Article Critique
The current paper is an attempt to critique Russell L Ackoff’s article on management information systems. The article appeared in the December 1967 edition of the Management Science journal. To start with, the paper shall endevours to provide a detailed summary of the key points of the article. Secondly, an attempt shall be made to critique the article on the basis of the positive as well as negative outlook evident from it. Also, the paper shall try to examine whether the author has used any relevant theories to support his arguments. Finally, a conclusion shall be provided taking into account its general view by the writer. Read More
In an attempt to analyze the relationship between changes in cash compensation and changes in earning components, a group of researchers has jointly uncovered the relationship. It has been evident that toward the end of a CEO’s term, the firm exhibits a lot of variations in its earning components. This is because of numerous attempts by the very CEO’s to manipulate the figures. An outgoing CEO can attempt to inflate current income to augment earnings based compensations. The study, therefore, puts in the light that increased discretionary spending by the CEOs in their late career time has income increasing effect and should be discouraged. The study also finds out that investment activities should be planned and implemented by CEO’s early in their career in order to effectively and with undivided attention, factor in the shareholders’ interests of wealth maximization. As unwise as it might not seem, later career investments by CEOs might not be in the shareholders interest. This argument by Casamatta & Guembel (2010), holds grounds. It is true that an exiting CEO has no shareholders interest in mind when investing in his late career. The act could cause long-term negative effects on the earning of a firm. Another cause of a change in the cash component is the difference between the continuing and exiting CEO. An exiting CEO could attempt to lower investments to reduce assets for his/her successor in order for him/her to be seen like he/she was the best fit for the job and also that he/she performed exemplary (Shleifer & Vishny, 1989). Read More
