The Journal of American Academy of Business, Cambridge

Vol.  14 * Num.. 2 * March 2009

 The Library of Congress, Washington, DC   *   ISSN: 1540 – 7780

 Online Computer Library Center   *   OCLC: 805078765 

National Library of Australia * NLA: 42709473

Peer-Reviewed Scholarly Journal

Most Trusted.  Most Cited.  Most Read.

Members  / Participating Universities (Read more...)

Main Page     *     Home     *     Scholarly Journals     *     Academic Conferences     *      Previous Issues     *      Journal Subscription


Submit Paper     *     Editorial Team     *     Tracks     *     Guideline     *     Standards for Authors / Editors

Members  *  Participating Universities     *     Editorial Policies      *     Jaabc Library     *     Publication Ethics

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 double blind peer review process.  The Journal of American Academy of Business, Cambridge is a refereed academic journal which  publishes the  scientific research findings in its field with the ISSN 1540-7780 issued by the Library of Congress, Washington, DC.  The journal will meet the quality and integrity requirements of applicable accreditation agencies (AACSB, regional) and journal evaluation organizations to insure our publications provide our authors publication venues that are recognized by their institutions for academic advancement and academically qualified statue.  No Manuscript Will Be Accepted Without the Required Format.  All Manuscripts Should Be Professionally Proofread Before the Submission.  You can use for professional proofreading / editing etc...

The Journal of American Academy of Business, Cambridge is published two times a year, March and September. The e-mail:; Journal: JAABC.  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.

Copyright 2000-2018. All Rights Reserved

The ‘Spillover Affect’ of Perceived Quality of Employees on Predictions of Provider Service Quality

Dr. Charlene Bebko, Professor, Indiana University of Pennsylvania, Indiana, PA

Dr. Lisa Sciulli, Professor, Indiana University of Pennsylvania, Indiana, PA



This research empirically looks at the influence service contact employees have on consumers’ predictions of an impending service delivery performance.  While ‘spillover affects’ have been mentioned in the literature, no research has been directed at investigating this effect on the dimensions of service quality.  Hypotheses are tested whereby employees staged as positive implicit cues (professionally dressed, well groomed service contact personnel) and those staged as negative implicit cues (poorly dressed, ill groomed service contact personnel) are compared in regards to their predictions of the service provider’s overall quality of service. Three service industries are compared to investigate whether differences in service quality predictions exist between industries when consumers are presented with implicit cues to the service.   The comparisons included banking, retail, and health care service providers.  Significant differences in the predictions of service quality for both banks and retail sales organizations are evident with respect to positive versus negative implicit cues, thus supporting the spillover affect for these service industries.    However, no significant differences are found in the predictions of service quality for a hospital with respect to positive versus negative nurse provider cues.  It is proposed that the results for nursing personnel may be due to a halo affect this profession may have on respondents.  Implications of  managing contact employee service quality image are discussed.  Consumers develop predictions or estimates for the likely outcome of a service exchange.  These predictions are regarded as expectations in consumer satisfaction / dissatisfaction literature (Wirtz, 1993 and Oliver, 1981).  These expected standards evolve as consumers develop probabilities that an outcome will occur if the consumer purchases and consumes a conceived service.  The popular Consumer Expectations Model developed by Zeithaml, Berry, and Parasuraman (1993) provides a comprehensive theoretical framework for examining consumer service expectations.  The model proposed three types of service expectations including desired, adequate, and predicted services.  Other researchers examined aspects of the expectations concept including a common theme to define expectations as estimates of anticipated service performance levels.  For example, the concept was labeled as the “predicted expectations” by Miller (1977), “desired expectations” by Swan and Trawik (1980), and later “normative expectations” by Prakash (1984).  Researchers have also extended the analysis and compared consumer service expectations across industries (Clow, Kurtz, Ozment, & Ong, 1997 and Bitner, Booms, & Tetreault, 1990). The SERVQUAL model is popularly used to evaluate the quality of services based upon five dimensions including tangibility, responsibility, reliability, assurance, and empathy (Parasuraman, Zeithaml, & Berry, 1988).   The widely held viewpoint in this research area is that consumers are satisfied with a service experience if it meets or exceeds their expectations.  For example, if a customer expects a banking transaction to take 5 minutes and it requires 10 minutes, their expectations are not met and they may become disappointed.  The service encounter then did not meet the customer’s expectations and will likely cause customer dissatisfaction.  Support of this quality assessment measure is based upon disconfirmation theory which states if experiences satisfy preconceived expectations positive ratings will result (Oliver, 1981). The research herein utilizes the Consumer Expectations Model mentioned above to study consumers’ service quality expectations (Zeithaml, Berry, & Parasuraman, 1993).  It provides a more comprehensive framework for empirically analyzing consumers’ expectations of service quality by suggesting a range of expected services.  This range of expected services is referred to as the normative expectation standards (NES).  This range is influenced by antecedents including both explicit and implicit service promises, word-of-mouth communications, and a consumer’s past experiences.  It is the antecedents of these expectations which may influence the degree to which a consumer may positively or negatively evaluate a future service experience.  This predicted service construct was hypothesized in the Consumer Service Expectations Model to affect adequate service or lower levels of service expectations.  Specifically, this research examines the relationship service contact personnel have with the five SERVQUAL dimension measures, service predictions, and  service quality expectations or NES, and thus, if a ‘spillover affect’ is operating.  A well recognized characteristic of a service offering is its intangible nature. Consumers create quality expectations of this esoteric offering by deriving meaning from other related cues in the environment.  These antecedents have been recognized as viable influences on consumers’ expectations of service quality (Devlin, Gwynne, & Ennew, 2002).  Thus, consumers frequently seek out cues to aid them in the consumer decision making process.  Implicit service promises are one of the determinants or antecedents of predicted service.  They are contrived by such cues as the price and tangibles associated with a service.  Implicit service promises including physical surroundings and environment are nonverbal forms of communication that play vital roles in the service deliver process (Sundram & Webster, 2000).  Implicit service promises differ from explicit service promises which the service organization conveys through public messages such as advertising, personal selling, and other recognized forms of communication. In addition, social contact or personalization of an interaction has been advanced as an important influence on the service encounter (Mittal & Lassar, 1996).  Crane and Clarke (1988) support the critical role service providers and contact personnel serve in customers’ evaluations of service quality.  Klemz (1999) provides evidence that the contact person’s role may vary depending on the service environment.  The customer’s evaluation of the service encounter is often influenced by this contact person.  Dress, appearance, and demeanor of these individuals become controllable elements which ultimately effect service expectations.  They may be viewed as antecedents to the consequences of a service encounter (Liu & Chen, 2006 and Bitner, 1990). Tangible cues and physical surroundings such as cleanliness and neatness of uniforms have also been described as servicescape quality (Swanson & Davis, 2003; Wakefield & Blodgett, 1994; Bitner, 1992).  The contact employee may be prominently viewed as the service from a consumer’s viewpoint.  Customers may then be inclined to use these visible aspects of the service environment as a tool to help discern the quality of the services offered. In addition, Gagliano and Hathcote (1994) examined customers’ expectations and perceptions of service quality in a retail apparel setting based upon personal attention, reliability, tangibles, and convenience.  Once again, tangible factors included the manner of dress and neatness of employees.  The empirical evidence gathered from retail specialty stores agrees with the assumption that employee appearance provides visible cues to customers that they use to form perceptions of store image.  These findings were supported by Wakefield and Blodgett (1994) when researchers manipulated assorted service scenarios so that respondents viewed two video taped situations – one high quality service and one low quality service.  When the employees were portrayed as ill groomed the service experience was judged as lower quality.  In contrast, well groomed employees were interpreted as participating in a high quality service situation.


Going Green – From Left to Center Stage:  An Empirical Perspective

Dr. Shel Bockman, California State University, San Bernardino, CA

Dr. Nabil Y. Razzouk, California State University, San Bernardino, CA

Dr. Barbara Sirotnik, California State University, San Bernardino, CA



In late 2007, the researchers conducted a telephone survey of residents in two Southern California counties.  A series of questions was included related to residents’ views and behaviors concerning protection of the environment.  The results of this study suggest that environmental issues have for the most part been mainstreamed.  Citizens of all age groups, education levels, and socio-economic levels seem to share concerns about the environment, and suggest that it should take priority over economic growth.  For the most part, there is more support among liberal, young, less wealthy, and less educated respondents for environmental protection, support of green business, and the government’s role in environmental protection.  But of significant interest in this study is the finding of a relative inconsistency between respondents’ proclaimed dispositions/views and their self reported environmental protection behaviors.  Older, more affluent and more highly educated respondents appear most likely to practice an environmentally friendly lifestyle; and conservatives are equally likely as liberals to engage in environmental protection behaviors.  For most people, it all started with Al Gore’s book “An Inconvenient Truth” and websites like and (Brown, 2008).  The public awareness of global warming is spreading and cannot be ignored, and “in marketing, eco-consciousness is now an expectation” (Erdman, 2008).   Environmental activists are becoming more and more prevalent in the decision making process of public and private builders (Ritter, 2006).  It is said that “going green” is now influencing many actions taken by companies such as Bank of America, Target, Honda, Starbucks and many others (Ritter, 2006).  Instead of Tupperware parties, moms are turning their attention to more eco-friendly products with EcoMom parties (Brown, 2008). There have been a number of studies attempting to determine what influence people’s attitudes about the environment.  Clark & Yu-Fai (2007) report that childhood recreational experiences are good indicators of adult environmental attitudes and behaviors.  Some distinctions are noted between certain recreational activities – both consumptive and appreciative (Clark & Yu-Fai, 2007).  “Consumptive activity participants were most likely to participate in environmental activism while participants in appreciative activities were most likely to recycle and participate in environmental education activities” (Clark & Yu-Fai, 2007).  Other research has shown that knowledge about ecological issues is linked to environmentally friendly behavior (Chan, 1999).  Many authors have focused on demographics as predictors of environmental attitudes and behavior, but the findings have been mixed over time.  For example, early research identified environmentally “aware” consumers as being younger than average (Van Liere and Dunlap, 1980), yet more recent research shows that the green consumer is older than average (Roberts, 1996).  Further, Henion (1972) noted that income was not related to environmentally friendly behavior, but Sandahl and Robertson (1989) and Roberts (1996) found that being environmentally conscious is negatively related to education and income. Consumers are developing high expectations for companies to be environmentally responsible, and businesses are responding to that expectation.  In a recent survey (Cone Consumer Environmental Survey, 2007), 93% of Americans believe companies have a responsibility to help preserve the environment, and 91% of Americans indicated that they have a more positive image of a company when it is environmentally responsible.  Businesses such as IBM, the Carlyle Group (one of the world’s largest private equity firms), and Goldman Sachs are beginning to reap the financial benefits of meeting the consumer’s green expectations by focusing on clean technology – technology which is not only environmentally sound, but also highly profitable. (Pernick and Wilder, 2007).  Further, business leaders increasingly recognize the important role they play in creating sustainable communities which combine housing, retail, and jobs in an environmentally friendly environment.  “The green ethic – energy-efficient, water-stingy buildings full of features that stress the natural over the chemical, the recycled over the new and the renewable over the finite – is firmly mainstream” (Ritter, 2006).  With regard to the extra expenses used to build green, it quickly pays for itself by the preservation of energy (Ritter, 2006).  In the March, 2007, issue of Business Week, Carey & Arndt, describe “why so many companies are suddenly synching up with eco groups.  Hint: Smart business.”  Senior adviser of Texas Pacific Group, William K. Reilly says, “We all swim in the same culture—and the culture is going green” (Carey & Arndt, 2007).  This is a much different perspective than five years ago (Carey & Arndt, 2007).  “The dynamic between corporate executives and activists, once fractious and antagonistic – has moved toward accommodation and even mutual dependence (Carey & Arndt, 2007).  Brian Erdman, 2008 describes this movement as “a kind of arms race to be the greenest.”  Coca-Cola’s vice president for environment and water resources is quoted making the claim that “Providing environmental value is becoming a competitive edge for business (Carey & Arndt, 2007).  However, Erdman asserts, “Today, by itself, green is not an ownable point of differentiation” (2008).  Credit card companies are also jumping on the green bandwagon.  “Green cards have been available in Europe for several years and have attracted a sizable following, tapping into the region’s well-established environmental movement.  Their move into the U.S. comes amid mounting concerns over climate change and impending mandatory restrictions on carbon emissions” (Cui, 2008.)  The Director of the Interfaith Center on Corporate Responsibility on Energy and Environment voiced her concerns about these green credit cards:  “What I am more concerned about is that it gives people an easy pass:  ‘OK, I’ve got my green credit card, so I can do things that are carbon-ridiculous” (Cui, 2008).  Also, ideas about having credit cards that allow the customer to recognize products which are more “green” than others are in the making (Cui, 2008).  Additionally, mothers and wives have recognized the importance of buying products that are safer for their family and eco-friendly.  “The EcoMom Party has arrived, with its ever expanding ‘to do’ list that includes preparing waste-free school lunches; lobbying for green building codes; transforming oneself into a ‘locovore,’ eating locally grown food; and remembering not to idle the car when picking up children from school (if one must drive)”  (Brown, 2008).  These women involved in the EcoMom society feel they hold responsibility because they are the ones who have most of the control when it comes to buying products and preparing food for their family (Brown, 2008).


Cognitive Learning Style and its Effects on the Perception of Learning, Satisfaction and Social Interactions in Virtual Teams

Dr. Margaret F. Shipley, University of Houston-Downtown, TX

Dr. Madeline Johnson, University of Houston-Downtown, TX

Dr. Shohreh Hashemi,  University of Houston-Downtown, TX



This study investigated the relationship between cognitive style and student perceptions of the social interactions, learning and satisfaction in virtual teams.  The cognitive learning style of students enrolled in online courses that required the completion of a team project were determined using an instrument based on Jung’s classifications for gathering and evaluating.   All collaboration among team members to complete the project was done online.  At the conclusion of the course, students responded to a series of statements relating to the virtual team’s cohesiveness, cooperation and communication.  Cognitive gathering style did influence perceptions of the team’s social interactions but cognitive evaluating style did not.  In addition to social interactions on the virtual team, students were also asked to assess their learning and satisfaction with the virtual team experience.  Cognitive differences in gathering style -- sensing vs. intuitive -- did generate differences in the perceptions of learning and satisfaction associated with the virtual team project experience. No differences in satisfaction or perceptions of learning were found to be associated with evaluating style.  Implications for pedagogical team design considerations of virtual projects are presented based on cognitive learning styles.  The popularity of distance education, particularly online courses, continues to grow among college students.  In the 2000-2001 academic year, 52% of universities offering undergraduate programs offered distance education courses for credit and, of these, 43% used the Internet for delivery (U.S. Department of Education, National Center for Education Statistics 2003).  Indeed, from 1998 to 2001 the number of universities offering some type of distance learning increased by 33% (Alavi & Leidner, 2001). Research comparing learning in the traditional classroom with learning online has grown with the increase in online courses.  Many of these studies involve learning comparisons made between the traditional and online versions of a particular course. (See Summers, Waigandt, & Whittaker, 2005.)  The widespread use of collaborative learning, particularly small group or team projects, in postsecondary education has generated a similar interest in understanding learning within virtual teams.  Collaboration learning involves different people with different perspectives working together to solve a problem (Kirschner & Van Bruggen, 2004).  An early investigation into the relationship of learning and computer-mediated collaborative learning reported that students using computer-mediated tools perceived higher levels of skill development, learning, and interest than those who relied solely on manual collaborative learning environments (Alavi, 1994).   An important concern in understanding collaboration in virtual teams has been whether computer-mediated communication (CMC) among team members is less effective than face-to-face group meetings.  In a 1997 study, researchers found that virtual and face-to-face teams exhibited similar levels of communication effectiveness (Warkentin, Sayeed, & Hightower, 1997).  Other issues in collaborative learning in virtual teams that have been studied include the role of trust in building collaboration among virtual team members (Javenpaa & Leidner, 1999; Coppola, Hiltz, & Rotter, 2004; Javenpaa, Show, & Staples, 2004); the content of discussions and reporting writing (Benbunan-Fich, Hiltz, & Turoff, 2003); the effects of diversity on team processes (Smith, 2005); and the degree of social and task cohesiveness (Irmer, Chang, & Bordia, 2000).   The results from these studies continue to support the general conclusion that there are no significant differences between virtual and face-to-face teams.  In both traditional and virtual environments, it has been suggested that instructional design should provide pedagogy in direct relationship to the learning style of the individual (Lengnick-Hall & Sanders, 1997).   Psychological variables are one of several elements that influence a student’s learning style (Dunn, 1989).  C. G. Jung, in the first English translation of Psychological Types, (1923) suggested that parts of human behavior are predictable. He identified sensation and intuition as the two opposing perceptual functions and thinking and feeling as the two opposing judging functions (Isaksen, Lauer, & Wilson, 2003).  Jung stated: By psychological function I understand a certain form of psychic activity that remains theoretically the same under varying circumstances…I distinguish four basic functions in all, two rational and two irrational – viz. thinking and feeling, sensation and intuition. … I differentiate these functions from one another, because they are neither mutually relatable nor mutually reducible. (p. 547)  On this basis, Jung developed a theory that individuals gather and organize information differently and reach decisions accordingly.  Furthermore, he claimed that, since individuals differ in what they perceive and how they obtain information about their experiences, they also differ in their motivations and skills.  Jung stated that people perceive experience either by sensing (using the five senses) or by intuition (using indirect attention to associations).  He concluded that, while sensing people focus on personal realities, trust their past experiences, and learn theories best by using practical applications, intuitive people are creative, appreciate new ideas, and are motivated by challenges.  The sensing strategy focuses on details relating to specific attributes of the data. Sensing gatherers have few preconceptions about what is relevant and, therefore, have a need to thoroughly examine a broad range of data in reaching a decision (Whetten & Cameron, 1998).  However, this tendency toward focusing on the details can cause sensing people to experience information overload and personal stress.  Sensing gatherers, therefore, react more negatively (than intuitive gatherers) to information that is too detailed or too heterogeneous.  The intuitive strategy for gathering information looks at the whole while the sensing strategy looks at parts of the whole and focuses on immediate experiences.  An intuitive strategy is thus a holistic approach, emphasizing commonalities and generalizations, and derives meaning through insight (Myers, McCaulley, Quenk, & Hammer, 1998). Intuitive gatherers tend to have a preconceived notion about the sort of information that is relevant and consequently, are comfortable limiting the amount of information to be considered in resolving a problem.  However, the need to establish commonalities makes processing information that is divergent from the norm or ambiguous in nature more difficult.  In contrast, sensing people succeed in this situation by doing a thorough analysis of these exceptions to the rules to determine a clearer relationship between elements of the problem that eludes the intuitive gather.  In collaborative teamwork these different approaches to gathering information can lead to enhanced learning and/or conflict.


Bayesian Factor Analysis in Survey Data: An illustration Using the Contemporary Catholic Trends Poll

Dr. John Considine, Le Moyne College, Syracuse, NY

Dr. Greg M. Lepak, Le Moyne College, Syracuse, NY



This paper explores the use of Bayesian methodology for regression analysis in evaluating survey data.   The technique allows for more robust modeling than would be possible using ordinary least squares regression and facilitates a more comprehensive analysis of many types of client or customer surveys. The paper uses, as an illustration, a national survey recently conducted on Catholics from all regions of the United States. The Contemporary Catholic Trends survey, as part of an ongoing poll, collects demographic information as well as responses to various “topic” questionnaires.  The paper shows how the methodology can be used to establish relationships in the responses and demonstrates the researchers’ ability to reach multi dimensional conclusions. Issues related to the analytical processing of survey results and their interpretations have received much attention (Bierner and Lyberg, 2003).  This paper presents a well developed statistical methodology and illustrates its efficient and effective application to interpreting multidimensional survey results. In particular, the paper examines the results of the most recent Contemporary Catholic Trends (CCT) poll conducted in March of 2008.  The CCT polls are telephone interviews with some 1,500 adult Catholics and are conducted annually in the fall and spring at Zogby International’s Computer Assisted Telephone Interviewing (CATI) Center in Utica, New York. The survey includes approximately sixty questions including a mix of the traditional demographic information as well as questions organized in modules related to specific topics of research.  The March 2008 survey included a module of questions related to the recent Pope’s visit to the US, a module of questions related to the presidential election, and, the focus of this paper, a module of questions related to the Church’s involvement in initiatives of community development.  This last module was developed by Business faculty who were looking for insights into ongoing initiatives that involve inner-city churches in economic development projects.  CCT surveys have been conducted biannually since 2001, with consistently high response rates.  The data is useful from a variety of perspectives.  Catholics constitute more than 20% of the American population (D’Antonio, Davidson, Hoge, and Meyer, 2001) and happen to be otherwise demographically diverse.  Therefore, research questions investigating attitudes of Catholic Americans can be examined without the large need for further adjustments.  In addition, the CATI center uses an effective weighting system to adjust for non-responses.  The module investigated in this paper contains survey questions related to engagement in community development initiatives.  In particular, the module attempts to gauge the attitude of Catholics toward the use of Church resources in community revitalization projects, often involving people from different faiths. Particularly in inner-city parishes, church leaders face a dual challenge of appealing to declining numbers of parishioners and addressing the realities of the surrounding neighborhoods. Successful management of these challenges can perhaps be facilitated by the use of the types of analysis already commonly used in the business environment. The goal of this study is to identify some characteristics of Catholics who support the use of parish money to assist non-Catholics as well of those who do not.  Consequently, in this analysis the questions contained in the community engagement module were considered along with questions relating to select views about religious, spiritual, and church issues. In total, twenty questions were used for this study. These questions are described in Table 2 below. The complete survey questionnaire can be found of the CCT webpage.  The Bayesian methodology allows researchers to not only look for relationships between criterion and predictor values but to also identify relevant factors that can be used to better understand relationships between values. Five such factors were identified for this analysis.  A description as well as a rational for the number and choice of these factors is included in the analysis section.  Although this paper focuses on the methodology, the context of the illustration is also of great interest. Much of our understanding of Church-based economic development activities comes from popular press and news media. This topic, however, has begun to demand the interest of analytical researchers (Livezey, 2000). In particular, there is a common understanding of the changing role of the Catholic Church, especially in urban cities. The collection and analysis of the recent CCT data is therefore timely and relevant and warrants further explorations, outside the scope of this paper.  Sample respondents were asked to indicate whether they agree with each of twenty church-related issues.  The criterion variable in this study was a measure of Catholics’ beliefs regarding the use of parish money to assist non-Catholics.  The remaining nineteen variables measured Catholics’ beliefs on other important and relevant issues and comprised the predictor variables for the analysis.  The criterion and predictor variables were quantified using five-point bipolar scales.  For these scales, a five represented strong agreement on a variable whereas a one represented strong disagreement.  A total of 1417 survey forms contained complete data and were used to assess the opinions of sample respondents.  Chen (1979) developed a class of Bayesian methods for regression analysis where the criterion and predictor variables are jointly random.  The Bayesian approach uses adaptive smoothing procedures and maximum likelihood estimation to produce stable representations of the predictor-criterion covariance structure.  For relevant ideas, the interested reader is referred to the paper by Pruzek and Lepak (1992) which discusses techniques in covariance and regression estimation that were motivated by Chen's work.  However, those authors developed adaptive smoothing techniques using frequentist principles where estimation is non-iterative and does not involve maximum likelihood estimation.


Teaching Nonprofit Financial Management: Bridging Strategic and Financial Issues

Dr. Daniel Bauer, Bellarmine University, KY

Dr. Keith Richardson, Bellarmine University, KY

Dr. David Collins, Bellarmine University, KY



The Nonprofit Career Guide (2008) shows that, in the United States, the nonprofit sector is twice as large as the construction industry.  Even though nonprofit organizations play a significant role in the economy, the majority of time in financial management courses is spent on corporate (for-profit) financial management decision making.   While nonprofit organizations have very different financial structures, many similarities exist with for-profit firms in regards to successful financial management practices.  This paper examines the similarities and differences between corporate and nonprofit financial management and provides useful classroom examples to bridge the strategic and financial issues in teaching nonprofit financial management.  In 2005 the nonprofit sector was valued at over $1.6 trillion, representing over 5 percent of the gross domestic product of the U.S. economy, 8 percent of wages and salaries, and 10 percent of employment (Nonprofit Career Guide, 2008).  This contribution to the economy makes the nonprofit sector twice as large as the construction industry in the United States and, thus, a significant economic player.   Although many are beginning to show their age, that significance is supported by the number of books that specifically focus on financial management for nonprofit organizations [Bryce (2000), Coe (2007), Connors and Callaghan (1982), Hankin, Seidner, and Zietlow (1998), Lang (1995), Linzer and Linzer (2007), McKinney (1995), Shim and Siegel (1997), Wacht (1984)].  Yet, those texts are aimed at specialized courses for nonprofit managers.  In the typical finance major, the majority of time in financial management courses is spent on for-profit (corporate) financial management decision making.  Further, the textbooks commonly used in such courses include very little information or discussion of nonprofit financial management.  The two exceptions are:  Brigham and Gapenski’s Intermediate Financial Management (1996) text, which includes a chapter on Financial Management in Not-for-Profit Businesses, and Gapenski’s Understanding Health Care Financial Management, Text, Cases, and Models (1993), which provides information on financial management in not-for-profit health care corporations.  Consequently, students are not often introduced to the specific financial management issues faced by nonprofit organizations and their managers.  The purpose of this paper is to outline the issues related to nonprofit financial management and to bridge the strategic gap in teaching both for-profit and nonprofit financial management.  In doing so, this paper examines the similarities and differences between for-profit and nonprofit entities and provides useful classroom examples that allow students to understand both for-profit and nonprofit financial management.  Nonprofit managers are like their for-profit counterparts in at least one way, both must develop skills in financial management.  Such skills allow managers to understand basic principles of financial management, and build the basic systems and practices needed in a healthy business.  Those practices revolve around two basic questions that, based on the entity’s goals, define how the firm obtains capital and how managers make investment decisions.  In the case of for-profit firms, Ross, Westerfield and Jordan in their Fundamentals of Corporate Finance text (2008) state the basic financial management questions as: What long-term investments should you take on?  That is, what lines of business will you be in and what sorts of buildings, machinery and equipment will you need?  Where will you get the long-term financing to pay for your investment?  Will you bring in other owners or will you borrow the money?  Those questions require the for-profit firm to carefully consider both the source and mix of capital (debt vs. equity) and the use to which they will put the capital raised.  Clearly, such use must be profitable for both the firm and the capital providers.  Bauer and Richardson (2002) state that nonprofit managers, in determining when to acquire equipment and other assets, must answer questions similar to, but different from, those posed above:  When is a long-term expense warranted? How do you decide if a large expenditure will pay off in the long run? Clearly the focus for nonprofit firms is different.  Nonprofit firms do not provide a return to equity providers (donors), nor do they repay debt providers out of profits (earnings) but rather out of cash flows generated from either charitable contributions (i.e.: donors) or auxiliary enterprises.  Thus, the capital investment need not be profitable (as defined by the for-profit firm) but must meet and/or advance the social objectives (mission) of the nonprofit entity.  As the above shows, nonprofit organizations have different financial structures than for-profit firms.  According to Brigham and Gapenski (1996), those differences have significant implications for many elements of financial management decision-making, including: defining goals of the firm, obtaining capital, and making investment decisions.  Yet, at the same time, many similarities exist in regards to successful financial management practices.  For example, both for-profit and nonprofit firms must overcome the agency problems of moral hazard and adverse selection.  Moral hazard occurs when the agent is insulated from risk and, so, may act differently than if exposed to the risk.  Adverse selection can result from information asymmetries between principals and agents. 


Remote Ownership Shareholders in the 21st Century:  Theoretical Implications for Corporate Governance, Profitability and Long Term Wealth Creation

Dr. Peter Spang Goodrich, Providence College, RI

Dr. Nancy Rossiter, Jacksonville University, FL



Theories are neither true nor false only more or less useful.  Theories are composed of assumptions and a framework.  The most important economic theorist for the development of American business practice has been Adam Smith.  Two contrasting models of the assumptions behind running an organization efficiently and effectively are the Shareholder and Stakeholder Models.   Professor Milton Friedman has advocated the shareholder model.  Professor R. Edward Freeman has posited the stakeholder model.  Neither of these theoretical models is true or false, but they have results based on their utility in accomplishing their goal.  We highlight the ethical implications behind these theories and propose a modification of the two polar theories.  This should result in more ethical, efficient, and effective corporate behavior and performance.  Shareholders (in addition to the other stakeholders) will benefit in the long-term from such ethical corporate behavior.  We discuss four topics related to more effective management -- theories, shareholder and stakeholder models, ethics and the law, model modification, and beneficiariesThe economic theorist who has dominated U. S. business conduct for the past century is, the "father of modern economic science," Adam Smith.  (R. Smith, p. xi) His neoclassical liberal economic theory was introduced in his 1776 book, The Wealth of Nations.  Yet, today, many economic justifications are based on the erroneous extension of Smith's brilliant coherent analysis of small businesses.  These eighteenth century firms had active owners exercising management control.  Today’s 21st century large corporations have passive owners separated from management control.  Therefore, much of Smith's traditional classical liberal economic theory is misinterpreted and misleading when discussing modern corporate governance. Theories assume a reality and a framework for analyzing empirical data and presenting a point of view.  Often the theoretical frameworks used in discussing management, or any other academic topic, favor assumptions of the prevailing cultural ideology.  Theories of ethics posit a view of human nature and conclusions about behavior based on intellect, emotions, and morality.  Often the assumptions underlying a theory are unstated or implied.  This does not sever the link of the assumptions to the final conclusions.  Making the assumptions conscious, however, makes a critical ethical theory possible.  Managerial ethics deals with the potential conflict between managerial actions, moral judgements, and organization practices.  Until recently, in the aftermath of continuing national business scandals, ethics has been a de-emphasized, marginalized, and often neglected field of study in many business curricula.  Yet ethics is crucial1  because management decisions inevitably involve decision-making based on the intellect, emotions, and morality. Theories are neither true nor false only more or less useful.  Nobel economics laureate Milton Friedman, for example, admits that there is no such thing as "pure competition.”  It is only an "ideal type" which allows for a better analysis of the economy "as if" it were competitive  (M. Friedman, 2002, p. 120).  In fact, Adam Smith disparaged stock companies, the equivalent of the modern corporation, that dispersed ownership -- "Joint stock companies differ in several respects, not only from regulated companies, but from private copartneries.  First, in a private copartnery, no partner, without the consent of the company, can transfer his share to another person, or introduce a new member into the company.  Each member, however, may, upon proper warning, withdraw from the copartnery, and demand payment from them of his share of the common stock.  In a joint stock company, on the contrary, no member can demand payment of his share from the company; but each member can, without their consent, transfer his share to another person, and thereby introduce a new member.  The value of a share in a joint stock is always the price which it will bring in the market; and this may be either greater or less, in any proportion, than the sum which its owner stands credited for in the stock of the company.  Secondly, in a private copartnery, each partner is bound for the debts contracted by the company to the whole extent of his fortune.  In a joint stock company, on the contrary, each partner is bound only to the extent of his share. The trade of a joint stock company is always managed by a court of directors. This court, indeed, is frequently subject, in many respects, to the control of a general court of proprietors.  But the greater part of those proprietors seldom pretend to understand anything of the business of the company, and when the spirit of faction happens not to prevail among them, give themselves no trouble about it, but receive contentedly such half-yearly or yearly dividend as the directors think proper to make to them. This total exemption from trouble and from risk, beyond a limited sum, encourages many people to become adventurers in joint stock companies, who would, upon no account, hazard their fortunes in any private copartnery.  The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.  Like the stewards of a rich man, they are apt to consider attention to small matters as not for their master's honour, and very easily give themselves a dispensation from having it.  Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company.  It is upon this account that joint stock companies for foreign trade have seldom been able to maintain the competition against private adventurers.  They have, accordingly, very seldom succeeded without an exclusive privilege, and frequently have not succeeded with one. Without an exclusive privilege they have commonly mismanaged the trade. With an exclusive privilege they have both mismanaged and confined it"  ( accessed 27 March 2005. Website of The Adam Smith Institute). Adam Smith's dominant theoretical economic model applied to understanding ethical corporate behavior should be more realistic and modern.  For one thing, Friedman's shareholder model bestows all the benefits to the owners on the basis of property rights, but fails to consider the distinction between active property and passive property.  Active property, on the one hand, focuses on the enterprise comprised of plant, equipment, good will, and organizational structure.  Active property deals with the efficient and effective operation of the firm on a daily basis.  Passive property, on the other hand, bonds and shares, certainly involves an interest in the enterprise, but virtually no control or responsibility over its operation.  Today, unlike the eighteenth century, the separation of active (control) and passive (ownership) property is the norm.  Neither classical liberal economic theory nor strict private property legal interpretations apply.  Let us also consider the concept of wealth.  Certainly, wealth growth is a key concern of the business enterprise.  To the holder of active property, the efficient and effective performance of tangible assets generates wealth.  To the holder of passive property, wealth is a bundle of expectations about future market performance, which may or may not be linked, to operational performance.  Possessors of passive property are free to trade this with others.  However, these transactions have little or nothing to do with the active direct property transactions of the corporation.  Even the concept of private enterprise has been distorted.  To Adam Smith, private enterprise involved but a few people toiling with their own labor or immediate direction.  With today's corporations having thousands of owners, the concept of corporate enterprise must be substituted for private enterprise.  Under corporate enterprise, the game is not about production, but about control by the autocrats of industry.


