The American Academy of Business Journal

Vol.  17 * Num.. 2 * March 2012

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

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Salesperson Attributions: Evaluating the Impact of the Timing of Prior Actions

Dr. Keith A. Richards, University of Tennessee at Chattanooga, TN

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



Our study examines how salespeople establish their expectancy levels based on the recency of prior events. According to our conceptual framework, expectancy is a function of salespeople’s perceptions of both their short- and long-term performances. Specifically, three types of attributions moderate the impact of the former on expectancy, whereas the impact of the latter is mediated by self-efficacy. In addition, we propose that salespeople’s expectancy estimates positively influence their future performance. Managers will be well served to know how these attributions are formed to improve coaching and goal setting. Marketing and management scholars have long been interested in what motivates behavior. Marketing has primarily been interested in how to motivate consumers to purchase their products (Lazarus, 1991; Bagozzi, 1981) and management has been interested in how to motivate employees to perform at a satisfactory level (Locke and Latham, 2004; Bono and Judge, 2003). As a result of combining these two interests, researchers in both fields have shown interest in salesperson motivation. The study of salesperson motivation has been examined under several theoretical frameworks. Expectancy theory (Walker, Churchill and Ford, 1977) and attribution theory (DeCarlo, Teas and McElroy, 1997; Dixon, Spiro and Jamil, 2001; Dubinsky, Skinner and Whittler, 1989; Johnston and Kim, 1994; Sujan, 1986; Teas and McElroy, 1986; Weiner, 1972) are two primary frameworks used to understand salesperson motivation. In this study, we employ a combined attribution - expectancy theory framework to examine how salespeople evaluate their own efforts and how those evaluations impact their future performance.


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International Trade and National Stock Market Linkages

Dr. Ilhan Meric, Rider University, New Jersey

Dr. Jean C. Darian, Rider University, New Jersey

Dr. Gulser Meric, Rowan University, New Jersey



Several previous studies find that the trade relationship between countries is a significant determinant of the linkages between their stock markets. In this paper, we provide additional empirical evidence for this hypothesis by using the correlation analysis and Granger-causality techniques with a sample of eighteen countries from different parts of the world. We find that countries with a high-level of trade relationship between them also tend to have a high contemporaneous correlation and significant lead/lag linkages between their stock markets. However, in our sample, there are also countries that have a relatively low-level of trade relationship but significant linkages between their stock markets. We conclude that trade relationship may be an important determinant, but not the only determinant, of stock market linkages. Stock market linkages between countries may also be affected by factors such as tracing the stock market movements of a world power (e.g., the U.S.) or a regional power (e.g., China), ethnic relationships, historical ties, and economic/political alliances (e.g. NAFTA and EU).  Studying the co-movements of national stock markets has been a popular research topic in finance (see: Makridakis and Wheelwright, 1974; Philippatos, Christofi, and Christofi, 1983; Meric and Meric, 1989; Lee and Kim, 1993; Meric et al., 2001; Meric and Meric, 2011). However, little attention has been given to what drives the co-movements of national stock markets. Several empirical studies demonstrate that international trade may be a significant driving force for the co-movements of national stock markets. They argue that countries with more international trade between them tend to have closer linkages between their stock markets. However, the number of empirical studies on this subject is surprisingly small. 


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Application of Capital Budgeting Techniques to Home Mortgage Refinancing

Dr. Gurdeep K. Chawla, National University, San Diego, CA



Organizations have used capital budgeting techniques extensively to evaluate proposals for investments in long-term projects.  Individuals can also use these techniques to make decisions about financing home mortgages.  The quality of decisions is improved because this analysis takes into consideration a number of variables (e.g., time value of money and tax implications) that might otherwise be overlooked.  This analysis also examines short and long-term implications of refinancing home mortgages. This paper offers real world examples to demonstrate the application of capital budgeting techniques which include payback period, discounted payback period, profitability index, net present value, internal rate of return, and modified internal rate of return.  Further, these examples were augmented by adding a few scenarios and a comparative analysis.  Findings revealed that the conventional wisdom of a 2% difference between the current mortgage interest rate and new mortgage interest rate may not be applicable in the current economic environment.  Home mortgage interest rates in the United States have been at their lowest levels in about forty years.  This has provided an opportunity for homeowners to refinance their mortgages and benefit from these low interest rates. In fact, home mortgage refinancing has increased tremendously over the past few years.  There are a number of reasons to refinance that include lowering monthly payments, shortening the loan period, using equity by cashing out, moving from an adjustable rate mortgage (ARM) to fixed a rate mortgage to lock in lower interest rates, etc. 


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An Evaluation of Flood Irrigation and Compost Use in South Texas Rio Red Grapefruit Production:

Are There Economic Values?

