The Business Review, Cambridge

Vol. 20 * Number 2 * December 2012

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

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In Search of Strategic Innovation in Global Logistics Competition: Operations, Measurement, and Cases

Dr. Sut Sakchutchawan, Waynesburg University, Waynesburg, PA



In global competition, firms compete for market shares and profit. This paper examines a specific innovation for a practical logistics system for competitive edge. Currently, many issues on operations of global logistics still occur but firms still struggle in searching for the strategic innovation. This could be one reason why the cohesive in logistic and supply chain has never fully integrated. To investigate sources of innovation in global logistics, this paper proposes a research model for competitive advantage and measurement. This paper employs several methodologies including e-research, a survey of literature for effective practices of logistics innovation, and case illustrations to highlight and explore innovative operations to be implemented for global logistics firms.  Today’s global market is more competitive than ever. Technological change and demanding customers force international firms to change the way they do business. The cost of logistics has a large impact on a firm’s profitability. A global market, outsourcing and operations place tremendous pressure on the logistics function to deliver the goods as quickly as possible at the lowest cost (Gunasekaran and Ngai, 2003). Therefore, a key determinant of business performance is the role of the logistics function in ensuring the smooth flow of materials, products and information throughout a company’s supply chain. The transport chain problem creates an urgent need for efficient and flexible integration of information and logistics systems. Emphasis must be placed on the provision of relevant and timely information throughout the transport procedure to allow participants to have improved knowledge about what is happening at each stage and to control what happens to their goods or cargos. However, logistics is more than an incurred cost, as transportation and distribution can be instrumental in achieving competitive advantage (Reimann, 1989). The performance of the transport carrier may influence the effectiveness of the entire logistics function of a company. It follows the process of selecting an appropriate transport carrier is important to the firm’s success (Meixell and Norbis, 2008). In this paper, an attempt has been made to highlight the importance of logistics innovation in global competitiveness along with implementation of practical model, case illustration, and measurement.   Current business research has been strongly influenced by several factors such as increased globalization, rapid growth of the internet, and information technologies. These trends will continue, and likely accelerate, as the 21st century progresses. Therefore, the methodology used in this research was based on e-research and a survey of the literature in the field. E-research encapsulates research activities that use a spectrum of advanced information communication technology capabilities and embraces new research methodologies emerging from increasing access to research instruments and facilities, sensor networks and data repositories, software and infrastructure services that enable secure connectivity and interoperability(Zikmund, 2003). E-research capabilities serve to advance and augment, rather than replace traditional research methodologies. Improved access to knowledge and information will enable researchers to perform their research more creatively, efficiently and collaboratively across long distances and disseminate their research outcomes with greater effect.  To cover all researches and literature related to logistics innovation, competitive advantage in logistics, and issues in logistics, I conducted several comprehensive searches on MIT Sloan Management Review, Journal of Manufacturing and Service Operations Management, Academic Management Review, Journal of Management, International Journal of Operations & Production Management, Journal of Product Innovation Management, European Journal of Innovation Management, Journal of Operations Management, Journal of Supply Management, Journal of Logistics Information Management, International Journal of Production Economics, International Journal of Physical Distribution & Logistics Management, Journal of Business Logistics, International Journal of Logistics Management, Journal of International Business Research, Harvard Business Review, Journal of International Business Studies, and Transportation Journal. These journals were specifically selected for the review as they represent significant research in logistics.


Job Satisfaction and Faith:  Testing the Effects of Religious Intensity on Job Satisfaction

Dr. Issam Ghazzawi, University of La Verne, CA

Dr. Yvonne S. Smith, University of La Verne, CA

Dr. Yingxia Cao, University of La Verne, CA



Job satisfaction is one of the most researched constructs in management literature, including numerous studies on the links between spirituality and job satisfaction.  However, relatively few researchers have explored the links between strongly religious employees and job satisfaction. Does a person who is committed to his/her religion exhibit higher levels of job satisfaction?  In this paper we use a multi-religion sample to study whether, and under what conditions, an individual’s intensity of religious faith affects his or her satisfaction with the job.  We find that there are positive, however, weak links between intensity of religious faith and job satisfaction. Religious faith also seems to positively affect intrinsic and extrinsic job satisfaction.  Employees are not machines – they are entire persons with racial, gender and spiritual dimensions.  A major influence on an employee’s job satisfaction or dissatisfaction is the subtle permission on the part of the employer to be an entire, whole person at work, to not “check one’s gender or ethnicity or faith at the door” (Heim & Murphy, 2001:6).  The desire to integrate the entire persona at work seems to be particularly strong for the generation now entering the workplace, the so-called Millennial generation (Brooks, 2008; Stone, Cross, & Purvis, 2003).  However this aspiration is not limited to one demographic or age group; rather it affects the job satisfaction or dissatisfaction of many employees (Brief, 1998).  This understanding has created a growing interest in the effects of spirituality and religion in the workplace (Duffy, 2006; Pfeffer, 2003).   Researchers have found positive correlations between an employees’ spirituality and his or her job satisfaction and commitment (Kolodinsky, Ciacalone, & Jurkiewiczm 2007; Milliman, Czaplewski, & Ferguson, 2001).  However the concept of spirituality, in contrast to that of religion, is largely defined by the individual concerned (Fry, 2003; Hill & Pargament, 2003).  Thus its value as a management variable remains in debate (Duffy, 2006; Worthington, Wade, Hight, McCollough, Berry, Ripley, Berry, Schmitt & Bursley, 2003).  Though spirituality in the workplace has been extensively researched, religion in the workplace has had much less study (Chusmir & Koberg, 1988; Von Bergen, 2009).  Religion can be thought of as a system of beliefs about the nature of the forces(s) that ultimately shape man’s destiny (Lenski, 1969: 98).  Hill and colleagues defined religion as “the feelings, thoughts, experiences and behaviors that arise from a search for the sacred…and the means and methods (e.g. rituals or prescribed behaviors) of the search that receive validation and support from within an identifiable group of people” (Hill, Pargament, Swyers, Gorsuch, McCullough, Hood, & Baumeister, 1998:21).  Broadly speaking, religions incorporate the spirituality of the individual into a communal system of worship, doctrine, values, prayer, and devotional practices (Fry, 2003; Zellers & Perrewe, 2003).  Broadly speaking, the literature on spirituality in the workplace tends to see it as a positive influence (Fry, 2003; Kolodinsky et al., 2008).  In contrast, however, the literature on religion in the workplace tends to focus on how employers have found the religious faith of employees to be either problematic (e.g. Cash & Gray, 2000; Digh, 1998) or divisive (Cavanagh & Bandsuch, 2002; Fry, 2003). 


Student Preferences Regarding Sustainability Topics in the Business Curriculum, Interviewing, and Job Offers

Dr. Ronnie Silverblatt, Florida International University, FL

Dr. Constance Bates, Florida International University, FL

Jack Kleban,  Florida International University, FL



While firms and consumers have recognized sustainability and taken measures to go green, business schools have yet to fully commit to developing green courses and programs.  This is a survey of undergraduate and graduate students regarding their views toward sustainability.  While firms and consumers seem to be aware of going green and what it means, most schools of business have yet to act.  Most colleges of business have no green courses or programs (Bates, Silverblatt, Kleban 2009).  This green student survey reveals how they view sustainability in their business curriculum, including questions regarding green job interviews and green job offers.For a number of years, articles have been addressing concern for American universities’ need to include sustainability into courses and curriculum. Professor David Grayson, director of the Doughty Centre for Corporate Responsibility at the Cranfield School of Management, went so far as to say, “Schools ignore sustainability revolution.”  He added that “Of the more than 10,000 business schools worldwide, only a handful have seized the moment” (Grayson 2010).  Bjorn Edlund wrote “Schools are blind to the sustainability revolution” he pointed out that “... business schools are late in discovering – and acting on – the need to develop sustainability segments in their offerings” (Edlund 2010).  Then, in the last few years, a number of schools began to show interest in sustainability and the development of sustainability projects and course material.  A search of the literature reveals a number of universities conducted surveys of students to determine their interest in sustainability in their personal lives and on campus: Arizona State, Georgetown, Western Michigan, Clemson, University of British Columbia, St. Andrews in the UK, Suffolk, Wells College, Indiana, Luther College, UC Davis, Creighton, Brown, Stanford, Carnegie-Mellon, McLennan, Kansas, University of Pennsylvania, and New Mexico State.  However, only a handful of these surveys included questions about sustainability in courses or programs: the Suffolk University survey asked 1 question regarding courses, University of Nevada at Las Vegas asked a couple of questions, and the University of British Columbia asked 5 questions regarding curriculum.  This article picks up where these surveys left off, extending the questions into the areas of green courses, specific green topics, green course activities, green majors and minors, and green job interviewing and offers.  We received 879 responses, of which we could use 875.  All were students from South Florida.  Eighty-one percent were undergraduates and 19% were graduates.  Ninety one percent were majoring in business, with 60% being female.  Seventy eight percent were employed full or part-time.  Eighty six percent were between 18 and 34 years of age.  Just over half, 55%, were from the U.S., 19% from South America, 10% from the Caribbean, with the remainder from around the world.


The Bullwhip Effect: Is there a Solution?

Dr. Syed Shahabuddin, Central Michigan University, Mount Pleasant, MI



Many researchers are concerned about what causes the bullwhip effect and, more importantly, how to reduce or eliminate it. The bullwhip effect has undesirable consequences for the supply chain, such as inaccurate forecasts, inefficiency, and waste.  Even though the bullwhip effect can be explained, it cannot be controlled, at least not in the current business and economic climate. For good or ill, control would require a degree of cooperation and openness among all members of a supply chain that is antithetical to the secrecy and competitiveness of free-market systems. Therefore, we must be satisfied with better understanding the causes and consequences of the bullwhip effect.  The bullwhip effect is a major concern for companies in a supply chain. The bullwhip effect has been defined as “demand order variabilities in supply chains are amplified as they move up the supply chain” (Goyal, 2002). In other words, the bullwhip effect refers to the fluctuation of orders (and thus inventory) as they move up the supply chain and as each organization reacts to solve, from its own perspective, its inventory or production problems. This variability becomes more severe when there are many members in the supply chain. The bullwhip effect is a concern for supply chain members, because variability of demand within the chain creates too much inventory and an inefficient supply chain. That is, the bullwhip effect increases orders resulting in higher cost of inventory, lower reliability of operations, and fluctuation of inventory.  One way to reduce the bullwhip effect is for all members of supply chain to work together to plan and coordinate. However, plans require forecasts. Most forecasts have errors, and errors increase as one moves up the supply chain. Wheatley (2004) has stated that "the most common cause [of the bullwhip effect] is the amplification of the inherent uncertainty that surrounds forecasts" (p. 1).  According to an Accelerated Analytics (2009), even though there will be less fluctuation at POS, the forecast becomes chaotic and unpredictable as it moves up the chain. A fluctuation in actual customer demand of ± 5 percent will be interpreted by supply chain participants as a change in demand of up to ± 40 percent. As shown in Figure 1, the actual demand may only change ± 5, but the upstream members’ reactions are exaggerated, thus the bullwhip effect, which the U.S. Department of Commerce estimates accounts for $3 trillion in excess inventory in the U.S. and European supply chain. Procter and Gamble’s experience with the volatility of demand has been cited by many researchers. Procter and Gamble believed that volatility would not occur, because its consumer demand was reasonably stable. Holt, Modigliani and Shelton (1968) noted a similar misperception among television set manufacturers; Hammond (1994) observed it in the pasta supply industry; Lee, Padmanabhan, and Whang (1997b) noticed it among soup companies; and Anderson, Fine, and Parker (2000) were concerned with the substantial volatility in the machine tool industry. Many similar fluctuations have been observed in the semiconductor equipment industry, which has been more volatile than the personal computer industry. Ironically, some researchers, such as Sterman (1992), have found the same perceptions about volatility even when subjects managed a fictitious supply chain (i.e., the “beer game”).  Proctor and Gamble also experienced fluctuation among its wholesale orders over time but found that its orders for raw materials fluctuated even more than its wholesale orders. A similar problem has been experienced by other companies in their internal supply chains (Baljko 1999a, 1999b). Baganha and Cohen (1998) have discussed empirical evidence of order fluctuation in industries with high levels of order variation, and Kahn (1987) even presented a macroeconomic ‘proof’ of the relationship among order volatility, inventory, and cost. However, the proof assumes that supply chains work perfectly according to supply chain principles, i.e., that all members in the supply chain share information and are genuine partners in the system, working together to achieve the most efficient supply chain.