The Value Relevance of Industry and Firm Cash Flows and Accruals

Dr. William D. LaGore, Eastern Michigan University, Ypsilanti, MI

Gary B. McCombs, Eastern Michigan University, Ypsilanti, MI



This paper examines the relation between security returns, industry-wide cash flows and accruals, and firm-specific cash flows and accruals during the period 1991-2001. We first replicate Ayers & Freeman’s (1997) findings that returns are significantly associated with industry earnings and this association begins and ends earlier than returns associated with firm earnings. We hypothesize the components of industry earnings - cash flows and accruals - are significantly associated with stock returns. Consistent with this hypothesis we find that both industry-wide cash flows and industry-wide accruals are significantly associated with returns and this association begins and ends earlier than returns associated with firm-specific cash flows and accruals. Contrary to expectations, we find no significant difference between industry-wide cash flows and industry-wide accruals. Finally, we hypothesize and find that industry-wide accruals are more value relevant than firm-specific accruals in years t and t+1. Collectively, these findings suggest industry-wide cash flows and accruals are value relevant; however, disaggregating industry earnings into its cash flow and accrual components is unnecessary as it does not provide incremental explanatory power beyond that of industry earnings. All data are publicly available from the sources identified in the paper.  A common belief in the investment community is that industry information has value relevance for pricing a firm’s stock. The production and analysis of industry information is extensive. For example, industry and trade associations produce significant amounts of industry information and data; however, there is little empirical evidence whether investors actually use this industry information. Financial analysts typically specialize in sectors or specific industries. Accounting textbooks discuss the importance of comparing a firm’s financial ratios to industry benchmarks. Given the perceived importance of industry information for asset pricing, surprisingly little empirical evidence exists as to the value relevance of industry accounting information.  One stream of empirical research documents the information content or “information transfers” associated with industry information. Research on “industry information transfers” examines whether a firm’s information announcements affect the stock prices of other firms in the same industry. Empirical research provides evidence of information transfers associated with earnings announcements (Foster 1981; Pownall & Waymire 1989; Han & Wild 1990; Freeman & Tse 1992), sales announcements (Olsen & Dietrich 1985) and management forecasts (Baginski 1987; Clinch & Sinclair 1987; Han et al. 1989; Pyo & Lustgarten 1990). Another stream of research examines the value relevance of industry information by investigating the association between industry information and stock returns. For example, Lang and Lundholm (1996, L&L hereafter) find industry earnings have incremental explanatory power beyond that of firm earnings, while Ayers and Freeman (1997, A&F hereafter) find that returns associated with industry earnings begin and end earlier than returns associated with firm earnings. However, these value relevance studies do not examine the components of industry earnings: cash flows and accruals. Prior research documents that cash flows are incrementally useful to earnings in determining firm value (e.g. Cheng, Liu & Schaefer 1996; Subramanyam 1996) and are more persistent than accruals (Sloan 1996). Thus, this study addresses the following research question: Are the cash flow and accrual components of industry earnings value relevant?  Beaver (2002) defines value-relevance research as examining the association between a security-based dependent variable and a set of accounting variables. Therefore, this paper examines the relation between security returns, firm-specific cash flows and accruals, and industry-wide cash flows and accruals. We use the term industry-wide cash flows and accruals to represent the cash flows and accruals of other firms in firm i’s industry, excluding firm i’s cash flows and accruals. Firm-specific cash flows and accruals represent firm i’s cash flows and accruals.  The terms industry/industry-wide or firm/firm-specific are used interchangeably throughout the paper. We use a value-relevance approach in this study for two reasons. First, the information set for industry information is extensive. Investors learn about earnings and cash flows not just from the earnings/cash flow announcements, but also from numerous non-accounting information sources (e.g. industry and trade association reports). Thus, the value-relevance approach determines whether the measurement of earnings and cash flows is consistent with the extensive industry information set reflected in the stock prices (Collins & Kothari 1989). Second, the timeliness of information is not an overriding issue (Beaver 2002). Industry information is incorporated into stock prices over a longer time period than the shorter windows typically used in event studies. For example, L&L find an average time period of 31 days (maximum 91 days) for the window when all firms in an industry announce their annual earnings.  We use a sample of 12,062 firm-year observations for the period 1991–2001 to replicate A&F’s main finding that returns associated with industry-wide earnings begin and end earlier than returns associated with firm-specific earnings. It is interesting to note A&F’s results for the years 1975–1989 are robust to a different sample period (1991–2001), and to a different methodology used to compute abnormal returns. A&F calculate expected returns as the monthly return of securities in firm i’s beta decile using the Scholes-Williams (1977) procedure, whereas, we use the standard market model to compute expected and abnormal returns. The results of our analysis provide evidence that industry earnings are value relevant and support A&F’s hypothesis that the association between returns and industry earnings begins and ends earlier than the association between returns and firm earnings. Consistent with A&F, we hypothesize that (1) the components of industry earnings, cash flows and accruals, are value relevant and (2) the association between returns and industry cash flows and accruals begins and ends earlier than the association between returns and firm cash flows and accruals. We test these hypotheses using a sample of 12,062 firm-year observations for the period 1991–2001, and find support for both hypotheses, as industry-wide cash flows and accruals are significantly related to stock returns and the association between returns and industry-wide cash flows and accruals begins and ends earlier than returns associated with firm-specific cash flows and accruals.  Empirical studies, such as Cheng, Liu and Schaefer (1996) and Subramanyam (1996), document higher explanatory power for firm cash flows than for accruals. We expect this higher explanatory power for cash flows to hold true with industry-wide cash flows. However, contrary to our expectations, we find no significant difference in the value relevance of industry-wide cash flows and industry-wide accruals. This suggests disaggregating industry earnings into its cash flow and accrual components does not provide any additional explanatory power for asset pricing. The reasons that make firm cash flows and accruals differentially valued as documented in the literature, such as the presence of transitory earnings (Cheng, Liu & Schaefer 1996) and the higher persistence of cash flows compared to accruals (Sloan 1996; Barth et al. 1999; Dechow, Richardson, and Sloan 2008), are reduced to an insignificant level for industry-wide cash flows and accruals. 


Iranian Generation Y Female & Male Decision-Making Styles: Are They Different?

Dr. Kambiz Heidarzadeh Hanzaee, I.A.U. (Tehran Science and Research Branch) University, Tehran, Iran



The purpose of the current study is to investigate and compare Iranian Generation Y female and male consumer decision-making styles. Sproles and Kendall’s (1986) Consumer Styles Inventory (CSI) was adopted in this study. A questionnaire survey was employed to collect the primary data to a non-probability sample of female and male undergraduate students of Azad University, the IAU branch. The results show differences among the female and male decision-making styles, suggesting that gender has a marked effect on shopping behavior. Identification of new traits, apart from those eight decision-making styles identified by Sproles and Kendall, for both groups of genders suggests that CSI cannot be applied without considering the socio-cultural factors among a wide domain of cultures and that this instrument needs to be developed to be applicable in multiple countries. These findings are useful for domestic and international retailers and marketers seeking effective targeting of Iranian Generation Y female and male consumers. Decision-making styles are important to marketing because they determine consumer behavior, are stable over time, and thus are relevant for market segmentation (Walsh et al., 2001). Advertisers and marketers can use such profiles to segment consumers into viable and profitable clusters (Durvasula et al., 1996). Decision-making styles may vary by different factors, such as the cultural groups (Durvasula et al., 1993; Durvasula et al., 1996; Fan and Xiao, 1998; Hafstrom et al., 1992) or the store types (Darden and Ashton, 1975); however, little attention has been given to the question of gender (Bakewell and Mitchell, 2004). Most studies on shopping orientation have focused only on female samples to identify the shopper typologies (AGB, 1987; Moschis, 1976; Stone, 1954; Darden and Ashton, 1975; Westbrook and Balck, 1985). This suggests that there has been a lack of interest in male shopping behaviors. Frarm and Axelrod (1990) reported that females have the primary responsibility for household shopping. Oakley (1976) noted that husbands avoid going shopping or carrying shopping bags because of a fear of being labeled as effeminate. Despite these historical trends, there seem to be enough male shoppers (even if they are a minority) in supermarkets and shopping centers to warrant our attention. Some studies therefore started to focus on male-female differences in shopping behavior (Dholakia et al., 1995). Campbell (1997) proposes that, because shopping is seen as a female activity, males have a different ideology from women as to what constitutes effective shopping behavior. The principle ideological difference relates to what Campbell describes as the instrumental versus expressive dichotomy, whereby men see shopping as something that is needs-driven and a purely purchase-motivated activity while women are more likely to regard the activity as being enjoyable in itself and related to the satisfaction of wants and desires. Also, compared to women, men simplify the shopping process by attending to a smaller number of information sources (Laroche et al., 2000). Furthermore, social and demographic changes are putting pressure on traditional gender roles and men now are playing a significant role in shopping activities (Dholakia, 1999; Dholakia et al., 1995).These changes are particularly remarkable concerning the young generation. In 1991, Douglas Coupland used the name Generation X as a synonym for the young people; however, today Generation X or Xers are in their 30s and marketers now are dealing with a new generation. Born between 1974 and 1994, this generation is named “Generation Y,” “Echo Boomers,” or “Millennium,” and they are the children of “Baby Boomers” or “Generation X” (Neuborne and Kerwin, 1999). The age or life-stage of this generation makes them unique to other cohorts. They have different financial commitments; thus, more than 70 percent of their income is spent arbitrarily, with the majority going to entertainment, travel, and food (McCrindle, 2002). Overall, Generation Y appears to have a positive attitude toward shopping as a fun experience (Zeithmal, 1985). Lehtonen Maenpaa (1997) indicates that this generation lives in an era in which shopping is not regarded as a simple act of purchase.The proliferation of retail and product choice has resulted in a retail culture in which acts of shopping have taken on new entertainment and/or experiential factors. In fact, Generation Y has become an accumulated materialistic and consumer culture more so than other generations as a result of technological innovation (Bakewell and Mitchell, 2003). The sheer magnitude of the group produces a profound impact on current business because they “love to shop” (Taylor and Cosenza, 2002). Catalog Age (1991) reports that they consider shopping an experiment rather than an errand, an event rather than a chore. Marketers who don’t bother to learn the interests and obsessions of Generation Y are apt to run up against a brick wall of distrust and cynicism, which is why companies like General Motors Corp. put together a task force to figure out how to appeal this generation (Neuborn and Kerwin, 1999).  Iran has a very young population and, according to a report published by Iran Unicef web site (2006), there has been an increasing birth rate between the years 1981 and 1991, with 60 percent of the total population below age 30 and 40 percent between 10 and 25 years old. Being such a nascent potential market, there is no empirical study focusing on this generation for Iran’s market.All the above mentioned evidence leads us to the proposition for this study: Iranian Generation Y male consumer decision making styles differ from Iranian Generation Y female consumers.The instrument used for this study is Sproles and Kendall’s (1986) Consumer Styles Inventory. No research has been done previously in Iran to examine consumer shopping styles by using this instrument; therefore, this is the first academic study focusing on Generation Y shopping behaviors to offer guidelines to Iranian and overseas retailers and marketers interested in marketing their products to Iranian consumers.  Early studies on shopping orientation were begun by the research of Stone in 1954; it used a sample of 124 female department store shoppers and developed the first shopping typology (Stone, 1954). The consumer typology approach attempts to define general consumer types, and the work of Stone was followed by other researchers (Moschis, 1976; Daden and Ashton, 1975; Stephesson and Willet, 1969). This approach can be criticized because it is doubtful that consumers can be grouped into distinct unidimensional behavior typologies, and labeling a consumer always as either “economic” or “price conscious” is unrealistically simplistic and does not reflect the growing research into the so called “hybrid consumer” (Walsh et al., 2001). Therefore, as Sproles and Kendall (1986) suggested, no approach was designed specifically to serve consumer interest professionals; hence, they developed a Consumer Styles Inventory (CSI) based on an exploratory study of Sproles in 1985.The CSI was administered in April 1985 to 501 students in 29 home economics classes in five high schools in the Tuscan area; they were asked to fulfill the forms about their decision-making styles, resulting in 482 questionnaires. Data were factor analyzed and the principal component method with varimax rotation of factors was used. They confirmed an eight factor model through their factor analysis of CSI. They described each factor as a consumer decision-making style, and defined it as a mental orientation characterizing a consumer’s approach to making choices that has cognitive and affective characteristics. Table І shows the characteristics of the eight consumer decision-making styles.


On the Mobility of the Romanian Work Force Within the European Economic Space. Opportunities, Causes, Consequences

Dr. Nela Steliac, Babes- Bolyai University of Cluj-Napoca, Romania



The adhesion of Romania on the 1st of January 2007 to the European Union opens legal paths of employing local work force. The adhesion and the economic integration assures one of the fundamental rights guaranteed by the communitary legislation, meaningly the free circulation of the work force within EES (European Economic Space), a right assured from the very creation of the European Community, since 1957. This implies: the right of every citizen belonging to the integrated space to search for a work place in any other member state; the right to work and live on the territory of that state; the right to benefit from the same treatment as the citizens of that state, in what concerns employment, working conditions, entry conditions and payment conditions. All these rights are not granted on the first day when a state becomes member of the European Union. There is a period of transition, in this respect, after the adhesion, which lasts up to a few years, for the free circulation of the workers, a period set by each EU member. Taking into consideration all these rights, the new EES citizens are drawn by the possibilities and the opportunities that give them the right to freely work on EU territory. This is also the case of our country. The phenomenon of work force migration into EU countries and not only, has started a few years before the adhesion. There are multiple causes for this phenomenon, but most of them have as starting point Romania’s economic situation after 1989, which did neither offer many chances of employment, nor chances to earn enough, so as to lead a decent life. If before the 1st of January 2007, as a state outside the EU, there were well established restrictions regarding the mobility of the Romanian work force, and not only, after that moment the member states of the EU started opening their „doors” either partly or entirely towards their own labour market. Many westerners saw this fact as a possible invasion of the East-European labor force. Economic reality, thouth has proven that the fears of the Europeans concerning massive migrations of eastern work force have been completely unfounded. Furthermore, the worker’s mobility has been and continues to be an absolutely positive element in the economic development of the EU. Europeans have assumed the same position regarding the opening of the labour market, in the case of Romania as well. The work force mobility within the EES cannot only have advantages but also disadvantages. The latter can actually be regarded as opportunity cost. Besides the immediate financial gains that they obtain, they also face family problems brought along by the „temporary desertion” of underage children. There are many such cases when children are left alone, without any parent or any other blood-relation, and also without their moral and emotional support. It is also felt in various branches of activity, and especially in constructions, a lack of qualified work force on the Romanian labour market. There have been cases in Romania, when in the deficitary activities foreign work force was called for help. One of the main advantages of Romania’s adherence to the E.U. is the free movement of labor force within the European territory. The economic adherence and integration ensure a fundamental right the community legislation warrants: the free movement of labor force within the Common European Economic Space (EES), freedom envisioned in 1957, when the European Community was created. This consists of any European’s right as citizen of this territory to seek for an employment in another member state; the right to work and live on the territory of the respective state; the right to benefit from the same treatment as the citizens of that state as far as the employment, working conditions, entrance conditions and retribution conditions are concerned. On January 1st 2007, Romania’s adherence opened the legal way for the employment of inland labor force.  The migration phenomenon of the Romanian labor force occurred immediately after the collapse of the communist regimen in 1989 and has become very ample for the last 10 years. There has been an official emigration of the labor force and an unofficial one. If the official one is measurable from the statistical point of view, the unofficial one is approximate.  The causes of Romanians’ emigration, regardless of the economic space people prefer to emigrate to, differ according to the period of time we are referring to. First, emigration had ethnical and political causes which turned into economic ones.  The consequences of emigration are diverse, from the positive ones to unwanted and negative ones applied to different domains: economics, social, material, family, macroeconomics and microeconomics.  The present paper shall present the migration phenomenon of Romania for the last years in all its aspects: causes, consequences, opportunities, dimensions and tendencies.  The collapse of the communist regimen of Romania in 1989 opened the gates to emigration towards West. Many Romanians have left – for good or temporarily – to Western Europe or to the United States of America - in order to have a better life.  The period before 1989 was characterized by two types of emigration: one generated by ethnical and political reasons, which led to a permanent emigration and a temporary one caused by Romanians’ departure for studies abroad or for employment contracted between Romania and other states.  After this period, most of the Romanians went abroad for financial reasons. The restructuring of the Romanian economy which passed from the centralized economic system to the market economy had unfavorable consequences over a large number of the population. Many plants financially supported by the state were closed and many employers became unemployed. The Romanian economy was no longer capable to ensure new jobs for most of the unemployed. Moreover, the wages paid by most of the employers were much too low for the everyday living (in 1991 the average minimum wage was about 26 US $). The post-revolution economic crisis determined a great part of the population that had become poor to wander about Western Europe and not only. The massive restructuring and reforms that took place in many domains of activity created an unbalance on the labor market. The lack of flexibility on the labor market (lack of qualification for certain domains or the refuse to get qualified by many of those capable of work due to the much too low wages) finally generated the Romanians’ migration phenomenon.


Applying Store Image and Consumer Behavior to Window Display Analysis

Dr. Shuo-Fang Liu, National Cheng Kung University, Taiwan

Wen-Cheng Wang, Hwa Hsia Institute of Technology, Taiwan

Ying-Hsiu Chen, National Taiwan University of Science and Technology, Taiwan



The models of global economy, society, culture and business have been greatly changed as a result of the improvement of scientific development and standard of living. Window display has propagandized media effect. Consumers can get fashion information from shop window; stores can attract consumers and stimulate their purchase desire. The main purpose of window display is to attraction consumer’s attention, deliver the product information and induce consumer’s memory connection. Therefore, vision composition of window display can create psychological feeling and emotion and it is the first store image information received by consumers; it mainly influences consumer’s decision of staying and purchasing and it is also key factor which determines the success of window display. Our study investigated the influence of consumer behavior and store image towards window display; its result showed: 1) the relevancy between store image and consumer behavior; 2) the relevancy between store image and window display; 3) the relevancy between store image and customer’s satisfaction; 4) the relevancy between store image and customer’s loyalty.  After Boulding (1956) first brought forward the concept of “image” many scholars studied this concept by applying it to the field of consumer psychology; all of them believed that consumers react according to the fact they trust and undertake their consumer behavior based on store image. Dodds et al. (1991) considered store image has significant influence on consumer behavior and store image appraisal can influence consumer’s buying will. Grewal et al. (1988) mentioned that characteristics of store’s consuming environment, service level and product quality provided so-called store image. Kapferer (1986) defined store image as the guideline of certain store mode and store property in consumer’s idea; it was composed by visible entity, individuality, culture, relation, image reflection and consumer’s personal interest; it included two properties: store’s functional particularity and store’s psychological atmosphere. Store’s functional particularity is opinion of store’s visible character; it is store factors related to product selection, level of price, credit system, product display and other objective quality. The psychological property of store atmosphere is the mental feeling of invisible store atmosphere; it is the feeling of ascription sense, calefaction, affability, excitement or entertaining.  The key determining factor of gateway no longer depends on the price and specification of information products. When the product itself has no difference, brand image needs to be created by building the store’s atmosphere and utilize window display to produce added value to products. Window display can attract consumer to buy, provide information of product and fashion; it also has the function of welcome, temptation and selecting the consuming property. Window display is the primary first space which contacts with consumers. Consumers spend averagely only few seconds on watching and considering while they pass by the shop window (Kenneth et al., 1995) so window display space must possess characteristics of instant transmission and connect store image and store consumers clearly and rapidly with information; it is also important to make account of space display methods and show imago and tactics in order to advance the vision effect window display. Window display needs to understand the consumer’s behavior modelcontinuous update and exhibit abundant originality so that it can induce consumers to enter and purchase also increase store’s competitive power. The most challenging issue for operator is how to enhance store image to consumers, exhibit shop window’s individuality and create popular topics to attract consumer’s attention. Effective window not only can promote the whole brand image but also increase the sales transaction achievement.  Window display is mainly to arouse consumers resonance; it can form tensional inherence life by the combining tension particularity of shape, color, light, space, location, sound effect and scene in addition to utilization of vision composition theory. Moreover, window display produces immediate effect because the course of consumers contacting the window display to their at once decision to enter the store is very brief; the result shows in no time. Thus, the tension expressivity should be able to force the consumers attention. The analysis principle of vision composition can be divided to four factors (Rudolf Arnheim, 1974):  a. Equilibrium: In an equilibrium composition of picture, factors such as molding, direction and location are closely linked to each other and can not be changed; each one is equally important. All perceptive activities are perceptive judgments and are connected to each other. Hence, direction is influenced by the location; any factor composition of a picture can attract the object around it and direct that object no matter this factor is a spot in hidden structure or a visible thing.  b. Modality: Modality means certain connotation existing exteriorly of itself; it is all the form style of shape, size, proportion or color which we obtain from observing or remembering something. Form is one of the particularities which are grasped by eyes; it is also sculpting which mainly indicates the appearance of object. Object of three dimensioned space is shown by the appearance of two dimensioned plain space; the appearance of plain is shown by one dimensioned line space. c. Light: Proper allocation of light source can unify and organize complicated forms; strong lateral light can be used to systematize the space. Shadow effect can be reached by using two dimensioned substance to express three dimension and depth; its space effect totally depends on the distribution of brightness. The incoherence of layered brightness creates a kind of abruptness in the space direction.  d. Color: All the visual images are presented by color and brightness. The contour line for defining the form the brightness and shadow is extended through eye’s differentiating ability of brightness and color; it become the important factor of three dimensioned space form. Color expression is mainly based on association; all kinds of colors undertake material association and nonobjective association.  Window display is like numerous intricate advertising boards hanged along the street and it is full of business chance. How to attract consumer’s attention and then reach the effective advertising benefit? Window display should stimulate consumer’s five senses; it first arouses consumer’s curiosity and interest then they have consumption desire and cause. Window display also helps promoting store image. The concrete methods to promote the interaction between store and consumer depends on the decoration, display, color, music, smell of store’s entire atmosphere, consumer’s activity area, store space, store’s special area; blending five senses to build perceptual consuming experience and utilize physical sense experience can mostly influence consumer’s contact point. Consumer can deepen their brand memory connection by using sensing experience towards store and products then they can deepen their memory connection. From another point of view, sensing experience is product’s selling point; the keystone and final goal are whether the procedure of sensory marketing can touch people’s heart. Product display techniques, POP promotions, sales promotions and shop signboards are main high lights of design plan for building store’s marketing atmosphere. Building store’s marketing atmosphere can start with romancing store’s atmosphere which includes utilization the arrangement of color, music and odor to add in marketing atmosphere; furthermore generating shopping atmosphere is done by using sales promotion, advertisement. Public media is used to broadcast the promotion information in order to have many people gathering at shop. Effective managing the marketing can guide consumers to buy; durative process of marketing needs to be maintained for avoiding wasting of resources. Shop window and display technique can be designed according the activity theme; effective display methods are used to reach the goal of attracting consumer’s attention. Consumer’s experience about store image can be explained in the following five types:


The Relationship between Leadership Styles and Foreign English Teachers Job Satisfaction in Adult English Cram Schools: Evidences in Taiwan

Fang Yi Wu, Cheng-Shiu University, Kaohsiung, Taiwan, R.O.C.



This study (1) investigates the relationship between adult English cram school leaders’ leadership style and foreign English teachers’ job satisfaction in Taiwan. Three leadership styles named transformational, transactional, and laissez-faire are identified in this study which are measured by Multifactor Leadership Questionnaire (MLQ–5X) (Avolio and Bass, 1999). Job satisfaction is assessed using the Job Descriptive Index (JDI) and the Job in General (JIG) Scale (Smith et al., 1969). In addition to quantitative analyses, a qualitative analysis, face-to-face interviews, is conducted in this study to probe into the reasons lead to these correlations between leadership styles and job satisfaction. Statistical results show that the relationship between transactional leadership style and job satisfaction was abundant, however, the effects both transformational and laissez-faire leadership styles have on foreign English teachers’ job satisfaction are moderate. Interviews show that a good teaching environment and easy-going coworkers were important factors that produce satisfaction among foreign English teachers. English is everywhere. Millions of people are learning it. Almost half of the world’s population will be more or less proficient in it within the next 50 years. The need to learn speaking English has become essential in business and for travel. Language schools in Taiwan, commonly known as “English cram schools,” are an essential part of life of the nation. Besides students, many adults, from business people to factory workers, attend English cram schools to improve their listening and speaking skills. Moreover, most Taiwanese attend English cram schools tend to look for instructors from English-speaking countries because they believe these native speakers by definition will be good at teaching English.  With thousands of jobs being advertised each month for English instructors, teaching English in Taiwan presents an inviting opportunity for many young Western college graduates in their early 20s and 30s. Teaching English abroad has numerous rewards for foreign English teachers: they can learn more about other cultures and attitudes, they have the chance for extensive foreign travel, and they are exposed to interesting lifestyles. Most of these English teachers are from the United States, Canada, the United Kingdom, Ireland, South Africa, Australia, and New Zealand. They come in substantial numbers, but it is difficult to get them to commit long term to teach in cram schools. In fact, many leave before completing their contract agreement, mostly because they are not satisfied with their working environment. This has become a major problem for many cram schools. Yet there are some foreign teachers who stay at one school for a long time. These foreign English teachers are willing to commit themselves to one school because they like their relationship with the school leader (or the school director), they enjoy their working environment, and they are satisfied with their jobs.  As mentioned above, the success or failure of an organization is determined by human beings. In recent years, leadership style has become an important topic of study in the management field and many researchers consider leadership style as an important variable in influencing an organization’s functions. Leadership style can influence followers’ job performance and job satisfaction (Robbins, 2001). The main leadership styles used here are transformational, transactional, and laissez-faire. These three styles are known as the new leadership theories and are used by most academics who study organization leaders (Bogler, 2001, 2002; Heller, 1993; McKee, 1991; Timothy and Ronald, 2004). A transformational leader typically inspires followers to do more than originally expected. Transformational leadership involves the process of engaging the commitment of the employees in the context of shared values and shared vision. Transformational leadership is particularly relevant in the context of managing change. It involves relationships of mutual trust between the leaders and the followers. On the other hand, a transactional leader is more likely to offer some form of need satisfaction in return for something valued by the employer. This could be increased salary, improved job satisfaction, or recognition. The leader sets clear goals, is adept at understanding the needs of employees, and selects appropriate, motivating rewards. As for a laissez-faire manager, exercising little control over the group and leaving employees to sort out their role and tackle their work without participating in the process are their main management characteristics. Once a leader is confident with his or her team and deems the team capable, he or she will step back and let the employees get on with the task without direct supervision. Job satisfaction is related to the feelings of employees and can be influenced by factors such as the quality of their relationship with their supervisor or employer, the quality of the physical environment in which they work, or the degree of fulfillment in their work. Job satisfaction is not the same as job motivation; rather, job satisfaction provides an indication of an employee’s well-being induced by the job (Michaelowa, 2002). Although abundant research has been carried out on the relationships between leaders’ leadership styles and teachers’ job satisfaction in elementary schools, colleges, and universities, but little research has been carried out on cram schools. Therefore, the main purpose of this study is to investigate the relationships between the leadership styles of school leaders and the job satisfaction of foreign English teachers in adult English cram schools in northern and southern Taiwan. The results of this study may give a chance to school leaders understand what foreign teachers need more clearly and whether their job satisfaction is related to the school leaders’ leadership style. Furthermore, school leaders may improve their foreign teachers’ commitment to the school by referring to the results of this study. The study primarily adopts a quantitative method to determine the correlation between leadership styles and job satisfaction. Leadership styles are measured by Multifactor Leadership Questionnaire (MLQ–5X, Avolio and Bass, 1999) and job satisfaction is assessed using the Job Descriptive Index (JDI) and the Job in General (JIG) Scale (Smith et al., 1969). To see the reasons lead to the quantitative results, a qualitative analysis, face-to-face interviews, is involved in this research because it provides a complete, detailed description. Such multi-method approach, including both qualitative method and quantitative method, is a trend in today’s research because qualitative analyses can first construct main relationships between variables in a research and quantitative analyses can give details based on these relationships.  The study is structured as follows. Next section outlines the methods and describes the data. The subsequent section shows the statistical results of the questionnaire and the findings of the face-to-face interviews. The final section concludes.


