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

The Journal of American Academy of Business, Cambridge is published two times a year, March and September.  The e-mail: drsenguder@aol.com; Website, www.jaabc.com  Requests for subscriptions, back issues, and changes of address, as well as advertising can be made via the e-mail address above. Manuscripts and other materials of an editorial nature should be directed to the Journal's e-mail address above. Address advertising inquiries to Advertising Manager.

Leveraging Generational Differences for Productivity Gains

Nancy Patota, Deborah Schwartz, Ph.D., and Theodore Schwartz, Ph.D.

ABSTRACT

Much has been written to describe generational differences in today’s workforce, including the problems of managing a team of multi-generational workers. These differences are often a source of conflict among employees but they could also be a source of strength. Often, the strengths and weaknesses of one generation complement another generation. Prescriptive approaches to dealing with this reality are lacking.  Our prescriptive approach involves identifying necessary competencies and the related strengths and weaknesses of each generation by competency. This tool allows managers and employees to work with multigenerational teams who complement each others’ skills, values and beliefs to meet team/project objectives. We provide examples of typical business situations and show how this tool can be used to leverage generational differences.

Contextual Barriers to Strategic Implementation:  An Examination of Frontline Perspectives

Dr. Karen A. Meers

ABSTRACT

Frontline employees are a valuable asset to many firms, but have been overlooked as a resource for strategic implementation.  This study measured the effectiveness of a newly implemented account management telemarketing program and asked frontline associates to identify the barriers to successful implementation of the initiative.  The sample consisted of 68 customer service representatives from a Fortune 500 company in the United States who had telemarketing calls added to their existing job tasks as a strategy to improve customer satisfaction ratings.  Effectiveness ratio data were collected twice over an eight week period to determine changes in telemarketing performance. Interview data were collected to determine the participants’ perspectives on barriers to the successful implementation of the program.  The participants revealed that job-reality mismatches were responsible for the four contextual barriers that hindered implementation success:  1) telemarketing was viewed as a low priority by the customer service associates in direct opposition to the perceptions of the management team; 2) stress and overload resulted from interfering job tasks and time pressures; 3) managers and associates lacked telemarketing experience; and 4) telemarketing was resisted.  Practical implications for utilizing frontline feedback in the strategic process to proactively address job-reality mismatches and implementation challenges are discussed.

The Impact of Inventory Reductions upon Cash Balances

Richard Skolnik, Ph.D.

ABSTRACT

Innovations in operations and distribution have resulted in a reduction in the inventory to sales ratio.   Contemporaneously, the financial asset to sales ratio has increased. Existing research has shown that management discretion results in higher than optimal cash balances.  This study investigates whether a reduction in inventory requirements results in greater management discretion and an increase in cash balances. A regression model with quarterly data from the Federal Reserve Flow of Funds balance sheet accounts finds a negative relationship between inventory and financial asset balances. The results suggest that reductions in inventory requirements lead to slightly higher cash balances.  The model also finds that the financial asset to sales ratio is negatively related to economic growth. Increases in economic growth correspond to lower levels of financial assets relative to sales.  Technological advances and investment in operations management have led to decreases in inventory levels necessary to support sales (Irvine, 2003). Since the beginning of the 1980s, aggregate and industry-specific inventory to sales ratios have declined; however, data from the Federal Reserve Flow of Funds and Outstanding Balances (Federal Reserve Board of Governors, 2005) indicate that decreasing inventory requirements have been accompanied by increasing cash balances. 

Teaching Customer Value Analysis to Business School Students

Gene Milbourn, Jr., Ph.D.

ABSTRACT

This paper will provide an outline on structuring a consulting project for business school students on the topic of Customer Value Analysis (CVA).  It will suggest a step-by-step program providing students with a methodology whereby they can manage “perceive” quality rather than relying on the traditional conformance criteria.  Specifically, the paper will assist students in identifying what quality is to customers; which competitors are performing best on each aspect of quality; and, how customers select among competing suppliers.  The seminal work of Buzzell and Gale (1987) and Gale (1994) on linking customer perceptions of quality to market performance is featured.  During the late 1980s and into the 1990s, businesses around the world added capacity in response to increased demand.  This movement inevitably led to increased competition to improved quality in both products and services through improved organizational processes.   Programs such as reengineering, TQM, just-in-time inventory control, quality circles, and work process engineering were popular and had a positive impact on organizational functioning. 

Standby Letters of Credit and Loan Sales; Joint Products?

