First Look

Abstract—The article discusses the benefits of time-driven activity-based costing (TDABC) combined with outcomes measurement for healthcare organizations. Topics covered include improving resource efficiency, optimizing care over the complete care cycle, and planning and budgeting of resource capacity. It also mentions that TDABC enhances quality of care and clinical outcomes while reducing healthcare costs.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=47638

Abstract—No abstract available.

Publisher's link: http://www.hfma.org/TDABC

Abstract—The paper describes the theory and preliminary results for an action research program that explores the implications from better measurements of health care outcomes and costs. After summarizing Porter's outcome taxonomy (Porter 2010), we illustrate how to use process mapping and time-driven activity-based costing to measure the costs of treating patients over a complete cycle of care for a specific medical condition. With valid outcome and cost information, managers and clinicians can standardize clinical and administrative processes, eliminate non-value added and redundant steps, improve resource utilization, and redesign care so that appropriate medical resources perform each process step. These actions enable costs to be reduced while maintaining or improving medical outcomes. Better measurements also allow payers to offer bundled payments, based on the costs of using efficient processes and contingent on achieving superior outcomes. The end result will be a more effective and more productive health care sector. The paper concludes with suggestions for accounting research opportunities in the sector.

Abstract—Faced with a large percentage of investors that chase short-term returns, companies could benefit by attracting investors with longer-term horizons and incentives that are more consistent with the long-term strategy of the company. The managers of most companies take their investor base as a "given" that cannot be changed through their actions or words. Using the case of Shire, a biopharmaceutical company with a strong commitment to the goals of improving the safety of its products and the reliability of its supply chain, the authors of this article suggest that companies have the ability and the means to change their investor base in ways that are consistent with their strategy. One of the most promising ways of attracting such investors is integrated reporting, which provides companies with a means of credibly communicating the commitment of its top leadership to diffusing integrated thinking across the organization and to building strong relationships with important external stakeholders. In the case of Shire, both a commitment to integrated thinking and the adoption of integrated reporting appear to have helped the company attract longer-term investors, which in turn has strengthened management's confidence to carry out its strategy of stakeholder engagement and investment.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=47651

Abstract—A case study in the management of new business enterprises in developing countries is examined. A dilemma facing a Malawian entrepreneur in whether to locate a packaging industry new business in his native Malawi or in the larger market of Nigeria is examined. Conflicting opinions on the case are offered by businesspeople with experience in Africa.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=47637

Abstract—We study the frequency of restatements by foreign firms listed on U.S. exchanges. We find that the restatement rate of U.S. listed foreign firms is significantly lower than that of comparable U.S. firms and that the difference depends on the firm's home country characteristics. Foreign firms from countries with a weak rule of law are less likely to restate than are firms from strong rule of law countries. While the lower rate of restatements can represent an absence of errors, it can also indicate a lack of detection and disclosure of errors and irregularities. We infer the magnitude of detection and disclosure by associating the frequency of restatements with the quality of the firm's internal reporting system. We find that only U.S. firms and foreign firms from strong rule of law countries show a positive association between restatement frequency and internal control weaknesses. Firms from weak rule of law countries show no significant association. We interpret these findings as home country enforcement affecting firms' likelihood of detecting and reporting existing accounting irregularities. This suggests that for U.S. listed foreign firms, less frequent restatements can be a signal of opportunistic reporting rather than a lack of accounting errors and irregularities.

Abstract—Traditional research has long treated reputation as an egocentric attribute, typically described as an intangible asset directly shaped by the focal actor's track record. We argue, however, that reputation is dyadic: that an actor can have different reputations with different alters, and that its various reputations are shaped by three processes-awareness, interpretation, and reevaluation. Awareness-the extent of the alter's knowledge of the focal actor's past behavior-is determined by the proximity of the two and by their centrality in the interorganizational network. Interpretation-the alter's processing of that knowledge to make inferences about the focal actor's character-is determined by what the alter perceives to be the root cause of the behaviors in question. Finally, reevaluation-change in the alter's beliefs about the focal actor-is determined by the gap between the alter's prior beliefs and new information. Specifically, when the alter's prior experiences of the focal actor are particularly negative, the latter's poor behavior in other relationships is unlikely to have much marginal effect. We test the resulting hypotheses by examining how a venture capital firm's reputation for unreliability, triggered by repeated withdrawals from investment syndicates, affects its probability of future syndication.