The Business Review, Cambridge

Vol. 2 * Number 1 * Summer 2004


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The Business Review, Cambridge is indexed  in the CABELL'S and ULRICH'S DIRECTORIES of Refereed Publications.   The primary goal of the journal will be to provide opportunities for business related academicians and professionals from various business related fields in a global realm to publish their paper in one source. The Business Review, Cambridge will bring together academicians and professionals from all areas related business fields and related fields to interact with members inside and outside their own particular disciplines. The journal will provide opportunities for publishing researcher's paper as well as providing opportunities to view other's work.  All submissions are subject to a two person blind peer review process.


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An Examination of the Moderating Effect of Competitive Scope on the Relationship Between Stage of the Industry Life Cycle and Firm Performance

 Dr. Kenneth C. Robinson, Kennesaw State University, Kennesaw, GA




This study found that the competitive scope a new venture utilized moderated and lessened the negative impact of entering industries in the later stages of the industry life cycle.  Overall, the regression analysis incorporating the direct and moderated effects of competitive scope and industry life cycle stage accounted for 45% of the variability in shareholder wealth creation for this study’s sample of 112 new ventures that had undertaken an initial public offering.  Additionally, incorporating competitive scope as a moderating variable was a key to determining the effect of stage of the industry life cycle on firm performance.  More specifically, stage of the industry life cycle did not have a statistically significant direct effect on shareholder wealth creation when utilizing regression models that did not incorporate interaction effects. However, stage of the industry life cycle did have a statistically significant effect on performance when utilizing a regression model incorporating the interactive effect of competitive scope and industry life cycle stage.  In sum, this research provides support for prior calls for more integrative research in the fields of strategic management and entrepreneurship to more fully ascertain the interactive effects of strategy and industry structural variables.


General Management’s Strategic Thinking in Asian Organizations - Empirical Findings of 4 Studies

 Dr. Peter H. Antoniou, California State University San Marcos, CA & The Ansoff Institute, CA

Dr. Catherine E. Levitt, The Ansoff Institute, San Diego, CA

Katherine Whitman, Mount St. Mary’s College, Los Angeles, CA




This article presents the findings of four complementary pieces of empirically validated research on the importance of effective management processes in the Asian business environment. The first study examined the relationships of 97 Indonesian top executives or general managers between their capability, competitive efficiency, strategic effectiveness, and the performance of their firms. The next concentrated on 55 Japanese firms and their relationship to their 475 SBUs in Japan. The third focused on the role of a transfer agent in technology transfer in 93 Chinese group companies in light industry. The last studied the mindset of 120 general managers in medium- to large-size Korean firms. The study looked at each organization, its culture and power structure and how the manager’s mindset affected the organization’s performance.


An Integrated Business Core: Hindsight Evaluation and Recommendations

 Dr. Norm Borin, California Polytechnic State University, San Luis Obispo, CA




Over the last decade a number of business schools have developed integrated business programs.  These programs have differed in a number of ways including the degree programs involved, the depth of the integration and the pedagogy used to teach integrative concepts.  Until recently there have been few studies published that have reported the effectiveness of these programs.  One such study reported extensively on a number of measures used to assess their programs effectiveness.  This school has since ended their integrative program. This paper provides a series of recommendations this school makes to those interested in starting their own program.  These recommendations are based on the difficulties this school had with running and ultimately continuing their program.   In response to a number of both internal and external forces many business schools during the 1990’s developed integrative business programs (e.g, Auckland University of Technology, University of Idaho, University of Tennessee, California Polytechnic San Luis Obispo).  This article presents a summary of one college’s experiences with their Integrated Core Program (ICP) and provides a list of hindsight recommendations for schools contemplating a program of their own.


Internationalizing the Business Curriculum: Developing Intercultural Competence

 Dr. A. G. Cant, Central Washington University, Ellensburg, WA




American businesses are confronted with the need to operate outside the comfort of their own cultural environment.  To be successful global managers requires the development of five key global cultural competencies; cultural self-awareness, cultural consciousness, ability to lead multicultural teams, ability to negotiate across cultures and a global mindset.  Given U.S. business students very limited understanding of other societies and their cultures, business colleges face a major challenge to prepare students for global assignments.  Of the three methods used by colleges to internationalize the business curriculum, only one approach provides the opportunity for students to develop the global cultural competencies necessary for them to succeed in a global career.  The creation of an international business degree or major allows students to gain insight from humanities and language courses and from actual international experience. While business has always operated between communities and across national boundaries, the world now faces a new era of unprecedented global economic interactions.  This highly competitive marketplace requires sophisticated management competencies necessary to work with staff, customers, suppliers, and government officials with fundamentally different values, assumptions, beliefs and traditions.  Managers in domestically focused firms have had the relative comfort of working within their own culture, whereas in the international marketplace cross-cultural management is the norm. 


The Self and Symbolic Consumption

 Dr. Kritsadarat Wattanasuwan, Thammasat University, Bangkok, Thailand




The paper explores theoretical concepts regarding the relationship between the self and consumption.  In consumer culture, consumption is central to the meaningful practice of our everyday life.  That is, we make our consumption choices not only from the products’ utilities but also from their symbolic meanings.  Basically, we employ consumption symbolically not only to create and sustain the self but also to locate us in society.  Nevertheless, from a critical point of view, striving to create the self through symbolic consumption may also enslave us in the illusive world of consumption.   Endeavouring to create the self in contemporary society is presumably inseparable from consumption ( ADDIN ENRfu Elliott 1997;  ADDIN ENRfu Gabriel and Lang 1995;  ADDIN ENRfu Gergen 1991;  ADDIN ENRfu White and Hellerich 1998).  Indeed, contemporary society is first and foremost a consumer culture – where our social life operates in the sphere of consumption ( ADDIN ENRfu Firat and Venkatesh 1994;  ADDIN ENRfu Giddens 1991;  ADDIN ENRfu Slater 1997).  That is, our “social arrangement in which the relation between lived culture and social resources, between meaningful ways of life and the symbolic and material resources on which they depend, is mediated through markets” Slater (1997, p.8).  Consumption is thus central to the meaningful practice of our everyday life.  Basically, we employ consumption not only to create and sustain the self but also to locate us in society ( ADDIN ENRfu Elliott 1994b, 1997;  ADDIN ENRfu Kleine and et al 1995). 


A Proposed Model for Cultural Impact on the Effects of Perceived Service Quality on Customer Loyalty

 Veerapong Malai, Bangkok University, Bangkok, Thailand

Dr. Mark Speece, Asian Institute of Technology, Bangkok, Thailand




This paper examines the effect of service quality on customer loyalty. Hofstede’s dimension in term of individualism-collectivism is used for describing a cross-cultural perspective on this issue. The article proposes that the different levels on the cultural dimensions could lead to different outcomes on perceived service quality and could moderate quality – loyalty relationships also.  A global culture is emerging. A great many businesses are confronted with globalization, and international trade has become increasingly crucial to every country. Services marketed within a home country have moved into foreign markets. Increasingly, a wide variety of services from many different countries are offered to consumers in any specific national market. Some services have gained acceptance from consumers and therefore succeed in the market, whereas other services struggle to survive.  Among the factors leading to success in the market is perceived service quality. If a company fails to deliver service quality, few consumers will display allegiance; they will simply switch to competitor’s services  Creating Customer Value: The Path to Sustainable Competitive Advantage.  Customers may be interested in many services, and they may be loyal or disloyal to any specific service depending on perceived service quality.  If service providers do not want their customers changing their decision to other services, they should build a customer loyalty. Loyalty leads to certain marketing advantages such as reduced marketing costs, more new customers, and greater trade leverage  The Chain of Effects from Brand Trust and Brand Affect to Brand Performance: The Role of Brand Loyalty.


Consumer Evaluations of Rebate Advertisements

 Miyuri Shirai, Ph.D., Yokohama National University, Kanagawa, Japan




This paper examines how consumers evaluate rebate advertisements. Both positive and negative responses were revealed from an experiment. The positive side was that large rebates raised consumer price and quality images of an advertised product, implying that they became less sensitive to retail price. The negative side was that a considerable number of consumers believed that the true saving they would receive was less than the indicated rebate amount. This came from the belief such that the manufacturer would not really absorb the entire cash back rebate because they would raise a product’s retail price or lower its quality. Another finding was that the essential attitude to rebates held by consumers was an important variable that impacted on consumer evaluations of the amount of the true saving, quality image, and purchase intention.  Rebates are widely used promotional tools capable of generating or enhancing consumer motivation to purchase products. Also, rebates have an advantage over other monetary promotions such as price-discounts or coupons in one particular aspect. That is, rebates do not affect consumer price expectations as much as coupons or price-discounts due to the fact that purchase and redemption are separately timed acts with rebates, whereas they are usually simultaneous for coupons or price-discounts (Folkes and Wheat 1995). It is very desirable for manufacturers and distributors to keep consumers’ price expectations at higher levels because future price evaluations become more favorable (e.g., Kalyanaram and Winer 1995). Thus, in this regard, rebates are considered a preferable promotional tool as opposed to price-discounts or coupons since they can induce consumer purchase intentions without lowering their price expectations.


Quality Management – A Way to Foster a Business

 Dr. Ivaon Mencer, University of Rijeka, Croatia




In the last fifteen years, the terms quality and quality management have been used quite often by professionals in the contexts of production processes, teaching and scientific research. The terms quality and quality management are also a very interesting subject matter of sui generis research.  Lately, experts have been pointing out in professional journals to the exaggerated use of these concepts. They believe that quality and quality management cannot solve every business problem and that their usage should be based on professionalism and not amateurism. However, from practice, we can see that the sublimation of these concepts brings about a faster way of accepting and implementing this type of management in less developed countries, where companies aspire to a greater share on the national and international markets.  In the course of the Second World War, quantity overshadowed quality, due to the enormous needs of war industry. The lack of general products and transition from war to peacetime industry prolonged this situation even a few years after the War.  The business expansion of the 1950s focused attention on quality, which simultaneously included both the processes and the particular conditions in which they occurred. The modern notion of quality looks at quality as a system of documented working processes, which in a given moment assure the most rational procedures, based on available technology and acquired working experience. In such conditions the quality of the product comes as a logic consequence.  After WW II, the economic expansion was influenced by different processes that may be summarised in (1) political and (2) technological.  Both processes insisted on the rational use of the sources intended for business exploitation.  Political processes continued the processes that started in 1918, while the economical ones resulted from the political polarisation that occurred in countries of a more-or-less similar level of economic development. 


Relationships between Organizational Socialization Tactics and Organization Identification of Professionals: Moderating Effects of Work Experience and Growth Need Strength

 Dr. Xiang Yi, Western Illinois University, IL

Dr. Jin-Feng Uen, National Sun Yat-Sen University, Taiwan




“Organizational identification” (OID) has significant implications for managing professionals in fast changing organizations. This study focuses on the relationship between socialization tactics and the OID of professionals. Work experience and personal “growth need strength” (GNS) are included as moderators. A survey based on the engineering professionals in high-tech industries was conducted. Three main results were found. (1) When ignoring the moderating effect, the serial tactic has a significantly positive effect on the OID; (2) Considering the moderating effect of work experience, collective and fixed tactics are helpful to OID of the professionals with work experience. (3) Formal and sequential tactics have positive impacts on the OID despite the GNS the professionals have, but high GNS professionals commonly have higher OID than the low GNS ones.  Researchers have suggested numerous ways to retain professional employees and reduce turnover by promoting loyalty and commitment. One method to achieve this commitment is establishing organizational identification through appropriate socialization tactics as a professional enters an organization (Ashford & Saks, 1996). Our study tries to explore the use of organizational socialization practices, which firms may use to influence the process of new employees’ organizational commitment, and their relationship with organizational identification (OID). We also discuss some moderating effects of some personal characteristics, like growth need strength and work experience, on the previous relationships.


