The Business Review, Cambridge

Vol. 23 * Number 1 * Summer. 2015

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

Online Computer Library Center   *   OCLC: 920449522

National Library of Australia * NLA: 55269788

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Supply Chain Management Education Using ERP Software: A Simulation-Based Approach Using SAP ERP-Sim

Dr. Jonathan Davis, The University of Houston Downtown, TX

Dr. Peter DeVries, The University of Houston Downtown, TX

 

ABSTRACT

Supply chain management is an increasingly important factor in competing successfully in the marketplace. In this paper, the authors examine how an enterprise resource planning (ERP) simulation approach is useful in teaching supply chain management concepts. ERP-Sim is an SAP-based simulation tool designed by HEC Montreal. The tool simulates a business in great detail, allowing student teams to control day-by-day business decisions and see results in an accelerated manner. Each student team manages transactions with customers and suppliers by sending and receiving orders, delivering products, determining pricing strategy, and managing inventory and cash flows. Student understanding was gauged using a pre-test/post-test method to measure teaching effectiveness, the results of which support the ERP simulation approach for certain pedagogical purposes. Business schools prioritize the integration of real-life examples, case studies, and technology into business curricula, and simulations provide an opportunity to meet this growing educational need. According to Faria et al. (2009), business simulations provide for dynamic business decision making, where students formulate a strategy and then carry out a series of decisions to implement the strategy. Constant feedback received from the simulations enables them to quickly evaluate their strategy and change it if necessary.  This paper examines ERP-Sim, a simulation package developed by researchers at HEC Montreal to teach business process flow in ERP systems for business students. ERP-Sim is a team-based simulation that allows students to operate a business, make strategic decisions, forecast sales, and monitor market trends to determine pricing strategy. This paper discusses an approach for using ERP-Sim to simulate supply chain business scenarios, make situational decisions, and assess the impact of those decisions on the firm’s profitability through the analysis of performance reports. This paper has two important contributions to the existing literature. First, this paper explores the applicability of ERP-Sim for supply chain decision teaching and analysis. Second, this paper offers an approach to linking strategic decisions to supply chain outcomes. Innovative technology in business education allows students to integrate information in their decision-making processes and to learn skills more effectively than in typical lecture-based classes. Moreover, innovative technology as a learning tool helps students to define their goals, make decisions, and evaluate progress. The use of innovative technology makes students active recipients of information transmitted by a teacher, textbook, or seminar. Thus, the teacher's role changes from being the center of attention as the dispenser of information to a facilitator who sets learning goals and provides guidelines and resources (Stallings, 1997). SAP is a worldwide leader in Enterprise Resource Planning (ERP) software. Headquartered in Germany, SAP’s ERP systems are used by the majority of Fortune 500 companies to integrate business processes with information needs. SAP allows organizations to seamlessly integrate their operational and functional units and provides management the capability to monitor and control the operations on a real-time basis.

 

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Countering Moral Muteness through Dialogue, Good Moral Conversation, and Conversational Learning

Dr. Ronald R. Sims, Professor, College of William and Mary, VA

Dr. William I. Sauser, Jr., Professor, Auburn University, AL

 

ABSTRACT

This paper takes a closer look at leaders’ responsibilities for building an organizational climate intended to proactively counter moral muteness.  The paper first briefly discusses the concept of moral muteness as described by Bird (1996), then highlights the importance of dialogue, good moral conversation, and conversational learning as opportunities for leaders to create and build organizational climates best positioned to counter moral muteness and unethical or immoral behavior.  The paper concludes with a brief summary of the role of the organizational leader in encouraging and supporting a new kind of conversation that catalyzes continuous dialogue and good moral conversation when it comes to business ethics and morality. “We have cast our own lot with learning, and learning will pull us through.  But this learning must be reimbued with the texture and feeling of human experiences shared and interpreted through dialogue with each other” (Kolb, 1984, p. 2).  Creating an organizational climate where employees feel safe to express their views on moral concerns is paramount to increasing the possibility of organizational leaders being able to counter moral muteness and unethical behavior.  Talking and learning about ethics evokes high anxiety and often fear in an organization’s most seasoned employees no matter their level or responsibility.  As a topic and organizational issue, ethics and morality have few equals in terms of uncertainty of outcome.  Awareness of the strong tone of beliefs and emotion generated when ethical issues are discussed leads to expressions of dismay at a trend that focuses on organizational values, beliefs, behavior and actions without attending to issues of process.  It has been our experience that it is very difficult to talk about ethics, values, beliefs, morals, virtue, integrity, etc. in a meaningful way without also talking and learning about values, beliefs, morals, virtue, integrity, etc.  The mere introduction to these and other ethically-related issues often generates in employees powerful emotional responses ranging from self-doubt and shame to frustration and confusion.  These emotional responses, if not openly addressed, can result in moral muteness or silence that can do nothing but increase the likelihood of unethical or immoral behavior on the part of employees. Feeling safe in the work environment takes on an added significance when one considers moral or ethical behavior.  Employees must feel supported and believe they can make choices or decisions related to ethical issues or dilemmas, especially when  they are venturing into what for many is uncharted territory.  In our view, a sense of security must be attained before employees can begin to consider the unfamiliar.  Trust is critical and enhanced by guidelines and organizational norms that encourage participation, risk taking, self-disclosure, mutual support, and dialogue (Schor, 1993). How do organizational leaders create an environment where employees are safe to think through the various factors involved and what they will need to do when confronted with ethical issues or dilemmas?  For example, will an employee be rewarded more for getting the job done on time no matter how she or he does it (even if it means not doing the right thing) or for taking the time to make the right (or ethical or moral) decision?  One would hope both factors would weigh equally into her or his thinking.  In the case of the organization’s leaders or the employee’s most immediate supervisor, is she or he giving the employee what is needed to be able to articulate the values which must be upheld and the organizational climate in which the employee feels safe enough to speak up in the face of potential wrong-doing?  Or is there the possibility that the pressure will be so great that the employee will cave and thus, not only bring about a risk to the organization, but also perpetuate what has become known as a culture of silence (Heineman, 2007) or moral muteness (Bird & Walters, 1989).

 

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Would You Bet Your Savings on Today’s Best Analyst? A Re-examination of Analysts’ Earnings Forecast Accuracy Persistence

Dr. Andreas Simon, Pepperdine University, Malibu, CA

 

ABSTRACT

Investors can track, to a hundreds of a percentage point, how individual Wall Street analyst’s stock picks perform. But they are largely powerless in determining the degree to which an analyst’s results are a function of skill – and how much they are attributable to just plain luck. This paper investigates whether we can identify, in advance, analysts who will issue accurate earnings forecasts next year. In other words, we are interested whether it is possible for individual investors to identify analysts who are truly skilled and not just lucky. The results suggest that there is some persistence in analysts’ forecast accuracy. However, the difference in forecast accuracy is low, and analysts seem not to be immune to behavioral biases affecting average investors. Thus, investors would be better advised to go with index funds and not try to pick the best analyst. A potential explanation for our finding of very low persistence in the forecast accuracy is related to the findings in Groysberg, Healy, and Maber (2011) that earnings forecast accuracy is not related to analyst compensation. A general notion among investors, the media, and academia is that substantial differences exist in the earnings forecasting ability of Wall Street equity analysts.1 In this article, we examine whether those differences are consistent. Exploration of whether analysts use consistent techniques to derive company earnings estimates is of benefit to market participants, who rely on the investment advice and research conducted by market professionals. In particular, are the substantial resources allocated to equity research within the major investment banks actually leading to the identification of mispriced securities and the investment potential of listed firms? Practically, it would be rational for investors to consider the earnings estimates of accurate forecasters more than the estimates of inaccurate forecasters (Sinha et al., 1997). Moreover, better inputs (accurate future earnings) into asset pricing models (e.g., capital asset pricing model, consumption CAPM) should improve firm valuation reliability, of which the implications are widespread, from industry regulation pricing, capital raising opportunities, and debt issuance (lower risk through reduced earnings variability). In addition, further research into the determinants of ex ante forecast accuracy may assist the equity research industry to improve their own forecasting techniques and resource allocation. However, there is growing evidence in the finance and accounting literature that analysts’ earnings forecast are affected by behavioral biases such as market sentiment and rounding. Given the difficulty of forecasting future earnings and the possibility that analysts do not have sufficiently strong incentives to spend the additional time and effort required to rigorously forecast them (Bradshaw 2010), it is possible that an analyst may reduce effort by making a number of simplifying assumptions about the future earnings of the firm. In this scenario, we would then expect an earnings forecast to be a noisy measure of actual earnings, reflecting aspects of the analyst’s estimate of the earnings being influenced by behavioral biases. This interpretation is consistent with theories in the behavioral literature that shows that behavioral biases (i.e. anchoring) arise in situations that require more judgment. Earnings forecasting requires a multitude of judgments, which may lead analyst to suffer from behavioral errors and make irrational forecasting decisions (Tversky and Kahneman, 1974).

