Department of Financial and Business Systems

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    Working capital management practices of small and medium-sized businesses in New Zealand : A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at Lincoln University
    (Lincoln University, 2023) Lim, Yew Hock
    Small and medium-sized businesses (SMEs) contribute significantly to a country’s economic growth. As the business environment changes constantly; SMEs need support and guidance on how to address working capital management (WCM) issues. Such knowledge will enable them to implement WCM effectively, increase their competitive advantage, and ensure their ultimate survival. Knowledge of WCM in SMEs, including a greater understanding of the WCM practices that SMEs actually employ and their motivations for, and barriers to, WCM, is needed to help SMEs adapt to ever-changing conditions. WCM is central to a business’s profitability, growth, and survival. However, only some SMEs manage working capital (WC) well. Since the early 1980s, poor WCM has been identified as the primary cause of SMEs’ failure, with approximately half of all SMEs failing within the first five years. WCM involves the management of four key business components: cash, inventory, accounts receivable, and accounts payable. The goal of WCM is to achieve an optimal WC level, where the business’s current assets are sufficient to meet its obligations or current liabilities. While excessive WC incurs opportunity costs, insufficient WC increases the risk that a business cannot meet its short-term obligations. Despite its critical role in business success, scholarly literature has shown that, due to SMEs’ unique characteristics, many SMEs lack identifiable, systematic, and/or effective WCM procedures. WCM for SMEs is often overlooked in previous studies. Given the importance of WCM, this research addresses omissions in the WCM literature by examining the WCM practices of New Zealand SMEs. More specifically, it identifies SMEs’ WCM practices, their motivators for, and barriers to, adopting (effective) WCM practices, and actions that SMEs could take to modify their WCM practices to address potential WCM issues. It contributes through the collection of qualitative data to provide deeper insights. The findings draw on questionnaire responses from 164 SMEs from 15 industries, and 11 interviews with SMEs, located in the Auckland and Canterbury regions. The research found that many of the participating SMEs lacked an understanding of the importance of WCM and had limited knowledge of WCM practices or procedures that could be taken to manage WC more effectively. While some of the SMEs lacked any identifiable systematic processes, others adopted informal, ad-hoc WCM practices and/or only basic WCM techniques. The identified causes are related to barriers such as resource constraints, having a simple business model with low sales volumes, and a lack of knowledge and expertise in financial management. Consequently, rather than spending time to identify and develop systematic WCM practices, most of the SME management teams of this research focused on revenue-generating activities or activities perceived to generate a higher return. This may provide insight into other aspects of WCM outside the scope of this research, including why SMEs are less efficient in managing WC, and why they are more vulnerable to financial crises. The research identifies WCM actions, from WCM planning to daily operations monitoring, that, when implemented will assist SMEs in addressing potential WCM issues and subsequently, improving the effectiveness of their WCM. Given their significant role in local economies, this research’s findings have implications that extend far beyond individual businesses.
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    Using accounting information systems to benefit micro businesses : A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at Lincoln University
    (Lincoln University, 2024) Benbow, Pamela
    Ninety percent of all businesses in New Zealand are micro businesses, defined as having zero to five employees. This sector is critical to New Zealand’s economy. Micro businesses create opportunities for new entrepreneurial talents, provide employment and offer consumers choice and variety including specialist goods and services. Central to all businesses is the need for information, managed by the accounting information system (AIS). The AIS supports decision-making, achieving business objectives and managing limited resources. Prior studies and government reports call for further research of micro businesses so that this sector of the economy can be strengthened. This research addresses this call by exploring the benefits of using AIS in micro businesses using multiple methods, including desk-based research, semi-structured interviews with professional accountants, a survey of micro business and finally semi-structured interviews of micro business owners. Findings show that a variety of tools are used, ranging from manual record keeping, to spreadsheets, to computerised AIS, and including a mixture of these tools. The majority of microbusinesses use computerised AIS tools, of which two software providers dominate. Some accounting firms specialise their practice either through industry or choice of AIS. Other accountants accommodate any AIS approach, focusing on the individual micro business needs. AIS use by micro businesses is primarily focused on monitoring cash flow, sales and income activities and compliance reporting (GST and income tax). The greatest utilisation of computerised AIS and add-on tools are observed with these activities. Micro businesses could utilise other features more, especially reporting, as a basis for decision-making. The decision to adopt computerised AIS includes factors affecting the individual business owner (generation, individual knowledge and skill and personal attitude to technology), internal business factors (financial costs, time costs and the business purpose and future) and external business factors (supply chain, regulatory bodies and supporting services). The benefits of using computerised AIS include connectivity, autofill, automated calculations and drilldown. Connectivity through cloud technology provides accessibility to a single version of the data between users regardless of location. Autofill populates data entry screens with information previously captured, reducing the need for typing. Automated calculations automatically completes basic arithmetic in the creation of invoices, supplier bills and reports. Finally, drilldown enables direct access to supporting detail for information provided on screen. These benefits may not be available in older versions of computerised AIS, or versions that only include a subset of the features. This research increases the understanding of factors impacting micro businesses in their decision to implement computerised AIS, and the benefits from doing so. The findings support accountants, government agencies and AIS software developers to devise strategies to support micro businesses. Findings from this research are applicable to micro businesses throughout New Zealand and more globally and will benefit other small businesses outside of the micro definition, both locally and globally.
