The Journal of American Academy of Business, Cambridge
Vol. 15 * Num.. 2 * March 2010
The Library of Congress, Washington, DC * ISSN: 1540 – 7780
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The Effect of Organizational Culture on Customer Orientation
Dr. Ceyhan Kilic, New York Institute of Technology, New York, NY
Dr. Turkan Dursun, West Texas A&M University, Canyon, TX
The purpose of this study is to investigate the antecedent role of organizational culture on customer orientation and performance outcomes of customer orientation in the marketing context through a theoretical model. The types of organizational cultures that were researched in this study are market culture, adhocracy culture, clan culture, and hierarchical culture. The performance outcomes that were investigated are relationship development and individual performance. The proposed model was tested over a random sample of 2000 marketers from a broad spectrum of businesses. The final sample consisted of 189 usable responses. A structural equation modeling analysis was used for model specification and hypothesis testing. According to the study results, market culture has a positive and significant effect on customer orientation. The study results also revealed that higher levels of customer orientation lead to higher levels of relationship development and individual performance. Market orientation motivates employees to become more customer-oriented, more committed to their company and job, and more satisfied with their job (Kohli and Jaworski 1990; Siguaw, Brown, and Widing 1994). Having a workforce with a strong market/customer orientation is especially important for a firm in the selling context. If a firm is market-oriented, it is more likely to take a planned action to train its sales employees to make them more market/customer-oriented. Since the marketing concept requires a firm to direct all of its activities toward providing customer satisfaction and establishing long-term customer relationships (Kotler 1980; Tadepalli 1991), there is a mandate for market-oriented firms to adopt customer orientation at the individual level. The term customer-oriented selling was defined as “the practice of the marketing concept at the level of the individual salesperson and customer” (Saxe and Weitz 1982, p.343). Customer-oriented salespeople or sales force can create a high level of customer satisfaction and thus, develop a strong customer base for the company. This notion also applies to marketers within the organization. Customer-oriented marketers help the organization reach its customer satisfaction-related objectives and goals. Past research on customer-oriented selling has focused on measuring and/or modifying the effectiveness of customer-oriented selling and examining the relationship between customer-oriented selling behavior and sales effectiveness (e.g., Brown, Widding, and Coulter 1991; Dunlap, Dotson, and Chambers 1988; Howe, Hoffman, Hardigree 1994; Michaels and Day 1985; Saxe and Weitz 1982; Tadapalli 1995; Thomas, Soutar and Ryan 2001). To date, few studies have examined possible determinants of individual-level customer orientation. These potential determinants include role ambiguity, role conflict (Hoffman and Ingram 1991; Siguaw, Brown, and Widing, II 1994), job satisfaction (Hoffman and Ingram 1991; Pettijohn, Pettijohn, and Taylor 2002; Siguaw, Brown, and Widing, II 1994), job involvement (O’Hare, Boles, and Johnston 1991), internalization of service excellence, job competence, job autonomy (Peggei, Riccardo, and Rosental 2001), organizational commitment (O’Hare, Boles, and Johnston 1991; Pettijohn, Pettijohn, and Taylor 2002; Siguaw, Brown, and Widing, II 1994), sales training, sales skills (Pettijohn, Pettijohn, and Taylor 2002), and job tenure (O’Hare, Boles, and Johnston 1991). In spite of its high importance, the number of studies on customer-oriented selling or individual-level customer orientation has been limited (e.g., Brown, Mowen, Donavan, and Licita 2002; O’Hare, Boles and Johnston 1991). Saxe and Weitz (1982) stated that “little empirical work has examined the effectiveness of customer oriented selling and the factors influencing the extent to which salespeople engage in it” (p.344). O’Hare, Boles, and Johnston (1991) urged that “Although customer oriented selling is an acknowledged practice, a complete understanding of is lacking” (p.61). O’Hare, Boles, and Johnston (1991) noted that “A review of work in the area of selling orientation/customer orientation indicates only limited research has examined the antecedents of this selling style” (p.64). Kelley (1992) urged that “very little research has investigated customer orientation and its antecedents” (p.30). According to Hoffman and Ingram (1991), “Little is known about the factors that affect customer-oriented behavior” (p.31). Recently, Brown et al. (2002) noted that “Despite the apparent importance of employees’ customer orientation to the implementation of the marketing concept in the market-driven company, research on the construct has been limited” (p.111). All of these scholars have tried to draw attention to the lack of empirical research on customer orientation at the individual level and the importance of a better understanding of the customer-oriented selling concept in today’s business world.
Real Output Growth and Inflation Volatility: Evidence from the Adjustment and Economic Recovery Programs in Africa
Hermann Sintim–Aboagye, Ph.D. and Nadeem M. Firoz, Ph.D., Montclair State University, NJ
We investigate the relationship between the uncertainty of inflation rates and economic performance in Ghana, Senegal and Uganda. These three African countries were considered at some point by IMF and World Bank to be promising among Sub-Saharan African countries to emerge from years of economic stagnation. We examine them within the context of IMF & the World Bank’s Economic Adjustment and Recovery Programs. First, we employ the GARCH framework to generate a time series of conditional variances of inflation as proxies for uncertainty of inflation and then test to determine its relationship with real output growth. After dividing the period of examination into pre-adjustment and adjustment eras, we use a regression model to test the nature of relationship between the variables and then employ granger causality tests to investigate direction of this relationship between uncertainty of inflation and the economic performance in the three countries. OLS results in Ghana and Senegal mostly confirm the negative relationship between inflation uncertainty and real growth however contrary to Friedman’s hypothesis causality tests outcomes provide evidence of a bi-directional and positive relationship between inflation uncertainty and real growth. Uganda provide the strongest result in the adjustment period that inflation uncertainty granger causes a real growth. Also, confirms, as existing literature report, the negative impact of inflation uncertainty on real economic growth. Sub-Saharan African (SSA) countries have faced a host of economic downturns and generally poor macroeconomic performance over the last couple of decades. Reasons for apparent perennial economic malaise includes among others, political instability, corruption, poor management of national resources and natural disasters. Under the auspices of the World Bank and IMF, a number SSA countries adopted variations of economic recovery (ERP) and structural adjustment (SAP) programs with a view to improving economic performance. Emphasis has been on controlling inflation, encouraging savings and investments to increase real growth rates, tightening fiscal controls and financial sector reforms. Some countries responded positively to these measures and saw improvements especially in inflation control and economic growth. According to an IMF survey paper three of such SSA countries that demonstrated promise were Ghana, Senegal and Uganda, the focus of this study. (1) This study focuses on the relationship between a moment of one of the primary targets of the IMF and World programs, inflation rates, and economic growth. During the periods of reform in Ghana, Uganda and Senegal, the levels of inflation were lowered and in some cases in very dramatic fashion. Specifically, between 1983 to 1991 inflation in Ghana went from 123% to 10.3%, in Uganda inflation went from 237% in 1986/7 to 3.4% in 1994/5 and in Senegal inflation dropped from 9.8% for the period 1978-84 to -0.4% between 1989-93. (2) These changes in the levels of inflation appear to have created different inflation regimes in each of the three countries respective economic histories. In his Nobel memorial lecture, Friedman (1977) discusses the effect of uncertainty of inflation leading to economic inefficiencies that lower output and employment. Increasing uncertainty affects the valuation of long term contracts and undermines the effectiveness of the signaling mechanism of prices in the allocation of resources in an economy (Jansen, 1989). This environment engenders higher inflation risk premia and increases the cost of financing business growth opportunities. In aggregate, uncertainty lowers economic activity which is captured by declining output growth. Empirical evidence provides support for the inverse relationship between inflation uncertainty and real economic growth. Studies by Wilson (2006), Wilson and Culver (1999) and Davis and Kanago (1996) find a negative relationship between the uncertainty of inflation and real economic growth. This study examines Friedman’s propositions in the context of the effect of IMF & World Bank programs on inflation uncertainty and real economic growth in Ghana, Senegal and Uganda. Employing conditional variances of inflation rates as a proxy for uncertainty, we use ordinary least squares regression and Granger’s Causality models to determine the nature and direction of relationships. OLS results from Ghana and Senegal mostly confirm the negative relationship between inflation uncertainty and real growth with Senegal showing significance at the 20% level in the ‘overall’ and the adjustment periods. Outcome of the granger causality tests for Senegal and Uganda in the pre-adjustment and adjustment periods provide some evidence of significant negative causality from inflation uncertainty to real growth. Results also revealed bi-directional relationship between the two variables in the three countries. The rest of the paper will be presented as follows; overview of the literature on inflation and the uncertainty of inflation followed by discussion on the recovery and adjustment programs adopted by Ghana, Senegal and Uganda, following that we will present the econometric model and results and then present implications and conclusions of the study.
