Knowledge that Transforms

This paper studies the identity transitions of East German audit recruits during the fundamental ideological, economic, and societal change brought about by the reunification of Germany in 1990. Integrating the identity work literature with key concepts from Pierre Bourdieu and Erving Goffman, we build on semi-structured interviews with two groups of recruits—university graduates and former state auditors—to explore and theorize the marked differences observed in these recruits' transition processes. In line with wider processes of territorial stigmatization, we argue that the West German audit firms pragmatically instrumentalized their local personnel, seeking to deploy them without intending to integrate them into the profession. In turn, the audit recruits met with this exertion of symbolic violence by managing a ‘spoiled identity’. The university graduates found it easier to recognize and accumulate legitimate forms of capital, thereby submitting themselves to the inculcation of the profession's socialization process, which ultimately yielded their institution into the profession. In contrast, the former state auditors' local knowledge and access to client networks provided immediately useful capital to the West German firms, which, however, sought to retain a status differential vis-à-vis these recruits. As a result of such strategies of condescension, the former state auditors maintained key aspects of their identity as a salient part of their self-conception. We further highlight the role of the local audit offices in the recruits' transition processes, as they evolved from flexible spaces, which allowed for experimentation and improvisation, into more structured units. This process embedded professional values and practices, thereby creating localized office identities.

The unprecedented contagion of the SARS-CoV-2 virus, causative of COVID-19, has spawned watershed economic, social, ethical, and political upheaval—catalyzing severe polarization among the global populace. Ostensibly, to demonstrate the most appropriate path towards responding to the virus outbreak, public officials in the United States (“U.S.”), representing both Democratic and Republican parties, stand accused of unduly influencing COVID-19 records in their respective jurisdictions. This study investigates the role political partisanship may have played in decreasing the accuracy of publicly reported COVID-19 data in the U.S. Leveraging social identity theory, we contend that public officials may have manipulated the reporting records in accounting for COVID-19 infection cases and deaths to validate the effectiveness of political party objectives. We employ Benford's Law to assess misreporting and evaluate the integrity of county-level COVID-19 reporting data through the construction of four distinct political party classifications. Specifically, we cross the county voting majority for the 2016 presidential candidate for each U.S. state (Democratic and Republican) with the 2020 gubernatorial political party (Democratic and Republican) in which each county resides. For the sample period of January 21, 2020 through November 3, 2020 (Election Day), the study's results suggest that the reported COVID-19 infection cases and deaths in the U.S. violate Benford's Law in a manner consistent with underreporting. Our analysis reveals that Democratic counties demonstrate the smallest departures from Benford's Law while Republican counties demonstrate the greatest departures.

While multinational firms invest large amounts of money in employee stock ownership plans (ESOPs) to reduce turnover, there is little evidence regarding ESOPs' effectiveness in retaining rank-and-file employees and none on a global scale. Building on psychological ownership (PO) arguments, we predict that a rank-and-file employee's ESOP participation will be negatively associated with a firm exit decision and that this effect will be stronger in contextual settings that are more conducive to turnover. For our analysis, we used internal data from a large multinational firm covering 190,453 rank-and-file employees and approximately 650,000 employee years. We find that ESOP participation is associated with a lower likelihood of individual firm exit decisions. We also find this effect to be more pronounced in countries with favorable labor market conditions and lower uncertainty avoidance (UA). Additional tests support our argument that PO arising from ESOP participation is particularly important for rank-and-file employees, who often only invest small amounts. Overall, our study provides cross-country evidence regarding the retention effect of ESOP participation for rank-and-file employees.