Profiting from Market Flash Crashes

Dr. Zi “Nancy” Ning, Delaware State University, DE

Dr. Alan L. Tucker, Fudan University, Shanghai, China



On 6 May 2010, from 2:42 p.m. to 2:47 p.m., New York time, the Dow Jones Industrial Average dropped by over 600 points, or about 6 percent, and the stock prices of eight major companies in the S&P 500 fell to a penny per share.  Twenty minutes later, most of that decline had been regained.  In all, over $1 trillion in market value temporarily disappeared.  Despite numerous governmental investigations and recent regulatory changes including the introduction of new circuit breakers and the elimination of stub quotes, many experts continue to opine that market flash crashes are likely to reoccur.  In this paper we analyze a derivative product designed to profit from any future flashes.  On 6 May 2010, from 2:42 p.m. to 2:47 p.m., New York time, the Dow Jones Industrial Average dropped by over 600 points, or about 6 percent, and the stock prices of eight major companies in the S&P 500 fell to a penny per share.  Twenty minutes later, most of that decline had been regained.  In all, over $1 trillion in market value temporarily disappeared.  If this disturbing event was a single, isolated episode that investors would never be subjected to again, then one could arguably shrug it off as merely an unfortunate few minutes of heightened anxiety and thereafter use the event as fodder for comic relief. (1)  Unfortunately, however, the 6 May 2010 flash crash may not have been an isolated event and may in fact reoccur.  For example, on 2 June 2010 the stock of Diebold, a technological services company, experienced a mini flash crash, plunging 35% (from $28 to $18) and recovering fully within minutes. This extreme volatility in Diebold appeared to be the result of an "electronic overreaction" to news reports of Diebold's long-expected settlement with the SEC over fraudulent accounting practices. (2) On March 23, 2012, the IPO of an electronic stock exchange, the BATS (Better Alternative Trading System), turned into a fiasco.  The BATS accounts for about 11% of the average daily stock-trading volume in the U.S. On the night of March 22, 2012, BATS had priced for a total offering of over $100 million. But when shares started trading on the next morning on its own electronic platform, they plunged from $15.25 to pennies in seconds. That dramatic event eventually led to the cancellation of the offering.  Evidence of disproportionate trading volume of exchange-traded funds (ETF’s) and their derivatives vis-à-vis the volume of the component underlying common stocks presents another potential avenue to future flashes.  A recent analysis by Bradley and Litman (2010) (3) suggests that some ETF’s could pose a serious threat to future market stability and lead to more flash crashes. (4)  For instance, iShares Russell 2000 Index (IWM) ETF had a short interest of 113% as of 30 June 2010.  To put that short interest position in perspective, keep in mind that 5% is considered a very high level of short interest for individual common stocks.  The shorting of ETF’s could rapidly slash the prices of their underlying stocks, in turn leading to even more shorting of ETF’s – thus throwing more fuel on the proverbial fire, analogous to the role played by the shorting of stock index futures in the stock market crash of October 1987.  Indeed, over 58 million shares of IWM were cancelled after the market close on 6 May 2010. (5)


Analyzing Domestic Digital Divide in Turkey

Dr. Cigdem Aricigil Cilan, Istanbul University, Istanbul, Turkey



The rapid development and change in information technologies in Turkey has led to an increase in IT usage rates in recent years. A look into the recent increase in rates of computer and internet use reveals a geometric growth. Numerous studies emphasize that the use of information technologies in a country is parallel to its level of development. Today, the "level of information technologies" is considered one of the key indicators to measure development. The differences in use of technology between countries and/or differences in access to and use of information technology between individuals in a country have introduced the Digital Divide concept. The difference between countries is called International Digital Divide whereas the differences between individuals in a country are called Domestic Digital Divide. Based on variables (age, gender, education, income, place of residence (rural or urban)) that determine the levels of access to and use of information technologies in Turkey, the purpose of this study is to analyze the country’s Domestic Digital Divide. For this purpose, the survey data from the European Social Survey conducted in Turkey in 2008 and published in 2011 were used and Categorical Data Analysis techniques are applied as statistical methods.  The level of Information Technology (IT) access and use vary among individuals in many countries. These differences usually stem from individuals’ demographic variation. This situation known as Digital Divide is a result of differences in age, gender, education, income and place of residence (rural or urban). This study aims to measure the Digital Divide which is believed to be an outcome of such differences. With the rapid developments in information technologies the Digital Divide has become an important issue. To date, studies on Digital Divide have been mainly based on the Digital Divide between developed, developing and underdeveloped countries while there are also studies are based on differences between various geographical regions. Digital Divide between countries and regions is also called International Digital Divide. Most of the studies in the literature to date focus on International Digital Divide.   In this study, interindividual differences in access to and uses of technology, in other words the Domestic Digital Divide in Turkey will be analyzed. For this purpose the study uses data collected in Turkey and published on the web by the European Social Survey, which is an internationally accepted data collection centre. There are a total of 4 variables in the survey related to information technologies usage: "Personal Use of Internet/e-mail/www," "Landline Ownership", "Mobile Phone Ownership", and "Phone Call via the Internet". This study will try to explain the concept of Domestic Digital Divide by using appropriate statistical techniques.  The term Digital Divide was used for the first time in the 1990s by Larry Irving, the former secretary general of National Telecommunications Infrastructure Administration. Initially, the Digital Divide was defined based on computer ownership or knowing how to use the computer (Tapscott, 1998).Recently, it has been used as a new form of computer and internet information technologies. Many researchers define Digital Divide as the obstacles encountered in accessing Information Technology Systems (Cullen, 2001). According to the OECD definition, Digital Divide describes inequality experienced by different socio-economic level of individuals, companies or countries in accessing and using information technology (OECD, 2001).Researchers and various theories have sought to develop methodologies to study Digital Divide. Corrocher and Ordanini's 2002 study emphasizes that Ricci's research sets the preliminary theoretical framework. Previously discussed only by developed countries, the concept of Digital Divide is today considered important in many countries. International platforms such as the United Nations, World Bank and OECD discuss the different rates of access to information resulting from the use of information technologies.  The studies that aim to measure and define the Digital Divide show some differences arising from the researchers.  Studies on Digital Divide tend to divide in two. One group measures Digital Divide with statistical methods while the other group focuses on the development of Digital Divide and the definition of variables used to identify the Digital Divide (Vicente & Lo´pez, 2011). Using micro data sets to identify the factors, some studies determined that Digital Divide is not a result of individual characteristics but a person's living space (rural or urban) cause Digital Divide (Horrigan & Wilson, 2006). A look into previous studies show that the most widely used statistical methods in measuring Digital Divide are Regression and Correlation Analysis, Factor Analysis, Multivariate Statistical Methods, Multidimensional Scaling, Canonical Correlation Analysis, Discriminant Analysis and Manova.


Social Risk and Female Entrepreneurs in Kerala, India: A Preliminary Assessment

Dr. Roshni Narendran, University of Wollongong, Australia



The aim of this paper is to highlight the concept of social risk in the literature of female entrepreneurship. In most studies, entrepreneurial risk is considered to be related to monetary concerns, but sociological risks are overlooked. The risks associated with social challenges will be discussed in this paper. First, a conceptual model is developed with the help of the literature review. This conceptual model is further explained with the help of a qualitative analysis that was carried out in the state of Kerala. This South Indian state is renowned for the high social status enjoyed by women; therefore, it was considered a suitable platform for this study. This study is derived from a large data set, from which the responses of 40 female entrepreneurs are analyzed in this paper. Five social risk factors were identified: mobility constraints, male hegemony, institutional void, perceived discomfort, and social stigma. The paper concludes with recommendations for policy makers and researchers.  This paper develops the theoretical concept of social risk and applies it to the situation of Indian female entrepreneurs. Even though the Indian economy is growing, a considerable number of Indian women are in poverty and are vulnerable to abuse and gender discriminatory practices (Cossman & Kapur, 1993; Holmes, Sadana & Rath, 2010). On the other hand, India carries a history of renowned women prime ministers, businesswomen, and actresses (Ghose, 1994; Ghose, 2007; Tan, 2011). Nonetheless, these women do not represent the entire population. Some women in India are victims of acid attacks, child marriage, and the dowry system (Ghose, 1994; CBS News, 2005; Gold, 2011). The dowry system and child marriages are said to have been abolished decades ago (Central Statistical Organisation, 2002); however, in rural areas, such practices still prevail (Holmes, Sadana & Rath, 2010). The government of India has introduced many incentives to help women overcome the obstacles in Indian society and to encourage small businesses (Seth, 2001; Planning Commission, 2007). In the sixth 5-year plan, for example, the government provided assistance for women to start and run businesses (Seth, 2001; Planning Commission, 2007). In spite of support from the government and changing social attitudes, however, Indian women are still victims of male hegemony (Anagol, 2010; Swain & Wallentin, 2009; Chakraborty, 2010). Such social attitudes instill fear in the minds of female entrepreneurs, and this fear of being socially penalized by the society is defined in this paper as a part of the social risk concept.  In the following section, social risk is defined and explained according to Solvic’s (1999) work on the perception of risk. First, various literature is reviewed to explain the origin of the concept, and two related concepts, perceived risk and affect heuristic, are explained (Solvic, 1999; Finucane, Alhakami, Slovic & Johnson, 2000). These concepts are related to the plight of Indian women, who have been victims of physical and emotional harassment (Karuppannan & Puthisigamani, 2007; Holmes, Sadana & Rath, 2010). Second, the research methodology is presented, followed by the empirical findings. Finally, the paper summarizes the salient points and concludes with recommendations for researchers and government officials.


The Immediate Feedback Assessment Technique (IF-AT): An Innovative Teaching Technique for Human Resource Management Students

Dr. Anna Blackman, James Cook University, Townsville, Australia



This paper aims to further contribute to the growing literature on Team Based Learning in higher education and employs the highly useful Instant Feedback Assessment Technique (IF-AT) in a study with a group of undergraduate university students in a Strategic Human Resource Management class at an Australian university. It was found that through the use of Team Based Learning and the incorporation of the IF-AT students’ skills in the areas of communication, overall learning, cognitive and interpersonal skills through the use of teams or groups of students was enhanced.  Suggesting that the potential of instant feedback could help to foster student engagement, encourage interaction between students and provide immediate feedback on student understanding.  Business needs have changed and so have the knowledge and skills required of business school graduates. “The traditional model of business education, where professors lecture and students work individually with little interdependence with respect to their performance and grades is not in line with the business community’s needs” (Siciliano, 2001:8).  This realisation has resulted in recommendations that curriculum and teaching methods be modified to enhance students’ skills in the areas of communication, cognitive and interpersonal skills through the use of teams or groups of students(J. Kunkel & Shafer, 1997; Siciliano, 2001) .  The literature on team based learning (TBL) and group work in tertiary environments is diverse.  TBL has been used in cancer education (Haidet & Fecile, 2006), classroom design in an agricultural economics learning environment (Espey, 2008) , nursing education (M. Clark, Nguyen, Bray, & Levine, 2008), legal studies tertiary classroom environments (Dana, 2007), civil engineering (Yost & Lane, 2007) and many other areas. The following themes have emerged from the analysis of this literature: cooperative learning, problem based learning, technology and TBL, decision making, engagement and action learning, and insights from psychology on TBL. In this paper, however, literature is mainly drawn from Higher Education and from the higher education literature from the fields of Management, Accounting and Psychology. One sticking point for TBL within a higher education setting is the assessment of team-based projects. The literature on feedback assessment approaches relevant to the concepts of TBL is briefly reviewed and the paper reports on a case study of the implementation of an innovative teaching technique, the Immediate Feedback and Assessment Technique (IF-AT) with second year undergraduate Human Resource Management students at an Australian university.  A number of authors have provided a thorough general overview of team based learning. Much of the literature emphasises the importance of teams in organisations and the imperative to engage in team building.  This is the stance taken by Hill (2001) who emphases the importance of team building, personality, culture and communication in organisations. He particularly explains the building blocks necessary to support a TBL initiative (trust, respect, understanding and team spirit) and the specific roles within working in TBL, from individual member to team leader.  A more widely cited overview of TBL is however, provided through the works of Michaelsen and his colleagues (Michaelsen, 1998; Michaelsen, Black, & Fink, 1996; Michaelsen, Fink, & Knight, 1997; Michaelsen, Knight, & Fink, 2004). 


