural sensitivity in multicultural workplaces. p10 observed, “the higher you go, the more you’re supposed to be involved in maybe more social engagement and building relationships, and that’s where that could be a challenge because sometimes the people you’re trying to network with, they don’t have the same cultural background as you have.” this comment highlights a significant challenge in leadership roles: the practical risk resulting from cultural differences in aspects of networking and social interaction. in the course of climbing the career ladder, a person must develop and apply various types of workplace relationships to advance their career and power. however, where there is a lack of cultural reference regarding such individuals from colleagues or prospective partners, there are impediments to meaningful encounters. elchawich (2024) stated that such a cultural misfit leads to exclusion, isolation, and low job satisfaction because leaders are out of the networks that do not accept those cultures. theme 2: promotion and advancement the researcher focused on prejudice, discrimination, and biased perceptions in formulating the theme. it points to the issue of career mobility of such employees in rigid bureaucratic organizations due to racism and sexism. p2 was deeply concerned about the issue, as he stated, “given the stereotype and conflicting values, it becomes difficult for the employees to cling to their jobs and practice mutual respect; they are likely to be trapped.” this idea addresses the challenge that african immigrants encounter in terms of promotion and career advancement within fortune 500 companies. discrimination and prejudice mean concentration camp conditions in which the minority workers can lack the opportunities to get a promotion, and all the ingredients are intrinsic to a system and pose barriers to success for the employees. this is further supported by williams et al. (2020), who suggest that preconceptions and prejudices in the business world, as well as organizational culture and practices, impact the lifecycle and upward mobility of minorities within organizations. one is likely to experience distrust of competency, prejudice toward performance, and discrimination against promotion opportunities. hence, these challenges are not only about job security but also relate to advancement and progression and can evidence discrimination and unfairness in employment relations. p4 also said, “sometimes cultural issues can suppress job satisfaction, communication, and collaboration, and thus promote misunderstanding and miscommunication.” this statement also demonstrates that culture plays a significant role in determining promotion and advancement, as it influences other aspects of work performance. nearly and globalization, which sometimes lead to intercultural conflicts and miscommunications, interfere with satisfaction with work and career advancement, key components of training. this aligns with the study by kuoribo et al. (2024), which demonstrates that culture has an impact on the ability of team members to convey ideas effectively, thereby hindering teamwork and efficiency. this means that if employees don’t have the opportunity to succeed in attaining the objectives set for them by eliminating confusion in the workplace and acquiring cooperation opportunities, they cannot demonstrate their capabilities in their workplaces and earn promotions. therefore, it is evident that the mentioned cultural issues are not situational but structural, affecting not 46 american journal of management vol. 25(4) 2025 only day-to-day procedures but also career advancement programs and opportunities for people from diverse backgrounds and minorities. this suggests that solutions must be found to enhance representation. for instance, p7 said, “in the field that you find yourself in right now, you will find a good percentage of african individuals, and on the other hand, you find a very large number of non-africans, especially the white color, the blacks, particularly the africans are more knowledgeable than the whites, but whites are occupying a higher percentage of the job.” the above statement highlights limited job representation and career advancement opportunities, despite having adequate education and knowledge, which underscores organizational systemic and cultural barriers. in support of this fact, the study that was conducted by qureshi et al. (2020) showed that employees of color are locked out of promotions because of prejudice and culture. such a display of gender and ethnicity at work underlines the need for organizational redressal to erase prejudice and to enable better prospects for mobility at the workplace. during the interview, p9 said, “i have experienced the feeling of being of low status and being receptions and never appreciated. a person told me that i have a smell that pains her head.” this shows discrimination and cultural prejudice on african immigration workers and how these shaped their perceptions and experiences in the labor market. stories of this nature provide examples of how prejudice not only removes people’s perceptions of belonging but also harms career progress. verbal abuse and the perception of no acknowledgment experienced by this participant in their job characterize the systematic level affecting satisfaction and promotions. a study by lee et al. (2020) found that such negative experiences negatively affect job satisfaction and restrict career advancement for minority employees. these outcomes are signs of another negative phenomenon that has been observed in organizational contexts, in which prejudice and cultural discrimination exclude minorities and restrict their promotions or opportunities, showing the importance of fair employment practices. p12 also from the it sector said, “i observed that there is a racial inclination; some races are keen on enhancing opportunities for their fellow races within americans, the american system… some cultures are loyal to their people, and they do this tactfully.” this comment also reveals promotion and career advancement discrimination based on race or cultural preference. this supports the argument for racial clustering, the notion that individuals who excel in organizations can leverage connections and social capital to advance and leave behind those of a different racial background. lee (2023) and machen et al. (2021) supported this notion, claiming that minority workers are discriminated against because of organizational cultures, and therefore, their chances for promotion are limited. the systematic discrimination of such a policy fosters employment opportunity disparities and hinders upward mobility for african immigrants and other minorities in the organization. theme 3: workplace inclusion the theme of workplace inclusion centers on the ways that perceived exclusion affects job satisfaction and performance. some participants explained how they were excluded from decision-making processes and how this impacted their professional development. p1 (real estate sector – professional) also agreed with this feeling on how they are sidelined in the contributions made by the team by saying, “as a minority, and also a black female, i would say they tend to probably have this notion that they’re not sure if you can lead a team. and again, it’s all about proving yourself and proving that you are vital to the company.” this shows that african immigrants are perceived. another potential negative outcome of this perceived need to constantly assert one’s worth is that employees may feel invisible or overlooked in the workplace, resulting in decreased workplace satisfaction and hindered career advancement. shore and chung (2022) also advanced this idea, stating that workers suffer decreased efficiency and satisfaction at work if they are regarded as part of some structure that offers little value. hence, experiences such as these may pose a real threat to the idea of inclusion for workers with np disabilities and the overall organization’s ability to integrate inclusively hired individuals effectively into the work environment. diversity is an important factor that defines today’s workplace, and following the cultural perspectives, here are some issues that could be in the opinion of p4 (finance sector – management) stated that knowledge workers in the present context work on such issues as “the freedom of relationship with american journal of management vol. 25(4) 2025 47 individuals of different cultures especially concerning interpersonal communication.” based on this assertion, the following questions concern the challenges associated with the issue of diversity and its impact. it may be necessary to attend to them in order to foster a positive attitude towards cultural diversity in organizations. according to homan et al. (2020), cultural diversity is a context that can shape interaction processes and, thus, team performance. there is a need to implement policies on cultural differences in an efficient manner to reduce discrimination against team members. the problem of working in heterogeneous teams, including conflict between direct and indirect communication, and difficulty in establishing rapport across cultures, is reminiscent of a broader problem in implementing inclusion policies and practices that must take into account differences in norms and values to foster effective cooperative working. p7 (healthcare sector – support/administrative) concluded his views as follows: “it all depends, in some parts, africans are really respected for their high level of knowledge of education and also their being hardworking, and on the other side, they think africans are fraudsters, loud, they don’t have manners, and they are not supposed to be here.” constraining the given statement, it is possible to describe the crucial. such mixed and often biased perceptions, as o’connell and mckinnon (2021) pointed out, can not only hinder an individual’s career advancement but also negatively affect their identity as employees within the organization. it impedes both integration and non-discrimination into working organizations and the capacity to operate effectively when people are subjected to mixed actual and perceived cultural heritage. these prejudices need to be sacked, and more importantly, the work environment must be shaped in such a way that it is more socially sensitive to everybody so as to be capable of raising the morale of these employees, as well as other employees, and at the same time, be capable of promoting the cause of each employee based on their performances. p8 (retail sector-management) concurred with the observation by opining thus: as this scholar pointed out, “when i came here to study in the united states, i soon discovered that a subordinate can very easily challenge the manager or leadership by giving his/her opinion or his/her opinion on what they do daily.” this statement reflects both the organizational structure and communication modes of the african and american workplace. the african people have a social organization through which one cannot argue with the figures of authority, as they are severely denied. on the other hand, most workplaces in america respond to the culture of free speech and debate, even among the lowest staff members. tear et al. (2020) affirmed this by pointing out that cultural theories determine the assessment of employee behavior toward managers. international competence, therefore, requires understanding these differences to improve communication efficiency within an organization in a multicultural environment. such an understanding may help african professionals manage these differences to enhance their social relationships and organizational adjustment within the united states. p10 (manufacturing sector technical/engineering) noted, “when people walk in on monday morning talking about baseball, and you’ve never played baseball or don’t understand the game, you always feel like, ‘okay, what am i going to say here?’ it highlights one of the challenges of participating in an organization where employees share popular cultural references that may make newcomers uncomfortable. such cultural gaps may hinder social inclusion and have an impact on workplace unity, which is supported by nesterova and dobronravova (2022). these are work-related areas of difference that may create difficulties in everyday interactions and social interactions between people with different cultural backgrounds, affecting their sense of belonging and perceived social inclusion. ideally, solutions to the challenges depicted above should be incorporated into strategies for workplace inclusion, which aim to enhance workplace understanding and promote affirmative interaction among employees from diverse backgrounds. theme 4: communication barriers communication barriers examines how tones and potential biases may impact interactions between african immigrants in the workplace and their counterparts in fortune 500 firms. this theme focuses on individuals' inability to communicate effectively within their workplace and the various implications this has for working relationships. p2 (technology sector technical/engineering) noted, ‘leaving aside the stereotype and conflicting values, it is difficult for employees to keep their jobs and work without feeling 48 american journal of management vol. 25(4) 2025 like they are being harassed.’ the statement by this participant reveals that conflicting values and stereotypes are major obstacles in organizational communication. such barriers result in miscommunication and misinterpretation, thereby developing negative impressions that affect job retention and overall performance. jelenko (2020) pointed out that such stereotypes and value differences not only affect one’s ability to communicate on the job but also erode an employee’s job satisfaction. focusing on the stereotype and not performance may create a toxic environment and lower morale among employees. it is indeed important to unmask these barriers to communication because the workplace should be a safe and positive environment for any individual to work in, without being discriminated against by their superiors or coworkers based on their cultural background. p5 (healthcare sector support/administrative) stated, “i found it challenging to manage the employee relations and office politics as some things are not said directly, and the cultural differences of being direct or self-promoting, especially in business meetings.” this feedback highlights the struggle with adapting to different communication patterns and other unspoken workplace policies. these differences can lead to complications that make it difficult for an individual to assimilate into a new workplace easily. in line with this view, aririguzoh (2022) demonstrated that cultural differences in communication norms pose significant barriers to intercultural communication. in many cases, failing to perceive these micro-messages and unspoken rules can prove disadvantageous to employees, as they are unable to relate well to their colleagues and superiors. overcoming these communication barriers is crucial for improving the working climate for all individuals and ensuring that employees can participate to the best of their ability within their organizations. p6 (oil and gas sector managerial level) recalled the following bias: “one of the major challenges i encountered is in the aspect of communication; from nigeria, we do have an accent, and this makes it difficult for people to understand you and for you to get your message across.” this comment is another illustration of how anchors, such as accents and communication styles influenced by cultural backgrounds, may present rational barriers in organizations. it shows that such biases can result in divergent interpretations of the same information or the outright omission of other valuable inputs due to the manner of their presentation. levon et al. (2021) supported this observation, arguing that accent and manner of speech greatly affect the perception and value of communication. this matter highlights the importance of understanding and respecting diverse customer needs in organizations to facilitate effective communication that is crucial in the workplace. p9 (retail sector – management) argued his response as, “if it is an organization that accepts other cultures, the diversity of such a culture makes me comfortable and offers my most productive effort. if it is an organization that does not accept other cultures, and i do not like toxic environments in any way, the best way to handle this is to ensure that their level of ignorance does not deprive me of my joy.” on the other hand, in organizations that have not adopted diversity, employees may experience feelings of discomfort and a lack of enthusiasm, which can affect their job satisfaction levels. monteiro and joseph (2023) believed that a positive environment enhances organizational commitment, the positive behavioral tendencies of workers, and other organizational virtues, while a negative environment yields undesirable behavioral patterns, such as low morale and poor performance from organizational workers. this underscores the fact that organizational culture acts as a crucial mediator in the overall employee experience and its impact. manufacturing sector and technical/engineering p11 noted, “since cultural differences can hinder effective communication, they should be avoided.” such a statement gives a clear indication of how cultural differences affect communication effectiveness in organizations. as stated by guo and stapa (2023), different cultural groups can hold varying perceptions based on their respective cultural communication and practices, which are vital when relaying information in technical disciplines. such barriers can lead to misunderstanding of instructions, project details, or feedback and hence lead to mistakes and poor performance. these imperfect communication barriers can be disadvantageous to the individual and the team in specific applicational technical areas where precision and accuracy of information are important. observation points to a much larger issue: cultural diversity and its impact on professional interactions and american journal of management vol. 25(4) 2025 49 productivity, particularly when considering approaches to enhance order and teamwork in heterogeneous organizational settings. theme 5: organizational support the codes generated to support the theme of organization support are diversity management and mentorship. organizational support refers to the extent to which fortune 500 companies support eradicating the cultural barriers of african immigrants. in this theme, support in the organizational environment is identified as a factor that influences the experience and performance of organizational members. in the case of the real estate sector – professional, p1 mentioned the following: for instance, my company has a department for cultural holidays because it is very diverse; however, the diverse individuals should come forward and demand more diversity. thus, the statement suggests that while some entities contribute to diversity, such as having cultural holidays, there could still be a general lack of diversity visible on the ground. another fact mentioned in babundo’s study (2023), was that diversity management must work when there is no symbolism, and every effort is attempted to integrate diversity programs into the organizational fabric continuously and cooperatively. the absence of such commitment may, therefore, imply that efforts towards diversity often do not bring into the workplace the kind of diversity the programs intend to convey, and they lack consideration of diversity issues. it underscores the need for focused and sustained advocacy to encourage organizations to adopt and implement diversity and inclusion strategies and procedures. as highlighted by p4 (management, finance sector), there is a problem that we never imagined in the course of the study, which is that “there is a lack of support to the various groups of employees.” the realities of today’s organizations and people practices provide evidence that many organizations fail to adequately address the issues of diverse employees. according to simon (2024), organizational diversityrelated activities can only be effective when they are non-superficial, sustained, and integrated, along with the implementation of organizational policies. it suggested that diversity is not merely something that needs to be instituted as a concept, policy, vision, or mission statement, but it also has to be present in the organization's working at all levels of leadership and management, as well as in its support structures. when diversity is not well-integrated at various levels, it may end up being applied as a superficial activity that fails to meet the true needs/ concerns of diverse employees, making diversity groups feel neglected/ excluded. p7 (technology sector technical/engineering) elaborated, “having companies sponsor this culture. having sponsored or provided funding to promote cultural awareness. the funding could be for awareness for group gatherings for making reservations or making people want to be more part of it.” it implies that we should not only have broad diversity initiatives but also targeted funding and resources for the finance and support of culture and cultural practices. for instance, meyers et al. (2020) noted that best practice support should encompass cultural resources that align with the cultural demands faced by workers. it also includes financial support, planning, and holding events that promote culture and diversity. measures like these can lead to increased interaction between different groups, improved organization and management in the workplace, and an overall enhanced organizational culture that will ensure all employees feel valued and motivated to work. p10, retail sector management, mentioned, “being misunderstood, especially when one is a calm person, a person of few words, you find people judging you as being timid or lacking maybe leadership qualities.” this statement clearly illustrates how individuals from diverse cultures encounter different working environments and the various forms of discrimination that may be faced by those with, for instance, limited verbal communication abilities. a lack of appreciation for varied communication methods can cause one to underestimate their abilities and hinder career advancement. based on the studies conducted by syakur et al. (2020), organizations' training and awareness programs must support and respect people’s diversity, including their communication preferences and cultural backgrounds. this approach can help eliminate some misunderstandings and foster a positive atmosphere among the company’s employees, where all of them will feel valued and appreciated. consequently, organizations are encouraged to be aware 50 american journal of management vol. 25(4) 2025 of diverse communication styles and empower everyone with equal opportunities to perform and be perceived as capable leaders within the organization. regarding the manufacturing sector, support/administrative p12 claimed, “so, certain races work to support their people within americans, the american system, and even despite how much it is overemphasized that discrimination is not acceptable, some cultures look after their people.” it identifies an ineffable trend of supportive responses from the organizations concerning the identified cultural realities that prevail in the working environment. they can lead to inequity and the perpetuation of social justice issues within an organization, even as it claims to value diversity. garrick et al. (2024) also noted that if the organizations provide clear signals of preference for certain groups, diversity initiatives fail to change structural discrimination. for diversity programs to be effective, there must be a genuine commitment to ensuring that diversity is practiced within the company without exclusion. it can also temper the effects of cultural segregation and help foster a healthier and more tolerant environment within the workplace. theme 6: networking and professional growth mentorship, language barriers, and career mobility were the themes assigned to generate the theme of networking and professional development. it is one of the key themes of the proposed study, which examines the impact of accessibility to professional contacts and opportunities on the career progression of african immigrants working for fortune 500 companies. some of them stated their managerial objectives for acquiring all of them and mentioned that they need access to these contacts to develop as individuals. another interesting factor that was a concern for p2 (technology sector – technical/engineering) was organizational culture, and he noted, ‘’values and expectations are set in stone without considering the cultural differences and individual values.” this comment suggests that organizational culture has a significant influence on networking and career mobility, as it overlooks the cultures of individual employees. if an organization does not uphold cultural values, then the employees are restricted and cannot progress in networking and career advancement. rabl et al. (2020) argued that for diversity management to gain a foothold, diverse values and views have to be integrated into practice. this integration facilitates the development of social spaces for workforce members from diverse origins to interact, exchange knowledge, and advance in their careers. first, cultural differences in terms of values and expectations should be taken into consideration to create equal opportunities for networking and enhancing professional performance in any organization. while doing so, it not only increases the career opportunities of each employee but also improves the corporate culture of the organization. p6 (healthcare sector – support/administrative) affirmed what the participants in the study had said by responding, “the third thing i will say is that there is social networking amongst nigerian communities that will provide people with opportunities to address these issues.” in this regard, therefore, there is a need for mentorship that will ensure people receive support and are offered direction when they encounter the challenging aspects that come with working in organizations. in their perspective, davis et al. (2022) noted that having a mentor is important in one’s career trajectory, particularly for people of color who bear different career challenges. mentoring networks facilitate the best career mobility, as well-connected support systems offer information and links to specific subsections. this is because it suggests that advertising the existence of mentorship programs and networking among organizations will likely minimize gaps and enhance professional development and diversification within organizations. p9 (finance sector – management) revealed, “in organizations that do not embrace other cultures... i try to manage the situation by not allowing their level of lack of knowledge to rub off my joy.” hence, such a statement suggests that there is a need to seek organizational support in addressing cultural matters and fostering professionalism. the non-acceptance of cultural differences in organizations can impact networking and increase the likelihood of non-white employees being underrepresented in promotions. according to kiradoo (2022), for employees to be more effective, the organization should support and encourage diversity in the workplace. equal treatment of the workers and increased opportunities based on aspects of cultural background; organizations can focus on networking and professional development. from a cultural perspective, this approach helps to overcome such barriers and, at the same time, enhances employee job satisfaction and career advancement opportunities of the culturally diverse staff. american journal of management vol. 25(4) 2025 51 p11 from the manufacturing sector and technical/engineering identified that “one of the major challenges is a movement within the corporate ladder in the organization.” the problem described above may or may not be ethnically related, but it tends to focus on the area of mobility in careers within corporate america. kittel et al. (2021) also emphasized the need to consider both structural bonding and organizational culture in relation to career progression. in networks and cultures where there isn’t support for diverse workers, it becomes difficult for them to advance in their careers. communication is crucial for gaining opportunities and maintaining careers, although the concept is relatively new and especially relevant for individuals from diverse groups who may not have as many of these contact points. consequently, to promote initiatives associated with the professional education and training of all employees, organizations must address these barriers. p12 (retail sector; management) affirmed, “i think if we can try to get into spaces where they can and advocate and stand up... if our organizations knew that “you know what if you are discriminatory, are going to be on the news,” then a lot more action would be put in tackling issues like that.” the above statement confirms the lack of networking to support people. according to the results presented in the research study by triana et al. (2021), it has been established that networking has a positive effect on career progression for people of color, particularly through the promotion of situations where workers can raise their concerns and the assurance that organizations are capable of addressing discrimination. by promoting inclusiveness in discussions and addressing these issues to work on them, organizations can improve their support structures to better embrace diversity and equality. it also works to eradicate discrimination and other issues related to promotion, networking, and connections among all employees in organizations. the objective of this research is to conduct a qualitative, exploratory case study to investigate how african immigrants in the it industry of fortune 500 companies perceive and experience organizational cultural challenges and their impact on employee performance. the study was conducted with twelve immigrants from africa, and a content analysis was performed to reveal the patterns and themes. from this thematic analysis, six broad categories emerged among the people interviewed. discussion this study supported the premise that african immigrants in the united states face significant challenges assimilating into the corporate world, particularly within fortune 500 companies. cultural barriers were identified as key obstacles to career advancement, work performance, and overall organizational experiences (hofstede, 2001). participants described systemic barriers that hinder professional growth, particularly in achieving fair career progression and navigating organizational culture constraints. these findings align with prior research highlighting cultural challenges in corporate settings (smith, 2020), career advancement disparities among immigrant professionals (johnson & lee, 2021), and the impact of organizational culture on workforce integration (ahmed, 2022). this chapter integrates findings with existing literature to explore how cultural factors influence the careers of african immigrants in fortune 500 organizations. the study’s limitations concerning methodological and practical considerations are discussed. the chapter concludes with recommendations for organizations and policymakers, based on the study's findings, outlining implications for both individual career development and corporate diversity strategies. finally, key findings are revisited, and potential directions for future research are proposed. limitations of the study this study also has some limitations to it. for instance, the study was conducted among african immigrants in selected fortune 500 companies in houston, texas, and the usa, with a primary focus on the information technology departments. it only focused on one category of african immigrants, meaning that it did not explore other phenomena of the challenges that other african immigrants face; the region of origin also had to be taken into consideration. there was still a huge potential for understanding how these immigrant professionals struggle. however, the exclusive nature of the study to african immigrants in civil society or those working in small to medium-sized firms or as businesspeople limits the coverage needed 52 american journal of management vol. 25(4) 2025 to appreciate the difficulties faced by immigrants in the country. the diverse range of industries and organizational sizes to which african immigrants belong may yield different outcomes in terms of cultural policies and emotional demands. implications the implications of the findings of this current study will be significant to the following stakeholder groups: leaders of fortune 500 companies and african immigrants in organizations, human resource professionals and practitioners, policymakers, and researchers. fortune 500 companies as presented in the case of the fortune 500 corporations, the study showcases the need for diversity and inclusion programs to be available at empresa. however, african immigrants' experiences indicate that critical challenges require specific diversity and inclusion programs to be developed. these professionals often encounter cultural issues, communication challenges, and the unavailability of essential networks, which hinder the promotion of their careers (burke, 2022). african immigrants as for the work situation of the african immigrants in these fortune 500 companies, the outcome of this study provides an in-depth reference for these immigrants. these insights will help these professionals identify some of the possible hurdles they are likely to encounter before implementing the strategies they will use. among the suggestions is for the african immigrant to go out in search of a protege in their organizations (roberson, 2024). they will be able to establish relationships with others who have experiences and insights into corporate culture, which will help them in their career paths. hr professionals since hr is considered the management of people, hr professionals are directly involved in creating cultures and policies within an organization (joyce et al., 2024). based on the results of this study, it is recommended that hr departments review their policies and procedures regarding the performance evaluation tool to enhance its fairness and equality. this may involve reformulating the assessment criteria, where objective work experience replaces trait-based assessment, which can negatively portray african immigrants due to cultural biases. a 360-degree feedback system could also be useful in enhancing the frequency at which potential biases are taken into account. since people from various levels within an organization offer feedback on a subordinate's performance, an organization is likely to obtain a more balanced perspective of a subordinate's strengths and weaknesses. policymakers the study's implications of the study narrowed down to the policymakers, especially those in charge of diversity and inclusion policies. first and foremost, it is clear that policymakers must establish sustainable frameworks for promoting talent acquisition and retention, as outlined by popo-olaniyan et al. (2022). recommendations the following section provides recommendations grounded on this study, which seeks to explore the cultural challenges of african immigrants in fortune 500 firms, more so in it organizations. enhancing cultural awareness and sensitivity training at present, fortune 500 companies require enhancing corporate cultural awareness and sensitivity training programs applicable to employees of all levels. as a result, this study focuses on how african immigrants encounter many social hurdles due to misconceptions about their communication practices, working principles, and cultural values. when implemented as part of diversity and inclusion practices, cultural competency education will help create an environment where everybody in an organization is american journal of management vol. 25(4) 2025 53 cherished and appreciated (mayfield, 2020). the kind of training provided must focus on distinguishing the collectivist and the individualist-orientated cultures, increase the understanding of the implicit bias, and guarantee the free discussion of the diversity in cultures. however, it should not be a single occasion that has reached its end once an employee has been trained on a specific skill; this training should form part of a continuous process. promoting effective mentorship programs companies should embrace having mentorship programs for minority and african immigrants to help them in their workplaces (mosuga, 2020). the study said that most african immigrants failed to find meaningful mentorship, a significant way of promoting their career path. getting a proper mentor may be a key to success because they can explain and advise on how things work in a given company. it suggests that organizations must ensure that african immigrants are matched with knowledgeable people who have overcome similar difficulties, as such people will provide helpful information and motivation. besides, the engagement of the top management in these mentorship programs will help to reaffirm the organization's commitment to equality and other related aspects of talent management within the organization (bohonos & sisco, 2021). encouraging proactive networking opportunities still, it also helps enhance the organization's organizational structure and contributes to the diversity and inclusion initiative. fortune 500 companies should develop a well-defined networking process to target african immigrants and other minority employees (gorman & kay, 2020). this paper sought to investigate the networks of african immigrants in their career progression and how they feel about being locked out of other subtle networking events. to this effect, companies can organize structured inter-group events like lunch-and-learn, group exercises, and other events that bring together different groups. further, companies must form erg for african immigrant employees to ensure they are supported and can network for their resources. such ergs can help the employees, influence organizational dialogues and activities, and enhance the degree of inclusion in the workplace (byrd, 2022). those opportunities must help reduce the existing cultural divides or gaps in the workplace, create social networks, and accrue social identity for those from different cultures. implementing inclusive performance evaluation processes employee performance assessment methodologies are to be redesigned to embrace all employees without discriminating against anyone. the work showed that traditional performance appraisals tend to reward such attributes as communication practices and cultural attitudes that are characteristic of u.s.origin workers to the detriment of workers of color, such as african immigrants (nutakor, 2019). companies can make it easier and less prejudiced by putting criteria for evaluating candidates in an objective rather than a subjective framework, apropos skills and achievements rather than karma-based norms of culture. this may involve using 360-degree feedback mechanisms and guaranteeing that performance appraisals are done by cross-sectional boards. in addition, more training for evaluators on cultural sensitivity is needed because culture plays a role in how the results of an evaluation are viewed (majda et al., 2021). in these ways, organizations will ensure that no subordinates will be mistreated, and all employees will be treated and reviewed relatively and equally. this will also enhance employee morale and their ability to stay with the company. fostering open communication channels employees and employers should always have open doors so that they can communicate or provide feedback regardless of their race (malhotra, 2024). some study participants noted they were lonely and frustrated due to their lack of communication. in this regard, organizations must schedule frequent meetings and group discussions. they should also have suggestions and complaints boxes where people can describe the challenges they go through and the recommendations, they would like to give without being punished. opinions must be opened and shared, believing that such actions enhance trust, thus ensuring that every 54 american journal of management vol. 25(4) 2025 staff member is valuable despite diversity (leroy et al., 2022). however, it is also necessary that leadership respond to feedback to help express the appreciation of employee grievances. it also helps establish corporate culture, besides enhancing employees' productivity, and it enhances companies' results by creating a favorable working environment. investing in language and communication skills development popular companies on the fortune 500 list should deem it compulsory to provide resources for language improvement and speaking for african immigrants (mosuga, 2020). as a result, despite many african immigrants successfully overcoming the language barrier, there can be some misunderstandings in interafrican business communication because mastering business english differences, which can be crucial in collaboration with counterparts from other african countries, could be better. when it offers an extension to the business communication courses, passion when introducing and workout sessions on interpersonal communication interactions, organizations will help the african immigrants to express their capability in the business marketplace. also, language learning will go hand in hand with the cultural information about the background of the learners, which will enhance their ability to integrate into the organizational environment. encouraging collaboration with external organizations corporations must also develop partnerships with other external agencies, community-based agencies, and institutes involved in helping african immigrants in the workplace (martinez-damia et al., 2024). it is necessary and would significantly enhance diversity as it is essential to engage and work with non-profit, community, and educational organizations; it also provides a good insight into the challenges african immigrants face in the country. when implemented, such collaborations may lead to the development of unique training, workshops, and other outreach activities that aim at creating a pipeline from underrepresented groups. moreover, in their existing social interactions with these organizations, the corporations can also get clues on the social issues affecting african immigrants (giazitzoglu & korede, 2023). this would give corporations a positive corporate social responsibility. conclusions this research employed an exploratory, qualitative approach to better understand the cultural aspects that affect the career mobility of african immigrants working in fortune 500 firms. therefore, the present study can deepen the understanding of how this particular group of employees might experience corporate reality and what can be done to promote it by those who are keen on diversifying and including people with such backgrounds. social identity theory was used to underpin the study with an understanding that people derive their identity from a group they belong to. in this context, african immigrants often find themselves navigating dual identities: their culture and the corporate culture in the united states of america, which they are required to dissolve. this situation can make for quite a nerve-wracking conflict because people attempt to integrate ethnic education with the chiefly egoistic, selfish organizational culture that defines large corporations like those that make up the fortune 500 list. the study explained the following important elements of the experiences of african immigrants: intended predictors included communication difficulties, perceived prejudice, and sponsorship. the study revealed that cultural differences occasion most communication barriers and lead to social isolation and frustration among african immigrant employees. some of the participants described how they or someone they knew experienced secondary oppression that contributed to their destruction of worth in multicultural organizations. with regard to this, it agrees with other studies that have shown that minority staff are subjected to other forms of stress that may be a reason for their dissatisfaction in the course of performing their duty as well as their overall well-being. secondly, the minority tax was evident; the minorities tried hard to prove themselves deserving of a chance, only to turn up burnt out, and this created turnover and low morale. american journal of management vol. 25(4) 2025 55 the study pointed to these as sectors that would call for the intervention of fortune 500 firms. the study also highlighted the need for fortune 500 companies to develop and operationalize diversity and inclusion frameworks that would include the frame for african immigrants. in this respect, the proposal that all workers ought to undertake training on cultural competence is a good model through which organizations can endorse diversity and cultural diversity. this training should also entail cultural issues and ways of dealing with prejudices into the decision-making process. mentorship issues emerged as another factor that was vital in the promotion of the careers of african immigrants. a program was established to connect an employee with a mentor in an organization depending on the problems they are experiencing as an african immigrant when employees are being hired. as a result, it should be understood that these programs help build professionalism in management and enhance corporate culture through the diversity of leaders. the study also drew attention to the need for more waived networking chances in organizations. many african respondents recognized themselves as socially excluded from informal events that are important for adapting to a new workplace and career progression. hence, organizations' formal systematic methods of networking, such as the employee resource group for the people of associated immigrant origins from africa, create authentic business relations that help workers map their careers better. from the applied aspect of the study implications for policy recommendations, the argument emerging from the bearing case is that more effort in public policy should be directed to the search for the right mechanisms that would enhance employment and, particularly, the non-absenteeism of gifted workers with an immigrant background from africa. this may be done by engaging such organizations to build trust and embrace the oddities of the multiple types of clients. also, links to educational establishments may create talent pools from underrepresented minorities and boost the economy. for human resource professionals, some of the study implications include the need to rethink ways in which performance management evaluation within organizations is fair. drawing on prior research, leaders in business management actively embrace diversity in the organizational structure which fosters an environment of diverse viewpoints and inspiration (dostanic, 2024; semujju et al., 2025). this means that an array of career ladders needs to be developed to map the skills and experiences needed to progress, which assists african immigrants in comprehending their career patterns. this shows that more frequent conversations about career planning can also help to improve satisfaction and retention rates. the consequences of the literature review of the study reveal that there needs to be a greater understanding of the experiences of african immigrants in an organizational context. some of the directions for further studies may include comparative analyses of immigrant populations from different ethnic, national, and cultural origins to reveal similarities in the observed phenomena and differences and peculiarities of immigrant experience. this could also involve following the african immigrants to understand their career trajectories as they 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(2024). barriers and challenges affecting quality education (sustainable development goal #4) in sub-saharan africa by 2030. sustainability, 16(7), 2657. https://doi.org/10.3390/su16072657 big data: goldmine or minefield? joni jackson chicago state university big data is the massive amounts of data produced by us and about us. when companies use big data to reach us, we may feel a strong emotional bond with the company, similar to the bonds of a close friendship. or, we may be left feeling creepy. an exploratory analysis was conducted to examine people’s relationships with and feelings toward companies and their use of big data. this paper presents the results of this exploratory analysis and provides a number of suggestions about how companies might create strong bonds with people, without making them feel creepy. introduction there has been explosive growth in the amount of data and information available to us and about us; this vast amount of information is “big data,” a term coined to describe the “proliferation of data and our ability to make productive use of it” (akimoff, 2013; desouza & smith, 2014). when one thinks about the amount of data and information created and collected by us and about us, consider this: “a child born in 2012 will leave a data footprint detailed enough to assemble a day-by-day, minute-by-minute, account of his or her entire life, online and offline, from birth until death” [italics added] (sullivan, 2012). this detailed account of an individual’s life helps companies not only to understand and meet people’s needs but also to build stronger bonds with them, bonds that resemble an intimate friendship. amazon.com, one of the world’s largest online retailers and a company that has consistently achieved top online customer satisfaction scores (rueter, 2014), illustrates the successful use of big data to build strong customer relationships. while amazon’s customer satisfaction ratings declined slightly at the beginning of 2015, it still delivered high levels of customer satisfaction. amazon has done so through its pioneering use of data to create customized personalization (e.g., “inspired by your shopping trends,” “similar others have purchased”). these personalized recommendations are very much like word-of-mouth from a friend, or what jeff bezos likened to a “‘return to yesterday’ when the owner of the corner store knew you and your likes and preferences” (ferranti, 2000). knowing people’s likes and preferences has enabled companies like amazon to create bonds with people that are more like friendships than “superficial transactional relationships;” these friendships can lead to trust and loyalty (childress, 2014). amazon’s success with customized personalization highlights the strength of this approach; their application and use of big data allows them to give people exactly what they want. this represents a goldmine for people as well as companies like amazon. similarly, target corporation used big data to get to know its customers. in 2002 a team of statisticians at target was asked, “if we wanted to figure out if a customer is pregnant, even if she didn’t want us to know (italics added), can you do that?” yes, they could, and they did (duhigg, 2012). by combining shopper data with third party data and using predictive analytics, target was able to create american journal of management vol. 16(4) 2016 57 detailed profiles of customers that enabled them to determine if a woman was pregnant and, if she was pregnant, the stage of her pregnancy. their use of big data allowed them to tailor offerings to meet a woman’s need for pregnancy-related products. target captured the type of information that friends have about one another, information that might lead to feelings of friendship, trust and loyalty (childress, 2014), similar to amazon’s customized personalization approach. this creates a goldmine for people. yet, target’s use of intimate information made people feel “creepy.” one might liken their experience to one in which a complete stranger approaches and addresses you by a favorite nickname that only family and close friends use far too familiar for someone with whom you do not share an intimate bond and one that might leave you feeling creepy. target’s use of big data allowed them to achieve a level of intimacy that enabled them to hone in on people’s immediate need (for pregnancy-related products). however, target’s intimacy was far too familiar for someone with whom people did not share a close bond. as a result, people were left feeling creepy. thus while big data creates a potential goldmine of friendships and strong emotional bonds with companies, big data may also create a potential minefield of frenemies who look and act like friends but leave people feeling ‘creepy‘ because they know these people are not their friends. while companies collect data about people, people also share data about themselves. along with the explosion in big data from company efforts, we also see an explosion in data that people willingly sharing about themselves (which contributes to big data). there is also a proliferation of tools that allow people to share intimate details about themselves with friends and strangers. commenting on this trend, carr (2015) likened people today to “mini-media companies” who listen to “the holy music of the self.” indeed, 2014 was declared “the year of the selfie” by twitter ((ng, 2014), a testament to our love affairs with “our self” and our proclivity to post minute-by-minute accounts of our lives and further evidence of our comfort with and desire to share every moment of our lives with others. this represents a goldmine for people as it allows them to create bonds with other people and companies by sharing. yet while we see an increase in people sharing data about themselves, often intimate and detailed, people still report concerns about their privacy, particularly about the amount and type of information that is being collected. the term “privacy paradox” was coined to reflect this disconnect, where people reported concerns about disclosure of personal information but continued to engage in behaviors that led to greater disclosure of personal information (barnes, 2006). this sharing, despite concerns with privacy, may not reflect a lack of concern about privacy but may instead reflect the fact that people are resigned to the reality that the cost of access to online information and services is their data and information. this represents a potential minefield for people. further, while people are aware of and contribute to data collection and aggregation, it is not altogether clear the extent to which people are fully aware of the data collection efforts (baylon, 2014). as the means of data collection and analysis become more sophisticated, this becomes an important question to explore. as companies become more sophisticated, the data collection techniques become far less transparent (to the extent that data collection can be considered transparent today). while many of the benefits of data collection are clear more information, more sophisticated insights, more intimate understandings that foster long-term, mutually beneficial and “friendly” relationships the rise of big data leads to challenges for people, challenges that may be magnified as people become less aware of the extent of the collection and use of their data. these challenges represent a potential minefield for people. method a small exploratory study was conducted among a convenience sample of eight women and three men, ranging in age from twenty-one to fifty-six. participants were asked about their understanding of big data and how they felt about companies using big data to get to know them. (note: respondents were not asked about specific companies; the companies mentioned in the results are those the respondents offered as examples.) 58 american journal of management vol. 16(4) 2016 findings the concept of big data overall most respondents were familiar with the concept of “big data,” either because of recent news stories or by inferring its meaning (“lots of data”). most also indicated that they were aware that companies conducted some type of data monitoring. while some never thought about data “being used against them personally,” others felt less comfortable with “marketers using all of these little tricks” to get to know them. some indicated that the notion of big data sounded “ominous.” one respondent indicated that big data made her feel like she was being “surveilled in the furtherance of consumerism.” how big data is collected how companies gathered people’s personal information emerged as an issue. respondents initially indicated that they felt companies should ask permission to access and use their information rather than use “sneaky ways of gathering information.” others noted that companies do ask permission (terms and agreements), but that people do not read (“i think i read [the terms and agreements] once ... long ago”). for one respondent, there is little real choice because “you don’t get to opt out of accepting terms and conditions if you want to use the product or service.” several respondents indicated that people tend to “over-share” and thus have agreed to give companies access to their personal information. “people put a lot of information out there” about themselves, so “a lot is our fault.” one respondent indicated that he would like to be able to control the message, but the “new hot thing is for everybody to put information out there.... to be so open to everyone is not good.” all of which contributes to big data. there was a sense among some that “we have all signed our lives away,” a sense that people are losing or have lost control over their own information. getting to know you insights from big data it seems to be important that companies make decisions about what types of relationships they want to have with their customers. one respondent described feeling “genial distrust and skepticism” when asked about companies’ efforts to get to know them. respondents want to feel like they have a choice, “like in a relationship you want to be a part of what’s going on.” another was quite adamant, stating “it’s about agency over my own life.” while another respondent stated that, “we live in a society where everybody lives out loud.” on this basis, one respondent indicated that companies are not invading our privacy but that companies do need to understand “boundaries” because there are no clear rules anymore about invasion of space or privacy. when asked how a company gets to know you if they don’t already know you, respondents offered several examples. amazon gets to know you by creating a shared space; it is more acceptable to get intimate details about people if you have a relationship in this shared space (this comment related to transparency in collection and use of data). one respondent stated, “i use my discover card to get cash rewards at amazon. that’s a good business relationship and a good idea. quid pro quo. this was an intelligent move. and i am fine with that. in terms of tracking my behavior -what makes my hackles rise is the notion of any type of friendship. but i don’t have a problem with someone taking data and coming to intelligent conclusions to make goods and services that match my needs. but do you have to track to get this kind of data? why not just ask people?” companies and brands as friends the idea that companies might aggregate information to become friends had positive as well as negative connotations. regarding the customized personalization pioneered by amazon, one respondent indicated that, “while i don’t love that feature, it can be useful at times.” another was adamant she did not want companies to use algorithms to peer into her life “i know what books i want to read.” others neither liked nor disliked the idea of companies using data to get to know them; they said they would use what they found useful and ignore what was not want useful. while some respondents indicated that they american journal of management vol. 16(4) 2016 59 were not friends with brands or companies, nor did they have (or want to have) a friendship with brands or companies, others described their relationships with companies as a friendship (“i have been dating costco for a long time”). what friendship means when asked about what friendship meant to them, several common themes emerged. friendships were characterized as long term, trusting, honest and non-judgmental. “you don’t have to explain yourself.” the basis of the friendship is a true understanding of an individual’s values. favorite brands or companies become favorites when they become identified with values important to the individual (“like patriotism because we do feel emotions;” “mom and apple pie;” “skippy peanut butter, really american”). friendships are also open and transparent. did they want companies to be their friends? favorite companies and favorite brands as friends favorite brands meet people’s needs “on multiple levels;” it is a “feel good experience” interacting with favorite brands or companies. but it was also clear that for others, the feeling was that companies are not persons and “we are not friends.” favorite brands are indeed like best friends for some however. here’s what some respondents said. “they know my name and even when i switch it up [change drink order], they know ... my family doesn’t even know me like that.” 1. “they care enough about me not to let me get this drink with extra whip cream.” 2. “it’s about me when i walk through the door, i am not one of those million faceless people, like family and good friends.” 3. they “learn my habits ... make me feel like they are paying attention ... that i am important enough that they take the time to get to know me ...i am wanted and acknowledged.” clearly, while people may harbor some concerns about companies’ collection and use of data, many acknowledge that it helps companies get to know them. can companies build relationships with people using big data? of course, however, companies also must address the challenges in the capture of big data. clearly the benefit of big data is that it leads to insights that allow companies to get to know their customers. yet, the challenge is doing so in a way that minimizes people’s sense of loss of control. the collection and use of people’s personal data respondents report some level of discomfort with the collection and use of their personal data, which may stem from a sense of a loss of control. companies do what they do “because they can.” i have “a visceral reaction to being manipulated.” i would like to see companies use “creative transparency,” to make their actions more clear and to “make it easier for people to opt in or opt out.” van otterlo (2014) posed a provocative question in his recent article, automated experimentation in walden 3.0, when he asked, “what happens to us, as a society, if ... informed citizens are predictively biased by technology capable of profiling and experimentation? technology can be used to shape decisions and behavior by manipulation, not force.” one of the participants expressed a similar concern when she stated, “they are shaping our preferences and we think it is all natural, but it is not.” discussion big data is big business. there is value in the snippets of data that we share about ourselves as well as the data that is unearthed about us. using big data, companies can know anything about any of us, with or without our knowledge. while companies clearly benefit from the use of our data, so do we. targeted, 60 american journal of management vol. 16(4) 2016 personalized offerings result from the insights companies glean from all of this data and provide us with a better overall experience. we have access to massive amounts of information, free of charge (cumbley & church, 2013; esposti, 2014). intimate relationships stemming from “big data” foster closer relationships with companies that may create long-term, brand loyal relationships with their consumers. but there is a flip side to the coin. while there are clear benefits, there are also costs. one cost is our loss of privacy, or as one respondent noted, loss of “agency over our own lives.” this may be one of the many reasons why target customers felt “creepy” after receiving targeted mailings. respondents with whom i spoke also pointed out that people are responsible for some of the information that is “out there.” so why do people feel so uncomfortable? are people more comfortable if it is a favorite brand? it seems that they may be. even those respondents who were adamant about not sharing details of their lives with companies were more relaxed in their body language when they spoke of their favorite brands (they laughed and smiled more). what is the difference? among respondents in this exploratory study, trust and honesty emerged as key themes in defining “friendships.” control, while potentially not a factor in friendship, is very likely a moderating factor when people are faced with “marketers using all those little tricks.” if big data undermines people’s ability to control their data (newman, 2014), does it decrease their trust in companies and brands? do people trust brands that are more transparent in their data collection efforts, and does trust follow from greater feelings of control? several respondents made reference to an idea that one called a “shared space” as a way for companies to establish closer relationships with their customers. one described “shared space” as sitting next to the same stranger in the same coffee shop at the same time every day. you have never been introduced, so you do not know one another, but you do “know” one another (because you know you share this same space and thus similar habits). you probably share more in common with this stranger than with another stranger who does not frequent this coffee shop regularly. thus, if he were on the phone and “the stranger in the coffee shop” commented on something overheard in his private phone conversation, he would be less uncomfortable than if a “stranger on the bus” commented on something overheard in his private phone conversation. he likened this to companies who share space with their consumers versus those companies who do not. so do our favorite companies or brands (“friends”) raise fewer privacy concerns, despite the fact that they collect “big data,” because they share space with us and are thus less likely to raise “our hackles”? this raises the question, what actions can companies take to be more transparent, friendly and trustworthy to create shared space? as the field of big data changes, new developments unfold rapidly. do these new approaches rely on more transparent means of data collection, means that might allay people’s concerns about privacy and led to greater friendships and more trusting relationships? some of the new developments in data collection and surveillance seem to suggest less transparent means of data collection. let’s examine some of these more recent developments. recent developments in data collection facial recognition facial recognition technology is employed by a number of companies; this software lets companies collect or infer people’s age, gender and ethnicity. the luce x2 touch tv is a new vending machine that not only greets people by name, but also helps people make better snack choices because it only allows people to buy snacks from a pre-approved list. the machine can also access information about people’s age and medical history (chumley, 2014). almax spa also uses facial recognition software in their eyesee mannequins that allows them to track people’s movements and to identify demographics (e.g., race, gender, age). future plans include audio recording devices that will capture snippets of people’s conversations (esposti, 2014; roberts, 2012). new patents/patents pending in 2014, apple submitted a patent application for technology that would allow them to infer people’s moods by comparing people’s baseline mood data to current mood data” (greenzeiger, m.f., phulari, r., american journal of management vol. 16(4) 2016 61 & sanghavi, m., 2014). verizon recently applied for a patent for a dvr set-top box that will monitor people (and pet) behaviors in the home “eating, exercising, laughing, reading, sleeping, talking, singing, humming, cleaning, playing a musical instrument, ... or engaging in any other physical activity ...” (esposti, 2014). amazon received a patent for “anticipatory shipping;” they can ship products that you have not (yet) ordered, but probably would based on your previous orders (bensinger, 2014). disney filed a patent to track guests at their theme parks by monitoring their shoes. according to disney, this would allow them to create a customized experience for guests; “... a mickey mouse park employee could call a child by name ...by using the child’s shoes.” moreover, disney indicated that shoe-tracking would be “less-invasive than other options (e.g., disney’s magicbands)” (sabri, 2016). cognitive computing cognitive computing is a fast-growing area that involves smart algorithms and self-learning systems. google assistant, microsoft’s cortana, amazon’s alexa, facebook’s m, and apple’s siri are examples of smart personal assistants that rely on cognitive computing. these apps can predict people’s behavior by learning their behavior from their “interests, schedule, family, friends, work, troubling cat-video obsession and everything you've ever bought or wanted to buy” (beer, 2012; nield, 2014); and, not only do these algorithms learn people’s behavior, they seek to be proactive by listening to people’s interactions and telling people what they might be interested in (kendrick, 2016; shahani, 2015). environmental data monitors the “array of things” project was recently launched in chicago; this project creates one of the first “permanent data collection infrastructures” in the united states. data trackers monitor environmental conditions (e.g., temperature, humidity, sound, etc.). the trackers can also monitor people and their movements although this is not part of the project’s current plans (heinzmann, 2014; moser, 2014). in toronto, there is a similar data tracker, turnstyle, that monitors smartphone signals in downtown toronto. turnstyle gathers data and information, then sells it to businesses who use this information to create offers for their customers. most smartphone users are not aware of this data collection” (crawford, 2014). conclusion these developments in data collection are more sophisticated and thus may allow the capture of data that is not subject to socially desirable posturing, which may increase the accuracy of data. but these approaches are becoming less transparent (i.e., people may be more unlikely to be aware of the data collection efforts). thus, what are the implications, if any, for the relationships between people and the companies who seek to friend them? does transparency matter in an environment where people understand that some choices are limited (i.e., the cost of access to many services is provision of one’s data). or do companies who successfully build long-term friendships with people enhance these friendships by being more transparent in their collection and use of data? are people less likely to feel controlled, manipulated or exploited if they are aware of the data collection? finally, would this explain the difference between people feeling creepy (i.e., target’s case) versus people feeling like we have “harken[ed] back to yesterday” (i.e., amazon). companies may benefit by making their data collection activities more explicit or transparent, and perhaps more importantly, understandable. although people often explicitly (and sometimes unwittingly) agree to share their data, the bonds of friendship may be strengthened when people understand and agree to the use of their data. r e f e r e nc e s akimoff, t. 