Loss Of Goodwill Research Articles

Impact of COVID-19 on Small Domestic and Inbound Travel Agencies and Tour Operators in West Bengal, India: Perspectives of Offline Owners-Managers

Purpose: This article delves into the mindset of small family business owners in tourism during the COVID-19 crisis, their strategies, and the barriers they faced in recovery. The study is particularly significant as it sheds light on the experiences of entrepreneurs in both urban and backward/rural areas of West Bengal, providing valuable insights for policymakers and professionals in the tourism and hospitality industry. Methodology: The qualitative research approach involved semi-structured interviews with thirteen family-owned tour operators or travel agency owners/managers. A fixed semi-structured questionnaire was used to explore their views on management operations during and after the crisis, allowing for open discussion and new insights. Principal Findings: The findings underscore the remarkable resilience of small family-operated tour operators and travel agencies. Despite facing multiple challenges, including threats of existence, the pressure of fixed costs, non-performing travel inventories, feeling unethical, uncertainty about the future, and feelings of loss of goodwill with lenders, these entrepreneurs have shown remarkable adaptability and determination. Originality: This research offers unique insights into the mindset of family business owners in the Indian context, particularly the urban-peripheral context. The study also highlights the gap between the government's measures and the needs of entrepreneurs in this post-COVID-19 era, providing a comprehensive understanding of the challenges and opportunities in the tourism industry.

Combating Deceptive Counterfeits With Blockchain Technology Under Asymmetric Information

Blockchain technology has recently been regarded as a promising anti-counterfeiting strategy. This article explores whether the retailer concerned with goodwill should adopt blockchain to combat counterfeits and disclose demand on the blockchain when both demand information and the supplier's product quality information are asymmetric. We also extend the model by considering the supplier's willingness to join the blockchain, endogenous authenticity proportion, and multiple suppliers. The main results show that when goodwill loss is high, the retailer always prefers blockchain; when this loss is medium, the retailer prefers blockchain only if both the unit production cost and proportion of authentic products are low. In some cases, the retailer has an incentive to disclose demand on the blockchain to motivate the supplier to join the blockchain, thereby achieving a win–win situation. The optimal government subsidy that both incentivizes the retailer to adopt blockchain and improves the supplier's preference for blockchain is also explored.

Energy Management and Charging Portfolio Analysis for Future Battery Powered Harbor Vessels

This paper intends to provide key insights to the marine designers and port authorities for adapting battery-operated zero emission electric harbor vessels (ZEE-HVs) and plan the resources for charging infrastructure. The present study is a cumulatively coordinated analysis of various significant aspects concerning the adaptation of ZEE-HVs for short-endurance commercial maritime operations. The sizing of onboard battery energy systems (OBES) is discussed for different short-endurance ZEE-HVs by considering the speed-resistance characteristics of the hull and open-water characteristics of the propeller without limiting their operations for specific load profiles/operating cycles. Charging portfolio selection is critical for a marine vessel as the OBES size is several times higher than a regular electric vehicle's battery. Hence charging portfolio selection criteria are presented to select a suitable battery charging protocol for each ZEE-HV as per the OBES ratings and available idle times on a typical day. Since the port is a commercial spot, uncertainty in resource planning leads to penalties and loss of goodwill. Therefore, Monte Carlo-based iterative analytical method is adopted to forecast the ZEE-HVs' maximum possible charging power demand on a typical day. By the load forecast data, optimal sizing of the load peak shaving battery (LPSB) was performed to limit load fluctuations at the port grid. The synergy of ZEE-HVs with LPSB and bi-directional charge-discharge controller is pivotal for effectively administering the seaport shore charging facility, which is demonstrated for a typical energy management cycle.

The Evaluation and Improvement of the Production Processes of an Automotive Industry Company via Simulation and Optimization

Production delays are significant problems for the loss of goodwill of the customers and the loss of profits associated with them. The delays may accrue as a result of insufficient resource planning and poorly designed unsatisfactory procedures. In this study, a new mathematical model is proposed to optimize the production processes by minimizing production delays, and a simulation model is developed to test the alternative facility designs. The purpose is to increase customer satisfaction by ensuring that the products are delivered timely and preventing lost sales in an automotive company that manufactures garbage collectors by using real data. The mixed-integer programming problem related to the minimization of production delays is solved by the GAMS CPLEX 24.1.3 software. In this way, the total delay in the production area is minimized by the mathematical model to prevent labor and time loss. Accordingly, the alternative designs are investigated for the improvement of the production processes by using discrete system simulation. A system analysis is performed to determine the bottlenecks in the production processes by developing a simulation model via the ARENA simulation software. With the proposed facility layout alternatives, the delays are eliminated, the total production time is reduced, and an increase in production efficiency is observed.