Dr. Vassilios N. Gargalas

ABSTRACT

In their traditional function, commercial banks make loan sales with recourse to free capital while they evaluate the credit-worthiness of their clients and also take a position of risk. However, government regulations prohibit banks from taking full advantage of this activity. Loan sales with recourse are treated as on balance sheet items, which requires additional reserves with the Fed, higher FDIC premiums, as well as increased capital requirements. At the same time, SLCs (standby letters of credit) and loan sales without recourse are off balance sheet items not subject to the above regulations. Using the time-state preference model, this paper shows that the cash flow structures of loan sales with recourse can be replicated by portfolios consisting of SLCs and loan sales without recourse. In this fashion, SLC and loan sales without recourse become joint or complimentary activities. Since these portfolios are in principle less expensive, one will expect banks to substitute these portfolios for loan sales with recourse.

The Connecticut State Income Tax: Progressive, Regressive and Proportional

Gary M. Crakes, Ph.D. and Melville T. Cottrill, Ph.D.

ABSTRACT

The State of Connecticut enacted legislation in 1991 to establish a state income tax on wage and salary income.  Over the past sixteen years it has been characterized as a progressive income tax up to the point of the threshold income levels where the maximum tax rate applies, and proportional thereafter.  However, when effective marginal tax rates are analyzed a more complicated pattern emerges revealing fluctuating ranges where the Connecticut state income tax is proportional, progressive and regressive.  Since the Connecticut State income tax on wage and salary income was implemented in 1991, it has been identified frequently as both a proportional and a progressive income tax; proportional, since the tax rate is constant at 5.00% above threshold levels of income when exemptions and credits disappear, progressive, since some analysis has shown that the top 50% of filers account for 86.50% of all income and pay 95.80% of the income tax. (1, 2)  In fact, it can be demonstrated that over some ranges of income the Connecticut state income tax is actually regressive. 

What Local Responsiveness Really Means to Multinational Corporations

Stephanie Hurt, Ph.D.

Abstract

The concept of local responsiveness offers a potentially effective lens through which to view the internationalization process of firms and the management of multinational corporations (MNCs). However, the last two decades of business internationalization suggests that the concept of local responsiveness as it has usually been applied does not help us understand the difficulties of firms’ forays into foreign waters. We feel this is due to an insufficient consideration of the difficulty and importance of transferring managerial practices during the internationalization process. In this paper, we attempt to re-invigorate the concept of local responsiveness by demonstrating how the concept has been too narrowly interpreted in terms of product/market similarities and suggesting that true responsiveness should include adaptation to the very different mindsets of the host country nationals to be managed.  

Modeling Purchasing Power Parity Using Co-Integration: Evidence from Turkey

Cem Saatcioglu, Ph.D.,H. Levent Korap, and Ara G. Volkan, Ph.D.,

ABSTRACT

In this study, we construct a co-integration model of the Turkish economy using high frequency data to examine the validity of the purchasing power parity (PPP) theory. The ex-post estimation results derived from the analysis of monthly observations for the January 1987 – December 2004 period generally support the use of the PPP theory in predicting the movement of currency values in the Turkish economy. The methodology developed in this study can be used in other countries to ensure the success of economic policies that depend on the existence of PPP relationships. 

Do Investors Over- Or Under-React? Evidence from Hong Kong Stock Market

Jianzhou Zhu

ABSTRACT

Using daily data on Hang Seng Index over the sample period of December 31st, 1986 to October 6th, 2006, we investigate the behavior of Hong Kong stock market following extraordinary price movements in a single trading day. We find evidence that investors in Hong Kong stock market tend to underreact to good news and overreact to bad news. The finding is consistent with the uncertain information hypothesis which states that investors tend to err on the side of caution when they are uncertain about the information they received. This behavioral tendency on the part of investors causes stock prices overshoot at arrivals of bad news and undershoot at the arrivals of good news; a phenomenon more likely to be observed in markets where quality of information is generally poor and lack of precision.

The Classification and Evaluation Model for Product Bundles

Dr. Tsuen-Ho Hsu and Kuei-Feng Chang, Ph. D. Candidate

ABSTRACT

In the previous literatures on bundles, most scholars focused on the pricing strategies of product bundles. However, the characteristics of bundles and their consumer evaluation factors were seldom mentioned. This study based on literature review to classify four types of product bundle (Integrated, Co-existing, Conceptual and Random) by two dimensions: degree of functional integrity and degree of symbolic increase. Besides above, this study start with consumers’ satisfaction to find those factors which influence purchasing and construct a product evaluation model for bundles. Finally, this study utilizes the above results and the complementary relationships shown by Oxenfeldt (1966) to explain four different types of bundle and submits the implications of their marketing.