A TQM Perspective of the ISO/TS Global Automotive Quality Systems Standard
Dr. C. P. Kartha, Professor, University of Michigan-Flint, MI
ISO/TS 16949:2002 was developed by global automotive industry to achieve world class levels of product quality and productivity competitiveness. The International Automotive Task Force (IATF), which consists of an international group of vehicle manufacturers and national trade associations, developed these standards in conjunction with the International Standards Organization. This specification aligns existing American (QS-9000), German (VDA6.1), French (EAQF) and Italian (AVSQ) automotive quality systems standards within the global automotive industry. The International Standards Organization approved this new quality standard with the objective of having a single document and registration process that is acceptable to all automobile manufacturers on a global basis. This technical specification is recognized internationally and helps organizations to do business worldwide. This paper examines the development and requirements of this standard from a Total Quality Management framework. One of the most effective strategies evolved over the years for quality improvement has been Total Quality Management (TQM). TQM is a systems approach to management that aims to enhance value to customer by designing and continually improving organizational processes and systems. It provides a new vision for management leadership. It places customers as principal focal point and redefines quality as customer satisfaction. The emphasis is on continuous improvement of processes through employee involvement and empowerment. TQM relies on fact-based decision making. An emerging need for guidelines and standards for TQM implementation forced countries to develop models for self-appraisal and for identifying and addressing quality issues. The first such attempt in the West to develop a comprehensive set of guidelines for achieving world class quality was in the United States. In 1987 the Congress established the Malcolm Baldrige National Quality Award. The purpose was to promote quality awareness, to recognize quality achievements in the U.S. companies, and to publicize successful quality strategies. The criteria used for the award incorporates all major elements of TQM and is often referred to as a de facto definition of TQM. The International Standards organization subsequently developed a set of quality standards, ISO9000, as a model for quality assurance standards in design, development, production, installation and service in 1987. The whole purpose behind the deployment of ISO9000 was to simplify the international exchange of goods and services by developing a common set of quality standards. It is a series of standards on quality assurance and quality management. The standards are not specific to products or services but apply to the processes that create them. The standards are generic and therefore can be used by manufacturing and service organizations around the world. The European Community (EC) nations adopted ISO9000 as the model for international standards for quality and required ISO9000 registration as a mandatory condition for doing business with other nations. The registration implies compliance to documented practices so as to guarantee a consistent level of quality. The ISO9000 standard went through a major revision in 2000 and the revised standard is referred to as ISO9001:2000. It incorporated a number of TQM based ideas such as process approach, customer satisfaction and continuous improvement in its development. A further revision of this standard was done in 2008. However, the changes incorporated in this revision are relatively minor. ISO900:2008 does not contain any new requirements nor does it contain changes to any of the existing requirements of ISO9001:2000. It only introduces clarifications of the existing requirements based on eight years of experience implementing the standard world-wide. Further, the structure and the outline of the latest revision remain unchanged. QS9000, an extended version of ISO9000 standards, is a quality system developed by the Big three automobiles manufacturers in the U.S. in 1994 to addresses some of their specific requirements. It was also introduced as an improvement over the existing ISO standards. QS9000 incorporates continuous improvement strategy into major functions of an organization. It emphasizes a proactive approach to defect prevention as well as reduction of variation and waste. The standard was mainly intended for the automobile manufacturers and their suppliers. Until the introduction of QS9000 the individual manufacturers imposed separate quality requirements on their suppliers, each with its own set of demands. Since the automakers often share the same supplier base, this caused suppliers to spend time and resources to satisfy individual customer requirements which were often redundant. By streamlining the Big three separate requirements into one commonly used set of standards QS9000 virtually eliminated the varying demands and the wastefulness that accompanied them thereby making it easier for the suppliers to do business with the automakers. Automakers around the world developed customized quality management systems such as the QS9000 in the U.S., AVSQ in Italy, EAQF in France and VDA6.1 in Germany. With globalization of automobile industry, a need emerged to develop a single quality management system that is acceptable to automobile manufacturers and suppliers around the world. The first such system, ISO/TS 16949:1999, was developed in 1999. This included requirements of ISO9000:1994. With the subsequent revision of ISO9000 in 2000, a revised and more comprehensive quality management system was published in March 2002 as ISO/TS 16949:2002
Validation of the Industrial Relations Orientation Self-Assessment Questionnaire
Dr. Stuart H. Warnock, Metropolitan State College of Denver
Dr. James H. Browne, University of Texas at Tyler
Dr. Peter J. Billington, Colorado State University at Pueblo
The Industrial Relations Orientation (IRO) Self-Assessment provides a perceptual evaluation of unions and unionization. This measure is comprised of the following three dimensions: 1) perception of unions’ impact on workers; 2) perception of unions’ impact on organizations; and 3) perception of unions’ image as portrayed in the media. This instrument addresses a long-standing need in business education and research by providing a validated self-assessment instrument that can be used to profile one’s affect, positive or negative, toward unions and unionization. Empirical evidence shows that two of the three sub-scales of the IRO Self-Assessment exhibit good reliability while the third is marginally reliable. Evidence of the dimensionality of the three subscales is provided along with norming data based on a national sample of student respondents. Finally, suggestions for future research involving the IRO are suggested. Labor unions have played a significant role in enhancing the material well-being and in improving not only the working conditions but also the upward social mobility of workers (union and non-union) in the United States during most of the 20th century (Lebergott, 1993; Mischel & Walters, 2003; Schmitt et al, 2007). Organized labor’s victories in the 1900s have been wide-ranging and include: the weekend, the eight-hour workday, employer-funded health care, a more humane workplace and Social Security” (Haslam, 2006). Unfortunately, some of the gains attributed to unionization during the previous century are now seen by many to be eroding as the first decade of the 21st century draws to a close. The call for union concessions and givebacks are being reported with more frequency in the media as evidenced by recent congressional hearings pertaining to the structure that the government bailout of Wall Street and the Big-3 automakers should take (Jones, 2008; Krisher, 2009). Coupled with the call for labor unions to give back much of their hard-won gains is the long-term trend characterized by a waning proportion of the labor force as being represented by unions for purposes of collective bargaining. As Table 1 shows, from 1985 to 2007, the percent of wage and salary workers who are union members, or who are covered by unions is decreasing; a trend most pronounced in the private sector (BNA, 2008). In an effort to offset the decline in the percentage of the workforce that is unionized or covered by union contracts, organized labor proponents are promoting passage of the Employee Free Choice Act (EFCA). The act would likely increase the number of workers represented by labor unions, and subsequently bolster the power of labor unions, by revising the union representation election process. Specifically, the EFCA would do away with the secret ballot election. Rather than requiring employees to cast their vote during a union representation election via secret ballot, a card-check certification system would be used. The EFCA requires only that “the majority of an organization’s employees have signed union authorization cards … If enough employees sign cards, the union will be certified—no vote required” (Berlinski, 2008). Whether or not the global financial crisis that began in 2007, and which continues into 2009, will result in more union give-backs or an increase in the power by organized labor is yet to be seen. Nevertheless, the role that organized labor will play in the coming years will in part be determined by how members of the labor force, and their counterparts at all levels of management -- whether they be first-line supervisors or board room executives – perceive unions and unionization, either favorably or unfavorably. Widespread antipathy toward unions on the part of rank-and-file workers will lead to further declines, whereas, favorable attitudes shaped by the cruel dynamics of the current crisis have at least the potential for creating a resurgence in unionization. Much is known about the impact of attitude on behavior (Fishbein & Ajzen, 1973; Thomas & Schofield, 2004). Negative attitudes of workers toward unions has been correlated with a decline in union membership (Brooks, 2004). As one study highlighted, an individual’s attitudes about unions better predicted one’s willingness to join a union than demographic and socioeconomic variables (Krahn & Lowe, 2007). In short, positive attitudes toward unions predict behaviors that are supportive of union membership and related union activities while negative attitudes toward unions are associated with behaviors that run counter to favorable union support or involvement. A better understanding of the various dimensions that comprise one’s attitude toward unions, or one’s “industrial relations orientation” (IRO), is needed. In addition, an instrument that can reliably measure this affect has significant potential benefits.
Four Tools (Under the Umbrella of Continuous Improvement) to Help Auditors Prevent/Detect Frauds
Dr. P. N. Saksena, Assistant Dean, Director of Graduate Studies, Indiana University South Bend, IN
The fact is that fraud is on the rise. This is evident from the trends reported in several reports issued by the Association of Certified Fraud Examiners (ACFE). Between 2002 and 2008, losses, in terms of the U.S. Gross Domestic Product, have risen from $600 billion to $994 billion and the percentage of annual revenue lost to fraud has risen from 5% to 7% (ACFE, Report to the Nation, 2002, 2004, 2006, 2008). Fraud has ramifications that affect several constituents. Fraud has the potential to negatively impact the company in which it is committed, its work force, its vendors and customers, its industry, the individuals and companies involved in its governance process, the local economy which it serves, the U.S. capital market, the U.S. economy, and also the world economy. With every case of fraud there is a bit of trust that is lost in humans, in the governance and regulatory process, and in free markets. Another fact is that while the responsibility of external auditors to detect fraud has increased over time (SAS 82, SAS 99), a majority or frauds are detected through other means and not through the efforts of the external audit process. This needs to change. The purpose of this paper is to discuss four tools, under the umbrella of continuous improvement, which will help external auditors conduct more thorough audits in an effort to prevent/detect frauds. It will also help the auditing profession regain its status as a significant player in the fraud prevention/detection area. The four tools discussed in this paper are training, environmental awareness, professional skepticism, and leaning from experience (see Figure 1). For these tools to be successful, an overarching goal of auditors should be continuous improvement. The fact is that fraud is on the rise. This is evident from the trends reported in several reports issued by the Association of Certified Fraud Examiners ACFE). From 2002 to 2008, losses, in terms of the U.S. Gross Domestic Product, have risen from $600 billion to $994 billion and the percentage of annual revenue lost to fraud has varied between 5% to 7% (ACFE, Report to the Nation, 2002, 2004, 2006, 2008). Fraud has ramifications that affect several constituents. Fraud has the potential to negatively impact the company in which it is committed, its work force, its vendors and customers, its industry, the individuals and companies involved in its governance process, the economy which it serves, the U.S. capital market, the U.S. economy, and also the world economy. With every case of fraud there is a bit of trust that is lost in humans, in the governance and regulatory process, and in free markets. In the past, the public accounting profession was held to a higher standard while being able to self-govern, control entry to the profession, establish a code of conduct and engage in peer review. More recently, the profession has been intimately connected with the ups and downs in the major cases of frauds. Arthur Andersen, most directly, was affected in the Enron fraud. Other frauds followed in WorldCom and Sunbeam which brought the public accounting industry to the front and center. This led to investors questioning the honesty and independence of public accountants. Its practices were investigated and new regulations were put in place through the Sarbanes-Oxley Act (SOX) (Sarbanes-Oxley Act 2002). Additionally, in an open letter to the Public Company Accounting Oversight Board (PCAOB), three former Chief Accountants of the SEC stated, “The foundation upon which investor confidence is built is an audit of the financial statements by an independent third party, the independent auditor. However, the past several years have shown numerous cracks in this foundation.” (Rezaee 2004). One issue that has arisen because of these scandals is the “expectations gap” that exists between what society expects from auditors and what auditors perceive as their responsibility. The growing public demand for accountability is captured in a study conducted by the AICPA in 2003. The study noted that over 80% of those surveyed believed the job of external auditors is to prevent fraud (AICPA, The CPA Letter, 2003). While this is a common public perception, the current auditing standards (SAS 88, SAS 99), do not require auditors to prevent fraud, nor are they designed to detect fraud, other than financial statement fraud. In other words, a whole host of occupational frauds (except financial statement fraud) would go undetected through the procedures performed during a financial statement audit despite the standards being followed.