Professional Morality: Perceptions of Turkish Teachers

Dr. Feyza Doyran, Bahcesehir University, Istanbul



We all want to have a “better world”. From educational perspective, in order to have a “better world”, we need better educational systems so that we can have “better people” in order to create a “better and a moral world” to live in. Teachers serve as moral agents in the classrooms; thus, they have the most important role as they are the ones who pass on the moral values to kids.  Students tend to identify themselves with their parents and of course with their teachers from the very early ages. As time goes by they encounter different people as their teachers and their character development partially is shaped with these encounters. We cannot determine on behalf of the students who they should take as a model and imitate so our responsibility should be, first of all, to become morally “better” people as human beings and as teachers, to demonstrate morally appropriate behaviors and professional morality and to design pre- and in-service teacher training programs and teacher education curricula which would incorporate courses emphasizing moral values and behaviors.  Teachers’ professional morality is a very important issue in all kinds and levels of educational settings. Nevertheless, this is usually not  a topic on its own to be dealt with in a separate course. It deserves special attention and more emphasis, especially if we want to have “better” people around. At present, some teachers may or may not direct special attention to moral issues in their courses.  The aim of this article, therefore, was to find out about the current understandings and perceptions of novice and experienced teachers, and students who are prospective teachers. The student data were gathered from the third year Foreign Language Education department students, at Middle East technical University, Ankara, Turkey; the teacher data were gathered from novice teachers who had one to two years of experience, and experienced teachers who had more than ten years of experience. Some of these subjects were also interviewed. The results of the data analysis revealed some interesting facts related to the present understandings and perceptions of students and teachers about “Teachers’ Professional Morality”.  In the next section, background to the problem of professional morality of teachers and theoretical model of the study are presented, followed by the methods of data-gathering and data analysis of the study. In the final sections, the results related to the perceptions of students and teachers related to teachers’ professional morality are given and main findings are discussed together with some suggestions for future research.


North American Economic Integration: NAFTA and Beyond

Dr. Igor M. Paramonov, Southern Alberta Institute of Technology, Calgary, AB, Canada



This paper examines various possibilities for future economic integration within and beyond the North American Free Trade Agreement (NAFTA).  Previous publications have suggested three potential trajectories including development within the envisioned original structure, deepening, and widening of NAFTA (Clement et al, 1999). It is necessary to revisit these directions while summarizing major developments and new perspectives.  Vision and hard work are required for NAFTA to remain one of the most economically competitive regional trading arrangements in the world.  In addition to NAFTA, each member nation has pursued its own plans to integrate with countries and regions beyond North America.  The most recent developments involve trade negotiations between Canada and the European Union, as well as both Canada and Mexico’s considerations to join the nine countries of the Trans-Pacific Partnership Pact.  The United States cooperates with a group of smaller developing economies within the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). This paper presents ongoing analysis of governmental, academic, and other sources for the purpose of teaching in the field of international business, including the uncommon course of “Business under NAFTA.”  Is the “Age of NAFTA” over?  This is a legitimate question to ask in an era where both Canada and the United States are seeking closer integration with countries beyond North America.  NAFTA is disappearing from the headlines and radars of both the mass media and academics.  The author of this analysis has been particularly motivated by the recently published article “U.S. might always be first – but Canada adjusts to Rising Asia,” by John Ibbitson (2012b).  Reviewing the results of the 2012 annual summit of the US, Mexican and Canadian leaders, he concluded, “The age of NAFTA is over.  Both Canada and the United States now have far higher priorities than integrating more closely with Mexico.”  This study examines the various scenarios of future economic integration within and beyond NAFTA based on past intentions and current conditions.  While NAFTA is the climax of economic integration, cooperative trading and close political relationships between member nations were in place long before the agreement was signed in 1993.  Among many previous books, articles, and reports on integration in North America and NAFTA, there are two fundamental studies addressing the evolution of multifaceted relations between Canada, the United States, and Mexico.  The first is “North American Integration: Theory and Practice,” a book written by a group of six practicing academics from all NAFTA member nations (Clement et al, 1999).  The authors pointed out that economic integration in North America did not start with the implementation of NAFTA in January 1994, nor would it have been interrupted if the agreement had not been ratified.  “Therefore, we regard NAFTA not as a milestone dramatically altering an historical process, but rather as a tool that may serve to better manage the ongoing phenomenon of North American integration in an efficient and equitable manner” (Clement et al, 1999, p. xi).  The second fundamental study is a trilogy by Professor Stephen Clarkson which documents North America’s evolution from autonomy in the XIX century to the interlocked social, cultural, and business structures of the XXI century (Clarkson, 2002, 2008; Clarkson, Mildenberger, 2011).  In both studies the authors traced NAFTA’s trilateral relationship from two bilateral relationships that existed between the USA and Canada and between the USA and Mexico, respectively.  The following chronology of important events originated in the first study (Clement et al, 1999, p.13) and was complemented by some important events emphasized in the second (Clarkson, Mildenberger, 2011). It has been updated for the purpose of this paper


Scheduling the Bottleneck of a n-Stage Process

Dr. Norman E. Pence, Professor, Metropolitan State University of Denver, Denver, CO



 This paper discusses a scheduling algo­rithm that will minimize the total preparation (set-up/tear-down) time for the bottleneck of a n-stage process involving multiple products.  Three conditions sufficient for an optimal solution are presented and the proof of the sufficiency is by induction.  There are two general problems addressed by this paper.  One is the development of a generalized algorithm to schedule the bottle­neck of a n‑stage process, and the other is the development of a generalized n‑stage schedul­ing procedure to schedule a n‑stage process.  It is appropriate, at this point, to present a generalized scheduling algorithm that can be used for a variety of production problems.  This algorithm should have a name that is suitable for any of these production scheduling situa­tions.  Conditions.  A collection of products, each requiring a certain amount of processing time, needs to be processed through a machine that is the bottleneck in a n‑stage process.  Prepara­tion (set‑up/tear‑dow­n) time must be applied before the machine can process the next prod­uct.  Preparation (set‑up/tear‑do­wn) time is substantial and costly, and the total preparation time for a collection of products is a function of the sequence of the products.  A single product quality variable determines the preparation (set‑up/tear‑down) time.  The last product processed in the previous production schedule through this bottleneck is known.  Objective.  Schedule the bottleneck to minimize the total amount of preparation (set‑up/tear‑down) time for a collection of products.   1. Determine the products to be pro­cessed.   2. Identify the product quality variable influencing preparation (set‑up/ tear‑down) time.  3. Select a unit of measure for this prod­uct quality variable and assign a nu­merical value to each of the prod­ucts in step 1 according to this prod­uct quality variable.   4. Arrange the products from step 1 in either descending value order or as­cending value order as determined in step 3 depending on whether a lower bound on product quality is desired or an upper bound on product quality is desired.  Assign product numbers from 1 to n according to this numeri­cal sequence.    5. Start the schedule with the same product that was last processed in the previous schedule if that product is demanded.  If this product is not demanded, start the schedule with the next demanded product, after the product last processed, in the numer­ical sequence from step 4.  When the end of the numerical sequence from step 4 is reached, the next product processed will be no. 1 and continue the schedule following the numerical sequence until the demanded collec­tion has been scheduled.  6. Determine the preparation (set­‑up/tear‑down) time necessary for each pair of consecu­tive products in the step 5 se­quence.  7. For the sequence of products and preparation (set‑up/tear‑down) times from steps 5 and 6, calculate the starting and finishing times for pro­cessing each of the products and the starting and finishing times for each of the preparations.   8. Schedule the bottleneck using the results of step 7.  To schedule all n stages of the process, the following generalized n‑stage scheduling procedure was developed. The mth stage of the procedure is the bottleneck.


Risk and Diversification in International Construction

Vahid Faghih and Amin T. Vahdat, Texas A&M University, TX



Market diversification is considered as a method to reduce risks regarding to the portfolio and projects. The diversification strategy of firms might affect revenue and market new entries of the companies. Unfortunately, there are few empirical findings regarding diversification of international construction companies. The current study performs an empirical analysis on diversification of international contractors and design firms. The study identifies (1) the pattern of contractors classified into business types, (2) the relationship between diversification level and size of the company, and (3) market entry strategy of US firms. The empirical study findings may be a start to investigation of diversification strategies of construction companies.  There is also an implied understanding that risk is something that can be identified.  In reality it seems that risk is not only identifiable and worth managing, but well managed risk can save millions of dollars on a company’s balance sheet. Given that fact, companies world-wide put a great deal of effort into identifying, analyzing, preparing for and defending against the adverse effects of risk.  One tried and true method for countering risk associated with market volatility is diversification.  Diversification in finance and investment circles is defined as a risk management technique that mixes a wide variety of investments within a portfolio. Diversifying will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio.  It is also believed that diversification plays the same sheltering role in a corporate setting.  Given this impression, it is understandable why even construction companies might pursue strategies of diversification to protect them in times when a particular construction sector suffers in losses that exceed the rest of the construction market.  One problem with this supposition is that investment options vary widely from real-estate and commodities to municipal bonds and domestic or international stocks.  For a company in the construction business the business options are much less diverse. The current study discusses construction contractors’ market diversification (for different sectors for different types of jobs) and analyzes diversification pattern and firm performance, focusing on international risk.  In many industries, larger firms are usually more diversified than smaller firms. So, market diversification is considered as one of the corporate strategies for risk management depending on the firm size and other situations. However, the current body of knowledge does not provide useful answers to the following question regarding to international construction companies: What are international contractors’ purposes in diversification? How much are contractors diversified? What combinations of different business sectors do they diversify into? This research is trying to answer some of these questions. The current study investigates the diversification pattern and associates performance of the largest international construction firms, using 6 years’ actual industry data published in Engineering News Record (ENR) top 225 international contractors  


The Relationship Between Motivational Tools and Job Satisfaction

Dr. Harun Demirkaya, Kocaeli University, Turkey



In today’s world of ruthless competition, the survival of any corporation depends on the performance and the effectiveness of human resources and job satisfaction is one of the primary elements that render human resources functional and effective in business life. It is influenced by motivating factors, and those factors eventually play a significant role in determining the level of job satisfaction. Motivational management, which aims to encourage employees to effective and productive working, utilizes various motivating factors for this purpose.  The purpose of this study which was conducted on a sufficient number of employees of a company by using the questionnaire method is to probe the relationship between motivational tools and job satisfaction in order to determine what types of modern motivational tools lead to various levels of job satisfaction. The results of the survey on a company reveal that motivational tools are not used effectively enough to ensure overall job satisfaction.  Today, businesses of the modern world are not, by nature, organizations that consistantly maintain their historical functions but they have become enterprises demanding scientific studies which project the future instead. The destiny of business is shaped by servants who gravitate towards studies aimed at leveraging the competitive power and by bringing new experiences into the play. Accordingly, transformation of organizational structures is accompanied by change of managers, and steers them into a guiding and supporting role rather than a controlling one.  Ordinary workers carry out assigned task but those who are raising a competitive superiority are those who go beyond the regular task and exert themselves to the utmost in order to make difference. Enabling workers to do more, yet specifically in a voluntary and intentional manner, has always been the key issue of management thinkers and managers. The solution of this problem is associated with the motivation concept.  Indeed, we call the process of creating a working atmosphere in a business where workers perform their tasks to the best benefit of organizational objectives that is "motivation management”. It should be kept in mind that a working environment in a business should be capable of meeting the demands and expectations of workers by boosting their level of satisfaction and enhancing their work achievement.  The present study coordinated through a survey applied to the workers of an already active business reveals the link between modern motivational tools and work satisfaction. Moreover, the study suggests major tips for the effective use of motivational tools across motivational practices of businesses.   The motivational concept defined by Latham at the depth of its historical perspective and details is based upon researches done during the fırst 50 years of the 20th century, and conceptual approaches (Latham and Ernst, 1006:182). However, the literal meaning of motivation is wider than its psychological meaning; and it literally means driving. The factor that drives is the motive (İnceoğlu, 1985:2). The Turkish meaning of motivation is represented by the words "saik, güdü" (Eren, 2003:316). The word "güdü" originates from the Latin word "movere”. Movere means to mobilize (Baysal and Tekarslan, 1998:100). The word "mobilization", namely "motivation" embraces a myriad of distinct factors. Motivation is correlated with the person's desire and effort to do work, act, and get the result (Koçel, 2011:620). In this respect, motivation is represented by the set of all efforts launched by businesses to ensure that workers converge to, believe in and are encouraged to fulfil the business objectives. 


