The American Academy of Business Journal
Vol. 11 * Num.. 1 * March 2007
The Library of Congress, Washington, DC * ISSN: 1540 – 7780
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The Crucial First Three Months: An Analysis of Leadership Transition Traps and Successes
Dr. Steven H. Appelbaum, Professor of Management and Concordia University Research Chair
John Molson School of Business, Concordia University, Montreal, Quebec, Canada
Miguel Valero, MBA, General Manager, UniFirst Canada Ltd., Montreal, Quebec, Canada
Transitions are critical time when small differences in the manager’s actions can have disproportionate impact on results. Leaders, regardless of their level, are most vulnerable in their first few months in a new position. Failure to create momentum during the first few months virtually guarantees an uphill battle for the rest of the manager’s tenure in the job. A survey was conducted among 175 managers. The respondents were asked to rank Watkins’s seven common traps and seven principles for success by importance order. The results were not only analyzed for the overall group of respondent, but also, by position (manager vs. executive), by sex (male vs. female) and by years of experience (5 years and less vs. 6 years and more). The authors obtained a 38% response rate. Sixty eight percent of the respondents were at the manager level while 32% were executives. Overall and in every category of respondent, the mistake that ranked as the most important was “Being Isolated”. “Coming with the answer” ranked #2 in all category of respondent with the exception of the executives who ranked this mistake equally #1 with “Being Isolated”. Most executive failures are not the result of commonly cited causes, such as insufficient intelligence, questionable motivation, dishonesty, or even lack of leadership capabilities. Most top executives actually have the intellect, skill, and experience to lead their companies through the inevitable challenges they encounter. It turns out that “softer” issues, such as communication mishap, misaligned expectations, and the notion that you have to be the savior are more often than not the real culprits, especially in the early days. In their research Neff and Citrin (2005) listed ten traps for new leaders. They are: 1) Setting unrealistic expectations. The most universal trap for a new leader wants to do so much so fast that you over promise and over commit. Setting unrealistic or unsustainable expectations is one of the most seductive and common pitfalls for new leaders. Real pressures lead to this, such as the all-too-human need to impress your higher authority. 2) Either making rash decisions or suffering from analysis paralysis.
Balancing the Hybrid Self in the Competing Landscapes of Consumption
Kritsadarat Wattanasuwan, Ph.D., Thammasat University, Bangkok, Thailand
The paper explores how a group of provincial women exercise consumption to balance their hybrid identities when they move to study in the capital. Ethnographic fieldwork is employed to achieve an insight of the group’s consumer acculturation processes. The interpretations reveal the complexly dynamic and paradoxical selves of these informants. Although they aspire to urbanise themselves in order to assimilate properly into the new consumption space, they still wish to persevere their ties with the provincial roots. Evidently, they seem to emerge in the third space where they can metaphorically be in both side at once through everyday consumption. As migration fabricates hybridity of cultures and identities (Hall 1990), the self needs consumption practices tailored to the third space (1) (Bhabha 1990) in order to balance the hybrid self. Indeed, the relationship between place, identity and everyday consumption is profoundly intertwined (Penaloza 1994; McDowell 1999). The term ‘place’ which I discuss here does not refer to just a physical area, rather it embraces local ways of life such as customs, values and certainly consumption practices. The notion of place also comprises symbolic meanings that we often incorporate into our identities. Thus, changing place (e.g. migration or even moving home) can frustrate and relocate our sense of identity. In order to understand this complex relationship, I employ interpretive research via ethnographic fieldwork. Specifically I examined a group of six female students from rural areas who came to study at a university in Bangkok. I explore how these informants employ everyday consumption to re-negotiate and re-settle themselves in a new spatiality, in this case, the cosmopolitan Bangkok. The interpretations aim to convey insightful understandings of the interplay between the self, geographical identity and consumption symbolism that emerged from the fieldwork.
Are Customers’ Dissatisfaction and Complaint Behaviors Positively Related? Empirical Tests
Dr. Godwin Onyeaso, Concordia College-University System, Selma, AL
A large number of studies on customer dissatisfaction and complaints behavior as well as other related consumer behavior studies are predicated on the belief that there is a statistically significant positive relationship between customer dissatisfaction and complaints behavior. Using time series panel data, this study tested this assumption and found that: dissatisfaction and complaints have a stable long run equilibrium relationship which permits them to positively influence each other, that past dissatisfaction explains current changes in complaints, that past complaints explain current changes in complaints, and that current changes in dissatisfaction explain current changes in complaints. Finally, strategic services management implications of these results about how service managers can use them to leverage their organizational performance through superior complaints management programs were briefly discussed. Empirical works on customer dissatisfaction and complaint behaviors have been growing (Crosby & Stephen, 1987; Goodman & Ward, 1993; TARP, 1981, 1986; Richins, 1980; Singh, 1990a,b; Bearden & Mason, 1984; Folkes, 1984; Singh & Wilkes, 1996; Peters, 1988; Granbois et al, 1987; Kim et al, 2003; Davidow, 2003, and Dellande, for a review) but shrinking recently (Lemmink, 2005). The major force behind the renewed interests in this area proclaimed that strategic market feedback benefits (Fornell & Wernerfelt, 1987, 1988) accrue to organizations when their managers maximize customer retention by minimizing customer dissatisfaction with better quality offering (Kim et al, 2003), and encouraging customers to voice out their complaints rather than exit (Peters, 1988) as prescribed by the defensive marketing strategy concept (Fornell & Wernerfelt, 1988). A common assumption underlying these works is that a positive relationship exists between customer dissatisfaction and complaints. The empirical validity of this assumption has not been tested. The purpose of this paper is to test this assumption. The bulk of the works in service management rooted in customer dissatisfaction and complaints behavior are predicted on the belief that there is statistically significant positive relationship between customer dissatisfaction and complaints behaviors.
Real Estate Investments with Stochastic Cash Flows
Riaz Hussain, Ph.D., University of Scranton, Scranton, PA
This paper examines the ownership of real estate as a long-term, risky investment. Using stochastic calculus, the risk is analyzed by assuming that the cash flows in a property investment are growing as arithmetic Brownian motion with the possibility of becoming negative, while the value of the property is growing as a geometric Brownian motion. The analysis takes into account depreciation and taxes. The results are useful for a corporation or a long-term individual investor interested in real-estate investments. Both individuals and corporations invest in real estate. A family may invest in a home to live. A landlord will invest in a rental property to earn a living. A corporation can invest in a shopping mall on behalf of its stockholders. A university has to invest in a parking garage to alleviate the parking problem on campus. A real estate investment is usually considered to be a safe investment. A bank may lend up to eighty percent of the value of a house to a homeowner, but the stockbrokers can lend only up to fifty percent of the stock purchased on margin. The stockbroker can monitor the price of a stock every day and send a margin call as soon as the value of the stock drops below a certain level. A real estate holding should be a long-term investment for a firm or an individual. Brown and Geurts (1) investigate the holding period of real estate properties by individual investors. By analyzing the real estate transactions in San Diego, they find that the average holding period by the investors is somewhat less than five years. The investor behavior is contrary to the theoretical calculations in this paper, which demonstrates that the optimal holding period is much longer. In another paper, Brown (2) explores the reasons for owning real estate by private investors. In particular he examines the risk peculiar to real estate investments, including the entrepreneurial abilities of the owner. Geltner and Miller (3) look at the risk in the real estate investments for individuals and try to measure it in terms of CAPM. Their conclusion is that one cannot really do so.
Mutual Fund Acquisitions and the Wealth of Target Shareholders
Dr. Xiyu (Thomas) Zhou, University of Alaska, Fairbanks, AK
Dr. Kevin C. H. Chiang, Northern Arizona University, Flagstaff, AZ
Dr. Craig H. Wisen, University of Alaska, Fairbanks, AK
The impact of mutual funds acquisitions on target shareholders’ wealth is an important topic considering the predominant role that mutual funds play as financial intermediaries. The results of the present study indicate that while target funds experience lower distribution and operation costs in post-acquisition period, the overall impact of acquisition on target funds’ performance is negative. These results suggest that mutual fund acquisitions destroy value in the long run. This phenomenon is partially driven by an implicit desire to achieve diversification on the part of some bidders whose main businesses are not in the asset management industry. The notion of shareholder wealth maximization is often advocated in corporate governance and control literature (see Jensen and Meckling 1976). Because of this emphasis, shareholder wealth has been extensively examined in the corporate merger and acquisition literature (see Becht, Bolton, and Röell 2002; Gondhalekar and Bhagwat 2003; Knapp, Gart, and Becher 2005). Relatively few studies though have focused on target shareholders’ wealth within the mutual fund industry. Jayaraman, Khorana and Nelling (2002) studied mutual fund mergers that involve the combination of two funds across fund families. (2) They found that this type of cross-family mergers results in a reduction in expense ratios for target shareholders, but this restructuring does not lead to significant changes in post-merger performance. Khorana, Tufano, and Wedge (2005) found that regardless of board structure post-merger fund performance and fees revert to the mean of the investment objective. An unanswered question within the mutual fund industry is whether fund acquisition in general improves the wealth of target shareholders. Unlike conventional companies, a mutual fund is often externally managed. In this case the fund and its investment adviser operate as separate units. The sponsor/advisor has a controlling role in fund operation while shareholders are usually passive in corporate governance. The fund and its sponsor/advisor are linked through service contract(s). These unique features make the acquisition of service contracts a key to improving the understanding of how target shareholders’ wealth is affected during and after consolidation.
