Decision Making in the Workplace: A Unified Perspective

By Lee Roy Beach | Go to book overview

CONCLUSIONS

In explicating the working hypothesis of image theory, Beach and Strom ( 1989, p. 2) borrowed this example from Peeters ( 1986):

Assume that there is a creature who lives solely on fungi; mushrooms are abundant and edible and toadstools may or may not be abundant but they are poisonous. The creature holds as its working hypothesis that every fungus is a mushroom. However, if the fungus has one or more attributes of a toadstool, that working hypothesis is quickly rejected. The reverse logic does not apply: a fungus that has many of the attributes of a toadstool must not be eaten even if it has one or more attributes of a mushroom. Hence the negative attributes of a particular fungus determine the decision about its edibility.

The analogy is certainly appropriate in the client-screening context. Auditing firms (the creature) depend on clients (the fungi) for their growth and profitability. Most clients present little risk (the mushrooms) to auditing firms and are acceptable. However, there are a few high-risk clients (the toadstools) who present substantial business risk to the auditing firm. For instance, a jury verdict of $338 million was awarded against Price Waterhouse in the audit of Miniscribe. Under these circumstances, the auditor's screening decision rule can be characterized as "hungry yet cautious." Positive evidence does not counterbalance the effect of negative evidence. Given that perfect discrimination of prospective clients is not possible, this screening strategy is safest because it favors false negative decisions (rejection of low-risk clients that have attributes of high risk clients) over false positive decisions (acceptance of high-risk clients that have attributes of low-risk clients).

There is no mystery about auditors' posture in the screening decision. In recent years, accounting firms have had to pay millions of dollars to settle claims alleging that their audits did not uncover financial problems. Accounting firms are routinely sued when they are involved in an initial public offering that goes sour. A position paper on legal reform, issued by the Big Six firms, indicated that there are about $30 billion in damage claims currently facing the profession as a whole. In the same paper, the firms indicated they are reducing the threat of litigation by avoiding what are considered high-risk auditing clients and even entire industries. High-risk categories include financial institutions, insurance companies, and real estate investment firms.

Although the screening strategy may be reasonable from the viewpoint of auditors, it presents a conundrum for prospective clients and indeed for the economic system as a whole. With respect to prospective clients, they may be forced to buy auditing services from accounting firms less used to assessing their industry. As such, they may not be getting the quality of

-115-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
Decision Making in the Workplace: A Unified Perspective
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Preface vii
  • 1: Image Theory, the Unifying Perspective 1
  • References 19
  • 2: Why a New Perspective on Decision Making is Needed 21
  • References 30
  • 3: Job Search and Job Selection 33
  • Conclusions 46
  • References 46
  • 4: Career Decisions 49
  • Conclusions 61
  • References 62
  • 5: Supervision and Job Satisfaction 63
  • References 71
  • 6: Why Employees Quit 73
  • Conclusion 89
  • References 89
  • 7: Audit Decisions 91
  • Summary 99
  • References 99
  • 8: Screening of Clients by Audit Firms 101
  • Conclusions 115
  • References 116
  • 9: Organizational Culture and Decision Making 117
  • Summary and Practical Implications 129
  • References 131
  • 10: Mitigating Cultural Constraints on Group Decisions 133
  • Conclusion 141
  • References 142
  • 11: Imagination and Planning 143
  • References 153
  • 12: Designing Marketing Plans and Communication Strategies 155
  • Summary and Conclusions 164
  • References 164
  • 13: Consumer Decisions Involving Social Responsibility 165
  • Conclusion 177
  • References 179
  • 14: Image Compatibility and Framing 181
  • References 193
  • 15: Image Theory and Workplace Decisions: Challenges 197
  • References 208
  • Author Index 209
  • Subject Index 215
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
/ 216

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.