The Journal of American Academy of Business, Cambridge
Vol. 18 * Num.. 2 * March 2013
The Library of Congress, Washington, DC * ISSN: 1540 – 7780
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Financial Performance and Financial Management of Founding and Non-Founding CEO’S
Dr. Terrance Jalbert, University of Hawaii at Hilo, HI
Mercedes Jalbert, The Institute for Business and Finance Research, HI
Dr. Kimberly Furumo, University of Hawaii at Hilo, HI
CEO’s extensively influence the operation and performance of firms. This paper is an exploratory study that examines the extent that CEO characteristics impact firm performance. Specifically, we examine management and performance differences between founder and non-founder CEO’s of publicly traded firms. We use a large dataset of annual Forbes CEO data, combined with Compustat data, covering the time period 1997 to 2006. Or results show that founder managed firms differ from other firms with respect to several variables including institutional ownership, inside ownership, total compensation, returns earned and capital structure. Several studies examine how founding CEO’s differ from other CEO’s. These studies generally find that firms led by founding CEO’s use different management practices and achieve better market performance than other firms. These findings leave open two questions. First, are there additional patterns between founder and non-founder CEO managed firms that can be identified? Second, are these patterns changing in light of recent changes such as the Sarbanes Oxley Act that impact firms and CEO’s. The exploratory nature of this study allows us to identify areas were founder and non-founder managed firms are managed differently. We also provide insights about performance as well as the relationship between CEO pay and firm performance. In addition, we confirm the results of earlier studies using more recent data. Wiersema and Bantel (1992) established that demographic attributes of CEOs affected firm performance and management decisions including youth, tenure, educational level, and functional background. This exploratory study examines the extent that a dummy variable indicating if the current CEO founded the firm or is a non-founder explains firm management and market performance indicators. We use data from the annual Forbes Compensation List supplemented with data from Standard and Poor’s Compustat. The data covers the time period 1997-2006. The results show that the founder variable explains several important firm management variables. Founder CEO’s manage their firms differently and achieve superior performance. The remainder of the paper is organized as follows. In the next section, we examine the relevant literature. Next, we discuss the data and methodology used in the paper. The results of statistical tests follow. The paper closes with some concluding comments. Palia and Ravid (2002) examined differences between founder and non-founder CEO’s. In their model founders work harder and become endogenously entrenched. Their results show that founders are less responsive to performance incentives and founder run firms are more profitable. Their results also show that firms led by family members of the original founders had lower market values. Fahlenbrach’s (2009) results show that founder managed firms invest more in R&D, have higher capital expenditures and made more focused mergers and acquisitions. After accounting for control factors, he finds founder managed firms produced a 4.4% annual abnormal return for investors. Jalbert, Rao and Jalbert (2002) also compared founding CEO’s to non-founding CEO’s. Their results show that founders earn substantially higher compensation than non-founder CEO’s.
China’s Influence on the Future of Global Business Culture in the 21st Century
Dr. Jose Aníbal Torres, Keuka College and Southern New Hampshire University
China’s rise to international economic prominence began with socio-political, economic and cultural reforms late 1978 and into 1979 under the leadership of Mao Zedong and Deng Xiaoping. These changes led China’s economy to unprecedented growth for the following three decades; after 1979. Today, China enjoys being recognized as the second largest economy in the world. However, while China’s economy realized an average growth of 9.7% over three decades, questions arise as to whether China can continue its economic growth of the past three decades. Further, challenging the global economic culture of the 21st century is the growth that has been witnessed by the BRIC nations, including an impressive economic growth opportunity from South Africa. That is, the 21st century is witnessing a global change in economic power, from a decrease in the developed nations, and an increase from the developing, emerging, economies. China’s future challenges as surmounted by a shift in the demographics, and arguably, the increase in their middle class; to potentially the largest middle class in the world. China’s rise in Asia, to hegemonic status, and global economic prominence has brought additional challenges, or opportunities, that must be addresses. These challenges focus on the need to develop a sustainable infrastructure, controls, and effective global leadership to sustain economic growth. Researchers project that China’s economy will slow down at a rate of 5 or 6 to 8%; with a higher percentage between the current years until 2015. And from 2016 to 2025 China’s growth is projected to decline to the range of 5 to 7%. While these rates suggests decreases in comparison to China’s past economic growth, they are competitive on a global scale and focus on the development of the new challenges that China is beginning to face. This study will discuss China’s rise in Asia, its economic influence in different regions of the world, its changing structures, its aging and young’s population’s effect, the rise of China’s middle class and the overall prediction of China’s economy to the year 2025. Globalization has been instrumental in transforming not only global economies and the international dynamics of power, but also redefining international power. The Chinese Olympic Games was intended to showcase China’s economic development progress and world leader status; which ultimately helped to transform China’s image as a global economic power and influence on business culture in the twenty-first century (Salloum, 2004). China’s embrace of a market economy, economic growth and geopolitical influence has attracted the attention of foreign countries, but not without its internal challenges (Norris, 2011). Additionally, China has undertaken impressive efforts to enact laws and regulations, in environmental protection, anti-monopoly, property rights and labor laws that encourage corporate social responsibilities and are fueling FDI inflows (Norris, 2011). According to analysts, the decrease of the developed countries’ economic power shifts this power dynamic in the direction of the emerging economies, and political power will inevitably follow; dynamics of geopolitical events of the 21st century. Further, China a large developing country with an emerging economy, is, arguably, accepting the responsibility of encouraging other countries to help in creating a more effective trade and financial system for sustainable world development (Ying, 2010). And during a recent G20 Summit, China’s President Hu Jintao, spoke about China’s position relative to future world economic development and regional cooperation. China’s growing power has not challenged its local region, and has been more of a contributor in maintaining its existing order (Wang, 2011).
The Effect of the Use of Online Advertising and Online Retailing on Marketing Strategy for Products
Dr. Mary Werner, Jacksonville University, Jacksonville, Florida
The onset of online advertising and online retailing has dramatically changed the marketing of products. Both these areas are part of the online marketing arena; online advertising being a method of promotion that is internet based and online retailing a way to distribute a product that is internet based. Both online advertising and online retailing appear to have been accepted as an integral part of marketing strategy that is necessary for companies to use if companies want to be able to survive and prosper in the marketplace. However, in terms of marketing strategy it was also noted that since both online advertising and online retailing are internet based, there is some common ground there that tends to blur the lines of distinction between the two areas. There are also challenges with respect to the two areas. Therefore, although online advertising and online retailing appear to have become common ways to promote and distribute a product, issues such as security and effectiveness have resulted in some companies moving away from the use of online advertising and online retailing. Research in the future should continue to offer approaches to resolve these issues. The introduction of the electronic means of doing business has had a tremendous impact on the nature of how the marketing of products takes place. All aspects of marketing have been affected. The marketing mix, which summarizes the basic activities involved in marketing a product, involves the identification of a target market or group of customers and then designing an appropriate product, price, promotion approach and distribution (place) approach, had been dramatically affected and forever changed with the development and evolution of e-commerce. There are now products of an electronic nature such as the smart phone and electronic readers that have changed the very lifestyle of the entire population of this earth. Pricing adjustments can be now made instantaneously due to the availability of electronic media. The distribution of products done by retailing can now be accomplished online. Communication, which involves advertising for the purpose of promotion now has the online option. This has enabled advertising to go global in a way never seen before and provides the opportunity for instantaneous communication as well. Therefore, the very nature of the practice of marketing has been revolutionized with the development of e-commerce. The areas of online advertising and online retailing are of particular interest since not only have these areas of advertising and retailing been dramatically changed with the development of e-commerce, but the distinction between online advertising and online retailing has become less obvious as a result. Prior to the development of e-commerce, advertising seemed to be clearly the way to communicate about a product and retailing seemed to be clearly the means by which a consumer obtained a product by providing a location for the consumer to go to for the purpose of purchasing a product. However, e-commerce via the internet brought about a change with respect to this situation. The website came into being and suddenly the distinction between what was advertising and what could be identified as retailing seemed to start to disappear. Customers can go to a website for a product and see all kinds of information about that product on the website itself which can be considered advertising. Many websites have several advertisements providing information about the product.
An Examination of the Relationship Between Teaching Presence, Social Presence, Learner Motivation, and Self-Reported Learning Among Online MBA Students
Dr. Herbert Pollard, King College
Dr. Randall Blevins, King College
Dr. Mary Connor, King College
Dr. Lorrie McGovern, Saint Leo University
The purpose of this study was to explore the relationship between the Teaching and Social presences of the Community of Inquiry (COI) framework, learner motivation, and self-reported learning. The study surveyed 1472 online MBA students; 270 students completed the survey. Study results found that teaching presence, social presence, and learner motivation, collectively, were significant predictors of self-reported learning. Online education has grown at a dramatic rate (Shea, Vickers, & Hayes, 2010). Educational institutions have expanded online delivery to provide greater student access and to satisfy market demands. At the same time, this accelerated growth has raised questions about student learning outcomes (Patterson & McFadden, 2009). Despite an increase in research, questions regarding student learning continue (Simmering, Posey, & Piccoli, 2009). The COI framework describes that learning occurs through the interaction of teaching and social presence (Garrison, Anderson, & Archer, 2000). Shea and Bidjerano (2010) suggested that a more complete understanding of the role of the learner might enhance the COI model. This study examined the impact of learner motivation on the association between the teaching and social presences and self-reported learning. The study found that teaching presence, social presence, and learner motivation, collectively, were significant predictors of self-reported learning. The CIO framework has been presented as a model for understanding learning (Rourke & Kanuka, 2009; Swan & Ice, 2010). Questions have been raised regarding the COI model’s linkage to learning (Annand, 2011; Rourke & Kanuka, 2009). Shea and Bidjerano (2010) suggested that the model may not reflect a state of completion and recommended that a Learner presence component be considered in the COI framework. While Shea and Bidjerano (2010) considered self-efficacy and effort regulation as possible components of learner presence, this study explored the association of learner motivation and the teaching and social presences of the COI framework. In addition, this study examined the strength of the teaching and social presences of the COI framework and learner motivation in explaining self-reported learning. Figure 1 presents the proposed model of this study. The COI framework was first presented by Garrison, Anderson, and Archer (2000), and it was proposed as a generic model that could provide order and methodology for studying effectiveness of computer conferencing. A process model of online learning, the COI has a constructivist view as its core (Swan, Garrison, & Richardson, 2009). The dimensions of the COI are teaching presence (TP), social presence (SP), and cognitive presence (CP). Learning is produced through the interaction of these components (Garrison, Anderson, & Archer, 2000). A team of researchers collaborated to develop an instrument to measure COI. Arbaugh, Cleveland-Innes, Diaz, Garrison, Ice, Richardson, and Swan (2008) presented the foundational article for instrument validation. The present study used this instrument to examine TP and SP. The Arbaugh, et al. (2008) instrument has been used and validated in other research studies (Burgess, Slate, Rojas-LeBouef, & LaPrairie, 2010; Diaz, Swan, Ice, & Kupczynski, 2010; Shea & Bidjerano, 2009; Swan, et al., 2008). This study used items from the Arbaugh, et al. instrument as measures of TP and SP.
Can Motivational Priming Change How Much Consumers Eat?
Dr. Cynthia Webster, Mississippi State University, Starkville, MS
The purpose of the research reported here utilized regulatory focus theory to determine the extent to which promotion and prevention priming of a consumer’s goals or motivation significantly affects their food portion size behavior. In Study 1, consumers’ motivations were primed explicitly; results supported regulatory focus theory in that a promotion prime led to an increase in food portion size behavior, and a prevention prime caused a decrease in food portion size behavior. In Study 2, consumers’ motivations were primed moderately. When primed moderately, regulatory focus theory was supported only for promotion-oriented consumers in that a promotion prime led to an increase in food portion size behavior and a prevention prime led to a decrease in food portion size behavior. With nearly 25% of the world’s population either overweight or obese, food consumption practices have been characterized as a global health crisis (Mishra, Mishra, and Masters 2012). In industrialized countries, the percentage is even greater and has been steadily increasing over time. In 2010, about 69% of the U.S. population was overweight with almost 36% of adults and 17% of adolescents considered obese (Ogden et al. 2012). Although such factors as genetics, food and beverage type, and sedentary lifestyles are well-acknowledged causes of obesity, research shows that the key cause of obesity is simply the amount of food consumed on a regular basis (e.g., Wansink 2006). Indeed, over the past two decades, the amount of a single food item consumed in a single eating occasion, known as a food portion size, has increased significantly. Unsurprisingly, studies have shown that consumers eat more when they are confronted with larger portion sizes (Dodson and Gerstner 2010). For most consumers, these larger portion sizes eventually become a consumption norm—that is, the amount of food a consumer is accustomed to eating. The current research seeks to understand more fully the processes underlying consumers’ food portion size decisions. Specifically, this research draws upon regulatory focus theory to discover whether the explicit and implicit priming of a consumer’s goals or motivation toward promotion (to achieve positive outcomes) or prevention (to avoid negative outcomes) significantly affects change in their food portion size behavior as per their consumption norm. Two studies were conducted to fulfill this purpose. Study 1 investigated the effects of explicit motivational priming on consumers’ food portion size change behavior. Study 2 was identical to the first study, except the motivational priming was more subtle in nature. Regulatory focus theory explains the means used by individuals for self-regulation during the pursuit of goals.
Salient User Beliefs for a Protective Technology: Conceptualization and Measurement Development
Dr. Janis Warner, Sam Houston State University, Huntsville, Texas
There is an ever increasing need to better manage and encourage users’ behavior to safeguard information assets as the growth of the Internet, cloud computing, online shopping, social media, wireless technologies, as well as many other technologies increase the user’s role in IT security. With the recent identification of the “protective” category for IT security technologies, there is a need to understand associated “protective technologies” user behavior. Identifying and understanding the salient user beliefs regarding IT security is a foundational step as those salient beliefs will likely guide user intentions and behaviors. This study conceptualizes and develops valid measures of salient user beliefs towards a target IT security behavior. The conceptual framework uses the qualitative interview approach advocated in the prominent Theory of Planned Behavior to identify salient user beliefs regarding a specific IT security artifact – anti-spyware. Once salient beliefs are identified, psychometrically sound measurements are developed through a systematic process which includes a pilot study, exploratory factor analysis and confirmatory factor analysis. “In practice, information security is compromised on a daily basis … [with] estimates of economic damage into the tens, if not hundreds of billions of dollars per year” (United Nations, 2005, p. xiii). Information systems security becomes increasingly complex as organizations open their information technologies (IT) to share their information and data assets more effectively with employees, partners and customers. Internal user practices (Wade, 2004) are being targeted as some of the most important aspects in protecting an organization’s sensitive information assets. Recent research on internal users has provided evidence regarding a significant lack of awareness of IT security requirements and/or and continued risky behavior (Spears & Barki, 2010; Hu and Dinev, 2005). Moving away from the technical perspective toward the socio-organizational approach addresses the need to understand human behavior in relationship to information systems security (Dhillon and Backhouse, 2001). Recent research has recognized the differences between “positive technologies” or technologies used for productivity purposes, “negative technologies” or technologies used for disruption of normal processing and “protective technologies” or technologies used to disable or neutralize “negative technologies” (Dinev and Hu, 2007). Our research goal is to begin bridging the gap (Dinev and Hu, 2007) in understanding the differences by focusing on developing a specific framework for protective technologies and related behavior. “Individual beliefs about technologies have been shown to have a profound impact on subsequent behaviors toward information technology” (Lewis, Agarwal & Sambamurthy, 2003, p.657).