The Iran - China Alliance
Kamrouz Pirouz, Ph.D., Montclair State University, Upper Montclair, NJ
Farahmand Rezvani, Ph.D., Montclair State University, Upper Montclair, NJ
The impact of China’s rapid economic growth in the last fifteen years has led to a substantial increase in its demand for energy. Iran’s ample supply of oil and gas and its need to counterbalance pressure from Europe and especially the US, have combined to initiate an alliance between the two countries. Our position in this paper is that this partnership is extremely beneficial to both countries and it should be strengthened in the years to come. The recent rise in the price of oil which broke the $60 a barrel mark in late August of 2005 is due to underlying fundamentals. The combination of a strong global demand, especially from China and India, coupled with tightness in supply and lack of excess capacity in refinery production worldwide, have been the main cause of the surge in oil prices. But political instability in the oil producing regions, especially the Middle East and Venezuela, and the resulting fear of supply disruptions have also added an element of unpredictability which becomes reflected in the price of oil. This paper, after considering the causes of the rise in the price of oil since 2005 seeks to examine the impact of China’s rapid economic growth on total world energy demand and the possibility of its alliance with Iran as a rich energy source to provide China with ample supply of oil as well as natural gas. A look at the history of oil price movement- Crude oil prices behave very much like those of any other commodity. They respond to shifts in demand as well as supply, which currently has two components, OPEC and non-OPEC production. In this section we look at a brief history of oil price changes in international markets since World War II. Crude oil prices ranged between $2.50 and $3.00 from 1948 through the end of the 1960’s. However, when viewed in 2004 prices, crude oil prices fluctuated between $15 to $17 during the same period. From 1958 to 1970 prices were stable at about $3 per barrel, but in real terms the price of crude oil declined from about $16 to below $13 per barrel.
The Capital Allocation in Developing Economies and their Vulnerability to External Shocks
Dr. Vefa Tarhan, Loyola University Chicago, IL
This paper investigates emerging market characteristics and whether or not emerging markets allocate scarce capital resources in an efficient manner. One of the findings of the paper is that while there has been a steady improvement in these markets, there still are some distortions. One of the significant problems is that the governments dominate the bond markets in these countries to the extent of completely crowding-out the private sector. At the macroeconomic level, this in turn simultaneously encourages inflation and curtails economic growth. At the corporate finance level, it forces firms to rely on short-term bank debt, exposing them to maturity risk, and also to borrow foreign currency denominated debt which exposes them to exchange rate risk. Additionally, due to the volatility of these economies firms have higher betas and higher cost of equity than developed economies. Using the events experienced during May-June 2006, the paper argues that these markets are susceptible to financial shocks created by hedge fund activities. Finally, the paper provides a recipe for the measures that governments and other institutions can take for further development of these markets by broadening and deepening these markets. This paper discusses the general characteristics of developing country capital markets and compares the workings of developing countries’ capital markets against the mature capital markets of developed countries. A partial list of developing country capital markets’ deficiencies include factors such as the “crowding-out” of the private sector from public debt markets, lack of financial instruments with long-term maturities, and the inability of firms’ to hedge their interest rate and foreign exchange rate exposures due to absence of liquid derivatives markets. Other developing country’s specific capital market imperfections are caused by asymmetric factors that limit the deepness and broadness of these markets. At the outset it can be said that, one way or another, from the investors’ perspective emerging markets create additional risk premiums that are typically not faced by the developing country investors. Thus, from firms’ standpoint, the developing capital market imperfections discussed above translates into a higher cost of capital, which obviously adversely affects their investment decisions.
Pricing American Options with Counterparty Risk
Lung-fu Chang, National Taiwan University, Taiwan
Dr. Mao-wei Hung, National Taiwan University, Taiwan
This article evaluates the impact of default risk on the prices of American options by the two-point Geske and Johnson method. Using the two-point Geske and Johnson method, we provide the analytical formula to assess vulnerable American options by pricing vulnerable European and multi-exercisable options under risk-neutral measures and employing Richardson’s extrapolation. To demonstrate the accuracy of our proposed method, we compare values of the vulnerable American option from our proposed method with benchmark values from the least-square Monte Carlo simulation method. Numerical evaluations illustrate the impact of counterparty risk on the prices of European and American options and demonstrate the accuracy of our proposed method. Over-the-counter (OTC) markets have come into the limelight in recent years. In the OTC market, financial derivatives of all types are widely traded. Financial institutions and corporate clients are the main participants in the OTC market. In contrast to exchange-listed options markets, there is no organizing exchange in OTC markets requiring options positions to be resettled daily and sufficient collateral posted. Therefore, the holders of OTC options are exposed to possible defaults from their counterparties. The traditional option pricing formulas suggested by Black and Sholes (1973) or Merton (1973) do not take counterparty risk into consideration. Several studies have concentrated on pricing vulnerable options, which are private contracts with the option payoff but without the protection of counterparty risk, as described by Johnson and Stulz (1987), Hull and White (1995), Klein (1996), Klein and Inglis (1999, 2001) and Hung and Liu (2005). Johnson and Stulz (1987) assume that options are unique liabilities in the option writer’s capital structure. If the option writer cannot make the promised payment, option holders will receive all of the option writer’s assets. Johnson and Stulz provide an analytical formula for pricing some vulnerable European options.
A Structural Equation Model of Total Quality Management and Cleaner Production Implementation
Dr. Ming-Lang Tseng, Ming-Dao University, Taiwan
Dr. Yuan-Hsu Lin, Ming-Dao University, Taiwan
Dr. Anthony SF Chiu, De La Salle University, Philippines
Chi-Horng Liao, De La Salle University, Philippines
A review of the literature revealed gaps in this area of organizational factors and cleaner production implementation, particularly inadequacy in this area of empirical testing of the organizational factors on cleaner production implementation. The aim of this study was to examine the total quality management elements and cleaner production implementation of numbers of manufacturing firm in order to determine the relationships among these variables. This research used of 267 Taiwan manufacturing organizations. The reliability (construct and item) and validity (convergent and content) of the constructs were evaluated. The result showed the Total quality management (TQM) elements were significantly and positively related to each other and cleaner production construct. A structural equation model constructed. The National Center for Cleaner Production Center, Taiwan has promoted cleaner production concept for several years. The concept of cleaner production is a preventative integrated continuous strategy for modifying products, processes or services, has been considered as the best technological strategy and good housekeeping toward sustainable development (Grutter, 2004). It embodies the more efficient use of natural resources and thereby minimizes waste and pollution as well as risks to human health and safety. Kjaerheim (2004) discussed on the intangible benefits and human factors derived from cleaner production project, cleaner production should no longer be viewed as a stand-alone option but be integrated in all business development activities to improve quality of life, protecting public health and improving safety. And, Stone (2006a) emphasized the importance of social factors in the implementation of cleaner production projects and identified a number of inadequacies in the change management processes used. Stone (2006b) “… a set of key internal organizational factors that strongly contributed towards the uptake of cleaner production and affected the potential on going improvement.”
Evaluating the Decision to Adopt RFID Systems Using Analytic Hierarchy Process
Koong Lin, Tainan National University of the Arts, Taiwan
Chad Lin, Edith Cowan University, Australia
Interests continue to grow in recent years for the adoption of Radio Frequency IDentification (RFID) technologies due to their capability for real-time identification and tracking. A good example of this was when Wal-Mart asked its top 100 suppliers to use RFID tags in 2005. This had a profound effect on the projected growth of RFID technology as well as potential applications in industries such as defense, wholesale, and retail. However, there are some business and technical problems and issues with the use of RFID technologies (such as data accuracy, costs and benefits, and security and privacy) and these warrant further research. Thus, this research aims to establish a decision analysis mechanism that can assist organizations to judge if they are suitable to adopt the RFID systems. The AHP (Analytic Hierarchy Process) methodology is employed to analyze the RFID adoption decision processes of both RFID expert and industry evaluators. Global spending on Radio Frequency Identification (RFID), according to Gartner, is likely to reach US$3 billion by 2010 (CNET, 2005). RFID can be used to integrate processes and technologies in order to conduct and manage global trade. Several major retailers such as Tesco in the UK and Metro in Germany are already rolling out large-scale RFID initiatives. For example, Wal-Mart asked its top 100 suppliers to use RFID tags by 2005 (EPCglobal, 2006). However, organizations often encounter challenges and problems when implementing new IT technologies (Lin et al., 2005b; Love et al., 2005). For instance, organizations are likely to face various costs, risks and uncertainties when assessing the new adopted IT technologies (Lin and Pervan, 2003; Tsao et al., 2004) such as RFID. Therefore, this research aims to develop a mechanism which can help organizations to identify their risks and choose a suitable adoption option for the implementation of RFID. Analytic Hierarchy Process (AHP) methodology is used to analyze the data as it is useful for examining different RFID adoption options and can assist organizations in predicting the possible issues and challenges when adopting RFID.
Budgeting as a Competitive Advantage: Evidence from Sri Lanka
Dr. Siriyama Kanthi Herath, Clark Atlanta University, Atlanta, GA
M. W. Indrani, University of Ruhuna, Wellamadama, Matara, Sri Lanka
This study empirically explores the roles of Budgetary Control Systems (BCS) as a component of the Management Control System (MCS) in creating and sustaining Competitive Advantage (CA). More specifically, it attempted to reveal the existing accounting control practices in a manufacturing firm in Sri Lanka; Harischandra Mills Ltd (HML). The study examined how the BCS assisted in satisfying the demand for Coffee and Noodles at a competitive price leading to higher sales volume creating and sustaining a CA. The study reveals the budgeting process at HML and recognizes a number of roles performed by the BCS and it concludes that regardless of the fact that a BCS can play a leading role in establishing an efficient MCS for creating a sustainable CA, budgeting will not function in isolation. Instead, it can be used more effectively by strategically joining it with emerging strategic oriented knowledge enterprises. The management accounting literature proposes that effective planning and control are crucial for achieving organizational goals and objectives. Effective planning ensures that goals are selected with care and effective control ensures that the selected plans are implemented appropriately. Budgets perform an important role both in planning and control in achieving organizational goals. With Anthony’s (1965) pioneering work on management control systems, budgeting has become an essential part in organizational management. According to Anthony, budget preparation is an inherent part of the management control process. The management control process starts with the establishment of organizational goals and devising strategies for attaining these goals. This process involves the preparation of a strategic plan and converting it into an annual budget that focuses on the intended revenues and expenses for each responsibility centre.
