The escalation/de-escalation of commitment to capital investment decisions is a complex phenomenon that is under-researched not least because of the fragmented nature of the extant literature, the absence of comprehensive studies of why managers escalate commitment particularly for projects that are perceived to be failing, and the overlooking of the capital investment project initiating process in the existing studies. These deficiencies in the existing literature seriously limit the understanding of this phenomenon and its impact on practice, hence the motivation for the present study. Drawing on an extensive review of the relevant literature that spans a period of five decades and includes a careful scrutiny of theoretical alternatives and more than 130 empirical works, this research develops an encapsulating approach-avoidance model that is applied in a large mixed-methods study of corporate managers in 274 Saudi companies. This model not only systematically groups and examines the direct effect of a large array of project-specific and non-project-specific variables, but it also captures the intervening role of project auditing in the escalation/de-escalation decisions. Primary data were mainly collected by means of a survey using a Likert-scale questionnaire that was specifically designed to take into account the purposes and data requirements of the present study as embodied in its theoretical model and hypotheses. Additional data were collected from conducting face-to-face interviews in three companies. To overcome one of the deficiencies of existing studies as mentioned above, sufficient data on the capital investment process were sought and obtained through the survey and interviews. Besides descriptive statistics, multinomial logistic regression and MODPROBE macro tests were applied to examine direct and indirect relationships and levels of data fit. An overall finding of this study is that the (de)-escalation phenomenon is not only present in the Saudi corporate environment but it is pervasive throughout the industrial spectrum, thus confirming the need for the comprehensive and insightful approach adopted by the present research to examine its determinants and their policy implications. The detailed statistical analysis provides sufficient evidence to support this approach. While it is found that contextual and project determinants have the most influence on how Saudi managers commit to a course of action, the (de)-escalation of commitment is, contrary to what is portrayed in most existing studies, influenced by a combination of rather than by isolated factors. Notwithstanding these results, of significant relevance to knowledge in this under researched area are the findings that: a) the commitment determinants are underlined by the type of capital investment process, and b) that project audit plays a major moderating role in how the determinants impact the (de)-escalation of commitment. Apart from the usual limitations associated with using a survey method, this study would have been able to offer more insights had it not been for the sensitivity of the topic and the socio-cultural inhibitors that prevented managers from taking part in more interviews. Nevertheless, the richness of the data collected and the findings from the elaborate analysis undertaken offer not only opportunities for future research but also practical guidelines to managers with respect to making capital project decisions.

Venture capital firms are collaborative and location specific actors. A significant source of specialised factor inputs (knowledge, expertise, resources, and finance) for investing in new high tech companies are large corporations, making them potentially complementary partners for independent venture capital firms in collaborations from which considerable value adding capacity might be derived. Employing a qualitative approach based on in-depth interviews with 30 London based technology oriented venture capital firm, this study (1) captures and explains the how, why, and under what circumstances do venture capital firms collaborate with large corporations and their corporate venturing divisions, and (2) the role that geographic proximity plays in facilitating this collaboration. Using a cross sector comparison, the core of the research inquires as to the structures employed, and the motivations and conditions for which this collaborative activity is pursued. In addition, it assesses the facilitating role that geographic proximity, and the opportunities and capacities of the London metropolitan region might play. The findings demonstrate that collaboration between venture capital firms and large corporations is increasingly common, but more formal collaborative structures are the exception. Driving this collaboration is the exchange of complementary knowledge for purposes of better investment selection and for improving options for investment exit. Geographic proximity plays a facilitating role and is particularly important during the investment selection phase. While the significance of co-location is somewhat downplayed, collaboration is indirectly facilitated through the innovation capacities and the opportunities for network interaction and international knowledge exchange which the London metropolitan region offers.

