The Business Review, Cambridge

Vol. 14 * Number 2 * Summer. 2010

The Library of Congress, Washington, DC   *   ISSN 1553 - 5827 

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The primary goal of the journal will be to provide opportunities for business related academicians and professionals from various business related fields in a global realm to publish their paper in one source. The Business Review, Cambridge will bring together academicians and professionals from all areas related business fields and related fields to interact with members inside and outside their own particular disciplines. The journal will provide opportunities for publishing researcher's paper as well as providing opportunities to view other's work.  All submissions are subject to a double blind peer review process. The Business Review, Cambridge is a refereed academic journal which  publishes the  scientific research findings in its field with the ISSN 1553-5827 issued by the Library of Congress, Washington, DC.  No Manuscript Will Be Accepted Without the Required Format.  All Manuscripts Should Be Professionally Proofread Before the Submission.  You can use www.editavenue.com for professional proofreading / editing etc...The journal will meet the quality and integrity requirements of applicable accreditation agencies (AACSB, regional) and journal evaluation organizations to insure our publications provide our authors publication venues that are recognized by their institutions for academic advancement and academically qualified statue. 

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A Proposal for the Convergence of Global Accounting Standards Relating to R & D Capitalization Based Upon an Empirical Study of Product Development Projects

Prof. Lee Tagliaferri, Pace University, New York, NY

 

ABSTRACT

 The Financial Accounting Standards Board Statement No. 2 (SFAS No. 2) and the International Accounting Standards Committee Statement No. 38 (IAS N0. 38) are in accord with respect to expensing research expenditures and criteria which are prerequisite for the selective capitalization of product development costs.  Hence, the two standards are not at odds because of differences in generally acceptable accounting principles.  Rather, the two are separated by a dichotomy of confidence which can be placed on subjective managerial judgments of the feasibility of product development objectives of a project. SFAS No. 2 allows no subjectivity for selective capitalization, whereas IAS No. 38 takes the opposite stance. The purpose of my study is to discern if specific product development objectives can be predicted to be successful with confidence and if others can be identified which do not fulfill conditions required for selective capitalization because of conditions of uncertainty. The outcome of my study perceives that certain categories of product development projects with specific technology and marketing objectives fulfill the criteria of success predictability for selective capitalization. 

 

Mark-to-Market Rule and Its Impact on the Financial Crisis

Dr. Hailu Regassa, Professor of Finance and Geri Wink, Hasan School of Business, Colorado State University – Pueblo

 

ABSTRACT

 The mark-to market rule also known, as “fair-value” accounting has been the subject of much debate and controversy over its impact on and implications for the current economic crisis in general, and financial markets, in particular.  Critics have identified this standard to be responsible for the undue write-downs of asset values at a time when there are no active secondary markets for those assets.  Companies that are subjected to this rule had to raise significant capital to stay afloat in the face of a precipitous drop in their stock prices to unsustainable levels in the midst of a dire economic crisis.  The US Government had to step in to prop up the balance sheets of some of those corporations, particularly major financial institutions, whose assets were significantly impaired.   Our paper explores on whether or not the market-to-market rule is actually responsible for the increased volatility in the stock prices of those companies that have to abide by this rule which, in turn, led to the impairment of their assets. We begin by addressing the primary objectives of accounting reports.  In general, accounting reports should accurately reflect and measure the current economic conditions of the firm, facilitate comparisons of a firm’s performance and its financial condition over time and across firms within an industry, and be as fairly objective and consistent as possible.  It is not clear which of these broad goals will repeal or revisions of the mark-to-market rule serve.  If they have their way, it is possible that some managers, usually motivated by managerial self-interest, may not disclose valuable information in order to engage in deceptive practices by fudging their accounting numbers to the detriment of shareholders and other stakeholders. 

 

Expecting Less and Getting More: Trike Survey Over Performs

Dr. Annette Ryerson and Dr. Barbara Looney, Black Hills State University, Spearfish, SD

 

 

ABSTRACT

 Current market research that implements survey collection is moving away from the traditional, quantitative method centered on mailed paper questionnaires.  Trends have shifted toward electronic options, from email contact and website surveys to blogs and chat rooms for customer feedback.  A recent student-generated survey for Lehman Trikes, the three-wheeled motorcycle manufacturer, relied upon a paper questionnaire; despite numerous structural flaws and non-standard implementation, the survey outperformed all reasonable measures of expectation.  The reasons for the survey success deserve consideration, as marketers move toward paperless data collection.  Based on the Lehman success, a cautionary pause may be due before researchers presume mailed surveys are passé.  Marketing survey results often generate new questions, even as they provide answers about product use, customer preference, and sales potential.  Surveys demand time in careful preparation; casual or hurried forethought can readily sabotage data collection.  Developing an effective survey is essential when attempting to collect the appropriate information needed to target customers with the correct message, price and promotion.  This paper focuses on a tightly controlled customer survey conducted in early 2009 for Lehman Trikes, Inc., a company that manufactures three-wheel, custom motorcycles.  Lehman agreed to have two marketing students from Black Hills State University provide research services by creating and conducting a customer survey. 

 

Expectancy Theory and Social Loafing in Marketing Research Group Projects

Dr. Pradeep K. Tyagi, Department of Marketing, San Diego State University, CA

 

ABSTRACT

 Students in a group project environment who shirk their obligations in the hopes of benefiting from the work of others are often referred to as social loafers. The benefits of group projects cannot be realized if groups are dysfunctional. Group performance researchers have repeatedly observed that individuals exert less effort when their efforts are considered individually. In this study, we examine the role of motivation and its components (Expectancy, Instrumentality, and Valence) as modeled by Expectancy-Value theory in controlling the phenomenon of Social Loafing in group project situations. Data were collected from two (high and low motivational) groups of marketing research students were collected to examine hypotheses based on expectancy-value theory. Results suggest that when instructors clearly and forcefully provide guidance that high level of efforts would lead to high project performance and that high performance will lead to desirable outcomes such as grades, the social loafing behavior is likely to decline. Marketing research projects cannot be carried out individually, requiring instead all group members put forth a sincere effort to carry out several complex tasks over the academic term to accomplish common goals. However, group performance researchers have repeatedly observed that individuals exert less effort when their efforts are pooled than when their efforts are considered individually (Latane, Williams, and Harkins 1979; Shepperd and Taylor 2009). Latane et al. (1979) coined the term “social loafing” to describe lessened effort of people working collectively as opposed to coactively and described as social disease.