Education and Labor Market in Knowledge-Based Economy of Korea
Dr. Namchul Lee, Korea Research Institute for Vocational Education &Training, Dankook University, Korea
The principal objective of this paper is to explore the reasons for male and female differences in participation rates in higher education and the labor market in Korea drawing on various aggregate data. Also, we compare to determine the relationship between education and labor market participation, and account for earnings inequality. More detailed attention is then given to issues concerning the changing composition of employment and unemployment in terms of occupation by gender. The results suggest that the overall differences in higher education at the college level which has been a heavily male-dominated area and in the labor market are primarily due to differences in observed socio-economic factors, such as wage differentials and cultural characteristics. Over the last forty years, education has been the main reason for the dramatic improvement the status of professional women. Educational attainment of the work force is a key development strategy aimed at promoting economic growth, and gender differences in education may be viewed as an important indicator of gender inequality (Mankiw etc, 1992). However, technology has proven to be an especially difficult area for women to penetrate professionally. They have been encountering very tough obstacles in the knowledge-based economy. The Korean economy has been transforming from manufacturing industry to a knowledge-based economy, owing to the continuous development of new one based predominantly on the technology, especially information and communication technology (OECD, 1996). In this paper, I analyze changes in the structure of woman’s higher education, labor force participation, employment, unemployment, and earnings inequality in Korea. The analysis is based on micro-data from the economically active population survey, statistical yearbooks of education, and a survey report on wage structures. In this paper, we aim to contribute to the reviewing literature and statistical data on this topic by studying changes over time industrial structure, labor force participation, and higher education programs. Understanding of the labor market trends provides a context for analyzing trends in higher education.
A Renewed Look at the Turnover Model for Accounting Knowledge Work Force
Dr. Yaying Mary Chou Yeh, CPA, Shih Chien University, Kaohsiung Campus, Taiwan, ROC
In an effort to understand the change dynamics on work attitudes and perceptions of the twenty-first century knowledge work force, this study explores a turnover model including organizational commitment, job satisfaction and turnover intent using accounting professionals as an example. Results from structural equation modeling (SEM) reveal that job satisfaction is the most important factor in determining employee propensity to leave for accounting knowledge workers. Organizational commitment is not critical in the turnover model for individuals with movement capital. Empirical test implies that firms should identify employees with different level of movement capital to design suitable retention programs. The conclusion of this study is also applicable to other high-level, service oriented knowledge employees in the age of knowledge economy. Knowledge worker, as first coined by Peter Drucker in 1959, is one who works primarily with information to develop and use knowledge in the workplace. Accounting professional is one of such who accumulates intellectual capital and business intelligence through specialization and expertise. The management of accounting knowledge workers, especially in the aspect of human resource development, requires contextual and careful attention and connection. The accounting profession has experienced profound changes in the past two decades. The globalization of the market place, fast intrusion of information technology, mergers of firms and increased litigation activities are but some of the challenges facing the profession (Schuetze, 1993). The Enron implosion wreaked more havoc on the profession than any other case in U.S. history (Thomas, 2002). The accounting profession is worried about not being able to recruit and retain enough professionals to fill the need after many scandals and the negative publicity in these couple of years (AOMAR, 2002). High employee turnover is a continuing problem, especially for accounting knowledge workers with vested capital in expertise and skills. The purpose of this study is to investigate work attitudes and perceptions in terms of the turnover model among accounting professionals with a hope to make an incremental contribution by generalizing characteristics about other types of professionals. Committed people are more likely to remain with the organization and work toward organizational goal attainment (Mowday, Porter, & Steers, 1982).
Market Controls on Corporate Social Responsibility: An Exploratory Study of Banking & Investment Policies (1)
Dr. Breena E. Coates, Chairman, San Diego State University, Calexico, CA
Corporate fraud, managed mendacity and other crimes necessitated passage of the Sarbanes-Oxley Act of 2002 (2). This conceptual paper resumes the discussion of corporate social responsibility by analyzing market controls that could facilitate business ethics, such as the “Equator Principles” in Banking, Grassroots Participatory Lending and other mechanisms. It explores these devices via a constructivist-interpretative methodology, using content analyses of scholarly and practitioner literature to deconstruct and synthesize business strengths, weaknesses, opportunities and threats over the last 20 years, and thus make policy-relevant recommendations for business and government. This exploratory study will be followed by an empirical analyses using survey research and statistical analyses of banking and investment loan evaluation procedures. This conceptual study examines how market controls could be an avenue for facilitating corporate social responsibility (CSR). CSR is the expectation that companies see their corporate strategies and decision-making within a framework that includes sustainability of social and environmental resources, and a keener understanding of the negative externalities generated through business actions–and not just profit and loss considerations. (Deresky, 2006). Our current system of business accounting harks back to the industrial revolution which set forth business practices that were largely oblivious to their social and environmental impacts. One explanation given is that our gross domestic product, based upon the “national account” principles set forth by John Maynard Keynes, while useful in its exactitude for accounting for capital goods, is elusive and ambiguous in tracking the impact of business on social and natural resources. The thinking of business and economics is about externalities, which may or may not be “internalized” to the organization via taxes and regulation through governmental instrumentalities. In the past it was possible to view the many of the costs of business as external—i.e., expenses generated by business but compensated for by the people.
A Factor Analytic Study of the Computer Anxiety Rating Scale: Evidence from an Egyptian University
Dr. Mansour Salman Mohamad. A. M. Lotayif, Al Ghurair University (AGU), Dubai, United Arab Emeritus
Dr. Ahmed El-Ragal, Arab Academy for Science and Technology, Alexandria, Egypt
Computer Anxiety Rating Scale (CARS) has been a topic of interest in computer literature for decades. The current study is an endeavor in this perspective. It attempts to determine the number of anxiety’s constructs within Woszczynski’s 16-item CARS. The experience of 344 undergraduate students was utilized to achieve the current study aims. Through Explanatory Factor Analysis (EFA), CARS was loaded on four factors that represent four constructs: future ambition about computer, technical, personal, and experience anxieties. Technophobia and computerphobic are two terminologies surface as consequences of massive usages of computer applications in most life aspects. North, and Noyes (2002); and McIlroy et al (2001) have defined technophobia is the anxiety about present or future interactions with computers or computer-related technology; negative global attitudes about computers, their operation or their societal impact. Drawing from psychology literature, anxiety is a disease for which there is no consensus about its causes. However, its debilitating symptoms are well defined. They range from trembling, facial strain and high resting pulse, to excessive rumination, dizziness, insomnia and impaired concentration in its most severe forms (Shrady, 1985). With regard to computer anxiety, students and adults suffer from the same fear. What complicates this matter is its ramification on the personality. More specifically, any form of students and adults’ failure in any computer classroom is perceived as a reflection of their personal worth instead of simply failing at an academic exercise (Fisher, 1998). Completions of computer courses help alleviate this kind of computer anxiety (Safford and Worthington, 1999; Gos, 1996). Fisher (1998, p. 14) suggests the followings to avoid computer anxiety in any classroom for students or any training session for adults: Let there be light. Make the room setting as welcoming and nonacademic as possible; It's in the cards. After initial introductions, pass around blank 3 x 5 index cards to all participants. Ask each to write just three things on the card: number of years out of school, greatest fear about entering training, and why he or she is taking the training; Tenure is tenuous.
Executing Strategies on Intellectual Capital: Case Study for Management and Corporate Governance
Jui-Chi Wang (Amanda), Hsing-Wu College, Taiwan
Skanida is the first company to report its valuable intangible asset on financial statement in the world and has made the distinguished contribution in intellectual capital (IC) development and affected greatly in today’s strategic management and business re-engineering practices. This case study first introduced the background of this Sweden company, and also its current financial performance. Jan R. Carendi, former CEO of Skandia, had worked for Skandia for decades and contributed his initiative knowledge and vision to build the foundation of intellectual capital in Skandia. Skandia Navigator was introduced to help the company to balance the financial and intellectual capital evaluation; therefore, the company’s successful factors can be visually seen and evaluated by quantitative ratios through the business development process. The strategic development and value creation as the hidden values of the company can be managed by utilizing the intellectual ratio and indicators. The strategies for Skandia’s human capital, intellectual capital management and distribution channel were also discussed. Furthermore, Skandia initiated extensive work on reshaping the group from a federative structure into a highly cohesive and uniformly governed group that makes effective use of operating synergies. Finally, the key questions examined internally and externally would provide detailed analysis and suggestion in changing external business environment and competitive realities for Skandia. In 2002, America’s Fortune magazine named Skandia as one of the 10 best companies for employee to work for. It is the first time for the magazine to rank the European companies in 20 years and the only Swedish company to receive this acknowledgement was Skandia. Also, Skandia Germany has been ranked number two in “Best Employers” survey that was conducted by Hewitt Associates consulting firm in 2004. Skandia insurance company was established in Stockholm, Sweden in 1855. It is the oldest listed insurance company in Stockholm Stock Exchange, Sweden, and on Jan. 12, 2005, Skandia has provided its service and product globally for over 150 years. The following statement is Skandia’s company profile: “Skandia Insurance still sells insurance worldwide, but long-term savings is becoming its new target. Skandia offers life, health, and property/casualty insurance; banking; and investment management.