Managers frequently deal with risk by considering uncertainty as an element of the decision problem over which they can exert control — for example, lobbyists trying to exert influence over regulators or managers trying to mitigate Operational Risks related to human processes. This perspective that the probabilities of uncertain events are at times ‘mutable’ — i.e. subject to one’s influence — has an important and previously under-appreciated role in decision-making under risk. The present research, structured as a series of three papers, addresses this gap between theory and practice on the topic of ‘control’ from a descriptive, theoretical and prescriptive perspective. The descriptive paper discusses a novel empirical test of the behavioural effect of ‘control’ on risk taking. The key finding that control does not always enhance risk taking but, instead, has a moderating effect on attitudes to risk, extends insights from related research. Strong preference for exerting control to eliminate uncertainty is also revealed. Affective and cognitive interpretations of the findings are offered and their correspondence with managerial attitudes to risk taking is discussed. The theoretical paper builds on methods in Decision Analysis and Philosophy, and develops a new probability revision rule for modelling control as interventions on uncertainties. This rule is shown to dramatically alleviate the judgmental burden of analysing multiple interventions. Foundational properties for probability revision rules for interventions, similar to the coherence criterion for Bayes rule, are also constructed and a proof that the proposed rule satisfies these properties is offered. In the prescriptive paper, a real world application of the probability revision rule is illustrated in the context of Operational Risk assessment, where several uncertainties are controllable (e.g. staff strikes). It is shown how this rule can be integrated with Operational Risk calculations to explicitly incorporate the effect of managerial mitigations on loss events, thus making a useful contribution to the field. In summary, this research explores the concept of ‘probability control’ as a way to manage risks in the context of Decision Sciences. It furthers our behavioural understanding of risk attitudes to better resonate with managerial perspectives on risk taking and extends the relevance of Decision Analysis methods to corporate risk management.

The primary focus of this study is to investigate the relation between Earnings Management (EM) and Corporate Social Responsibility (CSR) in the UK. While there are few studies in the existing literature that examined the relationship between EM and CSR, there is a lack of studies examining this relation in the UK. Furthermore, the existing academic literature appears to provide inconsistent results. These considerations motivate this study to bridge this gap in the literature by providing evidence of whether or not EM and CSR are related in the UK. The present study carried out through three empirical stages based on the data obtained from the FTSE 350 Index between 2008 and 2010. The first stage examined the EM practice using three EM models to estimate discretionary accruals as proxy for EM. The models were the Jones (1991), modified Jones (Dechow et al. 1995) and performance - matched (Kothari et al. 2005) models. Firstly, these models were tested using multivariate analysis; the findings revealed that the performance - marched model has been identified as the model that could most accurately measure the presence of EM. Secondly, by applying univariate analysis, the study has found insignificant differences between the high and low EM practices in UK firms and that the highest and the lowest levels of EM were in 2008. Similar results were discovered when comparing the differences between income - increasing and income - decreasing EM. The second stage tested CSR by applying both content analysis and disclosure index approaches to identify the level of Corporate Social Responsibility Disclosure (CSD) as proxy of CSR. The findings from the content analysis revealed that the employees (EMP) theme had the highest level of CSR information, followed by community (COM), environment (ENV), others (OTH), products and services (PRO), and customers (CUS). Similar results were obtained when the disclosure index approach was employed. The relationship between EM and CSR was tested in the final stage by using univariate and multivariate analyses. The findings revealed that firms with more CSR information reported lower EM. Further tests were performed to investigate the link between EM and CSR themes and the findings revealed that firms with more information of EMP, COM, EVE and PRO reported lower EM. However, no evidence suggested that CUS and OTH information affect EM. Overall, the findings suggest that the level of CSR improve financial reports’ quality. This study aspires to contribute to our understanding and knowledge on the issue related to the role of CSR regarding the quality of reported earnings.

Microfinance Institutions (MFIs) play important roles in socio-economic development and poverty alleviation particularly in developing countries. It has however been argued that the focus of MFIs is changing from the traditional purely social to commercial (mission drift) and has been criticised for neglecting the welfare of citizens and grassroots accountability in favour of commercialisation and accountability to donors/shareholders. This mission drift has resulted in changes in the structure and practices of MFIs. The study has been designed to examine how the accounting and accountability practices of a MFI can change in response to changes in its mission. The study presents case evidence from a large MFI operating in Cameroon with data collected through semi-structured interviews, informal discussions and documents. The study traces the evolution of the organisation and its accounting and accountability practices. A theoretical framework of an interpretive nature is used which draws on institutional entrepreneurship theory in order to highlight the importance of actors in the change process. The findings suggest a mission drift and transformations over the years from a social to a commercial organisation with the change impacting significantly on its structure and accounting and accountability practices.