 

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The Effect of Gender and Attachment on Forms of Workplace Bullying

Dr. Jacqueline N. Hood, Chair and Creative Enterprise Endowed Professor, University of New Mexico, NM

Elizabeth A. Hood, Brandeis University, MA

Dr. Kathryn J. L. Jacobson, University of New Mexico, NM

 

ABSTRACT

Bullying is becoming an increasingly important topic in the management literature as the negative consequences of bullying in the workplace become more understood. Although there has been a large amount of research on the prevalence of workplace bullying, as well as the individual and organizational consequences of bullying, little is known about the etiology of the bully. Further, although some research exists on gender differences in how workplace bullying is exhibited, overtly or covertly, there is a paucity of research on how attachment can impact bullying differently according to gender. This paper discusses two forms of workplace bullying and their relationship to attachment theory according to gender. Propositions for future research are provided. The current economic environment, along with organizational change initiatives (e.g., rightsizing, outsourcing, mergers), is stressful, with the individual employee experiencing heightened anxiety and fear. This anxiety and stress on managers and workers sometimes results in aggressive behavior towards others. When this aggressive behavior is targeted towards an individual or a group of individuals and is sustained over a period of time, it is referred to as bullying. Workplace bullying is becoming a topic of increasing importance for organizations attempting to cope with the high stress levels instigated by organizational changes as well as the global economic pressures. Managers need to ensure that they are creating a positive work environment in which they are able to retain the most productive employees. Workplace bullying can drive good employees out and decrease the productivity of those remaining in the organization.  Workplace bullying is defined as repeated, malicious, and health-endangering mistreatment of one or more individuals that are unwanted by the target(s) and cause humiliation, distress, or harm to that individual or group (Jennifer, Cowie, & Ananiadou, 2003; Einarsen, 1999; Namie & Namie, 2000). It is a form of aggression and violence in which the target of workplace bullying does not invite or welcome such behavior, and the behaviors by the bully are intentional (Keashly & Neuman, 2005). Bullying behavior can take many forms, including emotional and physical abuse or harm to the individual or group (Brodsky, 1976; Einarsen, 1999). Bullying behaviors can include threat to professional status (e.g., public humiliation), threat to personal standing (e.g., name calling), isolation (e.g., withholding of needed information), overwork (e.g., impossible deadlines), and destabilization (e.g., given meaningless tasks) (Rayner & Hoel, 1997).  The intent of the bully is of less importance than the outcomes or effects of the bullying. The motivation or intent of the bully is not always obvious or apparent, and it has been argued that bullies will sometimes engage in aggressive behavior that allows them to conceal any hostile intentions (Einarsen, Mattiesen, & Skogstad, 1998).  Attachment theory is a well-accepted theory that analyzes the nature of the parent-child bond (Bowlby, 1958; Hazan & Shaver, 1994). Securely attached individuals in comparison with insecurely attached individuals have been found to exhibit higher levels of self-confidence, competency and socially skilled behaviors (Elicker, Englund, & Sroufe, 1992). The theory has been applied to relationship behavior into adulthood (Hazan & Shaver, 1994; Little, Nelson, Wallace & Johnson, 2011; Mikulincer, Florian, Cowan & Cowan, 2002).

 

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Cost-Volume-Profit Analysis Using Different Probability Distributions

Dr. Hassan A. Said, Austin Peay State University, TN

 

ABSTRACT

For several decades stochastic cost-volume-profit (CVP) analysis has received ample attention in the accounting and finance literature, and still is fruitful not only because CVP analysis is itself an important accounting and finance issue, but also because methods developed in these area are often transferable to stochastic applications of other important accounting, finance and decision science problems. The CVP model delivers managers with the benefit of being able to answer specific pragmatic questions needed in today’s strategic business decisions. Because CVP analysis is based on statistical models, decisions can be broken down into probabilities that help with the decision-making objectives. This study investigates, explores, and applies the CVP model for the purpose of examining and comparing its applications to four different statistical distributions namely; Normal, Lognormal, Beta-PERT, and Kumaraswamy. Even though CVP analysis is based on specific information and requires tremendous attention to details, the best that it can do is provide approximate answers to questions, rather than ones that are mathematically exact. At the initial discovery stage, the CVP’s assumptions represent sacrifices in of the model's realism and accuracy, however, advancement in software technologies has made cost, effort, and computer time inexpensive and estimations of the random variables of the CVP model stochastically more feasible.  Clearly, a "perfect" solution to an unrealistic model has very little analytic or practical value. The "powerful" enough approach is to handle diverse probability distributions and dependency concerns that fit the CVP model’s assumptions. Ultimately, management’s judgments have to be made after careful investigation and deliberation and not just be trusted solely on statistics. The use of cost-volume-profit (CVP) analysis has application not only in the manufacturing sector but also for financial services entities (Basu et al. 1994). Despite a considerable research literature progress on CVP analysis, that has accumulated since the seminal contribution of Jaedicke and Robichek (1964), this advancement has been almost entirely unheeded by textbooks authors of accounting and finance. Like all financial models, CVP, is based on a set of simplifying assumptions that reduce the complexity of input and output variables to make decision making more tractable. To understand a financial model and its usefulness, its assumptions and their role in a decision must be understood. According to Horngren and Foster (2010), the basic CVP model is subject to ten essential assumptions and liming conditions: behavior of costs and revenues is linear, selling prices are constant, prices of production inputs are constant, all costs can be categorized into their fixed and variable elements, total fixed costs remain constant, total variable costs are proportional to volume, efficiency and productivity are constant, the model involves a constant sales mix or a single product, revenues and costs are being compared over a unit-volume base, and volume is the only driver of costs. Learning the basic deterministic CVP model is fortunate for students, but an understanding of the generalization of the model to uncertainty situations and relaxing some of its limiting conditions is an added improvement. A CVP model that incorporated uncertainty would hence provide a good entry point into the essential but challenging topic of decision-making under uncertainty. Virtually all real-world business decisions take place under conditions of uncertainty, and that at least some modest degree of familiarity with analytical approaches to decision-making under uncertainty could well benefit the future business leaders.

 

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Does Increases in Leadership Expenditures Influence Native Hawaiian Public School Completion?

