Variations in an Operational Theory Integrating Cash Discount and Product Pricing Policies

William Lim, Ph.D. and Muhammad Rashid, Ph.D., Canada

 

ABSTRACT

 

Building on Lim and Rashid’s (2002) operational theory of cash discounts and product pricing, this paper: (i) explains survey evidence that customers with higher borrowing costs are offered higher cash discounts; and (ii) suggests that demand elasticities and interdependencies are quantitatively more important than default risk.  Many theories have been proposed to explain the use of trade credit by vendors. Credit terms specify when invoiced amounts are due and whether a cash discount could be taken for earlier payment. The credit period is the length of time allowable for payment of the invoice amount. The cash discount is the percentage amount that can be subtracted from the invoice if the customer pays within the discount period. Smith (1987) and Ng, Smith and Smith (1999) show that credit terms involving a cash discount provide better screening and monitoring of a buyer’s financial position to protect potential rents from non-salvageable investment in the buyer. The determination of an optimal cash discount from a theoretical perspective originated with Lieber and Orgler (1975), who developed expressions for the expected net present value or NPV of accounts receivable and implicit form solutions of the optimal discount. Later, Hill and Riener (1979) derived an explicit form solution of an optimal discount in a situation where the firm has no bad-debt exposure and the fraction of buyers discounting is certain. In further work, Beranek (1991) provided analysis of behavioral factors determining the optimal discount. Recognizing that a cash discount is equivalent to a reduction in price, Rashid and Mitra (1999) linked it to the price elasticity of demand.

 

Exploring Facets of Job Satisfaction:  Lessons for Expatriate Managers in Vietnam

Dr. Kathryn J. Ready, MN

Van Dinh, Hanoi Economics University

 

ABSTRACT

 

Understanding job satisfaction measures is crucial in retaining experienced employees in a global economy, yet job satisfaction measures vary across countries. This study examines differences between American and Vietnamese students in their expectations of factors which are important to overall job satisfaction. Two samples, taken separately from the U.S. and Vietnam, were used to test differences in job satisfaction measures. The results show that while both groups agree on factors contributing to job satisfaction, differences are found in the importance of factors such as job security, recognition for work, creativity on the job, relationship with supervisors, and benefit packages. Theoretical and practical implications of the finding as well as directions for future research are discussed. Employees’ job satisfaction has been studied widely in the United States in order to understand the concept and its causes as well as its consequences. Researchers have identified factors such as recognition, working conditions, relationships with coworkers and supervisors, wage and benefits, promotional opportunities, fairness of treatment, as well as many others (e.g., Locke, 1976; Witt & Nye, 1992; Vander, Emans, & Van DeVliert, 2001) as being important to an employee’s job satisfaction.  Understanding facets of job satisfaction is important for today’s managers because it is associated with many critical organizational outcomes. For example, employees who are more satisfied with their jobs are less likely to be absent (Hackett & Guion, 1985), less likely to leave the organization (Carsten & Spector, 1987), are more likely to display organizational citizenship behavior (Organ & Konovsky, 1989), and more likely to be satisfied with their lives overall (Judge & Watanabe, 1993).

 

Small Business Taxation: An Evaluation of the Role of Special Treatment Policies

Jeff Pope, Ph.D., Australia

 

ABSTRACT

 

In many countries small businesses expect and generally receive special treatment, concessions or arrangements regarding taxation compared with medium and large business. Such policies are based primarily upon the role and importance of small business in economic growth and especially job creation, and the high administrative and compliance costs of including a large number of small entities in the tax system. This paper focuses on the latter aspect, using examples and data from various countries in the world, particularly the UK, USA, New Zealand and Australia. The arguments for special treatment seem compelling, particularly lower administrative and compliance costs, although difficulties usually arise at the margin or threshold where the special treatment ends. However, an often neglected argument is that small business often engage in high levels of tax evasion, based on the so-called ‘cash economy’, an opportunity generally denied to large business (at least domestically). It can be argued that benefits arising from evasion roughly approximate to the higher compliance costs endured by small business, particularly for income taxation. This paper evaluates this argument and the extent that special treatment taxation arrangements of small business are warranted. The conclusion sums up the experiences of the countries considered, the key policy implications, the limitations of the analysis, and indicates areas for further research.   In various countries throughout the world, both developed and developing, small business has long enjoyed favourable tax policy treatment. Generally, the term ‘small business’ is used favourably by politicians and bureaucrats, and others in the community.

 

Content Oriented Development of a Situational Interview

Douglas Flint, Ph.D. and Lynn Haley, New Brunswick

 

ABSTRACT

 

Content validity is typically determined qualitatively after test development.  This study conducted a quantitative content validation early in the development of a situational interview (SI).  By conducting quantitative content validation immediately following job analysis, important items were identified and the task field narrowed for further development.  The identification of those items early in the developmental process increased the criterion validity of the selection instrument.  The only quantitative content validity measure currently in use is the content validity ratio (CVR) developed by Lawshe (1975).   Even with the relatively small sample size in this study, most task and KSA items had significant CVRs.  In order to provide better discrimination among items, a confidence interval measure was developed.  Cronbach (1970) stated that content validity was “evaluated by showing how well the content of the test samples the class of situations about which conclusions are to be drawn.” Content validity is usually assessed by examining the extent that subject matter experts (SMEs) agree that success on a test item is essential for doing the job (Carrier, Dalessio & Brown, 1990). SMEs, are usually job incumbents, their managers, or supervisors.  Content validation is commonly a qualitative report in which consensus is achieved between SME’s on two levels.  First, agreement is sought as to whether particular items sample the content domain.  Second, consensus is sought on the issue that, collectively, test items reflect a representative sample of the content universe of the particular job.  These judgments are usually qualitative since many positions have too few incumbents or supervisors to make quantitative assessments possible. 

