The Business Review, Cambridge is indexed  in the CABELL'S, PROQUEST (ABI). 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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 Endless Surpluses: Japan’s Successful International Trade Policy

Dr. James W. Gabberty and Dr. Robert G. Vambery, Pace University, NY

ABSTRACT

In 1991, authors Akio Morita, chairman of Sony and Shintaro Ishihara, member of the Japanese Diet, published a book titled “A Japan That Can Say No”. This work called for the nation of Japan to take a much more self-assertive and aggressive attitude toward the rest of the world (especially the U.S.) in its diplomatic and business relations. The caustic tone of the book, with chapter titles such as “America Itself is Unfair”, “American Barbaric Act!”, and “Let’s Become a Japan that Can Say No” caused much consternation in the West. Nonetheless, before and after the publication of this book, the U.S. - Japan trade deficit was (and still is) enormous [Morita, Shintaro]. Consequently, Americans who express concern about large and persistent trade deficits are not engaged in Japan bashing, but rather may be strong supporters of free trade who are analyzing the effects of large-scale adverse economic phenomena that may need remedy [Lincoln]. In the 1950s and 1960s, the U.S. was the world's leading export powerhouse. The Marshall plan helped provide the capital needed to rebuild Europe and Japan, and fueled a tremendous demand for U.S. exports. During this period, the U.S. ran a substantial trade surplus of about one percent of gross domestic product. The U.S. also benefited initially from strong export demand in a wide range of industries, from low-tech textiles and apparel to sophisticated aircraft and machine tools.

Impacts of Computing Capability of Hispanic Business Leaders Upon WEB Search Strategies Utilized When Accessing Information

Dr. James L. Morrison, University of Delaware, Newark, DE

Dr. Titi Oladunjoye and Mr. Dale Rose, Albany State University, Albany, GA

ABSTRACT

Based upon a survey of Hispanic business leaders in the U.S., it may be concluded that individual computer capability is not a significant factor when searching for information online.  Within this context, it may also be concluded that Hispanic leaders with a greater degree of computing capability perceive similar information search strategies being utilized to those of lesser degree.  However, computer capability is a significant factor when making decisions as the credibility of information sources located.  The Internet (or the WEB) affords organizational leaders an opportunity to enhance their information-gathering capability as critical decisions are being contemplated.  The Internet is reshaping the way businesspersons plan, organize, implement, and control daily operations.  Of particular interest here is how the Internet is reshaping the ‘information universe’ of Hispanic business leaders as they go about collecting information as a basis for arriving at decisions.  The term, Hispanic, is used as a form of classification for the immigrants and descendants of a wide range of ethnicities, races and nationalities who use Spanish as their primary language.  (Wilmington News Journal, 2005)

Managing Change at HP Lab: Perspectives for Innovation, Knowledge Management and Becoming a Learning Organization

Dr. Michael Albert, Professor of Management, San Francisco State University, San Francisco, CA

ABSTRACT

The purpose of this paper is to describe a change process used at HP Lab to transform it to support knowledge management, innovation, and becoming a learning organization. A major focus of the study is to summarize and discuss key change processes and actions that helped transform HP Lab.  The change process, along with actions taken, will be discussed in light of the literature on change, culture, knowledge management and the learning organization.  The learning organization paradigm and the concept of knowledge management have received substantial discussion in the literature since the publication of Senge’s (1990) seminal book The Learning Organization (Argyris and Schon, 1996; Armstrong and Foley, 2003; Bierly, Kessler, and Christensen, 2000; Cohen, 1998; Davis and Botkin, 1994; Dowd, 2000; Dumaine, 1994; Ellerman, 1999; Davenport and Prusak, 1998; Drucker, 1997; Easterby-Smith and Araujo, 1999; Ellinger, Ellinger, Yang, and Howton, 2002; Garvin, 2000; Hamel and Prahalad, 1994; Holt, Love, and Li, 2000; Kim and Mauborgne, 1999; Jackson, Hitt, and DeNisi, 2003; Marquardt and Reynolds, 1994; Murray and Donegan, 2003; Nonaka, 1991; Nonaka and Takeuchi, 1995; Quinn, 1992; Senge, Kleiner, Roberts, Ross, Smith, 1994; Smith, 2000; Steward, 1997; Wang and Ahmed, 2003; Watkins and Marsick, 1993; Watkins and Marsick, 1996;; and West and Burnes, 2000). The literature stresses that organizations can create a key source of competitive advantage, embrace innovation, and improve bottom-line results by developing capabilities for knowledge management and becoming a learning organization.

Strategy, Success, a Dynamic Economy and the 21^st Century Manager

Dr. Robert L. Johnson, University of Phoenix, Phoenix, AZ

ABSTRACT

Having a sound strategic plan is a given now days to an organizations long term viability.  Unfortunately, too many executives get overly focused on the minutia of surviving the month or quarter they forget the big picture.  Sometimes, they are in a very successful business and think all is well.  However, "when an industry's basis of competition shifts, competitors gain and lose relative advantage, forcing a search for new sources of differentiation" (Werther & Kerr, 1995, p. 12).  The problem is, managers too often do not remain vigilant and fail to realize the environment has changed.  New technology, new consumer tastes, changing demographics, or new competitors differentiating themselves capturing market share can go unnoticed until it is to late. This article discusses strategic leadership issues facing today’s 21^st century manager in the dynamic technological, political, legal, social, and demographic environment.   There are probably as many definitions of strategy as there are academic and business researchers attempting to study and define it. "The word 'strategy' is derived from the Greek work strategia, meaning 'generalship'" (Oliver, 2001, p. 8).  Early business practices, or strategy, often copied those of the command and control structures of the military requiring little change in technique or application (Oliver, 2001).   In the early days before there was a wealth of academic research and new strategic theories published by those such as Porter, Barney, and Mintzberg; Sun Tzu's The Art of War was highly sought after reading by many top business leaders.  During the early days of strategic business thinking "strategy was primarily centered on winning the war by eliminating competitors" not by listening to and pleasing the customer, or improving quality or customer service (Oliver, 2001, p. 8). Today, the idea of a business or product strategy has received voluminous academic research and business acceptance.  A look at some views or definitions of strategy by some current thinkers that have impacted where we are today is appropriate.