This thesis examines the strategy formulation of small and medium enterprises in Greece by measuring the two principal dimensions of the strategy formulation process, the normative/descriptive dimension and the individual/collective dimension. For the purposes of the thesis a theoretical model of strategy formulation is proposed and evaluated, drawing upon the principles of contingency theory which presumes that there is no exclusive approach to strategy formulation which applies likewise to all firms in all circumstances. According to contingency theory there are many variables or factors which predict and influence the decision of formulating a strategy. Furthermore, the thesis investigates the role of accounting information on the process of strategy formulation by examining the relationship between the adoption of a specific strategy formulation approach and the information sources that SMEs use, the extensiveness of accounting information usage and the perceived usefulness of accounting information to SME managers. Using a data-triangulation (semi-structured interviews and a questionnaire), the findings of the study show the following: First, organizational size, perceived environmental volatility, the level of technology and specific owner manager characteristics (experience and education) are all significant predictors of SMEs adoption of a specific strategy formulation approach. Second, accounting information usage is positively associated with the normative and collective strategy formulation approaches. More specific, SMEs which utilize a broad range of information sources, which engage in extensive accounting information utilization and which perceive accounting information as very useful are positively correlated with the normative and collective approaches of strategy formulation. Third, financial performance was found to have a positive relationship with the descriptive and individualistic approach to strategy, meaning that SME owner managers who employ emergent strategies without the collaboration and participation of others in the process tend to achieve higher levels of profitability. Fourth, significant differences were found between SMEs having a different ownership status (family and non-family SMEs) and belonging to different business sectors (retail, construction and service providing firms) in relation to strategy formulation approach.

Management accounting and control research in developing countries has neglected gender issues. Focusing on management controls over marginalised female workers in Sri Lankan tea plantations, this thesis tries to fill this gap. It takes a postcolonial feminist perspective to theorise ethnographic accounts of mundane controls. The findings illustrate that there are 'embedded‘ controls through colonial and postcolonial legacies, which made the female workers 'double colonised‘. The notion of subalternity captures these repressive forms of controls in their work as tea pluckers. However, postcolonial transformations created a space for resistance against these controls. This shaped a subaltern agency and emancipation and gave rise to a more enabling form of postcolonial management control. The thesis contributes to debates in postcolonial feminist studies in organisations and management control research in general, and management control research in developing countries, in particular.

This thesis is concerned with designing a novel model for cash flow prediction. Cash flow and earnings are both important measures of a firm’s profit. The extant literature has discussed different models that have been applied to cash flow prediction. However, previous studies have not made attempts to address the dynamics in the cash flow model parameters, which are potentially nonlinear processes. This thesis proposes a grey-box model to capture the nonlinearity and dynamics of the cash flow model parameters. The parameters are modelled as a black box, which adopts a Padé approximant as the functional form and two exogenous variables as input variables that are considered to have explanatory power for the parameter process. Besides, this thesis also employs a Bayesian forecasting model in an attempt to capture the parameter dynamics of the cash flow modelling process. The Bayesian model has the advantage of applicability in the case of a limited number of observations. Compared with the grey-box model, the Bayesian model places linear restriction on the parameter dynamics. The prior is required for the implementation of the Bayesian model and this thesis uses the results of a random parameter model as the prior. In addition, panel data estimation methods are also applied to see whether they could outperform the pooled regression that is widely applied in the extant literature. There are four datasets employed in this thesis for the examination of various models’ performance in predicting cash flow. All datasets are in panel form. This work studies the pattern of net operating cash flow (or cash flow to asset ratio) along with time for different datasets. Out-of-sample comparison is conducted among the applied models and two measures of performance are selected to compare the practical predictive power of the models. The designed grey-box model has promising and encouraging performance in all the datasets, especially for U.S. listed firms. However, the Bayesian model does not appear to be superior compared to the simple benchmark models in making practical prediction. Similarly, the panel data models also cannot beat pooled regression. In this thesis, the traditional discounted cash flow model for equity valuation is employed to take account of the cash flow prediction models that have been developed to obtain the theoretical value of equities based on the cash flows predicted by the various models developed in this thesis. The reported results show that simpler models such as the random walk model is closer to market expectation of future cash flows because it leads to a better fitness for the market share prices using the new discounting model. The results reported in this thesis show that the new valuation models developed in this thesis could have investment value. This thesis has made contributions in both theoretical and practical aspects. Through the derivation of various models, it is found that there exists potential nonlinearity and dynamic feature in cash flow prediction models. Therefore, it is crucial to capture the nonlinearity using particular tools. In addition, this thesis builds up a framework, which can be used to analyse problems of similar kinds, such as panel data prediction. The models are derived from theoretical level and then applied to analyse empirical data. The promising results suggest that in practice, the models developed in this work could provide useful guidance for people who make decisions.