 

Examining the Bank Service Quality from Personnel Point of View: The Comparisons of State, Private and Foreign Banks in Turkey

Musa Pinar, Ph.D., Valparaiso, IN

Zeliha Eser, Ph.D., Ankara, Turkey

 

ABSTRACT

 

This research examines the bank personnel’s perceptions of the quality of banking service offered by the Turkish banks. Specifically, the study is aimed to: (a) examine the perceptions of the bank personnel regarding the importance of the bank services; and (b) to compare the perceptions of the bank personnel at state, private and foreign banks. The study, which provided some insights into the personnel perceptions in identifying the strong and weak areas of banking services at Turkish banks, found a significant difference between the personnel of private vs. state bank, foreign bank vs. state bank, but not between private vs. foreign personnel. These differences, or “gaps”, if not taken care of, could have an adverse impact on bank customer satisfaction and bank performance. The study also presents the implications of the results for service quality and competitiveness of the banks in Turkey.  In today’s dynamic, global marketplace, consumers have more choices and a wide variety of alternative banking services. A main challenge for banks is to understand how a customer decides which bank to choose when many of the banks offer similar products and services, such as extra services, free checking, phone access, and on-line and/or mobile banking, to name a few.

 

Foreign Products Images and Ethnocentrism among Consumers in Five Latin American Countries: An Analysis of Their Similarities and Differences

Dr. John E. Spillan, Dr. Orsay Kucukemiroglu, and Dr. Talha Harcar, PA

 

ABSTRACT

 

All over the world consumers are attached to countless products and services that arrive to their ports as a result of global trade.  Rapid communication and transportation has provided consumers with far more knowledge about products than any time in history. The results of this timely information accessibility allow the consumer to investigate the product’s country-of- images more thoroughly. Consequently, their information and opinions about the country and its products affects the consumer’s behavior. This situation is a major concern of marketers. The aim of this paper is to report the results of a study that was conducted to analyze the views of five Latin American Country consumers concerning country of origin images of products that they receive from other countries. Additionally, these counties ethnocentrism tendencies were investigated to develop a view on what other factors may be influencing their buying patterns. The findings of the study discovered that various perspectives exist among the five country consumers which have an influence on their ethnocentric buying tendencies.  Country-of-Origin (CO) is a compelling image concept that can be used to affect a product or company’s the competitive positioning and success in the global market-place foreign products.

 

Guidelines for Retirement Net Income Replacement Ratios

Dr. Ginette McManus, Dr. Rajneesh Sharma, and Dr. Ahmet Tezel, Philadelphia, PA

 

ABSTRACT

 

Our main objective is to simulate retirement net income replacement ratios that can be achieved under both constant and variable real savings rate scenarios over a 30-year pre-retirement wealth accumulation period.  Retirement income replacement ratios are estimated using an historical overlapping periods methodology and Ibbotson quarterly data over the 1926-2007 period.  Our methodology is performed for 10 portfolios, 5 having various fixed asset allocation percentages to equities and bonds and the remaining 5 providing life-cycle or shifting asset allocations.  Our results support that individuals need to save more than 10% of their pre-retirement annual gross income to have an acceptable chance at maintaining their standard of living in retirement, more so with more conservative asset allocations.  Given that individuals are most likely to stop saving in retirement, the most useful target value for pre-retirement planning is the retirement net income replacement ratio.  It expresses the level of retirement income needed to maintain pre-retirement standard of living upon entering retirement. 

 

Exchange Rate Regimes: Challenges from the Globalization for Emerging Market Countries

Dr. Chaiporn Vithessonthi, Thailand

 

ABSTRACT

 

In light of recent currency and financial crises, this paper reviews the literature on exchange rate regimes and evaluates the fixed and flexible exchange rate regimes with the focus on the possible choices of the exchange rate regime for emerging market countries. Given the recent trend of World’s financial integration, as a result of the globalization, has pushed most countries towards the full financial integration, the analysis touches upon the topics of roles of monetary policy, fiscal policy, currency crises, inflation, credibility, employment, and income under different exchange rate regimes. Overall, the results indicate that the complexity of the economic system and the dynamics of the economic development in emerging market countries have proven the difficulty of sticking to one exchange rate regime for a long period of time. Consequently, an emerging market country should consider a change of the exchange rate regime upon changes in the priority of its economic objectives.  Over the past decade, many developing countries such as Thailand, Indonesia, Mexico, or Argentina as well as developed countries such as England or Sweden have experienced currency crises, and thus have changed their choice of exchange rate regime towards either the extreme of floating rates or fixed rates. The debate on the causes of the crises is still ongoing. However, it is apparent that the financial markets of the emerging market countries have gradually been integrated into international financial markets in recent years. That means that the countries lifted the control on capital mobility and consequently opened up their domestic financial market. A surge in capital inflows into emerging market countries was initially due to domestic developments. However, large and persistent capital inflows can also create undesirable effects, including, for example, rapid monetary expansion, real exchange rate appreciation, inflationary pressures, and moral hazard problems.

 

The Performance of Filter Rules for the Norwegian Stock Index

Dr. Massoud Metghalchi and Dr. Vera Adamchik, TX

 

ABSTRACT

 

This paper tests various filter rules for the Norwegian OBX stock index. Our results indicate that trading filter rules do indeed have predictive power and could discern recurring-price patterns for profitable trading. Moreover, our results support the hypothesis that filter trading rules can outperform the buy-and-hold strategy.  A dominant theme in financial economics since the 1960s has been the concept of an efficient financial market. Fama (1970) defined an efficient financial market as one in which security prices always fully reflect the available information; any new information will be quickly and instantaneously reflected in prices. Furthermore, since news on any company, by definition, is unpredictable (arrives randomly), price changes will be unpredictable, or follow a random walk.  Fama made a distinction between three forms of Efficient Market Hypothesis (EMH): (a) the weak form, (b) the semi-strong form, and (c) the strong form. Advocates of the weak-form market efficiency hypothesis believe that investors who use any trading rule that depends solely on past market information (such as price or volume) cannot drive profits above a buy-and-hold strategy, implying that technical trading rules are useless.