The Quality of Goodwill Disclosures and Impairment in the Financial Statements of Energy, Mining, and Fuel Sector Groups during the Pandemic Period—Evidence from Poland

The COVID-19 pandemic has strongly affected the economic situation of many countries, which is worth considering not only globally but also in the context of specific industries. An asset that is particularly sensitive to negative economic changes is goodwill. The aim of this study is to assess the impact of the pandemic on the quality of financial disclosures concerning goodwill in consolidated financial statements of groups of chosen strategic sectors in Poland. We investigated the implications of the pandemic on the frequency and scale of goodwill impairment in relation to 23 companies listed on the Warsaw Stock Exchange from the Energy, Mining, and Fuel Index. We identified the research gap in this area. For the purposes of this study, two research hypotheses were formulated: (H1) during the COVID-19 pandemic, there has been a slight improvement in the quality of goodwill disclosures in the consolidated financial statements of groups in the energy, fuel, and mining sectors; (H2) The COVID-19 pandemic caused a decrease in goodwill due to impairment losses in the consolidated financial statements of groups in the energy, fuel, and mining sectors. The hypotheses were verified on the basis of the above research sample. In order to verify the first hypothesis, we tested 81 consolidated financial statements for the years 2018–2021 based on a self-developed index of the quality of disclosed information. To verify the second hypothesis, we analyzed the frequency and scale of the estimated loss of goodwill during the COVID-19 pandemic and its impact on the deterioration of the financial condition of the same research sample. The conducted research shows that the quality of disclosures regarding the goodwill in the examined sample has changed slightly. Contrary to our expectations, the pandemic did not materially reduce the value of goodwill. This means that the first hypothesis was verified positively, while the second hypothesis had to be rejected.

We are in survival mode: how family-owned small foodservice firms in India responded to the Covid-19 pandemic

PurposeThe purpose of this paper is to examine the crisis faced, strategies adopted, barriers for recovery and the future outlook by the operators of family-owned small foodservice business firms in responses to COVID-19. The COVID-19 pandemic has unfolded unprecedented challenges, severely disrupted the family-run small foodservice business units and often put them on the brink of closure of business.Design/methodology/approachThe methodology adopted is a qualitative research approach. The data for the research is collected through a semi-structured interview. The data was collected from the 13 family-owned foodservice providers. The data is collected through a semi-structured telephone interview as there is a restriction of travel between different regions.FindingsThe finding reveals that small family-operated foodservice firms faced multiple challenges, including threat for existence, the pressure of fixed cost, feeling unethical, financial instability, uncertainty on future and feeling of loss of goodwill with lenders.Originality/valueThe current research work is the first to discuss the impact of Covid-19 on small family-owned food services businesses in an Indian context.

Tempestividade da perda por redução ao valor recuperável do goodwill em empresas brasileiras

ABSTRACT This article aimed to examine the timeliness of goodwill impairment perceived by the Brazilian capital market. Despite it being widely studied internationally, the timeliness of goodwill impairment has not yet been empirically investigated in Brazil, given that previous studies focus on the determinants of this loss, on its disclosure, or on manager behavior. This question is relevant primarily due to the context of standardization of the International Accounting Standards Board (IASB), which has discussed possibilities for altering the treatment of goodwill. It is also important for investors, since a lack of timeliness affects the utility of accounting information for these users. The study provides indications that the discretion of the impairment test is used opportunistically, altering the moment of recognition of a goodwill loss. This shows the need for a joint effort between monitoring agents and standard-setting bodies to guide the use of discretion, as well as changes in manager behavior. It also indicates that the current rule for recording impairment fails in providing timely information, as it provides a shielding effect against losses. The study used non-financial companies listed on the B3 S.A. - Brasil, Bolsa, Balcão that had goodwill recognized in the 2010-2020 period. The analysis considered two dependent variables, applying a logistic regression to explain the recognition or not of goodwill impairment and a tobit model to predict its value. To examine timeliness, the current and lagged annual returns on shares were used. The findings suggest that losses through goodwill impairment are not recognized in a timely manner and that managers delay recording them by at least one to two years, with stronger indications of late recognition in two years. In addition, the loss amount can be influenced by returns occurring up to three years before its recording.

