Customer Disclosure Research Articles

Engaging customers with online restaurant community through mutual disclosure amid the COVID-19 pandemic: The roles of customer trust and swift guanxi

Online restaurant communities have emerged as an important channel for restaurants to engage customers and increase sales amid the COVID-19 pandemic in China. According to social penetration theory and social exchange theory, this study investigates how mutual disclosures between servers and customers influence customers' social influence and knowledge-sharing engagement through customer trust and swift guanxi. Using questionnaire data collected from 340 customers, this study finds that server disclosure facilitates customer disclosure, and both server and customer disclosures positively predict customer trust and swift guanxi. Furthermore, customer trust can in turn promote swift guanxi and customers’ social influence engagement, while swift guanxi promotes both kinds of customer engagement. The outstanding theoretical implications of the present research lie in that it depicts the formation mechanism of customer engagement from the new lens of mutual disclosure and guanxi in Chinese culture. Practical implications can help restaurants improve performance.

Peer effect of proprietary information: A cost–benefit analysis of customer information disclosure

AbstractThis study examines how industry peer firms' information disclosures affect firms' customer disclosure. Using samples of Chinese A‐share companies from 2007 to 2019, our results show the following: first, the peer firms' customer disclosures have a positive and significant effect on firms' customer disclosures. The results remain robust after the instrumental variable alleviates the endogeneity problem. Second, firms refer to peer firms' disclosure decisions only when it is difficult to weigh the disclosure benefits and costs. Third, firms tend to imitate the disclosure decisions of industry leaders. The cost–benefit hypothesis of proprietary information disclosure proposed in this study contributes to the literature.

What does it all meme? An exploration of meme stock litigation, regulatory scrutiny and defences for broker-dealers

US financial market regulators have taken a renewed interest in retail trading and brokerdealer practices following the January 2021 ‘meme stock’ extreme market volatility. In this paper, the authors examine broker-dealer practices and trading rules that are the subject of pending litigation. Specifically, this paper examines areas of potential regulatory interest in the aftermath of the trading frenzy, including payment for order flow and related customer disclosures. It also examines the rationale for certain trading restrictions implemented by some broker-dealers during the period of extreme volatility. It then analyses legal defences for broker-dealers in pending investor litigation. Lastly, this paper discusses potential criminal and regulatory liability for amateur traders active on social media and online forums.

An Examination of Relationship Selling Effectiveness in NCAA Division I Ticket Sales

Abstract: College athletics departments are making more money than ever and spending it even faster (Fulks, 2017). As athletics departments look to increase their individual schools’ revenue year-to-year, ticket sales stands out as one of the only revenue streams without a long term contract. The current study examined the effect of relationship selling on several purchase behaviors in Division I college football. A study of over 90 FBS schools concluded the factor of customer disclosure predicted all football-related purchase behaviors, while interaction intensity was found as a non-predictor or even negative predictor. Cooperative intentions predicted some but not all behaviors. Cross-selling behaviors were uniquely predicted by agent disclosure , which did not predict any other outcomes, suggesting that while relationship selling may have a positive effect on the bottom line, not all factors are positive. Additionally, findings suggest positive selling relationships appear differently, cross-selling the customer to another sport.

Governmental customer concentration and audit pricing

Purpose The purpose of this paper is to examine how the concentration of a specific customer type – governmental customer, affects the pricing of audit services in the USA. Design/methodology/approach This paper applies a standard audit pricing model by regressing audit fees on governmental customer concentration and other common determinants of audit fees. This paper also adopts an instrumental variable approach and performs propensity-score matched sample analyzes to mitigate the potential endogeneity problem. Findings Using data from major customer disclosures of US publicly listed firms from 2000 to 2014, this paper finds that governmental customer concentration is positively associated with audit fees, suggesting that a higher level of governmental customer concentration increases a firm’s audit risks and audit effort. In addition, this paper performs cross-sectional analyzes and show that the association between governmental customer concentration and audit fees is more pronounced for firms with weak internal governance, weak external monitoring and high financial risks. Originality/value This paper furthers the understanding of the interactive relationships in supply chain systems and adds new evidence to the literature on customer concentration. Prior studies on customer concentration typically treat all customer types in a uniform manner. To the knowledge, this is the first study that separates governmental customers from other types of customers in an audit pricing setting. The findings highlight the importance of examining governmental customer concentration when assessing a firm’s audit risks and audit fees.