 

Total Quality Management Practices and Performance

Dr. Esin Sadikoglu, Turkey

 

ABSTRACT

 

There are mixed and unclear results about the relationship between total quality management (TQM) practices and firm performance in the previous studies. In conjunction with this, the models developed in these studies lack a complete nature of the direct and indirect relationships among all important TQM practices and key performance measures in. For this purpose, this study developed a model of the direct and indirect relationships among total quality practices of leadership, strategic planning, training, employee management, information and analysis, supplier management, process management, customer focus, and continuous improvement and performance measures of employee fulfillment, innovation performance, operating performance, quality performance, customer satisfaction, and financial performance based on a comprehensive literature review. The model explains complex relationships among TQM practices and performance clearly. It is more comprehensive than the models developed in the previous studies as well. The model developed in this study can be tested to support the hypothesized relationships in the future study.  Total quality management (TQM) is a holistic quality improvement approach to firms by means of continuously improving products, services, people, processes, and environment involving all employees to satisfy customers, and maximize competitiveness of the firms.

 

Predicting Organizational Commitment: A Field Study of Full-Time and Part-Time Retail Employees

Stefanos K. Giannikis and Dimitrios M. Mihail, Ph.D., Greece

 

ABSTRACT

 

In the current empirical research we attempt to shed light on the organizational commitment of full-time compared to part-time retail employees.  For this purpose, we develop a theoretical framework in order to evaluate possible differences in affective, continuance and normative commitment between these two groups. Apart from just identifying whether employees “want to”, “need to” or “ought to” remain in retail firms, this research discusses why full-timers and part-timers might differ on attitudes. The sample consisted of 275 full-time and 213 part-time retail sales employees. Regression Analysis revealed that full-time and part-time sales workers differ on organizational commitment. Such knowledge is vital for retail firms that seek to retain a highly committed workforce in their demanding work environments. Theoretical and managerial implications for human resource management are discussed. 

 

Strategic Implications for the Future of the Texas Wine Industry

Dr. Michael H. Lau and Dr. Roger D. Hanagriff, TX

 

ABSTRACT

 

In Texas there are currently 113 bonded wineries.  Even with this growth, Texas wine is losing market share to out of state and out of country competitors.  The Texas Department of Agriculture (TDA) is searching for industry strategies to slow this trend.  The market analysis objective was to gather market information and create a comprehensive strategic outline that analyzes the Texas wine market.  The results indicate wineries have goals to increase production, but cost of production, grape supply and maintaining quality are concerns.  According to a recent report by the Texas Wine Marketing Research Institute (2006), wine consumption is on the rise across the United States.  Over the past ten years, total consumption of wine in the U.S. has increased by 39%.  Total wine consumption in the U.S. has reached a high of 279 million cases in 2006, a 3.3% increase from 2004-2005.  The increased consumption is the result of young adults finding greater interest in wine.  The Gallup Poll results show an 11% decrease in preference for beer and a 12% increase in the preference for wine from 2004-2005.

 

Regime-switching in Dow Jones EUROSTOXX 50 Spot and Futures Index Markets

José Luis Fernández-Serrano, Spain

M. Dolores Robles-Fernández, Madrid, Spain

 

ABSTRACT

 

This paper analyses the behavior of spot and futures DJ Eurostoxx 50 returns from the regime-change model perspective. We study a daily sample from January 1999 to June 2006. We consider different patterns in the mean and variance of both series allowing changes in the parameters depending on the state of the economy. Regime changes are governed by a first order Markov process. We find very strong evidence of switching behavior in Eurostoxx markets returns. The first one is characterized by low level of volatility and no dynamic behavior in the mean. The second one shows high volatility level and autoregressive behavior in the mean.  The main objective of this paper is to provide new evidence about the nonlinear behavior of stock returns by analyzing cash and futures DJ Eurostoxx50 indexes. It has become clear over the last years that nonlinear processes can explain the behaviour of different financial variables better that the linear ones. Financial markets have typically shown periodical switches from a low-volatility regime to a high-volatility regime related with jumps or crashes in the markets.

 

Insider-Outsider Hypothesis Revisited: The Context of Tunisian Business Environment

Dr. Mohieddine A. Ghecham and Atef Albahri, UK

 

ABSTRACT

 

The paper endeavours to discuss insider-outsider hypothesis in the context of the Tunisian business environment. By doing so, the paper expands our understanding about the underperformance of Tunisia in attracting fair level of foreign direct investors. The paper argues that privatised firms with domestic owners perceive the constraints imposed by the institutional framework differently than the privatised firms of foreign owners. Institutional constraints are less important to privatised firms with domestic owners than to privatised firms with foreign owners. Domestic owners have a better endowment with information that allows them to cope with institutional constraints hence can minimise the associated the transaction costs.  Moreover, the paper shows that the difference in the perception appear to be more pronounced with regards to informal institutional constraints than with regards to formal institutional constraints. This underlines the importance of tackling the informal institutions before reforms in formal rules achieve their expected outcome in the business environment.  This paper aims at enriching the recent debate that covers the role of institutional factors in the international business field (e.g. Weitzel and Berns, 2006; Kwok and Tadesse, 2006). It does so by adding to the discussion of the insider-outsider hypothesis that has emerged in some studies (Hellman, et al, 2000; McDonald and El-Said, 2002).

 

Energy: The Financial Dilemma of the Century

Dr. Flory Anette Dieck-Assad, Mexico

 

ABSTRACT

 

Petróleos Mexicanos (PEMEX), a Mexican state-owned company, is the only authorized by law to produce oil and gas in Mexico. PEMEX can neither issue equity nor borrow money by selling bonds; however, it finances one-third of the Federal Government expenses, leaving scarce money for drilling activities and, thus, restricting its ability to develop new reserves. PEMEX requires huge flows of investment in order to avoid its financial bankruptcy and secure the energy supply for Mexico’s sustainable development. The objective of the case is to place the student in the debate about sustainable development that encompasses political, economic, financial, and ethical decisions, in a geopolitical changing scenario where the “global warming” issue is presenting a new challenge for doing business in the future. A detailed Teaching Note is available from the author.  In the foggy morning of April 7, 2006, Elba Esther Gordillo Morales, national president of the Education Syndicate—Sindicato Nacional de Trabajadores de la Educación (SNTE)—was staring through the window. Suddenly, she decided to call for a reunion in her office with Expert Consultants, Inc. (EC, Inc.). She needed their evaluation to know if what she did in 2003 to support the energy reform was the right decision. As a member of the Mexican Congress, she had supported the energy reform even though the rest of the members of her political party, the PRI, decided not to support it.