An Empirical Analysis Concerning the User Acceptance of E-Learning
Dr. Salih Zeki Imamoglu, Gebze Institute of Technology, Turkey
With the rapid change of traditional practices, technologies, skills and accelerated rate of knowledge creation and dissemination; lifetime learning has become inevitable both for everyone and for every organization. An e-learning system is a promising alternative in the current educational revolution that is taking us from a print to a digitized culture, with a corresponding demand to deliver knowledge to educate large numbers of people over vast areas without the boundaries of time and place. The increasing importance of e-learning has made user acceptance a critical subject for both academicians and practitioners. Accordingly, in this study the e-learning concept is described with a detailed literature review, and user acceptance, in terms of perceived usefulness, is empirically investigated. In the twenty first century, a period of knowledge domination[BAS1] , technology is increasingly changing our lives. First, desktop computers appeared, followed by the Internet, a technology that enables any user to have access to unlimited quantities of information and knowledge. In the current educational revolution that is taking us from a print to a digitized culture, technology and the Internet are playing more active roles in the education and training processes[BAS2] . As a result, educators and academicians face an important challenge in how they define e-learning (LearnFrame, 2000; Cheng, 2006; Huynh, 2005). E-learning, a relatively new instructional computer technology, breaks the constraints of time and space while creating many benefits, including reduced costs, less regulation, improved ability to meet business needs, greater ability to retrain employees, lower recurring costs, and better customer support (Barron and Mayberry, 2000; Gordon, 2003; Burns, 2005).
International Reality of Internet Use as Marketing Tool
Dr. Maria Teresa Borges Tiago, University of the Azores
Dr. Joao Pedro Couto, University of the Azores
Dr. Maria Manuela Natario, Polytechnics Institute of Guarda
Dr. Ascensao Braga, Polytechnics Institute of Guarda
This paper analyzes the factors that are associated with success in using the Internet as a marketing tool. We administered a questionnaire to companies on three continents, considering six levels, which range from financial results and customer relations to buying efficiency. We divided the companies into three groups using cluster analysis and tested the nature of the companies in each group on two levels, one regarding firm’s characteristics and another considering the approach that firms took in the use of the Internet marketing tools. The results show that the benefits vary according to the way the Internet application are explored; that commitment level can affect the results and the impact is superior in the companies that explore the Internet potentialities in a wider perspective. These results demonstrate that the Internet is not only a means of sales promotion, but also relationship management and that companies who invest in an integrated perspective are more successful. As limitations of the study we consider the need for more research into the types of company activities that use the Internet as a fundamental component of the business. This paper contributes to the research on this topic with new evidence in a broad geographic sample. The accelerated development of the New Information and Communication Technologies (NTIC) has promoted globalization and the opening of new markets that require new business structures, new mentalities and culture, and new competencies. Thus, it demands the ability of companies to adapt and develop new capabilities. In face of uncertain scenarios derived by the growth of market competition, the challenges to organizations have become more complex and demanding. The organizations apply more to the NTIC to create generate process and distribute information in real time (Teo & Pian, 2003). They develop new opportunities of sharing large amounts of information and allow new relationships between the organizations and the customers (Boyle & Alwitt, 1999; Boyle, 2001). In this manner, they have become a crucial element not only in their internal activities, but also in their external relationships, in the ability to communicate and process information, in the identification of new business opportunities, in advertising their products/services, and in sales. In many cases the NTIC are already incorporated in the organization’s processes and strategies.
Optimal Stochastic Production Entry and Exit Models
Chuan-Chuan Ko, Jin Wen Institute of Technology, Taipei, Taiwan
Dr. Tyrone T. Lin, National Dong Hwa University, Hualien, Taiwan
This study aims to evaluate the firm value by risk adjusted discounted factor with no leverage condition. The proposed model considers the market entry model with investment cost and the market exit model with exit cost simultaneously. The results of this study find out the hysteresis difference only accessed by production entry or exit model, and the threshold of production is more conservative than the traditional net present approach or real options approach. The purpose of this work is to conduct study that when the project investment keeps out of debt, the anticipated rate of return on investment required by stockholders plus the risk premium shall be the revised risk discounted factor in order to measure the firm value. In addition, traditional financial management is based on the risk neutral approach to conduct measurement aiming at the stock price to convert into the firm value. That means the anticipated rate of return on investment is equivalent to the risk-free interest rate, which is accepted and identified by general finance scholars. However, when an enterprise is conducting real asset project investment consideration, if it utilizes the risk-free interest rate of the risk neutral approach as the anticipated rate of return on project investment, it will not be accepted by the practical sector. Therefore, in order to improve the difference generated from the object considered for real asset investment evaluation and financial commodities, this work adopts the anticipated investment rate of return plus the risk premium as the revised risk discounted factor so as to evaluate the income of the project plan more accurately. In addition, the real options approach is utilized to evaluate the optimum threshold of market entry and exit of investment strategy and measure the potential value of the investment plan. Lin and Lo (2006) conducted study on the most suitable lending quality of a financial institution (debt risk coefficient) and established the upper (lower) limit of this lending quality and explained the reasonable scope of lending quality under the premise of consideration on the entire maximum income by the financial institution. Lin, et al. (2006) conducted on how the financial institution should adopt the most suitable capital financing retreat policy evaluation under transparent market information.
Doing More Harm than Good: Unraveling the Mystery of Frustration Effects
Dr. Michael P. Lillis, Medaille College, Buffalo, NY
Dr. Frank J. Krystofiak, University at Buffalo, Buffalo, NY
Dr. Jerry M. Newman, University at Buffalo, Buffalo, NY
In a management context, there is a strong belief that employees view outcomes more favorably when they result from fair procedures rather than unfair procedures. Yet academic and popular accounts indicate that some procedural enhancements have the potential to backfire – i.e. process improvements can unexpectedly bring about an increased sense of injustice, thereby doing more harm than good. This study attempts to provide an integrative framework for understanding this so-called “frustration effect”: when does procedural justice enhance, and when does it diminish, distributive justice. To better understand the occurrence of frustration effects, the authors focus on Referent Cognitions Theory (RCT). Using structural equation modeling in a multi-sample framework, evidence suggests that the trigger for the so-called ‘frustration effect” depends on a belief in one’s entitlement to a preferable referent outcome. If outcomes are bad enough, and fail to meet individual expectations for a more desirable alternative, procedural fairness does little to enhance perceptions of distributive justice. The results are discussed in connection with practices used to allocate scarce goods and resources. The research literature provides reasonably consistent information about two components that are crucial in deciding if the allocation process is just or fair: distributive justice (which focuses on the perceived fairness of outcomes, Adams, 1965) and procedural justice (which concerns the justice of the process used to determine those outcomes, Greenberg, 1990). Additional research efforts suggest not only that both process and outcome dimensions play a role in determining fairness perceptions, but that they play an interconnect role. In other words, individual reactions to outcomes may be enhanced by the perceived fairness of procedures used to distribute those outcomes (fair process effect), and conversely, individual reactions to procedures depend on the perceived fairness of outcomes that were obtained through those procedures (fair outcome effect). There is evidence that procedural and outcome enhancements don’t always have positive implications for justice judgments.
Audience Attitudes Towards Product Placement in Movies: A Case from Turkey
Dr. Metin Argan, Anadolu University, Eskisehir, Turkey
Dr. Meltem Nurtanis Velioglu, Abant Izzet Baysal University, Bolu, Turkey
Mehpare Tokay Argan, Anadolu University, Eskisehir, Turkey
The practice of product (or brand) placement in movies and other multimedia has been an important emerging area of marketing and advertising communication in recent years. Marketers and movie producers now frequently use placement as the basis for multi-million dollar promotional campaigns. This study describes the attitudes of a sampling of Turkish moviegoers towards product placement in movies and analyzes data to determine the effect of product placement on a Turkish population of moviegoers. In order to examine product placement from an audience’s point of view, the study investigated a sample of Turkish moviegoers. The findings indicate that while there is generally a favorable attitude toward product placement, extensive commercial usage of product placement in movies is perceived by moviegoers as ethically less acceptable. The findings also indicate that movie going frequency and the level of movie enjoyment affect the attention paid to product-placement, whereas gender, age, education and income level do not affect attitudes towards product placement. The results of this research have significant implications for both the practice of marketing as a whole as well as to how the movie audience interprets product placement practices in Turkey. Product placement refers to the practice of including a brand name product, package, signage or other trademark merchandise within a motion picture, television show or music video (Brennan et al.,1999). This placement is done to influence the audience (Balasubramanian, 1994). The placement could be done within a movie scene to add realism to movie scenes, but from the product placement practitioners’ point of view, the desired influence is in the form of increased awareness of and intention to purchase the placed brand (Babin and Carder, 1996). Schudson (1984) points out the widespread practice of product placement by tobacco companies in the Hollywood movies of the 1920s. However, until the 1970’s, product placement practices were defined as poorly organized efforts.