Tell me more: how salespeople encourage customer disclosure

Purpose This paper aims to explore salesperson–customer interactions to identify actual behaviors that result in enhanced customer disclosure and classify them as disclosure tactics, and to explore whether certain tactics are more likely to lead to salesperson–customer relationship advancement. Design/methodology/approach This qualitative research uses conversation analysis to identify salesperson disclosure tactics that result in customer disclosure, using 12 video-recordings of authentic business-to-business initial sales meetings between a salesperson and customer. Findings Findings showed four disclosure tactics that salespeople use to get customers to disclose information: embedded expertise claims, tailored references, demonstrations of preparation and customer orientation and benevolence. These tactics appear more often and are executed differently in sales meetings that successfully advance. Originality/value The research addresses an unexplored area of specific salesperson behaviors and their connection to customer disclosure and relationship advancement in the exploration phase. Additionally, this fills a gap that cannot be addressed with traditional survey or interview data and brings conversation analysis to this particular area.

- Corporate managers' awareness of religious teachings and its impact on corporate social responsibility disclosure - A quantitative study : وعي مديري الشركات بالتعاليم الدينية وتأثيره على مستوى الإفصاح عن المسؤولية الاجتماعية للشركات - دراسة كمية -

The aim of this paper is to determine the impact of awareness of religious teachings on corporate social responsibility disclosure in Libya. To achieve this aim (310) of the questionnaires were distributed to respondents who are the managers of companies operating in Libya in 2018. The spss modeling was used in the descriptive analysis of the data, and the intelligent modeling used the least squares (PLS-SEM) to test the hypothesis study. The study found that there is a positive relationship between the company manager's perception of religious teachings related to the social responsibility disclosure and the corporate social responsibility disclosure level of the companies which operate in Libya. The impact has extended to the four dimensions of disclosure: community disclosure, environmental disclosure, employee disclosure, and product - Customer disclosure.

Where in the supply chain network does ISO 9001 improve firm productivity?

Operations management scholars have long suggested that processes play a critical role in a firm's competitive advantage. ISO 9001, in particular, provides a standard to improve the effectiveness and efficiency of processes. Similarly, network researchers argue that a firm's embedded position in the network plays a critical role in their competitiveness. Taking a network perspective, this research investigates if the productivity benefits of ISO 9001 depend, in part, on the network topology that connects the firm to their network partners. Using customer disclosure data from COMPUSTAT and ISO 9001, this study finds that network closure, industry homophily, and network centrality each moderate the effect of ISO 9001 on firm productivity. We find that ISO 9001 is more effective when firms are well embedded in the supply chain network and least effective when they are isolated. The overall results provide managers guidance on the strategic benefit of network position with regards to ISO 9001 effectiveness.

PENGARUH REWARD ATTRACTIVENESS, KNOWLEDGE BENEFIT, REQUIRED EFFORT, GROUP BELONGINGNESS DAN DISCLOSURE COMFORT TERHADAP EXPERIENTIAL BENEFIT CUSTOMER SATISFACTION DAN CUSTOMER LOYALTY

Purpose from this study was to determine the effect of attractiveness reward on experiential benefit, knowledge benefit on experiential benefit, required effort on experiential benefits, group belongingness to customer satisfaction, disclosure closure to customer satisfaction, group belongingness to customer loyalty, disclosure comfort to customer loyalty, experiential benefits to customer satisfaction and customer satisfaction to customer loyalty. The population used in this study is all Excelso customers who have amember card coffee shop Excelso. The number of samples in this study were 178 respondents. The analysis technique used is Structural Equation Modeling (SEM) using the AMOS 16.0 program. The results showed a significant influence between variable reward attractiveness on experiential benefit, knowledge benefit on experiential benefit, required effort on experiential benefits, group belongingness to customer satisfaction, disclosure closure on customer satisfaction, experiential benefits for customer satisfaction, and customer satisfaction for customer loyalty. Whereas variables that have no effect between variables group belongingness to customer loyalty and disclosure comfort to customer loyalty due to loyalty are influenced by satisfaction. Customers will be loyal when they are satisfied with the products or services offered by the company.