Optimal lot-sizing of an integrated EPQ model with partial backorders and re-workable products: an outer approximation

In this paper, we develop and optimise the lot-sizing policy in an integrated Economic Production Quantity (EPQ) model with partial backorders and re-workable products considering linear and fixed backordering costs. Time intervals, number of lots, and lot size are the decision variables of our model. The cost function includes the set-up costs, the holding costs, the goodwill loss costs, the fixed backorder costs, the backorder costs, the costs of reworking, the production costs, the disposal costs, and the screening costs. The profit function consists of the sale profits obtained from the sold products. The goal is to minimise the cost function and maximise the profit function under stochastic constraints simultaneously. A Lexicographic method is applied for integrating the conflicting objective functions. The integrated objective function, with stochastic constraints, is a Mix Integer Nonlinear Programming (MINLP) model. Accordingly, an Outer Approximation (OA) algorithm is provided for optimal lot-sizing the integrated EPQ model. Two numerical examples and a real large-scale example demonstrate the decent and acceptable performance of the presented OA with respect to the optimality criteria such as optimum solutions, complementarity, and taken iterations.

Environmental Smog Control Costs and proceeds of Oil and Gas Conglomerates

The study was carried out to analyse cost implications of environmental smog control costs on the proceeds of oil and gas conglomerates. Panel data were collected and organized from financial statements of selected conglomerates. Data were analysed using ordinary least square of multivariate analysis. Empirical findings revealed that environmental smog control costs have significant effect on the proceeds of the conglomerates investigated. Thus the study suggested and acclaimed that conglomerates should ensure that smog management and controls policies are formulated and implemented to avoid projecting a bad image of the establishment which could lead to loss of goodwill and reduce proceeds in the long run, there should also be effective regulations that will lead to adequate cost disclosure and appropriate financial performance reporting.

A guiding framework for enhancing database security in state-owned universities in Zimbabwe

This study sought to design a framework to enhance database security in state-owned universities. Database security has been a cause for concern for state-owned universities following many reported cases of state-owned universities that were repeatedly hacked locally and the fact that internationally and there seems to be no strategy in place to guide database security mechanisms in state-owned universities. The study followed a positivist research philosophy using a hypothetical model to test various hypotheses. Through the lens of activity, Social Technology System and deterrence theories, using a survey method to gather the information, the hypotheses were tested and analyzed to further understand security vulnerabilities, security controls and ideal architectural requirements of database security. Quantitative data were collected from 104 respondents using questionnaires. A deductive approach was employed to ensure that the proposed strategy was designed after collecting the necessary data. The quantitative data were analyzed using SPSS version 22. The research findings highlighted the following issues that affect database security: human factor, work environment and technology in use. These issues lead to data exposure, data theft, data corruption, loss of revenue and loss of goodwill. Finally, a framework was proposed that would enhance database security in state-owned universities.

Inter-regional M&As, home bias and the post-merger performance

ABSTRACT The under-performance of mergers and acquisitions (M&As) resulting from impairment of goodwill is of great interest to regulators and investors. This study investigates the performance of M&As from the perspective of home bias. The results indicate that (1) Post-merger performance is worse when purchased companies are in high-level executives’ hometowns. (2) When located in the executives’ hometown, listed companies pay higher premiums, and further loss of goodwill occurs in the following years. Integration efficiency after M&As is lower, as reflected in the higher degree of excess employees. (3) Cross-sectional analyses indicate that M&A under-performance only occurs when the province has a low level of market development, listed companies are non-state-owned enterprises, or listed companies’ executives are older. (4) Interactive effect test results suggest that fund holding, analyst following and media coverage can alleviate the negative impact of home bias on long-term performance.

Strategies Adopted by Airlines to Sustain Ticket Sales Performance Post the Zero Commission Policy: A Case of Kenya Airways (KQ)

The deregulation act has dramatically transformed the tourism distribution system since its inception in 1978. Deregulation act came up as a way to liberate the airline world from the entanglement of restrictive operating structure; this gave in the idea of cost cutting that negatively impacted the airlines and the travel agencies and slowly created a distribution gap. It also paved way to new operating environment; airline loss of goodwill among travel agents, introduction of low-cost no-frills carriers that tightened the competition cords, increased fuel prices and customer demands among others. The paper aimed at assessing the strategies adopted by Kenya Airways to sustain ticket sales post the zero commission policy. It specifically sought to establish the influence of yield management, internet and branding on determining ticket sales performance. The study employed survey design targeting Kenya airways sales staff and travel agents. The research instruments used were interviews and questionnaires. Descriptive statistics were used for data analysis. The results of the study established that Kenya airways depended on yield management in order to maintain their ticket sales management. The yield management strategy adopted includes focusing on corporate clients, price discrimination and cross selling. Further, internet with 60% presents the best alternative for airlines to bypass travel agencies in contacting their customers. Alliances such as sky team membership had also facilitated a large customer base for the airline. Kenya Airways focuses on corporate travellers and takes advantage of the hub and spoke system provided by JKIA to reroute passengers from other destinations that use airlines that are in the Sky team Alliance. The study recommends incorporation of retail customers as equal contributors to its performance in air ticket sales.