Relationships Among Service Orientation, Job Satisfaction, and Organizational Commitment in the International Tourist Hotel Industry

Yi-Jen Chen

ABSTRACT

Research in service orientation, job satisfaction, and organization commitment suggests that service orientation is indispensable for the successful management of the service industry. Furthermore, job satisfaction among employees contributes to the enhancement of employees’ commitment to their organizations. This study used a questionnaire survey to investigate the relationships among service orientation, job satisfaction and organizational commitment of employees who have worked at least one year in international tourist hotels. Hotels in the tourist industry adequately represent the service industry in Taiwan. For this study, a total of 1,100 questionnaires were sent to major hotels in early June of 2005. The human resource departments of these hotels distributed the questionnaire to their employees. At the end of  December 2005, 350 responses were collected, accounting for 31.8%.of the total survey.

Voluntary Disclosure: The Case of China

Dr. Jianguo Yuan and Dr. Huafang Xiao

ABSTRACT

Drawing on prior empirical research examining the determinants of voluntary disclosure separately, this paper empirically investigates the joint effect of managerial ownership and competition in the product market on the levels of voluntary disclosure of listed Chinese companies. Using an aggregated disclosure score to measure voluntary disclosures, the results indicate that managerial ownership is negatively associated with the extent of voluntary disclosure when the degree of competition the company faces is low; this relationship does not exist when competition is high. In addition, firms with lower competition and higher managerial ownership are less likely to make additional disclosures.  Since the Asian financial crisis of 1997-1998, both regulators and members of the business community in East Asia have called for greater corporate transparency. The low level of corporate disclosure has been identified as one of the factors that not only contributed to the Asian financial crisis, but was a stumbling block in the regional economic recovery (Berardino, 2001). Although China was not seriously affected by the Asian Crisis, Chinese companies were criticized for a lack of financial reporting transparency. Chinese regulators have recognized that equity markets require more disclosure in order to function more effectively, and have been actively improving voluntary disclosure in recent years. In particular, Chinese regulators have drawn attention to corporate governance and share structure in the poor level of corporate disclosure and have called for more disclosure in the annual reports of listed Chinese companies.

The Effect of Wage Differences on the Cyclical Behavior of the Two Genders in the Labor Market

Dr. Nissim Ben-David

ABSTRACT

During prosperous periods, which are characterized by an increase in productivity and in wages, the rates of separation from occupied jobs decrease while the probabilities of finding a new job increase. Thus, unemployment rates fall. Empirical observations however, indicate that the magnitude of this decline is not the same for both genders. This paper investigates the effect of the business cycle on the probabilities of transition between employment and unemployment for men and women. It provides a possible explanation of how different changes in variables, such as wages or productivity of each gender, would effect the separation rates and the probabilities of finding a job for each gender, and thus, determine differences in the magnitude and the direction of the change in the rate of unemployment.  The rate of unemployment tends to fluctuate between periods of economic prosperity and recession. The causes of these fluctuations in unemployment are changes in the flow of workers in and out of employment as a result of changes in the business cycle. The magnitude of these changes, however, differs between the genders.

Optimization of IC Manufacturing System by Using SPC/EPC Model

Jui-Chin Jiang, Ph.D. and Feng-Yuan Hsiao

ABSTRACT

As semiconductor manufacturing decided to make effort on the improvement of the process control capability, process control techniques such as statistical process control (SPC) and engineering process control (EPC) are becoming very popular in IC industry. There is a growing need to construct the rapid-response-to-variation process control system in the future when the customer satisfaction comes from the high-quality product. This research provides an integrated concept of SPC/EPC model to simultaneously monitor, analyze, feedback, adjust, and confirm the IC manufacturing system. An application of the contact etch procedure is discussed. Through an implementation procedure, the prevention by prediction control system is approved to get the more stability and lower variation product quality.  Recently, the semiconductor industry in Taiwan grows up very rapidly, and plays the key role in the global market. The 0.13μm manufacturing technology has approved in the production line. And the twelve-inch fabrication also gradually replaces the eight-inch fabrication to be the next generation production trend.