Treatment of Inflation in Investment Calculations

Dr. Laszlo Karpati, Professor,  Budapest Business School, Hungary

Dr. Laszlo Kozar, Professor,  Budapest Business School, Hungary

Dr. Krisztina Zimanyi, Professor, Budapest Business School, Hungary



The objective of the paper is to give recommendations regarding the treatment of inflation for calculation of a long-term investment. The most important figure to evaluate investments’ financial result is the Net Present Value (NPV). The main objective of the paper is to critically evaluate the methods in literature regarding the treatment of effect of inflation and to offer new methods for the appropriate treatment of inflation for long-term physical investments’ calculations. In order to evaluate the procedures suggested by different articles, the authors carried out a series of simulations (with different price and cost indices) in connection with the treatment of inflation in NPV calculations.  The objective of the paper is to give recommendations regarding the treatment of inflation for calculation of a long-term investment. The longer of the time span of the investment, the more important is to take into account the inflation effect on the financial achievement of the investment. The most important figure to evaluate long-term investments’ financial result is the Net Present Value (NPV). The NPV is the most widely accepted calculation method in connection with long-term investments, especially in case of physical ones. The main objective of the paper is to critically evaluate the methods in literature regarding the treatment of effect of inflation and to offer new methods for the appropriate treatment of inflation for long-term physical investments’ calculations.


The Continuing Backwardness of Eastern Europe: A Search for Institutional Explanations

Dr. Edwin C. Moore Jr., Chair, Management and International Business, Northwood University

Dr. Pesi Amaria, Consultant



The purpose of this paper is to generate a dialog and discussion of institutional economic research methods concerning the New EU countries. The paper presents a discussion on neo-classical research and concepts and institutional economic research and concepts. Comparisons and contrasts of Old EU and New EU countries development are offered. Finally a discussion specific to the evolution and history of the New EU countries is offered. Two major issues are discussed concerning the short time period of available economic data and the limited number of very diverse countries which makes comparisons difficult.  The purpose of this paper is to explore possible reasons why Eastern Europe (EE) has failed to develop as rapidly as was believed in 1989 with their new found freedom and independence from Soviet influence. While the newly independent Eastern European countries had much support as well as political and economic institutions imported from the West, many EE countries have had dismal economic performance to date.   This paper will focus on the success of formal institutional building and if the informal institutions and history of the region supported the formal institutions that were being imported. Much of the research referred to in this paper supports the notion that the informal institutions of a society need to be aligned with the formal institutions that are created. The assumptions of neo-classical economic analysis have to be considered and do they, independently, predicting economic growth.  The emerging economies in Central and Eastern Europe present both opportunities and risks on a global scale (Baldwin, Francois, & Portes, 1997). Ireland, Tihanyi, and Webb (2008) present their view that the incongruent transition of formal and informal institutions remains a key obstacle to promoting entrepreneurship in emerging economies. The rules, regulations, laws, and supporting organizational structures that establish order in economic, legal, and political frameworks are referred to as formal institutions (North, 1991). One must keep in mind organizations such as banks, governments, universities, and NGOs are not institutions as institutions are the rules that allow organizations to operate and determine how they operate. Informal institutions include the norms, beliefs, values, and similar conventions that form the socio-cultural relations within a society (North, 1991). While formal institutional policies and structures supporting capitalism have steadily emerged in Central and Eastern Europe aided by the requirements of EU membership, informal institutions remain divided between old and new economic systems (Ireland, Tihanyi, & Webb, 2008). “The problem of the interrelation between the economic system and other aspects of social life cannot be avoided” (Cangiani, 2011).  Just as Russia would have to overcome its history so would the old Satellites, now Transitional Economies, of Europe. Muravchik (2009) argues that the Eastern European countries did not overthrow Communism but a foreign power, the Eastern European countries have a long history of foreign rulership. As evidence Murachik presents Yugoslavia and Albania. With the loss of economic support the now transitional Eastern European countries would have to import economic resources, become competitive in exports, and import institutions. The institutions included not only formal institutions such a governance and financial institutions but informal institutions. Informal institutions include three types: general attitude such as trust in the economy, how the formal institutions are assessed, and finally permissibility of violating formal and informal norms.  The formal institutions do not alone build the infrastructure for a thriving economy and shape human behavior, but informal institution are equally important contributing to a country’s development growth or stagnation or decline that interact positively or negatively with formal institutions. To understand why the slow growth of Eastern European countries is observed in comparison to Western Europe after the breakup of the Soviet Union, we need to examine issues within and between east and west European countries how formal and informal institutions interact, how they contribute to development, how do they emerge and change, and what are the drivers for change in context within Europe and of the influence of global economic environment?


The Commitment of Investment Funds in Implementation of Accounting Disclosure Requirement at Jordanian State Universities

Dr. Jamal Adel Al-Sharairi, University of Al Al-Bayt, Amman, Jordan



The study aimed to identify the extent of the investment funds commitment in the Jordanian public universities to implement the accounting disclosure requirements, a questionnaire has been designed for this purpose and distributed to preparers of financial statements, who are (40), the recovered questionnaires which were appropriate for analysis reached (36) questionnaires, with a recovery percentage of (90% ).A questionnaire data was analyzed by using a (SPSS) and a number of statistical techniques through descriptive statistics, arithmetic means, standard deviations and percentages, in addition of using the (One-Sample-T Test) to examine the hypotheses of the study. The results of the study showed that the obligation to apply the accounting disclosure requirements have been achieved with low degree and that there are constraints limiting the commitment of investment funds in Jordanian public universities in applying the accounting disclosure requirements. The most important recommendations of the study are the need to work on the independency of investment funds from the university administration, thus contributing to begin applying the accounting disclosure requirements.  Investment funds in public universities have witnessed in recent times a significant increase of investment activities, particularly in light of the difficult economic conditions experienced by the Kingdom in general and the public universities in particular and the rationalization of government support for universities and lack of support by private companies in Jordan and so-called social responsibility, which called the activation of these funds and to find other ways of income for universities.  According to Article (3) of the Jordanian Universities Law no. (20) for the year 2009, The University has a formal legal personality with financial and administrative independence, for that it has the right to own movable and immovable property and the conduct of all legal actions, including the conclusion of contracts and borrowing with the approval of the Council of Ministers and the acceptance of aid, donations, grants, bequests, and has the right to litigate and to do all the work and legal and judicial procedures, and delegate in judicial proceedings the Attorney General or any other attorney, for which its non-profit institutions and its financial bylaw is governmental, so, the investment funds in public universities fall under the principles and assumptions of contemporary accounting as is the case in private sector companies, and it must submit its financial reports and final accounts at the end of each financial period by Jordanian chartered accountant auditors. In accordance to paragraph (d) of article (25) of Jordanian universities Law no. (20), for the year 2009.  On the basis that most private sector companies in Jordan shall apply the International Accounting Standards (IAS) in general and the accounting disclosure requirements particularly, and that the Jordanian legislator in Article (184) of the Companies temporary Law no. (23), for the year 1997, and Article no. (16) of the Disclosure Instructions issued by the Securities Commission in 2004,that all relevant parties shall abide by the International Accounting Standards issued by the International Accounting Standards Committee (IASC).Therefore, this study will address the commitment of investment funds in public universities to apply the accounting disclosure requirements.


An Assessment of the Impact of Rice Supply Chains on Yield in the Local Rice Industry in Ghana

Jonathan Annan and Eric F. Oteng-Abayie, Kwame Nkrumah University of Science & Technology, Ghana



This study assessed the local rice supply chain system with the view to identifying the actors and their roles, the production, processing and marketing systems involved as well as the constraints and prospects therein. The study also estimated the impact of the supply chain variables on yield (quality, quantity, productivity) of local rice.  It was established that there is an inefficient local rice supply chain, dominated by small-holder producers, millers and marketers, with other major actors operating from the fringes and poor information flow along the chain. The findings show that variables such as age of respondent, type of actor, farm size, extent of use of mechanization and type of cropping system practiced are determinants of yield and quality of local rice in Ghana.  The production of rice has become very crucial in the fight against poverty and hunger; its usefulness is exposed in both national security and calorie consumption concerns. As a result, world importation and supply of rice has appreciated significantly following the onset of the green revolution in the 1960s. Over time, successive governments have also sought to promote rice production to address food security, enhance import substitution and reduce poverty in Ghana. By 2010 for instance, policy target was to reduce importation of the staple by 30% whilst doubling annual domestic output by 2018. Indeed, current world market trends for agricultural produce show high retentive benefits for countries with more organised and developed supply chain networks. Yet, in Ghana, the apparent lack of coordination and weak information flow between actors in the rice value chain has negatively impacted on the competitiveness of the local rice industry. Ghana’s self-sufficiency ratio had decreased from 38% in 1999 to 24% by 2006, (CIRAD, 2007); although, by the 1970s, the country was fully self-sufficient in rice production (1). According to Assuming-Brempong (1998), Ghana has a competitive advantage in the production of paddy rice within the West African sub-region, however this competitiveness sharply declined at the downstream of the supply chain, owing to high processing and transportation costs. There is therefore the need to address issues of efficiency in the supply chain with regards to cost especially for processing and distribution cycles; as well as improving the quality of local production to enable it compete favourably with the imported rice. The thrust of this paper is to assess the supply chain systems in the local rice industry in Ghana and its impact on yield. The contribution of this study to literature is situated as follows: first, known studies have largely concentrated on the production side excluding the assessment of the supply chain networks. This study therefore assesses the supply chain of the rice industry in Ghana; identify various actors and their constraints. Second, we contribute to the growing empirical works by identifying the supply chain factors that affect rice yield in Ghana and to estimate the marginal effects of the various factors on the yield using a Tobit model. The next section presents a brief profile of the local rice industry: considering the production section, consumption and marketing patterns and the supply chain network in Ghana.  The third section will consider the research methods and the data used in this study. The presentation of results follows in the fourth section whilst the final section  provides the main conclusions.  According to Mobil et al. (1985), rice was already a major cash crop in Ghana as far back as the 17th and 18th century. The slump in rice production started in the 1980s and early 1990s because of drought and the non-competitiveness of local rice as a result of the implementation of the Structural Adjustment Program (SAP) which resulted in the removal of agricultural subsidies and most governmental support to the agricultural sector. However, from 1994 rice production started improving due to the introduction of programs which promoted water management practices, use of high yielding varieties and enhanced support services, albeit with increased private sector involvement. This notwithstanding, the total national rice consumption still outstrips production, with the deficit being filled with imports.   Until the 1920s, rice was mostly grown in Volta and Western Regions by women as the men were involved more in cash crop cultivation such as cocoa, rubber, oil palm and coffee.