Microcredit Programs and Consumption Behaviour of the Borrower: Evidence from Bangladesh

Dr. Sayma Rahman, California State University San Bernardino, C

Dr. Rafiqul Bhuyan Rafiq, California State University San Bernardino, CA

Dr. Mo Vaziri, California State University San Bernardino, CA



Microcredit program in Bangladesh provides small loans to rural people especially to women with the purpose of eradicating poverty. This study investigates the impact of microcredit on consumption pattern of borrowers and compares if the impact is the same for non-borrowers. Primary data has been collected from the Grameen Bank and the Bangladesh Rural Advancement Committee (BRAC) borrowers of some selected villages from three major districts in Bangladesh. Data of non-borrowers are collected from the same cohort to provide a control group for comparison with borrowers. To estimate the impact of per capita monthly expenditure and other household characteristics on budget share of items consumed by borrowers and non-borrowers the study relies on An Almost Ideal Demand System (AIDS) model. The estimated results of Iterative Seemingly Unrelated Regression (SURE) suggest that borrowers of microcredit programs are better off in terms of consumption of most of the food and non-food items compared to non-borrowers.  The microcredit program in Bangladesh is a unique innovation of credit delivery technique to enhance income generating activities. Its uniqueness is reflected in its collateral-free group-based lending strategy, very high recovery rate and emphasis that it places on women (Hulme and Mosley, 1996; Yunus, 1999; World Bank, 1994). The program extends small loans to poor people for self-employment activities thus allowing the clients to achieve a better quality of life (Hussain, 1998; Morduch, 2000; Rahman, 1995). It is the most sensational anti-poverty tool for the poorest, especially for women (Microcredit Summit 1997). The Grameen Bank - the largest microcredit institution - and the Bangladesh Rural Advancement Committee (BRAC) - the largest non-governmental organisation (NGO) - are the pioneers of microcredit in Bangladesh for almost three decades. Microcredit in Bangladesh is not only a very topical issue – the founder of the Grameen Bank has just been awarded the 2006 Nobel Peace Prize – but is has also been a topic of interest to researchers throughout the world  The success of microcredit has captured the interest of many researchers in broad areas such as women’s empowerment (Hashemi and Schuler, 1996; Sen, 1997; Goetz and Sengupta, 1996), sustainability and outreach, (Khandker et al. 1995; McNamara and Morse, 1998; Zeller and Sharma, 1999), group based lending, (Ghatak, 1999; Stiglitz, 1993; Varian, 1990) and poverty alleviation. Research suggests that access to credit has the potential to reduce poverty significantly (Khandker, 1998, Wahid, 1993; Khandker, 2003). Based on the success stories (Hossain, 1988; Hulme et al. 1996; Yaron, 1992; Montgomery et al. 1996) it is assumed that microcredit is improving the standard of living and well-being of the borrowers by improving their level of consumption. In this backdrop, it is worth examining the consumption behaviour of the borrowers and also to comparing that with the non-borrowers to see if there is any significant difference in the consumption pattern of the two groups.  This is an original study that has investigated the consumption behaviour of the borrowers from two major microcredit institutions in Bangladesh and compared that with the non-borrowers of the same category using the Engel curve analysis as suggested by Leser (1976). The underlying research question for this study is as follows: “Are the borrowers of microcredit better off in terms of consumption behaviour compared to non-borrowers?” In order to examine this we have used primary data from borrowers of the two major institutions and non-borrowers from non program villages to avoid endogeneity. In investigating the impact of per capita monthly expenditure and other household characteristics on the budget share of the items consumed by borrowers and non-borrowers we have used An Almost Ideal Demand System (AIDS) model.  The rest of the paper is structured as follows. Section Two provides the background literature. Section Three introduces relevant theories. Section Four describes data and its sources. Section Five specifies the model and results are discussed in Section Six. A conclusion is drawn in the final section.  Studies on consumption behaviour pioneered by Stone (1953), is performed by estimation of systems of demand equations explicitly derived from the consumer theory. The availability of household survey data from developed countries explains the huge empirical literature that has attempted to estimate systems of demand equations for different consumption categories. The estimation of the consumption-income relationship or Engel relationship from cross-section data has been paid considerable attention in the literature on developed countries. Blundell and Ray (1984) estimated the Engel curve analysis on demand system, while Giles and Hampton, (1985) studied the same on household expenditure using New Zealand data. Beneito, (2003) estimated income elasticity using Engel curve analysis on Spanish economy. Sawtelle, (1993) estimated two linear Engel functions for household total expenditure and 15 aggregate classification of consumer durable, non-durable and service expenditures using US cross section data. Using data from the United States, Lee and Brown, (1986) examine food expenditure on household data.  Apart from the Engel model, Deaton and Muellbauer (1978) introduced An Almost Ideal Demand System (AIDS) model, which has been subsequently adopted by Ray (1980). However, studies on consumption in the context of developing countries are not overwhelming. In this regard it is worth mentioning the study conducted by Weiskoff (1971), who studied demand elasticity for the developing economy. Ray and Meenakshi (2002), combine the expenditure and demographic information contained in the unit records of nearly 70,000 households to analyse rural poverty in India. Dey (2000) analyse the demand for fish in Bangladesh. Hendriks and Lyne (2003) use panel data on two villages of Africa. Ferdous (1997; 1999) uses AIDS model on household consumption using secondary data from the Bangladesh Bureau of Statistics.


The Effect of Market Orientation Intention and Superiority on New Product Performance

Hsiu-Jung Chou, Cheng Shiu University and National Yunlin University of Science and Technology



In this study, the new conceptual model is presented for market orientation which consisted of three general categories of concepts: the facets of the firm’s level of Market Orientation Intention and Superiority, the type of innovations and market positions as moderators and the facets of business’s new product performance. The definitions of the concepts and the specific propositions are developed and discussed. Our integrated model will provide new perspective for market orientation in terms of theoretical interest.  Different definitions and operationalizations of the market orientation construct exist in the marketing literature, however Kohli and Jaworskis (1990) and Narver and Slater’s (1990) are the two blueprints and prevalent in research of market orientation. Nevertheless, this paper proposes two conceptualizations of market orientation in attempting to address the market orientation debate: (1) a proactive focus and (2) a responsive focus (Narver, Slater, & MacLachlan, 2004). Particularly, this research suggests that a focus on responsive market orientation is negatively related to new product success, whereas a focus on proactive market orientation is positively related to new product success. These two conceptualizations are both expected to contribute to new product performance.  The purpose of the study is to investigate the relationship between different market orientation and new product performance. The research is to investigate the effects of the components of two orientations: Market Orientation Intention (divided into customer-oriented and competitor-oriented) and Market Orientation Superiority (divided into superior, medium, and low advantage), on new product development. The research also examines the contingency roles of innovation and market position. In summary, the underlying theses of the study are: (1) MOI and MOS are both positively related to new product performance, (2) a proactive market orientation better explains MOI than a responsive market orientation, (3) a superior advantage better explains MOS than medium and low advantage, and (4) innovation types and market position lays a significant role in fostering new product performance. As result, the conceptual framework in Figure 1 displays the relationships under investigation and divides the market orientation concept into two categories: Market Orientation Intention (MOI) and Market Orientation Superiority (MOS). Furthermore, this study conceptualizes innovation types and market position as moderator variables that will allow a balanced approach between the different market orientations.  The reviews start with a delineation of the market orientation constructs, namely Market Orientation Intention (MOI) and Market Orientation Superiority (MOS), and investigates their relationship with new product development and marketing performance. It then provides a theoretical background to explain the effects of the market orientations, and this section ends with an explanation of why MOI and MOS are expected to better explain market orientation than original focus. Next, it proceeds to investigate the direct effects of the MOI and MOS on new product performance. Finally, the rationale for the moderating effect of innovation types and market position on market orientation and new product performance are provided.  It is important to begin by clearly understanding the contents of a market orientation according to various perspectives, while considering its relation to business success. While there are various interpretations of market orientation, all have an operational focus on the processing of and responding to customer and competitor information. There are three major theories of market orientation. First, Kohli and Jaworski (1990) saw the marketing concept is the philosophical foundation of a market orientation, and contributed the first operational definition of market orientation to the discipline. Kohli and Jaworski (1990) based on the previous literature, suggested the three pillars of the marketing concept: (1) customer focus, (2) coordinated marketing, and (3) profitability, and defined the market orientation as “the organization-wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and organization-wide responsiveness to it.” Three core themes underline the operational definition: (1) intelligence generation, (2) intelligence dissemination, and (3) responsiveness. According to Kohli and Jaworski (1990), market intelligence involved careful analysis and anticipation of customer needs, preferences, and various market factors such as government regulation, technology, competitors, and other environmental forces. Effective market intelligence entailed organizational activities to develop an understanding of current and future customer needs and the factors influencing them. Intelligence dissemination means that participation of all departments in an organization is required for responding effectively to a market need. Responsiveness involved taking activities, such as selecting target markets, designing and offering products, as well as producing, distributing, and promoting the needed product, in response to the generated and disseminated intelligence.  Whereas Kohli and Jaworski (1990) define market orientation from a behavioral perspective, Narver and Slater (1990) define market orientation from a cultural perspective and assert that market orientation is “an essential element of business culture that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers (customers) and, thus, continuous superior performance for the business.” Narver and Slater (1990) argued that the market orientation content is a one-dimensional construct consisting of three behavioral components for market oriented organization: (1) customer orientation, (2) competitor orientation, and (3) interfunctional coordination. Customer orientation and competitor orientation both emphasize the gathering and processing of information pertaining to customer preferences and competitor capabilities (Lukas and Ferrell, 2000). Narver and Slater (1990) insisted that to satisfy the target customers’ current and expected needs and wants, market-oriented organization needed to understand and analyze the major current and potential competitors. The third component “interfunctional coordination” was defined “the coordinated utilization of company resources in creating superior value for target customers.” In this study, only customer orientation and competitor orientation will be taken into account as the behavioral components of market-oriented organization. The reason interfunctional coordination will not be a part of this study is that the focus of this study is any person within any function of a business could be a potential contributor in creating value for customers, a business needs to effectively and continuously use and integrate its entire human and other capital resources as necessary. The third content of market orientation considers customer orientation and market orientation as synonymous terms, and saw customer orientation as being a part of an overall, but more fundamental corporate culture (Deshpande et al., 1993). Narver, Slater, & MacLachlan (2004) refine the Deshpande & Farley’s (1998) construct of responsive market orientation which called MORTN, and developed the MOPRO scale for measuring the proactive market orientation.


The Construction Model of Customer Trust, Perceived Value and Customer Loyalty

Kuo-Ming Chu, Cheng Shiu University, Taiwan, R.O.C.



Relationship marketing has become one of the keys to success in acquiring strong competitiveness in the present market.  The main ideas of relationship marketing are customer trust and loyalty.  Although there has been considerable research into customer trust, most theories in general share two problems: First, there is the issue of how to build and maintain those factors that lead to a strong and concrete model of trust between business to business and business to customer. Second, there is the problem of assessing the role that customer value plays in the entire customer trust model.  This paper modifies the study of customer trust made by Sirdeshmukh et al. (2002) and expands it into a multidimensional conceptualization.  The result shows that in the 3C distribution industry, the most influential factor regarding customers is degree of credibility and trust they feel towards companies’ actions.  Thus, it is considered necessary to separate these behaviors into concrete management policies & practices (MPPs) and frontline employees (FLEs). The results of our analysis of MPPs and FLEs conclude that customer value plays a mediating role between customer trust and loyalty.  Plenty of studies have shown that trust is the fundamental element in relationship marketing between people and society. For a customer, loyalty is a positive attitude and is related to the level of re-purchasing commitment he or she possesses toward a brand in the future. This paper tries to modify the structure of customer trust developed by Sirdeshmukh et al. (2002), Graf & Perrien (2005), Cho (2006), Eisingerich & Bell (2007) and deplete customer trust and the mechanisms that might explain the process of trust enhancement or depletion in consumer-firm relationships. The purpose of this study is to develop a multifaceted, multidimensional model of the behavioral compnents of trustworthiness, and examine their differential effects on consumer trust. The focus of Sirdeshmukh et al. (2002) and Reinartz & Kumar(2000) on specific behavioral dimensions for two key facets- frontline employee (FLE) behaviors and management policies and practices (MPPs)- is conceptually appealing because these dimensions are rooted in strong theoretical frameworks and facilitate a fine-grained understanding of their differential effects on consumer trust. However, the Sirdeshmukh et al. model has two problems.  First, the model is constructed from the company’s perspective in analyzing the source of customer trust.  This does not follow the idea of long-term relationship marketing, where both the customer and the company play equal roles. Therefore, this study will discuss factors that lead to the result of trust from the customers’ as well as the company’s point of view.  The second problem involves the multidimensional elements that combined to form customer loyalty. There is one factor that is not discussed in past research: the company’s reputation. Hence, the motivation of this paper is to modify the customer loyalty module provided by Sirdeshmukh et al. (2002), Olivero & Lunt (2004) and Cho (2006) to establish a more comprehensive structure to help corporations to understand and manipulate customer trust and therefore enhance the firm’s competitiveness.  Through the development of Internet and e-commerce, with their advantages in convenience and cost, the 3C distribution industry is now undergoing a challenge, which it has never encountered before. As a result, relationship marketing seems more significant and important to the 3C businesses. This research will discuss from the 3C distribution industry’s perspective and develop customer relationships through the trust model. The last motivation of this paper is to explore how to maintain the customer value and satisfaction through building concrete loyalty that can strengthen the company’s long-term competitiveness. Prior research (Berry, 1995; Sirdeshmukh et al. 2002; Eisingerich & Bell, 2007) point out that trust is a fundamental step in building long-term relationship between buyer and seller. They have also addressed the significance of customer trust and how it plays a crucial role in decision-making, in building relationships, and promising (Nooteboom et al., 1997; Tax et al., 1998; Garbarino & Johnson, 1999; Urban et al., 2000; Komiak et al., 2005). As a result, a company needs to have an in-depth analysis from both the customer and the company when considering customer trust.  In a recent study, Crosby & Stephens (1987) observed three aspects in ideally satisfactory service: The interaction with the salesperson, the core services being acquired and the organization itself. Doney & Cannon (1997) and Ahearne et al. (2007) divide the relationship of outlet studies for “trust” into the role of “provider organization” and the role of “salesperson”.  Through this categorization, one can better understand the roles played in building trust relationships. According to a study made by Macintosh & Lockshin (1997) and Macintosh (2002), the trust that is gained by the salesperson is far more influential than the trust in the store itself. Sirdeshmukh et al. (2002) and Graf & Perrien (2005) have reached the same conclusion through an integrated module in social organizational relationships. They suggested that trust behavior influence customers through management policies and practices (MPPs) and frontline employee (FLE). They work a step further on how to construct, strengthen and wear down a mechanism. In order to develop a multidimensionality structure, “behavior that is trustworthy for a company” must be diversified before testing for the conditions that influence customer trust.  Allport (1994) believes that personality traits are the durable and steady reflections when human beings experience a stimulus, a person’s attributes will influence his or her willingness to demonstrate trusting behavior.  Trust is a human characteristic that is based on assessment of one another’s personality traits.  These traits will have different effects on the level of trust due to the past experience of personal or group interactions, as well as individual commitments. Kini & Choobineh (1998) and Dibben et al. (2000) believe trust is a personality trait that originates from oneself.  Different intensities of trust depend on personal decision-making habits and characteristics.  This is called “the individual’s tendency to trust”.  The source of the profile of the customer this paper adopts is from Allport (1994); Mayer et al. (1995); Sirdeshmukh et al. (2002) and Todorov et al. (2008) concerning opinions regarding trust.  Many previous studies are then divided consumer trust into “company trustworthy behavior” and “individual’s tendency to trust.”  As for “company trustworthy behavior,” a lot of scholars divided the source of trustworthy behavior into “company management policy and practices” and “frontline employee behavior.” Through these, customers can develop a positive impression of the company’s practices. Based on the construction of this model, scholars could strengthen the structure and deplete the organism of customer trust.  Based on the above relationship, H1 to H3 could be posed as follows:   H1:  The trustworthy behavior of company management policies & practices is positively related to customer trust.  H2: The trustworthy behavior of frontline employee is positively related to customer trust.  H3: The customer’s individual tendency to trust is positively related to customer trust.


Green Supplier Assessment: A Case Study of the Fire Extinguisher Industry

Mean-Shen Liu, Far East University

Dr. Sheu-Der Wu, Far East University



As the awaking influence of global governmental policies and consumers, green industry has become the primary goals for the traditional industries. Because of the increasing emphasis on green products, production and management have experienced cost increasing and production processes and materials changing. Green fire-fighting products are no exception. The motivation of this research is to understand whether green fire-fighting products could receive suppliers' supportive coordination and aids before promotion and production. If the industries are positively supported by suppliers, green-product viability can be enhanced and fire-fighting products can be improved.  This research is to explore how to develop mechanisms for selection and evaluation to be used by green suppliers. The development of these systems could be provided to the governmental agencies and private firms for the evaluation and management implemented by green suppliers.  In our evaluation, the dimension of “materials” was weighted highest by the suppliers, followed by the dimension of “energy utilization”. Under the sub-evaluation, among various weightings for materials, product utilization and maintenance were weighted highest and, in the weightings for energy utilization, product recycling was weighted the highest. In the weightings of “Liquid and Gas Residue,” product utilization and maintenance were weighted the highest, and in the weightings of “Solid Residue,” product recycling was weighted the highest. In the weightings under overall principles, the dimension of materials of product utilization and maintenance was considered by companies as the most important one.  Recently, environment protection has become one of the most important global issues (Shultz and Holbrook, 1999).  The EU environmental code – RoHS began its control policies in July, 2006, and WEEE reviewed its performance toward goals in December. For electronic and electromechanical product makers involved in the EU markets, no matter whether they were brand makers or OEM makers, these environment protection codes caused a remarkable impact. In addition, EuP requested that every EU member complete their international legalization process by August 2007, which triggered additional impacts (Yan, Xiu-yan, 2006).  Under the increasing global focus on environment protection, green industries focus on legislation. In June 1995, Japan implemented the Green Government Act, which regulated green procurement and became the major reference for selecting and purchasing green products within several administrative departments. In 1996, the Green Purchase Network (GPN) was established in Japan to promote green products and increase the proportion of products with an environmental protection function in Japan’s markets. In the US, green label norms were promoted by non-official and non-profit organizations and, in 1991, the US President proposed codes that would require government agencies to purchase green products. In 1992, the Federal Trade Commission (FTC) proposed guidelines suitable for nationwide operations and, in 1995, the US Environment Protection Agency provided the Implementation Guide for Environmental Protection Products as a reference for product purchases.  Until the 1990s, most consumers in the US were highly willing to purchase green products with a price premium of 5-20%. It was clear that green industries were becoming important to many countries. Therefore, manufacturers began to lean toward green components and ingredients. Industries—such as the electronic and electromechanical industries (Hirai et al., 2005; Zhu and Sarkis, 2006; Hu and Hsu, 2006), the packing and printing industries (Vachon and Kassen, 2006) and the aluminum industries (Ferretti et al., 2007), as well as individual firms also began to advocate green supply chains.  Green-Marks started in Taiwan in 1993 and, by the end of October 2007, there are 99 items had reached of the product specification standards. This achievement was top three in the world. By the end of 2006, 3303 products had qualified to get permission to use Green-Marks and achieved top five globally. Nearly five billion 4.87 billion Green-Marks labels had been placed. In 1998, the Taiwan government passed the “Government Purchase Code,” with Green-Marks articles included, and Taiwan became the first nation to promote green procurement through legislation. As a result, by the end of 2006, the procurement ratio in government agencies had reached 88%. With considerable effort by citizens, there had been NTD80 billion in economic value created with remarkable environment protection efficiency.  Prices of green products were usually higher than those of non-green products, mainly because of high overall production costs and strict product specifications. The major factor that impeded makers' willingness to buy green products was high production cost (Lu, Wan-lin, 2005) because any green production would naturally cause changes to the current status, such as increased cost, changed production processes and changed materials. Thus, when green procurement was promoted, a prudent planning effort was necessary. For overall supply chains, any firm engaging in developing green products also had to coordinate with suppliers with high performance in greening operations (Narasimhan and Carter, 1998).  Major goals for the evaluation and management of green supplies include making the products and production process for every supplier conform to green principles. The goal was to help suppliers understand the importance of continuous improvement on issues related to environment protection (Lu et al., 2007). In this area of research, Handfield et al. (2002)  applied green principles to evaluate suppliers by means of an analytical hierarchy process (AHP). Lu et al. (2007) followed with further development of green principles to evaluate suppliers by means of Fuzzy AHP.  As large portion of home accidents being caused by kitchen fires, the promotion for green supply chains for the fire-fighting industry was very important. However, there were still few researches for the evaluation of suppliers for the fire-fighting industry. This article is to evaluate of the supply chain for patented green kitchen fire extinguishers to determine which was more important among the dimensions of Materials, Energy Utilization, Solid Resides, Liquid and Gas Residue, and which phase—Before Production, Production, Delivery & Packing, Product Utilization and Maintenance or Product Recycling—was more important?  Research results can be provided for makers as a reference to reduce product risk.


Human Resource Management in the US, Europe and Asia: Differences and Characteristics

Dr. Gurhan Uysal, Ondokuz Mayýs University, Samsun, Turkey



Aim of this study is to discuss differences and characteristics between HRM in the US, Europe and Asia. Divergence can be seen in HRM practices between markets due to cultural and legal differences that enables international firms to adapt local norms. To identify characteristics provides a firm of effectively managing their international HRM practices.Therefore, literature studies demonstrate differenf characteristics in managing human resources between markets.  To clarify differences and characteristics in HRM between the US, Europe and Asia enables organizations to adapt their HRM practices to local norms. Literature studies propose that differences in HRM are due to differences in cultural and legal systems. This is important to MNCs that experience the decision between adopting local standards or maintain home country HRM practices.  Literature studies also demonstrate different characteristics between the US, European and Asian HRM. While US firms have more managerial autonomy, European HRM is more restricted in management of employees. In Asian transitional economies, HRM departments need to develop organizational learning for knowledge organization to increase innovation. Therefore, this study aims to explore differences and characteristics in HRM between the US, Europe and Asia.  Institutional factors generate national and regional differences due to extended historical processes, national business systems and cultural systems; therefore, are antecedents of management practices (Gooderham et al., 2006), and limit firm action by placing decision-making authority with third-parties (Richey, Wally, 1998: 82).  Firstly, impact of culture on HRM can be seen in individualism and collectivism, and differences in short- and long term orientation. Brewster (2004) says, US individualistic culture and achievement orientation results in US reward systems such as individual-based rewards and performance-related pay. Secondly, high individualism is related to development of human capital in organizations where employees are considered as critical resources (Cleveland et al., 2000); therefore, individualism is associated with the development of internal labor market (Hegewisch et al., 1997: 1). On the other hand, collectivist orientation leads to trade union recognition and collective bargaining that characterize industrial relation in Europe instead of direct management and employee communications  in the US (Cleveland et al., 2000: 13). Moreover, in collectivist cultures there are more cases of in-group recruitment because there is so much social pressure to help out friends in need (Tanova, Nadiri, 2005: 695). Trustworthiness, loyalty and compatibility between managers and employees are key characterisitcs for job applicants in collectivistic Eastern culture; whereas, competence is key to an applicant characteristic by managers in individualistic Western culture (Tanova, Nadiri, 2005: 695). In addition, in collectivist culture integration to group is important; therefore, firms do not hire foreign employees but hire local; however, in individualistic culture firms prefer foreign employees (Rouzies et al, 2003: 71). Thus, in a recruitment decisions less individualistic cultures such as German managers may place more weight on group cohesiveness while in individualistic culture such as the UK might emphasize individual characteristics related to performance.  In addition, the US and Asian firms can differ on long-term orientation. For example, Hong Kong firms have long-term, US firms have short-term orientation (Fields et al., 2006: 172). Long-term orientation in Japanese firms provides them of investing in projects with long-term payoffs (Kaplan, 1994), e.g., in training and development so that employees can learn firm-specific skills and knowledge (Tanova, Karadal, 2006: 143). Therefore, this is because, might be, growth or market share is key element to evaluating firm success in Japanese companies while short-term profits or share is key to US firms (Kaplan, 1994: 511). Thus, performance of Japanese managers is evaluated with current cash flows. Therefore, market share orientation forces Japanese firms to be price-competitive and cost-effective, which are associated with Kaizen and continuous improvement (Basu, Miroshnik, 1999: 727). Moreover, in China workers have moral connection to firms, and in the US workers have calculative relationships with their firms (Fields et al., 2006: 174). Therefore, training and development in China refers organizations to fulfilment of moral obligations to employees so that they feel accepted part of collective unit. In the US training is to develop employee technical and interpersonal skills because workers are interested in furthering their self-interests (Fields et al., 2006: 175).  In addition, levels of power distance and uncertainity avoidance have an impact on recruitment interview, communication, negotiation and participation processes (Sparrow, Hiltrop, 1997: 206). For instance, expectations of manager and subordinate relationships influence performance management and motivation.  Secondly, institutions affect on employment practices in Europe but provide guideleness for HRM practices in the US. In China, country’s powerful institutions represent China’s ideological frameworks, and govern the way individuals and firms behave (Law et al., 2003: 255). Labor regulations and trade unions have an impact on communication with employees in Europe. These legal frameworks and systems of industrial relations constrain firms from applying market-driven management practices (Gooderham et al., 2006: 1496). Moreover, employment legislations encourage corporate responsibility, and discourage employers from making employee redundant (Sparrow, Hiltrop, 1997: 204). In additon, mixed economic systems and old political systems significantly influence economic activities in China although the country is undergoing a rapid transition to a market economy (Law et al., 2003: 255). However, firms are more autonomous in the US, and therefore, there is a direct communication between management and employees in the US (Cleveland et al., 2000: 13).


The Global Odyssey of a Government Sector Bank in India: Implications for Contemporary International Business Management

Dr. Satya Prakash Saraswat, Bentley College, Waltham, MA



Based on a survey of 37 international branches of a large government (public) sector bank in India, this paper identifies the problems and opportunities faced by expatriate managers of global corporations from India.  The surveyed branches are located in 16 countries in Africa, Europe, Southeast Asia and the Middle East.  The investigation reveals that international managers of public sector banks from India encounter significantly different levels of difficulty in various regions of the world in five areas of investigation: (a) Cross-cultural human resources management, (b) Cross-country customer relationships, (c) Transnational regulatory compliance, (d) International competitive challenges, and (e) Global information technology management.  Some implications of these findings for multinational business in advanced countries are also discussed in this paper.  While large private sector companies from India are making international news by acquiring multi-million dollar companies in Europe and the United States, government or public sector enterprises are also making global operations an important element of their growth strategies. In the contemporary business environment dominated by multinational corporations (MNCs) and Information and Communications Technologies (ICT), globalization has become necessary for maintaining corporate profitability.  In recent years, the debate on globalization and the role of India in it as an emerging economy has been focused on private sector companies in two categories: (1) ICT industry dominated by companies such as Infosys Technologies, Wipro, Satyam Computers, and Bharati Telecommunications, and (2) large conglomerates controlled by established business families in India such as the Birla group, Reliance Industries, and Tata Industries.  This has obscured the role of mostly autonomous but government controlled public sector corporations in India and created the impression that India’s globalization strategy is confined to the emerging, high-technology private corporations founded on modern principles of entrepreneurship. These companies are addressing the requirements of their Western, mostly US and British, clientele by employing best-trained human resources, sophisticated technologies and advanced management models invented at world class business schools in Europe and the United States.  Recent successes of erstwhile notoriously inefficient and unprofitable Government-of-India (GOI) undertakings such as Indian Railways have indicated that government sector business enterprises in India can be made efficient without utilizing the advanced paradigms of business management where “unprofitable public undertakings are privatized and their employees given the golden handshake” [Bharadwaj, 2006].  By utilizing management models that address India’s unique requirements, it is possible to make public sector corporations profitable and efficient.  If this transformation occurs on a large scale, the evolving globalization strategies of these corporations will introduce an important element in the highly competitive international business markets in the 21st century.  There have been a number of high profile acquisitions of European and US companies in 2006 and 2007 by Indian companies or corporations controlled by persons of Indian origin.  Notable among these are (a) The Tata Group’s purchase of Jaguar and Land Rover from Ford Motor Company in 2008 for $2.3 billion [Timmons, 2008], (b) Mittal Steel’s merger with Arcelor SA of Luxemburg – with steel making facilities in 16 countries on four continents, Mittal Steel has now become the world's largest steel making corporation, and (c) Tata Steel's acquisition of Anglo-Dutch steelmaker Corus in January 2007.  Similarly, Tata Consultancy Services (TCS) belonging to the Tata Group of India has now opened a software service center in Ohio as an "in-sourcing" move into the US market [Yang, 2007] and Wipro, one of the largest business process outsourcing (BPO) companies in India, announced in 2007 that it was purchasing Info-crossing, a New Jersey based outsourcing firm, for $600 million.  Banks and other financial sector corporations in India are also globalizing rapidly and with an expected annual credit growth of 24% in the country, banks have made a significant contribution to India’s economic development.  Of the 88 largest banks in India, 28 are public sector, 29 private, and 31 foreign owned [Ta, 2007].  Many of these banks now have multinational operations with branches in Asia, Africa, Europe and USA.  “Bank of Baroda” (BoB) is an example of a large public sector bank in India that has made internationalization a vital part of its long term growth strategy and is now marketing itself as “India’s International Bank.”  As the fourth largest government controlled (public sector) bank in India, BoB has approximately 2,750 branches, 13,000 employees and 25 million customers in 21 countries around the world.  This paper examines the global strategy of this bank and provides a perspective on the issues encountered by managers of Indian multinational enterprises in Africa, Asia and Europe.  The broader implications of expansion by Indian companies in global markets and the challenges it may create for established western corporations are also discussed in the paper.  Academic publications in international business have traditionally covered topics such as cross cultural studies [Adler, 1989; Lee, 2006], organization of multinational corporations [Ghoshal, 1993; Gupta, 1991], differences in management practices [Broadbeck, 2000; Keil, 2000], determinants of direct foreign investment [Chan, 2006], quality of corporate governance in host countries [Husted, 1999; Kimbro, 2002], and corporate social responsibility [Dennis, 2003; Kostova, 2003; Mani, 1998]. These studies appear in prestigious journals such as the Administrative Science Quarterly, Academy of Management Review, Journal of International Business Studies and Columbia Journal of World Business [Adler, 1989; Lee, 2006; Chan, 2006, Ghoshal, 1993; Gupta 1991, Kogut, 1983].  In the past few years, some journals dedicated to the investigation of global issues in information technology such as the Journal of Global Information Technology Management, the Journal of Global Information Management, the Journal of Cases on Information Technology, and the Journal of Information Technology Cases and Applications have published numerous studies of business process outsourcing and organizational effectiveness in software industry [Khanna, 2004].  More recent studies of MNCs from emerging economies have focused on comparative performance, impact of information technology on labor productivity, foreign direct investment, digital divide, and partnerships with local businesses in LDCs [Sledge, 2007]. 