 

Challenges in Teaching Business Studies

Dr. Tahir Ali, Pakistan

 

ABSTRACT

 

Effective teaching of business studies can be linked with the economic development of a country due to its unlimited, multiplier effects. In the present fast moving digital world, teaching of business demands acquaintance of latest teaching methods and techniques on the one hand and knowledge of global business activities on the other. In most of the developing countries, there is a gap between the methodology of teaching business studies and its application in the market. The situation has been further deteriorated by the uncooperative behavior of business industries towards business education institutions. Effective teaching of business requires leadership qualities not only for better career counseling and development of students but also contributes to the resolution of business issues. Most of the teachers of business studies in such countries are deprived of good returns, recognition and growth opportunities in their field, resulting in low motivation and performance. To overcome these issues, a twofold strategy, comprising improvement of teaching methodology through concept development techniques and practical exposure of students to the business world and the development of research oriented environment for teachers with close liaisons with the business and industries is needed. Market is the best judge and its response would be the source of evaluation and modification for both the teacher and student.

 

The Anti-Competitive Effects of Entry Barriers on the Market:  The Case of the Romanian Tobacco Industry

Dr. Alina Mihaela Dima, Dr. Radu Musetescu, and Dr. Alina Popescu, Bucharest

 

ABSTRACT

 

Economists suggest that although contestable markets are a refined extension of the competitive markets theory, almost all real markets have some entry barriers, which could have strong implications for the market structure. Government intervention through fiscal measures might have adverse effects, especially on the concentrated markets, where competition is shared by few important players. The paper analyses from the economic perspective the impact of the entry barriers on the Romanian cigarette market, especially the negative effects of the measures taken by the government in order to comply with EU requirements and their impact on the competition. Adoption of EU’s acquis communautaire necessitates the raising of cigarette taxes to levels determined by EU directive 92/79/EEC, amended by directive 2002/10/EC. These established limits for cigarette excise in EU countries, but national authorities have the right to find the most appropriate way to implement them. As the Romanian cigarette market is characterized mostly as an asymmetrical oligopoly, the structure of the excises, along with other entry barriers, will distort severely the competition within the market.

 

Strategic Orientation and Performance: The Case of Equifinality from a Developing Market Perspective

Dr. Sarwar M. Azhar, IQRA University, Karachi, Pakistan

 

ABSTRACT

 

This paper tests the hypothesis of equifinality inherent in Miles and Snow’s (1978) research on strategic orientation and business performance. The results show that equifinality may not necessarily hold for firms in developing economies. Further, the present research also suggests that its underlying logic, which holds that research applicable to one business environment can be assumed to apply to other business environments, cannot be accepted as an assumption, as Sis also inherits from Miles and Snow typology. The research further suggests that the typology proposed by Miles and Snow does not work in the clear cut manner that is proposed by the authors; rather configurations of various orientations may be the norm in developing market contexts. The author notes that this research does not intend to suggest a new characterization of ideal types of strategic orientations, but shows that such ideal types do not necessarily exist, as proposed, in business environments.  Extant research is concerned with the role of business strategy or strategic marketing behavior (used synonymously in this paper) in the overall performance paradigm and value creating capability of the firm (Stoelhorst & Raaij, 2004; Slater & Olson, 2001; Doyle & Wong, 1998; Appiah-Adu, 1998). With regard to the positive association between strategies and firm performances, there is unequivocal evidence. For example, in a recent study, Yoon and Lee (2005) find that business strategy has a positive relationship with performance (p. 14).

 

The Application of Structural Equation Modeling (SEM) in Determining the Antecedents of Customer Loyalty in Banks in South Thailand

Nattakarn Eakuru and Nik Kamariah Nik Mat, Ph.D., Malaysia

 

 

ABSTRACT

 

The purpose of this study is to examine the relationships of several antecedents of customer loyalty in the banking sector in South Thailand. Customer loyalty is crucial in bringing long term profitability and managing services in tandem with the development of the global sector. From the literature, six antecedents of customer loyalty were identified. Each variable is measured using 7-point Likert-scale: perceived service quality (13 items), perceived value (11 items), trust (5 items), image (15 items), customer satisfaction (7 items) and commitment (6 items). Using survey method, 150 questionnaires were distributed to customers of four bank branches in the South of Thailand. The responses collected were 140 completed questionnaires representing 93 percent response rate. The data were analyzed using Structural equation modeling (SEM) method using AMOS 6. Confirmatory factor analysis of measurement models indicate adequate goodness of fit after a few items were eliminated through modification indices verifications. Goodness of fit for the structural models of hypothesized model shows promising findings. Four hypotheses were asserted: H1, H5, H8 and H9. H1: Perceived service quality is related positively with customer satisfaction, H5: Image is related positively to customer loyalty, H8: Image is related positively to commitment, H9: Trust is related positively to commitment.

 

Catastrophic Risk Management Mechanism for Tourism Industry

Dr. Chung-Hung Tsai, Taiwan

 

ABSTRACT

 

The risk analysis of earthquake is provided and developed by special modeling organizations that have developed portfolio loss models for the tourism industry. For a long time, it has been applied in the insurance industry to estimate loss by traditional empirical approach. An event-based probabilistic seismic risk assessment model was established for The Taiwan Tourism Earthquake Insurance Pool (TTEIP). Based on the request of TTEIP, the risk assessment analysis results were provided to TTEIP as reference for capacity adjustment, reinsurance arrangement, and exercise plan of claim process. The purpose of this study is to build a mechanism of catastrophic risk assessment and management for tourism. The mechanism integrates knowledge from many fields including earth science, structural engineering, and the insurance profession. Finally, management methods and pricing of earthquake risks are provided for government agencies, insurance/investment banking industries, and tourism asset owners.

 

Antecedents of Compensation and Relationship Among Compensation, Motivation, and Organizational Profitability

Imran Ahmed Shahzad and Komal Khalid Bhatti, Pakistan

 

ABSTRACT

 

The purpose of this study was to find antecedents of both financial and non financial compensation, to investigate the relationship between compensation and employee motivation and impact of employee motivation on organizational profitability. The researchers used a single questionnaire containing three types of questions. Regression analysis, correlation and other statistical calculations proved that basic pay, indirect pay, variable pay and social pay have positive impact on employee motivation. Further sufficient evidence is available to support that variable pay and social pay are major antecedents of compensation whereas basic salary has maximum influence on employee motivation.  Study shows that there is a positive correlation between compensation and motivation whereas motivation is also highly correlated with organizational profitability. Finally it was concluded that organizations having proper and updated compensation plans as per industry trends are more profitable as compared to rest of the organizations, which do not update pay plans according to the current trends.

