Leadership & Organizational Behavior

When will individuals accept or reject systems that subordinate them, when will they take actions that will challenge these status hierarchies, and when will such challenges be more intense, overt, and non-normative? Research suggests that individuals often justify and maintain systems that subordinate them, yet we suggest that there are certain boundary conditions that predict when individuals will no longer accept their place in such systems.

Counterfactuals are thoughts of what might have been. They are mental representations of alternatives to past occurrences, features, and states. As such, they are imaginative constructions fabricated from stored representations, typically embracing a blend of traces from both episodic and semantic memory.

In this paper, we examine people's appraisals of unusual objects and their intuitions about whether others will like those objects. Prior work suggests uniqueness motives (e.g., Need for Uniqueness) affect appraisals, but the effect of these motives on projection of appraisals to others is unclear. Contrary to some prior work, we argue that uniqueness motives do not govern projection of appraisals but rather that individual differences in perceived similarity to a target group do.

We survey and interview more than 400 executives to determine the factors that drive reported earnings and disclosure decisions. We find that managers would rather take economic actions that could have negative long-term consequences than make within-GAAP accounting choices to manage earnings. A surprising 78% of our sample admits to sacrificing long-term value to smooth earnings. Managers also work to maintain predictability in earnings and financial disclosures.

In this paper, we analyze the optimal policy for a risk averse agent who wants to sell a large block of shares of a risky security in the presence of price impact and transactions costs. Our framework reduces to the standard Merton portfolio problem in the absence of any market frictions. Optimal liquidation results in revenue distributions which are substantially different from those generated by a naive strategy. The main tradeoff involves choosing between revenue distributions which have high means versus those which have low variances.

Despite the influx of measures which can be customized to the demands of each business unit (e.g., customer satisfaction surveys and quality indices), many firms have been dogged in their reliance on standardized measures (e.g., conventional financial metrics) in performance evaluation. In this paper, we consider one justification: though customized measures may more accurately target the goals of a particular unit, standardized measures may offer more meaningful opportunities for relative performance evaluation.

In the Public Company Accounting Oversight Board's Sep 2004 Standing Advisory Group Meeting, one of the sessions was devoted to verifiability concerns regarding fair values. At that meeting, some participants expressed the opinion that accounting estimates pose broader problems beyond computing fair values, and investors need to be educated about the role of estimates in financial statements. This paper suggests an extension to the existing accounting model to allow users to better understand the role of estimates/forecasts in financial statements.