Developing an Essay Approach to Business Ethics Assessment
Dr. Loretta Cochran, Dr. Dave Roach, Dr. Kim Troboy, and Dr. Tracy Cole
Arkansas Tech University, Russellville, AR
Unethical choices and behavior in organizations damage individuals, negatively impact organizations, and reduce society's confidence in institutions. Many business schools teach ethics both in specific ethics courses and as a component of other courses as a means of integrating ethics into the curriculum. However, some question the impact of these efforts on students’ ethical reasoning. This pilot study examines the validity of an essay-format business ethics assessment. The assessment instrument addresses four dimensions of students’ ethical thinking: recognizing ethical issues in hypothetical business/engineering cases, consideration of stakeholders, reasoning and thinking critically in the analysis of these cases, and developing ethical solutions. The pilot instrument was administered to seventy-four sophomore and senior business students as part of a business school’s effort to assure and assess student learning. The students answered questions about the cases in an essay format. Five faculty members, blind to whether the essay was produced by a senior or sophomore, rated students’ analyses. Average ratings were higher for seniors. Faculty who rated the essays identified several opportunities for improvement of the assessment instrument and rubrics. The revised instrument and rubrics will be used in a full-scale assessment for both business and engineering students. The problem motivating this study is the growing concern over the ethical choices and behavior of both individuals and corporations and the subsequent effect on society. For several years, the idea that ethics should be taught as a component of business and professional programs has been gaining in popularity. Ethics has been a key topic area in management education for at least 20 years (Saari, Johnson, McLaughlin, and Zimmerle, 1988). One reason for increased attention to ethics and ethics assessment in business schools is the publicity due to cases where faulty ethical reasoning and unethical choices have negatively impacted individuals and organizations and reduced society's confidence in business organizations. Responding to the public outcry in the wake of financial misconduct by firms such as Enron, Blackstone, Tyco, WorldCom, and others, the United States Congress passed the Public Company Accounting Reform and Investor Protection Act (PL 170-204), commonly known as the Sarbanes-Oxley Act (Sarbanes, Oxley, and LaFalce, 2002). This law changed the procedures and business practice documentation in publicly-traded firms (Sarbanes, et al., 2002). Personal liability is now attached to the company official who signs the corporate tax return (Buyer, 2005). In addition, rules strictly regulate the verification and reporting of internal financial information. In this context, organizations and society expect graduates who understand the importance of ethics. The external auditing requirements of Sarbanes-Oxley reinforce this expectation (Buyer, 2005). A second reason for increased attention to ethics and ethics assessment in business schools is the possible culpability of business schools in ethical lapses by organizations (Ghoshal, 2005). Overemphasizing the goal of maximizing shareholder wealth while ignoring or minimizing concern for other stakeholders such as employees and customers may have produced an ideology where business school graduates learn to downplay ethical considerations (Ghoshal, 2005; Kochan, 2002). Viewing individuals as motivated primarily or solely by self-interest, management and organizational theory has developed a negative, “gloomy vision” (Hirshman, 1970) of individuals where management involves developing mechanisms for closely controlling human behavior (Ghoshal, 2005). This view is self-fulfilling (Gergen, 1973). For example, managerial assumptions about employee behavior lead the supervisor to closely monitor employees. Employees, feeling that they are not trusted, reduce their performance and commitment to the organization (McGregor, 1960; Strickland, 1958). Though there are some exceptions like stewardship theory (Davis, Schoorman, & Donaldson, 1997) and positive psychology (Cameron, Dutton, & Quinn, 2003), the view of individuals as self-interested actors who do not consider the interests of others remains the dominant paradigm in management theory (Ghoshal, 2005). A third reason for increased attention to ethics and ethics assessment in business schools is research that suggests a possible link between ethics and performance. For example, several studies with pharmacy students and pharmacy practitioners report that the ability to engage in moral reasoning is positively correlated with individual performance and perceived efficacy when faced with ethical dilemmas (Latif, 2000; Sheehan, Husted, Candee, Cook, & Bargen, 1980). At the organizational level, some research suggests a positive correlation between performance and social responsibility (McGuire, Sungren & Shneeweis, 1988). Moreover, Cortez, Silva, and Areal (2009) report findings that suggest investors may add social considerations as a criterion for investments without sacrificing financial performance. Possible reasons underpinning a positive correlation between social responsibility and an organization’s financial performance include reduced risk exposure from lawsuits and improved employee and customer goodwill (McGuire et al., 1988).
Updating a Business Environment Management Track
Dr. Constance Bates, Dr. Ronnie Silverblatt, and Professor Jack Kleban
Florida International `University, Miami, FL
With accumulating pressure on firms to develop sustainability programs, the question is, what should business schools do? A logical response is to develop business curricula that include sustainability. This article outlines the review and updating of a business environment management track in the College of Business. The old track, which focused on business, ethics, crisis management and community service, was redirected to focus on the broader issue of sustainability. An environment course listed in the program was re-designed to move beyond the 1970-80 issues of pollution and waste control to developing sustainability projects. A new course was added called Green Management. The track was modified to prepare students for green collar jobs. Additionally, sources on sustainability are presented, including texts, readings, cases, and websites. Our examination of our Business Environment curriculum began with administrators. They wanted justification for maintaining a track with only a handful of student participants. It became the task of the Curriculum Committee of the Department of Management, where the track is housed, to review and recommend the disposition of this track. The administration suggested deletion as the number of participants was so low. The Curriculum Committee, composed of professors who did not teach in the program area, evaluated the situation. The Committee began by looking at the environmental impact on business today. They noted that there are many urgent environmental issues influencing business policies. The rising cost of energy and natural resources is driving up the cost of production. Firms are developing green projects to reduce these costs by finding alternative sources of energy, different types of energy, and re-using both energy and resources in some way. The high cost of oil drives the search for grain fuels. This has distorted economies around the world. As corn and sugar producing resources are diverted to produce fuels (like ethanol), there are fewer resources producing food. This drives up the cost of grain around the world. Poor countries are having a hard time feeding their populations at the higher grain costs. The rising cost of petroleum has also led to deforestation from Brazil to Indonesia as farmers seek more land to grow corn, sugar, or palm oil for fuel. The deforestation has led to soil erosion, and some believe, global warming. There are also political and legal issues that are important. As farmers engage in deforestation or diversion from food production, citizens complain to their governments. Leaders try, then, to enact policies to protect the environment and preserve resources. This sets up a struggle between farmers and governments with the citizen/consumer in the middle. Other political and legal issues are cost and product safety. Consumers like products that are cheap, yet consumers don’t like to hear about sweatshops. Also, cheap products are occasionally unsafe. Yet, making a safer product makes it more expensive. Ingredient substitution has gained worldwide attention recently as producers seek to reduce costs with cheaper, unsafe ingredients. Global business and worldwide distribution means that one is in cost competition with everyone in the world. As a result, there is enormous pressure on firms today to reduce costs. The movement of people from one country to another has also led to a flow of flora and fauna across country borders. For example, when the melaleuca tree was introduced into south Florida, it took over local plants and shrubs and dominated the landscape. This Australian tree was used to surviving in a dry climate, so in the humid Florida environment it thrived where it had no delimiting factors or predators. Unfortunately, it uses up 30% more water than local trees, and gives less oxygen back to the atmosphere than local plants. Animals like the South American python have begun to dominate in the Everglades where they eat alligators, and lionfish from Asia have begun to dominate in the Atlantic Ocean around Florida, stinging people and poisoning local fish. Killer bees have migrated from South America to the United States, threatening people and crops. It is no wonder that President Obama’s stimulus plan has earmarked $150 billion dollars for green projects. His plan is also expected to create 5 million new green collar jobs.
Internationalization: Learning Curve and Transfer Costs. A Case Study: Harman International -Revel Brand
Dr. Frank F. Cotae, International School of Management, New York City, NY
The paper looks at the process of transferring manufacturing capabilities to Asia through the prism of the costs related for creating the desired value/products. A growing number of firms from developed nations, such as the USA, are increasingly seeking lower overhead costs through a higher degree of internationalization for their manufacturing operations. The case study of Harman Electronics is utilized as it prompts a cautionary stand with regards to the learning curve and transfer of costs needed for successful internationalization in China. The process of internationalization is advanced as being a tributary variable to transfer and learning costs considerations. Internationalization is defined as the “process by which firms increase their awareness of the influence of international activities on their future, and establish and conduct transactions with other firms from other countries (Beamish/Morisson/Inkpen/Rosenzweig, 2003).” The concept is further defined by Hollensen (2007) by defining it as “doing business in many countries, but often limited to a region.” The rationales for MNE choosing to internationalize their operations are segmented into three prongs: reduce risk, increase profitability and allow for learning from the core capabilities offered by global partners (Glaum and Oesterle, 2007). While most related literature seems to reconcile internationalization with a MNE’s performance there are voices questioning the linear relationship between a firm’s degree of globalization and its level of performance (Hennart, 2007). As internationalization is consistently seen as the basis for increased profits, the international transfer of manufacturing operations has become a model for corporate strategy. While MNE define such transfer as internationalization of operations this is rarely the case as each firm’s operations are rarely completely international (Hennart, 2007) instead focus on areas seen as the best choice for reducing production cost (Contractor, 2007). Harman International transfer of manufacturing operations from the US to China is seen as another example of a corporation opting for international transfer so as to reduce costs. Beamish et al (2003) describe the internationalization as “two-dimensional: inward and outward-looking dimension”. Exports require services of brokers, agents and foreign subsidiaries to retail the products. The quality of the service is not assured. Licensing requires a strenuous process of qualifying and monitoring of licensee’s actions. Joint ventures are considered superior performers versus the outright full acquisition of foreign endeavors (Beamish, 2003) as they require a lower level of investment. Harman International, a US based corporation, is engaged in the development, manufacturing and marketing of audio products and electronic systems. Co.'s businesses are organized into three segments: automotive, consumer and professional. The Consumer segment designs, manufactures and markets audio, video and electronic systems for home, mobile and multimedia applications (Harman Annual Report, 2007). The main retailing channels vary depending on the brand and price range. As such the lower priced product line - Apple iPod accessories- are sold at larger stores- Best Buy, Fry’s Electronics and Target-, while the higher end speaker systems retail through smaller and specialized network or dealers. The division’s products are marketed worldwide under brand names including JBL, Infinity, Lexicon, Harman/Kardon, Mark Levinson and Revel. The last brand -Revel-, a consumer product, is a speaker system recognized throughout the world for superior sound quality and high performance. It should be noted that this in-home speaker system retails at high end prices. Example a pair of Revel speakers could retail upwards of US$25,000, making them a specialty consumer items. While Harman’s 2008 Annual Report boosts of worldwide product presence, the company’s largest markets are in Germany and the United States. Consumer manufacturing facilities are located in California, Massachusetts, Mexico and China. The loudspeaker manufacturing capabilities include the production of high-gloss lacquer and wooden veneer loudspeaker enclosures, wire milling, voice coil winding and the use of computer controlled lathes and other machine tools to produce precision components. During the iPod accessories boom Harman entered into a business relationship with a Chinese manufacturing vendor with a clear strategy of reducing production costs and increasing profitability. Harman, initially a leader in the manufacturing and retailing of Apple iPod accessories had seen its market share dwindle as more competitors entered the market. The home theater systems long time coming is a trend that continuously refines itself. First, is started as a simple subwoofer and several speakers were adorned on the walls; second it shaped into the demand for high quality sound systems; third it progressed to in-wall units that are preferably wireless. Each change needed to be matched by an adjustment in operational strategy. A speaker unit that is positioned in the wall has placed the well finished and elegant wood boxed Revel speaker outside the market as a certain consumer segment shifted away from these visually appealing units, representative of Revel product line. The shift was also detrimental to the value vs. price relationship as audiophile consumers were able to get an “in-wall” speaker at a lower price than the elegant Revel. Competition in the consumer home electronics market remains intense with Bose, Klipsch, Polk Audio, B&W and Boston Acoustics as Revel principal competitors. The industry has been dominated by large Asian manufacturers with China at the forefront.