 

Is Training Evaluation Necessary?  What Are The Constraints that Might Exist in the Evaluation of Training Programmes in Taiwan?  How Can the Constraints be Overcome?

Hsien-Mi Lin, Taiwan, R.O.C.

 

ABSTRACT

 

Training is one of the human resource development strategies, and training programmes have been seen as an essential feature of organizational life.  Furthermore, Mann and Robertson(1996, p14) pointed out that “the evaluation of the effectiveness of training programmes is critical because without it, organizations have no good way to know whether training pounds are being spent wisely”.  This study, which reports the findings of training evaluation issue, is divided into four major sections.  The first section gives a brief exploration of the evaluation of training.  In the second section, the reasons why training evaluation is necessary are provided.  It then considers some of the constraints that might exist in the evaluation of training programmes in Taiwan and attempts to show that these are related to Taiwan’s culture, economy and politics in the third section.  The final section gives some suggestions on how to overcome these constraints and follows by a conclusion.  Training programmes have been seen as an essential feature of organizational life.  However, in spite of the heavy investment in training, organizations often find that they fail to evaluate adequately the value or success of their training programmes. 

 

The Significance of Relationship Marketing Orientation on International Joint Venture (IJV) Performance in Thailand

Wanida Wadeecharoen and Dr. Nik Kamariah Nik Mat, Malaysia

 

ABSTRACT

 

Relationship Marketing Orientation (RMO) has played a vital role in successful relationship management and firm’s performances. This paper reviews and synthesizes prior studies to address the significance of relationship marketing orientation (RMO) towards IJV firm performance specifically in a developing country like Thailand. In addition, this study investigates the conceptualization of relationship marketing orientation (RMO) within IJV context, as well as examining the relationship of RMO   and IJV performance by past researchers. Finally, this paper proposes a research framework to investigate the relationship of RMO with IJV performance in Thailand.  The international joint venture (IJVs) foreign investment has increased in the last three decades across all business sectors worldwide. IJVs represent one of the most popular strategies for firms from multiple countries to share risk and resources, to gain knowledge, and to obtain access to new markets. IJV enable firms to bring in foreign expertise and then upgrade their operating competencies. Hence, IJVs play a significant role in the dynamic world economy not withstanding Asian countries like Thailand.

 

Determining the Service Quality Dimensions and Zone of Tolerance for Hospital Services in Malaysia

Dr. Ahmad Azmi M. Ariffin and Norzalita A. Aziz, Malaysia

 

ABSTRACT

 

This paper attempts to identify the dimensions of service quality for hospital services in Malaysia and subsequently examine the gap between the expectation and perception on the various aspects of the services. The conceptualization of the hospital’s service quality of HOSPIQUAL in this study was developed based on SERVQUAL scale. A total of 210 respondents from Kuala Lumpur and a smaller town known as Batu Pahat involved in this study. The results of factor analysis revealed that HOSPIQUAL comprised of four dimensions namely tangible, empathy, reliability and responsiveness, in the sequence of their importance. This study also indicated that customers (patients) are most tolerable with factors related to tangible dimension and least tolerable with factors related to reliability dimension. In this overall, the size of zone of tolerance for hospital services was 0.81 on the scale of 5-point. The gap analysis between service expectations and perceptions showed that all scores for expectations were lower than their perception scores, indicating that there are a lot of service improvement efforts need to be carried out to enhance the quality of services rendered by hospitals in Malaysia.  The key to competitive advantage in today’s challenging business environment lies in delivering notable high quality service that resulted in satisfied customers (Shemwell et al., 1998).

 

Impact of Employee Participation on Job Satisfaction and Perceived Organizational Performance in Banking Sector of Pakistan

Komal Khalid Bhatti and Imran Ahmed Shahzad, Pakistan

 

ABSTRACT

 

It is widely believed, employee participation in decision making can effect their level of job satisfaction; productivity, commitment and turnover intentions. These variables can create comparative advantage for organizations. Study provides empirical evidence to support theoretical models that link job satisfaction, productivity, commitment and turnover intentions with organizational performance. For this purpose 34 banking organizations were selected. Response rate was 100%. Findings show that employee participation is an important determinant of job satisfaction components. Increasing employee participation has positive impact on job satisfaction but it also strengthens the link between other outcomes of job satisfaction. Naturally increasing employee participation is a long-term process that requires management interest and employee initiative.  The concept of employee participation as a more effective approach for managing human resource of an organization has attracted enormous attention and initiated significant debate among academics and practitioners. Employee participation practices have to be introduced in organizations so that everyone is given an opportunity to participate, work is conducted by consensus and multidisciplinary teams are utilized to implement processes.

 

Impact of Compensation on the Turnover Intentions of Employees:  A Case of Pakistan Telecom Sector

Kashif Amin Butt, Pakistan

 

ABSTRACT

 

Main problem for today’s employer is to hire and retain talented employees. All over the world every organization has realized the importance of human capital. It is perceived notion that compensation is accurate measure to reduce turnover. The present study will examine the impact of compensation on the turnover intentions of telecom sector employees of Pakistan. For this research 15 telecom companies were selected and 300 questionnaires were distributed physically for better response rate; the response rate was 89%. For the data analysis, Correlation and stepwise forward regression analysis were performed. The result showed that compensation has direct positive impact on employee retention and consequently reducing turnover intentions.  As technological development and competition are continuously growing, the requirement and demand for skilled labor is ever on increase. The organizations are regularly trying and developing such policies, which are employee friendly. Therefore all HR practices may it be hiring, developing compensation packages or plans for the development of employees are aimed at attracting, retaining and further developing good employees.