Analysis of Government Bonds’ Compound Interest Rates between 1996–2006 in the ISE Bonds and Bills Secondary Market Using Grey System Theory

Dr. Tolga Ulusoy, Kastamonu College, Kastamonu University,Turkey



This research predicts the compound interest rates of the government debt securities market in Turkey using the daily Istanbul Stock Exchange (ISE) Government Debt Securities Price Indices for January 1996- December 2006, with the exception of 2000. This paper employs the Grey Model (GM) to investigate the rate of returns on government bonds and bills and the error model to determine the deviation of rates on these bases. For comparison purposes, one variability of eight GM factors is examined with its errors. The results of this paper suggest the usefulness of Grey System Theory for predicting rates but not effects. Research solutions are differentiated into two periods, 1996 to 1999 and 2001 to 2006. The paper’s findings are that i) Omitted positive and negative errors are produced in the first period of all GM calculations and ii) GM generates the highest significant daily returns for the second period. Except for the January effect or other seasonal effects, the Turkey 2001 economy crisis and beyond has engendered important deviations.   Price prediction in financial markets using Grey System Theory has become increasingly popular in the international literature. However, there are few examples of the theory’s use in Turkish financial environments.[29] The purpose of this paper is to perform interest rate prediction on the Ýstanbul Stock Exchange Bonds and the Bills Secondary Market using the Grey System Model GM(1,1). The basics of GM(1,1), descriptions and the GM(1,1) models are also shown in this research. All computations were made by a simple MATLAB program.   They Grey System is a statistical method for use with insufficient data. The theory was first proposed by Julong Deng in 1982. The theory’s calculations simplify the complex methods and use a limited amount of data. Since the 1980’s, the theory has been applied to many systems in industrial, social, and ecological areas as well as in the fields of economy, medicine, traffic management, business management, education and environmental sciences [3;4;8;9;10;15;18;19;22]. Grey System Theory is successfully used to analyze uncertain systems that have multi-data inputs, discrete data, and insufficient data.  Grey System Theory aims to produce new data from original data with series forecasting. The Grey Model is a differential model, which has to use at least 4 kinds of data. These 4 kinds of data are replaced in simulation for all the years that are to be predicted. Grey decision-making refers to developing a forecast with Grey System Theory in order to use another method called grey forecasting and/or using the data and making decisions for the model. According to Deng, there are five types of grey forecasting: series forecasting, calamity forecasting, seasonal calamity forecasting, topological forecasting and systematical forecasting. [5] Grey Series Forecasting (GSF) is the one that forecasts magnitude and time distribution together for a known event. Grey Calamity Forecasting (GCF) is characteristic of grey magnitude, so GCF forecasts the time distribution for the past for the event being predicted. Grey Seasonal Calamity Forecasting (GSCF) is characteristic of grey magnitude, distributed in a certain span of time or “season,” and assumes the function of forecasting the time distribution for the past occurring over a certain span of time. Grey Topological forecasting (GTF) forecasts the time and magnitude distribution together for the affairs whose numerical representation behaviour is. The key for GTP is to determine some appropriate topology bases, so Deng calls it topoogical forecasting. Grey Systematic Forecasting (GSF) predicts the evolutions and developments of the variables in a system together, while the variables are subordinated to a tissue of GM (I,I) models so they can be solved sucessfully. [16;21]  GM is one of the newest series of methods for searching problems to gain solutions with fewer data and poor information. It uses a small sample of original data and at least one variable, known as poor information, to predict the data systems.[6] Grey comes between white and black and, according to Deng, all known information is “white” while all totally unknown information is “black.” But if you have informationGrey Systems Theory was developed for systems sciences groups and uncertainity systems theory and methods, and it conforms to the current systems science and uncertain systems theory. It is also the result of deepening perceptivity regarding uncertain systems[5] and is usable for factor analysis and decision-making techniques. [12-28] Well known scholars have engaged in research and applications of grey systems in many countries, regions and international organizations.[16] The international academic publication, the Journal of Grey Systems, originated in England in 1989, has become the core periodical of important international organizations dealing with grey systems. Another academic publication, also called the Journal of Grey Systems, was launched in Taiwan in 1997. Over 20 research findings on grey systems have received national or provincial recognition and awards. GM’s adoption along with other statistical techniques, such as garch, egarch or fuzzy systems, has led to several important research studies in this area [7-13]. Some computer statistics programmers have also adopted this theory to their systems. [24]  An algorithm of grey numbers and a grey algebraic system are the theoretical basis of Grey Systems Theory, and they play a very important role in the development of the newest grey systems research theories. In 2006, S.F. Liu put forward a new definition for a grey “Kernel”; an axiomatic system for the algorithm of grey numbers and a grey algebraic system has been built based on the grey “Kernel” and the degree of greyness of grey numbers. [17]


A Study on the Effect of the Degree of Optimism, Work Pressure and Work Efforts of Life-Insurance Salesman on Their Performance

Professor Hsing-chan Tseng, Chang Jung Christian University, Taiwan

Xin-zong Huang, Chang Jung Christian University, Taiwan



In a keen competitive work environment, it is very difficult for an outsider know the pressure from work every employee has to face everyday. But the life insurance salesmen in Taiwan may face even more critical challenges because their pressure from work is much more than ordinary employees with financial institutions. It is hoped that we could understand through the research if the personality characteristics of the degrees of optimism of life insurance salesmen can be transformed into better attitude toward work under the pressure of performance and works to achieve good sales performance.  This research adopted questionnaire survey method and received 378 valid filled questionnaires and six invalid filled questionnaires in 384 returned questionnaires. The subjects were employees with life insurance companies, insurance broker companies and insurance agent companies. We found that the work pressure and work efforts of salesmen who had higher degree of optimism had significant effects on their performance and the medium effects of pressure from work that might be used by the salesmen had significant effect on performance. The salesmen who had higher degree of optimism might take advantage of the medium effects of work pressure and work efforts to affect significantly their performance.  In Taiwan, the production value of service industries is about 67% of Gross Domestic Production (GDP) and the contribution degree to economic growth is about 6% that the service industries have played a key role in boosting Taiwan’s economy development. In order to enhance service industries, Executive Yuan adopted “The Guidelines and Action Plans for Developing Service Industries” in March 2005, which planned 12 service industries including financial service as the direction of development. Furthermore, the government also boosted “intelligence services”, that is the industry blending with knowledge about technology, engineering or science or the service industry helping the implementation of science, engineering and technology. After joining into WTO, the financial service industry has been more important for Taiwan. In 10 industries that GATT Secretariat asked Taiwan to fill in service industries, seven industries are financial industries (Zhan, Su-lian: The Analyses of the Impact of Joining WTO and Counter Strategies). That could prove the importance of financial service industry in Taiwan’s economy and society.   Following the trend of internationalization and liberalization of financial systems, after implementation of “Financial Holding Company Act” since July 9th, 2001, the law has helped financial institutions develop diversely and cross-industry integration. Financial industries like banks, bourses, asset management and insurance industries could become a financial department stores through cross-industry alliance in which, through cross marketing and integration marketing by financial holding companies, they could sell insurance, securities, bonds, fund, etc., at the same channel to satisfy the demand from clients of on-station-shopping and provide clients with appropriate allocations of asset. The financial industry is in a new era of great integration. The impact on employees with financial holding companies, banks, bourses, insurance companies may exert great pressure on the employees.   In Taiwan, the insurance industry faces even more critical challenges that not only financial holding, bank, security practitioner join into the battles of selling insurance products after the implementation of Financial Holding Company Act but also the restrictions on foreign financial institutions in doing business in Taiwan has to be lifted due to open market policy after joining into WTO. The open insurance market is the government’s long-term policy of financial internationalization and liberalization that there will be a more keenly competitive insurance market in Taiwan.   Life insurance and financial insurance industries are two leading industries in service industries. After Asia-Pacific Regional Operations Center entering into 21st century, the sales of insurance and financial products face dramatic changes. When the life insurance industry faces the change and impact from environment, the life insurance salesmen have to face even more pressure than other financial practitioners. Life insurance salesmen are front-line practitioners in insurance sales that their marketing capability is particularly important. The marketing capability comes from individual characteristics of personality and company’s complete education and training. It is hoped that we could understand through the research if the personality characteristics of the degrees of optimism of life insurance salesmen can be transformed into better attitude toward work under the pressure of performance and works to achieve good sales performance.  Since the government opened to applications for the establishment of insurance companies in 1962, the life insurance industry has been booming and insurance company is always No. 1 in top 100 financial service industries. Insurance is an invisible merchandise and the insurance product is mainly an invisible promise and it is bodiless. It is not like television set, refrigerator, table and chairs that customers could see and tangible. So, comparing to visible products, it is not easy for customers to accept insurance product. In the process of selling the product, it often needs a professional insurance personnel to explain the contents of insurance policy before completing the sale of the insurance.  However, in the past, insurance salesmen have always given people not good impression. In the stereotyped impression left by the past traditional society, most of people have some prejudices more or less to insurance salesmen. People will associate immediately with selling insurance policy in thinking when they hear someone is with insurance business. Most of people are worrying about pressure from personal relationship and the others’ negative impression that they dare not to join insurance business.  The main job of a life insurance salesman is to sell insurance policy and customer service. In the process of selling and services, he or she may experience many failures before success. Not everyone could stand such uncertainty and the sense of frustration. Therefore, the personality characteristics of insurance salesmen become more important. Sales management repeatedly try to understand determinant factors and give best-efficient management of sales human forces in the organization, such as the selection of salespersons, the arrangement of sales training process and evaluation of salespersons. However, in related literature, most of them emphasized on the understanding of determinant factors of salespersons’ performance (Churchiloll, Ford, Hartley and Walker, 1985).


Investigation of Employee Tenure as Related to Relationships of Personality and Personal Values of Entrepreneurs and Their Perceptions of their Employees

Dr. Becky H. Takeda-Tinker, Colorado State University Global Campus, CO

Dr. James W. Mirabella, Jacksonville University, FL



The purpose of this article is to report the results of an exploratory study into how tenure is impacted by differences and similarities in personal values and personalities between entrepreneurs and their employees. The study findings suggest that there is a positive correlation in personal values between entrepreneurs and their employees and that higher value scores are associated with longest-tenured employees. The study findings also indicate that longest-tenured employees are believed to have higher scores than recently-departed employees, in the personality traits of Agreeableness and Conscientiousness. The article provides practical implications from the study that suggest considerations for entrepreneurs who hire and seek to retain employees. Original Value of the Paper: this article provides value to the limited past research on entrepreneurial organizations. Furthermore, the findings present a perspective into the multi-faceted area of employee tenure, an area that is particularly important to small business survival.  Small business owners in the United States (U.S.) have identified labor shortages as one of the most significant issues that they encounter (Hornsby & Kuratko 1990).  The lack of qualified workers needed to staff these businesses has created both hidden and identifiable costs to company performance. Specifically, researchers have examined identifiable costs in the framework of employee turnover.  Studies have found that the cost of turnover can easily reach 150% to 250% of employee annual compensation due to the costs of the person leaving, recruitment, training, lost productivity, new hire, and lost sales cost (Bliss n.d.; Branham 2000; Pinkovitz, Moskal & Green n.d.). For small business owners, these costs can mean the difference between company survival and closure. There have been extensive studies on how personalities and personal values of business leaders of all types of businesses impact their organizations, including the decision of their employees to stay or leave their organizations based on organizational fit determined by the match of employee and organizational values and expectations (Lee & Mowday 1987; Blau & Boal 1987; Hom, Katerberg & Hulin 1979; Posner, Kouzes & Schmidt 1985; O’Reilly, Chatman & Caldwell 1991). Other studies have focused on understanding entrepreneur personality impact on organizational structure, strategy, and performance (Miller 1983; Collins, Hanges & Locke 2004). Nonetheless, no past studies have focused specifically on addressing how entrepreneur personality and values affect organizational fit related to employee tenure. Therefore, the purpose of the exploratory study was to examine the differences and similarities in personal values and personality between entrepreneurs and employees, and to examine the affect they have on employee tenure status. Given that entrepreneur values and personality have been found to significantly affect their organizational environments, this study sought to determine if entrepreneur self-perceptions and their perceptions of employee values and personalities are related to employee tenure status. The scope was limited to the self-reported personalities and personal values of thirty-eight entrepreneurs and their perceptions of the personalities and personal values of their longest-tenured employees and their recently-departed employees. The data gathered for this study was intended to provide evidence that similarities and differences in personal values and in personality can impact employee tenure status in entrepreneurial environments. Given the lack of precedent for such research, the conceptual study framework was based on past studies conducted by several researchers. This study included conceptual frameworks from Lukowski’s (2004) work on employer-employee congruence of values, Watson’s (1989) work on the accuracy of self-reporting of personality factors, and Tanoff’s (1999) study on personality.  For the examination of personal values, this study followed past research that utilized the 13 items of the Rokeach Value Survey (RVS) that specifically pertain to personal values (Rokeach, 1973).  The items were to measure entrepreneur self-perceptions of personal values and entrepreneur perceptions of employee personal values through a Likert-based scale that has proven to be reliable of Not Important (1), Somewhat Important (2), Important (3) Very Important (4), Extremely Important (5) (Feather 1975, 1998; Cable & Judge 1997; O’Reilly 1997).  In regards to the study’s assessment of personality, the 44-item Big Five Inventory (BFI) was utilized. The BFI incorporates questions regarding traits and then provides personality dimensions based on those traits in a Likert-based format that has been successfully used by past researchers (Benet-Martinez & John 1998, Tanoff 1999; McCullough, Bellah, Kilpatrick & Johnson 2001; Worrell & Cross 2004; Reynolds & Clark 2001, Watson 1989). The web-based survey was voluntarily taken by a sample population of entrepreneurs, defined as those who have both founded and currently operate their businesses, who were members of a popular Southern Nevada business organization (SNVBO).  All types of business owners and representatives have been able to join the organization and it has been considered the most inclusive business organization in Southern Nevada. The SNVG was selected due to its significant percentage of entrepreneurs, its membership diversity, and its highly active membership, that helped to enable the return of qualified questionnaire responses. Furthermore, as the area population has grown from less than 500,000 in year 2000 to nearly 1.8 million in year 2005 (Clark County n.d.), the majority of the people are from outside of the area so it was likely that the entrepreneurs were representative of many different geographical areas. The study was conducted using an online survey marketed through the SNVG. The survey was hosted by an independent third-party utilizing encryption and current protocol security standards for participant confidentiality.  Through electronic bulletins on their Web site and mass email distribution, SNVG Members were asked to take the survey by the Chairman and Chief Executive Officer of the organization.  From the electronic communication memos, interested members were able to click over to the hosted survey site through a provided URL.  Survey responses were returned within a 48-hour period and all questions were fully answered.  The survey was comprised of three segments to obtain 1) general demographic characteristics, 2) personal values, and 3) personality trait data. Personal values and personality trait information was obtained through entrepreneur self-reporting and through entrepreneur reporting of their perceptions of their employees’ personal values and personality traits. Additionally, for purposes of survey brevity, the participants were assigned either an evaluation of the personality traits and personal values of either their longest-tenured employee or their recently-departed employee, in addition to their own self-reporting of the two areas.


Public Service Motivation: An Antidote to the Scourges of Africa’s Liberal Democracies

Constantine Tongo, Covenant University, Ota, Ogun State, Nigeria



Paradoxically, the political elites in Africa’s liberal democracies either hold or vie for offices that belong to the public, yet they are grossly deficient in public service motivation (PSM). In this article, public service motivation (PSM) is defined as an individual’s psychological propensity to be induced to respond to the changing needs of people in society, via government institutions with expected economic rewards immaterial. Based on the above conceptualization of PSM, it is posited that the paucity of PSM amongst African political elites is reflected in their cravings for ill-gotten wealth, as well as ostentatious living.  This has resulted in their insensitivity towards the current needs of the people. In brief, these political elites are unable to evoke the required altruistic motivational context needed for bringing the dividends of liberal democracy to the people. This quagmire that now threatens Africa’s quest for democratic development is opposed to the thinking in the public administration literature which presupposes that occupants of public offices should be interested in maximizing the social welfare of societal members, rather than seeking their own private goals. However, political philosophers, like Friedrich Hegel, assert that liberal democracy provides a suitable political climate for individuals to achieve their selfish interests through satisfying their motivational need for self recognition. Therefore, given the present platform on which Africa’s liberal democracies are being built; it is believed that many public office holders have been entirely driven by their motivational need for self recognition rather than possessing any form of PSM. Consequently, for the continent’s liberal democracies to stand the test of time, with regards to meeting the needs of its people, it is recommended that only those persons with high PSM should find themselves occupying the seats of political power.  Even in primordial societies, the dialectics of individuals’ motivational need for recognition and of service in public life was discernible. For instance, Jesus spoke about these motivational needs of men while addressing a particular political class of the Jews in ancient Israel. Jesus said the following:  The Scribes and the Pharisees sit in Moses’ seat….For they bind heavy burdens and grievous to be borne, and lay them on men’s shoulders; but they themselves will not move them with one of their fingers. But all their works they do for to be seen of men, they make broad their phylacteries, and enlarge the borders of their garments. And love the uppermost rooms at feasts, and the chief seats in the synagogues. And greetings in the markets, and to be called of men, Rabbi, Rabbi…. But he that is greatest among you shall be your servant (Matthew 23: 2-11, King James Version). Going by the profundity of Jesus’ statements, the need for service ought to occupy a greater place in man’s public life than the need for recognition. However, Fukuyama (1992) asserts that what man had been seeking throughout the course of history, and what had driven the prior “stages of history” has been the motivational need for men to be recognized by other men. With the advent of liberal democracy as a system of government in our modern world, man has finally found his motivational need for recognition “completely satisfied” (Fukuyama, 1992). Rival political ideologies like hereditary monarchy, fascism, and communism could never satisfy man’s motivational need for recognition. Hence liberal democracy constitute the “end point of man kind’s ideological evolution” and the final form of human government”, and such constitute the end of history (Fukuyama, 1992).  The accuracy of Fukuyama’s prophetic declaration is further reinforced by the fact that in recent years there has been a remarkable consensus concerning the legitimacy of liberal democracy. The popularity of liberal democracy in today’s societies has grown in leaps and bounds, especially when compared with other extant governmental systems. According to Fukuyama (1992) this burgeoning interest in liberal democracy can be explained by the opportunity it provides men to be recognized as beings with certain worth and dignity.   Consequently, if liberal democracy provides a political climate for men to satisfy their motivational need for recognition, what then can be said of men’s motivational need for public service in modern African societies? Has liberal democracy withered men’s motivational need for public service in these societies? These questions become very relevant when we consider the problems currently besieging the quest for human development in the continent of Africa.   Presently, sub Saharan Africa is home to many of the world’s poorest countries and a growing share of the world’s absolute poor. Average real income per capita is lower than at the end of the 1960s, and wealth is unequally distributed (UN, 2001). African societies are also associated with endemic diseases such as malaria and HIV/AIDS, high child mortality, and low primary enrollments (UN, 2001).  With these identifiable problems, it is believed that people who vie for or assume leadership positions in the political sphere of Africa’s societies have a central role to play. However, if liberal democracy has the capacity to attenuate individuals’ motivational need for public service, how then can these problems which pose a threat to human development be tackled within the contextual framework of liberal democracy in Africa?  It is on this note that this article becomes important. First of all, the article seeks   to provide its audience with an understanding of the nature of individuals’ motivational need for public service. This is referred to as public service motivation. It is believed that once an understanding of public service motivation is gained, we would then be able to appreciate its importance in alleviating the human development problems in Africa.  It is also the objective of this article to review the state of Africa’s liberal democracies, especially in relation to mitigating the plight of the common man. The final and most important objective of the article is to justify the import of bringing PSM into Africa’s liberal democracies. As a background to the study, the article begins with an eclectic discourse of the nexus between liberal democracy and man’s motivational need for recognition in contemporary times. This provides an apt theoretical foundation necessary for discussing the very pertinent issues that come to the fore in subsequent sections of the article.  Liberalism, as the name implies is the fundamental belief in a political culture that allows individuals to pursue their own goals in their own ways provided they do not infringe on the equal liberty of others. The core values of liberalism include; commitment to the fundamental human rights, equality, rule of law, individual freedom, private property and a free market.


Quality of Life in Developing Countries: An Empirical Investigation

Dr. Tariq M. Khizindar, University of King Abdul Aziz, Jeddah, Saudi Arabia



This study investigates individuals’ perceptions of their quality of life (QOL) in developing countries, using Saudi Arabia as a case study. The study depicts that satisfaction with life in general derives from the satisfaction with particular life domains. Overall life satisfaction is derived from material well-being, community well-being, emotional well-being, and health and safety wellbeing domains.  Furthermore, the relationship between the demographic factors and the different domain of quality of life were investigated.  A sample of 775 residents living in the Western region in Saudi Arabia was surveyed. Simple regression analysis was used to test the study hypotheses.  The impact of demographic factors on the respondents’ perceptions of the various life domains was investigated using a series of T-tests.  The results of the regression analyses revealed that the Saudi resident’s perception and their satisfaction with particular life domains influenced their overall life satisfactionThe T-test analysis showed that several demographic factors were found to be significantly related to the over all QOL and its various life domain.  Discussion of results and their implications is provided. The concept of QOL-marketing is rooted in the notion of social marketing literature.  One can trace the concept of QOL to the 70’s when marketers were influenced by the social indicators movement. There are two views of QOL-marketing, that is the traditional view and the contemporary view. The traditional view focuses on the consumer well being (CWB) which emphasized the improvement of consumer well being on five areas of economics goods (i.e., acquisition, possessions, consumption, maintenance and dispositions).  On other hand, the contemporary view of QOL-marketing goes beyond the consumer well being, it deals with it as part of many other dimensions of well being including economic, work, family, physical (or health), leisure, social, environment, spiritual, and political (Sirgy, 2001).  This research adopts the latter view.  Many researchers have asserted the value of incorporating the social indicators and QOL measures into the mission, strategy and operation for prosperity of businesses and for better reflective measures for business performance which capture the sprite of QOL-marketing movement, (Drucker, 1969,. Biderman, 1974, Morss, 1974, Jones and Gardner, 1976, MacRae, 1985).  For example, Mulivill (1978) went further to define marketing in terms of QOL.  He states “ marketing is a total business of social activities that plan, price, promote, and distribute want satisfying products and services to customer so that a quality of life is delivered to customer that is culturally and aesthetically rewarding with the least environmental cost” Sirgy (2001) provided a theoretical and measurement framework for QOL-marketing research. The Middle East region is expected to have great potential and to play an important international economic role. Middle Eastern countries, with wealthy population, represent some of the most rewarding markets for Western firms. Consequently, effective and profitable operations require a good understanding of consumers in this market.  Further more, Saudi Arabia, with 100% Muslim population, would provide insight into the QOL aspect of Muslim world which constitute about one quarter of the world population and represent the majority in more than fifty countries.  With important geographical location and enormous natural resources, Saudi Arabia is at the center of the world making it the subject for global rivalries (Ali and Azim, 1999).  Therefore, failing to understand this population’s motivation, attitudes, and behaviors will hinder Western firm’s effort to conduct business with this important group of consumers Al-khatib, (2005).  Although several studies has been conducted internationally to look at different cultural perceptions of various quality of life-related issues (Sirgy, et al, 1998; Veenhoven, 2000; Ahmed and Krohn 1992 and Rojas, (2005), the Middle East as a region and the Islamic culture in particular has received very little attention.  For example, the world Database of happiness listed over 7400 studies from 150 countries with no cases related to Islamic culture Veenhoven, (2000).  Furthermore, Diener, (1996) in his work on National similarities and differences in Subjective well-being included more than 100 countries, only two, Bahrain and Tanzania, were found with Islamic population.  No doubts, the Middle East have been ignored in recent developments of the cross-cultural research.  The limited contribution of research related to the Middle East region can be traced to factors such as forbidden research cost, funding difficulties, cultural limitation which limit contact with adult population special with females and date collection and sampling problems related to fieldwork issues (Tuncalp 1988, Yavas and Habib 1986). These limitations, nevertheless, should not hinder researchers’ effort to extend and replicate marketing theories developed in the West to this region of the world.  This is particularly important for the accomplishment of external validity and global application of knowledge. The purpose of this study is to two folds: First, is to examine the direct effects of particular life domains on the quality of life of residents in Saudi Arabia.  That is, to look at the effects of health and safety wellbeing, emotional wellbeing, material wellbeing and community wellbeing on the perception of resident’s overall Quality of Life in Saudi Arabia.  Second, is to examine the relationship between the demographic of Saudi residents (age, gender, marital status, education and employment) and their overall QOL and its domains.  More specifically, the present study aim to answer five research questions: 1. What is the impact of overall material wellbeing on QOL of residents in Saudi Arabia?  2. What is the influence of overall emotional wellbeing on QOL of residents in the community? 3. What is the influence of community wellbeing on the perception of resident’s overall Quality of Life in Saudi Arabia? 4. What is the impact of health and safety wellbeing on QOL of residents in Saudi Arabia?  5. What is the impact of the demographic variables on the Overall QOL and its domains?  In the next section of the paper we will review the literature related to the quality of life and provide a theoretical and empirical support for the hypothesized relationships.  Also, we will detail the methodology employed in the study, the testing of the proposed hypothesizes and the discussions of the results.  The paper concludes by offering practical implication to both public policy makers as well as foreign firms operating in Saudi Arabia.


International Performance Appraisals: A Review of the Literature & Agenda for Future Research

Sharon L. O’Sullivan, Telfer School of Management, University of Ottawa, Canada



This paper reviews the literature on international performance appraisals and contrasts it against the domestic performance appraisal literature.  Specifically, it uses the domestic literature’s well-established 3-step framework for employee appraisal systems (EPAs), (namely, identifying performance dimensions, measuring performance, and managing performance) as a tool for identifying gaps in the international performance appraisal literature.  The results indicate that: (1) There has been a lack of distinction between performance dimension identification and performance measurement; (2) Insufficient attention has been devoted to rater training; and (3) There currently exists no acceptable (reliable and valid) measure of contextual performance for international assignments. Suggestions for future research are offered.  International assignments are often used by firms early in their internationalization process, because it helps to establish initial operations abroad using employees known and trusted by the firm.  Although myriad management challenges have been associated with international assignments, one of the key problems remains how to effectively evaluate and manage the performance of the international assignee. It is essential for accurate judgments to be made if appropriate developmental opportunities are to be initiated. Yet, despite years of research addressing challenges related to this topic, there has been little effort to systematically compare international performance appraisal research with its elder, domestic cousin (i.e., the domestic performance appraisal (PA) literature). This, therefore, is the first task of this paper.  The secondary purpose is to move beyond identifying gaps in the literature, and to propose specific research questions that could direct future research, as well as to offer suggestions for practitioners (where applicable). To conduct this comparison between the domestic and international PA literatures, this paper will be structured according to the three broad steps that have long been established as essential to the development of any reliable and valid PA system: (1) Identification of performance dimensions; (2) Performance measurement; and (3) Management of the PA system (Gomez-Mejia, Balkin, Cardy, Dimick, & Templer, 2004).  The discussion of each step will begin by reviewing what the domestic PA literature has to say about that step. It will then be followed with a look at the international PA literature’s observations about that step, and conclude with suggestions for how researchers might proceed to fill in the missing gaps. In the domestic realm, Borman and Motowidlo (1993) distinguished between technical performance, which is directly related to the technical tasks of the job, and contextual performance. They described the latter as being essential in identifying “the organizational, social, and psychological context that serves as the critical catalyst for task activities and processes” (Borman & Motowidlo, 1993, p. 73). Essentially, the identification of performance dimensions helps the organization to know both what is going to be measured by the appraisal system (i.e., what the organization means by “good performance”), and why these are the chosen criteria.   Performance dimensions are typically identified through the process of job analysis, which ensures that a content-valid (i.e., complete) set of performance dimensions are identified.  A systematic job analysis reduces the likelihood of problems such as criterion deficiency (failure to identify all the relevant performance dimensions, which can lead to the extinction of valuable behaviours that have not been recognized), criterion contamination (holding people accountable for behaviours beyond their control, which can contribute to perceptions of procedural and distributive injustice), and legal indefensibility (because performance appraisal systems that are not content valid are less legally defensible). It is important to note, however, that job analytic methods tend to favour functional task (or, technical) requirements to the detriment of contextual performance requirements.  In the international realm, contextual performance takes on greater importance There are at least two key reasons for this: First, technical criteria, while seemingly more objective, are not infallible – economic factors beyond the employee’s control (e.g., exchange rate fluctuations, transfer pricing, govt price control) can be influential in determining performance (Gregersen et al., 1995).  Second, because of the cultural challenges that arise when completing technical responsibilities abroad, few international assignments fail for technical reasons alone (Caligiuri, 1997).  Contextual factors may play a more central role in differentiating successful and unsuccessful international assignees because international assignees are fairly homogenous in terms of being good performers (Arthur and Bennett, 1997).  Although a mix of criteria (e.g., both technical and contextual) clearly appears appropriate, early international research in this area suggests that the contextual dimension is being neglected in the evaluation of international assignee performance. Specifically, Gregersen et al (1995) found a variety of variables (e.g., different cultures, levels of acquaintance between raters and expatriate, and expatriate time on the job) that were associated with sporadic, or non-existant, use of contextual types of criteria.  However, as noted above, job analytic methods are not as well suited to identifying contextual dimensions.  Therefore, it is also possible that the lack of clarity about contextual performance dimensions for international assignments is further contributing to their low rate of usage in actual international performance appraisal situations. International HR researchers have made some efforts to clarify contextual performance criteria relevant to the international assignee.  Each of these studies will be reviewed briefly here. A summary of the main unanswered questions arising from these studies will then follow. Arthur & Bennett (1997) surveyed international assignees and their managers to identify factors that were perceived to be important in the performance of the international assignees. They found an 8-factor model of international assignee performance dimensions that fit their data.  The factors (presented here in descending order of importance) were: Flexibility, family situation, management/administrative skill, integrity, effort, tolerance, cross-cultural interest, and openness. As the authors noted, several of these (e.g., flexibility, tolerance, and effort) involve more than just technical, task-specific knowledge – they involved contextual variables as well.  While Arthur & Bennett’s contextual/technical distinction was a useful contribution, the main difficulty with the factors they generated is that some of the factors (e.g., family situation) may be regarded, at best, as predictors of success overseas rather than indicators of effective performance abroad. That is, rather than define contextual performance dimensions (criteria) directly, their factors describe competencies that would be helpful for managing challenging contextual circumstances (i.e., predictors).   (And, from a Canadian perspective, where explicit emphasis on family status is prohibited in selection situations, some of these factors are legally dubious as well.)


Organizational Viewpoint of the Relationships in Supply Chains

Dr. Vojko Potocan, University of Maribor, Slovenia



In modern working relations, a company can improve its business dramatically, especially with formation and performance of suitable management. An important role in the whole management of a company also presents supply chain management (SCM), which represents the integrated concept of managing across the traditional functional areas of purchasing operations and physical distribution. SCM can be defined as “managing the entire chain of raw material supply, manufacture, assembly, and distribution to the end customer.” One of the main concerns about SCM is how much of the supply chain (SC) should be owned by each business. This is called the extent of vertical integration. But in the modern business environment, vertical integrations alone are not enough. The alternative to vertical integration is some other form of relationship, not necessarily ownership. In our contribution, we will examine the relationship between the links of the SC in terms of the flows between the operations involved. These flows may be transformed resources such as materials or transforming resources such as people or equipment. The term link to include all the different types of flow is exchange. This contribution discusses two theses: 1) How (different) relationships in supply chain impact organizing the SC and SCM, and 2) How (different) organizational forms impact SC and SCM.  Organizations in modern environment are able to assure their existence (and long-term development) with the entire satisfaction of needs and demands of end-customers. Producers can be competitive on the market (because offers predominate over demands) when they offer suitable price, quality, range, uniqueness, and contribution to sustainable development (as judged by customers) (Fly, Stoner, 2000; Cole, 2004; Potocan, 2004; Barry, Hansen, 2008). For this reason they are confronted with the constant dilemma, how to re-form their work (and behavior) to reach the desired target results. Entire and suitable (this is efficient and successful) organizational work can be assured on the following basis: permanent dynamic adaptation of intentions and aims, use of suitable business concept and innovative work (and behavior) (Tsoukas, Knudsen, 2003; Potocan, 2007; Barling, Cooper, 2008).  Entire and innovative (understanding) forming and performing purchasing operations and physical distribution also have an important role in business (Nigel, 1996; Mentzen, 2001; Potocan, 2004; Hill, 2007). They define the (possible) level of suitability when assuring the needs (and demands) of end users. The use of logistic and material management in an organization enables (partly) improvement of work, but not (also) “optimization” of the whole production process of products and/or services (in which more organizations collaborate). To deal with the whole supply process many different integrated concepts of managing across the traditional functional areas of purchasing operations and physical distribution were developed (e.g., materials management, merchandising, logistic, supply chain management).  SCM presents an ambitious and strategically significant concept, which can be defined as “managing the entire chain of raw material supply, manufacture, assembly, and distribution to the end customer” (Heitzer, Render, 2003; Murphy, Wood, 2004; Christopher, 2005; Ketchen, Hult, 2006; Coyle, 2008). SCM is the most developed integrated concept, but by its use, the organization meets some open dilemmas such as (Potocan, 2007): 1) what sort of connections exist among the part of SC?; 2) what is the role (meaning) of different units (e.g. parts) in the entire (SC)?; and 3) how can we optimize the parts of the entirety (to form structure) to reach “optimal results” of common work?  Organizations in the modern business environment need the entity of vertical and horizontal integrations (e.g., relationships) if they wish to design and implement more holistic SC (and/or SCM). In this frame, the work of the SC (and/or SCM) participants can be innovated, especially with non-technological innovations, oriented into suitable organizational forming and organized work (Daft, Steers, 1986; Hatch, 1997; Handfield, Nichols, 2002; Potocan, Kuralt, 2007; Russell, Taylor, 2008).  Therefore we would like to shift attention from a general-based discussion about SC and/or SCM to a more practical issue: how to plan the organization of relationships in SC (and/or SCM). We offer some new suggestions about: development of integrated concepts for management of SC, types of relationships in supply chains, starting points of organizational structure, and organizational viewpoint of the relationships in SC.  They are many different ways in which the linkage involved in the flow of materials and services can be integrated or grouped together (Pohlman et al., 2000; Rushton et al., 2001; Heitzer, Render, 2003; Hugos, 2006; Slack et al., 2006; Potocan, Kuralt, 2007). Four main concepts will be presented here. These have focused attention on managing across the traditional functional areas of purchasing operation and physical distribution.  They are material management, merchandising, logistics, and supply chain management (Waller, 2003; Cohen, Roussel, 2004; Larson, Halldorsson, 2004; Blanchard, 2006; Halldorsson, 2007; Johnsson, 2008).  Materials management: The concept originated from purchasing functions that took account of the importance of integrating material flow in its supporting functions, both throughout the business and out to immediate customers. It includes the functions of purchasing, expediting, inventory management, store management, production planning and control and physical distribution management. At the time of its inception during the 1970s, material management was seen as reducing “total costs associated with the acquisition and management of materials.” Different stages in the movement of material through a multi-echelon system typically are buffered by inventory. Where material management is not in place as an integration concept, these different stages often are managed by different people, reporting to different senior managers within the organization. The result of this separate functional management of the material flow often is high inventory level. The lead time to move materials through the systems is long, the system is inflexible to change, and the whole material movement is difficult to control. Material management means giving responsibility for whole materials and information flow to one part of organization. It then becomes possible to make improvements that allow the coordination, reduction, and even removal to some intermediate inventories. With reduced forecasting, greater accuracy of schedules is possible, bringing about greater planning stability. All this leads to reduced costs, which was the original intention of the concept.  Merchandising: In retail operations the purchasing task frequently is combined with the sales and physical distribution task into a role termed merchandising. Merchandising typically has responsibility to organize sales to retail customers, the layout of the shop floor, inventory management, and purchasing. This is because retail purchase operations have to be linked closely to daily sales to ensure the right mixture of goods available for customers to buy at any time.  Logistics: Logistics originated during World War II when it related to the movement and coordination of troops, armaments, and munitions to the required location. When adopted by the business world as a concept, it referred to the movement and coordination of finished products. Many organizations have a logistics function that manages the total flow of finished goods downstream from the plant to the customers. Here the term logistic is being used as analogous to what we called earlier “physical distribution management.” However, logistic more recently has been extended to include more of the total flow of materials and information. Some authors adopt a definition of logistics which is identical to that of materials management. But there are some differences between materials management and modern understanding of logistics. Material management does not concentrate on the physical distribution of finished product, but focused more on the planning and control of the processes inside an operation (including Material Requirements Planning - MRP and Just in Time - JIT). Logistics, on the other hand, tends to treat manufacturing as a “black box,” but does provide an emphasis on physical distribution management. These differences, though not great, are present because of the background of the two groups that have originated the concepts. The logisticians tend to come from marketing, the material managers from operation management, particularly purchasing.  Supply chain management: During the last twenty years, an even broader, more ambitious and strategically significant concept has emerged - SCM. SCM includes the entire SC from the supply of raw material through manufacture, assembly, and distribution to the end customer. It includes the strategic and long-term consideration of SCM issues as well as the shorter term control of low throughout the SC.   


