Rrs-11.docx

RELATED STUDIES According to “Chinese Journal of Management Science” written by DAI Jian-sheng and MENG Wei dong (2010), they investigated the mutually incentive problems in team production and how it shows an independent work team that confronts mutually incentive problems and the existence of the principal-agent relationships among the team. They have introduce the mechanism of profit sharing among the team members where it can effectively stimulate them to make great efforts to overcome moral risk in the joint of their production and to realize constrained paretian optimal. The research that was made by the authors in 2010 has a very helpful and big impact towards the mutually incentive problems in every team production a company faces and provides a clear understanding towards profits sharing between a lot of the team members. One of the recommendations that the researchers would like to add is to go more deeper on the effect of thee profit sharing in the employees. According to Giovanna Lo Nigro (2009) in a study entitled “Risk Assessment and Profit Sharing in Business Networks” that network nowadays is preferred governance form to conduct the economic transactions and that is also the solution to reach flexibility maintaining the cost and quality level. Since network concept also refers to several of organizational hybrids it is even more possible to decide the one that fits better to all the market necessities. In the study conducted also concerns two aspects, the profit and the risk which are strictly related and have to be a special factor concerning that the two depict a complete scenario which implies that risk assessment and management in the network environment will have a hard time neglecting profit sharing on in other words, profit sharing mechanisms should use risk as driver. In this context the study proposed a methodology that measure the risk in taking into account the two phenomena; risk estimation is a basic step to evaluate the opportunity cost of capital needed to compute the

network Net Present Value (NVP) that is likely assumed as base in the profit sharing process, wherein it has been tackled using the Shapley value approach that is inspired to the fairness principle while some of the opportunities cost of capital is assessed using the Capital Asset Pricing Model (CAPM). The researchers noticed that they focus more on the profit sharing among the business networks in the company which gives a very big help because they also tackled here the Shapley Value approach which gives opportunities cost of capital that is assessed using the CAPM. According to T. Karimo and H.I

Kulmala (2008) in a original article entitled

“Incentive profit sharing rules joined with open book accounting in SME networks”, where the authors stated that profit sharing rules that are applied together with open-book accounting are a synergetic combination that encourages SME networks to continuous innovation. This article studies also the profit sharing rules that works as the incentive of a company for a cost reduction in their networks. They have describe a study that is steel-roof that manufactures and assemble the network wherein profit sharing become more relevant shortly after a variety of open bookaccounting that was successfully implemented. Moreover, they presented a dynamic game that has a theoretic model for the study of some of the desired characteristic of profit- sharing rules in many networks. They found out that under the quite general assumptions, profit sharing rules needed to be satisfied in certain condition in order to gain encouragement of the network partners to announce their cost-reducing ideas immediately. Lastly, the authors stated that a suitable and simple profit sharing rule is the combination rule in which rewards the innovator and the target of cost reduction. One of the strengths that this study has is the rules of profit sharing embedded in this study which in some way gives help to every employee on how to act towards the rule that is given by Karimo and Kulmala.

In the paper of “Profit Sharing in an Auditing Oligopoly” by Xiaohong Liu and Dan A. Simunic (2005). They explained how they examined that in an auditing firm; profit sharing rules is also visible. They have used a linear contracting framework where they have investigated the effects of profit sharing I ever individual in their various decisions including in their pricing strategies and effort choices. They assume that efficient audit of different types of client also require different effort profiles in which they give respect to every degree of partner cooperation. (e.g the audit of a complex company requires different amounts of partner collaboration than does the audit of a simple company. Moreover, since the enforcement part would be too costly such as the head office of an audit firm or a court, to verify each client they have in any type of order they resolve in any compensation that disputes among the firms partners where it is reasonable to assume that client type will not be contracted upon for partner compensation purposes. In this research study, profit sharing is seen in a different way; in an auditing firm, where it had presented a dynamic theoretic model for the study of the desired profit. The researchers also stated the even a simple profit sharing rule gives rewards to the innovator and the target of each cost reduction. According to Qi Yuan, Zhao Xiokang and Li Yumin in the research entitled “Research on Profit Distribution of Supply Chain Knowledge Sharing Based on the Shapley Value and Gahp”, wherein connection with the problem to establish a fair and reasonable income distribution mechanism to employees the researchers based it on the evaluation theory of knowledge sharing with the combination of characteristic of the supply chain itself. The researchers also have construct a set of indicator system. On the basis the basis of the tradition in the Shapley Value algorithm, they added that a kind of distribution system can avoid the noncooperative game and it makes the ambiguity issues quantitative and clear. The introductory part

