The Journal of American Academy of Business, Cambridge

Vol.  18 * Num.. 1 * September 2012

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

 Online Computer Library Center   *   OCLC: 805078765 

National Library of Australia * NLA: 42709473

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Job Stress and Job Dissatisfaction: Meaning, Measurement and Reduction -- A Teaching Note

Dr. Gene Milbourn, University of Baltimore, MD



Two ubiquitous topics in organizational behavior and in human resource management courses are job stress and job satisfaction/dissatisfaction.  Our textbooks do well with the theoretical issues surrounding both but less well with the applied issues of their measurement and reduction in organizations. Numerous studies have found that job stress influences employee job satisfaction and consequently absenteeism, turnover and other negative outcomes. Since job satisfaction is viewed as an outcome of performance, impediments to performance generally create stress.  This article discusses the seminal work of Smith, Kendall, and Hulin on job satisfaction measurement (JDI),  Rizzo, House, and Lirtzman  on job stress measurement, and Friedman and Rosenman on the Type A personality and remediation.  While not intended to be a literature review, for pedagogical purposes selective research bearing on job stress and satisfaction is included.  Lastly, the paper will suggest an outline on structuring a project for students   to measure and reduce both stress and job dissatisfaction levels for use by instructors in higher education.  Sager (1991) defined job stress as a psychological state perceived by individuals when faced with demands, constraints, and opportunities that have important but uncertain outcomes.  Chen (2008) concludes that job stress is an individual reaction, and differs from general stress as it is also organizational-and-job related.  Wu and Shih (2010, 74), state that job stress is associated with adverse consequences for both the individual and the firm “since it has the effect of lowering motivation levels and performance, and increases turnover intentions.”  Likewise, Conway et al. (2010) concluded that job stress is one of the most important issues in health care because it has a negative effect on the safety and health of personnel.  Lawless  (1992) found that excessive job stress caused over one-third of all American workers to think about quitting their jobs, and that three-fourths of all workers feel that job stress lowers their productivity, and they experience health problems as a consequence.  Parayitam (2008), in developing an integrative model between stress, satisfaction, and life satisfaction, suggested that job stressors are positively related to work-family conflicts.  Sparks and Cooper (1999), in a large study of 7,099 workers employed in 13 different occupations, reported significant associations between a number of workplace factors and indicators of mental ill health, such as anxiety, somatic anxiety and depression.  Numerous researchers have found a link between job stress and job satisfaction.  Stamps and Piedmonte (1986), Cooper (1989), Vinokur-Kaplan (1991), Landsbergis (1988), and Terry et al. (1993) have shown that high levels of stress are associated with low levels of job satisfaction. However, Rees (1995) suggests that the relationship between stress and job satisfaction can differ depending on the group being investigated.  Most researchers conclude that since job satisfaction is viewed as result of performance, anything that interferes with performance such as the lack of clearly defined jobs or the lack of supportive leadership creates a stressful environment. Cummins (1990) reported that stressors are predictive of job dissatisfaction and a greater propensity to leave the organization.  Job stress costs America an estimated $200 billion annually, the UK 63 billion Pounds and Australia $15 billion (Savery and Luks, 2000). 


The 2008 Financial Meltdowns:  Were Early Warning Signs Detected and Disclosed By Management and Auditors?

Dr. Stanton Lindquist, Grand Valley State University, Grand Rapids, MI

Emily Drogt, Grand Valley State University, Grand Rapids, MI



We selected eight financial institutions experiencing difficulty during the global economic meltdown of 2008 to determine if early warning signs existed and were disclosed in the financial reporting process.  When examining five separate yet related financial factors, we found that indicators of imminent financial crises did exist in 2006 and 2007.  However, none of these warning signs were disclosed in the early 2008 financial reporting process by either management or the external auditors.  We concluded that the current financial reporting system is inadequate for informing shareholders and other interested users of impending financial crises.  During the global economic crisis of 2008, the United States witnessed the collapse of an unprecedented number of companies.  The resulting flurry of bankruptcies, mergers, acquisitions, and bailouts caused widespread chaos in the financial markets.  Consequently, investors lost hundreds of billions of dollars in market capitalization as well as confidence in the financial markets.  Many of the companies that survived, like GM, AIG, and Citigroup, are only in existence today because of massive government intervention.  The failures and subsequent bailouts of companies in certain industries, like the automotive industry, did not surprise the public after years of continuing net losses and declining share prices.  However, the collapse of companies in the banking and financial services sector appears to have caught investors by surprise.  Indeed, companies in this industry seem to have gone from relative profitability to the brink of bankruptcy in a startlingly short period of time.  Shareholders in these venerable financial institutions have been left wondering whether these collapses could have been predicted.  In this article, we will examine two issues:  1) whether warning signs of the impending collapse of companies in the financial and banking industry existed and 2) whether the design of Management’s Discussion and Analysis of Financial Conditions and Results of Operations (MD&A) and the external auditor’s going concern procedures allowed for timely and adequate disclosure of these warning signs.  We do not present the complex causes of the collapses in this article, but rather we focus on the timeliness and relevancy of financial information and disclosures provided to shareholders.  The following section presents a brief description of the design and intent of these two sources of financial information.  The purpose of Management’s Discussion and Analysis of Financial Conditions and Results of Operations (MD&A) is to provide readers with the information necessary to understand a company’s financial condition, changes in financial condition, and results of operations.  In order to address these basic objectives, the SEC requires management to comment on several areas, including the company’s liquidity, capital resources, and results of operations.  SEC Regulation S-K §229.303 provides management with the following guidance:


Organizations Should Capitalize on Employees’ Zone of Proximal Development While in the Midst of Change

Dr. Jerry Franklin III, Wayland Baptist University, Mililani, Hawaii



Based on developmental theories, humans either develop then learn, learn then develop, or mature mentally through a combination of the two.  Education-practitioners, school administrators, and community leaders all focus on trying to decide which concept is true.  Can these concepts lead to enhanced cognitive development and a better understanding of how they affect human learning and change?  This treatise compares, contrasts, and synthesizes the cognitive development ideals of Jean Piaget, Lev Vygotsky, Donald Schon, and Jeanie Daniel Duck.  Research suggests Vygotsky’s “Zone of Proximal Development” (and its communal learning properties) is the overshadowing theme supporting our leaders in their quest for change. Yukl (2010) states “Leading change is one of the most important and difficult leadership responsibilities.  For some theorists, it is the essence of leadership and everything else is secondary” (p. 298).  The author goes on to say “Major change in an organization is usually guided by the top management team, but any member of the organization can initiate change or contribute to its success” (Yukl, 2010).  As a developed society, the U.S. is susceptible to change and in many instances welcome the improvements anticipated with its inception.  On the other hand, because a developed society tends to analyze conditions that impact quality of life, which often results in anxieties being created (Rogers as cited in Franklin, 2009, p. 5).  Change lends itself to this type of analysis, resulting in resistance to the change the agent is trying to introduce (Rogers as cited in Franklin, 2009, p. 5).  This resistance will present itself in three major forms: (a) clients not understanding the change, (b) clients not believing in the change, and (c) clients protecting themselves from a perceived personal loss or hurt due to the change.  A change agent must address these concerns to ensure the innovation is adopted.  In the case of clients not understanding the change, informational forums should be conducted to explain the planned transition; providing expert contact information for any future questions should they arise (Rogers as cited in Franklin, 2009, p. 5).  For the clients not believing in the change, it has to be communicated to them why the change is needed, then solicit the help of opinion leaders to assist with obtaining buy-in from these nonbelievers (Rogers as cited in Franklin, 2009, p. 5).  Finally, for those clients afraid of the loss they will suffer due to the change; ensure they understand the organization has their best interests at heart.  This is done by informing them of programs being put in place to protect their pensions, positions, and careers (Rogers as cited in Franklin, 2009, p. 6). With the anxieties reduced, now the organization can concentrate on accepting and implementing the change, the priority mission of the change agent (Rogers as cited in Franklin, 2009, p. 5).  Additionally, this social context is defined within the construct of leaders understanding the technical and social requirements necessary for leading followers, and reciprocally, followers following leaders.  Hall and Densten (as cited in Franklin, 2009, p. 6) emphasized the importance of the latter in an attempt to explain the importance of the qualitative variations in follower behavior related to organizational change not only at the individual level, but also at the organizational level.  This fundamental understanding should not be overlooked because in order for leaders to lead, they must possess exceptional talent and the ability to meet the needs of their followers (Maccoby as cited in Franklin, 2009, p. 6).


Failure and Recovery: An Opportunity to Reconnect and Recommit to Customers After Service Failure in the Internet-Based Service Encounters

Dr. Akins T. Ogungbure, Troy University, Atlanta Site, Atlanta, GA



This paper examines how customers’ attribution for service failures and expected recovery in online service encounters are influenced by whether the recovery efforts are satisfying or dissatisfying to the customers; the relationship between satisfaction and other behavioral outcomes such as intention to remain and word-of-mouth is examined.  The Internet retailing and  service recovery warrants special attention because of its inherent ramifications such as the ease of attributing failure to the service provider after a service failure, the lack of interpersonal relationship, and the ease of leaving one service provider for another. The research explores some of the importance of Internet service recovery mechanisms relative to customer’s attribution for failure, expected service recovery, satisfaction, and intent to remain and how these mechanisms can be employed by the service providers to improve customer satisfaction, minimize negative word-of-mouth, and improve the firm’s profitability.  This study employs a web-based sample, and data were collected by means of questionnaires on the Internet. The collected data are analyzed using correlation and regression analysis to provide answers to the research questions. The results of the analyzed data are discussed and presented.  Internet-based service encounters especially Internet retailing or e-tailing has gone through a range of highs and lows.  Internet-based service encounters were initially thought as the future of commerce however, they lost favor in the business community and with some consumers after poor operations execution that led to a catastrophic 1999 holiday season (Mollenkopf, Rabinovich, Laseter, & Boyer, 2007).  The meltdown of the dot-com businesses a few years later though created some challenges and setbacks for the service providers and Internet-based services, but instead the phenomenon continues to grow, from 7 percent of total retail sales in 2004 to a projected 12 percent of total retail sales by 2010, or $316 billion (Chain Store Age, 2004).  In recent years, a great number of consumers have enjoyed the various benefits offered by the Internet and electronic commerce technologies.  Selling products and services on the Internet is predicted to have huge potential, and e-commerce has received enormous press, speculations, and criticisms. Academic researchers have suggested that the traditional “marketplace” interaction would be replaced by “marketspace” transactions (Rayport & Sviokla, 1994). The marketspace is defined as a “virtual realm where products and services exist as digital information and can be delivered through information-based channels” (Rayport & Sviokla, 1995). The Internet has not destroyed brick-and-mortar retailing as many people once feared. However, it has tremendously changed consumer behavior. The web provides shopping when you like, where you like, with access to a vast amount of research - from the product’s attributes to where it is cheapest. There are no real-world or traditional stores that can replicate all that. The traditional retailers are increasingly trying to give customers more control over their total shopping experience by bringing web-based and web-enabled technologies into the store thereby creating more clicks at the bricks (Byrnes, 2007).  With Internet technological advances, customers enjoy greater convenience such as web-based service centers where they can ask questions regarding product information, payment issues, delivery, product returns, etc. before and after making a purchase (Cho, Im, & Hiltz, 2003). Despite all the potential benefits of the Internet retailing environment, there are some issues that are related to the environment that need to be explored and resolved: One of these issues involves the management of online service failures and recoveries. Although service recovery has recently received increasing attention in the literature, it is commonly acknowledged that we still have a somewhat limited understanding of the topic (McCullough, Berry, &Yadav, 2000).  For instance, issues such as credit card security, privacy, on-time delivery, returns, and ease of navigating websites have surfaced as critical elements of e-service quality, and the online environment lacks most of the interactional human elements so vital to the traditional service experience (Holloway & Beatty, 2003). 


Toward a General Holistic Theory of Risk

Dr. David R. Borker, Manhattanville College, Purchase, NY

Dr. Valery N. Vyatkin, Saint Peters College, Jersey City, NJ



This paper argues for the need of a general comprehensive holistic theory of risk without which progress in applied risk management in all areas of organizational activity is illusory. Use of holistic risk in writings on enterprise risk management and decision analysis is examined.  Shortcomings of currently conducted applied risk analyses are addressed.  The origins of risk theory are summarized followed by the introduction of the concept of the multidimensional nature of risk. Early achievements during the seventeenth and eighteenth centuries in the development of the classic risk model are discussed.  A series of three proposed general risk formulas are presented.  These three general risk formulas are offered as the initial basis for the development of a general comprehensive holistic theory of risk. The subject of risk classifications to complement this theory is introduced and a need is indicated for further work in the development of a general holistic taxonomy of all risks.  The field of risk management requires the development of a general comprehensive, synergistic theory of holistic risk encompassing all of the multiple dimensions of risk phenomena. The absence of a comprehensive holistic theory of risk delays and even disrupts the development of truly applied risk management in any area of management activity.  The current knowledge of risk management has matured to the point where it is possible and necessary to begin to generalize in the form of an abstract theory of holistic risk. This will be in the form of synthesized knowledge within which separate concepts, hypotheses and laws become elements of a unified system of knowledge based upon an appropriate practical methodology applicable to any type of risk.  Toward this end, we offer some initial steps in the construction of an abstract theory of holistic risk that can ultimately be applied to any risk situation.  Specifically, we provide a series of risk formulas, tables and concepts toward the development of a general comprehensive theory of holistic risk.   In recent writings on risk assessment and risk management by corporate risk planners and management consulting firms, the term holistic has become increasingly popular and is frequently equated with the objectives of enterprise risk management (ERM). (Fraser & Simkins, 2010) (Gordon & Tseng, 2009) (Mikes, 2009) Virginia Prevosto identifies holistic risk as a synonym for ERM stressing its importance in monitoring and quantifying the “diverse risks that should be integrated into the enterprise view of the insurer.” (Prevosto, 2008)  On the other hand, Carl Pritchard defines risk management as using “a holistic approach, examining risk as a blend of environmental, programmatic, and situational concerns.” (Pritchard, 2010)  A holistic approach to risk is specifically identified with concepts such as comprehensive, integrated, complex, and cross-divisional.  (Palmer & Wiseman, 1999) (Liebenberg & Hoyt, 2003)  The Global Intelligence Alliance website concludes from its survey of global executives that “market intelligence, where information on the business environment is systematically gathered, processed and analyzed in order to aid decision-making, will include more holistic risk management and greater cross-organizational collaboration within the next five years,” (Intelligence, 2010)  Management and business consultants already advise and give practical training on how to conduct effective holistic risk assessment using fairly conventional risk assessment terminology.  For example, one such advisory group identifies the three components of holistic risk assessment as risk identification, analysis and mitigation. (Sympson, 2009)  Clearly in many cases, the term holistic is simply being used as a marketing catchword for making established methods of analysis seem novel, improved and more complex.