Dr. Shad Nelson, Texas A&M University, Texas

Mac Young, Texas A&M University, Texas

Dr. Roger Hanagriff, Texas A&M University, Texas

Dr. Steven Klose, Texas A&M University, Texas



Citrus is grown primarily in the Lower Rio Grande Valley (LRGV) of south Texas using flood irrigation, with approximately 70% of the citrus raised as ‘Rio Red’ grapefruit (Citrus paradisi Macf.). Supplemental irrigation is necessary in this region as annual precipitation is not sufficient to raise citrus in this semi-arid climate. A potential water-conserving strategy for citrus is compost application underneath the tree canopy. A 5-year field study was initiated in 2003 on mature, flood-irrigated ‘Rio Red’ grapefruit trees located in Weslaco, Texas. The objective of this study was to evaluate the impacts of bark-chip compost application on soil physical properties, root development, and subsequent citrus production when applied to the heavier soil of the LRGV. Three main treatments were evaluated: unfertilized, non-composted (UN); fertilized, non-composted (FN); and fertilized, composted (FC) trees. For this study, compost applications did not significantly alter soil bulk density (BD), however, a trend of decreased soil BD was observed as compost application increased, thus an indication that multiple year organic application can improve the physical properties of heavier soils. Increased compost application did significantly increase soil water retention, suggesting its importance for conserving water under the tree canopy. In 2007, a detailed root density study was performed, comparing: 1) a single 5-cm, 2) a single 10-cm, 3) and annual 5-cm (2003-2007) applications of compost with non-composted trees. Root density with annual compost application was 453% higher than with non-composted trees.


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Organizational Commitment in the Wake of Downsizing

Janice M. Spangenburg, Ph.D.



Change has really emerged and has become ubiquitous organizations and society. Never before has radical change been more important to study and understand. Organizations today must be competitive, resilient, and adaptable. This creates a most serious challenge for leadership today that is constantly trying to balance talent amid limited resources. Balancing the requirements of the leadership role with the operational and mission role becomes increasingly problematic especially when a serious change such as downsizing occurs and organizational commitment is affected. In a study by Hodge, Anthony and Gales, 1999), an offering of the reality of change and how this phenomenon has driven decisions that have affected both the structure and the contents. As evidenced for the last decade and beyond since this offering, change has been a very real part of life and has created ways for organizations to transform, develop and fine tune mechanisms that move toward competitive advantage and refinement of practices. Thus, change is ever present and requires methods that engage the entire population- leaders and members and move toward enabling organizational survival. In lean and often uncertain times that are faced by every organization leader today, this is an area that needs to be addressed. To do this effectively more needs to be discovered about the importance of organizational commitment and why leaders much consider this important element in all decisions effecting change and every method employed. This includes all areas of the organization from leaders to members in every role and every specialty. It has to be bottom up as well as top down and transcend every area to be complete and substantive.One of the areas that is vital to understanding the people or human component of organizations lies with individual organizational commitment and understanding this more.


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Teaching Tip: Using Rubrics Across Multiple Business School Student Tasks: A Special Focus on Service

Dr. Gene Milbourn, University of Baltimore



This paper will identify and discuss several seminal models in the quality service literature to include the research by Parasuranan, Zeithami, and Berry on the SERVAL instrument,  Hogan and Busch on the measurement of the service personality orientation, and, the work of Paajan and McLellan linking personality orientation to organizational outcomes.  A service rubric will be introduced and discussed which is consistent with each of these models.  For pedagogical purposes, the paper begins with a general discussion of rubric use in higher education and presents rubrics on Power-Point presentations, oral communication, and case analysis.  A rubric is a document that articulates the expectations for an assignment by listing the criteria or what counts and describing levels of quality from excellent to poor (Reddy and Andrade, 2010).  A rubric has three features:  evaluation criteria, quality definitions and a scoring strategy (Popham, 1997) which stipulate a grading scale for each dimension so that assessment can be thorough and consistent (Stevens and Levi, 2005).  Rubrics also allow students to judge the current quality of their work and the ways in which they could develop it further (Brough and Pool, 2005; Huber and Hutchings, 2004).  Knight and Tracy (2010) suggest that the rubric provides a framework for identifying the important learning dimension on a topic and it attempts to stipulate a grading scale for each dimension ensuring consistency.    The favorable validity and reliability of rubrics has been has been discussed by Moskal and Leydens (2000).  In a review of the research of rubric use in higher education, Reddy and Andrade (2010) state that “Rubrics are often used by teachers to grade student work but many authors argue that they can serve another, more important, role as well: When used by students as part of a formative assessment of their works in progress, rubrics can teach as well as evaluate. 


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Theory Building Related to Women in Combat

John Gutierrez, Doctoral Candidate, North Central University

Janice Spangenburg, Ph.D.



As times continue to change in society, in organizations and in the world, the military is also changing and the culture is different and more diverse than ever before with new challenges and new ways to envision the mission and the future. Firmly in that regard the role of women has had an emerging impact over the years. To date, the notion of women in combat has become one of the most discussed areas in the top leadership meetings and will continue to be something that is integrated more and more as our ranks reduce and our mission increases in a number of ways. This paper is designed to discuss a theory on the new challenges surrounding women in combat. In this paper, discussion on scholarly views and types of theory involved in the topic of women on the battlefield will be highlighted to determine the contributions of research toward theory.  In addition, discussion of how theory adds to the understanding of women on the battlefield as well as two areas of controversy or unanswered questions relating to the theory in question will be highlighted to provide further insight on the necessity of theory in research toward understanding emerging information.  Among the area of concern is that prior to the Gulf War of 1989, the United States military operations consisted of a linear battlefield, with a discernable front line where direct combat with enemies occurred while providing a relatively safer rear area to conduct support operations (Harrell et al., 2007).  Previously, on a linear battlefield, women would be relegated to the safer rear areas but with a non-linear battlefield, women have taken on roles consistent with a direct combatant, a role relegated for men and prohibited for women (Harrell et al., 2007). 