Personality, Intentionality, and the Structure of Support Networks
Dr. Cathleen McGrath, Loyola Marymount University, CA
Dr. Deone Zell, California State University, Northridge, CA
Dr. Charles M. Vance, Loyola Marymount University, CA
Support networks are a type of social network comprised of key persons that individual can turn to for advice, information or support. The structure of support networks plays a key role in their effectiveness, especially from a resource perspective. The structure of social networks can be the function of innate personality traits or conscious intentions. This study examines the impact of personality and intentionality on four structural aspects of support networks in the context of career planning. In so doing it bridges two disciplines (social network theory and personality theory) that have remained relatively disparate due to different theoretical underpinnings. Two questionnaires were administered to 653 business students in a university setting. One measured personality using the Big Five framework while the other examined aspects of students’ support networks. Findings show that after controlling for age, gender, ethnicity, and academic performance, three personality traits – extroversion, agreeableness and openness – significantly influence network structure. Extroversion leads to larger and more diverse networks, and stronger ties. Agreeableness leads to denser networks, while openness to experience leads to sparser ones. Findings also suggest that consciously putting one’s mind to the task of networking results in increased network size, regardless of personality. The paper concludes with a discussion of findings, practical implications, and directions for future research. Support networks are a type of social network comprised of key people that one can turn to for advice, information, or emotional support. The structure of social networks plays a key role in their effectiveness, particularly from a resource perspective (Brass, 1984). For example, networks that are large, diverse, rich in weak ties to casual acquaintances, and that contain “structural holes” between diverse groups lead to a range of positive outcomes including access to novel sources of information (Granovetter, 1973), the discovery of new jobs (Granovetter, 1995), fruitful inventions (Burt, 1992; Obstfeld, 2005), and more successful careers (Burt, 1992). Conversely, networks that are small, dense, and rich in strong ties to close friends and family have their own benefits, as such networks lead to increased accessibility (Baker, 1993), help with resource mobilization (Obstfeld, 2005), and protection in times of danger or uncertainty (Krackhardt, 1992). The structure of one’s social network can be the function of innate personality traits or conscious intentions. Individuals who are extroverted, agreeable, and intellectually curious, for example, might be expected to build larger and more diverse networks than those who do not possess these traits.
Indirect Consumer Attitude Measurement, Brand Transgression, and the Consumer-Brand Relationship
Dr. Ross B. Steinman, Widener University, Chester, Pennsylvania
This research examines how people respond to a brand transgression using both indirect and explicit consumer attitude measures. Participants were randomly assigned to transgression conditions and then instructed to complete various consumer measures. The author found that brand transgression had an immediate negative impact on consumer relationship when using explicit measures; this effect was not present when using indirect measures. However, the indirect measures added to the prediction of consumer behavior. This suggests that indirect measures can be used to better understand the consumer-brand relationship, especially after a brand violates trust with the consumer. Marketing implications are discussed. Indirect measures of consumer attitudes are used to assess attitudes without directly asking individuals to report on the attitudinal object of interest; this circumvents many of the issues associated with explicit, or traditional, self-report, attitude instruments (Greenwald & Banaji, 1995). One such measure is the Breadth-based Adjective Rating Task (Karpinski, Steinberg, Versek & Alloy, 2007). The Breadth-based Adjective Rating Task is based upon the premise that people tend to describe expectancy consistent information with abstract traits and expectancy inconsistent information with concrete traits. The abstraction bias is quantified by having participants rate how well trait adjectives, known to vary by breadth and valence, describe a consumer attitude object (Karpinski et al., 2007); Steinman & Karpinski, 2009a). If people have positive attitudes and expectancies of a consumer object then they tend to describe that object with broad positive and narrow negative traits. Conversely, if people have negative attitudes and expectancies of a consumer object then they tend to describe that object with narrow positive and broad negative traits. By examining the breadth and valence of the traits people use to describe a consumer object, the Breadth-based Adjective Rating Task provides an indirect measure of peoples’ attitudes and expectancies of that consumer object (Steinman & Karpinski, 2009a). For example, Steinman and Karpinski (2009a) examined the relationship between the Breadth-based Adjective Rating Task and past and future consumer behaviors using newspapers, an established and well-known consumer product, as the attitudinal object of interest. In their research, the Breadth-based Adjective Rating Task was found to be a significant predictor of prospective consumer choice. The Breadth-based Adjective Rating Task was also related to explicit attitudes and verbal reports of past consumer behavior (Steinman & Karpinski, 2009a). Steinman and Karpinksi (2009b) replicated and extended their research (Steinman & Karpinksi, 2009a) in the fast moving consumer goods domains of consumer electronics and food, respectively. In both areas, the Breadth-based Adjective Rating Task was a significant predictor of consumer attitude and behavior. Furthermore, it was reported that there was a significant interactive effect of the Breadth-based Adjective Rating Task and explicit attitudes in predicting consumer behavior. This suggests that the Breadth-based Adjective Rating Task increased predictive ability above and beyond explicit attitude measures.
A Rank Ordered Discrepancy Assessment of Commodity Association Member’s Perceptions of Product Value and Breed Performance Data
Dr. Roger D. Hanagriff, Texas A&M University, TX
Dr. Ryan D. Rhoades, 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 rank order of the breed performance traits and well as association measured and reported data. 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%). This study finds that members are utilizing the breed characteristics they find important in their business and marketing decisions and little discrepancy between the importance of breed characteristics and use of those items can be found. However, there are rankings of high use and importance variables such as docility, maternal, weaning weights, yearling birth weights, body condition score and yearling weights. These contrast the lower valued or used areas of rib eye area, hot carcass weight and intramuscular fat. 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 scorecard 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 score carding and heat mapping and they apply a mental model that frames assessment of uncertainty from both a potential and an exposure perspective. Score carding consists of taking qualitative discussions about strategic uncertainties and turning these discussions into ordinal rankings. Heat mapping, a process of taking the rankings from score carding 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 framework that directs the firm in selecting an appropriate uncertainty management strategy (Detre et al. 2006). So as previously stated, firms need to be proactive in managing uncertainty and can possible operationalize opportunities by drawing from qualitative discussions.
Job Role Change and Leadership Development
Dr. John T. Byrd, Bellarmine University, Louisville, KY
Joseph C. Thornton, Bellarmine University, Louisville, KY
This article describes the results of a study that assesses the philosophical orientation and values of a group of individuals being developed for a new work role. The new role requires leadership skills. The group involved in the training consists of assembly line employees who were selected to participate in an organizational change program because of the launch of a new product. The new role required greater competency in the use of interpersonal skills. Previous observations of employees trained in this new position resulted in the initiation of this research intended to identify and measure attributes leading to successful performance. Employees that are involved in change in their work roles in complex organizations often experience adjustment problems. Without training in the new job adjustment issues can create insurmountable problems.. An example of how training can be helpful with the use of cognitive continuum theory can be applied to leadership training was explained in an earlier article (Kutschera & Byrd, 2005). In that situation, similar to the circumstances at this organization, a communication model was utilized as part of an interpersonal skills training program to discuss the content of the new leadership role when making decisions. By framing and reframing issues, the “leaders in training” became sensitive to different cognitive predispositions as well as to different modes of processing information. This awareness increased the potential for flexibility in their new leadership role. Because of using the CCT and the Communications Model as part of that leadership development program, interest developed in gaining greater understanding of the trainee’s philosophical orientation and values before the beginning of the program. Because of this interest, formal research was added as a component of the program. This is a description of that component. The role of a Product Specialist and the issues in a new leadership role are detailed in a previous article (Kutschera & Byrd, 2005). Essentially, it consists of individuals assigned to new roles that demand leadership skills. These individuals are often unprepared and /or ill- suited for the position. In other situations, individuals have the cognitive predisposition to make the transition a smooth process. In any event, a new perspective is needed and some adjustment is necessary. This is particularly true in manufacturing settings where individuals have expertise with specific jobs and have developed narrow but important problem solving knowledge. The product specialists in this study are non-management assembly line workers who are being trained for a new product line. In this position, they will assist other assembly workers when problems arise during the production process. At the same time, they are responsible for training the workers in the new methods of product assembly.
Toward Using IT to Target Service Innovation to the Appropriate Segment: A Significant Application of Information Technology
Dr. C. M. Ehrman, Jerusalem College of Technology, Israel
The objective of this paper is to serve as awake up call to small "family run" businesses, in which the owners feel that their knowledge of their consumer market is sufficient to successfully promote service innovation. They feel that there is no need for primary data to analyze their market. In this paper it is shown that different markets segments have different priorities when selecting a provider of a service. An illustration is provided using primary data for providers of catering services. In the field of food catering, it is not uncommon to find families that have been in this service for generations. In terms of providing innovations, the general attitude of the family decision maker is that we know the market and information technology (IT) is unnecessary. In order to illustrate the necessity of IT, a given firm has been selected (Osher Brothers Inc.). The owners were interviewed and they insist that they know the market "inside out." This paper is devoted toward promoting the use of IT. It may be a good strategy to select the business segment in the service industry that is extremely reluctant to use IT, and demonstrate the error s that can come about without using any IT. Problem: Decision Makers in small family run businesses often feel that they "Know" their market and their customers and there is no need for IT. They know the USP (Unique Selling Proposition, a term coined by Rosser Reaves) that works and it will maintain or increase their market share. This paper focuses on the service area and innovations that the Decision Makers feel will succeed based on generations of success providing service for their clientele. The catering industry will be our service industry. The Osher Brothers' Catering was selected as a means of demonstrating how it is truly needed in the 21st Century. An extensive interview was conducted with the Osher Brothers catering. They felt that there is one and only one significant attribute that can define success or failure for their firm: Quality of the Food. Base on this "unanimous" feeling among the family members, one of the brothers went to Gourmet Cooking School, and indeed the quality of their food is truly superior to competing caterers in the area. In our study, we defined 8 categories that can be used to evaluate performance of any caterer. These attributes are listed in Table 1. Each respondent was asked to rate the caterer they used on the performance of the caterer (5 was excellent,…, 1 was very poor) for each of the se 8 attributes. The respondent was also asked to state the importance of each attribute using the same Likert Scale (5= very important,…,1= extremely unimportant). Using the Linear Compensatory Model (LCM from now on, introduced by Martin Fishbein), we generated a "Satisfaction" score, as follows: Assume that there are "I" attributes and performance scores for each attribute and importance scores for each attribute. Each performance score is multiplied by the corresponding importance scores for each attribute, and the product of these numbers are then added and divided by the sum of importance scores.
Leadership Practices: A Comparison Between Chile And Peru
Dr. Leopoldo Arias-Bolzmann, Professor, Universidad Adolfo Ibanez, Chile
Dr. Stanley Stough, Professor, Retired, Universidad Adolfo Ibanez, Chile
In a globalized world, leadership is a key factor that countries should consider to measure its competitiveness. It is important that everybody knows that effective leadership can be used as a competitive business advantage. The study that follows compares leadership practices between Chile and Peru, using as the instrument for data collection the LPI-Self questionnaire developed by Kouzes & Posner in 1993. The results of the study show that significant differences do not exist among MBA respondents in the respective countries on any practice dimensions. The results are of value in understanding how leadership differences or similarities impact on strategic execution within an organization. This study uses the neocharismatic, visionary approach to leadership developed by Kouzes and Posner (1993 & 1995) and their Leadership Practices Inventory-Self (LPI-Self) instrument (Kouzes & Posner, 1993) for data collection. The instrument contains 30 items, six for each of the five practices describe above. Each behavior is rated on a 10-point Likert scale. Research has shown that the more frequently an individual is perceived as doing the behaviors, the more likely that person will be identified as an effective leader. The LPI is a well-designed instrument in its simplicity and its power. It is easily understandable and provides a clear roadmap on how best to proceed in more fully developing leadership behaviors. The LPI provides both valid and reliable assessments of respondent leadership behavior and skill. It is one of the most widely used leadership inventories for both individual feedback and leadership research purposes. An in-depth analysis of its psychometric properties has been published and numerous doctoral dissertations have been based on the LPI. Results are analyzed between the two countries (Chile and Peru) and within each country.
Emerging Economies: Stock Markets After the Financial Crisis
Dr. Lucy Amigo Dobano, University of Vigo, Vigo, Spain
Latin-American stock markets have been characterised by strong unevenness and high volatilities owed, mainly due to their high political risk and high needs of financing. The aim of this paper is focused on the analysis of the possible relationship of causality between fluctuations in the principal Latin-American stock markets since the financial crisis originated in the United States in September, 2007. To achieve the proposed aim, the sample period ranges from the year 2007 to 2011 with daily data, considering the stock exchange indices of some of the most significant emerging economies, Chile, Mexico and Brazil, as well as an analysis of relations of integration that incorporates the stock market of Latin American values rooted in Madrid - LATIBEX - and some indicators of the most developed economies, the IBEX 35, DAX and DOW JONES, which are a special interest to managers in the international diversification of portfolios. In a first approach, different methodologies are applied to the indices in order to extract possible simultaneous relationships among them. Subsequently, a VAR model is considered following the procedure of Johansen (1988) and Johansen and Juselius (1990) to detect the existence or not of long term relationships. The findings provide evidence that returns profits are due to idiosyncratic risk and investors’ under-reaction to stock market-specific information. The high inflation rates experienced by Latin American economies in the period ranging from the late eighties to the early nineties resulted in enormous imbalances in the evolution of their stock markets. In general, the period from the late eighties to December 1992 can be described as a boom in Latin American stock markets, a cycle that culminated with the great fall in 1992. From then on, the situation has been one of instability marked by three important shocks. The first was produced by the devaluation of the Mexican peso in December 1994, followed by the first Asian crisis in autumn 1997 and finally rumours centred on the devaluation of the Brazilian real during the second half of 1998. Next, the events linked to September 11, 2001, in the United States would play an important role, all worsened by the crisis of the Argentinean peso at the end of that same year. After several years of extraordinarily favourable external conditions for emergent economies from the years 2002 to 2008, in which important financial influxes were received from the rest of the world, the financial crisis that began in September 2007 in the United States also influenced Latin America. After a first year in which the financial turbulence had a reduced impact on Latin American countries, the financial crisis that began in 2007 spread to these economies starting from mid-September 2009 due to the impact of the financial restriction and fall in global demand, which lowered the price of raw materials, triggering the interruption of the expansive period experienced in recent years.
Is Market Orientation an Advantage for Business Performance?
Dr. Richard Murphy, Jacksonville University, FL
Dr. Mohamad Sepehri, Jacksonville University, FL
Dr. Mary Werner, Jacksonville University, FL
Many organizations focused mainly on the product without much concern for customer wants and needs when practicing marketing for many decades. Eventually organizations saw the need to take a market orientation approach which involves a focus on customer satisfaction. This is an examination of this market orientation philosophy with respect to the effectiveness of market orientation’s advantage related to business performance. The conceptualization and development of market orientation is examined and the movement into the overall organizational culture expressed. Business performance is defined and examined and the market orientation and business performance relationship examined. Generally, a relationship between market orientation and positive business performance is established with respect to many aspects of business performance. The evolution of the practice of marketing from being focused on product development without much regard for customer satisfaction to one of a focus on market orientation, which involves the practice of all marketing activities based on concern for customer satisfaction, has taken place. This evolution seems to have taken place out of necessity. Competition increased in the marketplace and a focus on customer satisfaction became necessary for any organization to effectively compete in the marketplace. Organizations seem to operate under the presumption that the market orientation is an advantage with respect to business performance. However, an examination of this assumption, and in particular, which aspects of business performance are affected by an organization’s market orientation seems warranted. That is what this study does in order to present information to businesses so that they may practice marketing in the way that is most optimal for their organization. The marketing concept, as the discipline’s primary theoretical paradigm, developed in the literature with emphasis on definition and analysis. Prior to the 1950’s, marketing was seen as a departmental function focused on products, rather than on customers, and on convincing “prospects that they needed what the firm was producing” (Webster, 1988, p. 31). Drucker’s (1954) positioning of marketing as a general management responsibility matured the role of marketing into an overall company posture that places the customer at the center of business activity. There is only one valid definition of business purpose: to create a satisfied customer….It is the customer who determines what a business is…..Because it is its purpose to create a customer, any business enterprise has two – and only these two – basic functions: marketing and innovation.….Actually marketing is so basic that it is not just enough to have a strong sales department and to entrust marketing to it. Marketing is not only much broader than selling, it is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of its final result, that is, from the customer’s point of view. There is only one valid definition of business purpose: to create a customer….p. 37 Because it is its purpose to create a customer, any business enterprise has two – and only these two – basic functions: marketing and innovation. (Drucker 1954) (pp. 37-39). Conceptual development of marketing emphasized functional integration, organizational coordination, and customer value creation (Felton, 1959; Houston, 1986; Hunt & Morgan, 1995; Levitt, 1960; McNamara, 1972; Webster, 1988, 1994).