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http://www.npr.org/sections/alltechconsidered/2015/07/03/419540367/how-personal-should-a-personal-assistant-get-google-and-apple-disagree� http://www.npr.org/sections/alltechconsidered/2015/07/03/419540367/how-personal-should-a-personal-assistant-get-google-and-apple-disagree� http://www.pcworld.com/article/258034/data_snatchers_the_booming_market_for_your_online_identity.html� http://www.pcworld.com/article/258034/data_snatchers_the_booming_market_for_your_online_identity.html� http://ojs.library.queensu.ca/index.php/surveillance-and-society/article/view/walden3� ajm 19(1) master r1.pdf ajm 17(5) web_master.pdf ajm 17(5) web_master.pdf environmental factors for social entrepreneurship success: comparing four regions edward d. bewayo montclair state university, nj luis san vicente portes montclair state university, nj social entrepreneurship attempts to address social problems traditional entrepreneurs and governments fail to address. a growing amount of literature now exists that attempts to explain patterns that characterize successful social enterprises. but these patterns play out differently in different regions and countries. in this study we compare successful social entrepreneurs from north america, latin america, india, and sub-sahara africa to find out how they exploited or worked around locallyconstraining or institutional conditions in order to reduce humanitarian problems. we used information from the ashoka foundation for social entrepreneurship. our main finding is that institutional differences result in different approaches to social entrepreneurship, including the choice of social problems to tackle and population segments to focus on. in north america social entrepreneurs focus a little more on social injustice problems than on rural poverty. it is the opposite in africa. introduction the importance of social entrepreneurship in the alleviation of intractable social problems is being increasingly recognized globally. probably the best illustration of this point is the elevation of highly successful social entrepreneurs to nobel prize laureates. one such social entrepreneur is muhammad yunus, for his microfinance innovation to reduce rural poverty in bangladesh. the microfinance movement is now international. in academia, professional organizations such as the united states association for small business and entrepreneurship now requires their members to join the social entrepreneurship interest group. at universities there is a growing number of social entrepreneurship centers. one such center is the skoll center for social entrepreneurship at oxford. there is also a growing number of corporate and philanthropic foundations devoted to the promotion of social entrepreneurship globally. an example of these foundations is the schwab foundation for social entrepreneurship, which also sponsors the annual world economic forum, in which social entrepreneurship is regularly discussed and leading social entrepreneurs are celebrated (urban,2008). social entrepreneurship is being celebrated because it attempts to address social problems traditional entrepreneurs and governments fail to address. problems such as wide-spread poverty and disease have tended to grow worse world-wide, following the reduction in social welfare spending due to budget cuts in many countries since the early 2000s (borker & adams 2012; yitshaki & kropp, 2016). a growing amount of literature now exists that attempts to explain patterns that characterize successful social american journal of management vol. 16(4) 2016 39 entrepreneurship and social enterprises. one major study by alvord, brown and letts (2004), all of harvard university, examined seven highly successful social enterprises world-wide and identified several key patterns in these social enterprises. the seven cases included the grameen bank of bangladesh, and the plan puebla of mexico. the patterns included core innovations and adaptive leadership capacity. the patterns existed in all seven cases, but in different forms and degrees, depending upon environmental factors. for example, while the core innovation for the grameen bank was to initiate a micro credit package to assist poor women in bangladesh, the core innovation for plan puebla (mexico) was the creation of new agricultural technology for improving family income and welfare. mair and marti (2006) defined social entrepreneurship as “the interaction between social entrepreneur and context”. urban (2008) points out that while social problems are the central driver for social entrepreneurship, the key underlying forces for social entrepreneurs arise out of political institutions, economic institutions and social-cultural institutions. for example, undemocratic political institutions cause political upheavals and ensuing social problems to which social entrepreneurs often have to respond. but developed democratic institutions encourage social entrepreneurs to help victims of market failures and economic fluctuations (alvord et al, 2004 and datta and gaily, 2012). a weak banking system is bad for the commercial sector and results in high levels of unemployment and poverty, which are common targets of social entrepreneurship. the presence of underclasses in a society prevents segments of populations from participating in the mainstream political and economic activities, thus resulting in their marginalization. the presence of religious freedom encourages the establishment of faith-based social enterprises. the encouragement of social capital in a society is good for social entrepreneurship, just as it is for commercial entrepreneurship (sharir and lerner, 2006). in this study we compare successful social entrepreneurship in africa, india, latin america and north america. regarding africa, the study covers only sub-sahara africa, excluding south africa. the basic premise of this study is that the roads to successful social entrepreneurship in these regions are significantly different, given the fairly obvious differences in the political, economic and socio-cultural environments in the four regions. these four regions include a region that is one of the most politically and economically developed regions and another region that is one of the least politically and economically developed regions in the world, north america and africa, respectively. the four regions also include a region that is one of the most individualistic regions and a region that is one of the most collectivistic regions in the world, north america and latin america, respectively. these regional differences translate into different environmental factors for social entrepreneurship. kerlin (2010), in her study “a comparative analysis of the global emergence of social enterprise”, divided the social enterprise world into seven regions. she found the four regions covered in the study belong to completely different categories in terms of social entrepreneurship. in the south asian region, to which india belongs, the emphasis of social enterprises is on “sustainable development”. in latin america the emphasis is on “social/political benefit”. in north america the focus is on “sustainability”. kerlin also found that international aid was particularly important for launching and growing social enterprises in africa, much less so than it is in latin america, where civil society initiatives were more predominant. to study the differences in social entrepreneurship in africa, india, latin america, and north america, we used internet-based data available on the ashoka foundation for social entrepreneurship website. the ashoka foundation is the biggest international organization that supports social entrepreneurs globally. the organization celebrates social entrepreneurship success by electing social entrepreneurs to become fellows in the organization’s social entrepreneurship network. to qualify for the election, the social entrepreneur must demonstrate scalability to broad-based social impact of his or her initiative. in order to be elected to be a fellow, an evaluation team formed by the ashoka foundation prepares a detailed statement about the candidate and his/her social enterprise. these statements are posted on ashoka foundation’s website. currently there are over 3000 ashoka fellows from all regions of the world. by analyzing the information on the internet related to african, indian, latin american, and north american fellows, we discovered differences between these regions, such as differences in the innovations chosen, differences in the targeted demographics, differences in the financing of social ventures, and differences in the factors that inspired the social entrepreneurs to undertake the initiatives. 40 american journal of management vol. 16(4) 2016 literature review definition issues urban (2008) refereed to peter drucker as the first management scholar to introduce the concept of social enterprise, arguing that business organizations are social enterprises because they are creations of political and social institutions and as such they owe certain social obligations to society. however, even though there is a growing interest about social entrepreneurship due to its focus on attacking highly challenging social problems, there doesn’t appear to exist a common definition of the concept. social entrepreneurship has become a global phenomenon, and the global entrepreneurship monitor defined it as “any attempt at new social enterprise activity…with social or community goals…and where the profit is invested in the activity itself…rather than returned to investors” urban (2008). although social entrepreneurship varies from one region to another (kerlin, 2010), it is universally considered to be a form of entrepreneurship (dees 2007, contanzo, 2014; borker & adams, 2012; neck et al, 2009; yunis, 2006; meyskens et al, 2010; and buegre, 2014). table 1 venture typology (adapted from heidi neck, candida brush, elaine allen, the landscape of social entrepreneurship (2009) generally, entrepreneurship involves acting on opportunities, acquiring resources, and the building of an organization that creates something of value (schumpter, 1934; timmons and spinelli, 2004). a commercial entrepreneur has an economic mission and his impact is primarily economic, to satisfy effective demand in the market and gain financially. please see quadrant a in table 1. financial performance is his/her primary metric. in quadrant b in table 1 is a venture undertaken by a for-profit organization to attack social problems. this is intra-social entrepreneurship, a social enterprise started within an existing organization. it is also called corporate social responsibility or philanthropy if the organization merely makes monetary or material donations to charities. charities are indicated in quadrant c. quadrant d represents individuals or groups who establish ventures with solutions to social problems as the primary mission. however, they also seek economic sustainability. that is, they charge fees to cover their costs. they don’t highly depend on charitable contributions or government support, for operating costs. in reality, there aren’t many social ventures that can achieve total economic sustainability or even seek economic sustainability. dees (2007) has pointed out that only very few social ventures survive without philanthropic support and volunteers. and according to alvord et al. (2004) the capacity to build bridges between social ventures and external sources of support, especially financial support, is one of the key patterns in highly successful social ventures. american journal of management vol. 16(4) 2016 41 muhammad yunus (2006), the founder of the legendary grameen bank in bangladesh, classifies social enterprises into 4 categories according to the extent the social venture is able to recover its costs: no cost recovery (1), some cost recovery (2), full cost recovery (3), more than full cost recovery (4). yunus refers to category 4 social enterprises as social business enterprises (sbes). sbes plough aftercost earnings back into the enterprises to scale up their social impacts. if there are any investors, they receive only nominal rates of return. so, according to yunus any enterprise with a social mission is a social enterprise and its initiator is a social entrepreneur. a government-run project to fight poverty or illiteracy is a social enterprise. so is a charitable organization, such as action aid. while “social mission” is the foundation of all social enterprises, and charities generally meet this criterion, their modus operandi is commonly to provide short term solutions to social problems, such as food donations for poor people. bill drayton, the founder of the leading foundation that supports social enterprises globally is quoted as saying that “social entrepreneurs are not content just to give a fish, or teach how to fish. they will not rest until they have revolutionized the fishing industry” (neck, et al., 2009). increasingly though, charity organizations such as choice humanitarian are moving from short term service delivery approaches to long term sustainable solutions. the charity’s projects all over the world have transformed villages in poor countries from dependence to self-sustainability (choicehumanitarian, 2016). these charities provide long term solutions to social problems, although they themselves remain dependent on philanthropic support. the rise of the social enterprise sector: historical setting kerlin, 2010; borker & adams, 2012; urban, 2008; yitshaki & kropp, 2016; and the economist, 2006 argue that the emphasis on social enterprises in the last 30 years is the result of the failure of the welfare state and welfare economics. kerlin points out that “the united states, western europe…as well as south america experienced, to different degrees, a withdrawal of state support to [social benefit programs] in the 1980s and/or 1990s”. in addition, many latin american, south asian and african countries were subjected to economic liberalization reforms, popularly known as “structural adjustment programs” (kerlin, 2010).these internationally-sponsored policies adversely impacted government social benefit programs. the response to government failure to address social problems has been global but varied from region to region. accordingly, social enterprises have been found to take different forms and do different things. kerlin (2010) identified seven world regions in her comparison of social enterprise and social entrepreneurship approaches, namely, north america, western europe, japan, east central europe, latin america, sub-sahara africa, and southern asia. table 2 highlights these differences as identified by kerlin (2010). table 2 covers only the four regions that relate to this study. as can be seen from table 2, the four regions in the table differ from one another considerably. in the southeast asia region, to which india belongs, and latin america the focus of social enterprises was employment and human services such as education and health. in the africa region the focus on employment is much deeper. it even includes employment for self-sustainability or survival, hence the boom of microfinance as the most common form of social enterprise in the region. in the u.s. there was no focus as such. all causes, social and non-social, attracted the attention of social ventures, which tended to be charitable organizations. other differences between the four regions relate to funding sources. foundations were the main sources of funding in the u.s. civil society organizations sponsored most of the social enterprises in latin america. most of the social ventures in latin america are “communitybased enterprises” or cooperatives where community members collaborate to reach a common goal (paredo & chrisman, 2006 and urban, 2008). social ventures in the africa region greatly depended on international donors. it also turns out that africa had the highest international aid per capita. further, while state capability was weak in africa, southeast asia (india), and latin america, it was very strong in the u.s. combining a strong state capacity with a well-established market system the social ventures in the u.s. were highly dependent on private domestic foundations and corporations. and most of the social ventures in the u.s are charitable organizations supported by donations from philanthropists and corporations (borker and adams, 2012). 42 american journal of management vol. 16(4) 2016 table 2 comparative overview of social enterprise in four world regions and countries (adapted from janelle kerlin, 2010 “a comparative analysis of the global emergence of social enterprise”) north america (u.s.)* latin america (argentina)* sub-saharan africa (zambia & zimbabwe)* southeast asia (nine countries)* program area focus all nonprofit activities human service/employment employment and selfemployment employment/ human services common organizational type nonprofit/ company cooperative/mutual benefit microfinance institute(mfi)/small enterprise small enterprise/ association development base foundations and private companies civil society international donors mixed market functioning rating 3.5 strong 1 weak 1 weak 1 weak international aid per capita na/negligibl e $2 $54 $15 state capability rating 4 strong 1 weak 1 weak 1.5 weak *countries sampled in the region alvord, brown and letts (2004), all associated with the hauser center for non profit organizations at harvard university, did a study in which they identified four key patterns in highly successful and well-known social entrepreneurial ventures. they based their study on seven cases. two of these cases operate in africa, (the green belt movement in kenya, and the se servir de la saison sache en savane et au sahel in west africa), one in india (the self-employed women’s association), one in mexico (plan puebla), and one in the u.s. (the highland research and education center). the cases also include the now world-famous grameen bank in bangaladesh. with the exception of one case, the highlander research and education center, operating in the appalachian region of the united states, all seven cases relate to developing or underdeveloped countries. furthermore, with the possible exception of the green belt movement, which also focuses on sustaining the environment, all seven cases are centered on the eradication of poverty. table 3 provides some summary information about the cases we refer to in more detail in the following section. however, table 3 also refers to approtec, (appropriate technologies for enterprise development), a highly successful social venture in kenya and several other african countries. american journal of management vol. 16(4) 2016 43 table 3 patterns in six high impact social ventures (adapted from alvord, et al. 2004, social entrepreneurship and social transformation: an exploratory study) social venture core innovations leadership (building bridges) scaling up strategies social impact 15 years and over gb* bangladesh group lending for poor people without collateral. relationships with ngos, government and academia -created new microcredit packages reached 90 villages model is now global gbm** kenya grassroots mobilization to plant trees relationships with parliament women groups. attracted more volunteers & donors 45 million trees planed plan puebla mexico agricultural technology for poor farmers relationships with universities and government used government services to expand 300% increase in family income. sewa*** india union to campaign for services for poor women workers social activist lawyer built connections with other activists & elite officials expanded policy influence campaigns. 90% of india’s female labor force served hrec**** usa adult education to support grassroots groups to fight inequalities international experience and relationships with academia, social activists reached more adult actors in social movements strengthened labor and civil rights movements approt*** ** kenya inexpensive farm tools for poor farmers relationships with international ngos and manufacturers cheaper farm tools -small profit ploughed back over 500,000 people moved out of poverty. *grameen bank **green belt movement ***self employed women association **** highland research and educational center ***** approtec (appropriate technologies for enterprise development) the importance of innovation, leadership and perseverance in social entrepreneurship the seven cases studied by alvord et al. (summarized in table 3 above) are not only means to fight against poverty, but their approaches are highly entrepreneurial in the sense that they all embrace very innovative components. innovation is considered by many observers to be the foundation of entrepreneurship (timmons & spinelli, 2009 and allen, 2012). these social entrepreneurial ventures attack poverty, and do so in an innovative way. for example, grameen bank started out as a deliberate effort to find a way for helping poor women in bangladesh. muhammad yunus, the founder, in a university research project seeking ways to reduce poverty, found out that group lending could rescue poor people from exploitative money lenders. poor women groups could get small loans (microfinancing) without offering collateral. there was no need for the traditional collateral because group members put enough social pressure on one another to repay the loans. a well-known hurdle in the entrepreneurial path is lack of financing, especially in the start-up phase. the hurdle is particularly high for women, especially poor women (rouse & jayawarna, 2006). in the case of the green belt movement 44 american journal of management vol. 16(4) 2016 in kenya, founder wangari maathai used her charisma and contacts to get poor people come and work together to improve their well-being through tree planting. in the case of plan puebla in mexico, a group of university researchers developed maize production technology to enable poor farmers to improve their crop yield and income. the self-employed women association in india is a trade union and that was founded to organize self-employed women in the informal sector in order to improve working conditions such as wages and police protection. the highland research and education center in the u.s. was founded in 1932 to fight poverty in a poor rural appalachian mountain community. it provided adult education to organize groups to fight economic and political inequalities. in table 3 we also include appropriate technologies for enterprise development (approtec), a social venture in kenya that is commonly considered to be highly successful (rangan 2003, deeds 2007), although it was not one of the seven social enterprises studied by alvord et al. (2004). even though the two founders were not kenyan or even african, they were deeply touched by the poverty within rural peasant farming communities. they were in kenya as volunteers for u.k.-based international charity organization, actionaid. actionaid, as most other charity organizations, provide goods and services to the poor, which is not necessarily a lasting solution to the poverty problem. the founders left the charity and established approtec where they came up with an inexpensive pedal irrigation pump which farmers can use to increase crop yield. this is a more lasting solution to the poverty problem than what actionaid and some other charities commonly do. all seven cases studied by alvord et al had leaders with a strong passion about a social problem and the ability to garner support from diverse stakeholders (bridging capacity) to deal with the problem. these two characteristics enabled the founders to find needed resources in the form of money, materials and volunteers. dees (2007) pointed out that only a small number of social ventures succeed without external support. dees (1998) also characterizes social entrepreneurs as never being stopped by inadequacies of current resources. also, the leaders were transformational leaders. transformational leaders have the ability to inspire others to work for shared causes. they are often called upon to champion and manage radical change in organizations (seltzer & bass, 1990). muhammad yunus, the founder of grameen bank, even though belonging to an elite class (university professor), was touched by the poverty among women in rural bangladesh. to set up the microfinance bank (grameen bank) he had to win support from international donors and government. most importantly, yunus was trusted by poor villagers and he trusted them. ela bhatt was a social activist lawyer concerned about the social injustices against poor women before she founded a union, the self-employed women’s association, to fight against those injustices. she needed and won the support of other social activists and professionals. social networking and social capital have frequently been cited as key factors that lead to entrepreneurial success (aldrich & zimmer 1986; rooks et al., 2016). they are especially important in social ventures. sharil and lerner (2006) investigated eight factors that contribute to success in social enterprises. the founder’s social network was identified to be the most important factor. social capital and social networking are particularly important in movement-based social enterprises such as the selfemployed women association in india and the green belt movement in kenya. another common characteristic of high impact social ventures is the founders’ realization that poverty eradication has no quick fixes, that scaling the social impact of a social venture is a function of perseverance. social entrepreneurship is entrepreneurship in the first place. joseph schumpeter (1947) and many others define successful entrepreneurship in terms of venture growth. in the case of social entrepreneurship, expanding the social impact of the venture is the most visible sign of success. obviously there are different ways a social enterprise can scale up its social impact. alvord et al. (2004) have identified three patterns in scaling up social impact in social ventures: expanding geographical coverage to provide services to more people, expanding the range of services/products to the initial group or groups targeted by the venture, and undertaking activities that change the behavior of other allies/actors who directly or indirectly influence a given social problem. grameen bank started in a single village. it now operates in over 80,000 villages throughout bangladesh. additionally, the bank has introduced many additional loan packages, e.g., housing loans and education loans. the green belt movement in kenya has grown so much as to divide into two: “green belt movement kenya” and “green belt movement american journal of management vol. 16(4) 2016 45 international”. founded by wangari maathai, this organization has been responsible for planting 45 million trees in kenya, since its inception in the early 1980s. it now operates in 9 districts in kenya. rooted in two social movements, women and environment, the green belt movement appeals to a wide cross section of the population, both in kenya and outside. clearly, its expansion is hugely related to the constant flow of volunteers, donors and other allies. the founders of the grameen bank, the self employed women association, the green belt movement and approtec came from the elite in their societies. muhammad yunus and wangari mathaai were university professors. e. bhatt, the founder of the self employed women association, was a lawyer. so, why did they decide to embark on their social ventures and grow those social ventures? the motivation of social entrepreneurs remains an unanswered question (ruskin, et al, 2016). in an attempt to explain what motivates people to engage in the creation of social ventures, constance beugre (2014) refers to the concept of “moral engagement”. some people see social problems as violations of moral order. for example, some people believe that people should be treated justly. accordingly, social injustice is a violation of what is morally right. unmet social needs must be addressed. a social venture, such as the self-employed women association in india, described earlier, is a reflection of moral engagement. social entrepreneurs justify the morality of their actions by creating social ventures. they have to do something about what is morally wrong. it is a moral mandate. the moral engagement construct suggests that the most important trigger for launching a social venture is the presence of a violation of one’s moral standards (buegre, 2014 and yitshaka & kropp, 2016, ruskin. et al, 2016). methods to study the differences in social entrepreneurship in the four regions (africa, india, latin america and north america) we used internet-based data available on the ashoka foundation for social entrepreneurship website. the ashoka foundation is the biggest international organization that supports social entrepreneurs. the organization celebrates social entrepreneurship success by electing social entrepreneurs to become fellows in the organization’s social entrepreneurship network. in order to be elected to be a fellow, the social entrepreneur must satisfy a five-fold selection criteria: new idea, creativity, entrepreneurial quality, social impact, and ethical fiber. the criteria are briefly reviewed below. first, the entrepreneur’s idea must be new, not one that has already been tested in the field. second, creativity must be an obvious personality trait of the social entrepreneur. third, the social entrepreneur’s entrepreneurial passion and steadfastness must be high to help him or her deal with foreseeable and unforeseeable challenges. forth, the social entrepreneur’s idea must lend itself to adaptability in order to be applied widely to scale up its social impact. fifth, the social entrepreneur must be trustworthy to be able to create a groundswell of support for the social venture (ashoka.org, 2016). it is notable here that all five of the criteria ashoka uses to elect fellows are commonly cited as factors associated with successful entrepreneurship. a self-sustaining business model involves all five criteria (allen 2012, longenecker et al, 2012). as we saw earlier, social entrepreneurship is entrepreneurship to begin with (dees, 2007 & beugre, 2014). social entrepreneurs nominate themselves or are nominated for candidacy for ashoka fellowship election. an ashoka foundation country team does the preliminary interview of the candidate, followed by another interview by an ashoka representative from another country. the most critical step in the selection process is the evaluation by a panel of three “leading social and business entrepreneurs” in the country. this panel makes the final recommendation to the ashoka board of directors who grant fellowship status to social entrepreneurs. a statement summarizing how the candidate meets the five-fold selection criteria is written by an ashoka team. these statements or profiles contain observable desirable features of social entrepreneurs and their social ventures, according to the ashoka foundation. the ashoka foundation posts ashoka fellows’ profiles on its website. currently there are over 3000 ashoka fellows from all regions of the world. by analyzing the information on the internet related to fellows from africa (sub-sahara minus south africa), india, latin america (brazil, mexico and argentina) and north america (u.s. and canada), we 46 american journal of management vol. 16(4) 2016 expected to discover certain inter-regional differences in social entrepreneurs and social enterprises. in the literature review, it was pointed out that social enterprises are driven by social, political and economic environmental factors. these factors are remarkably different in the four regions. while north america and india have been stable democracies for decades, the same cannot be said of africa and latin america, to some degree. the north american economies are post-industrial, whereas most sub-sahara african economies are pre-industrial, where vast populations depend on peasant farming. india, brazil, mexico and argentina, to some degree, are emerging/industrializing economies. culturally, the four regions differ noticeably, especially based on geert hofstede’s model of national cultures (geert-hofstede.com, 2016). two aspects of this model are particularly pertinent to this study: power distance and individualism/collectivism. power distance is a measure of acceptance or rejection of inequalities, such as economic, political and social inequalities. competitive politics and progressive tax structures, which generally reduce inequalities, are more entrenched in north america than in any of the other three regions. all four regions, with the strong exception of the u.s., accommodate inequalities rather easily. in addition, the u.s differs from the other three regions in terms of the individualism cultural dimension. the u.s. is as particularly individualistic as the other three regions are particularly collectivistic (geert-hofstede.com, 2016). given the fairly obvious differences in the four regions covered in the study, social enterprises should focus on different social problems, target different population demographics, and finance their ventures differently. in addition, we should expect to discover differences in the personal characteristics of the initiators of social enterprises, such as career histories before embarking on social ventures, and motivations behind those social ventures (kerlin, 2010 and urban, 2008). more categorically we expected to discover and proposed that: h1: the most important focus of social enterprises in africa, india and latin america is the eradication of poverty. h2: the most important focus of social ventures in the u.s.(north america) is the amelioration of inequalities. being an advanced economy, we shouldn’t find poverty to be the leading driver of social entrepreneurship in the u.s. it hasn’t been in the past, as was noted in the literature review section. h3: the focus on inequalities in latin america, india and africa should be relatively low given the national cultures in these regions which tend to be tolerant to inequalities. furthermore, the focus on inequalities in africa should be particularly low due to the prevalence of undemocratic political institutions (alvord et al 2004, datta & gaily, 2012). h4: personal exposure to social problems tends to be the key trigger for undertaking social ventures, although less so in the u.s. than in the other three regions. h5: social ventures are started with initiators’ resources (personal savings, sweat capital and volunteers), although much less so in the u.s. than in the other three regions. h6: external financing (grants by charities and government) is more available for social venture expansion than for launching social ventures, although to a lesser degree in the u.s. than in the other three regions. these propositions will be found to be null (ho) based on the chi square (x2); the critical values are set at p=.05. the ashoka foundation categorizes social entrepreneurship fellows into five fields: economic development, civic engagement, environment, health, human rights, and learning and education. we american journal of management vol. 16(4) 2016 47 decided to focus on the field of economic development because of its direct connection with poverty alleviation. one reason for our interest in poverty alleviation is that “no poverty” is the number 1 of the 17 un-backed sustainable development goals. the second goal is “no hunger”, a co-relate of poverty. world-wide, poverty eradication has tended to attract the most attention of social entrepreneurship (alvord et al. 2004). poverty (population living below a country’s poverty line) is rampant in africa, with the largest number of the poorest countries in the world. but it does exist even in the u.s. (borker and adams, 2012). another co-relate of poverty is “inequalities”, but this is goal number 10 of the 17 sustainable development goals. the study covers 301 ashoka fellows: africa (17 sub-sahara countries, excluding south africa) 98; india 75; latin america (argentina, brazil, mexico) 91; and north america (canada and u.s.a.) 37. these were the entire populations under the economic development field on the ashoka social entrepreneurship foundation website when it was checked in 2015. findings table 4a shows the five sectors/areas of social issues upon which the surveyed ashoka fellows focused: rural development, job skills for employment, rights for disadvantaged communities, appropriate technology and development of entrepreneurs. the table indicates that the emphasis placed upon these issues differed between african, indian, latin american and north american ashoka fellows. these differences were significant according to chisquare tests (x2=55.950). as can be seen in table 4a, the surveyed african ashoka fellows placed a lot more emphasis on rural development than did their counter-parts in the other three regions. rural development was least emphasized in north america. thirty-six percent (36%) of the 98 surveyed african fellows had their focus on rural development. an example of an african social enterprise that focused on the eradication of rural poverty is arid lands information network in kenya. the organization enables rural farmers to access essential agro information. only 11% percent of north american fellows focused on rural development. thus, proposition h1, the most important focus of social enterprises in africa, india and latin america is the eradication of poverty is mostly valid. however, there was a discrepancy with regard to india. on the other hand, north america fellows placed most (65%) emphasis on equal rights. only 11% of the north american fellows focused on rural development. thus, proposition h2, the most important focus of social ventures in the u.s. is the amelioration of inequalities. being an advanced economy, we shouldn’t find poverty to be the leading driver of social entrepreneurship in the u.s. it hasn’t been in the past, as was noted in the literature review section, was overwhelmingly supported. table 4a major sectors aimed at by social entrepreneurs* ashoka fellows from rural development job skills for employment equal rights appropriate technology entrepreneurial skills n africa 36% 14% 19% 24% 7% 98 india 21 12 47 15 5 75 l. america 33 24 20 8 15 91 n. america 11 5 65 11 8 37 total 28 16 32 15 9 301 * x2 = 55.950, significant at p=.05 only 19% 0f the african fellows and only 20% of the latin american fellows emphasized equal rights in their social ventures. but indian fellows, with 47%, were closer to the north american fellows than to africa and latin america. the emphasis on inequalities in india is relatively high, as it is in 48 american journal of management vol. 16(4) 2016 north america. probably this is a reflection of strong democratic institutions in north america and india (datta and gaily, 2012 and alvord et al., 2004). an example of a social enterprise to fight inequalities in india is the sammaan foundation. the organization was started to help rickshaw operators own their rickshaws instead of renting them. as a result rickshaw operators can save enough money to access healthcare, which was previously unaffordable. proposition h3, the focus on inequalities in l. america, india and africa should be relatively low given the national cultures in these regions which tend to be tolerant to inequalities. furthermore, the focus on inequalities in africa should be particularly low due to the prevalence of undemocratic political institutions (alvord et al 2014) is not totally supported by this study. to further highlight the influence of environmental forces on social entrepreneurship we also compare the north american fellows with fellows from each of the other three regions. north america is strikingly different from the other three regions. it is highly economically and politically developed. sociologically, it has a highly individualistic society. it is also more egalitarian than the other three regions (geert-hofstede.com, 2016). in table 4b the north american fellows are compared with fellows of each of the other three regions. as table 4b shows, the comparisons of north american fellows with african and latin american fellows yield significant differences according to chi squires (* symbol). this is largely due the institutional differences between north america and these 2 regions. however, the comparison of north american with indian fellows yields insignificant differences. there are differences, but not statistically significant ones. this finding is largely due to the high emphasis on equal rights by both the north american and indian fellows. both north america and india have well established democracies (the economist 2015) that permit and/or encourage social activism leading to equal rights-oriented social ventures. table 4b major sectors aimed at by social entrepreneurs (n. america vs. other regions) ashoka fellows from rural development job skills for employment equal rights appropriate technology entrepreneurial skills n n. america 11% 5% 65% 11% 8% 37 vs. africa * 36 14 19 24 7 97 vs. l. am * 33 24 20 8 15 91 vs. india** 21 12 47 15 5 75 *differences between north america & these regions are significant. ** difference not significant. table 5a shows the population segments targeted by ashoka fellows in the four regions. the targeted populations differed between regions significantly (x2 =42.084). especially significant are the differences between african fellows and fellows in the other three regions. these differences echo those in table 4a about the social problems that were targeted by the social entrepreneurs. while 40% of the african fellows targeted rural peasant farmers, the corresponding number for north american fellows was 14%. on the other hand, the vast majority (62%) of the north american fellows targeted the general community in their social ventures. latin american and indian social entrepreneurs tended to target similar population segments. although there is some poverty in north america, targeting poverty and poor people doesn’t appear to attract much attention from social entrepreneurs. this is a further support to proposition h2. american journal of management vol. 16(4) 2016 49 table 5a population segments targeted by social entrepreneurs* ashoka fellows from rural farmers youth women entrepreneurs general community n africa 40% 20% 18% 3% 19% 98 india 23 8 15 12 43 75 l. america 29 10 10 10 42 91 n. america 14 5 5 14 62 39 total 29 12 13 9 37 301 * x2 = 42.084, significant at p=.05 table 5b compares north american fellows with fellows from the other three regions. the comparison with african fellows yields significant differences. the comparisons with latin american and indian fellows yields only insignificant differences. it appears that latin america and india aren’t as institutionally different from north america as africa is. institutional environmental differences result in differences in social entrepreneurship, as was indicated in the literature review. table 5b population segments targeted by social entrepreneurs (n. america vs. other regions) ashoka fellows from rural farmers youth women entrepreneurs general community n n. america 14% 5% 5% 14% 62% 37 vs. africa * 40 20 18 3 19 98 vs. l. am ** 29 10 10 10 42 91 vs. india ** 23 8 15 12 43 75 *differences between north america and this region significant; **differences not significant table 6a shows the career backgrounds of ashoka fellows in terms of the four regions covered in the study. the career backgrounds of the four groups differed significantly (x2 =62.983). as can be seen from table 6a, 45% of the african fellows were government employees before embarking on their social enterprise initiatives. probably this is a reflection of the importance of government employment in subsahara african countries. forty-four percent of north american fellows were in the private sector as employees or business owners. again this reflects the dominance of the private sector in the u.s. and canada. thirty-seven of latin american fellows were employees or volunteers in charity or civil society organizations. again this is a reflection of the huge role civil society organizations play in initiating social enterprises in this region (kerlin 2010). table 6a also shows that 20% of the indian fellows had been social activists (community organizers) for long periods in their lives, often since high school, and rarely holding regular jobs. an example of an indian long-term social activist is the owner of an organization that helps poor women beggars at temples become independent entrepreneurs. she had been an activist to help beggars since high school. her master of arts degree dissertation was on street beggars in temple complexes. 50 american journal of management vol. 16(4) 2016 table 6a social entrepreneur’s career before launching social enterprise* ashoka fellows from educational institution government private sector employment volunteer/employee in existing charity social activism n africa 17% 45% 19% 17% 2% 94 india 11 19 32 18 20 74 l america 14 18 28 37 3 90 n. america 3 22 44 31 0 36 total 13 27 28 25 7 294 *x2 = 62.983, significant at p=.05 table 6b shows that comparisons between north american fellows with fellows from africa and india in terms of careers before initiating their social ventures yields significant differences. on the other hand there were only insignificant differences between north america and latin america. the long history of charity organizations in the u.s. is probably the reason why a relatively large percentage (31%) of the north american fellows had career connections with charities, just as civil society organizations were the starting point for new social enterprises in latin america (37%). table 6b social entrepreneur’s career before launching social enterprise (n. america vs. other regions) ashoka fellows from educational institution government private sector employment volunteer/employee in existing charity social activism n n. america 3% 22% 44% 31% 0% 36 vs. africa* 17 45 19 17 2 94 vs l. am** 14 18 28 37 3 90 vs. india* 11 19 32 18 20 74 *differences between north america and regions significant ** differences not significant table 7a shows the social entrepreneurs’ sources of inspiration. the personal factors that inspired or motivated social entrepreneurs to undertake their social ventures differed significantly between the four regions (x2 = 30.288). the majority of latin american and african fellows embarked on their social ventures as a result of personal experiences, an empathetic feeling (ruskin, j. et al, 2016). an example of an indian social enterprise which arose out of a social entrepreneur’s personal experience is a women and child development service center near calcutta, india. the center was started by a divorced muslim woman to help divorced muslim women access services traditionally denied to divorced muslim women. another example is in kenya, africa, and is called “market information points”. the social entrepreneur witnessed how small farmers, including his parents, were being exploited by middlemen. his organization provides farmers the information they use to negotiate with crop buyers in order to increase their earnings. regarding personal experience as an inspiration for social entrepreneurs, it is noteworthy that this kind of inspiration, was lowest (38%) for north american fellows. proposition h4, personal exposure to social problems tends to be the key trigger for undertaking social ventures, although less so in the u.s. than in the other three regions seems to be valid. american journal of management vol. 16(4) 2016 51 table 7a social entrepreneur’s major source of inspiration* ashoka fellows from personal experience concern for others family total africa 53% 44% 3% 94 india 42 51 8 74 l. america 54 25 21 91 n. america 38 35 27 37 total 49 39 13 296 *x2= 30.288, significant at p=.05 on the other hand, as table 7a shows, concern for others’ social problems was the key (51%) inspiration behind social ventures in india. this is an expression of sympathetic feeling toward others (ruskin, j. et al, 2016). it may be recalled that social activism was also highest (20%) in india, as compared to the other three regions covered in this study. organizations in india, such as tata social enterprise challenge are actively encouraging the youth to become social entrepreneurs (2016). families, especially parental background, are a major influence on the decisions of would be entrepreneurs (longenecker et al. 2012). as table 7a shows, 27% of the north american fellows were inspired by their families to initiate social enterprises. such influence was especially low in africa, probably a reflection of the newness and limited size of the social enterprise sector in africa. an example of a social enterprise that was inspired by family background is the azzi institute in brazil. the founder’s mother had always been involved in social work and inspired her son to create an organization (azzi institute) to connect philanthropists with social causes. table 7b social entrepreneur’s major source of inspiration (n. america vs. other regions) ashoka fellows from personal experience concern for others family total n. america 38% 35% 27% 37 vs. africa * 53% 44% 3% 94 vs. l. am ** 54 25 21 91 vs. india * 42 51 8 74 *differences between north america and regions significant. **differences not significant in table 7b north american fellows are compared with fellows from the other three regions. in terms of inspiration for their social ventures north american, african and indian fellows differed significantly. however, only insignificant differences were found between north american and latin american fellows. table 8a shows the sources of financing used by the ashoka fellows in the four regions to start and expand their social enterprises. the table shows that these sources differed significantly between the four regions (x2 = 55.853 for starting up and x2 = 51.307 for expanding). however, in all four regions the importance of owners’ resources in financing new social enterprises is clear. this is a common pattern even for commercial ventures (longenecker et al., 2014 and allen, 2012). it is probably more profound for social entrepreneurs whom dees (1998) characterizes as being defiant to limitations of resources. 52 american journal of management vol. 16(4) 2016 table 8a financing the social enterprise starting up* ashoka fellows from owner’s resources government resources charity support formal borrowing multiple sources n africa 76% 7% 10% 0% 8% 91 india 82 3 8 4 10 73 l. america 49 1 18 2 21 90 n. america 43 2 11 0 43 37 total 65 6 12 2 15 291 expanding** africa 52 12 13 4 19 93 india 44 12 18 7 19 73 l. america 26 11 19 2 42 91 n. america 17 3 8 0 72 36 total 38 11 15 4 33 293 * x2 = 55.853, significant at p=.05 ** x2 = 51.307 significant at p=.05 table 8a also shows that north american fellows depended on owners’ financing the least. an example of a social enterprise that was started with owner’s resources in the u.s. is the sustainable economies law center, which champions legal reforms to support people who lose jobs when companies close plants. the organization relied on volunteers for the first three years. so, proposition h5: social ventures are started with initiators’ resources (personal savings, sweat capital and volunteers), although much less so in the u.s. than in the other three regions seems to be strongly supported by this study. table 8a shows that government and charities were rarely the main sources of financial support for social enterprises in all four regions. also, these sources were used a little more for expanding social enterprises than for launching them. accordingly, proposition h6: external financing (grants by charities and government) is more available for social venture expansion than for launching social ventures, although to a lesser degree in the u.s. than in the other three regions is somewhat supported by this study. we also see from table 8a that latin american social entrepreneurs depend a little more on charity financial support than social entrepreneurs in the other three regions do. this is probably a reflection of the active role civic organizations play in social entrepreneurship in the region (kerlin, 2010), as was noted in the literature review section. debt/bank financing is almost non-existent for social ventures. in table 8b we compare north american fellows with fellows from the other three regions in term of financing their social enterprises. table 8b shows that north american fellows finance their social startup social ventures significantly differently from fellows in the africa and india. on the other hand, there were only insignificant differences between north american and latin american fellows. american journal of management vol. 16(4) 2016 53 table 8b financing the social enterprise (n. america vs. other regions starting up ashoka fellows from owner’s resources government resources charity support formal borrowing multiple sources n n. america 43% 2% 11% 0% 43% 37 vs. africa * 76 7 10 0 8 91 vs l. am ** 49 1 18 2 21 90 vs. india * 82 3 8 4 10 73 expanding n. america 17 3 8 0 72 36 vs. africa * 52 12 13 4 19 93 vs. l. am * 26 11 19 2 42 91 vs. india * 44 12 18 7 19 73 *differences between north america and regions significance **differences not significant discussion, summary and limitations as expected, ashoka fellows in north america, latin america, africa and india are significantly different in many ways. clearly the most important differences are between north america and the other three regions. most of the differences and similarities can be traced to institutional differences. as kerlin (2010 and urban (2008) pointed out social problems drive social entrepreneurs. but social problems arise out of environmental forces. the weak economies in most sub-sahara africa create wide-spread poverty and disease. this study showed that of the four regions being compared, fighting rural poverty is most predominant among african social entrepreneurs. in contrast, rural poverty is least emphasized among north american social enterprises. another major finding in the study relates to the high focus on social injustices in north america and india. social injustices do exist in all four regions covered in the study, but they are most addressed by north american and indian social entrepreneurs. as alvord et al. (2004) and datta and gaily (2012) point out, it is safe and even attractive to address such injustices where strong democratic institutions exist, as they do in north america and india. opportunity recognition is the beginning of any entrepreneurial process. in addition, motivation is the basis of any entrepreneurial undertaking. in north america, a relatively big percentage of the ashoka fellows fight against social injustices out of sympathy with the victims of social injustices. such injustices arise out of the vagaries of the capitalistic market economy, such as closing a plant and relocating to a non-union region. in africa a relatively large percentage of the ashoka fellows fight against poverty because they experienced it personally; it was out of empathy rather than sympathy (ruskin, j. et al. 2016). although the ashoka fellows in the four regions differed in the ways they financed their social ventures, there are some noticeable similarities. like commercial entrepreneurs, most social entrepreneurs finance their start-ups internally (personal savings and sweat capital and volunteers) (allen, 2013). this was especially the case for african social entrepreneurs. north american fellows depended on their own resources the least. the dependence on own resources was still high for expanding social ventures because external sources of financing increased only slightly. again this pattern is shared with commercial entrepreneurs (meyskens, et al, 2010 and austin et al., 2006). north american and latin american social ventures depended on grants and charities the most. probably this reflects the long history of charities and civic organizations in these regions. 54 american journal of management vol. 16(4) 2016 this study clearly shows that economic and political institutions determine the nature of social entrepreneurship in any country. the comparisons between north american fellows and fellows from the other three regions indicate that africa is the most different region from north america. fellows from these two regions significantly differed in every category of comparison that was made in the study. the north american region is different from the other three regions economically, politically and socioculturally, but the gap is biggest with regard to africa. in this study five comparisons between north america fellows with other fellows were made. in four comparisons the differences between north american and latin american fellows were statistically insignificant, using chi squires. the comparisons between indian and north american fellows yielded insignificant differences two times. it seems that latin america is closer to north america than india is, at least in terms of social entrepreneurship. the similarities between north america and latin america probably reflect economic measures, as per world bank data (world bank, 2016). the similarities between north america and india probably reflect political/democratic measures as per the democratic index (the economist 2015). however, north american social entrepreneurs were closer to the latin american social entrepreneurs than they were to the indian social entrepreneurs. therefore, this study seems to imply that economic environmental factors may constitute a more important influence on the processes and outcomes of social entrepreneurship than do political and sociological factors. there is a need for a more systematic empirical study on this matter. a major limitation of this study is the nature of the sample. even though south africa was excluded from the african sample, nigeria and kenya, probably the most developed countries in sub-sahara africa, other than south africa, contributed nearly 50 percent of the african sample. in addition, only ashoka fellows focusing on economic development were studied. extending the study to other focuses, such as health, will most likely provide a fuller understanding of how social entrepreneurs are tackling the eradication of poverty. references aldashev, g. & verdier, t, (2009). when ngos go global: competition international markets for development donations. journal of international economics, (79), 198-210. aldrich, h. & zimmer, c. 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soto-rodríguez university of puerto rico, mayagüez campus edgar maíz-vázquez pontifical catholic university of puerto rico a key ingredient of the global competitiveness report is the executive opinion survey. this instrument relies exclusively in the opinion of top executives and ignores the perceptions of non-executive personnel. this research examines if a change in the type of survey respondents will make a difference in the global competitive index. the results analysis showed significant differences between executive and employees with respect to their perception of the competitive level of the studied economy. in order to assess the existence of a hierarchical bias in the eos, the researchers suggest further validation studies on other economies included in the gcr. introduction the concept of competitiveness is perhaps one of the most studied by researchers, practitioners and international institutions since the times of adam smith. notwithstanding, there is no worldwide common definition for this concept as of today. the proliferation of theories respond to a wide array of economic and non-economic factors examined from international, national and business firm perspectives (garelli, 2006; scott & lodge, 1985). the world economic forum (wef) is one of the many organizations devoted to the assessment of the static and dynamic constituents behind national competitiveness. the wef has been examining the many factors of competitiveness since 1979 through its global competitiveness report (gcr) and has been acknowledged as one of the leading reports in measuring the productive potential of nations worldwide. it has also helped policy makers, the business community and supporting organizations to understand the key factors that determine economic growth as well as the strategic mechanisms to articulate economic policies and institutional reforms (sala-i-martín bilbaoosorio, blanke, hanouz, greiger and ko, 2013). notwithstanding the recognition of the gcr within government and business organizations, its usefulness as a measure of the competitiveness of the countries and industries has been widely criticized. opponents to reports on competitiveness argue that the competitive ratings published by organisms like the wef, the imd, the oecd and the world bank do not reflect the reality of the participant countries (berger & bristow, 2009; kauffmann & kraay, 2008; kaplan, 2003; lall, 2001; ). critics also argue that the indicators used to assess competitiveness are not appropriate for all countries and/or economic sectors due to the great variations among them (vaillancourt-rosenau, 2003). according to vartia & nikinmaa (2004) the lack of precision hinders the effectiveness of these reports as a marketing tool for the 82 american journal of management vol. 16(3) 2016 economies included in these reports. the lack of precision could also distort the economic reality of these countries jeopardizing their ability to attract foreign direct investment. some researches criticize the methodology used by the wef and the imd arguing that the primary data obtained from a survey instrument is obtained from a specific sample of executive/entrepreneurs. in the case of wef’s competitiveness report, survey subjects per country range from 40 to 350 participants (browne, batista, greiger and gutknecht, 2014). primary data is obtained from these participants through the executive opinion survey (eos). this instrument measures senior management and corporate business leaders’ perception on the competitive level of the country in which they conduct business. according to vaillancourt-rosenau (2003) wef’s confidence in its eos stem from its capacity to measure the intangibles that hard statistics are unable to capture. however, the use of business executives as opinion leaders has been criticized. some opponents to the use of expert assessments claim their perceptions are biased toward the interest of the business community as their views might significantly differ from other type of respondents like ngos, employees and supporting organizations (kaufmann & kraay, 2008). as a result, the assessment might not be statistically representative because the sample was not randomly selected from other national groups (vaillancourt-rosenau, 2003). in addition, the assessment could also be biased by the ideological orientation of respondents in favor or against the government (kaufmann, kraay, & mastruzzi, 2004). from an empirical perspective, the use of different data sources reduces the statistical bias and improves the lack of representativeness of using a single data source. from the authors’ perspective, the fact that the eos only considers the perception senior management and corporate business leaders as the key input in determining the competitiveness of whole economy constitutes a statistical bias that from here on will be termed as a “hierarchical bias”. this study examines the differences, in the wef’s competitive index due to a change in the type of survey respondents. the aim is to validate if in fact the eos lacks of statistical representativeness due to a “hierarchical bias”. this exploratory research first examines extant literature on the competitiveness issue and then discusses the wef methodology used to develop its global competitive index. second, the results of the wef’s executive opinion survey (eos) obtained are compared to those obtained from the alternate survey sample (non-executives). next, the results are examined using a t-test to determine if there are significant differences between the original results obtained from the eos and the alternate sampled population (eos1). the paper concludes with a discussion of the implications of incorporating the perception of employees (alternate sample) as part of the executive opinion survey for both, the countries participating in the gcr and the wef itself. theoretical background the globalization phenomena brought a paradigm shift in the strategic thinking of firms without regard of their size and type (soto-rodríguez, 2011). to succeed in today’s competitive landscape, firms cannot be content with defensive strategies aimed at protecting their business turf. instead, companies – whether international, multinational or global – are now more focused on crafting strategies that can be molded and adapted to changes in their competitive environment (porter, 1990). this contrasts with the pre-globalization wisdom where the emphasis was on obtaining economic value through market segmentation, positioning, industry analysis and strategic planning (bartlett & goshal, 2002). the strategic imperative then urged companies to: (1) upgrade their strategies on a continuous basis, (2) adopt strategies with a global scope and (3) rethink and question current successful strategies before they become obsolete (bartlett & goshal, 2002). however, the fear of losing stability biased the company’s strategic thinking from innovative and creative approaches towards more predictable and conventional plans (porter, 1990). the rise in global competition ignited the pursuit of different ways in which companies could create and sustain their competitive edge. for instance, the concept of learning organizations emerged during the 1990s in response to this trend and called for improvements in the forecasting capability of the organization and a proactive attitude toward learning and continuous improvement (lussier & achua, american journal of management vol. 16(3) 2016 83 2001). its proponents posited that in order to survive and keep its competitiveness, companies must be skilled at creating, acquiring, and transferring knowledge (garvin, 1993). as such, a learning organization encourages creativity and innovation, fosters the free flow of ideas, open communication, and empowers employees to think, create, learn and solve organizational problems (senge, 1990; robbins & judge, 2014). in a similar fashion, the resource-based approach to organizational competitiveness proposed by grant (1991) encompassed an examination of the company’s tangible and intangible assets as they potentially constituted the core of a sustainable competitive advantage. by appraising the existence, rareness, imitability and value of its resources, firms were able to determine which ones could be used to create a competitive edge (hamel & prahalad, 1990). this presupposed that the company had the ability to: (a) make effective use of these resources, (b) integrate and coordinate them across the organization, and (c) exploit the potential of some of these capabilities (grant, 1991). contemporary strategic thinking evolved from these concepts to view the organization as a whole set of interrelated and interdependent parts aimed at the creation of value by virtue of the synergetic integration of its internal capabilities and the external environment (grant, 1991). the firm’s strategic intent (hamel & prahalad, 1989) leverages and aligns the organizational capabilities with its external constituencies to form an ecosystem of collaborators, supporters, clients, and suppliers that not only impact the creation but also the delivery of a valuable product or service (iansiti & levien, 2004). the success of the resulting ecosystem rests on the interconnectivity of the actors and its synergy nurtures and encourages the firm towards the recognition of new entrepreneurial opportunities (volker, 2012). while the interest of firms, economies and nations on the competitiveness concept could be traced back to the contributions of adam smith and david ricardo, this concept has evolved over the decades to reflect changes in approaches and perspectives. garelli (2006) attributes the proliferation of viewpoints and definitions of competitiveness to the collection of economic and non-economic factors measured by this concept. table 1 the many views of competitiveness organization definition world economic forum (wef) the set of institutions, policies, and factors that determine the level of productivity of a country (sala-i-martín et al., 2013, p. 4). institute for management development (imd) the capacity of a firm to create value through sustainable longterm growth and profitability (imd, 2014; p3). ireland’s national competitiveness council (ncc) a nation achieves competitiveness when it can provide its inhabitants with a better quality of life and a higher standard of living by supporting its companies to succeed in the international markets (forfás, 2003. p.21). organization for economic cooperation and development (oecd) the ability of companies, industries, regions, nations or supra-national regions to generate, while being and remaining exposed to international competition, relatively high factor income and factor employment levels” (wienert, 1997, p. 22). source: soto-rodriguez, 2011 some of these theories measure competitiveness at the level of the business firm, others at the national level, and even others at the international level. as shown on table 1, the definitions and views regarding this concept differ in terms of focus and scope. as the search for a common definition for competitiveness continues, researchers still keep debating the conflicting views around this concept (soto-rodriguez, 2011). this, however, has not stopped the rise of organizational initiatives such as the 84 american journal of management vol. 16(3) 2016 ones mentioned above focused on measuring the competitive readiness of countries and firms. some studies indicate that the competitiveness of any industry should be measured based on a set of objectives tailored to the particularities of the countries under analysis (haque, sultana & momen, 2014). for instance, alternative proposals other than wef and the imd measure national competitiveness of countries based on cultural and geographical features (chiang, wu, hsieh, wang, lin, and cheng, 2008). in spite of the diversity of perspectives, no one debates that human and intellectual capital is a key driving force of the new strategic thinking towards competitiveness of nations and economies (soto-rodríguez, 2011). over the years the gcr’s methodology has been subject to periodical revisions to cater for changes in global economy. the global competitive index (gci) has been the main output of the gcr report since 2005. it rests on the collection of primary and secondary data aimed at explaining the macro and microeconomic foundations of national competitiveness. while hard (secondary) data is obtained from national authorities and international agencies, an executive opinion survey (eos) is used to collect primary data from top executives from over 100 economies around the globe. as shown in table 2, the process of ongoing revisions has turned the eos into a valuable tool in crafting economic development strategies and investment decisions for policy makers, the academia, and the private sector (browne, geiger & gutknecht, 2013). table 2 the evolution of the executive opinion survey period revision outcome key elements 2000 – 2004 growth competitive index & business competitive index included both the academic fundamentals of economic growth theory and the microeconomic drivers of prosperity. 