Dr. Larson Ng, University of Hawai‘i at Mānoa, Honolulu, Hawai‘i

 

ABSTRACT

The following study attempted to analyze whether higher numbers of public high school completers can alone be achieved through increases of instruction expenditures among Native Hawaiians students. Using the high schools that comprise the predominately populated Native Hawaiian Leeward District, a correlation and bivariate regression procedure were employed to determine the nature and econometric relationship between leadership expenditures and high school completion from 2000 to 2007. Although leadership expenditures had predominately increased for all high schools, increases in completion were not observed for all schools. Moreover, with the exception of Waipahu High School, there was no conclusive econometric evidence to substantiate the idea that more expenditure in leadership leads to higher levels of high school completion during 2000 to 2007. Educational leadership, other than instruction, is a critically important factor that contributes to high school completion, where it is school administrators that set the goals and strategic direction for teachers to accomplish this task (Heck & Hallinger, 2010; Jarrett, Wasonga, & Murphy, 2010; Riley & Mulford, 2007). Accountability to the parents whose children attend public school is one of the major keys in sustaining quality education (Crum & Sherman, 2008; Jantzen, 2008). In the case of Native Hawaiian education, although Hawaii’s Department of Education (DOE) has historically allocated millions of dollars to further the advancement of Native Hawaiian students, Native Hawaiian’s are still the least likely ethnic group to graduate high school (Kanaiaupuni, Malone, & Ishibashi, 2005). Given the population density of Native Hawaiians living on the Leeward Coast of Hawaii’s Island of Oahu (Hawaii Department of Business, n.d.), this study will attempt to test whether increases in educational leadership result in higher numbers of high school completion by analyzing the DOE’s high school leadership expenditures (i.e., school management, program/operations management, and overall management) and its econometric relationship with Native Hawaiian high school completers (Hawaii Department of Education, n.d.a). With this research, it is hoped that the results will provide a current snapshot of whether increased leadership funding will improve public high school completion among Native Hawaiian students. The following section will go over the high school leadership expenditures, size of its graduation classes, and high school completers for all of the high schools that comprise the DOE’s Leeward District from 2000 to 2007.  Based on Table A1, leadership expenditures have been increasing on an average of 2.3% with a standard deviation of $174,536 per year, respectively. Graduating classes has seen steady of growth during this period and had an overall average growth rate of 1.8% with a standard deviation of 39 students per year, respectively. Completers also experienced a similar trend during this time frame with an average growth rate of 3.3% and a standard deviation of 41 students per year, respectively.  

 

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Factors Affecting the SMEs in Agribusiness in the Northeastern Region of Thailand

Dr. Sutana Boonlua, Mahasarakham University, Thailand

 

ABSTRACT

This research used a quantitative research methodology. There are three aims to determine the affecting factors for SMEs in agribusiness in the Northeastern region of Thailand: (1) to investigate the effects of the five factors (Government, Organization, Production, Market, and International) of the SMEs in agribusiness in the Northeastern region of Thailand and (2) to provide policy implications from the findings. The respondents consisted of 106 SMEs entrepreneurs in agribusiness in the Northeastern region of Thailand. There are five hypotheses were conducted with data collected during April and May, 2013. There are 22 variables (after 2 variables were extracted from factor analysis) of which divided into five factors. The results show all hypotheses are supported at the 1% level of significance. Based on research finding, recommendations were made to the relevant government, producer, and entrepreneurs for the formulation of encouraging climate to increase the SMEs in agribusiness performance in the region. The agribusiness plays a significant role in Thailand and South-east Asian countries economy. Agribusiness is a critical export engine and continues to dominate those countries’ merchandise exports despite significant government initiatives to enhance the development of new industries. Successful agribusiness underwrites the provision of manufacturing and private and public service provision in rural areas. Scrimgeour et al. (2006) stated that the key features of agribusiness have been debated in the literature. However, it is appropriate to note that agribusiness is characterized by its links to biological production systems and the associated variability. Likewise it is appropriate to note that in many instances it is characterized by long chains, with an hourglass shape, including primary, secondary and tertiary business activity that are distant from the market place. Thailand is divided into four regions which are Central, Northern, Northeastern, and Southern. The Northeastern region is generally arid and very dry, characterized by rolling surfaces and undulating hills.  In 2013, the population in Thailand was 67.45 million (The National Statistically Statistical Office of Thailand, 2013), 64% of which was located in the rural areas. Approximately 90% of the rural population, or almost 10 million families, earned living subsistence farming, particularly rice cultivation, field crops, fruits trees and perennial crop production (Nualvatna, 2003). In 2013, there are 39.38 million persons in the labor force and about 15.41 million persons are in agriculture sector (BOT, 2014). Most farming families in the Northeastern region of Thailand grow single crops such as rice, maize, sugar cane, cassava, and rubber trees. Thailand covers an area of 513,120 sq.km. or 321 million rai (2.5 rai = 1 acre) of which some 41.5% is farmland. There are only 9% for the land used for permanent crops with arable land of 32.5% (CIA, 2013).  Among of all crops of economic significance, rice is the most important and is grown in all regions with about half of Thailand total cultivated area (Nualvatna, 2003).

 

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Sub-Prime and Global Origins of Euro Sovereign Crisis

Dr. Sebastjan Strasek, Professor, University of Maribor, Slovenia

Bor Bricelj, University of Maribor, Slovenia

 

ABSTRACT

The paper researches the sub-prime and global crisis origins of the Eurozone sovereign crisis. We place the analysis of the European financial crisis in the context of both previous crises and find some striking similarities. The reasons leading up to the crisis were different for each country, but some of the factors were common: lax credit standards, property bubble funded by banks, highly exposed banking sector, contagion impacts through the financial market channel and through a generalized increase in global economic risk aversion. We suggest that the solution is not to add regulation, but to get rid of practices that come from being able to dump private loses on the public balance sheet. The euro crisis, triggered by the 2008-09 global financial crisis exposed external and internal imbalances in member countries. Unlike the U. S., where financial crisis is fundamentally about the bursting of the bubble in housing prices and over borrowing, in Europe, the current financial and debt problems have different economic roots, which had been built since euro launch in 1999. Two main views have emerged about euro-zone crisis. The first, so called German view (Allesandrini et al., 2012), prescribes the necessity of fiscal austerity in the south of the euro-zone to lessen the risk that the south many be forced to abandon the euro, the second, called Keynesian view (Merler and Pisani–Ferry 2012) which treat euro-zone sovereign debt crisis as being balance-of-payment crisis, with the euro-zone north benefiting from surpluses and the euro-zone south suffering from deficits. This interpretation argues that the current emphasis on fiscal austerity being counterproductive, given its negative impact on expected long-term growth rates (DeLong and Summers 2012). Stylized facts and empirical evidence (Alessandrini et al. 2012, Sanches and Varoudakis, 2013) suggest however that both the fiscal fragility of the south, and the north-south divide of external imbalances, contribute to the ongoing Eurozone crisis. Although every crisis has its own specific causes, some sources of vulnerability are common to most recent crises. These common sources include the following (Roubini, Setser, 2004 ): large macroeconomic imbalances (fiscal deficits, current account deficit), financing these deficits in ways that made countries vulnerable to liquidity runs and the increased risk of a fall in the exchange rate, doubts about the credibility of country’s commitment to take the policy steps to assume its long – term creditworthiness, fixed or semi – fixed exchange rates, microeconomic distortions (poor banking regulation, implicit and/or explicit government guarantees), political shocks, external shocks (terms of trade shocks, interest rate changes, sudden changes in investors behavior). As we see, countries are exposed to a wide range of potential sources of financial difficulties. Empirical analyses and recent academic literature on financial crises recognize that although there are enormous differences among different crises, there are some crucial components in the origins of the subprime meltdown fundamental for the destabilization of the Eurozone.

 

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Strategic Managerial Accounting Capability for Sustainable Goal Achievement: Empirical Evidence from ISO9001 Manufacturing Firms in Thailand

Chonthicha Thammavinyu, Mahasarakham University, Thailand

Dr. Phaprukbaramee Ussahawanitchakit, Mahasarakham University, Thailand

Dr. Sutana Boonlua, Mahasarakham University, Thailand

 

ABSTRACT

This research aims to investigating the relationship between strategic managerial accounting capability and sustainable goal achievement. The conceptual model is proposed by drawing on the resource-advantage theory and the contingency theory. The data were collected from 283 ISO9001 manufacturing firms in Thailand. The effective response rate was 27.26%. The results demonstrate that strategic managerial accounting capability positively impacts operational planning efficiency, internal control quality, and information value increase. Then, operational planning efficiency, internal control quality, and information value increase have a positive relationship with decision-making success and business excellence outstanding. Furthermore, decision-making success has positive relationships with business excellence outstanding. Decision-making success and business excellence outstanding also have positive relationships with sustainable goal achievement. For the influences of the antecedents, this research found that top management long-term vision, accounting system quality, technology pressure, stakeholder force, and competitive turbulence affect strategic managerial accounting capability. For the moderating effect, organizational learning capability is factor that encourages the relationships between performance evaluation justice awareness and sustainable goal achievement. This research provides the directions and suggestions for managers to identify and justify key components of strategic managerial accounting capability that may be critical in the operation of a business that affects the sustainable goal achievement. Therefore, the firm should promote and encourage strategic managerial accounting capability in ways that generate more benefits for both firm and stakeholders. In addition, future research should confirm the benefits of this scale by applying in different population to widen the generalizability of its findings.  World globalization provides the opportunity for emerging countries in Asia and Latin America to participate in world competition and borderless business (Jaruga and Ho, 2002). Thus, emerging countries are attempting to develop their countries’ infrastructure for encourage globalization strategy, while a number firms endeavor to develop organizational infrastructure for competitive advantage and sustainability. Accounting information, especially managerial accounting information, is important for firms to reach optimal strategic decision. The main drawback is that managerial accounting reporting has no regulation. It is internally-generated information (Morton and Hu,2008) and managerial accounting literature still lacks empirical evidence for investigating the relationship between the antecedents and the consequents of strategic managerial accounting.  The main purpose of this research is to investigate the relationship between strategic managerial accounting capability and sustainable goal achievement.