Enhancing the Impact of Study Abroad on Business Education Through International Field Learning
Dr. Charles M. Vance, Loyola Marymount University, Los Angeles, CA
Dr. Gary Sibeck, Loyola Marymount University, Los Angeles, CA
Dr. Alan Hogenauer, Loyola Marymount University, Los Angeles, CA
This paper examines strengths and limitations of current commonly-used experiential approaches for enhancing international business education, and proposes a new hybrid cost-effective approach combining a form of international internship with traditional study abroad, and utilizing flexible distance-based technologies. This paper also examines how this multifaceted approach provides a very valuable experiential learning alternative option that business schools may consider in enhancing the flexibility and impact of their international curricular offerings and improving student learning outcomes related to the development of important global competencies. Organizations today are placing a premium on global competence—a dynamic set of skills that promote work performance success across international boundaries international competencies—as they seek to succeed in an increasingly globally-integrated marketplace (Billing et al., 2010). These firms recognize that global competence among their professional staff translates into increased cross-cultural sensitivity and relationship-building capability, and greater creativity, and stronger problem solving skills. Other clear benefits to those possessing global competence include more effective personal adjustment to foreign surroundings, greater ability to build and lead multinational teams, improved ability to cope with rapid change and uncertainty, and enhanced ability to adjust and respond to differing political and economic environments (Bird et al., 2010). Particular individual competencies often associated with a global mindset and characteristics of global leadership career success include cross-cultural sensitivity and self-awareness, cross-cultural negotiations, emotional intelligence, openness to new perspectives and influences, inquisitiveness, managing uncertainty and complexity in international business environments, self-management, and international adjustment and adaptability (Vance and Paik, 2011). The old maxim that "experience is the best teacher" is still true today, and is increasingly serving as a guide for multinational firms in the effective development of global competencies within their workforce (Ng, Van Dyne and Ang, 2009). In their extensive survey on developing global leadership competencies, Black, Morrison, and Gregersen (1999) found that 80% of the executives interviewed described their foreign work expatriate assignment as the single most powerful developmental experience in their lives. This finding is in agreement with expatriate training literature that recommends forms of intense experiential learning for achieving learning objectives required for successful performance in the foreign working environment (Bird et al., 1999). Consistent with the recognition by many multinational firms of the importance of international experience and related learning activities for developing global competencies needed in the global marketplace, university business programs in several countries are increasingly employing student international experiential learning approaches in foreign settings for building critical global competencies, including international internships, study abroad, cross-cultural virtual teams, and short term travel study programs (Lumkes, Hallett and Vallade, 2012; Vance et al., 2011; Johnson, Rudolph and Seay, 2010).
Eliminating Degeneracy in the Transportation Problem
Dr. Norman E. Pence, Professor, Metropolitan State University of Denver, Denver, CO
Dr. Joseph S. Morrell, Professor (Retired), Metropolitan State University of Denver, Denver, CO
This paper discusses the transportation problem from the perspective of pedagogy in teaching quantitative methods to business majors. A technique is presented which eliminates degeneracy in the process of finding initial feasible solutions. The rationale for using this technique and the resulting advantage to the student is discussed. The classical transportation problem (Hizer & Render, 1996) is usually presented in a course in quantitative methods in business. Any of the five above algorithms can cause the transportation problem to degenerate. A shipment is a transfer of units from one shipping point to one demand point. Degeneracy occurs when the number of shipments is less than “the number of shipping points plus the number of demand points minus one.” The Modified Distribution Method (MODI) for determining the optimal solution to transportation problem requires the number of shipments to be equal to “the number of shipping points plus the number of demand points minus one.” If the initial starting feasible solution degenerates, it is not possible to use the MODI method to determine the optimal solution. When the transportation problem degenerates in the process of finding an initial feasible solution, students are faced with the following dilemma: Where do I place the zero that will result in a system of equations that will generate numerical values for the “row values” and the “column values” needed to determine an optimal solution? The placement of the zero is not arbitrary. It must be a zero shipment that will result in a system of equations that can be solved for all the” row values” and “column values”. The “row values” and “column values” are used by the modified distribution technique (MODI) or the stepping-stone algorithm to find the optimal shipping assignment. The technique presented in this paper prevents degeneracy and eliminates the decision for the student of where to place the zero. As a result the system of equations generated can be solved for the “row values” and “column values”. Thus this technique will always cause the number of shipments to be equal to the “number of shipping points plus the number of demand points minus one”; i.e., each shipping point will produce at least one shipment and each demand point will receive at least one shipment.
Say on Pay-Dodd Frank Act Effect on Corporate Governance and External Auditor’s Potential Responsibilities
Dr. Michael Ulinski, Pace University, Pleasantville, NY
Dr. Roy J. Girasa, Pace University, Pleasantville, NY
The researchers reviewed recent shareholder reactions to provisions of the Dodd-Frank Act related to its Say on Pay mandates. While shareholder Say on Pay votes are not binding on corporate compensation, implications effecting corporate governance are explored for negative shareholder votes on pay. Board of director removal, shareholder lawsuits and external auditor expanded scrutiny may be in the offering. Independent auditors may have to consider extended audit procedures including integration of Enterprise Risk Management concepts to assure compliance with laws and regulations. Expanded audit procedures would be required for the possibility of client illegal act and the auditor’s assessment of the entity’s ability to continue as a going concern. Conclusions are drawn and recommendations for further study are made. The financial crisis of 2007 that continues to reverberate to this day inevitably led to the focus of blame on a wide variety of alleged culprits whose greed led to negligent and wrongful acts that brought about the greatest downturn of the economy since the Great Depression. Among the most egregious behavior that was highlighted was that of executive compensation. Almost daily media reports show that many executives received extraordinary compensation while their companies’ earnings were suffering significant losses. Whereas the ratio of executive pay to the average worker was relatively modest a half Century ago, the ratio became almost obscene in the disparity especially when compared to that in other countries. Although the figures vary widely, often based on ideological perceptions, it appears that the ratio gathered by the Economic Policy Institute and cited by The Economist publication(1) has credibility. According to the author, U.S. CEO Compensation ratio to the average worker has varied substantially during the past two decades. From a high of 383.4%- 411.3% which factors in options granted and options realized in 2000, the current figure is approximately 231% including options realized.(2) The ratios are far greater that comparable CEO-average worker ratios in Japan, Western European nations, and even Canada. Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act,(3) which added Section 14A to the Securities and Exchange Act of 1934 (“Exchange Act”),(4) states the Securities and Exchange Commission (“Commission”) shall require at least once every 3 years that at the annual or other meeting of shareholders which the Commission which, according to its proxy solicitation rules require compensation disclosure, a separate resolution is to be presented to shareholders to vote to approve the compensation of executives. At least once every six years, the shareholders are to determine whether such vote concerning compensation is to be made every 1, 2, or 3 years. A particularly abusive form of compensation for executives has been the “golden parachute” which refers to an agreement between the company and its chief executives that in the event of a merger or acquisition whereby their positions will be terminated, they are to receive severance packages that gave additional compensation that was often extraordinarily generous. The ostensible purpose of the golden parachute was to discourage potential hostile takeovers. Accordingly, Dodd-Frank requires that whenever shareholders are asked to approve an acquisition, merger, or other disposition of all or substantially all the assets of an issuer, the shareholders must be advised in clear and simple form of any agreements that the company has undertaken with any executive officers of the company concerning any type of compensation that is based on or relates to the proposed merger or other said major corporate action. They must be advised of the total of all such compensation that may be paid or become payable to or on behalf of such executive officer. The disclosure is to be included in a separate resolution for voting purposes by the shareholders.
European Subsidies As a Factor Increasing the Competitiveness of Companies in the Czech Republic
Milan Sedlacek, Masaryk University, Brno, Czech Republic
Dr. Petr Suchanek, Masaryk University, Brno, Czech Republic
The article deals with the question if subsidies from the European funds have influenced competitiveness of the industrial companies in the Czech Republic. The primary research was carried out on the sample of 144 enterprises which answered several questions and provided financial statements from the past five accounting periods. These data were used as an input for financial analysis, cluster analysis and particular univariate and bivariate analyses to divide the companies into three clusters according their financial performance and evaluate the impact of the subsidy on their competitiveness. The conclusion gives evidence about different companies’ attitude to European subsidies and sum up the influence of this enormous financial support on their competitiveness. Czech Republic is a member of the European Union since the year 2004. Czech enterprises have from this moment unique opportunity to raise their competitiveness drawing the subsidies from European funds. The total financial support was during the previous programming period 2004 - 2006 more than €2.6 billion (The Ministry of Regional Development 1, 2011) and the actual programming period 2007 - 2013 offer even €26 billion (The Ministry of Regional Development 2, 2011). Significant part of these subsidies is allocated for private sector or more precisely for raising the competitiveness of industrial enterprises. This is the reason for the carried out research which should answer several important questions: “Do European Union and European subsidies matter? How important are they for the company competitiveness and what is the subjective opinion of company’s management on these external factors? “ Nevertheless, the main aim of this research is not only to answer the above mentioned questions but as well to bring another added value – to analyse the different effect of subsidies on more and less competitive companies. It is assumed that differently successful enterprises will be unequally influenced by the European Union and its financial support. The research is primary focused on industrial companies which are able to draw subsidies from European funds. The total number of these enterprises in the Czech Republic is 143 573, hence it was created a sample contained 200 companies with required options. Primary data source for this research was a questionnaire containing three parts. First part focuses on general information about particular companies. These questions were used for identification and classification of the enterprises. Following (main) part of the questionnaire contains 26 closed questions concerning company competitiveness and factors determining company performance. The last part includes financial statements for the past five accounting periods. The total number of companies that provided the data was 144. These companies operate in various parts of the Czech Republic and have different number of employees. A crucial issue of the research is the approach to measuring the company competitiveness. Recent studies offered a wide range of possible competitiveness evaluation. A numerous group of author use financial indicators as an optimal way how to express the competitiveness. For example Liargovase (2010) or Blažek (2008) use in their study the financial ratio Return on assets (ROA) whereas Richard (2000) or Barney (1997) prefers Return on equity (ROE). Another favourite indicator is Asset turnover which is used for example by Meric who claims that “asset turnover is the most important determinant of the capital employment and company competitiveness” (Meric, 2011). Furthermore, there is number of authors who agree with this statement and use Asset turnover as a measure of company competitiveness; see (Suchanek et al, 2007), (Gu et al, 2006) or (Habib, 2006).
The Financial Crisis 2009 – 2011. How Companies in Mexico Perceived the Crisis and Their Related Marketing Strategies
Dr. Hyun Sook Lee, National Autonomous University of Mexico, Mexico City
Based on the result of the field survey performed during September 27 to October 31 of 2011, three hypotheses were tested. Hypotheses 1 and 2 were accepted, but Hypothesis 3 was not accepted. The survey results provided us with data to determine that most companies in Mexico perceived the financial crisis of 2009 – 2010 negatively, but the recovery of 2011 positively, just as in most countries. As their survival strategies, quality or services improvement strategy was an important factor, although other strategies also were included in the analysis. Most companies combined several strategies in fact. Also, it is evident from our results that some successful companies didn´t depend on only Government´s supportive actions/efficient strategy but their own capability to overcome financial crisis. Companies and their suppliers, marketing intermediaries, customers, competitors, and publics all operate in a macroenvironment of forces and trends that shape opportunities and pose threats (Kotler, 2003, p. 161). The changing and uncertain marketing environment deeply affects the company. Instead of changing slowly and predictably, the environment can produce major surprises and shocks (Kotler & Armstrong, 1991, p. 56). In an economic crisis, business enterprises can no longer rely on conventional marketing strategies to improve performance. There is greater need for companies to maximize the return on their marketing and sales investments. (Incentive strategies , 1999, p. 1). New balances caused by economic crisis change the market conditions and imply mandatory changes in marketing activities and strategies of the enterprises. Economic crises have effects on long-term plans and programs of the enterprises just as on their strategies. Management of such periods has been so important and it has been essential for the enterprises to create a crisis-focused strategy (Apaydin & Geçti, 2011, pp. 243-248). An exciting dimension of crisis management for the marketing expert is the unpredictability of the inquiry: any potential crisis could spawn a financial and production nightmare for the company, yet the warning signs of an emerging crisis can be used to take proactive steps that avert a costly gaffe (Barton, 1994, p. 41). And, the overriding concern of top management should be what a company stands for in the minds of customers and prospects (Crain, 2009, p. 11). Economic crises cause falls in the GNP and therefore bankruptcies in the small and medium scale enterprises and unemployment. Crises have many common points across the countries affected (Apaydin & Geçti, Ibíd.). The global financial crisis of 2009 – 2011 was historical, causing numerous bankruptcies (Lee et al, 2011, p. 104) and will be remembered for many years and in many ways. In the meanwhile, according to the classical economists, any intervention of the state to the market conditions may disrupt the demand-supply balance within the economy which causes potential crisis (Apaydin & Gecti, Ibíd.).
Assessment Formats in Accounting: The Used and Abused
Dennis C. Stovall, Grand Valley State University, Grand Rapids, Michigan
Professors have always wondered what testing format is the most effective in assessing a student’s grasp for the information presented in their course. The trends in assessment are in constant fluctuation and are linked primarily to an individual professor’s opinion. With the recent format changes in professional assessments, such as the Certified Public Accountant Examination, which now consists of 80% multiple choice, an important question arises. What format is the most effective in assessing a student’s understanding in a course (Kuechler, 2011)? Professors first must account for the level and type of information being presented in each individual course. Then, they must seek the questioning formats which are realistic for both the course content as well as the desired grading time. Professors then are able to use their own discretion as to the proper method of assessing their students. The results conclude that some methods are more effective in courses where time efficiency takes precedence over a thorough assessment, such as the formats multiple choice, true/false, and matching. Other courses, whose main objective is to thoroughly assess the student’s knowledge in a discipline, may prefer the methods short answer, essay and interpretive exercise. All methods of assessment, when implemented in the proper individual situation, may result in the greatest overall benefit. A format can only be a supplement to the questions created. No method can transform the questions intrinsic value, but may only detract or enhance it. The style of questioning have been categorized into Multiple Choice (MC), Short Answer (SA), True/False (TF), Matching (M), Essay (ES), and Interpretive Exercise (IE). Studies have various conclusions as to the appropriate format for testing students. The variances are mainly due to variables specific to each course. The main objective is to use the information that coincides with the philosophy of a professor’s class as well as that of the institution. The academic level of a course and the present and future goals of an institution are common factors that are used in the decision as how to assess students. The goal of this paper is not to persuade accounting professors to a certain format preference, but instead meant to present meaningful information as to the actions of a group of diverse professors and institutions. The hope is that this information may be constructively used to reevaluate the form of assessment used in a department based on the goals of individual courses and institutions. Multiple choice is a common format of assessment and is found from introductory level courses progressing to the licensing examinations such as that for CPA certification. From our research we found that only 20% of teachers agree or strongly agree with the statement that they “...prefer to use multiple choice questions.” When asked if “Multiple choice questions adequately assess how thoroughly students understand a topic” the response was 30% agreed or strongly agreed. This left us with 40% who either disagreed or strongly disagreed with the previous question and 30% who remained neutral. When taking these numbers into account we find a majority of professors find this format to not be adequate in assessment.