Knowledge Sharing Routines, Task Efficiency, and Teams’ Service Quality in Instant Service-Giving Settings

 Kuo-Chien Chang and Fu-Sheng Tsai, I-Shou University, Taiwan

Dr. Shih-Chieh Fang, National Kaohsiung First University of Science and Technology, Taiwan




The Comparative task excellence relies more and more on knowledge, if not other sorts of capitals. For service team in instant service-giving contexts, service competences and quality are not based on how much members do at present service moment, bur on how efficiently they response and react for customers’ needs. Knowledge sharing routines (KSR) between team members, continuously, benefits because they not only served as common bases for information exchange, but they also demonstrates an alignment for members’ cognition differences. The present study focuses on dynamics of the reciprocal impacts between KSR and communication & conflict resolution (CCR) of team members on each other, and the consequences of this dynamics that are finally embodied in the task efficiency for service quality in the instant service-giving settings.  The nature of works in the organizations has been changed, especially in the era of new economy. Knowledge works replace sequential, regular ones with the characteristics of flexible, complex, and high uncertainty. In this background, the ability to implement knowledge activities well becomes increasingly vital in the way it helps obtain and sustain competitive advantage (De Carolis, 2003; Grant, 1996). Basically, the knowledge activities include the creation and integrity of knowledge, the accumulation and utilization of knowledge, and the learning and sharing of knowledge comprise knowledge management. Among these, knowledge sharing/flow is a footstone of the whole knowledge management integrity (Szulanski, 1996; Gupta and Govindarajan, 2000).  Since the paradigm has shifted from tangible to intangible emphasis, a team has to perform better in the knowledge processing to offer qualified and satisfying services. Originally distributed professionals are brought together to manage and match the needs of this fundamental transformation (Tjosvold & Tjosvold, 1995). As a result, team units become very important organizational design for task implementations (Gray, 2000).


Price Discovery in S&P 500 Index

 Yu-Shan Wang, Lecturer of Hsing Wu College of Technology; Ph.D. candidate of Tamkang University, Taiwan




The paper examines the long-run co-movement between the S&P 500 spot index, regular futures, e-mini futures and SPDRs over the period 1998/07/01 ~ 2002/10/31.  The paper employs the Johansen cointegration methodology, the vector-error correction model (VECM) with Granger causality tests, the newly developed general impulse response functions (GIRF) and the general variance decompositions (GVDC).  The empirical results show that the cointegration results indicate that there exists a cointegrating vector among four variables.  In other others, these financial markets are completely integrated.  Next, the results from Granger causality tests based on VECM point to bi-directional causality running from each other except for spot.  In addition to, regular futures, e-mini futures and SPDRs have identical comovement phenomenon from the GIRF.  Thus, the major finding of this paper is price discovery appears to be initiated lower transaction cost market.  In other words, it supports Fleming et al. (1996) the transaction cost hypothesis and Kawaller et al. (1987) leverage hypothesis. 


Cross Licensing and Patent Pool

 Ting‑Fang Chiang, Yuan Ze University, Chung‑Li, Taiwan




This study attempts to offer some antitrust principles to help examine the validity of cross licensing and patent pool for solving the complements problem, based on formal economic analyses. We show that inconsistency exists between the private and social optimal solution to the complements problem. To eliminate this inconsistency, the patentees' cooperation in setting lower royalties is socially preferred to noncooperation. While the policy to prohibit the use of royalty in cross licensing is not enough to solve this problem. Even though the patent pool's efficiency increases with the number of licensees, it is socially less efficient than the exclusive cross licensing with cooperation. A common phenomenon in the high‑technology industries is that the essential technologies for producing one product are possessed by different firms with patent protection. This phenomenon prevents any firm from single‑handed commercializing the product without infringing on others' patent rights. Therefore, various contractual arrangements, such as cross licensing or patent pool, prevail in these industries in order to solve this complements problem.(1) From time to time, these contractual solutions raised concerns about possible antitrust violations. After a long history of interactions between the antitrust law and intellectual property, the antitrust authorities have managed to issue antitrust guidelines on unilateral licensing. However, it is generally appreciated that the guidelines on unilateral licensing may not suit for cross license and patent pool. But, the antitrust guidelines on cross license and patent pool have not yet been systematically established.  After all, one general viewpoint was adopted by the authorities to examine the competitive effects of cross licensing and patent pool.


 A Study of Globalization, Culture and Organizational Performance in China

 Dr. Min-Huei Chien, The Overseas Chinese Institute of Technology, Taiwan




Mainland China’s economy has developed very fast and has a huge domestic market. Many foreign companies have invested in China, but without profiting from this investment. Research has indicated that cultural misunderstandings have undermined management effectiveness. Cultural conflicts erupted between Mainland Chinese companies and their western subsidiaries. Indeed, western and Chinese companies have many differences in concepts, attitudes and behavior. So western companies operating in China have to understand those differences. Cultural differences affect leadership behavior, management system, management effectiveness and ultimately organizational performance. This study will conduct a literature review, field study and in-depth interviews with organization CEOs and other experts. The goal of this study is to learn the practices of human resource management in China from the behavioral point of view. The results of this study will offer practical suggestions for western companies that invest in Mainland China. It will also provide principles which will help foreign companies in China to increase their competitive capability.


Small Business Strategy: A Comparative Analysis of US and Romanian Firms

 Dr. Michael Stoica, Washburn University, Topeka, KS

Dr. Patriya Tansuhaj and Dr. Jerman Rose, Washington State University

Dr. Jim McCullough, Puget Sound University




The study compares business strategies used by small businesses in two countries with very different economic conditions: the US and Romania. Two random samples have been selected, one for each country.  Findings partially confirmed Chrisman, Bauerschmidt, and Hofer (1998) theory that any model of small business performance should recognize the critical nature of environment, strategy and organizational structure:  The performance of small businesses will largely depend on the competitive strategies within the chosen industry.  Differences between businesses in the two countries and the strategies they use to increase performance are analyzed.  Small and medium-sized companies hold an important place in the modern economy. They represent over 95 percent of all US and European enterprises and over 60 percent of all jobs (Utsch, Rauch, Rothfuss, and Frese, 1999). The United States has a complex, well developed and largely market driven economy. This economy has developed over the past two centuries in a political environment which has been mostly favorable to private enterprise. While rapidly developing technologies and demographic forces challenge marketing managers there is a fundamental stability in the business environment. More importantly, there are well-established systems and sources of information generation and processing.  Romania on the other hand is only beginning to seriously turn toward a market economy. Since the fall of the communist regime in 1989, Romania has opened its doors to the outside world after a more than half a century of state control. The new political leaders have proclaimed support for market reforms but have been slow to implement them (Anton, 1994, Wilson 2000). 


Strategic Human Resource Management for Traditional Manufacturing Industry in Taiwan

 Dr. Jin Feng Uen, Ling-Ping Sun, Chih Huang and Shu Ling Wu

National Sun Yat-sen University, Taiwan, R.O.C.




A case study method is used in this research. Ten companies in traditional manufacturing industry with superior organizational performance and histories of transformation or related actions for business growth are interviewed extensively to explore how the traditional manufacturing industry strengthens or develops different organizational abilities through human resource practices (HR practices) according to different transformation strategies while facing different evolutional opportunities. Accordingly, universalistic perspective in strategic human resource management is used to find out a set of core HR practices which best fit the characteristics of traditional manufacturing industry in Taiwan. In addition, different transformation strategies with different HR practices are concluded as well in terms of contingent perspective.


A Case for Uniformity in International Accounting Standards for the Capitalization of Product Development Costs

 Lee G. Tagliaferri, M.B.A., Pace University, NY




The difference in accounting standards for the capitalization of product development costs between the United States and Europe is a major obstacle for a uniform international body of Generally Acceptable Accounting Principles.  The thesis of this paper bridges the gap in GAAP for the capitalization of product development costs between the United States SFAS 2 and international IAS 38, with changes designed for both. In substance, this paper identifies specific circumstances of product development which constitute criteria for the capitalization of product development costs.  The findings of this study present a case, on one hand, to incorporate, with objective criteria, selective capitalization in U.S. accounting standards, which is not now permitted. On the other hand, for IAS 38, this paper inaugurates objective criteria for selective capitalization, which are missing. The thesis of this paper is substantiated by copious empirical studies depicting risk circumstances for different types of product development projects.  The source of this knowledge is research literature written by scholars of product development who documented empirical studies while formulating management principles. The patterns of product development have changed markedly in the past 30 years since SFAS 2 was adopted, and the research literature incorporating empirical studies brings a new perspective to attendant risks of specific types of product development projects in the current dynamic environment of technology. There are two categories of development for an existing product: (1) development to search for improvements to the technology of one of the components of a product and (2) development to apply advances which become available in the technology of a component of a product. The findings of this study lead to the conclusion that there are circumstances in the second category of product development when advances in technology cause a product to become obsolete.


Entrepreneurial Intention: The Changing Attitudes of Tertiary Students in Australia

 Dr. Elizabeth Walker and Jennifer Devine, Edith Cowan University, Perth Western Australia




Small businesses are commonly recognised as a significant contributor to economies throughout the world, and responsible for job creation and vital for economic development.  Entrepreneurial activity is often associated with risk and previous studies have shown that women are more conservative than men in their overall approach to business and decision making. As today’s world of work changes there is a continuous rise in the number of people choosing to start their own businesses. Of interest is whether entrepreneurial activity in relation to becoming self-employed is mirroring these external changes and also how significant are variables such as gender and family background in determining entrepreneurial intention. This paper will present the results of a survey of 300 tertiary students and their attitudes to entrepreneurial activity.  The findings indicate some gender differences in entrepreneurial intention, but also that having a family business background, and a changing attitude to employment is a good indicator of future business ownership.  Current research suggests there may be more similarities between men and women and their intentions to act as entrepreneurs than there are differences (Kennedy & Drennan, 2002; Walker, 2000).  This is a shift from previous research which stated that women business owners were different from men on aspects such as motivation, risk taking and aspirations for business growth (Brush, 1992; Cromie, 1987; Rosa, Carter & Hamilton, 1996; Stevenson, 1986). In reviewing the current literature related on the entrepreneurial intentions of women, Kennedy and Drennan (2002) highlight the advantage of examining the entrepreneurial intention prior to start up phase, as there is "no danger of confusing determinants of entrepreneurial behaviour with characteristics that develop as a result of starting a business" (p75).