2004-2012 global competitive index included both macro and micro economic factors of competitiveness. 2012 to present an expanded gci addresses the impact of national culture on interviewee responses. source: global competitiveness report, 2008 – 2014. table developed by authors. the current version of the survey assesses participants’ perceptions and experiences on 14 broad areas that comprise the micro and macroeconomic issues affecting their work environment. the structure of the survey includes research questions that do not require a particular expertise on the subject matter or a hierarchical position in the firm to be answered. notwithstanding, the instrument relies exclusively on the opinion of top executives and completely disregards the skills and capabilities of employees, managerial and support personnel. in contrast, extant literature on learning organizations, resource-based models and competitiveness considers the organization’s human resource as a whole, not capital or technology factors, as the leading contributor to the development of a sustainable competitive advantage of any organization (ajitabh & momaya, 2004, fahy, 2002, & barney, 2001). the eos exclusive reliance on the expert opinion of executives and top managers prompted the authors to propose the concept of a “hierarchical bias”. to account for this bias the authors suggested to the wef’s local partner in puerto rico (puerto rico 2000, inc. and the international competitiveness institute), to run the executive opinion survey with a different population. the goal of the proposal was to examine the differences, if any, in the competitive index due to a change in the type of survey respondents. to that effect, this paper is built around the following hypothesis; h1: there is a significant difference in the competitive index of the puerto rican economy due to a change in the type of respondents in the executive opinion survey. american journal of management vol. 16(3) 2016 85 the basic premise of this study is that capital and technology cannot do much for the company’s value creation strategy if its human and intellectual resource at all levels does not have the capabilities and commitment to put them into good use toward this goal. the impact of the combined effect of these factors on the competitive level of the firm cannot be substituted or downgraded to the potentially biased perception of top executives. to test this hypothesis, researchers used the case of puerto rico, a developing economy included in the gcr from 2007 to 2015. method after a discussion session to unveil the 2014 gcr results, the authors of this paper proposed to wef’s local partners (puerto rico 2000, inc. and the international competitiveness institute) that the executive opinion survey portion of the gcr run with a different population to account for possible perception differences in survey respondents. instead of using top executives as research subjects, the authors proposed that the survey be answered by employees working at firms similar to those used in the original survey. the basic premise of the proposal stems from the fact that there might be differences in the way employees, managerial personnel and sme owners assess and perceive the sophistication of company operations and strategy, and the quality of the business environment in which they operate, thus affecting the competitive index of the economy in which it operates (hierarchical bias). procedures and sampling a letter of understanding (content sharing agreement) was signed between the wef and the local partners granting the researchers the authorization to use the executive opinion survey with the alternate research population. the spanish version of the survey was used to cater for understanding differences due to the language barrier. survey participants were contacted through the business administration graduate program of the pontifical catholic university of puerto rico (pucpr). this program, serves a professional population in the south, west and northern region of the island that reunites the characteristics mentioned above. also, its geographical dispersion contributed to the representativeness of survey sample. at the moment of the study, the participants were enrolled as students of the dba and mba program of this institution. in order to be eligible, they had to be working at a business firm –manufacturing, retail, service or smein a non-executive position (managerial or non-managerial). a total of 128 valid questionnaires were obtained through random visits to the three pucpr campuses located in the municipalities of ponce (south), mayaguez (west) and arecibo (north) representing more than double of the 60 questionnaires administered by wef’s local partner in the original study and 35% more than average sample size (between 87 and 93 participants per country) used by wef’s global study. instrumentation as mentioned above, the data gathering instrument utilized was the spanish version of the executive opinion survey (eos) supplied by the wef’s local partner. the eos goal is to capture valuable information on the country´s economic environment that it is difficult to obtain from other sources. according to browne, battista, greiger and gutknecht (2014): “most questions in the survey ask respondents to evaluate, on a scale of 1 to 7, one particular aspect of their operating environment; at one end of the scale, 1 represents the worst possible situation; at the other end of the scale, 7 represent the best (p. 87)”. the structure of the survey is divided into 14 categories each of which includes questions that measure the business environment of each country. the responses are edited for completeness, and tested for representativeness. then they are grouped into several categories that will eventually comprise the 12 pillars of the global competitiveness index. 86 american journal of management vol. 16(3) 2016 measurement the data collected from the employee opinion survey (eos) was then analyzed following the wef’s methodology. first, an arithmetic mean is calculated for every individual question of the eos. this measure (arithmetic mean) is interpreted as the country’s score for every indicator and is ranked along with the same measure between the others countries that were included in the gcr. second, using the successive aggregations of scores that include hard data not derived from the eos, a score is calculated for each pillar which in turn are grouped into threes sub-indexes that are used to calculate the global competitive index (gci). third, an alternate gci index was calculated based on the results of the employee opinion survey (eos1). for consistency and comparability purposes the authors used the hard data gathered and published in the 2014-2015 gcr. finally, the original score for the twelve (12) pillars (as published in the gci 2014-2015) and those calculated by the authors using the eos1 were then subjected to an independent sample t-test to assess if differences between the original and alternate gci scores were significant due to the change in survey respondents. findings and discussion the survey sample consisted of 128 participants, working in companies located in 25 municipalities of puerto rico, distributed along the four cardinal points of the island. this level of participation is within the parameters of sample size used by the wef’s local partners to gather data for the gci. figure 1 presents other descriptive statistics of survey sample. figure 1 executive opinion survey: respondent profile source: data obtained from the eos1. table adapted from gcr 2014-2015 by authors. american journal of management vol. 16(3) 2016 87 on the aggregate, respondent profile presented in figure 1 is aligned with the results published in the gcr 2014-2015 in terms of the respondent’s diversity and company’s representativeness. in terms of their profile, almost 90% of survey respondents were working in non-executive positions (figure 1a) with an average of 8 years of working experience. with regards to company size, 45 % of survey participants worked in a small or a medium sized enterprise, while the remaining 55% worked in a large or large/medium firm (figure 1b). figures 1c and 1d shows that the majority of the companies represented in this study were truly domestic in terms of ownership, type of operation (local or exporting) and revenue generation. as mentioned before, the basic premise that motivated this exploratory research was to determine if a change in the type of survey respondents, from business’s top executives to employees, will make a difference in the wef’s global competitive index. table 3 shows a comparison of the proposed change on the gci computed for the puerto rican economy. the first two columns show puerto rico’s gci as published in the 2014-2015 gcr report while the columns to the right are gci results using the employee opinion survey (eos1). the first and third columns shows puerto rico´s rank among the 144 economies examined in this report, while the second and fourth columns present its competitiveness score, based on a 7 point likert scale. the impact of employee perception on puerto rico’s gci rank as well as in each of the 12 pillars of competitiveness is evident. if the eos1 were to be used, puerto rico’s competitive index would drop from rank 32 to rank 78. the significance of this decline in competitiveness can be understood by using the wef’s framework that classifies countries in terms of their stages of development; factor-driven, efficiency-driven and innovation-driven economies. table 3 executives v. employees: two perspectives of puerto rico’s gci executive employees puerto rico 2014 puerto rico 2014 rank score rank score (out of 144) (1 7) (out of 144) (1 7) gci 204-2015 32 4.6 78 4.10 basic requirements (20.0%) 68 4.6 96 4.13 institutions 34 4.6 97 3.45 infrastructure 58 4.3 77 3.95 macroeconomic environment 99 4.2 96 4.34 health and primary education 103 5.3 111 4.80 efficiency enhancers (50.0%) 28 4.7 66 4.12 higher education and training 27 5.3 75 4.22 goods market efficiency 20 5.0 83 4.24 labor market efficiency 46 4.4 97 3.96 financial market development 21 4.8 79 3.83 technological readiness 37 4.9 62 4.03 market size 60 4.0 60 3.98 innovation and sophistication factors (30.0%) 27 4.5 39 4.04 business sophistication 18 5.1 54 4.25 innovation 29 4.0 33 3.82 source: gci as reported in the 2014-2015 gcr and the gci computed by the authors using the alternate eos1 88 american journal of management vol. 16(3) 2016 as shown in table 4, countries are allocated to a stage of development in terms of their gdp per capita and the main factors that hinges on their competitive level. according to the 2014-2015 gcr, puerto rico is an innovation-driven economy. however, the reassessment of puerto rico’s competitive index using the eos1 would represent a competitive level drop of 46 positions locating the island right next to economies like algeria (an economy in transition from a factor-driven to efficiencydriven stage), guatemala (an efficiency-driven economy) and croatia (an economy in transition from an efficiencydriven to innovation-driven stage). this decline could imply the existence of a perceptual difference between employees and executives in terms of puerto rico’s ability to achieve a level of productivity that could foster high levels of economic growth and wealth creation. table 4 wef framework to country classification according its stage of development stage of development classification gdp per capita competition drivers stage 1 factor driven < 2,000 factor endowments such as unskilled labor and natural resources transition 2,000-3,000 stage 2 efficiency driven 3,000-9,000 efficient production processes, and product quality transition 9,000-17,000 stage 3 innovation driven > 17,000 product diversification and process sophistication source: global competitiveness report. following the gcr methodology, figure 2 shows puerto rico´s performance in the 12 pillars of the gci as published in the 2014-2015 report (blue line). instead of being measured against the average scores across all the economies, this figure shows what would be the island’s performance if the eos1 were used to assess its performance in the 12 pillars (red line). the chart clearly depicts a less optimistic assessment of the island’s competitive potential from the employee’s perspective. it is worth mentioning that both gcis were calculated using the same hard data. therefore, the differences in gci scores are only attributed to differences in eos results. american journal of management vol. 16(3) 2016 89 1 2 3 4 5 6 7 institutions infrastructure macroeconomic environment health and primary education higher education and training goods market efficiency labor market efficiency financial market development technological readiness market size business sofistication innovation global competitiness index executive employees figure 2 puerto rico in the 12 pillars of the gci 2014-2015: eos v. eos1 source: global competitiveness report 2014-2014. figure adapted by the authors. in spite of the evident differences in gci scores due to the effect of eos and eos1, it was necessary to assess if differences between the samples of executives and employees were significant. to that effect, the sub-indexes calculated for the 12 pillars were subject to an independent sample t-test to assess if differences between the original and alternate gci scores were significant based on the change in survey respondents (table 5). it is important to note that pillars 3 (macroeconomic environment), 4 (health and primary education), and 10 (market size) were not included in this analysis because those pillars are comprised, for the most part, from hard data. in the same fashion, the t-test for the rest of the pillars excluded those indicators containing hard data. results for the t-test below show significant differences between the executive and employee samples. specifically, the analysis revealed statistically significant differences in pillars 1 and 2, (basic requirements sub-index), 6 and 9 (efficiency enhancers sub-index), and 11 (innovation and sophistication sub-index). for instance, pillars 1 and 2 dropped from rank 34 and 58 on the 2014-2015 report to rank 97 and 77 when recomputed using the eos1. similar declines in ranking are observed for pillars 6 (goods market efficiency), 9 (technological readiness) and 11(business sophistication). t-test results confirm the less optimistic perception of employees with respect the competitive level of the island’s economy and validate the overall decline in puerto rico’s gci presented on table 3. another aspect that might explain the differences obtained from the t-test analysis in pillars 1, 2, 6, 9, and 11 is the pervasive intervention of the government in economic and business affairs. in this respect, these results are a reflection of the employees unenthusiastic stance on the capability of the institutional environment to tackle current economic times by (a) gathering and divulging accurate figures that reflect the economic reality of the island (b) assuring the effective functioning of the economy with sound strategies and policies, (c) fostering a well-developed infrastructure, (d) supporting a healthy market competition, and (e) promoting a country with a high-quality business network that nurtures firms’ operations and strategies. 90 american journal of management vol. 16(3) 2016 table 5 comparison of executive opinion survey (eos) and employee opinion survey (eos1) pillar m sd t df p institutions (1st pillar) 4.057 38 .000* executive 4.56 1.21413 employees 3.22 .83619 infrastructure (2nd pillar) 6.673 6 .001* executive 5.15 .20817 employees 3.76 .35912 higher education & training (5th pillar) 1.727 10 .115 executive 4.53 .76855 employees 3.92 .40281 goods market efficiency (6th pillar) 3.378 20 .003* executive 4.80 .80306 employees 3.68 .75753 labor market efficiency (7th pillar) .101 14 0.82 executive 4.17 1.08067 employees 3.29 .77520 financial market development (8th pillar) 1.972 12 .072 executive 4.37 1.26980 employees 3.23 .83942 technological readiness (9th pillar) 3.034 4 .039* executive 5.63 .45092 employees 4.64 .34395 business sophistication (11th pillar) 3.824 16 .001* executive 5.07 .58902 employees 4.16 .40945 innovation (12th pillar) .649 10 .531 executive 4.28 .84951 employees 4.00 .59697 * significant at p < .05. levene´s test confirm the assumption that the variances of the two groups (eos and eos1) are equal. conclusions the objective of this exploratory research was to test the hypothesis with respect to the existence of what the authors termed a hierarchical bias in the executive opinion survey used by the wef to develop it global competitive index. the authors posited that the bias stems from the sampling design of the eos which considers only top executives as sampling subjects disregarding the opinion of non-executive american journal of management vol. 16(3) 2016 91 personnel. this approach collides with extant literature, which has established the human capital as key to the competitive potential of any business firm. even though the results are not intended to be conclusive, this research demonstrates that there might be differences in the way executives and employees perceive the competitive potential of their companies and the environment in which they operate. when compared to the original study, the use of the employee opinion survey (eos1) resulted in lower sub-indexes for the 12 individual pillars and the gci for the puerto rican economy. similarly, the t-test results showed differences between the executives’ and non-executives’ perceptions in terms of their assessment of areas that comprise the static and dynamic issues affecting the work environment and the sophistication of business operations and strategies. the perceptual differences observed in this exploratory research could be reflect of employee’s continuous exposure to current economic conditions in the island as well as the challenges of daily operations for they are the ones who feel more directly their effects. the executives, on the other hand, lose perspective of the most intricate elements that affect the organization, as they engage in other duties that deviates their attention. nevertheless, the results of this study suggest that the wef begin to consider the possibility of examining the perception of employees in future reports. this includes more extensive studies to assess the existence and impact of this hierarchical bias in the gcr. the authors propose pilot studies in economies with similar stages of economic development and within the different regions – north america, latin america, europe, and eurasiato cater for potential economic and regional variabilities. as in the case of the sustainability issue included in the 2014-2015 edition of the gcr, the authors recommend that the wef include in future editions of this report an adjusted gci that considers the hierarchical bias while assessing its effect on the eos. once validated, the survey instrument could be re-evaluated to include non-executive personnel as part of the survey sample. the authors believe that taking into consideration the hierarchical bias within the structure of the eos will add robustness to the cgi because results will be more holistic. it will provide a measure of the productivity of the human capital and the synergetic impact of this resource in the competitiveness of the firm. as such, the new gci will acknowledge the diversity, representativeness 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(oecd, working paper #55375). paris, france: organization for economic cooperation and development. 94 american journal of management vol. 16(3) 2016 american journal of management vol. 25(4) 2025 63 statement of financial position: a hybrid recognition model mary fischer university of texas at tyler this discussion explores the hybrid combination of fair value and historical accounting measures used to present an entity’s statement of financial position, including assets, liabilities, and owners’ equity. generally accepted accounting principles establish and guide valuation determinations that explain the valuation differences. the history of fair value guidance and recognition provides a foundation for presenting the advantages and disadvantages of financial measurement methods. financial reporting valuation has evolved over time and is a copulation of both fair and historical value methodologies to determine the reported value. future research is suggested to evaluate and resolve the outstanding reporting differences, concerns and issues. keywords: fair value, historical cost, financial statement measurements, codifications introduction different measurement models for valuing financial statement assets and liabilities remain a contentious topic in accounting (yoo et al., 2017). ensuring the accuracy of financial information for investors, stakeholders, and financial statement users across time and industries, with relevance and comparability, creates a challenging task for accounting regulators and providers (blecher, 2018). throughout the twentieth century, proponents of fair value accounting have advocated for its use over historical cost for financial statement reporting. they maintain fair value, which is more relevant than historical cost, as it presents the current value of the entity’s assets and liabilities. (munteanu & zuca, 2017). however, opponents claim that fair value has significant drawbacks, and its measurement creates inconsistent values, volatility, and financial situations, such as stock market downturns (bischof et al., 2014; majercakova & skoda, 2015). some have suggested that historical costs represent the present value of expected future cashflow. opponents of the historical costs recognition claim that its value changes over time and therefore the historical cost basis loses its relevance (zeff, 2007). early accounting guidance relied on the historical cost measurement basis because it is objective and verifiable (fasb, 2009c); however, recent pronouncements utilize more current value information (schroeder et al., 2023). this descriptive review contributes to the ongoing discussion of fair value and historical cost measurement guidance, as well as the values recognized for most assets and liability items presented in the statement of financial position. the current reporting model comprises a mix of both historical cost and fair value. historical costs are the more prevalent financial statement measurement due to their early advocacy by accounting standard setters (leuz & wysocki, 2016; tojek, 2021). major accounting measurement methods used to recognize historical and fair value are identified and discussed. given the identification of 64 american journal of management vol. 25(4) 2025 measurement methods, major balance sheet items and their current measurement methods that comply with us gaap are presented. lastly, a comparison of historical cost and fair value, along with some of the setbacks associated with using specific value, is discussed. an analysis of these findings together with suggestions for future research concludes the discussion. fair value accounting history some scholars blame fair value i.e., mark-to-market accounting practices for causing or exacerbation financial crises in the us (laux & leuz, 2010; menicucci, 2014; mcdonongh et al., 2020). following the 1929 stock market crash, the new york stock exchange (nyse) asked the american institute of accountants (aia) to devise rules for public companies to use that would ensure consistent investment reporting, allowing investors and other stakeholders to rely on it (emerson et al., 2010). in 1938 president roosevelt blamed fair value accounting for the 1929 market crash and the prolonged depression. he abolished the use of mark-to-market accounting as an acceptable accounting recognition technique due to its volatility and lack of authority in regulating the financial reporting of public companies, which resulted in investor misinformation (cascini & delfavero, 2011). rather than repealing the investment measurement method alone, the aia compiled a set of accounting principles that would become known as generally accepted accounting principles (gaap) (emerson et al., 2010). the 1929 market crash also served as a catalyst for the creation of the securities and exchange commission (sec) in 1934 (levitt, 1998). the sec is responsible for protecting investors, maintaining fair and orderly markets, and facilitating capital formation. although the sec has the authority to create accounting guidance for companies listed on the exchange, it chose to assign the power of financial reporting regulation to the aicpa (emerson et al., 2010). the aia accountants responded by creating the committee of accounting procedure (cap) in 1939 to promulgate accounting theory and reporting standards. after two decades of ineffective accounting standardization, the aia reorganized into the american institute of certified public accountants (aicpa) and shortly thereafter dissolving the cap assigning its responsibility including a charge to modify gaap to a newly created accounting principles board (apb) (young & mouck, 1996; emerson et al., 2010). in 1971, the aicpa established an accounting group to study the objectives of financial statements chaired by f. m. trueblood (goetz & birnberg, 1976). the primary recommendation of the trueblood commission was that financial statements should provide investors and creditors with useful information for economic decisions, focusing on the cash-generating ability of the business. the report also addressed accountability and stewardship by recommending that the financial statements provide information about the entity’s economic resources, obligations, and owner’s equity, including the disclosure of both historical cost and current cost when the values were significantly different (zeff, 2016). the trueblood commission report substantially influenced the future financial accounting standards board’s (fasb) concept framework projects, and the decision usefulness concept became an integral part of standard-setter objectives and accounting guidance (coetsee, 2010). the decision usefulness concept was a significant departure from the earlier accounting measurement based on historical costs, entry value, and exit value used for measuring assets and liabilities (zeff, 2013). in 1973, the financial accounting standards board (fasb) was created and the accounting principles board dissolved (beresford, 1998). fair value took a significant step forward with fasb standard no. 12, accounting for certain marketable securities (fasb, 1975). this new accounting guidance allowed entities to move away from historical recognition and recognize unrealized losses or gains on security transactions as a component of reported income (janell & imhoff, 1978). fasb statement of financial accounting concepts no. 5, issued in 1985 and amended in 2021, identifies five measurement attributes to determine the valuation of assets or liabilities, including historical cost, current cost, current market value, net realizable value, and the present value of future cash flows (pp. 3-4). fasb provided no guidance regarding valuation because the specific situation should determine the correct method to use, and it was not the responsibility of fasb to micromanage the decision (cascini & delfavero, 2011). american journal of management vol. 25(4) 2025 65 concept no. 5 (2021) became the basis of assets and liability fair value valuation decisions as well as the principles included in future accounting guidance. fasb statements of financial accounting standards (sfas) guidance addressing assets and liability fair value determination include the following: sfas 107: disclosures about fair value of financial instruments (1991) sfas 119: disclosure about derivative financial instruments and fair value of financial instruments (1994) sfas 157: fair value measurements (2006) sfas 159: the fair value option for financial assets and financial liabilities (2007) fasb standards with fair value guidance sfas no. 107, disclosures about fair value of financial instruments issued in 1991 expanded the existing historical cost guidance to require all companies to display the fair value of all financial instruments in their financial statements. the guidance was effective for companies with total assets of $150 million or more. the guidance was expanded to all companies in late 1995 (nelsen, 1996). sfas no. 119, disclosure about derivative financial instruments and fair value of financial instruments, issued in 1994 amended sfas no. 107 by requiring companies to disclose derivative activities. derivatives were defined to include currency swaps, forward contracts, and futures contracts. sfas no. 119 objective was to report the gains and losses from derivatives transactions in the income statement (wong, 2000). sfas standards no. 107 and 119 helped transition from historical cost to fair value recognition, increasing relevance to the financial statement user (cristea, 2018). however, the reaction to the standards was mixed. financial statement users who believed that historical cost was the appropriate way to value transactions were upset that fair-value transactions appeared to be volatile, while proponents of fair value thought the new standards did not go far enough in promoting and requiring fair-value valuations for comparability (răscolean & rakos, 2016). the standards define fair value as the amount of money the asset can be sold for in the current marketplace between willing parties that are not in a forced liquidation situation, using the following fair value metrics (kaya, 2013). entry value – the purchase price (if price changes then the replacement cost) exit value – the selling price it could be sold value in use – value the asset provides the company that owns it the three fair value metric definitions are argued to be too narrow. instead, many argue that the exit value would be the most relevant metric in establishing the valuation of an asset, as it takes the value from the seller's perspective. therefore, the financial statement reflects the asset's value at what the company could receive for the asset sale. instead, a separate metric, ‘value in use’ can be calculated as entry value minus exit value (pinto & pais, 2015; tang 2019). fasb issued two new standards, sfas no. 157, fair value measurements (fasb, 2006), and sfas no. 159, the fair value option for financial assets and financial liabilities (fasb ,2007) to increase comparability and consistency while helping to promote the usage of fair value accounting. these new standards decreased historical recognition by expanding the number of items that could be valued at fair value including the following assets and liabilities (ratcliffe, 2007). • loans receivable and payable • investments in equity securities • rights and obligations under insurance contracts • rights and obligations related to warranty agreements • host financial instruments that are separated from embedded derivative instruments • firm commitments involving financial instruments • written loan commitments sfas no. 157 (fasb, 2006) established a framework to measure fair value and create guidance for fair value measurement disclosures. the standard emphasizes that fair value is a market-based 66 american journal of management vol. 25(4) 2025 measurement, not an entity-specific measurement. therefore, a fair value measurement should be determined based on the assumptions that market participants can use the market price for an asset or liability. as a basis for considering fair value measurements, the guidance distinguishes between (1) those based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) the reporting entity’s own assumptions based on the best information available (unobservable inputs). the concept of unobservable input is designed to accommodate situations where little to no market activity is available for the asset or liability at the measurement date (emerson et al., 2010; kaya, 2013). disclosure guidance regarding the use of fair value to measure assets and liabilities in interim and annual periods was initiated to focus on the inputs used to measure fair value and for recurring fair value measurements using significant unobservable inputs together with the effect of the measurements on earnings for the period (cascini & delfavero, 2011; jaijairam, 2013). sfas 159, the fair value option for financial assets and financial liabilities (fasb, 2007), introduced disclosure guidance to facilitate comparison between companies that have similar or the same assets and liabilities but use different measurement methods (ristea et al., 2016). companies can elect to use fair value for certain assets or liabilities on an item-by-item basis, allowing the company to value an item at fair value while using the historical cost method for a similar item. however, once a company uses fair value accounting to value an item it cannot switch back to historical cost later (schneider & mccarthy, 2007; chung et al., 2023). fasb’s main goal in issuing sfas no. 157 (fasb 2006) and sfas no. 159 (fasb, 2007) was to create consistent rules and therefore comparable reporting of assets and liabilities values. before the guidance, gaap only required selected assets and liabilities to be valued using fair value resulting in inconsistencies of how items were reported that caused a lack of comparability. this inconsistency also caused a fluctuation in earnings. thus, the main goal of the new guidance was to reduce huge earning’s variations. for example, a company using historical cost valuation with investments consisting of stocks or trading securities would recognize any gain or loss on the sale as income only at the time of the sale or liquidation. under the new fair value accounting standards, if the fair value option is used, gains or losses on the investments would be recognized as income or loss each period, resulting in consistent market value recognition over the period the investment is held (cascini & delfavero, 2011). fair value accounting guidance conversion to codifications in 2009, the fasb moved all existing gaap pronouncements for nongovernmental entities into the accounting standards codification (asc) online at www.fasb.org to simplify access and improve usability. the asc consolidated all current standards into a new, numbered, structured, online, searchable database organized by topic, which can be updated in real-time as new standards are adopted or existing standards are amended. this structure enables users to easily locate specific guidance and have access to the latest information. thus, the codification became the single source of authoritative nongovernment gaap guidance (binz et al., 2023). sfas no. 107 and sfas no. 159 were combined with amendments to become asc 825, financial instruments (fasb, 2009f), which provides reporting guidance for financial instruments. although the codification includes a fair value option that can be elected for certain financial assets and liabilities, it’s primary guidance mandates disclosure regarding fair value, concentration of credit risk, and market risk associated with the financial instruments. the codification’s fair value option allows companies to elect to measure financial assets and liabilities at fair value, thereby reducing earnings volatility. entities have flexibility in selecting the reporting option including an instrument-by-instrument basis. companies that elect the fair value option must disclose the reasons for the election, how fair value changes affect earnings, and any information that would have been disclosed if the option had not been elected. once the option is elected, it is typically irrevocable unless a new election date occurs. any costs or fees associated with the fair value option election must be recognized immediately. additional required disclosures include differences between fair values and contractual cash flows, amounts of gains/losses from fair value changes in earnings, and how interest/dividends are measured. for american journal of management vol. 25(4) 2025 67 loans, receivables, and liabilities, entities must disclose estimated or attributable gains/losses resulting from changes in instrument-specific credit risk, along with the methods used to determine these amounts. annual financial reports require the disclosure of methods and significant assumptions used to estimate fair value. sfas no. 119 was combined with various derivative accounting standards to become asc 815 derivatives and hedging (fasb, 2009d). the codification provides transparent and consistent format in about its derivatives and hedging activities while aligning financial reporting with risk management strategies. the standard is complex due to its extensive requirements, including documentation and fair value measurement. guidance compliance can lead to improved transparency, enhanced risk management, and reduced financial volatility. overall, asc 815 establishes the accounting framework for derivative and hedging instruments and activities to promote financial reporting transparency and consistency. sfas no. 157 was combined with amendments and updates to become asc 820 fair value measurements (fasb, 2009e). since there was no prior guidance to define fair value, asc 820 defines fair value as the amount an asset/liability can be traded as of the balance sheet date – also known as the exit price. in addition, asc 820 allows assets or liabilities to be either grouped or stand alone in a transaction. grouped items may include business units, an entire business, standalone items, marketable security, or fixed assets. asc 820 also defines three approaches to valuing the fair value of asset or liability (emerson et al., 2010): market approach: compare value to similar assets or liabilities income approach: converted to present value by using discount rate from cash flows cost approach: creates value from a theoretical replacement perspective. with the means to determine the fair value, asc 820 identified the three levels of value recognition hierarchy. level 1 is the most reliable value because the items have an available value derived from an active market or exchange, such as the nyse. level 2 values are derived for items that do not have analogous items exchanged in the marketplace thus a value cannot be easily or consistently determined with an accurate value. therefore, level 2 values are assigned values obtained from appraisals or comparable item sales. level 3 values are more difficult to determine fair value due to their not having a marketplace or comparable basis for value determination. the entity with these assets or liabilities must use their judgement to estimate the item’s value or consult an outside valuation expert to determine an appropriate fair value. the three levels within the value hierarchy can be categorized into two groups: observable and unobservable. observable items are those with a fair value that can be obtained from an outside source or marketplace. unobservable items are those the entity owns that due to lack of a market must employ a comparable value, the present value of future cash flows, or a reasonable estimate to value the asset or liability (ketz, 2003; collins, 2020). statement of financial position values several valuation methods are prescribed as part of gaap guidance to report the assets and liabilities displayed on an entity’s statement of financial position. fair value is one of the valuation methods used in financial accounting, defined by gaap in asc 820 (fasb, 2009e) as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. however, gaap guidance using fair value is somewhat limited to accounting for selected assets as the use of historical cost is more frequently advocated by the fasb (tojek, 2021; leuz & wysocki, 2016). balance sheet the balance sheet comprises three main elements: assets, liabilities, and equity. assets are items that the entity has the right to its economic benefit. liabilities are the entity’s economic obligations. equity is the residual value of the assets after deducting the liability obligations and is accounted for by the activities that contributed to the asset less liabilities difference. each of the balance sheet elements has multiple subclassifications that provide information for decision-making. since the three classifications represent a myriad of transactions, they are measured using a hybrid mix of recognition methods depending on their 68 american journal of management vol. 25(4) 2025 circumstance and available information. some assets and liabilities are valued at historical cost, while others are valued at fair value. additionally, some assets or liabilities are valued on another basis, such as the lower-of-cost-or-market method, e.g., inventory. the commonalities and differences in the balance sheet account measurements exist because they have different sources, value formats, life spans, and recognition or measurement procedures. asc 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (fasb, 2009e). a fair value price shows the current and intrinsic worth of an asset or a liability and requires ongoing adjustments to reflect changes in market conditions, potentially leading to more dynamic financial reporting (rascolean & rakos, 2016). there are three valuation techniques used to measure fair value, including the market approach, cost approach, and income approach. the fair value for the market approach is measured at the market prices for identical or similar assets or liabilities. fair value using the cost approach is measured at the current replacement cost of a transaction determined from a hypothetical market participant’s perspective. when an income approach is used, fair value is measured by converting the net future income or expense cash flow amounts into a single current amount. these techniques can be used individually or in combination to measure the fair value of an asset or liability (collins, 2020). assets current assets current assets are items that represent what the entity owns and are listed on the balance sheet in order of their nearness to liquidity or cash. they typically have a lifespan of one year or less. current assets include cash, cash equivalents, receivables, inventory, and prepaid expenses. cash and receivables cash, cash equivalents and prepaid expenses tend to be recognized at historical value. receivables are initially recorded at their historical value however they are adjusted annually to their net realizable value using an aging process to identify the amount that is not expected to be received. the amount of anticipated nonpayment is recognized as a contra receivable, such as allowance for nonpayment if payment is judged to be possible or as an expense if payment is not anticipated. inventories according to asc 330 (2009b), inventories are tangible property held for resale or materials to be consumed in the production of goods or services available for sale. by reporting inventory at the lower-ofcost-or-net-realizable-value, a conservative approach is ensured that does not overvalue inventory. following its acquisition, management tests the inventory to ensure an up-to-date valuation. inventory value may be reduced for several reasons, such as obsolescence, damage, or missing items. these periodic remeasurements reduce the inventory to its current market value. in the event of a reduction in value, the inventory is written down to the lower of cost or net realizable value, using either an income approach or a balance sheet approach. when reducing the inventory value through the income approach, a loss is recorded in the period it occurs as another expense. when the balance sheet approach is used, a contra account records an allowance to reduce the inventory its net value. through the balance sheet approach, management is conservatively valuing inventory in a manner that does not exaggerate its estimated worth. in either case, according to gaap, the inventory value cannot subsequently be increased or written up if a higher value comes into being, such as an acquisition price increase. asc 330 requires an entity to report inventory at the lower of cost or market (lcm). according to the codification, when the cost of an asset exceeds its expected benefit, reducing the asset to its market value is a better measure of its expected future benefit. thus, the term market used in the phrase lower of cost or market implies current replacement cost provided it meets two conditions: a) market does not exceed the net realizable value and b) market is not less than the net realizable value reduced by an allowance for a normal profit margin (fasb, 2009b). american journal of management vol. 25(4) 2025 69 the criticism of the lcm rule is that it is applied only for downward adjustments, recognizing holding losses, while holding gains are ignored. thus, when the asset is sold, the costs are understated in the period of the sale, which can result in a misinterpretation of operating costs by external users of the financial data (schroeder et al., 2023). accounting standards codification asc 330 (fasb, 2009b) defines net realizable value as the estimated selling price of inventory in the course of business, less reasonably predictable costs of completion, disposal, and transportation. early accounting guidance required entities to measure inventory at the lower of cost or market with market defined using ceiling and a floor value less a normal profit margin. asc 330 was amended to simplify inventory measurement by requiring entities to report inventory within its scope at the lower of cost or net realizable value. this change eliminated the need to determine the market price and its related ceiling and floor (fasb, 2015). according to gaap, inventory consumption changes its balance sheet value depending on the cost method employed by the entity. if inventory consumption is measured using any method other than last-in, first-out (lifo), or the retail inventory method, the lower of cost and net realizable value is used for any subsequent measurement. however, if the inventory consumption is initially measured using the first-in, first-out (fifo) method, the lower of cost or market is used for the subsequent measurement. the inventory on hand at the end of the fiscal period is counted to reconcile the actual value on hand with the accounting value recorded. any difference is recognized as consumption and recognized as an expense. noncurrent assets noncurrent assets are those with lives greater than one year and are expected to help generate entity income. noncurrent assets commonly include trading security, investments, leases and tangible capital assets such as property, plant and equipment. leases present value is part of asc 820 guidance that defines future accounts such leases to a present value amount using a discount rate. present value can be used as an income approach for fair value measurement. the primary reason for using present value as a measurement method is specifically required by gaap such as asc 840 (fasb, 2009g) to measure lease assets or liabilities. investments observability is a key factor when measuring investments at fair value. when valuing marketable equity security, an observable input is a quoted trade price. conversely when valuing a private company investment, an unobservable input is the company’s projection. observable inputs are those that are developed using market data and reflect the assumptions of market participants. unobservable inputs are inputs for which market data are not available, and their value represents the entity’s best understanding of the assumptions that market participants would use when pricing the asset or liability (collins, 2020; ishinagi & oh, 2024). asc 820 requires valuation techniques to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs (fasb, 2009e). codification 820 also established a fair value hierarchy to distinguish the levels of observability achieved by level 1 measurements within the fair value hierarchy. level 1 fair values are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. level 2 fair values are other than quoted prices that are observable for the asset or liability, either directly or indirectly while level 3 fair values are unobservable inputs for the asset or liability (fasb, 2009e). according to asc 320 (fasb 2009a), trading security investments are investments that represent a creditor relationship with another entity and are typically bought and sold on exchanges such as the nyse. gaap requires investments in debt securities classified as trading securities to be measured at fair value and unrealized gains and losses from trading securities to be included in earnings. investments in debt securities classified as available-for-sale securities should also be measured at fair value; however, 70 american journal of management vol. 25(4) 2025 unrealized gains and losses from these securities must be included in equity account ‘other comprehensive income’ until realized. held-to-maturity (htm) securities are securities that the entity intends to and has the ability to hold until their maturity date. these securities are recognized at their amortized cost, which is the original acquisition price adjusted for the amortization of any premium or discount paid when acquired. income earned from htm securities such as bond coupons is recognized as income as it accrues over time. unearned gains or losses that arise from holding the htm, such as changes in market interest rates, are not recognized because the securities are intended to be held until maturity. however, if there is a permanent decline in the fair value of htm investment or an unexpected credit loss, an impairment loss is recognized (fasb, 2009a). these recognition treatments provide stability in the entity’s financial statement presentation. property, plant & equipment historical cost is the value resulting from a buyer and seller agreeing on an arm’s-length transaction and is used to recognize property, plant, and equipment (pp&e) acquisitions. pp&e are long-lived assets that create, house and distribute products and services. these capital assets include land, land improvements, buildings, machinery, equipment, and furniture and fixtures. according to asc 360 (fasb, 2009c) capital assets are initially measured at historical cost. in subsequent periods, depreciation is calculated based on the asset’s useful life for those pp&e assets other than land. in addition, accounting gaap guidance states that when an impairment loss is recognized, the adjusted carrying amount of a longlived asset is recognized as its new cost basis. liabilities current liabilities current liabilities are listed on the balance sheet in order of their nearness to consuming cash to settle the economic obligation, which typically has a life span of one year or less. current liabilities require the consumption of current funds to satisfy their obligation that can significantly impact the working capital of the organizations. generally, current liabilities include payables, deferrals and the current portion of longterm debt accounts payable accounts payable tend not to create a recognition issue as the obligation value is determined by a transaction that involves a promise to pay an amount at a subsequent date. deferrals are near-term obligations that require recognition to satisfy rather than a cash disbursement. a deferral example is the distribution of prepaid cash for services before the due date, or an advance payment received for a service obligation. unless the deferral is substantial, recording it as a liability will not significantly impact the financial statement presentation. when a long-term debt payment in the current period requires the use of current funds, gaap requires the transaction to be recognized as a current liability. however, not all current maturities are classified as current liabilities. an example is the retirement of a long-term liability using special or restricted funds, which will not need to be reclassified as a current liability because the retirement will not consume current entity resources. another situation that does not require a reclass to current liabilities is the issuance of new or additional long-term debt. neither of these examples should be reported as a current liability as they would distort the working capital presentation. noncurrent liabilities long-term debt typically, the largest value listed in the liabilities noncurrent section of an entity’s balance sheet is long-term debt. although many entities use historical cost to report their long-term debt obligations, sfas 115 (fasb, 1993) established the option for business entities to elect the fair value option for long-term financial liabilities. the guidance stipulates that if an entity designates a financial liability under the fair american journal of management vol. 25(4) 2025 71 value option, the entity must measure the financial liability at fair value, with any qualifying changes in fair value to be recognized in net income. when sfas 115 was converted to asc 825 (fasb, 2009f), the guidance was amended to allow fair value changes in assets to be matched with corresponding fair value changes of liabilities due to changes in interest rates (chung et al., 2023). thus, if an entity anticipates holding a debt liability until maturity, the intermittent changes in fair value are not only irrelevant but also misleading to shareholders and investors. these changes create gains and losses that do not reflect the economic reality of the debt. therefore, if a company has no intention or lacks the opportunity to extinguish a debt liability before maturity, recording the debt at the present value of its cash flows discounted at the market rate of interest more accurately describes the amount of money the entity will pay over the life of the debt. other long-term liabilities other long-term payable obligations include deferred liabilities, pensions, and leases that the entity does not expect to pay in full within the normal operating cycle. unlike debt liabilities, no portion of longterm liabilities are reported as current liabilities. since these liabilities are not financial instruments they are not eligible to be accounted for using fair value. therefore, these liabilities are recognized and evaluated using their historical values. equity equity is the risk capital of the enterprise. it has no guaranteed return and no repayment term for the owners. from a perspective of stability and solvency exposure, equity is permanent with an indefinite life (schroeder et al., 2023). the equity section of the balance sheet represents the net difference between the value of what the entity owns, i.e., assets, and what the entity owes, i.e., liabilities, and is often referred to as the entity’s residual interest. the balance sheet equity section is broken into multiple categories, including the display of various ownership and legal claims against the entity’s assets, such as stock classes, retained earnings, dividend requirements, and noncontrolling owner interest. this is also the section of the balance sheet that holds the unrealized gains and losses on investments in debt and equity securities classified as available for sale. historical cost vs fair value advocates of historical cost reporting prefer assets to be recognized at their acquisition price and liabilities to be recognized at the amount of their original obligation value. the negative aspect of this balance sheet valuation selection is its focus on the past and over time the amounts can change or become obsolete. the securities and exchange commission (sec) from its inception required historical cost accounting to be used for balance sheet reporting and disapproved revaluations (zeff, 2007, p. 49). in 1973, the trueblood committee issued a report stating that the objectives of financial reporting should be to provide information useful for making economic decisions, especially by external users, which shifted accounting standards to decision usefulness, enabling users to predict future cash flows (zeff, 2016). the financial crisis in the early part of the 1990s led the push for the use of fair value measurements for certain assets and liabilities (seay & ford, 2010; bowen & khan, 2014). according to barlev and haddad (2003), financial statements based on historical cost do not accurately reflect the real financial position and results of an entity's operations. rather, historical cost provides management opportunities to manipulate reported earnings and performances reported in the financial statements. on the other hand, fair value-based financial statements display the real financial position and the results of operations of an entity, as they measure the current value of assets, liabilities, and equity, which are more relevant for financial statement users. fair value is highly associated with stock returns compared to historical cost values. it is easier for shareholders to distinguish between two management tasks: maintaining equity and generating a return on equity that facilitates shareholders’ ability to judge management activities more effectively (barlev & haddad, 2003). 72 american journal of management vol. 25(4) 2025 in contrast to fair value-based financial statements, management has significant influence over the process when preparing historical cost-based financial statements. management can manipulate income to make the financial position look better using techniques such as “window-dressing.” barlev and haddad (2003) explain that historical cost based financial statements reflect the “manager’s voice” while fair value based financial statements reflect the ‘market’s voice’ (p. 384.). fair value based financial statements are more transparent as they provide complete full disclosure. accounting transparency means that the financial statements provide true, accurate, and complete information about a firm's business activities and financial position. fair value-based financial statements achieve this accounting transparency by reflecting the real economic value of business activities in income statements, as well as in assets, liabilities, and equity in the balance sheet (barlev & haddad, 2003; shortridge et al., 2006). blankespoor et al., (2013) examines fair value and historical value from an income statement perspective. they investigate whether historical cost is more reliable than fair value based on the nature and amount of judgments and estimates required to implement each measure (p. 778). using the historical cost method, they find that there are limited judgments and estimates at the initial measurement of an asset because the initial price is observable, but varies subsequently depending on the type of asset. financial assets have little difficulty measuring judgments and estimates; however, it is challenging to measure judgments and estimates for nonfinancial assets. the most difficult measurement under the historical cost is subsequent measurement regarding asset impairment. based on their findings, blankespoor et al. (2013) conclude that historical cost cannot always be considered more reliable than fair value. after identifying historical cost deficiencies, they examine the relevance of fair value from an income statement perspective. they find fair value can be useful when there is a recognition of unrealized gain or loss in income. it is particularly useful to assess the future cash flow if management sells the asset before maturity or the end of its useful life. in such cases, unrealized gains or losses provide information about the potential change in a corporation’s equity. this information is useful for assessing both cash flow prospects from the entity and the value realized by the entity if management choses to sell rather than hold the asset. blankespoor et al., (2013) conclude fair value should not always be considered more relevant than historical cost because the usefulness of information about unrealized gains or losses depends on whether management may or may not sell the asset before maturity or at the end of its useful life. determining value financial value measurement assumes that the asset or liability is exchanged in an orderly transaction between market participants to sell the asset or transfer the liability at the measurement date under current market conditions (fasb 2009e). often fair value is determined by the transaction price. however, it should be determined whether the exchange occurred between related parties or under duress. transactions occurring between related parties are not considered to have occurred at arm’s length. likewise, transactions occurring under duress, such as bankruptcy, sales, or other financial difficulties, may not approximate fair value. in these situations, management must determine whether fair value at initial recognition is accurately reflected by the transaction price (liang & riedl, 2014). to facilitate disclosures that are both consistent and comparable, gaap requires the use of the fair value hierarchy to determine fair value measurements (mcdonough et al., 2020). the hierarchy was created because the fasb recognized that active markets do not always exist for specific assets and liabilities (landsman, 2007). the fair value hierarchy consists of three levels, labeled as level inputs, ranging from 1) transaction price, to 2) comparable value, to 3) management’s judgment. a reporting entity should use valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs (fasb, 2009e). as the reported imputed fair value moves down the fair value hierarchy from level 1 to level 3 reliability and verifiability decrease while estimations and judgements increase. mark-to-market accounting is used for many financial instruments traded on open markets. this creates greater transparency for the valuation of these select assets. fair value is effective at reporting gains and losses on trading securities as well as available-for-sale securities. as both instrument types can be american journal of management vol. 25(4) 2025 73 measured using the level 1 input requirement, reliable and verifiable reporting is achieved. gains and losses on trading securities are reported directly in income whereas gains and losses in available-for-sale securities flow through accumulated other comprehensive income reported in the statement of financial position equity section. the issue regularly debated is whether fair value accounting is equally effective at measuring illiquid assets that can remain on an entity’s balance sheet for many years. seay and ford (2010) find identical long-lived asset transactions are often measured at different values on different balance sheets based on the same purchase date which results in financial reporting inconsistency within, among and between financial reporting entities (seay & ford, 2010, p.56). this is credible support for fair value accounting to be used so that more consistent reporting of the economic reality of balance sheet accounts is available. relevance and reliability of value determination when examining the justifications for and against the use of fair value accounting for valuation beyond financial instruments and derivatives, relevance and reliability are frequently a debate. the discussion specifically addresses whether the information is relevant to shareholders and investors, and whether it is more reliable than other valuation methods. ideally, fair value accounting should provide information that is more reflective of an entity's economic reality. carrying values based on any measurement other than fair value does not report the current economic value of assets and liabilities. conversely, fair value accounting could better reflect economic reality by revaluing assets and liabilities at every financial statement reporting date. however, the reevaluations will increase reporting costs (baker & burlaud, 2015; pinnuck & stevenson, 2021). when fair value reflects current market conditions, it is relevant because it offers the same conditions for investors to rely on the information for decision-making (emerson et al., 2010). this removes the disparity created by entities valuing identical items at different amounts. therefore, reporting all assets and liabilities on the balance sheet at fair value will offer a more accurate representation of an entities current economic value. advantage and disadvantages marketable securities are an asset for which fair value measurement is the most appropriate method of valuation due to the ease of obtaining a market value (răscolean & rakos, 2016). however, items such as derivatives that do not trade on a public market would be a more difficult choice for valuation as there is no means of obtaining a market value. thus, derivatives must be valued by company estimates or comparisons (kothari et.al., 2010). fair value reflects the current market value of assets, which is the same as that used by financial statement users (răscolean & rakos, 2016). a fixed asset purchased decades ago, valued using historical cost, does not accurately reflect the true value of the asset and may have significant hidden value if the market value has increased (fontes et al., 2025). due to the value of the assets following the market, the value of a company’s assets can plummet overnight if the market fluctuates wildly (hsu et al., 2018). problems can occur with the ability to properly set the market value of an asset due to various reasons. an asset might be specific to a certain industry or use, and that can make it difficult to get a market price (fontes et al., 2025). in situations like this, an alternative method, such as calculating the replacement cost after depreciation, could be used instead of fair value. (abbott & tan-kantor, 2018). suppose there is no market for a particular asset. in that case, managers must use their own judgement to value the asset which can be an opportunity for fraud if managers seek to make the financials appear as they would like in order to avoid paying taxes on income or to show an increase in the value of a company’s assets in order to impress investors (hsu et al., 2018). some statement users are against using fair value if a reliable market does not exist, which results in a true market value rather than allowing a company to value its assets as they see fit (hsu et al., 2018). 