Taking Charge: Challenges for Nonprofit Executive Successors
Dr. Joseph C. Santora, EPNC School of International Management, Paris, France
Dr. James C. Sarros, Monash University Caulfield, Victoria, Australia
Dr. Mark Esposito, Grenoble Graduate School of Business, Grenoble, France
The aim of this case study is to offer nonprofit executive directors and boards of directors’ lessons about challenges successors face when replacing long-term founders of nonprofit organizations. We begin with a brief profile of the organization, the founder, and the successor. Next, we compare and contrast the founder and successor on five leadership factors. We then present some challenges facing the successor as she began to “take charge” of the organization. Implications for leadership are offered to readers. Finally, we conclude our paper with the limitations of the study and suggestions for future research. Organizational life for a newly appointed nonprofit leader is extremely difficult today filled as it is with numerous personal and organizational ambiguities, and daunting leadership and managerial challenges (Gilmore and Ronchi, 1995; Watkins, 2009). These challenges include, but are not limited to, dealing with staff, securing funding from foundations, responding to board demands, and other internal and external organizational issues (e.g., Adams, 2010; Dym, Egmont, and Watkins, 2011; Gilmore, 1988; Hinden and Tebbe, 2003; Paull and Redmond, 2011; Smith and Moschel, 1993). In particular, a major challenge for new nonprofit leaders is devising an appropriate strategy to deal with the possible disruption of dysfunctional organizational damage caused when charismatic nonprofit founders decide to remain in the organization they launched. These leaders may continue to take an active hands-on role post-retirement in order to add self-perceived value to the organization through their varied work history and experiences. While opinion varies on whether founders should remain active in organizations post-retirement, such actions are nevertheless often part of life in nonprofit organizations (e.g., Gilmore and Brown, 1985/86; Leach, 2009; Linnell, 2004). “Letting go” often creates some very serious problems for founders (see Adams, 2005; Kets de Vries, 2003, Lewis, 2005) who have given their “heart and soul” to their start-up organizations. In this case study, we focus on the disruptive impact a founder had on his successor, the staff, and the organization. His inability to “let go” and thereby allowing the organization to mature to another, perhaps more sophisticated, stage of organizational development, created several personal and organizational challenges for his successor and for other organizational stakeholders. As Sorenson (2004), claimed, it is rare for nonprofit founders to plan for successor organizations.
Financial Sector Taxation: FTT as an Own Resource of EU Budget?
Assoc. Prof. Danuse Nerudova, Mendel University, Brno, Czech Republic
The financial crises which have spread from United States to the Europe in 2008 have initiated the discussion about the possible taxation of the financial sector. The aim of the financial sector taxation on global level was to find a tool, which could help to regulate the financial sector as well as to collect back the public money invested into the sector during the crisis. European Union added into the discussion third dimension – possible “new European own source” of EU budget. Even though the Commission was at the beginning considering the introduction of financial activities tax, finally it has concluded that in order to fulfil the objectives set at the beginning, financial transaction tax seems to be preferred option. The Commission has set three aims. Firstly, financial transaction tax should ensure the contribution of the financial sector to the public finances. Secondly, the introduction of financial transaction tax should help to limit undesirable market behaviour and finally, the implementation should avoid distortions on the internal market. Even though financial transaction tax appears to have potential for raising significant revenues from financial sector, in the other hand it is connected with the risk of negative effects on the GDP growth and decrease in the market volume. In order to eliminate those negative effects, the proposed FTT comprise certain avoidance strategies. The aim of the paper is to research the possibility of financial sector taxation, to discuss the proposal of the European Union on the introduction of financial transaction tax on EU level and to research, whether this type of the tax could be suitable candidate on EU tax as an own resource of EU budget. The discussion about the possible taxation of the financial sector has started in the European Union as a result of the financial crisis which has spread to the Europe from the United States in 2008. There have been three international platforms in which the roots of the crises have been discussed as well as the measures to avoid other crises have been searched. While the aim of the first two – G-20 and IMF was mainly to find a tool, which could help to regulate the financial sector and could help to collect back the money invested into the sector during the crisis, European Union added to the discussion the third dimension – possible “new European source” of the EU budget. In several Member States with deficits higher than 7% of GDP and public debt higher than 80%, the financial crises broke out into the debt crises. According to IMF, the interventions in the form of direct support to the financial sector has amounted to 3.5% of GDP in G-20 countries. However, the above mentioned public interventions had significant budgetary consequences, which today are very strongly felt in Greece, Spain or Italy. Therefore there is a strong consensus not only on the level of the European Union but also internationally, that financial sector should contribute to the public finances more fairly. Mainly with respect to the fact that at present, the financial sector in the European Union can be considered as under-taxed, for financial activities are exempted from value added tax.
The Stock Market Reaction to the U.S. Quantitative Easing Announcement: Evidence of the Emerging Stock Market
Dr. Yaowaluk Techarongrojwong, Assumption University, Thailand
The previous studies have extensively examined the impact of the U.S. conventional monetary policy announcement on stock returns in other countries. The impact of the U.S. unconventional monetary policy announcement on stock return in developing countries, especially in the firm level analysis, is relatively unexplored. This paper investigates the effect of the quantitative easing announcement in the U.S. on stock return in Thailand by using the event study approach. The announcements on November 25, 2008 and November 3, 2010 were examined with 653 firm-announcement observations. Several findings are noted. First, the quantitative easing announcements in the U.S. give a negative impact on the stock return in Thailand. Second, the negative abnormal return is also visible on the day prior to the announcement day, which disappears after a few days and becomes statistically significant and positive within a week. Third, the capital intensive industries respond to the quantitative easing announcement in the U.S. with the largest magnitude among the eight industry sectors. The subprime crisis in late 2007 made the U.S. economy sluggish (Dodd, 2007). The U.S. economic recovery has not been fully achievable until present. In normal time, the Central Bank influences the economy by using the conventional monetary policy which includes open market operation, direct borrowing through the discount window and reserve requirements (Meulendyke, 1998; Nakornthab, 2009). The conventional monetary policy seems ineffective as the Federal Reserve maintained a low policy rate (0.0-0.25%) from December 16, 2008. The unconventional monetary policy is a new solution that the Federal Reserve is implementing. One of the chosen monetary policy tools is Quantitative Easing (Q.E.). The Q.E. is an increment the size of the Central Bank’s balance sheet by using the newly created money to purchase securities from the commercial banking and private sectors. The purchased securities include long-term government securities and mortgage-backed securities. The objective of Q.E. is similar to the open market operation in the sense that it increases liquidity into the economic system (Bernanke & Reinhart, 2004). However, Q.E. pulls down the long-end yield rather than the short-end yield. The Federal Reserve implemented the first Q.E. in November 2008 and the second Q.E. in November 2010. The monetary policy affects the economy not only through the interest rate channel (Keynes, 1936) and the credit channel (Bernanke & Blinder, 1988), but also affects the economy through the financial market channel (Mishkin, 1996). Bernanke, Reinhart, and Sack (2004), and Joyce, Lasaosa, Stevens, and Tong (2011) found the evidence supporting the impact of quantitative easing on the financial asset price. When the world becomes more integrated, the impact of U.S. monetary policy announcements will not affect only the U.S. financial market. It will also affect the financial market in other countries, especially in developing countries which cannot control their capital fund flows. Thailand is an interesting case to examine since many capital control restrictions are placed and lifted over time.
Commercial Arbitration and other Alternative Dispute Resolution in the Middle East and in the West
Dr. Khodr Fakih, Lebanese American University, Beirut, Lebanon
Alternative Dispute Resolution (ADR) is a general term that describes a variety of processes used by parties to resolve dispute. ADR is a method and process that falls outside the court system. In other words, ADR methods replace certain lawsuits that ignore particular problems such as conduct-in-hostility, or waste of time/money. This paper will identify different types of ADR. In addition, it will address the similarities and differences between ADR types apply in the Arabic regions and the in the west. Alternative Dispute Resolution helps litigants find solutions without court procedures because they are less formal and adversarial than government judicial processes. In addition, ADR are non-compulsory systems, since litigants must consent to such methods in settling dispute. Based on various readings, modern regulations categorize ADR within two contexts. The first context operates within a friendly environment, whereby the outcome is non-obligatory. While, the second context is antagonistic, expensive, with binding characteristics. Indeed, ADR methods are recognized in Middle Eastern (Islamic) countries, which apply Shariah and modern law as well as in Western states. It should be noted that some ADR methods are widely known, while others are rarely used. For example, mediation, conciliation, and arbitration are well-mentioned in the Quran and Sunnah. On the other hand, facilitation and negotiation are applied, but are not mentioned in these sources. This is because facilitation and negotiation are employed within the context of conciliation, in order to achieve resolution among the various parties. However, from a Westernized perspective, facilitation and conciliation are used within the context of mediation. Despite the historic resistance to ADR methods, these processes have been widely accepted in recent years. In fact, some judicial systems now require parties to use certain ADR types before submitting their case to the courts. In order to fully understand ADR methods, it is important to explore their prominent features and characteristics. This paper attempts to provide a brief explanation of the ADR methods. This paper will be structured as follow. The firs part outlines mini-trial and summary jury trial. Second part clarifies early neutral evaluation and negotiations. The third part identifies conciliation and facilitation. The forth part describes arbitration and mediation, which allows reader to distinguish arbitration from other ADR types. A Mini-Trial is a private proceeding in which each party’s attorney briefly argues the party’s case before the other party. Typically, a neutral third party, who acts as an advisor and an expert in the area being disputed, is also present. If the parties fail to reach an agreement, the adviser renders an opinion as to how a court would likely decide the issue. The proceeding assists the parties in determining whether they should negotiate a settlement of the dispute or take it to court. Summary jury trial is a form of ADR that takes place after a law suit has been initiated but before the trial. Litigants present their arguments and evidence to a jury. The jury then renders a verdict. The jury’s verdict, however, is not binding. Rather, it serves as a guide to both sides in reaching an agreement during the mandatory negotiation that immediately follow the trial. This type is very fast to conduct, and parties can if they did not reach a settlement resort to a full trial later.
A Confirmatory Factor Analysis of Identifying Predictors of Innovative Behaviors
Chertchom Prajak, Chulalongkorn University, Bangkok, Thailand
Dr. Anuntavoranich Pongpun, Chulalongkorn University, Bangkok, Thailand
Innovator is the prime driver in today business. Steven Paul Jobs is a good example for this phrase. However, the characteristics of innovator are still in a chaos. Thus, this paper applied a Confirmatory Factor Analysis (CFA) by LISREL to uncover the nature of innovator and to examine the relationship between factors that affected the individual innovative capacity in Thai firm. Moreover, the study was to propose and test an extended model of the current model of the antecedents of individual innovation developed by Farr, Sin, and Tesluk (2003) cited in Hammond, et al. (2011) with the addition of new exploratory factors in predicting innovative behaviors from interviewing with 9 innovators of National Innovation Agency (NIA), Thailand, as well as confirmed testimonies and opinions by 29 experts and questionnaire surveying with 430 managers from Thai firms especially in manufacturing sector. Factor analysis was used to describe variability among observed determinants in terms of a potentially lower number of unobserved determinants and CFA was applied to indicate how the variables are linked to each other. The result demonstrates the eight required competencies of an innovator in manufacturing sector and the top three most important competency domains are “creative, Intellectual: Buddhi Carita(the doctrine of Buddhism ), and teamwork. National Innovation Agency (NIA), Thailand and Chulalongkorn Business School (CBS) jointly conducted a survey research on “Situation of the demand of human resources for innovation project development of the private sector in Thailand”. The researcher collected data from 300 companies and 73% of them are in manufacturing sectors. They found that Thai firms are highly paying their attention to the topic of innovation. Additionally, research stated that 72.01% of surveyed firms urgently required innovative employees. (NIA, 2011) From this evidence, this paper tries to provide an enhanced understanding of innovative people and competency model to help Thai industry in human resource management. Today competency based model is developed for understanding characteristic of a person that is related to effective knowledge, skills, abilities, behaviors in a specific job such as innovation project through empirical research. Additionally, it was used as an instrument to boost competitiveness for organizations. (Lee, 2010) Before each organization develops competencies, they need to understand the meaning of competency and core competencies needed for specific job. Competency is an observable performance that can be defined into 2 types; Visible Competency (ability based on work task or job outputs) and Hidden Competency (An ability based on behavior) for example motive, trait, skill, self –image, social role and body of knowledge. (McClelland, 1973; McAdam & McClelland, 2002; Spencer & Spencer, 1993; Woodruff, 2005) Individual is not equal, the differences may derive from Traits (McAdam & McClelland, 2002), cognitive ability, prior knowledge, and experience (Fasolo, et al., 2003).
Government Instability and Nigeria’s Vision 20-20-20: SMEs Development Perspective
Azende Terungwa, Benue State University, Makurdi, Nigeria
This study empirically evaluates the performance of the Small and Medium Scale Enterprises (SMEs) Equity Investment Scheme in Nigeria (SMEEIS), and the performance of banks after the Banks Consolidation exercise in Nigeria with emphasis on financing of SMEs. Secondary data of total credit to SMEs as percentage of banks total credit for a period from 1993–2010 were made available. Paired sample t-test was used as a technique to test the significance of bank loans before and after the introduction of both SMEEIS and Bank Consolidations. The result shows that there was no significance difference between the loans disbursed by banks to SMEs before and after the birth of these two government programs which were introduced by different administrations. The major recommendations are that; there should be in place a succession plan for policies regarding the development of SMEs. This should be backed up by a legislation shall compel the succeeding administration to continue the implementation of workable policies. Secondary, both the government and the banking sector should mutually agree on a credit guaranteed scheme strategy that will incorporate a risk-sharing arrangement as a way of encouraging the banks to channel funds to the SMEs sub sector for their growth and development which would translate into the national economic growth and sustainable economic development of Nigeria. In trying to put Nigerian economy on the fast lane to industrialization, all arms are on deck to enhance economic development. Specifically, the present administration of Dr. Goodluck Ebele Jonathan is of the vision that, by the year 2020, Nigeria would be one among the first 20 largest economies of the world otherwise popularly called Vision 20-20-20. This is achievable if it is premised on a sound and committed economic policy implementation in the country. It must be emphasized that it is while attending to small matters that bigger things are created (Sule, 1986). Vision 20-20-20, for example, is economically a big and remarkable thing, but unless Nigeria attends to smaller economic matters, she cannot achieve it. There is, therefore, the need to assess the country’s stand now to see if she is heading to the right direction in actualizing her dreams. From 1993-2010 which is the period of this study, Nigeria has passed through six different administrations each with different programs on SME development. Conventional wisdom has it that the path to economic prosperity requires stable socio-political institutions, certainly in macroeconomic policies, and flexibility in the financial markets (Feng, 2004).
The Impact of Internal Control to E-commerce Activities on the Quality of Accounting Information in the Banks Operating in Jordan
Dr. Jamal Adel Al-Sharairi, Al Al-Bayt University, Amman, Jordan
The study aims to identify the impact of Security and protection, legislation and laws on the quality of accounting information in banks operating in Jordan, which are (22) banks. A questionnaire was designed by the two researchers and distributed for this purpose on the internal auditors in banks and non-executive committees emanating from the Board of Directors who have direct contact with internal audit in each bank, the number of questionnaires distributed were (150) questionnaires, (120) suitable questionnaires were recovered for analysis, with the rate of recovery reached (80%). The questionnaire data was analyzed using the (SPSS) and 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 there was no significant impact for the combined independent variables (Security and protection , legislation and laws) on the quality of accounting information, but there is a statistically significant impact of Security and protection on the quality of its own accounting information. The study recommends the interest of existing and decision-makers in banks operating in Jordan to raise the level of legislation and laws in order to positively affect the quality of accounting information in those banks. Due to the need for accounting information which is constantly growing, especially after the emergence of companies diversified large, thus increasing the burden of information on banks, so that the assembly, operation and data processing methods can produce different information that meets the needs of its users from outside and within the economic units, and this requires a system of internal control to e-commerce activities with high efficiency, especially in the commercial banks as the incubator for companies capital sectors, and the leading commercial banks in the use of electronic commerce and assumed a lot of business. The information system of accounting is one of the subsystems of the information system, which works on the production data of a special nature, may contribute to the application of the requirements of internal control to e-commerce activities in banks operating in Jordan in the output of accounting information quality and efficiency of the replay, and could help meet the needs of management information on a continuous correct and appropriate, timely and meaningful and significant help in the process of planning, implementation and control of economic activities of the unit. The importance of the study of the impact of the importance of internal control requirements for e-commerce activities in the preparation and provision of accounting information characteristics, quality and highly efficient, enabling users to take information from the wise decisions and policy-making and future plans. The importance of this study is the first that touched on internal control and linked to e-commerce activities with the quality of accounting information. The problem with the study of the impact of the internal control requirements for the activities of electronic commerce in the banks operating in Jordan on the output of accounting information with high quality and appropriate and timely manner, allowing users to take advantage of that information, and rational decision-making, and planning and implementation. (Papadopoulos, G.A.,1998) Modern Electronic Commerce environments are heavily web-based and involve issues such as distributed execution, multiuser interactive access or interface with and use of middleware platforms.