Leadership for Successful Design: Actions of Project Leaders to Achieve High Quality Design

 Christina Alsnäs, Mikael Frödell, Martin Jaworski, Martin Johansson and Frank Schatter

Chalmers University of Technology, Göteborg, Sweden




A vast number of construction projects contain a large number of defects which result in increased costs. These defects may occur in the construction phase or in the designing phase due to human failure, lack of commitment or problems in the communication. The objective of this study is to identify important factors which by different acts performed by the project leader will result in successful design concerning the users’ expectations. To identify these factors and acts a case study has been conducted on a cross-functional project team designing a complex construction. Two consultants, the supporting function, the design manager and the project leader from the team were interviewed to elucidate the factors and acts they consider crucial for project success. Another three project leaders were interviewed to get a more generalised view of the factors and the leader’s acts. Theories concerning leadership, group dynamics and successful projects have been used to analyse the findings. The study shows that project leaders need to spend a great amount of time on being a social leader. This leadership role concerns mediating in conflicts and giving constructive feedback.In the construction industry the construction defects represent a great part of the total project cost. These defects occur in both the production and the design phase. Reasons to the defects vary, but the majority occurs due to human failure, lack of commitment or communication problems (Josephson and Hammarlund, 1999). A great proportion of the defects is results from badly performed leadership and can be avoided if the project leader keeps the co-workers informed and committed.


 e-Logistics: The future of the Automobile Industry in the USA

 David Kung, Ph.D. and Linda C. Gordon, J.D, University of La Verne, La Verne, California




The intent of this paper is to set the groundwork for the analysis of the impact of E-commerce on the automobile industry in the United States based on recent maturity in certain Information Technology.  Automobile manufacturing and retailing of such products has been greatly affected by such advancement.  On-line retailing has been maturing in the USA for the past six years, in particular, in the Business-to-Consumer (B2C) area.  Automobile industry has to capitalize on this gain beyond the traditional information sharing.  In addition, the major impact of the e-commerce environment will likely be in the Business-to-Business (B2B) area.  The B2B area is estimated to account for more than 70% of the total transaction volume in the years to come.  The first part of this research will address the impact Information Technology has in the manufacturing end of the industry.  Then the other end of the Supply Chain will be discussed based on recent developments in the consumer sector in regards to the use of Information Technology in the E-commerce environment and their impacts on the consumer expectation from the automobile industry.   Online transactions will be explored.   The next part of the research will concentrate on the current and potential developments in the B2B area of the E-commerce world regarding the relationships between manufacturers and suppliers, such as e-supply management and e-postponement.  Finally, the overall re-engineered Supply Chain of the automobile industry and the corresponding responsibilities of each entity and relationship to each other will be presented and discussed.


The Case Analysis on Failures of Enterprise Internal Control in Mainland China

 Ta-Ming Liu, Hsing Wu College, Taiwan




The establishment of a well-designed internal control mechanism has become a legislative requirement for enterprises and has won widespread support and participation from enterprises around the world.  A proper and complete mechanism of internal control does not only ensure the adding and retaining of asset value and boost the economical efficiency for the enterprises; that mechanism also helps achieve strategic goals of the enterprises.  In Mainland China, however, the reality of enterprise internal control does not completely measure up to the standard.  Most of the enterprises in China have not yet accomplished a build up of an effective internal control mechanism; in fact, some of the enterprises do not even have a mechanism.  The lack of internal control leads to destruction of some of the enterprises eventually.  Through case analysis of enterprises in Mainland China, one can find revealing evidence that shows a worsening situation in which fiscal misconduct, fraudulent financial reporting, illegal activity and law-breaking behavior exist far more commonly in enterprises and business sectors in Mainland China.  Thus, how to establish and implement internal control in such enterprises and boost the efficiency and effectiveness of their operation are subjects that require further and detailed study.  This paper uses Asia Enterprise as an example to discuss the reasons of internal control failures and propose suggestions for improving them.


Profitable Technical Trading Rules for the Italian Stock Market

 Dr. Massoud Metghalchi, University of Houston-Victoria, TX

Dr. Yung-Ho Chang, Tunghai University, Taiwan




This paper tests two moving average technical trading rules for the Italian stock market. Our results indicate that moving average rules do indeed have predictive power and could discern recurring-price patterns for profitable trading. Moreover, our results support the hypothesis that technical trading rules can outperform the buy-and-hold strategy.  Fama (1970) defined an efficient financial market as one in which security prices always fully reflect the available information; any new information will be quickly and instantaneously reflected in prices. Furthermore, since news on any company, by definition, is unpredictable (arrives randomly), price changes will be unpredictable or follow a random walk.  Fama made a distinction between three forms of Efficient Market Hypothesis (EMH): (a) the weak form, (b) the semi-strong form, and (c) the strong form. Advocates of the weak-form market efficiency hypothesized that investors could not drive profits above a buy-and-hold strategy using any trading rule that depended solely on past market information such as price or volume, implying that technical trading rules are useless.  After more than three decades of research and literally thousands of journal articles, financial economists and practitioners have not yet reached a consensus whether technical trading rules could discern recurring-price patterns for profitable trading. The overwhelming majority of financial economists support the “weak-form” efficient market hypothesis. This is because much of earlier research supported the random walk hypothesis. While the semi-strong form of EMH has formed the basis for most empirical research, the following studies have long supported the weak-form market efficiency: Larson (1960), Osborne (1962),  Alexander (1964), Granger and Morgenstern (1963), Mandelbrot (1963),  Fana (1965), Fama and Blume (1966), Van Horn and Parker (1967), Jensen and Benington (1970).


The Reaction of Bank Stock Prices to the IMF Term Loans in the International Currency Crisis in 1997

 Dr. Zhaohui Zhang, Long Island University - C. W. Post, Brookville, NY

Dr. Khondkar E. Karim, Rochester Institute of Technology, Rochester, NY




In this paper, we study how the IMF term loan announcements concerning South Korea in late November and early December 1997 affect informed trading of the equities of the U.S. international lenders in South Korea. Using the market model, we test whether the foreign exposure levels of different lenders can be distinguished and used by investors to rapidly price the lenders’ stocks proportionally in international currency crisis. The evidence indicates that the market is informationally efficient in trading the lenders’ equities during the IMF assistance of South Korea in late 1997 as investors incorporated the foreign exposure into pricing their bank equities fairly rapidly and proportionally. There is a significant positive relationship between the banks' equity prices and their respective exposure levels on the event days. This relationship is not shown on the nonevent dates.


 Japanese ‘Mini Banks’ Retail Banking Services through Convenience Stores

 Dr. William V. Rapp, The New Jersey Institute of Technology, Newark, NJ

Mazhar ul Islam, International University in Germany, Bruchsal, Germany




This paper analyzes how leading Japanese convenience stores (CVS) have organized themselves over the last two decades to offer services that are typical to the services of retail banks. These stores act as “mini banks” and offer services such as loan repayments, utility bill collections, online purchase payments, bank deposits, funds transfers between accounts, and credit cards that include consumer loans. In addition, most of the stores have installed automated teller machines (ATM) and multimedia kiosks (MMK) to offer more sophisticated financial services. Since there is a high concentration of CVS that are open 24 hours a day and seven days a week in the urban areas, busy individuals make good use of their services outside the normal banking hours and give these mini-banks a unique advantage over traditional bank branches.  The two main drivers of the evolution of “mini banks” are CVS’ strengths in strategic application of information technology and opportunities in financial sector, which resulted from a series of reforms that the government initiated over the past two decades combined with weakness among Japan’s traditional banks.  Leading CVS have strategically combined these two drivers in developing their “mini banks”, while exploiting their 24 X 7 advantage and a flight to safety among many consumers.  This “mini bank” model creates value for CVS in three ways.  First, it generates commissions from financial transactions, and second it increases extra traffic to the stores thus reducing overhead that in a traditional bank branch would have to be fully charged against banking services. Finally it enhances customer loyalty through some unique services for which customers come back to a particular CVS chain. This unique model, thus, offers an interesting banking paradigm that could be replicated in other parts of the world if similar environments and opportunities exist.   


 Government Revenue, Private Welfare, and Tax Reform in a Small Open Economy

 Dr. Chi-Chur Chao, Chinese University of Hong Kong, Shatin, Hong Kong

Dr. Bharat R. Hazari and Dr. Pasquale M. Sgro, Deakin University, Victoria, Australia




This paper examines the welfare and revenue effects of consumption and income taxes in a general equilibrium model with variable supply of labour and public goods.  We derive the optimal consumption and income tax rates for such an economy.  It is established that it is better to lower the income tax rate and increase the rate of consumption tax when this economy is in a downturn. The issue of tax reform has been in the forefront of government policy making in many countries.  In this reform there is a trend to adjust the tax burden away from personal income taxes towards consumption taxes.  For instance (on July 1, 2000) the Australian government cut personal income taxes by $12 billion and implemented a 10% across the board goods and services tax (GST) for compensating the loss in tax revenue.1 In a similar spirit, the Singapore government approved (on May 3, 2002) a cut in personal income taxes from 26% to 22% was immediately accompanied by a hike in the GST from 3% to 6%.2


 The Ultimate Organizational Change: From Public to Private Sector A UK Based Case Study

 Dr. David Cooper, University of Salford, Salford, UK




Informed by the UK Government led context of ‘Rethinking Construction’ and ‘Commitment to People’, this paper provides dialogue as to how Public sector organisation’s can be supported toward making the transition to managing and behaving commercially while continuing to focus on the provision and continuous improvement of an effective service.  Key issues discussed examine Political and social responsibility, potential sector differences as to internal organisational culture, the role of HEI’s in assisting change, the assessment and specificity of training needs, implications for systems and procedural change and the need for ongoing cultural and climatic development.  A work in progress case study is used to aid illustration, explanation, and allow scope for reflective commentary. The case describes the factors affecting a Metropolitan Borough (Local Government) Council Housing division as it attempts to move toward adopting a private sector capital structure and private sector management techniques.  Findings will be of interest to managers of public services, regardless of the country of origin.  In essence, the case chosen is one of four key medium- to long-term interventions that the University of Salford, Manchester, UK is currently involved.  It provides an insight as to the process of change that is leveraged by the decision to transfer housing stock from Council to private sector Housing Trust ownership.  A change that entails restructuring of the new organisation’s financing arrangements and work practices.  The process may sound simple, but it affects the very foundation of the organisational culture – ‘the way they do things around there’.  In many ways, such organisations need to pull and push their way through a process of organisational metamorphosis. 


 Cross-Cultural Differences in Perceptions and Acceptance of Biometric Devices for Information Security

 Dr. Janette Moody, The Citadel, Charleston, SC




Organizations throughout the world are introducing biometric devices into various sections of the economy for various reasons.  What began as a security feature for a limited number of government organizations has been adapted to such diverse uses as paying for school children’s lunches to tracking employees’ work attendance.  From an organizational perspective, justifications for use of biometric devices are plentiful.  However, public perception of these devices may be quite different from management’s, not only within a single culture, but also between cultures.  These perceptions in turn will influence public willingness to accept and use biometric devices. Although employee and customer/client usage of biometric devices can be mandated, a more productive alternative might be to understand their perceptions and address those specifically through education and information This paper describes common types of biometric devices and their current use in organizations, provides an overview of the cross-cultural research project, presents findings from the initial phase of the project, and concludes with future direction of the final project.


 The Changing Tax Regulation and Corporate Cash Dividends: The Experience of Companies Listed on the Jordanian Capital Market

 Ghassan Omet, The University of Jordan, Amman - Jordan




The numerous published theoretical and empirical papers have kept dividend policy in its prominent status in the corporate finance literature. However, much of the empirical research has been applied on companies listed on advanced stock markets.  Employing the panel data methodology, this paper examines the dividend policy behaviour of companies listed on the Jordanian capital market. Based on the time period 1989 - 2002, the results indicate that Jordanian companies follow stable cash dividend policies. In addition, the results indicate that the 1996 imposition of a 10 percent tax rate on dividends did not lead to any significant change (reduction) in regular dividend payments. Finally, it is concluded that following the change in the tax regulation, listed Jordanian companies followed a greater degree fo smoothing in their cash distributions.Corporate finance can be thought of as the study of three main issues. First, in what long-lived assets should firms invest? The term capital budgeting is used to describe the process of making and managing expenditures on long-lived assets. Second, how can firms raise funds for their required capital investment projects? This question involves determining the “optimal” capital structure. Third, what proportion of net income should companies distribute to their shareholders (dividend policy).