 

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Assessing Innovation

Dr. Geoffrey A. Wright, Brigham Young University, College of Engineering and Technology, UT

Jacob Wheadon, University of Purdue, Engineering Education

 

ABSTRACT

This paper (and presentation) describes the development of an innovation test/assessment tool, including analysis of the content domain, identification of the learning outcomes, item creation, testing of the test, and initial validation that can be used in engineering and business education settings, or industry. The purpose of the project outlined in this paper was to develop an innovation test instrument and perform an initial validation. The test needed to cover a broader range of innovation skills defined by the Innovation Bootcamp curriculum and needed to evaluate individual students’ abilities at performing each of the tasks outlined therein.  In industry and education, there is an increasing push for organizations and individuals to be more innovative (Wagner, 2010; Fagerberg, 1999). Rapid technological change has created the need for organizations and individuals to adapt quickly (Christensen and Eyring, 2011).  Christensen (1997) described how disruptive innovations fundamentally change markets and require new ways of thinking for organizations to adapt and survive.  He described how individuals in organizations need to think differently in order to compete in today’s marketplace.  Because of the rapid rate of technological change that is occurring today, disruptive innovations are changing markets even faster than in the past.  This has led to a greater need for people to cultivate innovation skills. Innovation skills are also needed to create job growth.  Drucker (1985) showed that innovation has been the leading source of job creation in the United States over the last century.  He called for organizations and individuals to focus their efforts on creating new value in society, both for their own good, and for the good of society in general. These calls have been echoed by politicians (Obama, 2011), economists (Friedman and Mandelbaum, 2011), and educators (Wagner, 2010).  In order to keep up with the demand for innovation education, educators at a private university in the western United States have developed a course focused on teaching innovation.  The course, titled the Innovation Bootcamp teaches technology and engineering students many behaviors and processes of innovation that have been identified in past literature (Howell et al., 2011).  At the Innovation Bootcamp, students learn tools that help them work through the five parts of the innovation model (as defined by the Innovation Bootcamp curriculum):  idea finding, idea shaping, idea defining, idea refining, and idea communicating.  Using this model, educators have taught the Innovation Bootcamp since 2008.  They have performed preliminary studies (Howell et al., 2011; Wright et al., 2010) and feel confident that the course is having a positive impact on the innovation skills of the students, even though they did not have a test to evaluate the impact the course was having on students’ ability to innovate. Consequently, they, and other innovation educators, need an assessment of students’ innovation skills that can be used as a pre- and post- test to see if a student is more innovative as a result of participating in the Innovation Bootcamp.  Having an innovation test would be very useful for improving teaching in this particular course, and it is hoped that such a test will have value for anyone seeking to teach innovation.  In an attempt to address this need, Lewis (2011) reviewed existing innovation and creativity tests and relevant literature.  His study found that existing test instruments were lacking in two major areas. 

 

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Strategic Marketing Creativity and Marketing Profitability: Empirical Investigation from Information and Communication Technology Businesses in Thailand

Jaruporn Meesuptong, Mahasarakham University, Thailand

Dr. Prathanporn Jhundra-indra, Mahasarakham University, Thailand

Dr. Saranya Raksong, Mahasarakham University, Thailand

 

ABSTRACT

Enterprises confront the rapid change of competitive environments in the new economy. They are imperative to adopt strategic marketing creativity in order to maintain competitive advantage in the long term. Based on the perspectives of both Resource-Advantage and Dynamic Capability, they produce unique capability to allow better marketing profitability. The purpose of this study is to examine the relationship between strategic marketing creativity and marketing profitability. The six dimensions of strategic marketing creativity include new marketing idea generation, dynamic research and development orientation, marketing activity integration, value development originality, novel marketing concept, and useful marketing program implementation. The data were derived from a survey of 228 marketing executives in information and communication technology businesses in Thailand. Ordinary least square (OLS) regression analysis is conducted to examine all hypothesized relationships among variables. The results indicate that five dimensions of strategic marketing creativity have partially significant positive influences on all consequences. In particular, new marketing idea’s generation and useful marketing program implementation has strongly influenced on all consequences. Additionally, dynamic marketing learning as an antecedent of strategic marketing creativity strongly influences on strategic marketing creativity. Conclusions and suggestions for future research are also interesting to be discussed accordingly.  In the digital era, the globally competitive environments are rapidly changed and a high complexity because there are growing liberalization and worldwide trading systems that are integrated in the pervasive developments of networks of communications technology. This speed of change is manifested and centered on swift changes in technology causing enlarged global competition and motivating the shortening product life cycles (Lee and Habte-Giorgis, 2004; Sadi and Al-Dubaisi, 2008). The flow of market information is numerous through the proliferation of media, communicable channels and customer contact points. This became challenge for conducting organizational strategy (Day, 2011). Furthermore, marketing problem includes product obsolete, the competitors’ imitation, and price wars (Hansen 2004). Whereas, customers are unable to articulate their future needs, but they have the willingness to pay for a new technology (Tidd, Bessant, and Pavitt, 2001).

 

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How to Analyse Automotive Industry Centres? - A Potential Methodological Model

David Fekete, Szechenyi Istvan University, Doctoral School of Regional and Economic Sciences,

Gyor, Hungary

 

ABSTRACT

Nowadays, the regional science and research programs about automotive industry are perhaps mostly connected in Gyor. This is due to the fact that the regional science is institutionalized in Győr for more than three decades ago, and the outstanding development of the city is depending on the automotive industry's performance.  On the base of the Széchenyi István University many scientific researches took place or are currently in progress in connection with automotive industry. I summarize in this study the structure, the methodology of the most important researches in connection with  automotive industry (“The Győr Region of the Automotive Industry, as the New Directions and Means of Regional Development” and “The Development of the Economic and Social Field of Activity of the Regional Innovation and Technological Knowledge Centre of the Automotive Industry at the Széchenyi István University.” titled research programmes) in order to sum up potential methodological principles of analyzing automotive industry centers. I show in the study the importance of connections between local authorities, automotive industry companies and tertiary education system and R&D institutions and I also suggest potential methodological tools. The institutionalised appearance of the regional science in Győr almost three decades ago and the significant development of the town mainly due to the achievement of the automotive industry together resulted in several finalised and presently in-progress research projects at the Széchenyi István University in the field of automotive industry and regions of automotive industry.  These research projects encouraged me to summarise the scientific work of this last period and provide methodological handholds and guidance for all those who with the aim of scientific perfection are interested in today’s leading industry of East-Central Europe, the automotive industry, and its regional and economic aspects.  In the (TÁMOP-4.2.1./B-09/KONV-2010-0003 „Mobility and Environment: Research in the Automotive Industry, Energetics and Environment in the Central and Western Transdanubian Region”) research project completed in 2012 the focus was on the location aspect of the automotive industry, seeking Hungarian and regional positions and analysed the characteristics of the supplier networks, their organisational and operational factors. The results inspired the research team to deal with the scientific question of how a district or region is formed around and upon the automotive industry, what economic, social and institutional network organising characteristics it has and how development could be influenced and changed by various means.  These scientific questions were elaborated in the research programme called TÁMOP-4.2.2.A-11/1/KONV-2012-0010 „