Improving Student Mentoring through Meditation
Dr. Robert McKeage, University of Scranton, Scranton, PA
Dr. LenTischler, University of Scranton, Scranton, PA
Dr. Jerry Biberman, University of Scranton, Scranton, PA
This article follows up a theoretical paper in which a model was presented on improving mentoring through self-awareness. This paper tests the model. Improvements were noted in the mentoring process for college students by using guided meditation to increase the protégé’s level of self-awareness related to the mentoring process. The purpose of this paper is to examine the application of a theoretical model of increasing self-awareness using guided meditation, to improve the mentoring process. The term “mentor” can trace its roots back to Greek mythology. Homer, in the Odyssey, wrote about Mentor (actually Athena, in disguise) as the “faithful and wise” friend of Ulysses, King of Ithaca. Before starting out on his 10-year journey, Ulysses entrusted Mentor to act as a teacher to his son Telemachus. From this beginning, the term “mentor” has been defined as “as a relationship between an older, more experienced mentor and a younger, less experienced protégé for the purpose of helping and developing the protégé’s career.” (Ragins and Kram 2007 p. 5) The success of mentoring has been well documented in the literature. Most of the research on mentoring has focused on the career outcomes of the protégé, with usually positive outcomes (Noe et al., 2002; Ragins, 1999) Qualitative reviews and a meta-analysis by Allen, et al. (2004) revealed that individuals who were mentored received more promotions and higher salaries than their non-mentored colleagues (Allen et al., 2004). This research also showed that mentored individuals reported higher levels of job satisfactions, career advancement, and higher expectations for advancement than did individuals without a mentor. Organizations are looking to mentoring as a guide to help nurture valuable members and for assistance in retention. Employees who are mentored in organizations report significantly higher levels of engagement (Sange & Srivasatava, 2012). Organizations that have higher levels of engagement show higher levels of productivity, lower turnover, higher total shareholder returns, and better financial performance (Baumruk, 2006). Unfortunately, much mentorship of college students isn’t as useful as in the business world. Building on ideas suggested by Boyatzis (2007), we created a model for improving a college student’s self-awareness about the mentoring process using a guided meditation process (McKeage, Tischler, Biberman and Rosencrance, 2010). This article discusses a preliminary test of this model. Today mentoring is more popular than ever. President Barack Obama proclaimed January 2012 as National Mentoring Month, saying, “Every day, mentors help young Americans face the challenges of growing into adulthood. By setting a positive example and sharing their time, knowledge and experience, mentors play an essential role in preparing our Nation's youth for a bright future. During National Mentoring Month, we celebrate the contributions of all those who cultivate a supportive environment for the next generation, and we recommit to expanding mentorship opportunities across our country.” ("President Obama Proclaims January as National Mentoring Month”, 2012)
The Long-Run Performance of IPOs in Taiwan Market
Jr-Jung Chiou, National Taiwan University, Taiwan, R.O.C.
The purpose of this paper is to investigate the long run stock price behavior of initial public offerings in Taiwan. The sample is comprised of 331 firms listed in Taiwan Stock Exchange with full three-year data and 441 firms listed in OTC market with full three-year data for the period from 1999 to 2011. The empirical test displays evidence of outperformance when we use CARs and BHARs as a measure of long-run performance. No matter which measure is used, we find that IPOs significantly outperform the market Index. Besides, concerning market conditions of going public date, going public during bullish periods did worse in the long run. Deciding to go public is one of the important events in firm’s life. This decision involves great impact in raising capital and creates many opportunities in the future and is facilitated through the initial public offerings (IPOs) procedure. After going public, firms have a new source of capital and access to new investments and growth opportunities, especially important in the growth stage in the life cycle. Since firms have various ways to raise capital and will not no longer depends on a few ones. Thus, IPO firms experience lower cost of capital and higher liquidity. In general, there is more benefit than drawback for firms to going public. For investors, they concern the stock price behavior of IPO firms and two interesting phenomena are well documented in literatures. The first anomaly is the initial underpricing; that is, the IPO firms tend to be underpricing in a sense of existence of short-run excess return. Second, the long-run performance of IPOs is negative returns adjusted to the market benchmark. Prior studies have investigated IPOs market, especially in the United States, but also in many other countries and financial markets. Among IPO studies, initial underpricing is more supported by empirical evidence than long-run underperformance is. Aggarwal and Rivoli (1990), Ritter (1991), and Loughran and Ritter (1995) show that IPOs significantly underperformed non-IPOs during the two to five year aftermarket period in US market. The second anomaly phenomenon is IPOs firms underperform in the long-run. One of the first researches on the long-run performance of IPOs is Ritter (1991). He found that IPOs firms underperformed market benchmark indices in a three-year post-market period. In addition to US security market, the underperformance of IPOs seems extend to plenty of other countries and markets. Levis (1993) examines the performance of UK IPOs firms over a three-year period and negative-return evidence is found in UK IPOs market. Lee et al (1996) investigate Australian IPO market during 1976-1989 and find a three-year negative return. Other studies such as Aggarwal and Rivoli (1990), Keloharju (1993), Kunz and Aggarwal (1994) and Firth (1997) all showed that IPOs firms experienced long-run underperformance. Besides, negative post-market performance does not limit to well-developed security markets but also extend to emerging markets in the world. For example, Aggarwal et al. (1993) document long-run underperformance evidence over a three-year period in Brazil market. Besides, they also examine aftermarket performance in Chile and Mexico markets. Recently, Schultz (2003) shows long-run performance of IPOs firms is significantly negative. Chahine (2008) investigates IPOs firms in France and finds negative post-issue performance.
Effective Use of Humor in Teaching College-Level Business Courses: Assessing an Instructor’s Humor Quotient
Dr. James H. Browne, University of Texas at Tyler, TX
Postsecondary and adult education constitutes a key industrial sector in the US economy. Recent statistics on trends in postsecondary education show that hundreds of billions of dollars is spent annually by public institutions of higher education (Desrochers and Wellman, 2011). Much attention has been focused on the use of effective learning principles in teaching adults. Also, research findings are available about the use of humor in teaching university-level business courses such as accounting, business ethics, and many other business courses. However, there is need for a self-assessment instrument that provides trainers and college professors with feedback as to their use of humor as an effective principle of learning. This paper explains the concept of a learning principle and reviews various learning principles. The use of humor in teaching adults is introduced for consideration as a principle of learning. The various functions of humor within the context of teaching adults are discussed. A self-assessment instrument for determining one's "Humor Quotient" is presented for diagnostic and developmental purposes. Lastly, suggestions are offered for developing a teaching style that integrates humor as a learning principle in college courses. "I learned allot and had fun too because of the professor's vast knowledge and great sense of humor." Who of us in higher education would not want this student declarative to describe our college teaching? Those of us in higher education, no doubt, would contend that we attempt to maximize student learning of the disciplinary content in which we teach. Yet, how many of us place a strong emphasis on the "humorous" aspect of learning? Humor, and the outward manifestations of humor (i.e., laughter and the smile), should be better understood by those of us in the field of higher education. The everyday phenomenon of humor is taken for granted by most of us in higher education. Slate et al (2009) report that the best college professors use humor to facilitate a supportive classroom learning environment. Boverie et al. (1994) report that use of humor in adult education not only has psychological and physiological benefits of humor but that it also facilitates the creation of a classroom environment conducive to learning. Educational professionals first experienced humor in the classroom as students and then later as teachers. In all likelihood there are hundreds of humorous occurrences most teachers precipitate, either intentionally or unintentionally. Yet, from this wealth of experience the typical teacher has little understanding of humor as a learning tool. If certain guidelines were identified that would allow for humor to be regularly and intentionally employed in the classroom then perhaps the above student declarative would more frequently have application to us. Through appropriate use of humor both teachers and students would have a more enjoyable and fulfilling classroom learning experience. Therefore, humor will first be viewed in a broad context of teaching with an emphasis on post-secondary education and then viewed specifically from teaching college-level business courses. There are many studies that identify and describe the characteristics of good teachers. One landmark study looked at the critical behavior of elementary and secondary teachers to ascertain effective teaching behavior (Ryans, 1960). This study identified 25 teaching behaviors from among a list of over 500 critical incidents that occurred in the classroom. Among these 25 behaviors (i.e., teaching behaviors that were either effective or ineffective) one was specifically related to humor. Teaching behavior characterized by a statement such as "likes fun, has a sense of humor" were identified as effective while the behavior described as "overly serious, too occupied for humor" was identified as ineffective. (Ryans, 1970:82).
Business Incubation Accelerator Tool for 21st Century
Dr. Hanadi Mubarak AL-Mubaraki, Kuwait University, Kuwait
Emhamad Hamad, Nottingham Trent University, U.K
Business incubation programs are designed to accelerate the successful development of entrepreneurial companies through an array of business support resources and services, developed by incubator management. The purpose of the paper is to explore, investigate and identify the business incubators as effective tool for the economic development. The identification based on the best practice of business incubation process in successful implementation of case studies. Methodology/approach: The research methodologies adopted in this research study are desk-research and case study of 10 incubator organisations in the international countries. Findings: The findings of this study indicate the business incubators as an effective and innovative tool in supporting the graduated companies. Practical implications: The empirical results highlight some implications for successfully developing and implementing best practice of business incubation program. Originality/value: This study makes a contribution to knowledge about the of business incubation. Incubators fosters technological innovation and industrial renewal (Allen and Rahman, 1985; Similor and Gill, 1986; Allen, and McCluskey, 1990; Mian,1996; Al-Mubaraki and Busler ,2011a). In addition, it is supporting regional development through job creation (Allen, and Levine, 1986; Mian,1997; Thierstein and Wilhelm, 2001; Roper,1999). The structure and functions of an incubator depends on local and national needs. Well-structured business incubators will provide all the resources and services needed to enable the survival and growth of small businesses. Despite the different types of business incubators, their processes and services are generally similar (United Nations Industrial Development Organization, 1999, 85). In addition, critical to the definition of an incubator is the provision of management guidance, consulting tailored ,technical assistance to young growing companies. Incubators usually also provide clients a place where business professionals are offered an organized resource rich environment and support services dedicated to start-ups. As a broad approach to enterprise development, business incubators are considered one of a positive and effective means as public intervention. Businesses generally report satisfaction from services and increases in turnover higher than non-incubated businesses (Nahavandi and Chesteen, 1988). The objective of the paper is to identify the business incubators as an effective tool for economic development based on successful implementation of case studies. It will focus on many criteria namely, definitions, types of incubators, services provided by incubators and goals of each business incubation program and number of client, graduated companies. The structure of this paper is as follows: Section 2 provides literature review of the business incubation. In Section 3 the research methodology included the evidence from literature review and 20 successful case studies to illustrate different key performance of the business incubation. In Section 4, the authors briefly discuss the findings of the study drawn from quantitative approaches of incubators. Section 5 concludes with implications of the business incubators from successful international countries.
The Pivotal Importance of Leadership, Knowledge Sharing and Organization Culture
Dr. Michael Ba Banutu-Gomez, Professor, Rowan University, Glassboro, NJ
Many business owners or individuals, who work for an organization, have gained the knowledge, skills and abilities needed to share and expose their expertise in a specific field of interest. Leadership is one of those words, which have many definitions, with tons of examples and scenarios within it. In this paper, leadership is defined and also recognized for its importance. We then discuss the advantages of leadership and what happens to an organization if leadership doesn’t exist. The next topic discussed what knowledge sharing is, its importance’s and the advantages and disadvantages of it. The last topic, focused on the definition of organizational culture and its importance. Upon completing this assignment it was quite clear, thousands of articles, journals, textbooks, websites and author titled books would come up in the search engine pertaining to leadership. Degree and non-degree holders have their share of intellect when it comes to leadership, organizational culture, and knowledge sharing. It seems that everyone has something to say about what the definition of each means and the qualifications and essentials needed to be declared as a leader or what an organization should have to be successful. Instead, it is best for the reader to take knowledge from each source and combine the information with what you feel is best for you, the success of your business or within a company that you work for. It’s a huge relief to know that typing in the word; “leadership” in your search engine, in a matter of seconds comes up with over 7 billion items that incorporates leadership in it. It is amazing to find that a lot of people had something to say about these topics listed in this paper, and all of the contributing writers and authors of many articles and books are all correct. A lot of strategies have been implemented because of their inputs, which is a job well done and deserves an encore. Throughout an organization, professional use or even in the personal lives of many, the word leadership plays a significant role in everyday lives and the tasks at hand. Although there are many different definitions of what leadership is, there are keywords and similar understandings of evolves around this particular discipline (Wikipedia, 2011). When defining leadership, we can say that it influences relationships among leaders and followers in hopes of obtaining accomplishments of a common task or shared purpose. The influence process has to target and work towards the achievement of the vision or set of goals of the organization. Leadership is definitely an important and critical management skill. Thus organizations need strong leadership and strong management for optimal effectiveness to satisfy all stake holders. Most importantly, we have to note that Leaders do not exist in a vacuum and that leadership is a form of symbiotic relationship between leaders and followers in any setting or situation. Some continue to argue about whether or not leaders are made or born, but a true leader ignores those types of arguments and concentrates more on developing leadership qualities that people look for in a leader. Leadership is how you go about influencing one person or a series of individuals without factoring how different they are from others and is a very valuable characteristic to have. Even though other leaders and followers come from the same or different place, leadership plays an important role in bringing unity. In Chapter 1 of “The Leadership Experience” textbook, emphasizes, “Leadership involves influence, it occurs among people, those people intentionally desire significant changes, and the changes reflect purposes shared by leaders and followers (Draft & Lane, 2008). After reading a few articles and book chapters, contributing writer, David Hakala for “HR World,” wrote about leadership qualities in laymen terms in which others can understand and grasp. Identified below in Figure 1.1, are 10 leadership characteristics and traits (Hakala, 2008):
Illegal Corporate Behavior: A Theory on Administrative Authority’s Confidence Bias
Sheng-Jung Shiau, Hsin Sheng College of Medical Care and Management and Department of Finance, National Yunlin University of Science and Technology, Taiwan (ROC)
Chun-An Li, Department of Finance, National Yunlin University of Science and Technology, Taiwan (ROC)
An extensive body of literature discusses illegal corporate behavior. Different from previous documents, our study focuses on the psychological perspectives of subjective self-confidence and bias of the CEO and the board, including the mindset of excessive self-confidence and a lack of self-confidence. Our theoretical model shows that if the CEO and the board possess no subjective confidence bias, illegal corporate behavior is present in a perfect illegal profit zone when the cost and profit of illegal actions are considered. Within this zone, adequately increasing the illegal level of the project can create a higher illegal risk premium for the corporate that encourages its own engagement in illegal activity. Our study also demonstrates that the relationship between the perfect illegal profit zone and the scale and growth rate of a corporate is a descending one. Our study further extends the model to the subjective perception of self-confidence bias of corporate administrative authorities. The findings suggest that illegal corporate behavior only takes place when the board is more optimistic than the CEO about the success rate of such behavior. Furthermore, we classified the self-confidence level of the CEO into different categories, and the result suggests that when the CEO is extremely lacking in self-confidence, illegal behavior will not exist in the corporate. When the CEO has extremely excessive self-confidence, illegal corporate behavior will definitely be exposed. When the CEO lacks self-confidence, adequately increasing the illegal level of the project’s extra illegal risk premium will be incurred more easily. Lastly, when the CEO has excessive self-confidence, illegal corporate behavior is more likely to be exposed. In recent years, many illegal corporate behaviors have been evidenced around the world. Much-publicized examples of companies performing these illegal behaviors are Enron, WorldCom, Xerox, and so on. Of all of these illegalities, the minor ones have resulted in significant financial losses for investors, while illegal behavior by major players ended up with the global financial crisis or tsunami. Gellerman (1986) conducted research on the top 500 companies in the US and found that about two-thirds of them had been involved in a certain degree of illegal behavior, one way or another. In the process of decision making for illegal corporate behavior, the management, including the CEO and the board, are considered as the crucial decision makers. Based on this idea, we could ask if illegal behavior of corporate occurs randomly or if there is a clue we can trace to such behavior. Does the self-confidence of the management bias itself so that it influences illegal corporate behavior? To help find the answer to these questions, are made the primary motive for conducting this study. Conventional studies have suggested that if we are to eliminate illegal corporate behavior it must be dealt with either by gentle measures from an ethical educational perspective or by strict measures such as laws (Sims, 1992; Crittenden et al., 2009; Szwajkowski, 1985; Crocker and Slemrod, 2005), but some held a rather contrary opinion (McKendall et al., 2002; Rose, 2007; Baucus and Baucus, 1997; Karpoff et al., 2008). Because countries around the world have diverse criteria regarding unethical and illegal behavior, this study does not investigate the boundaries of illegal behavior, but merely explores the theoretical deterrent effect of legal punishment upon illegal behavior when illegal behaviors are uncovered. Many studies find that when the anticipated gain of illegal corporate behavior is higher than the cost, it will then increase the chance of illegality occurring (Dalton and Kesner, 1988; Williams et al., 2005). According to the literature, this makes one consider whether illegal corporate behavior will help create an extra illegal risk premium. Such illegal risk premium is higher than the cost. The result makes the CEO and board willing to take risks and conduct such illegal corporate behavior. Earlier empirical literatures find that economic recession and boom times, as well as corporate size, can explain the occurrence of illegal corporate behavior.