Game Theory Analysis on Market Efficiency under Corporate Strategic Alliance

Chen-Kuo Lee, Ph.D. and Wen-Jun Yang

ABSTRACT

The study on corporate strategic alliance is becoming more and more important to the academic community. However, most researchers developed their theorems from social, behavioral, and managerial aspects. Few researchers have studied corporate strategic alliance from an economic, especially industrial organizational, standpoint. Therefore, this study intends to implement an OEM alliance model based upon game theory so as to analyze the market efficiency under a cooperative production organization, thereby demonstrating the contribution made by corporate strategic alliance to social benefits. This study indicates that the cooperative organizations will upgrade social benefits by sharing resources and reducing costs, provided that such cooperative organizations are not designed to restrict production and prices. In short, corporate strategic alliance is more efficient than a complete competitive market as far as resource allocation is concerned.  Facing the tremendous pressure imposed by globalization and technological innovation, more and more corporations in Europe and the United States (particularly information technological industries) have adopted a corporate strategic alliance to compete in the international market since the 1980s.

Ship Mortgage and Vessel Arrest Laws in Mainland China, Hong Kong and Taiwan: A Comparative Analysis

Dr. Felix W. H. Chan

ABSTRACT

Bank and other financial institutions providing ship finance require legal protection just as much as other entrepreneurs.  When a bank finances the purchase of a ship, the borrower has to execute a ship mortgage in favour of the bank.  By definition, a ship mortgage is a security over the ship which enables the bank, on default by the borrower, to take possession of the ship and sell it to discharge the debt.  In order to enforce the ship mortgage, the bank may ask a maritime court to arrest the ship and, through judicial procedure, sell or auction it.  This paper comparatively explores the legal and practical issues regarding the nature and the enforcement of ship mortgages in Mainland China, Hong Kong and Taiwan.  When a bank finances the purchase of a ship, the borrower has to execute a ship mortgage in favour of the bank. 

             Human Resource Management and Knowledge Management: A Road Map Toward Improving Organizational Performance

Dr. Fida Afiouni

ABSTRACT

The revolution of information technology is currently breaking organizational hierarchy, boosting communication, and creating a new art of production. Globalization is leading to increased competition, and customer satisfaction is the key word to ensure survival and competitiveness. In this context, knowledge management (KM) has become a must to ensure organizational effectiveness. The knowledge management literature has currently reached the point of acknowledging the importance of people management themes, but has not made the next step of investigating and theorizing these issues in detail. These two fields of human resource management (HRM) and knowledge management are still somehow disconnected. This paper argues that combining human resource management initiatives with those of knowledge management will help improve organizational performance.

Using the E-CRM Information System in the Hi-Tech Industry: Predicting Salesperson Intentions

Feng-Cheng Tung

ABSTRACT

With the rapid development of Information Technology, and the increase in different Internet user populations, electronic customer relationship management (e-CRM) plays an ever-more important role in the development and improvement of competitiveness within enterprises. This research combines innovation diffusion theory, the technology acceptance model and also adds two new research constructs, namely, trust and perceived information quality. Thus we set forth a new hybrid technology acceptance model to use the Hi-Tech industry in Taiwan as the focus of research in order to study salespersons’ intentions to use the e-CRM information system. Based on 285 questionnaires collected from 45 electronic corporations in Taiwan, the research finds that studies strongly support this new hybrid technology acceptance model to predict the salesperson intentions to use the e-CRM information system.

Valuing Pilot Projects in a Learning by the Finite Difference Method

Cherng-Shiang Chang, Ph.D.

ABSTRACT

By using the real option approach, Errais and Sadowsky (2005) value the pilot phase of a project requiring N stages of investment for completion as a compound perpetual Bermudan option.  Further, both market and technical uncertainty are incorporated into the dynamics of revenues and costs of the pilot project in the model of Errais and Sadowsky.  By applying an approximate dynamic programming algorithm, Errais and Sadowsky value the option to invest as well as the optimal exercise policy.  They implement the algorithm for a simplified version of the model in which the revenues are assumed to be constant.  However, this approach may suffer some difficulties: (i) if the dynamics of the state variables do not follow the geometric Brownian motion and (ii) the joint probability density function must be calculated in the case of multiple state variables.  In this article, we solve this problem by employing an alternative approach: the finite difference method. 