 

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Human Resource Diversity Management Capability and Firm Survival: Empirical Evidence from Hotel Businesses in Thailand

Nutcha Caron, Mahasarakham University, Thailand

Dr. Karun Pratoom, Mahasarakham University, Thailand

Dr. Pakorn Sujchaphong, Mahasarakham University, Thailand

 

ABSTRACT

Human resource diversity management has emerged as an important workplace issue for businesses in the twenty-first century in the modern organization and has long been recognized as a key constraint leading employee attitudes and behaviors towards working and organization which in turn, creates a competitive advantage.  The research aims to examine the relationships among human resource diversity management capability, its consequences; organizational commitment effectiveness, organizational citizenship behavior, and organizational loyalty efficiency, as well as organizational outcomes; organizational creation outstanding, organizational innovation success, and firm survival.  In addition, internal and external environments as antecedents; long-term vision, flexibility orientation, resource readiness, organizational experience, and environmental uncertainty are also examined.  The results were derived from a survey of 202 four-to-five star hotel businesses in Thailand using ordinary least square (OLS) regression analysis to examine the relationships among variables in the model.  The results indicate that human resource diversity management capability is positively and significantly associated with all its consequences.  Organizational loyalty efficiency is an essential element for organizational citizenship behavior and firm outcomes.  For antecedents, most of the variables are important factors for building human resource diversity management capability, except resource readiness.  Moreover, theoretical and managerial contributions for a strategic perspective also suggest future directions for research in this vein which are discussed. Human capital is an invaluable and indispensable existing resource and of key importance for any organizational effectiveness and the source of the firm’s competitive advantage (Kumar and Shekhar, 2012).  Martensen and Grøholdt (2006) suggest that today’s customers demand not only the core product but also a wide range of values, attitudes and experiences.  Responding in these circumstances depends on the firm's ability to employ employees with the right competencies, motivation and commitment. Therefore, human resource practices have to analyze problems and adopt new and useful approaches in order to survive (Agarwala, 2003).  Nowadays, Increasing human resource diversity is one of the most important challenges that organizations face (Roberson & Park, 2007; Cook & Glass, 2009), especially in creative and innovative contexts (Bassett-Jones, 2005) which in turn are linked to firm survival (Kochan, Bezrukova, Ely, Jackson, Joshi, Jehn, Leonard, Levine, & Thomas, 2003).  Therefore, one important key issue for the organization to gain competitive advantage and survive is managing diversity in the workplace by human resource management which creates suitable policies and practices to manage that diversity (Shen, D’Netto, & Tang, 2010).  Those approaches have to foster and support the creation and maintenance of an internal labor market and high-level skills base, which in turn will reduce staff turnover, retain scarce talent and improve creativity and innovation. Diversity refers to the mixture of people with different cultural background group identities within the organization (Jauhari & Singh, 2013), who possesses different knowledge bases, sets of skills, experiences, cognition, and points of views (Shore, Chung-Herrera, Dean, Ehrhart, Jung, Randel, & Singh, 2009). 

 

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Measurement of Local Entrepreneur Sector’s Expectations Concerning Research Institutions

Katalin Czako, Regional and Economic Doctoral School, Szechenyi Istvan University, Gyor, Hungary

 

ABSTRACT

Sector of local entrepreneurs creates an informative field for activities aiming to reach regional development. As this sector is important part of development policies Lengyel, (2010), Zonneweld and Waterhout (2010), Horváth (2011), Rechnitzer (2014), there are several applicable research methods in which framework, local developers trying to call attention of other local characters. In my present paper the first results of a research in progress are going to be reported. The study summarizes what expectations an international multinational company has got concerning a local innovative knowledge Centre. The introduced results in the study were processed as part of a 18 months long research program which is realized in an East-Central European town and the surveys are still in progress. The overall aim of the research program is to elaborate and develop the inner structure and the economical-social function of a Regional Innovative and Technological Knowledge Centre. The operation of the knowledge Centre is based on industrial and higher educational cooperation. In the course of the elaboration of the economic and social functions, it is an important goal to reveal the demand for local industrial participants and, according to this, an efficient operation of a future research Centre is going to satisfy local needs. In the interest of its realization, an interview-like survey is being done with local business characters. In the first part of this study the method of the measurement is going to be introduced. After that, the theoretical background of the structure of the deep interview and the arrangement of the questions in the interview are going to be introduced. Finally, the paper analyses the results in case of a global enterprise, which is a significant local business character. Győr, with its 130.000 inhabitants, is a middle city in East Central Europe. On the account of its economical achievement, it is Hungary’s and the region’s most dynamically developing city, to which its automotive industry contributes a lot. The city of Győr, thanks to its geographical abilities and past, has got a central role. In the Roman times a castle was built up here with protection function and the Centre formed into a city. It became an important junction of Pannonia’s road system; the later important continental commercial roads were being traced out at this time. Those geographical factors were started to be used at that time, which raised Győr to the commercial Centre of the region. It also played an important defensive role as a strategic endpoint in the time of the Turkish occupation. The city was expanding and enriching continuously during the long timezones besides the defensive infrastructure. It also functioned as an active Baroque centre until the end of the 18th century, the signs of this period raise the beauty of the city centre. Considering its current commercial and economical functions, in the 19th century it got a strong industrial central role, which is still preserved. At that time, automotive industry started to be presented in the town. Due to the long and rich past as well, after the change of regime (1989) a significant foreign investor layer settled down in the area. Such ventures started successfully which had no traditions before. The area of Győr became suitable for new industries as well, mainly thanks to the later International Industrial Park of Győr.

 

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Strategic Audit Professional Commitment and Audit Survival: An Empirical Research of Certified Public Accountants (CPAs) in Thailand

Nakarn Buaphuean, Mahasarakham University, Thailand

Dr. Supparak Janjarasjit, Mahasarakham University, Thailand

Dr. Phaprukebaramee Ussahawanitchakit, Mahasarakham University, Thailand

 

ABSTRACT

This study aims at investigating the influences of strategic audit professional commitment on audit survival through professional citizenship behavior, best audit practice, and professional loyalty awareness. The mediator variables that are audit quality, audit success, and audit survival are depedent on variables that moderate the variables of certified public accountants (CPAs) in Thailand. In this study 405 certified public accountants (CPAs) from Thailand are the sample of the study. Strategic audit professional commitment is a hypothesis that is to have direct and indirect effects on audit survival. Also, professional citizenship behavior, best audit practice and professional loyalty awareness are proposed to become keys mediators of the relationships among strategic audit professional commitment and audit survival. For the relationships among strategic audit professional commitment and its consequences can explain by the Self-Determination Theory (SDT). Future research is suggestion to seek other consequence variables of strategic audit professional commitment for literature review. Higher strategic audit professional commitment was associated with a higher level of professional citizenship behavior, best audit practice, professional loyalty, audit quality, audit success and audit survival. Theoretical and managerial contributions are explicitly provided. Conclusion and suggestions and directions of the future research are included. Over the past more than two decades of internal accounting in countries around the world, regulators have focused more on the quality of financial reporting. The most important measure is to provide a system to oversee the auditors to provide strict confidence and prevent errors in the future. At that time, the Securities and Exchange Commission in the United States (SEC: US) announced upgrades to monitor the work of auditors and to focus the auditor to perform the statutory accounts and the stock market according to a changing environment (Kwon and Banks, 2004).  It was also found that in 2014, Asian countries such as Japan faced problems such as banks seeking compensation for the damage caused by financial mistakes by filing a lawsuit worth 273 million dollars against Olympus Bank between financial statements 2000 and the first quarter of 2011 because of damage caused by financial mistakes. The news agency Reuters said it was the largest accounting scandal in the history of Japan and as a result, the three executives of Olympus went to prison (Reuters, 2014). In Thailand in 2012, regulators like the SEC filed against PLC’.Singha Paratech (SINGHA) ​​was referred to the Department of Special Investigation, due to the actions important to document and record revenue sale false accounts and financial statements of SINGHA in 2010, a total of 543.3 million. An auditor is limited to the scope of the management and cannot express an opinion on the financial statements for the year 2010 (Bangkokbiznews, 2012). Therefore, the event has encouraged widespread accounting reform both in Thailand and overseas, reflecting the responsibilities of management and auditors to be aware of operating at full capacity and ability. Auditors are responsible for audit and express an opinion in the audit report. Auditors must be allowed to express an opinion on the validity of the statements that will affect the quality of the financial statements and build the confidence of users that the financial statements are reasonable and that practical standards of accounting and auditing standards were used (Tandiontong, 2013; IFAC, 2003). Due to the fact that the work of auditors is affected by laws which are consistent with the duties and responsibilities of the auditors on the financial statements, high standards are required. Honesty, independence and obligations to the accounting profession are at a higher level, which is what the auditor will have to try to keep as long as possible. The study by Ahamad, Anantharman and Ismail (2012) emphasized that the obligations of the profession are important because employees with career commitment will have to abide by these regardless ethics and contribute to the higher turnover than employees who do not have such a career commitment.