How Service Employees Can Be Treated as Internal Customers in Hospitality Industry

Dr. Demet Varoglu, Middle East Technical University, Ankara, Turkey

Dr. Zeliha Eser, Baskent University, Ankara, Turkey

ABSTRACT

In this study, we propose a problem-based model which aims at solving the dysfunctional turnover and retention problems of the hospitality industry by applying the internal marketing concept. Mainly drawn from the Organizational Behavior and Human Resource Management literature, the model has three focal points: the organization, the job and the employee. For the organization as a focal point for effectiveness, we chose the performance measurement system to serve the firm by separating the high performing employees from the low performing ones. For the job as a focal point we picked job redesign as a field promising increase in the perceived meaningfulness of work for the employees. For the third and last focal point (the employee), the concepts of interactional justice, empowerment and career management were taken into consideration. Bringing all these concepts together, we believe that a strong service culture can be established and endured as long as the executives in the industry are committed to developing their business by looking up for various ways to apply internal marketing..  Services represent the majority of today’s economy, not only in developed countries but also developing countries throughout the world. In most countries, the service sector of the economy is very diverse, comprising a wide array of different industries that sell to individual customers and business customers as well as to government agencies and nonprofit organizations (Lovelock and Wright 2002). Service industries also account for most of the growth in new jobs. In addition, virtually all companies view service as critical to retaining their internal customers as well as external customers today and in the future (Braymer 1997). Providing service quality is no longer simply an option. Customers are more demanding. They do not only expect excellent, high quality goods; but also high levels of service along with them (Lovelock 2001, DeVader and Smith 2003, Cronin et al. 2000, Zeelenberg and Pieters 2004).

Perspectives of Corporate Governance in the U.S. and Abroad

Dr. Balasundram Maniam, Sam Houston State University, Huntsville, TX

Geetha Subramaniam, Universiti Teknologi MARA, Selangor, Malaysia

Jim Johnson, Sam Houston State University, Huntsville, TX

ABSTRACT

Financial scandals have rocked the financial world both in the United States and across the globe.  This paper briefly explores Enron, WorldCom and some of the other major scandals that have occurred.  It uses these cases as a backdrop to a discussion of corporate governance worldwide.  This paper reviews previous work and discusses the governance of exchanges, boards, internal auditing and compensation packages.  A discussion debating the box checking methods of Sarbanes-Oxley versus the “comply or explain” mentality of Europe is also found in this paper.  Recent scandals in the US and other major markets have brought the topic of corporate governance to the forefront.  It has become a major topic for both the media and everyday conversation amongst people who never talk business.  Scandals like Enron have brought previously unknown names like Ken Lay and Jeff Skilling into the mainstream media.  They have brought terms previously restricted to the business world like “off balance sheet accounting”, “cooking the books” and “overstated revenues” into everyday conversation.

Depictions of Health Care Consumer Empowerment: A Comparative Content Analysis of DTC Advertising at Two Points in Time

Dr. Amy Handlin, Monmouth University, West Long Branch, NJ

Abstract

This study utilizes content analysis of DTC (direct-to-consumer) prescription drug advertising at different periods of time to explore whether these ads are contributing to physician-patient friction by increasingly encouraging health care consumer empowerment. Findings suggest that there was little explicit change in the degree or nature of the empowerment message, or in the framing of the message, between 1998-1999 and 2004-2005. However, advertising visuals appear to be evolving in such a way as to potentially transform perceptions of the doctor’s office from a sanctuary into just another commercial venue. Of many contentious points in the ongoing debate about direct-to-consumer advertising of prescription drugs, one raised with notable frequency by physicians is the alleged tendency of these ads to encourage consumers to take health care matters into their own hands. In particular, doctors worry that an increasing number of patients are demanding prescriptions for advertised drugs and/or arguing with those providers who prescribe alternatives (as examples, see Lowes 1999 and Rosenthal, Berndt et.al. 2002).  However, the marketing situation is complex. While a majority of physicians believe that DTC advertising is convincing patients to insist on particular drugs, the pharmaceutical companies worry that their ads are failing to convey key information (Dickinson 2000a). Indeed, there has been a drop in the percentage of consumers who characterize DTC advertising information as “reliable” – even as they claim to have acted on this information by talking to their doctor about the advertised brand (Dickinson 2000b).

Savings Rate and Income Replacement Ratio

Dr. Ahmet Tezel, Saint Joseph’s University, Philadelphia, PA

ABSTRACT

It is widely accepted to calculate income replacement ratios for measuring how much wealth is needed at retirement and for assessing retirement readiness of individuals.  In this paper, I simulate income replacement ratios using the median U.S. household incomes from 1952 to 2004.  I also present a model to estimate income replacement ratios under a variety of savings rate assumptions and other relevant variables.  In addition to the basic savings rate, the model allows additional savings based on the portion of the real increase in incomes.  Individuals, financial planners, retirement plan sponsors, and governments use income replacement ratios as their main tool for measuring how much wealth one needs at retirement and for assessing retirement readiness.  The income replacement ratio is defined as the retirement withdrawal income funded by pre-retirement wealth divided by the pre-retirement income.  A 5% withdrawal rate from a pre-retirement wealth of $1 million would provide a $50,000 withdrawal income at the beginning of the retirement period.  Note that this retirement withdrawal amount would change to reflect the rate of inflation during the retirement period.  Assuming a pre-retirement income of $80,000, the income replacement ratio would be 62.5% ($50,000/$80,000).

Consumer's Perceived Value and Buying Behavior of Store Brands: An Empirical Investigation

Dr. Talha Harcar, Pennsylvania State University at Beaver, Monaca, PA

Dr. Ali Kara, Pennsylvania State University York Campus, PA

Dr. Orsay Kucukemiroglu, Pennsylvania State University, York, PA

ABSTRACT

Store brands have an important role in retail strategy due to their increasingly important strategic role for retailers. Therefore, understanding the store brand buyer behavior is a critical issue for marketers and researchers alike. This paper augments prior research by examining the factors influencing consumers’ purchase behavior of store brands.  We examine the decision to purchase a store brand using a conceptual model which incorporates a number of variables that are hypothesized to influence store brand purchase decision.  Using a sample of 782 shoppers, we have analyzed the relationships assumed in the conceptual model used.  Results confirm the relationships between store brand purchase and value consciousness, previous experience, and consumer perceptions. Managerial and academic implications of the study are discussed.  Intensive competition, fast technological innovations in the retail industry has had a considerable impact on the management of the retail industry in developing and executing new competitive marketing strategies. One of the most commonly implemented marketing strategies of retailers has been the introduction of their own retail (private label or store) brands. "Store brands" or "private label" refer to merchandise that carry wholesaler's or retailer's own brand name or a brand name created exclusively for that particular wholesaler or retailer. For example, Great Value is a store brand exclusively offered by Wal Mart stores and Hi-Top is a store brand exclusively sold by Minyard /Sack-n-Save grocery stores. Brands such as Tide, Whisk, Frito Lay are examples of national brands. In this study, store brand products are defined as the “…products owned and branded by the organizations whose primary objective is distribution rather than production (Schutte 1969).