74 american journal of management vol. 25(4) 2025 managers of companies with assets that cannot be truly verified for value in a market might be inclined to overvalue the assets rather than undervalue in an attempt to overstate income for the company due to the manager having a financial incentive to achieve a particular income (blecher, 2018: hsu et al., 2018). beginning with the financial downturn in 2009, the focus has been on banks using fair value to write off or dramatically lower the asset value (kothari et al., 2010; bowen & khan, 2014). some argue against fair value by claiming fair value does not properly explain asset valuation in a predictable manner (cascini & delfavero, 2011). the departure from historical accounting removes objectivity of accounting in situations where a real market value cannot be obtained. for example, enron employed fair value accounting measurement for some of its assets, which it subjectively overvalued (haswell & evans, 2018). even if a market is available to derive an accurate price, price variability can make it difficult to rely on that price as the best representation of the asset's value (whittington, 2015). if a particular asset decreases or increases in value drastically over a short amount of time at the end of the entity’s fiscal year, the value of the asset can be misinterpreted on the balance sheet. lack of consistency also occurs due to the lag between the fiscal year-end, when the financial statements are prepared, and the publication date. this delay could cause the fair value amount of the assets to become stale and inaccurate by the time the statements are made public (whittington, 2015). lack of comparability from company to company is also a major drawback of fair value accounting for assets and liabilities. if firm a chooses to use fair value to estimate value of an asset, but firm b uses historical cost, the two items are not comparable (fontes et al., 2025). valuation fluctuation can unnecessarily wreak havoc on investor and stakeholder confidence in a company. in blackstone group’s 2008 annual report, they included a statement that stated: during the 2008 financial crisis, the fair value of investments might be much lower than it was a few years ago, but the current value is not the actual long-term value (cascini & delfavero, 2011, p 6). even though the value of the investments were reduced, the company pleaded with investors that it would be temporary, and the investment’s value was greater than the amount the firm reported to comply with asc 820 (fasb, 2009e). often level 3 investments are overvalued due to reliance on internal estimates and outdated transaction data. in reality, the actual realizable value of these assets may be far below their stated values due to interest rates or market value changes (well, 2025). chief financial officers (cfo) tend to not like fair value accounting because it causes the company’s income to fluctuate, and they have no control over the timing or magnitude of the fluctuations (reason, 2008). as a result, cfos must spend a lot of time explaining to investors that the investment value is not increasing or decreasing because of the company’s performance, but rather the fluctuations of the company’s assets or liabilities fair value. for cfos, there can be the increased issue of valuing assets when working with accounting firms or auditors as there can be disagreement or lack of knowledge when valuing level 3 items with little or no information (reason, 2008). an auditor who is not well-versed in determining an appropriate amount for a fair value asset or liability might not be able to provide due diligence to investigate and determine a proper value. without the company’s ability to provide accurate asset or liability values, investors' assessment of the company's financial performance would be prevented (cascini & delfavero, 2011; kaya, 2013). proponents of fair-value accounting argue historical-cost financial statements are not relevant because they do not provide information about current values (chung et al., 2023). the balance sheet contains numerous accounts reported at historical cost that may be considered outdated and therefore irrelevant. if a significant period has passed since the land or property, plant, and equipment (pp&e) was purchased to open a production facility, the amount reported at historical cost may no longer reflect the asset’s economic value, creating a hidden asset for the entity. if land and property, plant, and equipment (pp&e) long-term assets were reported at fair value, the balance sheet accounts would need to be adjusted for appreciation or depreciation. the appreciation or depreciation value would be recorded in a long-term asset contra account to maintain the unrealized portion of land and property, plant, and equipment (pp&e) 's market or present value for financial statement users. the appreciation or depreciation offset amount to recognize the unrealized gain or loss would be recorded in the other comprehensive income account comparable to the recognition of a security investment’s american journal of management vol. 25(4) 2025 75 unrealized gains or losses. this recognition of the land and ppe make fair value display of capital assets comparable to the fair value hierarch recognition set forth in asc 820 (asc, 2009e). aluation method setbacks fair value accounting provides transparency and relevance by reporting the current market value; however, it is subjective and requires estimates for complex or illiquid assets, which can create situations that can be exploited for fraudulent activities, such as recognizing gains or losses on a selective basis (barrpulliam, 2019). another argument against fair value is that management may hire an appraiser to provide an appraisal that increases asset values solely to increase the entity’s income (emerson et al., 2010). a balance sheet approach, which potentially incorporates the extended use of fair value measurements not based on market observations, can result in information that is potentially unreliable and not easily verifiable. the complexity of fair value measurements can create an information gap between those preparing the financial statements and the statement users, resulting in an asymmetry that prevents investors and auditors from detecting manipulation (krumwiede, 2008; alharasis et al., 2022). conversely, when analyzing information produced by financial analysts, a preference for the income statement approach over the balance sheet approach is evident for long-term assets (krumwiede, 2008, p. 39). due to cost allocations, such as depreciation, the current market valuation of many assets is not reflective of the entity's economic reality. when a depreciable asset is acquired, management’s use of estimates to determine its useful life and the appropriate cost allocation schedule does not alter the overall expense; only its timing is affected. there is no justification to revalue the asset’s value in future periods. if the salvage value is later determined to have been inaccurately estimated, a gain or loss on disposal is reported in income as a part of normal operations. furthermore, the valuation of the asset as considered by an open market is not always reflective of the value of an identical asset. the relative value of an asset used by an entity for manufacturing goods or providing services will be more valuable than the dollar amount it could be sold for at a specific point in time (barr-pulmann, 2019). fair value standards have been found to be associated with litigation risks due to the evaluation volatility that is also likely to result in financial restatements (huang et al., 2020; cho & kang (2024); ashrol et al., 2025). even well-intentioned management estimates of fair value will be wrong to the extent that the various predictions and assumptions are wrong” (krumwiede, 2008). when estimates and predictions fall short, which can never be entirely avoided, the management's intent must be considered. this creates an unnecessary burden for auditors who will be required to analyze the situation that existed when the inappropriate or fraudulent estimate was created, as well as any subsequent revaluations. typically, fair value accounting systems do not have processes in place to identify or detect manipulation or fraudulent accounting transactions. therefore, the increased reliance on estimates compounds the difficulty of detecting criminal intent. (cardao-pito, 2024). conclusion as a measurement basis, the choice between fair value and historical cost measurement is determined by accounting standard setters and little evidence exists that entities choose between fair value and historical costs (christensen & nikolaev, 2013; fontes et al., 2025). the use of fair value reporting incurs additional costs compared with historical cost accounting. revaluation at each reporting period can create a cumbersome task that provides debatable benefit. this is coupled with the reality that many financial statement revaluations involve assets and liabilities that will not be transferred, resulting in unrealized gains and losses. in addition to the increase in compliance and auditing costs, additional costs can be imposed in the form of increased financial reporting errors and potential future abuses by opportunistic and dishonest management (cardao-pito, 2024)). since gains and losses can be presented on the income statement due to quarterly revaluations, the door is open for manipulation in either direction, based on management’s intent (cho & kang, 2024). although it is beyond the scope of this discussion, the infamous enron scandal has 76 american journal of management vol. 25(4) 2025 proven the near limitless possibilities of an overreliance on and misuse of fair valuation (haswell & evans, 2018). there are many nuances associated with each type of transaction that can be reported on the balance sheet. therefore, this discussion of balance sheet valuations is limited to the account classifications that represent the larger number of transactions or highest value in publicly traded entities’ financial statements. currently, a change to fair value accounting for all assets and liabilities reported on the balance sheet appears to be a challenge due to the added costs associated with measurements as the benefits must be sufficient to justify the implementation. there is ample evidence to the benefits of fair value accounting for debt and equity securities. research suggests that disclosed and recognized fair values provide informative data to investors; however, the level of information is affected by the amount of measurement error and the source of the estimates, whether made available by management or external appraisers (landsman, 2007). as these investments can be measured based on level 1 inputs, management has readily available verifiable information to recognize them at fair value. thus, the change to fair value accounting has been a useful and reliable tool for investors interested in the entity’s debt and equity securities. long-term assets are measured and reported in the balance sheet using a historical cost basis. cost allocations, such as depreciation and amortization, ensure that these items can be systematically reported without adjustments to market value, although recognition and reporting using fair value is also possible. any potential appreciation in the value of these assets flows into the income statement upon disposal and may not benefit from fair value accounting. according to gaap, long-term liabilities can be measured at fair value under the fair value option. the implementation of the fair value option has several advantages over other valuation methods, as it provides investors with an up-to-date valuation of an entity’s debt obligations. however, companies are unlikely to take advantage of the fair value option as unrealized changes can mislead the investors regarding the economic reality of the entity. ultimately, fair value changes act as a hedge offsetting the changes in asset valuations. although this discussion has presented a plethora of financial statement valuation and reporting information, there is a need for further research. for example, future research could determine whether the two measurement methods (i.e., fair value and historical cost) complement or substitute for one another, and whether the relationship might vary over time or by entity type. exploring these issues may help determine if historical cost information is lost when the fair value method is employed and how this lost information can be restored. since both measurement methods employ different assumptions, what data should be disclosed in the notes to clarify the reported valuations and provide decision-useful information for analysts and investors? future research can help to better understand why investors view fair value valuations for payables less decision useful than for receivables and does this perception influence entities’ selection of valuation methods. investing in this challenging issue might result in valuable insights for interested parties, including investors, stakeholders, and financial statement users. current gaap for financial reporting employs a hybrid mix of fair value and historical cost measurement to prepare the entities’ financial reports, which provide investors and other interested parties with ample information for decision-making. an overreliance on estimates and judgements when other methods are available creates an unnecessary addition of more unrealized gains and losses that may never materialize. valuation methods, such as historical cost, provide financial statement users with relevant and reliable information for illiquid assets and liabilities. reporting trading securities using fair value measurement provides financial statement users with timely market information. changing gaap to require the entities’ financial statements to be presented only using fair value measurement would be a disruption because users of the financial statement data employ the information for different purposes. what remains is for the fasb to determine whether financial statements based on fair value provide more reliable information than historical cost-based statements (landsman, 2007). american journal of management vol. 25(4) 2025 77 references abbott, m., & tan-kantor, a. 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(2016). the trueblood study group on the object of financial statements (1971-73): a historical study. journal of accounting and public policy, 35(2), 134–161. the indirect effects of cultural values on ethical decision making via utilitarian ethical orientation dinah payne university of new orleans christy m. corey university of new orleans lillian y. fok university of new orleans we examined whether utilitarian ethical orientation mediates the relationships between three cultural values, long-term orientation, activity orientation, and universalism, and ethical decision making (edm). to understand their role as antecedents to edm, cultural values were examined at the individual level of analysis. results indicated that act and rule utilitarian orientations significantly mediated the effects of universalism on edm. when coupled with act utilitarian orientation, universalism accounted for 50% of the variability in ethical decisions compared to only 30% when coupled with rule utilitarian orientation. implications for management practices and business ethics in multicultural and international corporations are discussed. introduction research on the link between individual–level values, ethics and ethical decision making is characterized by the inclusion of a wide range of values, some with a cultural focus (e,g, beekun and westerman, 2012; fok, payne, and corey, 2016; nevins, bearden, and money, 2007), and some without (e.g., fritzsche and oz, 2007; watson, berkley, and papamarcos, 2009). until recently, most studies of cultural values and ethics used a cross-cultural between group focus where the main conclusions were drawn with respect to between-culture comparisons (e.g., tsui and windsor, 2001). although understanding cross cultural differences is important, empirical investigations of the relationships between cultural values and ethical decision making may be more fruitful if we consider how the values operate at the individual level of analysis to affect individual decisions. in hunt and vitell’s (1986, 1993) model of ethical decision making, they assert that cultural values affect an individuals’ ethical decision making via their ethical orientations. recently, empirical evidence was found that supports the mediating effects of utilitarian orientation, specifically act utilitarian orientation, between the cultural values universalism and activity orientation and ethical decision making (fok et al., 2016). following fok et al. (2016), we expect cultural values, at the individual level of analysis, to influence whether decision makers are more likely to adopt an act or rule utilitarian american journal of management vol. 16(1) 2016 19 orientation which will, in turn, affect the ethical decisions they make. specifically, the predictive effects of the cultural values long-term orientation, activity orientation and universalism are considered. our goal is to replicate the findings of fok et al. (2016) regarding act utilitarian orientation, and to see whether the mediating role of rule utilitarian orientation can be demonstrated. in today’s organizational climate, cultural-based diversity challenges are as relevant in domestic operations as they are in international operations. increasing our understanding of the nature of cultural values and how potentially different combinations impact ethical orientations and, ultimately, work decisions and behaviors is important as managers face the challenges of an increasingly multicultural workplace. such a determination may lead to better management practice in dealing with multicultural work environments: to better understand what motivates workers, how they think, and how to fashion solutions that will be acceptable to all, regardless of cultural background. business ethics and ethical decision making ethics is an inquiry into the foundations of morality, the moral judgments, standards and rules of conduct of a person (taylor, 1975). it guides human behavior and helps one distinguish between good and bad, right and wrong (phatak, bhagat and kashlak, 2009), and it contributes to an understanding of what is equitable and fair (carroll, 2004; freeman and gilbert, 1988). velasquez (1998) defined business ethics similarly as a specialized study of moral right and wrong that concentrates on moral standards as they apply to business policies, organizations, and behaviors. business ethics is the “moral thinking and analysis by corporate decision-makers and other members regarding the motives and consequences of their decisions and actions (amba-roa, 1993, p. 553).” this last definition emphasizes the importance of the behavior of the moral agent, the individual decision maker, in business ethics, and it highlights the role of moral thinking in making decisions. most research in the area of behavioral ethics is based on rest’s (1986) four-stage model of ethical decision making (see kish-gephart, harrison, and trevino, 2010; loe, ferrel, and mansfield, 2000; o’fallon and butterfield, 2005). the ethical decision making process starts when a person recognizes a particular issue as posing an ethical dilemma (hunt and vitell, 1986; rest, 1986). eventually, the decision maker forms a moral intention by committing to a particular course of action. in the final stage, the decision maker engages in moral action which occurs when the intended behavior is acted upon. ethics is not reflected solely in an ethical intention or behavior. because the same intention or behavior can be attributed to different reasons or justifications (collins and wray-bliss, 2005; lahdesmaki, 2005; victor and cullen, 1988), the ethical basis of a behavioral decision may better be determined from the justification for that decision rather than from the behavior (or intention) itself. in empirical investigations, the ethical orientation of a decision maker is typically determined by analyzing the post-decision rationale for terminology that expresses different ethical theories (fritzsche and becker, 1984; granitz and loewy, 2007; lahdesmaki, 2005; premeaux, 2004; premeaux and mondy, 1993; victor and cullen, 1988). the ethical orientation reflected in a decision justification matters because it leads the decision maker to consider different criteria by which decision alternatives are judged (victor and cullen, 1988). it provides a framework within which individuals contemplate issues of right and wrong and assists them with determining the right way to behave (fraedrich and ferrell, 1992). past research suggests that individuals’ ethical orientation is associated with their ethical judgments (fraedrich and ferrell, 1992; fritzsche and becker, 1984; premeaux, 2004; premeaux and mondy, 1993). in models of ethical decision making, the exact point(s) in the process when one’s ethical orientation comes into play varies. in their model of ethical decision making, hunt and vitell (1986) assert that ethical theory is incorporated early into the decision making process during the problem evaluation phase. however, rest (1986) argues that ethical theory plays a role throughout the ethical decision making process from when a decision maker first conceptualizes a problem, through the evaluation and judgment stages, to when the decision is finally made. both agree that ethical orientation comes into play early in this process. 20 american journal of management vol. 16(1) 2016 utilitarian orientation and ethical decision making past research has shown that decision makers use a wide range of ethical criteria and theories to justify their ethical decisions (granitz and loewy, 2007; reidenbach and robin, 1988; schumann, 2001; shultz and brender-ilan, 2004). in the field of moral philosophy and decision reasoning, ethical theories have been classified into two types, deontological and teleological (e.g., beauchamp and bowie, 1979; murphy and laczniak, 1981). deontological theories focus on the specific actions or behaviors of an individual, whereas teleological theories focus on the consequences of those actions or behaviors (hunt and vitell, 1986). in other words, teleological theories are concerned with the anticipated impact of the behavior or action and the amount of good or bad that may result from it. while developing a behavior measure of ethical decision making in various business contexts, fritsche and becker (1984) found that most professionals provided some form of utilitarian reasoning to justify their ethical behavior. utilitarian ethical theories are classified as teleological in nature, because they assume that the morality of a decision is determined by taking into account the decision alternative that produces the greatest good for the greatest number of people. decisions are deemed unethical when they create personal gain at the expense of the greater good or when it results in inefficient goal attainment. in the current study, we focus exclusively on utilitarian ethical theory as an antecedent to ethical decision making. researchers generally distinguish between two forms of utilitarianism, act-based reasoning and rule-based reasoning (fritzsche and becker, 1984; premeaux, 2004; premeaux and moody, 1993;). when individuals invoke act utilitarian reasoning, actions are judged ethical depending on their outcomes and consequences for the decision at hand. rule utilitarian reasoning involves decision makers following rules (e.g., laws, organizational policies, personal code of conduct) designed to achieve the greatest net positive consequences over time. following the rules results in the greatest good in the long term and should not be ignored because of a possible exception. the conceptual link between utilitarian ethical orientations and ethical decision making has been demonstrated empirically. fritzsche and becker (1984) and premeaux (2004) found that individuals with a rule-utilitarian orientation were more likely to make decisions that emphasized ethical value, whereas those with an act-utilitarian orientation were likely to make choices that emphasized economic value. although we expect to replicate these findings, this is not the primary focus of this study. our goal is to better understand what factors influence the development of a rule or act utilitarian orientation and subsequent ethical decisions from a multi-cultural perspective. more generally, do cultural values that distinguish different cultures or nations also lead to predictable differences in utilitarian ethical orientations and ethical decision making? linking culture, values, and ethical behavior values form an important foundation of ethics: they are held by individuals and organizations (elango, paul, kundu and paudel, 2010). within the realm of business ethics, ethical business behavior stems from a manager’s personal values (hemingway and maclagan, 2004). hofstede (2001) associates culture with values, systems of which are core elements of culture. values are described as broad tendencies to prefer certain states over others; they are the deepest expressions of culture. morris et al. (1998) assert that members of the same culture are likely to share a set of values acquired in the process of socialization. values influence attitudes and decisions which, in turn, affect behavior. collectively, they form an ongoing spiral of culture (payne and landry, 2005; ma, 2010; taras, steel, and kirkman, 2011). culture influences ethical values, attitudes and behaviors (ma, 2010), and hunt and vitell’s (1986, 1993) theory of ethical decision making incorporates all of these elements. in their model, the effect of cultural values on ethical intentions and behaviors occurs through the ethical orientation of decision makers. a recent empirical investigation found support for this mediating effect. using business professionals from the u.s. and the u.s. territory puerto rico, fok et al. (2016) found that act utilitarian orientation significantly mediated the effects of two cultural values, universalism and activity orientation, on ethical decision making. universalists were less likely to adopt an act utilitarian orientation when american journal of management vol. 16(1) 2016 21 making decisions; those with a “doing” activity orientation were more likely to use this type of ethical orientation. although there were no national differences on rule or act utilitarian orientation or ethical decision making, the cultural value differences at the individual level of analysis mattered. next, we review three cultural value dimensions, long-term orientation, activity orientation (i.e., doing versus being), and universalism, that are expected to relate to rule and act utilitarian orientations and ethical decision making. time orientation the cultural dimension, time orientation, relates to the culture’s view of the past, the present and the future, how those time frames are regarded (adler, 1997) and time orientation length (hofstede, 2001). individuals with long term orientation may project years into the future when planning or making decisions, whereas those with short term orientation tend to focus on the here and now. long-term oriented societies believe in adopting behavior that will preserve and build future value. perseverance and thrift are noted as important values in long-term oriented societies (soares, farhangmehr, and shoham, 2007). based on the inconsistent findings of past research, the role of long-term orientation in ethics and ethical decision making is not clear (arli and tjiptono, 2013; christie, kwon, stoeberi, and baumhart, 2003; fok et al., 2016; nevins et al., 2007). using a sample of business students from the u.s., nevins et al. (2007) found that two aspects of long-term orientation, tradition and planning, were significant positive predictors of personal ethical values. cross cultural research in this area has produced less clear conclusions. christie et al. (2003) conducted a study of cultural values and ethical attitudes of business managers from india, korea, and the u.s. they found that u.s. managers were higher in long-term orientation but this did not consistently affect ethical attitudes across decision situations. in addition, fok et al. (2016) found no effect of long-term orientation on utilitarian orientation or ethical decision making even though u.s. and puerto rican business professionals differed significantly on this cultural dimension. activity orientation a culture’s view of doing versus being is related to the degree to which a group embraces achievement and rejects values found in leisure and family life. similar in nature to alas’s (2006) concept of performance orientation, this orientation concerns the encouragement and/or reward for performance improvement or excellence (also cited in resick, hanges, and dickson, 2006). “doing” cultures seek to achieve the most in life, while “being” cultures want to experience life such that scheduling and punctuality are not essential. the united states is a very doing oriented culture (kluckhohn and strodbeck 1961). there is surprisingly little research linking this cultural dimension to ethical values and decision making. as discussed previously, fok et al. (2016) found that activity orientation was a key value that had a direct relationship with act utilitarian orientation and an inverse relationship with ethical decision making. compared to be-ers, do-ers were likely to use an act utilitarian orientation and make decisions with more economic, and less ethical value. universalism/particularism universalism is the degree to which a culture values universal behavior or hypernorms (resick et al., 2006). universalism represents a culture’s desires to use well-established standards of behavior when dealing with ambiguous situations. particularism is a cultural approach that accepts the adaptation of behaviors to a given situation and set of relationships (lefebvre, 1982; trompenaars, 1993). in particularist cultures, behaviors, including those that break rules, are meaningful and adhere to commonsense notions that provide order and regularity (verkuyten, rood-pijpers, elffers and hessing, 1994). universalistic cultures are more rule-bound and potentially less well equipped to think individualistically about, for example, complex ethical issues or achieving solutions without challenging 22 american journal of management vol. 16(1) 2016 the rules. exceptions that might weaken the rule tend to be resisted (trompenaars, 1993). more particularistic cultures are not so rule-bound and may be better able to “think outside the box” when it comes to making complex decisions. in a rare study of this cultural value and ethical decision making, fok et al. (2016) found that universalism had a significant positive relationship with ethical decision making. after controlling for age, however, the effect was no longer significant. older professionals were significantly higher in universalism compared to younger professionals. in relation to ethical theory, universalists were more likely to have a rule utilitarian orientation, and less likely to have an act utilitarian orientation during decision making. the current study in the current study, we revisit hunt and vitell’s (1986, 1993) theory of ethical decision making and apply it to a model of cultural values, ethical orientation, and decision making in a business context. previous findings regarding three cultural values, long-term orientation, activity orientation and decision making. we attempt to replicate the findings of fok et al. (2016) regarding the mediating effects of utilitarian orientation on cultural values and ethical decision making using a larger u.s.-only sample. although this study lacks a cross-national focus, we intend to show that cultural values which have been used in the past to demonstrate meaningful differences between national cultures can also be treated as personal, individual-level values and used predict decision makers’ propensity to use utilitarian ethical orientations and make ethical decisions. based on the arguments presented above, we offer the following hypotheses: h1: the values of decision makers will influence their utilitarian ethical orientation. universalism will be positively related to rule utilitarian orientation and negatively related to act utilitarian orientation. long-term orientation and doing will be negatively related to rule utilitarian orientation and positively related to act utilitarian orientation. h2: the values of decision makers will affect their ethical decisions. universalism will be positively related to ethical decision making, whereas long-term orientation and doing will be negatively related to ethical decision making. h3: utilitarian orientation will be related ethical decision making such that rule utilitarian orientation will be positively related and act utilitarian orientation will be negatively related to decision making. h4: utilitarian orientation will mediate the relationship between values and ethical decision making. method participants/data collection participants were recruited from mba and undergraduate business courses taught in programs administered by a university in a large southern city in the u.s. neither the master’s nor undergraduate business administration program contains a business ethics course, but business ethics concepts are incorporated in various courses. all respondents gave their informed consent to participate prior to completing the study. the survey was posted online with other student material on a digital course management website. participants downloaded the survey, filled it out, and, upon completion, participants submitted their responses electronically. the sample included 176 participants. approximately 53% were mba students (n = 94) and 47% were undergraduates (n = 82). for the mbas, the subjects were 52% male with an average age of 33.48 american journal of management vol. 16(1) 2016 23 (sd = 8.41) with 12.96 (sd = 8.82) years of working experience and 5.21 (sd = 6.13) years in a management position. with respect to the undergraduates, participants were 52% male with an average age of 23.94 (sd = 4.92) with 5.76 (sd = 4.30) years of working experience and 1.03 (sd = 2.59) years in a management position. instruments cultural values universalism, long-term orientation, and activity orientation were assessed using the respective scales from a brenner and mcguire (2003; mcguire, fok and kwong, 2006) validation study. the instrument is a 150-item self-report questionnaire on nine cultural values and beliefs. items were developed based on qualitative research on culture, or taken directly or adapted from existing, validated culture surveys. brenner and mcguire (2003) found evidence of the cultural values instrument’s scale reliability and construct validity on a sample of american respondents. respondents indicated their agreement to statements about their ideal job and their values and beliefs using 7-point agreement scales. ethical decision making ethical decision making was assessed using the becker and fritsche behavioral decision (fritzsche and becker, 1984; becker and fritzsche, 1987; premeaux and mondy, 1993) instrument. this measure contains five hypothetical vignettes that describe various ethical dilemmas about coercion, bribery, environment/pollution, paternalism, and personal integrity (see appendix a). for each vignette, two responses were solicited. first, subjects were asked to indicate on a 0 “definitely would not” to 10 “definitely would” scale what their own decision would be to the scenario issue. with the exception of vignette 5, higher scores indicate a preference for economic value over ethical value; in vignette 5, higher scores indicate a preference for ethical value. to create a summary measure of ethical decision making in which higher scores indicate more ethical judgments, first ratings on vignettes 1, 2, 3, and 4 were reverse coded. next, an aggregate decision score was calculated for each respondent by averaging decision ratings across all 5 vignettes. after reading each scenario and providing a decision rating, participants indicated the reasoning behind that decision. options were presented in multiple-choice format, including an open-ended option. following whitcomb, erdener, and li (1998), decision reasons were coded as reflecting one of four ethical theories: rule utilitarianism, act utilitarianism, theory of moral rights, or theory of justice. as seen in appendix a, each vignette contained reasoning options related to at least two of the four ethical theories considered in this study. reasoning alternatives in all 5 vignettes included options that were ruleutilitarian or act-utilitarian in nature. the total number of times participants used a rule or act utilitarian coded reason was calculated across the five vignettes and used to indicate the level of utilitarian orientation reflected in their decision making. scores could range between zero (orientation never indicated) and five (same orientation indicated across decisions). results hypotheses 1, 2, and 3 concerning the expected directions for relationships between values, utilitarian ethical orientation, and ethical decision making were tested using correlation analysis. the results are presented in table 1. the level of significance is .05 for all statistical tests. the findings partially support h1; one of the three cultural values considered was related to rule and act utilitarian orientation. as expected, universalism was positively related to rule utilitarian orientation (r = .28; p < .01) and negatively related to act utilitarian orientation (r = -.26; p < .01). the values long-term orientation and doing were unrelated to either type of utilitarian orientation. 24 american journal of management vol. 16(1) 2016 table 1 correlations between main study variables and covariates note. lto = long-term orientation; when available, scale reliability is included in parentheses on the main diagonal. n = 176 * p < .05; ** p < .01 partial support was also found for h2 concerning the values-ethical decision making relationship. again, universalism was the only value significantly related to ethical decision making. confirming h2, universalists were significantly more likely make decisions that had ethical, as opposed to economic, value (r = .28; p < .01). finally, consistent with h3, rule utilitarian orientation was positively related to ethical decision making (r = .51; p < .01), and act utilitarian orientation had the opposite effect (r = -.61; p < .01). in h4, utilitarian ethical orientation is a proposed mediator of the relationship between cultural values and the outcome ethical decision making. based on the correlation results discussed above, we identified two sets of variables suited for mediation analyses and a test of h7. only universalism was significantly related to both forms of utilitarian orientation and ethical decision making, so it was included as the independent variable in two mediation analyses. first, we examined the indirect effect of universalism on ethical decision making via rule utilitarian orientation, and then we tested the same indirect effect replacing rule with act utilitarian orientation. two covariates, sex (men coded 1, women coded 0) and age, were controlled for in these analyses. the correlations in table 1 show that sex was significantly related to only two variables, universalism (r = -.25, p < .05) and long-term orientation (r = .19, p < .05). age, on the other hand, was significantly related to everything but sex and long-term orientation. compared to younger individuals, older decision makers were more likely universalists and be-ers, not do-ers, furthermore, they were more likely to make ethical decisions and use rule utilitarian-based reasoning to justify their decisions. younger individuals used more act utilitarian-based reasoning to justify decisions with more economic value. to test whether rule utilitarian orientation mediates the effect of universalism on the outcome ethical decision making, we followed the initial steps of the baron and kenny’s (1986) procedure, and then estimated the indirect effect using the bootstrap technique described in preacher and hayes (2004). regression results from the mediation analysis are presented in table 2. initially, we confirmed that the independent variable was a significant predictor of the criterion. the model without the mediator included was significant (f (3,172) = 9.46, p < .01), and universalism (β = .24; p < .01) remained significant after controlling for the covariates. the r2 was .14; the addition of universalism significantly improved this value (δr2 = .05, p < .01) from that observed in the covariates-only model. variables m sd 1 2 3 4 5 6 7 8 sex .52 .50 - age 29.03 8.46 -.04 - doing 4.51 .43 .24** -.17* (.88) lto 4.66 .65 .19* .09 .13 (.72) universalism 5.08 .65 .08 .23** .06 .11 (.92) rule utilitarian 2.15 1.03 -.03 .34** .02 -.03 .28** - act utilitarian 1.40 1.15 -.00 -.33** -.00 -.08 -.26** -.66** - ethical dm 7.21 1.62 -.10 .29** -.08 .12 .28** .51** -.61** - american journal of management vol. 16(1) 2016 25 table 2 mediation analysis for values, rule utilitarian orientation, and ethical decision making variables outcome: ethical decision (without mediator) outcome: rule utilitarian orientation outcome: ethical decision (with mediator) b se β b se β b se β covariates sex -.36 .23 -.11 -.08 .14 -.04 -.31 .21 -.10 age .04 .01 .23** .03 .01 .29** .02 .01 .11 value universalism .40 .12 .24** .23 .08 .22** .24 .11 .14* mediator act utilitarian --- --- .67 .11 .43** f (3,172) = 9.46** r2 = .14 δr2 = .05** f (3,172) = 10.90** r2 = .16 δr2 = .04** f (4,171) = 18.00** r2 = .30 δr2 = .20** note. δr2 based on values from the full and covariate-only models. n = 176 * p < .05; ** p < .01 the next step to establishing mediation requires that the independent variables significantly predict the mediator. here, the model that includes the outcome rule utilitarian orientation was significant (f (3,172) = 10.90, p < .01); universalism (β = .22; p < .01) remained significant after controlling for the covariates. finally, the r2 was .16, and, again, the addition of universalism significantly improved this value (δr2 = .04, p < .01) from that observed in the covariates-only model. finally, mediation tests were performed by regressing ethical decision making on the covariates, universalism, and the mediator rule utilitarian orientation (see table 2). in support of h4, evidence of mediation was found; the findings are summarized in figure 1. the overall model was significant (f (4, 171) = 18.00, p < .01) with an r2 of .30. the addition of universalism and rule utilitarian orientation significantly improved this value (δr2 = .20, p < .01). figure 1 standardized regression coefficients for universalism predicting ethical decision making mediated by rule utilitarian orientation the standardized regression coefficient between the predictor and outcome controlling for rule utilitarian orientation is in parentheses. 26 american journal of management vol. 16(1) 2016 rule utilitarian orientation’s direct relationship with ethical decision making remained significant even while controlling for universalism (β = .43, p < .01). although it remained significant, the relationship between universalism and ethical decision making was substantially reduced in this analysis (β = .14, p < .05) compared to the results for the no-mediator model (β = .22, p < .01). furthermore, based on the test of the .16 estimated indirect effect, rule utilitarian orientation significantly mediates the effect of universalism on ethical decision making. the true indirect effect is estimated to lie between .07 and .26 with 95% confidence. because zero is not included in this interval, we conclude that the indirect effect is significantly different from zero (p < .05). in the second mediation analysis, we tested the indirect effect of universalism on ethical decision making via act utilitarian orientation (see table 3). because the first and second mediation analyses include universalism and ethical decision making as the independent and dependent variables, respectively, the results for the first step, no-mediator model in tables 2 and 3 are the same. thus, we begin here discussing the second step, testing whether the independent variable significantly predicts the mediator. in table 3, the model that includes the outcome act utilitarian orientation was significant (f (3,172) = 10.10, p < .01); universalism (β = -.20; p < .01) remained significant after controlling for the covariates. the r2 was .13, and the addition of universalism significantly improved this value (δr2 = .04, p < .01) from that observed in the covariates-only model. table 3 mediation analysis for values, act utilitarian orientation, and ethical decision making variables outcome: ethical decision (without mediator) outcome: act utilitarian orientation outcome: ethical decision (with mediator) b se β b se β b se β covariates sex -.36 .23 -.11 .01 .16 .03 -.36 .19 -.11 age .04 .01 .23** -.04 .01 -.29** .01 .01 .07 value universalism .40 .12 .24** -.23 .09 -.20** .21 .10 .13* mediator act utilitarian --- --- -.78 .09 -.55** f (3,172) = 9.46** r2 = .14 δr2 = .05** f (3,172) = 10.10** r2 = .13 δr2 = .04** f (4,171) = 23.38** r2 = .51 δr2 = .37** note. δr2 based on values from the full and covariate-only models. n = 176 * p < .05; ** p < .01 in the final step, mediation tests were performed by regressing ethical decision making on the covariates, universalism, and the mediator act utilitarian orientation (see table 3). in further support of h4, evidence of mediation was found; the findings are modeled in figure 2. the overall model was significant (f (4, 171) = 23.38, p < .01) with an r2 of .51. the addition of universalism and act utilitarian orientation significantly improved this value (δr2 = .37, p < .01). american journal of management vol. 16(1) 2016 27 figure 2 standardized regression coefficients for universalism predicting ethical decision making mediated by act utilitarian orientation the standardized regression coefficient between the predictor and outcome controlling for act utilitarian orientation is in parentheses. act utilitarian orientation’s inverse relationship with ethical decision making (β = -.55, p < .01) remained significant after controlling for universalism. the direct effect of universalism on ethical decision making was reduced but remained significant (β = .13, p < .05) compared to the results for the no-mediator model (β = .24, p < .01). finally, a 95% confidence interval around the .18 estimated indirect effect ranged between .07 and .30. because this interval does not include zero, the indirect effect is significantly different from zero (p < .05). discussion in the area of ethical decision making in organizations, there is a growing emphasis on understanding why cultural differences affect behavioral and decision choices (ulrich and thielmann, 1993). in an effort to better understand this issue, we examined the relationships between cultural values, utilitarian ethical orientation, and ethical decision making in a sample of business students in the u.s. our findings reveal that the cultural value universalism drives the adoption of act and rule utilitarian philosophies, which, in turn, significantly impacts the types of ethical decisions made. these findings lend credibility to the idea that cultural values can and do indeed lead to different ways of conceiving and thinking through ethical dilemmas (goodwin and goodwin, 1999). although a debate persists about whether ethical decisions are driven more by individual or situational factors (e.g., trevino, 1986; trevino and youngblood, 1990), these findings confirm the influence of individual differences. the role of cultural values in ethical decision making was demonstrated by treating cultural values as an individual level personal disposition. of the three values examined, only universalism had a significant impact on utilitarian ethical orientation and ethical decision making. contrary to fok et al. (2016), universalism predicted both act and rule utilitarian orientations and ethical decision making after controlling for age and gender. this provides additional empirical support for hunt and vitell’s (1986, 1993) theory that cultural values work through ethical orientation to affect ethical decision making. of course, utilitarian ethical orientation is just one type of moral theory and it should not be the only one that matters. future research should investigate the link between cultural values and other ethical orientations that have been linked to ethical decision making. the lack of significance of doing activity orientation was surprising given it was a key variable that predicted act utilitarian orientation and ethical decisions in fok et al. (2016). also, our results are inconsistent with nevins et al.’s (2007) findings of a significant relationship between long-term orientation and ethical values. they did however consider separately two types of long term orientation, planning for the future and valuing the past. we used a measure of long-term orientation that combines these two aspects together. perhaps, this affected our lack of significant findings. 28 american journal of management vol. 16(1) 2016 in contrast to previous findings that moral reasoning patterns differ from issue to issue (jones, 1991; weber 1990; weber 1996), the current findings suggest that certain cultural values are associated with a the use of particular ethical theory when making a decision. notably, we aggregated the ethical decision ratings across the five vignettes and we calculated the total number of decision reasons provided by a participant that reflected act or rule utilitarian orientations. epstein (1979) argued that meaningful associations between individual characteristics and behavioral outcomes are more likely to be observed when the behaviors are aggregated over time or across situations. single incident behaviors or outcomes are susceptible to more sources of error than aggregate measures that capitalize on measurement reliability and are, thus, more likely to show behavioral stability. future research should examine the predictive validity of individual and situational variables when ethical decision making is measured at an aggregate or disaggregate level. limitations there are several limitations to this research. first, we measured ethical decision making in terms of behavioral intentions rather than actual behavior. measuring intentions rather than real-world behavior standardizes the context by removing consequences of the decision and social influences like peer pressure. however, hypothetical decisions have no real world consequences and may not be reflect what business professionals would actually do on the job. second, we did not test all possible cultural values that could impact ethical orientations and ethical decisions. finally, it is also possible that the respondents to the surveys altered their responses on the basis of the fact that ethical behavior is laudable or expected: they may have altered responses based on what they thought people would believe is the right thing, rather than what they themselves would or would not do in any given situation. references adler, n.j. 1997. international dimension of organizational behavior, cincinnati, oh: south western college publishing. alas, r. 2006. ethics in countries with different cultural dimensions. journal of business ethics, 69, 237247. amba-roa, s. c. 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(1998). business ethical values in china and the u.s. journal of business ethics, 17, 839-852. appendix a scenario 1: rollfast bicycle company rollfast bicycle company has been barred from entering the market in a large foreign country by collusive efforts of the local bicycle manufacturers. rollfast could expect to net 5 million dollars per year from sales if it could penetrate the market. last week a businessman from the foreign country contracted the management of rollfast and stated that he could smooth the way for the company to sell in his country for a price of $500,000. if you were responsible, what are the chances that you would pay the price? decision question: would you pay the price of $500,000? enter a number between 0 (definitely would not) and 10 (definitely would). decision justification: what is the reason for your choice in the question above? ethical orientation response options rule utilitarian such a payment is illegal. act utilitarian such a payment hurts no one. act utilitarian such a payment depends on a middleman who may not be trustworthy. act utilitarian such a payment is an acceptable practice in other countries. rule utilitarian such a payment is unethical a bribe. rule utilitarian such a payment is against company policy. act utilitarian such a payment is not unethical, it is just the price paid to do business. scenario 2: bill smith bill smith has recently accepted a job with a young, vigorous microcomputer manufacturer. microcomputer manufacturers are engaged in intense competition to become the first on the market with a software package that utilizes the english language and thus is easily used by the average customer. smith’s former employer is rumored to be the leader in this software development. when smith was hired he was led to believe his selection was based upon his management potential. the morning beginning the third week on the new job, smith received the following memo from the president: please meet with me tomorrow at 8:15 for the purpose of discussing the developments your former employer has made in micro-computer software. if you were smith, what are the chances you would provide your new employer with the software information? decision question: would you provide your new employer with the software information? enter a number between 0 (definitely would not) and 10 (definitely would). decision justification: what is the reason for your choice in the question above? 32 american journal of management vol. 16(1) 2016 ethical orientation response options rule utilitarian it is unethical for the president to request this information. act utilitarian smith should provide some but not all information. act utilitarian smith should keep his job. rule utilitarian it is unethical for smith to provide this information. act utilitarian smith should be loyal to his employer. moral rights it was unethical for the employer to mislead smith when he was hired. rule utilitarian smith should base the decision on whatever non-competition or security agreements are in force. rule utilitarian smith should protect his reputation. scenario 3: master millers company master millers company had developed a special milling process which yields a wheat flour which when used for bread provides a lighter, more uniform texture than conventionally milled wheat flour. unfortunately, the process gives off more dust than the emission control equipment presently installed can handle and still maintain emissions within legal limits. emission control equipment will not be available for at least two years, so the company cannot install it now. however, if the company waited two years to introduce the new process, competitors would very likely beat it to the market. the general manager wants to use the new process during the third shift, which runs from 10 p.m. to 6 a.m. by using the process at that time, the new flour could be introduced and the excess pollution would not be detected due to its release in the dark. by the time demand becomes great enough to utilize a second shift, new emission control equipment should be available. if you were responsible, what are the chances you would approve the general manager’s request? decision question: would you approve the general manager’s request? enter a number between 0 (definitely would not) and 10 (definitely would). decision justification: what is the reason for your choice in the question above? ethical orientation response options act utilitarian approving the request reflects that the equipment would be installed if available; that it is not available is not their fault. act utilitarian approving the request will cause minimal harm to the environment. act utilitarian approving the request brings with it a too-high risk of getting caught with resulting negative consequences. act utilitarian approving the request provides a large potential gain with low risk. rule utilitarian approving the request is illegal. justice approving the request is negative for the environment / life. scenario 4: j&p publishing company ted jones, senior editor of j&p publishing company, has just received a manuscript from one of his most successful authors. it provides the most authoritative account yet published of the history of the development of the atomic bomb. however, the final chapter contains a detailed description of how the bomb is made. jones has tried to convince the author to omit the last chapter stating that such information should not be made readily available to the mass market in paperback form. the author believes the chapter is critical to the success of the book and thus will not agree to its deletion. if you were jones, what are the chances that you would publish the book? american journal of management vol. 16(1) 2016 33 decision question: would you publish the book? enter a number between 0 (definitely would not) and 10 (definitely would). decision justification: what is the reason for your choice in the question above? ethical orientation response options act utilitarian those who want the information can get it now from other sources. rule utilitarian publishing the book may be detrimental to the company's image. rule utilitarian publishing the book is too dangerous to world safety. act utilitarian jones does not have the responsibility to make this choice. rule utilitarian publishing may have legal ramifications. scenario 5: jack ward jack ward is working in product development for an auto parts contractor. ward’s firm received a large contract last summer to manufacture transaxles to be used in a new line of front wheel drive cars which a major auto manufacturer plans to introduce in the near future. the contract is very important to ward’s firm, which has recently fallen on hard times. just prior to obtaining the contract, half of the firm’s employees, including ward, had been scheduled for an indefinite layoff. final testing of the assemblies ended last friday. the first shipments are scheduled for three weeks from today."" as ward began examining the test reports, he discovered that the transaxle tended to fail when loaded at more than 20% over the rated capacity and when subjected to strong torsion forces. such a condition could occur with a heavily loaded car braking hard for a curve down a mountain road. the results would be disastrous. the manufacturer’s specifications call for the transaxle to carry 130% of its rated capacity without failing. ward showed the results to his supervisor and the company president, who indicated that they were both aware of the report. if they did not deliver the assemblies on time, they would lose the contract. ward must now decide whether to show the test results to the auto manufacturer. if you were ward, what are the chances that you would notify the auto manufacturer?" decision question: would you notify the auto manufacturer? enter a number between 0 (definitely would not) and 10 (definitely would). decision justification: what is the reason for your choice in the question above? ethical orientation response options rule utilitarian ward has no additional responsibility. rule utilitarian ward should remain loyal to his company and remain silent. moral rights the risk of injury or death is too great to remain silent. moral rights the company has a responsibility to the public. moral rights it is criminal and dishonest to remain silent. act utilitarian the risk to the firm’s image, profitability, and long run potential are too great to remain silent. act utilitarian the risk of injury or death is too low to halt the sale. 34 american journal of management vol. 16(1) 2016 ajm 18(3) master2.pdf build a leadership greenhouse and root young leaders in learning experiences sandra k. pate angelo state university rex t. moody angelo state university over the years, the question of how to effectively use technology to facilitate student learning has dramatically changed. although the benefits of e-learning are numerous, recent employment surveys indicate that many employers think recent college graduates lack basic people and leadership skills. this paper suggests that when it comes to developing soft skills there is no substitute for learning by doing. a leadership class designed for graduating seniors will be discussed in terms of class activities selected to develop skills commonly associated with leadership. student feedback suggested that they felt more confident about competing in today’s competitive job market. introduction the impact of technology on education is evident for anyone who is teaching. technology, an integral part of e-learning and online learning, makes it easier to reach more students, provide enhanced learning opportunities, and communicate in multiple ways with students. unfortunately, recent employment surveys have shown that today’s college graduates do not have the soft skills required to be successful in today’s competitive business environment (alssid, 2014). this leads to the question of whether all learning formats are equal when it comes to developing leadership skills. thomas (2008) suggested that leaders learn to lead from experience, a concept supported by leadership pioneers like warren bennis, edgar schein, chris argyris, donald schon, and morgan mccall who provided greater understanding of experience-based leadership development. a leadership class organized around the premise of learning by doing is the basis of this paper. literature review the student readiness gap a number of surveys have asked employers about the importance of leadership in organizations today. the center for creative leadership (ccl) leader insights survey (2012) found 90 percent of the respondents thought leadership development should be part of every student’s educational experience (van velsor & wright, 2012). ccl also discovered the competency that survey respondents wanted most, the ability to communicate effectively, aligned with their primary concern that many students were unable to communicate face to face (van velsor & wright, 2012). the job outlook survey conducted by american journal of management vol. 16(1) 2016 35 the national association of colleges and employers (nace) found 78 percent of the respondents chose leadership as the skill they looked for on a candidate’s resume, which was followed by written communication skills (gray & koncz, 2014). all of these surveys show concern among professionals regarding the lack of good communication skills when interviewing job candidates. so what are the most desired skills? a survey conducted by careerbuilder asked respondents for their top five most desired skills and found the list included good people skills (a firm handshake and making eye contact), oral and written communication skills, and leadership skills (elliott, 2015; grasz, 2015). the careerbuilder survey reinforced the importance of several skills associated with leadership, especially oral and written communication. another survey focused on the confidence employers had in student capabilities. only 28 percent of the employers, surveyed by the american association of colleges and universities (aacu), thought students had high abilities in the area of oral communication skills and only 27 percent of these employers thought recent college graduates had the written communication skills (correct grammar, spelling, language usage) needed to succeed in the workplace (elliott, 2015; jaschik, 2015). a recent gallup poll had similar results, finding only 11 percent of business leaders strongly agreed that graduates had the necessary skills to succeed in the workplace (alssid, 2014). it is obvious that employers have low expectations regarding the communication skills of college graduates and their ability to succeed in the workplace. when discussing communication, most of us think of oral and written skills. deutschendorf (2014) suggested that listening skills are just as essential to leadership as speaking, although listening skills are virtually ignored. his basic tips for improving listening skills include learning to be fully engaged and letting the speaker know you remember a key point by referring to it in a question (deutschendorf, 2014). these tips seem obvious but many students find giving their full attention to a speaker challenging especially if they are concerned about missing cell phone messages. recent surveys have found that many employers think colleges need to consider increasing real-life learning experiences. grasz (2015) noted that 46 percent of employers, who participated in the careerbuilder survey, believed that colleges did not put enough emphasis on real-world learning by including relevant experiences in classwork. this percentage was even higher in a recent gallup poll where 88 percent of the business leaders surveyed thought higher-education institutions needed to include more learning activities that mimic real-world scenarios rather than testing students on abstract principles (alssid, 2014). carriger (2013) suggested that developing leadership potential benefitted from mentoring, leadership coaching and learn-by-doing opportunities, which seem to have both theoretical and practical support. van velsor and wright (2012) agree that the lack of developmental experiences, such as coaching, and mentoring, leave young employees ill-equipped to lead in a very challenging business environment. the absence of developmental opportunities is partially placed on an educational system that is overly focused on academic test results even though organizations in all sectors want leaders who can communicate effectively in person (van velsor & wright, 2012). based on these survey results, designing classes that promote the development of skills employers want and graduates need to be successful in the workplace seems to be a win/win strategy. the following leadership class was built around one such strategy, learning by doing. leadership: learning by doing the applied leadership course was designed to reinforce the skills that business recruiters and managers feel recent graduates are lacking. this three-credit course includes short lectures on leadership topics, guest speakers, and a variety of activities outlined below. the applied leadership course is an elective for advanced students, who represent a variety of business majors. over the last four years, this course has had between 20 and 27 students enrolled each semester. classes are almost equally balanced between men and women who represent a variety of ethnic backgrounds. 