 

Product Involvement as a Predictor of Generation Y Consumer Decision Making Styles

Megha Gupta, Aquiashala Brantley, and Dr. Vanessa P. Jackson, University of Kentucky

 

ABSTRACT

 

The purpose of this cross-sectional research study was to explore the influence of product involvement on Generation Y consumer decision making styles.   A convenience sample of Generation Y consumers at a Midwestern University completed a self administered survey questionnaire.   Two hundred and fifty useable questionnaires revealed that Generation Y consumers have different decision making styles when buying high and low involvement products.  Generation Y consumers were found to be brand store loyal, spontaneous, price value conscious and variety seekers when buying a high involvement product than when buying a low involvement product.  Recommendations for future research are offered. Decision making is a cognitive process which leads an individual to make a choice from various alternatives.  A consumer decision making-style (CDMS) is defined as a “mental orientation characterizing a consumer’s approach to making a choice” (Sproles & Kendall, 1986).  Knowledge of consumer decision making styles is clearly important to marketers because it is linked to purchase behavior (Mitchell & Bates, 1998).  As demographic groups within the United States population evolve, marketers need timely information that describes typical behaviors and preferences of consumers within these segments.  Profiling consumers could assist marketing managers gain a more profound understanding of consumer shopping behavior, and more efficiently target specific consumer clusters or segments (Jackson & Kwon, 2006).  One group to consider is Generation Y. 

 

Interpretation of Advertisements in Intercultural Setting

Olli Ristimaki, Metsaliitto Group

Dr. Senja Svahn, Tampere University of Technology

 

ABSTRACT

 This research focuses on the interpreting of advertisements in an intercultural setting. The purposes of the research were to study the influence of cultural contextuality when reading advertisements and secondly, to explore how interpretation is affected by the stage of the development and the role of advertising in a particular society. The data was collected in Finland and Uruguay. In the study, sixteen Finnish and fifteen Uruguayan university students took part in a computer-based survey that tested their interpretations of different print advertising pictures. In addition, five respondents from both groups were invited to a focus group interview to get a deeper knowledge of advertising and the characteristics of that particular society. The study provides a contribution to the assumption that culture has significant meaning when interpreting advertisements. The respondents found advertising based on typical characteristic of their culture to be more positive and these advertisements also created a stronger willingness to buy the product. The development stage and advertising role in society also has a significant effect on the general attitude towards advertising. Uruguayans found advertising more positive and were more willing to analyse them open-mindedly.

 

The Impact of Hyperlink on Online Course Design:  A Case Study of MBA Economics Course

Dr. Chien-Ping Chen and Xiaoyun Peng, University of Houston-Victoria, Victoria, TX

 

ABSTRACT

 

This paper explores the impact from one of most commonly used online instructional technologies, simulation and reference hyperlinks, on the students’ grade performance. Two sessions with hyperlinks and two sessions without hyperlinks of the same MBA Economics course serve as the samples of case group and control group respectively. The hypothesis testing on grades over different course assessments shows that hyperlink insertion has a significantly positive impact on student performance through the frequent assignments such as discussion board and homework. In addition, the case also confirms that the total time spent online is positively related to student performance through the discussion board; however, the browsing time over hyperlinks does not play any role in grade determination. Both the hyperlink insertion and total time spent have no significant impact on the performance in exams and term paper in which the desk-studying time is required. The overall impact of hyperlinks on the semester grade depends on the weight distribution over assessments.  The number of U.S. students enrolling in postsecondary online education courses has been increasing significantly. In fall 2007, some 3.94 million students took at least one online course at U.S. degree-granting institutions; an increase of 12.9 percent over the previous year (Allen and Seaman, 2008). Among all fields in higher education, economics is one of the best represented online disciplines, particularly at principles and MBA levels. Numerous empirical studies (Vachris, 1999; Navarro and Shoemaker, 2000; Neuhauser, 2002; and Coates et al., 2004) in economics teaching examined student performances (i.e. test scores) to conclude there is no significant difference between online environment and traditional face-to-face course.

 

A General Model for Variety Seeking Behavior

Esra Sonmezler Arikan, Bogazici University, Istanbul

 

ABSTRACT

 For decades, the stimulants for variety seeking behavior have been an area of primary concern. However, despite the numerous studies that exist both in psychology and in marketing, a unified framework which attempts to organize and integrate previous work has been mostly lacking.  Even if Hoyer and Ridgway (1984) have notified the academicians in this field of research that variety seeking behavior is the result of the interaction between individual-level and product-level characteristics, most of the studies conducted in the following years have continued to focus on either the product characteristics or the individual differences. This inclination has not only weakened the validity of the studies conducted but also hampered the development of integrative models. Reviewing the mainstream marketing journals and books, this study aims to propose a model that provides a more comprehensive framework for variety seeking in the consumer choice context. The model not only integrates most of the factors that are claimed to stimulate variety seeking behavior, but also offers various managerial implications that can be very helpful for both attracting and keeping variety seeking consumers.  Variety seeking as a consumer motive has generated considerable research interest since it is considered to be a determinant factor in consumer choice. While variety seeking behavior is thought to have relevance for several areas of marketing, most work has concentrated in the area of exploratory purchase behavior such as brand switching and hence, variety seeking has mostly been defined in this context (Hoyer and Ridgway, 1984).

 

Ethical Issues Encountered in Healthcare Organizations: Perceptions of Healthcare Administrators in Taiwan

Dr. Mei-Hua Chen, National Changhua Universiy of Education, Taiwan, R.O.C.

 

ABSTRACT

 For the past few decades, healthcare administrators played major roles in healthcare organizations.  Their practice involves ethical decision-making that significantly affected different stakeholders in the organization.  These ethical decisions are based on their professional ethical values.  Investigations on these ethical values in western countries have already been limited and that of eastern countries are far less scarce. This paper reports the results of an empirical study that aimed to examine healthcare administrators’ perceptions on professional ethical values they possess.  Five hundred forty nine healthcare administrators from nine medical centers and twenty-two metropolitan hospitals in Taiwan were surveyed.  The five most important professional values were: medical records confidentiality, equitable treatment of patients, respect for different backgrounds, compliance to professional standards, and professional development. In the spring of 2003, the outbreak of Severe Acute Respiratory Syndrome (SARS) in Hong Kong, Singapore, China, Canada and Taiwan caused tremendous panic around the world; the quick and deadly spread of the disease was terrifying.  As of July 11, 2003, there were 8,437 cases of SARS worldwide, leading to 813 deaths.  In Taiwan, as reported by the Center for Disease Control (CDC), there were 664 probable cases, leading to 73 deaths. 