Management Education Reform in a Knowledge Management Environment
Dr. Satya P. Chattopadhyay, University of Scranton, Scranton, PA
This paper seeks to link knowledge management (KM) principles to needs that businesses expect will be filled by trained management graduates. Knowledge management is defined, and business tasks are mapped onto a knowledge management scenario. The need to change the emphasis of present management curriculum to reflect the new realities is substantiated. Specifically, the components of a knowledge management system: knowledge acquisition, strategic sense making and communication are described. Ultimately, the goal of business education is to develop decision-makers of the future who will be able to make better quality decisions more efficiently in what is at the core, a problem-solving environment. The business world is the customer of trained professionals that academic programs seek to deliver, and it is increasingly vocal about the needs that it wants met. With ever-increasing sophistication in conceptualizing and articulating these needs, they are able to clearly identify the specific areas where they seek fulfillment. They are looking for individuals who will be able to hit the field running. They seek to hire employees who are competent, productive, innovative and able to anticipate and respond to crises. The academic programs seek to prepare their students so that they will be up to the task ahead. The students are provided with a body of knowledge that is a varying blend of theoretical principles and practical applications as they pass through the system. They learn how to conceptualize problem scenarios and develop solutions using knowledge inputs they receive. This knowledge transfer is the key. Strictly speaking, the problems of improving the quality and effectiveness of business programs are no different than the problems faced in the business world. It all boils down to the transfer of knowledge! However, the problem that is implicit is that most of the knowledge is what is known as “tacit knowledge” or knowledge that resides within individuals or groups and communities that are not accessible directly through non-personal interactions such as literature searches and/or database queries.
An Evaluation of Time-series Operational Performance on the Non-profit Hospitals in Taiwan
Ching-Kuo Wei, Oriental Institute of Technology, Taiwan
The purpose of this research is to study the operational performance of the non-profit hospitals in Taiwan from 2000 to 2004. This study adopts the Malmquist Productivity Index (MPI) and Bilateral Model to analyze the operational performances of 72 non-profit hospitals. The results show that the operational performances of these non-profit hospitals regardless of the attributes present a common tendency that the performances of 2001 and 2003 regressed as compared to the previous year, while that of 2004 has grown as compared to 2003. In addition, the implementation of Taiwan’s Health Insurance Global Budget System has a greater negative impact to the public hospitals; therefore, based on the category of authorization and responsibility, the operational performance of proprietary hospitals is better than that of public hospitals. Non-profit hospitals are quite popular in Taiwan and can be categorized into two forms, public and proprietary, by their characteristics. The public hospitals are established by the government to provide the basic health care needs for the public and also take care of the minority patients’ health services. The establishment of proprietary hospitals is mostly because of the tax reason and enterprise’s image, and most major business groups have set up hospitals. Moreover, they succeed to introduce the business management model to the hospital operation. The proprietary hospitals also have the nature of social public-welfare. On the discussion of hospital management efficiency in the past, the non-profit hospitals were compared with the profit ones. However, because they both have different attributes, it is more meaningful to study them separately. Besides, in recent years, the payment policy of Taiwan’s health insurance system has changed and caused the hospital management to change greatly.
Entrepreneurial Cognition and its Linkage to Social Capital
Janusz K. Tanas, Swinburne University of Technology, Melbourne, Australia
Dr. John Saee, Swinburne University of Technology, Melbourne, Australia
The main aim of this paper is to examine the cognitive and behavioral aspects of social capital and its influence on entrepreneurial development and economic growth. The paper presented is conceptual in nature with some support from secondary data assessment. Further, extant literature review seems to suggest that cognitive and behavioral aspects have received limited attention in the extant literature on social capital. The findings seem to suggest that cognitive and behavioral aspects are one of the main components of social capital which stimulate the development of trust, networking and relationships. Further, it is argued that cognitive coherence is a necessary catalyst for entrepreneurial development and thus economic growth. Entrepreneurship is central to the development of the existing and the transitional economies (Aldrich 1999). Entrepreneurial activity serve as a vital component of national economic growth and development during transition as it encourages action, promotes job creation, consequently, improving well being of the entire country (Bednarzik 2000; Keister 2000). Entrepreneurial businesses form the nature of social and economic stratification in a transitional economy (Haltiwanger & Krizan 1998). Thus, Entrepreneurship enables individuals to accumulate wealth, to expand their social contacts, and to improve their social and economic standing (Bates, 1997a; Fischer & Massey 2000; Haveman and Cohen, 1994; Keister 2000; Nee & Sanders 1985; Quadrini 1999). This paper investigates the phenomenon of entrepreneurship within the transitional economies with a specific focus on Poland. Particular attention is paid to the nature of social capital and its influence on entrepreneurship. Specifically, cognitive and behavioral aspect of social capital that influences the development of entrepreneurship within a society was examined. Findings suggest that tremulous social change experienced by Poland throughout its history has lead to a strong and resilient human capital providing stability and progress during the transitional change. Thus, the populace was more willing to accept both the negative and positive aspect of economic transition.
Chinese Management Philosophy – Study on Confucius Thought
Dr. Chiou-Hua Lin, Ming Chuan University
Yuan-Kai Chi, Ming Chuan University
It has been more than 5,000 years of the history in China. Though through many disorders, these chaotic situations could finally be settled and an orderly situation may then be developed. What can be relied on mainly is the continued contribution of both wisdom and effort from the well-learned people, creating the best management philosophy. Management is a kind of complicated development process. It has such features as target, method, input, time & space and development, etc. However, Chinese Confucianism has influences on the cultural development, social progress, international relationship and peace in China for several thousand years. These thoughts have long integrated into the management process and denotation. The Chinese Confucius management philosophy is: starting from management of oneself, then developing to the management of an organization, and further marching toward the “benevolence”, “loyalty & forgiveness” thoughts, as a management philosophy that concerns “life with focus on service as a goal”: 1. “Self Management”: It refers to the moral management of an individual. 2. “Family Management”: It refers to the life management of the family members to form a good family. 3. “Organization Management”: It refers to the management of an organization or a business. 4. “World Management”: It refers to the management of the world as a unity. From ancient Greek, the philosophy is “a science with love of wisdom” and “a science of intellectuals”, as the thinking and knowledge of dealing with human beings, up till now. The term of philosophy started in use by a Japanese西周氏 in 1877 through the translation of “utilitarianism” of J.S. Mill, and later was introduced into China. However, the linguistic root of Philosophy is the Greek words Philo and sophia, indicating the “love of wisdom”. In Greek, it refers to the overall knowledge. That is, including physics with target of the Nature (the knowledge of studying the natural laws), as the theoretical science of human thoughts, and the ethics of human behaviors, as a science of extensive coverage. However, “love” is just what pointed by Confucius in China that “one who knows is inferior to the one who loves, and one who loves is inferior to the one who loves to know”.
A Methodological Classification in ES Implementation Research
Mei-Hsia Chiang, National Central University & Hsin Wu College, Taiwan, R.O.C.
This paper classifies enterprise systems (ES) implementation research into variance research, process research and conceptual research with a methodological dimension. Classification in ES implementation researches can contribute to theory development and formulation in ES implementation literature. In addition, an ES implementation conceptual model is developed based on the hybrid of variance and process theory and the incorporation of some existing ES implementation researches. This conceptual model can guide future research by developing propositions to explain contradictory findings of business performance in ES implementation, to permit a generalization of findings to related phenomena and to put forward a research agenda. Overall, this paper is unique in two ways: first, a methodological classification in ES implementation researches is provided to facilitate a good theory-building procedure to improve theoretical development; second, a conceptual model of ES implementation is proposed to guide future research and practically successful ES implementation. Our analysis can add to knowledge accumulation and creation in the MIS academic and practical discipline. Enterprise Resource Planning（ERP）systems are variously called enterprise-wide systems or enterprise systems (ES). Enterprise systems are commercial software packages that enable the integration of transaction-oriented data and business processes throughout its entire organization, eventually to assist the inter-organizational supply chain (Markus et al., 2000b). During the 1990s, enterprise resource planning systems became the de facto standard for replacement of legacy systems in large and, in particular multinational companies (Holland et al., 1999). Ross (2000) noted that the six most common motivations for ES implementation are a common platform, process improvement, data visibility, cost reduction, strategic decision -making and customer responsiveness. Year 2000 compliance was the driving concern and merely the catalyst to replace an aging information technology (IT) infrastructure with one more manageable and better enabled to new business processes (Ross, 2000).
The Influence of Dimensions of Corporate Governance on Firm Values Using an Applied Structural Equation Model
Chung-Cheng Hsu, Ling Tung Institute of Technology & Da-Yeh University, Taiwan
This research was conducted mainly to study the influence of dimensions of corporate governance on firm values by applying a Structural Equation Model. This paper analyzes whether factors such as equity ownership structure, directors’ and supervisors’ structure, and information transparency are appropriate for studying corporate governance effects on firm value. Information transparency is the variable used to indicate the quality of a corporate governance mechanism. This study uses the index of the Securities and Futures Institute to divide the information transparency of a corporate governance mechanism into high and low groups. The results show that information transparency can profoundly influence the efficiency of corporate governance and enhances firm values. also: (1) confirmed validity of the overall structural model; (2) showed that, once information transparency within a firm is established, the equity ownership structure and directors’ and supervisors’ structure have significant influence on the firm’s value; and (3) showed that a strong relationship exists between the composition of the board of directors and information transparency. Corporate governance has a relatively long history in the U.S. and Europe. The term first appeared in the 1960s but did not attract much attention in Asia at the time. In 1995, in relevant conferences held by Asian Development Bank and Asian Pacific Economic Cooperation (APEC), the international community gave this concept deep thought and promoted the adoption of corporate governance mechanisms, particularly after the Asian financial crisis in 1997. For the years 1999-2001, inclusive, the Organization for Economic Cooperation and Development (OECD) included Asian companies’ corporate governance issues in its meeting agenda as a major topic to be discussed; OECD published the main principles for corporate governance in 2004. After the Enron debacle in the U.S., “corporate governance” drew considerable attention from the public.