The Importance of Strategic Roles as Determinants of Export Performance in European Subsidiaries

João Pedro Almeida Couto, Maria Teresa Borges Tiago, and José Cabral Vieira, University of Azores

ABSTRACT

In order to evaluate the export performance of subsidiaries of multinational companies a study is conducted on MNCs operating in Europe. This research uses a sample of 171 companies in five countries to analyze the level of exports as a percentage of total sales, using a grouped data regression model. The results show that export performance is positively related to effective relationship and initiative capabilities and negatively related to specific strategic roles. Furthermore, we find evidence for an inverted U-shaped pattern between export performance and subsidiary age.   In recent decades, the global context in which firms develop and implement business strategies has changed considerably. The globalisation process has evolved into a more regionalized approach and more country-specific adaptation of significant variables than had previously been foreseen. In such an environment, multinational companies (MNCs) may increase the transfer of activities to foreign subsidiaries. The benefits of decentralized initiatives have been mentioned by several authors such as Pearce (1997), Birkinshaw (2000), Holm and Pederson (2000) and Birkinshaw and Hood (1997, 1998a, 1998b). This transfer of global marketing activities and in particular, export activity, are a central concept of the present paper.

Development of K-economy in the GCC Countries: A Comparative Study on the GCC Countries and Asian NICS

Dr. Amzad Hossain, Ajman University of Science & Technology, Ajman, UAE

ABSTRACT

The smooth growth of the variables of k-economy is the perquisite in building a k-economy. This paper is an attempt to analyze the variables of k-economy in the GCC countries and Asian NICs. To find the status of development of such variables of k-economy, both descriptive and comparative analysis is used. While comparing the socio-economic variables of k-economy, Asian NICs are performing better than GCC countries. The GCC countries also are spending very limited amounts for the improvement of socio-economic variables of k-economy even if they have higher per capita income. The growth of the economic variables of k-economy of Asian NICs is more progressive compared to GCC countries. Such economic variables are measured by long-term improvement in the share of GDP by sector, inflation rates, unemployment rates, and manufactured and high-technology exports. The study finds that Asian NICs are adapting and diffusing new technology more rapidly compared to GCC countries as measured by ICT variables. These ICT variables include telephone line users, cellular subscribers, number of Internet hosts, Internet users and PC users. To adapt with the new technology is not only influenced by higher per capita income, it is also influenced by the society’s capability to attain, and the application of existing knowledge in daily activities. Thus, the policies and strategies related to knowledge development in GCC countries should be formulated taking into consideration society’s ability to absorb, understand and elucidate knowledge to their local context. Knowledge is one of the important primary resources at the current information age. The application of knowledge in the production and consumption process brings efficient usage of all the factors of production and products or services as well. As such, the European Council Summit in March 2000 (Lisbon) outlined a strategic goal for the European Union for the next decade as: ‘to become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion’ (Barry. N, 2001). Thus, it has become central part of discussion in any economic development strategy how the knowledge contributing to the sustainable production and consumption.

New Institutional Economy and Innovation Barriers:  A Microeconometric Evidence

Dr. Dilek Demirbas, Northumbria University, UK

ABSTRACT

This paper identifies some important specific external barriers to the innovation decisions of Small Medium-Sized Enterprises (here after SME). As SMEs play a particularly important role, because of their number and because of the large share of the workforce involved, the existence of innovative and internationally competitive SMEs will be a critical condition for Turkey’s future growth and prosperity.  However, despite the recognition, some crucial external barriers to innovation prevent SMEs from developing and contributing sufficiently. An analysis of 185 SME owners reveals that both formal barriers (instability on tax policies, business legislation, lack of property rights) and informal barriers (corruption, informal economic activities) form the most significant barriers for SMEs to innovate, as well as environmental barriers (low investments, lack of finance) and skill barriers (inability to grow into new markets, management problems, human capital issues). A Logit regression model was used to explain the probability of SME owner’s being affected by both formal and informal barriers. We believe that our results might be considered by policy makers to help achieve better and sustained innovation performance in the near future in Turkey.  Over the last fifteen years, some technological and structural changes have made it easier for SMEs to participate in the international economy. Advances in ICT (information and Communication Technology), and other forms of telecommunication, have been a major factor in facilitating information flows and expanding the market potential of smaller firms on a global scale. Governments have been making efforts to reduce barriers to international business activity, at the global and especially at the regional level to improve innovation activities for SMEs in order to improve the international competitiveness of SMEs.

Tax Competition and Tax Burden in EU Countries

Dr. Kaie Kerem, Dr. Tiia Püss and Mare Viies, Tallinn University of Technology, Tallinn, Estonia

ABSTRACT

One objective of the EU is to create a single economic space. The achievement of this objective is attempted with the help of economic policy. Important components of this are single monetary policy conducted by the European Central Bank and sustainable fiscal policy conducted by the Member States satisfying the criteria of nominal convergence. Economic globalization in the recent decades, tightening of the transnational economic relations and  increasing impact of internationalization on national developments have led to deepening of the convergence process, on the one hand, and increasing competition between the States, on the other. Tax burden has a notable influence on international competitiveness of the countries. High taxes suppress development of enterprises by reducing profits and increasing labor costs. At the same time, national tax revenues enable to increase investment in human capital, in research and development, through this also increasing international competitiveness of the country. In order for the single economic policy to yield positive results, the implementing economies must be close by the economic development level and work in a similar economic space. This article seeks to analyze changes in the tax burdens in EU-15 and EU-10 countries and to test for the tax competition using convergence analysis. We have used the harmonized data of tax burdens collected by OECD, Eurostat and European Commission. Data on taxes in EU-15 are available since 1980 and on EU-10 since 1995.

International Human Resource Management Can Be Achieved Through Cultural Studies and Relevant Training

Dr. H. W. Lee, National Chiayi University, Taiwan

ABSTRACT

Culture refers to a society and its way of life.  It is defined as a set of values and beliefs, or a cluster of learned behaviors that we share with others in a particular society, giving us a sense of belongingness and identity. Because of this, cultural understanding is becoming even more important because of the call to interact with many individuals from other countries and other cultures. This study answered several in-depth questions regarding the topic and allowed the researcher to venture into in-depth interpretation of qualitative results.  Furthermore, this research provided information on the relationship of organizational harmony to the use of cross-cultural studies and relevant training as an intervention for cultural issues.  It is the aim of this study to prove the efficacy of the above claim and to encourage further globalization in business transactions through cross-cultural studies and relevant training.   According to John H. Bodley (1999), culture refers to a society and its way of life.  It is defined as a set of values and beliefs, or a cluster of learned behaviors that we share with others in a particular society, giving us a sense of belongingness and identity.  It is predictable in form and content, uniform and similar across a particular human society that shapes behavior and cognition of individuals from generation to generation. Culture also includes a host of other disciplines such as history, language, behavior, mentality, symbolism, norms and values. It can be described in the manner by which people from a particular group, race, society or organization behave, communicate, perceive and react to the reality we are faced with.  Bodley (1999) further adds three basic components of culture, namely: what people think, what they do, and the material products they produce.  All forms of culture exhibit unique ways and value systems that aid and affect individuals in their perception and reaction to different life circumstances.