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    Relationship investment and local corruption environment: Evidence from China
    (John Wiley & Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand, 2023-12) Li, Zhaohua; Pan, X
    We examine how firms interact with government officials within a corruption environment. Using corruption convictions to measure the extent of political corruption at the province level and a sample of Chinese listed firms, we find that firms located in more corrupt provinces invest more in building connections than firms located in less corrupt provinces. These results are robust to the instrumental variable approach, adjacent province matching, propensity score matching and alternative measurement of political corruption. We also show that the effect of political corruption is more pronounced in non-state-owned enterprises (non-SOEs), smaller firms, firms with financial constraints and firms without political connections. Additionally, we find that those firms that invest more on connection building are less likely to restate financial reports and have lower financial statement comparability. Overall, the evidence from China is consistent with the political connection view that firms respond to political corruption by investing in relationship building, which contrasts with the evidence from the US.
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    Remuneration. It affects employees motivation to work and their commitment to work: A dissertation submitted in partial fulfilment of the requirements for a Post Graduate Diploma in Commerce at Lincoln University
    (Lincoln University, 1990) Poplawski, Marek
    This study initially examines theories of motivation that have been applied to world in recent times. Following this examination, the study looks at the ways some of these theories have been applied in a work situation, by studying a small timber firm in Christchurch. The case study showed that each worker in the small timber firm was motivated to work in a different way : i) For the three 'workers' in the firm, the main motivation to work was money; yet other motivators, such as the bonus payment scheme, company t-shirts and sweat-shirts, and increased responsibilities, also act as strong motivators. Some of these were separate to each employee, and were found to be very influential in making each employee work harder. ii) The production manager was not motivated to work primarily by money. He claims that as long as he is able to meet his financial commitments he will be content with what he is being paid. However, other factors in the work environment are important in the motivation of this employee. The challenge of the job, the creativity he is able to apply to the job and the large responsibilities this employee has, are major factors in motivating this man. iii) The owner/operator cares strongly about the fate of this organisation. For this reason he is interested in money as a means of keeping this business running. Part of the motivating force behind this man is the success of his business. He wants to be perceived as a 'successful businessman'. Money in terms of profit is an important goal motivating the owner. He is very proud to be part of this organisation and is extremely glad that he chose this type of firm to operate. Despite this he does not feel totally loyal to the organisation. The main motivating force behind this man is the life style that he is able to live by owning his own business. The flexibility that this affords him is important. The owner/operator is also motivated by the success of his employees. He wants to improve their skills so they can move on to better jobs and lead better lives. Being able to influence the future success of these people, is also a strong motivator. The owner/operator is able to apply different motivating techniques to each worker. These apply to specific things that motivate each employee. The result of applying different motivational techniques to each individual has been that total production is well above that expected from 'normal' employees under 'normal' conditions. It would be expected that in larger firms, such as a national organisations (eg Ministry of Agriculture and Fisheries and the New Zealand Post Office), employers would be unable to apply strategies that appeal to individual workers. Instead 'theories' are likely to be applied that appeal to the majority. The result of this is often dissatisfaction, low worker motivation and low commitment In terms of the ability to motivate individual staff members and promote commitment to the firm, small organisations have a great advantage over large organisations. This study also examines the predictors and outcomes of organisational commitment using Porter's Organisational Commitment questionnaire to survey employees of a small timber firm. The results showed that significant predictors that could be used to assess commitment included absenteeism, desire to remain in the firm, intention to remain in the firm, education, and awareness of the economic situation. Other factors influencing commitment to the firm were aspects of the job itself, fellow workmates, promotional opportunities, supervision and pay.
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    The relationship between team structure and technological advancement in Formula One : A thesis submitted in partial fulfilment of the requirements for the Degree of Master of Commerce and Management at Lincoln University
    (Lincoln University, 2023) Thomas, Anisha Andrew
    Formula One is renowned for its global reach, technological advancements, and the skill required to compete at the highest level. While the sport has historically been associated with innovation and the evolution of technology, there is a growing concern that Formula One has become more conservative and risk-averse in recent years, with regulations limiting true innovation. Additionally, financial pressures have shifted the focus towards incremental evolution rather than groundbreaking innovations, leading to a lack of diversity in engine manufacturers and a concentration of power among a few dominant teams. This thesis aims to investigate the role of team structure in determining the level of technological innovation or evolution pursued by Formula One teams. It explores the hypothesis that Entrepreneurial teams are more likely to drive Innovation, while corporate teams tend to focus on evolutionary changes within the sport. By analysing secondary data and conducting statistical analysis, the study examines the historical progression of Formula One, ownership structures within the sport, and the evaluation of technological development encompassing both innovation and evolution. The analysis of the data reveals that radical innovations in Formula One were predominantly driven by Entrepreneurial teams in the early years of the sport. However, as corporate participation increased, revolutionary innovation diminished over time. This contradicts the conventional theory that suggests larger firms with greater capital investments are more successful. Corporate interests, risk aversion, cost control, and profitability concerns have led to stringent rules and regulations that restrict teams' ability to innovate. To reclaim its status as the pinnacle of motorsports, Formula One must shift its focus towards nurturing and supporting entrepreneurial organisations that drive innovation. By fostering an environment that empowers these entities, the sport can rejuvenate its reputation as a breeding ground for groundbreaking technological advancements. While this study provides valuable insights into the relationship between team structure and technological development in Formula One, further research using primary data collection methods and updated information is needed to explore additional linkages and relationships.