 

Exploring Customer Satisfaction, Perceived Quality and Image: An Empirical Study in the Mobile Services Industry

Dr. Feng-Cheng Tung, Kun Shan University, Tainan, Taiwan

 

ABSTRACT

 With the rapid development of technology, the world has quickly become an information society built upon a foundation of telecommunication networks. Through the innovation of information technologies such as mobile communication, internet, and multimedia, time and space has become compressed as well. Telecommunication services are the integration of computer and communication, which deeply influence the increase of quality of life and information dissemination. According to statistics collated by the Industrial Economics & Knowledge Center (IEK), in 2005 there were 22.17 million mobile phones in circulation in Taiwan, with a saturation rate of 97%, ranked 22nd in the world.  This research integrates the American Customer Satisfaction Model, image and perceived ease of use to propose a modified American Customer Satisfaction Model to study consumer satisfaction with the mobile services industry in Taiwan. The American Customer Satisfaction Model is a general, cross-industry model that provides market-based performance measures for firms, industries, sectors and nations. It is based on a structural model that consists of six latent variables. A sampling of 235 questionnaires was collected from 300 current mobile phone service users in Taiwan. This research sent questionnaires by email in March of 2009. After four months, we had 238 returned as of July 2009. The rate of response for the questionnaire was 79.33%. The statistical analysis software used for the research was LISREL 8.3 and SPSS. This research adopted structural equation modeling for its data analysis to study the causalities among all parameters constructed in each model. Based on 235 questionnaires collected from 300 current mobile phone service users in Taiwan, the research finds that perceived expectations, perceived quality, perceived value, image and perceived ease of use have a major positive effect on customer satisfaction with mobile services.

 

Emotional Motives and Attitudinal Reflections of Workplace Deviant Behavior

Deniz Kantur, Bogazici University, İstanbul, Turkey

 

ABTRACT

 This paper concentrates on workplace deviant behavior with a special focus on the effects of emotional motives and attitudinal outcomes of such behavior. The conceptual model developed in the current paper integrates injustice perceptions, negative emotions, and job satisfaction in relation to workplace deviant behavior. Among the several determinants of the workplace deviance interpersonal injustice and discrete negative emotions are studied as determinants. Job satisfaction, on the other hand, is proposed as an outcome based on justification processes. After the literature review on workplace deviance in relation to injustice perceptions, emotions, and job satisfaction; the paper develops the relevant propositions and conceptual model of the study. The conceptual model developed here attempts to develop the literature on workplace deviance through integrating emotional determinants of such behavior and job satisfaction as attitudinal outcomes.  Workplace deviance has been a neglected topic until recently and there has been disproportionate emphasis in literature on the extra role behaviors as organizational commitment (Meyer and Allen, 1991) or organizational citizenship behavior (Dyne, et.al., 1994). However, researchers now increasingly give importance to the study of the behaviors at the other end of the spectrum because of their negative effects on organizations (Henle, 2005). Workplace deviance or counterproductive behaviors have become the focus of several studies in the past decade (Robinson, et.al., 1995, 2001; Skarlicki and Folger 1997; Judge, et.al., 2006). Research shows that organizations bear significant economic losses from deviant behaviors (Aquino, et.al, 1999).

 

Investigating Efficiency of GCC Banks: A Non-Parametric Approach

Dr. Hela Miniaoui and Dr. Abdellatif Tchantchane, University of Wollongong in Dubai, United Arab Emirates

 

ABSTRACT

 The aim of this paper is to measure Gulf Cooperation Council (GCC) banks efficiency. Data envelopment analysis (DEA) is performed to assess the technical efficiency of the top 50 GCC banks as a homogenous set over the period 2005-2008. Cross-sectional data for each year is used in the analysis to determine those banks operating on the efficiency frontiers which are used as benchmarks for their peer banks. The sensitivity of the results is investigated by applying constant return to scale (CRS), variable return to scale (VRS) DEA models. Data on banks based on two-year period windows each and covering the overall time period 2005-2008 are incorporated into DEA analysis providing us with targets for improvement over time.  The results show that only 14 banks of the sample are rated as efficient under CRS and/or VRS assumptions, and indicate that Islamic banks perform slightly better than the other types of banks.  We have investigated whether or not there are efficiency differentials between Islamic banks and conventional banks. Such investigation is motivated by the assumption that Islamic banks should be more efficient. DEA was introduced by Charnes et al. (1978) and it is recognized as a benchmarking technique for efficiency measurement and evaluating the performance of organizations involved in a wide range of contexts: banking (Avkiran 2009), hospitals (Banker, 1984), airports (Lam 2009), tourist hotels (Yu, 2009), educational institutions (Carrico et al. 1997; Celik et al. 2009), electricity sector (Hrovatin, 2009), transportation and construction contractors (El-Mashaleh, 2009). The firms range from public to private and non profit organizations. It is widely used by researchers to help managers, economists, chief executives, principals, unit leaders and firms’ policy makers to make critical decisions. Wu et al. (2009) used DEA to assess the performance of Olympic games. DEA may be applied to a single organization with multiple units as it may be applied across organizations operating under similar technologies. Edirisinghe et al. (2008) reported the use of DEA in a case study of 313 US unalike industry firms but grouped into 6 alike technological activities.

 

The Influence of Affect-Based Trust, Cognition-Based Trust, Institution-Based Trust, and Communication on Patients’ Satisfaction

Dr. Chung-Hung Tsai, Tzu Chi College of Technology, Taiwan

Bi-Kun Chuang, Chu Shang Show Chwan Hospital, Taiwan

 

ABSTRACT

 The aim of the study is to explore the influence of affect-based trust, cognition-based trust, institution-based trust and communication impact on patients’ satisfaction. The sample collected from four regional hospitals in Taiwan. The visit questionnaires were completed by 576 patients known to be eligible and data were analyzed by descriptive statistics, explore factor, correlation, and regression analyses. The conclusions are as follows: (1) Correlation analysis revealed that affect-based trust, cognition-based trust, institution-based trust, and communication were highly correlated with patients’ satisfaction. (2) According to the statistical results, the proposed model was more than satisfactory in explaining the variance of patients’ satisfaction for the samples of four hospitals; (3) Affect-based trust, cognition-based trust, institution-based trust and communication are the significantly and directly antecedents of patients’ satisfaction; (4) The rank of influential effect on patients’ satisfaction is affect-based trust, cognition-based trust, institution-based trust and communication. The result of the study can provide the executives and managers of the hospitals with the insight. That is, physicians are not only the most important suppliers of medical treatment, but also the best listeners of the patients.

 

Tax Avoidance and Evasion with Transfer Pricing

Dr. Atilla Uyanik, Marmara University & CPA, Istanbul

 

ABSTRACT

 This paper examines some common techniques that are used by enterprises and individuals to evade and avoid taxes with transfer pricing.  The emphasis will be on tax avoidance and evasion in international transactions and other cross-border situations. In addition to general overviews of cross-border tax avoidance and tax evasion, this research  specifically covers avoidance and evasion using “tax haven” jurisdictions, preferential tax regimes, transfer pricing techniques, thin capitalization, cross-border leasing arrangements, hybrid structures, and other financial market innovations. Because, financial services industry is being transformed by the interaction of several phenomena, including the wider process of globalization, the harmonization of the regulatory framework and the implementation of financial reforms in the World.  There are three spheres of transfer pricing analysis – income tax, customs and VAT – and the rules among these spheres are not harmonized. Because these rules intersect far more in practice than in theory businesses frequently face inconsistent treatment among these taxes, a three-way, potentially no-win situation whenever they structure cross-border related party transactions.  The world’s largest multinational enterprises transfer goods, services and intangible properties in cross-border related party transactions on a daily basis.  Horizontal harmonies are largely attributable to the influence of supra-national standard setting organizations: the Organization for Economic Cooperation and Development (OECD) in income tax, the World Trade Organization (WTO) in customs, and various regional economic unions, like the European Union (EU) in VAT.