 

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Perceived Product Quality and Soft Drink Brand Loyalty in the Lebanese Market

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

Albert Andraos, Lebanese American University, Lebanon

Garo Agopian, Rensselaer Polytechnic Institute, NY

 

ABSTRACT

Pivotal proofs from marketing literature and similar methodological research works as well as supporting insights from an exploratory study are combined in a theoretical paper that defines and examines the shared meanings of perceived product quality and brand loyalty. This study begins with a conceptualized part that answers the fundamental question “What do consumers mean by product quality and brand loyalty?” in the context of soft drinks. The paper then attempts to present an exploration of the linkage between these two elusive concepts by calculating the correlation of the quality-loyalty relationship. The discussion focuses on the soft drinks industry in Lebanon with data gathered through a questionnaire. Implications and propositions about the concepts are presented for managing the perceptions of quality and loyalty through differentiated and integrated marketing communication tools. Marketing is an interdisciplinary field which draws on knowledge and decisions from the social and behavioral sciences including social, clinical and cognitive psychology, sociology and anthropology – the study of humankind – as well as orientations and concepts from many other fields and disciplines such as philosophy, design and management. Some even go as far as to call marketing “applied economics”. The rise of holistic marketing that occurred at the turn of the century led to a shift in the understanding of marketing as a field of art and science. Moreover, the adoption of the holistic marketing concept fueled the recent development of one of the most interesting trends in marketing, the realm of consumer behavior. Consumer behavior is an offshoot of marketing that that focuses on directly dealing with the dissection of the mainstream consumer decision making process. Consumer behavior is concerned with understanding how both men and women choose and use products, ideas, services and experiences, their selection behavior and the ‘why’ behind their behavior as well as consumer goods, product quality and brand loyalty among many other concepts (Solomon, 2007, p. 7). Consumer goods include convenience, shopping, specialty and unsought goods. Convenience goods are those consumer goods which are purchased frequently, immediately and with minimum shopping effort (Kotler & Keller, 2012). Convenience goods have many subdivisions with FMCG (Fast Moving Consumer Goods) referring to those goods which have a short lifespan and are used frequently and conveniently by consumers (Mise, Nair, Odera, & Ogutu, 2013b). Among the most famous groupings within the clan of FMCG are the extended families of alcoholic and non-alcoholic beverages; the former being labeled as “hard liquor” and the latter including the class of ‘soft drinks’ (Mise, Nair, Odera, & Ogutu, 2013a). Non-alcoholic beverages in general and soft drinks in particular were among the first FMCG groupings to have an almost complete global presence - with marketing efforts dating back to the 17th century - and since then have come a long way to be considered as consumer staples among the myriad of 21st century FMCG (Mise et al., 2013a).

 

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Organizational Renewal Capability and Firm Sustainability:

An Empirical investigation of Chemical and Chemical Products Businesses in Thailand

Piyawan Khumyat, Mahasarakham University, Thailand

Dr. Karun Pratoom, Mahasarakham University, Thailand

Dr. Pakorn Sujchaphong, Mahasarakham University, Thailand

 

ABSTRACT

The current global business environment is highly competitive and turbulent. Thus, firms need to continually renew themselves to ensure success in competitiveness and in sustainable achievement, as firms need to deal with the changing situation by finding effective ways. Therefore, this research investigates the relationships between organizational renewal capability (including dynamic organizational learning, continuous organizational development orientation, proactive knowledge improvement awareness, flexible business practice concentration, and aggressive idea generation) on firm sustainability via organizational value creation, organizational innovation effectiveness, organizational excellence efficiency, and organizational competitiveness. Moreover, five antecedent variables, namely, top management support, organizational change readiness, organizational knowledge focus, technology turbulence and environmental uncertainty, are examined for their impact on five dimensions of organizational renewal capability. The conceptual model is proposed by drawing on the theories of Dynamic Capabilities Theory and Contingency Theory, both within the capability stream. The model is empirically tested by using data collected from mail surveys from among chemical and chemical products businesses in Thailand. Multiple regression analyses are utilized to examine and demonstrate the relationships among the consequents and the antecedents of organizational renewal capability. The results reveal that the posited five dimensions of organizational renewal capability have positive associations with five outcomes and five antecedents have positive associations with each dimension of organizational renewal capability. Competition in today’s business environment is becoming more global. Organizations are thus faced with unexpected changes and pressure from this increasing and constantly changing competition. Competition can arise in the same or in a different industry in which there is rivalry among both existing firms and new entrants. Furthermore, the current era of interconnected information and social networks allows consumers greater bargaining power because they have information for evaluating the choices before making a decision (Shimov, 2003; Sunarno, 2001). Thus, firms face extreme pressure to try to find a way to mark themselves as superior to their competitors. For the above reasons, most firms emphasize the importance of choosing and using an appropriate strategy, including finding those characteristics and capabilities which are required of the organization. Moreover, organizations must configure their existing assets and create new resources and capabilities according to dynamic environment (Eisenhardt and Martin, 2000). However, organizations need for their competitiveness to be sustainable rather than just a competitive advantage. In turbulent environments sustainability is a characteristic to sustain both long term opportunities and the potential of the firm. Therefore, the ability of the organization to continuously innovate, modify, create organizational resources and strategic capabilities are important (Agarwal and Helfat, 2009). However, competition in business acts as an appropriate judge between the firm and its environment and that can lead to the disappearance of the firm where a renewal does not occur or is not achieved. Adaptability and changeability become the guarantors of organizational survival according to their firm’s guidelines and environmental context (Santos, 2002 and 2003). Organizational renewal capability considers how best to implement changes and basis development that operational capability from inside and outside of the change. In that case, firm has to make appropriate choices between internal development and external suppliers as to which capability could renew their ability to be effective and benefit over the long term (Agarwal and Helfat, 2009; Rosenkopf and Nerkar, 2001). Moreover, many firms are trying to create their capabilities through continuous adaptation. Firms in industry face a critical gap between their capabilities and the needs of competition in an environment that changes all the time (Capron and Mitchell, 2009). The main focus of organizational renewal capability is a systematic method to link strengths to strategy.