Nominal Output Targeting

Dr. Mahmoud Araissi, Lebanese American University, Beirut, Lebanon



In this paper a macro- economic model in the area of monetary policy game theory is extended to one-sided dismissal rules concerning observed nominal output targets for the central banker.  Such a rule is shown to reduce inflationary bias if the central banker perceives her reappointment chances as being strong and is preferred to discretionary monetary policy.  The inflation bias inherent in agents in the economy, when they realize the incentive of monetary authorities to create monetary surprises, is responsible for what is known in this literature as credibility problem of monetary policy. Recently, there has been an increased interest in targeting easily observed and  less sensitive to monetary policy nominal target such as output (GDP) rather than inflation. We consider "trigger mechanisms" for firing the central banker, namely, nominal output targeting. This helps to stabilize the probability of dismissal of the central banker since it targets a more stable variable than the inflation or the monetary base. For example, in the event of a negative supply shock, real output decreases but inflation increases, leaving the nominal output little affected. In the case of a positive supply shock, the rate of real output growth increases and the inflation rate decreases, leaving the sum of the two rates not much affected. This makes nominal output targeting a more forgiving procedure than inflation targeting under either type of supply shocks.   A game suggested by Kydland and Prescott (1977) models wage setters having to specify the nominal wage before the Fed sets the money supply; this gives the Fed an incentive to inflate the real wage down to the level wanted by wage setters. This non-cooperative solution has an inefficient inflation bias. Barro and Gordon (1983) develop a model that solves the credibility problem by the central bank building a reputation under the assumption of symmetric and perfect information. A game theoretic paper by Canzoneri(1985) has modified Barro -Gordon and suggested that the Fed could be forced to adopt a cooperative solution which is time-consistent , when the Fed's forecast of money demand is private information. Garfinkel and Oh (1993) extends Canzoneri's (1985) two-period analysis of a targeting procedure to a multi-period setting. McCallum (2011) argues for the validity of using nominal GDP targeting for central bankers. Niskanen (2009) similarly proposes the Fed targets nominal final sales to domestic purchasers. The main difference between the current model and the earlier ones lies in the interaction of the parties with the central banker which would influence the monetary policy setting to producing the socially optimal outcome simply because it uses information in a socially optimal way. The case where unusually large supply shocks hit the economy is not dealt with here (See Lohmann (1992)). The next section describes a model of monetary policy with private information and supply shocks for two main cases: nominal output targeting with a central banker's dismissal clause if the target was exceeded, and the fully discretionary case without dismissal of the central banker, referred to below as the no dismissal, full discretion case. The following section extends the model to a no dismissal rule, full discretion, one period targeting regime. The section after that one discusses the dismissal rule. The solutions are compared based on the criteria of the inflationary bias, the output and the inflation variability. Finally, we  conclude with some remarks and possible extensions of the analysis.  The model presented here investigates the efficacy of dismissal rules. The aim of those dismissal rules is to obtain a better outcome than that achieved without them and with full discretion. Of particular interest is the issue of stabilization of shocks. In this paper, it is assumed that the monetary authority shares its private information with wage setters. The results in this paper build on using the analytical techniques developed in Fratianni, von Hagen and Waller (1992). The notation is identical to that in Arayssi (1996). Output is given by:


Involvement Levels and Constraints: A Study on Speed Skating Players

Dr. Chien-Hung Wu, Chung Chou University of Science and Technology, Taiwan R.O.C.

Dr. Ching-Tang Wang, National Taiwan University of Physical Education & Sport, Taiwan R.O.C.

Chih-Cheng Tseng, Tajen University, Taiwan R.O.C.



 The purpose of this study was to analyze athlete involvement levels and constraints in the roller sport of speed skating among those who competed in the 20th President's Cup Roller Sports Tournament in Taiwan in 2010. Participants were 245 age over 13 and older (junior, senior high school and college students and others) who engaged in the roller sport of speed skating. Findings showed that there was a negative, low level correlation between the respondents’ involvement level and constraints. In addition, the internal constraints had a significant indicated function to the factor of involvement levels. Overall, results shower an important link between athlete involvement levels and constraints.  The purpose of this study was to analyze athlete perceptions of the constraints of involvement in the roller sport of speed skating among those who competed in the 20th President's Cup Roller Sports Tournament in Taiwan in 2010. Since 2001 the people in Taiwan had experienced a higher standard of living due to a favorable economic climate. They have experienced an increase in the national educational level of its population and additional leisure time (Wu, 2009). The international media has brought much attention to the sport of ice speed skating. The five-day work week, which was established by the government in 2001, has resulted in a life style change for the Taiwanese working class which has enabled them to participate in more leisure activities (Wu, 2009).  Ice speed skating has generated a large public interest since the 2002 Salt Lake City Winter Olympics and has quickly become popular in the United States (Loy, & Della-Giustina, 2003). This same popularity and enthusiasm for ice speed skating in the United States had also peaked an interest in speed skating in Taiwan; as seen in the 2009 World Games in Kaohsiung, Taiwan. The result of the success of ice speed skating throughout the world has also increased the interest of the roller sport of speed skating in Taiwan. Now speed skating is getting more and more popular in Taiwan when female athlete Yu-Ting Huang won speed skating gold medals in the 300 meters, 500 meters, and the 1000 meters at World Games in 2009 in Kaohsiung. Then Taiwan male athlete Wei-Lin Lo had success and won one gold medal in the 300 meters and one silver medal in the 500 meters. In the 2009 World Roller Speed Skating Tournament in Haining, China, Qing-Yang Song won a gold medal in the Junior Men’s 42 kilometer road marathon and Meng-Zhu Li who won one bronze medal in the Junior Ladies 42 kilometer road marathon. This success has enticed individuals to participate in the sport along with other leisure activities in Taiwan. People are increasingly taking an active role in roller sport of speed skating as a form of physical activity. What helped entice higher interest was that the events were covered during prime time on the television, in newspaper, and on the Internet which added to the interest. On the other hand, identifying the strongest constraints provided information helpful toward creating strategies to promote this sport as a leisure activity. Understanding differences in perceived constraints associated with gender, age, participation, and involvement were useful for planning, promoting, and managing and organized the roller sport of speed skating programs. This study may identify athletes’ involvement in the roller sport of speed skating and also identify those constrains that might prohibit or decrease involvement.


Effects of Location and Animation of Internet Banner on Clickthrough Rates

Dr. Chatpong Tangmanee and Pakorn Prapakornkiat

Chulalongkorn Business School, Chulalongkorn University, Bangkok, Thailand



Internet banners have been under numerous examinations in order to learn which design features could lead to high rates of clickthrough. Previous research has reported effects of banner animation and banner location; however, results are still inconclusive. This study thus attempts to compare clickthrough rates (1) between those on animating and on stay-still banners and (2) between those on banners placed on top and in the middle of a screen.  Data from a quasi experiment confirm (1) the difference between the clickthrough rates on animating banners and those on stay-still banners is not significant, but (2) the difference between the rates on banners positioned on the top and those positioned in the middle of the screen is statistically significant at a 0.05 level.  In addition to extending insight into design issues of Internet banners practicing in Thailand, practitioners could adjust their online advertising campaigns based on the study’s findings.  According to several estimates, online advertising revenue will (1) outperform typical broadcasting channels, and (2) be at least US$  billion in 2012 (Internet Advertising Bureau, 2011). Among various forms of this online commercials, banner advertisement has become one of the most common formats (Calisir & Karaali, 2008). The banner advertising refers to a display of marketing messages in any form of presentation that appears on a computer screen while ones visit a webpage (Nichpornkul, 2000). Given the standard tools for online advertising campaigns, banners have received remarkable attention on design issues (Hong, et al., 2007; Yaveroglu & Donthu, 2008; Owens, 2011). That is, both researchers and practitioners would like to know the best design that could significantly contribute to the banner’s high effectiveness. Among a few indicators in a banner effective matrix (Hoffman & Novak, 1999; Ryu, 2007), a clickthrough (or a clickthrough rate) has been commonly accepted because of its valid reflection of advertising success and its simple measurement. Defined in this study, the clickthrough is the number of click a banner has received. It could be measured per a time interval (e.g., the number of clicks per hour) or per a campaign (or a project). The clickthrough rate is then the number of click divided by the number of those who had (1) visited the page in which the banner appeared and (2) presumably paid attention to the banner content.  Past research has examined a few number of design features that may lead to a banner’s high performance (Calisir& Karaali, 2008; Chen, et al., 2009; Edwards, et. al, 2002; Owens, 2011). Two of those features particularly of this study’s interest are banner location and banner animation. This banner location refers to different positions on a screen where a banner appears. Given a banner’s commonly rectangular shape, five locations could be on the top, the bottom, the left, the right, or in the middle, of a webpage or the screen. Based on Nichpornkul’s (2000) lab experiment, a banner on the top received the highest numbers of clicks, compared to the bottom, the left and the right locations. Tangmanee and DejArkom’s (2003) field experiment was based on Nichpornkul’s findings. Attempting to compare clickthrough rates between those on the top position and those in the middle location, they was able to confirm that the top location still received the higher clickthrough rate than those at the middle position. Although these two projects of Nichpornkul’s (2000); and Tangmanee and DejArkom’s (2003) are useful, they seem outdated, thereby, having validity concern. More recently, Zhang (2006) compared the effect from banners positioned on the left and that from banners positioned on the right on information-seeking task. Although far from online commercial task, Zhang (2006) discovered that the left location had more serious negative effect on the task than the right location.


Is Australian CEO Remuneration Linked to Company Productivity?

Damian Tien Foo Niap, RMIT University, Australia

Dr. Dennis Taylor, RMIT University, Australia

Dr. Clive Morley, RMIT University, Australia

Sang Ho Kim, RMIT University, Australia



The objective of this study is to investigate if there is a link between Australian CEO remuneration and productivity during a period of economic crisis. While there have been numerous studies on the relationship between CEO remuneration and conventional company performance measures such as return on equity which focus on a particular stakeholder, the shareholders, there is limited research on the link between CEO remuneration and company productivity which covers a broader range of stakeholders such as employees and the government. Our results indicate that there is a positive relationship between CEO remuneration and total productivity.  The remuneration of executives, particularly that of the chief executive officer (CEO), has for years attracted intense interest from the public media (Clarkson et al. 2006). The focus has increased following the global financial crisis (GFC) of 2008 especially in regard to what is viewed as the excessive remuneration of CEOs for poor performance (Girasa and Ulinski, 2009). The interesting question is whether CEOs in Australia really are rewarded for failure of financial returns to investors or whether there is a link with their companies’ productivity during a period of economic turbulence. The objective of this study is to investigate whether there is any link between CEO remuneration and companies’ performance in terms of their productivity, controlling for the influence of companies’ corporate governance structures during a period of financial crisis. The motivation for this study is twofold. Firstly, to the best of our knowledge, there is limited empirical research on CEO remuneration and the link with companies’ productivity (Gielen et al. 2009, Cardoso et al. 2011). Most prior studies have focused on determining whether there is a link between executives’ remuneration and financial profitability, rather than productivity for example Merhebi et al. (2006). However, productivity measures can be better indicators of a company’s financial health than reported earnings because earnings can be influenced by the different treatment of items such as depreciation that are permissible under accounting standards. Furthermore, short term profits may be achieved at the expense of productivity and long term performance by means such as reduction of maintenance works. Therefore, it is possible that productivity may be declining despite profits increasing in the short term (Kim et al. 1996). Secondly, excessive executive remuneration has attracted immense public attention due to the GFC, hence the period of this study from the year 2007 to 2009.  Agency theory (Berle and Means 1932, Jensen and Meckling 1976) posits that CEO remuneration may be used as a mechanism to align management’s interests with those of the shareholders and that this mechanism solves the issue of agency costs that arises due to the separation of management and ownership. Remuneration can be an important mechanism for soliciting effort, ensuring that executives act in accordance with owners’ interests, and rewarding productivity (Doucouliagos et al. 2007). However, Bebchuk and Fried (2003) argue that CEO remuneration may pose an agency problem because managerial remuneration may be the result of managerial entrenchment or power, and can be characterised as rent-seeking behaviour. Whilst agency theory focuses on management and shareholders, stakeholder theory covers a broader group of stakeholders. According to the ethical or moral perspective of stakeholder theory (Deegan 2006), companies have a duty, through decisions made by their CEOs, to consider not only the needs of their shareholding stakeholders but also those of their non-shareholding stakeholders through stakeholder management (McWilliams and Siegel 2001). Stakeholders may include not just shareholders but also the government including the Australian Tax Office, employees, suppliers and future generations (Deegan 2006). Drawing on both agency and stakeholder theories, one would expect CEO remuneration to be linked with company productivity, which can be considered as a return to stakeholders. Conventional theory posits that improvements in productivity drive wages upwards. A study by Gielen et al. (2009) finds that performance-related pay increases company productivity and employment growth.