Relationship Marketing in the American and Canadian Export Sectors: A Matter of Trust

Dr. Lise Heroux, State University of New York--Plattsburgh, Plattsburgh, NY

Dr. Ali Hammoutene, Ecole des Hautes Etudes Commerciales (HEC), Algiers, Algeria



This research explores eight export relationship dimensions from the perspectives of American and Canadian exporting firms. The results suggest that their evaluation of the relationship constructs is similar for seven of the eight dimensions: dependence, understanding, commitment, communication, distance, uncertainty and conflict. This is consistent with the perception that psychic distance between the United States and Canada is small and that both parties would have similar expectations in a trade relationship. However, significant differences were found for the trust construct. Canadian firms tend to attribute greater importance to trust than their American counterparts. Therefore, American exporters should not neglect trust-building activities with Canadian clients.  The relationship between the United States and Canada is the closest and most extensive in the world. They are each other’s largest trading partner, with a staggering bilateral trade volume of approximately $1.5 billion a day in goods and services in 2009, according to the U.S. Census Bureau. Their geographic proximity and participation in the Canada-U.S. Free Trade Agreement and subsequently in the North American Free Trade Agreement (NAFTA) with Mexico have facilitated trade across North America for firms of all sizes. The individual importing and exporting activities of firms on both sides of the border, and the relationships they have established with their trade partners, are responsible for the aggregate volume of bilateral trade in this region of the world.  Exporting represents one of the most common means of entering foreign markets. Its advantages over other market entry strategies are based on reduced financial risk, lower commitment of resources and a high degree of flexibility (Stottinger and Schlegelmilch, 1998). Exporting and export behavior have been the focus of a large body of literature (Cavusgil and Nevin, 1981; Douglas and Craig, 1992; Leonidou, 1995a, 1995b; Leonidou and Katsikeas, 1996; Li and Cavusgil, 1991). This early export marketing literature mainly focused on American, European and Japanese exports. However, the export marketing literature has recently expanded to include other regions of the world such as Dubai, Vietnam, Australia, Korea, Thailand, and other countries (Hammoutene, 2004; Lee and Griffith, 2004; Nguyen and Nguyen, 2010; Ogunmokun and Ng, 2004; Racela, Chaikittisilpa and Thoumrungroje, 2006).  This paper presents additional empirical evidence on eight determinants of successful export marketing relationships and on the role of psychic distance for Canadian and American exporters.  A sound business-to-business relationship can be beneficial to both buyers and sellers, such as importers and exporters.  Leonidou et al. (2006) state that sellers can better match their products and services to customer needs; secure high repeat sales and exploit new market opportunities; minimize customer switching to competitors; use their customers as a source of innovative ideas; and gain access to useful market information. Buyers can insure a long-term supply of inputs for their production; make use of the seller’s expertise and resources to protect their cost structure; suggest changes in seller’s production operations that would speed up processes; reduce wastage and improve efficiency; exploit technical developments and cost rationalization in the seller’s organization; and achieve better coordination of their company’s functions when dealing with multiple suppliers.  Export marketing relationship research has attempted to identify some determinants of successful exporting relationships. Leonidou et al (2006) review these factors and provide an integrated model of the behavioral dimensions of industrial buyer-seller relationships using empirical evidence in Greece, which confirms findings of previous research on the subject. The authors identify ten major constructs that play a critical role in successful business relationships: distance, trust, understanding, dependence, commitment, communication, conflict, adaptation, cooperation, and satisfaction.


Management Responses to Current Stock Prices

Dr. Donald Margotta, Northeastern University, Boston, MA



What should managers of corporations and of public policy do in response to current stock market prices and stock price changes?  The answer to that question has important implications for corporate governance issues as well as for the intellectual foundation of public policy regarding merger and proxy regulations.  It also requires an assessment of the normative value of certain precepts of finance theory. This paper reviews previous literature on this topic and provides evidence which suggests that while current stock prices and price changes indeed provide important signals for decision making by investors, their meaning for company managements, judges, and public policy makers may not be as compelling and depends on, among other factors, the nature of the company and of decisions being considered.  Fama (1970) states the ideal role for prices in a free market:  “In general terms, the ideal is a market in which prices provide accurate signals for resource allocation: that is, a market in which firms can make production-investment decisions, and investors can choose among the securities that represent ownership of firms' activities under the assumption that security prices at any time ‘fully reflect’ all available information.  A market in which prices always ‘fully reflect’ available information is called efficient.” While there is ample evidence that stock market prices allow investors to choose among securities and that markets, from an investor perspective, are efficient as that term is defined by Fama, there is some question on whether market prices provide “accurate signals” by which firms can make production-investment decisions and upon which policy makers can formulate appropriate corporate regulations. This paper first discusses what stock prices mean to investors. It next discusses what they may mean to corporate managers and policy makers.  Finally, the paper provides illustrations showing how several CEO’s responded to market reactions to their decisions and suggests how managers and policy makers should respond to market prices in the future.  Before discussing what meaning current stock prices have for corporate managers, it is first important to understand what they mean to investors and there is no question that stock market prices are important to investors, enabling them to choose among securities as Fama suggests.  Evidence that investors rely on market prices and price movements to make investment decisions can be seen in many areas.  For example, some investors use technical analysis that looks at historical price patterns for guidance in making investment decisions.  Bodie et al. (2010) state that “Technical analysis attempts to exploit recurring and predictable patterns in stock prices to generate superior investment performance.” The authors also discuss specific techniques investors use to make their investments on stock price data.  The cite trend analysis, for example, and describe “Dow Theory, the grandfather of technical analysis,” which looks at primary, or long term trend of prices, as well as secondary, or intermediate trends, and finally at tertiary, or minor trends.  The authors go on to describe variations on the Dow Theory, such as Elliott and Kondratieff wave theory, and they also describe numerous other stock price based tools investors use to make stock market investment decisions, such as point and figure charts, moving averages, and others.  In addition to the Bodie text cited here there are numerous other academic texts, practioner publications, popular books and software programs that offer advice on stock trading strategies based on stock price movements and patterns.  While Dow Theory investors focus on longer term trends in stock prices investors at the opposite end of the time spectrum base their stock investment decisions on a new form of trading strategy called high-frequency trading (also called “flash trading”) which uses computer algorithms to analyze price data within thousandths of a second and trades millions of shares in minutes in response to these very short term movements in stock prices. 


Do Large Projects Affect Agency Conflicts? Evidence from the Movie Industry

Dr. Wayne J. McMullen, Pennsylvania State University, Brandywine Campus, Media, PA

Dr. Raj Varma, University of Delaware, Newark, DE



Agency conflicts can cause managers to choose projects that enhance private benefits such as prestige or job security from risk minimization.  Extant research calls for a separate examination of large projects because the capital outlays of such projects can exacerbate or mitigate agency conflicts.  Our analysis of large projects in the movie industry indicates that larger projects provide managers with lesser private benefits from prestige and none from risk minimization.  We also find that the ex post returns from large projects are not significantly different from those of smaller projects.  These results are consistent with a competitive equilibrium in which a significant determinant of project choice is the tradeoff between private benefits from prestige and commercial success.  Drawing on the prominent work of Berle and Means (1932) together with the work of Jensen and Meckling (1976), a broad literature has acknowledged the existence of agency conflicts arising from the separation of ownership and control.  Extant theoretical research on agency conflicts advocates that managers may have motives different from value or profit maximization with the projects they choose to make.  Such managers may choose projects for a variety of private benefits arising from career and other concerns.  On the other hand, if value or profit maximization is the eventual motive for the manager, managers choose projects with competitive advantage as such projects would augment a firm’s returns.  In this paper, we investigate project choice in the movie industry.  Our attention to the financial performance of movie projects follows recent developments in the consideration of the movie industry by scholars in a variety of disciplines (See Elaishberg, Elberse and Leenders, 2005).  In particular, a small but slowly increasing number of finance scholars have been using the movie industry as a useful laboratory for testing various theories in financial economics.  For example, Fee (2002), investigates the choice of an entrepreneur to lose control by obtaining finance from a large outside investor versus maintaining control by getting independent funds in the movie industry because “the institutional features of the motion picture industry closely resemble those modeled in the theoretical literature” (p. 682).  Palia, Ravid and Reisel (2008) examine strategic alliances in the movie industry since “a movie project has a short-term horizon with a clear starting and ending point” (p. 484).  McMullen and Varma (2010) as well as McMullen and Varma (2011) examine project choice in the movie industry because of the rich project-by-project data available for this industry.  Our selection of the movie projects we choose to investigate in our study is inspired by research calling for a separate examination of large projects because large capital outlays of such projects can, as we discuss in the next section, exacerbate or mitigate agency conflicts.  The large projects we choose to examine in our study are movie projects based on fictional superhero characters, such as Superman and Batman, who typically have superhuman powers dedicated to protecting the public.  For decades, stories of superheroes have been an important part of our cultural psyche, appearing in numerous comic books and, more recently, in other media as well.  Our motivation for choosing to examine movie projects based on superheros because the capital outlays for such projects tends to be very large.  In our sample, movie projects based on superheroes have over twice the capital outlays of the projects in our comparison sample. 


U. S. Unemployment Is Not What is Officially Reported

Dr. Fred Maidment, Western Connecticut State University, Danbury, Connecticut



Unemployment in the United States has been historically high for longer than any period of time since the Great Depression, yet it shows no real signs of returning to its post-depression/pre-recession historic levels.  Unfortunately, the unemployment rates reported by the Bureau of Labor Statistics do not really reflect the true state of unemployment in the economy of the United States.  This reality and the ramifications of this lack of connection to reality between what the Bureau of Labor Statistics reports is the subject of this article.  The unemployment figure announced by the Bureau of Labor Statistics for the Month of November, 2011 was 8.6%.  This number was a significant drop from the previous number of 9.0% and the consistent 9.1 % from July through September, 2011 (Table A1: Employment of the non-institutional civilian population 16 years and over, 1976 to date, December, 2011).   The way the United States Bureau of Labor Statistics computes the unemployment rate is to determine the total number of individuals in the labor force each month and then determine how many of those individuals are then unemployed.  The people included in this calculation essentially include the persons currently employed and those receiving unemployment benefits.  Workers not included in the workforce and therefore the unemployment calculation include: those who have exhausted their unemployment benefits, but may still be looking for work; business owners who have closed their businesses and have not reopened a business or found a job; students who did not hold a job upon graduation and are currently looking for work; people who have started looking for work because a member of the family unit has lost a job; as well as others.  Essentially, a worker has to have been employed by someone else, and involuntarily lost their job before they can be counted as unemployed.  (Maidment, 2010).  From November, 2010 to November, 2011, the increase in the number of people not in the labor force was 1,793,000 people.  According to the Bureau of Labor Statistics, the total labor force actually declined slightly and the number of people employed increased by about 1,671,000 people during that time.  However, if the 1,793,000 are added back into the labor force, the unemployment rate is 9.6 percent. (Table A1: Employment of the non-institutional civilian population, 16 years and older, 1976 to date, December, 2011)  The nearly 1.8 million people that were removed from the labor force of the United States from November, 2010 to November, 2011 represent a full percentage point in the unemployment rate.   These 1.8 million are no longer considered as a part of the labor force.  They may be looking for work, but the Bureau of Labor Statistics of the Government of the United States no longer considers them to be part of the workforce.  According to economists, the current economic downturn started in January of 2007 (Holland, D., Burrell, R., Fic, T., Hurst, I, Cadize, I., Pilonza, V., 2009) .The labor force in 2007 was 153,124,000. The labor force in November of 2011 was 153,883,000, an increase of 759,000 in four years or an average of 189,570 new entries into the labor force per year.  The unemployment rate for 2007 was 4.6 percent.  From 2007 to November, 2011 the increase in the number of people not in the labor force was 7,815,000 (Table A1: Employment of the non-institutional civilian population, 16 years and older, 1976 to date, December, 2011).  If these individuals are added back into the labor force, the unemployment rate is 13.06 percent.


Revising Mortgage Financing and Social Security: A Financial Partnership

Dr. Craig H. Martin, University of Phoenix, Phoenix, AZ



The inclusion of mortgage financing instruments in the primary debt markets has contributed to mortgage rates fluctuations, which lead to severe turbulence in mortgage financing availability. The organization of the Old-Age and Survivors Insurance Trust Fund (OASI Trust Fund) as a pass-through payment system rather than as a sound annuity-based system has resulted in a precipitous decline in fund balance, which is predicted to continue unless economic modification is introduced. Examinations of the operational characteristics of the secondary primary residential mortgage market and the OASI Trust Fund are made to develop modifications for each that enable more favorable performance. Formation of a financial partnership of the Social Security trust fund with Fannie Mae and Freddie Mac agencies results in the provision of a stable interest rate for primary residential mortgages and a defined, risk-free investment pool for an annuity-based trust fund. Research to explore the political will to adopt these changes in the United States is proposed. Research to determine the possible applicability of the plan for other countries, primarily euro-denominated countries, is also proposed.  In the 1930’s under President Franklin Roosevelt’s New Deal program, the United States (U.S.) Government developed a means to enable homebuyers to acquire mortgages for their primary residences. The objective of the program was to provide mortgages via the banking system that had characteristic requirements of low down payments, longer terms to maturity in years and relatively low and guaranteed interest rates (Alford, 2008). The flaw in the program as conceived and one that still exists today is that the current mortgage rates are determined more by actions of the Federal Reserve Agency and less by the outcome of a sound financial analysis of the residential mortgage being considered. Fluctuating mortgage interest rates have correlated with hyper-inflated pricing (i.e. "bubbles") in mortgage markets, as well as contributed to a severely restricted market for mortgages (Wiedemer, Wiedemer, & Spitzer, 2011).  The OASI Trust Fund, which operates under the Social Security System, was designed to function as a pass-through payment system. The contributions of those working today pay benefits to those no longer working (, 2012). With an initial ratio of 41 persons working for each beneficiary of Social Security, the program functioned smoothly until the 1980s. Although revisions were made in the 1980s, the shrinking ratio between workers and beneficiaries, precipitated by a change in demographics, was not addressed (, 2012). With the present ratio of workers to beneficiaries at approximately 3:1 and moving to a rate of 2:1, system reform is rising in importance on the agenda of the U.S. Government (Dent, 2011).  This paper will first examine and propose reforms to each of the programs to establish both on sound and principled financial bases. Then a proposal will be considered to form a financial partnership which would benefit both the OASI Trust Fund and Fannie Mae and Freddie Mac, the government agencies  charged with providing affordable primary residential mortgages.  Fannie Mae was established as a government agency by the U.S. Congress in 1938 as one of President Roosevelt’s New Deal programs (, 2012). The goal of the program was to enable a greater number of primary residential home buyers to obtain relatively low-interest rates, low-down payments and longer maturity periods (in years) in which to repay their mortgages. Initially, Fannie Mae functioned as a national savings and loan association, enabling local banks to provide more affordable mortgage loans for the benefit of the buyers of principle residences.  An additional benefit of the establishment of Fannie Mae was that a secondary mortgage market was established to which brokers could sell primary mortgages which were granted to homeowners. The concept under which Fannie Mae was formed was that the agency could borrow at low rates from foreign investors because of the perceived support of the federal government. Fannie Mae would then purchase mortgage instruments from the bankers and brokers who grant loans (Alford, 2008). 


Financial (IL) literacy of College Students

Dr. Candy A. Bianco, Bentley University, MA

Dr. Susan M. Bosco, Roger Williams University, RI



This study surveys 574 full-time undergraduate college students to evaluate financial literacy. We also examined personal and familial characteristics, and future family and career expectations as predictors of financial literacy. The overall mean percentage of correct answers is 46%.  Students with a cumulative grade point average above a 2.0, business majors, males, and upper-class students outperformed their counterparts. Participants whose family income is high, have at least one charge card, and are Caucasian achieved higher scores. The results indicate that college students are financially illiterate.  The manifestations of the costs of financial illiteracy are apparent from studying several social phenomena.  For the most recent quarter ending March 2002, personal bankruptcy filings hit a new annual high of more than 1.5 million (ABI, 2002).  Financial problems are one of the leading causes for divorce in the U.S. (AAML, 2002; Stanley & Markman, 1997) and one of the major reasons for the elderly living in poverty (Mason, 2000). The trend from defined benefit plans to defined contribution plans has resulted in America becoming a nation of investment managers. At the end of the year 2000, over 42 million Americans were managing deferred compensation plan accounts worth  $1.8 trillion (Crawford, 2002).  Yet, in 1998 over one-half of Americans reported they have not saved enough for retirement, and 53% reported that they often live paycheck to paycheck (Molinari, 2002).  Many surveys have tested the financial literacy of adults.  All have shown that the majority of adults are not financially literate (CFA/AMEX, 1991; EBRI, 1995; KPMG, 1995;  Mastio,1999;  Money Magazine/Vanguard, 1996; Opiela, 1999; PSRA, 1996, 1997; SEC, 1999; Simon, 1998). In February of 2002, the United States Senate held hearings on the state of financial literacy and education in America. SEC Chairman, Harvey L. Pitt, Secretary of the Treasury,  Paul O'Neil,  and Alan Greenspan of the Federal Reserve Board were three of nine experts who all presented evidence that Americans do not have adequate knowledge to make personal financial decisions (Sarbanes, 2002). Several studies have been conducted on younger populations and concluded that high school students also show a lack of financial literacy  (ASEC, 2001; Jump$tart, 1997, 2000, 2002; NEFE, 1998).  The purpose of this study is to update the state of financial literacy among full-time undergraduate college students and to identify familial and personal characteristics that may impact their knowledge of personal finance.  The term financial literacy is used by many authors and organizations (ASEC, 2001, Chen & Volpe, 1998; ISFS, 2000; Jump$tart, 2002; Mastio, 1999;  NEFE, 1998; Ophelia, 1999; U.S. Senate Committee on Banking, 2002).  We define this term as having a working knowledge in the following four areas - investment management, retirement planning, general money management, and credit management.  A foundation in investment management and retirement planning includes knowledge of portfolio diversification, asset allocation, risk, and the importance of time horizons. 