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Analysis of ASEAN Economic Change, Consumer Behavior, Marketing Trends and International Trade With NAFTA

Dr. Sinee Sankrusme, Ramkhamhaeng University, Thailand



This study will be taking a detailed look at the status of some of the many nations that comprise the Association of Southeast Asian Nations grouping, which includes Thailand, Brunei Darussalam, Vietnam, Indonesia, Malaysia, Laos, Cambodia, Myanmar (Burma), Singapore, and the Philippines. The purpose of the study is to analyze economic change with ASEAN, consumer behavior, and marketing trends, including international trade between Thailand and ASEAN, Thailand and NAFTA, ASEAN and NAFTA (the North American Free Trade Agreement) using both qualitative and descriptive research methods. The results demonstrate that, as much as these nations expend time and money on mutual cooperation and on fostering trade and economic development between them, the truth remains that they are all very fierce competitors, with many ASEAN member states producing the same goods for export. Vietnam, Indonesia and the Philippines have taken on the manufacture or production of many of these products, especially those from the agricultural sector that have earned Singapore, Malaysia and Thailand considerable foreign investment and sales overseas. International trade between the groups in the ASEAN association is hampered by restrictive and protective trade barriers, tariffs, duties and taxes, which they are trying to find ways to eliminate without hurting their own domestic markets for goods produced in each individual nation. This study focuses on the consumer, his habits and behavior, and what impact this has on each country’s economy and the health of the others.


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Measuring the Economic Potential of Utilizing Sweet Potato Production in Small

Animal Forage and Crop Production System: A Systems Approach

Dr. Greta Schuster, Texas A&M University, Kingsville, TX

 Dr. Steven Lukefahr, Professor, Texas A&M University, Kingsville, TX

 Dr. Kim McCuistion, Texas A&M University, Kingsville, TX

 Dr. Roger Hanagriff, Texas A&M University, Kingsville, TX



While major research efforts on sustainable, small-scale production systems have been the focus at the international level, there has been little focus in the United States.  In general, economists assume that small-scale operations such as rabbit production are not viable as an agriculture business in the U.S. because rabbits are usually raised in small numbers as a backyard activity.  However, in recent years the demand for locally produced foods increases disparity of income, and development of farmers markets have increased the potential for smaller scale production systems.  Also, a rabbit as 4-H projects for children is a popular activity at present in the U.S.  With the increasing world population there is an increased demand for food.  Rabbits because of their prolific nature and ability to utilize a wide range of forages are a good protein source and income for small-scale producers (Cheeke, 1986). In the United States, North Carolina and California have the highest production followed by Mississippi, Louisiana, Alabama, Arkansas, Florida, New Jersey, and Texas, with a total of 23,845,000 total pounds of sweet potatoes produced in 2010 (USDA, 2011)  Proximate analyses revealed that both SP leaves and vines had numerically the same or higher CP but lower gross energy than commercial pellets.  NDF and ADF values were numerically higher for pellets compared to SP leaves.  However, NDF values were more similar between pellets and sweet potato vines, although ADF values were somewhat lower for pellets compared to sweet potato vines.  ADL was numerically lower for pellets compared to SP leaves. 


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The Motives Driving Activity-Based Costing Adoption: An Empirical Study of Saudi Firms

Mohammed Al-Omiri, Umm Al-Qura University, Saudi Arabia



This study aims to study the diffusion of Activity-Based Costing (ABC) systems among Saudi firms. In particular, the paper considers the issue as to what are the motivations behind adoption of ABC systems. A survey of 256 companies was conducted to ascertain the motivations behind ABC systems adoption. The survey was conducted employing a detailed twelve-page questionnaire sent to a random sample of 1,000 companies. Data were derived from 326 returned questionnaires including 75 from business units that had adopted ABC. The motives behind adoption of ABC systems was based on Abrahamson’s four perspectives namely the efficient choice perspective, fad or fashion motives, and forced selection motives. The motivations were formulated by asking the respondents to indicate the degree of importance attributable to each motive in the decision to adopt ABC on a scale of 1 to 7. The study provides evidence that three deficiencies relating to existing costing systems were the dominant motives for implementing ABC: the existing system did not provide useful information to management; it was necessary to update the existing costing information system; the existing costing system was not reliable. These were followed by a group of motives relating to the changing environment (competitive, manufacturing and cost structure).  The least important motives relate external pressure groups (e.g. external auditors, consultants and government/regulatory pressures) and fad/imitation motives. Recent years have seen the emergence of technologies that facilitate swift transfer of up-to-date information and ideas in national and international situations. There has also been intense national and global competition arising from the growing interconnectedness of economies and businesses as well as from large advances in global communication. The diffusion of innovation processes plays a major part in creating this modernisation and development.