Teaching Workloads of Marketing Program Leaders and Faculty and Criteria for Granting Load Relief

 Ron Colley, Ph.D., State University of West Georgia, GA

Ara Volkan, Ph.D., Florida Gulf Coast University, FL




Traditionally, teaching workloads in institutions of higher education are determined based upon types of degrees offered, American Assembly of Collegiate Schools of Business - International (AACSBI) accreditation status, and governance characteristics (i.e., public or private).  Since public institutions are funded by state legislatures and usually operate under authoritative bodies such as boards of regents and chancellors, they have to follow guidelines for teaching activities that originate from these sources.  Consequently, it is usual to find an official (i.e., maximum) teaching load specified in most states. However, there are few faculty members who teach the official or maximum load.  Given expectations of research and professional service, most marketing faculty members have an average (i.e., common) teaching load that is less than the specified maximum.  Thus, in most marketing units there are faculty members who may teach the maximum, common, or above or below the common load due to above or below average expectations in research and service. The two primary objectives of this research are to determine: 1) common teaching loads in semester hours, the common number of course preparations, maximum teaching loads, and the extent to which faculty and program leaders in given marketing programs teach different levels of loads; and 2) the reasons why faculty members teach different loads.  One motivation for this study is to provide marketing faculty and program leaders with empirical evidence that can be used to support their requests and decisions concerning teaching workloads and load relief when they negotiate with administrators, change jobs, or fill positions.  Given increasing pressures for doing more with less and calls from some legislatures to mandate minimum teaching loads, marketing faculty and program leaders need to have more than anecdotal evidence at their disposal and be informed how the level of their teaching workloads compares to those at institutions with characteristics similar to theirs.  The nation-wide results reported in this paper can be used for such comparisons during discussions with administrators and when recruiting or interviewing for jobs.


Executive Incentive Contracts and Privatization: Evidences from Transport Infrastructures

 Dr. Risharng Chiang, National Taiwan University, Taipei, Taiwan




This paper codifies and relates critical executive incentive-contracting issue to the unique principal-agent circumstances generated from privatization of transport infrastructure. It provides a framework for designing incentive contract. In the mathematical concept, an integrated multitask agency and common agency were modeled. In empirical explorations, evidences show first that when transport service consumers view the output of tasks as complementary, CEOs should be given lower-powered incentives from the Board and higher-powered incentives from the Government. For government, to encourage efforts allocated to primary transport service, less complementary second activity should be discouraged. Second, when uncertainty across tasks is highly correlated, CEOs should also be given lower powered incentives. From incentive regulation perspective, higher-powered incentive should be given when the relationship is positive and lower when it is negative. All of these predictions are confirmed by the empirical data.


The Impact of Organizations’ Use of Information Technology on Individual Privacy Rights

 Dr. Stanley J. Birkin and Dr. Gary Poe, University of South Florida, Tampa, FL




Organizations are composed of individuals who are involved with creating and maintaining a society in which there are practices, procedures, rules, roles, hierarchies, structures and traditions. Within organizations, expectations and rights are spelled out through these mechanisms.  Organizational activity is affected both by changes in technology and the adoption of that technology in business environments designed to resolve problems and exploit opportunities. These changes are more than just changing the way a person works but also involve the changing of people and their attitude toward the environment. In this paper, we shall focus on the privacy expectations and rights that arise in an organizational setting and we shall examine and assess the impact of rapid and pervasive information technology adoption. We extend the idea and apply the concept of the Panopticon to a modern setting of the workplace in which information technology is being deployed.  Over the past fifty years, Information Technology has made it possible for organizations to collect data more cheaply. Also, with the early information systems, there was a practical limit to the amount of data that could be collected because of the physical limitations of storage devices and retrieval capabilities. The Law of Demand and Supply states that the cheaper a good is, the greater is its demand. So, with the continuing reduction in the costs of capturing, storing and retrieving data we have seen the resulting accumulation of more and more data about various organizational activities and people (clients, employees, etc). Organizations are both adopting information technology systems and implementing complex software solutions that involve more data collection then ever before. 


Deregulation and Globalisation: Process, Effects and Future Challenges to Air Transport Markets

Dr.  Zhi H. Wang, Charles Sturt University, Albury, Australia




Through a sequence of investigations and empirical analyses, the research identifies that there is a difference in the liberalisation processes of North America (NA), the European Union (EU) and the Asia Pacific civil aviation markets (AP). This has impacted on the configuration of strategic airlines alliances. Airlines in more liberal markets have formed a larger scope for strategic alliances. Essentially, liberalisation and strategic alliances are beneficial to economic development and therefore should be pursued simultaneously in reducing the current existing barriers to entry into the regulated air transport market. Currently, increased complexity in the international business environments stem from a number of sources that pose long term issues, which further challenge the globalisation process and approaches. Further analytical results suggest two directions, that future air transport market consolidation and fragmentation that will have implications for both route structure and fleet issues.


Customer Relationship Management: Critical Issues in Implementation

Dr. Phani Tej Adidam, University of Nebraska at Omaha, Omaha, NE




Customer Relationship Management (CRM) is an important tool for creating customer value.  CRM benefits organizations with increased revenue and sustainability in the market place. Many companies focus on CRM, but fail in their endeavor.  However, the rate of success among CRM implementations indicates there is room for improvement. Therefore, what are the key success factors needed to facilitate positive and enduring customer relationship management? This paper contends that it is the implementation process that is flawed, and therefore explores the key factors of a CRM implementation, which companies must plan and execute to be successful. There are four key areas that this research has identified as focus areas to develop, and execute.  The focus areas are 1. People and Culture, 2. Process, 3. Technology, and 4. Metrics. The paper explicates these areas in greater detail.


Natural Environmental Disclosures of Pomsox Entities

 Alistair M. Brown, Ph.D., Curtin University of Technology, Perth, Western Australia




This paper empirically examines the level of natural environmental disclosures (NED) in annual reports of all Port Moresby Stock Exchange (POMSoX) entities of Papua New Guinea for 2002, with a specific focus on the effects of industry type, entity type, stock exchange listing and size on NED.   Unsurprisingly, the results of the study found a low level of NED consistent with what Brown and Tower (2002) coin a Traditional Reporting Model, although POMSoX entities showed a much higher level of NED than their Pacific Island Countries counterparts. A number of reasons are put forward for the low level of NED. Firstly, the low level of consciousness in Papua New Guinea of the western idea of natural environment issues may preclude a concern for disclosing NED in the annual reports of POMSoX entities. Secondly, the developmental stage of the accounting profession in Papuan New Guinea may mean accounting resources are concentrated on conventional accounting issues, such as the profit bottom line, rather than the triple bottom line.  And thirdly,  the lack guidance on natural environmental reporting issues by the International Accounting Standards Board (IASB) and the listing requirements of the Port Moresby Stock Exchange, from which POMSoX entities draw their guidance,  may dull the incentive to disclose environmental issues.


Matching Information Technology Services and Needs

Dr. Rimvydas Skyrius, University of Vilnius, Vilnius, Lithuania




The role of information technologies in servicing management information needs, despite having grown impressively over the few last decades, still creates controversy, especially at the complex end of the information needs spectrum. This research is based on interviews with business decision makers and examines their information activities, needs and role of information technologies in satisfying these needs. The programmed nature of information technologies is not always beneficial to serve dynamic activities and environment. It is concluded that the information users prefer simple and easy-to-use methods and techniques which leave more space for thought provoking and creativity.  Over the last ten or so years, more and more cases have been encountered when information technology has been named one of the critical, if not the most critical issue and competitive resource in rational human activities, such as business, research or governance. The last couple of decades have been marked by kaleidoscope changes and turbulent developments in information technologies (IT), which in their own turn have launched huge expectations of payoff and competitive advantages. The reality has presented the users of IT with not-so-ambitious results, including the quality of information products, services and systems.


The Acceptance Usage of Online Travel: A Study on Malaysian Travelers

Raja Mazhatul Yasmin, Universiti Malaysia Sarawak, Malaysia


The emergence of the Internet has fundamentally changed the way people do things.  Nowadays, the technology has become a significant tool in many aspects of people’s lives; either at home, in school, at work, in government or in leisure activities.  The number of world Internet users estimated until May 2002, has reached 580.78 million, the highest proportions coming from Europe (32%), followed by Canada and USA (31.5%), Asia/Pacific (29%), Latin America (5.7%), Africa (1.1%) and the Middle East (0.9%) (Nua Internet surveys 2002). Internet consumers were projected to double to 1 billion by 2005 (Iconocast 2001).  A report from NUA Internet surveys showed that 5.7 million Malaysians had used the Internet as at December 2001 which is an increase of 5.67 million since 1997.  One of the factors contributing to the positive growth of Malaysian Internet users is because the country has the second lowest dial-up Internet prices in South East Asia (ITU 2002). Hence, the raising number of Internet users shall greatly increase the opportunity of the Internet and web access. 


Non-financial Issues of Mergers and Acquisitions:  Cases from the Croatian Banking Sector

Marija Tomasevic Lisanin, Ph.D., Ivan Lovrinović, Ph.D., and Mirko Palić, University of Zagreb, Croatia




Globalization of the economy is one of the main driving forces fuelling changes in the strategy formulation and management process in the organizations regardless of their size and sector. In the attempt to consolidate market position or to enhance value creation process for their customer, companies from manufacturing, retailing, food, services, oil and other areas, challenged by the increased competition deriving from liberalization of national economies and a need to conquer new markets apply new business strategies characterized by building networks of relationships or forming strategic partnerships and alliances with others. However, one of the most popular choices in a range of business growth strategies, in last two decades, became a full integration of companies through mergers and acquisitions. Financial sector, with banking as its most important part has been strongly influenced by changes in competitive framework in Croatia. International banks, as a part of their strategies of increasing regional or global presence acquired control stock packages in a great number of local Croatian banks. In addition, number of the mid-sized or small Croatian banks wanted to consolidate their market position by integration of their business and have done it though mergers. Such changes were of the highest importance for participating bank mangers, their employees and clients, and therefore required well-prepared and thoughtful program of change management. As the wealth of empirical and theoretical data indicate, many mistakes in change management process can be linked directly to, and have causal connections with, breakdowns in communications. Such breakdowns in a great number of cases led to the failure of the entire endeavor.


Dimensions of Customer Satisfaction and Market Segmentation of Hong Kong Supermarket Industry

Helen K. W. Or and Geoffrey K.F. Tso, City University of Hong Kong, Kowloon, Hong Kong SAR, China




The present study attempts to find out indicators and a factor structure suitable for measuring customer satisfaction and to undergo market segmentation towards the Hong Kong supermarket industry. Factor analysis is conducted and 21 indicators are grouped into five dimensions labeled convenience, personal interaction, physical aspects, promotion and technical quality. Cluster analysis technique is then employed to segment the market into 3 clusters based on customers’ scores of importance level towards the five dimensions. A new measurement scale on customer satisfaction can be introduced and conclusions are stated out at the end.  In this increasingly competitive world, customer satisfaction is a critical success factor for servicing industries, not to mention the rapidly expanding grocery giants market – supermarkets. As reported by the Hong Kong Consumer Council in August 2003, the two market leaders in total have grown 29% in terms of the number of retail outlets in the past 10 years. This shows that supermarket becomes more and more important in people’s daily life compared with 10 years ago. Supermarket industry is facing fierce competitions in recent years and is no longer an era of just providing what customer needs. Instead, due to the presence of vigorous competition of potential new entrants, supermarket operators are facing much more difficulties. Parkn’ shop, Wellcome and many potential new entrants are now competing with the same market and they sum up to have over 90% market share in total. In order to fight for continuous profit growth, it is extremely important to make customers satisfy and loyal.