Reinvigorating the Caribbean and Central American Common Market

Keith R. St. John, Bentley University, Waltham, MA


Over the past three decades the prevailing views of regulating global trade have changed dramatically. Protective tariffs are now viewed as counterproductive and anachronistic and many countries are phasing them out. Free trade zones, duty-free zones, and treaties giving preferential reciprocal access are on the rise to varying degrees between many nations. Developing nations are finding new ways of progressing beyond being providers of raw materials for the richer countries. As investment and technology flow into the emerging countries, they are increasingly becoming industrialized and are progressing at fast rates. The fastest-growing emerging countries have become the locomotive force for the economic recovery of entire regions including Central America.  Latin American countries have struggled to achieve individual autonomy, and have often been in the orbit of commercial empires. External pressures and internal divisions have divided them and also unified them.  Famously, Gran Colombia and Gran Guatemala disintegrated into the patchwork of countries we know today. The pull toward unification then reemerged.  During the 1960’s Central America coalesced once again and formed an economic union, the Central American Common Market (CACM).  It had a promising start before war and political instability caused it to fracture during the 1970’s, ushering in the Lost Decade of the 1980’s. (1) Since that depressed time, many unifying forces have converged to invigorate the current state of trade in Central America. Costa Rica has emerged as the richest and most politically sophisticated country.  It leads the Central American region in income per capita. (2)  Panama, conventionally not classified as part of Central America, is rapidly gaining economic strength, and now is on a par with Costa Rica in income per capita, though its income distribution is less egalitarian. (3)  Panama's growth had already begun to accelerate when it ramped up the traffic through its major asset, the canal. When the Canal Authority was transferred from U.S. to Panamanian control, the country's growth and ambitions for optimizing its potential took a quantum leap. In more recent years with the formation of CAFTA-DR, the union of Central America with the Dominican Republic, the trade zone expanded into the Caribbean, allowing for further economic gain. A resurgent El Salvador has also given a boost to the economic prospects and international visibility of the region. However, the recent decades have not been kind to all the Central American countries. Nicaragua, Honduras, and Guatemala, despite having the largest land masses and three of the four largest populations, lag behind their neighbors economically.  Their indicators of economic well-being are sharply lower than those of their more prosperous neighbors. (4)  Nicaragua was severely handicapped during the 1979-1992 period, when the U.S. dramatically cut the volume of imports it accepted from that country. (5) Though its economy has rebounded in the past two decades, it still faces a wide gap in standard of living compared to its neighbors to the south. (6)  Reliance on trade with the U.S. is a concern for every country in the CAFTA-DR zone, not only for Nicaragua.  For each country the U.S. is the largest trade partner, both as the destination of exports and also as the source of imports; and the U.S. is also the largest source of foreign direct investment (FDI). (7)


The International Competitiveness of Jamaican Manufacturing Firms: A Qualitative Inquiry

Dr. Michael Elisha James, University of Phoenix



This qualitative study assessed the international competitiveness of Jamaican manufacturing firms with reference to the Malcolm Baldrige National Quality Award (MBNQA) criteria for performance excellence. It relied on thematic analysis technique commonly used in phenomenological studies. This thematic analysis is greatly inductive where the themes surfaced from the data through isolated patterns and processes and commonalities and differences and are not forced upon it by the researcher. The following themes were sorted based on interview questions: 1) Differences of TQM and Non-TQM firms, 2) Human resource planning and development are well established in TQM companies, 3) Shared management practices and values of Jamaican manufacturing companies, 4) TQM as an important management tool in a competitive business environment, 5) Perceived factors in business success and performance, and 6) Business operations issues of Jamaican manufacturing companies. The implications of this study for Business Leaders, Government Officials, and Academia are discussed. For example, Corporate Organizational Leaders wanting to implement quality management initiatives should conduct in-depth self-assessment to determine the extent to which managers within their organizations understand how, what, and why TQM practices enhance competitiveness.  This study presents results of the qualitative analysis performed on the participants’ perceptions with regard to the extent of quality management practices within the Jamaican manufacturing industry. The main purpose of this qualitative study was to assess the international competitiveness of the Jamaican manufacturing industry for TQM versus non-TQM businesses using the quality management model stipulated by the Malcolm Baldrige National Quality Award (MBNQA) Criteria for performance excellence. The adoption of effective quality strategies and practices must be one of the critical success factors for accomplishing international competitiveness. The problem is that, approximately ninety percent of the studies conducted in Jamaica have not focused on the use of quality management models for assessing the country’s industrial rejuvenation and competitiveness. Studies have focused exclusively on the use of economic models for assessing Jamaica’s international competitiveness. The use of economic models alone at any level of competitiveness assessment is no longer adequate. There is a need to integrate quality management models and economic models to gain a better understanding of Jamaican manufacturing firms’ international competitiveness.  The idea of integrating quality performance and economic performance has global significance as well because the Global Economic Forum (recognizing that the nature of international competitiveness is changing) has modified the concept of competitiveness (Frendel & Frenkel, 2005). The new Global Competitiveness Index “incorporates a larger number of factors than before to include human capital quality, the efficiency of the labor and financial markets, and the quality of the infrastructure” (Frendel & Frenkel, 2005. p. 32). Previously, “the Global Competitiveness Report of the World Economic Forum examined the relative competitiveness of economies [purely] on a broad basis of microeconomic and macroeconomic indicators” (Frendel & Frenkel, 2005, p. 29).


Trends in Outsourcing and Its Future

David Rosebush, Sam Houston State University, TX

Dr. Hadley Leavell, Sam Houston State University, TX

Dr. Balasundram Maniam, Sam Houston State University, TX



Outsourcing is used in many sectors of the corporate environment but this paper will focus on the following areas: Information Technology, Human Resources, and Science and Engineering.  In the past, outsourcing has been widespread in those particular fields.  A review of the reasons why companies decide to outsource will be discussed, followed by the benefits and disadvantages they encounter as a result.  The main concentration will be determining if outsourcing is profitable for the companies and how it has changed the current job market in the U.S and other developed countries including developing countries such as India.  These results will indicate the direction the U.S. is predicted to take in future outsourcing.  Local and off-shore outsourcing has been increasing significantly throughout the industrial economies of the world.  Outsourcing is a handing over of accountability and authoritative power for manufacture and administration of a segment of a firm’s business, usually activities for which the business has neither a strategic need or a singular capability, to an outside domestic vendor who can provide better service and potentially higher quality at a lower cost allowing the firm to concentrate resources and investments on basic competencies and high growth areas.  Outsourcing should not be confused with offshoring; outsourcing agreements create continuing relationships between supplier and beneficiary, with a high degree of risk-sharing. (Frajli, Poloski, Tkalac, 2003)  Providers that are outside of the boundaries of the company, usually within the same country, deliver products or services on behalf of the company.   Manning, Massini, and Lewin (2008) state that offshoring refers to the practice of sourcing and coordinating responsibilities and industrial roles across national borders, in simpler language the contracting out of work to other countries.  As the globalization of businesses rapidly increases outsourcing and offshoring of services particularly in the Information Technology (IT), Human Resources (HR), Science and Engineering (S&E), and Research and Development (R&D) departments may exist concurrently within any company and frequently they overlap in their functions. Manning points out that for much of the last 50 years outsourcing has steadily increased; just a few of the reasons for this increase are the rapid change and convergence of technology, price competition, skills shortage, finite resources, and a worldwide recession.  The reality that outsourcing is an integral part of the business model in the U.S needs to be understood and analyzed.  Ramachandran, et al (2004)  affirm that before becoming a part of the outsourcing process vendors must consider four points.  The first point is an evaluation of the rational decision-making process at the customers’ end. Secondly, a clear communication of their proposition to the customer must be made.  Third, a self-evaluation must be made to determine if they have sufficient internal ability to perform outsourced tasks and to maintain quality.  Fourth, an auditing of the significant investment needed to build similar resources like product brands or distribution facilities that are critical for success in other segments of the industry.  The advanced telecommunications available today allows digitized information that requires no face-to-face contact, like software programming and design, call center operation, accounting and payroll operations, medical records transcription, medical tests interpretation, paralegal services, and software research, to be easily outsourced.  The rapidly growing use of outsourcing has created many questions and challenges that must be addressed. It is frequently a hot topic in political debates. What work should be performed in-house and what should be outsourced?  Do the benefits exceed the potential costs of opportunism? Are the security risks within an acceptable range?


The Importance of Non-Equity Alliances and a Descriptive Assessment of Member Needs from a Commodity Beef Association

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

Dr. Ryan D. Rhoades, Texas A&M University-Kingsville, TX

Dr. Tracy Rutherford, Texas A&M University, TX

Justin Foster, Texas A&M University-Kingsville, TX



The objectives of this study were to demographically describe this beef breed association’s membership and to determine membership’s perceived service preference. Results are derived from 282 member survey responses from a census of all 527 active association members, which is a 53% response rate. Respondents were mostly: from Texas (48.7%), over 45 years of age (79.4%), have less than 50 head (50.0%), earning less than 40% of their income on the ranch (86%), and describe their ranch as a Seedstock enterprise (52%). Members were asked to rate the importance (1-4) of twelve potential services the breed association could provide that would contribute to the success of the breed in the next 10 years. Increasing commercial sales, developing specific markets, and increasing breeder education were ranked the preferred services by the overall membership. Junior members rated the importance of developing advertising, increasing breeder education, and increasing registration & records higher (P<0.01) than senior members. Small and medium sized operations placed greater importance (P=0.01) on increasing registration & records than larger operations. Those operation where more than 40% of their income was derived from the operation, rated increasing commercial sales higher (P<0.01) than those less than 40%. No major differences were found among operation type. These results suggest that membership is very diverse; however the roadmap for refining this commodity breed associations brand in the next 10 years includes services that will ultimately increase sales and education. Some differences in service rankings exist among different demographics. These members could be targeted to design strategies to strengthen those service areas.  Research has indicated that consumers are increasingly interested in branded products that offer product attributes aligned with their demand preferences (Howard and Allen 2006, Velasquez, Eastman, and Masiunas 2005, Patterson et al. 1999, Adelaja, Brumfield, and Lininger 1990).  As these consumer preferences increase, the associated commodity groups also create stronger alliances that assist their producers in building stronger genetics, improved supply chain control and marketability.  Commodity associations have long attempted to support their associated industries in a variety of manners.  This business association sometimes acts as an individual business with a focus to gain profits and reduce risk.  According to Pascale et al. (2000), firms must be proactive in managing uncertainty to create long-term value because uncertainty has upside potential as well as a downside exposure.  Focusing only on un-certainty avoidance as is typically the case in analyzing risk could cause a firm to overlook opportunities to create value (Nottingham 1996, Talavera 2004).  Detre et al. (2006) suggest a score card approach to measuring operation decisions by taking areas of the operation and qualitatively measuring potential opportunities and exposures for each area.  This is sometimes called scorecarding and heat mapping and they apply a mental model that frames assessment of uncertainty from both a potential and an exposure perspective. Scorecarding consists of taking qualitative discussions about strategic uncertainties and turning these discussions into ordinal rankings. Heat mapping, a process of taking the rankings from scorecarding utilizing both colors/symbols and generic strategies to communicate the impact of the uncertainty on the business, further operationalizes the assessment process. In essence, these mental models are designed to promote and generate discussion around key areas of uncertainty through a systematic frame-work that directs the firm in selecting an appropriate uncertainty management strategy (Detre et al. 2006).


Critical Evaluation of Solutions to the Too Big to Fail Problem

Dr. Muhammad Rashid, University of New Brunswick, Canada

Dr. Mohamed Drira, University of New Brunswick, Canada

Dr. Basu Sharma, University of New Brunswick, Canada



This paper presents a critical analysis of several diverse solutions to the too big to fail, TBTF, problem in the banking sector. The solutions considered are: limit on size, tax on profit, regulating systemic risk, improving bank governance, no bailout, raising capital adequacy requirements, and embedded contingent capital. To assess these solutions, a set of criteria factors which are mostly derived from the extant literature, are: probability of failure, spillover effects, moral hazard, information asymmetry, market discipline, competitive neutrality, efficiency, and ease of implementation. Findings show that no single solution is adequate enough to effectively solve the TBTF problem.  In the banking sector, the term too big to fail, TBTF, is frequently used to describe how regulators bailout a large failing bank. The term came into common usage in 1984 when the Continental Illinois National Bank – the seventh largest bank and the largest corresponding bank in the USA at that time, was rescued from failure. A clear statement about the TBTF policy emerged when in the defence of the bailout of Continental Illinois National Bank, the then Comptroller of Currency stated that regulators cannot permit any of eleven largest banks (in the USA) to fail (Kaufman, 2002).  The main reason for the TBTF policy has been the regulators’ concern about adverse spillover effects or systemic risk of a large bank failure on other financial institutions and simultaneously and ultimately on the real economy (1). The TBTF policy has short-run gain arising from the avoidance of spillover effects, but it has both short-run costs and long-run costs. According to Goodlet (2010), the short-run costs consist of the taxpayers’ funds which are used for the rescue, while long-run costs arise from the inefficient allocation of resources due to moral hazard behaviour of the TBTF institutions. With respect to the 1980s bailouts of savings and loan associations, Stern and Feldman (2009) report that long-run costs were three times the short-run costs. In the extant literature on the TBTF problem, though no comparison of estimated benefits and costs of the TBTF policy has been made, yet it is generally believed that costs outweigh benefits in the present value terms (Goodlet, 2010).  In the 2007-2008 financial crisis, the bailouts through such methods as direct supply of equity to failing banks, creation of special purpose vehicles to deal with toxic assets, and direct asset purchases, expanded both in size and coverage. According to the Bank of England (2009), such extraordinary interventions amounted to 75% of the 2007 nominal GDP in the USA, 95% of the 2007 nominal GDP in the UK, and 30% for the Continental Euro area. With the widespread usage of the bailouts during the crisis, the TBTF policy appears to be more entrenched than before. It is commonly believed by several analysts that stronger expectations of continued moral hazard, lack of market discipline, and competitive non-neutrality in favour of large financial institutions will result in more devastating financial crises in the future with much worse effects on the real economy (Goodlet, 2010). It is also generally believed that the expanded safety net exhibited by governments in the 2007-2008 financial crisis will be difficult to be maintained in the future due to stringent fiscal situations. A debate has been raging among academicians, market participants, and policy makers about solving the TBTF problem, and this debate has led to a host of correcting measures or solutions. In this paper, a set of these solutions are critically evaluated in the light of a list of possible criteria/factors. The contribution of this paper is to provide a set of criteria factors to evaluate all the possible solutions to the TBTF problem. 


The Effect of Online Seller Reputation on Consumer Willingness to Pay: An Empirical Study

Dr. Yingtao Shen, Stetson University, Deland, FL

Dr. Jin Li, North Dakota State University, Fargo, ND

Dr. Carolyn Nicholson, Stetson University, Deland, FL



In many online marketplaces, customers can post reviews of their shopping experiences with online venders and thus build up or damage the venders’ reputations.  This study answers two important questions regarding online sellers’ pricing strategy for homogenous products: (1) how do product characteristics affect the reputation-based price premium, and (2) should an online seller with a high reputation score charge a higher price for the same product than sellers with low reputation scores? Using an experiment and conjoint analysis, this study finds that when a product is perceived to be expensive and purchase of that product is perceived to be risky, buyer selection of sellers is more influenced by sellers’ reputation scores than by price; however, when a product is inexpensive and purchase of the product online is perceived as not risky, then price is more important than the reputation score when determining buyer seller preference.  With the growing proliferation of the Internet, online business-to-consumer marketing has achieved unprecedented growth over the past fifteen years. Today, while many conventional retailers also sell their products online, there are many vendors now that sell exclusively online.  While online shopping provides customers with a convenient purchasing opportunity, that opportunity can present certain significant disadvantages. When shopping in an online marketplace, such as Amazon and eBay, shoppers have to make two important, related choices: (1) the product itself, and (2) which seller from an array of multiple sellers who sell the same product.  All transactions involve risks. Cox and Rich (1964) define consumers’ perceived risk as related to two general factors: financial cost and the buyer’s certainty of “winning” or “losing” all or some of the money at stake. Sellers and buyers hold asymmetric information about the product, especially in an online transaction, with sellers having dramatically more. Consumers are aware that, in order to elicit high willingness-to-pay, a seller may overstate the quality of the product and/or fail to deliver promised services, such as shipping quickly, packing the product safely, and accepting returns for refunds without undue hassle. All of these risks may cause buyers certain loss in terms of money, time, and emotion(1). Previous evidence suggests that perceived risk in online shopping negatively influences consumers’ attitude toward Internet shopping (Jarvenpaa & Todd, 1997; O’Cass & Fenech, 2003; Fenech & O’Cass 2001; shih, 2004), intention to shop through the Internet (Salisbury, Pearson, Pearson, & Miller, 2001; Liao & Cheung, 2001; Pavlou, 2003), and Internet shopping behavior (Park, Lee, & Ahn, 2004, and Korgaonkar & Karson, 2007 ) (2).  Consumer purchase decisions are often based on a variety of informational cues.  Zeithaml (1988) distinguishes between intrinsic and extrinsic shopping cues. Intrinsic cues concern the physical characteristics of the product itself, such as its features, reliability, durability, and aesthetics. Extrinsic cues are factors external to the product, such as company reputation, price, retail store image, and country of origin.  Since online shoppers and sellers are typically in different geographic locations, online shoppers cannot physically examine the product until they have purchased and received it. Moreover, any problems with the product would delay use and gratification, since the correction of a problem adds a significant time lag to the purchase, unlike a brick and mortar store where an immediate product replacement is typically acquired.  An unfamiliar seller, then, poses significant information and time risks to the shopper.