 

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Social Media Behavior and Influence on University Students in Lebanon

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

Annelie Moukaddem Baalbaki, Lebanese American University, Beirut, Lebanon

 

ABSTRACT

Social Networking is becoming an essential part of our everyday life. People of all ages, cultures, backgrounds, genders and professions are joining these networks to interact, communicate and socialize with each other. These social networks (Facebook, Twitter, Instagram, Pinterest, Google+, LinkedIn) are engaging consumers from all over the world and keeping them busy and entertained. The number of users joining these networks is increasing by the day since it not just because it is a social trend to do so, but because of several benefits and advantages generated from joining social media. Consumers use these online social networks to share their interests, backgrounds, activities, photos, stories and real-life connections with their “friends”. They also share experiences with the products and services that they buy. Companies, on the others hand, use these social networks to communicate with their customers, attract them, engage them, build relationships with them and eventually trigger them to buy their products and services. This research tries to explore the social media habits of university students in Lebanon and its effect on their behavior as consumers. It also explores the effect of electronic word of mouth. In other words, it looks into the effect of recommendations by friends and by experts on the consumer behavior and buying intentions. Quantitative data was collected and studied through the use of a questionnaire. The sample composed of 227 university students living in Lebanon since this age group represents a major customer base.  According to Alkhas (2011), social media network is a new marketing phenomenon because it has become a new instrument used for integrated marketing communications. Moreover, it is used to allow companies grow a solid relationship with their customers. Social media involves a wide range of ways to share information. This includes social networking sites (Mangold & Faulds 2009). Online social networks sites as Facebook and MySpace have grabbed the attention of millions of users by which it’s used for many different tasks (Bicen and Cavus, 2010). Indeed, social networking’s reputation is highly obvious by its number of users (Cheung et al., 2010). According to the Statistic Brain Research Institute (2014), the number of monthly active Facebook users is 1.31 billion and the average time spent on Facebook per visit is 18 minutes. Among 135 million Arabs world widely, 81 million are active users of social media by May 2014, compared to 54 million users in May 2013 (Nazra A'la I'lam Al'ijtima'i Fi Al Alam Al Arabi, 2014) – a whopping 50% increase in just 12 months. Statista reported that 32.71% of the Lebanese population have Facebook accounts during 2012 while the percentage increased to 43% during 2013 (Nazra A'la I'lam Al'ijtima'i Fi Al Alam Al Arabi, 2014). During 2013, 1.9 millions of Lebanese citizens had access to the internet while only 61% of them are active users. Of the active users, 87% have social networks where Facebook and Twitter ranked the primary and secondary social networks. Of Lebanese people who carry a smartphone population, 85% has access to the mobile internet (Arab Brains, 2014)­.  However, despite Facebook’s and other social media’s popularity, the university student in Lebanon’s behavior on social media is still unclear. In addition, it is almost unknown how the material shared on Facebook or on any other social network is affecting his buying decision and behavior. Furthermore, understanding how and how much a consumer is affected by social media and electronic word of mouth (e-wom) is little in the Arabian countries in general, Lebanon in specific.

 

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Strategic Learning Management Orientation and Firm Sustainability: An Empirical Investigation of Auto Parts Businesses in Thailand

Mongkol Ekkaphan, Mahasarakham University, Thailand

Dr. Karun Pratoom, Mahasarakham University, Thailand

Dr. Pakorn Sujchaphong, Mahasarakham University, Thailand

 

ABSTRACT

Strategic learning management orientation has been viewed as one of key components that influence organizational performance. Drawing on the organizational learning theory and contingency theory, the objective of the study is to investigate the relationships among strategic learning management orientation and its consequences; organizational productivity, operational success, business excellence, corporate competitiveness and firm sustainability and also to explore the antecedents influence of  executive proactive vision, competitive knowledge, potential technology adaptation, and business environment complexity . The results were derived from a survey of 115 auto parts firms in Thailand provided the interesting points of the strategic learning management orientation was directly associated with firm sustainability. The hypothesized relationships among variables are examined by using ordinary least square (OLS) regression analysis. Results suggest that strategic learning management orientation are positively related to organizational productivity, operational success, business excellence, and corporate competitiveness which are as the mediator between strategic learning management orientation and firm sustainability. Executive proactive vision, potential technology adaptation, and business environment complexity do play an antecedent role in this study. Moreover, theoretical and managerial contributions, conclusion, and suggestions for future research are also interesting to be discussed. Globalization is a phenomenon of the 21st century. There are drastic transitions in their competitive environment such as political, social, cultural, technological and economical changes in the market conditions (Zhang & Zhang, 2003). According to business environment changes, criterions and requirements of doing businesses must be established to create the proper strategy in order to achieve the organization objectives under the intensely competitive circumstance. Also, firms have to formulate the strategies in organizational level with the clear and concrete operationalization. It is clear that firms need to learn, and the organization’s ability to learn is a key strategic capability to compete in modern markets (Santos-Vijande, López-Sánchez, & Trespalacios, 2012). Organizational learning has become unique tools in order to competitive advantage and performance (Garvin, 2000). The goal objective of organizational learning is to enhance an organization's core competence and create competitive advantages for success (Chau, 2008). Similarly, Barney and Zajac (1994) supported that the firms who connects organizational knowledge to learning from difference of competence process has results in increasing important competitive advantage. Thus, organizational learning is a source of heterogeneity among firms and a basis for a possible competitive advantage in dealing with business management practices and situations (Jerez-Gomez, Cespedes-Lorente, & Valle- Cabrera, 2005). The Thai automotive industry is one of the most important industries in Thailand. The Thai automotive industry is experiencing a high growth rate, and, as a result of the Thai government’s “Detroit in Asia” policy it affects Thailand‘s automotive industry progress toward a steady goal of becoming the world’s 10th biggest automaker (Bongsebandhu-phubhakdi, Saiki, & Osada, 2009). Especially, the main policy of the Thai government supports consumers to purchase new cars, namely, “The First Car Policy” (Panya & Ussahawanichakit, 2013). Consequently, high demand from the market has effect on domestic auto-makers to sell more vehicles. It is clear that the automotive industry is embarking into new ventures, facing new challenges, and will be operating in a continually changing environment. This view was also suggested by Kenney and Florida (1993), proposed that the future of automobile industry appears characterized by uncertainty, continuous change and innovation in technology, work practices, and markets.

 

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Issuing Firm Valuations pre- and post-IPO: Which Risk Component Matters?

Dr. Marie-Claude Beaulieu, Laval University, FSA, Qc, Canada

Habiba Mrissa Bouden, Laval University, FSA, Qc, Canada

 

ABSTRACT

This paper studies the role of firm and IPO market risks on IPO pricing.  We decompose total risk into its systematic and idiosyncratic components to reveal which one affects pre- and post-IPO valuations.  Our results show that IPOs are undervalued relative to a matched sample of traded firms when accounting for IPO market idiosyncratic risk during the IPO registration period. When we examine post-IPO valuation, we find that only the idiosyncratic risk of the issuing firm is not incorporated in the IPO market price in the first trading day. We also note that the level of idiosyncratic risk in the IPO market during the IPO registration period positively affects the issuing firm idiosyncratic risk in the early aftermarket stage. Overall, we show that IPO mispricing in the pre-offer period is explained only by the measure of idiosyncratic risk. Previous research on IPOs reveals a short-term anomaly, IPO underpricing (Ibbotson, 1975 and Ritter, 1984), which challenges our understanding of asset pricing. Information asymmetry, agency problems, signal and litigation are proposed explanations for this phenomenon. Typically, underwriters set an offer price below the fundamental value of a firm to motivate investors to purchase newly issued shares. This deliberate underpricing induces high initial IPO returns during the early aftermarket stage. To measure underpricing, authors such as Ritter (1984) often use the IPO initial return as measured by the percentage difference between the IPO price on the first day of trading and the IPO offer price. Purnanandam and Swaminathan (P&S) (2004) note that IPO aftermarket prices during the first days of trading do not correspond with the fundamental value of the issuing firm (p. 812). They use the market value of a selected established firm with characteristics similar to a given IPO to estimate the IPO relative value ratio (p. 818). They find that IPOs are overvalued compared to their matched firms (p. 812). Zheng (2007) reviews P&S’s valuation method and shows possible biases due to the omission of new primary shares, cash holding and debt value. Using a modified IPO valuation method to avoid the upward biases in the P&S (2004) valuation method, Zheng (2007) finds that IPOs are not overvalued relative to their peers. However, he shows that the mean of first day return is 12.16%, which is consistent with similar analyses in the literature. One question remains: if there is no over or undervaluation of issuing firms in the pre-IPO, then why are there high initial returns in the early aftermarket stage?  This paper focuses not only on IPO valuation but also on the possible explanations of IPO pricing in pre- and post-IPO stages by highlighting the important role of the issuing firm and IPO market risk characteristics during the IPO process. We investigate which risk component is involved in the ex-ante and ex-post IPO valuations. Compared to established firms, uncertain IPO stock value and demand for these newly issued equities are important because new issues have no stock market history.