Comparing Equity Valuation Models with Forecasting Capability: A Case of Taiwan’s Tourism Industry

Nan-Juen Tseng, Ph.D. Candidate and Yao-Hsien Lee, Ph.D.

Chung Hua University, Hsinchu, Taiwan, R.O.C

ABSTRACT

This paper makes use of various valuation models to evaluate the intrinsic value of companies in Taiwan’s tourism industry.  The results indicate that the Edwards-Bell-Ohlson (EBO) model is the best model available for valuation in terms of forecasting capability.  Due to a significant growth in the national income in the last two decades, there have been rapidly increasing demands for recreation and tourism services in Taiwan.  Taiwanese people have become more concerned about how to spend their leisure time efficiently than in the past.  As a result, tourism activities have become an important life-style for people in this country.  Tables 1 and 2 indicate that Taiwan’s tourism industry has a large market size and tourists are very willing to spend their money to obtain tourism services in order to increase the level of their quality of life.  This leads to the fact that tourism-related industries are regarded as promising new industries and valuable investment opportunities for investors in Taiwan.   It is noteworthy that Stephen (2004) describes the tourism industry as having the following industrial characteristics: (1) complexity: the undertakings of tourism agents are involved in a diverse range of  businesses and institutions. They may operate by themselves or cooperate with each other to promote the tourism business in order to form a service network for tourists; (2) public welfare: the purpose of running a tourism business is not solely for economic incentives, but also for educating the citizenry, providing pleasure to the tourist, presenting appropriate life-styles, releasing pressure, and so on; (3) generality: any region with attractive natural resources can be developed as tourism destination. For economic and public welfare purposes, they have positive social outcomes: each country has enthusiasm for developing tourism businesses; (4) invisible services: the tourism businesses are set to meet the needs of tourists.

Competitive Capability Evaluation for Middle and Small Enterprises in Regional Industries

H. Y. Cheng and D. M. Zhang, Science & Tech. Information Institute of Kunming

M. Ye and J. Xia, Kunming Science & Tech. Bureau

The middle and small enterprises of regional industry (MSERI) are very important composition of the regional economical development in China. In this paper, we use the analytical hierarchy process (AHP) and vague comprehensive judgment to evaluate the competitive capability of MSERI. First, by way of identifying the developmental relationships and setting up the index system of MSERI, we used Delphi investigation and three-decision problem solving to obtain the rates of indexes of various tiers in the MSERI system. Then we used the vague comprehensive judgment to evaluate competitive capability. Finally, we obtained the evaluation result of competitive capability of MSERI and discussed the relevant problems for the evaluation.

Identifying Organizational Capabilities As Predictors of Growth and Business Performance

Dr. Cemal Zehir and A. Zafer Acar, Gebze Institute of Technology, Turkey

Dr. Haluk Tanrıverdi, Sakarya University,Turkey

ABSTRACT

The firms need organizational capabilities which they have or which they will need to develop in order to overcome the competition they face today and in the future. These capabilities are the collective skills, abilities, and expertise of an organization. This paper examines the implications of organizational capabilities on growth and business performance. On this study, a research model and hypotheses have been developed. This research model has been constructed among eight dimensions of organizational capabilities and dependent variables included growth and business performance factors. Data collected from 456 owners and senior managers of 121 firms have been analyzed to test the hypothesis using regression analysis. As a result of this study, it is found out that increasing of the level on organizational capabilities has significantly positive effects on growth and business performance. The fundamental question in the field of strategic management is how firms achieve and sustain competitive advantage (Teece et al., 1997). Organizational capabilities have vital consequences on business performance to acquire sustainable competitive advantage. Therefore, the overall problem of this study is; how do firms acquire organizational capabilities needed for sustainable competitive advantage and what are the impacts of organizational capabilities on business performance?

The Relationships Between Family and Career-related Factors and Organizational Commitment: A Malaysian Case

Dr. Razali bin Mat Zin, King Fahd University of Petroleum and Minerals, Saudi Arabia

ABSTRACT

Organizational commitment of employees has been found to be a function of other personal and organizational variables. The sustained interest in organizational commitment stems, in part, from the recognition of the limitations of technological innovations in creating and sustaining competitive advantage.  For this reason, many organizations are seriously considering to undergo a paradigm shift from the control-mode model to a commitment-mode model in managing their employees. The data of this study were collected from employees who are holding managerial positions in selected public and private organizations in Malaysia. The analyses indicated that the career-related variables are most significantly related to organizational commitment. Relationship between family variables to organizational commitment received some support, though the findings revealed that it made the least contribution to the explained variance in organizational commitment.  Over the past two decades the relationship between family and career related variables  receive considerable attention from industrial and organizational psychologists, management scientists, and sociologists. Much of the interest in analyzing the relationships between these variables stems from the concern for the behavioral consequences that are hypothesized to result from those hypothetical relationships. Among other topics, organizational commitment have been argued to be related to productivity, attendance at work, turnover, retirement, participation, labor militancy, sympathy for unions and psychological withdrawal from work. Many studies had established the lingkage between  work and non-work related variables and organizational commitment (Kanter, 1977; Gutek, Nakamura and Nieva, 1981; Lambert, 2000; Razali, 1998, 2004).

Exploring Technologic Characters of Finance Group in Business Methods: Using Patent Content Analysis and Citation Network

Shu-Min Chang, Nan Kai Institute of Technology and

Ph.D. Student, National Yunlin University of Science Technology, Taiwan

Dr. Shann-Bin Chang, Ling Tung University, Taiwan

ABSTRACT

With the Internet now widespread, there are huge impacts to business operations. Many new business methods based on Internet technology have become critical to the success of enterprises. Additionally, a Business Method Patent White Paper was announced by the USPTO in 2000, most companies in the relevant industry of Internet want to develop a patent strategy based on their core competencies in order to establish competitive advantages. Finance technology is one kind of business methods technology that is important as an enabler of electronic commerce, and is often combined with security, e-shopping, and other technologies. However, the boundary for industries is confusing in the Internet era, business methods technologies across many industries including hardware, software, telecomm, finance, logistic, retailing… etc. Therefore, which firms owned the advanced finance technology was not easy to find. This study was concerned with the development of finance technology. We selected the finance group based on the study of Chang et al. (2005), and tried to analyze the technologic content and citation network of patents in this group. The conclusions of this study are three: 1. we can use patent content analysis and citation network studies to understand the technologic details of the finance group. 2. The major technologies of the finance group are concerned with payment, sales and trade security. 3. The leader firm of the finance group is Citibank; the followers are Open Market and Walker Digital, both of whom followed Citibank quite closely, while and remaining firms are lagging behind.