 

Perceived Fairness of and Satisfaction with Employee Performance Appraisal and Its Impact on Overall Job Satisfaction

Zara Sabeen and Syed Ali Abdullah Mehboob, Islamabad

 

ABSTRACT

 

Employee performance appraisal is one of the most commonly used and widely researched management tools in the world. Recent research has moved to themes of employee reactions towards performance appraisal as indicators of system satisfaction and efficacy. This study investigated employee reactions to fairness of and satisfaction with an existing performance appraisal system and its impact on overall job satisfaction, utilizing a survey questionnaire, from 500 participants from eighteen private banks of Rawalpindi, Islamabad (Pakistan). The findings of the study indicated that respondents perceived the performance appraisal system to be fair. Satisfaction (although not too high) was indicated with the performance appraisal system overall. The overall job satisfaction was explored to be least affected by the appraisal satisfaction.  The performance appraisal process, whereby a supervisor monitors the employee performance, compares it with the expected goals and targets, and then uses it for the further improvement of the performance and outputs, is, a common practice all over the world now a days,(whether formal or informal) The purpose of use and scope of the practice may range from very effective , future progress and career growth as well as organizational growth oriented to the least effective just for the sake of monitoring, promotion, punishment, and termination purposes. Whatever the purpose would be, it is an essential part of the organizational systems and processes.  Performance evaluation has been the area of interest for the researchers for very long time and a lot of research has been done in this area for the improvement of the system.

 

An Empirical Analysis of Association between Operating Cash Flows and Dividend Changes in Pakistan

Nousheen Zafar and Syed Zulfiqar Ali Shah, Islamabad

 

ABSTRACT

 

Miller and Modigliani’s 1961 work for establishing relationship between dividend changes and management’s expectations of future earnings and cash flows, which has not been proved to be a success is again tested in this paper. A data set of non financial companies of KSE 100 index is taken as a sample. OLS regression is used on cross sectional data for 40 firms to test the relationship between operating cash flows and dividend changes. Despite of the importance of operating cash flows in assessing dividend policy of a firm, this study has not found any significant relationship between dividend changes and level of operating cash flows of a firm. In order to check the importance of cash flows in determining dividend policy of the firm, whole sample is divided in three sub samples as per their growth levels. OLS regression is applied on each sub sample but again this study failed to develop any positive relationship between operating cash flows and dividend policy of the firm. This means that there are certain other factors which are responsible for the changes in dividend policy.  Corporate finance is almost always invariably based upon dividend policy. Corporate dividend policies are special point of interest for all theorists these days. The most initial idea developed about dividend policy changes was that dividend changes are associated with the earnings of the firm (Lintner, 1956).Then another argument was raised that value of a firm is only determined by the earning power of the firm’s assets or its investment policy, and that the manner in which earning stream is split between dividends and retained earnings does not effect the value of a firm (Miller and Modigliani, 1961).

 

Nature of Managerial Decision Making Along the Continuum of the Decision Making Pyramid

Ivana Pavic, Croatia

 

ABSTRACT

 

Decision making is immanent to any managerial function, because managers are not only administrators. By profession they are decision makers. Having that imperative their importance for organizational existence is not doubtful. Managerial decision making is not easy to describe because managers largely use intuition, instincts, feelings and judgments in everyday decision making (Harrison, 1999), avoiding hard systematic thinking and analysis of data, relying more on intuitive judgment (Tipuric, Prester and Hruska, 2003:366). But the framework for understanding managerial decision making lies in the piece of evidence that managerial work is largely the work of making decisions. What is more important is the fact that since management realizes itself through decision making processes, (Harrison, 1999) with the purpose of fulfilling various business tasks, managers have to act rationally in dynamic and turbulent settings. They, as decision makers, are expected to implement a high level of decision making quality, which depends on a variety of factors: managers' knowledge and experience, their ability to grasp and understand a problem, ability to analyze and synthesize, on one hand, availability of information in their environment and their use of decision making techniques and methods, on the other hand. Different levels of management (on management pyramid) use different approaches to the decision making process what implies the existence of the decision making pyramid.

 

Non Executive Directors and Performance of Firms: Empirical Evidence from an Emerging Market

Syed Shahbaz Ali Shah, Syed Zulfiqar Ali Shah,  and Nausheen Zafar, Pakistan

 

 

ABSTRACT

 

The study examines the relationship between Non Executive Directors and performance of the listed companies in an emerging South Asian market. Performance of the firms has been quantified by using market based measures as well as accounting based measures. Marris Ratio and Tobin’s Q represents the market based measures of companies performance whereas Return on Equity and Return on Investment captures the financial reporting perspective. Percentage of Non executive Directors present in Board of Directors has been used as the proxy for Non executive Directors. Sample has been divided into three groups by using Cluster analysis. It is evident that companies which are having more non executive directors in board show good performance whereas the companies with weaker Board perform unfavorably. Descriptive statistics also confirms the result. The study reveals Non executive Directors are positively related with the performance of firms. Therefore we can safely say that a more independent and effective board of Directors accelerates a firm’s performance.  Firms are defined by a network of relationships representing contractual arrangements for financing, capital structure, managerial ownership, and compensation, though from the earliest of business history these relationships had conflicts with each other, but the objective of every relation was same that is good performance of the business.

 

Leadership Styles’ Specifics in Large Croatian Companies

Danica Bakotić, University of Split, Croatia

 

ABSTRACT

 

Leadership could be observed through different leadership styles which influence on work efficiency and business success (Skansi, 2000, p. 54). Leadership style is the manner and approach of providing direction, implementing plans, and motivating people. There are a number of different approaches, or 'styles' to leadership and management that are based on different assumptions and theories. The style that individuals use will be based on a combination of their beliefs, values and preferences, as well as the organizational culture and norms which will encourage some styles and discourage others. So it could be stated that there are as many leadership styles as there are leaders. Many authors deal with this issue, so there are many different leadership styles classifications. For the empirical research in this paper, the Likert classification is used. Considering the decisions and the degree to which subordinates are involved in the decision making process, Likert define one of the most used leadership style classification. According to it the leadership style could be job based or employee based. Job based leadership styles are Exploitive-authoritative type or Benevolent-authoritative leadership style. Employee based leadership styles are Consultative leadership style or Participative group style.