The curvilinear relationships between structural embeddedness and productive efficiency: An exploratory study

Existing network studies pay much attention to the benefits of structural embeddedness. However, Uzzi (1996) points out the marginal benefits of structural embeddedness may follow a pattern of diminishing returns. Using major customer disclosure data from Compustat, this study investigates the curvilinear relationships between multiple aspects of structural embeddedness and productive efficiency. Applying both Wang and Ho (2010) and Chen and Lin (2009) stochastic frontier models, we confirm the diminishing returns of eigenvector and betweenness centralities with a partial support for interconnectedness. Implications from our findings can help decision makers better understand the effects of structural embeddedness and help devise network structural change strategies for productive efficiency.

Supplier Internal Control Quality and the Duration of Customer-Supplier Relationships

ABSTRACT Internal controls influence information quality, thus affecting the ability of supply chain partners, who rely on collaborative systems of information sharing, to reliably contract. Using SOX-related internal control assessments as a proxy for internal control quality and U.S. GAAP-mandated major customer disclosures, we find that supplier internal control quality influences supply chain relationship duration. Specifically, our evidence demonstrates that: (1) poor internal control quality increases the likelihood of subsequent customer-supplier relationship termination; (2) timely control weakness remediation attenuates termination likelihood; and (3) weaknesses affecting customer contracting drive the effect of internal control quality on relationship termination. Our results control for supplier operational quality and performance, and are robust to propensity score matching techniques, controls for reverse causality, and alternative proxies for relationship termination and internal control quality. Overall, our findings are consistent with customers viewing strong supplier controls as important, albeit overlooked, contracting elements with significant implications for supply chain relationships.

Supplier Internal Control Quality and the Duration of Customer-Supplier Relationships

Internal controls influence information quality and thus can affect the ability of supply chain partners, who rely on a collaborative system of information sharing, to reliably contract. Using SOX-related internal control assessments as a proxy for internal control quality and U.S. GAAP-mandated major customer disclosures from 2004 to 2012, we find that supplier internal control quality influences the duration of supply chain relationships. Specifically, our evidence demonstrates that: 1) poor internal control quality increases the likelihood that customer-supplier relationships terminate in the following year; 2) timely remediation of control weaknesses by suppliers attenuates the likelihood of termination; and 3) the effect of internal control quality on relationship duration is affected by customer dependency and control weakness severity. Results are robust to propensity score matching techniques and alternative proxies for relationship termination and internal control quality. Overall, our findings are consistent with customers viewing strong supplier controls as an important, albeit overlooked, contracting element that has significant implications for supply chain relationships.

Auditors and Disclosure Quality: The Case of Major Customer Disclosures

SUMMARYLittle is known about the relationship between disclosure quality and auditor quality. We measure disclosure quality as the likelihood of a firm fully disclosing the identity of their major customers in the Form 10-K filing. We also measure voluntary disclosure by exempt smaller reporting companies (SRCs) disclosing, and all firms disclosing the identity in the audited notes, or affirming no major customers. We expect that firms are more likely to disclose when they engage higher-quality auditors who have specialized knowledge of 10-K regulations. We hand-collect a sample of more than 26,000 (34,000) major customer disclosures that we use for our main tests (voluntary disclosure tests). We find that firms are more likely to mandatorily disclose their major customers' identity when audited by either an office- or national-level specialist whose clientele consists largely of firms with major customers. We corroborate these results with other higher-quality auditor measures: Big N, second tier, and office size. We also show that SRCs are more likely to voluntarily disclose when they engage a higher-quality auditor. We provide further evidence of an association between voluntary disclosure and a higher-quality auditor by ranking disclosure quality on audited disclosure, nonaudited disclosure, and no disclosure.JEL Classifications: M42; M41; D23.Data Availability: All data are available from public sources identified in the text.