Ethanol: The Least of Two Evils?
Flory Anette Dieck Assad, Ph.D., Instituto Tecnologico y de Estudios Superiores de Monterrey, Mexico
Is it possible to defend biofuel production surrounded by a world geopolitical environment of famine?; Is there really a world dilemma about “feeding” the means of transportation versus “feeding” human beings?; What actions are being taken by the world towards a food crisis?; What strategies should the world follow in order to avoid global warming in an ethical and ecological manner?; This Academic Case was written with the purpose of promoting class discussion. It may be used with permission from the author who will provide a detailed Teaching Note for educational purposes. The case is based on the information provided by the institution where the case was researched. Some data has been altered in order to maintain its confidentiality. On a rainy afternoon in Davos, Switzerland, a man is pensively walking home after a long day at work. Once home, he lovingly hugged his wife Hilde, as always, but now with a shady look. While he rested he asked himself: which will be the planet where future generations will live in?; will we have enough time to present adequate solutions to the economic, political, ethical, and technological dilemmas that our planet demands? With his eyes staring into emptiness, he remembered what happened on March 26, 2008 when the media announced the collapse of a gigantic ice block in the Antarctic. Scientists commented about the grate danger of global warming because a slab of 415 squared kilometers in West Antarctic—7 times larger than the island of Manhattan—broke off from the one thousand five hundred years old Wilkins Antarctic ice shelf. His 70th birthday was coming on March 30th, but he was not in the mood to celebrate it in any way. The only thing that the Swiss economist—Klaus Martin Schwab— could think about was on the dilemmas that were discussed in the “World Economic Forum” (WEF) held in Davos, Switzerland early in 2008.
The Investigation of Country-of-Origin Effect-Using Taiwanese Consumers’ Perceptions of Luxury handbags as Example
Dr. Hsin-Tien Han, Yuanpei University, HsinChu, Taiwan
The country-of-origin (COO) or “Made in…” label phenomenon has attracted extensive attention from academic researchers and marketers for over 35 years. Moreover, the country-of-origin effect will be more progressively salient because of rising global integration. The purpose of this study was (a) to examine the effect of COO on Taiwanese consumers’ perceptions of luxury handbags; (b) to explore the relative importance of the COO and the brand name when consumers evaluate luxury handbags; (c) to explore consumers’ purchase intention and the price they were willing to pay for luxury handbags made in different countries, and (d) to generate practical implication for manufacturers that consider moving their production into less reputable countries. Based on 233 surveys, the COO does appear to be an important information cue for product evaluation and the influence is stronger than brand name. With regard to the price expectation, Taiwanese consumers are willing to pay a higher price for the reputable COO (France and the U.S) and expect greater price discounts for the less reputable COO (China). The findings imply that utilizing a COO can be the source of competitive advantage, and help formulate better manufacturing and marketing strategies.
Exploring Web-based Services of Value to a Potential Niche Segment of Biotechnology Researchers in Malaysia
Dr. Abu Bakar Sade and Dr. Wan Fadzilah Yusoff, Multimedia University, Malaysia
Mohd Khairul Shualdi, Universiti Putra Malaysia, Malaysia
This study explores Web services that may be of value to a potential niche segment of biotechnology researchers in Malaysia. An online questionnaire was administered to samples of biotechnology researchers in Malaysia. The results show that the biotechnology research community has all the prerequisites to adopt Web-based (online) services that are of value to them. E-mail, instant messaging, and forums are the preferred communication tools for this segment’s online community. With the Internet’s flexibility, the shape of the Web site and the needs to which it caters can be easily changed and adapted over time as the community evolves. Niche segmenting strategy therefore provides a rich avenue for sustainable Web-based services, especially with the ever increasing proliferation of online services. Rapid developments in communication technology (particularly telecommunications) have brought a number of breakthrough and new alternatives to marketers. The most promising of these technologies is the Internet. The Internet is already the must-have platform for a huge number of services that marketers can choose to deliver and communicate Web-based services. Web sites and e-mail are the most popular forms, but others such as blogs, moblogs, podcasts, and videocasts are gaining popularity. With the proliferation of Web-based services, the crucial challenge is to identify services of value to a particular segment of the market.
The Environmental Responsibility of Multinational Corporation
Weng Kun Liu, Doctoral student, Argosy University, Orange County, California
The effects of the environmental destruction are getting worse increasingly. The corporations want a strong economic development, and they are aware that many of the environmental policies are in conflict with their economic growth. Corporation need to find a way to promote both economic growth and environmental protection. On one side, governments could played major roles in controlling and supervising the environmental issues. On the other side, corporations could improve the environment and quality of life by adopting the application of innovative technology and the strategic environmental management. However, some environmental problems may be beyond the margin of legal standard such as the issue of environmental ethics. Because multinational corporations run their businesses around the world, they especially need to recognize ecological ethics and social responsibilities in order to solve the near- and long-term problems of environmental pollution. By enhancing corporate environmental responsibilities and ethics, both the healthy environment and the strong economic development could be achieved optimistically and effectively. Nowadays, several well-established environmental trends are shaping our future of civilization including population growth, rising temperature, shrinking cropland per person, shrinking forests, and the loss of plant and animal species. First, world population grew by 3.7 billion in the past 50 years with 2% of the world average annual birthrate (Potts, 2007). At this birthrate, the world population is expected to reach approximately 9 billion in the next 50 years (Gilland, 2006). The second trend affecting the entire world is a temperature rise caused by the increasing atmospheric concentrations of carbon dioxide (CO2). As a result, the modest temperature rise phenomenon is melting ice caps and glaciers.
Financial Risk Tolerance: Scale Development and Analysis of Determinants
Elif Akben Selcuk, Bogazici University, Istanbul, Turkey
Asli Elif Aydin Altinoklar, Bilgi University, Istanbul, Turkey
Gaye Karacay Aydin, Bogazici University, Istanbul, Turkey
In this study, we develop a scale to measure individuals’ level of financial risk tolerance. Then, we investigate the differences in financial risk tolerance between public and private sector employees using a convenience sample from Turkey. Furthermore, demographic, socioeconomic, and attitudinal determinants of financial risk tolerance are investigated. Our results showed that for our sample, private sector employees are more financially risk tolerant than public sector employees, which indicates a possible self-selection effect. In addition, younger respondents and males were found to be more financially risk tolerant. General ambiguity tolerance was also found to be positively related to financial risk tolerance. Finally, our findings point out that private sector employees’ financial risk tolerance is higher for those with more work experience, suggesting that a socialization effect might be in place. Risk is defined as “the extent to which there is uncertainty about whether potentially significant and/or disappointing outcomes of decisions will be realized” (Sitkin and Pablo, 1992, p.10). Financial risk tolerance, on the other hand, is defined as “the maximum amount of uncertainty someone is willing to accept when making a financial decision” (Grable, 2000, p.625). Recently, owing to the global financial crisis that started with the spread of defaulted sub-prime loans, the importance of financial risk tolerance has been widely realized. Moreover, individuals became more conscious about the riskiness aspect of all financial decisions.
Moderating Effect of Powerful Customer on the Competence-Firm Performance Relationship
Sonic Wu, Ph.D., National Taiwan University, Taiwan
It is questionable whether powerful customers impel or impede firm performance. To survive, most firms would direct their resources in whatsoever capacity to fulfill the currently secured and powerful customers. We ask whether such strategic orientation leads them to a trap of usual core capability which makes them be in a difficult position to redirect necessary competence to catch up with the new demands once emerging with a considerable strength in the future. The marketing scholars assert that powerful customer is essential to the success of innovation and business performance. However, the strategy scholars argue that powerful customer leads to incremental product development, myopic research and development program, and decline in industrial competitiveness. In this research, I employ a comprehensive data of global firms in a fast-changing TFT-LCD industry to resolve this puzzle. Results suggest that with powerful customers, firms direct their resources and capabilities mainly to serve these customers and perform worse. In contrast, without powerful customers, they engage more in building and leveraging competence, and hence their performance is improved. It is questionable whether existing demands from powerful customers actually impel or impede firm performance. In order to survive and sustain, most firms would direct their resources in whatsoever capacity to fulfill the requirements of currently secured and powerful customers. While they are comfortable with the current capability to secure the current necessary financial resources from existing powerful customers,
A Game Theoretical Analysis of Benefit Equilibrium among Shareholders of Transnational Joint Ventures
Dr. Chen-Kuo Lee and Yeong-Bin Lee, Ling Tung University, Taiwan
In the thesis, the game theory is used to analyze the relationship of shareholders in transnational joint ventures(TJVs). The research finds, when one of the joint venture parties has the control over ownership, the total profits at the equilibrium will be less than that of an equal-interest subsidiary, and the larger the controlling interest is, the more the total profit will be reduced. The research also finds that “Controlling Interest” does not necessarily equal to “Right of Control”. Even with a minority interest, they can still exercise control over TJVs through many other means. Foreign Direct Investment (FDI) is the fundamental means and one of the major measures undertaken by a transnational corporation (TNC) to engage in international production to develop and expand both international and internal markets. It is characterized by foreign ownership or controlling of income gathering assets in other countries (West, 1969; Stopford and Well, 1973; Frank, 1989; Geringer and Hebert, 1989; Blodgett, 1991; Mjoen and Tallman, 1997). In addition to the establishment of a foreign subsidiary, Transnational Joint Ventures (TJVs) is another measure undertaken by a transnational corporation to compete in a global or multinational marketplace(Porter and Fuller, 1986; Harrigan, 1987; Schaan, 1983, 1998; Gupta and Govindarajan, 2000). Having been regarded as a strategic weapon, Transnational Joint Ventures(TJVs) is one of the components in the operating network of a transnational corporation.