Power Indices and Evaluating the FLP Minority Discount

Dr. John L. Teall, Pace University, New York, NY




This paper proposes application of power index models prevailing in the game theory literature to the valuation of control in Family Limited Partnerships (FLPs). While the FLP is highlighted in this paper because of recent attention in the tax and financial planning literature, the real aim of this paper is to apply the power index models to valuation in more general business and corporate settings, ranging from Real Estate Investment Trusts (REITs) to dual equity class firms. At issue here is the fact that the one-share one-vote rule applicable to the governance of most business firms provides for proportional voting power that differs substantially from proportional shareholdings of investors. This problem is particularly acute in small firms and partnerships where several (or many) shareholders may hold significant proportions of shares. This paper reviews well-known game theoretic algorithms (weighting or vote assignment schemes) for the alignment of power with proportional shareholdings. It also provides a simple measure of the "mis-alignment of power from proportional shareholdings" and discusses its application in determining more equitable vote re-assignment schemes.


A Paradigm Shift in Personal Injury Litigation in Hong Kong -- the Actuarial Perspectives

Dr. Wai-sum Chan and Dr. Felix W. H. Chan, University of Hong Kong, Hong Kong




Hong Kong was a British Colony before 1 July 1997.  The People’s Republic of China resumed the exercise of sovereignty over Hong Kong on 1 July 1997.  The Basic Law is the constitutional document for Hong Kong.  It sets out that the English common law system previously in force in Hong Kong shall be maintained.  Conventionally, the Hong Kong Courts follow the English authorities in choosing multipliers in personal injury litigation.  Most judges select the multiplier by reference to a spread of multipliers in comparable cases from England and Hong Kong.  The House of Lords in England recently made a significant judicial decision which approved actuarial evidence as the primary method of assessing future pecuniary loss.  This research paper examines the paradigm shift in personal injury in Hong Kong from the actuarial perspectives.  When an innocent party is injured in a tort-based system of law as the result of the wrong of another party, the innocent party should be awarded adequate and proper compensation.  The basic principle underlying the assessment of the quantum of damages is restitutio in integrum.  This principle has been defined in various dicta of the courts. For example, Lord Blackburn(1) has stated:


Connection between Commonly used Financial Ratios and Misrepresentation of Financial Statements of Collapsed Corporations

Ghassan Hossari, Ph.D. Candidate, Deakin University, Melbourne, Australia

Dr. Sheikh Rahman, Swinburne University, Melbourne, Australia




This paper unravels dynamic and intriguing shifts in the use of financial ratios in signaling corporate collapse. An empirical examination of the anecdotal evidences from notable recent corporate collapses coupled with the short-lived usefulness of financial ratios in various prediction models suggest that companies(1) that deliberately misrepresent their financial statements may have taken cues from the ratios that are commonly investigated. This proposition is supported by an extensive examination of over 50 studies conducted between 1968 and 2002.  The erosion in the reliability of numbers in financial statements has led to significant distortions in the predictive power of financial ratios when used in signaling corporate collapse. Recent collapses such as Parmalat in Europe, Enron and WorldCom in the U.S. and HIH in Australia, present yet another reminder that financial statement items are being misrepresented. These are all large corporations with well-established household names, and are for sure closely monitored by financial communities around the globe. Nevertheless, a common thread seems to link the collapse of these companies: none of these collapses were foreseen by credit rating agencies or foretold by the widely accepted bankruptcy prediction models. Why? This paper attempts to use some anecdotal evidence in order to provide logical explanations to the existence of such a common thread. It argues that there appears to be anecdotal evidence to suggest that directors of publicly listed companies that have collapsed may have deliberately misrepresented financial statement items.


Will the Health Boom of the Baby Boomers Result in an Asset Market Meltdown?

Sarwat Jahan, Cornell University, Ithaca, NY




In an overlapping generations model with rational expectations, this paper tries to analyze whether the baby boomer cohort will have an impact on financial markets. This paper finds that a one–time baby boom followed by a baby bust increases the price of capital when the boomers are working and hence saving for retirement. This finding seems to explain the increase in the stock prices in the 1990’s when most of the boomers were at their peak saving years. This model predicts that when the baby boomers retire the price of capital will fall resulting in “asset market meltdown”. If there is an increase in the longevity of baby boomer cohort, the price of capital will increase as long as this generation is working. However, when they retire the price will fall, re-enforcing the “asset market meltdown” hypothesis. Hence, this generation will be worse off in retirement.  Many believe that the increase in the US stock prices during the 1990’s was mainly attributable to the baby boomer cohort. According to this explanation, as the baby boomers began to save for retirement they drove up the price of capital. Therefore, there are concerns on whether the price of capital will decline as this generation begins to retire in the next decade.


A Decision Support System for Intent Detection based on Non-Verbal Behavior and Gestures

Judee K. Burgoon, Mark Adkins, John Kruse, Matthew L. Jensen, Amit Deokar, Douglas P. Twitchell,

Dr. Jay F. Nunamaker, Jr., Center for the Management of Information, University of Arizona, AZ

 Shan Lu, Dimitris N. Metaxas, Computational Biomedical Imaging and Modeling Center, Rutgers University

Robert E. Younger, Space and Naval Warfare Systems Center – San Diego, CA




Past research in deception detection at the University of Arizona has guided the investigation of intent detection.  A theoretical foundation and model for the analysis of intent detection is proposed.  Available test beds for intent analysis are discussed and two proof-of-concept studies exploring nonverbal communication within the context of intent detection are shared.  Each nation has the obligation to safeguard its homeland against deception and infiltration by adversaries who may be planning hostile actions.  Creating and supporting such a safeguard poses one of the most daunting challenges in the 21st century. Achieving high information assurance is complicated not only by the speed, complexity, volume, and global reach of communications and information exchange that current information technologies now afford, but also by the fallibility of humans in detecting hostile intent. All too often, the people protecting the borders and public spaces are handicapped by untimely and incomplete information, overwhelming flows of people and materiel, and the limits of human vigilance. Moreover, the vulnerabilities posed by human agents are exacerbated by the very same technologies that enable amassing the glut of information to be sifted, analyzed, and synthesized.


Healthcare Data Warehouse Analytics in the Courtroom

Dr. Donald J. Berndt, Dr. John W. Fisher, and Dr. James Studnicki

University of South Florida, Tampa, FL




The healthcare industry in the United States is characterized by a myriad of stakeholders including: direct providers of care, health maintenance organizations, hospitals and hospital systems, a variety of insurance companies, and the ultimate consumers – patients.  The interrelationships between important stakeholders are sometimes governed by formal agreements and contracts, bringing the courts into the health planning process.  In this paper, a court case involving a non-competition agreement between a surgeon and clinic provides an example of judicial activity in this area.  A comprehensive data warehouse of Florida healthcare data, being developed at the University of South Florida, was used to analyze the data pertaining to the case.  Example exhibits from the case are used to illustrate the various analytic approaches.  The healthcare industry in the United States is characterized by a myriad of stakeholders including: direct providers of care, health maintenance organizations, hospitals and hospital systems, a variety of insurance companies, and consumers.  Though there have been calls for nationwide health planning, the system is really a mix of market forces and state-specific regulatory policies, with federal government involvement through the enormous Medicare and Medicaid programs.  As noted in an interim report on the Florida certificate of need program, a reasonable market structure can be elusive [1].


Financial Reforms and Credit Supply: An Application to the Jordanian Banking System (1982 – 2002)

Khaled Al-Zu’bi, The Hashemite University, Jordan (DID NOT PAY THE REGISTRATION FEE)

Ghassan Omet, The University of Jordan, Jordan




Financial intermediaries (banks) and markets (stock markets) are supposed to ameliorate information and transaction costs and thereby foster a more efficient allocation of economic resources. The empirical literature supports the various theoretical models that emphasize the positive impact of banks (and stock markets) on economic growth.  Given the relatively large size of the Jordanian banking system, this paper focuses on two main questions:  First, has the 1989 interest liberalization had any impact on the lending activity of the Jordanian banks? Second, are main - stream determinants of bank credit applicable to the Jordanian banking sector?  Based on the empirical results, it is concluded that the 1989 interest rate liberalization has led to a decrease in the lending activity of Jordanian banks. In addition, the results indicate that much of main-stream determinants of credit are applicable to the Jordanian banking sector.  Famous economists have provided conflicting arguments about the importance of financial intermediaries (banks) and financial markets (stock markets) in economic development. On the one hand, Joseph Schumpeter (1934) argued that financial intermediaries play a positive role in economic development because they allocate society’s savings to various types of borrowers. Joan Robinson (1952), on the other hand argued that financial development follows economic development.


Job Preferences and Job Attainments of Hong Kong Graduates: A Study of Accounting and Management Majors

Dr. Mary Pang and Dr. To-ming Ho, City University of Hong Kong, Kowloon Tong, Hong Kong




This paper explores the job preferences and job attainments of accounting and management graduates in Hong Kong, and endeavours to identify whether significant differences exist in the job preferences and employment patterns between Accounting majors (considered to be “specialists”) as opposed to Management majors (regarded as “generalists”).  It is speculated that accounting graduates are likely to have strong job preferences in their choice of employment. Given the opportunity, it is argued, they would aspire towards the “professional service firms” (Morris and Empson, 1998). However, it is also proposed that their job preferences may significantly diverge from their job attainments, and which sector they eventually end up in their initial entry into the labour market is largely determined by the economic situation. In contrast, it is proposed that management graduates do not have such strong job preferences. But similar to the accounting graduates, the job attainments and sector of entry into the labour market of these management graduates are also, if not more so, dependent on the changing labour market conditions.  There is a wealth of literature on the sociology of the professions, and the concept of ‘professionalisation’.  Here we will not evaluate the various schools of thought, but instead will extrapolate a working definition of the professions in order to proceed with our main objective which is to understand the attraction of entry into the professions, and why there is a prevalence for accounting graduates to aspire to enter into the accounting professions or associated professional services. 


Derivative Accounting Changes and Equity Market Reactions

Dr. Feng-Shun Bin and Dr. Leonard Branson, University of Illinois at Springfield, IL

Dr. Dar-Hsin Chen, Tamkang University, Taiwan




This study examines whether US equity investors earn abnormal returns around an update in derivative accounting standard.  The results show that the stock market reacted positively and significantly to the introductions of FASB Statements 119, 133, 138 and 149.  FASB Statement 137 that delays the derivative reporting compliance date, however, does not come with significant market anomaly.  Furthermore, stock reactions vary across firms of different sizes, industry groups, originating countries, listing regulations and disclosure requirements.  We conclude US GAAP changes that demand additional derivative disclosure signal improved information transparency to the stock market, and cause discrete wealth benefit. Accounting professionals have been blamed for practicing financial reporting too lavishly to identify potential financial problems that lead to various market breakdowns, ranging from the derivative market bloodshed (e.g., Orange County bankruptcy) to the falsified earnings vaporization (e.g., Enron and World Communications collapse).  As part of the solution, the public demands that accounting information be as transparent and complete as possible.  The financial reporting policy makers, Financial Accounting Standards Board (FASB) among them, have been striving for continual updates in General Accepted Accounting Principles (GAAP) to extend the financial disclosure of publicly traded firms. 