Mergers and Acquisitions: Causes and Effects

Prof. Gabriele Carbonara, Parthenope University of Naples, Italy

Rosa Caiazza, Parthenope University of Naples, Italy



The aim of this research is to investigate current trend in international and italian M&A. At this aim we first recognize the main theoretical lines of research that identify determinants of M&A processes. Than, using Thompson Financial database, Zephyr database and KPMG reports, we mapped completed mergers and acquisitions (M&A) over the past decade, trying to identify main causes of the present boom. The present boom in M&A, started in 2005, bears a number of similarities as well as differences with the previous one, started in 1999. The value and number of M&A in 2005 were comparable to the avers in 1999-2001, as were the number of mega deals. The increase in global M&A in 2005 was driven by macroeconomic, microeconomic and institutional factors. The most important factor at the macroeconomic level has been continued economic growth. In 2005 in fact, world real GDP grew by 4.8% (IMF 2006). Favourable conditions in financial and stock markets prompted the growth of domestic and cross-border M&A. At the microeconomic level, a surge of financial flows to collective investment institutions, e.g. private equity funds, led to massive cross-border investments by these funds. The last part of this research is focalized on the Italian banking industry and the main cases of consolidation in this sector.  In the 1960s and 1970s, diversification and creation of conglomerates were common reasons for merging with or acquiring other companies (Rumelt et al., 1994; Weston and Weaver, 2001). In the age of economic globalization, M&A are more international in scope, involving companies from more than one country, their focus is also more to bring intra-industry companies together (Hitt et al., 2001).   The present boom in cross-border M&A, started in 2005, bears a number of similarities as well as differences with the previous one, started in 1999. The value and number of M&A in 2005 were comparable to the averages in 1999-2001, as were the number of mega deals. The top three target countries in terms of shares of total sales by value, the United Kingdom, the United States and Germany, were the same as in the previous boom. On the other hand, there were some changes in the industrial distribution of M&A in the two periods. The share of the primary sector was higher in the latest boom, at the expense of services. This is reflected in the fact that the top three target industries in 2005 were mining, quarrying and petroleum. They pushed the two leading industrial categories in the previous M&A peak, transport, storage and communications, and finance, to the second and third positions respectively, and displaced business services from the top three. There are some noticeable differences in the factors underlying the present upsurge in cross-border M&A, compared to those that drove the previous one. The financial markets no longer play key roles. Moreover, there is reason to believe that the present boom is driven primarily by strategic choices of firms in light of opportunities provided by economic growth. Most cross-border M&A are undertaken within the same industry, except where new types of investors are involved, such as private equity firms, that usually invest in any industry. The increase in global M&A in 2005 was driven by macroeconomic, microeconomic (corporate) and institutional factors. The most important factor at the macroeconomic level has been continued economic growth. In 2005 in fact, world real GDP grew by 4.8% (IMF 2006). Favorable conditions in financial and stock markets prompted the growth of domestic and cross-border M&A. At the microeconomic level, a surge of financial flows to collective investment institutions, e.g. private equity funds, led to massive cross-border investments by these funds.  Different theoretical perspective can be used to identify the determinants of mergers and acquisitions. Transaction costs economics (TCE) (Williamson, 1975, 1985, 1991) focuses on how an organization should organize its activities so as to minimize the sum of its production and transaction costs. In his early writings, Williamson (1975, 1985) identified markets and hierarchies as the two modes of organizing, and later acknowledged the additional role of inter-organizational forms (Williamson, 1991). In a free market, it is typically cheaper for a firm to buy a generic product from an organization that is an expert at producing it than it is to make the product itself. However, a market failure forces a firm to internalize an otherwise market exchange. In this way, TCE explains why an organization might choose to acquire another firm. The choice to acquire another firm, however, needs to be based also on other criteria that go beyond the cost analysis.  Resource dependence is a theory rooted in an open system framework, which argues that organizations must engage in exchanges with their environment to obtain resources (Scott, 1987). The need to acquire resources creates dependencies between organizations and outside units, such as suppliers or competitors. To successfully manage these dependencies, resource dependence theorists argue that organizations must acquire control over critical resources in an effort to decrease dependence on other organizations. In other words, an organization tries to increase its power relative to other organizations in its relevant environment (Thorelli, 1986; Pfeffer & Salancik, 1978). The process of internalization, through M&A, is a way to achieve these objectives. Acquisition are process that lead firms to obtain access to critical resources, to increase their power relative, to gain enough market power to neutralize the moves of a competitor, and plug a skill or resource gap.  One of the most important resources for achieving a competitive advantage is knowledge. Following knowledge-based theory we underline that firms can acquire other society to capitalize on opportunities for organizational learning (Hamel, 1991; Kogut, 1988; Mowery, Oxley, & Silverman, 1996). This rationale for acquisitions formation is consistent with a growing body of research that suggests that firms enhance their competitive position through superior knowledge (Simonin, 1997). Firms place a high priority on the acquisition as way to achieve technical skills or technological capabilities. It is often difficult for a firm that does not have a particular skill to buy it in the marketplace, because knowledge is often tacit and difficult to price (Mowery et al., 1996). A firm that wants to learn a particular skill often stands a better chance of accomplishing its objective acquiring a firm that is exemplary in that area. Support for these assertions is found in the literature on biotechnology and pharmaceutical industry. However if we don’t consider only technical knowledge but also knowledge related to clients and market structure, cross border acquisition of firms belonged to different industry can be seen as way to achieve this kind of knowledge.


The Effect of Inter-Organizational Relationships on Cooperation Intentions: Evidence from Small Firms in Turkey

Dr. Mujdelen Yener, Marmara University, Turkey



The purpose of this research is twofold; first, to develop and test a conceptual framework relating to inter-organizational trust among partners of a supply chain and its effects on performance; and, second, to articulate how trust affects the selection of partners in the process of merger or acquisition. The resulting model is useful for managers seeking to build trust and gain responsiveness and delineates a number of dimensions that can help management make decisions about on partner selection. Based on a survey of 88 small Turkish firms, the hierarchical regression analysis revealed that trust and human-specific assets are important components of cooperative behavior.  The dynamics of faster product development has set new expectation standards, and traditional managerial attributes are being revised to improve firms’ competitiveness in this new environment. Companies are now looking to develop competitive advantages in areas such as manufacturing flexibility, transportation, speed, and information availability, along with strategic response.  In recognition of these challenges, practicing managers and academic researchers have realized that a more integrated approach to conducting business is necessary and, as suggested by various academicians and practitioners, cooperation and trust have emerged as useful management concepts (Yener, 2003). The Academic Alliance Forum (1999) suggested that traditional company-versus-company competition is changing towards a business model where supply chains compete against supply chains. Therefore, companies construct ever more efficient and responsive supply chains as a means of competitiveness. With companies deciding to become involved in longer supply-chain relationships, their focus has turned to how to develop and manage the primary supply chain. The concept of interorganizational trust within the supply chain must be understood not just in terms of operational efficiency, but in terms of selecting business partners. The purpose of this research is twofold; first, to develop and test a conceptual framework relating to inter-organizational trust among partners of a supply chain and its effects on the performance; and, second, to articulate how trust affects the selection of partners in the process of mergers or acquisitions. The resulting model is useful for managers seeking to build trust in the Turkish manufacturing environment and, thereby, to improve supply chain responsiveness. It also reveals the factors related to establishing cooperation in mergers and acquisitions. Rousseau et al. (1998) defined trust as “a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another.” In fact, central to most definitions of trust are the notions of risk and vulnerability (Stickel, 1999). Although higher degrees of risk mean that managers must focus more of their attention on the commercial and financial characteristics of a deal they are contemplating, the need to work cooperatively over sustained periods of time means that they must also concern themselves with the trustworthiness of other parties to the deal (Ring and Van de Ven, 1992). In organization studies, trust between firms is a commodity that should be created or conserved. Therefore, as suggested by the literature, some degree of trust is required for transactions involving simultaneous exchange between the contracting parties. Inter-organizational trust has been discussed and documented in various theories and it is regarded as a major determinant of inter-organizational cooperation (Glaser-Segura 1998). These theories include “transaction cost economies” (Arrow 1974, Granovetter 1985), “resource dependency theory” (Handfield, 1993), exchange theory (Ring and Van de Ven ,1992; Gulati, 1995), institutional theory (Daft, 2007)  and agency theory (Gulati, 1995). The central proposition of these theories is that, when organizations invest in relationship-specific assets, engage in knowledge exchange, and combine resources with increased trust, a supernormal profit can be derived on the part of both parties to the exchange (Handfield and Bechtel, 2002). Advantages of this strong relationship include decreased cycle times, reduced lead times, less obsolete inventory and more flexibility in supply chain processes. Moreover, trust, with it’s broad construct and importance to inter-organizational relationships, exists at a variety of levels in organizations (Worchel, 1979) and, as such, is of critical importance to the formation and implementation of cooperation between firms, such as joint ventures, research end development collaborations, and marketing partnerships (Das and Teng, 1998; Ring and Van de Ven, 1992; Stahl and Sitkin, 2004). Since cooperation and mergers and acquisitions (M&A) share many characteristics, Stahl and Sitkin (2004) assumed that “trust” plays an important role in the M&A process as well. However, there has been comparatively little research with a goal to understanding the nature and dynamics of trust within the inter-organizational relationship. Attempts to create integrated models of individual trust have been successful, but few have been extended to the inter-organizational context (Caldwell, 2003).  This study advances the literature in this area in two ways. First, it examines the question of whether inter-organizational trust exists and, along the way, explores its antecedents. We argue that a reputation for trustworthiness is necessary, there must also be a concrete resulting responsiveness in the form of decreased cycle times; as the level of trust increases, greater responsiveness would be expected. Second, the study helps to articulate how trust affects the selection of partners in the M&A process. The qualities that are important for partner selection in a cooperative effort are examined in light of partners who have worked together and partners who have no prior interaction. Therefore, we propose that the buying company managers’ trust within the supply chain is a critical variable that affects the responsiveness and cooperation intensions.


The Ethic of Care and Student Cheating

D’Arcy Becker, James Rundall,  University of Wisconsin, Eau Claire, WI

Ingrid Ulstad, University of Wisconsin, Eau Claire, WI



Ethic of Care (EOC) theory proposes that ethical rules interact with situational variables in driving ethical decisions; what one sees as an ethical action varies as one’s frame of reference varies. This study investigates the influence of students’ EOC levels on their attitudes toward cheating.  Results from 172 undergraduate accounting majors indicate that the EOC is a significant factor in student beliefs about cheating, and that the EOC impact exists separately from gender effects.  Student cheating, reported to be at an all-time high, is a growing concern. This behavior is of particular interest given that students’ ethical actions while in college are considered a precursor to their ethical actions after college (Lawson, 2004; West, Ravenscroft and Shrader, 2004). Understanding the factors that influence students’ perceptions of cheating is of both immediate and long-term importance.  Not all students cheat all the time. What leads a student to cheat in one instance, but not another? Reasons behind student cheating are as numerous as methods students use to cheat. Students lack time to do their own work, they don’t care about the course material, they think they learn as much when they cheat as when they do their own work, they are worried about grades, or they are pressured into cheating by fellow students. Broughton (2008) suggests that business education itself may be at fault for providing students with a sliding scale of ethical behaviors. This study investigates the role situational variables play in student beliefs about cheating by investigating effects of the Ethic of Care (EOC). EOC theory (Gilligan, 1982) proposes that better ethical decisions result from a decision process that considers both formal ethical rules or standards and the implications on self and others that result from applying those rules. Every situation has unique characteristics, or situational variables, that warrant consideration in the decision process.  Prior research about student attitudes toward cheating shows students commonly disagree with faculty notions about what constitutes cheating. There is reason to believe these student attitudes are driven by situational variables. This study investigates whether one of those variables is a student’s level of EOC. We report the results of a survey measuring how acceptable students find some common forms of academic cheating behaviors, and investigate whether the ratings are influenced by the level of a student’s EOC. Because gender is sometimes associated closely with EOC, we investigate the impact of student gender on our results.  Student cheating research has focused on identifying methods of student cheating (Etter, 2004), cheating reduction efforts ( SEQ CHAPTER \h \r 1von Dran, Callahan and Taylor, 2001) and student attitudes toward ethical situations (Malone, 2006). Efforts to understand which students cheat (Brown and Choong, 2005) and why (Becker, Connolly, Lentz and Morrison, 2006), and the impact of ethics education on cheating ( SEQ CHAPTER \h \r 1Bampton and Maclagan, 2005) have also been undertaken. Student cheating research has not directly considered why student cheating varies from situation to situation. That is, why does a student see an action as completely dishonest and out of the question at one time and only somewhat dishonest, or even reasonable, at another? Situational variables may account for this apparent shift in beliefs. It may be that student knowledge about cheating is constant (they know the rules) but situational variables (e.g. a friend in need) change the way those rules are implemented in specific situations.  In general, there is a strong impact of situational variables on ethical decisions throughout society. The traditional scenario of whether it is ethical for a father to steal unaffordable medication for a dying child is a classic example; a black and white rule suddenly becomes grey in the right situation. One theory about the impact of situational variables on ethical decisions is Gilligan’s EOC theory (Gilligan, 1982).  EOC theory proposes that ethical responses are driven by an interaction between situational variables and ethical rules (Gilligan, 1982). The specific situation in which a person is involved is a major variable in decisions.  The term ‘Care’ refers to the notion that decisions are more ethical if consideration of the impact on others is included in the decision process. Rules and laws are de-emphasized in favor of flexibility to respond to situations according to their unique characteristics (White, 1998).  EOC impact is greatest when the decision setting is one with which the decision maker has extensive interpersonal experience (Skoe and Diessner, 1994). Because students have extensive interpersonal experiences in school, ethical decisions they make there may be influenced by EOC. Swaidan, Vitell and Rawwas (2003) showed that when ethics is perceived to be an issue, one’s ethical perspective is an important factor in decision making and EOC is more likely to impact decisions. Given their high level of familiarity with academic cheating, students readily understand that an ethical issue exists in such situations.  The decision maker also must personally relate to the decision setting for there to be an EOC impact. Students should be able to easily relate to the ethical dilemmas associated with academic cheating. Every student has faced pressure to cheat; it seems reasonable to assume that students tend to use EOC reasoning.


Emotional Concealment and Its Organizational Antecedents: A Theoretical Analysis

Dr. Hakan Ozcelik, California State University, Sacramento, CA



In this study, I have developed the concept of emotional concealment and analyzed its organizational antecedents. I have defined emotional concealment as a self-control mechanism in which an organizational member consciously and deliberately hides his/her emotions aroused as a result of his/her interactions with other members of his/her organization. I have proposed that emotional concealment involves an introspective self-negotiation process influenced by two judgments: an assessment of how other(s) would react if the emotion were expressed, and an assessment of how the person expressing the emotions will deal with these reaction(s). Then, drawing on the role theory perspective, I have developed a theoretical model to analyze the organizational antecedents of emotional concealment, including work-group norms, expert power, referent power, and informal personal network.  The way employees express their emotions is significantly under the control of organizations in which they work. In work settings, there is a "right" time, place and face for most feelings (Davis, et al., 1991). Keeping control of one's emotions is perceived as strength in the organizational setting. Emotional strength is seen as a prerequisite of functioning in an organization, and those who show their feelings are categorized as emotionally weak (Parkin, 1993). However, whether they are expressed or not, felt emotions constitute an inseparable dimension of life by affecting human behavior and social relationships. Hence, it appears that a significant portion of the emotions evoked within organizational relationships is kept hidden, or repressed; and those unexpressed emotions can have significant effects in organizational life.  Over the previous decades, a stream of research has evolved on expression of emotions as a part of the work role (Rafaeli and Sutton, 1987, 1989; Ashforth and Humphrey, 1995; Morris and Feldman, 1997; Wharton and Erickson,1993). These studies have mostly focused on the display of certain emotions by employees in different service industries. Within the framework of the emotional labor concept, (Hochschild, 1983) researchers have focused on organizational members in customer-contact functions. A significant number of qualitative studies have been conducted to analyze employee's acts of displaying appropriate emotions consistent with the rules of emotional expression towards his/her customer during service transactions. Some examples include flight attendants (Hochschild, 1983), cashiers (Rafaeli, 1989), bill collectors (Sutton, 1991), and nurses (James, 1993).  Although research on emotional labor has provided valuable insights into the discrepancy between felt and expressed emotions in organizations, it has mostly focused on the service industry and the emotions evoked and controlled in the context of relationships between the service agents and their customers. Thus far, relatively little attention has been given to the emotional aspects of relationships that exist within organizations, among the employees. However, emotional control and the discrepancy between expressed and non-expressed emotions are also an important part of intra-organizational relationships. A significant portion of emotional control is influenced by the nature of organizational settings.  Van Maanen and Kunda (1989) have regarded conscious managerial attempts to build, sustain, and elaborate culture in organizations as a relatively powerful form of organizational control. They maintain that the power of cultural control comes from its aim and capability to obtain "a deeper level of employee compliance (i.e. emotional) than other forms of control" (Van Maanen and Kunda, 1989, p. 88). They recognize that most of us live in a somewhat emotionally dissonant state within our work organizations and this dissonance plays important roles in our experiences in the workplace. It seems that the degree of this dissonance can be explained in terms of how we respond to such control mechanisms imposed on us in work settings, and the extent to which we lend ourselves to this control and conceal our true emotions.  The aim of this paper is to provide a conceptual framework to understand emotional concealment in organizational life by defining the construct and analyzing its organizational antecedents. Studying the concept of emotional concealment within organizations is important for several reasons: First, it systematically extends the understanding of emotional control from the domain of service industry and service agent-client relationships to intra-organizational life in any sector. Because of the more complex and long-term nature of intra-organizational relations, emotional control processes will be different than those discussed in an emotional labor context. Accordingly, the circumstances under which employees experience, express, and do not or cannot express emotions will be different. The construct of emotional concealment will provide a new framework to capture such differences and to contribute to the establishment of a new domain in the literature where the discrepancy between felt and expressed emotions in intra-organization relationships are discussed and discovered.  The construct of emotional concealment also creates an interesting bridge between emotion and cognition within the social context of organizations. The relationship between emotion and cognition has been a controversial issue for many years in the literature (Zajonc, 1980, 1984; Lazarus, 1982). Zajonc (1984) has maintained that "affect and cognition are partially independent systems and that although they ordinarily function conjointly, affect could be generated without prior cognitive process" (p.117). Lazarus (1982), on the other hand, has challenged this view by asserting that thought is a necessary condition of emotion. He defines emotion as resulting from an evaluative perception of an actual, imagined, or anticipated relationship between a person and the environment. In both perspectives, however, felt and expressed emotions have not been separated. This paper brings a new perspective to the emotion-cognition relationship by making this separation, and integrating a cognitive mechanism between the arousal and expression/concealment processes of emotional experience. Moreover, by relating the operation of this cognitive mechanism to the organizational context, it also captures the social interaction aspect of this experience.


The Dynamic Effect of Multiple Reference Points on Salesperson Call Selection and Risk Behavior in Multiple Accounting Periods

Dr. Frank Q. Fu, University of Missouri at St. Louis, MO



Despite the volume of studies conducted and the robust conclusions reached pertaining to sales quota setting, several important issues with respect to its subsequent impact on salesperson behavior remain unanswered. We propose a multiperiod, multi-reference-point framework, which helps explain some inconsistencies in the extant literature. This dynamic framework is rooted in goal setting theory and is consistent with empirical findings. The propositions are relevant to both academic researchers and sales managers. Academics in the area of sales force research and management making quota-setting decisions need to be aware that it may not be sufficient simply to consider the static impact of one reference point in single-period context.   Performing against quota is the lifeblood of sales (Johnston and Marshall, 2008). Sales quota has also been identified as an important antecedent of salespeople’s work attitude, motivation, and performance (Oliver and Anderson, 1994). However, it remains an under-researched area. Only recently, the notion of measuring salesperson performance over time surfaced as an important issue in sales force management research (Chonko et al., 2000; Schwepker and Good, 2004). Meanwhile, sales managers have struggled for years with implementing scientific ways of setting quotas to motivate their sales forces properly (cf. Johnston and Marshall, 2008).  The purpose of this paper is to underscore the importance of examining dynamic effects associated with multiple reference points and reference zones when establishing quotas for salespeople. The implications of not doing so are borne out especially under certain quota-setting policies wherein salespeople examine risks and decide on the extent of effort expended toward quota attainment. Based on a survey conducted in 2001, Hewitt Associates L.L.C. found that slightly over three-quarters (77%) of the 224 U.S. companies that participated in the survey used sales quotas as part of their sales incentive plans (Hewitt Associates, 2001). Similarly, according to a Sales & Marketing Management compensation study, nearly 90% of responding manufacturing organizations included either a bonus or a commission in their compensation packages (Galea, 2004). However, like much of sales management, quota setting is part science and part art. It is often difficult to develop a simple, fair, realistic, and motivational quota-setting system (Zoltners, Sinha, and Zoltners, 2001). Therefore, sales managers often use simple heuristics in setting quotas, such as percentage increase over the previous year’s performance. Frequently, quota setting is based on management expectations rather than scientific approaches, an approach that may result in potential problems with regard to sales force motivation. For example, under certain circumstances, salespeople who invest the least amount of effort and achieve the lowest sales may receive the highest income! Furthermore, with the wrong quota-setting policy, some salespeople may actually feel punished for working hard and exceeding their individual quotas. To elaborate, consider the following fictional example: Company XYZ has three sales territories: A, B and C. The company hires three salespeople—Andy, Barbara, and Charlie—to cover the territories, respectively. The compensation plan for each of them is an annual salary of $30,000, plus 20% commission if they achieve their sales quotas. We assume identical market potential for A, B, and C, and identical selling skills and experience for Andy, Barbara, and Charlie. We further assume sales to be a linear function of effort invested by the salesperson. The company sets quota based on previous year sales; that is, the quota will be the same if the salesperson failed to achieve quota in the previous year. Otherwise, it will increase by $20,000 from the actual sales.  As indicated in Table 1, Sales Rep. Barbara, who sold the least amount ($360,000 in three years), earned the highest income ($162,000 in three years), because she is “clever” enough to take advantage of the quota setting and compensation policy; in other words, she “sandbagged”—a term often used in sales that means the salesperson held back on exceeding quota to prevent increased future quotas.   This example may appear to be extreme, but similar scenarios are common in many sales force management contexts. Problems stemming from quota setting can not only hurt the company’s profitability but also negatively influence sales force morale. Salespeople who can exceed their quotas are given a higher quota in subsequent sales periods, which negatively reinforces effort. As important as it is, this problem has been largely overlooked in the sales force management literature. One fundamental reason stems from the static way many view quota setting. A focus on a single period of time is problematic.  Nearly all published studies pertaining to quota setting focus on a single accounting period (Chowdhury, 1993; Gaba and Kalra, 1999; McFarland, Challagalla, and Zenor, 2002; Ross, 1991). However, many salespeople join a company with the intent of staying with the same company for multiple years. Empirical studies regarding career stages of salespeople (Cron, Dubinsky, and Michaels, 1988), and other aspects of sales force management (Brown, Cron, and Slocum, 1998; Jones, Sundaram, and Chin, 2002; Smith, Jones, and Blair, 2000), for example, suggest that the average job tenure of salespeople is five years. Thus, if one takes multiple accounting periods into consideration, some of the inconsistencies in the quota-setting literature would be reconciled.   According to utility theory, it is commonly assumed that salespersons, like corporations, are profit maximizers (or equivalently, utility maximizers) (Farley, 1964); however, this assumption conflicts with empirical research, which has repeatedly indicated that “salespersons are quota achievers rather than dollar maximizers” (Churchill, Ford, and Walker, 1982, P.210). That is, motivation appears to decline once quota is made (Winer, 1973). Another example offered by Darmon (1974) presents a model in which salespersons work just enough to achieve an acceptable level of income.


Determinants of User Adoption of E-payment Services

Dr. Wen-Shan Lin, National Chia-Yi University, Taiwan

Dr. Jinn-Yi Yeh, National Chia-Yi University, Taiwan

Yan-Yan Chen, National Chia-Yi University, Taiwan



There are several online banking services available for conducting money transfers and making payments. This paper investigates the factors that affect users’ attitudes about Web-ATM services. Results indicate that bankers and online shops have to provide customized services and added-values to keep and attract customers who will use this service. This study serves as the basis to promote an e-payment method.  In the Internet era, the usage of Web-ATM serviceWeb-ATMhas been introduced to substitute the physical automatic teller machine (ATM) by combining the usage of the bank card and the chip reader. While major banks and commercial web sites are actively promoting the Web-ATM, few researchers have studied the behavior of consumers in adopting this online-banking service. Users’ attitudes toward adopting new technological-services or applications have been investigated for different technological-based services, e.g. a new payment system, Internet broadband service, etc. . (oh et al., 2003; Plouffe et al., 2001). The perceived characteristics of innovations are denoted as the most important predictors of adoption behavior (Kuisma et al., 2007). The theory of innovation diffusion also has been widely cited and applied to investigate users’ adoption of new technology (Carayannis & Turner, 2006).   This paper empirically investigates the factors in consumers’ decision to use a Web-ATM service. It begins with a review of previous works in analyzing the influences of diverse indicators on the consumer’s attitude in adopting online financial services. The proposed research model and hypotheses are then explained. Section four presents the methodology and results of the analyses. The last section offers the conclusions.  Online-banking services have gained popularity; topics pertaining to e-payment or online financial service have received attentions. Several theories reveal the factors that may affect consumers’ willingness to use an online financial service. They consist of: (1) factors that affect perceived usefulness and ease of use Davis et al., 1989); (2) theory of planned behavior; Ajzen, 2006; Ajzen, 1985; (3) innovation diffusion theory Lai & Lee, 2005; Roger, 2003); (4) service switching costsBurnham et al., 2003); and (5) factors that affect the adoption of e-payment Kuisma et al., 2007; Cheng et al., 2006).  Social influence, trust and perceived resources are factors in the literature that may influence users’ adoption of Internet-banking services. The innovation diffusion theory is used to examine new products, technology and applications (Oh et al., 2003; Cheng et al., 2006).  Based on the literature review, theories of innovation diffusion, social influence, trust and the perceived resources are applied in this study to investigate users’ behavior in adopting Web-ATM service. The research model (Figure 1) combines topics of (1) diffusion of innovation attributes, (2) perceived resources, (3) perceived relative advantage, perceived complexity and attitudes, (4) social influence, and (5) trust. Details of each hypotheses are given in the followings.  According to the literature, several constructs affect users’ adopting behavior: (1) compatibility(2) trialability(3) observability(4) perceived complexity, (5) perceived relative advantage. According to the technology acceptance model, an innovation with relative advantage, such as perceived usefulness, will increase consumers’ willingness to adopt the innovation (Oh et al., 2003). Chau and Hu (2002) take account of ‘compatibility’ in the theory of planned behavior as an external variable to perceived usefulness and perceived ease of use; the effects of compatibility were found to be significant only in relation to perceived usefulness. In contrast, Agarwal et al. (2000) have found that relevant prior experience is affected by the construct of ‘perceived ease of use.’ These findings suggest that constructs of ‘compatibility,’ ‘observability’ and ‘trialability’ may be the antecedents to perceived usefulness, i.e. relative advantage and perceived ease of use, i.e. complexity. This indicates the constructs of innovation and their interrelated relationship in affecting users’ adoptive behavior toward innovation. This leads to Hypotheses H1 and H2 :  H1a: Compatibility has an influence on perceived relative advantage.  H1b: Trialability has an influence on perceived relative advantage. H1c: Observability has an influence on perceived relative advantage. H2a: Compatibility has an influence on perceived complexity.  H2b: Trialability has an influence on perceived complexity. H2c: Observability has an influence on perceived complexity.  The construct of ‘perceived resources’ is an individual’s belief that he or she has the personal or organizational resources needed to use the Web-ATM service. The theory of planned behavior incorporates the construct of perceived behavioral control as the notion of perceived resource constraints (Mathieson et al., 2001). In our study, positive exploratory experiences before the adoption of the Web-ATM service may also be beneficial for people to learn how to use it. Therefore, the Hypotheses H3 are as follows:  H3a: Compatibility has an influence on perceived resources.  H3b: Trialability has an influence on perceived resources.  H3c: Observability has an influence on perceived resources.   Furthermore, ‘experience prior to real consumption’ helps a person to obtain knowledge on adopting an innovative service or product (Oh et al., 2003). In our case, people who have knowledge of Web-ATM, Internet, IC ATM cards, and own a card-reader, may find it is easy and convenient to use a Web-ATM service. Therefore, Hypothesis H4 is developed:


The Effects of Brand Affect on Female Cosmetic Users Brand Loyalty in Taiwan

Dr. Hsin Kuang Chi, Nan Hua University, Taiwan

Dr. Huery Ren Yeh, Shih Chien University, Kaohsiung, Taiwan

Dr. Cherng-Ying Chiou, The Overseas Chinese Institute of Technology, Taichung, Taiwan