The Effects of Major Customer Networks on Supplier Profitability

Whereas extant research on supply chain networks focuses mainly on the networks of major suppliers, this study fills a gap in the literature by exploring the relational and structural characteristics of networks of major customers and their impact on the financial performance of suppliers. Based on the major customer disclosure of the Statements of Financial Accounting Standards 131, this study identifies three dimensions of the major customer networks of U.S. public firms—customer concentration, mutual dependence and customer interconnection—and investigates how they affect the supplier's return on assets (ROAt+1) and return on sales (ROSt+1). Drawing on 717 suppliers and their major customer networks from the Compustat database, the study shows that customer concentration and interconnection negatively affect the supplier's ROAt+1 and ROSt+1, whereas mutual dependence enhances them and reduces the negative impact of customer concentration on the supplier's profitability. This positive interaction between customer concentration and mutual dependence demonstrates how two governance principles, power and embeddedness, simultaneously affect concentrated relationships with major customers.

Customer‐Base Concentration and Inventory Efficiencies: Evidence from the Manufacturing Sector

What is the link between customer‐base concentration and inventory efficiencies in the manufacturing sector? Using hand‐collected data from 10‐K Filings, we find that manufacturers with more concentrated customer bases hold fewer inventories for less time and are less likely to end up with excess inventories, as indicated by the lower likelihood and magnitude of inventory write‐downs and reversals. Using disaggregated inventory disclosures, we find that inventory efficiencies primarily flow through the finished goods inventory account, while raw material efficiencies are offset by higher work‐in‐process holdings and longer work‐in‐process cycles. In additional analysis, we document a valuation premium for more concentrated manufacturers after controlling for other firm characteristics, including default risk and cost of capital estimates. We conclude that investors trade off the costs and benefits of relationships with a limited number of major customers and, on balance, consider customer‐base concentration as a net positive for firm valuation. Overall, our study adds to interdisciplinary research in accounting and operations management by shedding new light on the relevance of major customer disclosures for fundamental analysis and valuation in the manufacturing sector.

The Effect of Supplier Relationships on Disclosures of Forward-Looking Information

This study investigates whether the need for supplier relationship-specific investments influences the disclosure of forward-looking information. Prior literature on relationship-specific investments argues that suppliers are reluctant to invest in relationship-specific assets, since the value to the supplier depends in part on the prospects of the customer. Since the customer is likely better informed about its own prospects, credible disclosures of forward-looking information are relevant to the supplier's investment decision. I examine whether managers use financial disclosures to convey this information to suppliers. Using firm-level data of customer-supplier relationships, I find that supplier relationship-specific investments are positively related to a customer's disclosure of forward-looking information in segments and management forecasts. More importantly, I show that the loss of a relationship-specific supplier, which creates a need for a new supplier, strongly increases the likelihood of initiating forward-looking disclosures in the following period. I find that proprietary costs reduce the association between supplier investments and disclosure, although this result is sensitive to the measure of proprietary costs used. Overall, the findings suggest that disclosures are important beyond capital markets and play a role in supply chain contexts.

Corporate social responsibility practice and corporate financial performance: evidence from Nigeria companies

Purpose – The purpose of this paper is to describe the nature and trend of corporate social responsibility (CSR) practices in Nigeria. The second objective of this paper is to examine the relationship between the dimensions of CSR disclosures and corporate financial performance (CFP) among Nigerian listed companies. Design/methodology/approach – To carry out this research, content analysis was conducted to extract CSR and financial data from annual reports of 68 companies listed on the Nigeria Stock Exchange. Financial data were cross-referenced with the NSE Factbook. CSR indexes and financial performance measures were computed for estimation of the regression analysis equation. The percentages were used to describe the nature and trend of CSR practice in Nigeria. This was followed by the hierarchical multiple regression analysis to examine the relationship between CSR and CFP. Findings – The results of the descriptive statistics show that the listed companies used CSR initiatives to communicate social performance to their stakeholders. From the regression analysis, community involvement disclosure, products and customer disclosures and human resource disclosures were found to enhance CFP. The results also reveal a negative relationship between environmental disclosure and CFP, which indicates that disclosure of environmental impact information could be value destroying in Nigeria. Research limitations/implications – The major limitation of this paper is the sample size. Also, failure of corporations to disclose CSR in the annual reports will have a material effect on these findings. Practical implications – The findings of this paper have practical implications on the management of Nigerian companies to re-think and re-strategize their CSR policies that incorporate social and economic performance to improve their CFP. Social implications – This paper has implication on stakeholders in validating the corporate citizenship of corporations based on the level of commitment and participation in CSR initiatives. Also, findings of this paper will alert the enforcement agencies on the status of CSR practices in Nigeria. Government in collaboration with private and public agencies should consider the needs for CSR framework and database to guide social and environmental reporting in the country. Originality/value – The paper has examined the relationship between CSR and CFP based on CSR dimensional approach. Aspect of human resource and products/customers CSR has been neglected in the context of Nigerian CSR research. This paper makes valuable contribution by offering new and fresh insight on these dimensions.