 Investigation of the Returns of Contrarian and Momentum Strategies in the Taiwanese Equity Market

Yi-Wen Chen, Hsing Wu College, Taiwan

ABSTRACT

This study examines the application of momentum and contrarian trading and portfolio strategies by investors on the Taiwan stock exchange (TSE), to determine if a combined momentum and contrarian strategy can produce better returns than either a pure momentum or a pure contrarian trading strategy. The momentum trading strategy is based on the assumption that markets are relatively rational, and that earnings and price momentum for a stock tend to persist over time until an event, such as a change in earnings, alters the momentum. The contrarian trading strategy involves the creation of a portfolio of low momentum stocks based on the assumption that momentum and price will (inevitably) increase over time. There have been a large number of previous investigations of issues involved with the development of momentum and contrarian trading strategies in other stock markets. However, there have not been extensive investigations of the TSE, with the possibility that the TSE has characteristics that result in different levels of effectiveness for these trading strategies.  

The Corporate Growth of the Firm: A Resource-Based Approach

Francisco Javier Forcadell

ABSTRACT

In this paper I analyze corporate growth from a resource-based view, based on a review of the literature on different aspects of growth. As a result of the review, I propose an integrated framework, stemming from the idea that all strategic alternatives available to the firm require and generate resources, in such a way that strategy influences firm resources and firm resources influence the strategy developed. According to this idea, this paper aims to integrate and systemize the different corporate strategy decisions addressed by the resource-based literature, with special emphasis on diversification strategy.  In this paper I carry out a review of the literature (mainly from resource-based literature) on corporate growth based on a framework that endeavors to integrate the different corporate strategic decisions. Growth is a dynamic resource-based process with its origin and effect in the resources possessed by the firm. The firm uses its resources to implement strategies and the results of its strategies determine the extent of its resources (quantity, nature and strategic value), which subsequently provide the basis for future strategies.

Antecedents of Learner Satisfaction toward E-learning

Dr. Yao-kuei Lee, Shih-pang Tseng, Dr. Feng-jung Liu, and Dr. Shu-chen Liu

Abstract

E-learning represents a paradigm shift in learning enabled by new information technologies. Since it heralds a radical change in educational method, learner satisfaction must be re-examined so the benefits of using new technologies can be maximized. Based on prior theoretical and empirical research, this study proposed a research model to explain student satisfaction from using e-learning (distance education) as a stand-alone educational method. Sample data were collected online from 3713 students enrolled in a southern Taiwan university’s continuing education division’s distance education courses. The proposed model was supported by the empirical data, and the findings revealed that factors influencing learner satisfaction toward e-learning were, from greatest to least effect, organization and clarity of digital content, breadth of digital content’s coverage, learner control, instructor rapport, enthusiasm, perceived learning value, and group interaction. Implications to learning quality and teacher’s role in the e-learning context were discussed.  With the ever-increasing popularity of the computer and the Internet, e-learning has become an important educational tool and method for the global society. More foreign students obtain their degrees through online courses, and online education, as a business block, has shown one of the largest growth cycles on the Internet (Huynh, Umesh, and Valacich, 2003; Symonds, 2003).

Corporate Governance around the World: An Investigation

Dr. Masrur Reaz and Mohammed Hossain,

ABSTRACT

Corporate Governance has received much attention due to Adelphia, Enron, WorldCom, and other high profile scandals happened during the last decade. The study is a comparative study of corporate governance around the world. The scholars have echoed their voice for four systems of corporate governance, such as Anglo-Saxon System, Germanic System, Latin System, and Japanese System. The study indicates that the developing economies are clearly less advanced in the area of corporate governance and need a more stringent focus on their practices as their corporate sector characteristics greatly differ from those in the industrial world. Hence, it is not wise to completely replicate western governance practices in the developing countries. Rather, a detailed picture of their corporate governance scenario would pave way to develop a prudent governance framework by identifying the underlying problem areas.  The foundations of modern corporations can be traced back to the 19^th century when entrepreneurs, encouraged by new legislation defining corporations, founded some great companies.

Measuring the Efficiency of National Innovation System

Ta-Wei Pan

ABSTRACT

The present study applies the data envelopment analysis (DEA) approach, using the traditional DEA, slack-based measure (SBM), and free disposal hull (FDH), respectively, to combine multiple outputs and inputs in measuring the efficiency of National Innovation System (NIS) among a sample of 40 countries. The results indicate that the overall technical inefficiencies of a country’s NIS are primarily due to pure technical inefficiencies rather than scale inefficiencies. Regardless of which model was used—DEA, SBM, or FDH—the best-practice calculations indicate that six countries—Japan, South Korea, New Zealand, Romania, Russia, and Taiwan—operated at the top level. Empirical results also indicate that the SBM model can provide DEA efficiency ratings more clearly. Finally, the Tobit regression reveals that the total expenditures on research and development, literacy, and national productivity significantly influence the efficiency of NIS in 44 countries belonging to the Organization for Economic Cooperation and Development.