Unlevered Beta, Financial Leverage, and Diversification in the Equity REIT Market
Hsiou-Wei Lin, Professor, National Taiwan University, Taiwan
Ming-Hsueh Chen, Ph.D. Candidate, National Taiwan University, Taiwan
This study expands on previous studies regarding the financial risk of equity real estate investment trusts (REITs) by focusing on the effects of geographic and economic diversification in terms of unlevered beta and financial leverage. We examine the interrelationships among the variables regarding the total risk of these firms and explore several research questions. First, we explore the association between geographic as well as economic diversification and unlevered beta. Second, we investigate the relationship between the level of diversification and REIT firm’s’ capital structure. Our evidence indicates the measures of diversification for REIT firms do not help explain the variability of their debt ratios. In contrast, the degree of economic diversification appears to a critical variable in terms of unlevered beta. This paper examines the extent to which the degree of diversification explains the variability in Real Estate Investment Trust (REIT) firms’ unlevered beta and capital structure. Over the last few decades, real estate portfolio diversification has been accomplished via investments in properties located in various geographic and/or economic regions. However, early work on geographic diversification found little benefit for REIT firms in terms of diversifying among broadly defined regions (Miles and McCue, 1982) or narrowly defined regions (Giliberto and Hopkins, 1990). Specifically, several studies found insignificant relationships between the degree of geographic diversification and equity REIT returns (Hartzell, Hekman, and Miles, 1986; Mueller, 1993; Fisher and Liang, 2000).
Managing Demand Uncertainty for Control and Dummy Wafers
Yi-Shu Yang and Dr. Yung Chia Chang, National Chiao-Tung University, Taiwan, R.O.C.
This paper considers control and dummy wafers problem with multiple periods and multiple products under demand uncertainty in a wafer fabrication. A chanced-constrained model is developed to minimize the total cost and to meet the demand for multi-products according to the service level requirements set by its customers. To decide an appropriate C/D wafer quantity for each grade at each period, this model is solved by an integrated approach which includes three phases: (i) transforming the empirical cumulative demand data into a set of data which is approximately normal distributed, (ii) transforming the chance-constrained programming model into an equivalent integer one, and (iii) using rolling horizon method to solve the problem dynamically. An example problem is studied for providing insight information to meet customer service levels and unfolding effective inventory management options. Control and dummy (C/D) wafers are necessities to manufacturing processes in semiconductor wafer fabrication. Control wafers are used in processes, for example layering, patterning, and doping, to ensure product quality and process stability by monitoring manufacturing parameters. Dummy wafers are used in process of heat treatment to distribute heat uniformly inside the furnaces. Any shortage of C\D wafers may cause the loss of equipment capacity, production move, and reduction of process yield.
Improving Student Mentoring through Self-Awareness-Based Pairing
Dr. Robert McKeage, Dr. Len Tischler, Dr. Jerry Biberman and Clyde Rosencrance
University of Scranton, Scranton, PA
This article is focused on improving the mentoring of college students by business people. Literature reviews have positively associated mentoring with higher levels of job satisfaction, career advancement, and overall work-life success. Organizations today are increasingly promoting mentoring and many business schools are also. Nonetheless, many undergraduate students are not getting the full benefit of their mentoring program. This article proposes improvement of the process for college students by using guided meditation to increase the protégé’s level of self-awareness related to the mentoring process. The purpose of this paper is to propose a way to improve the mentoring of college business students by corporate professionals and managers. The term "mentor" can be trace to its roots in Greek mythology. Homer, in the Odyssey, wrote about Mentor (actually Athena, in disguise) as the "faithful and wise" friend of Ulysses, King of Ithaca. Before starting out on his 10-year journey, Ulysses entrusted Mentor to act as a teacher to his son Telemachus. From this beginning, the term "mentor” has been defined as “as a relationship between an older, more experienced mentor and a younger, less experienced protégé for the purpose of helping and developing the protégé’s career” (Ragins & Kram, 2007 p. 5). One can find examples of mentoring dating back for centuries
The Global Compact: Social Responsibility at Global Scale
Dr. Ahmet Mentes, European University of Lefke
International investment opportunities increasing at an unprecedented rate along with globalization have made companies the most important actors of our social and economic lives. Globalization has broadened the meaning and the scope of social responsibility for companies. In this respect, the United Nations has determined the principles to guide companies to fulfill their social responsibilities. This initiative which consists of ten basic principles is called as “The Global Compact.” The Global Compact is the explanation of social responsibility at global scale. In this study, concepts such as, ethics, business ethics and social responsibility which are the basic elements of the Global Compact principles are explained. Suggestions are made for more widespread and effective use of these principles. The most critical of these suggestions is the necessity that the relation between participating companies and the United Nations Global Compact should be grounded on a legal framework. Industrial Revolution has resulted in rapid growth of the companies and increase of their importance for the society. The economic developments due to growth of the companies and increase of their importance in the social domain have triggered the social changes as well. As a result companies have started to improve their social qualities. The idea that the companies should have liabilities towards the society beyond realizing their own objectives has gradually become widespread.
Public Goods in a Market Economy: The Case Study of China
Bill Yueyun Chen, Ph.D., Professor, University of the West, Los Angeles, Rosemead, CA
This paper discussed the dilemma of public goods provision under a market economy system. In a free market system, entrepreneurs have insufficient incentives to supply public goods so governments must play key roles in this respect. However, direct government involvement has some serious side effects. The paper explores how the efficiency of the public good provision can be improved, which is particularly by using some theories, principles and management methods that have been successfully used in the private goods markets. The case of China’s public goods provision is utilized to illustrate the relevant issues. On September 22, 2008, an official from China’s Commission on Economic Development and Reform said that the biggest mistake in China’s health care reform in the past is over-emphasizing the roles of the free market system and trying to make its health care systems market-oriented; as a result, governments’ spending/investment in the sector has been proportionally lower, healthcare expenses too high to the ordinary people, and quality/services often too low. Similar problems happened in China’s higher education system reforms. China has tried to reform its higher education system and make it more market-oriented. As a side effect, some good students with poor financial resources can not afford to enter colleges while some students with bad academic performance but rich successfully entered into prestigious universities through different ways.
Process Integration in it Portfolio Management
Mohan Sharma, Philadelphia, PA
Rajneesh Sharma, Ph.D., Saint Joseph’s University, Philadelphia, PA
In the past few years, many Information Technology (IT) departments have been vastly expanded or created, and new processes have come into existence. With these increasing numbers of elements, organizations face the challenge of process integration. They must seek to integrate what are often rapidly changing sets of procedures to make processes work synergistically and maximize the return from IT. Current process frameworks and guidelines such as Capability Maturity Model Integration (CMMI) or Project Management Body of Knowledge (PMBOK) fall short of the challenges posed by process integration in Information Technology. This paper provides the basis of a framework for IT process integration. To do this, two groups of integration strategies are considered. First, we discuss horizontal and vertical integration strategies as a single group. We then address a second group of initiatives consisting of foundation building, innovation, and automation as complementary strategies to the first. Finally we discuss future trends in process integration. Every aspect of Information Technology (IT) is evolving: Architecture, technology, processes, governance, tools, systems, size, complexity, the functionality of applications and packages, and the many new ways in which IT is being used and is anticipated or en route to being used.
The Response of Organizations in Crisis Conditions
Dr. Ionut Pandelica, Dr. Amalia Pandelica and Dr. Bianca Dabu
University of Pitesti, Romania
This paper is an extensive analysis of bought international business press and academic literature in the field about crisis management and related fields. The paper is grounded on the premise that the psychology of the crisis is an important component of the present international context and psychological factors play an important part in the alteration of consumer’s behavior. That is why an essential condition for companies is to know and understand these aspects in order to handle the crisis successfully. The central message of this paper is that the response of the organizations at present should be based on a mix between outside and inside prospects within a high reaction speed. At the same time, we presented the organizational response as an adaptation process through change. Since September 2008, we began to carefully supervise the national and intenational business press in order to see which are the effects on various national economies of the financial crisis that began in the USA. It is amazing how fast the financial crisis extended and transformed into an economic crisis worldwide, all national economies being affected at a certain extent. Likewise, it is unbelievable how a crisis generated another crisis. For example, at the end of 2008, business analysts launched pessimistic forecasts regarding the evolution of national economies in 2009, but they considered scarcely the issue of social crisis generated by the economic crisis.
Leadership Styles of Expatriate Managers: A comparison between American and Japanese Expatriates
Pisal Yooyanyong, Asian University of Science and Technology, Thailand
Dr. Nuttawuth Muenjohn, School of Management, RMIT University, Australia
Strong competition in international markets has increased the demand for multinational corporations (MNCs) to send managers to manage their operations in a host country. It is believed that expatriates’ leadership is one of the prerequisite factors that contribute to the success of expatriates and described as a one of core requirements of global competency. In the current study, Twenty-three American and Twenty-five Japanese expats in Thailand were examined on their styles of leadership. Ten leadership components were investigated to determine the leadership styles of the American and Japanese expats and compare the results to identify the similarities and differences. T-test results revealed that there were significant differences on four leadership components (Decision Making, Visionary Ability, Training Succession and Supervising) and non-significant differences on six leadership aspects (Communication Skills, Achievement Orientation, Performance Feedback, Motivation, Leadership behaviour and Followers’ Performance). Implications for expatriates on leadership effectiveness are also discussed. The need of expatriate managers who can mange cultural differences effectively have become more important issue because the business the world business gets more complex (Schein, 1992). As the increasingly proliferation of expatriate managers in many nations including Thailand, which incorporates various national expatriate leaders such as Americans, Japanese, Australians , and British, question has always been arisen as to how these expatriates lead their host-nation subordinates, how they behave and what leadership style mostly employed. In practice, there is no single leadership style that works well in every context (Yukl, 2006) and expatriates need to be able to adapt different leadership styles to different cultural environment.