Gender Differences in Burnout among Life Insurance Sales Representatives in Taiwan
Dr. Chiang Ku Fan, Shih Chien University, Taipei, Taiwan
Chen-Liang Cheng, Shih Chien University, Taipei, Taiwan
There is a paucity of studies in which the relations among work-related gender differences are examined. Business competition has heightened, which has also increased the stress of workers. Life insurance is a vying business, but few studies have investigated burnout in this industry, particularly the relationship between burnout and the gender of sales representatives. Burnout was measured using the Maslach Burnout Inventory (MBI; Maslach & Jackson, 1986), which was the main measure of experienced job strain. The life insurance sales representative pool (N = 250) was selected using stratified sampling among employees in 29 life insurance companies in Taiwan. Mean scores were calculated for the three MBI subscales. Differences in mean scores were assessed using multivariate analysis of variance. Variables on which gender differences existed were selected as possible concomitant variables. Gender differences in burnout among Taiwan life insurance sales representatives were found to exist. However, our results indicate that underlying factors, such as working hours, have a profound effect on these differences. In 2002, Taiwan became a member of the World Trade Organization (WTO). In response, it was expected that domestic financial institutions, including life insurance companies, would face strong competition from foreign financial institutions and, as a result, were destined for tremendous change (Chiu, 2002). While business competition was stimulated, a lack of necessary competencies increased the work stress of life insurance sales representatives (Myers & Torrington, 2001). From 1996 to 2003, the average retention ratio among Taiwanese life insurance sales representatives at the 13th month of employment was just 48.1%. This means that more than 50% of life insurance sales representatives terminated their job within the first year, implying that burnout may be higher for those leaving their companies than those who stay in the organizations (Goodman & Boss, 2002). Half of new life insurance sales representatives may suffer from vocational burnout in their first career year. Sex differences in the manifestation of burnout have been reported for different occupational groups (Brake, Bloemendal, & Hoogstraten, 2003).
Understanding E-learning Consumers: The Moderating Effects of Gender and Learner Diversity
Dr. Yao-kuei Lee, Tajen University, Pingtung, Taiwan, ROC
Understanding consumer behavior is vital in formulating marketing strategies as consumer may form different perceptions due to individual differences for any given marketing stimulus. Using an e-learning acceptance model (Pituch and Lee 2006), a sample data of 259 Taiwanese undergraduates was used to investigate the effects of gender and learner diversity on consumers’ cognitive beliefs and intentions. The results revealed that the differences in construct means between males and females occurred at the front ends of the path model while those between nontraditional and traditional learners were at the opposing ends. It implied that different needs of various learner groups for e-learning, rather than academic discipline or gender seem to drive the differences in intention to use e-learning for distance education and for supplementary learning. In addition, gender and learner diversity moderated some of the model relationships. In particular, women’s adoption intention for distance education purpose was more strongly influenced by system interactivity and women’s perception of e-learning usefulness was negatively influenced by self-efficacy. System functionality predicted intention to use e-learning as a supplementary learning tool for traditional students, but not for nontraditional students, and perceived usefulness predicted intention to use e-learning for supplementary learning more strongly for nontraditional students than for traditional students. These findings help prioritizing the marketing efforts for different learner groups. E-learning has become an important educational and training method for corporate training, universities education, government employee training, and K-12 education.
Re-innovation: The Redefined Definition
Chi-Jyun Cheng, The University of Birmingham, UK
Dr. Eric Shiu, Lecturer, The University of Birmingham, UK
When redesigning a new product it is not only the time and the cost that are important, but also its characterization. While innovation has been much researched, re-innovation is essentially undefined and obscured. The authors attempt to illuminate the concept by reporting the insights obtained from their exploratory research. Eventually, this research provides a rigorous definition of re-innovation. When facing with either decreasing customer loyalty or falling market share caused by rapid environmental changes, companies often provide new products to speedily deal with these changes (Lukas and Menon 2004). However, research has shown that it is not easy for some current customers to accept a new product which is based on breakthrough innovations (Treacy 2004). In addition, most new consumer products fail (over 90 % each year) one of the reasons being that they use radical technologies which do not meet consumers’ requirements (Christensen et al. 2005). Conversely, companies can remain competitive by offering new products which are modified versions of existing products (Rothwell and Gardiner 1989). In fact, to constantly improve an existing product is a requirement of continued success for an organization (Rothwell and Gardiner 1983; Randal et al. 2005). This is partly because following this approach may not only reduce the cost of developing a new model but also decrease the lead time in bringing it to the market (Zangwill and Kantor 1998). Another possibility is that new product uncertainty could decrease (Song and Montoya-Weiss 2001). It is also possible that existing customers are more accepting of redesigned current products, because of the use of incremental technologies (Treacy 2004). Finally, perhaps this new model with slight changes would fit a company’s strategy regarding its competitors (Lin 2003).
ABC Joint Products Decision with Multiple Resource Constraints
Li-Jung Tseng, Ling Tung University, Taiwan
Dr. Chien-Wen Lai, Asia University, Taiwan
Owing to capacity constraints, the companies that produce joint products have to assess the economic desirability of further processing joint products beyond the split-off point. This applies especially in a situation where market demands exceed the company’s production capacity. In order to maximize total profits, these companies must learn how to utilize the limited resources efficiently. The aim of this paper is to develop an ABC approach for the further processing decision of joint products, with multiple resource constraints. With the approach presented in this paper, companies producing joint products could consider the process costs and the limited resources simultaneously and determine which products provide the higher unit profit per constrained resource. By applying this approach, companies producing joint products could utilize constrained resources more efficiently and this would lead to an optimal further processing decision for joint products with multiple resource constraints. Under the global competitive environment, the key factor for a successful enterprise is ongoing performance improvement. This strategic target is achieved by utilizing constrained resources efficiently. Traditional accounting methods usually assign overhead costs of products by using volume-related allocation bases such as direct labor hours, direct labor costs, direct material costs, machine hours, etc. This usually does not critically distort the product costs, as the overheads are normally just a small portion of the production process. But in a situation where there is a large diversity of products, or where there is a high level of automation, as Brimson (1991) pointed out, the distortion of overheads will be significant.
TCE Mode Selection Criteria and Performance
Dr. Lisa Y. Chen, I-Shou University, Kaohsiung, Taiwan
The concept of transaction cost economics (TCE) has been frequently used to analyze the determinants of entry mode choices. Throughout the literature, TCE has been used in many empirical studies to identify several crucial factors. This study, with grounding in the theoretical basis of TCE, investigates the factors that comprise multinational firms’ decisions to operate in foreign markets, with a view toward predicting performance. With a cross-sectional descriptive survey research design, a survey was developed for this study, in order to test the hypothesis and measure the variables. The survey was mailed to executive officers of U.S.-based small, mid-sized, and large multinational companies. The results of this study demonstrate that the effects of TCE variables were significant predictors of entry mode choice decisions and that the degree of control afforded by each entry mode choice had significant influence on mode performance. The cost of implementing a particular mode of entry is an important consideration in the choice of entry mode (Rajan & Pangarkar 2000). Recently, researchers have stressed the need to supplement efficiency considerations of the transaction cost model with strategic issues concerning entry modes (Aulakh & Kotabe 1997). Firms are expected to choose the governance or entry mode that minimizes the costs of carrying out particular transactions. In application, transaction cost economics (TCE) is concerned with comparing different institutional arrangements for carrying out economic activity (Burgel & Murray 2000; Williamson 1985). TCE posits that firms’ choice of organizational structure, including mode of foreign entry, is based on efficiency criteria for organizational structures that will economize on transaction costs (Yiu & Makino 2002). In addition, TCE is concerned with discovering the most efficient arrangement for an economic transaction, in which the basic choice for a firm consists of carrying out the transaction itself, engaging in an external transaction, or collaborating with a third party (Gemser, Brand, & Sorge 2004).
Cross-Cultural Leadership Behavior Expectations: A Comparison Between United States Managers and Mexican Managers
Dr. Sergio Matviuk, Regent University, Virginia Beach, VA
In the present global market, cross-national operations are common, which increases the interaction and relationships between people from different national cultures. The success of these cross-cultural business operations depends on the ability of the parties to understand and predict their counterpart’s behaviors. This ability is impacted by the people’s behavior expectations regarding how their counterpart’s should behave; because, if the behavior expectations do not match with the observed behavior, then the probability of conflicts and misunderstandings increases exponentially. This study focused its attention on the cross-cultural business relationship between the United States and Mexico and investigated if there were significant differences in leadership behavior expectations between a group of U.S. American managers and a group of Mexican managers. This study was cross-sectional and field-based, using a survey instrument to gather data. The Leadership Practices Inventory (LPI, Kouzes & Posner, 1997), adapted to define an ideal leader, was used to determine the leadership behavior expectations of each group. The results indicated that the U.S. American group had significantly higher leadership behavior expectations than its Mexican counterpart for all assessed leadership behaviors, which is helpful to anticipate potential sources of conflict when people from these countries interact. Results also suggested that variables such as education, gender, age, and their interaction had significant effect on participants’ leadership behavior expectations. This study contributes to a better understanding of the dynamics of cross-cultural business teams by identifying cultural variations in leadership behavior expectations between the U.S. and Mexico, which may help managers, trainers, and consultants to predict more accurately potential problems regarding cross-cultural interactions and develop strategies to increase cross-cultural business operations’ performance.
