Editorial: Rapid Information Systems Innovation: Impact on The Decision Makers

M Daud Ahmed
Editor, December 2012

Governance is an organisational management system for adhering to compliance requirements, ensuring transparency, enhancing credibility, maximising the wealth of the shareholders and managing sustained business growth. Organisations are regulated by various external entities such as central and local governments, industry sector, and professional and financing bodies. Each of these entities provides compliance requirements and guidelines. Although many of these criteria and guidelines overlap each other, they require different baseline performances. Compliance puts emphasis on operating a business in such a way that it not only satisfies various regulatory guidelines and constraints but also promotes moral and ethical practices. It demands to align the corporate goals with the wider stakeholders’ views. These markets driven complex compliance requirements can be used for creating specialised and niche opportunity but traditionally, it has been viewed as an impediment to business operations and successes. It is highly critical for a business to decide and specify whether it concentrates only on fulfilling the mandatory compliance requirements for existence or becomes a compliant follower to the market demand or a competitive performer or a strategic player or an industry leader. A business may choose to concentrate on one or multiple areas such as professional leadership in ISO standards, S&P rating, and sustainability leadership, etc. However, following and managing these compliance requirements and guidelines is a highly complex and tedious job. Extensive research is needed on how the New Zealand and Australian businesses ranging from small businesses to large corporate bodies can successfully manage compliance and use it for the business successes.

The NZJABR Volume 10, number 2 features five articles related to transparency, credibility and compliance issues of local businesses. The first article, “Conveying Trust: Transparency and Credibility Measures in Corporate Blogs” by Adeline Chua, Kirsten Robertson, Mathew Parackal and Kenneth R. Deans analyses how corporate blogs are laced with transparency and credibility related issues and affects the question of trust whilst helping companies to improve their marketing communication strategies. Based on an interpretive study of 16 companies, the article identifies eight transparency and five credibility factors for making corporate blogging trustworthy. The second article, “Entrepreneurial Not-for-Profits and Accountability” by Jill Hooks examines the annual report of Wellington Zoo to assess how well the facts are presented and whether or not the stakeholders’ expectations of accountability are materialised. Irrespective of a number of shortcomings in the annual report, the author considers this could be used as an exemplar of good reporting practices for the not-for-profit entities. The third article, “An Empirical Investigation of Agency Costs and Ownership Structure in Unlisted Small Businesses” by Nirosha Hewa Wellalage and Stuart Locke investigates agency costs in 240 small businesses and finds that the principal-agent (PA) and principal-principal (PP) agency costs vary by industry, and the life of the business and size. This study also presents a non-linear relationship between agency costs and ownership structure. The fourth article, “Compliance Costs: The Impact of the Increased GST Rate on Two New Zealand Businesses” by Heather Buchan, Karin Olesen, Anélle Black and Ranjani Kumar analyses the implications of the new GST regime for two New Zealand businesses. The study observes that compliance, training, and customer relationship are affected due to increases in the GST rate. The last article of this issue, “The Use of Z-Scores to Predict Finance Company Collapses: A Research Note” by Grant Samkin, Mary Low and Tracy Adams, analyses Z’-score of 20 failed financial companies to observe whether or not their collapse could be predicted earlier. The Z’-scores in the five years’ period prior to the collapse of the majority of these companies had suggested that the failures were imminent.