The purpose of the study aims at the discussion of the relationships among customer perceived value, brand trust, brand affect and brand loyalty. In addition, the study uses brand trust and brand affect as mediators to analyze the relationship between customer perceived value and brand loyalty. The research subjects are female consumers who ever used cosmetics, and they are asked to respond the questionnaire on understanding the differences and influences among customer perceived value, brand trust, brand affect and brand loyalty of cosmetics usage. The results reveals that (a) customer perceived value, brand trust, brand affect and brand loyalty have a significant relationship among each other, (b) customer perceived value will affect brand loyalty through the mediation effect of brand trust and (c) customer perceived value will influence brand loyalty through the mediation effect of brand affect.  In the 1970s, compact powder was the main cosmetic products in the domestic industry. At that time, cosmetic products were a luxury product because the society is still in the condition of deficiency of many things in daily life. Therefore, there are not too many chances to use cosmetics, and the most occasions to apply cosmetics are in a wedding ceremony or Chinese New Year. However, putting on make-up is believed as a suitable manner in any occasion nowadays. Also, following the spreading of cosmetic knowledge, the change of social viewpoint, and the high frequency of interpersonal interaction, the consumption in cosmetics has also increased (Dai, 1998). Thus, cosmetics has changed from a luxury product to a popular product because of the human nature in good looking, the increase of cosmetics requirement and the decrease of users’ age. In the meantime, the trend of male consumers in cosmetics is increasing yearly.  Furthermore, the rising of new cosmetic products and new marketing channels also impact the market. Especially, the number of the specialty stores for famous brand cosmetics have mushroomed in many areas. The speed of expansion and scope of the impact of famous brand cosmetics are out of imagination. Buying famous brand cosmetics becomes a symbol for a person. However, these famous brand cosmetics still need to focus on their target markets. No matter business in Taiwan or global market the competition is always aggressive, business operators have to seek for their market competitive advantages in order to operate and grow continuously. The key lies in seizing consumers’ heart. Therefore, how to increase customer’s evaluation before or after purchase and repurchase a product is an important issue to a business. As for cosmetics in Taiwan, the competition and market value are huge, and there are many cosmetics sold in Taiwan including SHISEIDO, KANEBO, CHANEL, CHRISTIAN DIOR, AVON, OLAY and so on. From customers’ point of view, cosmetic buyers feel they have hard time to ponder and distinguish the differences among each brand and make final choices because the functions are so similar. In addition to the price, other influence factors such as consumers’ willingness and continuousness to buy products are concerned to this study.  When consumers decide to buy, they concern not only a product’s value but also salespersons’ service, business image, brand equity. Moreover, the quality of interactive relationship is also related to consumers’ willingness to shop further. Therefore, consumers’ trust, satisfaction and loyalty are all important to a business. In particular, when a business faces a hyper competitive market, it should consider how to increase its brand equity to build a brand value into consumers’ mind in order to obtain the market competitiveness and create a profit. Accordingly, the aims of the study are to analyze the relationships among customer perceived value, brand trust, brand affect and brand loyalty and propose the purposes as follows: (s) to discuss the relationships among customer perceived value, brand trust and brand loyalty, (b) to discuss the relationship among customer perceived value, brand affect and brand loyalty and (c) to discuss the key factors that influence brand loyalty.  Customer perceived value means the results of consumer’s perception assessment to products or services (Zeithaml, 1988). That is a tradeoff result between perceived benefits and perceived costs. Perceived benefits are positively related to perceived value and behavior intention, and this is basic model of perceived value (Lovelock, 2001). Monroe (1990) considers that customer perceived value is quality or benefit received from a product in relative to the sacrifices in price. In addition, many researches propose perceived value is a consumer’s assessment of the utility of product based on the perceptions of what is received and what is given (Sinha & DeSarbo, 1998; Sweeney, Soutar, & Johnson, 1999; Ulaga & Chacour, 2001; Engel, Blackwell & Miniard, 2001; Hellier, Geursen, Carr, & Rickard, 2003).  Woodruff and Gardial (1996) identify that perceived value is the balance between desirable attributes and sacrifice attributes, and Lapierre (2000) further defines perceived value as the balance between acquisitions and benefits and payments and sacrifices. Dodds, Monroe & Grewal (1991) also pinpoint that generally buyers will consider purchasing at a set of prices rather than a single price, and perceived value will influence purchase intention and Dodds, et al. (1991) argue that price and perceived value presents a curvilinear relationship. Perceived value in benefits contain internal and external attributes, quality in perceptions and high level abstractions, and perceived value in costs comprise monetary price and non monetary price such as time, energy and effort (Zeithaml, 1988; Petrick, 2002).  By referring to Zeithaml (1988), Dodds et al. (1991) and Petrick (2002) measurement on customer perceived value, the study proposes that perceived valued is consumers’ overall perceptions on benefits and costs from cosmetics purchase and usage. The study focuses on the assessment on payments or sacrifices including two dimensions, behavior price and momentary price. Behavior price consists of time, energy and effort, and monetary price contains all service prices to customers (Petrick, 2002). Trust is not only been recognized as a very important human behavior but also been broadly discussed both in the fields of psychology, sociology and economics and in the topics of management and marketing practices (Hosmer, 1995). Generally speaking, trust is that a person believes the other person or mutually believes each other, and based on trust, it can facilitate the exchange on specific investment and information in the organization and mutual promises, the reduction of transaction costs, the occurrences of potential damages or revenges and frames with each other (Shen, 2004). Moorman, Deshpande and Zaltman (1993) define trust as a willingness to rely on an exchange partner in whom one has confidence. Similarly, Morgan and Hunt (1994) consider trust consists in an exchange partner in whom one deeply owns confident and honest. The definitions of trust on above all emphasize the importance of confidence. Therefore, the definitions can broadly apply to any condition such as transaction between buyer and seller or any transaction format between two parties.


Corporate Strategic Motivation: Evolution Continues–Henry. A. Murray’s Manifest Needs to Maslow’s Hierarchy of Needs to Anil Sarin’s Contributory Theory of Existence

Prof. Dr. Anil Sarin, India



In consequence to globalization and paradigm shift in the needs, many executives have reached to the state where money, power and recognition are not enough to motivate them further. The corporate sector of 21st century has started realizing that getting their executives married to higher packages of – Money, Recognition, Power (MRP)… based upon the existing motivational theories is not enough to keep them engaged in a organization. Money, Recognition, Power, Growth... though significant, but are not the only factors as there are several other factors beyond materialistic factors that keep executives motivated. Now, the question is: Which are those factors beyond materialistic factors that are influencing the executives to the extent where the motivational leverage of materialistic aspects starts diminishing. The talent retention is a major concern among organizations world over, with the global business opportunities expanding manifolds. Therefore, companies have to constantly develop innovative motivational strategies to retain and keep their executives effective and also attract new talent to their organizations for the sustained growth on long term basis. The time has come to give a new look to the existing motivational theories (a natural process of evolution) and develop the concepts which should be contemporary in nature and are able to provide motivational tools, capable of  managing beyond materialistic factors. This article identifies beyond materialistic factors and also offers a theory named as Anil Sarin’s Contributory Theory of Existence for managing - Give me (demanding) factors and Let me give (contributory) factors effectively for developing motivational strategies by maintaining the equilibrium between the two factors.  Historical views on motivation, even though not always accurate like many other studies, but have definitely proved to be an integral part of the foundation for evolutionary development. Motivation is a mix of forces that direct people to act. Motivation is a mental process which influences decision making of an individual / group or an organization to act or not to act, when, where, how to act or to act in favor or against. In today’s scenario, motivation can also be categorized as individual, group and organizational motivation. Depending upon the intensity of motivation, the effectiveness of the outcome of the act is substantially effected.  Scientific management believed that money is the primary human motivator. However, the human relations view suggested that social factors are primary motivators. Abraham Maslow (Psychologist) developed his hierarchy of needs theory in the 1940s based on Henry A. Murray’s postulation that people attempt to satisfy their multiple needs (Murray manifest needs) simultaneously rather than in some preset order. Unlike Maslow, Murray did not arrange the needs he identified in any particular order of importance. Murray’s Manifest Needs, presented in 1938, identified the set of needs, but only at an abstract state. Its present form comes from the contribution of J. W. Atkinson, who conceptually structured Murray’s ideas into a logical operational framework.  Further Maslow proposed a theory of hierarchy of a set of five such needs. He arranged them as – Physiological, Security, Social, Esteem and Self actualization needs. Each of these is related to one another and placed in hierarchy or prepotency. As per Maslow once a need is gratified, it no longer motivates a person’s behavior. He emphasized that people move up the pyramid of needs as each level is satisfied and could also move in a downward level if fulfillment of a lower order need is threatened. In addition to the above mentioned theories, other theories like Alderfer’s ERG Theory, Herzberg’s two-factor Theory, Equity Theory, Expectancy Theory, McClelland’s Theory, Goal Setting Theory, McGregor’s theory X and Y, Ouchi’s Theory Z including the concepts of Participative Management and Quality Circles have been used intensively and extensively for motivating the employees depending on many factors like – nature of work, competition, availability of manpower / talent, socio-economic needs, laws, culture, politics, corporate environment, insecurities, life style, professional standards, opportunities, growth, emotions, values, egos, expectations, participation, decision making, leadership styles, objectives etc.  In most of the organizations, motivational strategies are the outcome of particular motivational theory or the set of few or many theories depending on the situation and requirement of the organization as the talent retention is a major concern among the companies all over the world. With the global business opportunities expanding manifolds, companies have to constantly develop innovative motivational strategies to retain and keep their executives effective, efficient and also attract new talent for the sustained growth. Intensive and extensive analysis of the existing motivational theories revealed the most significant issue that all the theories have been based on the common assumption. As per this assumption, employees are always in a give me (demanding) mode. It paints human beings with one face which is always in demanding mode. This research study did not find this assumption appropriate, and found that human beings have got two faces / factors rather than one. The factor - Give me, of course, demands: money, power, status, love, respect, growth, designation, security….whereas, there is also another factor which is always interested to contribute to the people around them, society and the planet. This second factor is always in a contributory mode – Let me give, Let me contribute, Let me help, Let me serve. Looking at their unique characteristics, these factors have been termed as: 1. Give me (demanding) factor. 2. Let me give (contributory) factor. It always demands – I want food, water, social security, love, power, more money, recognition, growth, participation in decision making, status etc. Most of the existing motivational theories are based upon Give me factor. Accordingly, organizations develop the motivational tools for their employees based upon this factor.


An Empirical Study to Measure the Communication Skills of the Manager Assistants, Medical Secretaries and Office Workers in the Public Sector

Dr. Demet Unalan, Erciyes University, Kayseri, Turkey

Dr. Dilaver Tengilimoglu, Gazi University, Ankara, Turkey

Fatma Akdemir, Gazi University, Ankara, Turkey



Manager assistants and medical secretaries have great importance in the relations of organizational communication with external and internal environments of companies. Therefore, developing skills of medical secretaries will solve problems caused by deficiency of communication and provide a great benefit in increasing productivity. This study has been planned to determine the communication skills of manager assistants and medical secretaries in public sector. A questionnaire has been applied to 228 employers working in the ministry of finance, ministry of justice and hospitals of Erciyes University (3 hospitals). This questionnaire consisted of questions prepared in order to measure the communication skills of respondents. The first section includes questions about demographic properties and in the second part questions about communication skills are presented. According to the results of the questionnaire, feedback, self-expression and listening abilities of manager assistants and medical secretaries are sufficiently qualified. In its widest terms, communication can be called “information sharing activity” (Anderson, 1972) According to another definition, communication is also a process in which thoughts and ideas are exchanged mutually and the meanings are transferred between people by means of symbols such as language and gestures (Himstreet and Batty, 1969). It is the xchange of messages related to each other between two units  (Cuceloðlu,1996). Interpersonal communication is a one-to-one interaction in which messages are generated and transmitted by one person and subsequently received and translated by another (Tindall and Beardsley, 2003). Organizational communication is the sharing of any human activity that enables more than one person to concentrate on a purpose and that has a significant role in providing the necessary adjustment to and collaboration with their environment in order to work efficiently for their organizational purpose through cooperation and that have meanings in formal or informal structures (Karakoç, 1990). Researchers define five types of organizational communication systems: from below to up, horizantal,fascicular and reticular types of communication systems. While the first three systems may be called formal communication, fascicular and reticular types of communication systems are classifed as informal constructions (Hersey,Balnchard & Johnson, 1996). Communication skills have great importance in the work area just as they have in all areas of life. For most of the professions, communication skills such as being able to express oneself or to understand the others correctly are required for success and satisfaction at least in elementary level. But the professions differ from each other in the levels of the required communication skills. One of the professions in which the communication has importance is secretariat. In the informational society, this profession is now replaced with the notion “manager assistants” as a result of a different perception of the profession (Uygur and Koç, 2003).  Even if an organisation carries out its tasks more efficiently than expected, it should know that its achievement will not last long if it doesn’t show the same efficiency in communication (Tutar,2002). The provision of organizational communication efficiently depends on the competence of the medical secretaries in this field (Türkmen,1992). Even if the medical secreteries carry out their tasks with  a great capability, talent and performance, these characteristics will not be sufficent to make them succesful if they do not show the same talent in communication (Tutar,2002).  This research aims to measure the communication skills of the manager assistants, medical secretaries and office workers in the public sector.  The medical secretaries, manager assistants, and office workers who work for Ministry of Finance, Ministry of Justice and the hospitals of Erciyes University Medical Faculty constitute the universe of this descriptive study. The method of simple random sampling of 288 workers is included in the research. As data collection method, the questionnaire technique is used. The expressions in the questionnaire of the communication skills of the workers (feedback, expressing oneself and listening) are divided into two main groups called negative and positive. Positive expressions are scaled as never agree (1), mostly disagree (2), indecisive (3), mostly agree (4); completely agree (5) and no answers (0). Expressions that present negativity are scaled as never agree (5), mostly disagree (4), indecisive (3), mostly agree (2), completely agree (1) and no answers (0). In the survey the questions about three skills are given disorderly and each of the three skills is assessed out of 30 points after the questions are classified during the assessment. The assessment of the general communication skill is done out of 90 in total. (1,4,6,12,14,17th) expressions are used to scale feedback, (3,5,8,10,13,16th) expressions for listening skills and (9,7,11,15,18th) expressions for the skill of expressing oneself.  Hypothesis of the Research: The following hypothesis is formed to gauge the communication skills of the manager assistants, medical secretaries and office workers of the public sector.  H11: There is a relation between the communication skills of the manager assistants, medical secretaries and office workers and the case of having training on public relations.   H12:  There is difference between the manager assistants, medical secretaries and office workers who work in Ankara and who work in Kayseri in their communication skills. Statistical Analysis: To compare continuous variables, parametric and nonparametric analyses were used and the appropriateness of variables to normal distribution was determined. Chi-square test was used to compare the qualitative variables. To compare the two groups with respect to the scores of scales, student t-Test was used, and ANOVA was used to compare multiple groups. The statistical analysis was considered significant if p<0.05. All analyses were performed with SPSS for Windows, version 13.0.


The Pursuit of CSR and Business Ethics Policies: Is it a Source of Competitive Advantage for Organizations?

Dr. Arinaitwe. K. Stephenson, Uganda Christian University (UCU), Mukono, Uganda



Corporate social responsibility (CSR) has become a popular strategy for organizations to bolster their reputations and respond to pertinent social issues. Although CSR programs are important to the organization, the costs of these programs are so extensive that achieving a competitive advantage through CSR can be a notable challenge. In an effort to elucidate these challenges, this investigation considers whether or not organizations can derive a competitive advantage (CA) through corporate social responsibility programs. The results of the investigation suggest that CSR can lead to a competitive advantage, but only through integration of CSR with all aspects of the organization’s operations. The implications of this issue are discussed along with recommendations for organizations to develop and implement CSR programs. Corporate social responsibility (CSR) has become a linchpin for the development of organizations such as Starbucks and Ben & Jerry’s. Although these organizations support the use of this paradigm as a central driving force for the development of business activities, measuring the outcomes of CSR programs in terms of competitive advantage is a difficult task. Thus, while organizations such as Starbucks can pride themselves on doing “the right thing” assessing value from corporate social responsibility programs is the only salient way for organizations to know for sure if CSR programs really meet the demands of the bottom line. With the realization that efforts to measure CSR have not focused heavily on understanding the competitive advantage that can be garnered from these programs, there is a direct impetus to consider the specific outcomes that can be achieved through CSR programs. Using this as a basis for investigation, this research considers the following question to guide research: “Is the pursuit of corporate social responsibility and business ethics an important source of competitive advantage for the organization? Through a careful review of what has been noted about CSR, its impact on the organization and the outcomes that have been achieved by organizations using this paradigm, it will be possible to assess the overall impact of CSR programs on creating a competitive advantage for the organization.  A critical review of what has been noted about the definition of this term suggests that there is considerable variability on how scholars and organizations view this process. However, an analysis of definitions does show some commonalities among the explications offered. As such, it is pertinent to provide a review of how corporate social responsibility has been defined and conceptualized.  Ford (2007, p. 50) in his review of the definition of corporate social responsibility makes the following observations: “CSR is a combination of sustainable development and treating employees and the society within which companies operate with respect. The environmental impact of any economic activity should be weighed against the economic benefit and any measures that could mitigate the negative impact should be taken if they are at all economically feasible.” This author goes on to argue that under this programme workers should be treated fairly, receiving equitable pay, compensation and benefits. The complete program that is created following these ideas represents the total CSR program of the organization. Berger, Cunningham, Drumwright, et al., (2007) in their review of corporate social responsibility make similar observations about the definition of the process. As reported by these authors, “CSR is understood to be the way firms integrate social, environmental, and economic concerns into their values, culture, decision making, strategy, and operations in a transparent and accountable manner and thereby establish better practices within the firm, create wealth, and improve society” (p. 133). Berger and coworkers go on to report the corporate social responsibility programs go beyond legal and ethical frameworks to include a wide range of issues for the organization. Specifically, these authors contend that CSR programs can impact a wide range of issues managed by the organization including: “corporate governance and ethics programs; health, safety, and environment programs; attention to human and labor rights; human resource management policies; community involvement; respect for indigenous groups and minorities; corporate philanthropy and employee volunteering; adherence to principles of fair competition, anti-bribery, and anti-corruption measures; accountability, transparency, and performance reporting; and responsible supplier relations” (p. 133).  Finally, Angeles Gil Estallo, Giner de-la Fuente and Griful-Miguela (2007) also report that corporate social responsibility encompasses all activities performed by the organization. Specifically, these authors report the CSR encompasses the following: The assumption of rights and obligations due to the economic, political, and social activity performed by organizations. In other words, this is to create and develop values, such as protection, sustainability, compromise, and acting responsibly and economically as far as the environment is concerned. This is also applicable to the people and society in general, both short and long term, and independently of the distance (p. 381).  Although these issues are important, Angeles Gil Estallo et al do argue that corporate social responsibility has clear limitations. Because of the expansive responsibilities and needs of the organization, the costs of maintaining CSR programs is often extensive, limiting the ability of the organization to effectively engage in this type of action.  Based on the data provided here, it seems reasonable to argue that corporate social responsibility encompasses a wide range of issues for the organization, requiring the fair, equitable, ethical and legal treatment of all organizational stakeholders. Stakeholders include employees and the public as a whole—i.e. anyone that will in some way be impacted by the organization. Through the adoption of comprehensive programs and policies that support fair and equitable treatment of stakeholders, the organization is able to establish a clear corporate social responsibility program that will have direct implications for the way in which the organization does business. CSR programs are intended to have a holistic impact on the organization, producing improved outcomes in all levels of operations.


Sufficiency Economy Principles: Applications for Organisation Management Strategy

Dr. Teerayout Wattanasupachoke, Chulalongkorn University, Thailand



This study focuses on the conceptualisation and application of the sufficiency economy concept for use in organisation management strategy. This is aimed at understanding the deployment of the sufficiency economy principle in enterprises in Thailand as well as examining the relationship between the application of the sufficiency concept in organisational strategies and their performance. From an empirical investigation, a firm’s financial performance is influenced by various concepts of moderation principle, consisting of “leverage financing and capital structure”, “appropriate levels of growth and spending”, and “thorough evaluation of investment projects”. The neutrality way of business operations is then able to strengthen a firm’s financial performance. Regarding the non-financial performance, the knowledge application and morality conditions seems to be influential factors. “Efficient database and environment monitoring” and “integration of CSR into firm’s operations” are of prime concern for achieving higher non-financial returns. Therefore, the moderation principle, knowledge application condition, and morality condition are of critical importance to a firm’s performance. These factors should lie at heart of business management in order to enhance performance, stability, and sustainability of organisations.  The concept of a sufficiency economy is widely known throughout Thailand because His Majesty King Bhumipol Adulyadej, who is the greatly respected, developed the principle. Consequently, the philosophy of “Sufficiency Economy” lies at heart of all Thai people and has been regarded as a panacea for various recent business and economic problems. This is because the concept can lead to the balanced and sustainable development as well providing help for firms to cope with uncertainties (Ananthakul, 1998; Wong Cha-um, 2001). The sufficiency economy refers to a middle path of principles for appropriate conduct. In this respect, sufficiency focuses on moderation, reasonableness, and self-immunity mechanisms in any challenge from external and internal factors (Piboolsravut, 2004)  The sufficiency concept is then of utmost importance in protecting people and firms from adverse sudden effects as well as relieving problems, (Sussangkarn, 1999). This also sheds light on the necessity for Thai business organisations to apply the concept in strategic practices. However, the understanding of this concept remains limited and there is lack of a database regarding the connection between the concept and business enterprises. Therefore, research into the topic of “Sufficiency Economy Principles: Applications for Organisation Management Strategy” deserves significant attention for in-depth study. The figure one displays the framework of the study.  The focus of this study is on the conceptualisation and application of the sufficiency economy concept for use in organisation management strategy. The discussion is also impact on organisational performance. The following research objectives have, therefore, been set:  To understand the deployment of the sufficiency economy principle in enterprises in Thailand; To investigate the extent of the sufficiency concept when applied to the management strategies of enterprises in Thailand;  To examine the relationship between the application of the sufficiency concept in organisational strategies and their performance. The sufficiency concept consists of three main components: moderation, reasonableness, and self-immunity systems. Moderation means neutrality, being not too much or too little as well as not taking advantage at the expense of others (Piboolsravut, 2004, Tantivejkul, 1999). Reasonableness is related to rationality in decision-making, which should incorporate relevant factors and their consequences for consideration. Regarding being self-immune, there ought to be infrastructures ready for efficiently handling impacts from dynamic change (Piboolsravut, 2004). Risk management infrastructure and procedures may also be included in this regard. Apart from the three components, there are two required conditions for the sufficiency concept; knowledge application and morality (Piboolsravut, 2004). These mean the efficient utilisation of theories and methodologies for strategic planning and implementation as well as the reinforcement of moral conduct.  In addition, the sufficiency principle is well equipped with a Buddhist perspective on economics (Pryor, 1990). Schumacher (1973) stressed that the goal of the Buddhist economic life should be “Right Livelihood”. This means that the economy must be designed to provide all members of society with sufficient materials for their well-being and satisfaction. Also, there must be no harm done to others materially or spiritually in the community (Pryor, 1990). Interestingly, the sufficiency principle here is also manifestly consistent with sustainable sufficiency, a concept studied by various scholars. Sustainable sufficiency, which is evolved from sustainable development, refers to a synthesis of ecological, social, and economic objectives (Daly, 1990; Galdwin et al., 1995; Van Den Bergh, 1996, Yancken and Wilkinson, 2000). This concept stresses that there must be a mutual dependence between the ecological, social, and economic dimensions. Sustainable sufficiency is then defined as achieving economic results together with the right livelihood. This is to ensure the preservation of the natural environment and the welfare of individuals and society (Westing, 1996; Lamberton, 2005). The sustainable sufficiency combines the three aspects, ecology, society, and economy, and makes them mutually supportive (Galdwin et al., 1995; Lamberton, 2005). In this respect, a firm ought not to prioritise economic objectives over social and environmental concerns. This makes its status unsustainable. Moreover, a firm should create short-term profit growth as well as reinforcing an appropriate level of natural resource consumption and a stable supply chain. This is aimed at balancing short term and long-term goals as well as building an efficient transition to a sustainable sufficiency economy.


Perceptions of University Students on Academic Honesty as Related to Gender, University Type and Major in Turkey

Dr. Cemile Celik, Mersin University, Mersin, Turkey



Academic dishonesty has started to be an important issue at university campuses all around the world. In this study cheating and plagiarism were examined through the undergraduate students of  FE (faculty of engineering)   and FEAS (faculty of economy and administrative Sciences) of universities located in the largest three cities of Turkey. The sample of this study included 2182 students from FE and FEAS of universities in Ýstanbul, Ýzmir and Ankara. It was found that students were involved in cheating more than plagiarism. Academic honesty scores of female students, students of FEAS, and public university students were higher than the the other groups.  In business circles, immoral incidents and behaviours at managerial and technical levels are noticed over the world in recent years. Enron, Worldcom, Bristol-Myers, Arthur Anderson, Xerox, Citigroup, Merrill Lynch, Dozens of Dot-Coms are the well-known examples with ethical misconduct. Other than these issues which are  managerial decisions and choices, in technical spheres also there have been serious misconducts such as air pillows of automobiles that are not functioning, collapsed buildings and bridges, cancerogen food on sale etc. Ethical misconduct could be examined in relation to educational background of people who commit or decide on business issues through unethical means (Hosmer, 1985). Therefore, to understand the ethical nature of business related issues it would be appropriate to examine the honesty related perceptions of college students who would be making decisions for business in the future. In this sense, academic dishonesty and cheating among university students need to be studied (Bowers, 1964; McCabe and Trevino, 1993, 1997; Brown and Choung, 2005; Bunn, 1992; Maramark and Maline, 1993; Bernardi, 2004).   Ethical attitudes and behaviors of people mainly are formed in family and educational institutions. Therefore increasing ethical problems in the bussiness world have prompted many educational institutions and universities to examine their curriculum and look for ethical loop holes. Because it is commonly agreed fact that people do not behave immorally as soon as they become managers (Hume and Smith, 2006; 50).  All of the stakeholders of colleges and universities are responsible for dishonest attempts across the campuses.  Also the students, academics and managers of the institutions are responsible for the process. For instance, an accounting professor struggles for joining ethics and accounting professional education instead of wide spectrum of courses in order to increase moral reasoning, moral determination of the students (Karr, 2004; 29).  On the other hand according to Pavela and McCabe (1993) some educators do not believe that students regard cheating as immoral and that is one of the reason of the problems. In relatively traditional cultures, where understanding of individualism and competition is still weak, cooperating out of rules is tolerable and students may break rules more easily and also teachers may not behave determined and consistent in applying sanctions against the guilty (Hutchison, 2002; 308). According to Connors (1996), academics initially suggested students use web resources, but now they are disturbed by the results (quoted by, Austin and Brown, 1999; 21).  The popular proverb should be recalled: “Honesty is the best way to learn.” You shouldn’t steal, plagiarize, copy and cheat if you really want to learn. Because you can not develop yourself with the others’ knowledge and you can not learn to think well (Banner and Cannon, 1999; 116).  Bernardi’s et al. (2004; 406) work denotes that there is an important correlations between students who cheat and the ones who do not. Claxton (2005) describes varieties of academic dishonesty; fabricated and falsified research findings, lack of concise data handling and record keeping, fraudulent data, fabricated data, and not sharing credits.  Sims (1995) emphasized that the kinds of faculty dishonesty is much more varying in than those of students’. Students’ dishonesty include only telling lies to teachers, looking at others exam papers, and using wrong bibliography.  There are a variety of conclusions in the survey carried out on the students’ perceptions and attitudes. There is abundant evidence in the survey that the students cheat in college classrooms not only in the United States but also in Eastern Europe and Central Asia as a common activity. A great number of students from the different parts of the world surveyed agreed that there were various acts of classroom dishonesty during their college education (Grimes, 2004; 284). With regard to analysis of academic honesty, Hutchinson (2002; 304) suggests that ethical issues be discussed in groups of student first. For instance groups of students could be provided with research data and each group could produce their own findings to report. Later, groups could compare discrepancies and ethical implications of their reports.  Cheating and plagiarism make up two dimensions of the academic dishonesty. According to Savage and Favret (2006; 52) “Cheating is a violation that students expected instructors to confront”. Maryland University Student Honor Council describes cheating and plagiarism as “cheating is intentionally using or attempting to use unauthorized materials, information, or study aids in any academic exercise; plagiarism is intentionally or knowingly representing the words or ideas of another as one’s own in any academic exercise” (  The Oxford English Dictionary Online defines the plagiarism as : “to take and use the thoughts, writings, or inventions of another as one’s own”. In the past, regarded only as an academic matter  plagiarism nowadays threats all types and sizes of business and professional organizations. Since the development of technology made it easier to conduct crimes and more difficult to detect guilty (Nitterhouse, 2003; 215), it can be said that circumstances  determine the honesty of a person and the person needs technology. When deciding cheating or not in the school, what will the person do then? Will he review his ethics course class notes? (Hupp, 2007; 449).


Utilization Form of Tourist Guide Map: Tainan City Tourism Map as an Example

Dr. Shuo-Fang Liu, National Cheng Kung University, Taiwan

Chen-Yuan Kao, National Cheng Kung University, Taiwan

Wen-Cheng Wang, Lecturer, Hwa Hsia Institute of Technology, Taiwan



Maps normally are classified according to their characters such as: scale, content, usage, cartographic area and Utilization form. In this study, we focus on the utilization form to investigate the usability standard reference of tourist guide map. Usages of three types of map are analyzed in our study, namely: Standing-type, Folding-type, and Booklet-type maps. We select Tainan city to investigate in depth the usage behavior of the three types of map through both non-participant observation and questionnaire survey. Finally, we clarify and define the user’s information requirements of tourist guide map through our study, which can be used as reference for traditional or digital map interactive design. Additionally, we introduce these utilization concepts as reference for related business managers.  The locals and tourists need to move around in the complicated, modern big cities environment. Their cognition towards “locations” is changing from the unit interpretation of someone or something to the digital coding technology. Modern map is becoming more significant with its huge storage capability, advanced rational design, effectiveness and convenience, even though it is less emotional. Its importance is well proved by its wide popularity; such as layout map, route map, sequence map, program map and selective map are all essentially required for the promotional items and activities in streets, stations, tourist sights…etc. Map users can extract all the information they need to know about distance, location, direction, activity type and content through these maps. Maps are classified in various ways. In Ci Yuan Dictionary (1983), map is explained as the cartographic drawing indicates the geographic, economic and administrative division; it clarifies the existence of all the mountains, rivers, valleys, plains…etc. In Da Ci Hai Dictionary (2005), map is described as the map-drawing of the nature and social phenomenon on the ground; they are classified according to content (general map, thematic map), scale (large, medium, small), form (image map, 3D map, line-drawn map)…etc. The utilization forms of map are classified to three basic types (Liao Ke et al., 1985): Standing-type, Folding-type and Booklet-type maps. Content of tourism sightseeing guide mainly belongs to thematic map; depends on various factors, it utilizes all the three mentioned types of map. For example, Standing-type map is usually used on-site in scenic spot while folding-type map is often used within the range of specific tourism scenic spot; but Booklet-type map is used in a wider covering range of scenic spot or location. Therefore, we are trying in this study mainly to assign the requirements of utilization forms and information content of the three types of tourism guiding maps in order to conclude the “concept” of each utilization form.  This study uses non participant observation (Kathleen M. DeWalt & Billie R. DeWalt, 2002) method to observe the tourist guide center in front of the Tainan City Train Station; the observation and recording procedure are done without disturbing the map viewer. Pretest is done before the observation; it records the information of the map viewer such as gender, staying period, number of viewer and height average in order to understand the natural interactive situation between the map and the viewers.  The study conduct period is from December 8, 2006 to December 15, 2006. The observed samples are standing-type map, folding-type map, and booklet-type map. Three parts are included in the study result and analysis: (A) Analysis of non-participant observation. (B) Questionnaire analysis. (C) Concept of combined application. The detailed explanations are as followed:  Figure 1 is the standing-type map observed in our study; 652 persons were observed (405 males and 247 females). The result of observation is as followed:  Users’ height ratio: less than 150cm: 357 persons, 151-170cm: 201 persons, over 171cm: 94 persons.  Staying time: less than 10 minutes: 621 persons, 11-20minutes: 31 persons, over 21 minutes: 0person.  Numbers of viewer at the same time: one person: 588 persons, two to three persons: 49 persons, four persons or more: 15 persons.  When analyzing the standing-type map statistics, we find more people stay and view this kind of map compared with other two types; ratio of male is higher than female; most of them are less than 150 cm high; most of staying time is less than 10 minutes; most of the viewer watch the map alone. These contradicting results show that this type of map attracts various types of people and not only tourists, which should encourage more utilization and improvement of this type of map.  Figure 2 is folding-type map observed in our study; 58 persons were observed (27 males and 31 females). The result of observation is as followed: The ratio of foldable map viewer: unfold completely: 55 persons, partially unfold: 8 persons, fold: zero.  The way viewer watch the map: watch the map standing at the same point: 17 persons, watch the map while walking: 21 persons, watch the map stop-and-go: 10 persons.  Number of viewers at the same time: 1 person, 55 persons, 2-3 persons: 3 persons, more than 4 persons: zero.  When studying the folding-type map analyzes result, we find female viewers are more than the male which indicate that women prefer private and more comprehensive searching; most of the viewers unfold the map completely to search the sightseeing scenic spots, which indicates more desire for detailed information. Most of them read the map while walking; most of them read the map alone, which refers to the non-tourist use of the map, as the tourists normally in groups.


