THE UNIVERSITY OF MANCHESTER - APPROVED ELECTRONICALLY GENERATED THESIS/DISSERTATION COVER-PAGE Electronic identifier: 16349 Date of electronic submission: 27/09/2015 The University of Manchester makes unrestricted examined electronic theses and dissertations freely available for download and reading online via Manchester eScholar at http://www.manchester.ac.uk/escholar. This print version of my thesis/dissertation is a TRUE and ACCURATE REPRESENTATION of the electronic version submitted to the University of Manchester's institutional repository, Manchester eScholar. Approved electronically generated cover-page version 1.0 ACCOUNTING FOR UK RETAILERS’ SUCCESS: KEY METRICS FOR SUCCESS AND FAILURE A thesis submitted to the University of Manchester for the degree of Doctor of Philosophy in the Faculty of Humanities 2015 TARLOK N. TEJI MANCHESTER BUSINESS SCHOOL Contents LIST OF TABLES .......................................................................................................................... 9 LIST OF FIGURES ...................................................................................................................... 10 ABSTRACT ................................................................................................................................. 11 DECLARATION AND COPYRIGHT ............................................................................................ 12 ACKNOWLEDGEMENTS ........................................................................................................... 13 PREFACE ................................................................................................................................... 14 Chapter 1: INTRODUCTION AND OBJECTIVES ..................................................................... 15 1.1. Background ......................................................................................... 15 1.2. Research problem ............................................................................... 16 1.3. Research value ................................................................................... 18 1.4. Research framework ........................................................................... 18 1.5. Thesis chapters ................................................................................... 19 Chapter 2: UNDERSTANDING UK RETAIL ............................................................................. 22 2.1. Introduction ......................................................................................... 22 2.2. Background ......................................................................................... 23 2.3. Change and retail change models ...................................................... 25 2.3.1. Wheel of retailing .......................................................................... 26 2.3.2. Retail Life Cycle............................................................................ 26 2.3.3. Accordion ..................................................................................... 27 2.3.4. Environmental............................................................................... 27 2.3.5. Ecological ..................................................................................... 27 2.3.6. Conflict ......................................................................................... 27 2.3.7. Model variations and assessment ................................................ 27 2.3.8. Retail adaptation and resilience.................................................... 29 2.4. Deconstructing the kaleidoscope ........................................................ 30 2.4.1. Introduction ................................................................................... 30 2.4.2. Regulation .................................................................................... 31 2.4.3. Global influence ............................................................................ 33 2 2.4.4. Socio-demographic ....................................................................... 34 2.4.5. Physical retail dimensions ............................................................. 35 2.4.6. Digital retail dimensions ................................................................ 40 2.4.7. Customer Lifetime Value ............................................................... 45 2.4.8. Summary ...................................................................................... 46 2.5. Conclusion ........................................................................................... 47 Chapter 3: LITERATURE REVIEW ............................................................................................ 49 3.1. Introduction .......................................................................................... 49 3.2. Literature review map .......................................................................... 50 3.3. Financial information ........................................................................... 52 3.3.1. Introduction ................................................................................... 52 3.3.2. Accounting and financial information ............................................ 52 3.3.3. Usefulness and predictive capabilities debate .............................. 54 3.3.4. Ratio Analysis ............................................................................... 55 3.3.5. The current ratio and industry differences ..................................... 57 3.3.6. Going beyond ratio analysis .......................................................... 57 3.3.7. Summary ...................................................................................... 62 3.4. Governance, risk and company beta ................................................... 63 3.4.1. Risk and governance .................................................................... 63 3.4.2. Theories of corporate governance ................................................ 64 3.4.3. Corporate governance rules and reporting ................................... 64 3.4.4. Risk ............................................................................................... 66 3.4.5. Risk and the company beta .......................................................... 67 3.4.6. Summary ...................................................................................... 69 3.5. Business failure prediction models ...................................................... 70 3.5.1. Introduction ................................................................................... 70 3.5.2. The five model types ..................................................................... 73 3.5.3. Results of failure model studies .................................................... 78 3 3.5.4. Testing UK retail data ................................................................... 80 3.5.5. Summary ...................................................................................... 83 3.6. Failure theories and retail research ..................................................... 83 3.6.1. Introduction ................................................................................... 83 3.6.2. General theories implying failure .................................................. 83 3.6.3. Business and retail failure research .............................................. 84 3.6.4. Success and failure continuum ..................................................... 84 3.6.6. Defining retail failure ..................................................................... 86 3.7. Business and management research .................................................. 88 3.7.1. Introduction ................................................................................... 88 3.7.2. Marketing measurement frameworks ........................................... 89 3.7.3. Retail measurement frameworks .................................................. 90 3.7.4. Performance measurement theory ............................................... 90 3.7.5. Strategic control............................................................................ 90 3.8. Performance measurement and metrics ....................................... 91 3.8.1. Introduction ................................................................................... 91 3.8.2. Financial measurement frameworks ............................................. 92 3.8.3. Business measurement frameworks ............................................. 92 3.8.4. Balanced Score Card ................................................................... 93 3.9. Summary of literature review .............................................................. 94 Chapter 4: METHODOLOGY AND METHODS ......................................................................... 96 4.1. Introduction ......................................................................................... 96 4.2. Research objectives related to methods ............................................. 98 4.3. The pragmatic philosophical world view ............................................ 100 4.3.1. Ontology and epistemology ........................................................ 100 4.4. Challenges to the approach and methods ......................................... 103 4.4.1. Introduction ................................................................................. 103 4.4.2. Analysing published information ................................................. 103 4 4.4.3. Model building ............................................................................