Ownership Structure, Board of Directors, and Information Disclosure: Empirical Evidence from Taiwan IC Design Companies

Dr. Yue-Duan Guan, Dr. Dwan-Fang Sheu, and Yu-Chin Chu

ABSTRACT

The demand for information disclosure stems from the information asymmetry and agency conflicts existing between the management and the stakeholders. The solution to agency conflicts lies in the ownership structure and the function of board of directors. This study uses the 2003 annual report of IC design companies in Taiwan and their website information as subjects of evaluation, exploring the impacts of ownership structure and corporate board on the information disclosure level. The study result shows an insignificant negative association between managerial ownership and disclosure level. Secondly, blockholder shareholdings are negatively associated with disclosure level which implies that less information disclosure is required as share ownership is concentrated. Moreover, the qualified foreign institutional investor (QFII) ownership is associated with increased disclosure, indicating QFII playing an active role in the promotion of information transparency. Finally, the results show director ownership has a significantly positive impact on corporate disclosure, suggesting board acts as an effective internal corporate governance mechanism.

The New Techno Culture in the Workplace and at Home

Dr. Richard Gendreau

ABSTRACT

The new culture of technology started in the last decade of the 20^th Century with e-mail and progressed through cell phones, high-speed networks, wireless platforms and iPods. This techno culture brought the workplace and worker’s home into the digital age. New technology was not only entering the workplace and home at a faster pace, but it was changing at an increasing pace. Just after learning how to utilize a new technology an updated version infiltrates the workplace and home. This paper will explore how workers cope with technology and all the complications it causes. The author’s adventure with new technology will look at technophobia, information overload, multitasking paradox, uninvited e-mail, and technostress. The paper concludes by exploring ways to manage technology in the workplace and at home.  New Technologies create cultures of use around themselves. One should distinguish between society and culture, i.e., society refers to the community of people while culture refers to the systems of meanings which govern the conduct and understanding of people’s lives. In reading the lecture, the distinction between society and culture is often unclear and the terms are sometimes used interchangeably (American Anthropological Association and Computing Research Association, 1995).

Digital Music Pirating By College Students: An Exploratory Empirical Study

Harrison Green, Ph.D.

ABSTRACT

This paper addresses illegal music downloading by college students.  A survey was administered in three consecutive semesters.  Results indicate that males download more songs illegally than females who tend to have more respect for copyright laws.  Information Systems majors download more songs illegally than other majors but do not differ in respect for copyright laws.  In general, students tend to be undecided with regard to the legitimacy of copyright laws and the legality of file sharing.  No clear trend has been established with respect to the quantity of songs downloaded illegally.  There is some evidence that attitudes toward illegal downloading are influenced by legislation and prosecution.  Illegal music downloading is a common ethical problem encountered by college-age students.  College students typically have little money and like to listen to music frequently.  Universities have complained that music downloading clogs the network bandwidth and slows down other processing.  The number of lawsuits against illegal downloaders has rapidly increased within the last year.  Within the last couple of years, pay-per-track sites have become more prevalent with broader and broader selections.  Most students at our university have been very wary about trying the pay-per-track services. 

Exploring the Impact of Ethnicity on Conflict Resolution in Joint Purchase Decisions

Rina Makgosa, Ph.D.

ABSTRACT

The literature of family decision making contains studies that have investigated differences in relative influence across ethnic groups. The research reported in this paper concentrates on conflict resolution in joint purchase decisions across ethnic groups. Specifically, it investigates a mix of conflict resolution strategies used by husbands and wives from three ethnic groups in Britain — British Whites, Indians, and African Blacks in joint decisions to purchase major household consumer durable products. Results demonstrate that husbands and wives use several mixes of strategies when resolving conflict in joint purchase decisions. Specifically, it was found that a majority of British White husbands and wives use bargaining more than Indians and African Blacks. Additionally, compared with the British White husbands, both Indian and African Black husbands tend to combine bargaining, assertiveness, and playing on an emotion or all the conflict resolution strategies, whereas British White and African Black wives use all the four strategies more than Indian wives. Overall, results from our study show that ethnicity plays an important role in the understanding of the means of influence in joint purchase decisions.