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Absurdity in Print Advertising: Its Impact on Brand Name Recall and Alcohol Warning Label Recall

Dr. Leopoldo Arias-Bolzmann, Professor of Marketing, Universidad Adolfo Ibanez, Chile



The presence or absence of an absurd image was manipulated in a simulated print advertisement for a fictitious brand of wine cooler.  As predicted in the hypotheses, absurd images enhanced the recall of the brand name and reduced the unaided recall of an alcoholic beverage warning label.  Results are discussed in terms of the role of absurdity in advertising communications.  Absurd images frequently appear in advertisements (Stern 1988, 1990).  In this paper absurd ads are defined as incongruously juxtaposing pictorial images, words, and/or sounds that viewers perceive to be irrational, bizarre, illogical, and disordered.  For example, ads for Camel cigarettes portray a dromedary, cigarette dangling from his mouth, participating in sports and wearing fashion clothing.  Or, consider the British Airways ad in which dozens of shoes are shown flying into the sky.  Other examples include the Energizer Bunny (bunny playing a drum), the Coca-Cola Polar Bears (bears drinking Coke), and the California Raisins (dancing raisins).  No study has specifically counted the percentage of ads that use absurdity. Despite the common use of absurdity in advertising by practitioners, until Stern's (1990) conceptual work, which related the absurdity construct to literature and drama, the topic area has received little attention from academic researchers.  Arias-Bolzmann and Mowen (1992) have pioneered empirical research on the subject of absurdity, followed by Arias-Bolzmann, Chakraborty and Mowen (2000), and Arias-Bolzmann (2003).  Their research, among other aspects, indicates that marketers are also interested on the effect of absurdity on brand name recall.  Thus, the current study relates absurdity to traditional theories found in the consumer behavior literature. In addition to implications for theory, the results are relevant to advertising managers as well as public policy makers, referring to potential distraction of consumers from the mandatory warning labels.


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Effects of Newcomers Traits on Gaining Political Knowledge of the Organizations

Dr. Amr Swid, New York Institute of Technology, Manama, Bahrain



Political knowledge, involving the informal network of power and interpersonal relationships in an organization, is an often-overlooked dimension of learning how to fit into a new organization (Chao et al, 1994; Taormina, 1994). Moreover, newcomer research has been conducted independently of individual newcomer personality differences. To extend previous research, the present research examines the Big Five personality traits of newcomers and political knowledge as an immediate outcome of the process of newcomer adjustment. A 3-wave longitudinal study of 439 newcomers in 7 organizations examined Big Five personality traits as antecedents of political knowledge of the organization. The results suggested that among the Big Five traits, openness, neuroticism and conscientiousness were positively related to apolitical knowledge of the organization. Overall, the results suggested that the Big Five are one of the key determinants of organizational political knowledge.  Outcomes of adjustment are distinguished based on existing theory and research into proximal and distal categories where the proximal might also be called indicators (Saks & Ashforth, 1997a). The separation of proximal and distal outcomes is an important way to improve our understanding of adjustment. Research has neglected outcomes directly relevant to adjustment theory (Bauer et al, 1998; Fisher, 1986; Saks & Ashforth, 1997). Researchers bemoan the frequent use of broad work attitudes such as organizational commitment and job satisfaction as newcomers’ adjustment outcomes. Newcomers are primarily interested in resolving questions of how to act and how well they match the new environment.


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Product Placement in Online Games: An Exploration into Thai Gamers’ Attitude

Dr. Chatpong Tangmanee, Chulalongkorn Business School, Chulalongkorn University, Bangkok, Thailand

Dr. Jadtana Rustanavibul, Chulalongkorn Business School, Chulalongkorn University, Bangkok, Thailand



Marketers have been more attentive to advertisement in online games. Product placement via movies or news reports have been recognized; however, little is known about the placement in online games, especially in the context of Thai online gamers. This study thus attempts to (1) report the profile of Thai online gamers, (2) explore their attitude toward in-game placement, and (3) analyze their awareness and product recall. Based on the 253 number of usable questionnaires, Thai online gamers are mainly young, male students, spending 2-9 hours a day playing the games. They perceived congruence between game content and in-game placement and did not object to have commercials in the games. Although 86% of the samples were aware of in-game placement, their product recall is fairly low.  In addition to extending insight into online advertisement in the context of Thai gamers, marketers could arrange a more proper marketing plan based on these results.  One of advertising tools, product placement is a marketing technique through which firms could tangentially display their marketing messages through different channels. Television viewers may have noticed a can of soda on an anchor’s desk during a news broadcast or an instruction on how to brew coffee using a new coffee maker in one soap opera. 65 percent increase in sales of one of Hershey’s products were from product placement in the famous E.T. movie (Karrh, 1998; Gregorio & Sung, 2010).  Indeed, the placement  in entertainment media is an important alternative to attract one’s attention since advances in communication technologies have made it far difficult for marketers to deliver message via traditional media (LaFerle & Edwards, 2006; Lee & Faber, 2007).