An Experimental Approach to Test Theories on Time Pressure in Online Time-Limited Promotions
Dr. Ching-I Teng, Chang Gung University, Taiwan
Li-Shia Huang, Fu-Jen Catholic University, Taiwan
Wen-Chun Yeh, Chang Gung University, Taiwan
Previous research on online time-limited promotions rarely considered the influence of time pressure using an experimental approach (except for Lin & Wu, 2005). By using an experiment, this study examines several theories on time pressure and finds the limitations of previous theories: (1) time pressure increases choice deferral tendency, contradicting the findings of Dhar and Nowlis (1999), (2) time pressure both directly and indirectly influences total purchase amount, contradicting the findings of Herrington and Capella (1995) and (3) the construct of ‘perceived fulfillment of the shopping plan’ both directly and indirectly influences revisit intention, extending the findings of Teng, Huang and Chang (2006). Finally, implications and future research opportunities are discussed. What are the benefits of stores imposing time pressures on shoppers? What are the influences of time pressures on shoppers? Do the effects of time pressure vary according to the products being purchased? Previous studies did not fully answer these questions. The findings of the literature include: Time pressured consumers have a tendency to accelerate information processing and filtering, and thus focus on important attributes (Svenson & Edland, 1987; Wright, 1974; Zur & Breznitz, 1981). Facing two alternatives with high choice conflict, time pressure reduces the choice deferral tendency (Dhar & Nowlis, 1999). Spending per unit of time increases under time pressure (Herrington & Capella, 1995). Time pressure and store knowledge exert a combined influence on purchase volume deliberation, failure to make an intended purchase, brand switching, unplanned buying and information processing (Park, Iyer, & Smith, 1989). This paper contains three contributions by remedying the shortcomings of the literature. First, past works rarely examined the influence of perceived time pressure on choice deferral in online time-limited promotions while only Lin & Wu (2005) pioneered to explore the impact of moderate time pressure.
Is there a Dividend to an Institution for having an Accredited College of Business?
Dr. Antonina Espiritu, Hawaii Pacific University, Honolulu, Hawaii
The main purpose of the study is to determine if there exists a significant difference in full-time retention and graduation rate between institutions with and without accredited business schools. Using a sample of higher educational institutions in the far west region of the United States, the empirical results of the cross-sectional regression analysis indicate that on average, accredited institutions enjoy 23% higher graduation rate and about 15% higher full-time retention rate than non-accredited institutions. Even after controlling for other relevant institutional factors and student characteristics, the positive result of having the Association to Advance Collegiate Schools of Business accreditation or AACSB remain robust and statistically significant. Therefore, resources devoted by higher educational institutions to achieving, if not maintaining, high quality academic standards in Business and Management education through AACSB accreditation will and no doubt pay-off not only to the institutions but more importantly and consequently, spill-over to all major stakeholders. In the United States, the Council for Higher Education Accreditation (CHEA) serves as the national organization that coordinates the accreditation of universities and colleges. CHEA serves as the main voice for voluntary accreditation and assurance of quality to the Congress and Department of Education (www.chea.org). Accreditation in higher education is a process of self- and peer-review to ensure that the institution meets and maintains good quality academic standards in all areas such as the administration, instructional resources, faculty, physical facilities, student’s recruitment and the curriculum. Six major regional accreditation associations normally handle the primary or institutional accreditation. The secondary level of accreditation normally applies to schools or colleges and specialized programs or departments that are parts of an institution. In the field of Business, the Association to Advance Collegiate Schools of Business or AACSB International accreditation represents the gold standard of achievement for business schools worldwide.
The Development of a Competency Ontology
Jui-Hung Ven, China Institute of Technology, Taiwan, R.O.C.
Chien-Pen Chuang, National Taiwan Normal University, Taiwan, R.O.C.
We first explore the competency standards systems of America, England, and Australia. We find that they all emphasize on professional competencies instead of general competencies. Hence, we propose here a competency ontology structure, from the viewpoint of competency standards, which uses the domain ontology as the stem and competencies or skills as the branches. In other words, all competencies or skills are directly linked to the concepts of the domain ontology and are described as instances with the format "action verb + object + condition." The competency- or skill-related knowledge, the performance criteria, and the needed abilities are attached to the skills. We also use slots to give synonymous meanings to each concept and skill to enrich their semantic meanings. Based on the proposed competency ontology structure, we construct a software competency ontology to be used in our future researches. Ontology, with a big O, is a branch of philosophy that studies the nature of being. An ontology, with a small o, is an explicit specification of a conceptualization in a particular domain (Gruber, 1993). Hence, Ontology is a philosophical theory allowing us to construct an ontology or ontologies (Guarino & Giaretta, 1995; Guarino, 1997). In addition to concepts and relationships, ontologies have other terms to describe their properties, constraints, and instances. The most frequently used terms are concept, attribute, value, and instance in natural language representation; while class, slot, facet and instance are used in an object-oriented environment or in an ontology tool. Ontology-based applications have been expanded to many areas such as information extraction, virtual enterprise, semantic search, knowledge portal, e-learning, job recruitment, knowledge management, information exchange, and recommender system (Staab & Studer, 2004). As for the applications of competency ontologies, Hirata, Ikeda and Mizoguchi (2001) propose a total resolution for human resource development. They use a competency ontology that links to an education-training system, personal profile, organization process, career planning, job recruitment, and competency assessment to solve the obstacles encountered in a human resource area. The competency ontology includes core competencies such as listening, speaking, reading, and writing; work competencies such as coordination, cooperation and team work; and meta competencies such as supervising, action, and thinking.
Subsidiary Initiatives in Subsidiary Role Changing —In the Case of the Bartlett and Ghoshal Typology
Tzu-En Lu, Chungli, Yuan Ze University, Chungli, Taiwan (R.O.C.)
Lu-Jui Chen, Chungli, Yuan Ze University, Chungli, Taiwan (R.O.C.)
Wen-Ruey Lee, National Taipei College of Business, Taipei City, Taiwan (R.O.C.)
In this study we develop a model
of subsidiary evolution about the conditions that drive the role of subsidiary
changing by subsidiary initiatives. We see subsidiary initiatives as
entrepreneurial processes that find out the new way for subsidiary to expand
resources and to cultivate corporate capabilities. Bartlett and Ghoshal’s
typology of subsidiary is our basic frame of reference to infer to the effect of
subsidiary initiatives causes. Subsidiary role’s changing is a function of
subsidiary initiatives and initiatives make subsidiary for local learning and
global integration. Our provisional conclusion is that MNE subsidiaries not only
contribute to firm-specific advantage creation, subsidiaries also drive the
evolutionary process by their own distinct initiatives. Operating only in the
home market may allow an enterprise to survive in a primarily domestic industry,
but moderate international expansion often brings current benefits and provides
a base for future success should the enterprise become more global
The Effect of Business Cycles on Transition Probabilities in the Labor Market
Dr. Ben-David Nissim, The Max Stern Academic College & University of Haifa, Israel
In the theoretical model presented here, people choose between two economic states: being out of the labor force or searching for a job, i.e. being unemployed. Searching for a job enables them to move into a new economic state, which is being employed. Firms will offer vacancies as long as their economic value is positive. If they find a worker they get the economic value of an occupied job. In this economic environment, the transition probabilities between these two states play a central role in determining the economic value of each state for the firms and the agents. The wage rate is determined by comparing the economic value of being out of the labor force with the economic value of being unemployed. In equilibrium wage rate, transition probabilities and the unemployment rate are determined simultaneously. Changes in exogenous variables such as productivity, searching cost, government benefits to people out of the labor force or unemployment benefits, would lead a change in transition probabilities, the unemployment rate and the vacancies rate. The labor market is characterized by large flows of workers in and out of employment. The transition of workers in and out of employment is connected to the rates of job creation and job destruction. When more jobs are created the flows into employment increases and when jobs are destroyed the flow out of employment increases. I present a model that emphasizes both the changes of the separation rate and, the changes of the probability of the unemployed to find a job as factors that determine the changes in unemployment as well as the number of vacancies. The transition probabilities between employment and unemployment are affected by changes that are held exogenous. The matching function with two-sided search (developed by Pissarides (1984), Mortensen (1982), Diamond (1982) and others) is central to the theoretical literature on labor market flows. The main innovation in those papers is that market frictions are modeled by an exogenously given matching function that relates the number of matches per unit of time to the stock of workers and the firms engaged in searching.
Market Orientation Strategies and Business Performance: Evidence from Taiwan’s Life Insurance Industry
Dr. Yuan-Hong Ho, Feng Chia University, Taichung, Taiwan
Dr. Chiung-Ju Huang, Feng Chia University, Taichung, Taiwan
A comprehensive measure of insurance company's market orientation which includes customer orientation, distributor orientation, competitor orientation, environment orientation and, inter functional coordination was developed. The relationship between the degree of market orientation and the objective business performance of insurance companies in Taiwan was examined. The results of this study indicate that the degree of market orientation between companies is insignificant, and there is no empirical support for the existence of a positive and significant relationship between a company's business performance and its degree of market orientation. Further study on different type of company indicates that the relationship between the market orientation and business performance is significant in the newly established branches of foreign companies. Ever since Taiwan’s insurance market first opened its doors for American companies in 1987, the market has further expanded and encouraged development of both domestic and international insurance companies. By the end of 2005, Taiwan’s insurance market consisted of thirty independent insurance companies (domestic and international). More specifically, by the end of the fiscal 2004, financial assets held by insurance companies had represented 16.02% of the total value held by the nation’s financial institutions. The strong growth in this sector has given the insurance market a substantial control over Taiwan’s financial stability. However, because insurance coverage represents an intangible good, insurers are aware of the importance of differentiating on service, quality, and customer orientation. Currently, insurance companies in Taiwan enjoy high potential growth because the ratio of the number of life policies to total population is relatively lower than those in the United States and Japan. Despite the prospective growth, insurance companies in Taiwan work in a highly competitive environment where customers have constantly growing expectations and subsequently low loyalty. Given the nature of Taiwan’s insurance market, an insurance company’s market orientation and management strategy becomes exceedingly important.