The Role of External Debt, Total Trade and Labour Force in Economic Growth: The Case of Nepal

Ramesh Paudel, University of Wollongong

and Lecturer, Pacific College of Technology, Sydney, Australia

Dr. Min B. Shrestha, Nepal Rastra Bank, Kathmandu, Nepal

ABSTRACT

External debt, total trade and labour force are known as the major contributors to the economy of a nation. This study examines the role of these three variables in the economic growth in Nepal employing co integration test. The results show that total trade is associated positively with the economic growth but there is no significant relationship between external debt and the economic growth. It can be inferred from these results that the external debt has not been utilized properly so as to make it a contributor to economic growth in Nepal. The results do not support the general assertion that the labour force contributes to the economic growth positively. Economic growth is a fundamental issue in the global economy. This issue is more crucial for the least developed countries, where poverty is widespread. There are various factors affecting the economic growth of a country among which external debt, total trade and labour force are considered to be more crucial for developing countries. As capital is an important factor of production, the capital coming in the form of external debt can play a vital role in increasing the national output. However, excess use of such capital may have negative impact. Labour force is another key determinant of economic growth, which requires an efficient management for it to make positive impact in the economy. Similarly, the external trade is viewed as increasing the performance of an economy, but the import-dominated trade may affect the balance of payments situation adversely. Thus, although these three variables, viz. External debt, external trade and labour force are the key contributors to the economy, their balanced level and or efficient management are crucial for optimising their contribution. Otherwise, the economy may not achieve expected outcomes and in some cases their contribution may become negative. In this paper, the role of external debt, total trade and labour force are analysed in order to ascertain their contribution to the economic growth of Nepal.

Credit Rating of Corporate Debentures in India

Dr. Sudha Vepa, Pendekanti Institute of Management, Hyderabad, India

ABSTRACT

The initiation of liberalization in India led to a huge capital need. One of the means used for financing the needs of the private corporate sector is the Debenture.  Credit rating is compulsory in all countries where corporates have the freedom to borrow directly from the public. The concept of credit rating was introduced in India in 1987, for the purpose of rating debt obligations of companies. The service, used by a large number of companies in the private sector while making public issues in the past, is, in recent times being sparingly used. The study is an attempt to investigate and analyse the reasons for the same. The major findings of the study are: Corporate debenture issues made by the private sector, closely associated with the happenings in the capital market have been replaced by private placements. As a result, there is a reduced demand for credit rating. But an important aspect noticed is that over the years, credit rating of debentures introduced primarily as a regulatory requirement is now happening as a result of investor demand.

Trading Breakout Rules: Evidence from South Korea

Massoud Metghalchi, Ph.D., Xavier Garza-Gomez, Ph.D., and Chien Chen, Ph.D.

University of Houston-Victoria

ABSTRACT

This paper tests trading breakout rules for the South Korean stock market. Our results indicate that trading breakout 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 can 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), Fama (1965), Fama and Blume (1966), Van Horn and Parker (1967), Jensen and Benington (1970).

Co-opetition and Strategic Business Alliances in Telecommunications: The Cases of BT, Deutsche Telekom and Telefónica de España

Dr. Raymond Cairo, London School of Economics, United Kingdom

ABSTRACT

As a relatively new phenomenon compared to other ways of executing an international strategy, Strategic Business Alliances (SBAs) lack the theoretical support that most of their longer-established counterparts enjoy. Yet, the widespread use of SBAs in a large number of manufacturing and service sectors necessitates the development of a theoretical foundation. This paper’s contribution lies in the assessment of the suitability of an established theory in strategic management literature. Nalebuff and Brandenburger’s game theoretical “Co-opetition” has found wide acclaim as a theory that allows for applicability of game theory to strategic issues of business. Whilst the authors had a much wider focus than the specialized subject of SBAs in mind when they developed their theory, we argue that Co-opetition can be an extremely suitable theory to assess deciding developments with regard to a specific phenomenon as SBAs. Thereto, our empirical analysis of deciding developments within major alliances of three European telecommunication operators will be presented. The developments will then serve as input to our assessment of Co-opetition’s suitability as a theory in relation to SBAs. Applying Co-opetition’s PARTS  framework allows us to evaluate our empirical input and determine Co-opetition’s applicability as far as our cases concerns. That evaluation reveals that the theory can contribute in a practical way which is beneficial to corporate management involved in alliances. The occurrence of these contributions warrants our conclusion on Co-opetition’s suitability with regard to SBAs in the telecommunication sector. It also prompts us to propose further testing of the theory in order to include different types of alliances. Such an expansion of Co-opetition’s assessment will not only serve as building blocks in the quest for a more mature  theoretical foundation on alliances but will also be beneficial to those seeking to enhance their understanding of the elusive phenomenon of SBAs from a more practical angle.

Outsourcing Operations: A Case of One Machine Tool Manufacturer and its Subcontractor in Taiwan

Nelson N. H. Liao, Chaoyang University of Technology, Taiwan

Tsui Chih Wu, Shih Chien University, Taiwan

ABSTRACT

The present study samples all employees of a leading machine tool manufacturer and its outsourcing in-plant subcontractor in Taiwan to examine the intricate relation of leadership, teamwork, management control systems and the levels of their influences on product quality and service quality and additionally, which benefits can be created from this subcontracting partnership operation that will benefit both the firm and its subcontractor.  The major findings of the study were as follows: (1) Each paired dimensions for leadership, teamwork, management control systems, product quality, and service quality were highly and significantly correlated to each other; (2) The degrees of agreement between the employees of its subcontractor on the dimensions of leadership, teamwork, and management control systems were higher than, and significantly different from, those of the employees of the manufacturer; (3) The highest explanatory power for product quality for the manufacturer was management control systems, but for its subcontractor the highest was leadership; (4) The highest explanatory power for service quality was management control systems both for the manufacturer and its subcontractor; (5) Outsourcing the assembling task to its subcontractor proved to be a significant way for the manufacturer to achieve its competitive advantage and managerial flexibility in the marketplace.

 Corporate Boards, Ownership and Agency Costs: Evidence from Australia

Thanh Truong, RMIT University, Australia

ABSTRACT

This study examines the impact of board characteristics and corporate ownership on agency conflicts between managers and shareholders using a sample of top 500 Australian listed firms. Unlike previous studies such as Ang, Li and Cole (1999), Sigh and Davidson (2003), this study assumes that board characteristics are endogenously determined. Our findings are consistent with Singh and Davidson (2003). Overall results provide some insights into the changes recently emerged in the corporate governance environment in Australia. Boards of directors exist, independently from management, to ensure that the firm’s managers do not pursue their own interest at the expenses of other stakeholders (Fama 1980; Fama and Jensen 1983; Jensen 1986). This gives the base for policy reformers to formulate corporate governance principles and/or recommendations that have been adopted around the world. For instance Australian Stock Exchange (ASX) Corporate Governance Council released the Principles of Good Corporate Governance and Best Practice Recommendation in March 2003, and in the document, a more “independent and responsible” board is highlighted. Much has been written in media regarding their likely consequences of the implementation for listed firms since the document came in effect in 2004. Some argue that this is just a box-ticking exercise, others believe that Australian firms already have the board superior to most other major countries; the US and UK (Buffini 2003). This provides a good setting for analysis of the likely benefits and costs if a firm choose to comply with the guidelines.