36 american journal of management vol. 16(1) 2016 positive first impressions class activities are built around developing skills in areas that managers consider critical and none is more important than being comfortable meeting someone new and making a good first impression. the foundational skill of networking is practiced in the following activities. the elevator pitch the second day of class requires students to give an elevator pitch. in this exercise, students have to explain what makes them unique in two minutes. since many students tend to see themselves as being similar to everyone else, they are asked to think about their college experiences like internships, involvement in student organizations, volunteer work, part-time or full-time jobs, and study abroad trips. students can also include personal experiences, which clearly show that each of them have unique backgrounds and skillsets that many employers would value. even though students see the value of having an elevator pitch, they are surprised how hard it is to be confident, have clear talking points, and make eye contact. this early class exercise promotes bonding and empathy as students watch each other struggle to develop a good elevator pitch. each semester several students from this class attend a two-day job fair at another university where they practice using their elevator pitch. these students motivate others when they share the positive feedback they got from recruiters and how confident they feel about doing it again. networking lunch to reinforce their networking skills, students are required to make arrangements to take a businessperson or professional to lunch or coffee. although students offer to pay, the vast majority of the time their guest picks up the bill. this assignment also requires students to send a handwritten thank you note to their businessperson after they meet. students are expected to invite someone who has a career they are interested in, works in an industry they want to know more about (for example oil and gas or healthcare), or is a community leader they admire. this assignment does not allow students to select a family member or friend. since this assignment requires being prepared to ask questions, the first guest speaker each semester is a freelance writer. she shares tips on how to prepare good interview questions, the value of researching their guest, and the importance of staying connected with people you meet professionally. the contacts that students make from the networking lunch have led to internships, job offers, mentoring opportunities, and company visits. each semester two or three students are offered one of these opportunities, which tends to reinforce the power of networking. being a greeter a different student greeter meets each of our guest speakers at the college of business entrance, which requires doing a little research beforehand so they know what their speaker looks like. a greeter is expected to learn something about their guest speaker’s background, develop a few talking points, provide a bottle of water, and talk with them for 5 to 10 minutes before class starts. although only ten students can take advantage of this extra credit assignment, many students do not volunteer to be a greeter until they see other students do it first. the students who take advantage of this opportunity always say it was easier than they expected. effective listening effective listening is practiced when one of our ten community leaders speak for about 45 minutes and then answers class questions for another 30 minutes. students who ask guest speakers a question are reinforcing the skills they used during their networking lunch. community leaders who speak to the class are comprised of both men and women who represent a variety of organizations and backgrounds. for example, speakers represent both for-profit and nonprofit organizations; entrepreneurs who started a black-box theatre and a social media business; elected city officials like the mayor; military leaders including a lieutenant colonel and an intelligence specialist; and education professionals including a high american journal of management vol. 16(1) 2016 37 school principal, a university president and a university provost. each guest speaker receives a thank you card signed by each student who shares one thing they learned from that speaker’s presentation. receiving this personalized thank you card is one of the things guest speakers like the most because they are rarely used in our high-tech world. when we have a speaker, students are reminded to turn their cell phones off. the art of business writing in today’s business world, managers expect clear, concise written communication. the following activities practice both professional writing and constructive feedback. writing weekly journals during the course of the semester, students write ten journals, one to two pages long, that discuss the previous week’s activities. they are expected to be free of grammar, spelling, and formatting errors. in addition, the student journals have to be well written and organized. although these journals provide practice for honing writing skills, their journals also provides a summary of what they learned about leadership throughout the semester. in the beginning most students think this assignment is busywork but by the end of the semestert students are surprised by how much they learned and glad they have a record for future reference. graded journals are returned the same week they are submitted so students can correct their mistakes before the next journal is due. writing a leader paper the leader paper reinforces all of the skills students used when writing their weekly journals. this assignment requires students to select a leader who is deceased and read a book about their life. students have to condense what they read into a relatively short five-page paper that is well organized and correctly formatted. condensing large amounts of material into short reports or clear executive summaries is a skill most managers appreciate. the second half of this assignment requires a class presentation about their leader’s life. giving constructive feedback throughout the semester the class gives written and oral feedback on all student presentations. the end-of-semester leader presentations require every student to provide written feedback that is clear and constructive for each presenter. the objective of giving presenters feedback is to reinforce what they did well and what could be improved. overall, students agree that the class feedback is accurate and helpful. the ability to give constructive feedback is another communication skill valued by managers. oral communication managers rate good oral communication very highly. being comfortable speaking to one person or 30 people, for three minutes or 20 minutes is an important skill for anyone who wants to be an effective leader. networking lunch presentation every student gives a three-minute networking lunch presentation to the class. since this follows the elevator pitch, most students are already becoming more comfortable speaking in front of their classmates. the networking lunch presentation requires students to share who they took to lunch, why they chose that particular individual, the three most important things they learned about leadership, what went well and what did not go well, and if they would do it again (why or why not). the greatest benefit of this assignment is that students start to manage their speaking time since remembering key points they learned firsthand tends to be relatively easy for them. 38 american journal of management vol. 16(1) 2016 the penny game: eliminating “ums, ahs, and like” this is probably the exercise that students both love and hate, but it is always rated as their favorite exercise. each student is given three pennies before they speak extemporaneously on a random topic for one and a half minutes. each time they say “um, ah or like,” they lose a penny. this is a high-energy exercise that has amazing results. before the exercise, a short article is posted online with tips on how to avoid saying “um, ah, or like.” it does not take long for students to start using these tips in order to keep their pennies. at the end of class, anyone who has at least one penny gets a candy bar, however, every student gets a piece of candy as they leave class for being good sports. although this exercise tends to be light-hearted, it does not take long before students become very serious about eliminating filler words. most of them are surprised how much they use “um, ah, or like” without knowing it. giving a 20-minute picture driven presentation as mentioned previously, part of the leader project assignment requires a presentation on their leader’s life. since these presentations are picture driven, picking a more recent leader increases the probability of more pictures being available that depict each stage of their leader’s life. the only constraint, regarding the leader they select, is that they have to be deceased. as a result, both international and local; well-known and obscure leaders are selected for this presentation. presentation guidelines do not allow reading from notes or powerpoint slides. students also have to manage their time, look professional, and avoid standing behind the podium. some students are naturally gifted speakers but by the end of the semester, the overall improvement in everyone’s speaking skills is impressive. because students witness this improvement, they all seem more confident about their ability to speak well. learning about me understanding my leadership style being clear about their leadership style and thoughtful about how they will work with people professionally is the focus of the following assignments. being able to talk about their leadership skills has the potential to set a recent graduate apart from other job candidates. leader assessments students in the applied leadership class complete two personality assessments, the 41 questions personality test (41questions, 2016) and the disc personality test (disc personality test, 2016). an in-depth discussion of how to understand their disc results (understanding disc, 2016) is a helpful resource. tests are taken before class so their results can be used to form teams with diverse personalities. each team is asked to think of themselves as a member of a management team whose goal is to organize people in a way that uses their individual strengths and promotes working together effectively. teams then have to explain to the class how they are organized and why. when students are asked if their personality assessment fits them, to the surprise of most, they think their results were very accurate and provided valuable insights regarding the challenges associated with working with a variety of personalities. watching leadership videos any leadership video can be used but the last lecture by randy pausch, and the five c’s of leadership with indra nooyi (ceo of pepsico) are class favorites. videos are watched in class and then discussed. since each video provides a very different perspective on leadership, students are challenged to identify the leadership ideas that resonate with them. the point of showing these videos is to help students think about their personal leadership style. reading leadership articles during the semester, students read several articles about leadership and leaders. the articles recently used are the real leadership lessons of steve jobs and i’ve followed warren buffett for decades and american journal of management vol. 16(1) 2016 39 these 10 quotes are what i keep coming back to. the best articles challenge some of the assumptions students have about what makes a leader successful. writing a leadership philosophy one of the last class assignments requires students to write their personal leadership philosophy. each student has to identify the four leadership traits they feel most strongly represent their leadership style and then describe how these traits will affect the way they work with people. for example, a leadership philosophy might include the traits teamwork, trust, compassion, and commitment with seven to eight sentences explaining each. it is interesting to see how clear students are about their leadership style and how unique each one is. conclusion there is no doubt that the technological skills of today’s college graduates are highly valued by employers. however, based on employer surveys, the skills corporate america has the hardest time finding are soft skills. the premise of this paper is that people skills, required to be successful in today’s competitive business environment, benefit from learning by doing classroom experiences that cannot be duplicated online. employers who interview recent graduates with good communication and people skills, are more likely to add them to their short list of potential new employees. obviously a one-semester course is only a stepping stone on the path of self-discovery for young leaders, but it can be a spring board for continuous development of soft skills throughout their careers. references alssid, j. l. 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(2012). expanding the leadership equation: developing next-generation leaders. [white paper]. retrieved from center for creative leadership: http://insights.ccl.org/wp-content/uploads /2015/04/ expandingleadershipequation.pdf american journal of management vol. 16(1) 2016 41 http://insights.ccl.org/wp-content/uploads%20/2015/04/%20expandingleadershipequation.pdf� http://insights.ccl.org/wp-content/uploads%20/2015/04/%20expandingleadershipequation.pdf� ajm 18(4) master (r).pdf ajm 18_2_web_master.pdf boards’ different advisory tasks – what makes board members use their knowledge? max bankewitz university of witten/herdecke we investigate what makes board members use their knowledge and skills for providing advice to executives on different matters. distinguishing between functional and firm-specific advice, we examine how the use of knowledge and skills mediates the relationship between board processes and different advisory tasks. the empirical results highlight the leadership role of the chairperson and show that antecedents of the two types of advice differ. applying group effectiveness arguments, we contribute to the understanding of actual board behavior. furthermore, the study provides insights for both practitioners and policy-makers on how to make use of the board as an organizational resource. introduction most corporate guidelines, such as the g20/oecd principles of corporate governance (2015), focus on monitoring executive behavior as the main board task. however, research on boards in the last two decades has moved from a mainly single governance perspective, focusing on monitoring tasks towards a broader set of tasks that boards are involved in (hambrick, werder, & zajac, 2008; huse, hoskisson, zattoni, & viganò, 2011; zahra & pearce, 1989). it is important to better understand and explain the antecedents of board tasks other than monitoring, because these tasks may also contribute to a firms’ value creation (huse, 2007). boards’ involvement in these tasks contributes for instance to firm financial performance (zattoni, gnan, & huse; 2015). the literature about boards often refers to these tasks as service tasks (johnson, daily, & ellstrand, 1996). with regard to content, there exists a huge variety in the tasks boards perform even within the set of service tasks. they induce advice, networking and lobbying, as well as being involved in strategic issues. despite the development of the field, knowledge on what enables boards to successfully perform different service tasks needs to be further developed. first, the content of service tasks needs to be further detailed, and more fine-grained definitions of tasks should be developed and applied (machold & farquhar, 2013). there are ambiguous opinions on the theoretical frameworks of different service tasks, and theories are often used interchangeably (machold & farquhar, 2013). second, a behavioral approach of boards may help us to understand how board processes are related to different tasks (forbes & milliken, 1999). there is the need to move beyond the unsatisfactory results provided by input-output studies linking board composition with company performance (daily, dalton, & cannella, 2003; finkelstein & mooney, 2003). a better understanding about what actually happens inside and outside the boardroom affecting board performance is called for. scholars need to further open up “the black box of board behavior” to contribute to our understanding what enables boards to perform certain sets of tasks and what the antecedents of these tasks are. and third, moving beyond using archival data, theoretically derived hypotheses on the relationship 54 american journal of management vol. 16(1) 2016 between board processes and service tasks should be empirically tested on primary data. even though we acknowledge the efforts of several scholars in collecting such data, until now only few studies in this tradition have been published (see e.g. minichilli, zattoni, & zona, 2009; wan & ong, 2005; zona & zattoni, 2007). the purpose of this article is to investigate the antecedents that impact the boards’ ability to effectively perform functional and firm-specific advisory tasks. therefore, we introduce a more finegrained definition of advisory tasks. we argue that the content of advice provided matters, and that the antecedents of functional and firm-specific advice vary. we view the board as an organizational resource contributing to sustained competitive advantage by effectively providing advice. board members on the one hand need relevant knowledge and skills, and on the other hand actively make us of it, regardless of the content of advice (paper in progress by the author). some studies have examined the dynamics that make board members actively use their knowledge (zattoni et al., 2012; zona & zattoni, 2007). however, only few such as minichilli, zattoni, nielsen, & huse, (2012) have done this in relation to boards’ advisory task performance. we refer to well discussed concepts from the literature such as board relational norms (huse, 1993), chairperson leadership (leblanc, 2005), and board cohesiveness (forbes & milliken, 1999). we argue that these concepts are related to different types of advice and that the use of knowledge and skills mediates these relationships. viewing the board as a decision-making group at the apex of an organization, we further contribute to current knowledge by applying group effectiveness arguments (see e.g. mathieu, maynard, rapp, & gilson, 2008) in relation to boards. the paper is structured as follows. we begin with an overview of the current literature related to board tasks and the concepts used in this study. the formulation of hypotheses is embedded in this first chapter. we then introduce the data and variables used and present the methodology applied. the findings are presented and discussed afterwards in relation to the extant literature. after a final conclusion, implications for academics and practitioners are presented. theory and hypotheses board tasks there are needs for board studies contributing to our understanding what boards do and how they can contribute to organizational value creation (huse, 2007; pettigrew, 1992). therefore, studies of board tasks have gained increasing attention within the last 25 years resulting in different attempts to identify and categorize sets of board tasks according to different theories applied (hung, 1998; zahra & pearce, 1989). besides the progress in conceptualizing board tasks potentially impacting organizational competitive advantage, there is still the need to explore sets of board tasks, their theoretical derivation, and their empirical content (machold & farquhar, 2013). to examine what may be included in certain board tasks supports future research ambitions to study the relative distribution and dynamics of tasks. the boards’ involvement in sets of advisory tasks has so far been only topic of few studies (see e.g. krause, semadeni, & cannella, 2013; minichilli et al., 2009; wan & ong, 2005). there is significant variance in the theoretical framing of boards’ advisory tasks and many theories such as resource dependency theory (pfeffer & salancik, 1978) as well as the resource-based view (barney, 1991) have been applied. whereas resource-dependency arguments link organizations with their external environment through the board (hillman et al., 2000; pugliese, minichilli, & zattoni, 2013), we apply an internal perspective and acknowledge the boards value creation potential as an organizational resource providing advice to executives. based on their knowledge and skills, board members may typically provide valuable, rare, inimitable, and non-transferable resources to a firm, and by combining such resources they may contribute to the competitive advantage of the firm (zhang, 2010). different types of advice may however contribute differently to the competitive advantage of the firm. there is further variance in the operationalization of board advisory performance in a way that similar items may be used interchangeably (machold & farquhar, 2013). to understand what contributes to board performance, more fine-grained definitions and what is included in different board tasks are needed american journal of management vol. 16(1) 2016 55 (huse, nielsen, & hagen, 2009). we want to contribute to the scarce body of studies empirically measuring board advisory performance. we differentiate boards’ involvement in functional and firm-specific advice based on the content of advice provided. functional advice refers to the boards’ involvement in advice related to general management, legal, and finance topics. firm-specific advisory tasks cover technical and marketing related matters. we measure board task performance by the extent to which boards are involved in each task (minichilli et al., 2009). board relational norms the concept of board relational norms has its roots in the theory of contractual relations (macneil, 1980). relational norms are related to unwritten rules and principles inside and outside the boardroom and are studied between the board and the management (huse, 1993), owner family members (mustakallio, autio, & zahra, 2002), and as in our case among the board members. this construct covers the long-term dimension of board atmosphere characterized by trust, common values, and mutual expectations between board members. since this construct is difficult to operationalize, only few studies have examined relational norms among board members so far. however, the impact relational norms may have on board service tasks is shown by borch & huse (1993). in line with their arguments, we propose that boards’ involvement in different advisory tasks may benefit from relational norms. a board atmosphere described by trust, shared values, and long-term commitments among board members may facilitate board members actively providing advice, regardless of the content. especially in small businesses, where relational norms may supplement formal rules and structures, board members rely on these informal principles. regardless of the content of advice provided, we therefore hypothesize: hypothesis 1: there is a positive relationship between relational norms among the board members and functional as well as firm-specific advisory task involvement. board chairperson leadership excellence the excellence of board leadership may have an important role on boards’ involvement in different tasks. it is the chairperson that might be the person with the greatest ability to shape board leadership (leblanc, 2005). this is in line with roberts, mcnulty, & stiles (2005), who define the chairperson as the one having the most influence on board culture as well as board members engagement. applying basic group efficiency arguments (gladstein, 1984), his/her behavior in leading the board may ensure that the productivity of any board member increases with the interactions on the board. the chairperson is expected to lead individual board members in order to create an effective group and make board members feel equal (huse, 2007). it might be his/her highlight excellence in leadership that combines and coordinates these resources at the board leading to competitive advantage. empirical evidence suggests that board leadership excellence is an important predictor for board effectiveness (machold et al., 2011). in line with these consistent arguments highlighting the importance of the chairperson being responsible for board culture, and leadership excellence affecting board performance, we hypothesize: hypothesis 2: there is a positive relationship between board chairperson leadership excellence and functional as well as firm-specific advisory task involvement. cohesiveness cohesiveness refers to the degree of interpersonal attraction among board members and is concerned about the boards’ ability to continue working together (forbes & milliken, 1999). since boards are charged with complex and interactive tasks, the degree of interpersonal attraction among members impacts board task effectiveness (williams & o’reilly, 1998). however, a curvilinear relationship is best for the board in order to be involved in both, monitoring and service tasks (forbes & milliken, 1999). focusing on the relationship between cohesiveness and boards’ involvement in advisory tasks, we argue 56 american journal of management vol. 16(1) 2016 that high levels of interpersonal attraction may lead to active boards in performing advisory tasks. we assume that high level of cohesiveness (leading to group-thinking) might lead to boards performing monitoring tasks ineffectively, but does not affect advisory tasks in the same way. whereas relational norms rather cover the long-term dimension of board member behavior, cohesiveness is more related to a short-term perspective. interpersonal attraction as well as enjoying being a member of the board may therefore be especially important for boards dominated by external board members without close ties to the organization. sustained value creation might not be the first priority for these boards and their relationship with the organization may be often characterized by short-term commitment. in addition, board members of these boards usually do not rely on their board assignments since these assignments likely complement their main profession. therefore, a good board atmosphere may be of greater importance to these boards, stimulating the provision of advice. based on the knowledge and skills of their members, we assume that these boards may be rather involved in providing functional advice as they lack firm-specific competencies. we therefore hypothesize: hypothesis 3a: there is a positive relationship between cohesiveness and functional advisory task involvement. at the same time, we expect that boards dominated by internal board members or external board members with close ties to the organization may rather be involved in firm-specific advice. these boards may provide advice based on professional relationships and long-time commitments with the firm regardless of the interpersonal attraction among its members. we therefore hypothesize that cohesiveness does not have a predictive power for boards’ involvement in firm-specific advice. hypothesis 3b: there is no relationship between cohesiveness and firm-specific advisory task involvement. use of knowledge and skills whereas early board research often assumed that existing competences on the board will be used, current board literature widely acknowledges that the presence of knowledge and skills does not ensure per se that board members actively make use of it and apply it towards their tasks (see e.g. forbes & milliken, 1999; huse, 2007; zona & zattoni, 2007). applying resource-based view arguments and looking at the board as an organizational resource, zhang (2010) describes the use of knowledge and skills as the dynamic dimension of the competencies being present. it refers to how board members’ contributions are coordinated (forbes & milliken, 1999), and is about the group’s ability to cooperate and how board members generously make use of their competences on an individual level. open dialogue and free communication of preferences and considerations are important attributes of this concept and supposed to be fundamental for board effectiveness. that board members use their knowledge and skills as well as the impact of this use on board performance has been examined in several empirical contributions (e.g. minichilli et al., 2012; zattoni et al., 2012). the utilization of knowledge on board level is especially relevant for board advisory tasks (forbes & milliken, 1999). another paper in progress by the author supports this and shows that the use of knowledge and skills is an important predictor for boards’ involvement in different advisory tasks regardless of the content. we argue that the board members’ use of knowledge and skills plays an important role in mediating board processes and different types of advice boards are involved in. specifically, we suggest that relational norms such as common values, shared goals, and mutual expectations encourage board members to utilize their knowledge and skills. relational norms characterized by informal rules based on long-term commitment may contribute to board members applying their knowledge towards advisory tasks. we hypothesize: american journal of management vol. 16(1) 2016 57 hypothesis 4: the use of knowledge and skills positively mediates the relationship between relational norms among board members and functional as well as firm-specific advisory task involvement. as mentioned before, the use of knowledge and skills refers to the coordination of board members contributions (forbes & milliken, 1999) and their ability to cooperate. board chairperson leadership excellence positively impacts the quality of these processes as the chairperson may have the most influential power on these processes. we therefore hypothesize: hypothesis 5: the use of knowledge and skills positively mediates the relationship between board chairperson leadership excellence and functional as well as firm-specific advisory task involvement. a cohesive board atmosphere with interpersonal attraction among its members is expected to have a strong impact on board members’ use of knowledge and skills. in line with previous research we therefore hypothesize: hypothesis 6: the use of knowledge and skills positively mediates the relationship between cohesiveness and functional advisory task involvement. figure 1 research model and hypotheses methods to test our hypotheses we decided to use the “value creating board” research instrument (huse, 2009). this research instrument has been used by several scholars in different european countries such as italy (minichilli et al., 2009; zona & zattoni, 2007), the netherlands (van ees, van der laan, & postma, 2008), belgium (bammens, voordeckers, & van gils, 2007; van den heuvel, van gils, & voordeckers, 58 american journal of management vol. 16(1) 2016 2006), and norway (calabrò & mussolino, 2013; machold et al., 2011). we decided to use data collected in norway to meet our research question. sample and data collection the norwegian “value creating board” database contains survey data from 2003, 2004, 2005, and 2006. survey responses were collected from ceos, board chairpersons, and other board members. we decided to use the unique questionnaire survey data collected in 2005 (sellevoll, huse, & hansen, 2007). this data has been used in several previous studies of boards (e.g. minichilli et al., 2012; zattoni et al., 2015). the norwegian context is of particular interest for many reasons. even though norway is a small country in northern europe and some topics might not be directly transferable elsewhere, we did not find this a problem for this study. norway has a pioneering role in board approaches and board composition improvements (singh & vinnicombe, 2003), and it has a tradition of active boards (huse, 1990). moreover, the governance system in norway has many similarities (e.g. documented in the norwegian code of practice for corporate governance) with other countries (machold et al., 2011). for these reasons and since we are using a theory generated empirical test, this data may be applicable and interesting in other settings as per today. more importantly, the norwegian data set is the most comprehensive one amongst the “value creating board” surveys conducted in europe (huse, 2009:370). this survey contains 265 questions and covers more in depth questions relating to our interest of research than the data sets from other countries. most questions are linked to constructs which have been used or suggested by previous research contributions. moreover, it addresses a larger number of respondents (ceos, chairpersons, and board members) and has a fairly high response rate of about 33%, which is significantly higher compared to board studies in most other countries (finkelstein, hambrick, & cannella, 1996). in addition, as described in detail in huse (2009), the survey addresses in total 2,954 firms and is based on the second generation of the research instrument applying mostly seven point likert type scales. most of the available studies from italy, the netherlands, belgium as well as the 2003/2004 norwegian studies are based on five point likert type scales from the first generation instrument. as boards in general tend to conduct business under secrecy, access to board process data is traditionally difficult (daily et al., 2003; pettigrew, 1992). applying this unique research instrument and using questionnaire survey data follow earlier calls (forbes & milliken, 1999; hambrick et al., 2008) to go beyond the surface level and develop measures aiming to capture actual board behavior. therefore, to meet our research question and examine the inner working of boards, we find this data set very helpful. as described in huse (2009), the instrument was designed and data were collected in a way that a potential common method bias (podsakoff, mackenzie, podsakoff, & lee, 2003) is reduced to a minimum. procedures include for instance pilot studies, preliminary expert interviews, introductory letter, and thorough question wording to reduce item ambiguity and social desirability bias. in addition to the measures described above, harman’s one factor test was performed to test for common method bias. exploratory factor analysis revealed that based on the eigenvalues (threshold > 1.0) the majority of variance accounts for more than one general factor. the conclusion that common method bias should not affect the results in our study gets support by running a partial correlation procedure (lindell & whitney, 2001), which controls for method variance. for the purpose of this study, we apply a single-respondent design, which is a common approach in primary data governance studies (see e.g. pearce & zahra, 1991; zhang, 2010). in line with extant research (see e.g. zahra, neubaum, & huse, 2000), we decided to use responses from ceos. because of his/her knowledge on board processes (zattoni et al., 2015), we consider the ceo to be the most knowledgeable informant about phenomena pertinent to our study. additionally, taking boards’ special feature as episodic decision-making groups into account, ceos may be more likely able to evaluate boards’ involvement in service tasks (zattoni et al., 2015). we acknowledge the limitations a single respondent design has in the interpretation of the results (gabrielsson & winlund, 2000), but follow earlier arguments that multiple respondents might bias the results even more (kumar, stern, & anderson, american journal of management vol. 16(1) 2016 59 1993). therefore, we decided not to use the collected answers of board chairpersons and board members. using ceo responses only means that our research design is based on how the ceo perceives the concepts of interest in this study and therefore the results need to be interpreted in that way. this perception might be influenced by certain factors such as different backgrounds and identities (huse, 1993; huse & rindova, 2001). our sample includes complete and valid answers from 497 ceos. in total, 973 ceos answered the questionnaires and a non-response analysis showed no significant differences between respondents and non-respondents (huse, 2009). for the purpose of this study, we used only firms with at least 10 employees to ensure that micro-sized firms do not affect the results, as they often lack formal governance structures (gedajlovic, lubatkin, & schulze, 2004). additionally, to examine group decision-making constructs we excluded boards with less than 3 members from the analyses. one case where the age of the ceo was indicated as 1 was excluded from the analyses as well. dependent variables we use the boards’ involvement in advisory tasks as the dependent variables. this is a usual board performance measure in behavioral board studies (minichilli et al., 2009). to measure board involvement in functional advisory tasks, we use a composite index of three items measuring board members degree of involvement on a 7-point likert scale. for functional advice, the ceos were asked to evaluate board involvement in advice on i) general management issues, ii) legal and technical accounting issues, iii) financial issues. cronbach’s alpha coefficient for this variable is .737. involvement in firm-specific advisory tasks is computed as the mean of advice on i) technical issues (productionand information technology), and ii) marketing issues. the cronbach alpha in this case is .702. independent variables relational norms, leadership of board chairperson, and cohesiveness are the independent variables in our study. relational norms are measured as the mean of interactions between board members in six different areas: between board members there are i) unwritten rules and principles on how the board should conduct its business, ii) common values, attitudes, and norms regarding ethics, justice, corporate responsibility etc., iii) mutual expectations to each other’s future actions, iv) considerable weight on preservation of personal relations, v) considerable weight on preservation of professional relations, vi) considerable weight on trust when conflicts are to be resolved. leadership of board chairperson refers to the excellence of the chairperson i) in motivating and use each board member’s competence, ii) at formulating proposals for decisions and summarizing conclusions after board negotiation, iii) at leading board discussions. leadership is measured as the mean of these three items. cohesiveness is computed as the mean of three items on how the ceo assesses board members perception of belonging. it refers to how they i) appreciate being together in the meetings, ii) have very good atmosphere together in the board meetings, and iii) highly prioritize being a member of this board. all independent variables were measured using a 7-point likert scale and the cronbach alphas for these variables were .734, .826, and .752 respectively. mediating variable the mediating variable board members use of knowledge and skills is computed as the mean of three items in how board members: i) accept and acknowledge the possibility that they might be wrong in their considerations, ii) willingly offer advice based on private knowledge, ideas and views, and iii) communicate their personal preferences and considerations open and freely. ceos were asked on their agreement with these statements on a 7-point likert scale and the cronbach alpha in this case is .771. control variables different sets of variables are used to control on firm, board, ceo, and board chairperson level. organizational control variables include firm age, firm size by revenues, and high-tech nature of the firm. firm age and firm size are measured as natural logarithmic transformation (in order to create normal 60 american journal of management vol. 16(1) 2016 distributions) of the age of the firm at the time the survey was conducted (2005) and the annual revenues 2004 in norwegian kroner respectively. high-tech nature of the firm is based on whether the ceo perceives the firm being high-tech or not. at the board level we control for the number of board members (board members with full voting rights the firm had per october 10th 2005) and ceo duality, which refers to whether the ceo chairs the board at the same time. we control on firm and board level to take different structural settings leading to different board dynamics into account. on an individual level we control for tenure and age of the ceo and the board chairperson. tenure was measured as the number of years the ceo/chairperson is holding his/her current position. we control for these variables since they may influence ceo/chairperson power dynamics and determine the board task involvement (see e.g. shen, 2003; fiegener, brown, dreux, & dennis, 2000). analyses we statistically test (1) the effects that board relational norms, board chairperson leadership, and cohesiveness may have on functional as well as firm-specific advice, and (2) the mediating role of board members use of knowledge and skills. the hypotheses are tested using multiple linear regressions. applying baron and kenny’s (1986) mediating model, we test three models for each, functional advice (model 1-3) and firm-specific advice (model 4-6). to support a mediating relationship three conditions should be met. first, the independent variables must be significantly associated with the dependent variable (model 1 & model 3). therefore, we perform an analysis testing the direct effect board relational norms, board chairperson leadership, and cohesiveness have on functional and firm-specific advice respectively. second, the independent variables need to have a significant relationship with our mediating variable board members use of knowledge and skills. model 2 and model 4 test for these relationships. third, after entering the mediator in the regression analysis, the relationship between the independent and dependent variables should either disappear or significantly diminish. we test this in model 3 for functional advice and model 6 for firm-specific advice respectively. results descriptive statistics such as mean and standard deviation for the variables used in our analysis are presented in table 1. we further performed pearson’s correlation analysis and table 1 shows the correlation coefficients among the variables presented above. to check for possible collinearity among the variables, we performed variance inflation factor (vif) tests. results show vifs values within recommended ranges (1<x<3) (myers, 1990), far below the critical threshold of 10. this leads to the conclusion that multicollinearity should not affect the results in our study. american journal of management vol. 16(1) 2016 61 t a b l e 1 c o r r e l a t io n m a t r ix pe ar so n c or re la tio n m ea n st d. d ev ia tio n 1. 2. 3. 4. 5. 6. 7. 8. 9. 10 . 11 . 12 . 13 . 14 . 15 . 1. f irm a ge 48 .2 4 45 .6 4 1 2. f irm s iz e 65 5. 70 18 82 .9 6 .1 72 ** * 1 3. h ig hte ch f irm 0. 35 0. 48 -.0 54 .0 99 * 1 4. n um be r o f b oa rd m em be rs 5. 52 1. 85 .1 69 ** * .4 38 ** * .0 98 * 1 5. c eo d ua lit y 0. 04 0. 20 -.0 75 -.0 74 -.0 20 -.1 14 ** 1 6. c eo t en ur e 6. 87 6. 14 .1 40 ** -.1 42 ** -.0 52 -.0 60 .1 22 ** 1 7. c ha irp er so n te nu re 5. 43 5. 77 .1 26 ** -.1 69 ** * -.0 89 * -.1 55 ** * .0 43 .2 56 ** * 1 8. c eo a ge 49 .3 9 8. 03 .1 59 ** * .1 14 ** .0 72 .1 98 ** * .0 93 * .3 84 ** * -.0 40 1 9. c ha irp er so n a ge 53 .6 6 8. 28 .1 10 ** .0 27 .0 09 .1 46 ** -.0 59 .0 74 .3 03 ** * .1 22 ** 1 10 . r el at io na l n or m s 4. 79 0. 96 .0 38 -.0 47 -.0 17 -.1 16 ** .0 86 * .0 77 * .1 31 ** .0 13 .0 73 1 11 . c ha irp er so n le ad er sh ip 5. 06 1. 20 .0 55 .0 99 * -.0 30 .1 05 * .0 50 .1 02 * -.0 37 .2 10 ** * -.0 05 .3 33 ** * 1 12 . c oh es iv en es s 5. 14 1. 02 .0 61 .0 21 -.0 32 .0 32 .0 88 * .1 41 ** .1 18 ** .0 90 * .0 52 .4 19 ** * .4 30 ** * 1 13 . u se o f k no w le dg e & s ki lls 5. 32 1. 01 .0 65 .0 36 .0 24 -.0 51 .0 41 .0 54 .0 66 .0 16 .0 15 .4 11 ** * .3 99 ** * .4 55 ** * 1 14 . f un ct io na l a dv ic e 4. 47 1. 35 -.0 45 -.0 85 * -.0 12 -.2 46 ** * .0 10 .0 87 * .0 22 -.1 40 ** -.0 53 .2 28 ** * .2 67 ** * .2 58 ** * .4 00 ** * 1 15 . f irm -s pe ci fic a dv ic e 4. 03 1. 46 -.0 40 -.1 23 ** -.0 41 -.2 36 ** * .1 10 ** .1 02 * .1 32 ** -.0 35 -.0 83 * .2 14 ** * .2 17 ** * .1 87 ** * .2 83 ** * .3 79 ** * 1 ** * c or re la tio n is si gn ifi ca nt a t t he .0 01 le ve l ( 1ta ile d) . ** c or re la tio n is si gn ifi ca nt a t t he .0 1 le ve l ( 1ta ile d) . * c or re la tio n is si gn ifi ca nt a t t he .0 5 le ve l ( 1ta ile d) . li st w is e n =4 79 62 american journal of management vol. 16(1) 2016 model 1 tests the effects of the independent variables on functional advice. as hypothesized, board chairperson leadership (b = .236, p < .001) and cohesiveness (b = .150, p < .01) positively affect boards’ involvement in functional advice. however, we could not find support for hypothesis 1 linking board relational norms with functional advice. the adjusted r2 is .193 and the f change 10.541. we check for a significant relationship between the independent variables and the mediator in model 2. results show a positive significant effect of relational norms (b = .214, p < .001), chairperson leadership (b = .226, p < .001) and cohesiveness (b = .275, p < .001) on board members’ use of knowledge and skills. in this case, the adjusted r2 is .295 and the f change 17.629. in model 3 the mediating role of board members’ use of knowledge and skills is tested. as hypothesis 1 with regard to functional advice is a mandatory condition for potential mediation, and not supported by our data, we partly have to reject hypothesis 4 as well. the results provide support for hypotheses 5 and 6 that the effects of board chairperson leadership excellence and cohesiveness on functional advice are mediated by the board members’ use of knowledge and skills. specifically, for chairperson leadership excellence (b = .170, p < .001) the relationship diminishes whereas it disappears for cohesiveness (b = .071, p > .1). for model 3, the adjusted r2 is .251 and the f change 13.326. the results of model 1-3 are presented in table 2. table 2 regression analyses: functional advice standardized beta coefficients model 1 model 2 model 3 n=479 functional advice use of knowledge & skills functional advice ln firm age -.010 .044 -.023 ln firm size .027 .047 .013 high-tech firm .037 .054 .022 number of board members .248*** -.079* -.225*** ceo duality -.040 -.009 -.038 ceo tenure .130** -.006 .132** chairperson tenure -.066 .010 -.069 ceo age -.208*** -.056 -.192*** chairperson age .005 -.005 .007 relational norms .065 .214*** .003 chairperson leadership .236*** .226*** .170*** cohesiveness .150** .275*** .071 use of knowledge & skills .290*** adj r2 .193 .295 .251 f sign (change) 10.541 17.629 13.326 the levels of significance are *p < .1; **p < .01; ***p < .001 we examine the relationship between the independent variables and firm-specific advice in model 4. as hypothesized, we find support for board relational norms (b = .088, p < .1) and board chairperson leadership excellence (b = .190, p < .001) positively affecting boards’ involvement in firm-specific advice. further, hypothesis 3b assuming that cohesiveness does not affect firm-specific advice is supported by the results. the adjusted r2 is .130 and the f change 6.956. model 5 equals model 2, checking the relationships between the independent variables and the mediator board members’ use of knowledge and skills. after entering the mediator in model 6, the relationship between board chairperson american journal of management vol. 16(1) 2016 63 leadership and firm-specific advice diminishes (b = .148, p < .01) whereas the relationship between board relational norms (b = .049, p > .1) and firm-specific advice disappears. therefore, the results confirm support for hypotheses 4 and 5. for model 6, the adjusted r2 is .152 and the f change 7.578. table 3 shows the results for model 4-6. table 3 regression analyses: firm-specific advice standardized beta coefficients model 4 model 5 model 6 n=479 firm-specific advice use of knowledge & skills firm-specific advice ln firm age -.020 .044 -.028 ln firm size -.016 .047 -.025 high-tech firm .004 .054 -.006 number of board members -.191*** -.079* -.176*** ceo duality .052 -.009 .054 ceo tenure .049 -.006 .050 chairperson tenure .100* .010 .098* ceo age -.048 -.056 -.038 chairperson age -.086* -.005 -.085* relational norms .088* .214*** .049 chairperson leadership .190*** .226*** .148** cohesiveness .061 .275*** .011 use of knowledge & skills .182*** adj r2 .130 .295 .152 f sign (change) 6.956 17.629 7.578 the levels of significance are *p < .1; **p < .01; ***p < .001 discussion by examining the antecedents of different types of board advice, our results support the need to distinguish advisory tasks based on the content to understand boards’ involvement in different sets of tasks. functional and firm-specific advice may contribute differently to sustained competitive advantage of the firm and board processes determining the involvement in one type or the other may differ. our findings show that the board members’ use of knowledge and skills mediate the relationship between certain board processes and different advisory tasks, and provide further insights on group effectiveness theories in relation to boards. first, we look into the effects of the independent variables on functional advice and the mediating role of board members use of knowledge and skills. different to our hypothesis development, board relational norms do not impact boards’ involvement in functional advice. our main explanation is that board relational norms are grounded on contractual theories and focus on long-term, sustainable relationships (huse, 1993). we argue that boards mainly provide advice in certain areas based on the knowledge and skills of their members, and therefore boards are associated with the two types of advice to different degrees. we assume that board members being involved in functional advice are often external to the firm (non-executives) and appointed based on their experience (e.g. law or finance). they may be rather shortterm focused and their professional careers often do not rely on single board assignments. looking into 64 american journal of management vol. 16(1) 2016 board chairperson leadership excellence and its positive impact on boards’ involvement in functional advice, our findings highlight the importance of the chairpersons’ ability to affect board outcomes. this is in line with previous studies on board chairperson leadership (leblanc, 2005; machold, huse, minichilli, & nordqvist, 2011). the relationship between chairperson leadership excellence and functional advice is mediated by the board members’ use of knowledge and skills. the positive impact of board chairperson leadership on the use of knowledge and skills supports group effectiveness arguments highlighting the importance of board leadership on board performance. whereas relational norms are rather long-term oriented, cohesiveness may cover a short-term dimension of board atmosphere. our hypotheses that cohesiveness positively impacts functional advice, and that board members’ use of knowledge and skills mediates this relationship are supported by the findings. this supports aforementioned arguments with regard to that (external) board members providing functional advice are more short-term oriented. for boards dominated by these members, a cohesive board atmosphere where they enjoy working together may be more important than professional relationships based on unwritten rules and principles as well as common values. second, we examine the effect of the independent variables on firm-specific advice and the mediating role of the board members’ use of knowledge and skills. as hypothesized board relational norms positively impact the boards’ involvement in firm-specific advice and this relationship is mediated by the board members’ use of knowledge and skills. these findings support previous arguments that boards dominated by internal members or those having close ties to the organization are rather involved in firmspecific advice. as mentioned before, we assume that the behavior of these board members is based on long-term and sustainable decision-making. as in the case for functional advice, board chairperson leadership excellence is an important predictor of boards’ firm-specific advice and board members’ use of knowledge and skills mediates this relationship. regardless of the content of advice provided, the board chairperson has the power to affect board advisory performance through board processes such as the use of knowledge and skills. as hypothesized, cohesiveness does not relate to the boards’ involvement in firm-specific advisory tasks. board members being able to provide advice to executives on firm-specific matters are often supposed to be either internal or at least have close relationships to the organization and/or the executive team. decision-making in this case may aim at a sustainable development of the organization. short-term constructs relating to board atmosphere therefore seem to have little explanatory power on board firm-specific advice. further, our results support previous research that board members do not per se use their knowledge and skills (forbes & milliken, 1999; zhang, 2010) but that the application of knowledge towards certain tasks relies on various board processes. our findings show that board relational norms, board chairperson leadership, and cohesiveness positively impact board members’ use of knowledge and skills. therefore, in order to make use of the board as a valuable organizational resource, it is important to create a setting where board members apply the knowledge and skills at hand towards different advisory tasks. conclusion this study has contributed to our understanding of different tasks boards are involved in by distinguishing board advisory tasks based on the content of advice provided. by looking into what happens inside and outside the boardroom examining board relational norms, board chairperson leadership, and cohesiveness as antecedents of the two types of advice, we have further opened the lid of the “black box of board behavior”. mediated by the board members’ use of knowledge and skills, these relationships show what ceos and board chairpersons can do to improve board performance in giving advice on certain matters. we have empirically tested our hypotheses on a norwegian sample using questionnaire survey data. by showing that antecedents of functional and firm-specific advice differ, our findings support arguments calling for more fine-grained definitions of board tasks. chairperson leadership excellence is important for the provision of board advice, regardless of its content. as hypothesized, this relationship is mediated by the board members’ use of knowledge and skills. whereas board relational norms are american journal of management vol. 16(1) 2016 65 positively related to firm-specific advice, cohesiveness determines board involvement in functional advice. this indicates that based on the content of advice, different board dynamics determine board performance and that board members motivation to use knowledge and skills is related to different constructs. our findings support arguments by forbes & milliken (1999) showing the importance of board members utilizing their knowledge and skills for advice provision. in line with previous research, our findings highlight the importance of the board chairperson (e.g. bailey & peck, 2013; machold, huse, minichilli, & nordqvist, 2011) for the board to utilize their potential knowledge and apply it towards their tasks. by combining a more fine-grained definition of board tasks with a board processes approach, this study offers several fruitful avenues for future research. we suggest that the application of contingency approaches may deepen our understanding of when different advisory tasks are more relevant. for instance, this study is based on a norwegian sample and further insights could be gained through comparative studies. furthermore, future research may look into consequences of these tasks and examine how certain tasks can contribute in detail to organizational value creation. we acknowledge the limitation in our data with regard to the static dimension and therefore suggest that longitudinal studies such as machold & farquhar (2013) could capture the dynamics of board processes. this study offers several insights for 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(2007). beyond the black box of demography: board processes and task effectiveness within italian firms. corporate governance: an international review, 15, (5), 852– 864. american journal of management vol. 16(1) 2016 69 ajm 18_2_web_master.pdf ajm 17(3) web_master.pdf american journal of management vol. 17(3) 2017 47 strategic venturing for entrepreneurs: a new application of the socio-economic approach to management amandine savall iseor, magellan, iae lyon, université jean moulin/lyon 3 france yue cai hillon western carolina university usa cantillon originally described entrepreneurship as a practical and functional process of value creation to capture a concrete imagination of the future. management scholars have identified the two main failure modes of entrepreneurship as an inadequate understanding of the external environment and insufficient capabilities for internal management of the venture. however, there has been limited transfer of research-based knowledge into practice to decrease the high failure rate of new ventures. this study documents a new application of seam strategic venturing to simultaneously address both failure modes, as documented in two extended entrepreneurial cases from france and america. introduction entrepreneurial passion and leadership undoubtedly inspire entrepreneurial creations. however, it takes much more than enthusiasm to sustain lasting venture success. after reviewing research devoted to entrepreneurial success and failure (sauser, 1987; akehurst, et.al., 2012; justo, et.al., 2015; khelil, 2016; eggers & song, 2015), we recognized that entrepreneurial venturing is truly a complex social construction (mantere, et.al., 2013). however, researchers often attempt to determine an entrepreneur�s destiny with one perspective of a variable drawn from a fixed set of factors. researchers of entrepreneurial failure have identified two main targets of causal attribution: an inadequate understanding of the external environment and insufficient capabilities for internal management of the venture. yet, the traditional business planning process has not been updated to adequately address either of these failure modes. for research to have impact, strategic entrepreneurial venturing must put knowledge into action by simultaneously addressing both failure modes in the planning stage prior to launch. knowing in advance the likely venture failure modes introduces an ethical obligation to try to prevent them from occurring. therefore, the intervention-research reported in this article not only offers insight for a new approach, but it is also an example of socially engaged and responsible scholarship. seam business venturing recognizes the need for a comprehensive preventative approach to planning in order to not create a dysfunctional management structure. seam stands for the socioeconomic approach to management. the iseor research centre, created by henri savall in 1975, has experimented with the seam intervention-research method for over 40 years to diagnose and correct problems in more than 1,800 organizations across a wide variety of industries (savall, 2003). according 48 american journal of management vol. 17(3) 2017 to boje & rosile (2003, pp. 12-13), seam is �a basic intervention model which links economics, accounting, and a special sts [socio-technical system] approach to large system change. it bridges qualitative interview and observation method of the social with a quantitative, accounting and economical/financial analysis of the firm�s strategy. it combines research and intervention.� extensive practitioner data from this experience offers prescriptive advice as to the most likely problems to emerge in enterprise management. until now though, just like the entrepreneurial failure mode research, lessons from field research have not been reflected back in new field methods to prevent problems from occurring in the first place. our investigation begins with a brief review of relevant entrepreneurial venturing research and then proceeds to a descriptive study of the methods used to design for success in two seam start-up business venturing cases. both cases involve food related businesses, with one based in france and the other in america. we in no way mean to suggest that two instances of intervention-research of a new application of seam could offer generalizations to the field. it is merely our intent to begin a line of research that must eventually spread to the entire field of entrepreneurial studies. in an effort to diffuse lessons from research to prevent venture failures, we are creating a phenomenon to be studied rather than waiting for practice to change on its own. the landscape of entrepreneurial venturing research in our search for relevant previous research, we noticed an interesting distinction between the entrepreneur as a person versus the actions and functions that must be performed to plan and move an entrepreneurial venture forward. schumpeter (1934) defined a transformational and visionary view of an entrepreneur in contrast to the transactional nature of a manager. the historical context might explain why schumpeter�s theory of entrepreneurship stressed that it was the person that mattered and that individual traits determined their entrepreneurial success. academia was beginning to challenge scientific management (taylor, 1911) due to its destruction of worker individuality and the lack of shared goals between management and workers (drury, 1915). a more uplifting and inspirational belief was needed to avoid reducing organizations to such oppressive systems. schumpeter argued that entrepreneurial spirit and access to resources determine successful innovations (schumpeter, 1942). essentially, the right person with resources will succeed. in ideological terms, this is the classical economic �invisible hand of providence� prescription of trait and material resources, combined with a neoliberal anti-management sentiment. however, schumpeter�s views differed sharply with those of the neoclassical economists who were empowered to plan the depression economic recovery and who failed to challenge the tayloristic approach to management of the wartime production system. thus, it is fair to say that schumpeter�s perspective was influenced by economic ideology, and perhaps had some nostalgia for the booming unfettered market of the 1920s that had crashed. cantillon had much in common with keynes. both had made fortunes in speculative markets because they understood how macroeconomic structural factors of price, supply, demand, interest rates, and monetary supply worked. not surprisingly, cantillon put forth the opposite view of schumpeter, proposing that entrepreneurs are a stabilizing force in the market because they see opportunities to profit from temporary imbalances in the market resulting from a complex interaction of factors (rothbard, 1995). thus, cantillon entrepreneurs extract profit by arbitrage and sustain their ventures with active evidence-based management and strategic vigilance. schumpeter believed that the entrepreneur had the power to create disruptive imbalances in the market, by innovation or invention, and then profited from them (schumpeter, 1947). when considered together, the combination of personal factors and results that define a schumpeter entrepreneur seem to be quite rare. therefore, his view implies that most people who start and run their own businesses are not entrepreneurs, that even market disrupters are not necessarily entrepreneurs, and that the most critical factors of entrepreneurship cannot be taught. entrepreneurship is thought of as not merely a process of founding a new venture, but more importantly as �a process of value creation and appropriation led by entrepreneurs in an uncertain environment� (mishra & zachary, 2014, p. 2). the exploitation of opportunities leading to venture american journal of management vol. 17(3) 2017 49 creation and reward can only occur when there is an intentional and purposeful entrepreneurial act (thompson, 2009), a notion that makes us believe that an entrepreneur ought to be both visionary and functional. industry health, strategic orientation, and entrepreneurial competences directly contribute to the success of a new venture (cooper & bruno, 1975; miller, 1983; dollinger, 1984; sandberg & hofer, 1987; mishra & zachary, 2015). classical economics distinguishes entrepreneurs from managers, where managers do not commonly engage in the operations of entrepreneurial value creation (schumpeter, 1934). yet, historical entrepreneurship research has shown otherwise. in a creative or living organization, the role of a manager is to develop and integrate organizational systems and operations to achieve high efficiency by claiming the interpersonal, informational, and decisional roles (mintzberg, 1973), an operational role that corresponds with the desirable behavior of successful entrepreneurs. thus, the study of entrepreneurship has moved from classical economics to the discipline of management by applying behavioral sciences to examine how entrepreneurs achieves success (stevenson & jarillo, 1990). entrepreneurship is practical and functional (cantillon, 1755/2010) and is, as the old french verb entreprendre taught us, a process to undertake or capture a concrete imagination of the future. cantillon used the term extensively in his french manuscript on economic analysis and he is credited with introducing the notion of entrepreneurship into western societies (rothbard, 1995). unfortunately, his contribution was obscured by a translation into english by higgs (cantillon, 1931) that used the term �undertaker� instead of entrepreneur. coincidentally, as we return to the earlier french meaning of entrepreneur, our study also applies seam, a french perspective of management to replace the dysfunctional tayloristic form responsible for the anti-management bias in business venture planning and operations. seam entrepreneurial venturing in practice, the process of business planning was transformed into a document template and was popularized in the 1970s among high-tech startups. the business plan was intended as a practical tool to start a business and help venture capitalists assess investment opportunities. it was later adopted into business schools and economic development organizations as an essential part of starting a business. business plans are useful thinking tools, but not a blueprint for action. when a conceptualized business plan moves into real life and opens up to the environment, its lack of flexibility does not prepare the entrepreneur well to survive in reality. execution of a business plan requires actionable and detailed functional processes to support operational and organizational flexibility and active revision (gordon, 2013). traditional venture planning continues to serve the purpose of funding acquisition, as the focus is primarily on the discussion of feasibility and market potential, but not on the practical details of how to run the business on a daily basis. operational challenges that were less critical to investors at startup often become key barriers to business success a few months or years later. such latent challenges are much more difficult to address because they have tacitly grown into the structures of the venture, like a cancer or virus. such dysfunctions could have been easily prevented if they had been anticipated and not built into the business model from the beginning. in the 1970s, henri savall decided, �to build something unique in od scholarship� (boje & rosile, 2003, p. 12-13). the seam research methodology uses immersion in an organization by scholarpractitioners and cooperation between the scholars and the company�s actors to obtain a detailed scientific description of organizational processes and practices. knowledge of organizational change is then used to improve the organization�s performance. the main piece of knowledge developed through theses in vivo experimentations is the necessity of every organization to measure and reduce the hidden costs generated by the daily dysfunctions of organizational functioning. conversion of those costs into value-added can be made through intervention-research and a long-term management system, both aimed at releasing the human potential of the employees at each level of the organization. the outcomes of iseor�s 1,800 50 american journal of management vol. 17(3) 2017 interventions have shown that 35 to 55% of the hidden costs of dysfunctions, measured at the beginning of the intervention, can be recycled into social and economic value in less than one year. seam is a qualimetric approach, an integrative spiraling process of qualitative semi-structured interviews to extract quantitative metrics and financial measures (savall & zardet, 2011). the intervention-research process spirals through phases of diagnosis, project, implementation, and evaluation, with each cycle around the trihedron supported by implementing appropriate management tools and new strategic decisions made by the management team. a visual overview of the process of seam intervention-research is presented in figure 1. readers wanting a thorough theoretical and practical explanation of seam are referred to savall and zardet (1987, 2008). figure 1 three forces of change in seam the seam model has thus far been applied in only a few cases of entrepreneurial venturing, that is to say, doing intervention-research with unborn businesses. this is not current practice yet in the field of entrepreneurship and management consulting, as research tends to begin after the fact and findings often remain within academia. the challenges of entrepreneurship and business venturing could definitely get more attention from scholars-practitioners who could share their strong experience-based knowledge with young entrepreneurs. applying the socio-economic management approach to new venture development supports entrepreneurs in assessing potential challenges, identifying key indicators, formulating desirable behaviors, and implementing management tools to operationalize venture strategies. seam entrepreneurial venturing is a process of dynamic functional integration that rediscovers the original meaning and practice of entrepreneurship to link strategy with value creation prior to launch and american journal of management vol. 17(3) 2017 51 continuing into successful growth and development. this article next presents two seam interventionresearch cases, one based in france and the other in america, to demonstrate methods and value-added contributions for strategic venturing. methodology & findings: two cases of seam entrepreneurial venturing both business ventures are food service related and set up by female entrepreneurs who have extensive experience within the industry. although in different international markets, the two businesses were facing similar challenges. in this section, the background of each case and how seam entrepreneurial venturing intervention-research was implemented in each of the new businesses will be discussed in detail. french case of seam entrepreneurial venturing the french entrepreneurial venture is a catering company, expected to open for service in september 2016. the ongoing seam venturing intervention-research began as a 2-year process to correspond with the entrepreneurial search and planning process. the speed of new ventures might be misperceived by casual observers who only see a whirlwind of activity just before a new business opens, while the necessary long periods of research, planning, and preparation remain hidden from view. this new business has a family characteristic, as two siblings are involved. the sister is the main entrepreneur and her experience includes successive leadership positions in restaurants and catering businesses for eight years. however, the field of entrepreneurship is quite new to her. in contrast, the brother is a well-established entrepreneur and the property investor of the building and land where the new business will operate. he coordinates most of the construction issues with the architect and other construction professionals. the commercial concept of this new business is an italian food �bistronomy,� a term combining the bistro type of casual french restaurant with the gastronomy of high quality food. the location is in the middle of an industrial park in the suburbs of a large-sized french city. no direct competitor (i.e. an italian food restaurant) is operating nearby in the area. four main services will be provided: a beverage bar, catering services with typical italian food to take away or to eat in quick service onsite, restaurant services for typical italian meals for lunch and dinner, and corporate event services with seminar room rental, food, and beverages. the entrepreneur plans to hire seven employees: three for cooking and four to attend the clients in the different types of services provided. she will be responsible for the overall coordination of the business. between 2000 and 2010, 13,000 new businesses were recorded in the french catering industry, which represents almost 5% of the overall annual number of new businesses in france (eurogroup consulting, 2012). indeed, the catering industry is evolving and this market keeps growing, along with a fierce competition. medium quality level of food and catering services can no longer survive in the french market because french citizens are looking for a gourmet authentic cuisine, such as the italian food to be offered by the new venture. the major risk in the french catering industry is that many entrepreneurs have no experience in this field and want to start a business simply because they are epicure and gastronomy lovers. to further complicate matters, success in the catering industry requires staff with specific skills and experience, but many restaurants suffer from a high level of staff turnover and lack of employee commitment. the entrepreneur called upon seam intervener-researchers in summer 2014 to help her throughout this entrepreneurial journey. given the complexity of the project and the high level