The Development of a Methodological Framework of Market Orientation Implementation: A Value Chain Perspective

Dr. Amalia Pandelica, University of Pitesti

Dr. Ionut Pandelica, University of Pitesti

Dr. Ionel Dumitru, Academy of Economic Studies - Bucharest



This paper presents a methodological framework of market orientation implementation within the organization from system of value chain point of view. The paper is a theoretical one, based on a large bibliographical research (there have been used over 30 articles presenting the empirical findings of researches on various aspects of the concept) and develops a methodology which involves many phases which should be done by the executive level of an organization for it to become (more) market oriented. The article is grounded on the premise that market orientation is a complex and interdisciplinary concept whose implementation involves many changes within the organization. The success of the implementation process depends on many determinant factors, one of them being the extent to which all members of the value chain system, understand, support and act according to this orientation. Since the 90`s many researchers have shown a genuine interest for a new concept - market orientation. The first who studied it were Kohli and Jaworki (1990) and Nerver and Slater (1990). Relying on the theories developed by them, many other researchers focused on the study of the relationship between this concept and organizational performance. Market orientation is a theme approached by many specialists in various economic field: marketing (Narver and Slater, 1990), strategic management (Piercy, 1997), marketing management (Doyle and Wong, 1998), strategic management of human resources (Harris and Ogbonna, 1999) public services (Stokes, 2000). Even if as a concept it has a multiple choice approach all of them start from the same premise - market orientation is a business philosophy, which connects all functional departments of the organization to the operational environment, which has as an final outcome the creation of superior value for the customers and thus, the creation of a sustainable competitive advantage.  The researches dealing with market orientation envisaged both big companies and medium- and low-sized companies, non-profit organizations and various public institutions. If we also add the fact that the implementation of this concept within the organization cannot be accomplished without the support of all functional departments and employees, and the success of the implementation depends on the level of understanding and support of all members of the value chain system, we may conclude that this is a complex and interdisciplinary concept.  At present, the researchers are much more concerned with the way in which a company may become (more) market oriented.  In such a context, our paper would intend to develop a methodological framework with several phases which should be done in order that an organization become (more) market oriented. This framework should not be looked upon as to a static framework displaying the standard steps that the managers are compelled to take, but a dynamic framework within the executive level learn to do things better, faster and with lower costs, which leads to a ever increasing customer value.  In economic literature market orientation is variously approached:  1.“We use the concept of market orientation in order to point out the implementation of marketing concept within the organization” (Kholi and Jaworski, 1990). 2. “Market orientation is a business philosophy which has as final goal the creation of superior customer value” (Narver and Slater, 1990) 3. We may say that a company is market oriented when the culture of the company is dominated by values systematically ensuring the creation of superior customer value.  Practically, this means gathering of market information (about consumers and competition) and the use of these pieces of information in order to create superior customer value   (Slater, 1994). 4. Tuemine and Moller (1996) pointed out that only an interdisciplinary approach could deal with the complexity of the concept that is considered: business philosophy, inter-functional coordination, gathering of information about consumers and competitors, dissemination of information acquired to all functional departments within the organization and the response of the organization, source of organizational learning. 5. Quntana, Beeril(2001) and Hernandez (2002) highlighted five directions for approaching the concept: business philosophy, the process of administration and processing the information gathered from the market, inter-functional coordination (in connection with the transmission of information within the organization), source of organizational learning, source of competitive advantage. 6. One of the latest approaches of the concept refers to the market orientation from the point of view of the value chain system (Baker, 1999; Simpson, 2001; Grunert, 2002). This approach starts from the idea that the degree of orientation of a member of the chain is influenced by the degree of market orientation of all members of the chain. The competitiveness of the whole chain in the creation of the superior value for the customers depends on the involvement of each member of the chain. The various approaches mentioned above point out the complex features of the concept analyzed which can be at the same time:


Exchange Rate Regime Misfit and Currency Crises

Dr. Chaiporn Vithessonthi, Mahasarakham University, Thailand



In view of recent currency crisis in a number of developing and developed countries, this article examines the advantages and disadvantages of several exchange rate regimes with the focus on the possible choices of the exchange rate regime for emerging market countries. As the globalisation of financial markets has led most countries toward the liberalisation of their financial markets, monetary authorities face numerous challenges in managing macroeconomic policies so as to promote economic growth and stabilise the economy. This article enters the current debate on exchange rate policy by examining the effects of monetary and fiscal policy on macroeconomic variables under different exchange rate regimes. The paper presents propositions predicting a misfit between exchange rate regimes and a nation performance. Finally, the implications of the propositions for policymakers trying to address an exchange rate volatility issue are discussed.  Since the end of the Bretton Woods system, several developing and developed countries have experienced currency crises, which generally result in a change in the exchange rate regime towards either a fixed exchange rate system or a flexible exchange rate system. For example, after the massive, but unsuccessful, attempt (i.e., through massive sterilised intervention, reportedly with the amount of $70 billion, within a few hours) to prevent a collapse of the British pound in 1992, the British government had to allow the pound to float freely. The Swedish central bank’s attempt to defend the krona’s fixed exchange rate against speculative attacks also ended in failure, and thus had to allow the krona float freely with substantial losses on its foreign exchange positions in 1992. The attempts of several countries such as Mexico, South Korea, and Thailand did not fare better. Several explanations have been proposed to explain the causes of currency crises. According to the first- and second-generation models, currency crisis is a product of the government’s mismanagement of economy as well as lack of credibility (see Krugman, 1979; Obstfeld, 1994). The third-generation models suggest that a shock, which tends to be amplified by a financial accelerator mechanism, primarily contributes to the crisis (Bernanke et al., 1999). For instance, a pure shift in expectations against exchange rates can generate multiple equilibriums, which result in currency crisis (e.g., Chang and Velasco, 2001; Krugman, 1999).  In the process of global integration in the financial markets, several countries have to forgo the ability to control capital mobility and liberalise the domestic financial market so as to promote international trade and attract foreign investment into the country. Capital-account liberalisation promotes extensive foreign borrowing in private and public sectors and a rapid build-up of central bank’s foreign reserves. Capital inflows help a country accelerate its domestic development, and yet can entail undesirable consequences such as rapid monetary expansion, real exchange rate appreciation, and moral hazard problems. Hence, a country that has received large capital inflows is more likely to become vulnerable to currency crisis because a sudden stop in capital inflows or an unexpected surge of capital outflows will result in a balance-of-payment crisis as well as a currency crisis. In the aftermath of the exchange rate shock, substantial deviations from purchasing power parity are likely to persist (Aghion et al., 2001). Perhaps, it is due to the slow economic adjustment process and psychological effects of a crisis currency. Research on currency crisis suggests that countries can maintain a fixed exchange rate regime and repel speculative attacks by adopting a certain form of capital control (Tamirisa, 2006). It has been argued that the imposition of strong capital controls prior to or during a currency crisis can mitigate the negative effects of the crisis on the economy by slowing down the sell-offs of the currency, and thus minimising excessive exchange rate volatility.  Hence, monetary authorities in developing countries face difficult challenges when dealing with a choice of exchange rate regime and policy. Following a series of currency crises in 1990s, monetary authorities in many countries have changed their preference from hybrid exchange rate regimes to either a freely floating exchange rate system or a fixed exchange rate regime. Although a debate on the appropriate choice of exchange rate regimes for developing countries has received greater attention, our understanding of exchange rate regimes and the conditions under which one regime will perform better than others is still limited. This leads to an awkward situation for the international economics literature and for policymakers. In this paper, I clarify some of the ideas developed in the exchange rate literature and try to systematically analyse the conditions under which different exchange rate regimes contribute to the short- and long-term economic development of small and emerging countries. In doing so, the study helps identify the limits of the effectiveness of monetary policy and fiscal policy under several exchange rate regimes.  The fixed exchange rate regime refers to a situation in which a monetary authority is ready to maintain a given value of a currency with respect to other currencies by either buying or selling foreign currency for domestic currency at a fixed price (Krugman, 1979). In the literature, the fixed exchange rate system offers at least three key benefits. A first benefit involves a reduction in exchange rate risk, thereby promoting international trade and investment activities. A second benefit is that it can be served as a nominal anchor for monetary policy. A third benefit is attributed to minimising competitive currency depreciation and/or appreciation.  Under a fixed exchange rate regime, monetary policy, which can be defined as a change in domestic money supply so as to affect the rate of interest, may have no effect on the level of income and employment (Mundell, 1963). For instance, an increase in money supply, which is aimed at reducing the rate of interest, will depreciate the currency; therefore, exchange rate stabilisation operations must be undertaken to prevent the depreciation of the currency, thereby causing a fall in foreign exchange reserves and restoring the interest rate to the initial level. In essence, for an open economy with capital control liberalization, the imposition of a fixed exchange rate will make it difficult to control the domestic money supply (Obstfeld and Rogoff, 1995).


Responsible Financing?: The Equator Principles and Bank Disclosures

Dr. Jane Andrew, University of Wollongong, Australia



The purpose of this paper is to consider the impact of the Equator Principles on banking disclosures. The research explores whether signatory banks are disclosing information related to their obligations under the Equator Principles and discusses the types of disclosures being made publicly available. The research illustrates that banks are disclosing very little information to help users assess the impact the Equator Principles have had on these banks practices. It is also suggested that banks are reframing their identity through these principles, but it is still difficult to assess whether this is also transforming practice. There is little academic research considering financial institutions and their social and environmental responsibilities and this work seeks to address this gap. Corporations are under increasing pressure to represent themselves to multiple audiences, using complex, contested and often competing criteria to assess the performance of the firm (Cooper and Sherer, 1984; Cousins and Sikka, 1993; Gray, 2002). Cultural practices that respond to, produce and reproduce social expectations have been considered within the field of cultural and media studies (Agger, 1992; Hall, 1997), and this work is beginning to inform research in emerging fields such as corporate social responsibility, sustainable reporting, environmental accounting and ethical finance. This paper utilizes Hall’s (1997) work on media, culture and representation. I assume from the outset that information produced by corporations is framed discursively by the institutional and cultural structures that allow its emergence; it is constructed and constructing, productive and reproductive, constituted and constitutive. Accordingly, representations of and by the firm that fall into the category of corporate social responsibility are part of a process and are not an end in themselves as these can never be controlled entirely by the producer or the audience. This interactive process will be considered in more detail throughout the paper. It is hoped that this theoretical framing of voluntary corporate codes of conduct (specifically the Equator Principles) can help develop our understanding of the purpose, process and possible outcomes of these codes.  Increasingly, environmental groups hoping to expose those responsible for catastrophes, and prevent them happening again, are working up the chain of financial responsibility. Not content with holding up to public scrutiny the companies directly involved, they are seeking out the organizations that provided finance for projects that end in such disasters (Harvey, 2005, p.13).  It is well documented that many companies are now adopting voluntary codes of conduct. These are generally accepted to be statements that set out a corporation’s principles, ethics, rules of conduct and philosophical values as they relate to employees, shareholders, the environment, and stakeholders more broadly (Langlois and Schlegelmilch, 1990.) Multinational companies have participated in the reframing of their identity as corporate citizens. This label has expanded perceptions of the purpose of the firm. As some corporations have claimed motivations that are more than just profit maximization, this transformation has also brought with it a change in community expectations of corporate responsibilities (Wright and Rwabizambuga, 2006). The reasons corporations have sought to change their identities has been the focus of much research (Singh, 2006), however, it is impossible to understand this dynamic completely as corporate behaviour is constantly changing.  Even so, there are some theoretical explanations of this behaviour, the most present within the social and environmental literature are legitimacy theory, stakeholder theory,  media agenda setting theory and to some extent institutional theory. They all shed light on some aspects of the ‘voluntary’ behaviour of the firm, but individually they are not sufficient. Some have argued that there is considerable diversity in corporate response to social and environmental expectations. For instance Wright and Rwabizambuga (2006, p.93) argued that on one end of the spectrum, .firms that proactively respond to environmental issues conceptualize mounting pressures on their corporate reputation as a strategic opportunity to create real business value by adopting new practices above what is legally required of them, commensurate with the new sustainability agenda. At the other end, firms that react negatively to these challenges to their reputation view them as a new source of financial risk and liability, which has the potential to undermine their shareholder value (Wright and Rwabizambuga, 2006, p.93). Accounting researchers have struggled to develop a theory of managerial behaviour that is sophisticated enough to provide insight into the managerial motivation towards more ethical practices, voluntary social and environmental disclosures and the process of designing or signing a voluntary codes of conduct (Deegan, 2002). Much has been written that is consistent with the view that public disclosure of social and environmental information, in media such as the annual report, is undertaken for legitimizing purposes. Such a motivation for reporting (to legitimize the organisation’s operations) would be in contrast to a reporting approach which reflects an acceptance by managers of an accountability or a responsibility, to disclose information to those who have a right-to-know (Deegan, 2002, p.283)  Having said this, Deegan (2002) acknowledged that accounting researchers need to develop their theoretical framing of corporate behaviour. However, there is support for the view that corporations act voluntarily on social and environmental matters in order to maintain their social contract, and they do this based on their own perceptions of what society expects them to do (Deegan and Blomquist, 2006). Of course, part of this process involves the manufacturing of legitimacy through various strategies deployed by the company, in this way a corporation can actively seek to manage expectations (Neville et al, 2005). At best corporations seek to be legitimate by responding to social expectations and instigate ‘real’ change within the corporation (Branco and Rodrigues, 2006). Deegan and Blomquist (2006) have also considered the impact of stakeholder action on corporate behaviour, and their research provides some evidence that corporations are influenced by lobbyists (as does that of Tilt, 1994; 1997). It has also been argued that corporations use resources available to them to associate themselves with legitimate practices without significantly reorienting themselves towards improving their social and environmental performance (Moerman and Van Der Laan, 2005). It is also possible that corporations engage in strategies to dominate discourses of legitimacy, and determine the criteria by which they will be judged (Burchell and Cook, 2006). Some have even argued that corporations should not be allowed to self-regulate in terms of conduct. For instance, Levis (2006), from the World Bank’s Private sector Development Vice Presidency claimed that there are risks for both shareholders and stakeholders if corporations are allowed to self-regulate their CSR Codes of Conduct. He argued that the private sector has no incentive to adopt codes that truly limit the negative impact of profitable corporate activity on society. This work considers corporate codes of conduct as a mode of representation and a tool to assist the reframing of a firms public identity.


Measures of Marginal Cost in the Estimation of a Hybrid Model of Sticky Price and Sticky Information Price Settings

Dr. M. Murat Arslan, Middle East Technical University, Turkey



Theoretical models of price setting imply real marginal cost as a measure of real economic activity. However, most of the empirical literature has used the output gap as the measure of real economic activity by assuming it to be an appropriate proxy for real marginal cost. However, because of the some problems with the output gap, unit labor cost has been recently used to measure real marginal cost. In this study, a hybrid model of sticky price and sticky information price settings, which is called the SP/SI Phillips curve, is estimated by a full-information maximum likelihood estimation (MLE) method. In this estimation both the output gap and unit labor cost are used as alternative measures of real marginal cost to see which measure is more appropriate proxy in such a framework. Estimations show that more reasonable and sensible results are obtained when unit labor cost is used as a proxy for real marginal cost rather than the output gap. This result is robust to alternative sub-samples.  In the New Keynesian literature, the most common approach to theoretical modeling of short-run inflation dynamics is to assume some kind of sticky prices (and/or wages) in the optimization problems of forward-looking individuals and firms. This leads to the derivation of the New Keynesian Phillips curve (NKPC) in the framework of Calvo's (1983) model in which each firm adjusts its price with some probability in each period independent of waiting time. (1) Although the NKPC model has been used as the ``workhorse" in the literature and has an appealing theoretical structure, it has been criticized for producing implausible results regarding inflation dynamics. (2)  The empirical limitations and difficulties with the standard NKPC model have motivated researchers to go in two directions. In one direction the standard sticky price framework is modified and extended. (3) Some researchers, including Fuhrer and Moore (1995) and Gali and Gertler (1999), obtained a hybrid version of the NKPC and old Phillips curve by including a lagged inflation term into the NKPC. However, these hybrid Phillips curves also have difficulties in characterizing inflation dynamics. In the other direction, the sticky price model is abandoned, and new models are proposed to explain the observed price stickiness in data. Such as Mankiw and Reis (2002) proposed the “sticky information Phillips curve” as an alternative to the NKPC. In this model, a fraction of firms get complete information about the economy in each period randomly and independent of waiting time, and set their prices according to this new information, while the remaining firms set their prices according to old information. (4) In literature the sticky information model usually receives little or no support, and standard sticky price model or a version of it dominates the sticky information model. Recently, there is a new approach in theoretical modeling that leads to a hybrid model, which combines the sticky price and sticky information models in a single price setting model. (5)  Those theoretical models of price setting and inflation in the New Keynesian literature imply real marginal cost to measure real economic activity. Most of the empirical literature has used the output gap as an appropriate proxy for real marginal cost. But, because of the some problems with the output gap, some recent literature has used the unit labor cost as another proxy for real marginal cost, especially in the estimation of the sticky price models. Therefore, it is important which variable to be used in the estimations of those models to measure real economic activity. Some researchers such as Gali and Gertler (1999), Gali, Gertler and Lopez-Salido (2001), and Sbordone (2002) have used the unit labor cost to measure real marginal cost and concluded that the empirical difficulties of the NKPC model arise from using the output gap, which is not a good proxy for real marginal cost. In this study, a hybrid model based on Arslan (2005, 2006) that combines the sticky price and sticky information models is estimated. This model is called the SP/SI Phillips curve and nests the standard sticky price and sticky information models as special cases. This model is estimated by using the output gap and unit labor cost as measures of real marginal cost to be able to see which variable is more suitable as a proxy for real marginal cost in such a hybrid framework. I estimate the SP/SI Phillips curve by a full-information VAR-based maximum likelihood estimation (MLE) method with the U.S. data, and using the output gap and unit labor cost as alternative proxies of real marginal cost. There are two important structural parameters that can be used to compare the output gap and unit labor cost as alternative proxies. The first parameter of interest is the fraction of firms whose prices remain unchanged whether they are sticky price or sticky information type firms; it is interpreted as a measure of the degree of price stickiness in the economy. The other parameter of interest is the fraction of sticky price type firms; it is interpreted as a measure of the relative importance of the price setting models. Therefore, this study will investigate the effects of the chosen variable or proxy for the real marginal cost on the estimated values for those parameters. The estimation results show that the structural parameters of the SP/SI Phillips curve are estimated much more reasonably when unit labor cost is used rather than the output gap. When unit labor cost is used the price stickiness parameter is estimated to be around 0.88, which implies an average period for fixed prices around 8 quarters. These values are not far from generally accepted levels. Also, statistically significant fractions of both sticky price and sticky information firms are estimated, although the sticky price firms form the majority. But, when those estimations are performed by using the output gap, price stickiness parameter is estimated to be very high around 0.98, which implies unrealistically high 50 periods for fixed prices. Also, the fraction of the sticky price firms could not be estimated significantly, and insignificant estimation is higher than one. These results are robust to alternative sub-samples. The rest of the paper is organized as follows. In the next section, the price adjustment models and the hybrid SP/SI Phillips curve are described. Then, the issues in the measurement of real marginal cost are discussed. After that, the estimation method is explained, and the estimation results are given. The last section concludes.


Is the Relationship between Capitalism and Society Parasitic or Symbiotic?  The Role of Finance Leadership as Strategic Partners for Sustained Prosperity

Kasthuri Henry, Walden University

Dr. Robert DeYoung, Walden University

Dr. Jean Gordon, Walden University



The relationship between corporations and society is symbiotic in a world embracing sustainable capitalism. It is therefore imperative for individuals to be cognizant of the influence they exert on each other. Capitalism thrives under consumer confidence, investor assurance, and uninterrupted resource supply in a stable socio-political environment. These are foundational characteristics of a stable global economy. Drawing from the theories of Adam Smith, Karl Marx, and Max Weber this paper looks at the modern day dynamic between capitalism and society. For, without a sustainable society, the best of corporations will sink into oblivion due to lack of effective human capital, market, and stakeholders. The paper also explores the role of accounting and financial leadership in developing and executing the value-centric strategic vision of organizations with the overarching goal of sustained prosperity.  Social evolution lays the groundwork for the collective human experience. The evolutionary progression of society over the written history has provided a glimpse into the stages of hunter-gatherer society, agricultural communities, industrial age, and information age. The modern information age has brought with it a wave of global society that is unparalleled. Mechanism of commerce has evolved alongside social development that has taken place over the decades. Barter system, commodity based exchange of labor and products, and now to the monetary system with the complexities of balance of trade and exchange rate well illustrates the progression. Economy is the underpinning of modern day society.  Of the various forms of economy, a greater proportion of people in the global community embrace capitalism.  Having its roots in mercantilism, capitalism continues to evolve and impact society in myriad of ways.  It continues to make the civil society and economies interdependent.  Development in technology and transportation continue to fuel capitalism via globalization.  Today, globalization means more than multi-national corporations doing business anywhere in the world.  It has the added complexity of sovereign nations like United Arab Emirates, China, Russia, Norway, and Singapore investing in global corporations thus increasing their power to influence commerce and shape the global society via sovereign national funds.  Globalization has also changed the mix of resource availability for corporations introducing human capital concepts of outsourcing and off-shoring, expanded the supply chain across the globe, and leveraged technology to raise financial capital in multiple international stock exchanges.  Previously inaccessible markets have opened up challenging corporations to capture new customer bases armed with an intuitive understanding of the cultural underpinnings. The global society provides human, financial, and natural resources to keep the economic machine of capitalism ticking like clockwork while continuing to be shaped by it.  A walk back in US history demonstrates that Henry Ford believed that the key to a successful and sustainable automobile empire is to make a product that is affordable to the average American. He also knew that he needed to pay his workers above the minimum living wages so that they could afford to purchase the automobiles. By translating his beliefs into executable action, Ford perfected the concept of assembly line manufacturing in 1908 and the Model T was born. The launch price of $825 was further reduced over the following four years to a record low price of $575, handing Ford a 48% market share by 1914. The automobile was no longer a fancy toy for the rich; it became an integral part of everyday American life insuring sustained growth and profits for Ford Motor Company. Ford understood that the key to his business success was firmly planted in the knowledge that the lives we sustain will be our own. Corporations function in the context of society and draw their resources from society. An educated society provides a creative and forward thinking workforce driving the economic engine through business growth. A healthy and economically stable life in society facilitates consumption and investment. It is no secret that an ailing society will not be competitive in producing knowledge-workers to produce cutting edge products and services; it will also not be able to raise capital or spend on consumption to sustain the economic engine. So, what should be the basis for a viable relationship between corporations and the society they function in?  If it is a parasitic relationship where corporations make a profit at the expense of society, at some point the society hosting the corporation becomes nonviable. If it is a symbiotic relationship, the growth and prosperity is mutual. It is not difficult to determine which one of the relationships insures long term sustainable value creation for corporations.  Adam Smith’s theory of capitalism was inseparably intertwined with the concept of self-interest propelling personal progress, which by default caused socio-economic progress through the invisible hand (Smith, 2003). His view of self-interest did not spring from selfish greed or self-serving personal interest at the cost of society. Primarily an ethics educator and then an economic philosopher, Smith’s capitalism was built atop his ethical philosophy. He firmly believed that sympathy and compassion were common human traits inherent across the human race. Rooted in the opinion that these traits will temper the desires and self-audit the greed factor, he also appeared to have believed in the Christian value of love thy neighbor as the restraining force of blind power hungry greed (Smith, 2007). Max Weber echoed this view through the argument that the Protestant ethic provided the fertile ground from which the spirit of capitalism sprang to life and evolved (Weber, 2003). This may have been a reflection of the times when mercantilism was viewed as the oppressive colonial economic vehicle that needed reform.


Demographic and Psychographic Factors that Affect Environmentally Conscious Consumer Behavior: A Study at Kocaeli University in Turkey

Duygu Fýrat, Kocaeli University, Kocaeli, Turkey



Due to many reasons, environmental consciousness has germinated in society. Consumers have been influenced by this consciousness in their buying behaviors. Hence, this study intended to examine the factors that affect environmentally conscious consumer behavior. To achieve this, the author used the Straughan and Roberts (1999) survey. The results of the findings found that psychographic variables are more influential than demographic variables. Findings of the study are consistent with a number of other studies.  Starting in the 1980s, presses by environmental organizations, competition and academic discussions, a growing environmental consciousness were germinated. Particularly in recent times, climate change, drought and melting of glaciers due to global warming, many societal organizations and local institutions have striven to increase the public’s environmental consciousness. The progress seen in society has been brought about by environmental marketing and literature. It has said that describing environmental marketing is too hard. And it also has been said that descriptions of environmental marketing must change due to the changes that occur in environmental consciousness. This situation is illustrated by chloride-fluoride that incurs dangerous items that damages the environment (Uydacý, 2002: 82). When examining the literature, no common description about environmental marketing can be found. Some descriptions include: The term ''green marketing'' has been described as an organization's efforts at designing, promoting, pricing and distributing products that will not harm the environment (Pride and Ferrel, 1993 from Vlosky et. al., 1999: 125). According to another description, environmental marketing consists of all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs with minimal detrimental impact on the natural environment (Polonsky, 1994).  Environmental marketing was defined as the study of positive and negative aspects of marketing activities on pollution, energy depletion and non energy resource depletion by American Marketing Association (Uydacý, 2002).  It is possible to redouble the descriptions (Donato, 2005; Oxford, 2002 from Çabukoglu, 2003; Gulsoy, 1999). At last, how it is described, the basis of environmental marketing is fulfilling needs of people. In environmental marketing, businesses, included social responsibility, implemented marketing activities oriented to consumer satisfaction and not to give damage natural environment.  Enterprises have been gravitated environmental marketing for many reasons. These reasons were summarized like above. Enterprises perceive environmental marketing as an opportunity to perform their objectives (Keller, 1987 from Polonsky, 1994). Enterprises think that environmental marketing is more social responsible behavior (Davis, 1992; Keller, 1987 from Polonsky, 1994; Shearer, 1990; Freeman And Liedtka, 1991; McIntosh, 1990).  Governments are forcing enterprises to become more responsible.  Environmental marketing activities of competitors put pressure on enterprises to gravitate toward environmental marketing activities (Naag, 1990 from Plonsky, 1994). Cost factors associated with waste disposal or reductions in material usage forces firms to modify their behavior(Azzone And Manzini, 1994).  No matter what reason enterprises have in pursuing environmental marketing, they are going face to face with the consciousness of the consumer. Hence, enterprises must focus their activities to target the variety of consumer preferences. In this context, understanding the environmentally conscious consumer’s behavior is important for enterprises. Thus, the objective of this research Cost factors associated with waste disposal or reductions in material usage forces firms to modify their behavior is to investigate the effectiveness of demographic and psychographic variables on environmentally conscious consumer behavior.  Existing research on environmental marketing have focused on the buying of environmental products, environmental interest and relationships between demographic and psychographic variables and environmental consciousness consumer behavior. Findings of these researches are summarized below.  There exists a great deal of research about the effectiveness of demographic variables on environmentally conscious consumer behavior (Aaker And Bogazzi, 1982; Anderson And Cunningham, 1972; Anderson et al., 1974; Hume et al., 1989; Kinnear et al., 1974; Leonard-Barton, 1981; McEvoy, 1972; Murphy et al., 1978; Roberts, 1995; Roberts, 1996; Roberts And Bacon, 1997; Roper, 1990; Roper, 1992; Samdahl And Robertson, 1989; Tognacci et al., 1972; Van Liere And Dunlop, 1982; Zimmer et al., 1994; Arbuthnot, 1977;  Broker, 1976; Hounshell And Ligget, 1993; MacDonald And Hara, 1994; Roberts – Bacon, 1997; Stern et al., 1993; Antil, 1978; Kasarjian, 1971; Newell And Green, 1997; Schwartz And Miller, 1991; Laroche, Bergeron And Forleo, 2001; Rowlands, Scott, Parker, 2003; Shamdasani et al., 1993; Ay, Ecevit, 2005, Smith, 2001).  Age: Research regarding age and environmentally conscious consumer behavior has resulted in contradictory conclusions. Some of the research that investigate age as an independent variable of environmentally conscious consumer behavior, environmental attitudes and interests have found significant and positive relationships (Roberts, 1996; Samdahl And Robertson, 1989; Straughan And Roberts, 1999, Ay and Ecevit, 2005, Diamantopaulos et al., 2003; D’souza et al., 2006). Yet, others have found significant but negative relationships (Anderson et al., 1974; Tognacci et al., 1972; Vanliere And Dunlop, 1981; Zimmer et al., 1994). Still other researchers have found no relationships between age and environmentally conscious consumer behavior (Kinnear et al., 1974; McEvoy, 1972; Roper, 1992; Laroche, Bergeron And Forleo, 2001; Rowlands, Scott And Parker, 2003; Shamdasani et al., 1993). Gender: The general belief about gender and environmentally conscious consumer behavior is that women display stronger environmentally conscious attitudes than men. However, not all findings have supported this belief. Some of the studies found no significant relationships between gender and environmentally conscious consumer behavior (Arbuthnot 1977; Brooker, 1976; Samdahl And Robertson, 1989; Tognacci et al., 1972, Ay and Ecevit, 2005). Researchers who did find support for the general belief about gender and environmentally conscious consumer behavior include  Hounshell And Liggett, 1973; Robets, 1996; Roper, 1990; Roper, 1992; Stern et al., 1993; Van Liere And Dunlop, 1981; Laroche, Bergeron And Forleo, 2001, Smith, 2001.