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The Role of Training and Development in Controlling Workplace Stress

Dr. Sami A. Albahussain, University of Dammam, Saudi Arabia



This research focuses on the use of training and development to control stress. Employees are an important resource to an organization that whenever anything happens to them, the performance of an organization is affected. Employees are affected by various factors emanating both form the work environment and their home environment. They are therefore prone to stress. An organization can improve its performance by reducing work-related stress that affects employees in many ways. However, this study focuses on training and development as a means of reducing employee stress hence improving organizational performance. The study would focus on the various sources of stress for employees and the ways that they can be avoided. The study would utilize a qualitative research methodology with a deductive approach. Both structured and semi-structured interviews would be used to collect data from sampled employees from Saudi Railway Organization. The findings of the study confirm that training and development helps employees reduce stress at work hence improving their performance and the performance of the organization.  Saudi Railway Organization founded in 1976, is an independent public entity by the board of directors in support of the government. The organization earlier was Saudi Arabia Railway Corporation. As a new organization, there were many expectations from them. The market hoped for better transportation of passengers, goods and shipment services within the urban centers and across the neighboring countries. This means of transport aims at improving the economy, social networking, agriculture, industry development, and commercial activities in Saudi Arabia (Saudi Railways Organization, 2009). 


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Privatization and Endogenous Mode of Market Competition in a Mixed Duopoly with Quality Differentiation

Dr. Ya-Chin Wang, Department of Finance and Banking, Kun Shan University, Taiwan



Making an extension from a standard vertical structure, we construct a mixed duopolistic model with quality differentiation by taking market competition and privatization policies into account. The major finding is that no matter whether the public firm is a higher-quality provider or a lower-quality provider, the government has incentives to practice privatization. The management implications of the result are that the strategy of privatization will affect the decision making on quality investment and market competition, which will then result in different surplus shifting between the public firm, private firms and consumers in the multi-stage game. As in Matsumura (2010), privatizing the public enterprises ends up with a success to the society in viewing of social welfare. This result is different from the outcome in Lutz and Pezzino (2010), which shows that the nationalization is always social desirable, regardless the type of short run competition and the quality ranking in equilibrium. The critical element is that we endogenize the mode of market competition.  In many countries, a public-owned firm often plays an important role for their economies. In oligopolistic structure, when public and private firms compete with each other in the same market with different objective functions, it becomes a type of mixed oligopoly. Mixed markets exist in lots of industries such as telecommunications, electricity, postal, public transportation, heavy manufacturing industry, etc. As a result, the economic models of mixed oligopoly have received considerable attention in research. The major focus of the study in the literature, e.g. Bös (1986), Cremer et al. (1989), De Fraja and Delbono (1989, 1990), and Anderson et al. (1997), was to see welfare implications in the industry.


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Improving Behaviour Scores Using the Dual Scoring Matrix

Mei-Hung Ho, National Taiwan University, Taipei, Taiwan, R.O.C.



The credit scoring model is the most successful statistical model used in finance business. However, while the model has been actively developed for credit granting and portfolio management, most past researches have simply used the one-dimensional credit scoring model to segment customer risk. This study aimed to combine the banks’ internal behavior scoring model with the external credit bureau scoring model to construct the dual scoring model for existing credit card accounts. The predict power of this dual scoring model are obviously better than the one-dimensional internal behavior scoring model or the external credit bureau scoring model separately. Moreover, for further portfolio management and supervisory, we designed credit strategies that encompass credit limit management, card renewal and collection actions, which can in practice generate even greater benefits.  The credit scoring models have been actively developed to evaluate customer risk, and different credit scoring models have been applied to different stages of the credit cycle. Application scoring models can assist banks in deciding whether to grant credit to new customers based on those customers’ characteristics (for example, age, education, marital status, and so on) (Chen and Huang, 2003). In a similar vein, behaviour scoring model can assist banks as they analyse the consumption behaviour of their borrowers and predict the likelihood of their customers defaulting on their loans in the future (Setiono et al., 1998). Based on scoring models, banks can strengthen their risk control mechanisms, reduce their losses arising from bad debts, and increase their operating profits.   The recent global financial tsunami, which was triggered by the U.S. sub-prime housing market crisis in 2007, spread to the field for consumer spending. The banking industry responded by gradually ‘tightening its belt’ by issuing fewer credit cards and extending less credit.


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Product Management in the World Pharmaceutical Industry

Dr. Dragan Kesic, University of Primorska, Slovenia



We emphasize world pharmaceutical industry has been abruptly changing  in the last two decades. According to our research, we found the basic and most important factor of  strategic success of each pharmaceutical company is definitively a product which is a sound and needed basis for further growth and development of each pharmaceutical company. We  found out in our research work there is a huge lack of new, inventive pharmaceutical products, thus world phramaceutical companies try to find out new ways of searching for new products. One of the most logical approaches is to make strategic cooperations among pharmaceutical companies which result in various project and strategic alliances, which predominantly include merger and acquistion strategies which more and more prevail in  pharmaceutical industry.  We may conclude that products themselves are to play even more important and especially the highest top priority strategic role in the future development of world pharmaceutical industry and we may foresee even more consolidation processes in the future just of the new products management sake.  Pharmaceutical industry is still one of the most inventive, innovative and the most lucrative world so called ''high-tech'' industries, however we may talk at the same time of period of great and profound changes in this industry sector. Pharmaceutical industry today probably unite the biggest of all mankind potentials. The basic and crucial condition for each world original, inventive pharmaceutical company is to research and develop new products to offer to mankind new therapies and to enable covering all medical, not yet properly satisfied needs.