of investment in construction, the brother also wanted his sister to be actively advised in the venture. three main objectives of the intervention-research were initially agreed upon with the entrepreneur: (1) to ensure the financial business plan by creating an appropriate business model to make the new venture feasible and profitable: the role of the intervention researcher is to help the entrepreneur 52 american journal of management vol. 17(3) 2017 acquire the technical skills to build a realistic forecast and the negotiation skills to be able to face the lawyers, bank advisers, and accountants; (2) to establish the professional responsibilities of the entrepreneur and her brother in order to ensure the delivery date of the facilities: the role of the intervention researcher is to mediate between the two siblings and between them and the other partners (e,g, architect, marketing designer); (3) to design a strategic plan for the short, medium, and long run by defining the corporate values, the political axes, and an elaborated execution plan: the role of the intervention researcher is to train the entrepreneur to build an external vigilance system and to carry out the market analysis. concretely, the intervention researcher took the lead with the entrepreneur to train her in seam tools and concepts to elaborate her project, to ensure that her entrepreneurial energy was productively put into the venturing process, and to capitalize on the information and data that she collected. information is capitalized mainly by acting on our meeting notes and also by training the entrepreneur to extract actionable items from data she collects from external partners, such as catering experts, well-established entrepreneurs, and potential suppliers and clients. seam tools also proved useful in structuring her thoughts about the venture. the process documents served as reminders throughout the venturing process, and also provided research data. the three main objectives of the seam venturing intervention-research were translated into four types of actions to be carried out over a two-year period in work sessions with the entrepreneur. first, steering committee sessions helped to manage the relations between the two siblings and to follow the overall rollout of the venturing process. second, individual training sessions focused on the economic and financial aspects of the project to ensure the feasibility and profitability of the forecast plan. third, focus group sessions on the business concept and commercial offerings supported the corporate identity of the venture and enabled the entrepreneur to act on the market analysis and to continue the external vigilance. fourth, focus group sessions on human resources and management helped to deal with recruitment, management, and organization aspects of the venture. the rhythm of the process was adapted as the venturing project advanced. notably, the number of sessions increased while the duration of each decreased, as the entrepreneur preferred to meet more often in order to keep the venturing process on track. the seam work sessions gave her energy to put into her project and the alternation of the different types of work sessions enabled the entrepreneur to continually assimilate all the aspects in a structured and systemic way. in the summer of 2014, we elaborated the initial timeline and main milestones of the venturing process ahead of the two-year forecasted opening date. figure 2 shows the timeline of the seam venturing process. dynamic adaptation is necessary in the context of entrepreneurial venturing because of the many aspects that the entrepreneur discovers along the way. one of the biggest challenges of the entrepreneur is to fight against her own procrastination and doubts. this also explains why so many entrepreneurial venturing projects never succeed. the traditional view of entrepreneurship does not acknowledge that transaction and agency costs exist in the venturing process (marchesnay, 2014). thus, the hidden costs of non-execution or delay in action are not considered in the traditional business planning template approach. to counter these real and present hidden costs, the resolution sheet tool (savall & zardet, 1987) was used during the seam venturing process to help the entrepreneur move step-by-step between work sessions. the resolution sheet tool documents actions to be taken as a result of a work session and allows follow-up analysis and discussion throughout the process to continually anticipate and prevent future dysfunctions and their inherent costs from ever emerging. the entrepreneur hopes to differentiate her business in the market by creating a specific identity and a singular concept for competitive advantage and profit. the seam intervention-research helped the entrepreneur learn that her business differentiation depends upon four external strategic factors: the venture is the only corporate event services provider in the area; it is the only restaurant facility with a sunny patio in the area; it is the only takeaway catering service starting early in the morning in the area; and it is the only italian food provider within a radius of 10 minutes driving. additionally, the american journal of management vol. 17(3) 2017 53 entrepreneur decided that the seam model would be a strong factor of differentiation as well, in terms of internal organization and management system. figure 2 seam intervention-research timeline in seam, human potential is considered as a powerful way of steering the external strategy. indeed, savall & zardet, the founders of the seam model, consider that the success of the business in its market closely depends on the quality of the internal strategy. human potential is the unique lever of the internal strategy to generate a high level of socio-economic performance (savall & zardet, 2014), particularly through the accurate execution of the strategy (savall & zardet, 1995). consistent with this aspect of seam, the entrepreneur wishes to actively steer the human potential of her future team members to assure successful strategic implementation. as a research observation, we noticed that the main issues that the entrepreneur discussed during the intervention-research sessions shifted after about seven months to human resources, organization, and management aspects of the business venture. this emphasis on the real driver of value creation is largely, if not totally absent in traditional business planning and entrepreneurship. considering management and human resources in detail allows entrepreneurs following the seam venturing approach to prevent possible dysfunctions and their inherent costs. further, the implementation of the seam tools in the venturing process helps to concretely establish the strategic plan, the strategic execution plan, the structural design of the future organization, the competency management system of the future employees, and also to make the financial forecast more reliable. the seam tools enable the entrepreneur to articulate the collected strategic information, and the periodic actualization of the tools brings a dynamic dimension to the strategic venturing process. the strategy is thus more powerful because it is actualized and adapted according to the internal and external environments, thereby decreasing the gap between the design and the execution of the strategy. articulation among the seam tools also improves the effectiveness of the venturing process. for instance, the internal external strategic action plan (iesap) built on a three-year basis is closely articulated to the priority action plan (pap), which focuses on the immediate six-month period. the implementation of the iesap and pap strategic actions is facilitated by the seam operational time management tools, passing from strategic dream to concrete action. correspondingly, there is a heuristic back-and-forth process between the strategic planning tools and the time management tools. also, the strategic plan feeds the financial forecast of the business venture, which feeds back into the strategic plan 54 american journal of management vol. 17(3) 2017 with priority actions to be undertaken. the three-year financial forecast is improved and completed by qualitative information from the strategic planning tools. therefore, there is a back-and-forth actualization between pap, iesap, and the other tools. the entrepreneur customized the seam competency grid (cg) of her future employees in order to facilitate the recruitment, the training plan, and the daily working organization of her team. this enables her to target the expected skills of her employees by listing all the necessary skills for the healthy functioning of her business. the cg tool shows the importance of human potential, and it prevents possible future dysfunctions due to the lack of competencies. it also helps the entrepreneur foresee the development plan of her future collaborators. the four different services provided in the new business (e.g. bar, takeaway food, restaurant, and corporate events) are detailed in the product line table. this tool encourages the entrepreneur to define each product line according to four characteristics: product/service, targeted market, technology used, and human potential required (e.g. number of employees and specific skills). this tool enables the entrepreneur to realize which aspects will be important in the future organization and business. once completed, this document is a gold mine of strategic information and feeds back to the strategic planning tools and forecasted budget. formalizing the product line table also helps the entrepreneur to clearly think about the products and services that will be provided, and to realize if the business is feasible, particularly in terms of required human potential. finally, the product line tool helps to detect the overall coherence of the business lines. figure 3 seam venturing model american journal of management vol. 17(3) 2017 55 american case of seam entrepreneurial venturing the american entrepreneurial venture is a pop-up farmer�s market serving urban communities in western north carolina, and is expected to open for service in the spring of 2017. compared to the french entrepreneurial venture, it is still in its early idea formulation stage of planning. nevertheless, the discovery and venture planning process has spiraled through the three forces of seam change: policy decisions, problem-solving cycles, and management tools. the basic seam approach was adapted as a future-oriented process and is envisioned as a swirling cycle that moves through competitive intelligence, functional operations, and dysfunction speculations toward the creation of a comprehensive venture plan (see figure 3). the female entrepreneur is a trained chef who has dreamed of opening a food related business, but she needed an integrative approach to both understand the external environment and to build a corresponding internal management system for value creation. this journey began with an entrepreneurial opportunity inquiry using an open-systems approach of environmental scans and market exploration. some examples of relevant market trends include increasing numbers in the labor force of mothers with children under 18, long work hours and excessive travel times contributing to a work-life imbalance, and an aging population in western north carolina. increases were observed in consumer demand for local organic foods, environmentally conscious practices, farmer�s markets, and food truck sales. also, desires for healthy life-styles were reflected in trends of decreasing restaurant visits along with an increased appreciation for home-cooked meals. the qualitative environmental analyses were followed by quantification of trends and measurement of their financial impacts. for example, according to the npd group, families with children under 18 made 26.7 billion restaurant visits in 2013, a drop of 14% from 2008 (miller & associates, 2014, p. 32) and over 8,200 farmers� markets operated throughout the united states in 2014, an increase from 6,132 in 2010 (usda, 2016). the full set of results led to the discovery of multiple probable business opportunities. business models for each opportunity were then cross-analyzed and evaluated for genuine feasibility and sustainability (see figure 4). 56 american journal of management vol. 17(3) 2017 figure 4 business model canvas (osterwalder, 2010) this process helped the entrepreneur comprehend the underlying requirements and the return on investment associated with each potential venture. the process revealed the most appropriate opportunity to be a pop-up farmer�s market serving the urban work campuses and independent-living retirement communities in western north carolina. a pop-up farmer�s market entrepreneurial venture not only provides organic produce, but also aims to reconnect and develop a dialog between local farmers and residents. strategic goals and objectives were developed to initiate the operationalization plan for the selected venture opportunity. in the traditional approach during business planning, entrepreneurs and venture capitalists perform risk assessments on new ventures to comprehend return on investment prospects. such assessments generally include the evaluation of market feasibility in terms of market size, customer adoption, competition, and strategy. financial models incorporate revenue streams and costs, financial projections, breakeven points, and critical factors. operational frameworks add elements of technology, process control, and management team experience to the risk assessment. to enrich the traditional risk assessment and business planning processes, seam entrepreneurial venturing added value through benchmark challenges encountered by similar businesses during startup and operation. this step was accomplished through in-depth interviews with business owners, case research, and the entrepreneur�s self-reflection of time management and competencies. content and theme analysis helped the entrepreneur to group challenges into seven potential dysfunction baskets: product display, inventory management, transportation and logistics, employee training, business knowledge, relationship management, and personal constraints (see figure 5). american journal of management vol. 17(3) 2017 57 figure 5 mapping of dysfunction baskets gathering and assessing benchmark challenges enabled the entrepreneur to anticipate and formulate preventative or proactive strategies, and offered new perspectives on opportunity capture. new venture challenges were qualitatively identified and then their potential financial impacts were estimated to conceptualize their effects on emergent hidden costs and potential. these hidden measures are often overlooked in traditional financial feasibility assessments and accounting systems (see figure 6). 58 american journal of management vol. 17(3) 2017 figure 6 dysfunction basket example all of the intervention research findings and preventative actions were integrated with the market strategies to formulate a comprehensive proactive strategic action plan in which operational structure and processes support market strategies, and vise versa. figure 7 depicts this dynamic organizational ecosystem. the seam venturing actions have helped to operationalize the entrepreneur�s vision into performance indicators, policies and procedures, and management principles and methods. at the time of this article, the entrepreneur had accomplished the selection of a profitable venture prospect, development of venture iesap, hidden costs evaluation, and pap. the next steps in the process will be to design the competency grid (cg) of future employees to facilitate recruitment and training plans and the organization of daily tasks, and to engage in continued dialogue with key stakeholders to develop an economic balance for the venture. applying the seam tools, as in the french case, will help the american entrepreneur evaluate and reevaluate strategic storylines, priority actions, perform selfassessment, and understand her skills needs. the next section extracts commonalities of the french and american cases in an effort to synthesize one comprehensive seam venturing model. this new comprehensive approach is proposed as a value adding contribution of this article to greatly enhance the entrepreneurial and business planning tools at the disposal of entrepreneurs, educators, intervention researchers, consultants, and economic development professionals. american journal of management vol. 17(3) 2017 59 figure 7 seam venturing plan: internal external strategic action plan (iesap) and priority action plan (pap) discussion: contribution of seam to the traditional entrepreneurial venturing approach although the two ventures were set up in different countries, at different stages of development, and varied in the customization of the seam venturing process, multiple common contributions to the traditional entrepreneurial venturing approach were identified. the seam model and interventionresearch offer a set of value-added contributions that enhance the existing entrepreneurial venturing approaches beyond the emphases of market viability, risk assessment, and entrepreneurial attitude. drawing on common lessons from the two scholar-practitioner applications carried out in the french and american cases, we would like to summarize attributes in five areas of contribution. the first reflective contribution considers the needs of the entrepreneur as a person. the seam venturing approach helped both entrepreneurs improve their personal preparedness for sustained success and thus reduced fear of failure. organized comprehensive tools contributed to their preparedness with enhanced strategic priority action plans and detection and development of proactive actions to respond to potential operational challenges and hidden costs. managerial skills were strengthened, thereby enabling the entrepreneurs to create cohesion by design within their new ventures. companionship of intervener researchers also reduced the feeling of isolation and provided encouragement to reflect and to persevere. while the two entrepreneurs in our study are quite capable as individuals, more of their human potential was released, and developed faster, in consultation with an experienced intervention researcher. second, the seam tools enhance the steering and strategic direction of an in-depth venturing process. they also help the entrepreneur to formalize a detailed mindset of market analysis, strategic plan, and organization and management system. reflections from our entrepreneurs showed enhancement of critical thinking throughout the process, as well as greater focus on scheduling and task completion. the intervention-research encouraged the entrepreneurs to collect a wide range of information about the market. knowledge of competitors, clients, providers, employees, legal partners, and local authorities enhances the entrepreneur�s grasp of the internal and external environments of the new business. there is a positive correlation between the amount of relevant information collected and the entrepreneur�s 60 american journal of management vol. 17(3) 2017 capability to anticipate the environment�s evolutions. in other traditional entrepreneurship approaches, the market analysis would likely be left to an external expert, done via survey, or through existing demographic data analysis. in seam venturing, the entrepreneur directly engages in market analysis in order to get to know his/her future environment and to use this primary information to adapt the financial forecast and the strategic plan. the seam market analysis also implies that the entrepreneur meets and interviews potential future clients in order to co-design the commercial offer and product lines of the new business. this proximity enables the entrepreneur to test his/her ideas with real clients before deciding on the final commercial offer. third, the dysfunctions and hidden costs are discussed and foreseen in each step of the process and for each business aspect. it is rather more a preventative approach than a curative traditional approach. the most evident benefit of this operational pre-visioning was the thoughtful attention to employee skills and competencies, needs for training, and policies and procedures needed for daily functioning of the venture. our entrepreneurs learned of common dysfunction-causing practices in food-related ventures and planned accordingly. the application of seam intervention-research encourages the entrepreneur to design different business and strategic storylines for such things as products/services, organizational structures, prices, and investment. these storylines enable him/her to consider different options and to assess which options are more suitable over a longer time period of the venturing process. in other traditional entrepreneurship approaches, the entrepreneur would likely consider his/her entrepreneurial �dream� as the only option. while designing these different storylines, we also encourage the entrepreneur to imagine the possible challenges, dysfunctions, and even factors of failure. this approach is a new way of considering strategic planning, given that unimagined potential challenges often prevent the new business from functioning in the way the entrepreneur imagined when the business actually starts. storylines help the entrepreneur in deciding the different actions to be undertaken in order to overcome challenges when they do happen. fourth, the functioning of the new business is planned and envisioned with regards to the long-term human potential of the entrepreneur and future employees. seam focuses the strategic plan primarily on managerial aspects such as multi-skills training policy, productivity targets, and a value-added sharing system. as employees enhance their skill sets and actively work on specific initiatives to improve the business, compensation must grow as well. finally, the fifth contribution concerns the qualimetrics approach, which brings together qualitative, quantitative, and financial information to improve decisions and the decision-making process, the market analysis, and all other research aspects of the venturing process. comprehensive information helps the entrepreneur make sense of their ideas and of the business in numbers, words, figures, financial forecasts, the seam economic balance, and the strategic planning tools (e.g. iesap, pap). perhaps most strikingly, all information, regardless of type, is cohesively linked together into one big picture of the entrepreneurial venture. traditional entrepreneurship approaches usually imply that the entrepreneur looks to the future in an idealistic way (machesnay, 2014). the preventative aspect of seam comes into play while completing financial forecasts. at least three financial storylines are elaborated according to the level of dysfunctions and inherent hidden costs that could occur: realistic, pessimistic, and optimistic. for example in the french case, the possible factors of failure considered by the entrepreneur included the resignation of the cuisine chef a short time after the opening, a delay in the construction works, and the dissatisfaction of the first clients. to prevent these potential failures, actions were immediately decided for the recruitment and induction plan of new employees, with training to commence two weeks before the restaurant opens. a pool of possible recruits was created and construction was kept on schedule with active steering of the architect and construction professional workers. in addition to the realistic, pessimistic, and optimistic financial forecasted storylines, the seam model encourages the entrepreneur to simultaneously use different versions. indeed, the qualimetrics forecast is a powerful indicator to help the entrepreneur in considering different options, making sense of the numbers, and later on, in running the new business. however, a qualimetrics financial forecast and the detailed scenarios it offers would not be understood by traditional accountants and bank advisers. american journal of management vol. 17(3) 2017 61 fortunately, the application of seam intervention-research also helps the entrepreneur in switching through the different forms of information to suit the interlocutor. the two cases evidenced that seam intervention-research enhances the traditional business planning process by strengthening the operational vigilance during both the pre-birth antenarrative and the living storying of the venture. by sharing comprehensive tools, knowledge, and companionship, the mindset of seam interveners becomes part of the life of the organization. conclusion in theory, mintzberg (1998) categorized ten schools of strategy. each school represents a piece of a living �strategy safari� and their natural cohabitation forms the strategic landscape of an organization that is flexible against environmental turbulence. hamel, quoted by mintzberg (1998, p. 112) unveiled that �the dirty little secret of the strategy industry is that it doesn�t have any theory of strategy creation,� but to achieve adaptability or stability, strategic entrepreneurs must not be �people who abstract themselves from the daily details, but who immerse themselves in it while being able to abstract the strategic message from it� (mintzberg, 1998, p.71). however, because organizational purposes and goals are difficult to formalize, a strategic plan is often reduced to merely a quantification of these goals (mintzberg, 1998), a means of control that detaches entrepreneurs from the value creation process. nothing in the schools of thought or in the business plan template speaks to how value is created and how strategy and value creation are linked. they are abstractions of strategy and as such, only describe a business in terms of an optimization of reward. in essence, strategy is confused with the outcome, while leaving the extensive and detailed process of value creation a mystery. taken together, the detailed cases in this study offer a practical intervention-research based approach for entrepreneurial value creation through seam business venturing. we noted from the start of this paper that we make no claim whatsoever to generalization from two cases of intervention-research of a new application of seam venturing intervention-research. rather, by offering detailed descriptive records of the contexts and methods applied in each venture, there is food for thought and a foundation for future applications. for instance, progress of our entrepreneurs could be tracked both internally against their own plans and externally against ventures following a traditional startup route with no attempt to prevent common failure modes from playing out. we also challenge other scholar-practitioners to replicate our study to add to this line for research, or for those involved in strategy and entrepreneurship education, we issue a similar challenge to re-examine traditional ideas and methods for business venturing. perhaps the greater contribution of this work is in its example of research in action to serve the needs of educators, counselors, entrepreneurs, and management consulting scholar-practitioners. to reiterate our initial point, by helping lessons from research enter into practice, we are creating a phenomenon to be studied. this may take time to produce sufficient cases for comparative study, but the silent passive alternative would be socially irresponsible. we will continue to work with entrepreneurs to further enhance and develop the seam entrepreneurial venturing model in an effort to make it useful and applicable for all business ventures. finally, there is a symbolic meaning to the french and american stories compared in this study in that the two cases reconnect the present day practice of intervention-research with the historical roots of entrepreneurship. the literature review at the start of this article noted how the meaning of the word and the scholarly study of entrepreneurship shifted away from the original sense with the translation from french into english. the historical record marks this change from schumpeter's era forward with a pronounced emphasis on traits of the person associated with successful end results, in stark contrast to the detailed process approach to entrepreneurial value creation. while traits may play a role in who decides to 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(1942). capitalism, socialism and democracy. new york: harper and row publishers. schumpeter, j.a. (1947). the creative response in economic history. journal of economic history, 7, 149-159. stevenson, h.h. & jarillo, j.c. (1990). a paradigm of entrepreneurship: entrepreneurial management. strategic management journal, 11, 17-27. taylor, f.w. (1911). the principles of scientific management, new york: harper & brothers. thompson, e.r. (2009). individual entrepreneurial intent: construct clarification and development of an internationally reliable metric. entrepreneurship theory and practice, 33, (3), 669-694. usda. (2016). national count of farmers market directory listings graph: 1994-2016. usda agricultural marketing services local food research & development division. source: https://www.ams.usda.gov/sites/default/files/media/national%20count%20of%20operating%20 farmers%20markets%201994-2016.jpg a balanced scorecard approach to determine accreditation measures with clinical governance orientation: a case study of sarem women’s hospital abbas kazemi islamic azad university sajjad shokohyand shahid beheshti university, tehran masoomeh azimian islamic azad university this research is conducted to determine measures of accreditation with a focus on clinical governance and balanced scorecard approach. this descriptive survey was conducted on 80 members of staff of sarem hospital through random sampling and by morgan’s table. the participants were the staff from different wards who were involved in the accreditation process. for data collection, the “balanced scorecard” and “clinical governance” questionnaires were used. 54 indicators of accreditation were determined with a focus on clinical governance in terms of the balanced scorecard. correlation between clinical governance indicators and balanced scorecard perspectives contributes to reduce the complexity of hospital accreditation concepts. introduction evaluation is an integral part of any executive activity. since the application of measureable information leads to the improvement of executive activities and such improvement is the main objective. in addition, evaluation focuses on appropriate effectiveness and efficiency as well as expected productivity without requiring any extra money (sedghiani, 2005). the main objective of any health plan is to improve health and reduce pain and suffering. however, it has other objectives such as reducing the days of hospitalization, maximizing the efficiency of personnel, improving the methods of expending financial resources, and carrying costs (sedghiani, 2005). considering, the increasing changes in the environment and factors affecting organizations, performance evaluation systems can be effective for the pervasive evaluation of an organization and insert nonfinancial criteria into the evaluation in addition to financial ones (khajavi, 2001). grading and determining the credit of hospitals, which is called accreditation in health and medical circles, are carried out by auditing standards which have become common in the developed and some developing countries. this is a reliable and inevitable method for the assessment of the performance and quality of hospital services (sedghiani e. , 2003). accreditation is used to explain the quality of medical 80 american journal of management vol. 16(1) 2016 and health services and as a basis of the thought (khlifehgari, 2008). accreditation is the systematic evaluation of healthcare centers using defined standards focusing on sustainable quality improvement, patient orientation, and increase in safety of patient and personnel (khlifehgari, 2008). clinical governance does not only focus on achieving high quality of healthcare service but also sustainable improvement of healthcare quality (chandraharan, 2007). clinical governance is a framework through which organizations providing clinical services are considered accountable for improving safety by creating an environment in which excellence in clinical care flourishes and high standards of care are safeguarded. clinical governance consists of seven elements including patient and public involvement, risk management and patient safety, clinical effectiveness, education and training, using information, and staff management (heidarpour, 2011). according to heidarpour, who quotes from kelson, patient and public involvement can be explained both in individual and collective levels. he believes that individual involvement means participation of a person in making medical decisions related to his health, while public involvement is the active involvement of a group of people or a person as the representative of a group in developing health system policies and plans (heidarpour, 2011). education and training refer to continuous development of professional skills and expertise. recognition and forecast of risks and accidents and decrease in the probability of their occurrence and effects are the different elements of risk management. proper information is required for planning, implementation, management, and evaluation of services. clinical effectiveness is useful for the correct and punctual fulfillment of services provided to the patient and related to the improvement of quality and performance (heidarpour, 2011). according to studies, clinical audit aims to recognize the key beneficiaries of clinical audit for the prioritization of the topics of auditing, recognition of skills required for auditing, the ability of designing and planning for the projects of auditing, grading of hospitals (khlifehgari, 2008). staff management includes selection and recruitment of employees, their evaluation and supervision, development of personal skills, and providing them with welfare (heidarpour, 2011). balance scorecard method was introduced to the management circle as a powerful tool not only for the evaluation of performance, but also for the implementation of strategy. according to kaplan and norton, successful companies employ three perspectives including customer, internal processes, education and growth, in addition to financial measures for the evaluation of their performance (bakhtiari, 2007). the review of literature shows that the repetitious high number of measures and disagreement among evaluators as well as discrepancies between plans and evaluation of clinical governance and accreditation have caused ambiguity in the indices of accreditation and raised challenge to its implementation. as it was mentioned, this research aims to study accreditation indices, pillars of clinical governance, and perspectives of balanced scorecard to achieve a simply understandable, executable, and unified concept for the indices used to evaluate performance in medical sector. in addition, its objective is to determine the pillars of clinical governance in form of the perspectives of balanced scorecard as well as accreditation measures based on clinical governance and in form of balanced scorecard. methods and materials this research is a descriptive survey. its statistical population consists of the employees working at the different wards of sarem private hospital and involved in the implementation of accreditation project in 2013-2014. they include totally 100 persons. using morgan’s table, 80 questionnaires were distributed among the personnel of the hospital. the questionnaires contained five-level likert items. considering the purpose and nature of the research, two questionnaires were employed for the collection of data. one questionnaire contains 33 questions about the perspectives of balanced scorecard, and another one consists of 29 questions on the pillars of clinical governance. questionnaires include two types of questions: demographic and specialized ones. to test the validity of the questionnaires, they were provided to 10 experts of accreditation at hospitals and they were corrected. the reliability of the questionnaires was tested by cronbach’s alpha. this value for the questionnaire of balanced scorecard is american journal of management vol. 16(1) 2016 81 0.92 and that for the questionnaire of clinical governance is 0.90. they were calculated after their distribution among 20 persons. after distributing the questionnaires among the members of the statistical sample, these values were 0.89 for the first questionnaire and 0.91 for the second one. in other word, the reliability of the questionnaires remained intact after its distribution among the total members of the sample. the raw data collected for the description of demographic data and study of variables in the statistical sample, the techniques of frequency and percentage have been employed. finally, inferential statistics including one-sample t-test and pearson correlation have been employed for the analysis of the variables and hypothesis. findings the findings obtained kolmogorov-smirnov test show that all quantitative data of this research were distributed normally (p>0.05). the demographic data of the testees have been provided separately in the table 1: table 1 demographic data of the studies sample variables frequency percentage variables frequency percentage gender female 69 89.6 organizational units nursing office 3 4.3 male 8 10.4 medical equipment 2 2.9 total 77 100 quality improvement 4 5.8 age 20-30 21 26.9 administrative unit 13 18.8 30-40 32 41 clinic 15 21.7 40-50 17 24.3 para-clinic 8 11.6 total 70 100 maternity ward 3 4.3 working years less than 5 years 18 23.4 operating room 8 11.6 5-10 years 32 41.6 hospitalization 10 14.5 more than 10 years 27 35.1 pharmacy 3 4.3 total 77 100 position clinical employees 17 23.6 total 69 100 nonclinical employees 12 16.7 specialty midwife 21 30.4 nurse 15 21.7 clinical and nonclinical experts 43 59.7 physician 7 10.1 administrative official 15 21.7 total 72 100 laboratory technician 8 11.6 education high school 4 5.2 associate’s degree 11 14.3 technicalengineering expert 3 4.3 bachelor’s degree 52 67.5 master’s degree 3 3.9 phd 7 9.1 total 77 100 total 69 100 82 american journal of management vol. 16(1) 2016 the other findings of this research indicate that the total percent of agree and strongly agree levels is higher than 50 in all 11 criteria. it means that the positive response to the measures determined by the perspectives of balanced scorecard and pillars of clinical governance is higher than 50 percent. among the balanced scorecard perspectives, customer perspective has assigned the highest percent (91.98%) to itself. that means, this perspective has gained the highest percent of agree and strongly agree levels among all other criteria. after customer perspective, the patient and public involvement, a pillar of clinical governance has the second place (85.11%) after customer perspective and the percent of agree and strongly agree is of higher level. this high percent of agreement with customer perspective and patient-public involvement show that the measures of both are of high importance at sarem hospital. in addition, the pillar staff management has the lowest percent in terms of the levels agree and strongly agree (55.60). the total percent of the items agree and strongly agree has been provided in the table 2. table 2 the total frequency of agree and strongly agree levels variables total frequency of agree and strongly agree levels in percent financial perspective 60.19 customer perspective 91.98 internal process perspective 70.56 learning and growth perspective 61.79 clinical audit pillar 64.06 public and patient involvement pillar 85.11 risk management and patient safety pillar 76.28 clinical effectiveness pillar 63.81 using information pillar 74 education and training pillar 83.88 staff management pillar 55.60 t-test has explained variables and their measures. the results show that the measures including employee satisfaction and retention in the learning and growth perspective as well as the index evidencebased clinical practice in the clinical effectiveness pillar and the index employee welfare in staff management pillar have been confirmed averagely. in staff management pillar, the index teamwork measurement is of low importance. the results of t-test have been provided in the table 3. considering the content of the table 4, and the balanced scorecard model provided by kaplan and norton, the final model of the research was developed. in the figure 1, this final model has been provided. american journal of management vol. 16(1) 2016 83 table 3 the results of the t-test of the measures of balanced scorecard and clinical governance index sig (2-tailed) average standard deviation t-test 95% confidence interval upper limit lower limit income 0.000 3.80 1.053 6.582 1.04 0.56 profit 0.000 3.49 1.005 4.251 0.72 0.26 employee productivity 0.000 3.83 0.999 7.368 1.06 0.61 return on investment 0.000 3.58 1.074 4.699 0.82 0.33 cost structure 0.000 3.62 0.812 6.739 0.81 0.44 market share 0.000 3.38 0.889 3.717 0.58 0.17 economic value-added 0.000 3.53 0.754 6.200 0.70 0.36 resource exploitation 0.000 3.64 0.868 6.526 0.84 0.45 financial perspective 0.000 3.6082 0.54592 9.840 0.7313 0.4851 speed of providing services 0.000 4.13 0.978 10.137 1.35 0.91 east of access to service 0.000 4.42 0.656 18.937 1.56 1.27 costs imposed on patient 0.000 4.13 0.779 12.792 1.30 0.95 behavior with patient 0.000 4.58 0.614 22.679 1.72 1.44 interaction with patient 0.000 4.40 0.591 20.835 1.54 1.27 patient complaints 0.000 4.55 0.573 23.904 1.68 1.42 patient satisfaction 0.000 4.60 0.543 26.079 1.72 1.48 errors 0.000 4.23 0.788 13.789 1.41 1.05 performance speed and quality 0.000 4.22 0.595 18.067 1.35 1.08 customer perspective 0.000 4.3615 0.44903 26.778 1.4627 1.2602 deviation from the time of each process 0.000 3.47 0.777 5.202 0.65 0.29 deviation from the period of stay 0.000 3.54 0.972 4.838 0.76 0.32 ease of access to information 0.000 3.89 0.776 10.052 1.07 0.72 using information 0.000 3.91 0.819 9.659 1.10 0.72 bed occupancy rate 0.000 3.79 0.822 8.377 0.98 0.60 volume of services 0.000 4.07 0.664 13.903 1.22 0.91 use of technology 0.000 4.17 0.773 13.213 1.35 0.99 internal process perspective 0.000 3.8343 0.47853 15.199 0.9436 0.7249 number of projects 0.000 3.83 0.844 8.480 1.02 0.63 number of papers 0.000 3.95 0.978 8.442 1.17 0.72 educational budget 0.000 3.55 1.017 4.654 0.78 0.31 development of technology 0.000 3.88 0.966 7.959 1.10 0.66 information system 0.000 4.12 0.727 13.230 1.29 0.95 teamwork culture 0.000 3.61 1.138 4.669 0.88 0.35 employee satisfaction 0.336 3.14 1.303 0.968 0.44 0.15 employee retention 0.850 2.97 1.211 0.189 0.25 0.30 employee performance 0.002 3.47 1.270 3.252 0.76 0.18 learning and growth perspective 0.000 3.6078 0.72927 7.266 0.7745 0.4412 budget of clinical services 0.000 3.45 0.900 4.332 0.65 0.24 periodical audit 0.000 3.96 0.874 9.711 1.16 0.76 beneficiary interests 0.000 3.44 0.980 3.954 0.66 0.22 clinical audit pillar 0.000 3.6218 0.70541 7.785 0.7808 0.4628 communication channels 0.000 3.83 0.813 9.058 1.02 0.65 educational classes 0.000 4.71 0.486 30.960 1.81 1.60 hearing complaints 0.000 4.47 0.639 20.375 1.62 1.33 satisfaction survey 0.000 4.41 0.746 16.692 1.58 1.24 error record 0.000 3.88 0.843 9.198 1.07 0.69 policy for coping with errors 0.000 3.88 0.980 7.972 1.11 0.66 risk and safety management classes 0.000 4.39 0.632 19.308 1.53 1.25 84 american journal of management vol. 16(1) 2016 patient and public involvement pillar 0.000 4.22833 0.461770 23.493 1.33244 1.12421 relation between medical staff for intersectional transfer 0.000 3.87 0.858 8.971 1.07 0.68 monitoring of safety indices 0.000 3.94 0.888 9.311 1.14 0.74 safety and risk management pillar 0.000 3.9038 0.76895 10.381 1.0772 0.7305 application of modern technologies 0.000 3.72 0.873 7.224 0.92 0.52 introduction to evidence-based medicine 0.000 3.16 1.007 1.366 0.39 0.07 clinical effectiveness pillar 0.000 3.4408 0.80815 4.755 0.6255 0.2561 his system 0.000 3.59 0.826 6.190 0.79 0.40 employees and managers access to computer 0.000 4.05 0.951 9.652 1.27 0.84 appropriateness of information system 0.000 3.93 0.854 9.539 1.13 0.74 employees access to information 0.000 4.03 0.816 10.964 1.21 0.84 using information for planning 0.000 3.79 0.963 7.076 1.01 0.57 using information pillar 0.000 3.8829 0.65200 11.805 1.0319 0.7330 personal development plan 0.000 3.99 0.931 9.242 1.20 0.77 employees education 0.000 4.34 0.758 15.433 1.52 1.17 appropriate method of education 0.000 4.14 0.778 12.826 1.32 0.97 periodical educational plans for employees 0.000 4.25 0.785 13.877 1.43 1.07 training and education pillar 0.000 4.1809 0.64498 15.962 1.3283 1.0335 employee admission and recruitment 0.000 4.24 0.862 12.508 1.43 1.04 employee selection 0.000 3.72 1.091 5.785 0.97 0.47 employee satisfaction survey 0.000 3.37 1.198 2.680 0.64 0.09 employee welfare 0.241 3.15 1.074 1.182 0.39 0.10 employee performance assessment 0.000 3.46 0.958 4.189 0.68 0.24 teamwork assessment 0.002 2.61 1.047 3.288 0.16 0.63 staff management pillar 0.000 3.4219 0.76640 4.799 0.5971 0.2468 according to pearson correlation test, the relation of financial perspective with clinical audit pillar, customer perspective with patient-public involvement pillar, internal process perspective with clinical effectiveness pillar, learning and growth perspective with using information pillar, education and training, and with staff management is confirmed. however, the relation of customer perspective with risk management is rejected. based on the analyses, the final measures determined by perspectives and pillars were obtained and presented in the table 4. american journal of management vol. 16(1) 2016 85 table 4 accreditation measures determined by perspectives and pillars perspective remarks pillar of clinical governance objective measure financial if we succeed, how we are evaluated by the stockholders, beneficiaries and financial sponsors? clinical audit increase in profitability (bakhtiari, 1989: 22) 1income (gross income, developing income opportunities, basic income, operating income) 2market share 3return on investment 4economic value-added 5earned profit (operating profit) 6general financial allocation 7achieving organizational objectives 8beneficiary of organization 9grading increase in productivity (bakhtiari, 1989: 22) 10 – improvement of cost structure 11 – productivity of nursing personnel 12 – optimal use of resources and assets customer what is the expectation of patients and their families from us? how do our customers judge us? patientpublic involvement planning for and providing medical and care services to patients; the pillar of patient expectation and opinions and their care (heidarpour et al, 2011: 23) 13 – period of receiving services 14 – holding patients in respect during the provision of services 15 contribution in medical treatment 16 – problem decrease rate 17 – cost reduction volume 18 reduction of obstacles to the patients and their families 19 – the interval between diagnosis and medical treatment 20 – complaint rate 21 complaint hearing rate 22 – patients and their family satisfaction 23 better understanding of personal needs 24 – positive and better relation of the specialists leads to positive sustainable effects on health internal process which processes should be the best and most effective to gain the satisfaction of patients? clinical effectiveness clinical performance: taking correct measure at proper time, improving the use of systems and developing structures, improving performance quality (heidarpour et al, 1390: 70) 25 – the time spent for each process 26 – the rate of clinical and para-clinical referrals from other centers due to the state-of-the-art technologies used by the hospital 27 – duration of staying at hospital 28 – bed occupancy rate at the hospital 29 – frequent referrals 30 – use of his at hospitals 31 – change in service volume 32 – application of technology in different processes 33 – rate of quality improvement 34 – relation between clinical skills of the physician and patient values and priorities education and training providing educational programs inside and outside the hospital based on need 35 – number of projects in operation 36 – budget required to protect education and development 37 – time required for the development of the next generation of technologies 86 american journal of management vol. 16(1) 2016 learning and growth should we continue improvement? which types of culture, skills, and technological education are required to be developed to protect processes assessment, growth and development opportunity, personnel expertise and skills, continuous learning processes (heidarpour et al, 2011: 31) 38 – infrastructure for completing the processes and meeting the objectives 39 – personal development plan 40 – access to education and evaluation of necessary services using information improvement of information quality (heidarpour et al, 2011: 67) 41 – access to information 42 – using information resources 43 – method of information collecting and recording 44 – type of information 45 – presence of his 46 – planning, implementation, management and evaluation of necessary services 47 – online or written access of patients for the transfer of their experiences of treatment process and events happened during their hospitalization 48 – effective research processes staff management employee evaluation and supervision (heidarpour et al, 2011: 84) 49 – employee performance 50 – employee satisfaction survey 51 – correct selection and recruitment of employees 52 – employee supervision and evaluation 53 – development of personal and professional skills 54 – teamwork culture american journal of management vol. 16(1) 2016 87 figure 1 final model of research financial perspective conceptual model in the final conceptual model, the pillar patient safety and risk management from customer perspective has been deleted. in addition, measure of evidence-based medicine, employee satisfaction, retention, and welfare as well as teamwork assessment have been deleted respectively in clinical effectiveness pillar from internal process perspective, and in staff management pillar from learning and growth perspective. discussion the discussions of this research (table 3) show that according to the t-test, the significance (sig.) of the measures employee retention and satisfaction from learning and growth perspective is higher than 5%. this value indicates that the null hypothesis (the average importance of the index equals 3) is confirmed. 88 american journal of management vol. 16(1) 2016 in other words, the average of these measures has no significant difference with the test value (the digit 3). as the upper limit of the confidence interval is positive (0.44 for satisfaction and 0.25 for employee retention) and the lower limit is negative (0.15 for satisfaction and – 0.189 for employee retention), the average significance of measures has no significant difference with the test value (the digit 3). therefore, the said measures from learning and growth perspective are confirmed averagely by the statistical sample. it must be noted that other measures of this perspective have been confirmed strongly. according to the t-test, the significance value of the introduction to evidence-based medicine in clinical effectiveness pillar has been higher than 5%. this value confirms the null hypothesis and shows that the studied index has not significant difference with the test value. in other words, as the upper limit of the confidence interval of medicine is positive (0.39) and the lower one negative (-0.7), the average significance of these indices has no significant difference with the test value, which is 3. as a result, this index of clinical effectiveness was confirmed averagely by statistical sample. the significant value (sig.) of the index employee welfare is more than 5%. this value confirms the null hypothesis. in other words, the lower limit of this index is negative (-0.10) and the upper limit positive (0.39). that means the average of this index has no significant difference with the test value. therefore, this index is of average significance in the statistical sample. according to the t-test, the significant value (sig.) of teamwork assessment index is less than 5%. as the upper and lower limits are both negative (-0.16,-0.63), the average of this value (equal to 2.61) is less that the test value (3) and as a result, this index is of low significance in the statistical sample. moreover, employee satisfaction and employee retention from learning and growth perspective as well as evidencebased medicine index in the clinical effectiveness and employee welfare index in staff management have been confirmed averagely. the index teamwork assessment in the staff management pillar is of low significance. other measures of the balanced scorecard and those in the clinical governance have been strongly confirmed. that means 92% of the indices are confirmed. according to the results of this research, 54 measures were selected as strong ones and accreditation measures. this number is considerably fewer than that of the accreditation measures (jafari, 2010) set forth in accreditation standards evaluation manual (ramezani, 2011) of each hospital. however, nasiripour (2013) has introduced 27 measures in the balanced scorecard in his studies. this number is 56 measures in the study of ajami (2010) and 30 in the research of iravani (2012). the difference in the number of these measures confirms that measures may be different in each healthcare organization, while they may be similar in their type. this diversity can be found in the number of the measures in the balanced scorecard of other foreign studies too (baker, 1996; the mountain states group, 2010). in addition, the findings of this research show relation between financial perspective with clinical audit pillar, customer perspective with patient-public involvement pillar, internal process perspective with clinical effectiveness, learning and growth perspective with education training pillar, and using information with staff management. however, no relation was found between customer perspective with risk management and patient safety pillar. considering the pearson correlation coefficient (0.215) and its comparison with pearson correlation coefficient table as well as the degree of freedom and probability level (0.05) which is less than the value set forth in the table, no relation was found between risk management and patient safety pillar with customer perspective. in other words, the measures of customer perspective cannot be the same as the accreditation measures within the framework of risk management and patient safety pillar. according to the review of literature, no studies were found on the relation between the pillars of clinical governance with other performance evaluation methods including balance scorecard. however, the results of this research on the relation between clinical governance pillars and balanced scorecard perspectives can act as the supplement of the studies on clinical governance such as those conducted by buetow (1999) and chandraharan (2007). moreover, the clinical governance pillars (ravaghi, 2014) expressed from four perspectives of the balanced scorecard can be better understood by this method of expression. considering the experiences on the application of the balanced scorecard model in health and medical organizations, and the need to implement accreditation, and the results of this research, it seems that the localization of this conceptual model can play an important role in the improvement of the performance of hospitals. therefore, it is recommended that this model be employed american journal of management vol. 16(1) 2016 89 in private hospitals. the implementation of this model requires measuring measures, defining objectives, taking required measures to improve the performance of hospitals, and scoring the indices. since this model is flexible, it can be adjusted based on the progress of the different units. conclusion the recognition of accreditation measures based on balanced scorecard perspectives and clinical governance pillars reduces the large number of measures arising perhaps out of their iteration. in addition, the conceptual model of this research can provide cohesion to accreditation and clinical governance and lean to the elimination of disagreement between assessors and enhances insufficient motive of the medical personnel. the application of this model can facilitate the implementation of accreditation at all health centers. considering the existing experiences on the use of the balanced scorecard at health and medical organizations and the need to accreditation, as well as based on the results of this research, it seems that localization and use of this conceptual can considerably improve the performance of hospitals. therefore, it is recommended that this model be employed at private hospitals. the implementation of this model requires measuring indices, defining objectives and measures required for the improvement of hospital improvement, and finally scoring the indices. considering that the model is flexible, it can be adjusted based on the requirements of each unit. acknowledgement this paper is an extract of the master’s dissertation prepared under the supervision of dr. abbas kazemi (the supervisor) and dr. sajjad shokouhyar (the advisor) and defended at the science and research university – damavand branch. i 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(2010). balanced scorecard for small rural hospitals: concept overview & implementation guidance. hrsa information center. american journal of management vol. 16(1) 2016 91 perceptions, antecedents and consequents of employee engagement initiatives in australian organizations paul j. davis kazakh british technical university yuliya frolova kimep university william t. callahan kimep university this paper presents a research project which was designed to explore employee engagement (ee) initiatives in australian companies from the perspective of human resource (hr) managers. the research design was quantitative in the form of a self-administered survey instrument which was mailed to 703 hr managers in seven major australian cities. 205 (29 per cent) usable surveys were returned with almost two-thirds from women. respondents reported having a good understanding of ee but there was much less endorsement of the value, importance and benefits of ee initiatives. respondents generally indicated that their organizations were not committed to ee in any demonstrable way. the data highlighted that employee retention was the primary reason organizations embark upon ee initiatives and that the outcomes of initiatives were only tentatively acknowledged by respondents. the research has implications for hr managers, senior management, ee consultants and organizations generally. much more can be done to raise the profile, importance and benefits of ee initiatives. the originality of this research is that it is the first scholarly study to look at ee initiatives from the perspective of hr managers. introduction employee engagement (ee) is neither particularly contentious nor novel and yet as a practice it continues to preoccupy the interests of management and human resource practitioners. the literature also indicates that ee remains a topical research area for scholars, too. most fundamentally, discourse persists regarding the authenticity of ee as a divergent paradigm. ee has been questioned by some; its originality challenged. for example; it has been characterized as an emperor in new clothes (newman et al., 2010) and as an old woman in a new dress (schohat and vigoda-gadot, 2010). yet, for the most part, academicians conceive of ee as a distinctive and inherently worthy construct deserving of further investigation and understanding. the ensuing literature review explores the ways in which employee engagement has been found to add value to organizations. in its embryonic stage ee was perceived by some as the converse of burnout, able to be measured by the maslach burnout inventory – general survey (maslach and leiter, 1997; schaufeli and bakker, 2010; 2004). schaufeli et al., (2002), however, provided evidence that, even though engagement and burnout 42 american journal of management vol. 16(1) 2016 correlate negatively, they are not two opposites, but rather two independent states of mind. ee has, over time, also disentangled itself from other organizational behavior concepts for which it may be misconstrued as substitutable for. these include: workaholism (schaufeli et al., 2006; gorgievski and bakker, 2010); job satisfaction (schaufeli et al., 2006); job involvement (jeung, 2011; macey and schneider, 2008; hallberg and schaufeli, 2006); affective commitment (vigoda-gadot et al; 2012) and organizational commitment (macey and schneider, 2008; hallberg and schaufeli, 2006). by distinguishing itself from these related yet distinct concepts, ee has solidified for itself a unique identity. it seems apparent that little empirical, scholarly research on ee has been conducted in australia and no recent studies appear to canvass the topic from the perspective of hr managers. the primary objective of this exploratory study is to address these two shortcomings and explore the antecedents and consequents of ee initiatives in australian organizations. this paper is presented in the following order: first; a review of the relevant literature to contextualize ee and highlight the benefits organizations can derive from ee initiatives. the literature review also describes some organizational influences on ee and how environmental factors can positively influence ee in practice. the second section deals with research design. the method adopted to collect data is discussed as is the research process adopted. a justification for the data collection method is provided along with an acknowledgment of the limitations of the chosen method. the third section of the paper presents the findings of the research and provides a discussion of the interpretation and implications of the findings. the paper closes with a conclusion highlighting the opportunities and challenges arising from the implications of the research findings. literature review employee engagement seems to have been first introduced by kahn (1990: 693) who defined it as “the harnessing of organization members’ selves to their work roles: in engagement, people employ and express themselves physically, cognitively, emotionally and mentally during role performances”. schaufeli and bakker (2004) defined ee as “a positive, fulfilling work related state of mind that is characterized by vigor, dedication and absorption”. welch (2011) highlighted that these two definitions share a common focus on the manifestation of engagement: cognitive-absorption, emotional-dedication and physical-vigour. shuck and wollard (2010) defined ee as “an individual employee’s cognitive, emotional, and behavioral state directed toward desired organizational outcomes”. while academic and practitioner interest in ee policies and practices has garnered a good deal of attention for a couple of decades now, scholarly research has noticeably gained momentum over the past five or six years (shuck et al., 2012; vigoda-gadot et al., 2012; wollard and shuck, 2011; albrecht, 2010). this is likely due to a significant body of research positively associating ee activities with varied organizational benefits (shuck and reio, 2013). indeed; according to the literature, ee has been positively correlated with an almost endless list of virtues. as jose and mampilly (2014) noted recently, employee engagement initiatives promise many and various positive organizational and individual benefits. examples of the desirable outcomes ee initiatives can deliver include improving employee productivity (saks 2006) and job performance (rana et al., 2014; rich et al., 2010; macey and schneider, 2008; salanova et al., 2005). employee engagement has also been found to boost commitment and organizational citizenship behaviours (saks 2006) as well as contributing to a reduction in employee turnover intentions (rana et al., 2014; robison, 2012; shuck et al., 2011; saks 2006; harter et al., 2002; maslach et al., 2001). other research has positively associated employee engagement with delivering fewer workplace accidents (robison, 2012; may et al., 2004) and generating increased levels of customer service delivery and customer attentiveness (chalofsky, 2010). ee levels have also been linked positively to levels of customer satisfaction and favourable customer perceptions of a company's reputation (lockwood, 2007). further positive outcomes of ee initiatives include findings suggesting that employees who are engaged are more likely to develop positive relationships with internal and external firm stakeholders american journal of management vol. 16(1) 2016 43 (mishra et al., 2014) and act as ambassadors or advocates for the firm (chong, 2007; gronstedt, 2000). significantly, employees have been found to be more credible promoters of their organizations than corporate advertising or ceo communiqués (edelman, 2012). other scholars have concluded that organizations which develop high levels of engagement among their employees outperform their competitors (shuck and rose, 2013; macey and schneider, 2008) and generate higher revenues (harter et al., 2010; xanthopoulou et al., 2009; czarnowsky, 2008; wagner and harter, 2006). these firms, it has been found, also enjoy higher returns on investments (macey et al., 2009). finally, ee, it has been contended, has positive implications for employees’ private lives (bakker, et al., 2014), psychological well-being and personal accomplishments (shuck and reio, 2013). thus, ee has emerged and continues to evolve as an important and valued concept in the fields of business, management, industrial psychology, and human resources development (wollard and shuck, 2011). while the literature expounds of engagement virtues, little appears to be known about the antecedents of ee initiatives (wollard and shuck, 2011) leaving this as one largely unexplored aspect of ee. the literature does say more about the factors which are likely to help facilitate organizational efforts to increase their employees' engagement. these include: internal communication; transactional and transformational leadership; story-telling; work-group meetings; psychological empowerment; training and career development; organizational justice, and compensation and benefits (financial and nonfinancial). the ensuing paragraphs explore these facilitating factors. internal communication has been identified as positively influencing the success of employee engagement initiatives (chong, 2007; welch and jackson, 2007; saks 2006). it is argued that to develop ee, internal communication professionals must be involved immediately with new employees by orienting them to the organization, developing their professional skills, soliciting their comments and ideas, and taking time to listen to their concerns (mishra et al., 2014). when employees do not get information and feedback on their performance, it has been found to constitute a source of stress, which can contribute to disengagement from work (kumar and kumar-sia, 2012). leaders who are looking to build engaging climates must be encouraged to develop their emotional intelligence. they should also be attentive to their followers’ needs and be willing to respond appropriately (shuck and herd, 2012). accordingly, leaders should use their emotional intelligence to connect with employees and in turn employees then use their perception of a leaders’ emotional intelligence skills to make decisions about what kind of leader they are working with and how they can interact with the leader. transformational leadership is appropriate for focusing on the higher level needs of employees and to affect ee. it has been suggested that organizational and human resource leaders can use story-telling to engage and align their employees around their strategic planning efforts. rather than presenting strategic planning information to employees in traditional modes and language, leaders can deliver the same messages in the memorable language and format of stories. this can invite employee to contribute to planning efforts while they are still being crafted; giving employees the means to share and showcase stories consistent with the strategic vision and brand positioning; and developing story champions within the organization and encouraging senior leaders to become lead storytellers (baker, 2014). in tandem with or in place of storytelling, managers can more creatively use a common workplace activity – work-group meetings, to engage their employees by making their work-group meetings relevant and encouraging employee participation in the meetings where possible. (allen and rogelberg, 2013). psychological empowerment has been positively and significantly associated with ee since it enhances employee perceptions of competence, impact, and meaning (jose and mampilly, 2014). competence, or self-efficacy, is associated with an individual’s belief in his or her capability to perform activities with skill (jose and mampilly, 2014). employee perceptions of their impact are important because they reflect organizational involvement and indicate to employees whether they are making a difference in their organization (spreitzer et al., 1997). 