 

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Comprehensive Audit Planning Proficiency and Sustainable Audit Success: An Empirical Research of Certified Public Accountants (CPAs) in Thailand

Supawadee Chopset, Mahasarakham University, Thailand

Dr. Suparak Janjarasjit, Mahasarakham University, Thailand

Dr. Saranya Raksong, Mahasarakham University, Thailand

 

ABSTRACT

The objective of this research is two-fold; the first is to examine the effects of comprehensive audit planning proficiency on sustainable audit success through the mediating effect of effective audit judgment, audit value increase, audit risk reduction, efficient audit report, and audit reputation of certified public accountants (CPAs) in Thailand. Second, is to the studyimpact of long-term audit vision, audit profession well-roundedness, audit experience, audit learning competency, and business situation dynamism on comprehensive audit planning proficiency. In this research, data were collected by mail survey questionnaire administered to the 205certified public accountants in Thailand who are the sample of this study. The results of OLS regression analysis suggest that comprehensive audit planning proficiency has a significant positive effect on comprehensive audit planning proficiency consequents. Additionally, comprehensive audit planning proficiency consequents have a significant positive with efficient audit report, audit reputation, and sustainable audit success.Moreover, the influences of the antecedents, this research found that long-term audit vision, audit profession well-roundedness, audit experience, audit learning competency, and business situation dynamism have a significant positive effect on comprehensive audit planning. Future research needs to identify and examine other variables that may affect comprehensive audit planning proficiency, as well as mediating variables, in order to increase the contributions and benefits of the study. Also needs to collect data from different groups of other auditing professions, such as tax auditors (TAs) and governmental auditors (GAs) in Thailand. Nowadays, the rapid change and volatility of the economic environment has influenced on survival and maintenance of sustainable growth in a highly competitive situation. It include the climate of intense competition in the auditing profession has resulted in auditors paying more attention to conducting efficient and effective audits (Knechel, 2007).Which the regulators, capital markets have improved and more stringent regulations to align with complex business and economic conditions, which directly affects both accounting and auditing. Especially auditing has been expected from stakeholder for the reliability and quality of financial reporting, and usefulness for decision making(Peecher et al., 2007).Accordingly, auditors are both insurance providers and information intermediaries that provide independent verification of manager-prepared financial statements; audit performance contributes to the reliability and quality of financial reporting. Moreover, audit planning is an important factor in the competitive environment. Especially, the climate of competition in the audit market pressures auditors to gain audit competency (Mansouri, Pirayesh, and Salehi, 2009). Thus, the auditors should the audit planning toward effective practice and keeping up-to-date.

 

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Do University Outcomes Measure Up: An Australian Case Study?

Dr. Veronica Hampson, University of Southern Queensland, Toowoomba, Queensland, Australia

 

ABSTRACT

This research investigates the application of a change-based approach to outcomes based performance management (OBPM) in two Australian Universities.  The extent to which this approach is adopted and applied by the two Universities selected for the research is examined. A mixed-method research approach was used, incorporating document analysis, as part of Stage 1, and case study interviews, as part of Stage 2, to assess the effectiveness of implementation of OBPM in these Universities. This paper reports on the results of the document analysis from key documents from two Australian State Universities. Concerns are raised about the degree to which OBPM is adequate, in its current state of implementation, for enabling these Universities to know whether or not it is contributing to the long term outcomes they desire.  Performance measurement in all its various forms has become a central feature of much contemporary accounting research. The measurement of performance is increasingly common within universities, driven probably by Government policy that has seen the withdrawal of government funding so as to shift universities from being full funded to being partially subsidized. Universities are increasingly being asked to find productivity improvements, increase student contributions to funding, and to report on the educational impacts of their activities. For public universities to function within this increasingly competitive environment, stakeholders and users not only need information about what is spent on university activities, they also need information about what outcomes have been achieved (Frolich, 2011).  Such performance information must be published and disseminated to users if they are to make informed choices (Talbot 2005: 496–501). This is only possible if strategies and the use of performance measures are implemented.  The aim of this research is to investigate the application of a change-based approach to OBPM in two Australian Universities. The extent to which this approach is adopted and applied by these universities is examined. The research was conducted in two phases, namely document analysis and case study.   This paper reports on the results of the document analysis from key documents from two Australian State Universities.  This paper is organized into five sections. The next section provides an overview of the literature and commentaries on the OBPM approach to managing universities. Section 3 discusses the research methodology. The final two sections provide the results and discussions of the study followed by the conclusion and implications. As is the case with the general public sector, Australian universities are adopting management techniques associated with a performance measurement culture so as to improve their accountability. Accountability, in this sense, refers to improved outcomes or results. The assumption here is that focusing on producing outcomes and satisfying stakeholder interests will enhance accountability (Frolich, 2011). An OBPM approach to reporting performance requires universities to pay more attention to the way programs are contributing to outcomes and less on simply delivering outputs, carrying out activities and implementing processes. Because the university function involves a complex range of activities, it is not straightforward to design adequate outcome measures that are valid and which reliably capture the multifaceted nature of performance in the university (Poister, Pasha, & Edwards, 2013). 

 

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The Effect of Conservatism in Current Earnings’ Ability to Predict Future Cash Flows vs Future Earnings (Empirical Study of Manufacturing Companies in Indonesia Stock Exchange)

Ni Made Mega Primandari, Bournemouth University, UK

 

ABSTRACT

This research aims to test the effect of conservatism in current earnings’ ability to predict future cash flows and future earnings by using two different measurements of conservatism. Conservatism is measured by nonoperating accruals (Givoly and Hayn, 2000) and asymmetric timeliness measure (Basu, 1997). This research use 50 listed manufacturing companies in Indonesia Stock Exchange from the period of 2000 until 2011 as the sample. Regressions models are used to answer the research questions. Based on the result, conservatism increases the ability of current earnings’ to predict future cash flows based on nonoperating accruals method. On the other hand, the result using asymmetric timeliness measure indicates that conservatism reduces the ability of current earnings to predict cash flows. While, for the future earnings prediction the result from nonoperating accruals measurement shows that conservatism increases the ability of current earnings’ to predict future earnings. However, the result is not significant. Meanwhile, using the asymmetric timeliness measure, it found that conservatism decreases the ability of current earnings to predict future earnings. Therefore, these results suggest that the use of different conservatism measurement generates different results.  Financial reporting is one source of information that communicates the financial condition of the company’s operating activities in a certain time to interested parties. According to IASB Framework, there are some qualities that cause financial information helpful for business and financial decision-making. Two of those qualities are relevance and reliability. Relevance is assessed as the ability of current earnings to predict future cash flows (Kim and Kross, 2005) while reliability is defined as the ability of current earnings to predict future earnings (Richardson et al., 2005). Furthermore, many studies have been conducted about the ability of financial items such as current earnings and current cash flows as the predictor of both future cash flows and future earnings. The findings found that current earnings as the best predictor. However, there is an issue appears regarding the improvisation of the use of financial reporting. Accounting standard setters have adopted some new accounting standards throughout the past several decades in order to enhance the usefulness of financial reporting (Bandyopadhyay et al., 2010). Financial Accounting Standards gives a freedom to companies to choose the accounting method that they use in order to anticipate the unstable economic condition, one of the method is conservatism. This freedom is taken together result in an increase of conservatism in accounting numbers.  Conservatism is a fundamental practice of financial reporting. However, despite its core role in accounting practice, no accredited definition of conservatism exists. Watts (2003a) has explained conservatism as a principle in financial reporting which intend to assess earnings and assets with cautious because of the economic and business activities covered by the uncertainty. A general explanation of conservatism is expressed by the International Accounting Standard Board (IASB, 1989), which indicates that conservatism is “ a level of caution in the use of the judgement required in making the estimates involved under situations of uncertainty such that assets or revenues are not overstated and liabilities or expenses are not understated” (Ismail and Elbolok, 2011).

 

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