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Knowledge Transfer and International Outsourcing Alliances:  A Case Study of Taiwanese Suppliers

Dr. Wei-Li Wu,Ching Yun University, Taiwan

Dr. Yi-Chih Lee, Ching Yun University, Taiwan



In recent years, leading multinational enterprises have become accustomed to outsourcing their non-core business in order to increase the competitive advantage of their products. With the prevalence of global outsourcing, suppliers in developing countries have been provided with a good learning platform. Through their involvement in outsourcing, suppliers are able learn about the technology involved in product development from leading multinational enterprises. For instance, over the last few years, Taiwanese suppliers have achieved rapid growth through their cooperation in international outsourcing alliances, and have managed to develop their own brands and technology (e.g., computer firm Acer and the HTC smartphone). Therefore, this study focused on research on Taiwanese suppliers and explored the ways in which they learn about technology effectively through international outsourcing alliances. In general, the previous literature on international outsourcing alliances and supplier learning has tended to use the questionnaire survey method, thereby simplifying the differences in the cooperative relationships of various suppliers with their customers, which makes it impossible for the existing literature to reflect real situations in the real world. In order to fill the gaps in the research, this study aimed to conduct case interviews with five Taiwanese suppliers, and then put forward relevant propositions regarding knowledge transfer in international outsourcing alliances.


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A Study of Evaluation Criteria for Disclosure and Transparency

Dr. Yeong-Bin Lee, Ling Tung University, Taiwan



Disclosure and transparency is an integral part of corporate governance. Disclosure helps the public understand a company's activities, policies and performance with regard to environmental and ethical standards, as well as its relationship with the communities where the company operates. Inadequacy of disclosure and transparency may lead to unethical behavior such as fraud and corruption, costing not only the company but the economy as a whole. There is a close relationship between transparency and the enforcement mechanism of corporate governance. Both are interlocked with each other and have to work together in order to maximize efficacy. The study develops constructs for disclosure and transparency through Delphi method and builds a hierarchical structure via AHP analysis to identify important criteria and their priority setting for successful evaluation of disclosure and transparency. It is hoped that the study has contributed to the body of knowledge available to assist companies in the promotion of disclosure and transparency and relevant agencies in the provision of criteria for evaluation. The results of the study show that five key constructs for evaluation of disclosure and transparency are protection of rights of shareholders, strengthening of functions of board of directors, disclosure of financial information, information transparency, rights of stakeholders. 


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Exchange-Traded Funds: Characteristics, Growth, Problems and Evolving Issues

Mickey W. Keeling, Sam Houston State University, Huntsville, TX

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

Geetha Subramaniam, Victoria University of Wellington/Universiti Teknologi MARA, Malaysia



This paper reviews articles on the topic of exchange-traded funds (ETFs). ETFs have grown at a blistering pace since the first ETF began trading in 1993.  This paper details how ETFs’ shares are created and redeemed, the features of ETFS, the types of ETFs available to investors, and some of the problems and issues related to investing in ETFs.  The effects of the May 6, 2010, “flash crash” on ETFs are also reviewed.  Finally, some evolving areas of ETFs development are discussed.   This paper looks into the issues involving exchange-traded mutual funds (ETFs). Though ETFs resemble open-end and closed-end mutual funds, there are also important differences.  Exchange-traded funds are open-end investment companies whose shares can be traded on exchanges during normal trading hours. ETFs promise convenience, easy diversification, increased liquidity, low costs and tax efficiency.   Aber, Dan and Luc (2009) compared the price volatility and tracking ability of ETFs to conventional index mutual funds that tracked the same index as the ETF. They found that ETFs are more likely to be priced at a premium more than at a discount. By comparing prices of ETFs to net asset values, Ackert and Tian (2008), found that the average premium for U.S. ETFs was less than 2 basis points while the premium for country funds was greater than 10 basis points. In another related study on the degree of diversification, performance and performance persistence in ETFs, Adjei (2009) found that thirty-eight percent (38%) of an average ETF’s total risk is diversifiable. He also found no significant performance difference between S&P 500 index and ETFs based on that index. Bary (2010) surveyed the ETF landscape and describes the various types of funds available to investors, and provides details about some of the major sponsors of ETFs.   


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Board of Director Characteristics and Audit Fees:  Does Concentrated Board Ownership Matter?

Chi-Ying Chiao, Hsing Wu Institute of Technology, Taiwan ROC



This study examines the empirical relationship between four board characteristics (ownership, independence, CEO duality, and compensation) and audit fees in Taiwan listed companies. Using OLS regression to analyze the data, I find that concentrated board ownership is related to lower audit fees, and higher board compensation is related to higher audit fees. Further, the relationship between CEO duality and audit fees will be weaker when the board of directors holds concentrated ownership. The findings suggest that the concentrated board ownership has a significant impact on the determination of audit fees.  In the wake of the Enron and WorldCom scandals, concerns about corporate governance have been and continue to be a topic of important for shareholders, practitioners and academics. An effective board of directors is considered one of the strongest indicators of shareholder value and good governance, because directors have the responsibility of ensuring management acts in the shareholder’s best interest. In addition, it is advisable that listed companies to set up the audit committees to assist the board of directors to perform its supervision responsibilities such as examination of the accounting system, financial conditions, the procedure for financial reports of the company, and the internal control of the company. However, to set up the audit committees is not common in Taiwan listed companies. An effective board of directors still plays an important role in Taiwan listed companies.   The inherent risk and control risk for auditors are a fundamental aspect of an auditor’s fee setting process.