'meaning' is the value of a work goal or purpose, judged in relation to an individual’s own ideals or standards (thomas and velthouse, 1990). when individuals are treated with dignity, respect, and value for their contributions they are more likely to 44 american journal of management vol. 16(1) 2016 experience a sense of purpose and belonging which enhances their engagement with their work and organization (kumar and kumarsia, 2012). according to anitha (2014), training and career development is an important factor in influencing the success of ee initiatives. this is because when employees participate in learning and career development programs, their confidence increases in the development areas they are exposed to and this motivates them to be more engaged with their work (anitha, 2014). another facilitating factor in employee engagement initiatives is claimed to be organizational justice. organizations wanting to support their ee initiatives should foster a work environment focusing on organizational justice (ghosh, rai and sinha, 2014). in performance appraisal, for example, it is important for the supervisor to ensure that the outcomes are distributed fairly and equitably; the procedures are explained to employees; and all the rewards or sanctions that follow should be supported with clear explanation and justification in a manner that is perceived as fair by the employee (gupta and kumar, 2012). financial and non-financial rewards, anitha (2014) has claimed, represent an indispensable opportunity for organizations to enhance the success of ee initiatives. applied well, compensation and benefits have been shown to motivate employees to achieve better work outcomes and to encourage employees to focus more on their work and personal professional development. other means of enhancing engagement program outcomes may include providing employees with self-actualizing work; giving them opportunities to realize their life purpose, values, and goals through work, have a social impact through work, feel personal accomplishment, and believe in their highest career advancement within organization (fairlie, 2011). research design research design adopted a quantitative methodology and a questionnaire was developed in the form of a self-administered survey instrument. the survey comprised four sections: section 1 'demographic' (s1d) solicited basic demographic information from respondents including gender and age; section 2 'perceptions' (s2p) comprised 10 statements, employing a 5-point likert scale (1=strongly agree through to 5=strongly disagree), seeking respondents' personal perceptions and reflections regarding ee. section 3 'antecedents' (s3a) inquired regarding the reasons why respondents' organizations introduced an ee initiative if they did. respondents had the option to respond in three ways: that they did not know the reason why their organization embarked upon and ee initiative; that there was no specific reason for doing so; that there were specific reasons. if there were specific reasons, respondents were asked to number up to the top 3 reasons from a list of 10 possible reasons. section 4 'consequents' (s4c) invited respondents whose organization had introduced an ee initiative to rank outcomes of the initiative using a 5-point likert scale. the objective was to ascertain in financial and non-financial terms the relative value of ee initiatives as perceived by the respondent. the statements used on the questionnaire were informed by the literature review for this paper and from contemporary practitioner literature sourced in recent editions of the national hr publications of the american society for human resource management and the australian human resources institute. statements were open-ended and carefully reviewed to ensure they were concise, unambiguous and written in plain english. explanations of key terms were provided along with the survey itself. the survey was mailed to 703 human resource managers in private sector organizations in sydney, melbourne, brisbane, perth, adelaide, hobart and newcastle. the survey was mailed along with an addressed, replypaid envelope in an attempt to encourage a good response rate. organizations were identified through various online business directories. data collection was carried out over november and december 2014. data were analyzed using stata®, a statistics software program. the authors acknowledge that the research approach adopted has limitations. it is less personal and investigative in comparison with focus groups or semi-structured interviews, for example. therefore, it does not allow for the researcher to establish trust and rapport with participants which other research approaches can accommodate. this may limit the respondents’ engagement with the project and might then influence the time they give to considering their responses. the survey did not ascertain the american journal of management vol. 16(1) 2016 45 reasoning behind respondents’ opinions and any explanations for their opinions are not known. it is also possible that misinterpretation or differing interpretations of statements on a survey can result in responses which may not be intended or consistent among respondents. interviews and focus groups are able to clarify the information sought from participants to overcome this. a survey, however, is time efficient, focused, can potentially garner many more responses and is free from the common criticisms of interviewer bias. a survey ensures every respondent is responding to exactly the same question with the same information free from potential influences such as tone, emphasis and volume which can influence respondents participating in face-to-face interviews. findings and discussion demographic data of the 703 surveys mailed out, 205 (29.1 per cent) usable surveys were returned. of these, 128 (62.4 per cent) were completed by females and 77 (37. 6 per cent) were completed by males. 130 (63.4 per cent) respondents indicated that they were not a member of a recognized hr association and 75 (36.6 per cent) said that they were a member of such an organization. respondents were asked whether they held a tertiary-level qualification in hr or a tertiary-level qualification with hr as a major and 151 (73.7 per cent) respondents said that they did not hold such a qualification while 54 (26.3 per cent) said that they did. respondents were represented in all age ranges on the survey with 22 respondents under the age of 30; 55 respondents between 30 and 40 years; 72 respondents aged between 41 and 50 years; 37 respondents aged between 51 and 60 years and 19 respondents were aged over 60 years. perceptions the data indicates that the surveyed hr managers, for the most part, consider themselves to have a very good understanding of ee (75.12 per cent agreed or strongly agreed). however, this was the most positive finding of the study. responses to the other statements reflect a less than enthusiastic endorsement of ee programs and principles. for example; only 59.51 per cent of respondents agreed or strongly agreed that ee is an important part of the role of the hr manager. exactly two-thirds of respondents agreed or strongly agreed that ee principles and practices are important in organizations and two-thirds also agreed that ee initiatives result in positive benefits for organizations. from hr managers, this luke-warm regard for ee programs and principles is perhaps surprising given the prominence of ee in hr circles and the generally very positive profile that ee enjoys. in response to the statements that sought the hr managers' experiences with ee, the data reflects an even less favorable association with engagement in practice. by way of illustration, only 37.56 per cent of respondents agreed or strongly agreed that they consciously use engagement practices with the people they manage while just 40 per cent concurred that engagement practices are useful and applicable to all types of jobs. only one-fifth of respondents said that they believed their manager had used engagement practices to better engage them. in respect to the respondents' organizations, the data reflected that respondents did not see their organization as especially committed to ee in any demonstrable way. 31.22 per cent of respondents said that their organization had a formal, documented ee strategy in place while just 28.78 per cent of respondents agreed or strongly agreed that ee was a top ten business priority for their organization. indeed, only two-thirds of respondents felt that ee initiatives return tangible benefits to organizations. 46 american journal of management vol. 16(1) 2016 table 1 perceptions of respondents regarding employee engagement statements mean sd cv i have a very good understanding of what ee is about 1.89 0.92 48.74 i think ee is an important part of the role of the hr manager 2.27 1.00 44.06 i consciously use ee practices with the people i manage 2.81 1.07 38.29 i believe ee principles and practices are important in organizations 2.14 0.97 45.62 my organization has a formal, documented ee strategy in place 3.02 1.07 35.49 ee is one of my organization's top 10 business priorities 3.12 1.13 36.43 i believe ee results in tangible benefits for an organization 2.20 0.95 43.44 i believe that my manager has used ee practices to better engage me 3.18 0.92 28.90 i believe that our organization generally has a high level of ee 2.49 0.83 33.61 i believe ee practices are useful and applicable to all types of jobs 2.65 0.96 36.31 there were no significant differences between the data provided by male and female respondents in regards to their perceptions of ee with one exception. women were found to be 20 per cent more likely to use empowerment practices with people they manage compared with men while men were twice as likely to be strongly disinclined to using empowerment practices with the people they manage than were women. the raw numbers for the second observation, however, were just a few. generally, women were observed to be between 5 and 9 per cent more positively inclined towards ee than were men. more significant differences were observed in the data when comparing the responses of those who are members of a recognized hr association and those who are not. those respondents who identified as members of hr associations were more likely to be strongly positively inclined towards ee and far less likely to select the "partly agree; partly disagree option". for example; 49.3 per cent of hr association members strongly agreed that they had a good understanding of ee compared with 37 per cent of nonmembers. in contrast, 26.1 per cent of non-members and just 9.3 per cent of members selected the "partly agree; partly disagree" option to this statement. the number of hr association members strongly agreeing that ee delivers tangible benefits to organizations was double that of non-members. 20 per cent association members agreed strongly that they use ee practices with those they manage compared with 8.4 per cent of non-members. it was particularly interesting to note that members of hr associations reported a much stronger organizational commitment to ee than did respondents who were not members of hr associations. in response to the statement 'my organization has a formal, documented ee strategy in place', 44 per cent of association members agreed or strongly agreed contrasted with 23.8 per cent of non-members. in response to the statement 'ee is one of my organization's top ten business priorities', 40 per cent of association members agreed or strongly agreed compared with 22.3 per cent of non-members. whether hr managers who happen to be members of hr associations work for organizations more committed to ee or whether these managers are more aware of their organization's people initiatives is not known. it could be the case that association members have higher levels of interest in initiatives like ee or have more knowledge or skills to be able to influence organizational investment in ee. in any case, there does seem to be a positive relationship between appreciation for ee and membership of a hr association. the research similarly found a positive correlation between having a tertiary hr qualification and appreciation for ee. indeed, this association was even more pronounced with hr qualified respondents typically being two to three times more positively inclined towards ee than those without a tertiary hr qualification. almost three times as many hr qualified respondents, for example, strongly agreed that ee is an important part of the role of the hr manager than non-hr qualified respondents. 38.8 per cent of hr qualified respondents strongly agree that ee delivers real results to organizations compared with 18.5 per cent of those without a hr qualification. it should be noted that while ee did not receive high levels of endorsement from respondents', respondents did not strongly question the value and role of engagement either. the number of respondents american journal of management vol. 16(1) 2016 47 claiming partial agreement with the statements was significant; about one-third on average with a low of 20 per cent (statement one) and a high of 45 per cent (statement ten). this may indicate uncertainty, ignorance or apathy or it might signify that the respondents believe the observation made in the statements is contingent upon some variables. further research would be required to determine this but what can be reasonably deduced is that the role and value of ee practice in the surveyed organizations has not been convincingly established and that considerable opportunity exists to raise the profile of ee. antecedents of the 205 usable surveys, 50 (24.4 per cent) reported that within the previous three years their organization had not had any kind of formal or informal ee program in place. the remaining 155 (75.6 per cent) reported that their organization had had such a program within the last three years. of this 155 that acknowledged the existence of an ee initiative, 9 (5.8 per cent) said that they did not know the reason for the introduction of the ee initiative and 10 (6.4 per cent) said that there was no specific reason for the introduction of their organization's ee initiative. table 2 primary reason for employee engagement initiative reason freq. (n=136) per cent attract high quality job seekers 8 5.88 retain desirable employees 32 23.52 develop employees' work skills / competencies 13 9.55 increase employee job satisfaction 14 10.28 encourage higher levels of job-related creativity 17 12.50 increase employee productivity 15 11.02 improve organizational financial performance 13 9.55 deliver better customer/client outcomes 13 9.55 keep pace with a trend / keep pace with competitors 10 7.35 make employees more accountable for their work 1 0.73 the 136 respondents who did not select either "don't know" or "no specific reason" concerning why their organization introduced an ee initiative, were asked to indicate, in order of importance, the top three reasons for the introduction of their organization's ee initiative from a list of ten reasons. the findings are represented in the tables 2, 3 and 4. table 3 secondary reason for employee engagement initiative reason freq. (n=136) per cent attract high quality job seekers 14 10.28 retain desirable employees 16 11.76 develop employees' work skills / competencies 19 13.97 increase employee job satisfaction 18 13.23 encourage higher levels of job-related creativity 16 11.76 increase employee productivity 15 11.02 improve organizational financial performance 10 7.35 deliver better customer/client outcomes 11 8.08 keep pace with a trend / keep pace with competitors 10 7.35 make employees more accountable for their work 7 5.14 48 american journal of management vol. 16(1) 2016 table 4 tertiary reason for employee engagement initiative reason freq. (n=136) per cent attract high quality job seekers 11 8.08 retain desirable employees 21 15.44 develop employees' work skills / competencies 18 13.23 increase employee job satisfaction 15 11.02 encourage higher levels of job-related creativity 15 11.02 increase employee productivity 12 8.82 improve organizational financial performance 12 8.82 deliver better customer/client outcomes 20 14.70 keep pace with a trend / keep pace with competitors 2 1.47 make employees more accountable for their work 10 7.35 the data highlight some interesting observations regarding why organizations embark upon ee initiatives. firstly, it was discovered that there are indeed many quite different reasons why organizations appear to introduce ee initiatives. these reasons range from the somewhat cynical such as increasing employee productivity and keeping up with what other organizations are doing to the altruistic such as increasing employee job satisfaction or encouraging employee creativity through to the practical such as retaining desirable employees or improving the organization's performance. the practical antecedents were the most commonly chosen reasons for commencing ee initiatives while the cynical reasons were the least popular reasons. it was observable, however, that generally most of the reasons respondents had to select from were selected in relatively equal numbers with a couple of noticeable exceptions. employee retention was by far the most popular reason for embarking on an ee initiative while using ee as a tool to make employees more accountable was the least common reason given by respondents. table 5 total for all reasons given for employee engagement initiative reason freq. attract high quality job seekers 33 retain desirable employees 69 develop employees' work skills / competencies 50 increase employee job satisfaction 47 encourage higher levels of job-related creativity 48 increase employee productivity 42 improve organizational financial performance 35 deliver better customer/client outcomes 44 keep pace with a trend / keep pace with competitors 22 make employees more accountable for their work 18 consequents consistent with the findings reported in preceding sections, respondents only tentatively endorsed the value of their organization's ee initiative when asked about the results. the means recorded in the following table reflect concurrence with the statements between general and partial agreement. for the five statements the percentage of respondents either strongly or mostly agreeing averaged 57.35 per cent with an average 15 per cent either mostly or strongly disagreeing with the statements. it was interesting to american journal of management vol. 16(1) 2016 49 observe that only 38.24 per cent of respondents noted any unplanned or unexpected benefits from their ee initiative. this is somewhat contrary to the literature review that highlighted a great many potential benefits often derived from ee initiatives many of which, presumably, would not be planned for or even known to those who may only have moderate knowledge of ee as the research study found to be true of many respondents. it should be noted, though, that this study did not seek to identify how and to what extent ee initiatives are measured. it could be the case that respondents' organizations are not measuring or, not measuring effectively, the outcomes of ee initiatives and therefore may be unaware of the true nature and extent of the returns of their initiative. irrespective of the extent to which measurement is a factor, it is telling that only 56.18 of respondents felt that the time, effort and money put in to their ee initiative was worth it in terms of the results. a further 31.62 per cent partially agreed that the investment was worth it. findings of this study such as perceived lack or organizational commitment to ee; ignorance or skepticism of quite a few respondents or the cynical reasons of some for initiating an ee program could account for the overall halfhearted sentiment that ee initiatives are worth the resources they require to be implemented. however, there may well be alternate explanations for the findings and this could be an interesting and valuable topic for further inquiry. table 6 consequents of employee engagement initiatives statements mean sd cv our ee initiative achieved its objectives 2.21 0.82 37.05 our ee initiative was worth the financial investment 2.47 0.95 38.35 our ee initiative produced other, unplanned / unexpected benefits 2.72 1.08 39.93 our ee initiative has improved organizational culture / atmosphere 2.55 1.08 42.35 our ee initiative was worth the time, effort and planning it required 2.40 0.92 38.67 conclusion this study has highlighted that ee and ee initiatives in contemporary organizations appear to be only moderately valued in terms of their importance, applicability and returns. the esteem in which ee is held is noticeably higher for those who are hr qualified or members of hr associations. the concern is that many hr practitioners do not have, arguably, the appreciation of the value of ee as they lack association membership and relevant qualifications suggesting a knowledge or resource deficit relating to ee. as an exploratory study, this research has raised more questions than it has answered and there is good opportunity for further research as a result of this work. it would be interesting to discover why ee seems to have only received mild approval from the surveyed respondents. it is proffered by these authors that apathy, cynicism or ignorance could be contributing reasons yet more practical reasons may equally offer the explanation. this study has identified that many different reasons compete as antecedents for ee initiatives but more research is required to understand what circumstances influence these choices and whether, for example, industry sector or organization size might associate with particular antecedents. in regards to consequents, again respondents were tentative in their acknowledgment of ee initiatives delivering. these authors suggest that insufficient or inaccurate measurement may account for poor outcomes but it could be the case that ineffective design, implementation or management of ee initiatives may result in less than satisfying outcomes. again, further research could be directed at exploring this issue to discern better understanding. what can be stated with a reasonable degree of certainty based upon this study's findings is that ee has some way to go to convince hr managers that it is the panacea it is sometimes purported to be. perhaps more demonstrable organizational commitment to ee in terms of resources and education would raise employee consciousness and garner greater effort on the part of hr managers to push ee initiatives toward delivering on expectations. 50 american journal of management vol. 16(1) 2016 references albrecht, s. l. 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(2009), “work engagement and financial returns: a study on the role of job and personal resources”, journal of occupational and organizational psychology, vol. 82, pp. 183-200. american journal of management vol. 16(1) 2016 53 ajm 17(7) web_master.pdf american journal of management vol. 23(4) 2023 23 current trend in gender stereotypes and unpaid care work: evidence from three countries, the uk, nigeria, and ghana charles-monwuba ifeoma caleb university unpaid caregiving is a worldwide phenomenon. 42% of women cannot secure jobs because they are responsible for caregiving. women and girls undertake more than 75% of unpaid care work in the world. the un sustainable development goals 5 and target 5.4 aim to promote the rights and well-being of women and care providers but will remain unattainable if the rising trend in unpaid care work is ‘unchecked’. to interrogate present developments in unpaid care work, this article critically examines the trend in three countries: the united kingdom, nigeria, and ghana. this study is important because, despite years of awareness, there appears to be an uneven change in the situation of unpaid care work globally. gender stereotypes continue to be a cultural concern. this paper leveraged the altercasting theory and textual content analysis method. the study concludes that there is still a need to improve the situation of unpaid care work as it is not adequately indexed in the national economic indicators of some countries. keywords: unpaid care work, gender stereotypes, economic indices activists, development, global introduction an important yet unnoticed aspect of human growth in the domestic domain is unpaid care work. it offers domestic services for the convenience of the community and the home, such as laundry, grocery shopping, and water retrieval. people ought to view it as a form of labor that merits legal recognition and reward. government and society should not mistakenly perceive it as trivial or irrelevant. achieving gender equality and advancing social justice depends on acknowledging and appreciating unpaid care labor. without recognition, women frequently conduct this kind of job, which perpetuates gender disparities and undervalues women’s contributions to society. to achieve gender equality, society must address the gender divide in labor and ensure that women’s work is not undervalued or taken for granted by recognizing and respecting unpaid care work. governments can also act to assist and offer resources to those who perform unpaid caregiving, such as social safety programmes and access to inexpensive daycare. unpaid work is defined as any worthwhile endeavor performed by a person for their own home or the benefit of another without payment. these activities are productive because they make use of limited resources to meet human needs. according to ferrant et al (2014) “unpaid care work refers to all unpaid services provided within a household for its members, including care of persons, housework and voluntary community work” (p.3). likewise, oecd observes that unpaid care work includes caring for children, elderly and sick people (rost, 2021; power, 2020). it also includes washing, cooking, shopping, cleaning and helping other families with their chores. elson (2000) observed that unpaid care work involves time and energy in supporting human well-being, arising out of social or contractual obligations, including 24 american journal of management vol. 23(4) 2023 marriage and parenting as well as less formal societal relationships. furthermore, the 19th international conference of labour statisticians (icls 2013), broadened the particulars of the definition which must include “five mutually exclusive forms of work: • own-use production work comprising the production of goods and services for own final use. • employment work comprising work performed for others in exchange for pay or profit. • unpaid trainee work comprising work performed for others without pay to acquire workplace experience or skills. • volunteer work comprising non-compulsory work performed for others without pay. • other work activities (not defined in this resolution).” (charmes 2019. p.10) these parameters are also in tandem with the united nations’ understanding of unpaid work. overall, the definitions capture the heart of what is meant by unpaid care work in this setting, taking care of domestic duties, and providing for the weak and dependents in families and communities. these activities include caring for vulnerable people or wards who are neither compensated nor seen as contributing to the national gdp, such as a mother nursing her infant or a child cooking for parents who are elderly. according to power (2020), the global citizens organisation, women and girls perform more than 70% of unpaid housework globally, and, in 89% of households women perform the majority of household work. customarily many women across the world spend a lot of hours doing unpaid work like school runs, cooking, fetching water, cleaning the house, and taking care of their children and other people without being properly remunerated. this informal regular job helps to sustain other individuals to make their life less challenging so that they will have the time to engage in other jobs and activities that authorities formally recognized as prescribed employment in other sectors. despite this enormous contribution that is principal in most societies, these tasking services are hardly recognized as formal employment. the most alarming concern is that it is neither captured as national gdp nor considered when debating national policies connected with the economy of nations. if considered at all, it does not form part of serious consideration for concerted attention. the international labour organisation according to the oecd estimates that the total value of unpaid care work ranges from 10% to 39% gdp of some nations as it contributes more to the economy than manufacturing, commerce, and transportation. in the global north, a lot more hours are spent by women in unpaid domestic work than men. this is based on the insinuation that most domestic work is the natural turf of the female gender, society has instilled this belief on women through socialization and culture. accordingly, ferrant (2014) points out that “…women typically spend disproportionately more time on unpaid care work than men. due to gendered social norms that view unpaid care work as a female prerogative, women across different regions, socio-economic classes and cultures spend an important part of their day on meeting the expectations of their domestic and reproductive roles” (p.1). this is in addition to their paid activities if the woman is in paid employment, thus creating the “double burden” of work for women. consistently for generations, gender stereotypes as a social derivative have instilled in women from a tender age that they are (by nature) created for domestic unpaid jobs. this cuts across global culture as it is not restricted to any civilization. atim and awodala (2020) expatiate on this universal challenge by pointing out the outcome of a study conducted by un women (2018) on 33 countries, which shows that girls aged 7-14 do more housework than boys of the same age and perform other tasks, including care of younger siblings. this practice goes for women generally and they are not compensated by the government for it. given the universality of this issue, if not tackled, it will continue to hinder attainment of sdg 5 on gender equality. the authorities across the globe have not placed sufficient interest in this matter because they do not conceptualize it as primary. however, it is imperative to consider it as part of national planning that can stem the tide of the exploitation of women in unpaid domestic work. the current attitude to unpaid work infringes on the fundamental right of women to social and economic empowerment and limits their contribution to the economic development of the nations. therefore, this paper sets out to take a critical look at unpaid care work and the place of women in three nations. one in the northern hemisphere-the american journal of management vol. 23(4) 2023 25 united kingdom and two in the southern hemisphere ghana, and nigeria in west africa. the choice of the three nations is deliberate to measure the rate of awareness and how far the three countries have fared in recognizing unpaid work as part of national economic growth. as unpaid work differs very much in societies of various stages of development, a common denominator seems to be the infinite elasticity of unpaid work: it can be stretched or contracted, if necessary`` (swiebel,1999). the people’s culture and social system play a strong role here, hence the comparative investigation. this study will examine the advancements achieved in the two countries in the south regarding gender imbalance caused by unpaid work and the extent to which the problem has improved or worsened in these countries. in terms of women’s labor force involvement and how households divide their time between paid and unpaid work, there are significant cross-national variances. (lewis 2009; orloff 2009). studies repeatedly reveal that women perform the bulk of unpaid domestic work in every country, despite decades of progress towards gender equality in the workplace (craig and mullan, 2011). the study will focus on unpaid work in three countries: the uk, nigeria, and ghana. the study anticipates that the uk may have made advancements on this issue, and this will be used to evaluate the situation in nigeria and ghana as well as assess the efforts made to eradicate the gender-based imbalance in unpaid employment. the study is significant because it highlights the ongoing discrimination that women experience in both industrialized and developing nations (akhtar et al, 2023; apotsu et al, 2023; guvenen et al, 2022). these studies show that women in the global north spend a disproportionate amount of time on unpaid household chores in comparison to men, creating a double burden of duties because they also perform paid jobs. this lopsided distribution of unpaid labor restricts women’s economic options as well as their ability to participate in both social and political processes and achieve total emancipation. (klemmer, 2023). additionally, the gender gap in unpaid labor is more prominent in the global south because of other elements including poverty, limited access to education, and cultural norms that uphold conventional gender roles. the strain of unpaid labor is worse for women in these areas by additional obstacles such as restricted access to resources and services. this keeps the cycle of gender inequity constant and makes it harder for women to leave the constraints of their traditional roles. in addition, because unpaid work is unacknowledged or recognized and because women’s contributions to society are frequently disregarded and underestimated, women are marginalized by unpaid work. as a result, establishing gender equality and empowerment for women in the global south remains extremely difficult. general literature review theoretical review: altercasting theory this study is based on the context of the altercasting theory, which eugene weinstein and paul deutschberger created in 1963. this theory seeks to project a specific behavior in a person to evoke a particular response and attitude. “altercasting has been established as a potentially effective strategy for inducing compliance” (turner et al, 2010). altercasting is based on the idea that people are socially conditioned to behave in a certain way to live up to the expectations of the public’s compliance-seeking mindset. this typically entails a person being projected to play a certain role or have a certain attitude that is congruent with a specific private or social expectation. usually, pressure from society is used on the individual or group in question to comply with the request made. this position heavily depends on the social contract, which serves as the foundation for a certain behavior as the framing style (milfeld & pittman, 2023: witty, 2023). it could be used negatively or positively. making someone behave in a socially acceptable way may be part of the positive role, but an alternative behavior in a way that is socially offensive may also be acceptable in society owing to cultural attitudes and conventions which is the goal of the negative altercasting. 26 american journal of management vol. 23(4) 2023 figure 1 the process of behavioral change in altercasting theory concept: researcher the person occasionally might not be aware of this expected function that has been accepted by society. the topic of this study, which examines the function of compliance in three nations—the uk, nigeria, and ghana regarding gender and unpaid employment, is consistent with altercasting theory. negative altercasting actions have been imposed by society and culture regarding unpaid work as the responsibility of the female gender, and society has accepted that unfavorable idea. therein lies the relationship between the topic and the theory. gender stereotypes and unpaid care work in the uk gender inequality and unpaid care work are global issues. in most nations around the world, women dominate the unpaid employment sector despite all efforts to close the gap. according to statistics, the issue affects women more severely than men. oecd (2023) reports that the global gender disparity in unpaid care work shows globally that 48% of females performed unpaid housework, compared to 14% of men. in central america and the caribbean, 60% of women performed unpaid labor compared to 20% of men, and 46% of women in europe and central asia did unpaid labor compared to 23% of men. in east asia and the pacific, 41% of women and 12% of males worked unpaid jobs. in sub-saharan africa, 52% of women and 18% of males performed unpaid caregiving tasks. in the middle east and north africa, 46 % of women performed unpaid care work compared to 10% of men, and in south asia, 50% of the women did unpaid care work compared to 10% of men. women continue to provide unpaid caregiving duties more frequently than males in the united kingdom. for women’s career advancement and broader gender equality, this continuing gender gap in caring obligations has profound consequences. despite improvements in gender equality and an increase in the proportion of women in employment, societal norms and conventional gender roles continue to influence how unpaid caregiving is distributed. since they must not only meet their professional obligations but also take on the caregiving duties for children, aging parents, or other family members, women frequently find themselves managing roles. nearly half of the working-age women are providing an average of 45 hours of unpaid care every week, while 25% of men provide 17 hours, according to a study in the guardian highlighting the gulf in unpaid care work (topping, 2022). this indicates that females dominate this informal sector which is barely recognized in the economic indexes of the country. the survey goes on to further buttress this reality through a deeper statistical analysis by indicating that women in the uk provide 23.2billion hours of unpaid childcare which is estimated to be worth £382bn annually, while men provide 9.7billion hours worth £160bn. consequently, the study buttresses that this has formed an indicator for gender disparity as a driving force of gender-based inequality in the workplace (topping, 2022). women may be significantly burdened by this unequal distribution of caring responsibilities, which may impede their ability to advance professionally and constrict their ability to achieve financial independence. furthermore, cultural expectations and norms support these gender roles by frequently elevating the caregiving skills of women while downplaying their professional achievements. this diminishes the acknowledgement and significance of their employment outside the home and furthers the myth that women are solely responsible for providing care. women consequently frequently struggle to american journal of management vol. 23(4) 2023 27 balance their personal and work lives while receiving little appreciation for their caregiving efforts. since it promotes gender inequality and reduces women’s possibilities for job progression and financial independence, this imbalance not only affects women personally but also has larger ramifications for society. an illustration of unequal unpaid care labor by gender in the uk may be found below. figure 2 unpaid work disparity in the uk according to income level source: adapted from oecd library the social norm that demands women put caregiving ahead of their own goals and objectives promotes traditional gender roles and impedes the advancement of gender equality. furthermore, the absence of appreciation and encouragement for the caring work done by women can result in feelings of annoyance, exhaustion, and even dissatisfaction which can damage relationships with others and have a detrimental effect on general well-being. additionally, because of the asymmetry in caring obligations, women may suffer long-term financial consequences such as lower pay, fewer career possibilities, and less money saved for retirement. in general, there has not been enough action taken to reduce the gap and deal with the fundamental issues in the uk’s uneven allocation of caregiving (dotsikas et al, 2023; jirovsky & rieder, 2023; magda et al, 2023). while there have been initiatives to support gender equality at work and motivate men to take on greater caregiving duties, development has been gradual. the notion that women are responsible for providing care is still strongly influenced by cultural norms and societal standards. in addition to perpetuating gender stereotypes, this makes it more difficult for women to engage fully in the workforce and attain financial autonomy. the uk government has attempted to decrease the gap through legislation, but much more work must be done in this area to achieve true gender equality. the uk government has made great strides in addressing gender inequality through laws like the equality act of 2010, individuals are still legally safeguarded against prejudice in the workplace and greater society. (www.gov.uk/guidance/equality-act, 2010). it accomplished this by combining all previous anti-discrimination laws into a single act, streamlining the law’s interpretation, and enhancing protection in specific situations. and the implementation of shared parental leave. there are still obstacles preventing males from taking on caregiving tasks and preventing women from fully participating in the workforce. social norms, unconscious biases, and a lack of accessible, inexpensive childcare services are amongst these obstacles. in industries and occupations, women continue to earn less than their male counterparts due to the gender pay gap. to close this gap and build a culture that honors and encourages equitable caring participation. according to government statistics on the gender pay gap in unpaid employment, women continue to carry a disproportionate share of the responsibility for providing unpaid care (zapata roman et al, 2023; tripathi et al, 2022). women worldwide perform over three times as much unpaid care work as men do, 28 american journal of management vol. 23(4) 2023 according to the un. this includes tasks like cleaning, cooking, and looking after young or elderly family members. in addition to restricting women’s economic potential, this lopsided distribution of unpaid work also keeps gender inequities alive in society. governments and policymakers must address this problem and put in place measures that support gender equality in caregiving. overall, women spent far more time providing unpaid care in the uk than did men, and mothers were more likely than fathers to reduce their working hours or alter their schedules for childcare. (mcmunn and xue, 2021). the likelihood of long-term carers and stay-at-home spouses reporting higher levels of psychological distress and gender discrimination was higher. comparatively, the uk’s ranking in unpaid work shows that women continue to carry a disproportionate share of the burden of unpaid care work. a study by the office for national statistics found that women in the uk devote an additional 60% of their time to unpaid caregiving and domestic duties compared to men (home office for national statistics, 2021). this difference perpetuates traditional gender norms and expectations in addition to having an impact on women’s capacity to participate fully in the workforce. progress has been made in gender equality in tackling the proportion of unpaid care that women bear in the uk, however, there is still a long way to go before there is a fair and balanced division of unpaid work in the uk. gender stereotypes and unpaid care work in nigeria before colonial times in african society, especially in igbo culture in nigeria, communal and collective handling of unpaid care work was one of the cultural attributes. relations, dependents and family members assist in doing house chores at home and in the community to lessen the burden on any particular individual and to aid social commitment. the communal work is carried out in turns according to families depending on their needs at that moment. people take pride in helping relations or communities for little or no remuneration (ihunnah, 2022). however, with modernization, this practice has drastically changed because unpaid housework has been redefined by western conception. now, it has been seen as one of the drivers of gender inequality because it is mostly now done by women, just as in other societies outside africa. the culture has drastically transformed according to modern trends. in africa, it is estimated that most unpaid care work is conducted by women. about 75% of this duty is conducted by women and girls in nigeria (millennium goals report, 2012). as noted by herrera & torelli (2013) in other contexts in subsaharan africa, social norms and religion influence gender roles and are deeply entrenched, resulting in women doing virtually all unpaid work in the household. even when women are in paid employment, that does not result in the redistribution of unpaid work (herrera & torelli, 2013). commenting on the prevalence of unpaid work, nanko and tengzeng (2022) indicate that within africa, there are significant disparities between men and women in the discharge of unpaid care work. in south africa and mauritius, for instance, available data from undp (2016) indicates that women spend between two to three hours more on unpaid care work than men. women spend their time doing unpaid housework, as against men who spend similar time looking for paid jobs. in a study conducted by the british council nigeria (2012) on unpaid housework, they found out that the subjugation of women by unpaid housework relates to the perpetuation of patriarchal agenda that is culture driven. accordingly, “inequalities persist and are sustained by existing, mainly patriarchal powers, be they of religious or cultural origin or based on dominant economic models” (adebola, 2020, p.2). this implies that “in nigeria (…) women become primarily responsible for childcare, maintaining homes, washing, cooking, fetching firewood and water for drinking, as well as unpaid work such as helping with planting and harvesting farm produce and fetching firewood. the report further explains that due to unpaid care work responsibilities, women are also more likely to occupy low-level posts that offer them the flexibility they need to manage their households while working” (atim & awodola, 2020. p.30). in nigeria, the essential outcome of socialization and culture is the persistent involvement of girls and women in unpaid work which is not recorded in economic development and the annual gdp of the country. due to the lack of adequate government action, women’s unpaid care work challenges have increased due to a lack of direction and a working document. this has made it possible for care work not to be visible in nigeria and the responsibilities in this sector have rested with women. as more people spend time at home american journal of management vol. 23(4) 2023 29 due to crises in nigeria like riots and during covid -19, the burden of care rests with the women who will perform the household chores. as noted by nagarayan (2020) women rise earlier than the men to fetch water and at the same time are under pressure to provide food; particularly as new aid distribution modalities do not always reach them. as these happen, they take on more responsibility which may result in health challenges due to pressure. some organizations have succinctly described this problem in the following statements: according to the international labour organization (2018), nigerian women devote 60% more daily time to childcare than men. school closings and stay-at-home recommendations also increase the amount of unpaid care that women provide (women advocates research and documentation center, women for women international, and gender action for peace and security, 2021). further, information from nigeria’s national bureau of statistics (2018) on unpaid housework shows that women in nigeria make a considerable contribution to unpaid housework, devoting an average of 30 hours per week to household duties. along with cooking, cleaning, and childcare, this also covers other duties like fetching water, gathering firewood, and taking care of the family’s agricultural needs. the enormous amount of time and effort spent on unpaid housework is frequently overlooked and underestimated, which contributes to the persistence of gender disparities and the constrained economic prospects for women in nigeria. even though nigerian women play a vital role in maintaining families and communities through their significant domestic labor, the government disregards and undervalues their contributions. the astounding average of 30 hours per week spent on household chores includes not only customary duties like cooking, cleaning, and childcare but also physically tasking jobs like fetching water and gathering firewood. nigerian women also must take care of the family’s agricultural requirements, which adds to their already heavy workload. however, the lack of acknowledgement and appreciation for their efforts helps to maintain gender disparities and limits the opportunity for women to succeed economically in nigeria. women’s work is frequently devalued and neglected, despite the significant contributions they make to their families and communities. this inhibits women’s potential to earn money and achieve financial independence as well as supports the social norm that they should put their family responsibilities before their education or careers. as a result, nigerian women experience disproportionate poverty and confront formidable obstacles to achieving economic emancipation. unpaid care work has a significant negative economic and national gdp impact in nigeria, as there are significant ramifications for the economy and society from this imbalance in the distribution of care work which could have contributed to the advancement of the economy. consequently, women frequently become locked in a cycle of poverty and limited economic options because of the strain of unpaid caregiving, this has enormous ramifications for the economy in addition to having an impact on their financial stability (tacoli, 2012; fapohunda, 2012; uzoamaka et al, 2016). women’s potential contributions to productivity and economic growth are severely reduced when they are unable to participate fully in the workforce due to the obligations of caregiving. furthermore, the persistent gender imbalance in society is a result of the undervaluation and underpayment of care work. the obligation of caring for children, aging parents, and other family members falls disproportionately on women and can assume hours and energy. as a result, they have few opportunities to seek training, education, or employment that could lead to higher wages and greater economic stability. consequently, women frequently find themselves in unstable, low-paying positions or need social welfare programs to make ends meet. the absence of economic prospects further restricts their capacity to make investments in their own and their children’s futures, perpetuating the cycle of poverty. nigeria ratified both the optional protocol and the convention on the elimination of all forms of discrimination against women (cedaw) in 1985. additionally, the nation ratified the international covenant on civil and political rights, the international covenant on economic, social, and cultural rights, the african charter on human and peoples’ rights, and most importantly, the protocol to the african charter on human and peoples’ rights on the rights of women in africa, which was ratified by nigeria in 2005. the country also adopted the beijing platform of action in 1995. however, these promises have not been followed through in practice, and local implementation is still not strong enough. despite 30 american journal of management vol. 23(4) 2023 higher labor force participation, data from the core welfare indicators questionnaire (cwiq) indicate that women spend their time providing unpaid care for others (atim & awodol, 2020). in the same vein, angelurdinola and wodon (2008), cited in british council nigeria (2012), found that society expects men to provide for the family according to patriarchal ideals, while women are expected to take care of the home. as a result, women are now primarily in charge of the home. they are also more likely to take low-level positions that offer them the flexibility they need to manage their households while working, because of their unpaid caregiving duties (british council nigeria, 2012). in conclusion, more still needs to be done by nigeria on unpaid care work. only researchers and representatives from international organizations are paying attention to the state of unpaid care work in nigeria. there is no organized government effort to develop an official policy to recognize the impact of unpaid care work so that the sector could support nigeria’s economic expansion. gender stereotypes and unpaid care work in ghana ghana is a nation in west africa that has similar socio-political and geographic traits to nigeria. due to its shared colonial history, english is now the second official language. ghana’s societal structure has historically included a substantial amount of unpaid care labor. most of this responsibility has traditionally fallen on women, who are also responsible for caring for children, elderly or ill family members, and household duties. in light of this, nanko and zeng (2022) write, “studies from the ghana time use survey (gtus) conducted by the ghana statistical service (2014) suggest that women dominate in the area of unpaid care work while men dominate in paid work” (p.121). although crucial for the health of families and communities, these responsibilities are frequently overlooked and underestimated, which causes gender disparities and economic disadvantages for women. to solve these problems and advance gender equality and social development in ghana, it is essential to comprehend the dynamics and effects of unpaid care work. like many other nations, women in ghana bear a disproportionate amount of the responsibility for unpaid caregiving. women devote an average of six hours per day to unpaid caregiving, compared to men’s two hours per day, according to a survey by the ghana statistical service. this substantial disparity affects women’s financial autonomy and involvement in the formal labor market in addition to maintaining traditional gender roles and stereotypes. furthermore, the undervaluation of unpaid caregiving contributes to the persistence of gender disparities and restricts women’s possibilities for social and economic growth (owusu & kumi, 2023). women are consequently frequently compelled to put caregiving duties ahead of seeking education, career promotion, or entrepreneurship. this disparity affects not only women but also the general advancement and development of society. due to the overwhelming amount of unpaid care work they perform, women often find it difficult to fully participate in the labor market, which limits their ability to support the economy and lowers their chances of being financially independent. additionally, the perception that caregiving is entirely a woman’s job is maintained through the undervaluation of unpaid care work, reinforcing conventional gender stereotypes and impeding the advancement of gender parity. in terms of paid work, nanko and zeng (2022) report that men in ghana spend, on average, more time than women engaging in subsistence-oriented productive activities and formal sector employment: men work in the formal sector for 65 minutes on average, compared to 23 minutes for women. the undervaluation of women also has wider societal repercussions because it reduces their possibilities for leadership roles, job progression, and higher education. many women are forced to make challenging decisions between their career objectives and their caring responsibilities because they lack access to inexpensive and high-quality daycare options. this has an impact on the economy in addition to their financial security. productivity suffers and innovation is stifled when a sizable percentage of the population is unable to fully engage in the labor market. additionally, the absence of affordable childcare services has a disproportionately negative impact on low-income families, aggravating already existing inequities and maintaining the cycle of poverty. to develop a more diverse and equal workforce, society must understand how important it is to support working parents, especially women. we can enable women to follow their career aspirations, contribute to the economy, and ultimately remove barriers that impede advancement and advancement in society by making investments in accessible, high-quality childcare. furthermore, research american journal of management vol. 23(4) 2023 31 (zagel & van-lancker, 2022; guvenen et al, 2022; herrera torelli, 2013) has indicated that nations with higher rates of female labor force participation tend to see long-term economic gains from having adequate childcare choices. studies on unpaid care work in ghana reveal that women and girls perform the majority of the work, with little help or acknowledgement from the state or society (owusu & kumi, 2023; nanko & zeng, 2022; ferrant et al, 2014). cooking, cleaning, parenting, and taking care of old or ill family members are examples of this invisible and frequently underappreciated labor. according to ferrant et al (2014), cooking and caring for children make up for the majority of ghanaian women’s daily unpaid tasks: 13% and 21% of their total working time or 20% and 35% of their unpaid working time, respectively. other unpaid activities, such as fetching water, collecting firewood, washing clothes, and washing dishes require approximately the same amount of time and represent a total of three hours per day. figure 3 statistics representing unpaid care work in ghana adapted from ferrant et al (2019). design by the researcher unpaid care work has a critical role in maintaining families and communities, but it is frequently ignored in development agendas and policymaking, which contributes to gender inequality and the cycle of poverty. to underscore the need for a more inclusive strategy to address these concerns, we will go further into the unique difficulties experienced by women and girls in ghana when it comes to unpaid care work in this paragraph. most unpaid care work in ghana is performed by women and girls, who put in many hours a day on jobs that are crucial to the welfare of their families and communities. this significant load not only prevents them from pursuing educational and professional opportunities but also helps to maintain gender stereotypes and traditional gender roles. in ghana, social expectations and cultural norms frequently place a higher value on providing for others than on the personal growth and goals of women and girls. as a result, women are more likely to have restricted access to options for employment, education, and decisionmaking, which furthers their status as social outcasts. this cycle of gender inequality impedes the advancement of women as well as the general growth of the nation. to ensure that women and girls may participate fully in all parts of life, it is essential to eliminate the structural hurdles that stand in the way of this and to advance gender equality as a basic human right. we can build a more inclusive and just society in ghana by empowering women and girls, which will benefit society. the stereotype that caring is a woman’s responsibility is also reflected in the paid care sector in ghana. according to ghana statistical service (2014), women make up the bulk of healthcare professionals in 32 american journal of management vol. 23(4) 2023 ghana, with a startling 90% of nurses and midwives being female. this high percentage of women in the care industry not only upholds traditional gender roles but also the idea that caring for others is exclusively a woman’s task. to combat these prejudices and advance gender equality in the care industry, there have been recent efforts and movements. the “men in care” campaign is one such project that aims to get more men to enter the fields of nursing and midwifery (dumbaugh et al., 2014; aborigo et al., 2018). this initiative attempts to diversify the care workforce and increase opportunities for both men and women by questioning traditional conventions and expectations surrounding caregiving. in the paid nursing profession, there exists a gap in pay and leadership position between the majority female workforce and their male counterparts. groups like the ghana nurses and midwives association have pushed for legislation to address gender gaps in the healthcare industry and assist women in leadership roles (ferrant et al., 2014). this further buttresses the argument that even when women get into paid care work there remains a disparity in their pay compared to that of men which is why the ghana nurses and midwives association are advocating against this disparity. this campaign has created an awareness of the burden of unpaid care that women bear in the informal sector. these initiatives are essential in breaking down the deeply ingrained preconceptions that limit men’s and women’s potential to succeed in caregiving roles as well as empowering women in the profession. we can remove the obstacles that stop people from pursuing their love for giving care and support to others by fostering gender equality in the care workforce (mccarthy, 2018). it is crucial to understand that providing care is not only the responsibility of one gender and that everyone, regardless of gender, should be able to contribute to this important industry. we can promote a more welcoming and compassionate care environment that benefits both carers and people in need of care with improved representation and assistance. we may challenge societal conventions and prejudices about caregiving duties by advocating for gender equality in the care workforce. men have traditionally been encouraged to seek occupations in more “masculine” fields whereas caregiving has traditionally been considered as a mostly female role. mutual surveillance served as the basis for social control in “traditional” ghana because of the conviction that social (dis)order is a joint responsibility (akoensi, 2017). however, this antiquated perspective not only prevents men from discovering their passion for providing care but also upholds the notion that providing care is a lesser or less significant work. these detrimental perceptions can be abolished, and a more inclusive and varied care industry can be promoted by removing these barriers and encouraging men to work in the care industry and also at home. additionally, by including people of both genders in caregiving roles, we may offer care that is more varied and comprehensive. men bring special experiences, views, and talents to the table that can be very helpful to individuals receiving care. we may challenge established conventions and build a more just and compassionate society by appreciating and embracing the contributions of men in caregiving. it is important to understand that providing care is an essential component of being human and is not exclusive to one gender or the other. similarities and differences in gender stereotypes and unpaid care work in the uk, nigeria, and ghana when comparing the cultural, social, and economic environments of the uk, nigeria, and ghana, similarities and contrasts in gender stereotypes and unpaid caregiving can be seen. gender stereotypes around unpaid care work are slowly changing in the uk as more people are realizing the value of men helping with childcare and home duties. however, because women are frequently expected to take the lead in providing care, conventional gender roles still exist to some extent. in contrast, nigeria and ghana show more extreme gender discrepancies in unpaid care work, where women are disproportionately responsible for childcare and domestic duties (datta et al, 2006). these discrepancies can be ascribed to societal expectations, patriarchal institutions, and cultural norms that value men’s responsibilities as providers of support and women’s roles as carers. in nigeria, for instance, social convention expects that women should put their families before their careers, sometimes resulting in little chances for women to work outside the home for pay. because women are left with the dual burden of unpaid caregiving and low economic empowerment, this feeds the cycle of gender inequality in society (duffy and amenia, 2019) similar to this, patriarchal systems and conventional gender norms american journal of management vol. 23(4) 2023 33 in ghana further restrict women’s prospects for personal and professional progress by reinforcing the notion that they should be primarily responsible for childcare and housework. this makes it extremely difficult for women in ghana to enter the formal labor force and obtain positions that pay well. their inability to support themselves financially is hampered by this, which further feeds the cycle of poverty and inequalities based on gender. furthermore, the absence of accessible and reasonably priced childcare services makes things worse because the social structure forces women to choose between providing for their families and pursuing employment prospects. unpaid care work and gender stereotypes are significant problems in ghana, nigeria, and the uk, though they may take different forms in each. in the three countries, males are frequently expected to be the breadwinners while women are frequently expected to take care of children and handle home duties. however, the extent and nature of these stereotypes can vary based on cultural, economic, and social factors specific to each country. to buttress this, according to powell et al (2009), ``gender culture is a major factor in the work–family interface. while both national culture and individual gender attitudes influence individuals’ opportunities and behaviors, norms affect couples differently in different countries. to address and challenge the gender inequities that are fueled by these assumptions, it is essential to understand these similarities and variances. for instance, traditional gender norms have gradually shifted away in the uk in recent decades because of the dynamics of culture. women have challenged the idea that their primary function is to be caregivers by joining the labor and pursuing careers. women still encounter substantial obstacles and disadvantages in the workplace, such as the gender wage gap and low representation in senior roles, notwithstanding this progress (madsen et al, 2017; winkel et al, 2021). on the contrary, traditional gender roles continue to be established in ghanaian and nigerian societies. women are discouraged from pursuing ambitious careers and are encouraged to put their families first. as a result, there is a large gender gap in these nations’ employment prospects and wages. women are underrepresented in well-paying professions and industries, and they frequently experience cultural prejudices and discriminatory behaviors that impede their advancement. as women are supposed to prioritize their household duties over their jobs, the pressure to conform to societal standards worsens the gender gap. many intelligent and skilled women in nigeria and ghana are thus unable to make the most of their abilities and contribute to the workforce, which results in the loss of priceless talent and the potential for economic growth. it is a problem that needs to be addressed on a national scale in both countries. governments and organizations must act proactively to remove these obstacles and establish a setting that is welcoming and equitable for women. implementing policies that promote gender equality, such as paid parental leave, flexible working arrangements, and affordable childcare, can help alleviate the burden on women and enable them to pursue their professional aspirations. according to hegewisch and lacarte as cited in hess et al,(2020)`` reasons for part-time work, and the likelihood of working part-time over the life cycle, vary strongly between women and men, and women are much more likely than men to work part-time because of child care and other family care obligations`` (p.1). additionally, promoting a culture that recognizes and advances women’s career growth requires addressing cultural norms and assumptions surrounding gender roles. women’s untapped potential can help nations prosper economically, innovate more effectively, and innovate more. according to studies, organizations with diverse leadership teams outperform their rivals, and nations with better gender equality also have higher levels of overall human development and well-being (wang et al., 2022; pavez, 2021). in addition to helping people and businesses, empowering women in the workforce also makes society more inclusive and equal. governments, organizations, and individuals must collaborate to foster an atmosphere where women may succeed professionally and fully contribute to the development of their communities and countries. compared to the other two countries under consideration, the uk has made notable strides in addressing the issues of gender imbalance in unpaid housework thanks to political and social awareness campaigns. there is still work to be done in nigeria and ghana to achieve gender equality in unpaid care work to bring it to par with international standards. the biggest obstacles to achieving gender parity in both nations, 34 american journal of management vol. 23(4) 2023 nigeria and ghana, are a lack of government programs, a concentration on culture, and a lack of social consciousness. in furtherance of closing the lacuna of gender imbalance in unpaid care work, the international labour organization (ilo, 2018) has proposed a roadmap of the 3rs framework, which was later developed into “5rs”, to unpaid care work, including reward for care workers and their representation in social dialogue on issues that affect them and society at large. these recent commitments build on the 1995 beijing declaration and platform for action, which recognizes the importance of tackling the unequal distribution of unpaid work between men and women as an essential step towards achieving gender equality. the 5rs approach is a human gender-responsive action to mitigate unpaid care work inequalities and to reduce social hindrances that stop women from entering the formal sector of employment. according to chauhan and joshi (2021), the ilo 5r could be summarized as follows: recognize, reduce, redistribute, reward and represent unpaid care work. they are further detailed out as follows. recognize • incorporating measures of paid and unpaid care work in national statistics and in measures of economic progress. • measuring time-use and unpaid care work and its distribution within families and communities. • tracking care in public policies and investments. • documenting the social and economic multipliers of investments in care. • recognizing women’s work and care responsibilities across their life course. reduce • increasing access to care-relevant infrastructure and timeand labor-saving technologies. redistribute • investing in quality, affordable, and accessible care