Financial Accounting of Suburban Trees

Alistair M. Brown, Ph.D., Curtin University of Technology, Perth, Western Australia




This paper examines the possibilities of accounting for suburban trees by local councils and the business community of Australia. Taking a utilitarian view of the value of trees, it posits a way of recording suburban trees, which not only follows the traditional accounting practices of the Australian Standards Setting Board, but also encompasses the idea of sharing ideas from the disciplines of the environmental sciences and civic management to improve the lot of suburban residents. By using their techniques, local councils and business entities may be able to account for suburban trees as non-current assets.  But accounting for suburban trees requires more than mutli-disciplinary interfacing, it also requires a willingness to share and take on reporting responsibilities. By acknowledging the relevance of suburban trees, there is considerable opportunity for accountants to use classical accounting techniques to identify accurately the value of value of trees and therefore provide useful and relevant information to the business community.  Australia is a small open economy (Bharucha and Kent, 1998) although it has recently been classified as the world’s tenth largest OECD economy (European Parliament, 2004) and the world’s sixth largest country by  land area (Geoscience Australia, 2004). Its area of mainland and small fringing islands covers some 7692024sq km, but its total population is only small: 20 million people.


An Analysis of the Discourse of Turkish Print Advertisements from a Gender Perspective

Dr. Erdogan Koc, Dogus University, Istanbul, Turkey




This article explores the extent to which gender differences are taken into account in the design of Turkish magazine advertisements from an information processing perspective. Through a content analysis, the study particularly establishes that it is possible to draw many parallels between some of the most commonly known and significant international studies on gender and information processing and the print advertisements in Turkish magazines.The increasingly changing role of females in society in many countries in the last few decades, coupled with a transition of consumption from a generally physiological activity towards to a generally psychological one, especially in developed and developing countries (Chisna1, 1995), has made it clear that women as consumers can no longer be ignored by marketing practitioners (Jaffe and Berger, 1988; Shimp, 1993; Chisnall, 1995; Solomon, 1996; Fitzgerald and Arnott, 1996; Tellis, 1998; and Fill, 1999).  Many marketing practitioners have begun to see the need to understand the differences between the two sexes and to continuously adapt their marketing strategies, from product design to marketing communications and pricing to making their goods available, to the gender characteristics of their potential customers.  Given the fact that the size of the Turkish advertising industry has reached $1 billion, and that print advertising constitutes 31% of this figure (Reklamcilar Dernegi 2000), it is worth investigating whether marketing communicators find international research studies in the field of gender and information processing relevant and, if so, the extent to which they make use of these studies.


Workplace Spirituality: The Transition Between Mind and Matter in Business Management

Dr. L. Hernández, Dr. R. Ramos, and Dr. S. Ramos, Universidad de Las Palmas de Gran Canaria




Spirituality at work is a longing sought-after variable, it is linked to positive results for business management, make organizations grow faster, increase efficiencies and it is positively related to employee work attitudes. While there are some authors claiming that employees search for spiritual meaning in their workplace and motivate organizations to assume and introduce a spiritual dimension in the workplace, there is empirical work pointing out to employees not desiring or expecting organizational and supervisory involvement in spirituality as it is considered as a personal issue. The paper presents a theoretical approach based on spirituality at work not being a context-free phenomenon, and the need to explore into the independent variables in order to clarify the relevance of this new emerging field to the business community. In doing so, the proposed theoretical approach aims to provide answers to the practical and revealing questions that surround the application of workplace spirituality: Why do some individuals search for spiritual meaning in their workplace whereas others - within the same organization - do not? And Why does the expression of spirituality at work occur in certain organizations and not in others? Is spirituality at work an universal phenomenon or a cross-cultural concept?


Successful Foreign Direct Investment in India: A case of Suzuki Motor Corporation

Amar KJR Nayak, Xavier Institute of Management, Bhubaneswar, India




Hundred of foreign companies have been investing in India since the 1880s and even before. Despite a long history and experience of investment by several hundred foreign companies in India, only a few companies have had consistency in their growth and profitability in India. Given the typical conditions of an industrially developing host for foreign direct investment like India, not many foreign companies have invested in India in a manner that will yield consistent growth and profitability. The direct investment strategy of Suzuki Motor Corporation is a rare case of success in India. This paper (a) analyzes the Indian automobile industry in the twentieth century prior to entering of Suzuki Motors in India, (b) analyzes the nature, timing and scope of investment by Suzuki Motors in India, (c) evaluates the performance of Suzuki Motors in term of growth and profitability in India and finally (d) discusses the significance of the Suzuki Motor’s strategy of direct investment in a developing economy like India.  The first motorcar was brought to India in 1898. Although, imports of fully assembled cars began to grow slowly, there was no local assembly of cars in India until 1928. General Motors established an assembly plant in Bombay in 1928 to assemble cars and trucks using completed knocked down (c.k.d) kits imported from USA. Following this, Ford Motor Company established assembly plants in Madras in 1930 and then another assembly plant in Calcutta in 1931. In 1942, the Birla Group established Hindustan Motors Limited in Calcutta and then in 1944, the Walchand Group set up Premier Automobile Limited in Bombay. Subsequently, the Standard Motor Products Limited established to manufacture automobiles in Madras in the year 1948.


An Oscar for the CEO: Individuality, Collaboration and Leadership in Small to Medium Sized Enterprises

Dr. Kevin M. McKenzie and Prof Neil E. Béchervaise, Institute Chamaren, Melbourne, Australia




The successful CEO bears striking similarities to the director of a blockbuster movie. Constantly seeking to achieve a long-term vision for organisational success in which every project undertaken within and by the company contributes to the strength of its eventual public reception, the CEO becomes the Steven Spielberg, Jiang Yimou or Akiro Kurasawa of the organisation. Just as a Film Director must constantly reassure producers and monitor audience expectations, adjusting filming schedules to maximise location use while minimising shooting costs, the CEO juggles a complex integration of internal and often politically charged activities and hierarchical structures against the demands of external stakeholders. Changes in the perception of clients, shareholders and, ultimately the board itself (often fuelled by media driven short-term sensationalism with little regard to its sources and readers) impact the CEOs potential for immediate strategic success and longer-term strategic development.  Presenting the CEO as the author and director (auteur) of a film involving temperamental film stars and specialised moviemakers in difficult locations with limited public funding for a fickle audience, this paper demonstrates the practical similarities between entrepreneurial start-ups and independent film companies, and specifically between CEOs and film directors. The paper argues that offering new but incrementally related products in a turbulent economic climate is similar to offering a new film by Stephen Spielberg starring Sean Penn and Nicole Kidman. Audiences can be assured by the reputation of the director and leading actors but they remain hesitantly critical of the potential for the director to repeat his previous critical successes.  


How Much International Exposure is Beneficial in a Global Portfolio?

Dr. Tulin Sener and Dr. Hadi Salavitabar, State University of New York, New Paltz, NY




While dealing with global asset allocation, two important questions arise: How much international exposure is advantageous in a global portfolio and how much of it should be allocated to emerging markets and to which ones?  We show that global diversification is still beneficial due to the lower correlations, not necessarily the higher returns, of international assets. The addition of emerging markets to a global portfolio may lower overall portfolio risk while boosting portfolio return. However, the choice of the appropriate markets or regional indexes   is a critical issue when emerging markets are included in the analysis.  The degree of international exposure and portfolio shares of DCS vs. EMS are critical questions while optimizing the return and risk for the global portfolios. Limited numbers of studies address this issue. Without taking into account EMS, Winston and Bailey, 1996 limit the weight for foreign assets to 20 percent, while Stat man, 1999 and Clarke and Tulles, 1999 increase it up to 30 to 45 percent.  As for EMS, Divecha et al., 1994 tolerate the weight up to 10 to15 percent, but it is much smaller in practice.  In the meantime, only Statman, 1999 investigates various risk tolerance levels for optimal weights of DCS stocks.  He does not consider EMS and fixed income securities, an issue that needs to be extended.


Performance Impacts of Strategic Orientations: Evidence from Turkish Manufacturing Firms

Dr. Nihat Kaya, Dr. Lütfihak Alpkan, and Dr. Ibrahim H. Seyrek, Gebze Institute of Technology, Turkey




The research investigates the effects of basic organizational cultural orientations namely entrepreneurial, technological and customer orientations on firm financial performance when market dynamism is high and when it is low. Data were collected from 91 manufacturing firms operating in The Marmara region of Turkey. The research results show that there is a positive and meaningful relation between entrepreneurial orientation and financial performance when the market dynamism is high. Also, there is a positive and meaningful relation between technological orientation and financial performance when the market dynamism is low. On the other hand, there is a negative and meaningful relation between customer orientation and financial performance when the market dynamism is either high or low. The theoretical and managerial implications are discussed.  The new developments and changes occurring in the market force firms to develop more effective and competitive cultural orientations. The attitudes and expectations direct and motivate firms along their purposes. The high performance due to adopted orientation depends on sustainable competitive advantage and powerful organizational culture. These two concepts should be combined together in order to reach valuable, unique and difficult to imitate resources. In the recent years, it can be said that the firms are emphasizing technological, entrepreneurial and customer orientation for this purpose and the level of market dynamism seems to affect both the development and the performance impact of cultural orientations. In this research, we investigate the performance effects of entrepreneurship, technological and customer orientations on financial performance of Turkish Manufacturing firms at lower and higher levels of market dynamism. 


Study on Introducing Knowledge Management in the Business Purchasing Operations --With Taiwan Manufacturing Industry as an Example

Shinn-Jong Lin, Doctorial Candidate and Dr. Chiu-Chi Wei, Chung- Hwa University, Tawain




With the arrival of Knowledge Economy, business operation is under a drastically changing environment. If a business could utilize Knowledge Management in its purchasing operation to establish a proper material-purchasing system, it will offer effective management of information related to an ever- complicated purchasing operation, and thus create business advantages. Also, the introduction of Knowledge Management will make a real contribution to the business operations.  This paper targeted the manufacturing industry of Taiwan as the object of research. It found through case interviews, sorting, induction and analysis, that (1) there is high acceptance of introducing Knowledge Management into business purchasing operation; (2) business purchasing operations should apply Knowledge Management in the control of complicated purchasing operation procedures, and establish a proper purchasing- knowledge management system that, would be very helpful for purchasing operations; (3) the introduction of Knowledge Management will boost the efficiency and quality of business purchasing operations and ensure the smooth running of production and the reduction of production cost, and, (4) by implementing Knowledge Management and coping with Information Technology tools, the knowledge related to material purchasing can be accumulated, disseminated, transferred, and passed through, to avoid the faults in the operations of a business that result from the inexperience of some individuals.


Decision Making Under Uncertainty: Probabilistic or Possibilistic?

Dr. Tufan Tiglioglu, Alvernia College, Reading, PA

Dr. Emre Kaymaz, GST, Inc. /NASA GSFC, Greenbelt, MD




In this paper, we consider the problem of decision making under uncertainty.  We use Dubois and Prade’s Qualitative (Possibilistic) Decision Theory (1998) as an alternative approach to Von Neumann and Morgenstern’s Expected Utility Theory (1944).  We propose two decision trees with the same decision alternatives and their consequences for a hypothetical hurricane evacuation scenario to capture probabilistic and possibilistic decision-making analysis.  Proposed approach assumes that probabilities assigned on each decision path are based on approximate probabilities of each action taken during a hurricane evacuation that are indicated by surveys and possibilities assigned on each decision path are based on heuristic approach. The probability and possibility distributions of all the possible states calculated by Matlab programming indicate that possibility theory may be superior to probability theory in analysis problems where subjective judgments dominate the decision analysis.  The most commonly used decision making analysis techniques for hurricane evacuation are probability analysis.  Probability theory can be a powerful tool in appropriate circumstances; however, many times the type of uncertainty encountered in hurricane evacuation decision-making does not fit the axiomatic basis of probability theory.  Uncertainty involved in real hurricane risk situations is often epistemic (relating to the knowledge of things) (Williams, 1993) and the value of each parameter affected by risks and uncertainties is often difficult to quantify.  In attempt to aid decision makers in this kind of situations we need to provide tools a decision maker in order to compare alternatives.  Therefore, we illustrate a new paradigm, qualitative decision theory, to describe the attitude of a “rational” decision-maker in the face of uncertainty.