Impact of Cultural Barriers on Knowledge Management Implementation: Evidence from Thailand
Tanin Kaweevisultrakul, Ramkhamhaeng University (IIS), Bangkok, Thailand
Dr. Peng Chan, California State University, Fullerton, California
Today, knowledge management (KM) is widely regarded as an imperative tool to maintain and enhance a company’s core competencies. Although many companies had begun initiating KM program, little emphasis has been put to address the cultural barriers that may hinder the effectiveness of the program. Existing scholarly and professional works have pointed out that cultural barriers are among the major obstacles to the successful implementation of any KM program. The purpose of this research is to identify and examine the type of cultural barriers that affect the implementation of KM program in Thailand. Presently, knowledge management (KM) is regarded by many as an important tool to maintain and enhance a company’s core competencies and competitiveness. Disappearing boundaries, globalizing competition and rapid changing technology and business life – all these factors lead the economy to a knowledge-based direction. Keskin (2005) stated that, “…firms have become much more interested in stimulating knowledge, which is considered as the greatest asset for their decision making and strategy formulation”. In this sense, knowledge is a key resource bestowing a competitive advantage for entrepreneurial firms. In the new economy, effective knowledge management is vital because the achievement of a sustained competitive advantage depends on firm's capacity to develop and deploy its knowledge-based resources (Perez & Pablos, 2003). In recent years, many Thai companies started implementing KM program in recognition that knowledge possessed by an organization's employees is a highly valued, intangible and strategic asset (DeTienne et al, 2004). While these companies already initiated the program, little emphasis has been put to address the cultural barrier that hinder the effectiveness of the program.
A Study of Human Resource Development and Organizational Change in Taiwan
Dr. Min-Huei Chien, The Overseas Chinese Institute of Technology, Taiwan
Management of change in organizations has been one of the most important concerns of professionals in the recent times. This paper provides an understanding of human resource management (HRM) practices for organizational change, explores the development of HRM in the organizational culture context, and provides some disciplines for business that wish to develop an in-depth knowledge of organizational change. Mainland China’s economy has developed very fast and has a huge domestic market. Many of Taiwan’s companies have invested in China, which has caused a lot of organizational change. With the rapid rise of organizational change in Taiwan, understanding the dynamics of change is most frequently confronted with questions, such as what is the concept of change? How to decide what to change, and then how to change it? Is implementation of change always painful? What one needs to keep in mind while implementing changes in organization? The Human Resource Development (HRD) issues and challenges for employers and their organizations in the world and in Taiwan play an important role in business success. HRD, in an integrated sense, also encompasses health care, nutrition, population policies and employment. This paper covers the development of people through education and training in a national context as well as within enterprises and will conclude with a reiteration of the importance of HRD to enterprises and countries.. Taiwan’s remarkable economic transformation in the last 30 years has been, to a large extent, due to its capacity to leverage markets to achieve economic performance far beyond its production possibilities. Such sterling economic performance was the result of far-sighted policymakers in managing and optimizing the emerging external environment and existing domestic resources. As a result, Taiwan has been one of the most favored areas in Asia for investment by transnational corporations. Several recent major events that occurred in the global and regional environment have had serious long-term implications for Taiwan's economic viability and performance. First, the Asian financial crisis in 1997 devastated the financial and real sectors of many Southeast Asian economies that serve as Taiwan's hinterland for resources and market. As a regional hub, Taiwan cannot prosper as long as the regional hinterland remains economically weak and socially and politically unstable.
Non-Parametric Versus Parametric Methods for Testing Means Equality. The Case of Stocks Means
Dr. Paraschos Maniatis, Athens University of Economics and Business, Athens
The scope of this paper is twofold: a) to compare the stock closing prices in the London Stock Exchange of two relative sectors- that of the food processing industry and the food-retailing branch and b) to investigate in each branch the possible existence of strong correlation between closing price and size of the firm. To this end we have employed the appropriate statistical tools- the test of means equality and the correlation coefficient. The first problem relates to the hypothesis that the stocks of homologue branches as these of food processors and food retailers should behave in the same manner in the stock exchange. The second problem is of the same nature but concerns each sector separately, namely if the closing prices are in any identifiable relationship with the particular firm’s size. In order to research the relationship between stock market price and sizes four separate measures of size were taken – total value (capitalization), total assets, turnover and gross profit. A set of data was obtained by taking randomly two sectors in the London stock exchange market: one consisting of 21 food-processing companies (Group B) and the other consisting of 16 food retailer firms (Group A). The Money World Stock Sectors was used to obtain the data concerning gross profits and total assets and turnover for both types of firms. Random selection sampling does not mean haphazard selection (Goldstein and Lewis, 1996). It means that each member of the population has some calculated chance of being selected. A random sample should give every member of the population an equal chance of selection. In our case to select the random sample, a list was used where each member was given a number. Then a series of random numbers were used to select the sectors that take part in this analysis. For prices we used the closing prices of the stocks in a given date. In order to investigate the posed problems we have adopted the following approach: -Investigate the behaviour of each size variable and that of the closing prices.
An Examination of the Education Requirements to Become a CPA
Dr. Robyn Lawrence, University of Scranton, Scranton, PA
Dr. Ronald J. Grambo, University of Scranton, Scranton, PA
In 1988 the American Institute of Certified Public Accountants called for each state to require 150 credit hours of education, in addition to passing the national examination and meeting experience requirements, to become licensed as a certified public accountant (CPA). Over the ensuing years, a majority of the states passed some form of 150 hour requirement for licensure. The current study analyzed the diversity that exists in education requirements to sit for the CPA examination and become licensed as a CPA in each of the fifty states. Based upon this analysis, a minimum set of courses to meet the requirements of all of the states, as well as, a minimum set of courses to meet regional requirements were identified. This analysis is relevant given that the state education requirements ultimately affect the quality and quantity of CPA-related services available to users of such services. The variability in state requirements poses extra challenges for accounting educators, prospective students of accounting programs, accounting professionals, state accountancy boards, and clients of CPA-related services. In the United States, all certified public accountants (CPAs) are examined, licensed and regulated under individual state accountancy laws and regulations. However, consistency across the various states and other jurisdictions is enhanced through the Uniform Accountancy Act (UAA) which was first introduced in 1984 by the National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA). The NASBA is comprised of the boards of accountancy in the each of the fifty states, the District of Columbia, Guam, Puerto Rico, the Virgin Islands and the Commonwealth of Northern Mariana Islands. In 1988 the AICPA approved, effective beginning in 2001, requiring 150 credit hours of education, in addition to passing a national examination and meeting experience requirements, to become licensed as a CPA. In the ensuing years a majority of the states have passed some form of 150 hour requirement to become licensed as a CPA.
Descriptive Analysis of Social Standards for Suppliers in Top 100 Fortune Global 500 Companies
Dr. Deniz Kagnicioglu, Anadolu University, Eskisehir, Turkey
Dr. C. Hakan Kagnicioglu, Anadolu University, Eskisehir, Turkey
Nowadays, the social responsibilities of companies are gaining importance based on globalization. Companies develop codes of conduct to define social factors in their national and international activities. In the international context, codes are instrument companies can use to ensure the enforcement of minimum social standards within their area of influence. Codes of conduct also cover supplier practices. This can ultimately improve employee working and living condition as well as company success. In this study, top 100 Fortune Global 500 companies are analyzed for 8 social standards of suppliers. These social standards are based on ILO Conventions and Declarations. These 8 social standards are examined according to region (America, Asia, and Europe) of the companies and sectors (manufacturing, service, finance and technology) and results are commented. Social responsibility is one of the most popular concepts of today. As the firms getting bigger, effect areas of them are also getting wider. Competition and globalization force the firms to have international investments and it is difficult for the government to intervene these international firms day by day. The economics of globalization emphasizes competition, capital investment, free trade, growth and the transformation of markets. Too much has been made of the phenomenon of globalization in its economic dimensions. These do not sit easily alongside the priorities of people including women, minority groups, indigenous populations and children. Economic dimensions of globalization have acquired a status higher than human values or even above fundamental human rights, which are going to be seriously affected by current global trends (Welford, 2002). Moreover, growing firms, increasing trade and weakening government force bring new discussions to the agenda.
Analysis on the Evolutionary Game of Innovative Financial System
Chen-Kuo Lee, Ling Tung University, Taiwan
A financial system refers to a set of rules abided by human beings in their interactions over the years. These rules are formed via a dynamic game and are the innovative process of financial system. An innovative game is jointly created by innovative thoughts and game theories. Game theories are a critical analysis tool for evolutionary economics and are sufficient to interpret the process of innovative financial systems. Therefore, this study intends to discuss the innovative process of financial systems via revolutionary game theory. The research results indicate that, as far as the innovative process of financial systems is concerned, the trans-industry management system is an important innovative system in relation to intra-industry management system. Financial liberalization has accelerated since the 1980s. As a result, information technology and new markets have developed rapidly, causing all economies to rely on one another more than ever. Consequently, financial globalization has become an irresistible trend for both developed and developing nations. Financial globalization refers to a process and status in which financial activities have moved across boundaries and combined with other nations’ financial activities, including the internationalization of financial institutions, financial markets, financial tools, financial assets and revenue together with the unification of financial enactment, trading patterns, and international practices (Niehans, 1983; Podolski, 1986; Miller, 1992; Merton, 1992; Levine, 1997; Mantel, 2000; Mantel & McHugh, 2001). Financial globalization refers to the expansion process of financial activities, which implies the unification of financial trading rules and reduction of barriers, free movement of capital in international markets, an increasing connection between various nations’ interest rates and exchange rates, unrestricted financial activities, and fewer restrictions for admittance to financial markets. As a result, transnational banks continue to grow and more banks are growing multi-nationally; all financial institutions compete in the global market, and financial risks continue to increase (Girardone & Casu, 2004).
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