 

An Empirical Investigation of the Factors that Influence the Customer Churn in the Portuguese Fixed Telecommunications Industry: A Survival Analysis Application

Sofia Portela, Ph.D. Candidate and  Dr. Rui Menezes, ISCTE Business School, Lisbon, Portugal

 

Abstract

 Considering that profits from customer relationships are the lifeblood of firms (Grant and Schlesinger, 1995), an improvement on the customer management is essential to ensure the competitivity and success of firms, mainly in a period of economic recession. For the last decade, Portuguese customers of fixed telecommunications have easily switched the service provider, which has been very damaging for the business performance and, therefore, for the economy. This study aims to develop a comprehensive model of the residential customer churn in the fixed telecommunications industry in Portugal, which can support managers on the customer portfolio management. A survival analysis model is developed based on a random sample of 830 customers. Our results show that the majority of variables that influence customer churn are related to the customer spending with the service provider, and that usage, product or even subscription conditions do not seem to influence the duration of the relationship. We also found that the probability of a given active customer cancels his/ her relationship with the firm is neither constant over time nor across customers. Lastly, it seems that satisfaction does not influence customer churn. We can conclude that pricing is a sensitive area in this industry.

 

Understanding the Influence and Approaches to Effective Chinese Negotiations

Jose Anibal Torres, Argosy University – Sarasota

 

ABSTRACT

 This study focuses on the influences and approaches to Chinese negotiators.  Since most of the literature on Chinese negotiations has a Western bias, this study focuses on the variables and elements that influence Chinese negotiators and the approach they take when negotiating in an international environment, from a Chinese perspective.  The study begins by defining what is culture followed with the definition of Chinese culture and philosophy, that includes Universism, Taoism, Confucianism, and Buddhism.  This basic Chinese cultural understanding will provide a basic foundation to build upon in understanding what influences Chinese negotiators.  This is followed with a brief overview of the significance and influence of cultural dimensions, by Kluckholn and Strodbeck, Schwartz and Geert Hosftede, to show the complexity of understanding cultures and how they influence Chinese negotiators.  Since culture is not static and is constantly evolving international negotiators must have an understanding of those variables that influence Chinese culture, such as cultural dynamics, global flows and their consequences.  This cultural foundation will provide an understanding of Chinese negotiators’ behaviors during the negotiating process.  The study is followed with an understanding of the approach to Chinese negotiations as taught to the Chinese and the effects of their culture and philosophies and logic paradigms in negotiations. 

 

Consumer Decision-Making Styles and Multi-Channel Shopping: The Missing Links

E. Eser Telci, Bogazici University, Istanbul, Turkey

 

ABSTRACT

 Globalization of world markets and advancements in technology change the balance of power within the retailing industry, in favor of consumers. Traditional retailers with store-based operations are under the pressure of new channels that enable customers to shop at their convenience without a need for a physical environment. As a result, sellers that have realized the necessity of offering customers alternative shopping methods developed multi-channel retailing models. The aim of this paper is to identify the gaps in the multi-channel retailing literature about the role of consumers’ decision-making processes on their channel choice and/or patronage behavior. The study’s main contribution is that it proposes a model that highlights consumer decision-making styles as predictors of their multi-channel shopping intentions. Specifically, it expects multi-channels users to be less hedonistic and more price and fashion conscious consumers than users of a single channel. It also predicts consumers’ level of overall shopping involvement and gender to moderate the hypothesized relationships.  Retailing industry is passing through a restructuring period, characterized by a strong focus on customer orientation and the emergence of new channels. The rapid changes in technology and the rising power of buyers play significant roles on this change. Consumers’ interest towards different non-store selling forms force retailers to renew their strategic approaches to channel management so that they can establish long-lasting, profitable relationships with their customers (Payne and Frow, 2004). The most visible outcome of this reorganization is the increase in the number of retailers that use multiple channels.

 

Spectator Visual Perception Scale for Lighting at In-line Hockey Rinks

Dr. Chin-Hsien Hsu, National Chin-Yi University of Technology, Taichung, Taiwan R.O.C.

 

ABSTRACT

 This article develops a scale for measuring spectators’ visual perception regarding lighting at in-line hockey rinks, based on environmental psychology and sportscape theory, as well as to examine the reliability and validity of the scale. The subjects of this study are 339 in-line hockey spectators (aged 15-60) of the World Games in Kaohsiung, Taiwan, R. O. C. The CFA (confirmatory factor analysis) shows a good model fit assessment of the spectators’ visual perception model in renovated in-line hockey rinks, and the construct validity is also provided: (χ2(62, n=214)=106.27, p < .01, GFI=0.93, RMSEA=0.058, SRMR=0.043, CFI=0.98, NNFI=0.97, CN=184.30, χ2/df=1.71). This study’s great reliability and validity is able to measure visual-spatial perception of spectators while they are watching in-line hockey events. Meanwhile, this study also provides a direction for conducting future researches into sports marketing and consumer behaviors.  Servicescape, a tangible element in the service process, plays a significant role in the consumer satisfaction index (Ezeh & Harris, 2007). Servicescape refers to the physical environment in which a service process takes place. It might comprise lights, music, colors, facility designs, symbols, etc. Related researches have also been conducted on the impact of servicescape on consumer behavior. (Areni & Kim, 1994; Baker & Cameron, 1996; Correia & Esteves, 2007; Ezeh & Harris, 2007; Greenwell, Fink & Pastore, 2002; Harris & Ezeh, 2008; Hightower, Brady & Baker, 2002; Lin, 2004; Nguyen, 2006; Ogle, Hyllegard & Dunbar, 2004; Parish, Berry & Lam, 2008; Wakefield & Blodgett, 1996)

 

Minimizing Service Failure in Sports Centers with the Six Sigma Methodology

Dr. Kuei-Mei Cheng, National Taiwan College of Physical Education, Taiwan R.O.C.

Chun-Ming Shih, National Kaohsiung Normal University, Taiwan R.O.C.