services. • ensuring care-friendly and gender-responsive social protection systems. • implementing gender-responsive maternity, paternity, and parental leave policies. • implementing family-friendly workplace policies and arrangements. • shifting social norms on care. • engaging men and fathers in care. • developing care-relevant training and advocacy tools. reward • ensuring decent work for all care workers, including in the informal economy. • extending social protection to informal workers. represent • formalizing care and domestic work. • promoting freedom of association, social dialogue, and collective bargaining for care workers. • ensuring equal opportunity and treatment for migrant care workers.” the gender parity in unpaid care labor will significantly improve when the uk, nigeria, and ghana implement these ilo rules, and the global economy will benefit as a result. the 1995 beijing declaration and platform for action, which recognizes the significance of addressing the unequal allocation of paid and unpaid labor between men and women as a crucial step towards attaining gender equality, serves as the foundation for these more recent commitments. the sdg 5 on gender equality and target 5.4 further sets out concrete actions to be taken to address unpaid care work. american journal of management vol. 23(4) 2023 35 methodology the desk research and textual content analysis as a qualitative approach is the methodology for this study. this approach is thought to be appropriate and trustworthy for exploring public and governmental attitudes toward unpaid care work in the study's participating nations. to conclude, an analysis of this paper was conducted using content and related articles from ebsco, google scholar, scopus proquest, pubmed, unesco, and ilo media sites and libraries, as well as multiple internet sources, magazines, newspapers, multiple library materials, books, conference proceedings, surveys of prior research, and videos. to gather pertinent and up-to-date bits of information on the subject, pertinent materials from sources that fit the scope of the study were listed and critically assessed. for textual analysis, additional supplemental information for discourse was also taken from many secondary sources. as the flow of information moves more and more online, data collection by academics is becoming less reliant on direct human interaction. to collect and disseminate data remotely for academic research, more traditional methods have been supplanted by the internet and other media platforms (rush et al., 2009; yang et al., 2023; rakasiwi & setyowibowo, 2023). these sources provided information that was used in the desk research to make judgments on the subject at hand. this extensive investigation gave the researcher access to the most recent information and opinions on the subject. findings and discussion the united kingdom, nigeria, and ghana were the three countries included in this study. according to the analysis of the topic from internet secondary sources, the uk has consistently worked to reduce the gender gap in unpaid care work through a variety of government, private, and corporate measures. there is still more work to be done in this area for nigeria and ghana. the following table provides examples of these areas. table 1 indication of action areas by the three countries to close the gender gap in unpaid care work rating of uk, nigeria, and ghana indicating action areas to close the gender disparity in unpaid care work sn indicators uk ghana nigeria 1 laws av pa pa 2 policy action av pa na 3 national campaigns av pa na 4 education campaigns av pa na 5 improved childcare options av pa na 6 flexible work conditions av na na 7 government support programme in times of crises. av pa pa key: available: av. partially available: pa. not available: na concept by the researcher the table summarizes the study’s findings and provides an overview of how the gender gap in unpaid labor is being closed in the study’s target nations. the bulk of the texts concur that there is still a lot to be done in bridging the gender gap in unpaid care work on a worldwide scale. while the global south still needs to put in more effort to close this social divide, the global north is consistently working to do so. as the table above suggests, closing the gender disparity in unpaid care work in the uk, ghana and nigeria requires a multi-faceted approach that addresses the root causes of the problem, which include cultural norms, gender roles, and lack of government support. for nigeria and ghana, strong legislations and policy actions can be put in place to protect the rights of women and promote gender equality, including 36 american journal of management vol. 23(4) 2023 laws that mandate paid parental leave, flexible work arrangements, and equal pay for equal work. national campaigns and education programs can raise awareness about the importance of unpaid care work and its impact on women’s economic and social well-being. improved childcare options, such as affordable and accessible daycare centers, can also help reduce the burden of unpaid care work on women. flexible work conditions, such as remote work and part-time options, can enable women to balance their care responsibilities with paid employment. government support programs, such as social protection programs, can provide a safety net for women and families in times of crisis, such as natural disasters or economic downturns. although the uk has legislation in place to reduce gender inequality, more government support programs are required. for example, tax credits and child benefit payments can help families that are caring for others financially. support for caregivers may also be offered, such as training opportunities and respite care. for ghana, government support programs, such as social protection programs and cash transfer schemes, can provide financial assistance to families with caring responsibilities. support for carers, including training and access to health services, can also be provided. closing the gender disparity in unpaid care work in the uk, ghana and nigeria requires a comprehensive and sustained effort from all stakeholders, including the government, civil society, and private sector, to address the underlying causes of the problem and promote gender equality. conclusion this study compared unpaid caregiving practices in ghana, nigeria, and the uk to assess gender stereotypes. certain criteria were utilized to rate each nation’s performance in unpaid care work for the three countries considered in this study: ghana, nigeria, and the united kingdom. in addition to increased daycare alternatives, flexible work schedules, and government support programs during crises, they also include laws, policy actions, national campaigns, and laws. from the data analyzed above, only the uk has consistently used a multifaceted strategy to try to close the gender gap in unpaid care work. to bridge the gender gap in unpaid care work, there is still much work to be done in nigeria and ghana. considering the environmental and societal conditions, approaches to tackling the gender disparity in unpaid care work should be treated as a global issue. studies have shown that the global south, particularly nigeria and ghana, used as microcosms for this work, have not done well to effectively narrow the widening gender gap in unpaid care work, despite some countries, especially in western countries, doing well in formalizing unpaid care work. recommendation generally, antonopoulos (2008) suggests an audacious plan to lessen gender-based gaps in unpaid care work. she emphasizes the need for comprehensive anti-poverty policies that consider gender differences in paid and unpaid labor. these policies continue gender-based inequality by ignoring the systemic and human factors that cause poverty. considering these, this study makes the following recommendations: ● gender equality and campaigns to address unpaid care work should be interpreted and implemented based on the peculiarities of culture of each nation, due to differences in location and social context, particularly in the global south. the universal appeal has failed. however, such tailored responses must be geared towards reducing the burden of unpaid care work on women and girls. ● there should be a criteria to gauge each nation’s development in this field. second, this will be achievable when countries prioritize tackling unpaid care work and enact laws, policies and fund holistic programmes to address it. ● to raise awareness from an early age, studies on unpaid care work and gender equality should be included in all levels of schooling, from primary to tertiary. ● a review of literature materials should be conducted to remove books that promote unpaid care work as the role for women and girls. american journal of management vol. 23(4) 2023 37 ● the government should create more opportunities in the 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(2023). caregiving is women’s work: unequal distribution of unpaid housework in chile during the covid-19 pandemic. ajm 17(6) web_master.pdf ajm 18_1_web_master.pdf linking organisational culture, leadership styles, human resource management practices and organisational performance: data screening and preliminary analysis amer ahmad alanazi universiti utara malaysia faridahwati mohd. shamsudin universiti utara malaysia johanim johari universiti utara malaysia this paper explored the data collected regarding the study linking organisational culture, leadership styles, human resource management practices and organisational performance. two hundred and fifty six saudi arabia private firms participated in the study. the data was analyzed using statistical package for the social sciences (spss) application package version 22. an initial data screening and preliminary analysis was performed in order to ensure that the assumptions of multivariate analysis have not been violated. specifically, the assessment of missing values, outliers, normality test and multicollinearity test were performed in the present study. we concluded that the data was fit for further multivariate analysis. introduction the importance of the initial data screening in multivariate data analysis technique cannot be overemphasized because the validity of inferences drawn from statistical test results accuracy of the of results largely depend on the whether the key assumptions of multivariate analysis have been violated or not. although the validity of inferences drawn from statistical test results depends on how well data meet the key assumptions of multivariate analysis, however, literature indicates that many research have been carried our without reporting whether such assumptions are violated or not (hoekstra, kiers, & johnson, 2012). study also suggests that initial data screening in multivariate data analysis technique is intended to identify and correct some methodological errors or at least to minimize their impact on the overall study results (van den broeck, cunningham, eeckels, & herbst, 2005). the purpose of this paper was to explore the data collected regarding the study linking organisational culture, leadership styles, human resource management practices and organisational performance. specifically, our goal was to confirm that the key assumptions of multivariate analysis have been violated before conducting the main analyses for the study. toward this end, the remainder of this paper is organized as follows. in section 2, we the research method employed for this study was highlighted. this is followed by presentation of the and discussion of results in section 3, which are based on assessment of 70 american journal of management vol. 16(1) 2016 missing values, assessment of outliers, normality test, as well as multicollinearity test. finally, based on the results, conclusion was drawn in the section 4. methods sample and procedure the sample for this study was conducted among private firms in saudi arabia. based on the determined sample size of 346, the present study distributed 400 questionnaires to chief executive officers (ceos)/directors of private organizations in saudi arabia. to achieve higher response rate in the present study, several attempts have been made, including phone call reminders, short message services (sms) to those respondents who were yet to complete their survey after one month from the date it was sent to them (dillman, 2000; sekaran & bougie, 2010). hence, these efforts yielded 302 returned questionnaires, out of 400 questionnaires that were distributed to the target participants. this gives a response rate of 76%. of these 302 questionnaires, 32 were invalid and considered unusable as significant part of those questionnaires were not completed by the participants; and the remaining 270 useable questionnaires were used for the analyses. this accounted for 68% valid response rate. therefore, the valid response rate of 68%, based on al-marri, ahmed, and zairi (2007) satisfied all the statistical requirements and proved to be very useful for purpose of testing hypothesized relationships. measures human resource management practices we used 10 items taken from the works of (arthur, 1994) and macdufie (1995) to measure the two dimensions of hrm practices, namely, commitment-based hrm practices, as well as performance based hrm practices. specifically, for each dimension, five items were adapted. however, for the sake of parsimony, hrm practices have been conceptualized as second order the construct. ratings were completed on a seven-point likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree). sample items include: “our organization offers formal training and development of individual skills”. “in our organization, employees work strictly within the assigned tasks”. “in our organization, managers are the ones who make the decisions”. nitaqat status this measure developed for this study aims to determine the current status of the respondent’s company within the general nitaqat scheme. the section consists of two items. the first item directly asks the respondent about the nitaqat status of the company. the choices of answers are: “red”, “yellow”, “green”, “platinum”, and “i do not know”. the second item asks the respondent to indicate an approximate percentage of saudis employed. the second item serves as a confirmation of the current nitaqat status of the company. the choices of answers are: “less than 6%” (corresponds to red nitaqat status), “7-11%” (corresponds to yellow nitaqat status), “12-39%” (corresponds to green nitaqat status), “over 40%” (corresponds to platinum nitaqat status), and “not sure.” organizational culture organizational culture was assessed using an organizational culture assessment instrument (ocai), which reflects four dimensions of organizational culture (hierarchy culture, market culture, clan culture, and adhocracy culture), will be used to measure the kind of organizational culture that prevails in the respondent’s organization. more specifically, twenty items were adapted from ocai to measure aspects of organizational culture. hierarchy culture was measured with five items (e.g., "the organization emphasizes permanence and stability. efficiency, control and smooth operations are important" and "loyalty and truth hold our organization together is loyalty and mutual trust, commitment to the organization runs high."). market culture was measured with five items (e.g., "the management style in the organization is characterized by individual risk-taking, innovation, freedom and uniqueness” and "the management style in the organization is characterized by hard-driving competitiveness, high demands and american journal of management vol. 16(1) 2016 71 achievement"). clan culture was measured with five items (e.g., "the management style in the organization is characterized by security of employment, conformity, predictability and stability in relationships" and "the glue the holds the organization together is the emphasis on achievement and goal accomplishment"). finally, adhocracy culture was measured with five items (e.g., "the organization defines success on the basis of having the most unique or the newest products. it is a product leader and innovator" and "the management style in the organization is characterized by teamwork, consensus and participation"). for each dimension, participants will be asked to state the extent to which they agreed with each statement by using a 7-point likert type scale (1 = strongly disagree, 7= strongly agree). leadership style leadership style was measured using the leadership behavior questionnaire (lbq iv) developed by pearce (1997) and validated by pearce and sims (2002). the original questionnaire includes four key dimensions of leadership: directional, transactional, transformational, and empowering. pearce and sims showed high internal consistency of the items (cronbach’s alpha over .9), and the subsequent empirical studies (e.g., wood, 2005) demonstrated high levels of reliability as well. in total, the section includes 12 items corresponding to the four leadership styles considered in this research. for each style, items from pearce and sims (2002) will be selected. in addition, a general question regarding leadership styles as defined by pearce and sims (2002) is provided. it defines each leadership style and asks the respondent to select the one which matches the leadership style of their organization most. organizational performance organizational performance was assessed using a twelve-item based on the work of delaney and huselid (1996). sample items include: “how would you compare your organization’s performance over the past 3 years in terms of quality of products, service, and programs?” “compared to other organizations that do the same kind of work, how would you compare your organization’s performance over the last 3 years in terms of marketing”? ratings were completed on a seven-point scale ranging from 1 (substantially worse) to 7 (substantially better). results and discussion prior to conducting the main analyses, the data collected were subjected to preliminary analyses in terms of missing values, statistical outliers, normality, linearity, homoscedasticity, and multicollinearity. this was to ensure that the statistical assumptions necessary for multivariate analysis were satisfied. results pertaining to each of the four key assumptions are reported below. missing values missing value “is one of the most pervasive problems in data analysis... its seriousness depends on the pattern of missing data, how much is missing, and why it is missing” (tabachnick & fidell, 2007, p. 62).it is statistically important to check for missing values before conducting any analytic procedures because some statistical packages (e.g., smartpls) will not work even with a single data missing. furthermore, overlooking cases with missing values could lead to the loss of vital information, which subsequently minimizes the statistical power and increases standard errors(peng, harwell, liou, & ehman, 2006). while there is no universally acceptable cut-off in the literature regarding the percentage of missing value in a dataset for valid statistical analysis (schafer, 1999), for instance, argued that a missing rate of 5% or less is immaterial. on the other hand, bennett (2001)asserted that statistical analysis is likely to be valid when the amount of missing value is 10% or less. to determine if there was any value missing in the dataset, the statistical package for the social sciences (spss) was used. the results of the missing values analysis are provided in table 1. 72 american journal of management vol. 16(1) 2016 table 1 result of replaced missing values no variable number of replaced missing values 1 hrc04_1 1 2 hrc05_1 1 3 attitudes_1 12 total number of replaced missing values 14 out of 19,170 data points percentage of replaced missing values .07% note. percentage of missing values was obtained by dividing the total number of randomly missing values for the entire data set by total number of data points multiplied by 100. as shown in table 1, of the 19,170 data points in the spss dataset, 14 were randomly missed, thereby accounting for .07%. in particular, commitment-focused hr practices and performance-focused hr practices had 1 missing value each. finally, attitudes had 12 missing values. despite the fact that .07% missing value in a dataset is still valid for a meaningful statistical analysis (schafer, 1999), it was decided that the missing value be replaced using mean substitution (tabachnick & fidell, 2007). need to explain what mean substitution is. statistical outliers according to tabachnick and fidell (2007), a statistical outlier is “a case with such an extreme value on one variable (a univariate outlier) or such a strange combination of scores on two or more variables (multivariate outlier) that it distorts statistics” (p. 72), and thus leading to type i error and/or type ii error. in this study, two forms of statistical outliers were examined, namely: univariate outliers and multivariate outliers. the former were examined based on standardized values. according to tabachnick and fidell (2007) a case with standardized values of ±3.29 (p < .001) or more is considered to univariate outliers. in line with this threshold, it was found that none of the case was identified to have standardized values above the threshold of ±3.29 (p < .001) or more. hence, no potential univariate outliers were detected. furthermore, to be sure that that assumption of statistical outliers has not been violated in the present study, multivariate outliers were assessed using mahalanobis distance (d2). according to tabachnick and fidell (2007) mahalanobis distance (d2) refers to the “distance of a case from the centroid of the remaining cases where the centroid is the point created at the intersection of the means of all the variables” (p. 74). the results for the assessment of multivariate outliers are presented in table 2. as shown in table 2, the assessment of multivariate outliers was based on 65 observed variables, with recommended threshold of chi-square is 104.72 (p = 0.001). according to hair, black, babin, and anderson (2010) a data case with mahalanobis desistance value greater than the chi-square value is considered to have multivariate outlier. following hair et al. (2010), fourteen multivariate outliers were detected and subsequently deleted from the dataset (table 4). hence, after deleting fourteen multivariate outliers, the final dataset used for the main analyses was 256. american journal of management vol. 16(1) 2016 73 table 2 summary of cases with multivariate outliers respondents id mahalanobis distance (d2) 4 118.07185 67 119.13717 161 116.75945 176 126.26486 190 128.29393 196 113.53889 198 126.4059 199 143.90992 210 110.84645 213 121.42591 226 111.67267 242 127.76731 244 111.22221 247 141.40957 note. n = 65; df = 64; x2 = 104.72; p = .001; d2 = ≥ x2 normality even though pls-sem does not rely on the restrictive assumption of multivariate normal distribution like covariance-based structural equation modeling (hair et al., 2010; hair, ringle, & sarstedt, 2011), checking the behavior of data collected before conducting the main analyses is very crucial. this is because conducting pls-sem analysis with non-normal data can inflate bootstrap standard errors, and, thus, underestimate the structural model relationships(chernick, 2008; hair, hult, ringle, & sarstedt, 2014). to confirm that the normality assumption has not been violated, first, the skewness and kurtosis statistics were checked. according to kline (2011), the assumption of multivariate normal distribution becomes a major concern when the skewness and kurtosis statistics are greater than ±3 and ±10, respectively. table 3 summarizes the descriptive statistics of the normality test. table 3 descriptive statistics for normality test n mean sd skewness kurtosis statistic statistic statistic statistic se statistic se op01 256 5.05 1.586 -.953 .152 .584 .303 op02 256 5.64 1.269 -.804 .152 .241 .303 op03 256 5.65 1.253 -.465 .152 -.850 .303 op04 256 5.33 1.467 -.835 .152 .456 .303 op05 256 5.08 1.464 -.718 .152 .446 .303 op16 256 4.22 1.806 -.480 .152 -.696 .303 op07 256 4.49 1.650 -.516 .152 -.286 .303 74 american journal of management vol. 16(1) 2016 op08 256 4.97 1.406 -.832 .152 .787 .303 op09 256 5.05 1.442 -.667 .152 .341 .303 op10 256 4.98 1.393 -.714 .152 .844 .303 op11 256 5.02 1.357 -.899 .152 1.056 .303 op12 256 4.60 1.488 -.371 .152 -.211 .303 ns01 256 5.04 1.395 -.767 .152 .643 .303 ns02 256 4.97 1.269 -.725 .152 .822 .303 cc01 256 5.27 1.117 -.310 .152 .000 .303 cc02 256 5.40 1.119 -.539 .152 .196 .303 cc03 256 5.26 1.065 -.295 .152 -.127 .303 cc04 256 5.16 1.070 -.102 .152 -.462 .303 cc05 256 5.16 .995 -.254 .152 .146 .303 ch01 256 5.12 1.039 -.139 .152 -.397 .303 ch02 256 4.91 1.219 -.233 .152 -.155 .303 ch03 256 5.06 1.110 -.377 .152 .116 .303 ch04 256 5.37 1.009 -.279 .152 -.267 .303 ch05 256 5.30 1.047 -.557 .152 .963 .303 cm01 256 5.10 1.038 -.048 .152 -.325 .303 cm02 256 5.27 1.029 -.334 .152 -.004 .303 cm03 256 5.16 1.109 -.504 .152 .303 .303 cm04 256 5.11 1.036 -.250 .152 -.151 .303 cm05 256 5.18 1.018 -.330 .152 .535 .303 ca01 256 5.18 1.013 -.390 .152 .504 .303 ca02 256 5.34 1.062 -.465 .152 .535 .303 ca03 256 4.96 .996 -.380 .152 1.017 .303 ca04 256 4.97 .978 -.327 .152 .151 .303 ca05 256 4.75 1.218 -.276 .152 .090 .303 dl01 256 5.76 1.504 -1.518 .152 2.054 .303 dl02 256 5.79 1.461 -1.500 .152 2.214 .303 dl03 256 5.43 1.794 -1.252 .152 .620 .303 tsl01 256 5.21 1.853 -.865 .152 -.303 .303 tsl02 256 5.42 1.926 -1.085 .152 -.087 .303 tsl03 256 5.54 1.701 -1.205 .152 .712 .303 tfl01 256 4.05 1.971 .031 .152 -1.217 .303 tfl02 256 3.77 1.899 .023 .152 -1.048 .303 tfl03 256 4.04 2.007 -.145 .152 -1.153 .303 emp01 256 4.24 2.175 -.252 .152 -1.382 .303 emp02 256 5.23 1.801 -.931 .152 -.025 .303 emp03 256 5.18 1.894 -.810 .152 -.571 .303 hrc01 256 4.55 1.383 -.751 .152 .425 .303 hrc02 256 4.72 1.301 -.686 .152 .502 .303 american journal of management vol. 16(1) 2016 75 hrc03 256 4.85 1.163 -.182 .152 -.206 .303 hrc04 256 4.97 1.269 -.356 .152 -.039 .303 hrc05 256 5.13 1.401 -.776 .152 .388 .303 hrp01 256 4.95 1.467 -.438 .152 .468 .303 hrp02 256 5.40 1.323 -1.073 .152 1.620 .303 hrp03 256 5.22 1.359 -.709 .152 .620 .303 hrp04 256 5.52 1.244 -1.198 .152 2.331 .303 hrp05 256 5.77 1.190 -1.218 .152 2.161 .303 lgcy01 256 2.85 1.632 .768 .152 .056 .303 lgcy02 256 2.89 1.689 .735 .152 -.293 .303 lgcy03 256 2.98 1.819 .795 .152 -.287 .303 lgcy04 256 3.30 1.839 .692 .152 -.448 .303 lgcy05 256 3.13 1.757 .789 .152 -.274 .303 lgcy06 256 2.98 1.823 .849 .152 -.366 .303 lgcy07 256 2.43 1.626 1.307 .152 1.232 .303 lgcy08 256 2.76 1.717 .882 .152 .040 .303 attitudes 256 4.26 1.336 -.217 .152 -.239 .303 as shown in table 3, there was no evidence of violation of the assumption of multivariate normal distribution since the skewness and kurtosis statistics were all below the thresholds of ±3 and ±10, respectively. to further verify whether the data collected follows the normal distribution curve, both histogram and the normal probability plot (p-p plots) of the regression standardized residual were considered in this study. figure 1 normal probability plots as demonstrated in figure 1 and figure 2, the data collected conformed to normal distribution curve. hence, it can be concluded that the assumption of multivariate normal distribution was not violated. 76 american journal of management vol. 16(1) 2016 linearity linearity assumption states that the relationships between predictor variables and dependent variables are linear in nature(casson & farmer, 2014). because pls path modeling belongs to the family of regression analysis, it is important to confirm if the linearity assumption is met, so as to avoid underestimation of the relationship between the independent variables and dependent variables. linearity assumption is usually confirmed through partial regression plot between each predictor variable and the predicted variable (hair et al., 2010). furthermore, most of the residuals should be scattered around zero point, as well as having a straight-line relationship with predicted dependent variable scores(pallant, 2010). the results of linearity test (figure 2) showed that the relationships between the independent and the dependent variable were linear because most of the residuals depicted straight-line relationships with predicted dependent variable scores, and also scattered around zero point. thus, it can be concluded that the linearity assumption had been verified before conducting the main analysis. figure 2 partial regression plots homoscedasticity homoscedasticity (i.e. equality of variances) is defined as a situation where the variance on a criterion variable appears to be constant over a range of predictor variables (hair et al., 2010). it is also imperative to confirm whether the assumption of homoscedasticity has been satisfied before undertaking the main analysis because when the variance on a criterion differs over a range of independent variables, heteroscedasticity becomes a major concern. hence, heteroscedasticity can seriously distort findings of the study, thereby increasing the chance of committing type 1 error(hair et al., 2010). similar to linearity, homoscedasticity assumption was and tested by analyzing a residual plot, and that scattered around zero point. as depicted in figure 3, the assumption of homoscedasticity was not violated since the residual plots mostly scattered around zero point. figure 3 scatter plot of the residuals american journal of management vol. 16(1) 2016 77 multicollinearity in order to confirm whether the assumption of multicollinearity had been satisfied, tolerance and variance inflation factor (vif) values were checked. statistically, tolerance value is defined as 1 minus the proportion of the variance that is explained (r2 value) for the regression of one independent variable on all remaining independent variables (allison, 1999). on the other hand, vif refers to the reciprocal of the tolerance (1/1-r2) and it indicates the magnitude of inflation in the estimated regression coefficients by the existence of correlation among the predictor variables in the model (allison, 1999; jani, 2014). according to hair et al. (2010), tolerance values above .10 and vif values less than 10 indicate no multicollinearity among the independent variables. table 6 summarizes the results of multicollinearity test among independent variables. table 4 shows that the tolerance values ranged from .296 to .865, and vif values ranged from 1.156 to 3.374, thereby suggesting that multicollinearity was not a major concern in the present study. table 4 results of multicollinearity test exogenous latent variables collinearity statistics tolerance vif nitaqat status .791 1.264 clan culture .365 2.736 hierarchy culture .325 3.076 market culture .296 3.374 adhocracy culture .376 2.661 directional leadership .540 1.850 transactional leadership .641 1.561 transformational leadership .745 1.343 empowering leadership .677 1.478 commitment focused hr practices .805 1.243 performance focused hr practices .865 1.156 legitimacy .678 1.475 conclusion in spite of the fact that initial data screening and preliminary analyses add to the credibility of multivariate technique, literature indicate that many research that have been carried out in management related discipline did not report whether the key assumptions of multivariate analyses have been violated or not. having performed data screening and preliminary analyses, we found that data collected for this study has not violated multivariate assumptions, including assessment of missing values, assessment of outliers, normality test, as well as multicollinearity test. hence, we concluded that the data was fit and suitable for further multivariate analyses. references al-marri, k., ahmed, a. m. m. b., & zairi, m. 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(2008). bootstrap methods. a guide for practitioners and researchers (2nd ed.). hoboken, new jersey: wiley. delaney, j. t., & huselid, m. a. (1996). the impact of human resource management practices on perceptions of organizational performance. academy of management journal, 39, 949-969. doi: 10.2307/256718 dillman, d. a. (2000). mail and internet surveys: the tailored design method (2nd ed.). new york: john wiley & sons, inc. hair, j. f., black, w. c., babin, b. j., & anderson, r. e. (2010). multivariate data analysis (7th ed.). upper saddle river, new jersey: prentice hall. hair, j. f., hult, g. t. m., ringle, c. m., & sarstedt, m. (2014). a primer on partial least squares structural equation modeling (pls-sem). thousand oaks: sage publications. hair, j. f., ringle, c. m., & sarstedt, m. 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(2006). advances in missing data methods and implications for educational research. in s. s. sawilowsky (ed.), real data analysis (pp. 31-78). charlotte, north carolina: information age publishing. schafer, j. l. (1999). multiple imputation: a primer. statistical methods in medical research, 8(1), 3-15. doi: 10.1177/096228029900800102 sekaran, u., & bougie, r. (2010). research methods for business: a skill building approach (5th ed.). new jersey: john wiley and sons. tabachnick, b. g., & fidell, l. s. (2007). using multivariate statistics (5th ed.). boston, ma: allyn & bacon/pearson education. van den broeck, j., cunningham, s. a., eeckels, r., & herbst, k. (2005). data cleaning: detecting, diagnosing, and editing data abnormalities. plos med, 2(10), e267. american journal of management vol. 16(1) 2016 79 ajm 18(3) master2.pdf assessing the effectiveness of outsourcing human resources recruiting david m. savino ohio northern university the wave of outsourcing indicates the willingness on the part of many organizations to contract out many business functions including those in the human resources area. one such common outsourced hr function is recruiting, sometimes referred to as recruitment processing outsourcing (rpo). while this is a very common phenomenon, the surprising fact is that the quality of the partnership relationship seems to be taken for granted and many times with little or no assessment. this paper is an attempt to determine if outsourcing of hr recruiting functions is actually achieving the initial expectations developed when the partnership was first proposed. introduction as the amount and degree of outsourcing of human resource functions continues to increase, the issues of value, creating competitive advantage and the support of organizational strategy constantly come up for thought and discussion. there is no doubt that hr outsourcing in and among itself is a strategic choice that most companies have decided to adopt that brings with it a whole host of possibilities when thinking about the best way to perform certain human resources functions that traditionally were always done in house. basically, hr outsourcing in its most general form means that an organization has, for various reasons, decided to delegate some of its non-core functions to an outside partner or intermediary who can provide a degree of expertise that will support an organization’s core abilities better than having all of its functions performed by in house resources (dapper, 2013). in an ever changing environment characterized by a fluid economy, expanding intense globalization, nonstandard work arrangements and intense competition outsourcing human resource functions not only seems logical but also a necessity (kock et al., 2013). the evidence is clear that outsourcing all kinds of organizational functions including those in human resources shows a significant shift in responsibility from inside to outside that will not only continue for decades to come but also in its scope of degree of robust and rapid growth (hauser, 2011). the basic reasons for the continued use and the rapid growth of outsourcing are numerous. they range from supporting the organization’s overall strategy, leveraging competitive advantages, emphasizing more core competencies, cost efficiencies, expanding into new markets, reducing liabilities and risk and utilizing more highly skilled expertise not found within a given organization (green et al., 1999; belcourt, 2006; ee et al., 2013). while past research indicated that most hr outsourcing was done as a time and money saving proposition as a way to pay less for certain services, the reality is that the decision was sometimes made too hastily and without adequate information to actually justify using outsourcing (jeffay et al., 1997; wallace, 1998). even though outsourcing is not a new phenomenon its value is still being debated in spite american journal of management vol. 16(2) 2016 17 of all the in depth analysis that has been done concerning its relative advantages and disadvantages (dapper, 2013). table 1 shows some of the perceived positive and negative effects of outsourcing. table 1 perceived positive and negative effects of outsourcing perceived positive effects perceived negative effects freeing time for core competencies loss of in-house knowledge gaining innovative hr expertise gap in what is needed versus what is delivered networking for better hr knowledge risk of conflict with outside partners enhancing the strategic focus of in-house functions lack of custom made systems and processes use of standardized and validated methods lack of total accountability reducing the need for hr staff potential higher costs when results fall short _____________________________________________________________________________________ adapted from kock et al., 2012 despite the growth and popularity of hr outsourcing in recent years there appears to be little empirical evidence to show how outsourcing decisions are made, how these decisions are implemented and quite surprising how the effectiveness of outsourcing is measured and its implications for the overall performance of the hr function (cooke et al., 2005). assessing recruitment processing outsourcing (rpo) when it comes to human resources the usual question deals with which hr functions to outsource and which ones should an organization maintain control over. one way to answer that question may be to look to a study done several years ago. a survey conducted by vernon and others (2000) of almost 4,000 organizations found that the most common hr functions that were outsourced were training and development, recruiting and selection, pay and benefits and workforce outplacement and reduction. while all these functions are extremely important, no other function directly gets to the heart of how organizations develop and maintain a competitive advantage as does the recruiting function. the essential nature and significant strategic priority of developing and maintaining a highly competitive organization for years to come is firmly embedded in an organization’s recruiting efforts. according to taylor (2010) the necessity to attract, retain and motivate a highly qualified workforce should be a major strategic priority as achieved through the performance of hr functions based on perspectives that are military-style, alignment-focused, future-oriented and look to the employment market to achieve long-term success. the important nature of recruiting and its tie to the future continued success of the organization may lead some to wonder why this function would be so commonly delegated to an outside partner. the beginnings of recruitment processing outsourcing (rpo) seem to date back to the early 2000s based on the idea that it was awash with low-value, high administrative work that made it best suited for outsourcing (leggett, 2007). it was and is generally thought by many that using consultants, outside recruiters and placement organizations is desirable because of the vast amount of routine work required to deal with the early stages of identifying an applicant pool for potential hiring (armstrong, 2003). however, while it is generally true that many of the basic hr recruiting functions may be outsourced to a partner organization, many of the higher level recruiting and selection final decisions are still retained inhouse therefore achieving a separation between administrative and strategic human resource management (ume-amen, 2010). administrative human resources performed by business partners is focused more on day-to-day operational hr functions while strategic hr performed by the organization’s in-house hr professionals 18 american journal of management vol. 16(2) 2016 is more concerned with how well the performance of human resources functions aligns with the overall organizational success. this evolving hr model relies on the separation of the performance of hr functions where the measurement of administrative duties is based on cost factors such as cost per hire and turnover rates while strategic hr is measured on how far hr outcomes support overall organization strategy (ulrich, younger & brockbank, 2008). measuring and evaluating rpo performance obviously, for rpo to work well the outcomes and expectations for both parties need to be well defined, effectively communicated and mutually agreed to. as a result of a great deal of deliberation and analysis of the rpo option organizations expect better recruiting results in a more efficient manner. the interesting fact is that organizations, to some degree, may have more leverage in gaining these results based on the idea that, unlike an organization’s own hr recruiting staff, outsourcing partners do not need to be compensated until the contracted services have been provided at a level of quality and quantity as initially agreed to by the two parties (green et al., 1999). according to lever (1997) the monitoring and the evaluating of outsourcing vendors should include factors such as clearly stated recruiting expectations and targets up front based on agreed to measures, accurate and frequent status reporting, vendor notifications if goals are not being met and some type of satisfaction surveys of the people being recruited to determine their perceptions of the recruiting process as handled by the vendor. of all the hr functions, recruitment may be argued as the most important one in terms of its implications for the organization when it comes to current and future employees (heikkonen, 2012). recruitment is such a vital process related to the organization’s core functions because it’s not only the most likely source of developing and maintaining a competitive advantage but it’s an important way to support organizational strategy, promote corporate culture and the way to insure success for decades to come. whether outsourced or not, recruitment deals with the high quest of promoting and supporting organizational success through the acquiring of talent and talent management when combined with enlightened or knowledge management (whelan and carcary, 2011). while talent management is extremely important factor behind hr outsourcing and rpo, a significant primary driving force is also cost, cost savings and time efficiency (chartered institute of personnel and development, 2009; bentley, 2007). however, while cost benefit discussions are important they are sometimes tempered by nonfinancial factors that deal with the outcomes and consequences of rpo related to the levels of satisfaction and quality (cooke et al., 2005; belcourt, 2006). factors related to enhanced quality of candidates achieved through rpo along with expertise availability are key success indicators that organizations seek (chartered institute of personnel and development, 2009; chiang et al., 2010). according to research, areas where internal organizational recruiting managers were highly satisfied deals with the creation and communication of a hiring plan, the skills, expertise and advice of the vendor recruiter and offer management (johnson et al., 2014). in addition, it is important to note that a great deal of the evaluation of the results achieved through rpo are as much about various costs as it is about the fundamental perceived recruiting outcomes. cost advantages can be argued as a driving force of any outsourcing activity. as one study indicated, about two-thirds of those surveyed agreed that the fundamental reason for recruiting outsourcing was the need to cut costs (heikknon, 2012). interestingly, the areas of perceived dissatisfaction with rpo were with process components dealing with advertising and candidate sourcing, quality of candidates supplied, pre-screening assessment and employer branding (johnson et al., 2014; heikknon, 2012). as might be imagined the inability to consistently deliver on cost control in a significant way was a major area of concern in the review of rpo arrangements (hauser, 2011). in addition, the ability of rpo to deliver in the area of organizational value, recruiting expertise and being fit for purpose also indicates needed areas of improvement (johnson et al., 2014). american journal of management vol. 16(2) 2016 19 developing a true partnership with all the assessments and evaluations of the performance of rpo providers one thing seems very clear. the need for greater recruiter assimilation with its client organization from a cultural perspective is essential (johnson et al., 2014). selecting a partner who is compatible in terms of an organization’s vision, values, goals and culture is very important and can save resources, time and effort in the need to educate a partner on these elements (rafter, 2006). contrary to this felt need and view is the reality that the partnership aspects of hr recruiting may be lacking. existing literature on partnership seems to suggest that the relationship between partnership quality and successful outsourcing outcomes are being taken for granted (abdul-halim et al., 2014). partnership quality that relies on mutually shared values among the parties is very important in the achieving high hr outsourcing outcomes (ren et al., 2010). however, there seems to be a fear that hr practitioners lack the knowledge in selecting their outsourcing partners and even how this outsourcing relationship should be managed (ates, 2013). since the partnership concept is not new those in hr recruiting considering rpo should look to the successes achieved by those in marketing and organizational systems research that promote sustained social connections in business (raman et el., 2013; ren et al., 2010). in light of this, there are two different views that may be considered in developing a successful hr recruiting outsourcing relationship based either on a transactional approach or a true working partnership style (abdul-halim et al., 2014). the transactional style rpo is based on formal contracts that dictate specific exchange processes that involves some risk as well as benefits gained while the true partnership promotes the achievement of mutually agreed to organizational objectives and the building of competitive advantage in their respective industries (ates, 2013). while both seem viable options it appears that the partnership concept may yield the better results when it comes to hr recruiting being outsourced through rpo which promotes partnership quality based on trust, commitment, benefit and risk sharing, controllable conflict, business understanding and effective communication (swar et al., 2012). conclusions and implications for successful rpo relationships to take place the roles of the internal hr manager and external recruiter need to be well defined and executed to facilitate a seamless, high quality recruiting experience that is fit for purpose based on high capabilities, solid advice and expert skills (johnson et al., 2014). the key to it all seems to be that each organization considering to outsource for the first time or those who wish to continue to outsource hr recruiting needs to know what the real purpose actually is as far as why it is done. the main advantage may well come from what organizational customers want from the rpo experience, be it expertise, process excellence, cost considerations or some specific accommodation of a recruiting scenario (heikknon, 2012). to some extent one measure of rpo success may be the willingness of organizations to provide positive levels of rpo endorsements of the process and an overall willingness to recommend that others do it (johnson et al., 2014). with the complexity of recruiting and selection it may be wise to prioritize what specific dimensions may be achieved through a hybrid approach based on a mix of internal-external expertise (heikknon, 2012). the partnership relationship in rpo may then best determine recruiting responsibilities based on respective structures, abilities and market awareness (gospel and sako, 2010). the ultimate assessment of rpo may well come down to the evaluation and the assessment that needs to be done in comparing rpo to traditional recruitment efforts. instead of electing to do rpo because it seems to be the thing to do as a current overwhelming wave, the real reason may come down to the balance achieved through successful rpo that allows organizations to concentrate on other important core competencies and strategies. no doubt somewhere in all this review and assessment the cost and cost savings achieved of rpo are not going to be forgotten or minimized. therefore, post-process evaluations of rpo will most likely include measurements such as cost per hire or quality of hire (heikknon, 2012). overall, most organizations realize that recruiting needs are rapidly evolving and changing. future effective partnerships in rpo may well depend on the providers ability to quickly adapt to the customer demands such their continuing 20 american journal of management vol. 16(2) 2016 priority to concentrate on their own core business competencies and the need for new and improved recruiting innovations that can be delivered in a cost efficient manner ( hauser, 2011). regardless of the reasons of exactly why rpo is done, it definitely continues to grow and appears to be a long-term strategy for organizations that employ it. references abdul-halim h., ee, e., ramayah, t. and hazlina ahmad, n. (2014). human resource outsourcing success: leveraging on partnership and service quality. sage open, july-september, pp. 1-14. armstrong, m. (2003). human resource management practice. 9th edition, sterling usa, kogan page ltd. ates, m.f. (2013). the effect of partnership quality on outsourcing success in human resource functions. international journal of academic research in business and social sciences, 3, pp. 705-731. belcourt, m. (2006). outsourcing – the benefits and the risks. the new world of work and organizations, vol. 6, issue 2, june, pp. 269-279. bentley, r. (2007). perfect partners: picking the right mix. personnel today, july, pp. 20-24. chaing, f., chow, i. and birtch, t. (2010). examining human resource outsourcing in hong kong. the international journal of human resource management, vo. 21, no. 15, pp. 2762-2777. chartered institute of personnel and development. (2009). hr outsourcing and the hr function. threat or opportunity? chartered institute of personnel and development, london. cooke, f.l., shen, j. and mcbride, a. (2005). outsourcing as a competitive strategy? a literature review and an assessment of implications. human resource management, vol. 44, no. 4, pp. 413-432. dapper, e. m. (2013). personnel outsourcing and corporate performance. european journal of business and management, vol. 5, no. 26, pp. 150-155. ee, e., abul halim, h. and ramayah, t. (2013). hr outsourcing success: does partnership quality variables matter? journal of business economics and management, vol. 14, no. 4, pp. 664-676. gospel , h. and sako, m. (2010). the unbundling of corporate functions: the evolution of shared services and outsourcing in human resource management. industrial and corporate change, vol. 15, no. 5, pp. 1367-1396. green, c. r., youngblood, s. a., and gray, d. a., (1999). human resource management outsourcing: the make or buy decision. academy management executive, vol. 15, no. 3, pp 85-96. hauser, s. g. (2011). recruitment outsourcing is the wave of the present. workforce management, vol. 90, issue 2, pp. 12-14. heikknon, m. (2012). the rationale and effectiveness of recruitment outsourcing. masters thesis, department of management, aalto university school of economics, finland. jeffay, j., bohannon, s. and laspia, e.k. (1997). beyond benefits: the changing face of hr outsourcing. benefits quarterly. johnson, g., wilding, p. and robson, a. (2014). can outsourcing deliver satisfaction? a hiring manager perspective. personnel review, vol. 43, no. 2, pp. 303-326. kock, h, wallo, a, nilsson, b and hoglund, c. (2012) outsourcing hr services: the role of human source intermediaries. european journal of training development, vol. 36, no. 8, p 772-790. leggett, r. (2007). how to decide if recruitment outsourcing is right for you. strategic hr review, vol. 7, issue 1, pp. 32-41. lever, s. (1997). an analysis of managerial motivations behind outsourcing practices in human resources. human resources planning, 20(2), pp. 37-47. rafter, m.v. (2006). the culture connection. workforce management, vol. 87, no. 12, pp. 39-47. raman, r., chadee, d., roxas, b. and michailova, s. (2013). effects of partnership quality, talent management, and global mindset on performance of offshore it service providers in india. journal of international management, 19, pp. 333-346. american journal of management vol. 16(2) 2016 21 ren s. f., ngai, e.t. and cho, v. (2010). examining the determinants of outsourcing partnership quality in chinese small-and medium-sized enterprises. international journal of production research, 48, pp. 453-475. swar, b., moon, j., oh, j., and rhee, c. (2012). determinants of relationship quality for is/it outsourcing success in public sector. information systems frontiers, 14, pp. 457-475. taylor, s. (2010). resourcing and talent management, 5th.edition, chartered institute of personnel and development, london. ulrich, d., younger, j. & brockbank, w. (2008) the twenty-first century hr organization. human resource management. vol. 47, no. 4, p. 829-850. ume-amen (2010). outsourcing of recruitment and selection is beneficial for an organization: individual analysis of ten banks including local and multinational. interdisciplinary journal of contemporary research in business. vol. 2, no. 5, p. 355-383. vernon, p., phillips, j., brewster, c., and ommeren, j. (2000). european trends in hr outsourcing. report for william m. mercer and the cranfield school of management. wallace, k. s. (1998). avoid the 10 major pitfalls of outsourcing. workforce , vol. 77, no. 9 , september, pp. 44-45. whelan, e. & carcary, m. (2011). integrating talent and knowledge management: where are the benefits? journal of knowledge management. vol. 15, no. 5, pp. 675-687. 22 american journal of management vol. 16(2) 2016 american journal of management vol. 24(4) 2024 29 integrating philosophy into the entrepreneurship curriculum: using stoicism as a practical guide for entrepreneurship students lawrence s. silver southeastern oklahoma state university management education, and by extension, entrepreneurship education, is most effective when the ideas taught in the classroom are relevant to the workplace. the need to carefully examine business school curricula was presented in the 2013 book by the graduate management admissions council, disrupt or be disrupted: a blueprint for change in management education. one way for entrepreneurship programs to remain relevant is to keep up with current ideas and actions of practitioners. this paper examines stoic philosophy, which is currently popular with many entrepreneurs and business leaders. the author argues that educators may want to integrate stoic philosophy into the entrepreneurship curriculum. keywords: entrepreneurship education, philosophy, stoicism introduction management education faces increasing competition, not only from other business school programs but from companies such as google and microsoft as well. one reason for this competition is that some new entrants in management education see, in traditional business schools, an emphasis on theory and academic research and a lack of practical instruction (gmac, 2013). this paper proposes needed changes in the entrepreneurship curriculum to address this problem. over the past few years there has been a great deal of innovation in entrepreneurship education. universities have instituted courses in design thinking (thompson and schonthal, 2020) and quality function design (sagnak, aba, kazancoglu and tayaksi, 2017). universities have also integrated entrepreneurship with the fine arts (archino, lanier, and mcclain, 2020), and with classic literature (benson, 1992). in addition, some small liberal arts colleges are becoming entrepreneurial incubators and incorporating entrepreneurship into the liberal arts curriculum (baker and powell, 2019). while these changes in entrepreneurship education are aimed at better preparing students for the “real world” of entrepreneurship, practitioners have adopted a method of handling the frustrations of starting and managing a new business through the ideas of stoic philosophy. such well-known entrepreneurs as warren buffett, bill gates, jeff bezos, elon musk, eugenio pace, and aytekin tank practice the teachings of stoicism (holiday, 2017). for entrepreneurship education to remain relevant, educators need to examine what these successful entrepreneurs see in stoic philosophy as an element of their success and consider incorporating the philosophy into the entrepreneurship classroom. the purpose of this paper is to outline the basic concepts of stoic philosophy, how the philosophy applies to business education and, specifically, to entrepreneurship. 30 american journal of management vol. 24(4) 2024 history of stoicism in 323 bce, alexander the great died without a legitimate heir. in 31 bce, there was a naval battle at actium, which off the western coast of greece. caesar octavian (later caesar augustus) defeated the forces of marc antony and cleopatra. the time between these two events was known as the hellenistic period. it was a time when a number of philosophical schools developed in greece, including the stoic school of philosophy (pigliucci, 2021). stoicism was founded by zeno of citium (present day cyprus). the school was called stoicism because zeno’s followers met in a public space known as the stoa poikile, or painted porch. stoa, then became a way to refer to the school. ancient stoic philosophers include seneca, epictetus and the roman emperor, marcus aurelius. enlightenment philosophers who were heavily influenced by stoicism include baruch spinoza, immanuel kant, ralph waldo emerson, and henry david thoreau (pigliucci, 2021). it should be noted that during the hellenistic period, philosophy was not an academic subject. philosophy was a way one lived to live the best life possible, not in the sense of wealth or fame, but in the sense of being the best human one could be. achievement of this goal was known as eudaimonia. stoic philosophy experienced a revival in popularity in the 20th century. in addition to entrepreneurs previously listed, stoic philosophy influenced nelson mandela, gandhi, and vice-admiral james stockdale. mandela and stockdale both credit their ability to withstand long periods of time in prison (mandela in south africa during apartheid and stockdale as a seven-year prisoner of war in vietnam) to their practice of stoicism (holiday, 2017). additionally, the popular counseling technique of cognitive behavioral therapy (cbt) is based on stoic philosophy (robertson, 2019). modern stoic philosophy: what it is there are three ideas central to modern stoic thought. one is that we do not control our lives or the world as much as we think we do. two, we can recover from misfortunes (such as failure in a new venture) by focusing on what we can control. third, rather than pursue wealth and fame, it is more important to live by reason and as a good member of the human community. thus, stoicism is a philosophy that encourages human betterment by living reasonably and pro-socially. in addition, it provides a way for us to not be unnecessarily swayed by either fortune or misfortune. we are to govern our lives from within rather than being driven by external forces (pigliucci, 2017). the life stoics seek is one worth living, eudaimonia in greek, and this is achieved when we deploy wisdom for the betterment of society. eudaimonia is achieved through the four cardinal virtues and the dichotomy of control pigliucci, 2021). the four cardinal virtues are practical wisdom, courage, justice, and temperance. table 1 illustrates these four virtues and their meaning. table 1 four cardinal virtues virtue explanation practical wisdom informs us of the difference between what we can change and what we cannot change. courage courage, in stoic philosophy is first and foremost moral: the courage to do the right thing. justice informs us of what the right thing is. temperance this is the idea that action should be taken in the right measure. adapted from pigliucci (2021) american journal of management vol. 24(4) 2024 31 dichotomy of control the dichotomy of examines what we do and do not control. under our control are our judgements, opinions, values, motivation, and aversions. other people may well, and often do, attempt to influence our thoughts, opinions, and values, but the decision is ultimately ours. in contrast, our reputation, status in life, body, and property are not under our control. we can influence them, but we cannot control the outcome. for example, we can eat a healthy diet and go to the gym but still get sick. another example has to do with reputation. we can work hard for the betterment of humanity and build trust with our clients only to see this trust destroyed on social media. the roman writer cicero explained it this way. an archer can be diligent in practice, selecting the right equipment, and focus intently on the target, but once they let go of the arrow, nothing is under the archer’s control. wind might blow the arrow off target, or someone may throw a rock and deflect it (beverly, 2016). thus, once a person understands the dichotomy of control, they no longer concern themselves with outcomes – only with the soundness of their decisions. once this is practiced, we do not attach our selfworth to outcomes, but only to the attempt. the greeks call this ataraxia, which is an inner tranquility that comes when we realize we have done everything that is in our power to do. virtue underlying all stoic philosophy is a system of virtue ethics. the stoics agreed with socrates that virtue is the chief good for a human life. ethics, for the stoics, is not just about doing what is right or wrong. it is about how to become a better person. thus, virtue ethics focuses on a person’s character. the question, then, is not “is my action right or wrong?” it is “what would a virtuous and just person do in this situation?” (pigliucci, 2017, 2021). stoics believe that one’s health, wealth, education, or station in life do not make them either a good or bad person. a person can be virtuous, and indeed should live a virtuous life, under any circumstances. thus, one’s particular life situation is indifferent to living a virtuous life. however, people do differ in their life situations, and the stoics divided these into “preferred” and “dispreferred” indifferences (pigliucci, 2021). since most of us would prefer to be financially well off and physically healthy, these are examples of preferred indifferences. in contrast, poor health, poverty, and a low status occupation are considered dispreferred indifferences. again, the point is that none of this prevents us from living a life worth living. modern stoicism: what it is not despite the extensive popular literature on stoicism, a number of misconceptions persist. an extended discussion of these misconceptions is beyond the scope of this paper, but several of the most common ones are presented here. the google definition of the word stoic is “a person who can endure pain or hardship without showing their feelings or complaining.” while this, on its face, is true, it is the methods of achieving this that are not well understood. in fact, stoic philosophy is about living a life worth living filled with happiness and joy. this is best achieved with several stoic practices. one is understanding and living by the dichotomy of control discussed in the previous section. another is to frame death in a way that removes anxiety about death. the fact that everything on this earth is impermanent and we never know when our last day is encourages us to live life to the fullest each day we are given (weaver, 2020). another misunderstanding is that stoicism teaches withdrawal from the world. yet engagement in the world is encouraged by stoic philosophy. two of the most famous ancient stoics were seneca the younger who served in the roman senate and as an advisor to the roman emperor nero and marcus aurelius who served as emperor of rome. moreover, a list of modern stoics who are active in public life was offered in the introduction to this paper (weaver, 2020). the most often cited criticism of stoicism is that it is humorless and involves an unfeeling approach to other people. stoicism has no problem at all with humor and finds it always preferrable to anger. seneca 32 american journal of management vol. 24(4) 2024 tells a story about the roman senator cato, a stoic role model when was in a debate on the senate floor with lentulus. as cato was arguing his case, lentulus – that violent partisan, remembered by our fathers -gathered as much thick saliva as he could and spat right in the middle of cato’s forehead. cato wiped his face and said, “i’ll assure everyone, lentulus, that they’re wrong when they sat, you’re not worth spit.” (seneca, on anger 3.38.2) [farnsworth, 2018] in terms of suppressing emotions, there is also a common misunderstanding. the stoics see three categories of emotions. the first is pre-emotions over which we really have no control. examples are blushing and the beginning of anger. the second category is unhealthy emotions, which interfere with reason. these include full-fledged anger hatred, and fear. we should never act based on unhealthy emotions. finally, there are healthy emotions, which are to be mindfully cultivated. these include proper love, proper joy, and a sense of justice (farnsworth, 2018). stoicism and entrepreneurship the principles of the stoics discussed above are useful and transferable skills for entrepreneurs. stoicism, as a whole philosophy of life, helps maintain emotional resilience in the face of adversity that is sure to occur in new ventures. it also gives a deeper sense of purpose and meaning to our endeavors (robertson). below are some statements from prominent entrepreneurs who believe stoic philosophy has contributed to their entrepreneurial success. jonathan newhouse, ceo of conde nast says this is how stoicism influenced his world view: “people devote a lot of time and emotional effort to things that are beyond their control – what other people do, how other people react to them, even the weather…the stoics recognized it was foolish or counterproductive, to attach oneself to things that are beyond. one’s control. when there are things within one’s control – one’s thoughts, attitudes, and moral purpose” (robertson, 2019). eugenio pace, ceo, and co-founder of autho puts it this way: “being an entrepreneur in the tech world means creating new experiences, opening untapped markets and forging new paths. starting a business is risky and involves. charting foreign territory. that’s why i find the teachings of the stoics important for remaining grounded through tumultuous endeavors” (roberson, 2019). chris meyers, co-founder, and ce) of bodetree is also a fan of stoic philosophy. he writes: “what if i told you there’s a school of philosophy dating back to ancient greece that can help you handle all those obstacles on a daily basis and as a bonus, may even enrich your quality of life? and better still, you don’t have to be a scholar to figure out how to use it. it’s called stoicism, and it’s a practical philosophy that’s used by some of today’s greatest thinkers and business minds, including tim ferris, ryan holiday, ariana huffington, and jack dorsey” (roberstson, 2019). finally, nassim nicholas taleb wrote in his bestseller, antifragile: “seen this way, stoicism is about the domestication, not necessarily the elimination, of emotions. it is not about turning humans into vegetables. my idea of the modern stoic sage is someone who transforms fear into prudence, pain into information, mistakes into initiation, and desire into understanding” (taleb, 2012). american journal of management vol. 24(4) 2024 33 the question then is how entrepreneurs can apply these principles. ryan holiday outlines four principles for application. first, make the best use of your time. this relates to the stoic idea of the impermanence of all things and that we will all die. he suggests creating a “to do” list with achievable tasks and to be clear with your intentions for the day. second, be the master of your emotions. he notes that while we cannot control events, we can control our reaction to events (dichotomy of control). the stoic entrepreneur is a master of their emotions and in control of their daily habits. third, walk the path of virtue. entrepreneurs are faced with a number of ethical dilemmas. he suggests they think of ways to solve the ethical problem and to choose the most virtuous path. finally, develop self-mastery. the greeks used the word askesis for this type of self-discipline. incredible outcomes are possible when we are masters of our time and our actions (holiday, 2017). these are just a few examples of how stoic philosophy can be applied to entrepreneurship. regardless of what we, as academics teach in the classroom, it is obvious that stoic philosophy is a driving force for many successful entrepreneurs. conclusion we have argued that stoic philosophy has gained a wide following with many successful entrepreneurs. stoic philosophy is also practiced by a number of professional sports teams and athletes and is popular with business authors and psychologists who practice cognitive behavioral therapy. to remain relevant, business schools may want to consider incorporating stoic philosophy into the entrepreneurship curriculum. in the introduction, we cited an essay from the graduate 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