of the Shapley Value with correction factor is more reasonable, fair and more favorable to the mobilization alliance enthusiasm. The authors of the study discussed all about the distribution in the supply chain knowledge where it is connected again in the Shapley Value Algorithm and how it is fair and somehow favorable on the enthusiasm of the mobilization alliance. According to the Journal of Undergraduate Research written by Sonia Rolland (2006), that one of the biggest and most successful cooperative in the western world is the Mondaragon Corporation Cooperative that is somehow located in the Basque region of Spain. The owner of the said cooperative is Jose Maria Arizmendiarrieta, with the help of the most unique corporation all over the world, and also the uniqueness of the Mondragon’s company they see the primary purpose of the company as producing jobs and value to the communities. The success of Mondragon company is attributed to professionalism, accountability and efficiency based on new technology, continuing education, and willingness of people to work together. In this case study of the Mondragon Corporation and Cooperative the research somehow explained the uniqueness and determination of the company to stay long in the business industry for over a hundred year and how they are attributed with professionalism, accountability and efficiency on facing their people to work together. According to the Journal of “Knowledge Embeddedness and the Transfer Mechanism in Multinational Corporations” by Jacky F.L. Hong (2009) wherein the paper reports is qualitative study that was conducted by the four Japanese subsidiaries in the country of China and Vietnam about their procedure of international knowledge transfer. To figure the literature regarding the diverse types and characteristics of knowledge and multinational corporations (MNCs), they look different kind broad mechanism adopted and locally formulated by the host country subsidiaries for transferring foreign knowledge and putting the locally embedded

knowledge into a practical use at the local setting. And also the findings of the researchers indicated the limitations of referring a standardized, universal set of knowledge and transferring mechanism without considering local idiosyncrasies. Lastly the contribution of local agents and institution throughout the process of local knowledge adaptation and development In the study entitled “Earning Management in Australian Corporations” written by Mark Wilson (2011) in this article the researcher has conducted a survey of the literature examining the earnings management behavior of Australian corporations. While some of the numerous motivations for the earnings of the management are the proposed in this study and in the current period the turnover of the CEO is the only thing that is phenomenon for which there is consistency on the empirical support. The researchers also added the number of discontinuities in the distribution of earning around each benchmarks such as the zero profit level. However the researcher also added that there is no proof associated with abnormal accrual behavior. Evidence regarding the ability of the many variety governance mechanism to constrain some of the earnings in the management that is also mixed. While several studies reports a negative relation between the sizes of the auditor the management’s earning, no Australian study has yet attempted to control the likely endogenous nature of this report. In this study they have discuss the only thing why the turnover of the CEO becomes a phenomenon and when this happens it affect the sales and profit of the company. In the study of Constantine Illopoulos and George Hendrikse (2014) entitled “Influence Costs in Agribusiness Cooperatives” , the researchers had added the influence costs problem in the governance structure “agribusiness cooperative.” The Influence costs are the highest in cooperatives than in investor-oriented firms due to the unique governance structure of the former. The researchers has formulated and tested the hypotheses regarding to the relationship

between the influence cost and the seven variables which are membership size, member heterogeneity, average number, age, singleness of purpose, managerial compensation and professional versus inside the management. The main result of the researchers are that heterogeneous member preference, older average member age and the investment in the multiple product lines do all contribute to the higher influence costs. In addition, the cooperative with well-paid, powerful and professional managers incur lower influence costs. The impact of this to the membership size is the level o influence costs are undetermined. According to the Journal of Annick Willem and Marc Buelens the “Knowledge Sharing in Inter-unit Cooperative Episodes: The impact of Organizational Structure Dimensions” (2009) They study how classic organization structure should be modified to be more acclimate to organizational knowledge sharing. Specifically, they appear at the dimension: coordination, centralization, formalization, and specialization, in their relationship to the concept of knowledge sharing. Empirical data was gathered by means of questionnaire in two companies. Their findings mean that expected relationship such as the negative effect of centralization or the positive effect of lower formalization, were not found.