Lamar Pierce and Michael Toffel receive the 2014 RIPA for their research on how to identify trustworthy auditors
Submitted by Network for Business Sustainability
The 2014 Research Impact on Practice Award was announced yesterday at the Academy of Management’s annual meeting in Philadelphia. The award is given by Canada’s leading public-private partnership in business sustainability, the Network for Business Sustainability (NBS) Canada, and the Organization and the Natural Environment (ONE) Division of the Academy of Management, the professional organization for management professors. Professors Lamar Pierce and Michael Toffel won the 2014 RIPA for their rigorous study on the key qualities of trustworthy auditors.
Pierce and Toffel’s research article, “The Role of Organizational Scope and Governance in Strengthening Private Monitoring,” studied the conditions under which auditors provide more or less stringent audits. As many auditing firms “cross sell” additional services such as consulting, Pierce and Toffel found that auditors are more lenient when auditing customers who buy their other services, perhaps because the auditing company tries to keep both of these revenue streams flowing. The researchers’ recommendation: for more stringent auditing, choose a firm solely focused on auditing. Compared to independent firms, franchises and subsidiaries also tend to be more trustworthy auditors because they are subject to monitoring by corporate headquarters, and so have stronger incentives to audit stringently. Pierce (Washington University in St. Louis) and Toffel (Harvard Business School) published their findings in the journal Organization Science.
Pierce and Toffel’s deep insights into the auditing industry demonstrates the valuable insight academic research can offer business practice, underscoring the core objectives of the Research Impact on Practice Award. “Researchers and managers often care about the same issues, but the two communities do not often share what they know,” says Tima Bansal, executive director of NBS. “This award is about connecting those two communities and sharing their knowledge.” Frances Bowen, ONE Chair, adds: “Sustainability researchers are eager to have their insights put to work.”
Auditing, certification, and other private monitoring are widespread. Governments often require monitoring of compliance with environmental, labor, consumer, and financial reporting rules, and firms seek to understand quality and workplace conditions in their supply chains. “If the monitoring isn’t credible, this oversight is valueless,” explains Pierce. In all these situations, says Toffel, “our findings should help firms make better choices about which auditors are more likely to provide a more accurate portrayal of the facts on the ground.”
The Research Impact on Practice award seeks to celebrate and share academic research that has the opportunity to change business. In addition to the winning article of Toffel and Pierce, the 2014 Research Impact on Practice Award Ceremony also recognizes two runners-up research teams; Elke Schüssler, Charles-Clemens Rüling and Bettina Wittneben, who studied how to advance climate negotiations; and Joern Hoppmann, Michael Peters, Malte Schneider and Volker H. Hoffmann for their work on how to craft effective renewable energy policy. These research products will be promoted and made publicly available on the NBS website in the coming months.
To learn more, please contact Jessica Kilcoyne, Communications Coordinator, NBS Canada at 519-661-2111 x88932 or firstname.lastname@example.org.
About NBS: A Canadian non-profit established in 2005, the Network for Business Sustainability is a powerful and growing network of international academic experts and business leaders. NBS produces authoritative resources on important sustainability issues – with the goal of shaping management practice and research. (http://nbs.net/)
About ONE: The Organizations and the Natural Environment (ONE) Division of the Academy of Management is dedicated to the advancement of research, teaching, and service in the area of relationships between organizations and the natural environment. (http://one.aomonline.org/ONE_Web/Home.html)
A Canadian non-profit, the Network for Business Sustainability produces authoritative resources on important sustainability issues - with the goal of changing management practice. We unite thousands of researchers and business leaders worldwide to develop sustainable business models for the 21st century.
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