 

An AHP-based Mutual Fund Portfolio Selection Model

Dr. Susila Munisamy and Lee Kee Huat, Malaysia

 

ABSTRACT

 

One of the important areas of research in finance is mutual fund portfolio selection. In this paper we present a model which can be used to help decision makers select a suitable mutual fund portfolio based on Analytic Hierarchy Process (AHP) that allows both the investors unique preference structure and their options to be taken into account.  The model is set up according to the specialty of the Malaysian mutual fund market which includes attributes unique to a Malaysian investor such as preference in Islamic funds and the option to use the Employees Provident Fund savings as an additional source of investment. The model presented here recommends asset allocation and identifies the most suitable mutual funds within an asset class, consistent with the needs of the investors. This model is utilized to conduct an empirical analysis to select mutual funds offered by Public Mutual Ltd. for five prospective investors. The results indicate that investors should hold diversified portfolios of asset classes with the weights for each asset class adjusted to reflect one’s attributes and preferences. The model can help financial advisor to serve prospective investors better and will significantly improve the professionalism in the mutual fund industry.

 

Would its Past Reflect its Future Performance: Indian Banks?

Gurcharan S. Pritam Singh and Dr. Susila Munisamy

 

ABSTRACT

 

This paper investigates the technical efficiency and productivity of the Indian banking sector over the period spanning 2002 to 2006 using data envelopment analysis (DEA). The empirical findings indicate a wide diversity of efficiency and productivity exists among Indian banks. Our productivity estimates show an overall productivity growth of 7.7% over the span of 5 years. The productivity trend was largely led by technological trends rather than technical efficiency. The foreign banking group is found to be more productive as compared with nationalized and private banking groups.  Over the last two decades, banking industries have witnessed widespread regulatory reform around the world (Zahid, 1995; Fanelli and Medhora, 1998). This involved a range of policies for the liberalization of interest rates, the removal of controls on lending and lending diversification, the lifting of barriers to competition, the privatization of the public financial institution and the introduction of market based securities (Hardy and Patti, 2001). Regulatory reforms are widely recognised to be an important tool for enhancing efficiency, productivity and quality in the provision of financial services to all sectors of the economy. India’s banking sector underwent a period of major regulatory reforms during the early and late 1990s. The major thrust of the financial reforms was to promote better use of resources by banks management which will bring about productivity enhancement.

 

Consumer Brand Choice Behavior When Selecting a Specialty Good as a Gift: An Extensive Field Study on Mobile Telephones in Eskisehir, Turkey

Dr. N. Figen Ersoy and Dr. Nuri Calık, Eskisehir, Turkey

 

ABSTRACT

 

Social and psychological factors are regarded as more important than economical ones in determining the consumer’s brand choice behavior in the gift-giving process of a specialty good such as an expensive mobile telephone to their family members, close friends and colleagues. The purpose of this paper is to find out the major determinants of consumer gift-giving behavior and whether demographic differences of consumers play a significant role in brand choice behavior. The paper consists of three main parts. The first part deals with theoretical background and prior research. The second part explains the essentials of the research model and formulated hypotheses. Finally the third part comprises analyses and conclusions.  Consumer brand choice behavior in the gift-giving process of specialty goods like mobile telephones has recently evolved from the traditional approaches in this subject matter wherein price or value have the priority for analytical purposes. Now, social norms and high involvement with the product is the main concern and the starting point, as seen in recent research.

 

Have Earnings Lost Value-Relevance? Revisiting Latest Evidence on EVA

Annette Holler, Germany

 

ABSTRACT

 

Value-based management, aiming at the maximization of shareholder wealth, gained global recognition. Whereby, Economic Value Added (EVA) has become the central metric for executives to evaluate, remunerate and communicate corporate performance and for investment managers to supervise portfolio performance. Research of Stern Stewart & Co. initially manifested EVA’s usefulness via superior associations with stock prices. However, numerous studies by academicians refuted those claims. While few recent studies suggest that EVA ultimately gained superiority over earnings, changes in market recognition without analogous changes in financial reporting give rise to serious doubts. Further, ambiguous results reopen the financial management debate on EVA’s utility. Thus, this study revisits the value-relevance of EVA, residual Income (RI), earnings and operating cash flows.  After reducing survivorship bias and estimating independent firm-specific EVA data, 2,147 annual observations from U.S. firms over the period 1995-2006 serve to assess the capability of competing performance measures to explain the firm’s market value and stock returns. Relative tests show earnings’ and RI’s dominance over EVA; further, incremental tests find that solely earnings’ accruals provide considerable and significant additional information, while EVA’s accounting adjustments imply just marginal incremental information. To conclude, findings do not support suppositions on today’s superiority of EVA but prove earnings’ enduring predominance over the last decade. Nevertheless, results advocate adoption of RI for management compensation, external communication and security analysis and disclosure of EVA and RI in financial reporting, to align management objectives with shareholders’ interests and facilitate value-based performance monitoring.

 

The Personal Income Tax applied in the Member States of European Union:  The Case of Spain

Dr. Maria Luisa Fernández de Soto Blass and Dr. Santiago Alvarez García, Spain

 

ABSTRACT

 

In the Communication on "Tax policy in the European Union - Priorities for the years ahead" (COM/2001/260 of 23 May 2001), the Commission reiterated its belief that there is no need for an across the board harmonisation of Member States' direct tax systems. For tax policy, the Communication established, as a main priority, the need to address the concerns of individuals and businesses operating within the Internal Market by focusing on the elimination of tax obstacles to all forms of cross-border economic activity, in addition to continuing the fight against harmful tax competition. This approach was confirmed in the Communication "The contribution of taxation and customs policies to the Lisbon strategy" (COM/2005/532 of 25 October 2005) (European Commission, 2006)  As far as direct taxes are concerned, Article 94 provides for the Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, to adopt provisions for the approximation of such laws, regulations or administrative provisions of the Member States that directly affect the establishment or functioning of the common market. Some recommendations and legislation have been adopted in the personal tax, company tax and capital duty areas.

 

Online Shopping Behavior and Characteristics of Consumers in Eskisehir, Turkey: Who, What, How Much and How Often?