Narrative: An Alternative Way to Gain Consumer Insights

Dr. Kritsadarat Wattanasuwan, Thammasat University, Bangkok, Thailand



This paper explores ‘narrative’ as a qualitative research method to gain consumer insights.  Fundamentally, narrative is a story of one’s experiences, feelings and beliefs.  It illustrates how one acts and interacts with others as well as how one makes sense of one’s world.  First the paper sketches out the definition and the underlying philosophy of narrative interview and narrative analysis.  Then the paper discusses how to conduct and interpret the narrative interview lucratively.  Later the paper assesses the limitations of the narrative method, and proposes how we can justify and enhance the trustworthiness of narrative interviews.  ‘Narrative’ is a term being used broadly, and being applied in many different ways.  In qualitative research, narrative has become a vital research strategy to grasp the insightful data which can barely be attained by any other methods (e.g., Bonsu and Belk 2003, Joy and Sherry 2003, Muniz and O’Quinn 2001, Penaloza 2001, Price et al. 2000, Thompson and Haytko 1997).  Fundamentally, narrative is a story of one’s experiences, feelings and beliefs (Langellier 1989, Mishler 1986, Polkinghorne 1995).  It illustrates how one acts and interacts with others as well as how one makes sense of one’s world (Ricoeur 1981, Smith 1981, White 1981).  Thus, narrative inquiry is the superlative way to explore phenomenologically one’s experience of particular events.  Although narratives can be conveyed in various means, marketing researchers usually elicit one’s narrative through interview.  In this paper I address narrative interview as a qualitative method for consumer research.  First I sketch out the definition and the underlying philosophy of narrative interview and narrative analysis.  Then I discuss how to conduct and interpret the narrative interview lucratively.  Later I assess the limitations of the narrative method, and propose how we can justify and enhance the trustworthiness of narrative interviews.  Finally I examine the particularities of marketing research for which the narrative interview is appropriate and explore a few eminent examples of marketing research having employed narrative interviews.   Narrative interview is a data collecting method by which we enquire a research respondent to tell us a story of what we want to study.  It is the way we try to understand the point of view and experience from the perspective of those (e.g., research respondents) who live it (Polkinghorne 1988, Ricoeur 1981).  Narrative interview allows research respondents to unfold the way they view themselves and their world.  Manifestly the stories being told reveal the research respondents’ personal meanings of a particular event and the complex motives that drive their behaviour .  Through narrative interview researchers have a better opportunity to deal with the complexity of human reality, particularly the multifaceted nature of the self.  As social saturation in postmodernity has decentred human experience into pieces (Firat and Venkatesh 1995), we are striving to bring together diverse elements into an integrated whole in order to live meaningfully (Gergen 1991).  We try to re-organise and unify our saturated self into the narrative self (Giddens 1991; McAdams 1997).  We make an effort to coordinate the multiple and conflicting facets of our lives within a narrative framework which connects past, present, and an anticipated future and confers upon our lives a sense of sameness and continuity ( ADDIN ENRfu McAdams 1988). 


Banking and Financial Market Regulation: An analysis of the Effectiveness of Prudential Controls in Australia

Carlo Soliman, Solicitor and part-time Academic, New South Wales



The cataclysmic effects of the Global Financial Crisis (GFC), the failures in the euro zone and the increasing global instability and uncertainty in other economies such as China have reverberated in ways never before witnessed in history. The consequences have been dire and the future is by no means clear. Remarkably until now, Australia has been relatively unaffected by this turmoil. This article argues that Australia’s prudential regulations which are administered by the Australian Prudential Regulation Authority (‘APRA’) have been an important cornerstone in the minimisation of the adverse effects of the market failures seen abroad. A continuation of a proactive risk-based regulatory approach which encourages a culture of compliance has resulted in further reforms which, whilst expensive to the banking and finance industry and the investing public, will build upon and ultimately strengthen Australia’s arsenal to withstand the uncertainties that are yet to come.  Australia has been fortunate, over the course of its history partly through geographic isolation and reliance on its various primary export industries, to enjoy reasonable economic stability relative to other European nations. Much of this stability owes its success to the conservative practices of the nation’s forefathers. The first major financial system inquiry was the Royal Commission on Monetary and Banking Systems, entitled Commonwealth of Australia, Report of the Royal Commission Appointed to Inquire into the Monetary and Banking Systems in Australia, Commonwealth Government Printer Canberra (1935) chaired by Mr Justice Napier in 1935. This inquiry was established to determine the changes needed to maintain stability in the economy following the Great Depression. The Commission concluded that financial markets required regulation in order to avoid instability.  More than half a century later heralded the dawn of the Financial System Inquiry (‘FSI’) into the banking and finance industry. The three inquiries (1) that comprised the FSI were to become the most comprehensive modern review of the Australia financial system and a decisive influence on lawmaking in this area. The reforms initiated by the FSI were predominately influenced by the Wallis Report in 1997, which was the third and final report that comprised the FSI and the Corporate Law Economic Reform Program 6 (‘CLERP 6’). The result was the establishment of a conservative regulatory environment which aimed to make financial institutions and providers of such services accountable for their conduct and transparent to investors.(2)  The Wallis Report also prescribed certain standards of conduct and service expected in the banking and finance sector.  (3) The rationale for a strong legislative regime was to promote economic growth, protect institutional and general investors and to assist business to meet the future challenges of an emerging integrated world economic marketplace.  


The Opportunity Recognition Framework in the Hong Kong SMEs Context

Dr. Wing Lam, The Hong Kong Polytechnic University, Hong Kong

Dr. Ada Hiu-Kan Wong, Lingnan University, Hong Kong

Phyllis Chung-Sze Tong, The Hong Kong Polytechnic University, Hong Kong

Dr. Ziguang Chen, City University of Hong Kong, Hong Kong



This paper presents a preliminary framework of opportunity recognition in the Hong Kong small and medium enterprises (SMEs) context. Guanxi and four trait variables, namely self-monitoring, extroversion, self-efficacy and creativity are the independent variables while the number of opportunity recognized by entrepreneurs is the dependent variable in the framework. The model indicates a mediation effect of guanxi between self-monitoring and the number of opportunities recognized, and between extroversion and the number of opportunities recognized. Meanwhile, SMEs marketing characteristics are determined by personalities and behaviour of the entrepreneurs as they do not conform to the traditional marketing theories (Gilmore et al., 2001). This paper provides new research directions to the field of SMEs marketing.   The Closer Economic Partnership Arrangement (CEPA) between China and Hong Kong has provided many opportunities to Hong Kong enterprises in mainland China. These facts show that Hong Kong entrepreneurs of SMEs have to adapt to a variety of China business environments regarding the increase in business opportunities. Relationship is prominent in business development in China. The concept of “Guanxi” describes the special relationships embedded in the network in doing business, especially in the Chinese context (Davies et al., 1995). It is deeply embedded in the Chinese Confucianism philosophy and has perpetual influence in modern China. As CEPA brings numerous business opportunities to Hong Kong SMEs, identifying factors that affect these CEO’s number of business opportunities recognized should be considered as an important research area (Christen et al., 1994; Gaglio, 1997; Gartner et al., 2003; Kirzner, 1997; Shane and Venkataraman, 2000). Some studies (Ardichvili et al., 2003 and Kasouf, 2003) reveal that personal traits can explain entrepreneurs’ ability in opportunity recognition. This study develops an opportunity recognition framework of which guanxi is theorized to mediate the impacts of self-monitoring and extroversion on the number of opportunities recognized. In addition, entrepreneurial self-efficacy and creativity are proposed to have positive effects on the number of opportunities recognized.  Different from large enterprises, SMEs apply unconventional marketing approaches (Carson, 1990) to survive in fierce competitions. This phenomenon is mainly caused by haphazard, limited resources and expertise of these SMEs (Scase and Goffee, 1980). The entrepreneurs use their network as a tool to carry out marketing strategies (Gilmore et al., 2001). Guanxi and the four personal traits, namely self-monitoring, extroversion, self-efficacy and creativity provide directions to Chinese SMEs’ entrepreneurs to utilize their personal characteristics and network for marketing behaviour. Opportunity recognition has emerged in the field of entrepreneurship research (Craig and Lindsay, 2001; Gaglio, 1997; Venkataraman, 1997; Shane and Venkataraman, 2000; Shepherd and De Tienne, 2001) for many years. It is the critical first step of the entrepreneurship process (Christen et al. 1994; Hills, 1995; Timmons et al. 1987). Stevenson and Jarrillo-Mossi (1986) asserted that entrepreneurship involves the ability and desire to recognize and pursue opportunities. Schumpeter (1934), the father of entrepreneurship, emphasized that individuals should pay attention to the ways which new opportunities arise in the market. As entrepreneurship is equivalent to market changes and development, recognition of opportunities is one of such changes and it represents a difference between entrepreneurs and other market variables. Therefore, scholars agreed that understanding opportunity recognition represents an interesting area for all of them to develop the entrepreneurship theory (Kirzner, 1979; Timmons, Muzyka, Stevenson and Bygrave, 1987).


Approaching Family Businesses: Contextual Factors and Implications on Research Strategies

Markus Baur, University of Latvia, LV



This article discusses methodological aspects in family business research by asking whether there are specific factors in the context of family firms that might influence research strategies. The paper concentrates on the description of family business idiosyncrasies – relevant as constraining problems to research - and their specific impact on research strategies. These influencing aspects are either family firm system related or related to the evolutionary stage of the scientific discipline. When researching on family businesses, one must consider certain contextual factors that might influence the research process. On the one hand those factors are due to the existence of the reciprocal effect of the systems family and business; a basic definitional element of the family business. For example, families behave different than shareholders; they prefer privacy and confidentiality – public companies are supposed to provide a high level of transparency. Thus, if one is intending to study a business where a business family is (highly) involved, he/she has to consider the family system respectively the behaviour of the family in the data gathering process. On the other hand, there are factors that are related to the evolutionary stage of the scientific discipline such as the missing framework guiding the research process. Factors like these are influencing research strategies and should hence be considered when designing a study. This work tries to identify those factors that are existent in the context of family firms and evaluates their implication on quantitative and qualitative research approaches.   The Germany based WIFU Wittener Institut für Familienunternehmen being active in the field since over ten years determines the research in the field to be complex and recognises the existence of the multitude of academic disciplines, methods and research questions (, 2011). This comes from the overlap of various different academic fields such as systems theory, family therapy, gender, psychology and business management studies to just name a few. This mesh of academic fields is increasing the complexity of the field as researchers are coerced to think multidisciplinary and apply more than one field of expertise. Working with more than one scientific discipline is generally critical as the researcher opens an easy target for criticism.  The circumstance of heterogeneity of the family business bears the problem that quantitative approaches have a lack of timing and eventfulness. Dawson & Hjorth (2011, p. 3) argue that “the empirical is transformed into the temporality of the rhythms of asking questions, of taking notes, or of responding to propositions”. The authors suggest to rather studying the processes of a family business using a narrative approach in order to attend to the social dynamics of relational constructs, such as roles, resources, projects, organizations, and goals(1). Whereas case studies are the dominating method in qualitative research designs, the authors suggest supplementing case study methodology with biographies of business families because “their life stories confirm and supplement case studies”. The strength of this method lays in the comprehensive investigation of the business’s respectively the family’s history and would therefore provide a deep look inside the bibliography. The weakness of this method is the – besides an extensive analysis – the openness the approach demands.  


Market-Based Instruments and Economic Indicators for Climate Change and Water Pollution Control.

Dr. Maria Luisa Fernandez de Soto Blass, University CEU San Pablo, Madrid, Spain



The Green Paper on market-based instruments for environment and related policy purposes  explores possible ways forward with The Water Framework Directive (WFD) with the aim of launching its announced review. In this sense the paper fits into the framework set by the new integrated water and climate change agenda (EUROPEAN COUNCIL, 2007) where market-based instruments and fiscal policies in general will play a decisive role in delivering the EU's policy objectives. The paper also explores options for a more intensive use of market-based instruments in different areas of environmental policy at both Community and national levels.The main Market-Based Instruments for Water Pollution Control considered were. 1.- Water quality trading, 2.- Water pollution taxes and levies, 3.- Water Resource Extraction Taxes and Fees 4.- Wastewater Taxes and Fees.5.- Public– Private Partnerships (PPPs).  The indicators presented here relate to waste water treatment. They show the percentage of the national population actually connected to public waste water treatment plants in the early 2000s. The extent of secondary (biological) and/or tertiary (chemical) treatment provides an indication of efforts to reduce pollution loads.  The EU is a leading force in the world in taking action on environmental sustainability and, in particular, on climate change. This has been confirmed recently through the adoption of the energy and climate policy package) as the Communication from the Commission An energy policy for Europe - COM(2007) 1, 10.1.2007 - and Communication from the Commission Limiting Global Climate Change as endorsed by the Spring European Council (European Council 8/9 March 2007, Presidency conclusions) in which the EU repeated its commitment to addressing climate change internally and on an international scale, to promoting environmental sustainability, to reducing dependence on external resources and to ensuring the competitiveness of European economies. In addition, halting loss of biodiversity, preserving natural resources that are under pressure and protecting public health also require urgent action (COMMISSION OF THE EUROPEAN COMMUNITIES, 2007).  This paper is the result of the researches that the author is carrying out about “Taxation and Climate Change”, that is a National Investigation and Development Research (DER2010-14799) and the other research about “The management of the water for fluvial basins and for States, Regions or Autonomous Communities: problems and solutions "(USP BS PPC013/2010).  Without public intervention and the strong commitment of all actors, these ambitious objectives cannot be reached. The EU has increasingly favoured economic or market-based instruments (“MBI”) – such as indirect taxation, targeted subsidies or tradable emission rights – for such policy purposes because they provide a lexible and cost-effective means for reaching given policy objectives. The more intensive use of MBI has also been advocated in the EU´s 6th Environment Action Programme (6th EAP) and the renewed EU Sustainable Development Strategy (EUROPEAN COUNCIL, 2006) as well as the renewed Lisbon Strategy for Growth and Jobs (EUROPEAN COUNCIL, 2005).  The economic rationale for using market-based instruments lies in their ability to correct market-failures in a cost-effective way. Market failure refers to a situation in which markets are either entirely lacking (e.g. environmental assets having the nature of public goods) or do not sufficiently account for the "true" or social cost of economic activity. Public intervention is then justified to correct these failures and, unlike regulatory or administrative approaches, MBIs have the advantage of using market signals to address the market failures.  Taxes and charges are very clearly a price-based MBI and so the actual level of environmental quality achieved is variable.


