This paper investigates if Japanese firms that report small positive profits participate in earnings management through real activities manipulation to avoid reporting losses. The evidence indicates that these firms upwardly manage earnings by cutting discretionary expenses and overproducing. Meanwhile, the findings also suggest that they simultaneously record income-decreasing accruals, suggesting that firms reporting small positive profits have a stronger incentive to avoid reporting losses.

Purchaser and medical professionals have conflicting interests about price setting. Purchasers prefer pricing based on current amount of resources paid (‘worth of paid resources’)-fundamentally based on the attitude of ‘rationalizing medical expenses’, and medical professionals prefer pricing based on desirable amount of resources claimed by themselves (called ‘worth of skills’)-fundamentally based on the attitude of ‘accommodating medical professionals’. This study revealed the relative worth of paid resources for different kinds of surgeries and the absolute worth of paid resources for each kind of surgery do not converge respectively with the relative and absolute worth of skills. In this circumstance, the government needs to consider that prices should be set based on the perspective of rationalizing expenses or accommodating professionals, when they design the relative and absolute amount of prices for different kinds of rationalizing expenses or accommodating professionals, when they design the relative and absolute amount of prices for different kinds of surgeries. This study showed the government designed the relative and absolute amount of prices in a balanced manor of both views.

The purpose of this article is to investigate the relationship between performance measurement system and financial performance in decentralized organization. A questionnaire survey was mail-administered with 3,245 decentralized units listed on the First Section of the Tokyo Stock Exchange and data has been collected from 307 units. The models were examined by confirmatory factor analysis. The result revealed that the units which use not only formal information with financial & non-financial performance measures, but also informal information showed significantly higher scores in financial performance. The conclusion is that informal information plays an important role in successful performance measurement system.

This article proposes an activity-based costing model for measurement of customer profitability. According to proposed model, we should (1)divide the marketing activity as a part of the value chain into subactivities:(a) sales force training and education activity, (b)market research activity, (c)order acquisition activity, (d)order execution activity, (e)accounts receivable recovery activity, (f)after-service activity, and (g)supporting service activity. (2)(i)calculate the customer gross margin by using the “sales-cost of goods sold matrix”, (ii)apply activity-based costing(ABC) to the above subactivities to convert the resources consumed into activity costs by using the “resource-activity matrix”, (iii)complete the “activity-customer matrix” to assign activity costs to each customers　,and (iv)determine the customer profits by making the “customer profitability table”, and (3)derive generalized equations to get the customer profits. This model should be available for a company to manage marketing strategy and cost management effectively under the limited resources.