The Role of Advisory Board in Developing Market Sustainable IT Curriculum
Dr. Mustafa Kamal and Kerry Henson, University of Central Missouri, Warrensburg, MO
Offering a dynamic IT curriculum for college degree program that is market compatible requires a constant focus on changing knowledge / skill sets for entry level IT positions. The curriculum has to be customer driven rather than technology driven. An Advisory Board representing IT industry plays a critical role in shaping curriculum. As the global competition in IT market intensifies, IT developers / engineers, in addition to being technologically knowledgeable and competent must also understand the business view of the organization. Our research finds that more and more IT businesses in the USA are looking for university graduates that are competent in soft business skills in addition to their hard IT skills. The power of outsourcing basic computing technology such as computer programming, database design, customer service operations and system development, to mention a few have changed the conditions of employment in IT. Many of the projects that went off-shore did not perform well due to failure to consider important factors in business dimensions. Although many of these core activities have come back and are here to stay, more and more of the non-core activities such as those mentioned above, among others will continued to be outsourced. Institutions have learned and are continuing to learn what can and should be outsourced.
The Issue and Strategy about Independent Innovation of Private High-Tech Enterprises in China
Dr. Duan Xiao-Hong, Huazhong University of Science and Technology and
Chinese University of Geosciences, China
Nowadays the worldwide independent technological innovation not only enhances the competence ability of enterprises, but also reduces national technological dependence on foreign countries. Near the end of the transitional period when China joined into the WTO, a great number of the foreign enterprises have rushed into China. Chinese companies have faced more severe economic and competitive environments. From the perspective of the maintenance status of patents, the innovation ability of domestic patentee is weaker than that of foreign patentee (Qiao, 2008). Therefore, it is profoundly significant for the national companies' sustainable development to speed up their innovation ability. Neglecting the establishment of the evaluation to the entrepreneur will cause the business economic efficiency being low and the enterprise's sustainable innovation being immersed in trouble (yang et al, 2008). To change the Chinese competence status in the world, government must promote country’s ability of independent technological innovation. But when advocating country’s innovation, it is more important to think Chinese private high-tech enterprises which are main force of China high-tech industry development to improve the ability of independent innovation. This thesis analyzed the issue of Chinese private high-tech enterprises in process of cultivating their independent innovation based on Chinese present situation, and put forward some useful solving strategies: firstly, enhance the dominant position of enterprises independent innovation based on Market-oriented; secondly, invest Omni-directionally; thirdly, actively construct regional innovation culture.
Intangible Assets (or Lack Thereof) Association with Firm Distress
Dr. Zane Swanson, University of Central Oklahoma, Edmond, OK
Prior research has investigated the upside value of investing in intangible assets and knowledge creation. This study looks at the downside of not investing in intangible assets. The lack of intangible assets suggests firms are not creating future opportunities and at the worst may be subject to financial distress. The empirical analysis indicates that firms without intangible assets are more prone to bankruptcy and financial distress. The effect of intangible assets upon firm characteristics is a debatable issue in the present knowledge economy. This analysis examines the question from a new perspective on the research frontier of the value of intangible assets to the firm. The empirical findings also serves by providing information about complete markets with respect to intangible asset ownership. A previously researched proposition is that intangible assets (e.g., patents) are indicative of intellectual property and correspondingly higher firm value (Eberhart et al. 2004). The current analysis examines the flip side of the coin: that insufficient intangible property acquisition indicates a lack of firm prospects. The proposition is translated into a testable empirical analysis where a firm’s bankruptcy prospect (Altman’s Z score) is analyzed with respect to existence (or lack) of intangible assets. The results are consistent with the proposition that firm without intangible assets in the knowledge driven economy are more likely to go bankrupt or be in financial distress.
Effects of Individual Differences on Choice Strategy in Goal-Directed Online Shopping
Dr. Pei-Fen Li, Ming Chuan University, Taipei, Taiwan
This study examines consumer information-processing and decision-making in goal-directed online shopping environments, focusing on the effects of individual differences on the process of selection of decision strategies. The study proposes that prior Internet shopping experience and perceived self-efficacy in information processing have an impact on consumers’ strategy preferences. The findings indicate that consumers with greater amounts of prior Internet shopping experience tend to display higher levels of perceived self-efficacy in information processing. As a result, a more detailed and elaborate information processing is more likely to be selected in an online shopping context. Theoretical and managerial implications of findings are also discussed. The emergence of the Internet has changed the way information is communicated and processed. Although the interactive nature of the Internet has enabled consumers to make informed product choices more conveniently, information processing in online shopping environments has presented a challenge, to a certain extent, for the consumer depending upon an individual’s level of knowledge, experience, and cognitive ability. If this new interactive medium is going to evolve in the way expected, inevitably consumer information and decision processes in the Internet-mediated shopping environment will change and become more complex due to its unique nature. The context of electronic communications has enabled consumers the ultimate freedom to choose and process information. Nevertheless, such freedom may result in either the reluctance of consumers to process information due to heavy cognitive burdens, or may increase their motivation to search for more information (Ariely, 2000).
The Internal Mechanisms to trigger Industry Cluster: Five Restraints and Three Positive Feedback Cycles - Model the Dynamics of the Industry Cluster
Dr. Weijun He, Professor, China Three Gorges University, China
Jiangtao Tan, Doctor candidate, Hohai University, China
Xiongying Guan and Na Liu, China Three Gorges University, China
The Internal Mechanisms to trigger an industry cluster and to choose the appropriate space are always difficult and important problems that have troubled academic researchers. This paper starts with an investigation on the constraints to the build-up of industry cluster. A dynamical model of industry cluster has been developed to simulate the process from the start-up to the establishment of an industry cluster. Based on this model, three positive feedback cycles have been discovered. As a core component, the driving forces and constraints of an industry cluster are complex in both structure and functionality. According to how it is constituted, the impetus of an industry cluster includes all the elements that, as the driving force, contribute to the initialization and development of the cluster. Early scholars concentrated on the understanding and describing industry cluster production power. The research on the impetus of industry clusters has gone through some major changes. The focus was on the recognition of the impetus, and the analysis of the attributes and functionality. This has been shifted to investigating on the development of the impetus and their interaction. Compared with the formation dynamics, the impetus of industry cluster has more influential attributes that impact the cluster in a more sustained mechanism.
An Empirical Study of Customer’s Emotion and Satisfaction in China
Sun Hong, Huazhong University of Science and Technology, Wuhan, Hubei, China
The purpose of this study was to examine consumption emotions that influence a consumer's satisfaction in the Chinese context. A quantitative research design was adopted for this study. The author divided the product consumption emotions, which was elicited by marketers’ control- lable factor in product consumption, into Attribute - level Emotions (ALE) and Beyond Attribute – level Emotions (BALE) and proposed a theoretical model to depict the relations between ALE, BALE and satisfaction. A self-completion questionnaire was developed and ministered to consumers in China. The results showed that Attribute- level positive emotions and negative emotions, beyond Attribute - level negative motions all have significant impact on satisfaction. The importance of customer satisfaction to the success of consumer goods manufactures (Mittal and Kamakura, 2001; Voss et al., 1998) and to the success of retailers (Darian et al.,2001) has been well documented. Customer satisfaction is regarded as a primary determining factor of repeat shopping and purchasing behavior. The greater the degree to which a consumer experiences satisfaction with a retailer, for instance, the greater the probability the consumer will revisit the retailer (Wong and Sohal, 2003). There is no doubt that significant scholarly attention has been devoted to the area of customer satisfaction(Fournier and Mick，1999;Garbarino,1999;McQuitty et al.,2000;Oliver,1999).
Effectiveness of Technology Transfer Measures in Improving SME Productivity: An Empirical Study of Taiwan
Jih-Ming Hsu, SJD Candidate, Golden Gate University, San Francisco, CA
Small and medium enterprises (SMEs) have to overcome their limitations of economic scale by utilizing technology transfer to survive in the market place. In order to promote SME technology transfer and enable SMEs to make practical use of advanced and innovative R&D achievements, Taiwan’s government and legislature have established certain measures to promote technology transfer between government agencies and SMEs in recent years. These measures have brought about some impacts upon the productivity of SMEs. This article conducts an empirical study on the effectiveness of the measures in improving productivity of SMEs. It discusses whether the measures live up to the expectations of SMEs- increasing productivity and provides insight on the influence of the measures. We found that most of the technology transfer measures in Taiwan have a positive effect on improving the productivity of SMEs. The current measures might not have an immediate problem for improving the productivity of SMEs. Nevertheless, it is necessary for the Taiwanese government to improve the effectiveness of the SBIR program to accomplish the function of SMEs in the economy. Small and medium enterprises (SMEs) have been the catalyst of economic development in many countries (Organization for Economic Cooperation and Development, 2006; Smith, 2006; Priest, 2003; Gross & Allen, 2003; Gutterman & Erlich, 1997). However, given their small size and limited resources, SMEs usually lose ground against large firms (United States Congress, 1995), such as marketing forces and manufacturing efficiencies (Jones & Jain, 2002).
Drawing Up a Model of Financial Standing of a Company
Dr. Monica Violeta Achim, Babes-Bolyai University Cluj-Napoca, Romania
Dr. Sorin Nicolae Borlea and Dr. Ludovica Breban, Vasile Goldis University, Arad Romania
This paper intends to create a modern model of own financial standing, based on the SWOT analysis method, combined with evaluation charts methods and attempting a qualitative and quantitative evaluation both of the standing and of the evolution of different economic-financial indicators that contribute to the general economic-financial standing of the company. The model is both complex and synthetic, since it is able to synthesize all the analytical information through a simple evaluation using an evaluation chart expressing both a qualitative point of view (critical point, weak point, uncertain point, strong point, forte) and a quantitative point of view (by ascribing scores from 1 to 5). In the actual context of economic globalization, time means money for every investor. The decision of investing on the capital markets of various geographical locations have to be grounded by return calculations that are both fast and efficient within an objective and professional financial diagnosis. The notion of diagnosis comes from the Greek diagnostikos and represents someone’s ability to discern. It implies the ability to analyze and comprehend performance (Deaconu. A. 2002:p.30).
The Relationship between Job Dimensions and Job Satisfaction of SME Entrepreneurs in Thailand
Dr. Chinintorn Nakhata, Bangkok University, Bangkok, Thailand
The research question guiding this study is: To what extent are job dimensions related to the job satisfaction of SME entrepreneurs in Thailand? The modified version of the Job Diagnostic Survey (JDS) developed by Hackman and Oldham (1980) was sent to 500 SME entrepreneurs. Based on 392 usable responses, SME entrepreneurs perceived task significance and task identity as the job dimensions most present in their jobs, while perceiving feedback as the least. They had a moderate level of job satisfaction. Skill variety, task identity, and task significance had weak positive relationships with job satisfaction, while autonomy and feedback had moderate positive relationship with job satisfaction, suggesting that SME entrepreneurs in Thailand should focus on improving the job dimensions of autonomy and feedback. SME entrepreneurs have become a major labor force in Thailand since the economic crisis of 1997. In a context of widespread restructuring, reengineering, and downsizing of large enterprises and of a reduction in opportunities for career advancement, a number of Thai people have decided to become SME entrepreneurs instead of continuing as traditional employees in large enterprises (Wasuntiwongse, 1999). Realizing the importance of SME entrepreneurs to economic and social development, the Thai government has given its full support to enhancing the performance of SME entrepreneurs. To further stimulate entrepreneurial activities in Thailand, it is important to understand which job dimensions SME entrepreneurs derive job satisfaction from.