This dissertation focuses on entrepreneurial finance and exit strategies via IPO. Three quantitative studies have been conducted based on a dataset of entrepreneurial firms listed for the first time in the London Stock Exchange (LSE) between 2002 and 2012. Initial Public Offering (IPO), as a major event for external resource acquisition, is a milestone in both the life of an entrepreneurial venture and the entrepreneur himself. How to gain a good performance in IPO? What factors drive their leave from the business they set up after IPO? And whether and how the founder's leave after IPO may affect the subsequent performance of the business? These questions become main concerns for both entrepreneurs and investors. The three studies in the dissertation address these issues from different perspectives. Since the research questions and test variables are different across studies, the sample size for each empirical study is slightly different from each other. The first study extends our understanding of the categorical imperative by exploring how the category spanning behavior of the main founders may harm their resource acquisition via IPO, as well as the way they offset such penalty. This question was tested using main founders of 173 startups listed for the first time in the Alternative Investment Market (AIM) of LSE. The study supports the past literature confirming that, compared to IPO firms whose founders specialise in one industry or one function, those founded by category spanners are generally devalued by investors. However, such devaluation is less severe in case founders are partly hybrid, spanning categories in one dimension (either for industry or function) but being a specialist in the other dimension. The results also show that an external expert endorsement can offset the penalty of hybridity, especially when hybridity occurs along multiple dimensions. The second study explores variance in the exit decisions of founders after IPO, and examines factors explaining these decisions. Through analyzing the exit behaviour of 313 founders at 177 entrepreneurial firms listed in the main and alternative market of LSE, we find that power structure is associated with founders' total exit but does not equally well explain partial exits behaviors (i.e. financial or managerial). Moreover, the effect of power on total exit is also moderated by the type of capital market in which the IPO takes place [main market of the LSE versus Alternative Investment Market (AIM)]. The third study examines whether and how different founder exit strategies influence a firm's operational and stock performance. We find that while the post-IPO departure of the main founder is related to a short-term drop of the stock performance, in the long-run, it is positively related with the firm's financial performance.

This study highlights the role of cash flow forecasting process in capital budgeting decisions, where the forecasting process starts with identifying the procedures and methods used in forecasting, and ends by estimating future cash flow required by managers for decision-making. This study utilised questionnaire survey to collect data from 69 manufacturing and oil companies operating in Libya within contingency and new institutional sociology theories, which are commonly used in capital budgeting research. Further, this study seeks to ascertain the key variables associated with the forecasting process in capital budgeting decisions. In this regard, this study examined the contingent and institutional variables influencing the use of forecasting procedures and methods associated with the adoption of different capital budgeting processes. Consequently, the results of this study explored the forecasting procedures, methods and the capital budgeting techniques used in manufacturing and oil companies operating in Libya. The researcher found that most manufacturing and oil companies depend on personal and management's subjective estimates in forecasting their future cash flows. In terms of the extent of use of capital budgeting techniques, the findings indicate that most Libyan manufacturing and oil companies use the payback period (PB) and accounting rate of return (ARR) to evaluate and select the investment opportunities, as well as rely upon subjective assessments in evaluating the project risk inherent within capital budgeting decisions. In addition, this study applied the partial least squares structural equation modelling (PLS-SEM) technique to test the research hypotheses. Using the same sample of Libyan manufacturing and oil companies, the findings are as follows. First, the use of forecasting procedures/methods and components of cash flow are positively associated with the extent of use of capital budgeting techniques. Second, the forecasting horizon and the use of multiple data sources in forecasting are significantly associated with the use of forecasting procedures and methods. Third, the presence of qualified persons responsible for estimating future cash flow is positively associated with the use of forecasting procedures and methods. Fourth, the findings suggest that the influence of contingent variables differs from public to private companies. Fifth, the study findings also suggest that coercive, mimetic and normative pressures are significantly associated with the use of forecasting procedures and methods. Finally, the research findings revealed that there is a significant relationship between the procedures and methods used in forecasting (PMUF) and the firms’ financial performance (PERF), whilst the study does not find any evidence that the extent of use of capital budgeting techniques improves the firms’ financial performance. The findings of this study offer new important insights and contributions to the existing literature, as well as have useful implications for practitioners and researchers.