How can employees engage customers?

Purpose– The purpose of this study is to understand how to engage customers socially in the full-service restaurant industry. More specifically, based on the existing theoretical background, it was hypothesized that server disclosure induces customer disclosure. By a literature review, it was further hypothesized that server disclosure and customer disclosure influence trust, which in turn positively affects commitment and loyalty.Design/methodology/approach– The proposed hypotheses were empirically tested using data collected from 287 full-service restaurant patrons. Structural equation modeling was conducted to empirically test the proposed theoretical hypotheses and evaluate the proposed conceptual model.Findings– Based on the data analysis results, server disclosure was found to be a key predictor of customer disclosure. In addition, server disclosure and customer disclosure aid in the creation of trust, and can thus help to enhance commitment and loyalty. The theory building process revealed that gender is a significant moderator.Practical implications– First, restaurant managers need to develop a systematic training program which would help restaurant servers attain adequate knowledge of their job. Furthermore, the restaurant servers must know the importance of frankness when providing services; a frank confession is the key to understanding the minds of people. Finally, restaurant managers are required to hire employees with an outgoing and likeable personality because they are more likely to induce customer disclosure. To achieve this, restaurant managers should conduct in-depth interviews or personality tests in the recruiting process, which help clarify an applicant’s personal traits.Originality/value– Social penetration theory was applied to identify the relationship between server disclosure and customer disclosure, as it is first attempted in the hospitality industry. In addition, this study separated mutual disclosure into two subdimensions (e.g. server disclosure and customer disclosure) and investigated the impact of these two subdimensions.

Customer-Base Concentration, Inventory Efficiencies, and Firm Valuation: Evidence from the Manufacturing Sector

What is the link between customer-base concentration and inventory efficiencies in the manufacturing sector? Using hand-collected data from 10-K Filings, we find that manufacturers with more concentrated customer bases hold fewer inventories for less time and are less likely to end up with excess inventories, as indicated by the lower likelihood and magnitude of inventory write-downs and reversals. Using disaggregated inventory disclosures, we find that inventory efficiencies primarily flow through the finished goods inventory account, while raw material efficiencies are offset by higher work-in-process holdings and longer work-in-process cycles. In additional analysis, we document a valuation premium for more concentrated manufacturers after controlling for other firm characteristics, including default risk and cost of capital estimates. We conclude that investors trade off the costs and benefits of relationships with a limited number of major customers and, on balance, consider customer-base concentration as a net positive for firm valuation. Overall, our study adds to interdisciplinary research in accounting and operations management by shedding new light on the relevance of major customer disclosures for fundamental analysis and valuation in the manufacturing sector.

Balancing on a Tightrope: Customer Relational Capital, Value Creation and Disclosure

This paper documents and compares the perceptions of key functional specialists regarding the contribution of 16 customer relational capital components to value creation and the motivations underlying its external disclosure. Findings of questionnaire surveys to samples of UK listed company marketing directors (who create customer relational capital) and finance directors (who report customer relational capital) are supplemented by follow-up interviews. Marketing directors and finance directors broadly agreed on the relevant importance of the components to value creation. While companies attempted to internally collate information on those components of most value creation importance, there was a lack of correlation between perceived value creation importance and the extent of external disclosure. This suggests that external disclosure is a poor proxy for value creation importance. In terms of disclosure incentives, marketing directors prioritise trust creation among a range of stakeholders whereas finance directors take a more share holder-centric perspective. External disclosure attracts new customers and informs other stakeholders, yet may adversely affect relationships with existing customers and/or breach specific non-disclosure agreements or generic industry restrictions and regulations. Harming competitive position is considered the major disclosure disincentive. In the view of marketing directors, managing the external disclosure of relational capital is akin to balancing on a tightrope.