 

 

ABSTRACT

 Nowadays, people have started to attach importance to leisure and recreation. More and more people exercise in order to relax as well as remain healthy. Therefore the need for recreational activities and facilities has increased. Hence, the Taipei City Government has approved a budget for establishing sports centers. However, owing to the rise in consumer awareness and the competitive market of private health clubs, enhancing customer satisfaction and minimizing service failures has become a vital issue for sports center operators. This study examines service failures in sports centers by using the Six Sigma Methodology as well as the cause and effect diagram. A few suggestions for the management of the sports centers are provided as well.  In modern society, most people live with increasing pressure and have a bustling lifestyle. However, as trends have changed, people have started to attach more importance to leisure and recreation. In addition, since the Taiwanese have started to take two days off per week, more and more people exercise in order to relax and to maintain their health. Therefore the need for recreational activities and facilities has increased. Taiwanese professional athletes such as Chien-Ming Wang, Mu-Yen Chu, Cheng-Min Peng, and Chin-Feng Chen enjoy great popularity around the world and have inspired people in Taiwan to exercise.  As the capital of Taiwan, Taipei has followed the trend and endeavored to create a healthy city, aiming to encourage citizens to exercise and improve their health. The city government unprecedentedly established a sports center, which has been privatized. The main goal is to uphold the citizens’ right to participate in sports and achieve their “Public Fitness” goal (Taipei City Bei-Tou Sports Center, 2004). Thanks to its successful marketing strategy, the sports center attracted as many as seven thousand users within a month.

 

A Semi-Quantitative Approach for Evaluation of Cost-Effectiveness of Safety Measures

Dr. Eirik Bjorheim Abrahamsen, University of Stavanger, Norway

Dr. Willy Røed, Proactima AS, Norway

 

ABSTRACT

 A cost-effectiveness analysis is a well established discipline, and is often used as basis for comparisons between competing safety measures. There is, however, a gap between the theoretical cost-effectiveness analysis and the practical implementation of the tool as decision-making support. Ideally, the decision-maker should have a number of methods at hand. Some of these should be detailed and sophisticated and being used when a few safety measures are compared and the consequences of unfavourable decisions are severe. On the other hand there is a need for simplified methods to sort out some cost-effective measures from many alternatives in less complicated comparison studies or in pre-studies to more sophisticated comparisons. This paper suggests a method for semi-quantitative cost-effectiveness analysis used as a part of a screening process to identify safety measures to be assessed in a more detailed analysis. In the proposed method, evaluation of cost-effectiveness is not only based on a cost-effectiveness ratio such as the expected cost per expected number of lives saved, which is usually done in a traditional cost-effectiveness analysis. A cost-effectiveness ratio is based on expected values, which means that the uncertainty to large extent is ignored. A broader reflection of uncertainties is incorporated in the suggested method in order to make sound and robust judgements about the safety measures’ effects on risk. An example from risk analyses of Norwegian road tunnels is presented to illustrate the use of the semi-quantitative approach.

 

Selecting the Most Feasible Strategy for Green Supply-Chain Management

Dr. Chen-Kuo Lee and Shu-Ho Chen, Ling Tung University, Taiwan

 

ABSTRACT

 Along with the rapid economic growth and the swift expansion of enterprises across the world, human beings are utilizing natural resources faster than ever. Meanwhile, the excessive development and pollutions are causing the most severe damages to the environment and has thus destroyed the ecology. Faced with the deteriorating environmental issues, enterprises have to adopt new management models in all aspects throughout their business activities. Apparently, the green supply-chain management is the most effective tool that helps enterprise accomplish their management goals and solve the environmental issues at the same time. In Taiwan, however, the green supply-chain management still has a long way to go before the enterprises adopt it consciously. Therefore, this study attempts to analyze the external conditions related to the green supply-chain management by SWOT method thereby identify the potential opportunities and threats and, meanwhile, assess the internal conditions required by the green supply-chain management thereby identify the advantages and disadvantages possessed by the enterprises, and thus create a solid framework for the enterprises with respect to the implementation of green supply-chain management. Most importantly, this study concentrates on the most feasible strategy for green supply-chain management in relation to the present situations of Taiwan’s enterprises.

 

Determinants of Capital Structure Policies of Turkish Manufacturing Firms

Deniz Parlak, Ph.D., Dogus University, Istanbul, Turkey

 

ABSTRACT

 In contemporary literature the knowledge about capital structure policies of individual firms is mostly derived from data from developed economies in which the degree of market capitalization is high and information asymmetry is low. The purpose of this study is to identify the factors that affect capital structure decisions of manufacturing firms in an emerging economy, Turkey and to find out which theory best explains the situation.  Capital Structure decisions of individual firms have been an important concern for researchers throughout the last 60 years. The theoretical framework has evolved around three theories. First, the trade-off theory maintains that firms have an optimal capital structure policy, so they set a target debt-to-value ratio according to their risk class and gradually move towards it. Second, the pecking order theory sustains that firms prefer internal finance and sticky dividend policies determined according to their investment opportunities; if external finance is required first they issue safe debt, then hybrid securities and equity the last resort. Last, the market timing hypothesis states that the first order determinant of corporations’ capital structure decisions is the relative mispricing of the debt and equity instruments at the time the firm needs financing.

 

Top Level Manager’s Leadership Styles in Large Croatian Companies

Dr. Ivona Vrdoljak Raguz, University of Dubrovnik, Croatia

 

ABSTRACT

 The purpose of this paper is to explore top level manager’s leadership styles in large Croatian companies. The research framework examines leadership styles in large Croatian companies based on the Likert analysis of organization and leadership styles. Survey research has been conducted in the paper based on the answers of 81 top managers of large Croatian companies. The result of the research reveals that the dominant leadership style in large Croatian companies regarding the company size and fundamental industry is consultative leadership style. Details of the results, implications of the findings, and conclusions are presented and discussed. The present study provides a starting – point for further research of leadership styles in Republic of Croatia. This research is among the first and most exhaustive exploratory carried out in the Croatian context of large Croatian companies.  Leadership is a subject that has long interest among people. The numerous leadership theories have been developed at the end of the last century and the beginning of 21st Century. Some theories as a base have leadership style (Tannenbaum & Schmidt, 1958), others as a main variable have the way of making decisions (Vroom & Yetton, 1973, Vroom & Jago, 1988), third are focused on question of perspectives on Effective Leadership Behaviour (Ohio State Leadership Studies, Michigan Leadership Studies, Harvard Leadership studies, Hersey & Blanchard, 1982), while the fourth Theories represent Dyadic Role Making (Leader - Member Exchange), Graen et al. (1974) and Hollander (1978).

