Article Abstract:
Shareholder lawsuits are currently a hot issue. This article compares the characteristics and disclosure policies of companies that were targets of shareholder litigation with those of similarly at-risk companies that were not sued. In contrast to widely held beliefs, a sharp stock price decline does not automatically trigger a lawsuit. Litigation targets experience an abnormally good operating and stock market performance prior to litigation, where the non-sued companies are typically mediocre performers. The litigated companies communicated with investors more extensively than control companies, issuing more optimistic announcements but fewer warnings of forthcoming disappointments. Moreover, as a group, the litigated companies did not resume their high-flying performance after litigation. Shareholder litigation should be viewed as a potential cost of disclosure, however it does not overshadow the considerable benefits of an active disclosure policy. (Reprinted by permission of the publisher.)
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Article Abstract:
Countering claims that cyberspace will bring the end of organizations in general and of the firm in particular, this article points to the role organizations play in fostering the production and synergistic development of knowledge. Formal organizations help turn the partial, situated insights of individuals and communities into robust, organizational knowledge. To organize knowledge in this way requires acknowledging the boundaries inevitably erected within organizations through the division of labor and the division of knowledge. Infrastructure for organizing knowledge must overcome these boundaries. Assuming that knowledge is a frictionless commodity possessed by individuals makes communications technologies and social organization curious antagonists. This article argues instead for compatible organizational and technological architectures that respond to and enhance the social production of knowledge. (Reprinted by permission of the publisher.)
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Article Abstract:
Information disclosure activities of most companies are largely limited to compliance with legal requirements and to occasional reactions to external events, such as a negative analyst report or a proxy contest. However, the absence of a carefully planned and executed disclosure strategy is shortsighted and detrimental to the company and its managers. Such a strategy of voluntary information disclosures has considerable potential for changing stakeholders' perceptions of the company and thereby its market value, for decreasing the cost of capital and consequently enhancing growth, and for improving the terms of trade with supplies and customers as well as reducing the likelihood of regulatory intervention in the firm's affairs. This article outlines the development and implementation of a disclosure strategy. (Reprinted by permission of the publisher.)
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