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Measuring the Health of a State Branded Wine Product in Texas

Dr. Roger D. Hanagriff, Texas A&M Kingsville

Dr. Olga Murova, Texas Tech University

Dr. Michelle Santiago-Mullins, Sam Houston State University



Previous research had shown that consumers can switch between different brands based on wine market share; and some categories of consumers are not very concerned with taste and quality differences behinds the label (Ehrenberg, 2000).  The consumers cannot usually measure a taste value prior to purchasing wine, so consumers make their decision on what to buy based on the previous knowledge, the label and the bottle.  Researchers found that consumers’ attitudes towards a brand do not predict buying behavior accurately (Fishbein and Ajzen, 1975). Instead, consumers’ attitudes towards the action of buying the brand, moderated by their subjective norms, predict buying intentions much more accurately, as tested in the theory of attitude formation (Fishbein and Ajzen, 1975; Sheppard et al., 1988). Scott and Davis (2005) developed a scale to measure the health of a brand, which is derived from consumer’s measure of five parameter areas.  These areas measure pre-purchase, purchase, and post-purchase values associated to the health of a branded product.  In reference to consumer demographics, Texas consumers are primarily between the ages of 45 and 60, upper income levels and interested in seeking out wines that taste great, but are not high-priced.  Also these consumers overwhelmingly prefer red wines over other wines and associate terms such as smooth, full-bodied, dry and balanced. 


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Human Resources Development for Aging Population in Korea

Dr. Namchul Lee, Korea Research Institute for Vocational Education and Training, Seoul, Korea



Population ageing will result in the decline in the number of the economically active and thereby hinder growth. The governments and societies around the world are concerned as this will mean that fewer numbers of productive workers will be left to shoulder the growing burden of supporting the elderly. This may bring about a crisis in both economic and social terms.  The purpose of this study is to present long-term policy alternatives in the future through an analysis of the causes of aging in Korea. This article will raise two agendas. First, we will forecast the future of the aging population around the world. Second, we will focus more specifically on creating future jobs and human resources development for the aging population.  Currently, Korea faces a severe aging crisis. (1) Baby boomers, those who were born between 1955 and 1963, are likely to lead a large-scale aging process after 2020. Aging has a positive aspect of lengthening average life spans and creating new industries; however, it expedites the fixation of a low-growth era caused by its negative effects such as capital, finance, etc. According to major domestic research institutes over recent years, it has been analyzed that the growth potential of Korea is on the decreasing trend due to the decline in the productive population following the aging phenomenon. Meanwhile, the OECD estimates that Korea’s average potential growth rate in 2010-2011 will be in the baseline scenario containing mid-to-long-term economic forecasts (OECD, 2010). SERI (2004) forecasted that the potential growth rate may decline to 4 percent in 2010 and 3 percent in 2030 due to only population factors, including aging.


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The Long Run Relationship between ISE-100 and S&P-500

Dr. Elif Guneren Genc, Istanbul Commerce University, Istanbul

Elcin Aykac Alp, Asist. Prof., Okan University



In today's economic trends, there is the flow of goods/services, labor-force, technology, and capital in a global perspective exceeding the borders which affect the economies of countries. Commerce and financial links show that there are relations in the movements of one country with another and they share the common conjecture. In this sense, minimization of the risk depends on the relations of returns of stocks and bonds and investor's international portfolio diversification. In this study we analyzed the relation between ISE-100 and S&P-500 for the period 07.01.2000–29.04.2011. This period contains especially two big crises. These crises also affect the structure and lead the nonlinearity of these data.  Today, trends in world economy and circling of goods and services, labor, technology and capital around the world without knowing no geographical bound, affects the national economies. Since all national economies are affected from the events of the rest of the world through commercial and financial links, it is understood that cyclical components are interdependent and share a common conjuncture as a result of relations of a country’s cyclical movements with the other countries’ cyclical movements. On the other hand, due to different economic structures, development levels, systems and geographical characteristics of countries’, it may have different features and interactions in each country.  As the run of financial markets is both shaped by internal economic developments and fed in global economy phenomenon, continuously repeated growth or economic crises are observed both in micro level and macro level.