Electronic Portfolios in Business Schools

Dr. Eleanor J. Flanigan, Montclair State University, Upper Montclair, NJ



An effective tool used by business students eager to introduce themselves into the professional work world is an electronic portfolio (ePortfolio).  A technologically sophisticated portfolio can be used to supplement the rather sparse chronological or thematic listing typically found on a resume.  The career portfolio is a showcase of work focused on documenting the diverse items displayed to enhance opportunities for employment.  This type of portfolio is totally dedicated to highlighting achievements, relevant work samples, and one’s accomplishments.  Although academic portfolios can serve many purposes, the career portfolio is the one most appropriate for the business professional and for those just beginning their working lives.  This paper will describe ideas for both the process of developing a career ePortfolio along with dealing with the topics relevant to the final product.  It will address question such as "Why create a career portfolio?", "What should be in it?", "If Web 2.0 technologies are used, what are the issues?" "|How are these Web 2.0 Webfolios created, stored, and disseminated?"  Unless people are unusually reflective and deliberately trace their intellectual and their professional growth, most move along and go with the flow of daily living and daily work needs.  Many are not consciously aware of the paths that lead them from one level of knowledge or from one career to another.  Whereas professionals keep pace with new requirements placed upon them, most students move ahead according to the required collegiate curriculums. Students take the prescribed courses as directed without much reflection on their cumulative knowledge or recognition of the connection between these courses.  Both groups, however, accumulate valuable experiences along their paths sometimes forgetting how they actually got to some pinnacle of experience.  Important anecdotes or incidents are tucked away in memory but are not documented otherwise.  Professional and business people are certainly aware of keeping their resumes up to date, although they may not do this until some employment crisis forces them to reflect and report on their accomplishments. Annual job assessment reviews often prompt scrambling through the papers or memories of the prior year to compile a report for the desired salary raise or promotion.   Somewhat similar to this situation, students find that as graduation approaches and career opportunities present themselves, preparing comprehensive resumes requires them to sum up their achievements and experiences.  This is usually an onerous task.  Rather than waiting until the end of the program, it may increase the students' ability to comprehend the path of learning and recognize their emerging competencies if they had to collect and preserve their work in a creative accumulative project, reflecting and assessing during the process.  The usual process for developing an ePortfolio is for students to collect relevant work in their courses as they progress through their academic careers.  The work used for the portfolio can reflect student progress not only in business subjects but also in a variety of other courses.  This article will confine itself to the career portfolio, which is the one most appropriate for the business community as well as for entering a career.  It will describe ideas for both the process of developing an ePortfolio along with dealing with the topics relevant to the final product. 


New Business Ecosystems and Innovation Strategic Choices in SMEs

Soufiane Mezzourh, University of Toulouse 1 Capitole, Centre de Recherche en Management

Walid A. Nakara, Groupe Sup de Co - Montpellier Business School, Montpellier Research Management



The current paper seeks to develop existing theories around innovation ecosystems, where a major focus has been the relationships between and within firms in established ecosystems. The paper extends current research to consider the manner in which new business ecosystems develop to support innovation and strategic choice. Using case study methodology to explore keystone innovations within a French SME, the concept of « keystone innovations » is introduced and a Cytoscape model of the e-book business in France developed. Results indicate direct implications for both innovation theory and management which are explored here as the basis for future research. The originality of this work lies partly in its acceptance that new business ecosystems develop to support innovation and in the exploration of their development reported.  The examination of innovation in nature (biomimicry) as a template for artificial innovation is relatively well established. In ‘Biomimicry’, Janine Benyus gives new impetus to the bionics program initiated half a century ago (Benyus, 2002), which argues that man should replicate the genius of nature in his work. This consideration of nature in the search for developments in organizational theory can be applied to business ecosystems and – indeed – research has been developed here with considerable success. Where ecosystems are developing, clear parallels have been developed between the manner in which developments occur in nature and organizations. In nature, ecosystems are born from the co-evolution of species. In business, ecosystems arise from the co-innovation of organizations. To use the term of economist Joseph Schumpeter, innovation serves a dual function: creating and destroying ecosystems without ever reaching equilibrium – the climax, as it would be termed by ecologists.  The current paper draws heavily upon established research in the field of business innovation ecosystems (Adner, 2006; Adner & Kapoor, 2009), which has primarily focused upon relationships between and within firms in established innovation ecosystems, but extends this thinking to argue that it is innovation itself that creates ecosystems and causes their extinction and to consider evidence of the dynamic nature of the process of creative destruction. Further, the paper introduces the concept of « keystone innovations » to examine the evidence through the use of Cytoscape modeling techniques applied here to a case study of the e-book business in France. Lessons beneficial to both innovation theory and practice are suggested, alongside areas where future research could be developed.  Innovation is clearly the result of complex interactions between multiple actors, such as universities, researchers and business as well as the economic and institutional environment. In this systemic view of innovation, economics, sociology and more recently ecology, bring, each in its way, interesting answers.  From a biological vantage point, innovation is literally a network: “a good idea is a network", says Steve Johnson; “A specific constellation of neurons – thousands of them – fire in sync with each other for the first time in your brain, and an idea pops into your conscience. A new idea is a network of cells exploring the adjacent possible of connections that they can make in your mind”. Therefore, to better understand the nature of innovation, we’ll have to start by shaking ourselves free of this misconception: “An idea is not a single thing. It is more like a swarm” (Johnson, 2010).  The systemic nature of innovation is also visible at the “macro” level, i.e. in the society as a whole. In his famous book The Network Society, the Spanish sociologist Manuel Castells says: from the Industrial Revolution “the great lesson to be learned is that innovation is never isolated. It expresses both a state of knowledge, a specific institutional and industrial environment, the skills and the capabilities required to define and solve a technical problem, the economic mentality needed to make these applications viable, and a network of producers and users likely to connect their experience in a cumulative fashion”.


Economic Growth and Employment in the Equilibrium Labor Market

Choi Chang kon, Professor, Economics Dept., Chonbuk National University, Korea



It is often argued that job creation by economic growth is not so large as in the past, which is measured the so called “employment elasticity” or “employment intensity” of growth. Empirically it is estimated as growth rate of employment divided by growth rate of GDP. So far, many papers looked at data of GDP and employment growth to estimate it. They find indeed that the measured value of elasticity has decreased in most countries. While there have been many empirical studies about that issue, no study has identified the structural determinants of employment elasticity. That is, they did not look upon the question of what determines the employment elasticity. This paper shows theoretically that employment elasticity is determined by the structure of technology and preference, thus, the labor demand and supply. The theoretically derived formula of employment elasticity allows us to identify its determinants. In testing and applying the theoretical result, first, some calibrated values of parameters and estimated values of labor supply structure found in other studies are applied to the theoretically derived formula to calculate the employment elasticity. And we compare the empirically estimated elasticities and theoretically calculated ones. Secondly, we try to identify which determinant has contributed to change (allegedly, decrease in most empirical studies) in the employment elasticity.   Recently, most countries have persistent job shortage and unemployment problem. And apparently, since the employment does not increase enough while the economy grows, the phenomenon has been called as “Jobless growth”. Due to the chronic high unemployment in many countries, it has become an important and imminent question in Macro or Labor Economics to understand how employment growth is related to economic growth. The idea is that the employment effect of economic growth has been reduced and is not the same as in the past. (1) While there have been many studies about that issue, no study has identified the structural determinants of employment elasticity. Most studies look only at empirical data of output growth and employment growth and estimate the empirical value of the elasticity. This paper’s goal is to employ an equilibrium labor market model in addressing this question and to find the structural determinants of employment elasticity. That is, it examines how labor market structure is related to the job creation and employment effect of economic growth.  Some examples of recent papers in this line research are as following. Seyfried (2006) estimates that employment elasticity is in the range from 0.31 to 0.61 in specific states with an average estimate of 0.47 for the whole U.S economy. Padalino and Vivarelli (1997) look at the data of the G-7 economies over the period 1960-1994. (2) They find that employment elasticity is different between U.S.A and Europe. Kapsos(2005) looks at the growth rate of GDP and employment in many countries and estimates employment elasticity. Kapos(2005) finds that the elasticity has indeed decreased in some countries. Piacentini and Pini (2000) estimates the employment elasticities - both in aggregate and in individual economic sectors - for the G-6 + Sweden over the period 1960-97. (3) So far, however, no paper has tried to identify structural determinants of employment elasticity with respect to economic growth. While looking at empirical data of output and employment and estimating the elasticity, the basic underlying premise in the most previous studies is that employment effect of growth is (mainly) determined only by technological factor (so, labor demand), not giving attention on other side of market (so, labor supply). That is, most studies are based on an implicit presumption that labor-saving technology may reduce the employment elasticity as the economy grows.


Decision Making using Multi Criteria Decision Making (MCDM) Techniques

Rajeev Trehan and Rohit Sharma

Dr. B. R. Ambedkar National Institute of Technology Jalandhar, Punjab, India



Topsis and AHP are  non-conventional decision making technique which have been widely used to check whether the decision made is consistent or not. A case study for selecting an electronic item has been discussed. Cell phones of different brands / models have been surveyed and major parameters are taken as attributes for all the alternatives. The optimal alternative is selected with the application of AHP method. The priority ranking is formulated on the basis of number of parameters viz: price, camera memory, storage capacity, weight, sleekness, etc.   Decision making involves many intangibles that are required to be traded off and measured along with the tangibles for good decision making. AHP is a theory of measurement using pairwise comparisons. This technique gives result as per the judgment of experts to derive priority scales. AHP is a multi-criteria, decision making method which can be used by management practitioners and academicians  In this paper a case study of mobile phones and motorcycles of various brands have been selected having price range. The best model is selected by applying MCDM techniques considering various parameters.  Multicriteria decision-making (MCDM) methods are helpful in making important decisions that cannot be made straightforwardly. The  MCDM is based on the principle that decisions should be made by use of multiple criteria. T. Saaty created analytic hierarchy process (AHP) and the analytic network process (ANP)  by using the concept of MCDM. They are used to identify decision criteria. [18]. An MCDM model for a decision making helps the decision maker to evaluate various alternatives and decide on the best. The various alternatives are evaluated along common multiple criteria. The criteria are assigned relative weights of importance. Thus an MCDM-model for a decision problem has three basic steps: to identify the decision hierarchy having criteria; to determine the relative weights of the criteria of hierarchy; comparing various alternatives and  rank them in order of preference. MCDM models have been put to use in a wide variety of practical applications such as employee evaluation, marketing strategies, benchmarking, engineering design evaluations, supplier evaluation, etc.[19,20]. MCDM models have quite often been used for structuring and solving TQM related problems. It has been found in  several studies related to  project management that: a combination of quantitative and qualitative criteria can be used in project selection. MCDM helps in the measurement and aggregation of the various project selection criteria. MCDM technique is most  appropriate for prioritizing and ranking projects [21]. The criteria used in MCDM are designed to cover anagerial trade-offs, environmental uncertainty and resource requirements. It has suggested that the quality of the model/user interface depends more on comprehensive illustrations than on interactiveness of the tools used [22]. MCDM methodology helps decision makers to explore a wide range of drivers and consequences. The MCDM involves selecting or ranking the alternatives associated with non-commensurate and conflicting attributes [23]. MCDM is normally confronted with the problems of intangible as well as tangible factors [24]. A multiple criteria decision-making (MCDM) approach is one of the most well known branches of decision making. Decision environments have developed increasingly to become multi-person and multi-criteria situations [25].


