Information systems, Human Information Processing, Performance peaks, Differential performance peaking

The annual report is a communication instrument which may be used to differentiate among the various organizations in the business community. Both the results of economic activity (content), and the manner in which those results are presented (form),' constitute the message of the annual report (Li [1]). Owing to the potential impact of the annual report on decision makers, the Securities and Exchange Commission and the American Institute of Certified Public Accountants,2 through their institutional pronouncements, act to develop user confidence in the information contained in the annual report. These pronouncements have in large measure been addressed to monitoring content, leaving the presentation format of the annual report a discretionary variable.' Any attempts to influence annual report user (stockholders, security

Edward J. Lusk, [Discussion of Cognitive Aspects of Annual Reports: Field Independence/ Dependence]: A Reply, Journal of Accounting Research, Vol. 11, Empirical Research in Accounting: Selected Studies 1973 (1973), pp. 215-224

This article presents the authors' reply to their criticism of an article written by Joshua Ronen related to transfer pricing and divisional autonomy, published in an earlier issue of the journal "The Accounting Review," as of April 1975. In their criticism, the authors were interested in bringing some of the suggested transfer pricing systems into a common perspective in such a way that it would facilitate interrelating these systems and would avail a comparative analysis of the extent to which the main goals of transfer pricing can be achieved. In this article, first the authors shall reconcile their terminology with the one used in the transfer pricing system. Second, they will paraphrase the seven steps provided by Ronen, which he claims to be a summary of information flows in the system. This paraphrasing will be short of complete reproduction only because of the needed consistency in the terms used. Finally, the authors will analyze these steps in light of their criticism and Ronen's comment. The conclusions, which are not different from those stated in the criticism, will be embedded in the analysis.

Reviews the book "Current Practice in Program Budgeting (PPBS): Analysis and Case Studies Covering Government and Business," by David Novick.

The article discusses discriminant analysis as applied to the resource allocation decision. Oftentimes the various departments within an organization must compete for investment funds. These resources may be allocated by the strategic planner given his perception. The normative discriminant system suggested is sufficiently flexible to be used as a descriptive system if the headquarters feel they would not alter the investment funding decisions given an expost analysis of the prior investment proposals. In this case, the priority coefficients would reflect the funding rationale as it has been applied to the previous investments. This paper shall be addressed to an examination of this question. In order to establish an organization frame of reference, an organizational model will be suggested. It is within this organizational context that the derivation and utilization of the priority coefficients shall be presented. The organizational model, which shall be adopted is that of a decentralized profit seeking entity, although the foregoing analysis applies to any organizational situation where investment funding decisions are centralized relative to the decentralized segments which initiate investment proposals.

The article focuses on the decision flexibility of decision makers, which is an alternative decision criterion. In complex decision situations, organizational decision makers often are required to elect and implement a specific decision alternative, so that over time the organization best moves towards its goals. Best may depend upon realization of anticipated states of nature and availability of future decision alternatives. When there is risk involved in either the availability of future decision alternatives or occurrences of states of nature, maximization of expected payoff might be used to guide the selection of a particular decision alternative. However, in environmentally dynamic situations, decision makers may seek an alternative criterion, which authors call decision flexibility. A flexible decision is one, which maximizes the probability of achieving a managerially selected output cutoff. A number of researchers found that in complex decision situations, decision-maker selections differed from those, which would be selected using the expectation model. In an attempt to understand the variation between results of the model and the observed decision behavior, utility theory and subjective probability estimation have been introduced into the expectation model.

The article discusses the nature and scope of major transfer pricing models. The purpose of transfer pricing systems is to generate prices for internally produced and consumed commodities. The authors examine the capability of various transfer pricing models to handle the issues of organizational decentralization and optimization. The analysis takes into consideration the development of transfer pricing models in three categories. They are the economic theory of the firm, mathematical programming approaches, and other analytic approaches.

A mathematical model is analyzed to determine the impact of two alternative monetary policies upon the rate of change of prices and the level of real national income. The first is a once and for all change in the rate of growth of the money supply to a new level; the second is found through an optimization analysis using the maximum principle of postaudit. It is found that the second policy not only leads to a final equilibrium position in less time than the first policy, but it also induces less variability in both prices and real income.