A Study on Consumer Behavior for Green Products from a Lifestyle Perspective

Dr. Wen-Lan Wang, Ling Tung University, Taiwan



This study discusses the relationship between lifestyle and green consumption behavior to identify potential green consumers.  Using green products as the research objective. This study sampled people over the age of 16 from the general population in Central Taiwan and collected 433 valid samples. A structural equation model (SEM) was employed to analyze the data and facilitate a discussion on the effect of lifestyle on green consumption behavior.  This study discovered that plan-oriented lifestyle had a direct and negative impact on green consumption behaviors that show consumers are unaligned with reality and green consumption behaviors that demonstrate complacency with current status. Conversely, work-oriented lifestyle had a direct and positive influence on green consumption behaviors that demonstrate complacency with current status. Fashion-oriented lifestyles had a direct and positive effect on green consumption behavior that shows consumers are unaligned with reality and green consumption behaviors that demonstrate complacency with current status. These findings suggest that the green consumption behavior of consumer groups with varying lifestyles differs significantly. Regarding green consumption behavior, the three lifestyles described (plan-oriented, work-oriented, and fashion-oriented) represent the potential green product consumers, who have different objectives when purchasing green products. Thus, when selling green products to consumers with different lifestyles, businesses should emphasize various points and adopt different marketing strategies and tactics depending on the objective of the various consumers.  With increasing concerns regarding dwindling natural resources and protecting the environment, people have begun considering their consumption behavior more. This realization and cognition has brought gradual changes in consumer behavior and consumers are paying more attention to green products; thus, the green industry is prospering. Because the green industry emphasizes environmental protection, the damage it causes the environment is relatively less; thus, the social costs incurred should also be relatively lower. However, the principles of the green industry are not necessarily aligned with that of business organizations in general, such as businesses’ pursuit of low costs and high profitability. Additionally, green products have a price disadvantage compared with other products on the market because the cost of producing green products may be higher. To strike a balance between environmental protection and business sustainability, businesses must understand their markets, customers’ green consumption behaviors, and the relationship between lifestyle and green consumption behavior, enabling them to better segment their markets for more effective marketing. With growing awareness of environmental issues, some consumers are willing to contribute toward protecting planet Earth by paying more; thus, if businesses can identify these potential customers, effectively segment their markets, then the green industry can continue to benefit from the abundant opportunities. Because the global ecology is gradually deteriorating, environmental protection is becoming the common objective of countries worldwide. Generally, if the lifecycle of a product (which involves material sourcing, product manufacturing, selling, product utilization, and disposal) involves the functions of being “recyclable,” “minimally polluting,” and energy saving,” then the product is considered a green and environmentally friendly product. Examples of such products include low-pollution mercury free batteries, recyclable paper products, and water-saving toilets. These products satisfy consumer needs and are environmentally friendly because they minimize the use of toxic materials and also reduce energy or resource wastage.  Governments worldwide are all striving toward long-term environmental and sustainability objectives. To achieve their environmental objectives, numerous countries are setting limits on their trading activities, or imposing stringent standards on their products. Consequently, these measures have increased production costs, which is why the price of green products is typically higher than that of non-green products.


Assessing Hotel Managerial Efficiency Change in Taiwan

Mei-cheng Wu, Chungyu Institute of Technology and National Cheng Kung University, Taiwan

Chia-yon Chen, National Cheng Kung University, Taiwan



The tourism industry experienced a downward trend because of the global economic downturn, but few recent studies discussed the change in productivity of Taiwan's hotels from 2007 to 2009. Therefore, this study used Data envelopment analysis (DEA) data and the Malmquist productivity index to examine the changing productivity of Taiwan's international tourist hotels. Research results show that the efficiency of Taiwan's international tourist hotels during that period has shown a declining trend and the main factor influencing the total efficiency of hotels was inadequate pure technical efficiency. In addition, although technical progress exists in the hotel industry, the degree of catch-up declined. Thus, hotel efficiency must be increased to improve the competitiveness of Taiwan's hotel industry.  The global tourism industry has experienced a significant decline in the number of tourists in recent years because of the U.S. subprime mortgage crisis and the global economic downturn. However, because of the impact of the global economic slump on Japan, which is the main source of tourists to Taiwan, the number of Japanese visitors to Taiwan decreased by 7.92% in 2009 compared to the previous year. Fortunately, this decline was offset by the Taiwanese government relaxing regulations regarding visitors from China in July 2008. This resulted in a 14.3% growth in the number of overall visitors to Taiwan in 2009 compared to 2008.  In response to the business opportunities of catering to tourists from China, the number of international tourist hotels in Taiwan expanded to 64 locations by 2009, with a total of 18,645 rooms, which is a 5.14% rise compared to 2007. Nevertheless, because of the increase in hotel supply, room occupancy rate in international tourism hotels dropped to 64.7% in 2009, a drop of 3.87% compared to 2007 figures. In addition, because of the general decline in the people's purchasing power, business owners lowered room prices to increase the occupancy rate; however, this had a limited effect. Generally, both the occupancy rate and room revenue for tourist hotels have experienced a downward trend.  This implies that Taiwan's international tourist hotels are in a state of oversupply, which leads to fierce competition in the hotel market. In this situation, the primary issues faced by international tourist hotel operators are how to ensure hotels are economically efficient and whether hotel managers are using resources efficiently.  Recently, DEA was used to explore efficiency among a broad range of industries, demonstrating the value of industry analysis and providing a basis for measuring efficiency. Barros (2005) conducted production capacity analysis of the operating efficiency of 42 hotels in Portugal. Firstly, the Malmquist index was used to differentiate between changes in TE and changes in efficiency caused by technological reasons. Secondly, a Tobit regression model was used to examine the variables that may influence operating efficiency in hotels.  Chen (2006) utilized cost efficiency to assess the operating efficiency of 55 tourist hotels in 2002. This study yielded empirical results that suggested average efficiency was approximately 80%.Wang et al., (2007) utilized a stochastic frontier approach to estimate the relative efficiency of the 66 international tourist hotels in Taiwan during 1992-2002. In addition, the Malmquist productivity index is used to analyze the range and the causes of the productivity change. The results reveal that managerial efficiency of the international tourist hotel industry improves gradually.


Different Ethnicities: An Impact of Ethnic Language on Consumer Response to Price-Off Advertising

Panitharn Juntongjin, Thammasat University, Bangkok, Thailand

Dr. Kritsadarat Wattanasuwan, Thammasat University, Bangkok, Thailand



Many researchers try to explain the impact of ethnic language in advertising and prove that it does affect consumers’ attention. However, there are some important issues that remain unsolved. First, whether the impact comes from just noticeable difference of the alphabets or from the language per se. The other is whether different consumers who have different language systems (ideographs versus alphabets) will have the same perception on ethnic language stimuli in price-off promotion message or not. This paper proposes research propositions and provides research tools in order to answer these issues.  Language has been one of the main topics in consumer behavior literature for many years. A lot of consumer behavior researchers during the past decade pay attention to how language in advertising can affect consumers in many contexts. For example, in a subculture context, one of the main research in this area is the work of Koslow, Shamdasani, and Touchstone (1994), they did research on how ethnic language in advertising can influence Hispanic consumers in the US by using accommodation theory, and they found that ethnic language had positive impacts on the perception of Hispanic consumers. Another example of the context that had been studied quite a lot in the language field is bilingual consumers; such as the works of Zhang and Schmitt (2004); Luna and Peracchio (1999, 2001, 2002, 2005); Noriega and Blair (2008); as well as Puntoni,  Langhe,  and Osselaer (2008). All of these research papers focused on how bilingual consumers react to bilingual advertisings. Although they focused on different based theories, they found that bilingual advertisings have different impacts on the consumers’ perception compared to those using only English language to communicate. A language study in consumer behavior research is one of the main topics in the field that gain more interest from researchers during the past decade, not only because language is part of everyday-life communication, but also because of the overcrowded communication message surrounding consumers that make marketers and marketing researchers try to find alternative methods to communicate to their consumers more effectively, and the use of language to create salient message is one effective way to do it.  Every firm always tries to communicate something to their customers. One kind of marketing messages that has been widely used is price-off promotion message. Firms, especially retail business, mainly use this kind of message to communicate and to gain more buying intention from their customers and potential customers that they currently have low price promotion for their products or particular stores (Anderson and Duncan, 1998). Many marketing scholars (e.g. Kalyanaram and Winer (1995); Neslin (2002); and Howard and Kerin (2006)) also try to do research to maximize the efficiency for this kind of message, in order to gain customer attention as an outcome. Most of the researchers focused on how each sentence and a combination of sentences in price-off promotion can affect customers’ attention; such as the roles of sale sign, reference prices, and limited time availability on customers’ attention. And they found that almost every combination can create a positive impact on the shopping intention.  However, when tactic of ethnic language to the combination of price-off promotion message is applied, it may not a straight forward successful method to gain a positive reaction from all consumers in every ethnicity, because language is a very sensitive issue, and there are many aspects of these issues that can lead to different reactions when apply to different groups of ethnicity. Some of the issues that remain unclear are; first, the impact of ethnic language in advertising, whether it comes from just noticeable difference of the alphabets or from the language per se. The other is whether the two ethnicities that have different language systems (ideographs versus alphabets) will have the same perception on ethnic language stimuli in price-off promotion message.


Barriers to E-Government Implementation and Usage in Egypt

Dr. Ahmed Samir Roushdy, Sadat Academy for Management Sciences, Egypt



The Purpose of this research is to determine Barriers to e-government implementation and usage in Egypt. An empirical case study using an interview-based research agenda is adopted. After reviewing the literature on e-government, the paper firstly proposes a conceptual model, which is consequently used to determine empirically in Egypt, the key factors affecting e-government implementation and usage from organizational, technological, social, and political perspectives. The present paper introduces a comprehensive over view of barriers facing the implementation & usage of e-government in Egypt.  Electronic government is defined as the use of information and communication technology, particularly the internet, as the means to improve government administration efficiency and deliver services to citizens, business, and other entities (carter & Belanger, 2005; UN e-government survey, 2008). When analyzing the extent literature on e-government, different studies have identified various factors that impact implementation & usage (weerakkody et al., 2007; Irani et al., 2007; Chen et al., 2006; Gichoy a., 2005; Chercu & Lee, 2005; Refaat, 2003; Moon, 2002). A common argument that has also surfaced in the literature is that e-government offers many benefits and can potentially offer opportunities to developing countries (Ndou, 2004; Kurunanada and Weerakkody, 2006; Irani et al., 2007). Yet although the benefits of electronic services are well documented, the implementation of e-government has faced many challenges in both developed & developing countries. The reason for such challenges are often explained by researchers as influenced by the complexity of the changes that are faced by the public sector, which are primarily driven by the internet and its array of associated information and communication technology (ICT; Beynon – Davies & Williams, 2004).  Like many other countries in the Middle East region Egypt officially began its public sector electronic services initiatives in 2006, yet has not achieved the necessary level of success in terms of implementation and usage in addition, to date, no previous studies have been conducted to understand the implementation and usage challenges of e-government in Egypt. These arguments provide the motivation for this research.  The research is structured as follows. The next section presents the key factors affecting e-government implementation & usage through a synthesis of extent literature. This is followed by the presentation of a conceptual model for e-government implementation & usage in section 3. Section 4 then outlines the research approach used for the study. Section 5 outlines the findings of an empirical study conducted to determine how the key factors identified in section 2 related to the Egyptian context. A discussion follows in section 6, where the empirical findings are then synthesized with the literature. Finally, the research concludes by discussing the research implications & identifying areas for future research.  The introduction of e-government facing a number of barriers in different countries (Seifert & Petersen, 2002; Zakarey & Irani, 2005). The barriers to e-government have summarized from several perspectives: infrastructure, Technological, organizational (Ebrahim & Irani, 2005; Lam, 2005). Table (1) summarizes the organizational barriers in implementation & usage of e-government which have been empirically found in many e-government implementation & usage researches. 


Innovativeness and Business Performances: Empirical evidence from Bosnia and Herzegovina’s Small-Sized Firms

Dr. Ivan Matic, University of Split, Croatia

Velimir Jukic, Parliament of Bosnia and Herzegovina, Bosnia and Herzegovina



Innovation and innovative activities in today’s business environment have become conditio sine qua non of contemporary organizations’ survival and development. Although there is a multitude of innovation researches in the literature, those oriented on small-sized firms, especially researches that are focused on relationship between small-sized firms’ innovativeness and their business performances, are scarce. Therefore, the purpose of this paper is to examine mentioned and in relevant literature presumed relationship between small-sized firms’ innovativeness and their business performances, and to provide new empirical insights. In order to achieve this objective empirical research was conducted on the sample of 151 small-sized firms in Bosnia and Herzegovina, findings of which suggest on interesting inferences such as that different types of innovation introduced (product or process) in small-sized firms have the same influence on their business performances.  Keywords: innovation, innovation types, organizational innovativeness, business performances, balanced business performance measurement systems. Organizations in today's highly competitive environment, characterized by high complexity and dynamism, need to devote special attention to building and strengthening of their competitive advantages, which is a prerequisite to their survival, growth and further development. One of the main ways how modern organizations can improve and increase their performances (results) and achieve competitive advantage is to develop innovative activities and introduce innovations in their business. The relevant literature is full of researches in which authors have investigated innovativeness and innovative activities in organizations and in which they are pointing-out innovation’s crucial importance in gaining competitive advantage. Some of them are even prepared to claim that organizational innovativeness is the main source of organization’s competitive advantage. In that sense Hill and Jones (1998, pp. 113) claim that contemporary competition essentially comes down to competition in innovations. Nevertheless, the majority of conducted innovation researches in the relevant literature dealt with innovation in large and mainly successful companies, while innovation in small-sized firms was a subject of considerably smaller number of researches, despite the fact that in economies of most of the countires, including Bosnia and Herzegovina, small-sized firms constitute about 95% of commercial sector. Consequently, the researches in which the relationship between small-sized firms’ innovativeness and their business performances is investigated are scarce, where almost all conducted researchers were focused on small-sized innovative firms from sectors of top technologies, mainly electronics, and in recent time biotechnology. Therefore, the aim of this paper is to offer new empirical insights on the presumed relationship between innovativeness and business performances in small-sized firms of all activities, on the case of Bosnia and Herzegovina.  Innovations are present in all life spheres, and in organizational context they can be defined as implementation of new ideas that create value for organization (Linder et al., 2003, in: Leskovar-Spacapan and Bastic, 2007, pp. 535). Innovativeness, furthermore, is by definition a permanent organizational characteristic, which is reflected through appropriation and ability of organization or company to adopt innovation and truly innovative organizations or companies are those that demonstrate innovative behaviour consistently over time (Nilakanta, 1996, pp. 633). In literature of organizational innovativeness, the distinction placed on the technical vs. administrative innovation dimensions prevails as one of the most meaningful innovation dichotomy (Daft, 1978; Dalton, 1962, Damanpour, 1991), where, following Damanpour’s conceptualization (1991) “technical innovations pertains to products, services and production process technology, i.e. they are related to basic working activities and can concern either product or process”, while “administrative innovations involve organizational structure and administrative process, i.e. they are indirectly related to the basic work activities of an organization and are more directly related to its management (Han et al., 1998, pp. 36).


Jordanian Income Tax and Sales Assessors’ Reliance on the Requirements of  IAS No. (12)

Dr. Jamal Adel Al-Sharairi, University of Al Al-Bayt, Amman, Jordan



This study aims to show Jordanian Income Tax and Sales assessors 'reliance on the requirements of International Accounting Standard No. (12), a questionnaire was designed and distributed to the assessors who are distributed to seven departments within Amman Municipality, the distributed questionnaires were amounted to (400), (340) questionnaires were recovered from, with a recovery of 85%. The data of the questionnaires were analyzed using the (SPSS), with a number of statistical techniques through descriptive statistics, arithmetic means, standard deviations and percentages, the study hypotheses were tested by multiple regression tests. The study found that the income tax and sales assessors depend on the requirements of International Accounting Standard No. (12), as there are no difficulties that limit the dependence on the requirements of International Accounting Standard No. (12) by the Jordanian income tax and sales assessors. The study recommended increasing the appropriateness of income tax law and Jordanian sales with International Accounting Standard No. (12) in particular, and international accounting standards in general.  Tax revenues are essential to the state treasury in Jordan as one of the main sources for the infrastructure of the national economy, and due to the increasing investment and expanding companies as the Kingdom enjoys security, safety and a suitable environment for investment, state’s interest of the tax has increased to be able to continue in spending and providing appropriate services and atmosphere for the tax payers, and a just distribution of wealth among citizens. In most countries, there are legislations and tax laws that specify in detail the items of income that are subjected to income tax and the time of its subjection and the expenses that are accepted to be reduced for the purposes of income tax and the timing of their reduction, although there are great similarities between financial accounting which is based on the accepted accounting principles and International Accounting Standards and International Financial Reporting in the States that adopt these standards, and between tax legislations of different countries in the process of determining the timing of recognition of income and expenses, however, there is also some differences between them, and thus the asymmetry number of net accounting profit before the tax which is apparent in the income statement, and between taxable income which is calculated in the light of the Income Tax Act in force in the State, based on this difference, the apparent income tax expense will vary in the income statement for the financial period for the amount of income tax payable for the same period. (Abu Nassar, Jordanian Income Tax and Sales Law is considered the basic reference to the income tax and sales assessors in the calculation of taxable income of the payers that serve the interests of the state and the Jordanian society, which receives the appropriate service in return. International Accounting Standard has developed a standard for this purpose, namely International Accounting Standard No. (12).  The significance of the study derived from the importance of relying on the IAS No. (12) in determining the tax to the tax payers by Jordanian income tax and sales assessors, because it covers most of the cases that differ in legislations and laws, especially to address the timing of recognition of income and expenses and determine the procedures to calculate the amount of payable income tax for the current and deferred periods, this standard explains the procedures for dealing with the treatment of permanent and temporary differences.