The Study of Creating an Operational Performance Model for Restaurants Serving Afternoon Tea in Taiwan

Dr. Jiung-Bin Chin, Department of Hospitality Management, Hungkuang University, Taichung, Taiwan



In recent years, restaurants serving afternoon tea have gradually emerged in Taiwan, and they focus their customers mostly on youngsters, students, and women. Also, there are a lot of people want to pursue a venture of such kind of restaurants. Therefore, this study hopes to create a complete set of operational performance model for restaurants serving afternoon tea. First of all, the study conducts interviews with four categories of experts: restaurant operators, restaurant staff, performance evaluation scholars, and recurrent consumers in order to develop key performance indicators that impact the operation of restaurant business. The indicators include five inputs of core products, geographical location, parking difficulty, in-store style and service quality, as well as one input of product prices. And then the study uses Data Envelopment Analysis (DEA) to study 12 restaurants with same natures in Taichung, Taiwan by conducting a projection analysis of inputs and outputs as well as analyzing and sorting the pros and cons of these 12 restaurants; and finally, the study proposes the recommendations.  Afternoon tea originated from the United Kingdom, and only the ancient noble would enjoy afternoon tea. Nowadays, it has become popular in Taiwan; initially the restaurants focused on the female celebrities by selling mainly high-priced relative products. In recent years, restaurants of parity have gradually emerged focusing the customers on youngsters and students; and such marketing practice has successfully attracted the public to consume. It is because restaurants serving afternoon tea offer a comfortable environment for chatting and gathering, less time limitation on using the meal, cozy and relaxed atmosphere; and usually the restaurant will also play soft music to help relaxation. Since today people like to record their life with photography and thus people are attracted by seeing the pictures of nicely decorated restaurants and want to dine there. Therefore, the restaurant decoration also plays an important part. In regard of food served, mainly are light meals and desserts. Lately, muffin and honey toast are two popular dishes on the menu with a variety of different ingredients creating different tastes. At to the part of beverage, tea is the major one as it helps getting rid of greasy meal.  Therefore, this study would like to do research on a number of restaurants serving afternoon tea, not just the part of the meal, but to explore other aspects to learn more about the keys to their business performance.  Venus (2011) pointed out that in Victorian England in 1840 AD, England Duchess of Bedford Lady Anna got melancholy and bored every afternoon and thought that the time before the formal dinner party was long and she felt a bit hungry, thus she asked the maid to prepare a few slices of toast, cream and tea. Later, Duchess Anna invited several close friends served with tea and delicate desserts to share a relaxing afternoon. Suddenly, it became a fashion in the noble social circle and female celebrities loved it. Until today, it has formed as an elegant and comfortable afternoon tea culture, and also becomes a traditional "British Tea Culture”, which is the origin of so-called "Victorian Afternoon Tea."


The role of Trading-House Structure in Commodity Financing

Prof. Dr. Laszlo Kozar, Budapest Business School, Department of Commerce, Budapest, Hungary

Peter Sutak, University of Debrecen, Debrecen, Hungary



In 2009, firstly, due to the financial crisis that had outgrown itself into an economic crisis, secondly, as a result of a significant loss of confidence in certain financial support institutions, the external financing of the agricultural sector had decreased significantly. As a result of this, the sector financed by an already moderate propensity to risk exposure had further financing sources withdrawn, at the time, when, due to the effect of the crisis on the overall economy it required additional financing.  The tendencies of “activities” displayed on the part of financers had once again raised those questions that centre on the relationships and cooperation models of the financial-, financing- and business sector.  In the following, we shall be focused on the direct and indirect financing alternatives of the domestic agricultural sector by commercial banks, their market assessment and risk analysis.  The complexity of the subject necessitates an explanation on the reasons behind the decreasing financing activities and their analysis, emphasizing the direct effects and sector specific characteristics emerging in relation to the agricultural sector.  The Hungarian agricultural sector underwent significant changes in the nineties. The transformations of the production and property structure started the same time with the opening of the price scissor of industrial-agricultural products, with the narrowing of internal and external market possibilities, with the radical decrease of profitability within the sector, with the significant diminishing of financial possibilities. Unfavorable economic impacts were often increased by environmental factors that affected production.  Last years’ economic and financial crisis made even worse the situation of agriculture, which became manifest mostly in a further structure of financing possibilities.  Unlike in other West-European countries, there has not been developed specialized network for institutional agricultural financing in Hungary. The sector’s financing is being done mainly by commercial banks, based on their own regulations and evaluating system.  Presently, the liability of private enterprises and corporations in agriculture is close to five billion USD. The leading role of commercial banks is evident as shown in Fig. 1 – it illustrates the sharing of the most determining financing forms within the sector.  As most indirect financers of the sector such as factor companies, leasing companies, and integrators, are also re-financed by commercial banks, the leader position on the market gains even more importance. We have to mention that in many cases the banks are present on the credit market as intermediaries, when the primary financer is the state. The necessity of an involvement at such an extent is a consequence of the low profitability already mentioned above.  The interests of the sector and of the national economy are in many cases contrary to the profit orientation of the financers: the bank sphere will only grant credit on strictly commercialized basis for agriculture as well, by guaranteeing the due profit of the credited amount. Thus, even through public utility, no preferences can be introduced into the credit system (Frankovics, 2005).


Competitive Advantage in the African Market:  The United States versus China

Dr. Falih M. Alsaaty and Dr. Granville Sawyer, Bowie State University, Maryland



The speed at which China is achieving its economic goals has in recent years attracted the attention of scholars and policy makers in the United States, European Union, and elsewhere around the globe. The attention is largely attributed to the belief that China is steadily becoming a formidable and potentially dominant player in the global economy, as evidenced by its trade, investment, and foreign aid policies in Africa. China is undoubtedly a feared rival from an economic standpoint. What makes the country so challenging is its relentless drive for global superiority. This is apparently taking place at the expense of business firms of other nations. China’s competitive advantage is mainly nurtured by its large and growing population, abundance of natural resources, influx of foreign direct investment, large trade surplus and seemingly undervalued national currency. This paper explored the competitive advantage – as measured by merchandise exports – of the United States relative to China in Africa. It is found that U.S. market share in Africa is gradually declining while that of China is rapidly expanding. U.S. firms ought to pursue more aggressive strategies to improve their competitive advantage in the continent.  China’s rapid ascendance to an influential global economic position puts it inevitably in direct competition with many countries including the United States. This is particularly true with respect to China’s inroads into African. China is vying for market opportunities in the continent, as is the case with other countries. Nations cooperate among themselves and, at the same time, compete with each other for economic prominence. What makes the Chinese case unique – as far as Africa is concerned – is that the Chinese government through its centrally planned agencies has been courting African governments to establish long-term strategic ties with individual countries. As a result, it has forged strong commercial relations with many countries that resulted in continued inflows of goods and services to the continent and the outflows of natural resources to China. As a trader and investor, China has proven to be able to exert strong bargaining power over its African partners. This is because the country is a large buyer of natural resources, offers sizeable packages of long-term economic assistance, is removed from past political or military conflicts, and – as widely reported – refrains from imposing its policies or ideologies on the countries under discussion.  Economic theory predicts that external economic ties (i.e., trade, aid, and direct investment) with Africa are crucial to the continent’s economic growth and prosperity. The inflows of capital, technology, and expertise to recipient countries would invariably increase their aggregate investment, employment, productivity, and output.  The aim of this paper is to explore the competitive advantage of the United States relative to China in Africa. Merchandise exports are used as a proxy for competitive advantage. For comparison purposes, major industrial countries (Canada, France, Germany, Italy, and the United Kingdom) are also included in the analysis. A sample of thirteen largest countries in terms of population – 20 million inhabitants or more in 2010 – was selected for investigation for the years 1999 and 2010 (Table 1). It is assumed that this sample size will provide a comprehensive and accurate picture of the United States’ as well as China’s market position in Africa. A limitation of the paper is that no attempt is made to assess the impact of merchandise trade (or other external economic ties) on the economic development of African countries, for such assessment is beyond the scope of this paper.  Behar (2008) described China’s interest in Africa by saying that the Chinese seem to be everywhere in the continent: drilling for oil in Sudan, searching for trees in Mozambique, opening textile manufacturing in Kenya, digging in copper mines in Zambia, laying expressways in Angola, and prospecting for uranium in Zimbabwe. China’s fascination with Africa has attracted the attention of scholars. They are divided as far as the country’s impact on the continent. Some scholars (e.g., Maswana, 2009; Ancharaz, 2009; Yin and Vaschetto, 2011) argued that China’s economic relations with Africa could enhance the continent’s economic development efforts. Other scholars (e.g., Ademola, Bankole, and Adewuyi, 2009; Giovannetti and Sanfilippo, 2009) indicated that China’s economic policies toward Africa have been more harmful than beneficial. Ancharaz (2009), in discussing China’s foreign assistance to Mauritius, pointed out that Chinese foreign assistance to finance the country’s construction and infrastructure projects had been a welcome relief even though the assistance was tied to the use of Chinese labor and other inputs. Yin and Vaschetto (2011) believed that China’s well-coordinated trade, aid, and investment had been instrumental in building the foundation of an infrastructure essential for sustainable economic development in Africa. Giovannetti and Sanfilippo (2009, p. 500) claimed that ‘Africa has proven to be particularly vulnerable to the competitive threat posed by China in third market’. The authors added that they found significant evidence of displacement effect on African exports.


Attitude, Motivation and Decision Making and their Relationship to Trust in Family Businesses

Dr. Josiane Fahed-Sreih, Lebanese American University, Byblos, Lebanon



Trust between shareholders, and trust between management and employees is crucial to the functioning of organizations. Scholars from various time periods and diversity of disciplines seem to agree that trust is highly beneficial to the functioning of organizations and especially family businesses. In this paper a definition of trust and a model of its antecedents and outcomes are presented, which differentiate trust from similar constructs. This study will focus on how trust might have positive effects on attitudes, perceptions, and behaviors within organizational settings. It also highlights how trust can affect the speed of decision making. A survey questionnaire is used as the research instrument. Results and implications of findings are discussed.  Many family business studies focused on the issues inherent to family businesses such as succession, balancing family with professional expertise, but most have realized that the psychological elements are very important in family businesses (Cohen 1974, Dyer 1986, Rosenbatt et al. 1985). Some argue that the greatest threat to the continued survival of family businesses is not so much linked to technology, competition and customers as much as it is linked to the family relationships (Hoover et al. 1999).  Scholars expressed a great deal of interest in trust. But its study in organizations has remained problematic for several reasons: problems in definition of trust itself; lack of clarity in the relationship between risk and trust; confusion between trust and its antecedents and outcomes; and failure to consider both the trustor and the trustee (Schoorman et al. 1995). Numerous potential benefits of trust were examined by organizational scholars who have devoted less attention to examining the different ways that trust might transmit these benefits. Studies appear to make two fundamental distinctions regarding how these effects occur. The dominant perspective is that trust results in distinct (main) effects such as more positive attitudes, and higher levels of cooperation (e.g., Mayer et al. 1995). Other studies suggest that trust is beneficial because it facilitates the effects of the other determinants on desired outcomes. Instead of proposing that trust directly results in desirable outcomes, it suggests that trust provides the conditions under which certain outcomes such as cooperation are likely to occur. This paper will attempt to resolve problems related to the concept of trust and explore different models of how trust might produce positive effects on attitudes, perceptions, and behaviors within organizational settings. The paper will be structured as follows. The first part is a literature review on the definition of trust and the importance of trust in organizations, the second part is the sampling and methodology used to collect and analyze the data, the next section will be the presentation of the results of the study and the last section concludes the paper.  Trust is the willingness to accept vulnerability based on positive expectations about another's intentions or behaviors (Mayer et al. 1995). It is also defined as the extent to which one is willing to ascribe good intentions to and have confidence in the words and actions of other people (Cook & Wall 1980). It is a personality trait of people interacting with peripheral environment of an organization (Farris at al. 1973). Trust can be also defined as the extent to which one person can expect predictability in the other's behavior in terms of what is 'normally' expected of a person acting in good faith. It is a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another.  Trust makes decision making more efficient by simplifying the acquisition and interpretation of information. Trust also guides action by suggesting behaviors and routines that are most viable and beneficial under the assumption that the trusted counterpart will not exploit one's vulnerability (Zaheer et al. 2003).