Dynamic Alliance Formation: The Role of Partner’s Partner in a Structural Balance Approach of Dynamic Networks
Kuen-Shiou Yang, National Taiwan University, Taipei, Taiwan
Firms are often confronted with incentives and risks of strategic alliances with business partners. However, firms tend not to initiate strategic actions alone without considering the relationships with their partners. Therefore, this paper builds upon the structural balance model to study the roles of the incentives and risks in alliance partnership between partners and competitors. In this paper it shows that the structural balance in the relationships between a focal firm and its partners as well as competitors exerts great influence on the dynamics of alliance formation. Specificalliance in a structural balanced situation, a focal firm is more likely to form partnerships with its partner’s partner that possesses complementary resources to the firm. Yet, in the structural unbalanced situation, the competitive relation between a focal firm and its partner’s partner lowers the likelihood of alliance formation between the focal firm and the partner’s partner. Research limitations and future directions are also discussed in this paper. Firms can overcome their weakness, create value, and enhance performance by allianceing with others. Through strategic alliances, firms have intensives to get benefits from their alliance members including accessing complementary resources and capabilities (Burgers, Hill, and Kim, 1993; Chung, Singh, and Lee, 2000; Hamel, Doz, and Prahalad, 1989 ;Hamel, 1991; Harrigan, 1985; Lorange and Ross, 1992), competitive organizational learning (Argyris and Schön, 1978; Bettis and Prahalad, 1995; Dosi, 1988; Fiol and Lyles, 1985; Hamel, 1991; Moingeon and Edmondson, 1996; Prahalad and Beettis, 1986), and strategic response to the competition (Gimeno, 2004).
Learner Performance at the Preschool I Ching Summer Camp in Malaysia
Dr. Shinn-Jong Lin, Shu-Te University, Taiwan, R.O.C
This study examines learner performance at the I Ching Summer Camp, a Chinese cultural education activity organized by the Creativity Kindergarten in Johor, Malaysia. Learner performance is assessed on three levels (cognitive, psychomotor, affective), and three individual factors are tested (gender, age, parents' level of education) for their effect. The results show that learner performance was in general good, and that individual factors do have significant effects on performance. Malaysia is a multicultural country. Wikipedia (2008) states that ethnically Chinese school children in Malaysia must study two languages, in addition to all of the other subjects learned, making a total of ten subjects. With so many subjects to be covered, Chinese language has lost its position of unique importance in the eyes of the Chinese community, and knowledge of Chinese culture has inevitably suffered. In this highly connected 21st century, there has been an explosion of human knowledge, of science and computer technology, and of multiculturalism. This situation seems to reflect the broadness and flexibility of the I Ching, which is a distillation of Chinese classical wisdom. Elements from the I Ching can be incorporated into modern education to make the I Ching more accessible and applicable to the modern world.
Stock Market Volatility: A Comparison of Vertically Integrated Technology Companies
Dr. Neil Terry, Dr. Anne Macy, and Dr. Amjad Abdullat, West Texas A&M University
Stock market volatility has been omnipresent in the information technology sector. This manuscript compares the stock performance of vertically integrated information technology companies across six different twenty-month periods between the years 1996-2006. The five companies included in the study are Apple, IBM, Hewlett-Packard, Sun Microsystems, and NEC. The focus periods include the browser era, the Y2K era, the post-Y2K era, the post-9/11 era, the outsourcing era, and the mobile/wireless era. The lowest stock market returns are in the Y2K or post-9/11 eras for all five firms. The highest stock market returns for the five companies in the study are spread across four different eras. The results imply that while vertically integrated technology companies have a tendency to decline in price in a down market, positive return periods in a bull market are not highly correlated within the industry. The information technology sector has transformed the economy and changed the basis of competition (Sampler, 1999). Information technology boosts the efficiency of the decision-making process and is perceived by many executives as an integral part of their business strategy (Molloy and Schwenk, 1995; Bartholomew, 1998). Investors have struggled to comprehend the potential and the limitations of information technology companies as the industry has continued to evolve over time. Not surprisingly, the volatility of stock prices for information technology firms has been extreme as many companies struggle to survive a couple of years after reaching a peak stock valuation. On March 10, 2000 the Nasdaq composite peaked at an intra-day high of 5,132 and declining to half its value within a year before finding a bear market bottom on October 10, 2002 at an intra-day low of 1,108.
The Gender Connection to Grades Between Online and Traditional University Courses
Dr. Marian C. Schultz, The University of West Florida
Dr. James T. Schultz and Dr. Thomas Sieland, Embry-Riddle Aeronautical University
This study sought to determine if there is a significant difference between the overall course grades which students received in online, versus traditionally delivered courses. The study utilized data from two University of West Florida courses, one graduate and one undergraduate, for a five year period. The research hypothesis stated that there will be a significant difference between the final course grades of female, compared to male students, who take an online course. The study also hypothesized that the overall course grades of male students taking online courses would be significantly different, when compared to those taking the same course in the traditional classroom delivery method. The study, composed of 837 individuals, found that there was no significant difference in overall course grades between female and male students taking either graduate or undergraduate online courses. The study also found that there was no significant difference between the overall grades of males taking an online course, as compared to a traditionally taught classroom course. The purpose of this study was to determine if there is a significant difference in the overall course grades between females and males who took the same class through the online delivery method. Additionally, the study sought to determine if there is a significant difference in the overall course grades between males who had taken courses online, compared to those who took the same class through the traditional classroom delivery method. Two courses in the Department of Management/MIS at the University of West Florida were selected for this study. Only two courses were utilized in this study since the number of courses offered in both delivery methods is limited.
Role Conflict, Role Ambiguity, Job Satisfaction, and Burnout among Financial Advisors
Courtney Fichter, Ph.D. Candidate and Dr. John Cipolla
Lynn University, Boca Raton, FL
Financial advisors have begun to take on a more “counselor-type” role from the traditional broker. Therefore, they have become more susceptible to role stressors (role ambiguity and role conflict) and decreased job satisfaction that could lead to burnout. The purpose of this study is to examine and measure demographics of financial advisors, levels of role conflict and role ambiguity, as well as job satisfaction and burnout to determine the relationships between these variables. The theoretical framework includes Maslach’s Burnout Inventory (1981), Herzberg’s Motivation-Hygiene Theory (1959), and role theory (Katz and Kahn, 1966, 1978). The corresponding measurement tools used to collect data will be Maslach’s General Survey (1996), the abridged Job Descriptive Index and the Job in General scale developed by Smith, Kendall and Hulin (1969), as well as Rizzo, House, and Lirtzman’s (1970) measures of role conflict and role ambiguity. The objective of the study is to extend current literature by testing a “new” target population of professionals and determine the significance between demographics, role conflict, role ambiguity, job satisfaction, and burnout among financial advisors. Results may help financial employers identify areas of role stress and job dissatisfaction to help reduce burnout and address employee-related issues such as turnover, absenteeism, and employee health.
Webnography: A New Tool to Conduct Marketing Research
Pradeep K. Tyagi, Ph.D., San Diego State University, San Diego, CA
Online communication is increasingly becoming an important part of consumers’ life. In order to understand various aspects of consumer behavior in a contemporary society, marketing researchers have to focus on web as a social forum. Webnography or web-ethnography is an attempt to utilize information generated in natural context on the internet. In this study, we review the literature relating to webnography and conducting online research. Current approaches of data collection are critically examined and implications for marketing research are discussed. The issue of anonymity as it pertains to validity of research data is also be examined. World Wide Web mediated communication is increasingly becoming a critical source of consumer information. While there is a large body of research on the internet and Computer Mediated Communication (CMC), the potential of web generated information in marketing research has remained largely unexplored. “Webnography” or web-ethnography is an attempt to utilize information generated in natural context on the internet. The context is described as natural because in an online world information is generated from natural conversations among consumers. In marketing research, the focus of most online research has been mainly to conveniently and efficiently collect survey data from respondents. However, in order to understand social life in a contemporary society, we have to focus on web as social forum (Puri 2007).
Accountants’ Values and Ethics: Self-Regulatory Outcomes
Dr. Marilyn Waldron, University of South Australia
Dr. Edwin Doty, East Carolina University
Business failures commonly reveal questionable behavior by executives, including accountants. The exponential growth in bank failures in the 1980s is an example where the public blamed the accounting profession for lacking ethical and professional behavior. Self-regulation implemented by the accounting profession between the years 1988-1991, as a response to the public’s criticisms, provides a unique opportunity for research of the accounting professions’ ethics. The present study examines Certified Public Accountants’ (CPA) ethical decision making subsequent to the self-regulation. Compared with CPAs’ ethics prior to regulation, the evidence indicates a shift in behavior toward improved ethical decision making. The results point to the efficacy of the accounting profession’s self-regulation in response to the public outcry. Since the 1960s, the business environment has fallen under siege by the public calling for higher ethical standards. Professionals in all areas of US business, including accountants, have been threatened with lawsuits in the face of public dissatisfaction. The public has been losing confidence in the capacity of Certified Public Accountants (CPAs) to deal with ethical challenges due to their part in business failures. A particularly volatile period for business occurred in the 1980s when bank failures escalated. The resulting onslaught of litigation heightened the accounting profession’s awareness of the necessity for improved ethical conduct. The profession’s response was self-regulation in the period 1988-1991, which encompassed a move to raise standards and increase training to improve ethical practices.