The Empirical Study on the Effect Factor of Top Management Remuneration in China

Dr. Jianjun Zhu

ABSTRACT

This paper covers the research on the effect factors of top management compensation of Chinese enterprises. We adopted the data based on 986 listed companies from 2004 and 2005. We examined the following: business performance, scale of the company, the corporation governance structure, the number of top management, and the registration area of company. The results are as follows: (1) There is a positive relationship between top management remuneration and return on equity (ROE), the total assets, and the number of top management; (2) There is a negative relationship between top management remuneration and the stock-holding ratio of controlling stockholders; (3) Top management remuneration of the eastern area is apparently higher than that of the central and western regions; (4) Top management remuneration is more closely relevant to 2004’s performance than 2005’s.  An interesting public sentiment exists regarding CEO compensation (Offstein and Gnyawali 2005). Accompanying the rise in CEO compensation is a corresponding ascension in managerial and academic feelings ranging from curiosity to downright hostility (Nichols and Subramaniam 2001).

Optimizing Investment Portfolio by Applying Return Factor Model: A Case Study for the Mechanical Device Industry of China

Chung-Chang Lien, Ph.D., Chie-Bein Chen, Ph.D., and Ming-Ju Wu

ABSTRACT

The stock market of China developed very fast in recent years.  In 1990, there are only 10 A-share stocks, and the A-share stock rose to 720 at the end of 1997.  Stock investment has been a common financial activity and it is also a good outlet for investment.  In this study, an investment framework is established for the China listed A-share companies’ stock of mechanical device industry.  This study selects two return factors (book-to-market ratio and momentum) to be the input of DEA-BCC model while the return on stock set as output.  Applying the DEA-BCC model, it is easy to evaluate the stock’s relative efficiency value and to choose several good performance stocks to construct our investment portfolio.  Finally, this study use Markowitz’s mean-variance theory to decide the optimal investment weights for the portfolio.  “Efficient Market Hypothesis” (EMH) defined that a financial market can be seen as efficient if the market utilizes all available information in setting the prices of assets.  This will also result in no existence of excess normal-return on the financial market. 

Nonlinear Patterns of Job Satisfaction and Age Cohorts in an Industrial Environment

Dr. Debra Hunter

ABSTRACT

This paper attempts to explain nonlinear patterns of job satisfaction and age among working professionals in an industrial environment.  The study confirms previous research that older employees uphold the highest level of job satisfaction followed by younger employees within the same manufacturing facility. The fluctuations in job satisfaction levels among the 5 cohorts of age resembled a “U” shape.  Accordingly, the study attempts to explain reasons for such variations based upon the relationship between reward values (extrinsic and intrinsic) and need gratification in the workplace.  Accordingly, older employees placed a higher value on intrinsic and extrinsic rewards provided in the workplace when  compared to younger cohort groups.  Furthermore, extrinsic reward values were significantly higher among older employees. This study will assist manager’s efforts in the training, development, and reward system design for employees across all ages to increase motivation and job satisfaction that will ultimately leads to higher productivity. One of the primary goals of management in a production environment is maximizing efficiency and effectiveness of resources to achieve organizational goals. Research studies indicated that satisfied and motivated employees have an important impact on the company’s overall performance (Van Dyne, 1994).  However, reward values and job satisfaction may differ among a heterogeneous groups of employees based upon age differences.  Such differences are important for managers attempting to design strategies and reward systems that are complimentary of employee expectations from the workplace. 

Implement Business Strategy via Project Portfolio Management: A Model and Case Study

Dr. Du Lan-ying and Shi Yong-dong

ABSTRACT

This paper provides an approach to translate business strategy into projects successfully via project portfolio management. It reviews the failure in strategy implementation and limitations of the previous solutions, and compares main differences between “project-based company” and “product-based company”. A complete model is developed based on the theory of project portfolio management and personal experiences in consulting engagement. A case study within China Construction Third Engineering Bureau verifies the model and presents as a good example for application. The model is helpful and valuable for top managers as well as researchers and consultants in strategic management. It is the bad execution that often damages the success of deliberate strategy. Top managers have more deliberate strategic options that yield less value. A study of 275 professional portfolio managers reported that the ability to execute strategy was more important than the quality of the strategy itself (Mavrinac and Siesfeld, 1998). Strategy implementation was the most important factor shaping these portfolio managers' assessment of management and corporate valuations. In the early 1980s, a survey of management consultants reported that less than 10 percent of effectively formulated strategies were implemented successfully (Kiechel, 1982). A 1999