Indirect Measures of Assessing the Bachelor of Science Major in Accountancy Program at National University
Dr. Consolacion L. Fajardo, National University, San Diego, California
This study will analyze the results of two indirect measures used in the assessment of the Bachelor Science, Major in Accountancy program for academic year 2009-2010 at National University. This will include analysis of the monthly students’ self-assessment of learning on three items: (1) I gained significant knowledge about this subject, (2) My ability to think critically about topics in this class has improved, and (3) I can apply what I learned in this course beyond the classroom. In addition, it will analyze results of the Alumni Survey conducted by Office of Institutional Research and Assessment (OIRA) in 2010 to determine how well the program learning outcomes prepare graduates for entry into the accounting profession specifically on the questions: (1) Do graduates get employment after graduation? (2) How important is your degree from National University in helping you with professional advancement? Universities and colleges have accelerated the move to work out program modifications for the improvement of the quality and assessment of learning in the face of pressure from various sectors. Business educators are integrating a variety of active learning strategies to enhance learning and the application of skills and knowledge to real-world situations. Educators are also experimenting with new assessment techniques to meet assurance of learning standards (Weldy & Turnipseed, 2010) National University was founded in 1971 and is the second-largest, private, nonprofit institution of higher learning in California and the 16th largest in the United States. Currently, National University offers 99 undergraduate and graduate degrees. National University is committed to accessibility and offers programs at 27 campuses in California, one in Henderson, Nevada, as well as online. Its mission is to make lifelong learning accessible, challenging, and relevant to a diverse student population. At the University, courses are taught in a one-course-per-month format, giving the student an ability to focus on learning one course at a time and the flexibility to pursue an academic plan at their own pace (National University, 2011). The University has been engaged in assessment and reflection for more than thirteen years, previously using paper-based system. Due to the difficulty of inputting data manually, the University switched to the use of Accountability Management System (AMS) that is available both on and off campus and, through use of its discussion boards, allows for collaboration between faculty and across a department, a school, and the University. Minimized paperwork allows faculty to focus on analyzing assessment results and collaborate on identifying ways to improve program curriculum and, thus, student learning. The Office of Institutional Research and Assessment (OIRA) coordinate training for the faculty to assist them with any changes in assessment process and technology.
The Study of Creating a Performance Model of Products Related to the Starting of One’s Own Coffee Shop
Dr. Jiung-Bin Chin, Department of Hospitality Management, Hungkuang University, Taichung, Taiwan
Because the coffee culture entered into the Taiwan market and with a very wide range of customer groups, today, many people love the taste and brew various types of coffee drinks by themselves; moreover, many people want to engage in the business of coffee shop as well as many other reasons, which thus brought up the motivation of this study. The study hopes to create a complete set of operational performance model of products related to coffee shops. Initially, this study conducts interviews with experts in four different fields - coffee shop operators, coffee shop staff, performance evaluation scholars, and coffee shop consumers in order to develop key performance indicators which impact the operation of coffee shop, including three inputs of cost, innovation, and total preferences score as well as an output of product prices. And then the study uses Data Envelopment Analysis (DEA) to conduct projection analysis of inputs and outputs on 31 products covering three categories of innovative drinks, flavored tea and coffee drinks, as well as analyzes the pros and cons and proceeds ranking of these products. In the end, the study will propose the recommendations. In recent years, since the coffee culture entered in the Taiwan market, many people can come into contact with such a trendy coffee drinking, and thus many people think that drinking coffee is indispensable in life and some people think it is a habit, or maybe an attitude. Perhaps, people just want to taste the coffee, or they just want to show their taste in lifestyle. Therefore, everyone has different opinions in drinking coffee. Plus the power of today's mass media and business marketing, there are many large and small coffee shops opened in different styles. Thus, coffee shops can be seen everywhere in Taiwan. Whether it is canned coffee drinks in the convenience stores, chain coffee shops, or independent exquisite cafes, they all represent a different segment in the coffee market. And their marketing practices, product prices, and core products of these segments are not quite the same. In addition, in order to learn the product trends in the industry of coffee shops and to avoid a strong competition as well as to erect different styles of products, this study creates products called "innovative drinks” that will not be seen in any coffee shops, by blending in different flavored black tea and innovative flavored coffee drinks, and meantime, reserving the classic taste of coffee. This study mainly explores several products which are worthy of becoming physical goods and they can be as reference information of creating products for opening coffee shops in the future. Zhuo Weimin (2009) pointed out that the first coffeehouse appeared in Mecca, which is generally believed was established in about later 15th century and quickly spread before the 1550's. They could be traced in the capital of Constantinople and Damascus in the Ottoman Empire. The exquisite and luxury of coffee shops in Constantinople set a good example for the later European coffee shops. Then, in about 1650, the Venetian brought coffee into Italy and the first coffee shop opened in Italy. In 1720, Florian Fancessari opened Florian Cafe at St. Marco’s Square (Piazza San Marco) in Venice. For over three hundred years, this cafe has been running continuously and the business is still booming, where is a must-go place for people who like to drink coffee. In the recent more than 10 years, coffee shops have become popular.
Beyond Compliance: Making the Most of Academic Program Reviews
William F. Martin, Psy.D, MPH, MA, MS, DePaul University, Chicago, Illinois
Accountability is increasing in all sectors of the economy including higher education. As diverse stakeholders question the relevance, cost, and value of degree programs including business degree programs at the undergraduate and graduate level, then it becomes critical for administrators to make the most of accreditation and program reviews. In this article, a process will be described to approach accreditation and program reviews as a path to continuously improving the quality and effectiveness of a concentration within a MBA program. Business administration educators are required by accrediting bodies and government agencies to assess the quality of their degree programs. These requests can be viewed from two perspectives. One perspective is to comply with the requirement. The other perspective discussed here is to go beyond compliance. This perspective embraces the spirit of continuous quality improvement (CQI). This paper describes how at a large Midwestern private University an administrative request imposed by the Illinois Board of Higher Education (IBHE) resulted in going beyond compliance. This review focused upon uncovering to improve the degree program. Given the assault on higher education from numerous fronts including high costs (Ensign & Korn, 2012), choking college debt even among households with annual incomes of $94,535 to $205,335 (Simon & Barry, 2012), questionable relevance (Warhurst, 2011), declining rate of return (White, Miles, & White, 2010), sustainability of the business model of MBA programs (Thomas & Peters, 2012) and vanishing value (Saba et al, 2011), it is critical that degree programs be continuously evaluated for improvement. This is particularly true in the age of the boundaryless career (Kelan & Jones, 2009) in which the older hierarchical structures, layers of management, and the role of managers is changing dramatically with pressures to contain costs, automate processes, and increase the mobility of talent to adjust to changes in ownership, markets, and financing. Schlegelmilch & Thomas (2011) conclude in their paper entitled “The MBA in 2020: Will There Still Be One?” that there is “…a need for substantial changes, both in content and in the mode of delivery (page 474).” Furthermore, these critiques and pressure for greater accountability are not limited to business schools but even the relevance of algebra is being questioned (Hacker 2012). Not only is higher education changing substantially but so too is the workplace.
Internet Mediated Live Communication with Web Vendor Sales Representative: An Empirical Study on Embarrassing Products
Dr. Pimmanee Rattanawicha, Chulalongkorn University, Bangkok, Thailand
Internet has become an important media for businesses to communicate with their customers. With the advancement of technology and high speed of Internet, web vendors can provide different channels for the customers to live communicate with their sales representatives via Internet in an e-business environment. The increased use of these online sales representatives on websites is the obvious evidence of how important to provide the quality support for customers. This research has three main objectives. The first one is to analyze factors associating with Thai Internet users’ (1) decision to choose a preferred Internet mediated channel of live communication (text chat, audio chat or video chat), and (2) decision to choose a preferred gender of an online sales representative when they want to contact with web vendor. The second objective is to explore products and their degrees of embarrassment felt by Thai users. And the last objective is to examine whether Thai Internet users’ (1) decision to choose a preferred Internet mediated channel of live communication, and (2) decision to choose a preferred gender of an online sales representative differ when products of their interests change from general (or non-embarrassing) products to embarrassing ones. The statistical analysis based on data collected from 500 Internet users in Thailand reveals that an Internet user’s age, gender, perceived ease of use, perceived usefulness, and usage experience of text chat as well as Internet shopping experience seem to have associations with his/her decision to choose a preferred channel of live communication. It is also found that a Thai user’s decision to choose a preferred gender of an online sales representative associates significantly with his/her gender. Concerning embarrassing products, impotence drugs, condoms, and enemas are the top three products with the highest degree of embarrassment felt by Thai users, both males and females. The study also indicates that Thai users choose a channel with least social presence, that is text chat, and choose a sales representative with the same gender as themselves when dealing with embarrassing products. The increased usage of Internet throughout the world has brought opportunities and challenges for businesses. Vendors have their websites as another channel to communicate with their customers. Many of them also provide live support to serve their online customers in order to maintain good relationships with them. However, an important question, “Do Internet vendors provide the right format of support that their customers prefer?”, is yet to be answered. In this study, we aim to find the answer to that question by examining the factors which may be associated with Thai Internet users’ decision to choose a preferred channel on Internet vendor website to live communicate with an online sales representative, as well as a preferred gender of an online sales representative. The three Internet mediated live communication channels focused in this study include, from the less to richer formats, (1) text chat or instant messaging, (2) audio chat or VoIP (voice over Internet Protocol), and (3) video chat or video call. The issue about embarrassing or non-embarrassing products on the website was, as well, another topic in this study.
Roberta J. Cable, Ph.D., CMA, Professor, Pace University, Pleasantville, NY
Patricia Healy, CPA, CMA, Associate Professor, Pace University, Pleasantville, NY
eXtensible Business Reporting Language (XBRL) is a language used for the electronic communication of financial information. In 2009, the U.S. Securities and Exchange Commission (SEC) recognized the importance of this language when it mandated XBRL financial reporting of U.S. publically traded companies to be phased in during a three-year period. Today, all U.S. publically traded companies have to file with the SEC using XBRL. We believe that graduating accounting majors who are familiar with XBRL will be at a competitive advantage when they seek employment. The purpose of this research was to determine to what extent, if any, undergraduate AIS students were exposed to XBRL. XBRL primarily has been taught in Accounting Information Systems (AIS) courses and AIS is typically a required course of undergraduate accounting majors. We reviewed AIS textbooks and course syllabi. We found that faculty who used textbooks with significant to moderate coverage of XBRL were more likely to assign this topic to their students. Faculty who used textbooks with very limited coverage of XBRL did not expose their students to this topic. Most importantly, based upon the syllabi review, only approximately one third of the faculty included XBRL in their courses as an objective, a topic or an assignment. eXtensible Business Reporting Language (XBRL) is a language used for the electronic communication of financial information. It is a standardized way to translate financial data into a format that computers can read and understand. Typically, financial information is treated as a block of text in a document or a webpage. XBRL provides identifying tags for individual items of data and these tags enable automated processing of financial information. Software is able to recognize data formatted with XBRL tags and this allows for storage and exchange of information. This process enables users to manipulate tagged data into a variety of formats that provide better information for analysis. Sheridan and Drew stated, “The technology’s promised benefits – greater company control of data definitions, exponentially improved efficiency for analysts and investors - are just beginning to be realized. Improvements in XBRL creation and validation software are making it possible to exact information that allow analysts, investors, and others to extract key information from public company data far faster than they could ever before.” (124) The standardization of XBRL supports its use in financial reporting throughout the world. Tittel stated, “XBRL is undeniably a global standard for business reporting, and it’s here to stay.” (4) XBRL is used in a variety of internal and external business reporting purposes in the United States and is officially accepted by the European Parliament as well as many other governments. In 2009, the U.S. Securities and Exchange Commission (SEC) recognized the importance of this language when it mandated XBRL financial reporting of U.S. publically traded companies to be phased in during a three-year period.
A Quality Analysis of Lean Six Sigma and the Effects on the Management Firm
Sohail Ahmed, UiTM Shah Alam
Quality is one of the principal key themes found in management decision making. Time, innovation, cost reduction and efficiency are other key success factors for successful management. All of these themes are customer-driven. Customers expect a high level of quality.1 Organizations should respond speedily and timely to all customer requests. Innovation creates products, services, and processes that will meet the needs of each customer. Customers face continuous pressure by organizations to reduce the cost of their products or services. Managers should continue to invest in sufficient resources that promote customer satisfaction in order to attract and to retain a customer base which will ultimately increase the orgnaization’s profits. Six Sigma is a quality improvement methodology that can help management with most of these themes. It is the latest method in a progression of an integrated quality plan series.2 Innovation in the process or to realize improvement for every process is a part of Six Sigma strategy.3 Many companies throughout the world have emphasized quality as an important strategic dimension because a quality focus reduces costs and increases customer satisfaction.4 Companies that have applied Six Sigma system have achieved success through innovation activities, such as financial outcomes, because of cost reduction by process improvement5. Without ongoing continuous improvement, your cost of quality (COQ) will be between 20 and 35% of the revenue stream of the product’s selling price.6 Six Sigma through its affect on the cost of quality (COQ) can also help to promote cost reduction.7 But Six Sigma alone cannot dramatically improve process speed or reduced cost and invested capital. Lean provides tools for analyzing the process flow and the delay times at each activity of a process.8 Lean production is also one of the eight elements to cost reduction. 9 Lean Six Sigma combines quality improvement with increases in the process speed to help address not only time-to-market, but it extends also to cost reduction and customers-satisfaction demands. Therefore, Lean Six Sigma can help managers to overcome all the key themes. Information plays an important role in this process which is supported by the management’s accouting which also asserts the important role that information plays in the process.10 Customers expect high levels of quality. The early 1980s was a dark period called the "era of losing competitiveness” for American manufacturing industries. The quality-cost trade off philosophy, as named becaue quality is costly, was influenced in literature of traditional U.S. manufacturing during this decade. Quality advocates found it difficult to get the attention and the committment of senior management to a total quality control program. To overcome this indifference to quality improvement, quality advocates devised a financial approach to qualify how they hoped to capture the attention of senior management. Their efforts resulted in the cost of quality.11 Traditional costing systems measure and report cost of quality (COQ) as a part of quality management. The cost of quality (COQ) refers to the costs incurred to prevent, or the cost arising as a result of, producing a low-quality product. The costs of quality consist of four categories, prevention costs such as design and process engineering or quality training, appraisal costs such as inspection and product testing, internal failure costs such as detects maintenance costs, and external failure costs such as customer support and warranty repair.12 After concentrating on management’s attention to quality, it should be done in two other steps: 1) Identifying quality problems or causes of the cost of quality, and 2) taking actionto improve quality.13 By the early 1980s, Motorola had perceived that they were suffering from hugely, wasteful factors in their processes.
