Human Behavior in Organizations

Description of Subtheme:

Industrial economics includes a variety of microeconomic models to explain the structure and performance of markets and the analysis of the firm’s behavior in imperfectly competitive markets, monopoly, oligopoly, and monopolistic competition. It also involves a presentation of the conditions to exercise monopoly power, the relationship between profit rates and concentration or size, the persistence of profits over time, industry turnover and inter-industry comparisons, and the analysis of antitrust policy with a focus on industrial structure, different organizational and pricing strategies, such as vertical integration, mergers, collusion, price discrimination and advertising. It also calculates efficiencies for firms, industries, financial institutions and macroeconomic and microeconomic factors that affect the firm’s performance.

Economics analyze the impact of social and cultural elements on consumer behavior and preferences, taking into account the influence of cultural norms, social networks, and advertising on market results. Behavioral economics is an interdisciplinary discipline that examines the influence of social, cognitive, and emotional variables on economic decision-making by integrating knowledge from psychology and economics. In addition, acknowledge the importance of social norms and institutions in influencing economic behavior and results, examining their impact on economic growth, trust, and collaboration. The examination of inequality and distributional analysis is intricately connected to this subtheme, exploring the ways in which social and cultural factors lead to discrepancies in income and access to economic opportunities. It analyzes the economic worth of cultural items, investigates the impact of cultural events on local economies, and explores how cultural diversity influences economic outcomes. In addition, the subtheme is in line with the examination of education and human capital, investigating the impact of cultural and social elements on educational achievement and employment results. Economics can enhance their comprehension of the intricate connections between economic behavior and societal and cultural issues by integrating knowledge from sociology, psychology, and other social sciences.

Studying corruption and mechanism to detect and fight corruption is a fertile research area. Fighting corruption is not an easy task due to its nature as a multifaceted social phenomenon that growing in many aspects of societies. According to Prof. Seliem, research in this area may focus on the association between cultural dimensions -such as uncertainty avoidance, power distance, performance orientation, future orientation, assertiveness, institutional collectivism and individual collectivism-, gender and human and corruption.

Using cultural differences in predicting corruptive practices is crucial for multinational and international firms. This facilitates the adoption of relevant HRM strategies in recruiting, selection, compensation, performance appraisal, and training and development.

Another stream of literature may extend to study Customer Behavior in Marketing. The probability of delivering a completely error free service is almost not feasible especially with the distinctive characteristics of services. Thus, failure is very common in the service environment. However, customer satisfaction is severely deteriorating with the occurrence of the service failure resulting in negative word of mouth and customers’ switching behavior. Therefore, marketing scholars recommended the successful implementation of service recovery immediately after the occurrence of service failure to reduce or eliminate the negative consequences of service failure. Despite the flow of research that examined the importance of perceived justice in the service recovery context, direct relationship between the different strategies of service recovery and customer satisfaction was revealed in the recent literature. Thus, suggesting a nonlinear relationship between the aforementioned link, which further points to the possibility of the existence of moderating variables such as corporate image or brand judgement among others. Nevertheless, despite the crucial role of corporate image in the literature and in practice, scarce research examined corporate image in service recovery context while the moderating role is not yet tested. First, research is recommended to examine service recovery strategies and corporate image in different industries and different culture especially in developing countries. Second, future research should examine omitted variables that deemed to be important in the recovery context such as repeat failure and failure attribute. Finally, more research is needed to investigate other customer outcomes such as customer retention, loyalty and word of mouth to identify the moderating role of corporate image. In addition, this theme may extend to study emotional intelligence in organizations, investor preferences, individual behavior, and positive psychology.

Accounting information supports decision-making process. The role of accounting in this process cannot be undervalued. This can be confirmed by investors reactions to accounting information. For instance, the reaction of investors to a company with a good news information may be completely different from their reaction to a company with bad news information. This proposes that accounting information could generate negative, positive or neutral behavior and perception. The potential effect of accounting confirms the behavioral aspects of accounting since accounting information is prepared and used by people. How accounting information is presented should fulfill the principles constantly being established in the profession but also should be comprehensible to different users in the society, who depend on accounting information for investment decisions. According to Dr.Mokhtar, identifying investors’ reaction to the disclosure of risk-related information is a promising area of research.

Research in behavioral accounting has depended on experimental, correlational or field techniques. However, this research lacks to a theoretical framework that would sustain the problems or hypotheses tested. Therefore, more empirical studies is needed about the impact of accounting on human behavior this can provide a better understanding of the behavioral environment of accounting that may serve as a guidance in formulating an accounting theory.

Financial reporting aims to provide relevant and faithfully represented information about the economic events of the entity. This information should be high quality, consistent, understandable and comparable to increases investors' confidence in financial reporting and support capital markets efficiency. However, accounting standards have a great deal of flexibility that provides the chance for managerial choice in the preparation of annual reports and hence threaten the quality of financial statements. Earnings management practices may mislead the users of financial statements by providing inaccurate information about a company’s operational performance reflecting the negative impact of earnings management practices on the qualitative characteristics of accounting information. Research in this area may examine the differences in earning management practices using firm characteristics, board of directors characteristics and ownership structure. In addition, developing new models for detecting earning management practices is a promising research area.

Reviewing the literature indicate that very little research has been done regarding the determinants of impression management in developing countries. Hence, a gap exists in the literature; consequently, research to convey insights regarding this spring of research is needed to identify the determinants of impression management strategies in the annual reports of business firms by applying content analysis of these reports.