Impact of External Knowledge in the Product Life Cycle of Electronic Devices

Ilan Bijaoui, Ashkelon Academic College, Israel

Itshak Tabatchnik, Bar Ilan University, Israel



Knowledge is an important source of competitive advantage in general, and especially in the case of innovative products. The present study addresses the phenomenon of seeking external knowledge in order to generate growth.  We prove in this research that intensive use of external knowledge correlates positively with business success in the sector of electronic devices. We show further that electronic devices that are based primarily mainly on the use of internal knowledge end up failing. External knowledge is critical mainly in a market at the Growth and Mature phase of the Product Life Cycle (PLC). The empirical research was carried out on a sample of 65 high-tech products selected from those produced by Israeli firms specializing in electronic devices.  Sustainable competitive advantage requires adapting the knowledge capabilities of the firm over time in order to overcome changes in the technological and market environments. Internal knowledge is no more the main base for competitive advantage. External knowledge is required in order to develop new competitive advantage. The literature distinguishes between external continuous and discontinuous (Miller, 1999) or disruptive knowledge (Christensen, 1999) as a source of competitive advantage. Continuous knowledge refers to the current technological and market environment of the firm. Discontinuous knowledge refers to new market and technology, beyond the scope of the firm. Disruptive knowledge refers to new technological knowledge expanding the current market to new low-end customers.  In the context of open innovation (Chesbrough, 2003, 2006), the boundaries of the firm become permeable to continuous and discontinuous knowledge from external sources (Lichtenthaler 2008). The resource-based view (RBV) of the firm (Barney, 1986, 1991) explains the conditions under which companies can achieve a sustained competitive advantage based on their bundles of resources and capabilities, and internal source of knowledge. Resources are “stocks of available factors that are owned or controlled by the firm.” Barreto (2010) reviewed and analyzed the diverse research streams on static and dynamic capabilities and suggested a new conceptualization of dynamic capability based on external knowledge, as an aggregate multidimensional construct.  D’Aveni (1994) discussed the dynamic context of hypercompetitive environments, and Bourgeois and Eisenhardt (1988) – the dynamic context of high-velocity environments founded on environmental shifts in the competitive, technological, social, and regulatory domains. This interest is rooted in the longstanding importance attached to the link between the strategic choices and environmental conditions of firms. Companies must be managed in such a way that they can build successive temporary advantages by effectively responding to successive environmental shocks (D’Aveni, 1994, Eisenhardt & Martin, 2000). "Dynamic capabilities are necessary, but not sufficient, conditions for competitive advantage” argued Eisenhardt and Martin (2000). In their view, long-term competitive advantage does not rely on dynamic capabilities but on the resource configurations created by these capabilities and on “using dynamic capabilities sooner, more astutely, more fortuitously than the competition.” Teece, Pisano, and Shuen (1997) proposed the dynamic capabilities framework for filling the gap between static and dynamic contexts. They defined dynamic capabilities as “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments.”


Destination Image and Marketing Strategy: An Investigation of MICE Travelers to Taiwan

Dr. Che-Chao Chiang, Cheng Shiu University, Kaohsiung city, Taiwan

Ying-Chieh Chen, Cheng Shiu University, Kaohsiung city, Taiwan

Dr. Lu-Feng Huang, Cheng Shiu University, Kaohsiung city, Taiwan

Kai-Feng Hsueh, Cheng Shiu University, Kaohsiung city, Taiwan



This study investigates the role that destination image can play in the development of tourism marketing strategies to promote Taiwan as an attractive objective for travelers in a MICE tourism context. The better understanding of destination image arises from its nature character in determining traveler future visitation and the notable economic potential for tourism enterprises and destinations. The study aims to examine the destination image as perceived by meeting planners. The findings demonstrate the destination image that is associated with natural beauty, friendly and secure environments to travel, attractive cultural festivals amongst MICE planners as a key for business purposes. Some implications and strategies are also discussed.  Destination image in the tourism sector has been defined as a crucial element in the development of promotional marketing of a tourism destination (Martín and Bosque, 2008; Pike and Ryan, 2004; Beerli and Martín, 2004; Chalip, Green, and Hill, 2003). Many authors have revealed that the overall representations connected with knowledge are commonly associated with individual cognitive environments (Oppermann and Chon, 1997; Oppermann, 1993). In other words, the positive destination images can significantly increase the likelihood of actual visitations by tourists. Evaluating positive and negative destination images from a marketing viewpoint is useful for industry and government to strength destination competitiveness. Considerable attention has been given to focusing on a substantive understanding of destination image and its major influence in tourist destination selection behaviour in many countries (Mair and Thompson, 2009; Gallarza, Saura and García, 2001).  From a tourism perspective, individual travellers hold perceptions, impressions or ideas of a destination, with their overall impressions being perceptions of destination image (Gartner, 1989; Gartner and Hunt, 1987). One particular study of Martín and Bosque (2008) noted that destination image is a contributing factor to participation levels in tourism-related activities. In the tourism marketing literature, various authors have suggested that two major components are generally referred to tourist perceived destination images including: cognitive and effective evaluations about tourism objects. The both two elements of perceived destination images play an important part in influencing tourist’s tourism experience. In this regard, destination image can be understood as fundamental elements in the context of tourist site selection process because tourists to worthy destinations at a particular may be generated by their increased awareness (Yoon and Uysal, 2005; Gallarza, Saura and García, 2001; Rittichainuwat, Beck, and LaLopa, 2001; Leisen, 2001). Many authors agree that it plays a decisive role in the decision-making of travellers, and is frequently used as a successful element in the marketing of tourism destinations by presenting constructive images using a mixture of media to targeted travellers (Gallarza, Saura and García, 2001; Beerli and Martín, 2004; Leisen, 2001; Rittichainuwat, Beck, and LaLopa, 2001). To put it simply, if destination marketers want to create a positive image satisfying one’s trips, they need to better understand the relationship between destination image and visitors’ selections concerning tourism destinations. Hence, it would seem crucial that the creation of positive images of tourism destinations is a useful strategy that can be used to meet the potential needs and wants of travelers, particularly the attractive characteristics of destinations to provide government and marketers at destinations with opportunities for increasing profits and gaining their competitive advantage.


The Costs and Benefits of Corporate Social Responsibility

Pornpipat Kaeokla, Gradate School, Chulalongkorn University, Thailand

Dr. Aim-Orn Jaikengkit , Chulalongkorn Business School, Chulalongkorn University, Thailand



This article provides a review of literature and past research regarding approaches in identifying and measuring the costs and benefits of corporate social responsibility (CSR).  It has been found that the costs of CSR depend on the form of CSR activities in an individual organization.  In an organization that emphasizes philanthropy, there are donations of money or items.  This is considered a CSR expenditure for charity and community.  Meanwhile, in an organization where the CSR principle is incorporated into its core business, social and environmental costs are also incurred.  The various benefits of CSR are considered mostly in terms of their effect on corporate profits; however, at present the weighing of CSR’s costs and benefits still lack clear and well-accepted approaches.  Only estimates can be made based on changes in revenue, the cost savings or the cost of opportunity incurred, which are then used to provide a measurement in numerical or monetary terms for an organization’s decision-making regarding CSR.  Corporate social responsibility, or CSR, and business operations have become linked and need to be considered together.  Not only does the CSR principle help contribute to social and environmental welfare but the business also benefits from CSR in terms of goodwill, trustworthiness, and competitiveness (Porterand Kramer, 2006; Sprinkleand Maines, 2010; Weber, 2008).  In this way, conducting CSR is a “WIN-WIN” situation.  In other words, while business operations focus on making maximum profit, a portion of returns should be provided for the benefit of society as well.  Organizations have realized the importance of CSR and put it into practice.  Each individual organization may have different forms of CSR (Halmeand Laurila, 2009) .  Some organizations focus on donations while others focus on doing activities in communities and with the general public to give back to society.  But in fact, CSR is not just making donations or carrying out charity activities.  CSR has a larger scope and should be incorporated as part of the organization’s operations   for social consciousness building within corporation.  An organization may have to make more investment or allocate more resources to reflect its CSR efforts.  This brings up the question of how an organization can tell to what extent investment and resource allocation should be made for CSR operations compared to requirements in other areas (Knoxand Maklan, 2004).  The management needs to be confident that the costs of CSR are not over the benefits earned  (Lanzona, 2001).  CSR processes and activities do not originate without any investment (Robins, 2008). On the contrary, they incur more operational costs either in the form of money, items, goods and services or staff’s time  (Halmeand Laurila, 2009; Seifert et al., 2003).   As there are costs,  it is necessary to know the benefits or the results generated by the costs (Robins, 2008).   The purpose is for consideration in making decisions regarding an organization’s CSR strategy (Weber, 2008). As Sprinkle and Maines (2010, p. 452) remark, “CSR decisions are not made in a vacuum but, rather, are made via an informed understanding of the benefits reaped and the cost incurred.”  Because of this, information of CSR costs and benefits are important, traditional accounting systems do not support and in fact measures such costs and benefits explicitly  (Sprinkleand Maines, 2010).  Studying approaches in the measurement or the estimation of CSR costs and benefits is thus a good start for a new way of data presentation, separating it from the measurement of financial performance  (Dagilieneand Gokiene, 2011) .  


Quantitative and Qualitative Approaches of Incubators as Value-added: Best Practice Model

Dr. Hanadi Mubarak Al-Mubaraki, Kuwait University, Kuwait

Dr. Michael Busler, Richard Stockton College, NJ



In the US as well as internationally, business incubation has proven to be a highly successful element in economic development and job creation. Today, an estimated 7,000 incubators exist worldwide. Among those, approximately 1,800 are in the US and 900 in Europe. Business incubation has been defined as the provision of high-level business/support services, including network for contacts, to accelerate the development of entrepreneurial companies. This research evaluates the quantitative and qualitative findings of a survey, which shows incubators as a value-added to the market because notably of support services received. Ten international case studies were examined; and their success practices identified as well as some of their obstacles. The case studies were chosen based on their well-known international success outcomes. The results of the survey and case studies indicate the value-added of job creation, technology transfer, commercialization, reduction of indirect start-up costs for companies, and graduation companies in the market. The results also show quantitative and qualitative responses used to determine success rates and key indicators of incubators in various countries. The best practice model based on the lessons learned from case studies indicate that the success of incubatees to sustainable graduation is reliant upon: (1) clear objectives, (2) incubators location, (3) access to services, (4) employment creation, and (5) economic development strategy. When accomplished, the best practice model can lead to a 90% survival rate of companies and reflects sustainability in the market.  Concept of incubating businesses is one of the highly successful elements in an overall economic development strategy. Business incubation formally began in the US in the 1960s, and later developed in the UK and Europe through various related forms such as innovation centres, technopoles/science parks (Campbell, 1989; Al-Mubaraki, 2008; Al-Mubaraki et al. 2010; InfoDev. 2009a; Mian, 1997; Phillips, 2002; McAdam and McAdam, 2008). It is recognized as a way of meeting a variety of economic and socio-economic policy needs, which can include: (1) employment and wealth creation, (2) support for small firms with high growth potential, (3) transfer of technology, (4) innovation promoting, (5) enhancing links between universities, research institutions and business community, (6) industry cluster development, and (7) assessment of a company’s risk profile.  The United States has the largest number of business incubator programs in the world. In many ways, the US has been a pioneer in this industry, where the growth has been rapid from less than a 100 in the 1980s to about 1,800 in 2010 (NBIA, 2010). The United States government has played a predominant role in supporting incubators with legislative allocations for economic development and job creation (Chandra and Fealey, 2009; Monkman, 2010). They have also provided support at both the local and federal level by providing sponsorship (Chandra and Fealey, 2009). In addition, there are currently thought to be around 900 business incubators in Europe (NBIA, 2010; Monkman, 2010). The estimated number of incubators worldwide is 7,000.  National Business Incubation Association (NBIA, 2010) defines business incubation as “a dynamic process of business enterprise development, which: (1) nurture young firms; help them to survive and grow during the start-up period when they are most vulnerable, (2) provide hands-on management assistance, access to financing and orchestrated exposure to critical business or technical support services, and (3) offer entrepreneurial firms shared office services, access to equipment, flexible leases, and expandable space—all under one roof.” The most important element that identifies incubators from the rest of similar establishments is that, it provides high level business support/management services under one roof for entrepreneurs and new ventures that have medium to high level technological focus to create synergy (e.g., Allen and McCluskey, 1990; Aerts et al., 2007).  Wiggins and Gibson (2003) note that business incubators must accomplish five tasks in order to succeed: (1) establish clear metrics for success, (2) provide entrepreneurial leadership, (3) develop and deliver value-added services to member companies, (4) develop a rational new-company selection process, and (5) ensure that member companies gain access to necessary human and financial resources.


Lessons From Experience With Wage Flexibility in Asia

Sohail Ahmed, University Teknology MARA, Malaysia



The rapidly developing countries of Asia are firmly committed to export-led growth strategy. As labor markets tighten, two related policy objectives arise: One is to promote growth in productivity in order to maintain a unit labor cost edge in the highly competitive international markets; and the other is to maintain employment stability in the face of internal and external shocks.  This has brought workings of the labor markets sharply into focus in these countries, compelling them to address rigidities that hamper the realization of these objectives.  A common feature of labor markets is wage rigidity in manufacturing and in the public sector, resulting in wide salary ranges, cascading wage increments, and bonus payments that do not necessarily reflect the financial health of firms. This paper reviews the experience of Japan and Korea with flexible wages. Additionally, as an illustration, features of the Malaysian labor market are examined following Malaysia’s move to a more flexible wage structure.  It is argued that flexible wages will help in achieving the objectives of maintaining a competitive edge in unit labor costs and maintaining employment stability.  However, successful implementation will require sound industrial relations and a broad consensus on how productivity gains are shared. Equally important are those institutions that help to synchronize macro (unit labor cost) and micro (profit-sharing) considerations.  A smoothly functioning labor market, one that facilitates labor productivity improvements and employment stability in the face of internal and external shocks, is indispensable to a strategy of export-led growth. It is often argued that an essential feature of such labor markets is a flexible wage structure. Drawing on the experience of Japan and Korea, this paper examines the case for introducing wage flexibility. It is argued that a flexible wage structure is highly desirable, both for maintaining a competitive edge in unit labor costs and for achieving employment stability. In many developing countries, there is considerable wage rigidity in the unionized manufacturing sector and in the large public-sector bureaucracy. Wages in manufacturing are determined through collective agreements that last two to three years, are legally binding, and result in a downwardly sticky wage structure. The collective bargaining process has led to wide salary ranges, large wage differentials, cascading wage increments (once granted they become the basis for further increments), and a perverse bonus system whereby payments are legally binding irrespective of the firm’s financial situation. These factors have combined to reduce wage flexibility. Such rigidity will result in adverse consequences for the economy.  In a highly competitive international environment, maintaining an edge in unit labor costs is a top priority. If wages are inflexible, the main policy tools for lowering unit costs are productivity growth and exchange rate depreciation. Productivity growth responds slowly and requires considerable investment, while exchange rate manipulations can have destabilizing macro-economic consequences. Another approach is to create dual labor markets (new entrants being paid lower wages ) to bring down the marginal wage, but such fragmentation of the labor market distorts the incentive structure and is generally undesirable. The ideal vehicle for labor market adjustments to internal and external shocks is a flexible wage structure. At the macroeconomic level, wage flexibility would result in average nominal wages moving with productivity growth, thus maintaining internationally competitive unit labor costs. In the public sector, linking wages to a broad index such as economy-wide labor productivity growth, results in a smooth evolution of wages and avoids the need for sharp adjustments. It is also argued that at the firm level, wage flexibility raises productivity. This has led to the popularity of bonus payments, since they are incentive payments that link rewards with performance. Such incentives could also be given to encourage workers to invest in skill development programs.  Not withstanding measurement problems, the empirical evidence is supportive of the positive effect of incentive payments on productivity; however, bonus payments increase productivity only when they are accompanied by sound labor-management relations. Indeed, to enjoy both micro and macroeconomic advantages of wage flexibility, firm level and economy-wide performance and rewards must be closely synchronized. A social contract that emphasizes consensus-building as a clear and important goal of all sides in the wage bargaining process is thus a sine qua non for enjoying the benefits of wage flexibility (Cable, 1989).