Business Ethical Orientations Among Management Students: A Comparative Study of Two Countries
Dr. Razali Mat Zin, King Fahd University of Petroleum and Minerals, Saudi Arabia
This research is intended to investigate the impact of culture on the ethical attitudes of business managers in Saudi Arabia and Malaysia. Adopting Hofstede’s cultural typology, this study examines the relationship between his five cultural dimensions—individualism, power distance, uncertainty avoidance, masculinity and long term orientation – and management students ethical attitudes and various demographic and organizational variables. This study will use primary data collected from a selected sample of undergraduate students in business management who are studying in two universities in the Kingdom of Saudi Arabia and two other universities in Malaysia. The findings showed that there are significant differences between the Saudi and Malaysian business students views in all the attitudinal statements about business ethics except on the item, “export unsafe products. There has been considerable debate regarding the effectiveness of business ethics instruction (Arlow & Ulrich, 1980; Beekum, 1996; Braxton, 2004; Razali, 2006). In addition, the AACSB (Barnett & Karson, 2004) states that, "students should have a background of economic and legal environment as it pertains to profit and/or non-profit organizations along with ethical considerations and social and political influences as they affect such organizations." This new trend is also relevant and applicable in the context of higher learning institutions in developing countries such as Malaysia and Saudi Arabia. Universities in Malaysia and Saudi Arabia should give serious attention about inculcating the right ethical value orientations among their students as part of the preparation before they join the workforce in the real world.The purpose of this research is to investigate and compare the impact of national cultures on the ethical attitudes of undergraduate business management students in Saudi Arabia and Malaysian universities. Employing the cultural typology proposed by Hofstede (1980, 1997), this study examines the relationship between the cultural dimensions of individualism, power distance, uncertainty avoidance, masculinity, long-term orientation and the ethical attitudes of business managers in these countries. This research is the first cross-cultural business-ethical study to focus on these two countries together – Malaysia and Saudi Arabia. It should give us a better understanding of the relationship between the culture and the ethical attitudes of future business managers (who are currently enrolling in undergraduate business degree programs) in Malaysia and Saudi Arabia. It should also help facilitate international business transactions in the future among these two countries. It is also the first attempt to study empirically the relationship between Hofstede’s five cultural dimensions — individualism, power distance, masculinity, uncertainty avoidance, and long- term orientation — and the ethical attitudes of future business managers toward common questionable practices in business. This study should give us a better understanding of the relationship not only between culture and ethical attitudes of business managers but also between Hofstede’s cultural dimensions and ethical attitudes of business managers. Empirical research on business ethics began thirty five years ago, triggered by rising scandals in business corporations, with Baumhart (1961) publishing a descriptive research on the ethical behavior of managers. The late 1980s witnessed an acceleration in empirical researches – descriptive as well as explanatory – after a slow growth in the 1960s and 1970s (Fritzsche, 1997). In most of these studies culture is considered as one of the independent variable influencing one’s ethical attitudes and behavior.
The Age of Internal Audit Function and Internal Audit’s Contribution to Financial Statement Audit: Implications on Audit Fees
Dr. Zulkifflee Mohamed, Universiti Tun Abdul Razak (Unirazak), Kuala Lumpur, Malaysia
The internal audit (IA) function has become well recognised as one of the key governance mechanisms the role of which has evolved over time. Despite its earlier role as the company’s ‘watch-dog’ for the organisation, the changes in the business complexity and globalization have significantly changed the scope and the nature of IA processes. The roles of IA have expanded and now it is typically encompass a consulting role, including risk management, control assurance and compliance work. Depending upon the assessment of external auditors on the quality of the IA, professional standards permit the contribution of internal auditors to financial statement audit. Yet, the economic effect of this nexus remains unclear. On one hand, the substitution view propounds that a more active IA function would encourage external auditors’ reliance on such a function, reduce duplication of audit work leading to potential cost savings and lower audit fees. By contrast, the complementary controls perspective suggests greater investment in IA activities will be associated with higher audit fees. As such, this study aims to examine two aspects of IA quality namely IA competency and IA contribution to financial statement audits. Consistent with substitution view, this study predicts a negative relationship between one of the competency aspects of IA which is the age of the IA function (years) and audit fees. Second, this study tests whether the contribution of internal auditors to financial statement audit reduces audit fees. Data analysis is based on a cross-sectional regression model with observations of 73 public-listed firms in Malaysia which include publicly available data matched with survey responses from their internal and external auditors. The results of the study suggest that the competency of IA namely the age of the IA function (years) is associated with lower audit fees. Furthermore, findings for both aspects of IA quality (competency and IA contribution) lend support to substitution views for explaining the links among IA quality and audit fees. The IA function has become well-recognised as a one of the key governance mechanisms and that role has evolved over time. Despite its earlier role as company’s ‘watch-dog’ for the organisation, the nature of IA processes today has expanded and typically encompasses consulting role, including risk management, control assurance and compliance work. This is reflected by the new definition of internal auditing by the Institute of Internal Auditors (IIA, 2011) that defined it as: …an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. In Malaysia recently, given the new set of rules being imposed to the Public Listed Companies under Bursa Listing Requirements (2009), it is likely that the IA function will continue to increase in its importance. For instance, the new Bursa Listing Requirements has mandated the establishment of the IA function and also requiring the IA to report directly to the audit committee. These requirements reemphasized on the importance of the IA function in supporting the organisation to comply with these new requirements as well as the role that the internal auditor could play in terms of enhancing the quality of the IA and the involvement in the preparation of the financial statement audit. Consequently, this new phenomena has attracted a significant interest and attention of academic researchers and practitioners alike. In particular, an emerging stream of research that focuses on the contribution of IA to external audit work, IA attributes and its implication for audit fees.
Retaining Valuable Employees in the Public Sector: The Case of Egyptian Pharmacists
Dr. Dina Metwally, Helwan University, Egypt
Employees might leave their organizations for personal or organizational reasons. Whether employees leave because of personal or organizational reasons, cost of turnover makes it a necessity for managers to give a high attention to employees’ retention. This study investigates causes of pharmacists’ turnover in a public sector organization in Egypt. High turnover level of Egyptian pharmacists in the public sector is influenced by the public sector practices and policies. The paper suggests a new career path strategy that overcomes dissatisfaction factors to retain and attract talented pharmacists to the public sector. A great deal of research has been conducted to link employees’ attitudes with work outcomes. Research has focused on studying job satisfaction as the key attitude related to employees` behavior such as job performance and turnover (e.g. Shore & Martin, 1989; Carter et al, 2003; Long & Thean, 2011). It is argued that general attitudes toward the organization may have a great impact on the decision to stay with the organization than more specific attitudes toward the job (Mitchell et al, 2001). Cost of turnover makes it a necessity for managers to give high attention to employees’ retention. Avoiding high cost of employees` turnover requires managers to focus on improving employees` satisfaction, reducing turnover, improving quality and cutting costs (Waldman et al, 2004; Jones & Gates, 2007). For the purpose of this study, job satisfaction is defined as the positive emotions an employee has toward his/her job (Locke, 1976). Specifically, job satisfaction is defined as "the extent to which people like (satisfaction) or dislike (dissatisfaction) their jobs" (Spector, 1997, p. 2). Also, turnover is defined as one`s propensity to leave (Lyons, 1971). Many researchers have reported a negative relationship between job satisfaction and turnover (e.g. Currivan, 1999; Griffeth et al, 2000; Long & Thean, 2011). Organizations of all sizes and types struggle to retain talents, and are trying hard to do something about it (Mitchell et al, 2001). The question is how can an organization attract talented employees? Also, how can and organization keeps its talented employees? This study investigates these questions in a public sector pharmaceutical organization. It explores the main causes of pharmacists’ turnover in the public sector. The study moves around pharmacists, public sector organizations, satisfaction and turnover. The impact of job satisfaction on turnover intentions has been widely discussed in the literature (e.g. Gaertner, 1999; Brannon et al, 2002; Carter et al, 2003; Waldman et al, 2004; Ton & Huckman, 2008). It is argued that overall job satisfaction is associated with turnover intentions. Researchers have reported a significant correlation between turnover intentions and satisfaction with work itself (e.g. Hom & Griffeth, 1995; Shader et al, 2001; Colding, 2006). Other researchers have demonstrated a significant correlation between satisfaction with payment level and promotion on the one hand, and turnover intentions on the other (Hom & Griffeth, 1995; Padilla & Sujit, 2000). Whilst job satisfaction is regarded as an employee’s attitude, turnover is considered as an employee`s behavior (Griffin & Moorhead, 2011). Two different ways of defining and measuring job satisfaction have been identified in the literature: the global view of satisfaction that is concerned with the overall satisfaction and the facet view that views satisfaction as an attitude with multiple dimensions or `facets` (e.g. Locke, 1976; Kalleberg, 1977; Kalleberg & Reve, 1992; Price, 1997; Currivan, 1999; Padilla & Sujit, 2000; Colding, 2006; Griffin & Moorhead, 2011).
The Applicable of Relational Factors to Determine the Performance of International Joint Venture (IJVs) in Thailand Small and Medium Enterprise (SMEs): A Conceptual Framework for Future Research
Dr. Wanida Wadeecharoen, University, Bangkok, Thailand
Dr. Athiwat Kanjanavanikul, Thonburi, University, Bangkok, Thailand
Dr. Sombat Teekasap, Eastern Asian University, Bangkok, Thailand
Small and Medium Enterprises (SMEs) in the form of International Joint Ventures (IJVs) are performing as the important actor towards Thailand economic. Since IJV has been representing as a preferable strategic entry mode used by Multinational Enterprises (MNEs) to enter in ASEAN region particularly in Thailand, the number of SME IJV obviously has seen an increasing of 45 projects from 2009 integrated to a total of 298 IJV projects in 2010. The major player in SME IJVs comes from Japan, US, EU and ASEAN regions, respectively. This is because of unity characteristic of SME IJV can access to a large volumes of capital resources, technology transfer, managerial management and market networks. With these words Thailand SME could be enhanced of competitive advantage in global market through the usage of IJV. Although, the usage of IJV in Thailand has no sign to decrease, however, the failure rate of IJV can be as high as 25 percent from the total industrial sectors report by Board of Thailand Investment (BOI: 2011). Moreover, the antecedent of successful SME IJV is unpredictable. In doing so, inter-partner relationship problem has been identified as a possible factor causing the high failure rate of IJV. Thus, this study is an attempt to highlight the important of relational factors in the form of relationship marketing orientation (RMO) concept comprise with bounding, empathy, reciprocity and trust with the linkage of SME IJV performance in Thailand. Based on this concept, relational factors are implicit to be important predictors to determine the successful of IJV SME in Thailand. Therefore, this is required to be empirical investigating for further clarifying. Thailand economy is dynamically driven by small and medium enterprises (SMEs), since the number of SMEs projects are closed to three million (2,924,912 enterprises) and directly response to 78 percent of national employment (OSMEP: 2010). Additionally, SME contributes to 37.8 percent of national GDP and close to 9 trillion baht (The Nation Business, Jan 18, 1010).
What does the Implementation of IFRS for SME bring for Viticulture
Dr. Hana Bohusova, Mendel University, Brno, Czech Republic
Dr. Patrik Svoboda, Mendel University, Brno, Czech Republic
Agricultural activity is largely different from other activities that the entities perform in order to achieve profit. Unlike other business activities, agriculture is significantly dependent on natural climatic conditions, and therefore a particular specialization of agricultural produce depends on geographic location. Agricultural producers use every form of business organization, from small farms to large publicly held corporations. Although most entrepreneurs working in agriculture are small and medium enterprises, the specifics of agriculture are significantly reflected in the financial reporting intended primarily for large corporations traded on the capital markets. A special activity within the scope of agriculture is wine industry. Due to the industry and product characteristics, wine industry need, in order to present useful financial statements, the special accounting treatment. The aim of this paper is to review the possibilities of implementation of the provisions relating to agriculture in the frame of IFRS for SMEs into practice of entities whose object of activity is wine growing and production of wine and to recommend appropriate application in practice. There are designed specific treatments for wine industry in this paper. Farming is important for the EU's natural environment. According to the European Commission (2012) rural areas represent 91% of the territory of 27 European Union Member States and are home to more than 56% of its population. Agriculture and forestry has still crucial importance for land use and management of natural resources in rural areas of the EU and as a platform for economic diversification in rural areas. Agricultural activity is largely different from other activities that the entities perform in order to achieve profit. Agricultural production is significantly dependent on natural climatic conditions, and therefore a particular specialization of agricultural produce depends on geographic location. Agricultural activity has very heterogeneous characteristics due to the great diversity of activities that it includes. The term agriculture is used in the broadest sense to include the breeding, keeping or cultivation of all kinds of animal or vegetable life except forestry and fishing. According to Sedláček (2010) the agricultural activity is characterized by specific activities that require the appropriate accounting treatments. Also according to the International Accounting Standards Board (IASB) (2008) the nature of agricultural activity creates uncertainty or conflicts when applying traditional accounting models, particularly because the critical event associated with biological transformation that alter the substance of biological assets are difficult to deal with in an accounting model based on historical cost and realization principle. The specifics of biological character of transformation should be reflected by the methodology for reporting of the agricultural enterprises´ activities. In a world context, there are only a few countries that have specific accounting standardization on agriculture. There is a special International Accounting Standard concerning Agriculture for publicly traded companies - IAS 41 Agriculture. The treatments of IAS 41 Agriculture concern agriculture as a whole and they do not take into consideration special character of individual activities which can differ in many ways. There are two main groups of special assets connected with agriculture: consumable biological assets, which are harvested as agricultural production (livestock for the production of meat, livestock held for sale, crops as maize or wheat, trees grown for timber) and bearer biological assets which are biological assets other than consumable biological assets (livestock for milk production, grape vines, fruit trees). Assets in the second group are not agricultural production, but they are self-regenerating assets (SGARAs). Due to many differences between these two groups, it is not possible to report all of agricultural activity by using one set of reporting treatments. The agricultural activities differ in the length of production cycle as well. Wine industry is a special activity within the scope of agriculture.