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Economic Impacts Derived from a Newly Developed Community Supported Equine Facility: Impacts to Rural Tourism

Dr. Roger D. Hanagriff, Texas A&M University, Kingsville, TX

Dr. Randall H. Williams, Langdon L. Reagan, Texas A&M University, Kingsville, TX

Trent Whitis, Texas A&M University, Kingsville, TX



According to the U.S. Census Bureau, the estimated percent change of the population in Wilbarger County, Texas will decrease by 6.1 % (U.S. Census, 2000). When a decreasing population occurs in a normal situation, property taxes increase due to a decreasing tax base and sales taxes decrease.  In order to increase sales tax revenue, people must be attracted to the City of Vernon.  One way to bring people to Vernon is through tourism.  Equestrian based facilities are uniquely qualified to facilitate significant economic impact because participants generally spend multiple days in town, bring with them multiple family members or supporters and spend money on motel rooms, food, fuel, and take advantage of other retail purchase opportunities.  According to Brown (2002) and Lewis (1998) rural tourism has become a popular destination for tourists.  In addition, Lewis predicts that because of this renewed interest in America’s rural communities; tourism in this area should continue to grow. According to the Travel Industry Association, nearly two-thirds of all adults in the nation, or 87 million individuals, have taken a trip to a rural destination (Travel Industry Association of America, 2001).  Several reports conclude that state support of rural tourism creates positive and significant returns on investment of state funding (Hanagriff and Lau, 2009; Murova, Hanagriff, and Lyford, 2009).  Murova and Hanagriff (2011) found that smaller communities with a higher sense of identity had higher economic impacts from events in larger communities.  Also found in this report were highly correlated tourism activities related to higher economic impact that include tourists traveling greater distances, utilizing hotels and plans to visit surrounding areas. 


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The Survival of Small Businesses in the Absence Supportive Political and Economic System

Dr. Rassem Amash, Royal University for Women, Riffa, Kingdom of Bahrain



Many economists agree that small and medium enterprise can a very powerful tool to stimulate the economy and create a tremendous economic growth if is gets a proper support system. Small business and entrepreneurship is a culture, for instance U.S.A, Singapore, and Israel did realize the importance of small businesses and tried to nurture it; as a fact two third of jobs added and economic growth were created by small and medium enterprise, for instance Israel 2005-2008, Singapore 2006-2009, South Korea, Brazil, the question is always asked why it does work for one region and it does not work for the other. Some developing countries with natural resources are trying to diversify the economy and fight unemployment, by investing heavily in programs to stimulate the economy; and support fellow citizen by providing free education, grants, scholarships, training on the job, loans for small enterprise and many other financial support, but the money did not solve the problem of slow economic growth and high unemployment. The research is set to examine the challenges and difficulties facing small, medium enterprise and entrepreneurs in developing countries, in addition the research will examine the support system available in such countries. The study will focus on wealthy, rich with natural resources region, but high unemployment and other economic challenges.


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Cash Flow Residential Real Estate: Time to Buy?

Zeke Galo, Sam Houston State University

Dr. Hadley Leavell, Sam Houston State University

Dr. Balasundram Maniam, Sam Houston State University



Cash flow producing residential real estate bears many desirable characteristics for portfolio diversification, but is often overlooked as an asset class for inclusion in an investor’s portfolio.  Given this fact and in light of the current correction, this paper undertakes a top-down initial analysis to see if the present time is ripe for investment in this asset class.  This paper uses two relative value measures to make this assessment.  The first is a price-to-rent ratio.  It was found that 1) housing values are currently lower than historic rent prices, 2) the current level is above the historical low and 3) it was noted that the recent bubble could have an after effect that violates the historic low. The second method looks at median existing housing prices relative to new housing prices.  A widening spread in prices is noted, but it is difficult to confirm a trend due to “noisy” data in new home prices but the trend appears to be downward.  Ultimately the assessment is made that residential real estate will trend lower in the short term, but a return to health continues to be uncertain.  Since this hard asset tends to be a long term investment and it is not possible to pick an absolute bottom in any investment class other than through sheer luck, now is possibly the time to pursue cash flow residential real estate for inclusion into an investment portfolio.  The recent market crash has given investors who already had a full plate of data to sift through even more reasons to question what they already know.  Risks that the average investor thought he understood suddenly blew up as margin calls and general fear caused models to break down and confidence to disappear.  Following the crash, there were three overlapping effects or stages of response.  The first effect was the shock and the “what happened” response. 


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Self Control Theory: Recognizing Your Company’s Vulnerability to Employee Theft

Jason Geesey, Tarrant County College, Fort Worth, TX

Claudia Rocha, Texas A&M University, College Station, TX



Today business success is dependent upon several important variables and scholars may suggest those are related to planning, execution, and innovation.  In fact these three variables are often analyzed when diagnosing business failure.  Yet, many of us fail to recognize the importance of human capital and how it contributes to a business’ success or failure.  Astoundingly almost one out of three small business failures occur because of internal theft (Kulas, McInnerney, DeMuth, & Jadwinski, 2007).  Although many have argued that internal theft can be controlled or eliminated through planning and execution the number of failures continue to plague businesses – especially small organizations.  Despite prior research describing the problems and suggestions of how to mitigate internal theft, it is a problem that still continues to burden today’s businesses.  Kulas, McInnerney, DeMuth, and Jadwinski (2007) confirm that 30% of all business failures occur because of employee theft.  Hence, the authors believe there may be another methodology for eliminating or deterring internal theft by utilizing the constructs of Self-Control Theory.  Self-Control may not only help reduce internal theft it may diagnosis other human resource problems that can ultimately change an organizations future.   According to many experts business failures occur because of poor business planning, a lack of capital, and mismanagement.  Yet, research suggests another hypothesis that management seem to ignore until it’s too late.  Many business owners do not want to consider such losses or are too embarrassed to admit they have become victims of their employees (Eckelberry, 2005). 


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