The Impact of Change in Federal Funds Rate Target on the Stock Return Volatility in the Stock Exchange of Thailand: A Firm Level Analysis

Yaowaluk Techarongrojwong, Assumption University, Thailand



Numerous empirical studies have examined the impact of change in monetary policy action on the stock return volatility, but research on the impact of change in international monetary policy action on the domestic stock return volatility, especially in the firm level analysis of the emerging stock market, remains relatively unexplored. Thus, this research focused on this unexplored dimension by using the Federal Funds futures to compute the unexpected change in the Federal Funds rate target for 20,417 firm-announcement observations. Two key findings emerged from this research. First, the stock return volatility of the capital intensive industry in Thailand was more positively affected by the unexpected change in the monetary policy by Federal Reserve. Second, the firm level stock return volatility in Thailand positively responded to the unexpected change in the Federal Funds rate target during the contractionary monetary policy action in Thailand.  Keywords: international monetary policy action, domestic monetary policy action, Federal Funds rate target, stock return volatility, Thailand, industrial structure. The effects of change in monetary policy action on the asset price has been widely examined in the domestic context over the past decades (Rigobon & Sack, 2004; Bernanke & Kuttner, 2005; Bredin, Gavin & O'Reilly, 2005; Bredin, Hyde, Nitzsche & O'Reilly, 2007; Konrad, 2009). Evidences on the effects of change in international monetary policy action on the domestic asset price are limited especially in the context of developing countries. The change in international monetary policy action has two key effects on the stock market. One line of research examines the impact of change in U.S. monetary policy action on the global stock return (Johnson & Jensen, 1993; Ehrmann & Fratzscher, 2006; Hausmann & Wongswan, 2006; Wongswan, 2009). The other line of research examines the impact of change in U.S. monetary policy action on the volatilities in the global stock returns (Baks & Kramer, 1999; Connolly & Wang, 2003; Konrad, 2009).  The financial market in Thailand is relatively small and emerging. The financial asset price in Thailand could be affected by the change in the international monetary policy action due to the fact that Thailand has been confronted with the risk of uncontrollable capital flow. The financial market in Thailand is a challenging market to examine since many capital control restrictions have been placed and abolished over the past decade. The change in the U.S. monetary policy action is important information for the financial market in Thailand since the U.S. economy is the largest economy in the world. However, the stock market in Thailand responds differently because Thailand seems to adopt the confusing financial liberalization policy which makes its level of integration with the world market becomes low.  Previous research mostly examined the effects of change in international monetary policy action on the domestic stock price at the aggregate level, except Karim’s research (2009). Karim (2009) focuses the impact of the U.S. monetary policy action on the domestic stock return. However, the impact of the change in the international monetary policy action does not only affect the first moment of the stock price but it also affects the second moment of the stock price. In addition, the aggregate level analysis fails to capture the impact of the firm specific attribution in explaining the impact of change in international monetary policy action on the domestic stock return volatility. To solve this problem, this study examined the impact of the change in the Federal Funds rate target on the stock return volatility in the Stock Exchange of Thailand (SET) at the firm level analysis.


Relationship between FDI and Industrial Categories in Thailand

Dr. Sutana Boonlua, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Christopher Gan, Commerce Division, Lincoln University, New Zealand

Dr. Minsoo Lee, HSBC Business School, Peking University, China



Thailand has been one of significant recipients of foreign direct investment (FDI) among developing countries over the last 30 years, and has recorded rapid and sustained growth rates in a number of different industrial categories. Thailand has shown a clear policy transition for foreign investment over time from an import-substitution regime to an export-oriented regime. Before the 1997 Asian Financial Crisis (1985-1996), Thailand had the fastest growing level of exports in manufactured goods among Asian economies. FDI plays a significant role in the Thai economy. Thailand has been pursuing different foreign investment policies at different times depending on the development objectives and economic situation in the country.  The main objective of this research is to evaluate the determinants of FDI in Thailand using the Eclectic Paradigm. Panel data is used to estimate and evaluate the empirical results based on the data for the years 1980 to 2004. The primary research question addresses what factors motivate, attract, and sustain the FDI in Thailand.   The results show that the inflows of FDI in Thailand, which are supply-driven, are significantly influenced by its 21 largest investing partners. The 1997 Asian Financial Crisis has no impact on the determinants of the inflows of FDI into Thailand. The results also show that increases in GDP and trade between investing partners and Thailand potentially attract more FDI into Thailand.  The categories that attracted the largest foreign direct investment (FDI) inflow in Thailand are industry, financial institutions, and trade. Financial institutions attracted an average of 50% per year of the total FDI since 1970, but this dominance has moved to industry and trade with more than 70% since 1993 (BOT, 2005). The Bank of Thailand (BOT) reports that financial institutions were the most important category until 1992 and decreased rapidly from 53% to 2.91% in 1993 and that category has never regained its popularity. Trade became the most popular category after the decline of the financial institutions category and it became more and more fundamentally important to FDI after the 1997 Asian Financial Crisis, the share for trade category comprised 13% and 50% in 1993 and 2001, respectively.  Smaller FDI inflows during 1993-1996 (before the 1997 Asian Financial Crisis), the real estate category decreased to 30% and dropped to 2% in 1997. The category came under pressure in 1995 for two main reasons: the over-supply of houses and office spaces, and the central bank’s squeeze on lending (Wong, 2001). The lending squeeze was caused by accelerated interest rate from 10.9% in 1994 to 14.6% in 1998 that depreciated the cash flow problems, making it difficult to sustain living standards. This is demonstrated in the property clock diagram (Newland, 2004, p. 26) and the Thai economic indicators, starting with the rise in property value and rising interest rates, then a drop in share prices which eventually affected the falling international reserves (US$ 38 billion in 1996 to US$ 27 billion in 1997), making it harder to obtain finance.  Finally, the economy burst with low/falling interest rates and higher unemployment (1.55% in 1997 to 4% in 1998).


The Effect of Age on Charitable Giving in Taiwan:  Is Afterlife Consumption a Driving Force?

Dr. Tungshan Chou, National Dong-Hwa University, Hualien, Taiwan

Dr. Gordon Woodbine, Curtin University of Technology, Perth, Western Australia



Researchers in both the United States and Taiwan have devoted attention to charitable giving and the factors influencing the process. Azzi and Ehrenberg's (1975) economic model in particular, their preference for using afterlife consumption as a major driving factor in charitable giving continues to attract the interest of researchers. This paper revisits the area using data from the latest available national social survey completed in Taiwan in 2008. Earlier Taiwanese studies concentrate on giving to religious entities (i.e., temples, churches and equivalent places of worship), whereas this paper examines giving to other charitable bodies, religious and non-religious and includes the views of both religious and non-religious adults. It is reported that religious affiliation acts as the major motivator to charitable giving and although giving increases with age, its association with accumulating afterlife benefits is strongly questioned.   Charitable giving is a subject that has been much discussed and researched in a western context by economists and social scientists over the past fifty years or so. Laurence Iannaccone, in his seminal paper “Introduction to the Economics of Religion” (1998) discusses the role of religion in the social and economic sphere within the context of one of the world’s top giving nations, the United States. He refers to the work of economists, Azzi and Ehrenberg (1975) who developed a multi-period utility maximizing model, which they subsequently used to examine a large statewide data bank of American households in order to establish the factors likely to predict levels of giving within various mainly Christian communities. Their findings encouraged a number of economists to pursue similar U.S. studies, an area that continues to attract attention in the new millennium (e.g., Brooks, 2003; Hrung, 2004; Blomberg et al., 2006; Thornton et al, 2010). Continued interest may be warranted as, according to a 2010 report published by the U.K. based Charities Aid Foundation (CAF), the United States ranks fifth out of 153 countries included in a comprehensive survey of social trends. Reported charitable giving is measured using a world giving index that ranks nations according to the incidence of giving of both money and time by individuals.  The Giving USA Foundation also reports that charitable giving currently amounts to 2.1% of annual GDP (US$304 billion), although amounts donated in 2010 dropped 3.6% compared to the previous year. The amounts involved are nonetheless significant in economic terms and justify the attention of researchers interested in identifying the factors motivating citizens to give, particularly the religious community, who are major contributors to this invaluable largesse. Religiosity and its association with age as factors influencing giving have attracted the attention of economists in recently published articles. In particular, the finding that the aged tend to give more of their time and money to religious entities (e.g., churches they attend) led to the conclusion that people are motivated by a need to accumulate ‘after-life consumption’. The term was coined by Azzi and Ehrenberg (1975) who included it as a major variable in their household-allocation-of-time model.  These and other matters are discussed in greater detail in later sections of this paper. The United States is a nation where close to 40% of the population attends a church or its equivalent on a regular basis and it is the financial giving that emerges from these individuals that underpins much of the philanthropic benevolence reported by the Giving USA Foundation. Christians and members of other faiths in the United States give to both religious (e.g., churches in the form of tithes and offerings) as well as non-religious institutions (many of which are managed and operated by Christians and other faith based organisations). Charitable giving within the religious community and its antecedents has been little studied in other cultural settings within the sociological or business literature. Taiwan is the exception in that in the last few years studies of Taiwan Social Change Survey (TSCS) data, economists Chang (2005) and Tao and Yeh (2007) presented some useful insights into the issue of giving within an oriental setting providing a very different worldview in terms of its religious and cultural underpinnings.   


Measuring the Effects of Learning on Business Performances: Proposed Performance Measurement Model

Dr. Ivan Matic, University of Split, Faculty of Economics, Croatia



In today's business environment, characterized by increasing dynamic and complexity, learning in organization, i.e. organizational learning has been proposed as a main source of competitive advantage of modern organizations. Statements such as „the ability to learn faster than your competitors could be the only sustainable competitive advantage in given environment„ (De Geus, 1988; Stata, 1989), best describe the importance that researchers give to the concept of organizational learning. On the other hand, in the last 20 years performance measurement has undergo a genuine revolution regarding the reorientation from traditional to contemporary, balanced, performance measures, i. e. performance measurement systems, and as such it moved to the centre of academic and practitioners’ interest. Given the fact that relationship between organizational learning and business performances is not nearly enough empirically investigated and explained, the purpose of this paper is to propose a balanced performance measurement model, specially designed to measure the effects of learning in organization on its business performances. Bearing this in mind, performance measurement literature has been reviewed, especially the most important performance measurement systems, such as BSC, EFQM, Performance Prism, Performance Pyramid System, etc., on the basis of which the balanced performance measurement model, encompassing seven non-financial and three financial measures, aimed to measure the effects of learning on business performances of organization, has been designed.  In today's business environment, characterized by increasing dynamic and complexity, learning in organization, i.e. organizational learning is crucial for survival and advancement of modern enterprises. Specifically, in process of adapting to such a fast changing environment, modern organizations have freedom of choice of the ways of adjustment, which brings us to the organization's ability to learn over time, especially if we know that the adjustment itself implies the existence of potentials in the organization to learn, forget and relearn, based on its past behaviours (Fiol and Lyles, 1984, pp. 804). Statements such as „the ability to learn faster than your competitors could be the only sustainable competitive advantage in given environment„ (De Geus, 1988; Stata, 1989), best describe the importance that researchers give to the concept of organizational learning, i.e. it is regarded as a main source of competitive advantage of 21st century organizations. Moreover, some of the most famous gurus of organizational learning such as Argyris, Schein and Senge share a common view that organizations need to learn quickly if they want to maintain their competitive advantages (Lim and Chan, 2004, pp. 100).   On the other hand, business performances are indicator of how well does organization accomplish its goals (Ramanujam, 1986 in: Lin and Kuo, 2007, pp. 1069), while business performance measurement results are basis for managers, owners, employees and other stakeholders for estimating organization’s overall success in particular period of time, as well as inputs for needed changes and improvements in organization’s future business activities. In the last 20 years performance measurement has undergo a genuine revolution regarding the reorientation from traditional to contemporary, balanced performance measures, i. e. performance measurement systems, and as such it moved to the centre of academic and practitioners’ interest.


Individual Behavior Change Through Economic Shocks Exposure:  Empirical Evidence from Romania

Dr. Pandelica Amalia, University of Pitesti, Economics Faculty, Romania

Dr. Pandelica Ionut, Agora University of Oradea, Business Administration Faculty, Romania

Dr. Diaconu Mihaela, University of Pitesti, Economics Faculty, Romania



The individual well-being is determined by many things like the level and secure income, job stability and characteristics, health, social relationships and family. In some ways and to a different extent all these were affected during the last three years for many people worldwide. The identification of the economic and social consequence of the economic crisis is a very complex and difficult issue taking into account that a precise estimation can’t be done because many of these are not visible yet. Still, a complex analysis of these effects should include some certain directions: implications over individual behavior (a less healthy lifestyle, alcohol abuse, marital conflicts, suicides, criminality rate, domestic violence and divorce rate), implications over consumer behavior (changing the consumer behavior with important consequences over market structure), implications over health (mental health and addiction problems, the adoption of a less healthy food because of the consumption of cheap food, alcohol and nicotine due to stress, poor disease management due to overburdened health care services), implications over beliefs and attitudes (the things in which people believe and they treasure).  We can better understand and learn based on previous similar experiences even if each economic crisis episode has its particularities, but also based on the experience of other uncertain situations (different types of crisis). That is why, in order to determine the key drivers of individual behavior in uncertain situation, like the nowadays context, we started from a border context. During 2009-2010, we analyzed several studies made in the context of various types of crisis: economic crisis (Kelley and Schewe, 1975; Shama, 1978, 1980; Shipchandler, 1982; Ang et al., 2000; Ang, 2001; Zurawicki and Braidot, 2005; Dutt and Padmanabhan, 2009; Garling et al., 2009; Fiszbein et al., 2003; Qelch and Jocz, 2009; Robles et al., 2002; Kittiprapas, 2002; Stegaroiu and Stegaroiu, 2010; Urbonavicius and Pikturnien, 2010), food security crisis (Miller and Reilly, 1994; Pennings et al., 2002; Jin and Koo, 2003; Lusk and Coble, 2005; Kalogeras et al., 2008; Wansink, 2004), terrorism crisis (USA, 2001), public health security crisis (Saad, 2009). The purpose of this analysis was to determine the extent to which these uncertain situations with negative impact on people (risk-generating situations) display some common aspects regarding the change of behavior. The results of the analysis pointed out some interesting aspects, that in all risk generating situations, the psychological factors like risk perception and risk aversion play an important role in determining the change of human behavior.   In modern world, risk-concept is very often used in various circumstances: health, investment, terrorism, economic trends, food security, strategy etc. As Hillson and Murray-Webter (2004) pointed out, there are many definitions for risk-concept in the academic literature. In spite of this variety, there is a consensus within different approaches regarding the fact that risk is associated with uncertainty and generates consequences/effects. The modern theories in cognitive psychology and neurosciences describe two fundamental ways in which human being understand and interpret risk content and its consequences. The first system is based on algorithms and normative rules, as probability analysis, formal logic and risk assessing. This system implies a slower response, a higher effort to analyze and an aware control.


Does Shareholder Retention Matter in Explaining the Under-Pricing Phenomenon of Malaysian IPOs?