Effect of the buy‐online‐and‐pickup‐in‐store option on pricing and ordering decisions during online shopping carnivals

AbstractThis study focuses on the value of the buy‐online‐and‐pickup‐in‐store (BOPS) option during online shopping carnivals. We develop a newsvendor model in which a retailer faces the risk of online order overload and provides consumers with a BOPS option. The optimal pricing and ordering decisions under the benchmark scenario and the omnichannel retailing scenario with the BOPS option are analyzed. The results demonstrate that after implementing the BOPS option, the retailer will maintain or lower the price instead of raising the price. In addition, we find that the fraction of BOPS consumers, the unit goodwill loss, and the retailer's best online service capacity play significant roles in the implementation of the BOPS option. We identify the condition under which the retailer can benefit from the BOPS option.

The Importance of Marketing Strategy for Creating and Maintaining Goodwill for Construction Companies

If a company wants to have a long-term presence on the market, it must have a long-term marketing strategy. It should respect the expected technical, technological and socio-economic development. All these factors are clearly manifested in the construction industry. Construction activities are specific in that their products are for long-term use and financially demanding for the investor. The underestimation of trends, technological changes and investor requirements leads to loss of clients and a significant deterioration in the economic situation. Creating a marketing strategy to keep it on the market can prevent these problems. In construction it means estimating trends and shaping a marketing strategy. This activity is very demanding and costly. It leads to the creation of Goodwill and its focus and is an integral part of the company’s assets. If is the marketing strategy insufficient or wrong, it will result in the loss of Goodwill and therefore clients in the market. Construction companies needs to build Goodwill and record it as part of the company’s property. Goodwill is also part of internal accounting. This is where the cost of marketing will take place, not only in terms of costs. There is a need for companies to deliberately choose the methods through which they will express the value of Goodwill.

Cognitive Dissonance or Agency Theory, what Explains the Loss of Impairment of Goodwill?

Objective: The purpose of this research is to analyze the impairment loss of goodwill in companies listed in Brasil, Bolsa, Balcão [B]3 from the perspective of Agency Theory and Cognitive Dissonance Theory.Method: We used a sample composed of Brazilian non-financial publicly traded companies listed in [B]3. The analysis was conducted through the logistic regression, considering an unbalanced panel data set for the period from 2010 to 2016.Originality/Relevance: This study uses a theory of psychology, the Cognitive Dissonance Theory, to try to explain the occurrence of goodwill impairment loss.Results: The results point to the Cognitive Dissonance Theory as the theory that explains the goodwill impairment loss, since managers tend to record a goodwill impairment loss in the current year, when there was already a loss recorded in the previous year, as a way to decrease the mental discomfort caused between their cognitions.Theoretical/Methodological contributions: It contributes to the literature in order to associate the decisions made by managers with a psychological behavioral theory that until now has not received prominence in the attempts to justify the decisions of agents. The gain from this research is also directed to investors, as it allows them to make decisions not only based on what the accounting reports say, but taking into account other aspects, such as managers’ behavior and cognitions.

Dissonância Cognitiva ou Teoria da Agência, o que Explica a Perda por Impairment do Goodwill?

Objective: The purpose of this research is to analyze the impairment loss of goodwill in companies listed in Brasil, Bolsa, Balcao [B]3 from the perspective of Agency Theory and Cognitive Dissonance Theory.Method: We used a sample composed of Brazilian non-financial publicly traded companies listed in [B]3. The analysis was conducted through the logistic regression, considering an unbalanced panel data set for the period from 2010 to 2016.Originality/Relevance: This study uses a theory of psychology, the Cognitive Dissonance Theory, to try to explain the occurrence of goodwill impairment loss.Results: The results point to the Cognitive Dissonance Theory as the theory that explains the goodwill impairment loss, since managers tend to record a goodwill impairment loss in the current year, when there was already a loss recorded in the previous year, as a way to decrease the mental discomfort caused between their cognitions.Theoretical/Methodological contributions: It contributes to the literature in order to associate the decisions made by managers with a psychological behavioral theory that until now has not received prominence in the attempts to justify the decisions of agents. The gain from this research is also directed to investors, as it allows them to make decisions not only based on what the accounting reports say, but taking into account other aspects, such as managers’ behavior and cognitions.