Economic Freedom and Inflation Performance: Cross Country Evidence

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

ABSTRACT

Although the role of economic freedom on investment and economic growth has received considerable attention, its effects on inflation are less well known. The purpose of this paper is to bridge this gap in the literature by analyzing empirically the effect of economic freedom on inflation performance. The results indicate that countries that are freer economically have lower inflation rates, suggesting that the institution of economic freedom is a significant complementary pillar to formal institutions for monetary restraint.  Over the past three decades, a distinguished body of empirical literature on the political economy of inflation has emerged offering insights into the deep underlying causes of cross-country differences in inflation outcomes (Alesina et al., 1997; Romer and Romer, 1997; Kirchner, 2001). Instead of focusing on the specifics of policy, as is characteristic of much of traditional theories of inflation, the political economy approach places particular emphasis on the underlying institutions and political economy processes that shape these policy choices - and ultimately determine inflation outcomes. Notable among these institutions are central bank independence, exchange rate regimes, collective bargaining arrangements, and the degree of political instability and social polarization, among others. Surprisingly, the relationship between inflation performance and economic freedom, a critical component of a country’s institutional framework, has not been adequately analyzed as perhaps it should be in view of the empirical evidence that has accumulated supporting the desirable influence of economic freedom on other yardsticks of economic performance (Berggren, 2003). The purpose of this paper is to bridge this gap in the literature by analyzing empirically the effect of economic freedom on inflation performance using a large sample of countries, both developed and developing, in the decades spanning 1970-2000.

Financial Market Reactions to Monetary Policy and Open Market Operations: The Australian Case

Xinsheng Lu and Yaomin Wu, Monash University, Clayton Campus, Vic., Australia

ABSTRACT

This paper investigate the reactions of asset prices and return volatility in broader financial markets   to Australian monetary policy announcements and the Reserve Bank’s Open Market Operations (OMOs) with an extended GARCH (1, 1) model. The effects of monetary policy and the open market operations are tested in an integrated model that incorporates announcement effect of the official interest rate target. The empirical results indicate that the Bank’s open market operations have significant contemporaneous impacts on the short-end interest rate spot and futures markets. Significant lagged impacts of OMOs are found for all six spot and futures markets considered in this study. Financial futures markets tend to have stronger reactions to the central bank’s policy stance and domestic market operations.  In this paper, we investigate the impact of Open Market Operations (OMOs) conducted by Reserve Bank of Australia (RBA) on interest rate and foreign exchange markets. We examine the influence of the Reserve Bank’s domestic market operations on asset returns volatility through an extended GARCH (1, 1) model. The effects of the Reserve Bank’s open market operations are examined in a model that incorporates announcement effect of the official cash interest rate target. The investigation deals with six markets: 90-day Bank Acceptable Bill (BAB) spot and futures markets, 3–year bond spot and futures markets and the AUD/USD spot and futures markets.

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

Dr. Maria Luisa Fernandez de Soto Blass, San Pablo-CEU University, Madrid, Spain

ABSTRACT

Unlike indirect taxes, the EC Treaty does not specifically call for direct taxes, income and corporate taxes, to be harmonised. However, article 94 of the EC Treaty provides for approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the common market. In any event, national tax rules must respect the fundamental freedoms provided for the EC Treaty. The following text summarises a consolidation of existing directives in this field.  The present paper introduces new figures and formulas never seen before at book of taxes, analyses the concept of the corporation tax., makes a brief approach to the history of the tax in the European Union, studies the elements of this tax in Spain as the beneficiary, taxable person, territoriality, basis of assessment, exemptions, explains the basic mechanism of the tax, deductions, the taxable base, the tax rates, collections and examples.  This paper is the result of three researches that the author is carrying out at The Institute for Fiscal Studies, Ministry of Economy and Finance, Spain, University of San Pablo-CEU, Madrid, Spain, from 2003 to 2006, and at University of Leeds, United Kingdom, from 1st July to 1st September of 2004, 2005 and 2006 that is going to continue at the same time and place.

Manufacturing Innovations: Case of Croatia

Jasna Prester and Najla Podrug, University of Zagreb, Croatia

ABSTRACT

In cooperation with Frauenhofer Institute, Graduate School of Economics and Business Zagreb and Faculty of Electrical Engineering, Mechanical Engineering and Naval Architecture (University of Split) conducted a survey with aim of collecting in-depth information about the innovativeness of Croatian manufacturing companies. The research is part of a broader project on European level and survey targets are discontinuous piece manufacturing companies with 20 or more employees.  The paper analyses the main domains where innovations in Croatian companies take place. Since the minority of Croatian companies have the privilege to finance innovation through self investment, authors identify locations in which Croatian government should intervene with incentive loans in order to enable innovation and help Croatian companies to compete on equal level in EU.  The aim is to identify gaps between innovation practices in Croatian companies to those prescribed by theory. Which modernization efforts have been done is examined as well as the changes in product specifications within last two years. The results for Croatian manufacturing companies are compared with the latest prescribed technology in field of “operations management” and other comparative studies.  Furthermore, the paper analyses increase in  financial performance as a result of investing in modernization and innovation. The side effects of modernization, for example the decrease in employment, are also investigated. Based on survey results, prescriptions are provided for manufacturing innovations in Croatia. 

When Does Corporate Governance Add Value?

Hsiu-I Ting, National Kaohsiung First University of Science and Technology, Taiwan (R.O.C.)

ABSTRACT

This paper examined when corporate governance added firm’s value.  Using sample of TSE-listed companies from 1992 to 2002, this paper endorsed the positive effect of corporate governance on firm performance.  Different from the previous studies, this paper concluded that the corporate governance effect performed better under poor economic conditions, higher agency costs, and complicated firm structure.  Furthermore, corporate governance mechanism could work effectively when the executives realize the importance of the corporate governance.  Recent research shed light on the importance of corporate governance in emerging markets. La Porta, Lopez-de-Silanes, Shleifer, and Vishny (1998 and 2000) demonstrated that, across countries, corporate governance is an important factor in financial market development and firm value.  There are good reasons to think that the effectiveness of corporate governance might be different based on different situations.  First, economic cycle could be an important factor that contributes to the effectiveness of corporate governance.  Several studies examined a link between corporate governance and firm value during East Asian financial crisis of 1997-1998.  Mitton (2002) indicated that stronger corporate governance was especially important during extreme economic distress.  Lemmon and Lins (2003) also adopted a sample during the East Asian financial crisis.  The authors showed that cumulative stock returns of firms in which managers and their families separate their control and cash flow rights through pyramid ownership structures are lower by 12 percentage points compared to those of other firms.

