Quantitative and qualitative investments in internal control personnel and firm operational efficiency: Evidence from Korea
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Author(s)Inkyung YoonLink to ORCID Index: https://orcid.org/0000-0002-7064-7227
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Hansol LeeLink to ORCID Index: https://orcid.org/0000-0001-6776-410X
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Dongjoon ChoiLink to ORCID Index: https://orcid.org/0000-0002-2464-6039
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Eunsang JeeLink to ORCID Index: https://orcid.org/0000-0002-5174-3117
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DOIhttp://dx.doi.org/10.21511/imfi.20(3).2023.23
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Article InfoVolume 20 2023, Issue #3, pp. 273-284
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100 Downloads
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Creative Commons Attribution 4.0 International License
Although internal control systems in firms aim to provide reasonable assurance regarding objectives related to operations, reporting, and compliance, research focusing on operational efficiency is limited. This study investigates the impact of both quantitative and qualitative investments in internal control personnel on a firm’s operational efficiency. Utilizing a fixed-effect regression model, the Heckman (1979) two-stage model, and a two-stage least squares procedure, this study analyzes 4,471 firm-year observations from Korean listed firms from 2018 to 2020. The findings indicate a positive association between investment in internal control personnel and operational efficiency. This relationship remains robust even under sensitivity tests and concerns of potential endogeneity, as confirmed by the Heckman and two-stage least squares models. Specifically, the Heckman model shows that the ratio of the number of employees (coef = 0.023, t-value = 5.20) and certified public accountants (coef = 0.256, t-value = 5.43) responsible for internal control is positively associated with operational efficiency. Average work experience (coef = 0.002, t-value = 1.84) of internal control personnel is also positively related to operational efficiency. This study provides empirical evidence for the significance of investing in internal control personnel to boost operational efficiency and suggests that firms should consider both quantitative and qualitative aspects of internal control.
- Keywords
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JEL Classification (Paper profile tab)J21, M40, M41
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References30
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Tables7
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Figures0
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- Table 1. Sample selection
- Table 2. Descriptive statistics
- Table 3. Pearson’s correlation (N = 4,471)
- Table 4. Effect of investments in internal control-related personnel on a firm’s operational efficiency
- Table 5. Heckman’s (1979) two-stage analysis for Table 4
- Table 6. Effect of investments in internal control-related personnel on a firm’s operational efficiency: Two-Stage least squares (2SLS) regressions
- Table A1. Variable definition
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Evaluating the nationalization & privatization effect: a case of Indian banking industry
Manju Rajan Babu ,
Ashok Kumar M.
doi: http://dx.doi.org/10.21511/bbs.13(1).2018.02
Banks and Bank Systems Volume 13, 2018 Issue #1 pp. 11-21 Views: 2900 Downloads: 409 TO CITE АНОТАЦІЯThe facilitation of economic transactions and friendly investor environment is undertaken through effective performance of financial systems. Mobilization of savings and funding the profitable business opportunities are essential in improving the efficiency of intermediation. The study aims to evaluate the effects of nationalization and privatization on Indian banks. Various factors have been considered to examine the effects of privatization and nationalization, including sources of public sector inefficiency, measures of firm performance, econometric issues, and the mode of privatization. The data was collected for the period of 1998 to 2016 from Indian banks. Data Envelopment Analysis (DEA) was used to evaluate the financial reports of the banks selected to evaluate the efficiency of input and output variables. Positive results were observed, concerning the efficiency and profitability of banking industry after banks’ privatization. Performance of private banks has been observed effective and efficient as compared to the public sector banks. Privatization of banks must be increased and maintained to sustain the efficiency of the banks and implement strategies to maintain the assets. Future studies may recruit more appropriate sample size to evaluate the privatization and nationalization effects of Indian banking industry. Greater number of banks will provide more precise results, using data envelopment analysis.
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Management accounting practices and organizational performance
Rewan Kumar Dahal
doi: http://dx.doi.org/10.21511/ppm.20(2).2022.04
Problems and Perspectives in Management Volume 20, 2022 Issue #2 pp. 33-43 Views: 2095 Downloads: 726 TO CITE АНОТАЦІЯManagement accounting practices (MAPs) are crucial for manufacturing firms to control diverse organizational operations and improve their organizational performance. The study aimed to analyze the scope of MAPs and their association with the organizational performance of Nepalese manufacturing firms. The outcomes relied on primary data obtained through structured survey from 223 medium to top-level employees of the selected companies. It was found that traditional management accounting practices had greater dominance (β = 0.817, p = 0.000) in the package of MAPs than contemporary management accounting practices (β = 0.707, p = 0.000) in Nepalese manufacturing firms. The extent of use of contemporary management accounting practices was marginally greater (mean = 3.757) than traditional management accounting practices (mean = 3.563). The analysis also disclosed no association of MAPs with organizational performance of Nepalese manufacturing firms. Though the study had a moderately small sample size from the manufacturing industry, future studies may examine the association between MAPs and organizational performance by taking samples of the manufacturing and service industry to ensure comparability and generalizations. The study endeavored to advance management accounting literature by presenting pragmatic evidence on the association of MAPs with organizational performance in the Nepalese scenario.
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Impact of operational activities on customer satisfaction in cafes and restaurants: A mediating role of infrastructural elements
Saida Zainurossalamia ZA ,
Dwi Martiyanti ,
Gusti Noorlitaria Achmad ,
Dadang Lesmana ,
Rizky Yudaruddin
doi: http://dx.doi.org/10.21511/im.18(4).2022.02
After restrictions on community activities caused by the COVID-19 pandemic were lifted, numerous businesses, including restaurants and cafes, have already resumed normal operations. Competition is also unavoidable. Thus, companies should motivate their managers to develop various operational strategies to increase customer satisfaction. This study aims to analyze the relationship between customer satisfaction and operational management activities, including layout, decoration, location, and cleanliness. In addition, it examines human resource management, food quality, and atmosphere as mediating variables. Data were obtained using an online questionnaire conducted between June and December 2021. A total of 1,068 clients of cafes and restaurants were selected as the participants using purposive random sampling. Data were evaluated using variance-based structural equation modeling. The results showed that operational management activities promote cafes and restaurants (p-value = 0.000). Furthermore, this study indicates the role of infrastructure elements, specifically human resource management, atmosphere, and food quality, as moderating variables on customer satisfaction (p-value = 0.000). Overall, the findings of this empirical study provide a theoretical contribution by emphasizing cafe and restaurant operational strategies that enhance customer satisfaction.