GA-Assisted Backpropagation Algorithm for Building Neural Network Forecasting Models
Dr. Kua-Ping Liao, Kun Shan University of Technology, Taiwan
Although the backpropagation algorithm can be used to find an optimal combination of the values of weights and biases quite efficiently, it can become trapped by a local minimum and thus the combination found may not be globally satisfactory. In addition, there are still the problems of choosing the learning rate and the number of hidden nodes. The proposed approach is to use a genetic algorithm to deal with them. Cross-validation is used to avoid over-fitting and enhance the forecasting performance of the neural network model built. Neural networks are computation-intensive models inspired by the study of the human brain. The development of efficient algorithms and the improvement in computer processing speeds greatly facilitate the building of these kinds of models. The basic building unit of a neural network is a neural cell, which is called a neuron. Neurons are connected together by synaptic weights to form a neural network. In order to carry out a task successfully, normally a neural network with many neurons is needed. A feedforward neural network consists of a few layer of neurons connected by synaptic weights and signals are only allowed to flow in a forward direction. Normally each neuron is allowed to have a bias, which is used to increase or decrease the net input to a neuron by a certain amount. There are three kinds of layers: the input layer, the hidden layer and the output layer. Reference can be made to Figure 1. The input layer is used to receive signals from outside the neural network. The output layer consists of neurons which send signals outside the neural network. The hidden layers receive signals from the input layer, process the signals, and then send the signals to the output layer. By changing the synaptic weights and biases, a neural network can be adapted to serve a specific purpose.
Quant Segmentation using the Multi-Method Multi-Criteria Approach: The Way of the Future
Dr. Chaim M. Ehrman
In the field of Marketing, there are 2 distinct strategies the Marketer can choose. One strategy is to focus on mass markets. The assumption is that everyone can purchase your product, and the marketer’s goal is to maximize product usage. A good example would be the marketing strategy for Coca Cola: The appeal is for young and old; wealthy and poor; Highly educated and Grammar School dropout. The focus is on mass markets. The alternative to mass markets is market segmentation. Kotler and Armstrong (P. 185) define Market Segmentation as follows: “A Marketer has to try different segmentation variables, alone and in combination, to find the best way to view the market structure.” In today’s economic climate, the strategy of appealing to mass markets is not appealing at all. Money is tight and marketers have limited funds to promote their product. Similarly, consumer spending is declining and consumers are reluctant to spend when the item is not necessary. Segmentation will allow the marketer to focus on the consumers who are likely to spend money for your product. The usage of marketing dollars will be far more efficient when one uses market segmentation. In the next paragraph, the issue of qualitative and quantitative segmentation will be addressed. Qualitative segmentation defines the market structure by behavioral patterns using qualitative research. The Prism method labels consumer groups by their propensity to purchase items. For instance, “Furs and Wagons” are the nouveau riche consumers who suddenly became wealthy and were not wealthy before this point.
A Literature Review on the Relationship of Capital Structure and Product Market Predation
Tzu-Hui Pan, Associate Professor, China University of Science and Technology, Taiwan, R.O.C.
The study attempts to review the related researches about capital structure choices and product market predation. The overall point that we wish to emphasize is that opening the linkage between capital structure and the “real” side of firm’s decision. The findings of this study indicate that the firm’s allocate of capital structure do influence the firm’s product market as suggested by the theoretical models. At the same time, Results of related empirical studies merely satisfy the theoretical discussion, which implies the high relationship between capital structure and product market competition. The major purpose of this survey paper is to summarize the literatures about the relationship of capital structure and product market predation, relate to know empirical evidence, and suggest some ways for future research. We first introduce the model developed by Tirole (1988). Since this paper is one of the most important article of capital structure. The leading conclusion of the model is that a higher equity lowers the probability of the bankruptcy and thus reduces the cost of bankruptcy. Then, we focus on those papers developed by Patrick Bolton and David Scharfstein. Since they are by no means the initial authors to present a theory between the relationship about rational predation and capital structure. The center argument of Patrick Bolton and David Scharfstein (1990) is that agency problems in financial contracting can give rise to rational predation. Snyder (1996) revise the model of Patrick Bolton and David Scharfstein and add the renegotiation factor into his model to make the model be more like the real world situation. The main conclusion of Snyder (1996) implies that the commitment value of the contracts will impair with the possibility of renegotiation. Renegotiation forces the investors and entrants to pursue a “deep-pocket” strategy. Besides, we also review some empirical studies, such as Chevalier (1995), Dan Kovenock and Gordon Phillips (1997), and Zingales (1998).
The Causality between Economic Growth and Industrial Energy Consumption in Turkey
Mehmet Mucuk, Ph.D. and Baki Yýlmaz, Ph.D., University of Selcuk, Konya, Turkey
It is accepted that energy is the most important input for economic and social development in developing countries. However, energy has to be used efficiently and effectively especially in the production process to attain this goal. The aim of this paper is to examine the empirical relationship between industrial energy consumption and economic growth in Turkey for the period 1970-2006. Towards this purpose Johansen cointegration and Granger causality tests are used. The results show that a long run relationship existed between both variables. The causality analysis indicates unidirectional causality from economic growth to industrial energy consumption. After industrial revolution, worldwide energy consumption has increased significantly. Unbalanced distribution of energy resources across the world and scarcity of energy reserves lead to severe problems. Because energy is the vital input for economic and social development of any country. However, there is no consensus on the relationship between energy consumption and economic growth in the literature. For the policymakers the direction of causality is very important. After 1980’s due to developments in population and industrialization, energy consumption has increased rapidly in Turkey. Prior to “1980 Decisions” Turkey had pursued a highly regulated inward-looking economic strategy and had an inefficient financial system. With the structural reform program of 1980, overall development strategy moved away from a highly regulated inwardlooking economy with direct monetary controls toward an outwardoriented, open economy operating with a market-based approach (CBRT, 2002: 11). The period beginning with the “Decisions” has caused a fundamental change of the composition of economy in favor of industry. This change has led to an increase in energy consumption.
Constructing Two-Stage Credit Scoring Model Using Cox Model and SVM: The Case of SMEs in Taiwan
Lee-Cheng Lin and Lee-Ing Tong, National Chiao-Tung University, Taiwan, R.O.C.
Most credit scoring model using one-stage classification model may usually have the low accurate rate of default. Although the existing credit scoring model using two-stage classification method may enhance the accurate rate of default, they do not consider that non-default borrowers are classified erroneously may result in banks or financial institutions to loose a lot of the revenue. Moreover, the existing credit scoring model does not consider the impact of economic recession on the accurate rates of default and non-default at various times. This study proposes a two-stage model using Cox model and SVM has effect on classifying the accurate rates of default and non-default. A real case for Taiwanese SMEs is provided from a Taiwanese financial institution and empirical results demonstrate that the accurate rate of the proposed two-stage model better than that of the existing credit scoring models using the one-stage model. As the international finance has been developed fast, the risk that enterprises are facing now is more complex than before. Thus, banks and financial institutions must develop an effective model for evaluating the credit risk to prevent default of enterprise borrowers.
How Measure of Creditworthiness Differ among Livestock and Crop Farm Businesses?
Seda Durguner, Ph.D. Candidate, University of Illinois at Urbana Champaign, Champaign, IL
Dr. Ani L. Katchova, University of Kentucky, Lexington, KY
This paper uses FBFM (Illinois Farm Business Farm Management Association) cross section data from 1995 to 2004 to evaluate whether credit scoring models should differ across livestock and crop farm businesses. Specifically, the effect of financial ratios on borrower creditworthiness is analyzed and significance & magnitudes of these financial ratios’ coefficients are compared between livestock and crop farm businesses. The logit results show that liquidity, profitability, and financial efficiency have higher magnitudes for livestock farm businesses compared to crop farm businesses. On the other hand, solvency and tenure ratios seems to have more significant effect for crop farm businesses compared to livestock farm businesses. Hence a major conclusion drawn from these results may be that multiple credit scoring models may be needed, separately for livestock and crop farm businesses. Credit scoring models may apply more weight to liquidity, profitability and financial efficiency ratios for livestock farm businesses while more weight may be applied to solvency and tenure ratios for crop farm businesses. Due to asymmetry, lending to small businesses have been a time consuming process for large financial institutions. However, with the development of credit scoring models, this process became more efficient. Ely and Robinson (2001) find evidence that large banks have increased their presence in small business lending. They concluded that this trend is consistent with the view that new information technology, especially the use of credit scoring models, has changed the structure of small business lending.
Stress Coping Styles of Students at Universities and Colleges of Technology
Ying Ming Lin, Ph.D., NanKai University of Technology, Taiwan
Ming Yu Wang, Ph.D. Candidate, National Changhua University of Education, Taiwan
This research used stratified random sampling to carry out in-depth interviews with students across ten Universities and Colleges of Technology. The aim of this study was to develop a student stress and coping styles inventory. Based on the coding of the peer encoders, and after categorizing and generalizing qualitative interview data, experts and learners engaged in the discussion, after which coded data was converted into the inventory items. Afterwards, five experts examined the content validity of various items, and modified or removed the items with content validity. The final inventory, consisting of 30 items, conformed to the reliability and validity requirements of qualitative research. According to the reliability and validity, the student stress and coping style inventory was divided into four factors, active problem coping, active emotional coping, passive problem coping, and passive emotional coping. Along with scientific improvements and rapid information development, competitiveness among people has become increasingly intense. Accordingly, people have become busier and; therefore, stress is a natural consequence. An appropriate amount of stress is a juncture for self-growth and a motivation for people to progress actively. It not only affects our thoughts and feelings but our behavioral models as well. However, both of physical or mental stress causes problems and discomfort, and can have serious negative effects on people. Chen, Lin, & Tu (2006) indicated that educators often emphasize the acquisition of knowledge, so they often neglect the emotional feelings of students during the teaching process, which can lead to emotional stress and learning problems.
Measuring Ethical Perceptions and Intentions Among Undergraduate Students in Barbados
Philmore Alleyne, Dwayne Devonish, Julia Allman, Wayne Charles-Soverall and Ayanna Young Marshall
The University of the West Indies, Barbados, West Indies
Concern has been raised on the ethical behaviour of business persons in the face of problems with Enron and the current global economic crisis. It is believed that unethical behaviour may stem from the lack of proper ethics instruction being taught in schools and universities. This paper sought to measure the ethical intentions and perceptions of ethical problems among undergraduate students in Barbados. The study used a self-administered survey among students at a Caribbean university. The findings of this study showed that gender, age, academic majors and religious commitment significantly affect the ethical perceptions and intentions of students within the Caribbean. . Ethics has become a highly debated topic among governments, businesses and societies due in large measure to the increasing number of scandals involving business professionals. As a result, ethics constitutes a critical aspect of business today in which students must be conversant. This must also be reconciled with the increasing focus on corporate social responsibility both in the private and public sector. Ethics can be defined as an "inquiry into the nature and grounds of morality where the term morality is taken to mean moral judgments, standards and rules of conduct" (Hunt and Vitell, 1988). Singhapakdi (2004) defined ethical intentions as ‘an individual’s predisposition to act in an ethical manner’.
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