Compensation Management in Croatian Enterprises: An Empirical Study

Lovorka Galetic, Ph.D. and Ivana Nacinovic, University of Zagreb, Croatia

ABSTRACT

Compensation management is an important factor for attaining higher labor effectiveness, thus also improving competitive abilities of an enterprise. To determine the state of compensation management in Croatia we conducted at the end of 2004 an extensive research in 63 Croatian enterprises. The results of the research have been analyzed with the purpose to determine whether salary represents an important motive for higher work engagement, to see whether Croatian enterprises develop compensation strategy and adequately formulate compensation system and to determine objectives that enterprises want to achieve with the compensation system. Do Croatian enterprises use more fixed or incentive salaries and do they apply group incentive plans such as profit sharing, gain sharing, stock options, ESOP etc.? As well, we examined if performance appraisal is used in Croatian enterprises and does the compensation strategy in Croatian enterprises bring to creation of the competitive advantage? All results have been analyzed from the aspect of the small, medium and large enterprises with the purpose to support the main hypothesis of this paper that “large enterprises have implemented a more developed, complex and elaborated compensation system than small and medium ones”.  Croatian economy faced significant changes in the last 15 years – transition from central planned to market economy along with separation from former Yugoslavia and creation of a separate state. Nevertheless, in the beginning of 1990’s Croatian enterprises were at a high level of economic development for that time with long tradition and present at developed international markets. Unfortunately, the war that occurred in Croatia (1990-1995) and poorly performed privatization starting from 1996 caused huge drawbacks for Croatian enterprises. Although companies even prior to imposed changes did not have fully implemented modern compensation management standards, in restructurings that occurred within the companies compensation management became one of the most neglected areas in enterprises. Along with privatization, reasons for this disappointing state include high unemployment rate - 18,3% of registered unemployment rate (Croatian bureau of statistics, 2006), numerous organizational restructuring processes in all areas of the company and labor market inefficiency.

Procedural and Distributive Justice: Differential Effects on Employees’ Work Outcomes

Dr. Sarminah Samad, Universiti Teknologi Mara, Malaysia

ABSTRACT

This paper presents the findings of a study, which examined the differential effects of procedural and distributive justice on employees’ work outcomes (organizational commitment and job satisfaction). The sample consisted of 500 manufacturing employees in the electronic and electrical manufacturing industries in Malaysia. The results hypothesized that procedural and distributive justice perceptions were positively related to organizational commitment and job satisfaction. Both procedural justice and distributive justice made significant effect on employees’ organizational commitment and job satisfaction. The results revealed that distributive justice had more effects on both job satisfaction and organizational commitment than procedural justice. Findings and implications for managerial practices in the study were discussed and put forward.  Through the past several decades of empirical research in organizational behavior and other related fields, a great deal of literature has documented the antecedents of employees’ work outcomes mainly job satisfaction and organizational commitment in work organization.  Expanding on these studies numerous empirical studies in literature reviews have shown many different variables that affect employees’ work outcomes. This study narrowed these variables down to organizational justice focusing on procedural justice and distributive justice factors. The rational of this study was due to most of the previous research on employee’s work outcomes and organizational justice, has been carried out among managerial and professional level of employees. Little is known about the effects of procedural justice and distributive justice on employee’s work outcomes in terms job satisfaction and organizational commitment particularly among lower level of employees in electrical and electronic manufacturing industries in Malaysia. This group of employees has played a significant role to the Malaysian economy growth. Manufacturing sector has also contributed significantly to the Malaysian Gross Domestic Product (GDP) and total export products.

Impact of Exchange Rate on Foreign Private Investment in Nigeria

Salami O. Adeleke, Ph.D. and Olayinka A. Esuola, Adekunle Ajasin University, Akungba Akoko

ABSTRACT

Nigeria in the last few years has been clamoring for Foreign Investment in the country. This believed to be a facilitator to economic growth and development, which is believed to lead to industrialization of the economy in the long run. Foreign Investment is known to play an important role in the future as a source of capital, managerial expertise and technology for both the developing economies and economies in transition. Foreign Investment performance is based on certain factors that determine its flow. This study is focused at seeing the relevance of Exchange Rates on Foreign Private Investment In Nigeria.  Augumented Dickey - Fuller (ADF) unit root test statistics was used on the series for the model to check their stationarity of exchange rate and other relevant variables after which it was estimated. Times series data from period 1970 to 2001 was used for the analysis.  It was discovered after estimation that Exchange rate is the most important variable that affects Private Foreign Investment in Nigeria of all the other macroeconomic variables such as interest rates, inflation rate and Gross Domestic Product used in this study.  Exchange rate was recommended to be more market responsive, inflation rate should be pursued to single digit and there should be more generous incentives for foreign direct investment in the country.  According to Krishna (2003), Foreign Private Investment can be classified as Foreign Direct Investment (FDI) and Foreign Portfolio Investment (PFI). FDI is an investment in real assets where real assets consist of physical things such as factories, land, capital goods, infrastructure and inventories. The Multinational Corporations (MNCs) is chief source of DFI. This may come in both joint ventures as well as fully owned subsidiaries. Whereas, international investment in financial assets such as shares, debentures and bonds are called PFI (Foreign Portfolio Investment).

Factors Influencing Individual Investor Behavior:  An Empirical study of the UAE Financial Markets

Hussein A. Hassan Al-Tamimi, Ph.D., University of Sharjah, United Arab Emirates

ABSTRACT

The paper aims at identifying factors influencing the UAE investor behavior. This paper develops a modified questionnaire. The questionnaire included thirty four items that belonged the five categories, namely self-image/ firm-image coincidence; accounting information; neutral information; advocate recommendation; and personal financial needs.  Six factors were found the most influencing factors on the UAE investor behavior. The most  influencing factor was by order of importance: expected corporate earnings, get rich quick, stock marketability, past performance of the firm’s stock, government holdings and the creation of the organized financial  markets. On the other hand, five factors were found the least influencing factors on the UAE investor behavior. The least  influencing factor was by order of importance: expected losses in other local investments, minimizing risk, expected losses in  international financial markets, , family member opinions,   gut feeling on the economy. Two factors had unexpectedly least influence on the behavior of the UAE investors behavior, namely the religious reasons and  the factor  of family member opinions.  Research in behavioral finance is relatively new. Within behavioral finance it is assumed that information structure and the characteristics of market participants systematically influence individuals’ investment decisions as well as market outcomes. According to behavioral finance, investor market behavior derives from psychological principles of decision making, to explain why people buy or sell the stocks. Behavioral finance focuses upon how investors interpret and act on information to make investment decisions. In addition, the behavioral finance  places an emphasis upon investor behavior leading to various market anomalies.