 

Workplace Spirituality of Oriental Culture View

Lin Han Pin, Dr. Jeng Yoau-Chau, and Lin Hong Min, National Changhua University of Education, Taiwan

Dr. Chen Ming-Chia, Ming-Dao University, Taiwan

 

ABSTRACT

 In recent years, spirituality in the workplace is gradually valued, as many leaders regard spirituality as a meaningful solution. Thus, scholars endeavor to construct a holistic framework to help leaders recognize complicated spiritual developments in the workplace. After years of study, researchers have come to realize the existence of an in-depth spiritual consciousness and internal existence of spirituality. This study takes the view of the Oriental culture and designs measurement tools for workplace spirituality through a cause-and-effect relation model, which concerns factors of workplace spirituality, as criterion for future research.  At the end of the 20th century, while knowledge economy and technology satisfied material needs, people were lost, ethics and social values were distorted, and there was corruption and crime. Thus, “material life” and “spiritual life” were out of balance. Elliott and Lemert (2006) indicated that a new self-based individualism was developed to allow active and individual free will, as well as an ability to interact with others in an environment of globalization. Human-based economies and managerial concepts emphasize free will, experience, and feelings, and stress human existence and ethics. This individualism was regarded as a philosophical change, born of philosophical thoughts, and applied to areas such as ethics, within economic and managerial fields. Donde and Dennis (2000) also indicated that a more effective approach is required to stimulate employees’ inner powers upon corporate operations. Thus, contemporary organizations and management teams have widely discussed the concept of the “essence of human beings’ existence” (Jurkiewicz & Giacalone, 2004; Moor & Casper, 2006), and thus, studies on “spirituality” were developed. However, “spirituality” is an abstract concept, and not easily defined, thus, various definitions exist. Spirituality does not necessarily refer to religious doctrines.

 

Role of Quality Cost Information and Reporting in Decision Making in Jordanian Industrial Shareholder Companies

Dr. Muhammed Yassein Rahahleh., Al Albayt University, Jordan

 

ABSTRACT

 This study aims at investigation usage quality cost information and reports in Jordanian industrial corporations on measuring and reporting of quality costs.  The study showed that there are significant effect of company size and sector of the company, companies belongs to medical, chemical, electronic, food sub sectors report and utilized these reports in different decision making process. There is significant relationship between the use of comprehensive quality management and the measurement of quality costs, reporting about it and used cost report in decision-making. The study recommended the managements of Jordanian Industrial Corporation to implement the concept of quality costs, measure, and report about it, use the reports of quality costs in decision making and train the employees on the measurement of quality costs.  Many organizations have adopted a reliable method for measuring and reporting cost of quality (COQ) and used it to improve operations; the magnitude of benefits in financial terms cannot easily be quantified. Quality cost is as important for all firms, but the importance of quality cost was just realized recently. Studies and research showed that quality cost has a great share of the total cost and sales of any organization. Burner, 1976 estimated the quality cost of a company producing machines and instruments as 5% of sales rotation. In another study, Moyrzed Glemo,(1979) stated that quality cost was about 38% the sales of a company for Iron melting, and Wellat and Haiss estimated quality cost for IBM at the beginning of the 1980s to be 30% of the industrial cost (Giakatis at el 2001).

 

A Study on Strategic R&D Investment Behavior in Transnational Corporations

Dr. Yeong-Bin Lee and Dr. Chen-Kuo Lee, Ling Tung University, Taiwan

 

ABSTRACT

 Employing the game theory established by Reihildle Veugelars (1995), this paper aims to analyze the causes that formulate the strategic R&D investment behavior of transnational corporations. The motives behind the R&D investment behavior of transnational corporations may be divided into three categories: (i) progressive transnational R&D investments under dominant strategies; (ii) follow-the-crowd transnational R&D investments under the bandwagon effect; (iii) diversified transnational R&D investments under mixed strategies. Findings of this study indicate that two important strategic variables are reflected in the R&D investment behavior when a transnational corporation engages in global competition, namely, the internal configuration of global business activity and the external coordination. The R&D investment behavior is the consequential result of the interaction of these variables. It is by the globalization of R&D that a transnational corporation may enhance, to a great extent, its strategic advantage and simultaneously upgrades its competitive edge in the international arena.  Since 1980s, as a result of rapid economic globalization and intense international competition, the life cycle of product and technology is getting shorter and shorter day after day. To circumvent the risk of technology development, reduce the cost of technology development, and satisfy the host country’s request for localization of product and the technology development, transnational corporations have gradually desalinated the traditional concept that takes the Home Country as the center of research and development(R&D) .

 

A Study on Leisure Attitude and Educational Cognition ­To Survey College Students in Central Taiwan

Ju-Mei Hung, Dr. Pei-Ling Wu, Ming-Chieh Wu, Dr. Ching-San Chiang,

ChienKuo Technology University, Taiwan

Hurdy Su, JSCORP, Taiwan

 

ABSTRACT

 To research leisure concepts and leisure tendencies among young people, a questionnaire was administered to survey samples of college students in central Taiwan. Part one of the questionnaire comprised 36 questions on leisure attitudes while part two comprised 36 questions on leisure educational cognition. Part three asked about four background items for data collection purposes. A total of 1221 valid questionnaires from 1442 administered (resulting in a response rate of 84.67%) were used for data storage and analysis. Five processes were followed: planning, preparation, piloting, survey, and analysis. The conclusions drawn indicate not only a medium relation between leisure attitude and leisure educational cognition, but also a high agreement level between both parts. To reject the null hypothesis, part one included the sex, college, school year, and job situation; part two included the same items except for school years. The Nomogram concept was introduced to find the most important items in each part using a combination of means, factor analysis, and stepwise linear regression analysis for confirmation. The results indicated that, in some colleges, the direction of courses in relation to leisure could be important items for curriculum development.

 

Globalization and Granger Causality in the Stock Market for the G7

Dr. Rui Menezes, ISCTE Business School, Av das Forcas Armadas, Lisboa, Portugal

Dr. Andreia Dionisio, University of Evora, CEFAGE-UE, Evora, Portugal

Dr. Diana Mendes, ISCTE Business School, Av das Forcas Armadas, Lisboa, Portugal

 

ABSTRACT

 This paper analyzes the process of stock market globalization on the basis of cointegration and Granger causality tests. Granger causality is based on regression modeling and typically captures current and past causal relationships in the data. The dataset used in our empirical analysis was drawn from DataStream and comprises the natural logarithm of relative stock market indexes since 1973 for the G7 countries. The main results point to the conclusion that significant causal effects occur in this context with well defined causal directions. There is also evidence that stock markets are closely related in the long-run over the 36 years analyzed and, in this sense, one may say that they are globalized. As expected, there is evidence that the US stock market dominates in general over the remaining markets.  Recent debates on economic globalization have triggered a substantial amount of research papers that try to determine its causes and explain the consequences of this phenomenon in terms of market performance and their ability to adjust globally to economic boosts and crisis. This has been particularly relevant in the case of financial markets and even more so in the case of stock markets. Indeed, the process of globalization of international stock markets has been deeply studied both by economists and other researchers interested in this subject such as, for instance, physicists and, invariably, they conclude that stock markets are highly “globalized” [Kasa (1992), Arshanapalli and Doukas (1993), Chung and Liu (1994), Masih and Masih (1997, 2002), Zhou and Sornette (2003), Tavares (2009)].