Rasidah Mohd Rashid, Northern University of Malaysia, Sintok, Kedah, Malaysia

Dr. Ruzita Abdul Rahim, National University of Malaysia, UKM Bangi, Selangor, Malaysia



This paper investigates the influence of shareholders’ retention on the performance of initial public offerings (IPOs) in Malaysia between 2001 and 2010. Based on a sample of 295 IPOs listed in Bursa Malaysia, we find that pre-IPO shareholders’ ownership or retention averages 73% and has a negative relationship with the IPO performance. This finding is consistent with the signaling model, which argues that a reduction in the proportion of original owners’ shareholding or retention signals the higher risk of such firms. In other words, the market interprets original shareholders’ lower retention as reflecting their lack of confidence in their firms’ future prospects.  Underpricing, which takes place when the offered prices for new issues fall below the price on the first day of trading (Rock, 1986; Carter et al., 1998; and Certo et al., 2001), is a universal phenomenon in IPO markets. A number of explanations have been offered to clarify the puzzle, but very little attention has focused on pre-IPO characteristics—specifically, those whose information can be accessed by potential investors from the prospectus. Numerous studies have been conducted to examine the main explanations, including the winner’s curse, prospect theory, agency theory, and signaling theory; however, nearly all of these studies have been carried out in developed markets. Such studies are still scant in the context of emerging markets, including Malaysia. This shortfall is normally attributed to the lack of available relevant data. The present study is an attempt to close this gap by offering evidence about the relationship between firms’ original shareholders’ retention and level of the IPO underpricing in Malaysia. Investors of Malaysian IPOs can benefit greatly from findings of this study, primarily because the unique features of the Malaysian market might not allow them to adopt strategies based on findings from other particularly developed markets.  Several studies related to shareholders’ retention have been conducted (Barry et al., 1990; Jain and Kini, 1994; Prasad et al., 1995; Espenlaub and Tonks, 1998; Sanders and Boivie, 2004; and Zheng and Stangeland, 2007). A few studies have documented the role of retention in signaling firms’ quality (Jain and Kini, 1994; and Zheng and Stangeland, 2007). However, very few studies have extended the relationship between retention and underpricing (Barry, 1989; Habib and Ljungqvist, 2001; Bradley and Jordan, 2002; and Wong et al., 2011). One such study by Wong et al. (2011) focuses on Asian REIT IPOs. However, these studies have not examined how retention specifically influences the underpricing in the general IPOs market. The current study fills this gap in the literature by directly examining the relationship between original owners’ retention and the level of IPO underpricing. Theoretically, retention is essential in signaling the growth and quality of the firm. However, we have yet to establish strong evidence with regard to the relationship using the signaling theory as a void exists in the literature regarding how the signaling theory could actually explain the relationship between underpricing and retention among pre-IPO shareholders.  The main theoretical contribution of this paper relates to signaling theory; we argue that information from the prospectus will provide a signal to investors. Since outsiders are less informed than insiders, outsiders try to interpret or look for signals in insiders’ decisions and actions. If outsiders believe that insiders’ actions indicate the high (low) quality of the firms, they will act accordingly by increasing (decreasing) the prices of the respective firm’s shares.


Collective Efficacy as A Mediator: The Effect of Relationship Oriented Leadership and Employee Commitment Toward Organizational Values

Dr. Pieter Sahertian, Kanjuruhan University of Malang, Indonesia

Dr. Christea Frisdiantara, Kanjuruhan University of Malang, Indonesia



Research in leadership has not given serious attention to employee expectation with an emphasis on the mediation of the impact of objectives to behavior. One important employee expectation is the belief in individuals’ capabilities, which can produce sufficient progress and performance outcomes.  This research aims to study the mediating effect of employee efficacy by testing two models constructed based on Bandura’s cognitive social theory. Model 1 hypothesizes that relationship-oriented leadership will contribute to employee commitment to organizational values through their collective efficacy while Model 2 hypothesizes that relationship-oriented leadership will have a direct effect on employee commitment to organizational values and indirect effect on employees’ personal efficacy. The sample for this research includes 135 respondents from a loan bank/rural bank (Bank Perkreditan Rakyat) in the area of Probolinggo and Lumajang, East Java. Data were analyzed using AMOS 4.0.  The findings provide strong support for Model 2. Relationship-oriented leadership has an impact on employees’ collective efficacy. Meanwhile, employees’ personal self-efficacy can predict their commitment to the collaboration with the customer. Relationship-oriented leadership can also directly and indirectly affect employees’ commitment to the organizational mission and the improvement of effective performance.  Previous research has shown that relationship-oriented and task-oriented leadership can make different contributions to the performance expected from employees. Superior Employees with a superior who applies relationship-oriented leadership will likely be satisfied with their superior and will exert their maximum effort to achieve effective performance, thereby increasing their commitment to the organization.  In a study examining the leadership of schoolmasters, Ross and Gray (2006) found that transformational leadership has a direct effect on commitment. Pillai and William (2004), Yousef (2000), Judge and Bono (2000), Walumba, Wang, and Lawler (2003), and Sahertian (2010) found similar results. Research has also shown that relationship-oriented leadership has a direct effect on employees’ personal capability (Felfe & Schyns, 2002; Pillai & Williams, 2004; Sahertian, 2008). However, in an analysis of the leaders of BCA Bank in the Malang region, Sahertian (2010) found that relationship-oriented leaders have an insignificant impact on employee commitment. Similar results were found by Muchiri (2001) and Brown (2003).  Various studies have examined the impact of leadership behavior on employee efficacy and found that belief in one’s own capability both personally and collectively can impact the performance of the organization, such as achievement and commitment of the organization. Evidence related to employees’ personal impact on performance has been found, but research on the collective efficacy of employees remains relatively scarce.  andura’s cognitive social theory states that an individual’s self-efficacy can act on something independently (i.e., agency), which serves as the basis for an action. Self-efficacy or belief in the capability of oneself is “the belief of one’s own ability in organizing and producing actions required to achieve certain outcomes” (Bandura, 1997). Self-efficacy has a direct impact on the individual’s behavior and objectives, expected outcome, and perception of obstacles and socio-cultural opportunities (Bandura, 2000). Collective efficacy is the activity of all members of the team who work together to achieve a collective result; individual actions often cannot be distinguished from one another. Individuals who feel that they will be successful in a task would have a greater probability to succeed because they are faced with a challenging objective, endeavor to achieve it, persist in trying to succeed despite failures, and ultimately develop a mechanism for managing their emotional conditions.


Timing the Taiwan Stock Market:  Simple Rotation vs. Sector Rotation

Dr. Su-Jane Chen, Metropolitan State College of Denver, Denver, CO

Dr. Ming-Hsiang Chen, National Chung Cheng University, Chia-Yi, Taiwan



This study investigates two active trading strategies— simple rotation and sector rotation. One prompts investors to rotate their portfolio between the stock market during economic boom and risk-free securities during economic bust while the other effects investment allocation between cyclical sectors in economic upturn and noncyclical sectors in economic downturn. Test results uniformly favor the simple rotation while both active strategies outperform the passive buy-and-hold strategy. Moreover, the study reveals that the supremacy of the simple rotation has transformed from wealth accumulation in the pre-March 2000 era to downside risk protection in the post-February 2000 era. This is encouraging especially in consideration of the ease and cost effectiveness for individual investors to implement this active strategy. In contrast, this research casts some doubt on sector rotation as a viable market timing trading strategy, particularly once transaction costs and sector ETFs and mutual funds scarcity in Taiwan are factored in.  Conventional wisdom in finance posits that no one can consistently beat the market. This, in turn, leaves buy and hold as a logical investment choice. However, this strategy has faced its challenges from time to time, most recently in the post-millennium era. Due to the 2000-2002 and 2007-2009 bear markets, a buy-and-hold portfolio formulated at the peak of 2000 in the U.S. would still be in the red today. In contrast, market timers argue that market timing, an actively managed investment strategy, should yield a better performance than a passive buy-and-hold strategy. As a result, market timing strategy has been closely studied in finance literature.  Prather and Bertin (1998) find that a market timing trading strategy guided by discount rate changes outperforms the benchmark market portfolio. Their strategy, the simple rotation strategy hereafter, calls for a full investment in the market upon an initial discount rate cut and a complete pullout from the market with exclusive holdings of riskless assets instead upon an initial rate increase. Chen and Chen (2009) extend Prather and Bertin (1998) to the investigation of seven developed countries and produce similar empirical support for market timing. Conover, Jensen, Johnson, and Mercer (2008) illustrate that expansive monetary policy favors cyclical stocks while restrictive monetary policy benefits noncyclical stocks. They, in turn, propose a sector rotation strategy. Under the scheme, industry sectors are first classified into cyclical and noncyclical sectors based on their respective market betas. Investors following this active trading strategy then rotate their portfolio holdings accordingly between the two broad sectors. In essence, an initial discount rate cut signals an exit from the defensive sector and a simultaneous entrance to the cyclical sector while an initial discount rate increase prompts exactly the opposite. Empirical evidence derived from their study supports dominance of the sector rotation strategy over two passive strategies, including the buy and hold.  Extending Prather and Bertin (1998) and Conover et al. (2008), this study evaluates the two rotation treading strategies against each other as well as in comparison to the buy-and-hold market portfolio.


The Impact of Using Information Technology on Accounting Systems Used in Jordanian Telecommunications Companies

Dr. Majed Alsharayri, Balqaa’ Applied University, Salt, Jordan



The study aims at analyzing the reality of using information technology and identifying the impact of information technology and its components on the effectiveness of accounting systems in Jordanian telecommunications companies. A special questionnaire was designed for the purposes of this study and data collection through a random sample selected from the population of the study, which consists of working in accounting systems in Jordaniantelecommunications companies, the statistical package was used for the purpose of analyzing the data statistically to validate its hypotheses.  The study found many results, the most important of it, that there is a positive impactfor the information technology on the effectiveness of accounting information systems, where the average of the paragraphs’ meansfor the hardware, software, networks and databasesreached to (3.4924). The study concluded some recommendations based on the conclusions of the study, as working to raise the competencies of users of accounting systems and developing their skills through training on the use of what is new of techniques and software, the need to keep up with companies sample study of technological developments and update the hardware, software and systems for telecommunications and information,in addition to strengthen the activities of accounting information systems and the expansion of research in this field aimed at improving the efficient use of information technology.  Organizations face significant challenges in this century,from these challenges,the rapid changes in the fields of information and telecommunication technology and the liberalization and opening up of global markets, which resulting in increasing competition among companies to gain customer loyalty and maintain or increase their market share.  The rapid developments and changes have contributed in the emergence of great importance of information technology and the emergence of clear impact on accounting systems, in addition to the need to use it as a meaningful and effective way in increasing the effectiveness and efficiency of accounting systems based in organizations.  The role of information technology and its importance shows in any organization, starting from the inputs through the operational activities and access to the outputs, where the organized information technology remains in a constant state within the organization and between its units, systems and personnelor externally with its customers.  As a result of technological developments and economic globalization, information systems nowoccupy the status of wide importance in all fields, where they have developed at a rapid pace and their applications were numerous in all administrative levels, these systems havebeen used in operational, technical data and strategy levels, theaccounting information systems bring numerous benefits as they provide important information to all communities of users of accounting information.  The information produced by the systems is an essential resource of the organizations’ resources at their different forms, they are the foundation of the financial decisions whether it is an operational, investment or financial decisions, as these decisions contribute in raising the performance of the organization and achieve competitive advantage which reflected positively on the market value of the organization and then maximize the shareholders' wealth, and its continuity in the sector in which it operates among the economic sectors that expanded the use of information systems in a large telecommunications sector, as it contributes in reducing cost, time and improving the quality of services provided to customers.


Factors Influence Student's Choice of Universities in Egypt

Dr. Ahmed Samir Roushdy, Sadat Academy for Management Sciences, Egypt



It is important for higher educational institutions to know what influence students' choice of a university. Various factors have been identified; some are economic based, such as the cost of university tuition, scholarships and grants, accommodation (room and board). Others are none economic factors, such as university size, and location. This research is designed to explore which of these factors are most important for students when choosing a university. It is assumed that economic reasons play the largest role in choosing a university. I hope this research will provide a comprehensive overview of the different factors that play important roles when students choose a university.  The analysis of university choice by students examine how the influence of personal and family background characteristics, actual and expected market conditions, and economic incentives interact to shape their choices about the sequence of decisions that result in an educational outcome. More sophisticated analysis of university choice emphasizes the heterogeneity in various respects (academic aptitude, family resources, and so on) of the subjects studied and the interactions among these varied characteristics and various opportunities and incentives in producing observed choices.  The choice made by individuals is influenced by the person's characteristics, which themselves are partly a function of past choices and also partly a function of expectations about future opportunities and alternatives (Behrman et al. 1998). Nowadays in Egypt there are more opportunities for high school students to go to universities. However the competition in recruiting more students and retaining them has become more complicated than ever before. Facing a growing competitive environment, higher education institutions have increased dramatically the competition for recruiting and retaining students providing a high quality service as the solution to compete. Universities are mobilizing all the resources for recruiting, such as changing their financial aid policies to allow students from low income family to attend good university like most of the other private universities in Egypt. Universities are updating their campuses to become more diverse and attractive as that is what high school seniors and their parents expect. In other words, to know students' and their parents' expectations could be one of the effective ways that universities have to take to face the highly competitive new environment (Schweitzer 2006, St. John et al. 2005, Thomas et al. 1996, Walther 2000).  The education one can get from a chosen university will generate a significant impact on a person's whole life. It is said that there are many significant decisions an individual must to make in his or her life, among which choosing a university is often listed as the second most important decision in life-exceeded only by the choice of a wife or husband; while in money terms attending a university is often considered the second largest expenditure in life-­exceeded only by the cost of a house (Sowell 1996). As such students and their parents are all very serious and careful when choosing a university to attend. It is crucial to realize that there are many factors, such as economic, academic, geographic, cultural, and even political factors, that can influence students and their parents to chose the most suitable and desired university to attend (Boatwright & Ching 1992, Paa & McWhirter 2000, St. John et al. 2005, Teachman & Paasch 1998, Wilson & Wilson 1992, Zuker 2006).


Advantages and Disadvantages of Commercial Alternative Dispute Resolutions

Dr. Khodr Fakih, Lebanese American University, Beirut, Lebanon



According to the literature, there is no conclusive list that can embody all Alternative Dispute Resolution types because it involves numerous processes and techniques used to resolve conflict. Generally, ADR systems consist of negotiation, conciliation, facilitation, mediation, and arbitration along with a combination of these methods. All those types of ADR methods aim to resolve conflict in a convenient and effective environment. However, these systems like other judicial/non-judicial structures, offer certain advantages and disadvantages. This paper will illustrate the advantages and disadvantages of such system.  The rise of global and trans-national commerce has created tensions and challenges for the international community. On one hand, international commerce has facilitated the movement of people, trade, and services. However, there have been controversial debates on how dispute arising from this development can be resolved efficiently. This has resulted in the popularization of Alternative Dispute Resolution (ADR). Alternative Dispute Resolution is a way of settling dispute outside the courthouse.  This system is consensual, confidential, and flexible which ultimately produces a settlement. Because of these advantages, the international community has been increasingly attracted to ADR system as an alternative method to judicial courts. Despite this popularization, various questions have been raised regarding the validity of this method. This is especially true since such method has proven that it contains not only advantages but also disadvantages. This paper will illustrate the historical analysis of arbitration as the most formal type of ADR method. In addition, we will point out the advantages and disadvantages of Alternative Dispute resolution as a method of settling disputes.  The paper will be structured as follows. The first part demonstrates the historical analysis of arbitration; the second part illustrates the concerns and benefits of the Western and Eastern countries applying arbitration. The last part presents the advantages and disadvantages of Alternative Dispute Resolution Methods.  Arbitration, a system of resolving dispute has historically been reflected and affected by various modes.  These forms relate to socio-political conditions that influenced the development of arbitration as an alternative form of dispute resolution.  As a result, it is important to provide a comparative framework that traces the development of arbitration in Shariah, the Middle East, and the West. In the Middle East, arbitration was known in the pre-Islamic period, as a method of settling dispute among tribes by the tribal chief.  Arbitration resolved various types of disputes, although the settlement itself was neither organized nor binding. However, customs compelled the parties to willingly execute the rendered award as a sign of honor and respect.  In contrast, the advent of Islam legalized arbitration and consequently arbitral proceedings became better organized. Arbitration was the most dominant method of resolving dispute in the early stages of Islam primarily because the features of courts/judges were not established. Indeed, arbitration is documented in the Quran and the Sunnah, and these sources cover many issues including domestic, civil, commercial, contractual, and political dispute. Arbitration in Islam results in a binding contract among parties.  Once they agree to arbitrate in any matter, parties must honor the agreement and the decision rendered by the arbitrator(s). In the Quran  God commands you to give back anything the people have entrusted to you. If you judge among the people, you shall judge equitably. The best enlightenment indeed is what God recommends for you. God is Hearer, Seer.   According to this verse, the parties are obligated to execute the decision rendered by the competent authority (judges/arbitrators), which must end the dispute in a fair manner.  If this decision is not implemented, then the defaulting party would be penalized as a transgressor by the competent authority. Furthermore, the word arbitrator (Hakam) was used in the Quran to describe the judicial role of the Prophet, or the person who is conducting such a task. In addition, the Prophet settled disputes based on his personal reasoning (wisdom) because an organized court system had not yet been established.


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