The Defects of Chinese Food Safety Supervision Based on Game
Zefeng Dong, Tianjin University of Science and Technology, Tianjin, PRC
In 2009, a new act, the Food Safety Law, reformed the Chinese food safety supervision system, but a four-year practice has already proven that the current system still has big defects. This paper focuses on the organizational structure of the supervisory system and suggests that it is the main reason why a great number of food safety accidents are still occurring. Firstly this paper concludes that the system distributes the responsibilities according to the different links of food supply chain, which is one of essential defects of the system. Another defect is the two-level supervision system: the superior level, national organizations, and the lower level, local agents, have not direct connection and close “principal-agent” relationship, because the local agents are totally under the administration of local governments. On this base, the two-level supervision system, this paper sets up a dynamic game with incomplete information and deduces its perfect Bayesian equilibrium. Finally, this paper concludes that a thought of superior level supervisors to avoid negative influence and monitoring cost leads them to select not to inspect the lower level while the market condition is superficially good; the superior level prefers to ignore the anticipated risk while the lower level shows sensitivity to it; the asymmetric punishment to the grey income effect the decision of lower level, the market condition and essentially the information transmission. In China, a series of food safety scandals continuously occurred in the last several years, which considerably crashed consumers’ confidence on the food made in China, and also exposed many corrigible drawbacks in the Chinese food safety supervisory system. In February 28th, 2009, a new act, the Chinese Food Safety Law, enforced and then the reform was implemented and the current supervisory system was thus built (see http://www.gov.cn/flfg/2009-02/28/content_1246367.htm). Even the Food Security Law enforced and a new leading organization founded, which intends to coordinate in the work between different administrations, no signal has indicated that this this supervisory system has improved. Since a variety and great amount of accidents are still occurring in almost all of China, and even some big and famous companies have fallen into scandals of producing illegal foods, beverages or medicines; Thus, to predict that what has been exposed by public media are only a very limited part of the illicit behaviors of food industry is reasonable. To assume the reason why these faults are still occurring, some people summarized the problems still existed after 2009 and suggested that the inefficacy of Chinese food regulation is closely concerned with the lack of professional intellectuals, low working efficiency of food inspection institutes, food producers with large quantity but micro-scale that impedes effective administration, and the implementing inability of some policies (Zhang et al, 2009; Zheng, 2009). However, the substantive reason why this change caused by the Food Security Law has not meted citizens’ expectation is horizontally inappropriate design of supervisory organizational structure: Firstly the responsibility distribution of each organization in this system, and secondly, the vertically double-level internal administration system.
Towards A Theory of Macromarketing in Emerging Economies
Dr. Akins T. Ogungbure, Troy University, Atlanta Site, Atlanta, GA
Dr. Rodney J. Oudan, Worcester State University, Worcester, MA
The purpose of this paper is to address the importance of the theory of macromarketing in promoting economic development in developing countries. This paper has argued that macromarketing is important to emerging markets. The study considered the applicability of macromarketing concepts to the problem of economic development. General theories of macromarketing were discussed and a model was developed. Theory can provide description of relationships between variables, enable prediction of important outcomes, and provide explanation of why variables are related in certain ways. Macromarketing is often viewed as creating an efficient system for exchange processes from producers to consumers while accomplishing the objectives of society. This paper proposes a theory of macromarketing based on the understanding, explanation and management of the relationship between marketing and society. The marketing literature reviewed shows that insufficient attention to marketing thought and methodology exists when addressing the problems of economic growth that face developing countries. Macromarketing studies marketing within the context of the entire economic system, with special emphasis on aggregate performance. Bartels and Jenkins (1977) assign the broadest definition to macromarketing, indicating that it refers to marketing in general – the marketing process in its entirety, and the aggregate mechanism of institutions performing it. Fisk (1981) posits that macromarketing should be viewed as social process: (1) as a life-support system provisioning technology, (2) as a focus on quality and quantity of life-goals served by marketing, (3) as a technology for mobilizing and allocating resources, (4) and as a discipline concerned about the consequences of marketing, i.e., the spillover effects of marketing for those who may not seek or be aware of the intended or unintended activities of marketers. Macromarketing is typically seen as the purview of marketers interested in examining the interactions among markets, marketing, and society. The interplay of markets, marketing practices, and societal well-being however is of interest to many scholars, from a wide array of academic traditions. Macromarketing as a field of study therefore would be well served to engage in conversations with other disciplines; to interpret and to understand the research of others in ways that can expand and complement the field (Shapiro, Tadajewski, and Shultz, 2009). Hunt (1976) argues that macromarketing suggests a higher level of aggregation, usually marketing systems or groups of consumers, while micromarketing refers to individual units, normally individual organizations (firms) and consumers or households. Macromarketing in this context refers to the study of marketing systems, the impact and consequences of marketing systems on society and the impact and consequences of society on marketing systems. Moyer (1972) argues that the major function of macromarketing is to evaluate, in a normative sense, marketing within our society. Macromarketing studies marketing within the context of the entire economic system, with special emphasis on its aggregate performance. Micromarketing, on the other hand, is firm-oriented. Shawver and Nickels (1979) suggest that “macromarketing is the study of exchange activities and exchange systems from a societal perspective.” The study of macromarketing therefore addresses how the effective use of marketing can influence and promote economic development, and in turn, how organizations and government can control marketing systems in a way that enhances the aggregate and societal effects of the marketing effort. As Woodruff wrote in 1958, “production may be the door to economic growth of a developing country, but marketing is the key that turns the lock.”
Dr. Pınar Comez, Istanbul, Turkey
In this study, the impacts of ambidexterity and leadership behaviors on innovative firm performance are investigated by using data collected from manufacturing organizations in the Marmara area, a major industrial region of Turkey. Survey respondents are mid- and top-level managers (n=224). This study further examines the role of market turbulence on these interactions by including market turbulence as a control variable in the research model. It was found that ambidexterity and leadership behaviors affect innovative firm performance, and the role of the market turbulence was found to be significant. Today, modern business life is becoming increasingly more complex, due in part to the rising uncertainty and dynamism of environmental conditions and the increasing intensity of competition. Consequently, organizations must compulsorily find new ways to adapt and integrate their internal structure within the framework of continually changing market conditions. Firms that effectively exploit their capabilities and their competitive advantage and gain and internalize new information more quickly will be one step ahead of their competitors. Dess and Origer (1987) suggest that firms operating in dynamic and complex environments must effectively implement (corporate) strategies that will place them at a competitive advantage in their respective marketplace. In particular, the results of exploitive activities related to firm performance can be seen in the short-term while those results related to explorative activities are generally realized over the long-term (Wang and Rafiq, 2009). In view of the existing literature, it is clear that corporate strategies and leadership behaviors within an organization may significantly influence firm performance and survival (Bass, 1994; Floyd and Lane, 2000). Companies that are successful in the present and, at the same time, have the ability to adapt to future conditions are called ambidextrous, and this concept is increasingly emerging as highly important in relevant literature Tushman and O’Reilly, 1996; Gibson and Birkinshaw, 2004; Raisch and Birkinshaw, 2008). In this study, it is searched for the effects of ambidexterity on (innovative) firm performance in the strategic context, operating under the premise that ambidexterity is defined as the interaction between explorative and exploitative innovation strategies. Studies focusing on the associations between leadership behaviors and firm performance are available in business literature (Bass, 1994), but many environmental factors which may influence leadership behaviors, organizational performance and the relationships between these two concepts are worthy of further research. For example, in some studies conducted during dynamic environmental conditions, transformational leadership behaviors were found to more positively affect performance (Waldman et al., 2001; Nemanich and Vera, 2009). In light of this information, this empirical study examines the effects of ambidexterity, transformational leadership and transactional leadership behaviors on firm performance as well as the role of business environment’s dynamism. It introduces into existing literature an empirical study which has been conducted in an emerging country. The business environment in Turkey allowed for the application of this research during dynamic, transitional conditions. It is believed that this study will be helpful in understanding and examining the universal validity of arguments which were first suggested and examined in Anglo-Saxon countries.
The Second Order Confirmatory Factor Analysis of A New Product Success Measurement Model: An Empirical Study of Thai Consumer Product Industries
Suchart Tripopsakul, Chulalongkorn University, Bangkok, Thailand
Dr. Wilert Puriwat, Chulalongkorn University, Bangkok, Thailand
Dr. Suphakant Phimoltares, Chulalongkorn University, Bangkok, Thailand
Dr. Achara Chandrachai, Chulalongkorn University, Bangkok, Thailand
Measuring new product success is the complicated task since it is a multidimensionality and multi level of analysis. Previous studies attempt to identify the effective indicators for measuring new product success. The propose of this study in to develop a new product success measurement model for consumer product industries in Thailand. According to member firms of Food Processing Industry club in February 2011, 227 companies were chosen as a research sample. Structural equation modeling (SEM) and the second order factor analysis (CFA) were utilized to test our proposing model. The research shows that the model of new product success measurement in consumer product industries consisted 3 main components (Financial, Market, and Customer based performance) and 9 indicators were fitted with the empirical data, determined from the Chi-square values = 46.224, and not statistical significance (p = 0.873) at zero degrees of freedom (df = 24) indicated that model not different from the empirical data. Goodness of fit index (GFI = 0.917), and Root Mean Square Error of Approximation (RMSEA = 0.038). The result shows that Financial-based performance has the highest priority for measuring new product success in consumer product industries in Thailand. The second priority dimension is Market-based performance, and Customer-based performance is the third priority dimension. New product development (NPD) is the most critical strategy for firms (de Brentani, 1986; Barcey and Benson, 1987; Urban and Hauser, 1993; Griffin, 1997; Cooper, 2000). In order to prosper in their business and gain more competitive advantage beyond the competitors, firms need successful new products to attract prospective customers and also retain existing customers. Nevertheless, new product developments are highly risk projects and the cost of failure is very high (de Brentani, 1986; Cooper, 1990; Urban and Hauser, 1993). According to Cooper’s study (2001), the success rate of NPD project is less 15 percent and nearly half of firm’s total resource involves with failure projects. There is an attempt to identify the factors that concerned with new product success (Huang et al., 2004). Nevertheless, as the different definition of success can generate different outcomes (Craig & Hart, 1992). Although measuring new product success is very important for firms, this issue still elusive and ambiguous since the multidimensional nature of such success, the different levels of analysis that can been examined (Griffin & Page, 1993). There has been limited endeavor to clarify the concept of new product success or to synthesize and empirically test such classification schemes. Furthermore, most new product measures have been developed from the study of industrial products. Since the nature of consumer products heavily differ from industrial products (Kolter and Armstrong, 2004), and it requires the specific customized model of new product success measurement. New product success measurement is the complex task since it is multidimensionality and can be analyzed in multi level of analysis (Griffin and Page, 1993; Palmberg, 2006). Several studies attempt to identify the factors for measuring new product performance (Maidque and Zirger, 1984; Cooper and Kleinschmidt, 1987, 1993; Huang et al., 2004). Molina-Castillo and Munuera-Aleman (2009) proposed three level of analysis for new product success measurement; namely, performance at firm level, at program level, and at project level.
Financial and Real Sector Interactions in Nigeria
Dr. Oluyele Akinkugbe, University of Namibia, Namibia
Babatunde I. Ekundayo, Univerity of Ibadan, Nigeria
The literature—theoretical and empirical—on need for a clear understanding of the complex interrelationships that exist between financial and real sectors of economies continues to grow in the last three decades. Without doubt, an in-depth knowledge of these relationships promotes better policy formulation—monetary, fiscal and trade. It also enhances the regulatory and supervisory framework for the financial sector, for sake of promoting sustainable real sector growth trajectories. However, empirical evidence and theoretical debates on the relationship between financial sector development and economic growth remains inconclusive. In this paper, we contribute to the debate by examining the interaction between the financial and real sectors in Nigeria. Time series data on selected variables for the period 1970 to 2010 is used. Results of our analyses confirm strong interactions between the financial and real sector variables in Nigeria over the study period. We conclude by recommending that measures to check observed excesses and lapses in Nigeria’s financial sector that tend to inhibit real sector growth, and overall economic development be put in place. The debate over the interaction between the financial and real sectors cannot be over accentuated. Some argued that financial development act as a catalyst for real sector development (Levine, Loayza and Beck 2000; Calderon and Liu, 2003; Neusser and Kugler, 1998); the other line of thought opined that real sector development spur development in the financial sector. The proponents of this line of reasoning include: Robinson (1952), Gurley and Shaw (1967), and Jung (1986), among many others. There are some that opined that the relationship could be bi-directional. They argued that the two sectors are crucial to one another. Put differently, economic development enhances financial development, while the converse is also true. Studies that support this line of reasoning include Thornton (1996), and Albulescu (2007), among many others. Thornton (1996) and Albulescu (2007) argued that real sector plays a significant role in the development of the financial market and also that through increasing real sector’s competitiveness and liberalization; financial sector development act as one of the major factors that promote real sector. In every economy, there is need to understand the complex interactions between the financial and real sectors of the economy. A proper understanding of this relationship promotes better regulation and supervision of the financial sector which, in turn can facilitate economic development. Another reason stems from the fact that healthy financial sector is perceived to be a catalyst for sustainable economic development which, every nation desires. More importantly, this is crucial in developing countries where the level of uncertainty is high (especially in markets and politics, to mention a few) and thus, exert much influence on macroeconomic policies formulation. Since independence in 1960, Nigeria has witnessed numerous forms of financial restructuring; the idea has been that the impulses generated would be transmitted into the real sector to spur economic growth. The Adoption of Structural Adjustment Program (SAP) in 1986 introduced a financial sector reform that was characterized with interest rate control, selective credit expansion, use of reserve requirement and other direct monetary control instruments. The problem of weak corporate governance, over dependency on public sector deposits and weak capital base, continue moreover to afflict the sector; hence the need for continuing restructuring efforts. The consolidation exercise introduced in 2004 to strengthen the financial sector saw a reduction in the number of Banks from well over 100 to 20. Deposit banks were required to raise their minimum capital base from about N2 billion to N25 billion by the end of 2005. Furthermore in 2009, the Central Bank of Nigeria (CBN), unveiled a ten year reform blue print, anchored on four cardinal reform programmes to further improve the sector. These are: enhancing the quality of banks, establishing financial stability, enabling healthy financial sector evolution and ensuring that financial sector contributes to the real sector development. Despite all these reforms, the fact remains that the sector is still underdeveloped.
Effects of Audio Feedback and Download Status Display on Perception of Delay: An Exploration into Thai Downloaders
Dr. Chatpong Tangmanee, Chulalongkorn University, Bangkok, Thailand
Pawarat Nontasil, Chulalongkorn University, Bangkok, Thailand
To cope with delay during download, information providers often seek techniques to keep downloaders informed. Two of the widely-accepted techniques are (1) presenting audio signal as feedback when the download is over or (2) displaying a download status. Yet, a literature review could not locate any empirical work addressing an effect of audio feedback and that of download status display as well as their interaction effects on Thai downloaders’ perception of delay. This study hopes to fill this void. A field experiment on an actual information provider with 2,160 participants yield that (1) the effect of each of the two variables on the downloaders’ perceived delay were not significant but (2) the interaction effect of both variables on this perception were statistically significant a 0.05 level. In addition to extending insight into concepts of human-computer interaction’s feedback presentation in the Thai context, practitioners could apply the findings in order to offer services on which downloaders perceive least delay. Given the drastic increase of online content, it is inevitable to have a large volume of complaint on delay, especially during download sessions. Consequently, researchers have to examine (1) delay in the online context together with reaction to such delay and (2) solutions to deal successfully with the delay. Shneiderman (1984) is among the pioneers in investigating information system delay. Indeed, he and other scholars (Miller, 1968; Nielsen, 1993) have stated based on their experiments that (1) if an information system could display results within 0.1 second, users would perceive no delay and aware of the system’s true interactivity, (2) if the information system could display results within 1.0 second, users start noticing the delay but their “flow of thought” has not been interrupted (Nah, 2003, p. 2213). As such, there is no need to deal with any delay but this one second is the limit by which the system must display results, and (3) if the information system spends 10 seconds or longer to display results, users definitely lose focus on the system, subsequently notice the long delay and start behaving irrationally including the ultimate hit of ALT-CTRL-Del buttons. As a result, users must be given feedback to indicate that the system is processing the user’s request and will shortly display the results. Although many guidelines agree on the 10-second limit within which common users could tolerate a delay, Shneiderman (1984) argues further that an information system must respond to users within 2 seconds, if it takes longer, feedback is definitely needed. Despite discrepancy on the limit of waiting time for tolerable delay, users deserve to be informed, either through the output display or via the feedback presentation. Technical implementations such as a bandwidth increase have been solutions to this delay problem (Olshefski & Nieh, 2006; Gorn, et al., 2004). Although these technical solutions could alleviate the problems, they may have yielded other more serious consequences. That is, a technical improvement in delay situations may have drawn more users, leading to longer delay (Polak, 2002; Curran & Duffy, 2005). Therefore, researchers may tackle the delay problem from a behavioral perspective (Gorn, et al., 2004; Dabholkar & Sheng, 2008). Based on psychology literature, ones prefer to be fully informed. Waiting for a download to complete would be agitating unless users are informed of the entire download process.
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