World Cruise Industry: Strategic and Financial Choices to Face the Main Risks

Dr. Gabriele Carbonara, Parthenope University of Napoli, Italy



The cruise industry has enjoyed dynamic growth over a period of 25 years, driven mainly by demand from North America that is the main source market, covering two-third of the market, followed by Europe which cover one-fourth of the global market. Competition is dominated by the "Big Three" cruise groups, the Carnival Corporation, Royal Caribbean International and Star Cruises enjoy a combined market share of over 85%.  In the competitive international cruise industry, there are a number of factors that affect companies’ performances. The general economic and business conditions can adversely impact the levels of potential vacationers’ discretionary income and thereby reduce the net revenue yields for cruise brands. Competition among different cruise ship operators and providers of other vacation alternatives, tax laws and regulations can affect company business. Reduction in consumer demand for cruises can result from any number of reasons, including geo-political and economic uncertainties and the unavailability of air service, the international political and economic climate, armed conflicts, terrorist attacks and threats thereof, availability of air service and other world events. Negative incidents, unusual weather conditions or natural disasters, such as hurricanes and earthquakes and the impact of the can cause the alteration of itineraries or cancellation of a cruise or series of cruises. Finally changes in operating and financing costs, including changes in foreign currency, interest rates, fuel, food, payroll, insurance and security costs can impact on business performances. The aim of this article is to identify the main characteristics of cruise industry, the sources of risks and the financial instruments that have to be used to face them.  The groundwork for the modern day cruise industry was laid down as far as the early 1950’s. Following the arrival of air transportation service between Europe and North America, large transatlantic liner companies were forced to seek alternate usage for their ships (Cartwright and Baird, 1999; Ward, 2005). Before the employment of the jet airliner, it took a boring, monotonous fourteen hours to fly across the ocean. After the jet was placed in trans-Atlantic service the time was halved. The wide bodied airliners with comfortable seats, good meals and drink, sound and movie entertainment made the time pass quickly. Business people and tourists found the time saved was of greater value at their ultimate destinations than waiting for a ship to complete its four day crossing. By the early 1970's most of the trans-Atlantic ships were gone (Santangelo, 1984). With a rapidly shrinking transatlantic passenger base, opportunistic shipping companies repositioned their service from transportation to vacation travel. At the same time, lines that led the transition, such as Princess Cruises (1965), Norwegian Caribbean Line (1966; now Norwegian Cruise Line, NCL), Royal Caribbean Cruise Line (1969; now Royal Caribbean International, RCI), and Carnival Cruise Lines (1972), paced the industry. The passenger base was relatively small, in fact in 1970 only 500.000 people took a cruise (CLIA, 2005) because it was an expensive, formal, and relatively lengthy vacation (Frankel, 1987). These factors contributed to the product’s snobby image and limited appeal. Cruise concept at that time was still focused on destination, rather than the ship themselves, and promoted cruising as a highbrow, luxurious experience. As port and itinerary differentiation became minimal between the major cruise lines, the attraction of the ship as a destination in itself became the main marketing focus for the cruise lines. The "Fun Ship" concept coined in 1973 by Carnival Cruise Lines exemplifies this new trend as it became more about the ship than its destinations (Cartwright and  Baird,  1999). By promoting a fun-ship experience, Carnival would send a message that was unique  in the cruise industry. By anchoring the brand with the Fun Ships positioning strategy, Carnival built an unmatched value proposition on the promise of fun, a promise that would direct the company’s marketing strategy for at least the next thirty years. In contrast to the typical cruise customer, the Fun Ships theme attracted a relatively young and middle-class  clientele. Carnival offered an entertainment experience, with the industry’s first full casinos, live music, discos, and wild daytime activities that were a complete change from the image of cruising as shuffleboard and afternoon tea. Also the new ships built in the 1980s reflected the fun concept with bright colours and neon lighting unlike anything before seen in a cruise ship. Carnival pursued first-time cruisers as part of a concerted market-development strategy. To communicate the brand message, Carnival crafted marketing communications that articulated the Fun Ships image by showing the ships and their entertainment architecture, as well as by featuring guests dining, dancing, playing, swimming, sunning, and socializing at an affordable price.  The 1980’s saw the industry mature and become a solid participant on the leisure and hospitality industries. As companies grew so did their ships. Up to the late 1970’s the optimal ship was regarded to be 20,000 tons and able to carry 800-passengers. The "optimum" size would soon be reformulated. As competition within the cruise industry grew, prices were reduced in order to attract a broader mix of passengers. As expected, cruise lines sought out means to reduce their operational expenses and started designing larger ships to maximize the benefits of economies of scale (Mancini, 2003). The early 1980’s saw the arrival of 70,000-ton ships with capacities for 2000 passengers. Lesser operational expenses and an increase in cruise and on-board revenues fuelled the drive for bigger, more efficient and more appealing ships. Since 1980, the industry had grown tenfold to more than nine million passengers in 2004, with an annual growth rate of 8.2 percent, making it the fastest-growing form of leisure travel (Garin, 2005). Whereas luxury brands once held sway, less than 5 percent of current cruise capacity served this market and an even smaller segment of the industry was served by destination or specialty cruiseines that sailed, for example, masted sailing vessels or replica paddle-wheeler ships for river cruises. Roughly one-third of the market, often veteran cruisers, sailed the premium cruise lines but cruising was dominated by brands that served the contemporary segment, a clever label used by cruise marketers to describe the mass market. Competition for the contemporary customer was fierce, particularly between Royal Caribbean International and Carnival Cruise Lines, however was fierce also the competition that come from outside the cruise industry in the form of land-based resorts and hotels in sightseeing destinations.


The Effects of Organizational Downsizing and Layoffs on Organizational Commitment: A Field Research

Dr. Asuman Akdogan, Professor, Erciyes University, Turkey

Ayse Cingoz, University of Nevsehir, Turkey



Responding to today’s quickly changing environments is prevalent these present days, with quality performance depending on a firm’s appropriate size rather than extended size. Researchers’ and practitioners’ views related to firm size began to change in the early 1990s. As a result, some new concepts and initiatives, such as organizational downsizing, began to take place in the field of management and organizations. Organizational downsizing, which is defined as reducing an organization’s use of human and capital resources to correct misalignment and improve performance (DeWitt, 1993), offers many benefits, from increased productivity to creating synergy. Exploiting these benefits depends on “the survivors” attitudes and behaviors. Organizational commitment is one of the attitudes that is affected by organizational downsizing. In this paper, we examined how organizational downsizing affected survivors’ commitment to the organization. A survey was conducted using five firms in the manufacturing industry in Kayseri (Turkey) that were undergoing downsizing.  Data were obtained from 163 employees and was analyzed using SPSS 15.0. The survey revealed that employees’ positive perceptions of organizational downsizing increased organizational commitment, including affective, continuance, and normative commitment.  Since 1990, intensive environmental change has influenced all people and all organizations. Factors such as globalization, transformation to a knowledge economy, adjusting to changing conditions, and national and international crises have all prompted organizations to seek more flexible, simpler, increasingly dynamic, and mobile organizational structures. Within this changing environment, organizations begin to develop strategic alternatives to adapt to new internal and external conditions and to use all available resources effectively. The strategy of organizational downsizing is one of these alternatives. Organizations may implement a downsizing strategy to achieve an appropriate size, to restructure, to adjust to increasing technological advancements, to specialize in their core business, to become more flexible, to cut costs, to remain competitive, to speed the decision-making process, or to execute new ideas quickly (Applebaum et al., 1997; Rabin, 1999; Baron & Kreps, 1999). A growing body of evidence from both practitioner and academic literature, however, indicates that many downsizing efforts have failed to meet their objectives. In many cases, these failures have resulted in trouble. The negative implications of downsizing on remaining employees (survivors) are one of the main reasons organizations fail to meet the above-mentioned objectives.  Downsizing tends to induce reduced commitment among  survivors. Any downsizing process that employees perceived as unfair and unfavorable reduces their organizational commitment.  Furthermore, a reduction in organizational commitment not only results in ascending absenteeism and severance, but diminished productivity. These factors, too, prevent organizations from meeting their downsizing objectives (Meyer et al., 1998; Lâmsâ & Savolainen, 2000; Knudsen et al., 2003). Particularly in case of break even point and crises periods, these kinds of unfavorable implications during downsizing increase the problems an organization experiences, even leading to crises that cannot be solved (Akdoðan & Cingöz, 2007). Macro economic crises experienced in Turkey during the last fifteen years have affected organizations unfavorably. Organizations that are not prepared for crises and are not flexibly structured have favored organizational downsizing to cut costs and increase productivity. Moreover, downsizing is often one of the primary strategies an organization uses to restructure. Another factor that has prompted organizational downsizing in Turkey is privatization. Privatization politics evolved after 1980, and the economic status of the government was modified.  Consistent with privatization politics, it was expected that the government would relinquish its commercial activities, and state economic enterprises would be privatized.  As a result, many employees ran the risk of losing their jobs and most of them lost their jobs. In this context, we aim to: 1) examine the theoretical relationship between organizational downsizing and organizational commitment; 2) reveal how employees of downsized organizations operating in Kayseri (Turkey) perceive organizational downsizing; and (3) identify the impacts of these perceptions on organizational commitment. The results of this survey should guide organizations’ managers who adopt a downsizing strategy about the possible human resource issues that result from downsizing and how to appropriately implement downsizing activities. Organizational downsizing is defined as management’s efforts to reduce their organization’s use of human and capital resources to correct misalignment and improve performance (DeWitt, 1993). In addition, organizational downsizing involves systematically reducing a workforce through an intentionally instituted set of activities through which organizations aim to improve efficiency and performance (Appelbaum et al., 1999b). Cameron (1994) also defines organizational downsizing as “a set of activities undertaken on the part of management and designed to improve organizational efficiency, productivity, and/or competitiveness” (p. 192). Downsizing represents a strategy managers implement that affects the size of the firm’s workforce, its costs, and the work processes” (Cameron, 1994, p. 192). Further, Cascio (1993) defines downsizing as the planned elimination of positions or jobs. In the light of these various definitions, it can be concluded that downsizing is a planned and intentional endeavor rather than a fortuitous event; one that is designed to improve the efficiency and effectiveness of the organization, rather than solely workforce reduction. Downsizing also affects work procedures and processes within the organizations.


The Use of Earning per Share in the Analysis of a Company’s Market Value

Dr. Monica Achim, Babes-Bolyai University, Romania

Dr. Sorin Achim, Babes-Bolyai University, Romania

Sorin Borlea, Babes-Bolyai University, Romania



One of the most common indicators for a company of public interest is the earning per share (EPS), which is the net result produced by a share during a financial period. The role of EPS is to exert a significant impact on the share price and, consequently, an important role in the investor’s decision making. In this article we intend to review the calculation method for the EPS indicator, useful for explaining its evolution through its composing elements. We will also highlight the limits in the use of this indicator and the possible modalities of surpassing these limits. Finally, we will reflect the best techniques for a good analysis of EPS indicator, useful for a best decision making by any investor.  The importance of this indicator in the investors’ decision making lies in the fact that it relates the internal performances of the company and its public image on the market, reflected through the internal stock market ratios. In other words, any stock market investor will begin the analysis required for decision making starting from the EPS indicator.  Companies choose to be cautious, because if their earnings per share do not reach analyst’s forecasts, the short-term impact on company stocks could be negative, causing them to decrease in value. Vice versa, if the reported EPS is higher than expectations, the stocks of the company increase in value.  Due to the importance of this indicator, International Accounting Standard Committee created a specifically standard, the IAS 33, „Earning per share”, requiring the presence of this indicator within the structure of the Profit and Loss Account. Conform IAS 33, all entities whose securities are publicly traded or that are in the process of issuing securities to the public, must comply with the principle’s standard (IAS 33.2). Other entities that choose to present EPS information must also comply with IAS 33 (IAS 33.3).  Headline EPS is included in company publicity and is often computed by an analystThe calculation methodology of EPS is prescribed by IAS 33 principles for the determination and presentation of EPS amounts in order to improve performance comparisons between different enterprises in the same period and between different accounting periods for the same enterprise. Conform IAS 33 EPS would be determined in two ways: „Basic earning per share”- BEPS and „Diluted earning per share”- DEPS.  Basic EPS is calculated by dividing profit or loss attributable to ordinary equity holders of the parent entity (the numerator) by the weighted average number of ordinary securities outstanding (the denominator) during the period (IAS 33.10). The earnings numerators (profit or loss from continuing operations and net profit or loss) used for the calculation should be after deducting all expenses including taxes, minority interests, and preference dividends (IAS 33.11).Ordinary share (also known as a common share or common stock) is an equity instrument that is subordinate to all other classes of equity securities (IAS 33.5). For determining the result per basic share, the net result of the exercise corresponding to the common shareholders is determined as shown below:  Preference securities are different from common securities by the fact that while common securities are given variable dividends according to the result of the financial year, preferential securities are given fixed dividends, irrespective of the results obtained by the company. For calculating the earning per share, the number of common securities is equal to the average of the common securities circulating during the respective financial year. In the EPS calculation, it is more accurate to use a weighted average number of common securities over the reporting term, because the number of common securities can change over time. The average of common securities circulating in the respective financial year reflect the possibility that the value of the share capital should be variable during that financial year, as a result of the variation in the number of securities in circulation at a certain moment. The denominator is calculated by adjusting the shares in issue at the beginning of the period by the number of shares bought back or issued during the period, multiplied by a time-weighting factor. The time- weighting factor is equal to the number of days during which the respective shares were in circulation, as a quota from the total number of days from the period (IAS 33.20-21).  In order to create an example, we will consider the following data: Alfa company obtains at the end of the financial year N, a profit of 10.000.000 $. There are no preference securities and, consequently, no preference dividends to be provided. During the financial year N, there take place the following variations in the number of shares in circulation.


An Examination of Social Disclosures by Islamic Banks: Evidence from UAE

Dr. Marwan Mohamed Abdeldayem, University of Dubai (UD), Dubai, UAE



Islamic banks have grown in size and significance in the world over the past three decades. Not only Islamic institutions have been formed, but also there are many conventional banks have started to offer Islamic banking products and services to their customers both inside and outside the Islamic world. The guiding principles for an Islamic financial system are based on a set of rules and laws, communally referred to as Sharia, which serves to guide the economic, social, political, and cultural aspects of Islamic societies. Sharia is created from the rules dictated by the Quran and its practices, and the explanations rendered by the Prophet Muhammad (PBUH). Applying these principles, a similar approach is employed as that used in previous studies, in particular the study of Maali, Casson & Napier (2006). Therefore, a benchmark set of social disclosures suitable to Islamic banks is adopted in this research effort. These are then compared, using a disclosure index approach, the actual social disclosures contained in the annual reports of six Islamic banks (located in UAE) to this benchmark. Furthermore, content analysis is undertaken to measure the volume of social disclosures. The empirical findings suggest that social issues are not of major concern for most Islamic banks in UAE.  Islamic banks can be taken to mean those banks that claim to follow Islamic Sharia in their business transactions. Sharia requires transactions to be lawful (halal) and prohibits transactions involving interest and those involving speculation. It also requires Muslims to pay the religious tax Zakah. Based on the Quránic prohibition of charging interest, Islamic banking has moved from a theoretical concept to embrace more than 100 banks operating in 40 countries with multi-billion dollar deposits world-wide, Islamic banking is widely regarded as the fastest growing sector in the Middle Eastern financial services market. An Islamic bank is based on the Islamic faith and must stay within the limits of Islamic law or the sharia in all of its actions and deeds.  Four rules govern investment behavior: A. The absence of interest- based (riba) transactions; B. The avoidance of economic activities involving speculation (ghirar)  C. The introduction of an Islamic tax, (Zakah); D. The discouragement of goods and services which contradict the value pattern of Islamic law (haram).  Islamic banks are structured to retain a clearly differentiated status between shareholder's capital and client's deposits in order to ensure correct profit- sharing according to Islamic law. As in Islamic banks all of their products and services provided by them according to Shariá or Islamic concepts and these concepts can be summed up as: It is the process of providing information designed to discharge social accountability, typically this act would be undertaken by the accountable organization and thus might include information in the annual report, special publications or reports or even socially oriented advertising.  In Islamic perspective it is an understanding of the concepts of accountability, social justice and ownership. The early Islamic banks, such as The Farmers' Credit Union (established in Pakistan in the late 1950s) and the Mit Ghamer Savings Bank (established in Egypt in 1963), were based on social initiatives to accomplish social goals and objectives. Mashhour (1996) reported that the establishment contracts of many of the Islamic banks (such as Dubai Islamic Bank (DIB) in 1975, Faisal Islamic Banks in Egypt and Sudan in 1977, and Jordan Islamic Bank in 1978), included some articles requiring the Islamic bank to undertake social activities. For example, the first goal mentioned in the Act establishing the Sudanese Faisal Bank in 1977 mentioned that the bank 'works according to Islamic principles to support the development of society'. The Act that originally regulated Jordan Islamic Bank in 1978 set the goal of the bank as 'aiming to meet the economic and social needs in the field of banking service'. The Act also included a special section about the social services of the bank. More recent acts regulating Islamic banks have included similar statements about the banks' social role (such as, Iraqi Islamic Bank's articles of association in 1993) (see Maali, Casson & Napier, 2006) Reference should also be made to some Islamic financial institutions established in countries where Muslims are a minority. There was a proliferation of interest-free savings and loan societies in India during the seventies (Aharoni, 1982). The Islamic Banking System (now called Islamic Finance House), established in Luxembourg in l978, represents the first attempt at Islamic banking in the Western world. There is also an Islamic Bank International of Denmark, in Copenhagen, and the Islamic Investment Company has been set up in Melbourne, Australia (Beck & Loayza, 2000)  Several theories have been developed in the social reporting  literature trying to answer the question of why companies disclose social information, where such disclosures are not enshrined in legislation (Gray et al., 1995).Theories also investigate for whom social information is provided, since there are many potential users of information disclosed by companies, with different level of importance for the company.These theories of social reporting have offered many explanations for social disclosures, but they have not provided a conclusive answer to either the question of why the actual social disclosures observed in practice have been made or the question of what should be the appropriate form and content of social reporting. Daoud, (1996) argued that in order to make sure that the religious expectations of customers who deal with Islamic banks have been met, Islamic banks appoint a religious auditor (This may be a single adviser, who is usually referred to as the Sharia consultant, or more commonly takes the form of a 'Sharia Supervisory Board). Sharia Supervisory Boards are in-house religious advisers. They issue a report to the users of financial statements certifying that the bank has adhered to Islamic principles' (Karim, 1990). The responsibilities of the Sharia Supervisory Board include ex ante and ex post auditing of transactions, the calculation and payment of Zakah, and advising the bank on its accounting polices (Karim, 1990, Maali, et al., 2006). This board provides the necessary assurance for those who deal with Islamic banks that their religious expectations have been met. The existence of such assurance may reduce the necessity for very detailed disclosure of several issues.


Revised Mean Absolute Percentage Errors (Mape) on Errors from Simple Exponential Smoothing Methods for Some Popular Non-Normal Independent Time Series

Dr. Luh Yu (Louie) Ren, University of Houston-Victoria, Sugar Land, TX

Dr. Yong Glasure, University of Houston-Victoria, Sugar Land, TX



Commonly used Mean Absolute Percentage Errors (MAPE), and author’s revised Mean Absolute Percentage Errors (RMAPE) are applied to measure the forecasting accuracy from different Simple Exponential Smoothing Methods for some popular non-normal independent time series.  Simulation results show that both MAPE and RMAPE can only provide sensitive forecasting accuracy measurements on Simple Exponential Smoothing Methods when coefficients of variation (c.v.) is smaller than 0.4 or is much greater than 4.0 for those popular non-normal independent time series.  The complexity from the ratios of MAPE and RMAPE will mislead researchers on distinguishing the forecasting accuracies from different Simple Exponential Smoothing Methods for those popular non-normal independent time series with moderate c.v.’s.   The complexity from the ratios will be released only when the c.v. is very small, or when the c.v. is very large.  Therefore, when data are from those non-normal independent time series studied in this paper, the Mean Absolute Deviation (MAD) reveals the validity of the forecasting accuracies from various Simple Exponential Smoothing Methods, but not from MAPE or RMAPE. Mean Absolute Percentage Errors (MAPE),, is a widely used accuracy measurement in forecasting with non-negative actual observations, for instance, on monthly or quarterly sales, tourism forecasts, economic indicators, etc. (e.g., Chen, Bloomfield, Fu (2003), Song, Witt, and Jenson (2003), Swanson, Tayman, and Barr (2000), Wang and Liu (2005), and Weller (1989))  However, in practical forecasts such as forecasts on profits, actual observations may end up with negative values.  In this paper, a revised definition for Mean Absolute Percentage Error (RMAPE), , is considered.  Many researchers, like Chatfield (1988), believe that the Mean Squared Error (MSE) and the Mean Absolute Deviations (MAD) are not appropriate forecasting accuracy measurements because a few large observations can dominate the measurement.  Since the MAPE expresses the forecasting errors from different measurement units into percentage errors on actual observations, it is unit free; therefore, the MAPE is probably the most widely used forecasting accuracy measurement of this kind (Goodwin and Lawton, (1999)).  One common criticism of the MAPE is on its existence when the actual observation At is equal to 0.  Makridakis (1993) also argued that the MAPE is asymmetric in that “equal errors above the actual value result in a greater Absolute Percentage Error than those below the actual value”.  Similarly, Armstrong and Collopy (1992) stated that the MAPE … put a heavier penalty on forecasts that exceed the actual than those that are less than the actual.  Ren (2007) pointed out that neither MAPE nor RMAPE is a sensitive forecasting accuracy measurement for comparing different Simple Average Methods with moving periods (p) of  1, 3, 5, 7, 9, and averaging periods (k) of 3, 5, 7, and 9, and on normally distributed independent time series with coefficients of variation between 0.2 to 2.0.   In this paper, we find out that the complexity from MAPE and RMAPE also applies to those popular non-normal independent time series when Simple Exponential Smoothing Method is applied and the coefficients of variations of those popular non-normal independent time series are between 0.4 and 4.0.  31,000 random data are simulated from each of T-distribution with 3 degrees of freedom, Uniform distribution in interval (-½, ½), and Chi-squared distribution with 2 degrees of freedom.  To have their mean be 1 and the standard deviation be the coefficients of variation (c.v.), we make the following transformations. 


An Empirical Study of the Relationship Between Asian and U.S. Stock Markets

Dr. Yi-Wen Chen, Hsing-Wu College, Taiwan

Dr. Jui-Chi Wang, Hsing-Wu College, Taiwan

Mohammed Shaki, National University



The main study wants to focus on the relationship between stock interaction and informative transmission among of nine stock markets in Asian and three stock markets in US. The study tries to use unit root, cointegration test, Error Correction Model, and Granger causality to discuss whether nine Asian stock markets with three US main markets have long-term consistence trend and cointegrative phenomena existence. Meanwhile study Asian markets with US markets have existed investment dispersal effect. Additionally, the study uses impulse response function to detect the change in co-movement relationship between nine Asian markets and American stock markets as exogenous variables change.  Finally, the strongest cointegration relation between nine Asian markets and American markets is examined.  The data are collected from Informed Winners Plus 2000 by weekly and study period is from first week of January in 1990 to fourth week of June in 2007.  Every nation’s economic development is directly impacted by volatility in its stock market. In studying stock market trends, researchers have employed various methods of predicting market performance. Hsiao (1981) used bivariate AR to study the relationship between monetary support and stock prices on the markets of six countries: Australia, Japan, Hong Kong, Singapore, Thailand, and the Philippines. Eun and Shim (1989) used the vector auto-regressive model (VAR) and the Johansen cointegration test to review the relationships of the world’s nine largest exchanges: New York, Tokyo, London, Toronto, Frankfurt, Zurich, Sydney, Hong Kong, and Paris. Fisher and Palasvirta (1990) used cross-spectral analysis to test dynamic market relationships among most of Asia’s 23 exchanges.  Since 1990, global economic development has tended toward liberalization, internationalization, and localization. Asian stock markets have grown especially fast, with total trading volumes that nearly rival the U.S and U.K. markets.  With the exception of Japan, however, Asia’s stock markets are small to middle size. Each country depends highly on its international trade partners, and are thus easily influenced by fluctuations in their larger trading partners’ economies. The present study focuses on the relationship between stock interaction and information transmission among nine stock markets in Asia and three stock markets in US. The study looks specifically at these questions:  1. Do the stock indices demonstrate a consistent long-term trend?   2. Do the stock indices demonstrate co-integrative phenomena?  3. Do the stock indices demonstrate autoregressive phenomena among each other?  4. Do the stock indices demonstrate evidence of existing in causal relationships?  Prior studies have emphasized the relationships among the US, Japanese, and European stock markets. However, those markets are characterized by the strength of their stock systems and the maturity of their transaction processes, while most of Asia’s markets remain in their infancy and their equity systems still lack integrity. The Asian equity markets, especially the smaller ones, are easily impacted by fluctuations in developed countries’ exchanges. The markets of developed nations thus behave differently than do those of emerging countries. To better understand these developing markets, this study employs unit roots, the cointegration test, the VAR model, and Granger causality.  Eun and Shim (1989) used VAR and the Johansen cointegration test to test the relationships among the world’s nine biggest stock markets: those of New York, Tokyo, London, Toronto, Frankfurt, Zurich, Sydney, Hong Kong, and Paris. The study period was from December 1979 to December 1985. The researchers observed a high degree of interaction among the nine markets. Researchers also demonstrated dynamic responses of each market to shock experienced by its cohort. Shocks to the U.S. market in particular transmit rapidly to other nations, whereas the opposite is rarely case. This suggests that the U.S. stock market is the leading market.  Fisher and Palasvirta (1990) used spectrum analysis to test dynamic stock market relationships among the majority of Asia’s 23 exchanges. The study period was from 1986 to 1988. The findings demonstrate a high degree of interdependence among those nations’ stock markets the profound effect of the US stock index on those of other nations’. The degree of interdependence varied; for instance, the Malaysian and Singaporean markets demonstrated greater dependence on the U.S. market than did Japan’s.  Ko and Lee (1991) compared the daily stock returns of the U.S., Japan, and Asia’s “four dragons”: Hong Kong, South Korea, Singapore, and Taiwan. The researchers found lower cross-correlation in the South Korean and Taiwanese stock markets, owing to the two nations’ blue laws for foreign investors. Japan, Hong Kong, Singapore, and U.S. demonstrate a significant correlation in their daily returns, suggesting that their capital markets behave as a closely connected and cointegrative market.  Cheung and Mak (1992) indicated Asia stock markets which include U.S., Japan, Hong Kong, Singapore, Taiwan, South Korea, Thailand, Philippines, Malaysia, and Australia don’t have efficient informative transmission and U.S. stock market is leader of other nations except for Taiwan, South Korea, and Thailand. Japan does not obviously lead the Asian market. Researchers adopted an error correction model and Granger causality to test those stock markets’ short and long-term dynamic relationships.


A Note On “New” Selling Strategies:  Are They Really New or Are they Merely Recycled Strategies that have been in Use for Thousands of Years?

Dr. Chaim M. Ehrman, Loyola University Chicago, Chicago, IL



The basic assumption in creating new and improved selling strategies is, Newer is Better. However, when  a selling strategy has been introduced over  5,000 years ago and is still currently an effective strategy,   it should not be classified as “New.”  Similarly, it would be most unwise to discard these “old” strategies that have been used successfully for thousands of years in favor of “new” strategies. The term new is  incorrect. It is recycled. A typical planning horizon does not go back 5000 years!. For purposes of illustration, 3 Selling Strategies are selected. It will be shown that  these strategies  have been referenced in the Bible (5,000 years ago) and in the Talmud (2,000 years ago). In this paper, it will be shown that indeed the methodology of these strategies were actually used thousands of years ago. The reader  is encouraged to extrapolate these findings to other  effective selling strategies that have been used for centuries.  The three selling strategies that are selected for purposes of illustration are the following: 1. Balance Theory.  2. AIDA.  3.“Yes, Yes”  Strategy also known as Confirming Strategy. In Consumer Behavior, the key focus in buyer behavior is to measure preferences of the decision maker and identify expected purchase behavior.  Balance Theory has been introduced by Heider (1958).  He used the Balance Theory to  introduce triadic relationships. Preference is defined by a positive sign and dislike is defined by a negative the sign. The Triad is the object that may or may not be purchased;  the Decision Maker; and  Significant Other, i.e. ,a person who has influence on the decision maker’s choice behavior.  There are 2 Scenarios: Harmony and Disharmony. When we multiply all signs of the triangle and the sign is positive, there is harmony. If the sign is negative, there is disharmony. When there is Harmony, the Decision Maker essentially gets what s/he wants. When there is disharmony, one cannot predict what the decision maker will do. However, disharmony represents an opportunity for sales. A good message can have direct impact and cause the decision maker to buy a product even though his initial reaction was not to buy. The next paragraph illustrates an application of Balance Theory  in a commercial for a Mercedes Benz. A  recent commercial for a Mercedes Benz illustrates the use of the Balance Theory in Sales. Please note that  the commercial does not say, “Buy a Mercedes Benz!” The commercial introduces disharmony. The husband wants the Mercedes Benz and the wife does not want to purchase this car. The husband states, “Honey, I think we should buy a Mercedes Benz. It is excellent on mileage, maneuverability and comfort.” The wife exclaims, “Oh no. You promised to remodel my kitchen and take me for a vacation to the Caribbean Islands. {At this point, the commercial has introduced disharmony. He wants the Mercedes Benz and she does not. The husband and wife  like each other, so we have a positive sign multiplied by a positive sign, multiplied by a negative sign, which is a negative sign. (See Case 6 in Figure 1). There is an opportunity for a Sale.}  The Husband claims, “Dear, this is not a car. What we are buying is an investment. After 2-3 years, the Mercedes Benz has the highest trade in value compared to any other car. It’s like getting the car for free for 3 years and then you get your money back.” The wife says, “Well, if it’s an investment, I’m in favor of good investments. But don’t forget about remodeling my kitchen and our vacation.” He says, ”Of course not.”  In the entire commercial, there is no statement that says, “Buy a Mercedes Benz. You simply have a negative statement – the wife would prefer a remodeled kitchen. However, there is room for negotiation once you have disharmony, and ultimately the car is sold as an investment, not as a car. The application of the Balance Theory by the Serpent in the Garden of Eden will illustrate that this technique has been around for thousands of years and it works!  The use of the Balance Theory will be illustrated through  triangles.  The variable Y is for the decision maker, “You.” The variable, SO, is the “Significant Other.” The variable O is the “Object” that may or may not be purchased. The sign “+” means positive feelings and  “–”  means negative feelings.   If you multiply all 3 signs on the triangle and the sign is positive, then you have harmony  If you multiply all 3 signs on the side of the triangle and the sign is negative,  you have disharmony. The Balance Theory will be illustrated when the Decision Maker has to decide where to go for the Dinner, and he and his significant other have very distinct  preferences.  Our example addresses the issue of  going out with your girlfriend (SO)  to a steakhouse for Dinner. In terms of identifying a selling opportunity for a competitor, we will address the following: Does the fish house down the block have any selling opportunity to  convince you to go there for Dinner. There are 8 possible cases. See Figure 1 for all possible scenarios.  Case 1: You enjoy steak, your SO enjoys steak, and you and your SO are getting along just fine. The Fish House has no chance. Harmony.   Case 2: You enjoy steak, your SO is a vegetarian and will not eat steak, and you and your SO are arguing and fighting all the time. You will go for the steakhouse to avoid SO. The Fish House has no chance. Harmony.   Case 3: You are the vegetarian, your SO enjoys steak, and you and your SO are arguing and fighting all the time. Clearly, the Fish House is your choice to avoid SO.  There is no need for the Fish House to “sell” its restaurant, it’s a given that that is where you will go. Harmony. Case 4: You are the vegetarian, your SO is also a vegetarian, and you and your SO are getting along just fine. The Fish House is a given and there is no need to sell their Restaurant. You will go to the Fish House  for Dinner. Harmony.  Case 5: You do not enjoy steak, your SO also does not enjoy steak, and you and your SO are arguing and fighting all the time. Now we have uncertainty. Is the discomfort of eating steak greater than the discomfort or seeing your SO, then you will go to the Fish House. If the discomfort of seeing your SO is greater than the discomfort of eating steak, then you will eat steak just to avoid meeting SO, because she does not like steak and will not go there for Dinner. The Fish House has now a chance to convince you the enjoyment of eating fish exceeds the discomfort of meeting SO, and you should eat fish. Opportunity; Disharmony 


Contact us   *   Copyright Issues   *   Publication Policy   *   About us   *   Publication Ethics

Copyright 2000-2017. All Rights Reserved