Replenishing an inventory system permitting lost sales under Poisson demand and short lead times: Explicit performance and an efficient algorithm

In-store, on-shelf availability is a key tool that assists sellers to compete in a market whenever store loyalty is low. On the other hand, the increasing incentive to reduce stock places pressure on suppliers to shorten their lead times. In this work, a continuous-review inventory model is developed and investigated, under the assumptions of random demand with a Poisson distribution and an ordering cost. It is further assumed that unsatisfied demand becomes lost sales. Closed-form expressions are derived for the objective of maximizing the expected profit per unit time and for the expected cycle length, service level, holding cost, and lost-sales penalty cost (i.e., margin lost plus a goodwill loss). We assume the policy (Q,r), meaning that a replenishment of quantity Q (integer) is ordered once the (integer) level of the on-hand integer reaches r, known as the reorder point. We find that the searching domain is composed of a bounded two-dimensional domain and a line. An efficient algorithm with polynomial-time complexity that searches for the optimal integers is developed. The real-world applicability of the method and a sensitivity analysis of several key parameters are investigated via a numerical example. The superior performance of the proposed model with respect to an adjusted well-known newsvendor model is shown. Finally, we also compare these two models when the assumption of a short lead time is relaxed.

A cash‐constrained dynamic lot‐sizing problem with loss of goodwill and credit‐based loan

AbstractWe consider a small retailer that manages its inventory under a strict cash constraint. At each period, the retailer's available cash restricts the maximum inventory level that it can replenish. These retailers are nanostores, which are widely present in emerging markets, or small online retailers in some Chinese e‐commerce platforms. We assume that the retailer can decide the satisfied demand quantity even if it has enough inventory, but unsatisfied demand in one period may cause customer demand to decrease in the next period considering the loss of goodwill. The retailer could adopt a credit‐based loan provided by its suppliers or e‐commerce platforms to alleviate cash shortages. A profit maximization single‐item lot‐sizing model is constructed for this problem. Numerical tests demonstrate that cash‐flow constraint is different from traditional capacity constraint, and that cash availability, as well as loan interest rate, can substantially affect a retailer's optimal lot‐sizing decisions. Our model can help a retailer decide at the beginning of the planning horizon whether it is worth applying for a credit‐based loan with a given loan policy. We prove that the zero‐inventory‐ordering property still holds for certain situations, and propose a polynomial algorithm with heuristic adjustments to solve this problem when customers' payment delay length can be neglected. If unit variable ordering costs are equal and the loss of goodwill rate is zero, the algorithm can obtain optimal solutions. Under other situations, comparisons with CPLEX 12.6.2 show that our algorithm can reach optimal performance in most cases, and it has a computation time advantage for large‐sized problems.

Enhanced optimal inventory control policies of perishable products in a retail business: a comparative simulation study under different cost structures

This paper experiments different replenishment policies of perishable products using simulation-based optimisation approach. The main contribution of this study is to recommend the best replenishment policy and whether enhancing a typical periodic review policy can lead to a better outcome. It was found that enhancing a typical periodic review policy with a backroom and a reorder level can lead to a higher net profit. In some instances, integrating both of them together can outperform implementing them alone, as they can complement each other. The finding also suggests that enhancing the base policy by screening out bad items before reaching the customers may not be so cost-effective if the removed items cannot be sold to generate extra revenue or the loss of goodwill is not the main concern. These findings can help shop managers to make right decisions on the optimal inventory policy in a certain situation under an uncertain environment.

Enhanced optimal inventory control policies of perishable products in a retail business: a comparative simulation study under different cost structures

This paper experiments different replenishment policies of perishable products using simulation-based optimisation approach. The main contribution of this study is to recommend the best replenishment policy and whether enhancing a typical periodic review policy can lead to a better outcome. It was found that enhancing a typical periodic review policy with a backroom and a reorder level can lead to a higher net profit. In some instances, integrating both of them together can outperform implementing them alone, as they can complement each other. The finding also suggests that enhancing the base policy by screening out bad items before reaching the customers may not be so cost-effective if the removed items cannot be sold to generate extra revenue or the loss of goodwill is not the main concern. These findings can help shop managers to make right decisions on the optimal inventory policy in a certain situation under an uncertain environment.