Dr. Nuri Calık and Dr. N. Figen Ersoy, Turkey

 

ABSTRACT

 

This paper tries to bring about a better understanding of the online shopping behavior of consumers who reside in Turkey. It attempts to draw a profile of them with respect to their demographic traits. The study consists of three parts. The first part deals with the theoretical background based on literature review and summarizes past research  dealing with this phenomenon. Consumer online shopping behavior, perceived quality of the services rendered by the establishments, risks attached to online shopping, mall and user characteristics, and the typology of online shoppers are discussed in this section. The second part mainly discusses the survey of online shoppers, the research model and the basic premises of the model, and the hypotheses formulated. The third part discusses the outcomes of the analyses in terms of bivariate and multivariate tests and evaluates the relative attitudes of the consumers with respect to their demographic traits. With these results, we try to bring forth the typology of such consumers.  Internet shopping in Turkey first started almost two decades ago with banking transactions. The ease and comfort provided by the services rendered in these transactions attracted many consumers to Internet usage for shopping purposes.

 

Conceptual Model on Leadership Process in Chinese Knowledge-Based Companies

Dr. Li Zhang, Qiong Jia and Baowei Liu, China

 

ABSTRACT

 

This paper constructs a conceptual model on leadership process in knowledge-based companies under the Chinese cultural context. Based on the difference between traditional leadership style and knowledge leadership style, this paper describes the leadership characteristics in knowledge-based companies. According to the research of KM (KM) implement stages and knowledge leadership characteristics, this paper presents the leadership process model, finally delineates the different characteristics in different KM stages. The results show that there is a correlation between leadership characteristics and KM; leadership characteristics play different roles in the process of KM development.  A transformation is occurring from the Old Economy to the New Economy, from an emphasis on the main factors of production, namely capital, land and labor, to an emphasis on information, knowledge and technology [1]. Knowledge is the main factor of competitive advantage, which has been the most essential flowing resource in the knowledge-based companies. But how can the knowledge resource be managed effectively in the organization? The answer is leadership. In the knowledge-based companies, without leadership, the knowledge can’t be well utilized. Leadership in the knowledge-based companies has new characteristics in the globalization and digital times. The performance is up to what degree the leaders melt knowledge into organizational culture, and how they transform these invisible resources to the concrete actions for the enterprise to get more value in the intense market competition [2,3].

 

Monetary Tightening and Bank Financing of SME and Large Companies in Croatia

Damir Baran and Ana Rimac Smiljanic, Croatia

 

ABSTRACT

 

This paper presents and analyses the results of the survey of Croatian banks carried out by researchers of Faculty of Economics in the autumn of 2007. The empirical survey has been conducted as a part of the research project - Financial Policy and Financial and Economic Framework of SME Support in Croatia. The main objective of the research presented in this paper is to arrive at a better understanding how recent monetary tightening of Croatian National Bank influences credit policy of commercial banks towards SME and large companies. Our basic conclusion is that new monetary tightening will significantly influence corporate asses to bank credit. The influence on the SME should be more significant than on the large companies. Nevertheless, according to our results, the volume of the corporate lending should be at the levels achieved in 2006.  Prompted by high bank loan growth rates, at the end of 2006 Croatian National Bank adopted a decision of the mandatory inscription of treasury bills. With this decision, that has started to implement at the beginning of the year 2007, Croatian National bank intends to restrict the growth of bank loans to 1% per month, i.e. to 12% per year. Indirectly, the intention of the Croatian National Bank is to restrict commercial banks in their routine to take loans abroad, which threatens to cause the acceleration of the external debt. If a certain commercial bank, in selected period of one month, places loans at the rate higher than 1% (when compared to the loans placed in the same month of the previous year)

Monday Effect and Stock Return Seasonality:  Further Empirical Evidence

Dr. Rengasamy Elango and Nabila Al Macki, Oman

 

ABSTRACT

 

This study investigates whether the anomalous ‘weekend effect’ found in many developed and developing markets around the world is also present in the rapidly emerging Indian equity market. We use the real-time data of three of the major indices of the National Stock Exchange of India (NSE) for 1999-2007 period. Standardizing the data, we apply a set of descriptive and inferential statistics on the above three indices. Our analysis produced mixed results indicating that the Monday returns are negative and low in the case of two out of three indices.  The K-W test, which is a non-parametric test applied to examine whether the ranks of mean returns for each day of the week are equal, shows evidence of a statistically significant difference in the case of one sample index,  CNX S&P Nifty Junior.  The implication is that the weekend effect is present in small stocks.  Dummy variable regression, which again examines the weekend effect shows that Monday returns are negative in one of the bench-mark indices, the NSE S&P Nifty confirming that the Indian Market is inefficient and could be exploited to maximize returns.  Surprisingly, Wednesdays have yielded the highest mean returns across indices. However, volatility is also higher in these stocks. These findings offer interesting opportunities for individual investors and portfolio managers to place bid/ask orders in order to maximize their returns. However, due caution needs to be exercised while making the above decisions.

 

Destination Attractiveness: Are There Relationships with Destination Attributes

Dr. Sebastian Vengesayi, Australia

 

ABSTRACT

 

This paper investigates the effects of Destination Attractions (DA) and Destination Support Services (DSS) on Destination Attractiveness (DAtt).  The aim is to highlight how destination supporting services influence destination attractiveness. Researchers have highlighted the importance of various destination attributes as determinants of destination attractiveness, but rarely has the relationship been empirically tested to examine the influence of these attribute on destination attractiveness. This study uses Structural Equation Modeling to empirically examine this relationship. A study of 275 tourists reveal that not all destination attractions have direct influence on destination attractiveness. On the other hand destination support services have both direct and indirect influence on destination attractiveness.  This study focuses on the research stream that has been well developed over the years on tourism destination attractiveness. Research studies, both conceptual and empirical, have examined the determinants of destination attractiveness. Various destination attributes have been identified as determining the attractiveness of tourism destinations. These attributes have then been used to assess the level of attractiveness of destinations but there appears to be no s attempt to empirically measure the significant effects of these indicators/attributes on destination attractiveness. What is lacking are studies that investigate the direct and indirect influence or destination attractions and destination supporting services on destination attractiveness. This study aims to fill this gap and reveal the direct and indirect influence that these attributes have on destination attractiveness (Crouch & Ritchie, 1999).