 Perception and Development of TQM in Small Manufacturers: An Exploratory Study in India

Dr. Choong Lee, Pittsburg State University, Pittsburg, Kansas




Recently total quality management (TQM) has attracted increasing interest throughout the Indian manufacturing industries and its programs have been widely implemented.  Currently, there are few studies conducted about TQM implementation by small manufacturing firms in India, even though small firms are still dominant in many areas of manufacturing industries in India.  This study analyzes survey results of Indian small manufacturing firms to investigate the present status of TQM and its development and perception among them. Recently, the Indian manufacturing industry has been suffering from declining competitiveness in global markets.  The rise of living standards and resulting higher labor costs deprived Indian firms of a competitive edge in global markets and puts them in a very difficult position to compete against foreign competitors.  These developments surrounding Indian firms make it increasingly difficult for them to compete solely on the basis of price.  They need a strategic shift.  In order to provide continued economic growth, India must move away from its reactive, low-cost based strategy which relies on cheap labor.  Indian firms must develop a new competitive edge based on quality.


Using Threshold Error-Correction Model to Investigate Asymmetric Price Transmissions between the Real Estate and Stock Markets in Taiwan

Tsangyao Chang, Ph.D. and Yao-Men Yu, Ph.D., Feng Chia University, Taichung, TAIWAN

Chien-Chung Nieh, Ph.D., University, Taipei, TAiWAN




In this study, using a threshold error-correction model, we investigate price transmissions between the real estate and stock markets in Taiwan over the 1986Q1 to 2003Q2 period.  The results from Granger-Causality tests based on corresponding threshold error-correction model (TECM) clearly point to unidirectional causality running from the real estate market to stock market in the short run.  Furthermore, we find asymmetric price transmissions between these two markets in the long run. These findings ought to be made readily available to individual investors and financial institutions holding long-term investment portfolios in these two asset markets for their likely implications today.  Identifying the relationship between real estate prices and stock prices has been a widely debated issue within academic circles and among practitioners, alike.  Although current literature on the relationship between real estate and equity markets tends to show conflicting results, most of the empirical evidence seems to support the view that the two markets are segmented.  Goodman (1981), Miles et al., (1990), Liu et al., (1990) and Geltner (1990), for example, argue for the existence of such segmentation within various real estate markets and stock markets.  In direct contrast, Liu and Mei (1992), Ambrose et al. (1992) along with Gyourko and Keim (1992), report results that contradict that position, claiming that real estate and stock markets are in fact integrated.  The predicament faced here, therefore, is whether the two markets are segmented or integrated.  Our primary objective then is to ascertain whether any significant relationship does exist between these markets and, if so, to determine what implications it may have for active market traders. 


Exploration of the Effects of Relationship Marketing Tactics in Taiwanese Travel Service

Dr. Yi Ming Tseng, Tamkang University, Taipei, Taiwan




This research explores the effects of relationship marketing (RM) tactics on enhancing relationship quality in the services industry. Through data from banking, airlines, and travel agencies, we discuss five types of relationship marketing tactics and how they influence the customers’ perceptions about long-term relationships.  We also include customers’ inclination toward the relationship as a mediator into the model to help the framework more completely. Research findings support that tangible rewards, preferential treatment, and memberships are effective in developing customers’ long-term relationships, and behavioral loyalty is also influenced by relationship quality.  Relationship marketing has been conventionally defined as "developing," "maintaining," and "enhancing" customer relationships (Berry and Parasuraman 1991).  What are the effective methods for developing and keeping these relationships and how they work may be complex questions. Relationship marketing tactics are methods that can be actually executed for implementing relationship marketing in practice.  We would like to propose and discuss five main kinds of relationship marketing tactics in the service industry and construct the relation model of these tactics and other relationship marketing concepts. These efforts will be helpful in yielding insights in the field of relationship marketing.  Our research goal is to understand if the application of relationship marketing tactics will be helpful for developing a long-term transaction relationship. The objectives of this research are threefold. First, how significant are the effects of relationship marketing tactics on constructing long-term relationship? Second, will the consumers’ perceptions of a long-term relationship reinforce the relationship quality?  Third, through the implementation of relationship marketing tactics, will it further influence the construction of consumers’ behavioral loyalty?


Change, Strategic Response and Confusion in Governance: Leadership Archetypes and Cultural Resistance in the Mature Stage Organization

Dr. Jillian de Araugo, Mentone Girls Grammar School, Victoria, Australia

Dr. Neil Béchervaise, Australian Graduate School of Entrepreneurship, Australia




In an aggressively competitive marketplace, media response to dramatic changes with a potential to impact on the reputational capital of the organisation often generate erratic governance response with consequent strategic planning implications. Responsibility for these knee-jerk reactions is invariably carried by the CEO.  Recognising the role of the CEO as a key contributor to the reputational capital of a not-for profit organisation, particularly, this paper observes that governing boards select leaders on the basis of immediately perceived needs for change but are seldom prepared for the successful implementation of that change. More importantly, it argues, the success of leaders initiating and then consolidating change depends more on their ability to change leadership style as needs demand to protect shareholder value and support Board perceptions of organisational reputation than on their ability to maintain effective strategic direction. This paper presents recent research by the authors on leadership selection and the role of governance in maintaining strategic direction in support of the CEO when organisational reputation is challenged.


How Corporate Culture Affects Standardization of International Marketing Strategies

Dr. Subodh Bhat and Dr. Ryan Snow, San Francisco State University




The study found that high-tech companies characterized by an innovative culture were likely to have less levels of standardization of international marketing strategy. Contrary to expectations, we found that an easygoing culture was associated with greater standardization. The other organizational culture dimensions of stability, people-orientation, outcome-orientation and detail-orientation were unrelated to standardization.  The purpose of this study is to analyze how corporate culture influences the level of standardization of international marketing strategies for high-tech multinational companies. We used the Organization Profile Scale developed by O’Reilly, Chatman and Caldwell (1991) and Chatman and Jehn (1994) to uncover the facets of organizational culture in high-tech companies in the San Francisco Bay area and examine each facet’s role in standardization.


Management of Buyer-Supplier Conflict: The Case of the Turkish Automotive Industry

 Dr. M. Kamil Kozan, St. John Fisher College,Rochester, NY

Dr. S. Nazli Wasti, Middle East Technical University, Ankara, Turkey

Ayca Kuman, Ankara Chamber of Industry, Ankara, Turkey




This study utilizes data from 51 buyers in Turkish automaker firms and 72 supplier firms to match the types of buyer-supplier relationships to conflict management styles.  The buyer-supplier relationship types are determined using Bensaou’s (1999) two-dimensional model that groups relationships based on buyers’ and suppliers’ relationship-specific investments.  Bensaou’s model identifies four types of relationships; namely, strategic partnership, market exchange, captive buyer, and captive supplier.  The conflict management styles developed for interpersonal or intra-organizational contexts (namely, accommodation, compromise, avoidance, forcing, and problem solving) are extended here to the inter-organizational context and an attempt is made to match these styles to the relationship types found in the Turkish automotive industry.  While a direct match is not observed, it can be seen that the two parties display different forms of conflict management in their interactions.  The results are discussed within the context of the historical evolution of automotive buyer-supplier relationships in Turkey and their present power balances. Studies of buyer-supplier relations in different cultures would be a welcome addition to globalization research.  This is particularly relevant for emerging economies (Choi, et al., 1999, Humphrey and Schmitz, 1998) where the insights gained from research on buyer-supplier studies—which have so far mainly focused on U.S. and Japanese practices—can be tested.  This study focused on the buyer-supplier relations in Turkey, a developing country considered to be one of the emerging markets for global business.  The study approached buyer-supplier relations from a conflict management perspective.  The underlying assumption was that further insights can be gained into buyer-supplier relations when the behavior of the parties is studied while in conflict.  


Economic Freedom and Inflation: A Cross-National Study

Dr. Fahim Al-Marhubi, Sultan Qaboos University, Sultanate of Oman




This paper explores the empirical relationship between the degree of economic freedom and inflation. Empirical evidence based on cross-country data supports the hypothesis that greater economic freedom leads to lower inflation.  The phenomenon of inflation has long been a topic of interest among economists and policymakers. The traditional literature viewed sustained inflation as essentially a monetary phenomenon, irrespective of whether the initiating factors are fiscal imbalances or cost-push in nature. This view is reflected in Friedman’s (1963) famous dictum “Inflation is always and everywhere a monetary phenomenon.” In recent years, motivated by insights from game theory, the theory of public choice and the public finance literature, economists have adopted a broad political economy perspective to the study of inflation in order to identify the deep structural determinants of differences in inflation rates across countries. This approach has spawned a huge empirical research on the institutional arrangements that can have significant influences on the operation of the inflationary process. The impact of differences in collective bargaining arrangements, the independence of central banks, political instability, and social polarization, among others, on inflation performance has been widely analyzed in the recent literature. However, as much as such a link has been studied, the role of economic freedom, a defining feature of the institutional framework, has barely been explored.


The Effects of Knowledge-Based Resources and Technological Uncertainty on Firm Performance: An Emprical Study

Dr. Nihat Kaya, Dr. Ibrahim H. Seyrek, Dr. Bülent Sezen, Gebze Institute of Technology, Turkey

Caner Giray, Istanbul Commerce University, Turkey




This research investigates the effects of knowledge-based resources on firm performance when the market dynamism is low and high. The research has been conducted on 91 firms operating at several sectors in Marmara region of Turkey. The effects of knowledge-based resources on financial and non-financial firm performance are investigated when the technological uncertainty is low and when it is high. The findings show that there is a meaningful relation between knowledge-based resources of the firm and financial and non-financial firm performance when the technological uncertainty is low. On the other hand, when the technological uncertainty is high, there is a meaningful relation between knowledge-based resources of the firm and non-financial firm performance, but there is not a meaningful relation between knowledge-based resources of the firm and its financial performance. The theoretical and managerial implications are discussed.  Fast changes and developments in technology creates negative situations for companies that do not produce  technology. It is obvious that technological development brings a lot of uncertainties for firms. The most important of them is the fact that every technological development makes the company’s abilities and knowledge obsolete. Gaining new skills and knowledge or buying them brings considerable cost to firms. The uncertainties caused by new technological developments may prevent the effective usage of knowledge-based resources of a company. With the introduction of every new technological development, the competitive advantages gained by existing knowledge-based resources become less effective. Especially, in sectors where technological developments are seen frequently, the flexible organizations are more advantageous (Pfeffer and Salancik, 1978). Even if it is stated that specialization makes firms less capable of responding to technological changes, the effects of knowledge-based resources on different performance criteria have not been adequately investigated.