International Analysis of Factors Affecting Child Labor

Lauren Urbish, Florida Atlantic University, Boca Raton, FL



The focus of this research paper is show a variety of factors that affect child labor.  The research outcomes prove which factors to be most significant in eliminating child labor around the globe.  The factors were chosen from the World dataBank website.  This selection is applied to 248 countries, during a ten year time period, 2001-2010.  The topic of child labor was originally chosen because it is incredibly interesting to study.  Child labor is a major part of discussion in any economic development course, due to its sensitivity and all the outside forces affecting it. The subject is important, because child labor is a crucial stage of every country’s economic growth.  All first world countries have experienced child labor at some point in their history.  As many countries have evolved into a technologically advanced, internet powered, app frenzied world, some countries have not.  Second and third world countries are still developing.  Many of these lower income countries are transitioning from an agricultural economy to a more industrialized one.  Hoping from there, to transition to a technology advanced economy.  One major problem a country faces during a transition from a farming society to an industrialized manufacturing one is: child labor.  Thanks to activists and the internet in the 21st century, the world has never been more aware of this practice.  People have never been more concerned than they are now to end this cruel custom of forcing children to work.  The earliest recorded reports of child labor date back to 1832 from Great Britain.  For many developed countries, child labor skyrocketed during the 1800’s.  During this time, countries that are considered first world now were just beginning to enter their industrialized phases.  The United States refers to their transition as the Industrial Revolution.  At this time, a great deal of factories were built to manufacture goods, and thus many jobs were created.  These job positions were filled with any available labor, including any able children.  This phase of economic growth is recorded in the U.K., the U.S., countries in the EU, Japan, and Belgium (Basu, 1999).  A child laborer is between the ages of 7 and 14 years old.  A child laborer is defined as either economically active, being compensated for work, or if a child produces output that is destined for a market.  The International Labour Organization (ILO) defines ‘child labour’ as   “Work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development.  It refers to work that: is mentally, physically, socially or morally dangerous and harmful to children; and interferes with their schooling by: depriving them of the opportunity to attend school; obliging them to leave school prematurely; or requiring them to attempt to combine school attendance with excessively long and heavy work” (International Labour Organization, 1996-2012).  In many countries, even including second and third world countries, they have some policy against child labor.  These policies can be anywhere between an outright, enforced ban on child labor or suggestive limitations on younger children.  The ILO’s definition is intended to cover as many alternatives as possible, to attempt to eliminate deficient data on child labor.  In theory, the more liberal a definition, then the more child laborers are accounted for.  Currently, the ILO estimates that there are 215 million child laborers around the world (International Labour Organization, 1996-2012).  However, this number includes only full time workers, who average 10 hours a day of labor.  As broad as the ILO’s definition is, it is still restrictive.  Part time and invisible workers, including house slaves and undocumented children laborers, are not counted in this estimate.  If these children were included, the amount of child laborers is expected to more than double. 


State Revenue Growth Variability

Dr. Sanela Porca, University of South Carolina Aiken, SC

Dr. Donald Schunk, US Bank National Association, Minneapolis, MN



Over the course of every business cycle, U.S. state budgets face episodes of revenue instability. Revenue surprises during economic prosperity lead to expanded state government spending and encourage tax cuts; then as the economy slides into recession, state revenue shortfalls trigger sudden, debilitating spending cuts. Because economic cycles create a climate of ongoing revenue uncertainty, government decisions inevitably take place in a crisis-like atmosphere. Since volatility ultimately plays an important role in shaping state budgets, the determinants of revenue instability should be better understood.   Over the course of every business cycle, U.S. state budgets face episodes of revenue instability. While all states (except Vermont) require balanced budgets, economic expansions and contractions continually confound revenue forecasts and cause constant changes to spending and tax policy.  Because economic cycles create a climate of ongoing revenue uncertainty, government decisions inevitably take place in a crisis-like atmosphere. This often leads to the unplanned, inefficient (i.e. across-the-board) budget cuts that typify state policy during fiscal crises. Yet when the economy expands, the need to reform the budgetary process is forgotten as revenues rise above the long-term trend. Stable and predictable revenue to run state government programs is elusive.  Since volatility ultimately plays an important role in shaping state budgets, the determinants of revenue instability should be better understood. Beyond cyclical problems, revenue volatility may be exacerbated by structural issues. In particular, a state’s particular mix of taxes may engender fiscal instability if it is weighted too heavily toward volatile revenue sources. Thus, the relative shares of sales, income and other taxes that comprise total revenue may influence revenue fluctuations across states. The tax structure—the revenue portfolio and its diversification---remains a political choice, even if cyclical instability remains unavoidable.  This paper investigates the causes of revenue variability across U.S. states, focusing on the effects of economic volatility and revenue source diversification. We assess the state’s portfolio of revenue (essentially, the balance between sales and income taxes and non-tax revenues) as a potential stabilizing force, after controlling for economic fluctuation. Revenue diversification has never been analyzed in the context of state budgetary fluctuation, although it is well-known in other areas of economics.  Markowitz’s (1952) established the notion of diversification in the context of an investment portfolio. Moreover, empirical evaluations of diversification spread to regional economics, where the focus turned to the diversity of a region’s industrial portfolio and the implications for economic stability and growth (Conroy, 1975).  Precise measurement of revenue diversification in the budget portfolio, however, has not received the much attention. Until the 1990s, the public finance literature treated revenue diversification in an ad hoc fashion. Revenue systems were generally viewed as balanced if the shares of major revenue sources fell in some pre-determined range. For example, applying a variant of the Hirschman-Herfindahl index to state-local revenues, Suyderhoud (1994) represents the first attempt to distill revenue systems down to a single measure of revenue diversification. While this kind of single diversity measure has been used in different settings, the role such a measure of diversity may play in explaining revenue instability has been overlooked.  This is the first study that attempts to look at the relationship between a scalar measure of diversification and revenue growth variability. The analysis covers the 48 contiguous U.S. states during the 1990s and early 2000s.  Specifically, we construct several alternative scalar measures of state-level revenue diversification. We then consider the usefulness of these measures, in conjunction with measures of economic instability, to explain variability of state-level revenue growth.  In particular, we look at fluctuations in the growth rates of state general fund revenues after adjusting these revenues for legislative changes to tax rates or tax bases. Ultimately, we find that the degree of revenue diversification and economic variability are both significant in explaining revenue growth volatility for a pooled sample of observations covering both the economic boom of the 1990s and the recession and sluggish recovery of the early 2000s.  Observed state revenue portfolios (and potentially revenue stability) are the result of many different and often competing factors. As mentioned in the introduction, a critical issue in judging various determinants of state revenue growth variability is whether the instability is a result of structural or cyclical budget imbalances. Cyclical imbalances via economic fluctuations do not necessarily require making changes to the revenue system; rather, they are a natural feature of the business cycle. However, a structural imbalance--that part of revenue variability caused by the mix of revenue sources--generally requires making permanent changes to the revenue portfolio. This section provides an overview of the literature, highlighting the relationship between tax structures and the characteristics of the overall tax system.


Competitive Analysis of the Turkey

Ana Bulic, University of Zagreb, Faculty of Economics and Business, Croatia

Madina Abylkassymova, Ministry of Economic Development and Trade, Kazakhstan

Radu Tatucu, London Business School, UK



The paper, in general, deals with Turkey’s competitive advantages. Specifically, the focus is on Turkish economy and its significance in the global economy, or to be more exact, on Turkish economic growth and competitiveness. Namely, Turkey is a middle-income country with good endowments such as strategic location, large domestic market, young population and some natural resources, but dependent on oil and natural gas imports. Turkey had sustainable economic growth after macroeconomic stabilization and structural reforms since 2001. The economy is becoming increasingly diversified and export-oriented with large FDI inflows. Turkey’s competitiveness is limited by its vulnerability to external shocks, quality of human capital and R&D capacity, constraints in national business environment resulting in a large share of informal economy. The main purpose of this paper is to give an insight into how the Turkish economy will keep its competitiveness, achieve its potential to meet growing domestic and foreign demand, develop further its production and increase the skill level of labor force in order to attract even more FDI.  The Republic of Turkey is a transcontinental Eurasian country, strategically positioned at the intersection of Europe, Central Asia and the Middle East and surrounded by four seas. Turkey is a democratic secular state, organized in 81 provinces. It has independent executive, legislative and judicial branches, and roughly 50 political parties. With a 2010 GDP of $958.3 billion (in PPP) and a $12,300 per capita GDP (in PPP), Turkey is the 17th largest economy in the world and the 6th largest economy in Europe. Its population was over 73.5 million people in 2010. (CIA Factbook) It is likely to become a major regional power, the largest and fastest growing economy in Central and Eastern European region. The country is active on the international arena and well integrated with the West. It is a member of the UN, NATO, OECD, Council of Europe, OSCE, the G-20 major economies, and has begun official full-membership talks with the EU in 2005.   Turkey's economic performance over the last decades has been volatile with periods of high growth and economic slowdowns due to financial and economic crises. Over the last twenty years, the country had an average annual economic growth of 3.9%, but during the 2002-2007 period, it grew on average by 6.8%. The economy was severely hit again by the world economic crisis and declined by 4.7% in 2009. In 2010, the growth has recovered at 1.7%, GDP in nominal terms reached $741.8 billion and GDP per capita reached $10,399. In terms of income per capita, Turkey is below the average for twelve new EU member countries and majority of Eastern European countries. (World Data Bank)


Subsidies of the European Union funds as a Tool to Enhance Competitiveness of Companies in the Czech Republic

Milan Sedlacek, Masaryk University, Brno, Czech Republic



The article focuses on analysis of drawing subsidies from the European Union funds by companies of the manufacturing industry in the Czech Republic. Moreover, on the basis of the data obtained through primary research, a comparison of the way companies with above-average and substandard rate of competitiveness utilise the subsidies has been carried out. The conclusions thus give evidence not only about the utilisation of the subsidies as a tool to enhance competitiveness of a company, but also about different attitudes towards such method of financing, depending on the success rate of a company.  The Czech Republic submitted its application for accession to the European Union on 17 January 1996, thus officially embarking on the systematic process of gradual harmonization of its own legislation with the legal order of the European Union. Progressive completion of the fixed schedule enabled the Czech Republic to access the European Union on 1 May 2004. Since that moment opportunities for Czech companies to draw subsidies from the European Structural Funds have opened up (1). In the shortened programming period of 2004 – 2006 the Czech Republic as a whole could obtain over €2.6 billion from these funds (The Ministry of Regional Development 1, 2011), while in the ongoing period of 2007 – 2013 €26 billion is to be granted. (The Ministry of Regional Development 2, 2011) The fact that the financial resources flow not only into the private sector, but provide significant support to activities in the public sector as well represents quite a unique opportunity for private companies to raise additional funds to enhance their competitiveness.  Apart from researching a group of companies, which will be defined later, comparative analysis of two subsets of that group has been carried out. These subsets of companies were defined with regards to their different competitive abilities, demonstrated in this case by economic performance, or more accurately, on the basis of different return on assets. The formation of the two clusters of companies by the criterion chosen enabled us to draw conclusions on varying viewing of subsidizing policy of the European Union seen from the perspective of more and less competitive companies.  On the basis of the primary research, the above mentioned hypotheses will either be confirmed or rejected and this work will also bring conclusions on how, relating to their competitive ability, Czech companies understand the role of European subsidies.  The process of drawing subsidies from the funds of the European Union is subject to a sophisticated system of conceptual and strategic documents on the levels of both the European Union and that of individual member states, where these are implemented into practice by a range of other executive documents. Apart from other things, the rules encompassed in these documents specify exactly the circle of prospective subsidy beneficiaries. And thus only companies of specific industries in the Czech Republic are entitled to draw money from the funds – simply put these include agriculture, tourism and manufacturing industry. The first mentioned sector - agriculture is a sphere employing a very complex system of subsidy allocation arising from both original national programmes and also from new programmes co-financed by the European Union. From this perspective agriculture does not represent an optimal subject matter to look into as the desired outcomes of the analysis are to reflect entirely the effect of the European Union subsidies. The absolute volume of financial resources flowing into tourism is significantly lower than the support allocated to the sector of manufacturing industry. Therefore we have chosen to analyse companies of the manufacturing industry, namely those which strictly comply with sector classification of an economic activity as stipulated by the subsidy policy regulations (2).


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