Quality Management through Human Resources: An Integrated Approach to Performance Improvement

Dr. Mesut Akdere, University of Wisconsin-Milwaukee, Milwaukee, WI

ABSTRACT

Quality management has become one of the methods to improve quality of products and services and increase organizational productivity and performance across industries around the world. Furthermore, Human Resources professionals and researchers have been focusing on the ways to integrate quality management as a core and strategic business process. This paper provides an overview on quality management through Human Resources and presents its implications for performance improvement.  The challenge of becoming a strategic partner and participating in the strategic planning of an organization has been significant for Human Resources (HR) scholars and practitioners as a way to help the organization gain a competitive advantage. In many HR departments, strategic partnering has become one of the goals of the overall HR function and serves as a source of motivation and rationale for HR’s bottom line contribution to organizational performance. This is not unique to U.S.-based organizations but is the case for many organizations in developed and developing countries. In their annual reports, most organizations state that their people—employees—are their most important assets (Barney & Wright, 1998). However, a major challenge for the field of HR involves finding ways to effectively and efficiently utilize organizations’ human capital.

A Model for an Internet-Based International Resource Center

Dr. Gail Kellersberger and Dr. Shohreh Hashemi, University of Houston-Downtown, Houston, TX

ABSTRACT

This paper introduces a creative model for an Internet-based international resource center (IRC) that provides a medium for knowledge exchanges in a variety of fields and presents a forum for cross-cultural exchanges and collaboration, both locally and globally.  This IRC, as a repository for a wide variety of media and information, can be a worldwide conduit for eradicating the existing boundaries among cultures.  The IRC, which can contain public and private features, can offer different kinds of user-friendly experience, anything from a simple read to an intriguing self-test or survey with immediate feedback, from a posted message on a bulletin board to a full chat room exchange.  It can also be used to establish outreach to academicians and businesses around the globe.   The IRC’s modular design and implementation allows both for continuous enhancements and planned growth.  Our model offers immediate use, yet allows for evolution and creativity in the hands of various developers – it is collaboration in the making.  We recommend this model to any campus interested in developing a hub of “matters international” without dedicating hefty funding for the privilege.  In a flat world where individuals have to communicate and compete on a global level, there is an urgent need for cross cultural awareness and sensitivity to the values and practices of other nationalities and cultures.  Unfortunately, U.S. international illiteracy is an accepted fact, and more than one expert has bemoaned American ignorance in a dangerous world (Sovern, 1989).  Studies have been undertaken to identify and meet U.S. national security needs, as well as the needs of international business and trade, in the area of foreign languages and international studies (Burn, 1980) and this move toward internationalization is clearly demonstrated in the recent National Security Language Initiative (NSLI) of the U.S. government which cites the lack of Americans who speak other languages fluently and aims to redress that deficiency (Powell and Lowenkron, 2006).

The Drivers of Corporate Social Responsibility: A Critical Review

Dr. Matthew Haigh, University of Amsterdam

Dr. Marc T. Jones, Ashridge Business School

ABSTRACT

The paper criticises the dominant discourse of corporate social responsibility (CSR) by examining six sets of factors conventionally considered as promoting outcomes consistent with core principles of social responsibility: intra-organizational factors, competitive dynamics, institutional investors, end-consumers, government regulators and non-governmental organizations.  Each factor is addressed conceptually, empirically, and with respect to its likely future significance in promoting outcomes consistent with CSR.  Our overall conclusions are not promising on any of these dimensions.   Business ethicists borrow from the works of such as Thomas Hobbes, John Locke and Jean-Jacques Rousseau to assert that normative obligations on the firm imposed by the social contract require constructive responses to the needs of owner and non-owner groups (Palmer, 2001).  Ethics and responsibility are most often unreflexively presented as atomised problems for individual decision-makers in the firm, solvable through straightforward application of logical rules and codes of conduct.  Relevant definitions of responsibility are narrow: “issues of corporate responsibility are of smaller scope than the ethical foundations of capitalism” (Goodpaster, 1983, p. 3).  Ethical questions are restricted to external corporate effects such as the means of production, in which relevant questions are held to arise in places such as stockholder and consumer protection and occupational health and safety.  Exemplary behaviour is encoded in governance guidelines emanating from organisations such as stock exchanges. 

The Development of a Menu

José Villacís, Ph.D., Universidad San Pablo, Madrid, Spain

ABSTRACT

The consumer rationally looks for the highest utility being guided by the instinct of getting pleasure. This has been the starting point and the conclusion of all the theories dealing with the theory of consumption. Discarding the analysis of utility measurement, all theories analyzed how the individual looked for utility maximization to the limit. This paper shows that the only and best way to achieve such maximization is to look for the combination (not the group) of goods allowing for behavior optimization. This point of view, that must be the first one, comes from the combinatorial mathematics theory. The phases of economic activities that end in obtaining utility are, at a first stage, the choice of goods in two ways: diversity and quantity. The combinatorial order of consumption or creation of the menu will be established. The combinatorial theory that establishes menus takes place at the second stage. A disorganized, non entropic world can be established where individuals do not know their preferences and cannot create their own combinatorial menus. Economic individuals are enemies of pure, non compensating risk and, therefore, will prefer the advantages in the choice to obtain the best menu to the adventure of risk without reward.

Examining the Effects of SARS on the Risk Profile of Airline Stocks

Dr. Elaine Loh, University of Adelaide, South Australia

ABSTRACT

This paper examines the effects of SARS on the risk profile of various airline stocks listed at the stock exchanges of Canada, China, Hong Kong, Singapore and Thailand – a partial set of nations affected by the disease in 2003.  The analysis was conducted via a three-stage methodology to examine the impact of SARS on the total risk (volatilities) of airline stocks, the systematic risk component of the stocks and the ratio of systematic risk to total risk associated with the airline stocks.  Our results indicate that airline stocks had a tendency to become more volatile and were also more likely to adopt an “aggressive” nature in the wake of SARS, although formal structural break tests provided no evidence to suggest a structural break in the systematic risk component of airline stocks.  The impact of SARS on the ratio of systematic to the total risk of airline stocks was, however, ambiguous.  The increase in total risk was explained primarily by either a rise in systematic or idiosyncratic risk, depending on the airline stock under consideration.   Severe acute respiratory syndrome, or SARS, was first reported in Asia in February 2003.  Over the next few months, the disease spread to more than twenty countries in North America, South America, Europe and Asia before the global outbreak was contained.  Since SARS spreads easily between humans and is