Is Standard Costing Obsolete?   Some Empirical Evidence from Malaysia

Maliah bt. Sulaiman, Nik Nazli bt. Nik Ahmad & Norhayati bt Mohd Alwi

International Islamic University Malaysia




Many authors have predicted that the shorter product life cycles, advanced manufacturing technologies, decreasing emphasis on labour in the production process and global competition may lead to the demise of standard costing.   Our exploratory study seeks to provide empirical evidence on the extent companies in Malaysia use standard costing.   Additionally, we also examine the differences on the use of such a technique between local Malaysian firms and Japanese affiliates.   We surveyed 66 companies from the Industrial and Consumer products sectors listed on the Kuala Lumpur Stock Exchange and 21 Japanese affiliates in Malaysia.   Despite its various criticisms, our empirical findings appear to suggest that standard costing is still being used by a large majority of firms in Malaysia.   Thus, Malaysian companies (both Japanese and local) seemingly perceive that the basic principles of standard costing are still sound.   The limitations of the study are discussed and suggestions for future research given.  Standard costing, according to various authors, is inconsistent with today’s manufacturing environment (e.g. Johnson and Kaplan, 1987; Monden and Lee, 1993; Ferrara, 1995; Drury, 1999). Instead, to meet the intensely, competitive, global  business environment, companies should use tools or strategies such as JIT, ABC, TQM, process reengineering, life cycle assessment and target costing.  


Examining the Relationship between Organizational Excellence and Business Performance: An Exploratory Study with Turkish Firms

Dr. Musa Pinar and Dr. Henry L. Crouch, Pittsburg State University, Pittsburg, KS

Dr. M. Cengiz Pinar, Yasar University, Izmir, Turkey




This exploratory research paper examines the relationship between organizational excellence and the business performance of Turkish firms. Darling and Nurmi (1995) identified three key leadership requirements -- taking care of customers, constant innovation, and committed people for organizational excellence needed to achieve superior organizational performance. This study found a significant relationship between organizational excellence and business performance, where firms with high organizational excellence outperformed firms with low organizational excellence on a number of performance measures. The results suggest that in order to achieve high performance and organizational excellence, firms need to “take care of their customers, must constantly innovate, and must have committed people”.  Several prior studies have documented the requirements for, or the keys to, a better business performance (Drucker 2001; Peter and Austin, 1985; Peter and Waterman, 1982; Scherkenbach, 1988; Wing, 1988). Tracy and Wiersema, (1995) suggest that successful organizations (the market leaders) excel at delivering the best value through one of the “value disciplines of best product, best total costs, or best total solutions.” However, they state that choosing one area in which to excel does not mean abandoning the other two. They must still meet minimum acceptable levels.


Information and Communication Technology Enabled Competency Changes: Mediating Effects of HRM Practices

Dr. Aylin Ataay, Galatasaray University, Istanbul, Turkey




This paper considers the adoption of information and communication technologies (ICT) as vehicles for enabling changes in organizational structure and employee competencies. Based on cross sectional data collected from 372 employees in Turkey, we found that employee competencies had been changed to respond structural changes caused by the introduction of ICT to the work context. The results show that with the adaptation of ICT and accompanied structural changes, the employees had to know how to access information more quickly and effectively, they had to be more capable and volunteer to share information with others, they had to adapt continuously changing work conditions and they had to make decisions in a shorter period of time. We also found that HRM practices mediate the relationship between ICT enabled organizational structure changes and perceived changes in employee competencies in other words when complemented with appropriate HRM practices, ICT adoptions have a greater affect on employee competencies.


Conceptual Model of Post-Formation Governance in Cross-border Partnership

Dr. Arthur Lin, National Taipei University, Taiwan

Hsiu-Yun Hsieh, University of Birmingham, United Kingdom

Mei-Chi Lai, Taiwan Management Institute, Taiwan




If a joint venture continues unstable, then the prospect of realizing the potential benefits for being a partner will be hampered. The breakdown of the JV relationship between Taiwanese Mosel Vitelic and German Infineon is an example. Nevertheless, the existing IJV research remains inadequate to provide a comprehensive knowledge base concerning effective management of cross-culture collaborations. Motivated by this gap in research, this paper reviews three sets of variables (contextual risk factors, cultural difference, interpartner relationship) that may lead to partners’ risk perceptions regarding performance and agency problems, and consequently urge partners to adjust their original governance decisions made at the ex ante stage. This paper contributes towards a better understanding of how to sustain the partnership over time until partners achieve their strategic objectives. In the first section, we discuss the rationale for conducting this research. We then continue by proposing a more integrative conceptual model (i.e. risk analysis) and discussing its relevance to understanding the issue of risk in cross-border management. In the third section, we discuss the association of perceived risk and post-formation governance. In the fourth section, various antecedents to risk perception are presented, along with research propositions. The paper concludes with a discussion of the implications of this study for IJV practitioners.


Software Project Risk Management Supported by Agent Technology

Rita Nienaber, Elsabe Cloete, and Dr. Andries Barnard, University of South Africa, South Africa




The software project management environment is rapidly changing due to globalisation and advances in computing technologies. Currently software projects are developed and deployed in distributed and collaborative environments. This means that traditional project management methods cannot and do not address the added complexities found in a distributed environment, such as effective sharing of information, messages and knowledge among project contributors, as well as efficient task scheduling, tracking and monitoring. Numerous software development projects do not live up to expectations or sadly fail. This is demonstrated by the fact that software projects often do not comply with the traditional standard measurements of success, namely time, cost and specifications. In this paper the utilisation of stationary and mobile software agents is investigated as a potential tool to improve software project risk management. We also propose and discuss a software agent framework to support risk management. Although still in its initial phases, this research shows promise of significant results in enabling software developers to meet market expectations, and produce projects timeously, within budget and to users’ satisfaction, while ameliorating the risk associated with software project development.


Oil Convenience Yields as Call Options

Dr. William T. Lin and Dr. Chang-Wen Duan, Tamkang University, Taiwan




We divide the business cycle of crude oil into two periods by the intermediate months and apply call option model to estimate convenience yields.  The underlying variable is nearby futures contract with maturity date in the intermediate month, exercise price is distant futures contract with maturity date in the final month of business cycle.  We find that the convenience yields of crude oil show a seasonal behavior the convenience yield of WTI is higher in the summer, while that of Brent is higher in the winter, suggesting WTI is more susceptible to the effect of summer demand shock, and Brent is subject to the effect of winter supply shock; the convenience yields of crude oil during the business cycle have a negative relationship with inventory level, indicating the presence of a business cycle. Regression analysis finds that convenience yield may explain the price spread of crude oil that the price spread increases when the convenience yield of WTI rises and that of Brent drops. Empirical analysis of volatility finds that at low inventory level, spot prices of crude oil vary more than futures price, resulting in higher convenience yield based on options model; at high inventory level, spot and futures prices have roughly the same variability, resulting in lower convenience yield. These results are consistent with Samuelson (1965) hypothesis and the empirical study of Fama and French (1988).


Activity Based Costing in Malaysia: A Case Study of a Successful Implementation

Maliah Sulaiman, International Islamic University Malaysia

Jamaliah Abdul Majid, Universiti Utara Malaysia




While proponents of activity-based costing (ABC) claimed that the technique brings numerous benefits to companies that adopt the system, companies, particularly in Malaysia, are slow to use ABC.   This may, perhaps, be due to the scant knowledge of what implementing it entails.  Given this, our paper documents a case study on the implementation of activity-based costing (ABC) in a multinational telecommunications company in Malaysia.  The process of implementation is described and the various problems and benefits of ABC implementation are discussed. The problems faced by the company are also documented. It is hoped that the results of the case study will encourage other companies, in general, and Malaysian companies in particular to adopt ABC.  In recent years, activity-based costing (ABC) has been recognized as one of the important management accounting innovation.   The technique is gaining increasing acceptance amongst practitioners.   It is a tool to help allocate overheads with a greater degree of accuracy.   The issue of more accurate overheads allocation is pertinent because often when pricing relies on flawed cost data, the problems will be perpetuated.   The traditional accounting approach where cost allocation is based on labor hours or machine hours rarely reflects the true cause and effect relationship between indirect costs and individual products.   Thus, ABC corrects for the limitations of traditional costing by identifying all the work activities and the costs that go into manufacturing the product.


Corporate Governance, Competition and Productivity Growth in Turkish Companies

Yuko Hisa, Hitotsubashi University, Japan

Shoichi Hisa, Takachiho University, Japan




This paper is concerned with the analysis of total factor productivity at the company level using Turkish manufacturing companies. The main empirical conclusion are 1)Higher levels of top one, public, and foreigner’s shareholders ratio are associated with decreases in the growth rate of productivity, 2) Higher levels of debt are not associated with decreases in the growth rate of productivity, 3)Expenditure on R&D has an effect on the growth rate of productivity.  The analysis of corporate governance system attracted increasing attention in recent year. Many studies analyzed efficient monitoring and disciplining mechanisms that will reduce the agency costs associated with the separation of ownership and control. Most of these studies concentrate on capital market as structure of shareholder, debt and main bank system in Japan. However market competition will be important as well as capital market. Otherwise, there are a few studies which compare with capital market and market competition. In this paper we focus on the three elements which impact on the growth rate of productivity in Turkish companies.


European Banking Integration: A Complex Process

Elisabeth Paulet, ESCEM Poitiers, France




Changes that derive from financial liberalisation in a competitive environment constitute one of the major points of discussion in the debate on European Integration. The European financial area offers several freedoms: freedom of establishment, freedom of capital circulation and freedom of provision of financial services. In this context what will European banking look like tomorrow? The aim of this paper is to establish a topology of the existing banking systems in order to discuss the position of universal banks. The first section presents the similarities and differences between European countries and describes how evolution towards a unified banking system will be possible.  The role of universal banks in the context of European integration is analysed subsequently. As the European regulation privileges the size criterion, the core of the discussion is first a review of the increasing concentration in banking which is taking place not only at an internal level (inside each member country) but also at a Community level. The situation in different member countries will be presented to demonstrate the advantages and disadvantages of a compact banking system.Changes that derive from financial liberalisation in a competitive environment constitute one of the major points of discussion in the debate on European Integration. The European financial area offers several freedoms: freedom of establishment, freedom of capital circulation and freedom of provision of financial services. In this context what will European banking look like tomorrow? The aim of this paper is to establish a topology of the existing banking systems in order to discuss the position of universal banks. The first section presents the similarities and differences between European countries and describes how evolution towards a unified banking system will be possible.


Analysis of Long-Run Benefits from International Equity Diversification between Taiwan and Its Major European Trading Partners: An Empirical Note

Tsangyao Chang, Ph.D., Feng Chia University, Taichung, Taiwan

Chien-Chung Neih, Ph.D., Tamkang University, Taipei, Taiwan

Ching-Chun Wei, Ph.D., Providence University, Taichung, Taiwan




This paper employs four techniques of cointegration tests, PO, HI, JJ, and KSS approaches, to test for pairwise long-run equilibrium relationship between Taiwan’s stock price index and each of the stock price indexes of four European markets - French, German, Dutch, and British stock markets.  The results from these four tests are robust and clearly consistent in suggesting that the Taiwan stock market is not pairwise cointegrated with the four European stock markets.  This provides strong evidence that there exist long-run benefits for Taiwan investors diversifying in the equity markets of Taiwan’s major European trading partners, France, Germany, Holland and the UK, over the sample period considered from January 6, 1998 to May 30, 2002.  These findings could be valuable to Taiwan individual investors and financial institutions holding long-run investment portfolios in the equity markets of France, Germany, Holland and the UK. ver the past two decades, the globalization of international stock markets has generated a vast amount of research using cointegrating techniques (see, Taylor and Tonks, 1989; Chan et al., 1992; Kasa, 1992; Arshanapalli and Doukas, 1993; Chowdhury, 1994; Kwan et al., 1995; Masih and Masih, 1997; and Kanas, 1998, 1999) to investigate whether there exist long-run benefits from international equity diversification.  According to these studies, asset prices from two different efficient markets cannot be cointegrated.  Specifically, if a pair of stock price is cointegrated, then one stock price can be forecasted by the other, thus suggesting that there are no gains from portfolio diversification.



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