The Choice between First-Price and Second-Price Auction by an Informed Seller

Shih-Chung Chang, Chih-Hsiang Hsu, and Ming-Sung Kao

ABSTRACT

This paper analyzes how an informed seller determines the optimal auction format. Standard first- and second-price auctions are considered in this model. Since the seller has superior information about the object, selection of an auction reveals the seller’s private information, which influences bidding strategies. Our main finding is that an informed seller will hold only a second-price auction. The intuition is that bidders’ strategies in each auction format have different sensitivity to the information revealed by the seller. When the seller announces that he will hold a first-price auction, it signals to bidders that they have overestimated competitors’ valuations, and this leads to a lemon problem. Thus, bidders bid the lowest value in the first-price auction. On the other hand, Bidders’ strategies in the second-price auction are independent of the information revealed by the choice of auction format, so revenue in the second-price auction is higher than in the first-price auction.  Traditionally, papers concerning auction theory assume an uninformed seller facing a set of bidders with private information. However, the assumption that the seller is uninformed is unrealistic given that he owns the object for a period of time. For instance, the seller may at least have more information about the object’s quality than the bidders do. Milgrom and Weber (1982) first note this problem and argue that it is better for a seller to reveal his or her private information.

The Role and the Ambit of Corporate Governance and Risk Control Frames

Marco Taliento, Ph.D.

ABSTRACT

The following brief notes deal with the two principal corporate governance frames/models (once considered core norms, key concepts and regulative principles for business administration, management, control), as observed in the major countries: (i) the Anglo-Saxon/American system, that is “market based” and “shareholder-oriented” and (ii) the Latin-German-Japanese paradigm, that is “credit based” and “stakeholders-oriented”. The specific attempt of this study is to highlight the best international theories and practices about modern corporate governance processes, drawing attention to their role and ambit, and, on the other hand, to the need of suitable risk control mechanisms. In particular, it is possible to ascertain the new role played by the risk-variable in businesses, previously considered within internal control scheme, then as a tool of a wider management philosophy (enterprise risk governance).  A “sound” corporate governance system is a fundamental premise to the achievement of general objectives as (1) economic-financial returns, (2) going concern condition (or firm’s survival), (3) growth.

Application of the Grey Prediction Theory Compared with Other Statistical Methods on the Suitability of Short-term Forecast:  Outbound Visitors from Taiwan

Dr. Ching-Yaw Chen, Dr. Pao-Tung Hsu, and Chi-Hao Lo, Yu-Je Lee and Che-Tsung Tung

ABSTRACT

The Grey Prediction Theory is aimed at the system model under condition of uncertainty, information integrity, and it needs a minimum only four datum to forecast. It can obtain good predictive results in short-term forecasts. Therefore, we use the Grey Prediction Model to predict the number of outbound visitors. The number of outbound visitors from Taiwan is the data obtained from the Taiwan Tourism Bureau, and is compared for accuracy and error rates with other forecast models. These results can hopefully provide subsequent researchers with references in related topics, and provide related agencies, local governments, and related planning departments in private enterprises with references to Taiwan’s future tourism demands in policy setting and tourism market sales and management strategies. Prediction primarily involves finding possible patterns among existing historical data and using objective and scientific methods and functional relations of variables established from numerical models to perform predictions on uncertain trends.

Productivity Growth, Human Capital and Technical Efficiency

Dr. Yahn-Shir Chen and Chao-Ling Lin

ABSTRACT

From the perspectives of structure-conduct-performance model and resource-based theory, this study employs the data envelopment analysis (DEA) and Malmquist productivity index to estimate the production performance of audit firms in Taiwan. Production performance assessed in this study includes productivity change, technical change, and technical efficiency change. In addition, effects of human capital embodied in partners on technical efficiency of audit firms are examined. A balanced panel of data from 45 public accounting firms is obtained from the 1996-2001 Census Report of Public Accounting Firms in Taiwan. Empirical results reveal that, on average, audit firms experienced a productivity growth of 27% and a technical progress of 31% but a 5% decline of relative efficiency during the sample period. We also report a positive relationship between technical efficiency of the firms and human capital embodied in partners.