Review of Contemporary Business Research

The Impact of Cultures on Shaping Earnings Benchmarks
Nargis K.B. Makhaiel

Abstract
Purpose: This paper studies the influence of the Egyptian context on shaping earnings benchmarks. Design/methodology/approach: This study adopted interpretive approach as research philosophy and interviewing as research method. Findings: This paper finds that firms model their published profit figures to the prevailing level of profits in its sector, these findings are consistent with the cultural-collectivist feature of Egyptian society that refer to a very tight social framework among Egyptians, leading to imitate each other. This study finds, unlike research conducted in developed countries, in Egypt, a one of emerging economics, financial analysts' forecasts are not generally considered an earnings benchmark; however, increasing profits and retaining this pattern; and industrial norms are prevailing profits levels, and hence they are completely regarded as important targets for firms to beat in order to ensure their economic and social fitness and their management effectiveness. It also is found that firms are interested in meeting all these earnings targets as one set in a sequential manner, starting with the most important one. Originality/value: This paper contributes to literature by shedding light on the fact that there are no earnings benchmarks which can be generalised among contexts; differences in the situations and circumstances of contexts play key role in shaping earnings targets a firm seeks to achieve. It also sheds light on industrial earnings norms as an important earnings benchmark.

Full Text: PDF     DOI: 10.15640/rcbr.v5n1a12