 

Dynamic Fuzzy Set in Design and Its Application-Auxiliary Costs of Hair Beauty

Dr. Pei-Ling Wu, Ming-Chieh Wu, Heng-Sheng Chen, Chienko Technology University, Taiwan

Hurdy Su, JSCORP, Taiwan

 

ABSTRACT

 A triangular fuzzy set, “” set, is the type most often used for the practical applications. A fixed membership function is a general fuzzy set. A cumulative sum chart (cusum chart) could be used with a “>” mask cusum chart, “>” chart. In this research, we introduced “>” chart through general fuzzy set to construct dynamic fuzzy set for practical purposes. The model consists of three routines, the fuzzy set of “>” chart and α level of fuzzy set and fuzzy subtraction. It is not merely that we extended the “” set to the dynamic fuzzy set; we also designed the upper and lower limits of the dynamic fuzzy set. To prove that the model for the dynamic fuzzy set could be used in a practical application, we chose the auxiliary costs data received from the Moon-Fine Hair Beauty Salon Company in Taipei as our case example. The data from 11 days included items, days from three categories, along with the sum of each items of three categories. The results were that the outcome was had no difference between the “>” chart and three routines of dynamic fuzzy set, and that the latter was simpler than the former. The contributions of this research include three parts. First, we developed dynamic fuzzy set. Second, the dynamic fuzzy set with real numbers was transferred directly from cumulative series data of the “>” chart. Last, the model consists of three routines, for the dynamic fuzzy set could be used instead of general fuzzy set to make decision.

 

Students’ Perceptions and Intentions Towards Entrepreneurship: The Empirical Findings From Croatia

Danica Bakotic, Ph.D. and Dejan Kruzic, Ph.D., University of Split, Croatia

 

ABSTRACT

 Entrepreneurship is increasingly recognized as an important generator of growth, innovation and especially new job creation. As a result of that, there is progressively academic, political and corporate interest in entrepreneurship enhancing. In this context the formal education represents one of the possible ways of entrepreneurship endorsement. Many researches show that the entrepreneurship education has substantial effect on entrepreneurial success and they also illustrate the positive relationship between entrepreneurship education and economic development.  Since today’s students are generators of future development their insights and attitudes on entrepreneurship could considerably determinate the future business activities. This paper deals with entrepreneurial intentions of students because of their potential effect on future context of entrepreneurship. The purpose of this paper is to investigate the entrepreneurship perception and entrepreneurship intention of Croatian university students and to find out whether they are ready for the market game and risk taking which arises from entrepreneurship activities.  The empirical research is conducted on 176 graduate students of businesses who attended the course Entrepreneurship, and who are expected to enter in the process of the entrepreneurship.  In order to investigate the perceptions of youth and their entrepreneurship intention, the research instrument which was used is the questionnaire with 16 questions which covered four dominant areas. The first group of questions is related to the type of potential business, the second group is about financial aspect of business, then follow the questions which deal with the ways of implementing a business idea, and the final set of questions considers the source of information needed to generate business idea and its successful implementation on the market. 

 

Students’ Entrepreneurial Characteristics: Empirical Evidence from Croatia

Dejan Kruzic, Ph.D. and Ivana Pavic, MBA, University of Split, Croatia

 

ABSTRACT

 For decades, entrepreneurial activity has been acknowledged as a significant contributing factor to the economic vitality of any country. Within the field of entrepreneurial research, among different approaches, the most followed one is psychological characteristics school of entrepreneurship which focuses on personality/psychological characteristics that an individual as an entrepreneur possesses, what gives him higher potential to perform entrepreneurial acts than someone who does not possess such characteristics.  The basic objectives of this research are: (1) to inventory entrepreneurial characteristics among Croatian business students in order to define their entrepreneurial profile; (2) to evaluate to what extent entrepreneurship education at university develops entrepreneurial capacities and mindsets. This paper offers the results of the survey conducted among Croatian business students at the University of Split in the academic year 2008/2009. A questionnaire for testing entrepreneurial characteristics /personality traits/ was administrated to a sample of 265 students of business in the final year of their degrees. Among given answers for each question respondent had to choose the one that best describes his/hers believes values, need and attitudes.

 

Creating Sustainable Value for Society: Social Entrepreneurship

Dr. Ayla Zehra Oncer and Dr. Muge Leyla Yildiz, Marmara University, Istanbul, Turkey

 

ABSTRACT

 The firms that operate in the field of meeting social needs, in their own niche do not bring success in solving societal problems. For this reason, there is a need for social entrepreneurs along with the classic entrepreneurs who have profit motives.  This is the reason why social entrepreneurship, which is one of the most current subjects in recent years, is the focus of our study. In this context, the “Wheat Movement” which has been a worldwide example for the social entrepreneurship move started in Turkiye is studied as the sample case. Depth interview and document analysis are chosen as the suitable data collection methods for the research pattern and interpretive analysis has been used as the analysis method. In our study, the conception of social entrepreneurship and the social value created from these activities have been approached and we tried to explain what sort of sustainable values these sample cases create for the society.  The traditional division of society into two sectors, one called public and one called private. Traditionally public duties like schooling, sanitation and official transportation are in many countries often taking care of by private enterprises, and various traditionally private businesses are often run by governments, nationally or locally. But above all a third sector has emerged as an important alternative in today's societies in the past decade or so.

 

Alternative Perspectives on New Product Innovation

Danupol Hoonsopon and Guntalee Ruenrom, Ph.D., Chulalongkorn University, Bangkok, Thailand

 

ABSTRACT

 This paper proposes a combination way to look at product innovation distinct from the previous literature that classified product innovation from customers and technological perspectives. In this paper, researchers view product innovation as the combination of technology and customer perspectives. Understanding the characteristics of a new product can help firms to form guidelines to develop new products according to firms’ resources and environment.  At present, many firms acknowledge the importance of new product innovation to increasing their performances and sustaining their businesses in the market or industry (Brown and Eisenhardt, 1995; Heeley, Matusik, and Jain, 2007; Srinivasan et al., 2009). For example, 3M has a commitment to develop innovative new products to improve its performance and sustain its growth (3M, 2009). In a dynamic environment, changing customer preferences, technology, and the reduction in product life cycles  drive firms to develop new products to survive (Pil and Cohen, 2006; Xu and Li, 2007).  Past literature classified product innovation into various dimensions. For example, Wuyts, Stremersch, and Dutta (2004) divided product innovation by degree of newness (radical and incremental innovation). Srinivasan, Lilien, and Rangaswamt (2006) defined product innovation in terms of architecture design. Further, Dell'Era and Verganti (2007) defined product innovation as serving the emotional needs of customers in the market.