The paper seeks to enhance our understanding of the interaction between the development of disciplinary power in western liberal society and Foucault's writings on governmentality, through examination of the political processes resulting from the largest public scandal in the UK, the Poulson scandal of the early 1970s. The first research motive is to uncover any additional insights or hidden understandings that can be derived by applying Foucauldian historiographical and governmental perspectives as strengthened by Dean's (2010) analytics of government to the history of corporate governance in English local authorities over the forty years following Poulson. We argue that the continual process of intervention, investigation and prescription by central government set in motion by the scandal resulted in an increase in disciplinary power within local government by changing the expectations of council officials, elected representatives and politicians in Westminster through the normalisation of these intrusions and the spirit of dependency and compliance which resulted. Secondly, the paper examines the strengths and weaknesses of the analytics approach in a complex situation involving many genealogical disruptions to the status quo over a long time-period; and whilst the paper found the method helpful, limitations emerged regarding its claims to empirical certainty through precise questioning. Finally, the paper examines the significance of countering corruption as a motivating factor in the rise of disciplinary power in English local government, which it finds as limited.

In levers of control (LoC) research, empirical and conceptual ambiguities have hampered the establishment of a coherent body of knowledge. Mixed findings, variability in the approaches to account for the levers’ combined use, and variability in conceptual choices (e.g., the conceptualization of interactive and diagnostic control) have caused this unsatisfactory state. In response, we validate and extend theory on the LoC framework by meta-analytically synthesizing quantitative evidence from 58 independent samples and 10,374 observations. We develop two models of the combined use of the levers, which portray their simultaneous use and mutual relationships, and relate them to capabilities and performance. For theory validation, we uncover stylized facts that demonstrate that organizations use the four levers in combination, not in isolation. Moreover, following the logic of the resource-based view, the levers are related to performance via capabilities. These relationships are robust to moderating influences of the dimensions and conceptualization of interactive control and managers’ hierarchical level. For theory extension, we systematically uncover the need to complement the resource-based view with other theories and offer related suggestions. Our moderator analyses identify boundary conditions that limit the generalizability of the LoC framework. For example, surprisingly, the conceptualization of diagnostic control emerges as a boundary condition. On a general level, our findings might serve as an inspiration for better appreciating future survey-based knowledge creation in management control research and also provide researchers from other disciplines with a more comprehensive understanding of the enhancement of capabilities and performance.

We introduce a novel Big Data analytics model to detect upward revenue misreporting. The model uses freely available Google searches of firm products to provide external entity business state (EBS) evidence. The veracity of the reported numbers is enhanced when auditors can obtain external EBS evidence congruent with the reported numbers. The Google search volume index (SVI) of firm products is a good candidate for such EBS evidence because it nowcasts (i.e. predicts present) firm sales and is independent of management control. A large discrepancy such as a high sales growth together with a large decline in the SVI suggests possible manipulation upwards of revenues. We find that an indicator variable, MUP, of a firm in the top sales growth quartile and bottom ΔSVI quartile in each industry-quarter predicts revenue misstatements incrementally to the F_Score, Discretionary-Revenues model, two alternative upward revenue manipulation identifiers, and analyst and media coverages. MUP predictability is stronger in end-user industries and in interim quarters relative to the fourth quarter. We also find corroborating evidence that MUP firms have lower sales growth persistence, larger increases in accounts receivables, and lower allowances for bad debts, consistent with their lower revenue quality.

Obesity has become a topic of public discourse in Britain with claims that it is now one of the major causes of ill health and premature death. In an effort to tackle this obesity ‘crisis’, the UK government has introduced mandatory calorie labelling on menus. This legislation requires that the number of calories associated with a meal option, together with the recommended calorie consumption per day, be displayed on menus. Such ‘calorie accounting’ seeks to prompt the consumer to make menu choices consistent with public health ambitions and to encourage food establishments to reformulate lower calorie menu offerings. Drawing on the concepts of technologies of government (Miller & Rose, 1990; Rose & Miller, 1992) and biopedagogy (Harewood, 2009; Wright, 2009), this paper suggests that calorie accounting operates as a technology of biopedagogy which seeks to discipline and govern the body in contemporary neoliberal society. The paper also contributes to recent accounting scholarship on counter-conduct (Foucault, 2007) by highlighting how calorie accounting produces a form of counter-conduct that coexists with conformity to governmental goals. The paper draws upon three primary data sources: a documentary analysis of 44 policy documents on obesity and calorie reduction, an analysis of 112 responses to a public consultation exercise on calorie labelling, and 20 interviews with relevant actors.