Question
1.Evaluate the quality of the problem statement. What elements meet quality requirements? Why? What elements require quality improvement? Why? 2.For the elements requiring quality improvement,
1.Evaluate the quality of the problem statement. What elements meet quality requirements? Why? What elements require quality improvement? Why?
2.For the elements requiring quality improvement, what specific corrective steps in formulating a researchable problem would you recommend to each author?
3.Based upon THE review of the sample problem statement, what are the criteria should be use to evaluate the problem statement?
Problem Statement
Earnings surprises can result in declines in firm market value, create questions regarding management competence, and lead to executive termination (Feng & Koch, 2016; Habib & Hossain, 2018).As a means to reduce earnings surprises, managers voluntarily issue earnings guidance to establish earnings expectations and to communicate news to reduce the extent of asymmetric information between management and investors (Hirst, Koonce, & Venkataraman, 2017; Kim & Park, 2019).Development of earnings guidance requires management decisions, and decision-making occurs in an environment of uncertainty (Artinger, Petersen, Gigerenzer, & Weibler, 2015).Decision-making uses both rational cognitive thought processes and intuition (Akinci & Sadler-Smith, 2016; Kahneman, 2017).
The social problem is that earnings surprises may result in a drop of firm market value of up to 7 percent, increase a firm's cost of capital, and create a perception that management is incapable of running the company (Feng & Koch, 2018; Goodman, Neamtiu, Shroff, & White, 2017). The specific management problem is that bad decisions regarding management earnings guidance may cause earnings surprises for public companies headquartered in the United States, and the bad decisions may or may not result from a decision-making process that balances rational cognition, intuition, and the influence of psychological factors such as hubris and power (Fast, Sivanathan, Mayer, & Galinsky, 2018).This study extends prior research regarding the role of evidence and intuition in management decision-making and the influence of psychological factors such as hubris and power to the topic of management decision-making (Francis-Smythe et al., 2017; Garcia 2016).
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