 

An Empirical Study on Transactional and Authentic Leaders: Exploring the Mediating Role of Trust in Leader on Organizational Identification

Dr. Meltem Ceri-Booms, Khazar University, Baku, Azerbaijan

 

ABSTRACT

 This research presents the empirical results of a study regarding the relationships between the concepts of transactional and authentic leadership, trust in leader and organizational identification. The sample used in the analysis (N=232) was taken in Turkish companies that abide by Corporate Governance Rules. The results of the study indicate that the aforementioned leadership styles (transactional and authentic) have a positive relation with trust in leader. Furthermore, trust in leader, as a full mediator, develops organizational identification among followers. The results also specify leader behaviors that promote followers’ trust for their leaders. Implications and directions of future research are discussed at the end of the paper.  The world of business is changing. Organizations are becoming flatter and hierarchical structures are being compressed, while maintaining and developing the continuous potential of companies’ workforces becomes the key for remaining competitive. In order to comply with these changes, businesses seem to be focusing more on “their employees”. Grojean and Thomas (2005) suggest that the result of employee-focused efforts is the establishment of employee identification with the organization, referred to as organizational identification (OI), which consequently causes increases in performance and commitment. Evidence indeed shows that a person who identifies him/her self with an organization will likely behave in the best interest of the organization (i.e De Cremer & Van Knippenberg, 2002, Kitapçı et. al., 2005, Riketta, 2005). 

 

Relationship Marketing and Customer Loyalty: An Empirical Analysis in the Healthcare Industry

Dr. Aykut Ekiyor and Dr. Dilaver Tengilimoğlu, Gazi University, Turkey

Dr. Sengun Yeniyurt, Rutgers University

Ergin Ertürk, Acıbadem Health Group, Turkey

 

ABSTRACT

 This study was carried out to determine the role of relationship marketing in achieving customer loyalty in the healthcare industry and to identify patients’ perceptions of relationship marketing activities. A questionnaire was utilized to geather date from 371 patients at a private hospital in Turkey.  An exploratory empirical analysis indicates a significant link between customer satisfaction and customer loyalty.  The results also reveal a significant relationship between patient trust in the hospital and customer loyalty. Other important factors that could impact customer loyalty considered in this study include: the availability of special services, communication, and politeness. The long term and permanent relationships with customers based on relationship marketing activities have become important competitive factors in today’s world. Achieving customer loyalty constitutes a significant competitive advantage for organizations.  Loyal customers become less sensible to price changes, remain insensible to the actions of rival organizations, purchase more frequently and in a higher quantity.  Because of such behavior, loyal customers are a significant competitive advantage for any organizations.  Relationship marketing is an important tool for achieving customer loyalty, to protect and increase market share, and to obtain long term competitive advantage. 

 

Pilot Study Regarding Organizational Culture Dominant Values: Romania’ Case

Dr. Ionut Pandelica, Agora University of Oradea, Romania

Dr. Amalia Pandelica and Dr. Bianca Dabu, University of Pitesti, Romania

 

Abstract

 After 20 years of transition, the culture of Romanian companies is still dominated by some remaining block culture mentalities proper to Eastern and Central European countries. Although, from a technical point of view the transition may be regarded as an ended process, it is certain that there is still a communist inheritance strongly integrated in this culture in series of remaning mentalities. Such mentalities are to be found in the culture of Romanian companies framed into a vicious circle of inertia representing significant change resisting structures.  Thus, this paper displays the results of a pilot study meant to establish the diagnosis of the dominant values of Romanian companies’ culture. The results reveal the fact that although some reminiscences of the communist period are still integrated in the culture of Romanian companies some of those mentalities have been overcome.  Within the transition toward a competitive market, the capacity of Romanian firms to initiate internal changes and to cope with the external ones that is their adaptation capacity is conditioned mainly by some old mentalities of block culture characteristic to Eastern and Central European countries. Block culture represent that cultural fund common to all Central and Eastern European countries, acquired in over 40 years of command economy regime. It practically synthesizes the entire range of cultural remains of a 40-year experience, being a drawback to effective change, an impediment to the reforming process. This occurred, as Sztompka (1994) stated, as a result of old socialist regimes intention to forcefully modernize the society but still preserving traditional elements. Such a block culture can be placed at intermediary level between national cultures and global cultures, and its effects on change processes are deeply negative as they rather keep that conditions that favoured them. 

 

The Determinants of Sovereign Credit Ratings – A Worldwide Study

Ana-Maria Minescu, CEO Advisor, Unicredit Tiriac Bank, Bucharest, Romania

 

ABSTRACT

 This paper aims to quantify the relationship between sovereign credit ratings and various determinant factors for a sample of 82 worldwide countries during the period 1996-2008. The study employs regression analysis to assess the explanatory power of several factors. The following factors are found to be relevant explanatory variables: GDP/capita, inflation, default history and corruption.  Sovereign credit ratings attempt to synthesize the assessment of a government’s ability and willingness to repay its public debt. Such ratings are provided by various agencies, but the main ones and most widely recognized ones are Moody’s, Standard & Poor (S&P) and Fitch. Sovereign credit ratings are closely watched by the whole investment community for various reasons, such as: (i) the sovereign credit ratings are seen as an indicator of the level of interest rate at which the government can borrow on the international financial markets; (ii) many types of investors are restricted with regard to the countries where they can invest, being required to invest only in financial instruments from countries with a sovereign credit rating above a certain threshold (in this context, the sovereign credit rating is seen as a measure of risk); (iii) as the existing literature has repeatedly shown, the level of the sovereign credit rating has a direct impact on the rating of corporate debt issued by companies operating in the respective country, acting most of the time as a ceiling – basically the rating of such corporate debt can almost never be higher than the sovereign credit rating.

 

Lot Sizing a Multistage Production Process

Dr. Abdul-Nasser El-Kassar, Lebanese American University, Beirut Lebanon

Dr. Noura Yassin, Beirut Arab University, Beirut Lebanon

Karim Maknieh, Lebanese American University, Beirut Lebanon

 

ABSTRACT

 This research extends the production lot size model to a multistage production process that accounts for the various costs involved in the production of an item. A mathematical model is developed and a closed form formula for determining the optimal lot size is obtained. The uniqueness of the optimal solution is demonstrated and numerical examples are given to illustrate and analyze the model. Most traditional approaches to the problem of controlling and maintaining inventories of goods produced do not consider the different costs involving the finished product. The basic inventory models have been modified and extended in many directions so that they closely describe the actual inventories encountered in real-life situations. The modifications and extensions account for the factors that influence the inventory costs. These factors include deterioration, allowable shortages, costs linked to order quantity, inflation, time discounting and credit facilities.  Time discounted EOQ models was investigated under inflationary trends and cost increases (Bierman and Thomas, 1977; and Mangiameli et al., 1981). The EOQ model was considered under condition of permissible delay in payments (Goyal, 1985). The effects of defective items were incorporated into the basic EOQ model (Porteus, 1986). An EOQ model was proposed with the assumptions that defectives of a known proportion were present in incoming lots and that fixed and variable inspection costs were incurred in finding and removing the items (Schwaller, 1988).

 

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